Court File and Parties

Court File No.: CV-11-436012 Written Costs Submissions Filed: 20190415 Costs Endorsement Released: 20190604 Superior Court of Justice – Ontario

Between:

TRILLIUM POWER WIND CORPORATION Plaintiff

- and-

HER MAJESTY THE QUEEN, in right of the Province of Ontario, as represented by the Ministry of Natural Resources, the Ministry of the Environment, and the Ministry of Energy Defendant

Before: MASTER M.P. McGRAW

Counsel: M. Cooper E-mail: cooper@cooperlaw.ca -for the Plaintiff, Trillium Power Wind Corporation

E. Wagner E-mail: eric.wagner@ontario.ca

• for the Defendant Her Majesty the Queen in right of Ontario (the “Province”)

Costs Endorsement Released: June 4, 2019

Costs Endorsement

I. Background

[1] This Costs Endorsement arises from 2 motions, one which was settled, another which was not brought.

[2] As set out in my Case Conference Endorsement dated March 6, 2019 (the “Endorsement”), the Plaintiff brought a motion to compel the Province to search 52 hard drives seized from the Ontario Premier’s Office (the “Production Motion”). The Province intended to bring a cross motion for security for costs with respect to the cost of the hard drive searches (the “Security For Costs Motion”, together with the Production Motion, the “Motions”). Five (5) telephone case conferences were held between November 1, 2018 and March 6, 2019 and the Motions were scheduled to proceed before me on April 3, 2019. However, as a result of significant case management and discussions between counsel, the Province consented to modified search terms for the search of 10 hard drives and did not bring the Security for Costs Motion.

[3] Pursuant to the Endorsement, the parties have filed written costs submissions. The Plaintiff seeks costs of the Motions on a substantial indemnity scale in the amount of $76,256.92 or alternatively, $46,484.25 on a partial indemnity scale. The Province submits that costs should be reserved to the trial Judge or alternatively, that $3,000 on a partial indemnity scale is appropriate.

II. The Law and Analysis

[4] Section 131(1) of the Courts of Justice Act (Ontario) states:

“ Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”

[5] Rule 57.01(1) of the Rules of Civil Procedure provides as follows:

“In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.”

[6] Costs rules serve five purposes: (1) indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) facilitate access to justice, including access for impecunious litigants; (3) discourage frivolous claims and defences; (4) discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) encourage settlements (394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at para. 10; Deonath v. Iqbal, 2017 ONSC 3672 at para. 20).

[7] In determining costs, the overriding principles are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291 (C.A.); Deonath at para. 21). The general rule is that costs on a partial indemnity scale should follow the event (394 Lakeshore at para. 12). The principle that costs should follow the event should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure, or oppressive or vexatious conduct of proceedings (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore at para. 14).

[8] The situations in which costs on a substantial indemnity scale are awarded are rare including where one party has behaved in an abusive manner, brought proceedings wholly devoid of merit, and unnecessarily ran up the costs of the litigation, having regard to Rules 57.01(e) and (f) with respect to the conduct of any party and the steps taken (Standard Life Assurance Co. v. Elliot, [2007] O.J. No. 2031 (S.C.J.) at paras. 9-10).

[9] In exercising my discretion to award costs, I have also considered Rule 1.04(1) which requires that the Rules of Civil Procedure be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. I have also applied Rule 1.04(1.1) which compels the court to make orders and give directions, including costs awards, that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding (Deonath at para. 21).

[10] A five-Judge panel of the Court of Appeal recently highlighted the goals of promoting settlement, fairness to the parties, access to justice and proportionality (Cadieux (Litigation guardian of) v. Cloutier, 2019 ONCA 241 at paras. 21-25).

[11] The Plaintiff initially sought the search of 52 hard drives, 24 of which were in the possession of the Ontario Provincial Police and 28 in the possession of the Province’s cyber-security unit. The Plaintiff also sought the hard drives of 3 additional key officials in the Premier’s Office. As set out in the various telephone case conference Endorsements, through case management, computer user lists provided by the Province and discussions between counsel, this was reduced to 22, then 10 which the Province agreed to search based on modified search terms.

[12] Notwithstanding that the Production Motion was resolved by case management and agreement, and the Security For Costs Motion was not brought, the conduct of the parties which contributed to the time and cost of the Motions is relevant to costs. In this regard, certain conduct of the Province contributed significantly to the costs of the Production Motion incurred by the Plaintiff.

[13] In particular, with the Motions scheduled to proceed for a full day on April 3, 2019, the Province did not file any materials by the deadlines set out in my Endorsement dated December 11, 2018. The Province also did not respond to numerous inquiries by the Court office and Plaintiff’s counsel as to whether it continued to oppose the Production Motion and/or if it still intended to bring the Security For Costs Motion. As a result, facing a court-ordered deadline of January 31, 2019, the Plaintiff completed, served and filed its Motion Record in support of the Production Motion. Given the nature of the substantial relief sought, the Plaintiff’s Motion Record was 636 pages. During the March 6, 2019 telephone case conference, the Province acknowledged its failure to respond in a timely manner on numerous occasions including its failure to comply with certain deadlines set out in my Endorsements.

[14] Having considered all of the relevant circumstances, I conclude that the Plaintiff is entitled to some costs of the Production Motion on a partial indemnity scale. In doing so, I have considered the principles set out in Kearney v. Hill, 2017 ONSC 6306 and Muskala v. Sitarski, 2017 ONSC 2842. In particular, the general rule is that costs will not be awarded where a motion is settled on all issues except for costs unless there are exceptional circumstances (Kearney at paras. 27-31; Muskala at paras. 5-12).

[15] Similar to Kearney, I conclude that exceptional circumstances exist in the present case. These include the express agreement of the parties to resolve the Motions on all issues except for costs and the fact that the Motions would unlikely have been resolved without deferring the issue of costs given the disparity between the parties’ positions. The settlement of the Motions spared the parties from incurring more costs and was consistent with Rule 1.04(1) and proportionality.

[16] Further, the basis for and determination of costs of the Production Motion arises almost entirely from the conduct of the Province, namely its unresponsiveness to the Court and the Plaintiff which caused the Plaintiff to incur unnecessary costs. This determination does not require the Court to engage in a hypothetical analysis of the parties’ rights or what the outcome of the Production Motion might have been (Muskala at para. 9).

[17] I further conclude that it would not be fair or reasonable to award any costs with respect to the Security For Costs Motion which was not even brought, let alone argued. Unlike the Production Motion, where the Plaintiff was the moving party, the Plaintiff was not compelled by a court ordered timetable to prepare materials or incur any costs with respect to the Security For Costs Motion and did so by choice.

[18] I do not accept the Province’s position that costs of the Motions should be reserved to the trial Judge given its claim for costs thrown away as a result of two adjournments of the trial of this action to allow the Plaintiff to bring the Motions and a previous motion. Any such costs may be claimed by the Province at the appropriate time and are unrelated to this Court’s consideration of the costs of the Motions.

[19] I reject the Plaintiff’s submissions that it is entitled to costs on a substantial scale. The Plaintiff has provided no case law in support of substantial indemnity costs and I am not convinced that any conduct of the Province or the circumstances of the Motions call for costs on a higher scale. This includes that the Production Motion was resolved, the Security For Costs Motion was not brought and significant case management was provided in order to arrive at a resolution. The Plaintiff submits that substantial indemnity costs should be awarded because there is sufficient evidence to refute the Province’s pre-motion representation that no relevant documents had been intentionally destroyed or not produced. In my view, the Plaintiff is asking me to engage in the kind of hypothetical exercise rejected by the courts in Muskala and Kearney and I refuse to do so.

[20] Turning to quantum, the amount of $46,484.25 sought by the Plaintiff is excessive in the circumstances and not within the reasonable expectations of the parties on motions of this nature, particularly where the Motions did not proceed. This amount should be further reduced as follows:

i.) the Plaintiff has not provided any basis for why this Court should determine the costs of two case conferences before Firestone J.;

ii.) the Plaintiff seeks costs for 2 counsel called to the bar in 1976 including attendances by both at the case conferences before Firestone J. and on some of the telephone case conferences before me and to prepare and review materials. In my view, it was unnecessary to have 2 counsel in attendance, let alone 2 counsel of this experience, and given the overall time claimed, unreasonable in many instances to claim for second counsel to review materials;

iii.) the Plaintiff is not entitled to any costs of the Security For Costs Motion (including its claim for 32 hours of research by a legal research lawyer in anticipation of this motion).

[21] At the same time, I also reject the Province’s assertion that $3,000 is fair and reasonable. The cases cited by the Province in support of this amount are all distinguishable (Lipovetsky v. Sun Life Assurance Co. of Canada, 2018 ONSC 1649; Park v. An, 2018 ONSC 3096; Winston v. Sunalliance Insurance Co. of Canada, [2006] O.J. No. 5286 (S.C.J.)). Specifically, these cases do not involve the significant number of documents in the context of E-discovery nor the complexity of issues as the present case.

[22] In my view, taking into consideration all of the relevant factors and circumstances, I conclude that it is fair, reasonable, proportionate, consistent with Rule 1.04(1) and within the reasonable expectations of the parties for the Province to pay costs to the Plaintiff fixed in the amount of $15,000 within 30 days.

Costs Endorsement Released: June 4, 2019

Master M.P. McGraw