COURT FILE NO.: CV-19-1655 DATE: 2023/05/30 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Stephen Pack and Natasha Bitsakakis Pack, Plaintiffs AND: Cord Blood Bank of Canada Inc. and Bernadette Ellison aka Bernadette Scherz, Defendants

BEFORE: Justice M. J. Valente

COUNSEL: Emily C. Durst, for the Plaintiffs James Coristine, Counsel for the Attorney General for Ontario Safia J. Lakhani, Counsel for Iler Campbell LLP and Hunter Stone

SELF REPRESENTED: Bernadette Ellison aka Bernadette Scherz

HEARD: In Writing

THE HONOURABLE MR. JUSTICE M.J. VALENTE

COSTS ENDORSEMENT

Overview

[1] My ruling of April 6, 2023 addressed: (1) the motion of the defendant, Bernadette Ellison aka Bernadette Scherz (the “Ellison Defendant”) for leave to examine certain witnesses at the hearing of the plaintiffs’ motion to strike the statement of defence of the corporate defendant (the “Witness Motion”); and (2) the motions of the plaintiffs, His Majesty the King in Right of Ontario (the “Crown”) and Iler Campbell LLP (“Iler”) to quash various summonses to witness with respect to the plaintiffs’ pending motion to strike the statement of defence of Cord Blood Bank of Canada Inc. (collectively, the “Motions to Quash”).

[2] The plaintiffs, the Crown and Iler were each successful in opposing the Witness Motion and as moving parties on the Motions to Quash.

[3] In my ruling of April 6, 2023, I encouraged the parties to agree on the issue of costs, failing which I was prepared to entertain written costs submissions. I have the submissions of the plaintiffs, the Crown and Iler but no submissions from the Ellison Defendant although the time for delivering of their submissions expired on May 5, 2023 pursuant to my endorsement of April 6, 2023.

Position of the Parties

[4] The plaintiffs seek their costs of both motions on substantial indemnity basis in the amount of $10,498.32. The plaintiffs submit that they are entitled to their costs on this elevated scale because the Ellison Defendant unnecessarily lengthened the duration of the proceedings and their issuance of the summonses to witness were found to be an abuse of process. Iler likewise seeks its costs on the substantial indemnity scale in the amount of $7,263.75 for the same reasons as the plaintiffs. For its part, the Crown seeks its partial indemnity costs of $7,158.60. In support of its position the Crown submits that all of the information sought from it by the Ellison Defendant was available in the court files, and for that reason, both the Witness Motion and Motions to Quash were unnecessary.

[5] As previously stated, the Court has no cost submissions from the Ellison Defendant, and therefore, their position is unknown.

Guiding Principles

[6] Section 131(1) of the Courts of Justice Act, RSO 1990, c. C. 42, as amended, provides that “subject to the provisions of an Act or rules of the court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and that the court may determine by whom and to what extent the costs shall be paid.”

[7] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub-Rule 57.01(1), including, in particular:

a. the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer; b. the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[8] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants (see: Fong v. Chan, [1999] O.J. No 4600 (Ont. C.A.) at para. 24).

[9] Justice Perell in 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern costs rules, at paragraph 10, as follows:

(1) To indemnify successful litigants for the costs of litigation, although not necessarily completely: (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and to (5) to encourage settlements.

[10] The usual rule in civil litigation is that costs follow the event and that the rule should not be departed from except for very good reasons (see: Gonawati v. Teitsson, [2002] CarswellOnt 1007 (Ont. C.A.) and MacFie v. Carter, [1920] O.J. No. 71 (Ont. H.C.) at para. 28).

[11] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is “fair and reasonable” having regard to what the losing party could have expected the costs to be (see: Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, (Ont. C.A.)).

[12] A party may be entitled to substantial indemnity costs where a party makes an unproven allegation of fraud, bad faith or misconduct against another party, or conducts itself improperly during the course of the litigation: Conroy v. The College of Physicians and Surgeons of Ontario, 2011 ONSC 1664 at para 8; Brownhall v. Canada (Department of National Defence) (2007), 87 O.R. (3d) 130 (Div. Ct.).

Discussion

[13] The plaintiffs, the Crown and Iler were each successful on the motion. The issues were of moderate complexity, but I find that the matter was of considerable importance to each of them. Their materials were concise and of assistance to the Court.

[14] I also find the respective hourly rates and time expended by counsel for each of the plaintiffs, the Crown and Iler to be reasonable and appropriate.

[15] Because the Ellison Defendant (a) delivered voluminous materials which for the most part were of little assistance to the Court, (b) amended those materials more than once without any obvious purpose, and (c) at least in the case of the Crown, failed to confirm what evidence they sought to elicit from Court staff, it is my view that the Ellison Defendant lengthened unnecessarily the duration of the proceedings, and therefore, increased the costs of the successful parties.

[16] In determining the amount of costs to be awarded in favour of the plaintiffs, the Crown and Iler, I also rely on my finding that the Witness Motion and the numerous summonses to witness served by the Ellison Defendant were an abuse of process. The evidence sought by the Ellison Defendant was either irrelevant or already available to them. To my mind, the Ellison Defendant brought the Witness Motion and served the summonses to witness to delay the adjudication of the plaintiffs’ motion to strike the statement of defence of the corporate defendant. There cannot be any other rational reason for these strategic manoeuvres.

[17] Although I do not have the benefit of the Ellison Defendant’s costs submissions, and therefore, do not have the benefit of the amount of costs they might reasonably expect to pay, I do note that Justice Gibson ordered the Ellison Defendant on August 26, 2022 to pay the plaintiffs’ costs on a substantial indemnity basis following their failed Rule 15 motion. I am therefore of the mind that it ought to be within the Ellison Defendant’s reasonable expectations that a similar award would be made should they initiate additional motions with a view of delaying the litigation.

[18] Having made these findings, I am nonetheless not of the view that the Ellison Defendant’s conduct with respect to the Witness Motion and Quash Motion was not so improper, so egregious to warrant an award of costs against them on the substantial indemnity scale in the amounts claimed by the plaintiffs and Iler. On the other hand, they are each entitled to more than they would otherwise be awarded on the partial indemnity scale.

[19] In considering all of these factors and those under Rule 57.01 not specifically referenced, I exercise my discretion to fix costs of the motions as follows:

a. the costs of the plaintiffs are fixed at $8,000.00 plus HST together with disbursements of $339.00 inclusive of HST; b. the costs of Iler are fixed at $5,200.00 plus HST together with disbursements of $339.00 inclusive of HST; and c. the costs of the Crown are fixed in the partial indemnity amount as claimed of $7,158.60 plus HST.

Disposition

[20] It is therefore ordered that the Ellison Defendant shall pay:

a. costs to the plaintiff fixed at $9,379.00 all inclusive within 30 days of the date of this Endorsement; b. costs to Iler fixed at $6,215.00 all inclusive within 30 days of the date of this Endorsement; and c. costs to the Crown fixed at $8,089.00 all inclusive within 30 days of the date of this Endorsement.

M.J. Valente, J Released: May 30, 2023