Court File and Parties

Court File No.: CV-20-00644499 Date: 2021-11-10 Ontario Superior Court of Justice

Re: Dent-X Canada, Plaintiff/Respondent And: Marco Houde, Martin Sirois, and 9021-1962 Québec Inc. o/a Distribution Ongles D’or, Defendants/ Moving Parties

Before: Justice Mohan D. Sharma

Counsel: Solomon Ross Fischhoff, for the Plaintiff / Responding Party François Sauvageau, for the Defendants / Moving Party

Heard: November 9, 2021 (in writing)

Endorsement

[1] This is my cost decision following the release of my decision on a motion brought by the defendant, 9021-1962 Québec Inc. o/a Distribution Ongles D’or (“Ongles D’or”). That motion was heard on August 9, 2021. My decision was released on October 4, 2021.

[2] In its motion, Ongles D’or sought to have this action dismissed as a Strategic Lawsuit Against Public Participation (SLAPP) under s. 137.1 of the Court of Justice (“CJA”). I denied this relief as I was not satisfied the expression related to a matter of public interest. In the alternative, Ongles D’or argued the claim should be struck for failing to plead essential material facts, and because the allegations constituted an abuse of process. I stuck certain portions of the claim, with leave to amend, and declined to strike the action as an abuse of process.

[3] I invited the plaintiff to make cost submissions within 14 days, Ongles D’or to deliver responding submissions 14 days thereafter, and the plaintiff had a further 7 days to deliver reply submissions.

[4] The plaintiff delivered its submissions on October 15, 2021. Ongles D’or did not deliver submissions within 14 days. Its counsel understood that because my decision was being appealed, Ongles D’or did not need to deliver cost submissions. I clarified this misunderstanding with the parties through an email sent by my assistant on November 2, 2021. In fairness to Ongles D’or, I provided it with a further opportunity to deliver responding submissions, which were received on November 3, 2021. The plaintiff delivered reply submissions on November 4, 2021.

[5] While Ongles D’or may be appealing my decision, this factor has not weighed into my assessment of costs.

[6] The plaintiff seeks full indemnity costs in the amount of $199,861.05, or in the alternative, costs “on the ‘higher end’ of the Substantial Indemnity Scale.” Alternatively, based on offers to settle it made, it is seeking $147,719.25 in full indemnity costs, and $16,200.81 on a partial indemnity basis, plus $9,122.70 in disbursements.

[7] In support of its position, it cites:

a. The voluminous motion material filed by Ongles D’or, noting the supplementary motion record which contained 11 affidavits.

b. More than 10,000 pages of exhibits.

c. More than 100 hours spent preparing for and attending examinations.

d. The aggressive manner in which Ongles D’or pursued this motion. The plaintiff states “[Ongles D’or] attempted to turn what should have been a straightforward preliminary or pleadings motion into a ‘mini-trial’.” The plaintiff states because of the allegations made, it could not afford to leave Ongle D’or’s allegations unanswered.

e. That the plaintiff was largely successful on the motion.

f. That the defendants refused to consolidate this proceeding with a separate action brought by Ongles D’or.

g. There were two offers to settle made by the plaintiff:

i. The first offer, made on April 21, 2021, was for the plaintiff to discontinue this action (and Ongles D’or’s motion) on a without costs basis and without prejudice to the plaintiff asserting a counterclaim in the action brought by Ongles D’or.

ii. The second offer, made on May 5, 2021, was for the plaintiff to discontinue this action on a without costs basis and without prejudice to the plaintiff asserting a counterclaim (but not defamation) in the Ongles D’or action. It was open for acceptance until May 7, 2021.

[8] Ongles D’or submits that no costs should be ordered, given the mixed success of the parties, and the presumption against costs in s. 137.1(8) the CJA. Alternatively, it submits costs should be reserved to the judge deciding the action.

[9] Ongles D’or makes the following points in response:

a. The Offers to Settle were revoked on May 7, 2021 by way of email.

b. Pursuant to s. 137.1(8) of the CJA, there is no reason to depart from the presumption that costs are not be awarded against an unsuccessful defendant who brings an anti-SLAPP motion. It says that there was evidence to suggest that its motion was not frivolous.

c. Given the fraud allegations Ongles D’or made, it was incumbent upon it to advance as much evidence.

d. Comments I made which suggested the plaintiff was equally involved in aggressively litigating this motion.

e. There was a mixed result. I found the plaintiff had failed to plead that the alleged defamatory statement was published.

[10] Section 137.1(8) of the CJA provides that if a judge does not dismiss an action under this section, then the responding party is not entitled to their costs on the motion, “unless the judge determines that such an award is appropriate in the circumstances.”

[11] Pursuant to s. 131(1) of the CJA, the Court has a broad discretion when determining the issue of costs. Rule 57.01(1) sets out the factors to be considered by the Court when fixing costs.

[12] The overall objective of fixing costs is to determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v Public Accountants Counsel for Ontario, 2004 CanLII 14579 (ON CA), [2004] OJ. No. 2634 (C.A.). In determining costs, I must consider the factors set out in rule 57.01(1), as well as the principle of proportionality set out in rule 1.04(1.1).

[13] In Veneruzzo v. Story, 2018 ONCA 688 at para 39, the Ontario Court of Appeal stated:

The purpose underlying the costs provisions in s. 137.1 disappears when the lawsuit has none of the characteristics of a SLAPP, and the impugned expression is unrelated to a matter of public interest. In those circumstances, it is not the initial lawsuit challenging the expression that represents a potential misuse of the litigation process, but rather the s. 137.1 motion. A costs order denying a successful respondent its costs on a s. 137.1 motion, even though the lawsuit was not brought for an improper motive and the claim did not relate to a matter of public interest, could be seen as encouraging defendants to bring meritless s. 137.1 motions.

[14] After carefully considering the submissions of the parties, I find that this is an appropriate case to impose a cost award under s. 137.1(8) of the CJA. The underlying dispute was a purely private one. If the reason for the impugned communication was, as Ongles D’or argued, to find other clients of Dent-X for the purpose of a class action, one might expect the content and tone of its communication to be vastly different. The way this motion was pursued, the number of affidavits, the time spent on cross-examinations, and the volume of material filed, in my view, was disproportionate to the interests at stake on this motion. An anti-SLAPP motion rarely requires this level of evidence, and no evidence is admissible on a pleadings motion. These factors strongly suggest a misuse of the anti-SLAPP rule.

[15] I do not take the offers to settle made by plaintiff into account in my assessment of cost. Those offers were open for acceptance for only a matter of days. They were certainly revoked before this motion was heard.

[16] In considering the above factors, the submissions of the parties, and rule 57.03 which presumes costs will be fixed at the conclusion of a contested motion, I order Ongles D’or to pay the plaintiff costs of this motion fixed in the amount of $80,000, inclusive of HST and disbursements, to be paid within 30 days.

Justice Mohan Sharma

Date: November 10, 2021