COURT FILE NO.: 13-57387
DATE: 2022/01/05
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Tanya Woods and 2285675 Ontario Inc., Plaintiffs
AND:
University of Ottawa, Defendant
BEFORE: Regional Senior Justice Calum MacLeod
COUNSEL: Jason Rabin, D. Kenneth Gibson, & G. Boyd Aitken, for the Plaintiffs
Jamie A. Macdonald & Crystal Li, for the Defendant
HEARD: November 19, 2021
COSTS DECISION
[1] On August 27, 2021, I gave judgment to the plaintiff following a seven-day trial. I have now received submissions on costs.
[2] As set out in the reasons for judgment, the claim arose under an agreement between Ms. Woods when she was an upper year law student at the University and CIPPIC, a legal clinic operated by the Faculty of Common Law. The plaintiff had developed a concept for a class action to unlock funds owed by the music industry to certain artists who could not be identified or located. CIPPIC had entered into a consortium agreement with two law firms to pursue the class proceeding and had agreed to compensate the plaintiff if and when CIPPIC received a portion of compensation awarded to class counsel.[^1]
[3] I awarded judgment for $328,396.82 which I remarked was very close to the position taken by the University and a long way from the claim asserted by the plaintiff. As I found at the trial, the plaintiff was owed precisely what the agreement required. That was a minimum of 5 percent of the costs awarded to class counsel or 50 percent of the amount paid by the consortium to CIPPIC. CIPPIC had received $656,793.64 (which was 10 percent of the award to class counsel).[^2]
[4] A successful plaintiff is presumptively entitled to costs on a partial indemnity scale. The court however has full discretion to make an award of costs that is just, under all of the circumstances. Considerations will include offers to settle, including compliant Rule 49 offers, the result of the proceeding, the conduct of the parties, maintenance of unreasonable positions that lengthened the proceeding or drove up the costs and all of the other factors set out in Rule 57.01.
[5] As discussed in the reasons for judgment, the plaintiff had sued the University not only for what she said was her entitlement under the agreement (5 percent of the total awarded to the class rather than the 5 percent of the counsel fee) but also for a myriad of other causes of action including breach of fiduciary duty, professional negligence, breach of copyright, misrepresentation and bad faith. She also sought punitive damages. I determined that there was no substance to these claims and awarded only what the plaintiff was owed under the contract.
[6] The plaintiff was only partially successful when measured against the claims she advanced (up to $3.6 million). Moreover, it is reasonable to infer that had she made demand only for the amount the court ultimately awarded at the outset of the litigation, she would have been paid. Instead of this, her original demand to the University was for millions of dollars and when it was suggested she meet to discuss what she really was owed, she commenced this litigation. At no time did the plaintiff make a reasonable offer to settle.
[7] On the other hand, faced with this claim, the University denied all liability. Apart from a nominal offer made in 2013 ($40,020 plus interest), it was not until March 5, 2014 that the defendant made a significant offer by proposing to pay $312,500. It was not until June 18, 2019 that the defendant offered to pay $328,397 plus interest and costs to the date of the offer.
[8] This June 18 offer, however, meets the requirements of Rule 49.10 (2). Unless the court orders otherwise, that rule provides for partial indemnity costs to the plaintiff to the date of the offer and partial indemnity costs to the defendant from the date of the offer until the end of the trial. The plaintiff submits that partial indemnity costs to the date of the offer would be $114,854.31 (based on actual costs to that date of $188,787.81). The University submits that its partial indemnity costs from the date of the offer should be $103,254.77.
[9] I agree with counsel for the University that the plaintiff’s total bill of costs of approximately a half million dollars is unreasonable. The defendant’s total bill of costs to the end of trial is just over a third of that amount.
[10] In awarding costs, the court must consider not what the party receiving costs felt it was necessary to spend on the litigation but rather what amount it is reasonable to require the other party to pay. I acknowledge that a plaintiff has the burden of proof and will frequently incur more costs than a defendant but in this case the plaintiff’s costs were undoubtedly driven by the multiple causes of action she fruitlessly attempted to pursue. There was a perfectly legitimate triable issue about the proper interpretation of the contract and the amount owing under the contract without seeking to pursue additional exotic claims that were not supported by the evidence.
[11] In the final analysis, I find that a fair result to both parties is achieved in this case by awarding no costs. This result is readily achieved by application of Rule 49 because the plaintiff’s reasonable costs to the date of the offer would approximate the $103,254.77 claimed by the University from the date of the offer to the end of the trial. Even without Rule 49, however, this result appears fair.
[12] The plaintiff was successful in obtaining judgment for the amount owed to her under the contract. The University did not formally acknowledge that debt nor offer to pay it until well into the litigation. The University was paid and has had the benefit of the funds derived from the class proceeding. In addition, while I found no liability to the plaintiff for negligence, there might have been no issue to try had CIPPIC approached the questions of contractual drafting, independent legal advice, contract administration and documentation with the kind of precision a law school might encourage in training future lawyers.
[13] On the other hand, the plaintiff and her lawyers crafted a complex sprawling action attempting to fix liability on the University well beyond the amount she recovered. Various allegations were made about the integrity and professional competence of lawyers who worked for the University and who the plaintiff described as friends. This action was pursued over more than seven years and the University has been obligated to mount a defence up to and including the trial. Those could all be factors in denying costs to an otherwise successful plaintiff.
[14] As a consequence, in the exercise of my discretion pursuant to s. 131 of the Courts of Justice Act, there will be no costs.
[15] There was also a motion for a sealing order. That will be the subject of a separate endorsement.
Mr. Justice C. MacLeod
January 5, 2022
COURT FILE NO.: 13-57387
DATE: 2022/01/05
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Tanya Woods and 2285675 Ontario Inc., Plaintiffs
AND:
University of Ottawa, Defendant
BEFORE: Regional Senior Justice Calum MacLeod
COUNSEL: Jason Rabin, D. Kenneth Gibson, & G. Boyd Aitken, for the Plaintiffs
Jamie A. Macdonald & Crystal Li, for the Defendant
COSTS DECISION
Regional Senior Justice Calum MacLeod
Released: January 5, 2022
[^1]: For full details, see the reasons Woods et al. v. University of Ottawa, 2021 ONSC 5720
[^2]: See Baker (Estate) v. Sony BMG Music (Canada) Inc., 2011 ONSC 7105