COURT FILE NO.: CV-18-608396-CP*

CV-19-621378-CP*

DATE: 20200902

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

BRADLEY DORMAN Plaintiff

– and –

ECONOMICAL MUTUAL INSURANCE COMPANY, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, PHILIP HOWELL AND BRIAN MILLS Defendants

*And 27 related proceedings:

Court File Nos. Style of Cause**

CV-18-00607935-00CP Jeanette Mieyette v. Allstate Insurance Company of Canada, et al.

CV-18-00607931-00CP CV-19-00621372-00CP Shelli-Lynn Black v. Belair Insurance Company Inc. c.o.b. Belair Direct, et al.

CV-18-00607933-00CP CV-19-00621375-00CP Catherine Brooks v. Intact Financial Corporation c.o.b. Intact Insurance, et al.

CV-18-00607934-00CP CV-19-00621379-00CP William Elliot v. Aviva Insurance Company of Canada, et al.

CV-18-00607937-00CP CV-19-00621385-00CP Jill Nicholson v. Unifund Assurance Company, et al.

CV-18-00607939-00CP CV-19-00621387-00CP Fernanda Sampaio v. Certas Home and Automobile Insurance Company, et al.

CV-18-00608382-00CP CV-19-00621389-00CP David Macleod v. The Commonwealth Mutual Insurance Group, et al.

CV-18-00608386-00CP CV-19-00621374-00CP Madeleine Bonhomme v. Co-operators General Insurance Company, et al.

CV-18-00608390-00CP CV-19-00621386-00CP John Ross Robertson v. Echelon General Insurance Company, et al.

CV-18-00608399-00CP CV-19-00621377-00CP Mark Cicciarelli v. Wawanesa Mutual Insurance Company, et al.

CV-19-00611894-00CP CV-19-00621371-00CP Kristopher Baron v. St. Paul Fire and Marine Insurance Company, Travelers Insurance Company of Canada, et al.

CV-19-00611895-00CP CV-19-00621380-00CP Garry Gibbons v. TD Insurance, et al.

CV-19-00611899-00CP CV-19-00621382-00CP Brian Nagle v. Gore Mutual Insurance Company, et al.

CV-19-00611901-00CP CV-19-00621388-00CP David Sura v. CUMIS General Insurance Company, et al.

**Each action also names Her Majesty the Queen in Right of Ontario, Phillip Howell and Brian Mills as defendants.

Proceedings under the Class Proceedings Act, 1992

BEFORE: Justice Edward P. Belobaba

HEARD: In writing

COUNSEL: Paul Harte, Ronald Bohm, Maria Damiano, Kevin E. Kemp and K. Jay Ralston for the Plaintiffs

Mark A. Gelowitz, Laura K. Fric and Carla Breadon for Defendant Economical Mutual Insurance Company

L. Glenn Frelick, Dona Salmon and Adam Mortimer for Defendants Her Majesty the Queen in right of Ontario, Philip Howell, and Brian Mills

Christine Lonsdale and Alison Bond for Defendant Certas Home and Automobile Insurance Company

Paul J. Martin, Sarah J. Armstrong and Daanish Samadmoten for Defendants Aviva Insurance Company of Canada, Co-operators General Insurance Company, CUMIS General Insurance Company, and Gore Mutual Insurance Company

Geoffrey B. Shaw and Arthur Hamilton for Defendant Wawanesa Mutual Insurance Company

Byron Shaw and Patrick Healy for Defendants Intact Financial Insurance and Belair Insurance Company Inc.

Belinda A. Bain, Scott Kugler and Heyla Vettyvel for Defendant TD Insurance

Cheryl M. Woodin and Joseph N. Blinick for Defendants St. Paul Fire and Marine Insurance Company and Travelers Insurance Company of Canada

Paul Tushinski and Gillian Eckler for the Defendant The Commonwell Mutual Insurance Group, incorrectly named The Commonwealth Mutual Insurance Group

Lisa A. Armstrong for Defendant Echelon General Insurance Company

Alan D’Silva, Patrick O’Kelly, Glenn Zacher and Alexandra Urbanski for Defendants Allstate Insurance Company of Canada and Unifund Assurance Company.

Costs Endorsement

[1] The plaintiffs filed proposed class actions against 15 insurers and the insurers’ government regulator alleging that the auto insurers were improperly deducting HST from statutory accident benefit payments and the government regulator was letting this happen.

[2] Two of the insurers settled their actions. The 13 non-settling insurers together with the government regulator brought a jurisdiction motion based on the Court of Appeal’s recent decision in Stegenga[^1] that held that the LAT has exclusive jurisdiction over all SAB-related disputes and no court actions are permitted.

[3] In a decision released on July 10, 2020 I concluded, based on Stegenga, that this court did not have jurisdiction over the proposed class actions against the defendant insurance companies. but did have jurisdiction over the proposed class actions against the defendant government regulator.[^2]

[4] I asked for costs submissions - first from the non-settling insurance companies, next from the plaintiffs, and then from the government regulator.

[5] I will deal with each of the cost awards in turn.

Costs payable by plaintiffs to defendant insurers

[6] The decisions of the Court of Appeal in Stegenga (about the LAT’s exclusive jurisdiction) and the Supreme Court in Bisaillon[^3] (that class actions cannot proceed in court where another tribunal has exclusive jurisdiction) made for a short and predictable jurisdiction motion. Given that each of the insurers’ arguments were the same, they sensibly agreed that one of them, Economical Mutual (that had litigated Stegenga) would take the lead, file a single factum and make the required submissions. Given that Stegenga and Bisaillon were directly on point, Economical’s submissions were largely indisputable and the plaintiffs had little to offer in response.

[7] I do not question the plaintiffs’ good faith in filing these proposed class actions. As I noted in my decision:

In principle, the class action was designed for this very purpose – class-wide allegations about defendant insurers improperly reducing SABs contrary to government guidelines; alleged regulatory negligence in the investigation and enforcement of complaints; individual recourse to the Licence Appeal Tribunal not viable because most of the HST amounts in question were less than the LAT filing fee …[^4]

[8] But for jurisdiction, this would have been a viable class proceeding. This doesn’t mean, however, that the defendant insurers are not entitled to their reasonable costs for prevailing on the jurisdiction motion. I do not accept the plaintiffs’ submission that no costs should be payable by the plaintiffs because of the novelty of the legal issue or the public interest nature of the proposed class litigation. The legal issue, after Stegenga and Bisaillon was no longer novel, and the public interest dimension, although significant, was not all-embracing and was really no different than the limited public interest dimension that is present in many other class actions where unsuccessful plaintiffs are nonetheless required to pay costs.[^5]

[9] The defendant insurers, through their lead litigant, Economical, are entitled to costs on a partial indemnity basis, to be divided amongst themselves as they deem appropriate. Given the almost slam-dunk nature of the jurisdiction motion (my reasons on this point, even with several long quotes, were only three and a half pages) the costs relating to this motion, in my view, should be in the range of $10,000 to $15,000.

[10] I am reassured in this regard by the plaintiffs’ certified submission that they would have sought $15,000 from the non-settling insurers had they prevailed on this motion. I am also reassured by the costs that were awarded to the successful defendant insurer by the motions judge ($3500) and by the Court of Appeal ($7500) in Stegenga where the LAT jurisdiction point was first argued.

[11] In my view, a costs award to the successful insurers in the amount of $15,000 would be appropriate. Add to this a further amount of $1000 per insurer for the costs of the action (minimal at best on the facts herein) and the overall total is $28,000. This, in my view, would be a fair and reasonable costs award.

[12] However, and apparently with a straight face, the 13 insurers have submitted costs requests that total almost $620,000. Seriously. The lead litigant, Economical, (who simply repositioned the submissions that it made in Stegenga,) asks for just under $140,000 and the 12 co-defendants ask for about $40,000 each – for an overall total of $620,000. This is a preposterous costs request that is excessive and unreasonable in the extreme. It’s probably best if nothing more is said about it.

[13] I am satisfied, based on the facts herein and my review of the factors set out in Rule 57.01(1) that a fair and reasonable costs award to the 13 non-settling defendant insurers is $28,000 all inclusive – that is, $15,000 for the motion and $13,000 for the actions.

Costs payable by government regulator to plaintiffs

[14] As I explained in my decision,[^6] the reasoning in Stegenga and Bisaillon does not assist the Financial Services Commission of Ontario defendants. I concluded that this court has jurisdiction to hear the proposed class actions against the FSCO defendants. The plaintiffs are entitled to their partial indemnity costs as against these defendants.

[15] I was pleased to learn that the costs payable by the FSCO defendants to the plaintiffs has been settled by the parties. The FSCO defendants have agreed to pay $12,500 all-in to the plaintiffs.

Disposition

[16] The plaintiffs shall pay $28,000 in costs to the non-settling defendant insurers and the FSCO defendants shall pay $12,500 in costs to the plaintiffs. The plaintiffs may request that FSCO forward the $12,500 costs award directly to counsel for Economical, in which case the plaintiffs will contribute a further $15,500 – both amounts to be paid in trust for the non-settling defendants and further paid out as these defendants deem appropriate.

[17] I am obliged to all counsel for their assistance.

Signed: Justice Edward P. Belobaba

Notwithstanding Rule 59.05, this Judgment [Order] is effective from the date it is made, and is enforceable without any need for entry and filing. In accordance with Rules 77.07(6) and 1.04, no formal Judgment [Order] need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this Judgment [Order] may nonetheless submit a formal Judgment [Order] for original signing, entry and filing when the Court returns to regular operations.

Date: September 2, 2020

[^1]: Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615. [^2]: Dorman v. Economical Mutual Insurance Company, 2020 ONSC 4004. [^3]: Bisaillon v. Concordia University, 2006 SCC 19, at para. 22. See also Curactive Organic Skin Care Ltd. v. Ontario, 2012 ONCA 81 at para. 4. [^4]: Dorman, supra, note 2, at para. 2. [^5]: See, for example, Leon v. Volkswagen AG, 2018 ONSC 5693 (cross-border securities trading) and Kaplan v. Casino Rama, 2019 ONSC 2025 (customer privacy breaches). In almost every class action, a segment of the public may have a significant interest. Yet costs are routinely awarded to a successful defendant. [^6]: Dorman, supra, note 2 at paras. 28-32.