COURT FILE NO.: CV-21-00660297-0000
DATE: 20220711
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JOSEPH VOLPE and M.T.E.C. CONSULTANTS LTD., Plaintiffs
AND:
KRISTYN WONG-TAM, PAUL AINSLIE, YAHOO MEDIA GROUP INC., ELIZABETH DI FILIPPO, FRESHDAILY INC., MEDIA CENTRAL CORPORATION INC., ENZO DIMATTEO, MARIA RIZZO, NORM DI PASQUALE, MARKUS DE DOMENICO and IDA LI PRETI, Defendants
BEFORE: Justice Glustein
COUNSEL: Paul Slansky, for the plaintiffs
Kevin McGivney and Natalie D. Kolos, for the defendants Kristyn Wong-Tam and Paul Ainslie
Jeremy Opolsky, Ryan Lax and Adrienne Oake, for the defendant Maria Rizzo
Tim Gleason and Amani Rauff, for the defendant Ida Li Preti
Iain A.C. MacKinnon, for the defendants Norman Di Pasquale and Markus De Domenico
Andrew W. MacDonald and Emma K. Romano, for the defendants Yahoo Canada Corp. and Elizabeth Di Filippo
COSTS REASONS
Overview
[1] By Reasons for Decision dated May 26, 2022 (the Reasons), I granted the five anti-SLAPP motions brought by (i) Wong-Tam[^1] and Ainslie, (ii) Rizzo, (iii) Li Preti, (iv) Di Pasquale and de Domenico, and (v) the Yahoo Defendants. Consequently, I dismissed the Action against the moving party defendants.
[2] The parties were unable to agree on costs. The parties delivered written costs submissions between June 9 and June 30, 2022. All of the moving party defendants provided a costs outline (with their written costs submissions) but the plaintiffs did not provide a costs outline despite being invited to do so under para. 413.
[3] I have reviewed the costs submissions of all parties, as well as the costs outlines provided by the moving party defendants. I set out my costs reasons below.
[4] In summary, Di Pasquale and de Domenico, Li Preti, Wong-Tam and Ainslie, and the Yahoo Defendants all seek their full indemnity costs pursuant to s. 137.1(7) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as follows:
(i) Di Pasquale and de Domenico seek costs of $57,994.40[^2];
(ii) Li Preti seeks costs of $110,442.90;
(iii) Wong-Tam and Ainslie seek costs of $85,708.25;[^3] and
(iv) The Yahoo Defendants seek costs of $60,011.63.
[5] Rizzo retained counsel on a pro bono basis. Since Rizzo was not exposed to full indemnity costs under her pro bono arrangement, she seeks her costs on a substantial indemnity scale in the amount of $69,720.48. Rizzo applied hourly rates based on the 2005 “Information for the Profession” bulletin from the Costs Subcommittee of the Rules Committee (the 2005 Costs Bulletin), unadjusted for inflation.
[6] The plaintiffs submit that (i) it is appropriate in the present case to depart from the full indemnity presumption under s. 137.1(7) and (ii) as such, the court should order costs on a partial indemnity scale for all of the moving party defendants.
[7] The plaintiffs further submit that the quantum of costs sought by Li Preti is not reasonable or proportionate, and should be reduced to $70,000 at full indemnity with a corresponding reduction at a partial indemnity level.[^4]
[8] For the reasons that follow, I order the plaintiffs to pay (i) the full indemnity costs sought by Di Pasquale and de Domenico, Li Preti, Wong-Tam and Ainslie, and the Yahoo Defendants and (ii) the substantial indemnity costs sought by Rizzo. It is settled law that the s. 137.1(7) full indemnity presumption is to be applied by the courts unless the plaintiffs can establish circumstances to justify the “appropriateness exception”[^5] under s. 137.1(7). The plaintiffs have not met that burden in the present case.
[9] Further, I do not reduce the quantum of costs sought by Li Preti. The plaintiffs failed to file their own costs outline to challenge the quantum sought by Li Preti. In any event, there is no basis to find that the overall amount, hourly rates of counsel or number of hours were excessive.
Reasons for Decision
[10] In my Reasons, I summarized my conclusions at para. 18:
For the reasons that follow, I grant the motions and dismiss the Action. I find that:
(i) The defendants have met the threshold under s. 137.1(3) to establish that the proceeding arises from an expression that relates to a matter of public interest, which includes (i) the decision of the TCDSB to remove and reinstate the LGBT YouthLine link, (ii) the issue of whether public taxpayer funds should be used for advertisements in media which expressed the views in the Initial and YouthLine Articles, and (iii) the responsibilities of the trustees and councillors to represent their constituents (including LGBTQ2S+ students, parents, and teachers) and ensure an inclusive and safe school environment;
(ii) The plaintiffs have established under s. 137.1(4)(a)(i) that there are grounds to believe (i.e., the legal and evidentiary analysis on the motion weighs in favour of the plaintiffs) that the defamation claim has substantial merit. Expressing the view that a plaintiff is homophobic, transphobic, or anti-LGBTQ2S+ would tend to lower the plaintiff’s reputation in the eyes of a reasonable person.
However, the plaintiffs have not established under s. 137.1(4)(a)(i) any grounds to believe that the remaining causes of action (misfeasance in public office, inducing breach of contract, or wrongful interference with economic relations) have any substantial merit. There is no evidence to find any bad faith, excess of powers, intention to cause a breach of contract, or an unlawful act. Consequently, the plaintiffs have failed to demonstrate that it weighs in their favour that the other claims are valid;
(iii) The plaintiffs have failed to establish under s. 137.1(4)(a)(ii) that there are grounds to believe that (a) the defence of fair comment raised by all defendants or (b) the defences raised by particular defendants of qualified privilege, justification, statutory immunity under s. 391 of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A (the CTA), and responsible communication are not valid defences.
While the court on an anti-SLAPP motion does not assess the full merits of a defence as at trial, the plaintiffs have failed to demonstrate that it weighs in their favour that none of those defences are valid. […]
(iv) The plaintiffs have not established under s. 137.1(4)(b), on the balance of probabilities, that the harm suffered from the Impugned Statements is “sufficiently serious” that the public interest in permitting the proceeding to continue outweighs the public interest in protecting the defendants’ expression. There is little or no evidence of harm, weighed against the importance of the defendants’ expression seeking to ensure LGBTQ2S+ inclusion in the TCDSB, the use of public taxpayer funds for City advertising, and the safety of LGBTQ2S+ students in the TCDSB, particularly in the context of the public debate in which the plaintiffs were engaged.
Applicable law on costs on an anti-SLAPP motion
[11] Section 137.1(7) sets out the presumption for full indemnity costs upon the dismissal of a proceeding on an anti-SLAPP motion:
If a judge dismisses a proceeding under this section, the moving party is entitled to costs on the motion and in the proceeding on a full indemnity basis, unless the judge determines that such an award is not appropriate in the circumstances.
[12] The genesis of the presumption is to “(i) reduce the adverse impact on constitutional values of unmeritorious litigation; and (ii) to deter the commencement of [SLAPP] actions”: Levant, at paras. 78-79.
[13] Consequently, it is the unsuccessful responding party’s burden to demonstrate why a departure from full indemnity costs is appropriate, if the proceeding is dismissed: Joshi v. Allstate Insurance Company of Canada, 2019 ONSC 5934, 58 C.C.E.L. (4th) 27, at para. 14.
[14] It is the dismissal of the proceeding that generates the full indemnity presumption, not the basis for the dismissal. Simply because a court finds in favour of an unsuccessful responding party on one or more issues on an anti-SLAPP motion does not alter the presumption of full indemnity costs upon the dismissal of a proceeding under s. 137.1.
[15] In Levant, the motion court relied on divided success on various issues as the basis on which to award partial indemnity costs (at para. 73). The Court of Appeal reversed the costs decision and held, at para. 77:
[M]erely concluding that there are countervailing determinations on the factors that are required to be considered under s. 137.1 is an insufficient basis to make a finding that it is not appropriate to award full indemnity costs. If that was all that was required, most cases would not draw a full indemnity costs award since, as the existing case law under s. 137.1 amply demonstrates, there are countervailing determinations in many cases. To adopt that as the distinguishing feature would result in the presumptive costs award not being presumptive at all.
[16] Similarly, the court in Fortress Real Developments Inc. v. Robidoux, 2018 ONCA 686, 426 D.L.R. (4th) 1, held, at para. 66:
The language of s. 137.1(7) offers no support for Fortress's narrow reading, nor does the legislative history of the provision. The language is clear. If the defendant is successful on the motion, the defendant should receive full indemnity costs, subject to the motion judge deciding that full indemnity is not an appropriate award in the circumstances. The starting point is not predicated on the basis upon which the defendant succeeds on the motion.
[17] Consequently, even if the court finds substantial merit to the defamation claim against a moving party, the full indemnity presumption applies: Niagara Peninsula Conservation Authority v. Smith, 2018 ONSC 127, 45 C.C.L.T. (4th) 167, at para. 15.
[18] In Fortress Real Developments, at para. 63, the court held that factors governing the application of the appropriateness exception include the general cost principles under Rule 57.01 and the governing costs principle that costs claimed must be fair and reasonable:
[A] motion judge, when deciding how he or she should exercise his or her discretion under s. 137.1(7), will be guided by the considerations that guide the exercise of discretion with respect to costs in other civil proceedings. These include the factors identified in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. They also include the overriding objective in any costs order that the award be fair and reasonable, having regard to all of the relevant factors including any applicable legislation: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Neuberger v. York, 2016 ONCA 303, 131 O.R. (3d) 143, at para. 17.
[19] Further, the court in Fortress Real Developments held, at para. 67:
The motion judge, in determining whether the circumstances warrant an order other than costs on a full indemnity basis, will consider a variety of factors, including any determinations made under ss. 137.1(4)(a) and (b), any findings made as to the motivation of the parties, and the manner in which the parties have conducted the proceedings.
[20] In determining whether the appropriateness exception is to be applied, the court may consider (i) the “presence or absence of factors that might drive an award of costs on a higher scale in regular civil litigation”: Levant, at para. 81, and (ii) any factors which reflect the “indicia of a SLAPP lawsuit”, such as (a) “a history of the plaintiff using litigation or the threat of litigation to silence critics”, (b) “a financial or power imbalance that strongly favours the plaintiff”, (c) “a punitive or retributory purpose animating the plaintiff's bringing of the claim”, and (d) “minimal or nominal damages suffered by the plaintiff”: Levant, at para. 82.
[21] It remains the unsuccessful responding party’s onus to satisfy the court that the appropriateness exception applies, if the proceeding is dismissed under s. 137.1. The unsuccessful responding party must be able to establish that based on the presence or absence of any of the factors set out at paras. 18-20 above, the court should not apply the full indemnity presumption. It is not the obligation of the successful moving party to establish the presence or absence of any of the possible factors.
[22] Full indemnity costs under s. 137.1(7) are all costs incurred by the successful moving party, provided that such costs “would reasonably have been contemplated as the amount a lawyer would actually charge the client”: DEI Films Ltd. v. Tiwari, 2018 ONSC 4818, at paras. 14-15.
[23] Consequently, the court must consider whether the full indemnity costs claimed are fair and reasonable. In United Soils Management Ltd. v. Mohammed, 2019 ONCA 128, 53 C.C.L.T. (4th) 1, leave to appeal refused, [2019] S.C.C.A. No. 153, the court held, at para. 42:
We do, however, agree with the appellant that there remains an obligation on a motion judge, when determining the quantum of costs under s. 137.1(7), to undertake the same type of analysis that is required when fixing costs in any other context. Just because the award is on a full indemnity basis does not mean that the successful party is entitled to whatever costs were incurred. The quantum must still be fair and reasonable for what was involved in the particular proceeding: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26. The award must also be proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding: see r. 1.04(1.1), Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[24] Costs of anti-SLAPP motions are often significant, since they frequently require “a complex process involving several different tests and measurement standards with weighing and balancing of difficult factors”, as set out by Myers J. in Canadian Thermo Windows Inc. v. Seangio, 2021 ONSC 6555, at paras. 145-46:
My only concern then is whether the costs claimed are so high as to offend some notion of the public interest. I do not think there is a principle of law that allows me to be offended by a raw number.… I do not condemn the defendants' lawyers for their market-based hourly rates. Nor can I find that they overworked this major motion file.
It would be arbitrary for me to say that anything over $X offends the public interest or the conscience of the court.… I saw similar bills in practice for significant motions. While some would like to think that anti-SLAPP motions should be quick and minor events, the statutory scheme imposes a complex process involving several different tests and measurement standards with weighing and balancing of difficult factors. These are massive motions as discussed earlier.
[25] Consequently, motion courts have ordered significant full indemnity costs awards in anti-SLAPP motions, including costs awards of:
(i) $164,186.76 in Canadian Thermo Workers, at para. 147,
(ii) $132,000 in Bernier v. Kinsella, 2022 ONSC 1601, at paras. 10-14,
(iii) $151,741.51 to the moving party Al Jazeera in Levant, ordered by the Court of Appeal at para. 92,
(iv) $131,076 in Niagara Peninsula Conservation Authority, at para. 23,
(v) $129,106.61 plus HST in Fortress Real Developments, at para. 76, and
(vi) $122,286.94 to the defendant Ms. Mohammed and $126,438.55 to the defendant Ms. Barclay in United Soils Management, at paras. 10, 17, and 43.
Applicable law on pro bono costs
[26] Awarding costs to parties represented by pro bono counsel (i) ensures that parties are not free to abuse the judicial system without the threat of costs sanction and (ii) promotes access to justice by encouraging lawyers to take on deserving cases even if the client cannot afford to pay: 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 2006 CanLII 35819 (ON CA), 82 O.R. (3d) 757 (C.A.), at para. 35; Raimondo v. Ontario Heritage Trust, 2017 ONSC 6121, at para. 11.
[27] Pro bono costs cannot be a windfall to a party who retains counsel on a pro bono basis. The court must be satisfied that there is an arrangement between the litigant and his counsel that any costs awarded will be paid over to counsel: Goetz v. Kay, 2020 ONSC 924 (Div. Ct.), at paras. 43, 44, and 46.[^6]
Analysis
[28] The plaintiffs raise two issues: (i) the appropriateness exception and (ii) the quantum of costs sought by Li Preti. I address each of these issues below.
Issue 1: The appropriateness exception
[29] The plaintiffs submit that it is appropriate for the court to order costs on a partial indemnity scale, rather than the presumptive full indemnity costs under s. 137.1(7). I do not agree.
[30] All of the moving party defendants were successful in dismissing the Action. Consequently, the presumption of full indemnity costs applies, and the plaintiffs are required to satisfy the court that the presumption should be rebutted. For the reasons that follow, I do not find that the plaintiffs have met their onus.
[31] The plaintiffs submit that none of the indicia of an anti-SLAPP suit could be found based on the Reasons. However, at paras. 98 and 379 of the Reasons, I held:
The plaintiffs produced no documentary evidence of any contract it had which was allegedly cancelled. The plaintiffs produced no evidence as to its advertising revenue from the City, or general advertising revenue, either before or after the Motion. While calculations of financial losses totalling $11.8 million are alleged at paras. 145-49 of the Superseding Statement of Claim, there is no such evidence before the court on the motion.
Volpe makes the bald assertion that his reputation as a journalist has been damaged because he will no longer be viewed as independent and impartial if the Impugned Statements are believed. However, the plaintiffs have not produced any business or financial record to establish any downturn in business arising from their loss of reputation.
[32] Consequently, the plaintiffs failed to establish that there are no indicia of an anti-SLAPP suit. This factor does not support setting aside the full indemnity presumption.
[33] Further, the plaintiffs failed to establish that the nature of the claim supports an award of partial indemnity costs. In particular, I held that there was no evidence of malice, intentional conduct, or bad faith to support any of the serious allegations related to the causes of action for misfeasance in public office, inducing breach of contract, or wrongful interference with economic relations. I held, at para. 18(ii) of the Reasons:
However, the plaintiffs have not established under s. 137.1(4)(a)(i) any grounds to believe that the remaining causes of action (misfeasance in public office, inducing breach of contract, or wrongful interference with economic relations) have any substantial merit. There is no evidence to find any bad faith, excess of powers, intention to cause a breach of contract, or an unlawful act. Consequently, the plaintiffs have failed to demonstrate that it weighs in their favour that the other claims are valid.
[34] The failure to lead any evidence to support serious allegations of misconduct cannot support a finding to set aside the full indemnity presumption.
[35] While I did find that the plaintiffs’ defamation claim had substantial merit under the s. 137.1(4)(a)(i) test, it was the only finding made in favour of the positions taken by the plaintiffs. Such a “countervailing” factor cannot support setting aside the full indemnity presumption, as stated in Levant.
[36] The plaintiffs also failed to establish that any of the general costs principles under Rule 57.01 could apply to reverse the full indemnity costs presumption. To the contrary, it is not contested that:
(i) The plaintiffs claimed over $30 million in damages and the Action was dismissed;
(ii) The issues in the proceeding were important: The defendants faced a massive claim for damages challenging the rights of elected officials to engage in expression on behalf of vulnerable groups without fear of litigation which would prevent such expression (as well as the right of the media to report on such issues);
(iii) The issues in the proceeding were complex: The plaintiffs advanced multiple causes of action against 11 defendants. The evidence required to address the plaintiffs’ claims was extensive; and
(iv) The conduct of the litigation by the plaintiffs incurred additional costs. The plaintiffs filed a 76 page affidavit without headings and which was unnecessarily lengthy, repetitive, confusing, and substantively deficient on the issues before the court. The Volpe affidavit often restated lengthy portions of the statement of claim. Each of the defendants was required to prepare an affidavit reviewing all of the evidence related to their conduct. Cross-examinations required two and a half days (and only after defendants’ counsel co-ordinated their cross-examinations).
[37] Consequently, the plaintiffs failed to establish any Rule 57.01 factors which supported a reversal of the full indemnity presumption.
[38] The plaintiffs do not submit that the quantum of costs sought by any of the moving party defendants (except Li Preti) are unreasonable. There is no basis to modify the amounts sought if ordered on a full indemnity scale, as these costs are reasonable given the factors discussed above.
[39] The plaintiffs rely on the decision of the Court of Appeal in London District Catholic School Board v. Michail, 2022 ONCA 378, to submit that the court “specifically endorsed a consideration of whether expression was limited in the context of costs”.
[40] I do not agree that the Michail decision is applicable to the present case.
[41] In Michail, the respondent, Ms. Michail, had brought numerous proceedings arising out of the termination of her employment by the London District Catholic School Board (the Board). The Board then brought an application to declare Ms. Michail a vexatious litigant. Ms. Michail brought an anti-SLAPP motion to have the vexatious litigant application dismissed: at paras. 1-2.
[42] The motion court dismissed the motion, finding that Ms. Michail failed to establish that the expression giving rise to the vexatious litigant application was a matter of public interest. The Court of Appeal held, at para. 5:
We see no reason to interfere with the motion judge's decision. Her reasons reveal a thorough understanding of the applicable principles, which were applied correctly. The motion judge did not err in identifying the impugned expression as vexatious, or in finding that vexatious proceedings do not relate to a matter of public interest. We observe, as the motion judge did, that the LDCSB is not seeking to prevent the appellant's access to the justice system and suppress her ability to express herself through litigation, but rather asks the court to ensure that only legitimate proceedings are permitted to proceed. The LDCSB does not seek to prevent the appellant from continuing to speak about matters of public interest or her legal disputes, which she does routinely, including online, to the media, and to others who choose to give her an audience. Put simply, the relief sought by the Board will not, if granted, prevent the appellant from expressing herself on matters of public interest. It would only prevent her from instituting or continuing vexatious proceedings. We also note that the motion judge's decision does not prevent the appellant from responding to and putting her best foot forward on the Board's application to have her declared a vexatious litigant.
[43] Consequently, the Michail case did not result in the dismissal of the proceeding, and as such, did not engage the cost consequences of s. 137.1(7). Rather, the costs issue before the motion judge (and the Court of Appeal) arose under s. 137.1(8), which presumptively provides that the “the responding party is not entitled to costs on the motion, unless the judge determines that such an award is appropriate in the circumstances”.
[44] In Michail, the motion judge ordered costs to the respondent Board of $7,500, exercising her discretion under s. 137.1(8): at para. 3. The Court of Appeal did not interfere with the discretionary costs order, concluding that “in light of the motion judge's finding that the underlying action did not have the characteristics of a SLAPP and that the impugned expression did not relate to the public interest, it was open to her to order costs, and the amount awarded was reasonable in the circumstances”: at para. 6.
[45] For the above reasons, the decision in Michail does not assist the plaintiffs. It does not address the costs regime under s. 137.1(7). In the court’s brief reasons in Michail, there is no reference to any of the s. 137.1(7) cases (including Levant and Fortress Real Developments), let alone any suggestion that the principles in the s. 137.1(7) cases were to be modified based on the Michail analysis.
[46] Further, the discussion at para. 5 in Michail (set out at para. 42 above), does not relate to the issue of costs. Rather, it refers to the ability of Ms. Michail to retain access to the court system and express herself through litigation and only relates to the requirement under s. 137.1(3) that a court on an anti-SLAPP motion first determine whether the impugned proceeding “arises from an expression made by the person that relates to a matter of public interest”.
[47] Consequently, I do not accept the plaintiffs’ submissions based on the Michail decision.
[48] For the above reasons, I order the plaintiffs to pay full indemnity costs in the amount of (i) $85,708.25 for Wong-Tam and Ainslie, (ii) $57,994.40 for Di Pasquale and de Domenico, and (iii) $60,011.63 for the Yahoo Defendants.
[49] With respect to the costs sought by Rizzo, I order the plaintiffs to pay substantial indemnity costs in the amount of $69,720.48, based on the unadjusted 2005 Costs Bulletin.
Issue 2: Li Preti costs
[50] The plaintiffs submit that the costs sought by Li Preti of $110,442.90 are excessive and unreasonable. The plaintiffs submit that such costs should be reduced to $70,000 on a full indemnity scale, with a corresponding reduction at other levels of indemnity. I do not agree.
[51] The plaintiffs rely on (i) the full indemnity costs incurred by the other defendants, (ii) the hours incurred by counsel for Li Preti, and (iii) the hourly rate of $725 charged by senior counsel for Li Preti. I address each of these submissions below.
(i) The full indemnity costs incurred by the other defendants
[52] The court can consider the costs incurred by other defendants in determining whether the costs incurred by a particular defendant are fair and reasonable. However, the court must assess the reasonableness of costs based on the Rule 57.01 factors, as governed by the principles in Boucher. A defendant who incurs more costs than another defendant does not automatically have its costs reduced.
[53] In the present case, the costs sought by Li Preti are well within the range of costs in similar complex anti-SLAPP motions as summarized at para. 25 above. The present case was complex and raised important issues going to the heart of expression by an elected official. The plaintiffs prepared lengthy affidavit material and a voluminous factum. It was reasonable for the plaintiffs to expect that Li Preti would take every reasonable step available to protect her right to expression and to ensure that she could advocate on behalf of her constituents.
[54] I adopt the approach of Myers J. in Canadian Thermo Windows. It is not the role of the court to be “offended by a raw number”. While a comparison could assist the court in considering whether there are concerns as to hourly rates or whether the file is “overworked”, the difference in amounts is not sufficient on its own to demonstrate that costs are not fair and reasonable.
[55] This is particularly so in the present case, where all of the defendants provided costs outlines with detail as to each timekeeper, the number of hours worked, and the actual rates charged. In contrast, the plaintiffs chose not to deliver any costs outline, despite being requested to do so in the Reasons.
[56] While the court retains a discretion to find that costs are not fair and reasonable even if the unsuccessful party does not provide a costs outline, the failure of an unsuccessful party to deliver a costs outline is a relevant factor in addressing any objections the unsuccessful party may raise as to the costs incurred by the successful party. The principle was summarized by Daley J. in Halton (Regional Municipality) v. Ohashi, 2021 ONSC 8399, at paras. 15-16:
The defendants elected not to file a costs outline and as such the court is left to consider the plaintiff's costs outline without the benefit of knowing what costs were actually incurred by the defendants in responding to the motion. The defendants' costs outline would show what costs the defendants could reasonably have expected to pay in the event they were unsuccessful on the plaintiff's motion.
It has been held that an attack on costs claimed based on excessive time spent is no more than an "attack in the air" where that party has not delivered its own costs outline. It has also been held that the court may rightly infer that the party opposite devoted as much or more time to the proceeding as did the plaintiff in this case. The failure to deliver a costs outline, when so ordered, may not be determinative of what is a fair and proper amount for costs, but is one factor that may be considered: Risorto v. State Farm Mutual Automobile Insurance Co., 2003 CanLII 43566 (ON SC), 64 OR (3d) 135 (Winkler J, as he then was).
[57] Consequently, I consider the costs sought by Li Preti on the basis of the hours incurred, the hourly rates charged, and the factors under Rule 57.01.
(ii) The hours incurred by counsel for Li Preti
[58] The plaintiffs submit that “the number of hours charged [by Li Preti’s counsel] is much higher than that which was charged by other counsel”. However, the defendants’ costs outlines do not support the plaintiffs’ position.
[59] Li Preti’s counsel incurred 185.8 hours on the matter.[^7] Rizzo’s counsel incurred 299.2 hours on the matter. Counsel for Wong-Tam and Ainslie incurred 157 hours. Counsel for the Yahoo Defendants incurred 131.5 hours (with no time claimed for attendance at the hearing). Counsel for Di Pasquale and de Domenico incurred 84.8 hours.[^8] The average of the time incurred is 171.66 hours.
[60] The plaintiffs provided no information as to the hours incurred by their counsel.
[61] Based on the above, I do not accept the plaintiffs’ submission that the hours incurred by Li Preti’s counsel were “much higher than that which was charged by other counsel”. The evidence is clear that the hours charged were consistent with those charged by other counsel, and much less than those charged by counsel for Rizzo (which were accepted as reasonable by the plaintiffs).
[62] Further, given the Rule 57.01 factors discussed above relating to the amount claimed in the action, the importance of the action, and the complexity of the issues raised in the action, I find that the hours incurred were within the reasonable expectation of an unsuccessful party.
(iii) The hourly rate charged by counsel for Li Preti
[63] The plaintiffs submit that the $725 hourly rate charged by senior counsel for Li Preti was “unreasonable, unfair, and disproportionate”, in light of the hourly rates charged by counsel for the other defendants, some of whom were more senior than Li Preti’s counsel. I do not agree.
[64] An hourly rate of $725 for counsel called to the bar in 2001 is within the 2005 Costs Bulletin, adjusted for inflation, as that approach was followed in Stewart v. Allen, 2022 ONSC 2082, at para. 14. On a full indemnity scale, a partial indemnity rate of $350 per hour based on the 2005 Costs Bulletin, adjusted for inflation, would produce a full indemnity hourly rate of approximately $730, based on the calculations in Stewart at para. 17 of the inflation-adjusted partial indemnity rate of $486.09, assuming that such partial indemnity rate was two-thirds of the full indemnity rate.[^9]
[65] Further, there is no basis to conclude that the hourly rate charged was excessive. An hourly rate of $725 for senior counsel engaged in complex matters is not unreasonable. While some of the other counsel may have charged a lower hourly rate, there is no evidence that the actual fees charged by those counsel are indicative of a standard hourly rate for senior counsel.
[66] By way of example, counsel for Wong-Tam and Ainslie charged $575 per hour even though called in 1991. There is no evidence before the court that such rate was a standard rate for that counsel given his seniority and experience. To the contrary, such an hourly rate would be much less than under the 2005 Costs Bulletin adjusted for inflation and is inconsistent with hourly rates often charged by senior counsel. It is just as likely that the $575 hourly rate was a negotiated rate between the law firm and the client, outside the standard rate charged by a lawyer with more than 30 years of experience.
[67] The plaintiffs’ reliance on the rates sought by Rizzo is ill-founded. Rizzo sought costs based on the 2005 Costs Bulletin, without any modification for inflation. However, the approach taken by Rizzo cannot restrict the ability of other defendants’ counsel to seek full indemnity based on current market rates.
[68] Again, the plaintiffs chose to not provide the court with the relevant hourly rate information for their own counsel.
[69] For the above reasons, I do not modify the hourly rate of senior counsel for Li Preti.
[70] Finally, I note that on an overall basis, the fees sought are consistent with the cases referred to at para. 25 above, all of which were successful anti-SLAPP motions in complex and important matters which resulted in the dismissal of the Action. This comparison further supports a conclusion that the costs sought by Li Preti are reasonable.
Costs order
[71] For the above reasons, I order costs in the amounts of (i) $57,994.40 for Di Pasquale and de Domenico, (ii) $85,708.25 for Wong-Tam and Ainslie, (iii) $60,011.63 for the Yahoo Defendants, (iv) $69,720.48 for Rizzo, and (v) $110,442.90 for Li Preti.
[72] All costs are to be paid by the plaintiffs to the moving party defendants within 30 days of this order, subject to para. 419 of the Reasons.
GLUSTEIN J.
Date: 20220711
COURT FILE NO.: CV-21-00660297-0000
DATE: 20220711
ONTARIO
SUPERIOR COURT OF JUSTICE
JOSEPH VOLPE and M.T.E.C CONSULTANTS LTD.,
Plaintiffs
AND:
KRISTYN WONG-TAM, PAUL AINSLIE, YAHOO MEDIA GROUP INC., ELIZABETH DI FILIPPO, FRESHDAILY INC., MEDIA CENTRAL CORPORATION INC., ENZO DIMATTEO, MARIA RIZZO, NORM DI PASQUALE, MARKUS DE DOMENICO and IDA LI PRETI,
Defendants
COSTS reasons
Glustein J.
Released: July 11, 2022
[^1]: All defined terms are as set out in the Reasons.
[^2]: Unless otherwise stated, all costs amounts include disbursements and applicable HST on fees and disbursements.
[^3]: Wong-Tam and Ainslie delivered a bill of costs in the total amount of $86,651.80 but on p. 4 of their costs submissions “request that the costs of the motion be fixed in the amount of $85,708.25”. I order the slightly lower amount requested.
[^4]: The plaintiffs do not challenge the full indemnity quantum of costs sought by any of the other moving party defendants, although the plaintiffs submit, as noted above, that the full indemnity costs should be reduced to a partial indemnity scale.
[^5]: (a term set out in Levant v. DeMelle, 2022 ONCA 79, 82 C.C.L.T. (4th) 48, at para. 81, leave to appeal to S.C.C. requested, 40109)
[^6]: The plaintiffs raised the “windfall” issue as an objection to the costs sought by Rizzo, but withdrew that objection by an email to the court when satisfied by Rizzo’s counsel that all costs would be paid to Rizzo’s counsel.
[^7]: Unless otherwise stated, all reference to hours worked include the appearance at the hearing on April 20 and 21, 2022.
[^8]: In their costs submissions, Di Pasquale and De Domenico claim a total of 89.9 hours for counsel’s work until the hearing, and an additional 14 hours for attendance at the hearing, which would total 103.9 hours. However, the total of the hours in the bill of costs (excluding attendance at the hearing) is 70.8 hours instead of 89.9 hours, and the fees sought of $48,002.40 (excluding fees for the appearance at the hearing) are based on 70.8 hours. Consequently, I adopt the lower amount of hours (70.8) and add the 14 hours for attendance at the hearing, for a total of 84.8 hours.
[^9]: If the partial indemnity rate was assumed to be 60 percent of the full indemnity rate, the inflation-adjusted full indemnity hourly rate under Stewart would be $810.15.