Court File and Parties

COURT FILE NO.: CV-20-644743

DATE: 20211019

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BANK-STROX RENOVATION INC., Plaintiff/Moving Party

AND:

LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA, LOCAL 183, DEREK MELO and OTHER UNIDENTIFIED INDIVIDUALS, Defendants/Responding Parties

BEFORE: Kimmel J.

COUNSEL: Leora Wise, for the Plaintiff

Daniel Iny and Geetha Philipupillai, for the Defendants

HEARD: August 7, 2020 (Supplementary written submissions on costs dated July 12, 2021, August 3, 2021 and September 24, 2021)

COSTS ENDORSEMENT

Procedural History

[1] A motion by Bank-Strox for an urgent interim and interlocutory injunction came before me for hearing on August 7, 2020. Given the urgency, I provided an initial endorsement to advise the parties of the outcome of the motion on August 14, 2020, with an endorsement containing my reasons to follow. My reasons were provided in an endorsement dated August 18, 2020 (in Bank-Strox Renovation Inc. v. Laborers’ International Union of North America, Local 183, 2020 ONSC 4911).

[2] The plaintiff’s motion was granted on terms that the parties were to incorporate into a consent order. My understanding is that order was never finalized. At the request of the parties, the issue of costs was deferred. This was, in part, because the parties were embroiled in other legal proceedings and it was thought that they might be able to resolve costs as part of a broader resolution if they had some time to do so. It was anticipated that any decision regarding costs might become a bargaining chip in the broader negotiations and it was agreed by both parties that it would be better to allow those to first run their course for a set period of time. I agreed to leave the issue of costs open for six months.

[3] Paragraph 71 of my August 18, 2020 endorsement allowed either party to come back and ask the court to make an award of costs within that timeframe: “If such a request is made, I will determine a process for brief, in-writing, page-limited costs submissions to be made by both sides. If neither side makes a request for a determination of costs by the court by February 18, 2021, costs will be deemed to have been settled.”

[4] The parties did not settle the other proceedings pending between them before this court or before the Ontario Labour Relations Board, nor the issue of the costs of the motion before me. The successful plaintiff intended to ask for costs to be determined, but inadvertently missed the February 18, 2021 deadline to do so. It sought the court’s indulgence for some extra time to try to settle costs, or to request that the court decide the costs issue. My April 12, 2021 endorsement, following an April 7, 2021 case conference to consider this extension request, provided as follows:

The underlying rationale for deferring the determination of costs does not appear to me to have been spent as long as there remain other issues outstanding between the parties. The costs were intended to be one of the bargaining chips in the broader negotiations and those do not appear to have run their course. The “deemed” settlement was a fiction that was created by the court under a discretionary order to allow the parties time to negotiate and I am prepared to extend that fiction for a brief time longer in service of that ongoing objective. However, I am not prepared to do so indefinitely. The extension will be peremptory to the plaintiff.

[5] The deadline in para. 71 of my August 18, 2021 endorsement was extended, nunc pro tunc, from February 18, 2021 to June 30, 2021. The plaintiff advised of its desire to have the court determine the issue of costs within the extended deadline and the parties exchanged their cost submissions in accordance with a consent timetable, that was approved and later amended by the court. It now falls to me to decide the issue of costs based on those submissions dated July 12, 2021, August 3, 2021 and September 24, 2021, respectively.

Overview of the Injunction Granted

[6] Given the time that has elapsed since my original decision and endorsement, it is helpful to repeat the overview that was contained in my August 18, 2020 endorsement, at paras. 2-7:

[2] Bank-Strox engages primarily in the restoration of balconies and garages at apartment buildings and condominium towers.

[3] Laborers’ International Union of North America, Local 183 (LIUNA) is the certified bargaining agent (the “Union”) of approximately thirteen (13) employees of Bank-Strox (the “Members”), who are currently negotiating for a first collective agreement with Bank-Strox. The Members were in a legal strike position at 12:01 a.m. on July 23, 2020.

[4] On July 23, 2020, the defendants and other members/representatives of Local 183 commenced picketing at the entrances of six apartment buildings and condominium sites in Toronto at which Bank-Strox is currently engaged in restoration projects: 1500 Bathurst Street, 276 St. George Street, 3700 Kaneff Crescent, 490 Eglinton Avenue East, 396 Avenue Road, and 666 Spadina Avenue (collectively, the “Sites”).

[5] Bank-Strox and the Members were in litigation for a number of years leading up to the certification of the union, and there is other ongoing litigation between the parties.

[6] Since the strike began on July 23, 2020 and up until the hearing of this motion, the police had been called nine times to attend at four of the Sites as a result of the picketing activity between July 23 and 27. While the strike is still in its early days and the aggressive picketing activities that precipitated this motion have not been continuous or persistent across all six Sites, it did not start off as a peaceful demonstration. Bank-Strox is concerned that the presence of the police did not effectively deter the unlawful and aggressive actions of the picketers and that their actions were only curbed as a result of the injunction proceeding and will resume if not enjoined.

[7] This is not an extreme situation, yet. The Union is correct that a robust society should be able to tolerate a certain level of tension and acrimony on a picket line. However, the picketers did not set the tone of this strike as a peaceful demonstration. Their initial behaviour on the picket lines was aggressive and the presence of the police, when called, did not cause them to cease all of the behaviours that the police advised them were unlawful. What has transpired so far is enough to satisfy the test for granting an injunction, which will be tailored to the situation so as to minimally impair the rights of the Members to express themselves during their legal strike action.

The Parties’ Positions on Costs

[7] The written submissions of the parties detail their respective positions.

The Plaintiff’s Position

[8] The plaintiff seeks substantial indemnity costs totalling $110,000.00 in legal fees (80% of its full indemnity fees) and $528.90 in disbursements (both amounts inclusive of HST). This is supported by a Costs Outline indicating full indemnity costs of legal fees of approximately $137,000.00 for its urgent injunction motion that was supported by fifteen affidavits, two affidavits in reply to the three responding affidavits filed, a detailed written legal briefing and a full day of oral argument. Before the parties exchanged their written cost submissions, the plaintiff offered to settle the costs of this motion for an all-inclusive amount of $60,000.00 on July 7, 2021.

[9] The plaintiff argues that its entitlement to costs is presumptively indicated as a result of its success in obtaining an injunction after meeting the heavy burden that it faced. Conversely, it is argued that the denial of the injunction that was requested against Mr. Melo personally was not a “win” for the defendants because, as a business representative of the defendant LIUNA, Mr. Melo is restrained by the injunction that was granted against: “the Union and its Members, agents, servants, representatives or substitutes or anyone acting under their instruction or having knowledge of the injunction order” in any event.

[10] The plaintiff relies upon Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, 140 O.R. (3d) 77, at paras. 8 and 12, where the Court of Appeal endorsed awarding substantial indemnity costs to, among other things, discourage frivolous claims and defences and inappropriate behaviour by litigants in their conduct of proceedings and as a means for the court to express disapproval of the conduct of one of the parties to the litigation.

[11] The plaintiff argues in this case that the union engaged in a campaign of harassment, intimidation, violence, and illegal activity that interfered with the plaintiff’s goodwill and important business relationships and prospects for future work. The plaintiff places particular emphasis on false accusations of assault by a Bank-Strox employee, made in an attempt to defeat the plaintiff’s motion, which were disproven by video footage. The plaintiff argues that these are circumstances worthy of sanction and that ought to attract an award of substantial indemnity costs.

[12] The plaintiff further argues, in reply submissions, that the labour injunction cases that the defendants rely upon, in which no or nominal costs were awarded, are distinguishable.

[13] The defendants brought a cross-motion challenging the admissibility of certain of the plaintiff’s evidence, which was partially successful and served to circumscribe the evidence that the court considered. However, the plaintiff notes that the injunction was still found to be justified even without regard to any of the impugned evidence.

The Defendants’ Position

[14] The defendants submit that the amount of actual legal fees reflected in the plaintiff’s Costs Outline (and by extrapolation, the amount of substantial indemnity costs claimed) is exorbitant and disproportionate to the nature of the issues and the reasonable expectations of the defendants, whose own all-inclusive costs are indicated on their Costs Outline to be just under $42,000.00 ($25,000.00 on a partial indemnity scale).

[15] In addition to the “divided” success on their cross-motion, the defendants also argue that some of the more onerous restrictions sought by the plaintiff, regarding the length of delay and the permitted number of picketers, were not ordered by the court. It is suggested that there was some measure of divided success on the motion, which the court should factor into the costs assessment.

[16] The defendants suggest that this case should be aligned with other labour injunction cases in which no or nominal costs (in the range of $10,000.00 to $20,000.00) were awarded against unions when picketers were enjoined on similar terms, especially because the terms in this case were tempered by the court from what the plaintiff had asked for. The Union argues that it is also relevant to the costs assessment that there was no finding of contempt against the defendants.

[17] The defendants also argue that awarding the plaintiff substantial indemnity – or even partial indemnity costs – would not serve the policy rationale and objectives outlined by the Court of Appeal in Net Connect. Rather, they suggest that any significant award of costs in this case may encourage employers to seek onerous and unjustified restrictions on picketing activity, which are not tailored closely to the circumstances of the particular situation, hoping that they will be rewarded with significant costs awards regardless of whether the court imposes the full scope of restrictions they seek.

[18] The defendants argue that the leading jurisprudence regarding picketing injunctions that emphasizes the need for restraint when dealing with the expressive and associational freedoms at stake should be carried through to the court’s consideration of costs: see e.g. Industrial Hardwood Products (1996) Ltd. v. Industrial Wood and Allied Workers of Canada, Local 2693, 2001 CanLII 24071 (ON CA), 52 O.R. (3d) 694 (C.A.), at para. 37-38. Otherwise, there is the risk that awards of costs in picketing injunctions could act as a “sledgehammer” which would be contrary to the public interest: see Connolly Construction Ltd. v. U.A., Local 512, 1983 CarswellNB 168, at paras. 6-7.

[19] The defendants submit that, if any costs are to be awarded to the plaintiff, a reasonable costs award should not exceed $15,000.00 (inclusive of fees and disbursements).

Costs Analysis

[20] Awards of costs are governed by r. 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”).

The Plaintiff is Entitled to Costs

[21] Costs should follow the event. The plaintiff is entitled to an award of costs as the successful party on this motion. This was not a case of divided success. The plaintiff sought an injunction. The defendants opposed it and raised a number of evidentiary challenges (some of which were successful and some of which were not, but none of which impacted the outcome of the case). In addition to opposing the injunction in its entirety, various restrictions were sought by the defendants on the scope of the order sought, some of which were incorporated into the final order, and some of which were not. There was some give and take in the positions regarding the scope of restrictions, but this was not a case of extreme overreaching by the plaintiff in the terms sought.

[22] The plaintiff was successful in the ultimate result and that is the measure of success. The denial of the injunction requested against Mr. Melo personally was not the focus of the evidence or argument and was functionally irrelevant given that his conduct was restrained by the scope of the injunction granted. Neither side presented any separate Costs Outline associated with the issues specific to Mr. Melo.

[23] The factors in the labour injunction cases referred to by the defendants in which the court declined to award any costs are not present in this case. This case did not involve a novel point of law nor was it a borderline case. There were numerous instances of illegal or unlawful picketing activity, including assaults and threats. Examples of findings made in my August 18, 2020 endorsement include:

a. Picketers were not universally respecting the advice of the police when told not to trespass and not to block non-unionized workers and sub-contractors from entering the Sites. While some picketers responded to this advice by moving off the private property, their conduct appears to have persisted in a number of instances, despite the advice and presence of the police.

b. None of the police efforts appear to have put an end to the morning work interruptions at the Sites. To the contrary, the verbal and physical altercations have persisted.

c. While these occurrences have taken place over a short period of time, I find that they amount to a sufficiently serious and ongoing, daily obstruction of the plaintiff’s ability to undertake its planned work at the Sites.

d. The picketers have shown a lack of respect for the police efforts by their continued delay of vehicles and attempts to obstruct individuals from entering the Sites to work each weekday morning and by their willingness to threaten the workers and in some instances get physical. This behaviour needs to be curtailed before it escalates further. The picketers appear to be willing to test the limits and extent to which the police are prepared to get involved.

e. In this case the unchallenged evidentiary record discloses examples of the picketers:

i. Obstructing and interfering with persons, including in particular the plaintiff's employees and vehicles, as well as third party subcontractors, customers and suppliers from accessing the Sites;

ii. Trespassing on the Sites; and

iii. Engaging in physical and verbal intimidation, assaults and threats of assault, violence and threats of violence, and harassment to individuals attempting to cross the picket lines.

f. The evidence about delays and interruptions in this case does not amount to total blockades. However, the targeted blocking of access to the Sites at critical entry times for construction workers each weekday morning without any clear indication of when access will be granted appears to be designed to interfere with the normal arrival and commencement of construction work in the mornings. These access delays can affect work during more than just the few hours of picketing time each day if workers and sub-contractors are not prepared to wait around.

g. While some work is continuing, these activities also said to be interfering with the plaintiff’s goodwill and an important business relationship with the property manager of all but one of the Sites. This property manager (Cromwell) has engaged the plaintiff on various projects in the past and the plaintiff hopes to get business from this property manager in the future.

h. It can be inferred that threatened delays to multiple projects for one property manager (Cromwell) could lead that customer to look for another contractor for these or future projects.

i. In this case, there is no evidence of any purposeful communication by the picketers about the reason for their strike and their objectives at the bargaining table. They seek to exert pressure on the plaintiff through the daily attempts to prevent workers and sub-contractors from working at the Sites (on a rotating basis, without warning of which ones) through the use of physical and verbal threats, intimidation, and the strategic blocking of access during the weekday mornings.

Scale and Quantum of Costs

[24] Having considered the submissions of the parties, and having regard to the Rule 57.01 factors that are to guide the exercise of my discretion in awarding costs under s. 131 of the CJA, I am awarding the plaintiff its partial indemnity costs of this application, fixed in the amount of $55,000.00, plus disbursements of $528.000 (both amounts inclusive of plus applicable taxes).

[25] Despite my findings regarding the defendants’ conduct, noted above, I do not consider this to be a case that warrants the level of judicial disapproval that is intended to be reflected in an award of substantial indemnity costs. Labour injunction cases often arise in situations of “legal” strikes, during which the union members are picketing in circumstances that involve some level of trespassing and altercations. While trespassing and verbal and physical altercations are not condoned, they are a reality and part of what the court must consider in many of these cases. The need to consider the effectiveness of police involvement is a further recognition of this reality. The defendants are correct that, among the many findings regarding the conduct of the union members made in reaching the conclusion that an injunction should issue (summarized above), there was no finding of contempt.

[26] The principle of indemnity, which is a relevant consideration under r. 57.01(0.a), does not translate into an award of full or even substantial indemnity costs in most cases. Those are the exceptions; the norm is partial indemnity costs. An award of partial indemnity costs strikes the right balance in this case.

[27] While the amount of costs indicated in the defendants’ cost outline is one factor that the court may take into account when considering what their expectations might have been if they lost and were awarded costs under r. 57.01(0.b), I am mindful of the fact that their Costs Outline was prepared after they knew the outcome of the motion and, while I do not suggest any nefarious, there can be a concern in these circumstances that the losing party’s costs outline may have been tailored. But even if it was not, the time and fees indicated appear to me to be on the low end of the scale of what would objectively be anticipated it would cost for a hard fought injunction with multiple affidavits and extensive written and oral submissions. The amount indicated in the defendants’ Costs Outline (of $25,000.00 on a partial indemnity scale) is not the only measure of what might be objectively expected or proportionate to award for costs in a case such as this.

[28] I have considered the argument made by the defendants that costs should not serve as a disincentive against union members exercising their recognized expressive and associational freedoms or be used as a sledgehammer. That is a valid consideration, but in this case it must be measured against the conduct of the picketers, which was aggressive and crossed the line from the outset, was consistently testing the limits of their lawful rights, was exercised with a lack of respect for the police efforts to maintain the peace and included allegations of assault that were objectively demonstrated to have been false through video surveillance evidence subsequently obtained.

[29] The principles of proportionality and what I consider the reasonable objective expectations of the defendants should have been regarding the potential costs award they might face if they lost, have caused me to reduce the amount of partial indemnity costs claimed by the plaintiff. I am not criticizing the time and effort expended by plaintiff’s counsel on this hard fought motion, but there is still a balance that has to be factored in. I have fixed the plaintiff’s partial indemnity costs in the all-inclusive amount of $55,000.00. This fee amount is within the range (albeit slightly less than) what the plaintiff offered to settle the costs for in early July 2021. While that was not a Rule 49 offer per se, it is an indication that the amount I have awarded is within a range of reasonable, as I take the offer to have been made in good faith by the plaintiff in an effort to resolve the issue of costs on terms it considered to be reasonable. I find this to be a reasonable and proportionate amount of costs to award in the circumstances of this case.

[30] The amount I have awarded is arbitrary, but costs awards often are, which is why they are discretionary. The plaintiff is also entitled to recovery of the claimed disbursements of $528.00 (inclusive of applicable taxes) which appear from the plaintiff’s costs outline to be reasonable.

Costs Award

[31] Having regard to all of the submissions, I have fixed the plaintiff’s partial indemnity costs in the all-inclusive amount of $55,000.00, which is significantly less than the partial indemnity costs they claimed (of $94,307.68) and about double what the defendants indicated their partial indemnity costs to be ($25,000.00), plus the claimed disbursements of $528.00. In my view, this leads to a fair and reasonable outcome in the circumstances of this case.

[32] This endorsement is effective from the date it is made and is enforceable without any need for formal entry and filing.

Kimmel J.

Date: October 19, 2021