COURT FILE NO.: CV-18-590402-CP
DATE: 20191219
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BORIS GROSSMAN and MICHAEL ARNTFIELD
Plaintiffs
and
NISSAN CANADA INC., c.o.b. as NISSAN CANADA FINANCE and INFINITY FINANCIAL SERVICES CANADA, NISSAN CANADA FINANCIAL SERVICES INC., SERVICES FINANCIERS NISSAN CANADA INC., and NISSAN NORTH AMERICAN, INC.
Defendants
Proceeding under the Class Proceedings Act, 1992
BEFORE: Justice Edward P. Belobaba
COUNSEL: Matthew Baer, Vadim Kats, Carlin McGoogan, Emily Assini and Christopher Du Vernet for the Plaintiffs
Michael Schafler, Kirsten Thompson and Chloe Snider for the Defendants
COSTS - CERTIFICATION
[1] In reasons released on October 29, 2019, I certified this breach of privacy action as a class proceeding.[^1] The plaintiffs now seek the costs of the certification motion.
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[2] The plaintiffs ask for $532,162.17 for fees, disbursements and applicable taxes. For a straight-forward certification motion, this is an extraordinarily high costs request. The defendants level a range of criticisms at this costs submission and ultimately suggest that costs should be awarded in the cause.
[3] Let me start with the overall quantum. I agree with the defendants that the $532,162 request is excessive and unreasonable. The defendants' criticisms about over-litigating, over-staffing and over-docketing are well-founded. In almost every area of legal effort the costs incurred by class counsel were unreasonable - for example, in the filing of a mega-long factum in breach of the Rules and in the time docketed by (too many) class counsel on case conferences, the preparation of motion records and attendance at cross-examinations. As the defendants noted, "the plaintiffs claim to have spent 1600 hours on this motion - a solid year for a lawyer with a full practice."
[4] The defendants point to their costs outline for this motion. The defendants' total, on a partial indemnity basis, is about $173,000. This is much more reasonable. As already noted, this was a relatively straight-forward certification motion. In my experience as a class action judge, a costs award in the general range of $160,000 would be fair and reasonable - as a starting point.[^2]
f 51 However, the actual costs awarded' on this motion must take the following into account:
(i) The plaintiffs were only partially successful. Seven causes of action were pleaded, but only two, intrusion upon seclusion and negligence, survived certification; the proposed class definition was narrowed significantly (the plaintiffs having abandoned the argument that anyone who ever provided Nissan with personal information be in the proposed class); and only four of the 12 proposed common issues were certified.
(ii) The plaintiffs made several last-minute admissions and amendments that not only disrupted but fundamentally changed the nature of the motion and resulted in a significant waste of time and effort. For example, as I noted in the certification decision, "When it became apparent during the hearing that [the breach of contract] submission would not succeed, the plaintiffs abruptly changed direction"[^3] and presented a very different contractual
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theory. When confronting similar obstacles about the class definition, the plaintiffs abandoned their original submissions and changed course dramatically. When the court noted that they failed to plead vicarious liability, the plaintiffs advised they would amend their pleading and did so after the hearing was concluded.
[6] The case law is clear that "[W]here a successful plaintiff substantially recasts his or her case for certification, the defendant's liability for costs may be reduced to compensate the defendant for the prejudice it suffered in wasting time responding to a case that was improperly formulated at the certification motion."[^4] This principle very much applies on the facts herein. The nature and extent of the restructuring and rearranging by class counsel, much of it "on the fly" and while the hearing was proceeding, was significant. A major adjustment in the costs award is justified.
[7] I have reviewed the factors set out in Rule 57.01 and I find it fair and reasonable to reduce the suggested $160,000 by half and fix costs at $80,000 all-inclusive, payable forthwith by the defendant to the plaintiffs.
Justice Edward P. Belobaba
Date: December 19, 2019
[^1]: Grossman v. Nissan Canada, 2019 ONSC 6180 [^2]: InKaplan v Casino Rama, 2019 ONSC 3310, a relatively similar "data hack" case, I awarded $160,000 in costs to the successful defendants. Also see my discussion of average costs awards on certification motions in Dugal v Manulife, 2013 ONSC 4083; Rosen v EMO Nesbitt Burns, 2013 ONSC 2144; Crisante v DePuy, 2013 ONSC 5186; Brown v. Canada (Attorney General) 2013 ONSC 5637; and Sankar v Bell Mobility, 2013 ONSC 5916. [^3]: Supra, note l, at para. 23. [^4]: Das v George Weston Limited, 2017 ONSC 5583, at para. 40.