Court File and Parties

Court File No.: CV-21-658274 Date: 2022-05-10 Superior Court of Justice - Ontario

Re: Brewers Retail Inc., Applicant – AND – William Campbell, Georgina Higgs, Diana Humphreys, Thomas Martin Krueger, and David Ramsay, Respondents – AND – Financial Services Regulatory Authority of Ontario, Intervenor

Before: Justice E.M. Morgan

Counsel: Dana Peebles, Randy Bauslaugh, and Leah Ostler, for the Applicant Ari Kaplan, David Rosenfeld, and Caitlin Leach, for the Respondents Clio Godkewitsch and Jody Brown, for the Intervenor

Heard: Costs submissions in writing

Costs Endorsement

[1] On February 10, 2022, I issued my reasons for judgment certifying this claim as a class action for the purposes of a settlement proposed by the parties.

[2] The Ontario pension regulator, the Financial Services Regulatory Authority (“FSRA”), sought to intervene in order to oppose the certification and proposed settlement, and brought a motion requesting that the matter be stayed in favour of jurisdiction of the Financial Services Tribunal (“FST”) over the dispute. Since FSRA’s submissions on intervention were blended in its argument before me with its opposition to certification and its submissions on the stay of proceedings, I granted FSRA intervenor status in order to consider its full position on the merits. In the result, I did not accept FSRA’s position and dismissed its motion for a stay and rejected its opposition to certification.

[3] I have now received costs submissions from all counsel. I start my consideration of those submissions with a reminder that costs awards are discretionary under section 131 of the Courts of Justice Act. In general, that discretion is to be exercised in accordance with the guidance provided by Rule 57.01 of the Rules of Civil Procedure. I am particularly mindful that costs awards should reflect the principle of indemnity for successful parties found in Rule 57.01(1)(a.0) and the reasonable expectations of unsuccessful parties found in Rule 57.01(1)(0.b).

[4] Turning first to the FSRA, its counsel concedes that some costs are owing to the Applicant, Brewers Retail Inc. (“Brewers”), for the certification motion although they dispute the amount sought by Brewers’ counsel. It is FSRA’s further position that no costs should be awarded to the Respondents, who are collectively a committee representing the proposed class of Brewers’ pensioners (the “Committee”). And finally, FSRA’s counsel requests an award of $22,443.30 for FSRA, representing partial indemnity fees plus tax and disbursements for its motion to intervene.

[5] I am not inclined to award any costs to FSRA for its motion for leave to intervene. The argument of that motion was undifferentiated from the argument of the balance of the proceedings. When the arguments were addressed on their merits, FSRA was entirely unsuccessful. With respect, I see no justification for making the other parties pay costs for FSRA’s erstwhile successful motion to intervene in a case in which none of FSRA’s positions were accepted by the court. FSRA’s intervention is precisely what caused the other parties to incur costs above and beyond the costs of a motion on consent.

[6] Counsel for the Committee seeks costs in the amount of $51,104.25 plus HST as against FSRA. For its part, FSRA’s counsel submits that the Committee is not entitled to any costs for a number of reasons, specifically because the Committee was not a moving party and, in any case, because its costs request is duplicative of Brewer’s request. FSRA also argues that the Committee has failed to provide sufficient detail in its Costs Outline.

[7] I agree with the position set out by the Committee’s counsel in its written submissions that the Committee’s cooperative approach with Brewers was necessary to the certification motion and kept the costs down. The fact that it was not the moving party is really not germane to the costs issue; in a certification in advance of settlement approval, someone has to move and someone has to respond, even though the two sides are essentially on the same page.

[8] Likewise, the fact that there is some duplication between the Committee and Brewers is inevitable; they both sought certification in respect of a settlement in which they were both fully engaged. Pointing to some duplication between two necessary – indeed, essential – parties is not an argument against costs for each of them.

[9] The cooperation between the Committee and Brewers is reflected in the relatively modest (for a certification motion) costs sought by the Committee’s counsel. While I agree that the Costs Outline submitted on behalf of the Committee is thinner on detail than a full Bill of Costs would be, that is generally the nature of a Costs Outline on a matter that does not resolve a case in full. The amount sought by the Committee is, as indicated, a reasonably modest amount. I am inclined for the sake of convenience to round it down to $51,000 all inclusive, but given the size of the request I am not inclined to investigate the number of hours spent on the matter by the Committee’s counsel.

[10] As for Brewers, its counsel seeks a costs award against FSRA in the amount of $159,351.01, inclusive of all disbursements and HST. It has submitted a detailed Bill of Costs which shows the large-scale effort put into this matter by Brewers’ counsel. I note that FSRA’s counsel submits that the hourly rates used by Brewers’ counsel are greater than those accepted by two of my colleagues in different cases. I have no doubt that my colleagues exercise their discretion with respect to costs in ways which they deem appropriate, and that they generally assess costs submissions with a view to the particular context of the cases and the efforts of counsel before them. I will do the same.

[11] In my view, Brewers’ counsel’s efforts in the present case were rather impressive. In their submissions they describe the monumental task involved in working out the proposed settlement, which entailed nearly 10 years of effort in order to create a compromise resolution to the dispute over the indexing of the subject pension plan dating back to 1974. They have had to confront the opposition of FSRA on two fronts – i.e. both in the FST and in this court. It is noteworthy that FSRA argued before me that a class proceeding is not the preferable procedure as the matter should be resolved by the FST, when the FST had already deferred the question to the court.

[12] I do not fault FSRA’s counsel for putting maximal effort into their opposition to Brewers’ and the Committee’s proposed settlement; that is no doubt what their client wanted them to do and reflects how their client instructed them to proceed. But when you put that kind of effort into an objection, you can expect to be met with maximal effort in response.

[13] Counsel for Brewers has been careful to exclude from its costs request matters which cannot be attributed to FSRA’s participation in the litigation. In their submissions, they specifically indicated that,

10. [Brewers] is not claiming any of the cost of its counsel’s time to prepare the document brief and legal submissions to overcome FSRA’s jurisdiction arguments before the FST, although that work significantly reduced the research, drafting and preparation time required for the motions before this Court.

11. Further, [Brewers] acknowledges that the considerable time its counsel invested: (i) to develop the Settlement Agreement; (ii) to prepare a [Brewers] supporting Affidavit to explain the dispute, the negotiations, and the resolution; (iii) to then draft a consent Notice of Application; and (iv) to prepare a short Factum for a brief certification hearing, was all work completed at a cost to [Brewers] that is not recoverable from FSRA.

[14] They go on to indicate that, by contrast to the matters described above, all of the time and effort invested in responding to FSRA’s opposition to the matters before me are recoverable in a costs award:

12. In contrast, the time incurred by [Brewers’] counsel to respond to the decision of FSRA on February 19, 2020 to oppose this class proceedings is recorded, and recoverable. The Bill of Costs therefore covers: (a) all of the work required to consult with Committee counsel and FSRA counsel as to how to proceed in the face of FSRA’s opposition, to amend the draft Notice of Application, to update the draft [Brewers] Affidavit to describe the events arising from FSRA’s opposition, and to attend the case conference of June 1, 2021; and (b) 90% of the time required to research and draft the [Brewers] Certification Factum; 100% of the work required to prepare the joint Responding Factum to the FSRA stay/dismissal motion and [Brewers’] Reply Factum on certification; and 90% of the time required to prepare for and attend the hearing on November 29, 2021.

[15] This division between work attributable to FSRA’s intervention/opposition to certification, and work not directly attributable to FSRA’s actions in that regard, is appropriate. It correctly reflects the duality of Rules 57.01(1)(0.a) and (0.b) as described in paragraph 3 above.

[16] In terms of overall quantum, I find Brewers’ request within the range of what one would expect in a case with this kind of strenuous opposition from a public regulatory body. Brewers’ counsel has limited its request to a partial indemnity scale, but beyond that they have not been hesitant to show in their Bill of Costs that the case consumed a substantial amount of billable time.

[17] Under the circumstances, I am not prompted to investigate or to question precisely the number of hours that counsel for Brewers invested in the case. Their efforts were successful, and so their investment paid dividends that are well deserved. Again, I might round their request down ever so slightly for convenience sake.

[18] FSRA shall pay costs to Brewers in the amount of $159,000 and to the Committee in the amount of $51,000. Both amounts are inclusive of disbursements and HST.

Released: May 10, 2022 Morgan J.