Court File and Parties

COURT FILE No.: CV-17-580326

DATE: 20211207

ONTARIO SUPERIOR COURT OF JUSTICE

RE: PARAMOUNT FINE FOODS et al., Plaintiffs

-and-

KEVIN J. JOHNSTON et al., Defendants

BEFORE: F.L. Myers J.

COUNSEL: Niklas Holmberg, for the plaintiffs.

Kevin J. Johnston representing himself.

READ: December 7, 2021

COSTS ENDORSEMENT

[1] The plaintiffs seek complete indemnification for their costs incurred in prosecuting successfully six counts of contempt of court against Mr. Johnston.

[2] In my Reasons for Decision regarding sentencing dated September 22, 2021, reported at 2021 ONSC 6558, at para. 131, Mr. Johnston was provide with a month to respond to the plaintiffs’ costs submissions. Mr. Johnston has not delivered any costs submissions.

[3] The plaintiffs seek costs on a full or substantial indemnity basis because:

a. Findings of contempt necessarily involve reprehensible conduct;

b. The particular conduct in this case, namely, hate speech combined with incitement of disrespect for the court and the rule of law, are reprehensible; and

c. Mr. Johnston behaved reprehensibly maximizing the plaintiffs’ costs while making public statements derisive of the court’s process;

[4] The plaintiffs’ full costs are $251,445.53. Calculated on a substantial indemnity basis, costs are claimed at $226,816.50.

[5] I do not think that punitive costs necessarily flow from a finding of contempt of court in all cases. While they often may be found to be appropriate, in each case the court must exercise its discretion judicially in accordance with relevant considerations. In contempt proceedings in particular, care needs to be taken not to double-punish or over-punish conduct for which an appropriate and proportionate sanction has previously been imposed.

[6] I say no more about the acts of contempt committed by Mr. Johnston. My reasons finding him in contempt of court dated July 29, 2021, reported at 2021 ONSC 5285, and then the Reasons for sentence referred to above speak for themselves. It is hard to imagine a more perfect storm of offensive misconduct than brought about by Mr. Johnston’s hate speech coupled with his express statements of contempt for the court and the rule of law.

[7] But I have sentenced Mr. Johnston for those acts already. Among the considerations in sentencing Mr. Johnston to jail rather than imposing a fine were Mr. Johnston’s public statements that he has organized his affairs so as to be judgment-proof. Accordingly, I have already determined that a monetary penalty is not appropriate for Mr. Johnston’s acts of contempt of court.

[8] Having said that, I agree with Mr. Holmberg that Mr. Johnston conducted this proceeding reprehensibly. He deliberately stalled and ran up the plaintiffs’ costs while publicly delighting in doing so.

[9] The court takes very seriously every litigant’s right to counsel. Mr. Johnston abused the court’s scheduling indulgences to pretend to seek counsel despite his publicly stated position that he does not use counsel in civil matters.

[10] Mr. Johnston also filed material at the last minute before sentencing, in breach of the court’s scheduling orders, that repeated many of the statements for which he had already been held in contempt. These materials did not cause delay or much extra costs. They are just indicative of Mr. Johnston’s failure to abide by the court’s processes.

[11] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), (2004), 71 O.R. (3d) 291, at paras 26, 37.

[12] In Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239 discussing the availability of elevated costs awards, the Court of Appeal wrote:

[43] The applicable principles can be summarized as follows:

a. the fixing of costs is discretionary and the motion judge’s costs award attracts a high level of deference – it should be set aside on appeal only if the trial judge erred in principle or if the award is plainly wrong: see Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27;

b. costs on a substantial indemnity basis should only be awarded “where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”: Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, at p. 134; and

c. the kind of conduct that will justify an elevated level of costs is not limited to conduct in the proceedings and can include the circumstances that gave rise to the litigation: Mortimer v. Cameron (1994), 1994 CanLII 10998 (ON CA), 17 O.R. (3d) 1 (C.A.), at p. 23; Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 30.

[13] In my view, Mr. Johnston reprehensibly maximized the plaintiffs’ costs of these proceedings by his derisive and abusive approach. There were additional case conferences that ought not to have been required. The proceedings took months longer than should have been required. The plaintiff was put to the maximum degree of proof without any admission by Mr. Johnston. Of course the burden of proof is on the plaintiff throughout. But that does not free a responding party of accountability for maximizing costs.

[14] While I am not punishing Mr. Johnston again for his acts of contempt, the context and underlying facts are relevant. Mr. Johnston’s refusal; to admit the obvious and to participate in the proceeding responsibly, led to Mr. Fakih having to re-live in court the entirety of Mr. Johnston’s attacks against him. Mr. Johnston could have admitted that he said the things captured on video, purged his contempt, and argued sentencing for example. Instead, he extended the proceedings to their fullest and tried to extend them further at each hearing.

[15] This is certainly a case for an award of costs on a substantial indemnity basis.

[16] The motion was carried almost entirely by Mr. Holmberg. He had to watch many hours of videos published by Mr. Johnston throughout the proceedings. He delegated appropriately some of the research tasks. The rates charged and the hours incurred at each step of the process are reasonable.

[17] Ultimately, in my view, substantial indemnity costs provides the best assessment of the amount for which Mr. Johnston should be liable. In very large cases such as this one, a 10% discount from full indemnity is generally appropriate to take into account overlap among firm members and inherent inefficiencies in multi-timekeeper tasks.

[18] In all, it is fair and reasonable for Mr. Johnstone to indemnify the plaintiffs for substantially all of their legal costs. I fix the sum payable for costs at $226,816.50 as claimed. This is an amount that Mr. Johnston ought reasonably have anticipated in light of his own efforts to extend the proceedings and maximize the plaintiffs’ costs.

F.L. Myers J.

Date: December 7, 2021