COURT FILE NO.: CV-19-00625030-00CP

DATE: 20211020

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RINA DEL GIUDICE and DANIEL WOOD

Plaintiffs

• and -

PAIGE A. THOMPSON, CAPITAL ONE FINANCIAL CORPORATION,

CAPITAL ONE BANK (CANADA BRANCH), CAPITAL ONE (SERVICES) CANADA INC., CAPITAL ONE, N.A., CAPITAL ONE BANK (USA), N.A., GITHUB, INC., AMAZON WEB SERVICES INC., AND AMAZON WEB SERVICES (CANADA) INC.

Defendants

John A. Campion, R. Douglas Elliott, Glyn Hotz, Darrel N. Hotz, Hugh Scher, and Jeff Childs for the Plaintiffs

Laura F. Cooper, Sarah J. Armstrong, Alex D. Cameron, Vera Toppings and Pavel Sergeyev for the Defendants Capital One Financial Corporation, Capital One Bank (Canada Branch), Capital One (Services Canada Inc., Capital One, N.A., Capital One Bank (USA), N.A.

Scott Kugler, Brent J. Arnold, Elie Laskin and Kavi Sivasothy for the Defendants Amazon Web Services Inc., and Amazon Web Services (Canada) Inc.

Proceeding under the Class Proceedings Act, 1992

HEARD: In writing

PERELL, J.

REASONS FOR DECISION - COSTS

A. Introduction

[1] This is a costs decision in this proposed class action under the Class Proceedings Act, 1992.[^1]

[2] The action has been dismissed as against the Defendants: (a) Capital One Financial Corporation, Capital One, N.A., Capital One Bank (USA), N.A., Capital One Bank (Canada Branch), Capital One Services Canada Inc., (collectively “Capital One”); and (b) Amazon Web Services Inc., and Amazon Web Services (Canada) Inc. (collectively “Amazon Web”). The action was discontinued as against the Defendant GitHub Inc.[^2]

[3] In the action, it was alleged that on March 22 or 23, 2019, the Defendant Paige Thompson hacked the data base of personal information collected by Capital One from American and Canadian citizens. The Capital One data was stored on the computer servers of Amazon Web. Ms. Thompson misappropriated the data. She posted the data on the website of GitHub, which provides a forum for software developers to share information. As a consequence of this data breach, personal and confidential information of 106 million applicants for Capital One credit cards was exposed or became vulnerable to exposure to the public. It is estimated that approximately six million Canadians were affected.

[4] On August 6, 2019, Rina Del Giudice commenced a proposed Canadian class action with respect to the data breach. Subsequently, Daniel Wood became a co-Plaintiff.

[5] Class Counsel are a consortium: (a) Gardiner Roberts LLP; (b) Cambridge LLP; (c) Hotz Lawyers; and (d) Scher Law Professional Corporation. The consortium brands itself as “PDBL – Privacy and Data Breach Law Group.” The lead counsel are John A. Campion and R. Douglas Elliott. On April 30, 2020, the consortium was granted carriage of the proposed class action.[^3]

[6] In their original Statement of Claim, the Plaintiffs advanced a $10.9 billion data breach case against the Defendants. On August 27, 2020, the Plaintiffs delivered a Fresh as Amended Statement of Claim, in which they advanced a $240 billion data misappropriation and misuse case.

[7] On August 27, 2020, I directed that the certification motion have two phases. Phase I was to determine whether and the extent to which the Plaintiffs satisfied the cause of action criterion, the first of the five statutory criteria that must be satisfied for an action to be certified as a class proceeding. I scheduled five days of hearing in December 2021 for the four remaining certification criteria.

[8] There were three days of argument on June 7, 8, and 9, 2021 for Phase I.

[9] For Phase I, the Defendants asserted that none of the nineteen pleaded causes of action were certifiable. They submitted that the Plaintiffs had not properly pleaded any recognized causes of action. For several causes of action, the Defendants submitted that constituent elements were missing. They submitted other causes of action are not known to the law. The Defendants recognized that several of the pleaded causes of action were novel, but the Defendants submitted that these novelties should be struck because they go beyond the incremental development of the common law. The Defendants submitted that all of the causes of action should be struck without leave to amend.

[10] After the Phase I hearing, I concluded that the Plaintiffs’ Fresh as Amended Statement of Claim should be struck out in its entirety without leave to deliver a Second Fresh as Amended Statement of Claim. I struck the Plaintiffs’ Fresh as Amended Statement of Claim in its entirety. I dismissed the action as against Capital One and Amazon Web.[^4]

[11] Capital One incurred actual legal costs of approximately $900,000 in defending the action. It requests costs of $814,595.10, all inclusive, on a substantial indemnity basis or costs of $678,945.27, all inclusive, on a partial indemnity basis. The claim for costs does not include costs associated with the Plaintiffs’ motion for an injunction and a related refusals motion.

[12] Amazon Web incurred actual legal costs of approximately $600,000. It requests costs of $549.849.04 on a substantial indemnity basis or costs of $458,207.53 on a partial indemnity basis.

[13] The Plaintiffs acknowledge that Capital One and Amazon are entitled to their costs - but only for a pleadings motion. The Plaintiffs submit that there is no basis for a costs award on a scale other than a partial indemnity basis.

[14] The Plaintiffs submit that the costs claimed by the Defendants are excessive and not within the reasonable expectations of a party bringing a s. 5(1)(a) motion, or a motion under rule 21.01(1)(b) of the Rules of Civil Procedure.[^5]

[15] The Plaintiffs submit that having regard to the normative costs principles and also the principles and policies of the Class Proceedings Act, 1992, the appropriate awards of costs in the immediate case are $150,000, all inclusive, to Capital One and $75,000, all inclusive, to Amazon.

[16] For the reasons that follow, I grant the costs on a substantial indemnity basis. I award Capital One $725,000, all inclusive, and I award Amazon Web $500,000, all inclusive.

[17] In my Reasons for Decision on the certification motion, I describe in detail, the procedural history of this action. In those reasons, and in my Reasons for Decision with respect to several interlocutory motions including the associated costs decisions,[^6] I describe in excruciating detail, some, but not all, of the unfortunate circumstances that in my opinion justify costs on a substantial indemnity basis. I incorporate those reasons for decision and make them part of the immediate decision.

B. The Scope of the Claim for Costs

[18] Capital One and Amazon One claim the costs of the action including the costs of the Phase I motion. The Plaintiffs submit, however, that the Defendants may only claim the costs associated with Phase I of the certification motion, which was a pleadings motion without evidence, cross-examinations, etc. and which motion was procedurally staged before the completion of pleadings, the delivery of responding materials for Phase 2 of the certification motion, cross-examinations, productions, examinations for discovery, etc.

[19] The Plaintiffs submit that the Defendants cannot claim costs extraneous to the Phase I motion.

[20] The Plaintiffs did not identify what portions of the Defendants’ respective Bills of Costs were extraneous to Phase I of the certification motion. Rather, they submitted a Plaintiffs’ Bill of Costs for what they would have claimed for costs had they been successful on Phase I of the certification motion. The Plaintiffs’ Bill of Costs for Phase I certification motion reveals that the Plaintiffs actual costs for legal expenses exclusively for Phase I was $451,074.64, all inclusive. On a substantial indemnity basis, the Plaintiffs’ costs claim for Phase I would have been $361,174.89, all inclusive. On a partial indemnity basis, the Plaintiffs’ costs claim for Phase I would have been $271,275.14, all inclusive.

[21] The prime reason that I directed that there should be a bifurcated certification motion was to determine which of the nineteen causes of action pleaded called for the Defendants to plead and marshal evidence for a defence. Given the Defendants’ position of challenging all of the causes of action and also raising jurisdictional challenges, I allocated three days of argument just for the cause of action criterion.

[22] I did not anticipate that none of the pleaded actions would fail to satisfy the cause of action criterion, and the purpose of the bifurcation motion was to reduce both sides’ costs for the certification motion and to reduce both sides’ exposure to costs for the certification motion. I thought it salutary not to require either party to incur the expense of putting together an evidentiary motion record until it was determined what causes of action would be going forward substantively or jurisdictionally.

[23] In the immediate case, had I not bifurcated the certification motion, and had I decided all the certification criterion at one hearing, the costs consequences for the unsuccessful Plaintiffs, who were shipwrecked on the cause of action criterion, would make the Defendants’ present large claim for costs microscopic in comparison to what they could claim for having prepared an evidentiary motion record to defend nineteen causes of action and to argue the four additional certification criteria.

[24] The result of Phase I of the certification motion was that the Plaintiffs’ proposed class action was dismissed in its entirety. It is trite, normal, and appropriate in these circumstances to award the successful defendants their costs for their success on the motion and for their success in having the action dismissed.

[25] No purpose would be served by bifurcating the costs assessment in the immediate case. No purpose would be served by determining just the costs of the motion and then determining by a separate subsequent costs assessment the Defendants’ costs of the action, although it might be interesting to do so because it would almost certainly reveal that Class Counsel has invested millions of dollars in legal services for prosecuting this action, and that exercise of a separate assessment of the Defendants’ costs would provide a better comparable for the Defendants’ costs extraneous to the Phase I action.

[26] In any event, the Plaintiffs’ objection to the scope of the claim for costs including costs extraneous to Phase I is a quibble precisely because the certification motion was bifurcated so that the bulk of the Defendants’ work would be and was about attacking the Plaintiffs’ pleading. In other words, there are not a great deal of costs for work extraneous to the Phase I motion.

[27] I, therefore, shall proceed to assess the Defendants’ costs for their success in having the proposed class action dismissed which includes their work extraneous to the Phase I motion.

C. The Scale of Costs

[28] The Plaintiffs submit that there is no reason for this court to depart from the ordinary rule that costs are to be awarded on a partial indemnity basis. The Plaintiffs submit that there was simply no conduct on the part of the Plaintiffs or their Counsel that warrants a departure from the average costs awards noted for pleadings or certification motions in class proceedings.

[29] The Plaintiffs submit that they were entitled to amend their pleadings as their understanding of the case evolved over time and that they are entitled to advance every reasonable claim they have against the Defendants. The Plaintiffs submit that there is nothing in the Fresh as Amended Statement of Claim that would justify a departure from the normal partial indemnity costs award and that the Plaintiffs have a right to strategically frame their pleadings as they wish.[^7]

[30] The Plaintiffs submit that in the circumstances of the immediate case, it was their counsel’s solemn obligation to urge the Court to give access to justice for the vulnerable Ms. Del Giudice and to seek to modify the behaviour of Capital One, which had disregarded her right to privacy.

[31] The Plaintiffs submit that their lawyers did not make allegations of unprofessional and improper conduct against Capital One and its counsel but rather their lawyers raised the concern that there was a threat to the personal dignity of Ms. Del Giudice by the production of her data without prior Court consideration.

[32] The Plaintiffs submit that their lawyers had an unyielding duty to pursue their Plaintiffs’ and the Class Members’ case to the best of their ability and to protect their client’s interest in the strongest possible terms. The Plaintiffs submit that believing themselves to be wronged, they had a right to litigate vigorously even if ultimately unsuccessful.[^8] Thus, the Plaintiffs write in their costs submissions:

Counsel have a duty to pursue their client’s case to the best of their ability and to protect their client’s interest in the strongest possible terms. This duty is not new. Henry Brougham, later Lord Chancellor, in his defence of Queen Caroline against the charge of adultery brought against her by her husband, King George IV, addressed the House of Lords in this way:

[A]n advocate, in the discharge of his duty, knows but one person in all the world, and that person is his client. To save that client by all means and expedients, and at all hazards and costs to other persons, and, among them, to himself, is his first and only duty; and in performing this duty he must not regard the alarm, the torments, the destruction which he may bring upon others. Separating the duty of a patriot from that of an advocate, he must go on reckless of consequences, though it should be his unhappy fate to involve his country in confusion.[^9]

This expression of a lawyer’s unyielding duty to pursue his client’s case to the fullest extent “endures because it is essential to the integrity of the administration of justice.”

[33] The Plaintiffs submit that neither the Plaintiffs nor their Counsel should be sanctioned for pursuing the action to protect the privacy interests of the Plaintiffs or putative Class Members against powerful defendants.

[34] Respectfully, I say that the Plaintiffs’ submissions do not accord with the actual circumstances of the case that I have been case managing since its outset. There are ample justifications for awarding costs on a substantial indemnity basis in the immediate case.

[35] I begin by noting that contrary to the Plaintiffs’ submission, their counsel did make allegations of unprofessional and improper conduct against Capital One and its counsel and against the counsel of Amazon Web both in correspondence and in open court (and also against counsel of GitHub, for that matter before the Phase I motion.).

[36] There is no doubt that the Plaintiffs’ lawyers before and at the Phase I hearing submitted that the Defendants’ lawyers had breached their professional obligations. In this regard, I repeat what I wrote in paragraphs 38-41 and 48-50 of my Reasons for Decision for the Phase I motion:

38. On June 9, 2021, after hearing some submissions from the parties, I treated the case management conference as a preliminary motion and Phase I got underway. There was an uproar about the Document Brief.

39. Ms. Armstrong told me that over the weekend, Mr. Campion had objected to her filing of the Document Brief as improper and as a breach of Ms. Del Giudice’s privacy and of the Rules of Civil Procedure.[^10] She denied impropriety, but said, however, that the brief had never been filed in the court file and that she had withdrawn the documents from https://ontariocourts.caselines.com, where the brief had been filed for the purposes of the hearing of Phase I. She said that she had offered to refile a redacted version of the documents, but Mr. Campion had declined this solution.

40. Mr. Campion submitted that the filing of the Document Brief was an abusive act meant to intimidate him personally and to intimidate and embarrass Ms. Del Giudice and to scare her from proceeding with her class action. He submitted that the filing of the Document Brief was a breach of privacy by Capital One’s and Amazon Web’s lawyers and another invasion of privacy by Capital One and Amazon Web. He said that the Defendants’ lawyers had breached their duties as officers of the court by filing the documents without court approval and without the documents being under seal. He said the Defendants’ lawyers had improperly attempted to convert a pleadings motion into a summary judgment motion. He said that he had not appreciated until the week before the motion, when he began his preparation for the argument, that Capital One and Amazon Web had filed Ms. Del Giudice’s credit application that contained confidential information about her occupation, her income, and her SIN number. He said the Defendants knew and had acknowledged that this information was confidential personal information. He said that the documents should not have been unilaterally filed without a sealing order and a direction from the court. He objected to the filing and unilateral use of the Document Brief. He asked the court to make a direction that the documents were not admissible. He said that the court should chastise the Defendants and their lawyers for their intimidating conduct and breaches of confidence. He said that he was entitled to cross-examine and have the authenticity of the documents and Ms. Del Giudice’s signature proven. He said that he is entitled to have this case tried and that it would be egregiously unfair to allow the Defendants to turn a pleadings motion into a summary judgment motion based on contract documents that have never been proven and that were not referred to in the Plaintiffs’ pleadings. He said that if the court directed that the documents were accepted, then he would proceed under protest. He said that, in any event, the filing of the documents was a fatal mistake by Capital One and Amazon Web because the filing was both an admission of wrongdoing and a demonstration that these Defendants had violated the privacy of Ms. Del Giudice once again. He said that while he objected to the filing of the contract documents, he would capitalize on their filing to show that his clients had numerous viable causes of action.

41. After hearing Mr. Campion’s submissions, I did not call on Ms. Armstrong to reply, and I directed that the Document Brief could be used on the certification motion. After my direction, Mr. Campion said he would proceed under protest, and he asked that the Document Brief be sealed. Ms. Armstrong said that she would seek instructions, and later in the hearing, she advised that Capital One did not oppose a sealing Order.

42. If there is something beyond obviousness, it is that Ms. Del Giudice’s application form was incorporated by reference in her Fresh as Amended Statement of Claim. If Ms. Del Giudice had a right of privacy or confidentiality with respect to those documents, she waived it when she decided to be the champion for the other Capital One cardholders and sue for $240 billion. I do not believe that she or Mr. Campion were intimidated in the least by the filing of the Document Brief. If Ms. Del Giudice is genuinely scared to proceed, then she is not qualified to be a representative plaintiff notwithstanding her affidavit in the Certification Motion record that deposes her championing qualities. Ms. Del Giudice is suing to recover $240 billion, and she has experienced battle-hardened lawyers to protect her for the legal warfare that befits such a prize. For present purposes, I assume that she is up to the task and will not be intimidated.

43. Mr. Campion’s submission that there was unprofessional or improper conduct by Ms. Armstrong or Mr. Kugler is without a scintilla of merit. The filing of the contract documents was not a breach of privacy. Capital One was filing documents that ought to and normally would have been filed by Class Counsel on a certification motion. Ms. Armstrong and Mr. Kugler were professional in providing a defence of their clients who were being sued for $240 billion and whose liability remains to be determined.

44. Save for the matter of redacting the SIN number and the amount of Ms. Del Giudice’s income, there was nothing that would remotely justify a sealing order in the immediate case. I simply direct that Capital One file the Document Brief with personal information redacted.

[37] The Plaintiffs’ reference in their costs submission to Henry Brougham, later Lord Chancellor, in his defence of Queen Caroline is not apt. In the immediate case, the Plaintiffs’ lawyers are acting pursuant to a contingency fee retainer for clients suing for $240 billion in the Superior Court of Ontario. In the Trial of Queen Caroline, Lord Brougham was acting for a client in what was in effect a public trial in the House of Lords of the English Parliament. The aristocratic peers were debating the Pains and Penalties Bill 1820. The statute had been introduced at the urging of King George IV to strip Queen Caroline of the title of queen and to dissolve the royal marriage. In the immediate case, in the context of the certification motion, the indignity that Ms. Del Guidice’s lawyers sought to protect her from suffering was that it would be revealed to the public what is her salary as a cook. The indignity that Lord Brougham sought to spare Queen Caroline was being dethroned and divorced. (The bill passed the House of Lords, but the statute was not submitted to the House of Commons because of Queen Caroline’s popularity with the public.)

[38] Lord Brougham said what he said, but that’s not the end of the story. Years later, at a dinner in the Inner Temple, Lord Brougham, repeated his remarks, after which Lord Chief Justice Alexander Cockburn rose to speak:

My noble and learned friend Lord Brougham said that an advocate should be fearless in carrying out the interests of his client; but I couple that with this qualification and this restriction – that the arms which he wields are to be the arms of the warrior and not of the assassin. It is his duty to strive to accomplish the interests of his clients per fas [by means of justice] not per nefas [by means of injustice]: it is his duty to the utmost of his power to seek to reconcile the interests he is bound to maintain, and the duty is incumbent upon him to discharge, with the eternal and immutable interests of truth and justice.[^11]

[39] In the immediate case, the Plaintiffs’ submissions of their glorious cause and duties as advocates to fight the unbeatable foe, to right the unrightable wrong, to fight for the right without question or pause, to strive with their last ounce of courage and to be willing to march into Hell for that cause is to tilt at windmills.[^12] The Defendants and the Defendants’ lawyers never disputed the importance of protecting the Class Members’ privacy and human dignity, and the Defendants’ lawyers never suggested that the Plaintiffs or the Plaintiffs’ lawyers were not entitled to vigorously prosecute Capital One and Amazon Web. It was Plaintiffs’ lawyers that brought up the matter of the Defendants’ lawyers acting unprofessionally. It was the Plaintiffs’ lawyers who brought up the issue of the courageous advocate fighting the glorious fight as the justification for advancing the unsubstantiated proposition that the Defendants’ lawyers had breached their professional responsibilities and had attempted to trick the court and abuse the Plaintiffs and their lawyers.

[40] If the Plaintiffs are entitled to vigorously prosecute, then the Defendants are just as much entitled to vigorously defend, but it was the Plaintiffs not the Defendants that brought up the matter of when the line of professionalism gets crossed. In the immediate case, all the Defendants did was put the Plaintiffs to the test of the cause of action criterion of s. 5(1) of the Class Proceedings Act, 1992, which, by the way, the Plaintiffs were obliged to do in any event, because even on a consent certification, the court must be satisfied that all of the criteria for certification are satisfied.[^13]

[41] Similarly, the Plaintiffs’ submissions about their entitlements to amend their pleadings as their understanding of the case evolved over time, to advance every reasonable claim they have against the Defendants, and to strategically frame their pleadings as they wish are to tilt at windmills that do not exist. Neither the Defendants nor the court got in the way of the Plaintiffs’ rights to plead their action as they saw fit. Unfortunately, the Plaintiffs saw fit to plead in a way that did not satisfy the requirements of the Rules of Civil Procedure and the substantive law.

[42] The Plaintiffs’ failure was an absolute failure, and it was a self-inflicted failure because: (a) their Fresh as Amended Statement of Claim egregiously contravened the rules of pleadings; (b) it was plain and obvious that the pleading failed to disclose any legally viable causes of action; and (c) the pleading improperly and inexplicably transformed a straightforward data breach case into a data misappropriation and misuse case that was largely unrelated to the facts that gave rise to the litigation.

[43] The Plaintiffs are largely responsible for the high litigation expense of the proceedings. They substantially expanded the scope of the action from the action that was described at the carriage fight motion. The Plaintiffs’ litigation strategy and Class Counsel’s conduct in implementing that strategy were an enormous investment in prosecuting the action and required Capital One and Amazon Web to respond with a commensurate investment in defending the action and in defending their counsel from unsubstantiated allegations of professional misconduct.

[44] The Defendants never suggested that the Plaintiffs’ claim should be dismissed because the action was frivolous or vexatious. The Defendants, as defendants are entitled to do, submitted that the Plaintiffs had not complied with the technical rules of pleading and that the Plaintiffs had not demonstrated a reasonable cause of action. The Defendants’ lawyers acted with professionalism and honourably.

[45] To be clear, I do not suggest that the Plaintiffs’ lawyers acted dishonourably, and they certainly were entitled to passionately and vigorously advance the Plaintiffs’ case, but I do say that there is no inevitable conflict between a lawyer’s duty to resolutely advance his or her argument and his or her duty to treat the opponent and his or her lawyer with courtesy, dignity, and respect.

[46] In the immediate case, I alerted the Plaintiffs at the carriage motion that their pleadings would be challenged on technical grounds by the Defendants. It is inevitable and necessary in class actions that the Plaintiff satisfy the cause of action criterion for certification and the Plaintiffs’ lawyers knew that their pleading was going to be tested at the certification motion. Plaintiffs’ counsel ignored my alert. The Fresh as Amended Statement of Claim grossly violated the technical rules of pleading. The Plaintiffs failed to satisfy the substantive requirements of the cause of action requirements of the Rules of Civil Procedure and the Class Proceedings Act, 1992. The Plaintiffs’ submission about unprofessional and improper conduct by the Defendants’ lawyers was uncalled for and was without a scintilla of merit.

[47] Costs on a substantial indemnity scale or full indemnity scale are reserved for rare and exceptional cases, where the conduct of the party against whom costs is ordered is reprehensible or where there are other special circumstances that justify costs on the higher scale.[^14] In my opinion, the case at bar is one of the rare and exceptional cases where costs on a substantial indemnity basis is warranted.

D. The Quantum of Costs

[48] I turn now to the matter of the quantum of the Defendants’ award of costs.

[49] In Pearson v. Inco Ltd.,[^15] at para. 13, the Court of Appeal established the following principles for fixing costs on a certification 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 object of the Class Proceedings Act, 1992 is to provide enhanced access to justice.

[50] The court's discretion in awarding costs arises under the authority of s. 131 of the Courts of Justice Act[^16] and is to be exercised by a consideration of the factors in rule 57.01(1) of the Rules of Civil Procedure.[^17] 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.

[51] In their costs submissions, the Plaintiffs submit that the costs claimed by the Defendants are excessive and not within the reasonable expectations of a party bringing a s. 5(1)(a) motion, or a motion under rule 21.01(1)(b) of the Rules of Civil Procedure. The Plaintiffs submit that the amount claimed for costs must be fair and reasonable for the unsuccessful party in the particular circumstances.

[52] Relying on several costs decisions of Justice Belobaba[^18] and Justice Morgan[^19] and two of my own costs decisions,[^20] the Plaintiffs submit that costs awards tend to range between $100,000 and $300,000 on a partial indemnity basis. Based on this range of costs awards and the particular circumstances of the immediate case, the Plaintiffs submit that the appropriate awards of costs in the immediate case are $150,000, all inclusive, to Capital One and $75,000, all inclusive, to Amazon.

[53] I agree that a critical controlling principle for the awarding of costs is that the sum awarded reflect the fair and reasonable expectations of the unsuccessful litigant.[^21] In Boucher v. Public Accountants for the Province of Ontario,[^22] after a two-day hearing of a judicial review application, the motions judge fixed costs on a partial indemnity scale at $187,682.51, all inclusive. On appeal, the Court of Appeal reduced the aggregated award to $63,000, all inclusive. At para. 24 of his judgment, Justice Armstrong stated:

24. The appellants submit that the motions judge accepted the bills of costs that were presented to her without any deductions. The bills were prepared in accordance with the calculation of hours times dollar rates provided by the costs grid. While it is appropriate to do the costs grid calculation, it is also necessary to step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable. This approach was sanctioned by this court in Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 (Ont. C.A.) at para. 4 where it said:

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

See also Stellarbridge Management Inc. v. Magna International (Canada) Inc., 2004 CanLII 9852 (ON CA), [2004] O.J. No. 2102 (C.A.) para. 97.

[54] In Davies v. Clarington (Municipality)[^23] at para. 52, Justice Epstein stated that the overriding principle in awarding costs is reasonableness. She stated:

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)], this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said: "[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice."

[55] The assessment of reasonableness is discretionary and very much dependent upon the circumstances of each case. In some cases, it may be reasonable for the successful party to make exhaustive efforts and to commit enormous legal resources, and in those cases, it might be said that the unsuccessful party could reasonably expect to pay those costs. In other cases, however, the successful party may have been well served by giving his or her lawyer instructions to make exhaustive efforts, but it might be disproportionate and unreasonable to expect the unsuccessful party to pay those costs, even if he or she would have expected or anticipated that his or her foe would have marshalled those legal resources.

[56] The immediate case was one of those cases in which it was anticipated that each side would commit enormous legal resources to the certification motion. And they did. As noted above, the amount of the Plaintiffs’ claim was ginormous and worthy of a massive allocation of legal resources both in prosecution and in defence. The Plaintiffs’ evolving theory of the case was complex and designed to expand the legal universe of the law of privacy. The Books of Authorities comprised 4,353 pages of cases and legal articles. In addition, during argument, the Plaintiffs’ lawyers made copious references to a 250-page academic text about big data and the information economy.[^24] There were three days of argument. The amount claimed for costs in the immediate case is within the reasonable expectations of the Plaintiffs and commensurate with the nature of the case and the Phase I motion.

[57] Keeping the fairness and reasonableness factor in mind and the other principles that guide the court’s discretion in awarding costs and having reviewed the Defendants’ respective Bills of Costs, in my opinion, the appropriate award in the immediate case is $725,000, all inclusive, for Capital One on a substantial indemnity basis and $500,000, all inclusive, for Amazon Web, all inclusive.

[58] In arriving at the above awards, I considered the partial indemnity awards in my own other cases and extrapolated what the award might have been on a substantial indemnity basis. The exercise was interesting – for me, at least – but not particularly helpful, given that the immediate case is not comparable to any proposed class action.

[59] All class actions are unique, but this one has elements as rare as Astatine. In Pearson v. Inco Ltd.,[^25] at para. 13, the Court of Appeal said that costs in class actions should, if possible, reflect costs awards made in closely comparable cases, recognizing that comparisons will rarely provide firm guidance. There was no closely comparable case to the immediate case.

[60] Although there are no closely comparable cases to the immediate case, for what it is worth, my analysis of my own costs awards is set out in the following chart. For what little it is worth, I discovered that the range of my costs awards on certification motions is from $10,000 to $1,350,000. My average (mean) award is $334,000. The medium of my awards (midpoint) is $215,000.

1. Web Objective Inc. v. SociaLabra Inc., [2018] O.J. No. 1781 $10

Plaintiff awarded $10,000.

2. Williams v. Toronto (City), [2011] O.J. No. 2897

Plaintiff awarded $18,649.

3. Boal v. International Capital Management Inc. 2021 ONSC 2018

Defendant awarded $35,000.

4. Persaud v. Talon International Inc., 2020 ONSC 4432

Plaintiff awarded $36,000

5. Brigaitis v. IQT Ltd. (c.o.b. IQT Solutions), [2014] O.J. No. 862

Plaintiff awarded $50,000.

6. Bennett v. Lenovo (Canada) Inc., [2017] O.J. No. 6000

Plaintiff awarded $60,000.

7. 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2008 CanLII 27822 (ON SC), [2008] O.J. No. 2276

Defendant awarded $63,707.

8. Coulson v. Citigroup Global Markets Canada Inc., [2010] O.J. No. 1787

Defendants awarded $70,000.

9. Arenson v. Toronto (City), [2012] O.J. No. 3664

Defendant awarded $70,537.

10. Topacio v. Batac, [2011] O.J. No. 1611

Plaintiff awarded $80,906.

11. Topacio v. Batac, [2011] O.J. No. 1611

Plaintiff awarded $83,485.

12. Topacio v. Batac, [2011] O.J. No. 1611

Plaintiff awarded $90,360.

13. Lavier v. MyTravel Canada Holidays Inc., 2008 CanLII 44697 (ON SC), [2008] O.J. No. 3377

Defendant awarded $125,000.

14. Bernstein v. Peoples Trust Co., [2017] O.J. No. 1743

Plaintiff awarded $146,493.

15. G.C. v. Jugenburg, 2021 ONSC 5144 and 2021 ONSC 5213

Plaintiff awarded $150,000.

16. Cavanaugh v. Grenville Christian College, [2012] O.J. No. 3883

Defendant awarded $150,825.

17. Cavanaugh v. Grenville Christian College, [2012] O.J. No. 3883

Defendant awarded $150,000.

18. 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2008 CanLII 27822 (ON SC), [2008] O.J. No. 2276

Defendant awarded $173,693.

19. Carter v Ford Motor Company of Canada, 2021 ONSC 5586

Plaintiff awarded $195,288

20. Boal v. International Capital Management Inc. 2021 ONSC 2018

Defendant awarded $212,068.

21. Lundy v. VIA Rail Canada Inc., [2015] O.J. No. 2782

Plaintiff awarded $214,624.

22. Peters v. SNC-Lavalin Group Inc., 2021 ONSC 6161.

Defendant awarded $285,000.

23. Wright v. Horizons ETFS Management (Canada) Inc., 2021 ONSC 4499

Plaintiff awarded $290,704.

24. Lipson v. Cassels Brock & Blackwell, [2013] O.J. No. 4667

Plaintiff awarded $298,583.

25. Parker v. Pfizer Canada Inc., [2012] O.J. No. 3891

Plaintiff awarded $300,000.

26. Peter v. Medtronic, Inc., [2010] O.J. No. 68

Plaintiff awarded $300,000.

27. Harris v. Bayerische Motoren Werke Aktiengesellschaft, 2020 ONSC 4220

Plaintiff awarded $300,000

28. Boal v. International Capital Management Inc. 2021 ONSC 2018

Defendant awarded $300,000.

29. 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2010 ONSC 5390, [2010] O.J. No. 4208

Plaintiff awarded $308,683.

30. Hodge v. Neinstein, 2014 ONSC 6366, [2014] O.J. No. 5204

Defendant awarded $341,758.

31. Sondhi v. Deloitte Management Services LP, [2018] O.J. No. 1224

Plaintiff awarded $353,791.

32. McCracken v. Canadian National Railway Co., [2012] O.J. No. 5716

Defendant awarded $450,000.

33. Cappelli v. Nobilis Health Corp., [2019] O.J. No. 2918

Defendant awarded $537,696.

34. Mancinelli v. Royal Bank of Canada, 2020 ONSC 3743

Plaintiff awarded $700,000.

35. McCracken v. Canadian National Railway Co., 2010 ONSC 6026, [2010] O.J. No. 4650

Plaintiff awarded $740,650.

36. Labourers' Pension Fund of Central and Eastern Canada (Trustees of) v. Sino-Forest Corp., [2015] O.J. No. 5358

Plaintiffs awarded $786,399.

37. Vester v. Boston Scientific Ltd., 2017 ONSC 2498, [2017] O.J. No. 2079

Plaintiffs awarded $875,000.

38. Das v. George Weston Ltd., [2017] O.J. No. 4858

Defendant awarded $985,602.

39. Fehr v. Sun Life Assurance Co. of Canada, [2017] O.J. No. 1749

Defendant awarded $1,000,000.

40. Berg v. Canadian Hockey League, [2017] O.J. No. 4659

Plaintiff awarded $1,012,066

41. Das v. George Weston Ltd., [2017] O.J. No. 4858

Defendant awarded $1,350,000.

[61] As the above chart reveals, I have made some very substantial awards on a partial indemnity basis. I think that the immediate case falls into the type of case where a substantial award is appropriate. The intensity and intricacy of the argument in the immediate case was similar to Das v. George Weston Ltd., where like the case at bar, I held that the plaintiffs had not pleaded a reasonable cause of action and where I awarded $1.0 million and $1.35 million in costs to the defendants respectively. The Court of Appeal upheld my decision and reduced the costs awards by 30% because of the public interest component of the case.[^26]

[62] In the immediate case, as noted above, on a substantial indemnity basis, the Plaintiffs’ costs claim for Phase I would have been $361,174.89. However, I am skeptical that that sum is a true reflection of the legal work that the Plaintiffs’ lawyers actually did in preparation for Phase I, which work might not be chargeable for the certification motion.

[63] In this last regard, it may be noted that the Plaintiffs’ lawyers would have expended a great deal of legal resources in formulating legal theories for the carriage fight, which legal resource would have been carried forward into the Fresh as Amended Statement of Claim and into Phase I. In contrast, the Defendants’ legal battleship had to get up to speed to meet the already full speed ahead legal battleship of the Plaintiffs.

[64] In the immediate case, I note that on a partial indemnity basis, Capital One claimed costs of $678,945.27, all inclusive, and Amazon Web claimed costs of $458,207.53, all inclusive. In my opinion, those claims for costs on a partial indemnity basis were fair and reasonable and within the expectations of the Plaintiffs on a partial indemnity basis. That being the case, awards of costs of $725,000 and $500,000 on a substantial indemnity basis are fair and reasonable, and, if anything, an under-evaluation of the Defendants’ entitlement.

E. Conclusion

[65] For the above reasons, I award Capital One $725,000, all inclusive, and I award Amazon Web $500,000, all inclusive, payable forthwith.

Perell, J.

Released: October 20, 2021

COURT FILE NO.: CV-19-00625030-00CP

DATE: 20211020

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RINA DEL GIUDICE and DANIEL WOOD

Plaintiffs

• and -

PAIGE A. THOMPSON, CAPITAL ONE FINANCIAL CORPORATION,

CAPITAL ONE BANK (CANADA BRANCH), CAPITAL ONE (SERVICES) CANADA INC., CAPITAL ONE, N.A., CAPITAL ONE BANK (USA), N.A., GITHUB, INC., AMAZON WEB SERVICES INC., AND AMAZON WEB SERVICES (CANADA) INC.

Defendants

REASONS FOR DECISION - COSTS

PERELL J.

Released: October 20, 2021

[^1]: S.O. 1992, c. 6.

[^2]: Del Giudice v. Thompson, 2021 ONSC 3696 [GitHub discontinuance] and Del Giudice v. Thompson, 2021 ONSC 4024 [re GitHub settlement].

[^3]: Del Giudice v. Thompson, 2020 ONSC 2676 [carriage mtn].

[^4]: Del Giudice v. Thompson, 2021 ONSC 5379.

[^5]: R.R.O. 990, Reg. 194.

[^6]: Del Giudice v. Thompson, 2021 ONSC 2015; Del Giudice v. Thompson, 2021 ONSC 5187.

[^7]: Pinon v. City of Ottawa, 2021 6172 at para. 14 (Div. Ct.).

[^8]: Kaymar Rehabilitation Inc. v Champlain Community Care Access Centre, 2010 ONSC 6614; Banque Indosuez v. Canadian Overseas Airlines Ltd. (1990), 33 B.C.S.C.; aff’d (1992) CarswellBC 2212 (C.A.).

[^9]: R. v Neil, 2002 SCC 70 at para 12, quoting Trial of Queen Caroline (1821), by J. Nightingale, vol. II, The Defence, Part 1, at p. 8.

[^10]: R.R.O. 990, Reg. 194.

[^11]: George P Costigan Jr., “The Full Remarks on Advocacy of Lord Brougham and Lord Chief Justice Cockburn at the Dinner to M Berryer on November 8, 1864” (1931) 19 Cal. L. Rev. 521 at p. 523.

[^12]: Leigh Mitch/Darion Joseph, “The Impossible Dream” lyrics from Man of La Mancha.

[^13]: Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 at para. 21 (S.C.J.).

[^14]: Standard Condominium Corporation No. 1466 v. Weinstein, 2021 ONSC 3526; Whitfield v. Whitfield, 2016 ONCA 720; Best v. Lancaster, 2015 ONSC 6269; Said v. University of Ottawa, 2014 ONSC 771; 3574423 Canada Inc. v. Baton Rouge Restaurants Inc., 2012 ONSC 296; Toronto Kaymar Rehabilitation Inc. v. Champlain Community Care Access Centre, 2010 ONSC 6614; 1483677 Ontario Ltd. v. Crain, 2010 ONSC 1353; St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, supp. reasons 2010 ONCA 479; Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.); Standard Life Assurance Co. v. Elliott (2007), 2007 CanLII 18579 (ON SC), 86 O.R. (3d) 221 (S.C.J.); McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 CanLII 41899 (ON CA), 59 O.R. (3d) 97 (C.A.); Alie v. Bertrand & Frère Construction Co. (2000), 11 C.L.R. (3d) 149 (Ont. S.C.J.), aff'd (2001), 2001 CanLII 62748 (ON CA), 11 C.L.R. (3d) 12 (Ont. C.A.)

[^15]: (2006), 2006 CanLII 7666 (ON CA), 79 O.R. (3d) 427 (C.A.).

[^16]: R.S.O. 1990, c. C-43.

[^17]: R.R.O. 1990, Reg. 194.

[^18]: Dugal v. Manulife Financial, 2013 ONSC 6354 ($575,000); Rosen v. BMO Nesbitt Burns Inc. 2013 ONSC 6356 ($290,000); Cristante v. DePuy Orthopaedics 2013 ONSC 6351; ($175,000); Kaplan v. Casino Rama, 2019 ONSC 3310 ($160,000); Sankar v. Bell Mobility 2013 ONSC 6886 ($150,000); Brown v. Canada (Attorney General), 2013 ONSC 5637 ($130,000); Grossman v. Nissan Canada, 2019 ONSC 7379 ($80,000).

[^19]: Tataryn v. Diamond & Diamond, 2021 ONSC 3573 ($200,000).

[^20]: Carter v Ford Motor Company of Canada, 2021 ONSC 5586; Wright v. Horizons ETFS Management (Canada) Inc., 2021 ONSC 4499.

[^21]: McGee v. London Life Insurance Co., [2008] O.J. No. 5312 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 2005 CanLII 63806 (ON SC), 74 O.R. (3d) 728 (S.C.J.); Caputo v. Imperial Tobacco Ltd. (2005), 74 O.R. (3d) 728 (S.C.J.); Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Lee v. General Motors Co. of Canada, [2004] O.J. No. 2245 (S.C.J.).

[^22]: (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.).

[^23]: (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.).

[^24]: A. Agrawal, J. Gans, and A. Goldfarb, Prediction Machines: The Simple Economics of Artificial Intelligence (Harvard Business Review Press, Boston Massachusetts, 2018).

[^25]: (2006), 2006 CanLII 7666 (ON CA), 79 O.R. (3d) 427 (C.A.).

[^26]: Das v. George Weston Ltd., 2018 ONCA 1053, leave to appeal to the S.C.C. ref’d [2019] S.C.C. No. 69. Das v. George Weston Ltd. was a negligence claim against Loblaws, which purchased goods from a clothing manufacturer in Bangladesh for sale in Canada. The Claim was for $1.85 billion, punitive damages of $150 million, special damages, pre and post-judgment interest, and costs on a substantial indemnity basis. The claim was brought on behalf of the in Bangladesh citizens who were the victims of the collapse of the Rana Plaza, an apartment building being used as a clothing factory. In the collapse, 1,130 people died, and 2,520 people were seriously injured. The case at bar is a claim for 240 billion by six million Canadian citizens who were the victims of a data breach with unknown financial injuries, if any. Making this comparison between the cases for the purposes of assessing costs just reveals the venality and low utility of the whole exercise.