Court File and Parties

Court File No.: CV-21-666255 Date: 2023-01-09 Superior Court of Justice - Ontario

Re: COOL WORLD TECHNOLOGIES INC., and ETHEL KATHERINE DODDS, Applicants – and - TWITTER, INC. and TWITTER CANADA ULC, Respondents

Before: F. L. Myers, J.

Counsel: Sujit Choudhry and Joel Bakan, for the Applicants Matthew Diskin and Kristin AuCoin, for the Respondents

Read: January 7, 2023

Costs Endorsement

[1] In a brief endorsement dated December 14, 2022, I dismissed the respondents’ motion to strike the amended notice of application for failing to state a reasonable cause of action.

[2] The applicants seek their costs of the motion on a substantial indemnity basis of $89,393.90 plus HST and disbursements of $17,625.48.

[3] The applicants sue the respondents for refusing to post and promote their commercial advertisements on Twitter. Twitter refused the ads ostensibly because the ads offended Twitter’s prohibition against politicized paid content.

[4] Twitter submitted that this claim was an inappropriate effort to apply the constitutional right of freedom of expression enshrined in s. 2 of the Charter of Rights and Freedoms to private parties in a private contractual dispute.

[5] I held that, to the contrary, the amended notice of application stated with great particularity a cause of action for breach of contract. No doubt the applicants rely upon aspects of freedom of expression to inform their case. They do so while advancing the recognized public policy defence to contractual limitations discussed by the Supreme Court of Canada in cases such as Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4.

[6] Tercon is not an arcane or esoteric case. The court routinely sees exclusion clauses in contracts and deals with the balancing issues raised in Tercon.

[7] As the applicants pleaded facts that give rise to recognized causes of action, the motion was dismissed. Whether the claim succeeds or fails is for another day.

[8] The applicants say they incurred costs to develop their theory of the case before the application commenced of $57,982 plus HST. They do not seek recovery of those costs on this motion.

[9] The applicants then incurred costs of $50,337.75 plus HST reviewing the respondents’ motion and amending their initial notice of application to add requisite facts to make out the causes of action alleged.

[10] I do not see how it can be reasonable for the respondents to be responsible for costs incurred by the applicants to amend an inadequate pleading in response to compliant. This is the usual outcome of a successful motion to strike. As I noted in my initial endorsement, motions like this simply teach the applicants how to do a better job to plead their causes of action against the moving respondents.

[11] The applicants then claim $24,150 for 10 hours of Mr. Choudhry’s time and for 30 hours of Mr. Bakan’s time to draft a factum (that was oddly delivered in a motion record). They say that the time is heavily discounted. Mr. Choudhry is seeking $800 - $840 per hour. Mr. Bakan is asking for $500 - $525 per hour. Mr. Bakan is a senior lawyer in years of call. He is a renown academic. But he proposes to bill at senior rates for performing time-intensive tasks of document preparation.

[12] The applicants claim a further $20,475 plus HST for 10 hours for each of Mr. Choudhry and Mr. Bakan for preparation for court. Only Mr. Bakan made submissions in court for the applicants. They say that this time too is heavily discounted.

[13] The disbursements consist of: (a) contract paralegal fees, filing fees, social media expert fees, legal consultant fees, and travel, accommodation, and meals; and (b) $2,405.03 inclusive of HST for printing the compendium. Apart from filing fees, I do not see how any of the rest is recoverable as a disbursement on a simple motion to strike. No expert evidence was admissible or adduced. Legal fees are to be assessed as fees. No printing of a compendium was required. The entire documentary process was dealt with electronically.

[14] The motion was heard in person. I do not know why anyone had to incur travel, accommodation, or meals for the motion. Virtual attendance would have been completely acceptable and appropriate.

[15] Virtual proceedings have benefits and warts. But one of the clearest benefits is the enhancement of access to justice by reducing the need for costly attendance by people who must spend or lose money to attend – whether counsel from away or expert witnesses who need to close their professional practices. Virtual proceedings save people from needless costs.

[16] Clients are free to pay their lawyers to travel to in-person hearings if they wish. But absent good grounds, I do not think it reasonable to expect the other side to pay for travel costs for a straightforward pleadings motion.

[17] The applicants do not accuse the respondents of any reprehensible misconduct to entitle them to costs assessed at a punitive level. They assert that the motion was without merit and that the outcome was asymmetrical. That is, the applicants risked their entire proceeding being ended. The respondents’ worst outcome was that the case moves forward in the ordinary course.

[18] Both of those submissions are correct in my view. That is what happens on a motion that seeks dismissal of a claim. The applicants won and as a result they are presumptively entitled to their costs on a partial indemnity basis.

[19] The applicants submit that the time they expended was reasonable especially because the topic is one of potentially great public interest. The applicants submit:

Fourth, any assessment of the proportionality of the fees of Twitter and the Applicants requires a comparison of the length and quality of their written submissions. The Applicants drafted the amended Notice and a comprehensive factum. Twitter only prepared a factum, which failed to address or even cite leading Canadian cases on the application of the Charter to private law (Ryan, Pepsi-Cola, Simpson, Grant); the doctrines of public policy (Douez, Uber, Canada Trust), unconscionability (Uber), and good faith (Wastech); or contracts of adhesion (Uber). Nor did Twitter's factum cite any secondary sources.

[20] I am afraid it is the applicants who approached the motion disproportionately. I respect that it took them $57,000 to draft a notice of application that did not work and then another $50,000 to draft one that did work. It may be hugely creative and it may change the law of internet advertising in Canada. Or not. But that is not the point right now. At this stage, I expressed the outcome of the motion as follows:

[34] In short, this is just a pleadings motion. The facts in the notice of application, if true, state causes of action to challenge Twitter’s decisions and the bases it asserted for those decisions. The doctrines of good faith, unconscionability, and public policy are all known to law and are all engaged and fairly pleaded with great particularity in the originating process. Whether the facts are ultimately proven to be true or a judge finds there to be a contract, or a breach of the duty of good faith on the facts as proven, or sufficient market power, vulnerability, and unfairness to amount to unconscionability, or any public policy applicable and of sufficient weight to meet Tercon and subsequent cases, is for another day.

[21] Tactically speaking, Twitter probably should have quit while it was ahead after it showed the applicants that their first draft was deficient and led them to produce an amended notice of application that contains express references to the existence of a contract and contractual doctrines that are known to law. But it pressed forward, invoked the jurisdiction of the court on the merits of the claim, and lost. It should therefore be liable to pay the applicants’ reasonable costs fixed as between the parties and with access to justice in mind.

[22] I do not agree that this is a case of a behemoth litigant trying to bury a little guy through bullying tactics. The applicants make the point themselves that Twitter’s factum was not especially comprehensive. It argued its main point – that the applicants were trying to apply constitutional rights to a private contract. Tercon was a full response. The rest, while interesting, was foreshadowing of argument at trial or on appeal after issues have been joined and after the relevant facts have been found at trial.

[23] Counsel may wish to consider whether this matter ought properly to proceed as an action especially if the applicants are going to need discovery of the documents behind Twitter’s many policies and Twitter’s application of those policies to the applicants and others in similar circumstances. But that too is for another day.

[24] I do not doubt Professor Bakan’s comprehensive research nor his publicity peoples’ entitlement to have him act for them. But it is not reasonable, in my view, to saddle the party opposite with ten hours of senior counsel time for Mr. Choudhry and then with paying for drafting work to be performed at senior rates.

[25] In all, in my view, Twitter ought to be liable to partially indemnify the applicants for the fees and disbursements reasonably incurred responding to the unsuccessful attack on the amended notice of application. In my judgment, adjusting the rates claimed to 60% for “partial indemnity”, reducing the costs claimed Mr. Choudhry at very senior rates for occupying a second chair, and reducing the billing rate for drafting to a junior’s level (with senior supervision), reasonably entitles the applicants to partial indemnity for fees in the amount of $20,000 all-inclusive. I would allow $1,000 for unspecified filing fees and other disbursements.

[26] Whether any of the time referred to in paras. 8 and 9 above may be recoverable in the ultimate cause is for the judge who decides that issue. I did not include or consider any of it in fixing the costs of this motion.

F. L. Myers, J. Date: January 9, 2023