Court File and Parties

COURT FILE NO.: CV-17-581322-00CP DATE: 20210513

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GEORGE AZAR, Plaintiff – and – STRADA CRUSH LIMITED, Defendant

BEFORE: Justice E.M. Morgan

COUNSEL: Henry Juroviesky, for the Plaintiff Rahool Agarwal, Vlad Calina, and Maya Bretgoltz, for the Defendant

HEARD: Submissions in writing

Costs endorsement

[1] On April 30, 2021, counsel met with me in a case conference to discuss next steps in this action. In my endorsement summarizing that discussion, I briefly reviewed some of the unusual features in the procedural history of this matter, including its certification and subsequent decertification under the Class Proceedings Act, 1992. I also described a motion that the Defendant intended to bring with respect to settling the terms of the Order that was previously heard by me: Azar v. Strada Crush Limited, 2021 ONSC 3245, at paras. 1-3. The Defendant is particularly concerned with clarifying the terms on which costs were awarded to it in that ruling.

[2] The costs at issue are the $37,800 awarded to the Defendant in my ruling of January 27, 2020: Azar v. Strada Crush Limited, 2020 ONSC 549, at para. 36. As of the date of the recent case conference, those costs were unpaid by the Plaintiff. Counsel for the Defendant served materials seeking to have the decertification Order provide that Plaintiff’s counsel is personally liable for those costs if his client would not pay them. It was Defendant’s counsel’s position that since Plaintiff’s counsel had provided a costs indemnity to his client at my direction in a previous motion, it was incumbent on Plaintiff’s counsel to honour that indemnity and not let the costs owing to the Defendant go unpaid: see Azar v. Strada Crush Limited, 2019 ONSC 4436, at para 18.

[3] At the April 30, 2021 case conference, the Defendant’s motion to settle the terms of the Order and to provide that costs be made personally payable by Plaintiff’s counsel was scheduled to be heard by me on July 5, 2021. Both sets of counsel determined that they are available on that date and that they would be ready to argue the motion as scheduled. I indicated in my case conference endorsement that a CaseLines account had been established for this action by the court office to facilitate the filing of materials.

[4] On May 5, 2021 – a week after the case conference and two months before the hearing of the Defendant’s motion – Plaintiff’s counsel advised me by in a letter emailed to my assistant that the costs awarded to the Defendant were being paid in full and that the motion for his personal liability for those costs need not proceed. The following week, on May 12, 2021, Defendant’s counsel advised me, also in correspondence emailed to my assistant, that the costs had been received and were paid in full.

[5] In their May 12, 2021 communication, Defendant’s counsel set out their position that the payment of the outstanding $37,800 in costs by the Plaintiff represents success in their motion to settle the Order and to have the outstanding costs paid by Plaintiff’s counsel. In light of what was characterized as a success in the motion, Defendant’s counsel indicated that they were now seeking further costs.

[6] Plaintiff’s counsel has provided me with written submissions in response to this latest costs request. It is his position that the $37,800 in costs were paid voluntarily in an effort to resolve the outstanding costs issue/terms of the Order, and to move on with the action. Plaintiff’s counsel is planning to seek recertification of the action, and I had indicated in my case conference endorsement, at para. 4, that the costs issue from the decertification ruling would have to be resolved prior to any recertification motion.

[7] The Defendant’s motion to have the Order provide for personal costs liability of Plaintiff’s counsel was never heard or decided by the court. As indicated, it was scheduled for July 5, 2021, which is still a month and a half away. The need for that motion to be heard has been dispensed with by the recent payment of the outstanding costs in full. I am advised that there are no other contentious terms of the decertification Order. Accordingly, what the Defendant now seeks is not so much the costs of its aborted motion (since one has no entitlement to costs of a motion that did not proceed), but rather costs thrown away in preparing the motion.

[8] Plaintiff’s counsel submits that this new request takes him by surprise. In his written submissions, he states that if Defendant’s counsel were going to seek further costs in this matter it is unfair that they did not “speak up”, as he put it, before the $37,800 was paid. The suggestion is that this might have changed his (or his client’s) willingness to resolve the issue by making the payment.

[9] In their reply, Defendant’s counsel refers to the fact that costs were sought in the Defendant’s Notice of Motion to settle the Order from the decertification motion, which is where the issue of Plaintiff’s counsel’s indemnity was raised. Counsel for the Defendant also indicates that the $37,800 in costs was delivered unilaterally by Plaintiff’s counsel without discussion as to the present motion to settle the terms of the decertification Order.

[10] I cannot agree with Plaintiff’s counsel’s characterization of the Defendant’s present motion. The Defendant was not moving for costs; it was moving for the costs already awarded in its favour to be recorded in the formal Order as being enforceable in a different way – i.e. against Plaintiff’s counsel rather than only against the Plaintiff himself. The $37,800 received by the Defendant this past week was not paid “voluntarily” as Plaintiff’s counsel puts it. It was paid pursuant to my ruling of January 27, 2021. It was already due and owing to the Defendant, regardless of whose funds were used by the Plaintiff to satisfy the debt.

[11] That said, I appreciate that Plaintiff’s counsel took a positive step in resolving the controversy that had erupted over costs. The full payment of the $37,800 has obviated the need for a further motion to settle the decertification Order and has freed up the July 5th date for other motions to be heard. Indeed, Plaintiff’s counsel has inquired as to whether that date can now be used for his proposed recertification motion.

[12] I am not certain that the parties will be in a position to argue a recertification motion by July 5, 2021, and so I do not want to schedule it without canvassing them on that issue. But the point is that Plaintiff’s counsel has served judicial economy and is making an effort to proceed with the case by resolving the outstanding costs matter without requiring the question to be argued.

[13] Section 131 of the Courts of Justice Act makes costs a discretionary matter for courts. The Supreme Court of Canada has indicated that there is a strong policy in the courts of encouraging parties to “reach a mutually acceptable resolution to their dispute without prolonging the personal and public expense and time involved in litigation”: Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 SCR 623, at para. 11. This has been described as “sound judicial policy” that “contributes to the effective administration of justice”: Ibid., quoting Kelvin Energy Ltd. v. Lee, 1992 CanLII 38 (SCC), [1992] 3 SCR 235, 259.

[14] The Defendant was, as indicated, fully entitled to be paid the costs awarded to it in my January 27, 2020 reasons for judgment. It should not have had to prepare a motion in order to be paid costs already awarded to it. But I appreciate that Plaintiff’s counsel saw that point well in advance of the motion. Paying those costs was a step in reducing the personal and public expense of further litigation over the matter, and in its own way contributed to the effective administration of justice.

[15] I view it as incumbent on courts to encourage parties to take reasonable steps in an effort to decrease the costs and increase the efficiency of the litigation process. In light of this overarching policy, I will exercise my discretion to dispense with any award of costs thrown away.

[16] Counsel should take out the Order from the decertification motion without any term referencing Plaintiff’s counsel paying the costs personally. Those costs have been paid and counsel’s role in that are not the subject of that Order.

[17] Counsel should also be in touch with my assistant with respect to a schedule for the next steps in this action. If another case conference is called for, that can be arranged in the upcoming weeks.

Morgan J.

Date: May 13, 2021