Court File and Parties
COURT FILE NO.: CV-20-85340
DATE: 2022/07/12
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SageTea Inc., Plaintiff (Responding Party)
AND
The Attorney General of Canada and Nuruddin Shivji, Defendants (Moving Parties)
BEFORE: Madam Justice Robyn M. Ryan Bell
COUNSEL: Alexander Bissonnette, for the Plaintiff Alexander Gay and Calina Ritchie, for the Defendants
HEARD: In writing
COSTS ENDORSEMENT
[1] The Attorney General of Canada and Mr. Shivji were entirely successful on their motion: I dismissed SageTea’s defamation claim arising in Quebec on the basis that this court has no jurisdiction over the subject matter of the claim and I struck SageTea’s remaining defamation claims on the basis that it was plain and obvious these claims could not succeed.[^1] The defendants seek their costs of the motion in the amount of $16,084.
[2] There is no issue that the defendants are entitled to their costs of the motion on a partial indemnity basis. SageTea does not take issue with the hours spent by counsel for the defendants in relation to the motion. In my view, the number of hours spent on the file reflect the complexity of the motion, which required submissions in respect of the court’s jurisdiction under the Crown Liability and Proceedings Act[^2], attornment, estoppel, and each allegation of defamation. The defamation claims were part of a group of causes of action relied on by SageTea for a claim in excess of $10,000,000 in damages. The issues on the motion were, therefore, of significant importance to the defendants.
[3] SageTea does, however, take issue with the hourly rates proposed for Crown counsel in the defendants’ costs outline. The proposed hourly rates exceed the hourly rates charged internally to departments. SageTea characterizes the proposed hourly rates as “artificial” and submits that their use ignores the principle of indemnity and constitutes an attempt by the Attorney General to effectively recover its costs on a full indemnity basis.
[4] I do not agree.
[5] The following table sets out the lawyers for whom a claim for fees is being made, their year of call, their internal hourly rate, their proposed hourly rate, their proposed partial indemnity hourly rate, and the maximum partial indemnity hourly rates under the 2005 Notice to the Profession:
| Lawyer | Year of call | Internal hourly rate | Proposed hourly rate | Proposed partial indemnity hourly rate | Maximum partial indemnity hourly rate under the 2005 Notice to the Profession |
|---|---|---|---|---|---|
| Anne McConville | 2000 | $283.91 | $400 | $240 | $350 |
| Adrian Johnston | 2013 | $246.38 | $325 | $195 | $225 |
| Calina Ritchie | 2009 | $246.38 | $325 | $195 | $225 |
[6] The defendants note that the internal hourly rates “charged” by in-house government lawyers to other government departments reflect an internal accounting mechanism between departments. They are not intended to reflect an assessment of the cost of legal services provided by government lawyers.
[7] Section 131(2) of the Courts of Justice Act[^3] and s. 36 of the Solicitors Act[^4] affirm the Crown’s right to recover its partial indemnity costs in proceedings in which it has been successful, even though the Crown is represented by salaried counsel. Section 131(2) of the Courts of Justice Act provides:
In a proceeding to which Her Majesty is a party, costs awarded to Her Majesty shall not be disallowed or reduced on assessment merely because they relate to a lawyer who is a salaried officer of the Crown[...].
[8] Section 36 of the Solicitors Act provides:
Costs awarded to a party in a proceeding shall not be disallowed or reduced on assessment merely because they relate to a solicitor or counsel who is a salaried employee of the party.
[9] As the Court of Appeal for Ontario observed in Ontario (Attorney General) v. Rothmans Inc.,[^5] courts in many jurisdictions (including Ontario) have adopted the principle that, where a successful party is represented by a salaried lawyer, the proper method of fixing costs is to deal with them as though they were the costs of an independent outside counsel. In affirming that the motion judge was entitled to follow this approach, the Court of Appeal concluded:
In the end, the motion judge simply followed the test signalled by Armstrong J.A. in Boucher v. Public Accountants Council for the Province of Ontario…: “the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”
[10] Evidence of the actual costs of the legal services provided by salaried counsel to the Crown is not required when fixing costs in favour of the Crown: Chiefs of Ontario v. R.[^6] The overarching objective remains to fix an amount that is fair and reasonable for the unsuccessful party to pay, rather than an amount fixed by the actual costs incurred by the successful party.
[11] In this case, the hourly rates proposed for the defendants’ lawyers exceed the hourly rates charged internally to departments. However, the hourly rates proposed yield partial indemnity rates which are less than the maximum rates set out in the 2005 Notice to the Profession, rates that the Court of Appeal has observed are out of date: Inter-Leasing v. The Minister of Finance.[^7]
[12] In my view, having regard to the experience of counsel as well as the nature and importance of the issues raised on the motion, the proposed hourly rates are reasonable.
[13] The amount of $15,855 in legal fees and $229 in disbursements for a total of $16,084 is a fair and reasonable amount for SageTea to pay in respect of the defendants’ motion. I fix costs of the motion in the amount of $16,084, all inclusive. This amount is to be paid by SageTea to the defendants within 30 days.
Madam Justice Robyn M. Ryan Bell
Date: July 12, 2022
COURT FILE NO.: CV-20-85340
DATE: 2022/07/12
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SageTea Inc., Plaintiff (Responding Party)
AND
The Attorney General of Canada and Nuruddin Shivji, Defendants (Moving Parties)
COUNSEL: Alexander Bissonnette, for the Plaintiff Alexander Gay and Calina Ritchie, for the Defendants
COSTS ENDORSEMENT
Justice Ryan Bell
Released: July 12, 2022
[^1]: 2022 ONSC 2938.
[^2]: R.S.C. 1985, c. C-50.
[^3]: R.S.O. 1990, c. C.43.
[^4]: R.S.O. 1990, C. S.15.
[^5]: 2013 ONCA 353, at paras. 136-138.
[^6]: 2007 CarswellOnt 9798, [2007] O.J. No. 4068.
[^7]: 2014 ONCA 683, at para. 5.