COURT FILE NO.: CV-17-570771-00CP
DATE: 2019/10/24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jullian Jordea Reddock
Plaintiff
– and –
Attorney General of Canada
Defendant
H. Michael Rosenberg, James Sayce, and Charlotte-Anne Malischewski for the Plaintiff
Eric Lafreniere, Susan Gans, Negar Hashemi, Lucan Gregory, and Heather Thompson for the Defendant
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
A. Introduction and Overview
[1] Pursuant to the Class Proceedings Act, 1992,[^1] Jullian Jordea Reddock sued the Attorney General of Canada, which is to say that he sues the Federal Government of Canada. The Reddock Action arises out of the use of administrative segregation in the Federal Government’s penitentiaries, which are administered by the Correctional Service of Canada, sometimes referred to as “CSC”. Because of the use of administrative segregation, Mr. Reddock alleged that the Federal Government breached the inmates’ rights under the Canadian Charter of Rights and Freedoms, [^2] including their rights under s. 7 (life, liberty, and security of the person), s. 9 (arbitrary detention), s. 11 (h) (double jeopardy) and s. 12 (cruel and unusual treatment). Mr. Reddock also advanced a systemic negligence claim against the Federal Government.
[2] Mr. Reddock moved for a summary judgment of the common issues in his action. His motion was successful. The Class Members were awarded aggregate damages of $20 million and they have the right to bring individual claims for further compensation.[^3]
[3] Mr. Reddock seeks a partial indemnity award of costs of $1,235,590.33, all inclusive. This award is comprised of $958,132.44 in counsel fees and $135,310.33 in disbursements, plus HST.
[4] In assessing Mr. Reddock’s claim for costs, there are three unusual circumstances in his case that are relevant to the reasonableness of the counsel fee and as to whether or not the costs claimed are within the reasonable expectations of the Federal Government.
i. First, at the same time as Mr. Reddock, who was an inmate in several federal penitentiaries, was suing the Federal Government for damages caused to fellow inmates by their placement in administrative segregation, in Brazeau v. Attorney General (Canada), Christopher Brazeau, later joined by David Kift, sued the Federal Government in a separate class action for damages caused by the placement of inmates in administrative segregation. Messrs. Brazeau and Kift, who were inmates in several federal penitentiaries, suffered from very serious mental illnesses, and their class action was on behalf of similarly situated inmates. The class members of the Brazeau Action were carved out of the class for the Reddock Action.
ii. Second, McCarthy Tétrault LLP, co-Class Counsel, whose services are a part of Mr. Reddock’s claim for costs is also pro bono counsel to the Canadian Civil Liberties Association. While the Brazeau Action and the Reddock Action were being litigated, the Association as a public interest litigant was challenging the constitutionality of prolonged administrative segregation. Over the course of nearly five years, McCarthy Tétrault LLP donated more than 2,300 hours of legal work to Canadian Civil Liberties Association v. Canada.
iii. Third, several of Mr. Reddock’s experts chose not to bill for their services, despite being entitled to do so. For example, Professors Coyle and Mendez did not charge any expert witness fee.
[5] The Federal Government submits that Mr. Reddock’s claim for costs, including disbursements, should be substantially reduced. It makes this submission without suggesting what would be the appropriate award of costs and without submitting any information about its own legal costs. The gist of the Federal Government’s argument is that Mr. Reddock’s claim for costs is excessive because his Class Counsel were also Class Counsel in the Brazeau Action and the addition of McCarthy Tétrault LLP Co-Class Counsel was unnecessary.
[6] The Federal Government’s argument is set out in the overview paragraph of its Costs Submissions and it is repeated in the concluding paragraph of the submissions. These paragraphs of the Costs Submissions state:
OVERVIEW
- Class Counsel’s request for $1,235,590.33 for costs is disproportionate and excessive. Reddock was largely a replication of Brazeau v Attorney General (Canada), yet Class Counsel seeks an additional $143,527.19 in fees alone. Adding the negligence claim to Reddock cannot justify eliminating the savings that should have been realized through the overlap with Brazeau and then incurring significant additional fees over and above those savings. The negligence claim was duplicative insofar as it resulted in no additional damages for the class members. Canada cannot be expected to pay excessive fees because Class Counsel chose to split Brazeau and Reddock or because the Plaintiff retained additional counsel in Reddock. Class Counsel’s approach to this litigation was unreasonable and their fees should be reduced.
Conclusion
- The fees and disbursements requested by the Plaintiff should be substantially reduced. Class Counsel duplicated their efforts, over-resourced various steps in the proceedings, and failed to realize cost savings that should have resulted from the overlapping work in Brazeau. Certain aspects of the Plaintiff’s motion were also dismissed, the Plaintiff refused to consent to an adjournment thus requiring Canada to fully defend every aspect of the motion, the Plaintiff refused reasonable cost saving measures suggested by Canada with respect to the repetitive cross-examinations, and the Plaintiff abandoned parts of his claim without notice to Canada. Collectively, these factors justify a significant reduction in the fees and disbursements sought by the Plaintiff.
[7] For the reasons that follow, I reduce the costs claimed by $113,000 and I award Mr. Reddock costs of $1,122,590.33, all inclusive.
B. Legal Background
[8] The court's discretion in awarding costs arises under the authority of s. 31(1) of the Courts of Justice Act,[^4] and is to be exercised by a consideration of the factors in rule 57.01 (1) of the Rules of Civil Procedure.[^5] These factors include the principle of indemnification, the reasonable expectations of the parties, the complexity of the proceeding, the importance of the proceeding and the conduct of the parties in litigation.
[9] The traditional discretionary principles developed for costs awards are codified in rule 57.01 (1), which states:
Factors in Discretion
57.01 (1) 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.
[10] The most general rule about costs, not to be departed from without good reason, is that costs at a partial indemnity scale follow the event, which is to say that normally costs are ordered to be paid by the unsuccessful party to the successful party on a partial indemnity scale.[^6] This is the "loser pays" principle.
[11] A critical controlling principle for the awarding of costs is that the sum awarded reflects the fair and reasonable expectations of the unsuccessful litigant.[^7] The overriding principle in awarding costs is reasonableness.[^8]
[12] In exercising its discretion with respect to costs in class proceedings, the court may consider such factors as: (a) conduct or poor judgment that unduly prolonged the preparation or argument of the motion for certification; (b) failure to follow the schedule; (c) improper case-splitting; (d) delays in abandoning causes of action and issues that were ultimately dropped; (e) failing to communicate the revised list of common issues; and (f) refusing to acknowledge the significance of submissions and concessions.[^9]
[13] An important factor in awarding costs in class actions is s. 31 of the Class Proceedings Act, 1992, which provides that:
In exercising its discretion with respect to costs under subsection 131(1) of the Courts of Justice Act, the court may consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest.
[14] Under s. 31 of the Act, in class proceedings, the approach to fixing costs is the same as in ordinary actions, but the court should give special weight to whether the class proceeding was a test case, raised a novel point of law, or involved a matter of public interest.[^10]
[15] In application, the principal that costs of a class proceeding are fixed in the same way as in ordinary actions, but the court should give special weight to whether the class proceedings was a test case, a novel point of law, or a matter of public interest means that if the representative plaintiff is the unsuccessful party, the award to the successful party may be reduced or negated. Contrary to Mr. Reddock’s submission in the immediate case, while s. 31 of the Class Proceedings Act, 1992 directs a court to consider discounting a costs award, it is not the basis for increasing an award beyond what would normally by awarded in a party and party costs assessment.
[16] Another important factor in awarding costs in class actions is the principle that the court should have regard to the underlying goals of the Class Proceedings Act, 1992; namely: (1) access to justice; (2) behaviour modification; and (3) judicial economy.[^11] With respect to access to justice, defendants, just as much as plaintiffs, are entitled to access to justice, and the court in exercising its discretion must be aware of the access to justice implications of its award to both plaintiffs and defendants.[^12]
[17] In Pearson v. Inco Ltd.,[^13] which concerned the fixing of costs on a certification motion, the Court of Appeal identified the following principles for fixing costs that can be taken to apply to costs in a class proceeding generally including a summary judgment motion: (1) Ontario, unlike other class proceedings jurisdictions such as British Columbia, has not sought to interfere with the normal rule that costs will ordinarily follow the event; (2) the costs must reflect what is fair and reasonable; (3) the costs should, if possible, reflect costs awards made in closely comparable cases, recognizing that comparisons will rarely provide firm guidance; (4) a motion for certification is a vital step in the proceeding and the parties expect to devote substantial resources to prosecuting and defending the motion; (5) the costs expectations of the parties can be determined by the amount of costs that an unsuccessful party could reasonably expect to pay; (6) the complexity of the issues; (7) whether the case raises an issue of public importance; and (8) a fundamental objective of the Class Proceedings Act, 1992 is to provide enhanced access to justice.
[18] As may be noted, one of the factors mentioned by the Court of Appeal is the costs awards in closely comparable cases. In this regard, Mr. Reddock relies on the following comparables:
Hughes v. Liquor Control Board of Ontario[^14]
$2,374,497.13
Fairview Donut Inc. v. The TDL Group Corp.[^15]
$1,850,000.00
1250264 Ontario Inc. v. Pet Valu Canada Inc.[^16]
$1,702,777.79
Das v. George Weston Ltd.[^17]
$1,634,921.12
Lavender v. Miller Bernstein LLP[^18]
$1,009,063.32
Brazeau v. A.G. Canada[^19]
$800,000.00
C. Discussion and Analysis
[19] As I shall explain in more detail below, I disagree with and give no weight to the Federal Government’s argument that Class Counsel’s approach to this litigation was unreasonable and their fees should be reduced because, among other things, Class Counsel’s approach in the Reddock Action was inefficient and duplicative and it wasted the savings that should have been realized through the overlap with the Brazeau Action.
[20] Removing the Federal Government’s essential argument and applying the above legal principles to the circumstances of the immediate case, the only points that the Federal Government scores are that: (a) with Messrs. Brazeau and Kift having claimed and been awarded $24,976.50 in partial indemnity fees for the settlement discussions in the Brazeau Action, Mr. Reddock cannot claim $84,106.20 for the concurrent settlement discussions in the Reddock Action; and (b) there may have been some duplication of legal services or some double charges given the overlap between the Brazeau and Reddock Actions.
[21] There is some traction to these two points, but they do not call for a substantial reduction in the counsel fee. I, therefore, reduce the counsel fee by $100,000, which along with HST yields a $113,000 reduction from the costs claimed by Mr. Reddock. Put shortly, having regard to the normal principals that guide the court’s discretion in awarding costs, an award of $1,122,590.33, all inclusive, is justified, reasonable, and within the reasonable expectations of the Federal Government.
[22] Mr. Reddock was the successful party, and he achieved a substantial judgment for the Class Members. The normal rule is that partial indemnity costs follow the outcome of the litigation, and court’s do not make distributive costs award as if litigation were a law school exam to be graded with more costs to the students with A passing grades and less to the students with C passing grades. Mr. Reddock was the successful party with a substantial success. Thus, as far as costs are concerned, it is of no moment that Mr. Reddock did not prevail on his claim under s. 11(h) of the Charter.
[23] Unlike the situation in Brazeau where Messrs. Brazeau and Kift abandoned a substantial claim at the summary judgment motion and I reduced their award for costs substantially, Mr. Reddock did not abandon his s. 11 (h) Charter claim, but he was simply unsuccessful in proving it. That want of success does not diminish or detract from the outcome that he achieved a substantial judgment for other reasons. For the purposes of an award of costs, he was the successful party and costs follow the event. In Brazeau, by abandoning claims so late in the proceeding, a great deal of work was done that was wasted and that justified a reduction in costs in that case. But abandoning a claim and failing to prove a claim are not the same thing, and there was no divided success in the immediate case that would justify a reduction in the costs to be awarded Mr. Reddock.
[24] I, however, pause to say that Mr. Reddock did not assist himself, or the court, by submitting, as litigants frequently do, that he was “totally successful”. Litigants are ill-advised to add the adjective “totally” in describing the outcome of litigation because it is a rare occurrence in litigation that success is total. So, the adjective is both false and unnecessary, and its use just encourages the unsuccessful party to argue, as the Federal Government did in the immediate case, that it was not totally unsuccessful.
[25] Moving on in the analysis, and putting aside the effect, if any, of the Brazeau Action on the legal services and disbursements incurred in the Reddock Action, the Federal Government did not provide any other basis for its submission that the counsel fee and disbursements were excessive. Apart from its argument about the overlap in the cases, it did not provide any basis for an argument that costs of approximately $1 million, all inclusive, for the Reddock Action or for a case of the nature of the Reddock Action was unreasonable and beyond its reasonable expectations.
[26] The Federal Government did not file its own bill of costs for the Reddock Action – or for the Brazeau Action, for that matter. Its submissions that Class Counsel’s work on the Reddock Action was excessive or that there were efficiencies that ought to have been achieved because Class Counsel was also involved in the Brazeau Action are belied by the fact that the Federal Government did not file its own bill of costs for both cases. When an unsuccessful party does not file a bill of costs but alleges over-lawyering, courts are very sceptical about the allegations and may draw the inference that had the bills been filed, the bills would have revealed that the extent of the successful party’s endeavors were not excessive or unexpected by the unsuccessful party. Without the support of a bill of costs, allegations of over-lawyering have been described as "no more than an attack in the air".[^20]
[27] In the immediate case, absent any information to prove differently, it appears to me that the Federal Government committed as much and likely expended much more legal resources than did Class Counsel. And, in the immediate case, I rather doubt that the Federal Government achieved much efficiencies for Reddock given that it assembled somewhat different legal teams for both cases.
[28] In any event, in the immediate case, putting aside the effect, if any, of the Brazeau Action on the legal services and disbursements provided, on an item by item basis, the costs claimed by Mr. Reddock appear fair, reasonable, and the costs claimed are what might be expected in a litigation as complex and important as the Reddock Action. Absent backing information, if anything, it is the pot calling the kettle black for the Federal Government to submit that Class Counsel over-lawyered the case. Put somewhat different, if there had been no Brazeau Action or if Brazeau had been litigated by different Class Counsel, the costs claimed in Reddock are appropriate, fair, and within the reasonable expectations of the Federal Government.
[29] I turn then to the Federal Government’s arguments that it cannot be expected to pay excessive fees because Class Counsel chose to split Brazeau and Reddock and that cannot it be expected to pay fees that do not take into account savings that should have been realized through the overlap between Brazeau and Reddock.
[30] The Federal Government’s arguments do not work for three reasons.
[31] First, while there was indeed overlap between Brazeau and Reddock, the extent of the overlap is much overstated and while it is true that the Brazeau Class Members could also have been Class Members in Reddock but were excluded, the cases were very different. It is not correct to say that Reddock was largely a replication of Brazeau v. Attorney General (Canada). It is not correct to say that the fees incurred in Reddock are not proportionate because the majority of the work was already done in Brazeau. Both cases involved appropriate expenditures of legal resources.
[32] It is not apt to say blithely that Class Counsel chose to split Brazeau and Reddock. There are significant and substantial difference between the two cases. Brazeau was crafted to be a case for the inmates who had very serious pre-existing mental health problems when they were placed in administrative segregation, and it was all of understandable, necessary, desirable, and inevitable that there be two separate class actions. It is doubtful to the extreme that if Brazeau and Reddock were a single class action that it would have been certified.
[33] Although the backdrop of penitentiaries and allegations of Charter breach was common the mental health issues made Brazeau a different class action. Except perhaps for the issue of whether the review process for admissions was contrary to s. 7 of the Charter, neither case was a test case for the other and huge swaths of the respective cases did not overlap because the legal situation of those inmates with mental health problems and who were placed in administrative segregation was significantly different from those of inmates who had no serious pre-existing mental health problems. The overlap in the cases is much overstated.
[34] Second, it is only with the benefit of speculative theoretical hindsight that it could even be said that there were efficiencies to be achieved from the Brazeau Action that would justify Class Counsel in Reddock downing tools and not working or doing less work on the Reddock Action. And this is particularly true because the Federal Government tenaciously defended both cases.
[35] The Federal Government was quite happy to take ironical and inconsistent approaches in advancing its defences and playing one case off against the other. It is not as if the Federal Government was ever prepared to concede that the decision in one case would obviate the need to comprehensively litigate the other case. It is only after the fact that there could be said to be any duplicative work or lessons to be learned one case to the other. It was the correct decision to separate the cases, and viewed prospectively, which is the proper analytical perspective, there were no savings to be achieved between the cases, which were concurrently being prosecuted. Class Counsel’s approach to the Reddock litigation was both necessary and reasonable.
[36] Third, the actual position of the Federal Government during the run up to the Reddock Action was that the outcome of Brazeau did not govern Reddock. It is only in its Costs Submissions that the Federal Government suggests that the work done on the Reddock Action was inefficient because of the work already done on the Brazeau Action. The reality was that Reddock was litigated by the Federal Government on the basis that the outcome in Brazeau involving seriously mentally ill inmates was wrong or distinguishable and the issues decided in Brazeau did not bind the Federal Government in its defence in the Reddock Action. Thus, it takes irony into hypocrisy for the Federal Government to say that there were efficiencies to be achieved in Reddock because of Brazeau. I do not fault the Federal Government for tenaciously defending the cases as it did or for making inconsistent arguments in the various cases that have addressed administrative segregation, but I do conclude that there is not merit to the Federal Government’s inefficiency argument and that with a modest reduction, Class Counsel’s fee was not excessive.
[37] Therefore, for the above reasons, I award Mr. Reddock $1,122,590.33, all inclusive.
Perell, J.
Released: October 24, 2019
Reddock v. Canada (Attorney General), 2019 ONSC 6151
COURT FILE NO.: CV-17-570771CP
DATE: 2019/10/24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jullian Jordea Reddock
Plaintiff
– and –
Attorney General of Canada
Defendant
REASONS FOR DECISION
PERELL J.
Released: October 24, 2019
[^1]: S.O. 1992, c.6. [^2]: Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11. [^3]: Reddock v. Canada (Attorney General), 2019 ONSC 5053. [^4]: R.S.O. 1990, c. C-43. [^5]: R.R.O. 1990, Reg. 194. [^6]: McCracken v. Canadian National Railway, 2012 ONSC 6838; Hague v. Liberty Mutual Insurance Co., 2005 CanLII 13782 (ON SC), [2005] O.J. No. 1660 (S.C.J.); Pike's Tent and Awning Ltd. v. Cormdale Genetics Inc. (1998), 27 C.P.C. (4th) 352 (Ont. Gen. Div.); Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 CanLII 239 (ON CA), 17 O.R. (3d) 135 (C.A.). [^7]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 at para. 24 (C.A.); Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 CanLII 9852 (ON CA), [2004] O.J. No. 2102 at para. 97 (C.A.); Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 at para. 4 (Ont. C.A.); McGee v. London Life Insurance Co., [2008] O.J. No. 5312 at paras. 5-8 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 CanLII 63806 (ON SC), 74 O.R. (3d) 728 at paras. 23-25 (S.C.J.). Lee v. General Motors Co. of Canada, [2004] O.J. No. 2245 (S.C.J.). [^8]: Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 at para. 52 (C.A.). [^9]: Good v. Toronto Police Services Board, 2016 ONCA 250, leave to appeal to the S.C.C. refused [2016] S.C.C.A. No. 255; Pollack v. Advanced Medical Optics, Inc., 2012 ONSC 1850; Lau v. Bayview Landmark Inc., [1999] O.J. No. 4385 at para. 4 (S.C.J.). [^10]: Sutherland v. Hudson's Bay Co., [2008] O.J. No. 602 at para. 11 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 CanLII 63806 (ON SC), 74 O.R. (3d) 728 at para. 32 (S.C.J.); Joanisse v. Barker, [2003] O.J. No. 4081 (S.C.J.); Fehringer v. Sun Media Corp., [2002] O.J. No. 5514 (S.C.J.); Garland v. Consumers' Gas Co. (1995), 1995 CanLII 7179 (ON SC), 22 O.R. (3d) 767 (Gen. Div.), aff’d (1996), 1996 CanLII 1022 (ON CA), 30 O.R. (3d) 414 (C.A.). [^11]: Green v. Canadian Imperial Bank of Commerce, 2016 ONSC 3829; Brown v. Canada (Attorney General), 2013 ONCA 18 at para. 37; Smith v. Inco Ltd., 2012 ONSC 5094 at paras. 74-109; Ruffolo v. Sun Life Assurance Co. of Canada, 2009 ONCA 274 at para. 37; KRP Enterprises Inc. v. Haldimand (County), [2008] O.J. No. 3021 (S.C.J.); McNaughton Automotive Ltd. v. Co-operators General Insurance Co., 2007 CanLII 12709 (ON SCDC), [2007] O.J. No. 1453 (Div. Ct.). [^12]: 2038724 Ontario Limited v. Quizno's Canada Restaurant Corporation, at para. 17, leave to appeal to Div. Ct. denied 2011 ONSC 859 (Div. Ct.); Fresco v. Canadian Imperial Bank of Commerce, 2010 ONSC 1036 at para. 18. [^13]: (2006), 2006 CanLII 7666 (ON CA), 79 O.R. (3d) 427 at para. 13 (C.A.). [^14]: 2018 ONSC 4862, leave to appeal costs ref’d 2019 ONCA 305. [^15]: 2014 ONSC 776. [^16]: 2016 ONSC 5496. [^17]: 2018 ONCA 1053 varying 2017 ONSC 5583. [^18]: 2018 ONCA 955. [^19]: 2019 ONSC 3422. [^20]: Smith Estate v. Rotstein, 2011 ONCA 491; Class v. Smith, 2018 ONSC 1767; Risorto v State Farm Mutual Automobile Insurance Company, 2003 ```