Court File and Parties

Court File No.: CV-19-626722-0000 Date: 2023-05-21 Superior Court of Justice - Ontario

Re: Mirza Chaudhary and Masud Raja, Plaintiffs And: Muhammad Shahid, Defendant

Before: Vermette J.

Counsel: Jonathan Rosenstein, for the Plaintiffs Thabang Pebane and Abdalla Ali Al-Baalawy, for the Defendant

Heard: In writing

Endorsement as to Costs

[1] On January 25, 2023, I released an endorsement (2023 ONSC 653) dismissing the action under subsection 137.1(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”).

[2] The parties were not able to agree on costs and have delivered costs submissions.

[3] Subsection 137.1(7) of the CJA states the following on the issue of costs:

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.

Positions of the parties

a. Position of the Defendant

[4] The Defendant is seeking costs on a full indemnity basis in the amount of $34,366.96 pursuant to subsection 137.1(7) of the CJA.

[5] The Defendant submits that this “anti-SLAPP” [1] motion was complex and required in-depth analysis of the law and evidence. He points out that success on the motion led to the dismissal of the Plaintiffs’ entire case.

[6] The Defendant notes that subsection 137.2(1) of the CJA provides that a motion under section 137.1 may be made at any time after the proceeding has commenced. He states that, after consideration, he decided to wait until after the examinations for discovery were conducted before proceeding with a complex and costly motion under section 137.1 because there would be further evidence for the parties to consider at that time.

b. Position of the Plaintiffs

[7] While the Plaintiffs do not dispute that the Defendant is entitled to costs, their position is that the costs should be on a partial indemnity basis.

[8] The Plaintiffs argue that it is appropriate in this case to depart from the “augmented costs approach” set out in subsection 137.1(7) of the CJA because of the Defendant’s delay in bringing the anti-SLAPP motion. The Plaintiffs rely on the decision of the Court of Appeal in Levant v. Day, 2009 ONCA 244 at para. 29 (“Levant”), where the Court stated the following with respect to a related provision, subsection 137.1(8) of the CJA: [2]

Both parties point to the underlying merits of each of their positions before the motion judge, and her assessment of the merits as having an impact upon the issue of costs of the motion. The most significant factor here, however, is that the anti-SLAPP motion was brought after the action was set down for trial. As indicated in Pointes [1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22] at para. 73, s. 137.1 establishes a “judicial screening or triage device designed to eliminate certain claims at an early stage of the litigation process”. Section 137.1 contains various provisions intended to expedite the hearing of these motions, including a prohibition against taking other steps until the motion is heard: Pointes, at para. 43. Given the serious cost consequences which can result from a successful anti-SLAPP motion, such as full indemnity costs as per s. 137.1(7), these motions should be brought early in the proceedings. Here, the delay in bringing the anti-SLAPP motion justified an award of costs in favour of the successful plaintiff, the respondent, despite s. 137.1(8).

[9] The Plaintiffs submits that if delay in bringing the motion makes it “appropriate in the circumstances” to depart from the augmented costs rule in subsection 137.1(8) of the CJA, then that same delay should also make it “appropriate in the circumstances” to depart from the augmented costs rule in subsection 137.1(7).

[10] The Plaintiffs do not take issue with the quantum of costs claimed by the Defendant with respect to the motion (i.e., $4,828.50 on a partial indemnity basis). With respect to the costs of the action, the Plaintiffs argue that the Defendant should only be awarded half of the amount that he is claiming on a partial indemnity basis ($15,795.27 / 2 = $7,897.64) as these costs would have been avoided if the motion had been brought in a timely fashion.

Discussion

[11] When deciding how to exercise its discretion under subsection 137.1(7) of the CJA, the Court is to 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 Rule 57.01 of the Rules of Civil Procedure, as well as 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 Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686 at para. 63.

[12] I agree with the Plaintiffs that some discount is warranted to account for the delay in bringing the motion. However, the discount should be more modest than the one proposed by the Plaintiffs.

[13] In my view, there is no valid reason not to grant costs on a full indemnity basis with respect to the costs of the motion. The delay in bringing the motion did not affect the quantum of these costs and, in accordance with subsection 137.1(7), the Defendant is entitled to his costs of the motion on a full indemnity basis (i.e., $8,047.50). I note that the quantum of costs incurred by the Defendant for the motion is lower than the amount reflected in the Plaintiffs’ costs outline, which supports the reasonableness of the amount sought by the Defendant.

[14] In contrast, the delay in bringing the motion had an impact on the costs incurred by the parties with respect to the rest of the action. A portion of the costs could have been avoided had the motion been brought earlier and this needs to be taken into consideration. However, I disagree with the Plaintiffs that the delay justifies a double discount, i.e., using a partial indemnity scale instead of a full indemnity scale and cutting the costs in half. Given that subsection 137.2(1) of the CJA provides that a motion under section 137.1 may be made at any time after the proceeding has commenced, I find that it would not be appropriate to exclude completely a significant portion of the costs incurred by the Defendant in the action, as suggested by the Plaintiffs. This is especially the case since the Plaintiffs used the transcript of the examination for discovery of the Defendant in support of their position on the motion. In my view, the appropriate discount for the delay in bringing the motion is to grant costs on a partial indemnity basis, which is the typical costs consequence when an action is dismissed.

[15] Based on the Defendant’s costs outline, the Defendant’s costs on a partial indemnity basis for the action (minus the motion) are in the amount of $15,795.27. The costs outline shows two timekeepers for most categories of time spent, but the time spent by each timekeeper is not specified. While the Plaintiffs have not filed a costs outline reflecting their costs of the action and have not commented on the quantum sought by the Defendant (except for their position that it should be reduced to account for the delay in bringing the motion), this Court must be satisfied that the costs sought by the Defendant are fair and reasonable. Based on my review of the Defendant’s costs outline and the hours spent by his lawyers, I find that it is appropriate to apply a small reduction to take into account potential duplication of work between the timekeepers involved and to ensure the overall reasonableness of the costs award in light of all the circumstances of this case. In my view, the appropriate amount of costs on a partial indemnity basis for the action is $12,000.00.

Conclusion

[16] Taking the foregoing into account, as well as the factors set out in Rule 57.01(1) of the Rules of Civil Procedure and the reasonable expectations of the parties, I find that the fair and reasonable award of costs in favour of the Defendant is: (a) for the motion, $8,047.50 on a full indemnity basis; and (b) for the rest of the action, $12,000.00 on a partial indemnity basis. In my view, this is an amount that the Plaintiffs should reasonably have expected to pay in the event that they were unsuccessful on the motion and the action.

[17] The costs are payable by the Plaintiffs to the Defendant within 30 days.

Vermette J. Date: May 21, 2023

Footnotes

[1] “SLAPP” stands for strategic lawsuits against public participation.

[2] Subsection 137.1(8) of the CJA provides that “[i]f a judge does not dismiss a proceeding under [section 137.1], the responding party is not entitled to costs on the motion, unless the judge determines that such an award is appropriate in the circumstances.”