Court File and Parties

COURT FILE NO.: CV-09-390846-00CP

DATE: 20190723

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARIA MICEVIC, Plaintiff

– AND –

JOHNSON & JOHNSON, ORTHO-McNEIL-JANSSEN PHARMACEUTICALS INC., JOHNSON & JOHNSON INC., JANSSEN-ORTHO INC., COLBAR LIFESCIENCE LTD., and CANDERM PHARMA INC., Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Brian McPhadden, for the Plaintiff Mirilyn Sharp, for the Defendant, Canderm Pharma Inc.

HEARD: July 23, 2019

COSTS AND MORE COSTS

[1] On September 6, 2018, I issued a Certification Timetable Order in this matter which set out specific deadlines for the accomplishment of various steps on the way to certification of this class action. The Plaintiff did not meet the internal deadline for serving a factum, causing the Defendant, Canderm Pharma Inc. (“Canderm”), to incur unnecessary costs.

[2] On January 28, 2019, I released my decision on settlement approval. In that judgment I awarded costs in the amount of $5,000 to Canderm reflecting the extra expenses it was forced to incur due to the tardiness of the Plaintiff in respect of the timetable leading up to certification and settlement. I did not indicate when, precisely, the costs payment was due, but the understanding is that court orders are effective immediately and, as a matter of ordinary business practice, money is typically to be paid within 30 days of its being due. A judgment that concludes ‘The [party] shall pay the [opposing party] costs in the amount of…’, and that provides no outside deadline for payment, is not meant to give the payor license to delay payment indefinitely. Ordinary business sense is presumed to govern the parties.

[3] It is now six months after the award of costs to Canderm and they still have not been paid.

[4] Counsel for the Plaintiff in correspondence with counsel for Canderm has taken the position that the $5,000 in costs to Canderm are not payable until after the settlement funds have been distributed. That suggests that not only is the timing at issue but the source of funds for the payment of costs is at issue. The only reason that I can think of for class counsel to say that payment of costs must wait until the settlement funds are distributed is that the payment is to be made from funds that remain after the distribution.

[5] The Plaintiff’s position takes counsel for Canderm by surprise as it was never part of the costs Order that I issued on January 8th. It takes me by surprise as well.

[6] I am particularly surprised by this because no one made this clear to me when it came to my approval of the Distribution Protocol that accompanied the settlement of this action. As it happens, I had an opportunity to specifically review that Protocol on March 5, 2019, when a controversy arose with respect to the funds available for one of the subclasses represented by counsel for the Plaintiff. There was no provision made in the Distribution Protocol for $5,000 in costs already ordered to be paid to Canderm. It did not occur to me, and no one made the submission, that the class would be deprived of $5,000 out of its already rather modest settlement.

[7] Counsel for the Plaintiff has taken a number of alternative positions over the course of the six months since my January 28th ruling. The latest position is that the costs to Canderm are not payable until after the companion action in British Columbia has been dismissed. That is apparently based on Plaintiff’s counsel’s reading of the definition of “effective date” in the formal settlement Order that followed my approval of the settlement.

[8] Counsel for Canderm takes issue with the Plaintiff’s interpretation, as it does not make any sense. I agree. No one ever thought in January 28, 2019 that Canderm’s costs, which were already designed to compensate for unnecessary delay by Plaintiff’s counsel, would have to wait for a court process in another province to work its way through. This seems like a position designed to delay the payment to the latest possible date, with no discernable rationale or reason for waiting until that late date.

[9] The costs to Canderm were not made payable only after the distribution to the class has been made. Indeed, if that were the case it would suggest that the costs ordered payable to Canderm will only be paid on the off chance that there is money left over after all distributions have been made. That is not how court-ordered cost payments work; they are not payable only if there is some extra money left over.

[10] I do not know what the arrangement is as between the Plaintiff and class counsel in respect of payment of these costs, but from Canderm’s point of view the delay in payment and the uncertainty as to whether they will be paid at all is not reasonable. The $5,000 in costs ordered on January 28, 2019 are to be paid to Canderm without further delay.

[11] My colleague Perell J. indicated in 2038724 Ontario Limited v Quizno’s Canada Restaurant Corporation, 2010 ONSC 5390, at para 44, that “in some situations it would be appropriate to order costs of a case conference immediately.” That makes sense to me, especially given that costs are at a presiding judge’s discretion under s. 133 of the Courts of Justice Act.

[12] In my view, thoday’s case conference is one of those situations. The hearing before me today was a contentious one, not an informal management-style discussion. Counsel treated it like a more formal motion, and I received it that way. Counsel for Canderm has submitted that today’s hearing was necessitated by the untenable positions taken by the Plaintiff, and that Canderm should be compensated for its counsel’s need to expend time and effot in responding to those positions and in trying to collect the costs that were ordered six months ago.

[13] Canderm seeks a total of $6,102.00 for today’s appearance and the efforts leading up to today’s appearance. The Bill of Costs shows that Canderm was put to a disproportionate amount of costs in collecting the $5,000 that should have been paid months ago. In my view, Canderm is entitled to at least partial compensation for those costs unnecessarily incurred. It should not take more costs to collect outstanding costs.

[14] In addition to the $5,000 already payable by the Plaintiff to Canderm, the Plaintiff is ordered to pay an additional $5,000, all inclusive, in respect of today’s case conference. The sum of both of these amounts – i.e. a total of $10,000 – is payable by the Plaintiff to Canderm forthwith.

Morgan J.

Date: July 23, 2019