DATE: 20230925
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Heath v. Attorney General of Canada et al
BEFORE: Associate Justice Rappos
COUNSEL: Nancy Sarmento Barkhordari, for the Plaintiff Tengteng Gai and Sahar Mir, for the Defendant, Attorney General of Canada
HEARD: July 6, 2023 (via videoconference) and In Writing
E N D O R S E M E N T
RELIEF SOUGHT BY THE PLAINTIFF
[1] The Plaintiff, Julian Heath, brought a motion for an order setting out a timetable to be adhered to by the Plaintiff and the Defendant, the Attorney General of Canada.
[2] The motion was returnable before me on July 6, 2023. An order was granted on consent of both parties. The timetable attached to the order sets out dates for the completion of examinations for discovery and mediation that were agreed to by the parties and itemized in an Amended Discovery Plan.
[3] In his notice of motion dated May 3, 2023, the Plaintiff also sought costs of his motion that was originally returnable on April 12, 2023. At that motion, the Plaintiff intended to seek an order striking the statement of defence of the Defendant for delay, and/or failure to provide its list of documents under rule 30.08(2). In the alternative, the Plaintiff sought an order setting out a timetable.
[4] The motion to strike did not proceed on April 12, 2023, as, through inadvertence, the motion was not confirmed by Plaintiff’s counsel in accordance with rule 37.10.1.
[5] At the hearing on July 6, 2023, the parties argued the issue of the Plaintiff’s entitlement to costs of the motion to strike. The Plaintiff acknowledged that the motion to strike was rendered moot as a result of the parties agreeing to the Amended Discovery Plan.
[6] As set out in my Endorsement dated July 6, 2023 (the “Prior Endorsement”), I raised with counsel the following three issues regarding the Plaintiff’s request for costs:
(a) the jurisdiction to order costs with respect to the motion to strike, since that motion was not before me and was not intended to be heard by me;
(b) the impact of rule 37.10.1(4), which provides that “[i]f no confirmation is given under subrule (1), the motion shall not be heard and is deemed to have been abandoned, unless the court orders otherwise”; and
(c) the applicability of the body of case law that holds that costs generally should not be awarded when parties settle “except for costs”. See Muskala v Sitarski, 2017 ONSC 2842, Kearney v. Hill, 2017 ONSC 6306, and the decisions that have followed and/or cited those two decisions.
[7] The Prior Endorsement set out a timeline for the parties to serve their written submissions on these issues, which the parties adhered to.
FACTS
[8] This action was commenced on October 9, 2020. The Plaintiff seeks $7.0 million in damages in connection with his treatment while he was an inmate at a penitentiary known as Collins Bay Institution. The Plaintiff alleges, among other things, that he was improperly searched, improperly detained in a dry cell for five (5) days, and improperly placed in administrative segregation.
[9] The Defendant initially took the position that the Plaintiff was a class member in a class action, such that certain claims in this action were duplicative. The issue was discussed at a case conference before Justice Perell on January 29, 2021.
[10] The Defendant subsequently served its statement of defence on or about March 12, 2021.
[11] The Plaintiff brought a motion to opt out of the class action, which was rendered moot because of a decision that provided for an additional opt-out period.
[12] On September 8, 2021, the Plaintiff confirmed in writing to the Defendant that he had opted out of the class action.
[13] On September 9, 2021, counsel for the Defendant noted that document disclosure would “be a lengthy process” and expected that the earliest documents would be ready for disclosure would be early in 2022.
[14] On September 10, 2021, the Plaintiff served a draft affidavit of documents.
[15] The affidavits filed for the motion contain copies of numerous e-mails and letters exchanged by counsel between September 10, 2021 and February 22, 2023 regarding production of documents, the scheduling of examinations for discovery and mediation, and the completion of a discovery plan.
[16] On September 20, 2021, counsel for the Defendant provided tentative dates for meditation, as the Defendant “is not prepared to firmly schedule dates at this time and confirmation that work is underway on our end to advance this litigation.” In response to a request for a schedule, counsel stated that “I will revisit the issue of a schedule one the AGC’s documents have been provided to you (which may impact your own assessment of the timing of discoveries) or early in the new year, whichever comes first.”
[17] On February 23, 2022, the Defendant was still not prepared to disclose relevant documents. Counsel to the Defendant stated in an email that “this is a lengthy process. I expect it will still be at least two or three months before disclosure will be ready.”
[18] On April 6, 2022, counsel to the Defendant stated in an email that “the AGC is not in a position to confirm next steps until we have provided our documentary disclosure. Unfortunately, the AGC will still require at least 4-6 more weeks to complete its productions.”
[19] On July 6, 2022, the Plaintiff served his motion record for the motion to strike. The motion record was 106 PDF pages, and contained a three-page notice of motion, a 27 paragraph/5-page affidavit (without exhibits) sworn by one of the Plaintiff’s lawyers, and copies of the pleadings.
[20] From July to November 2022, lead counsel to the Defendant was on medical leave and the matter did not progress. Following counsel’s return, the parties exchanged correspondence concerning the preparation of a discovery plan.
[21] In an email sent on November 16, 2022, counsel to the Plaintiff informed counsel to the Defendant that “costs of the motion would be mitigated by Canada complying with its obligations under the Rules at this time.”
[22] On December 19, 2022, counsel to the Defendant stated in an email that the Defendant was in the final stages of completing its documentary disclosure. On December 20, 2022, counsel noted that “I have repeatedly forewarned you of the length and involved process the AGC’s documentary discovery would be in this case.”
[23] The Plaintiff’s materials indicate that by January 13, 2023, his counsel had commenced preparation of supplementary materials in support of his motion to strike.
[24] On January 13, 2023, counsel to the Defendant confirmed that productions would be delivered by January 31, 2023. The Defendant delivered its list of documents on January 30, 2023. Supplementary lists of documents were provided on February 13, 2023 and March 4, 2023.
[25] On February 7, 2023 the parties signed a Discovery Plan.
[26] On February 8, 2023, the Plaintiff offered to settle the motion to strike with the parties agreeing to a timetable and the Defendant paying $5,000 in costs to the Plaintiff. The Defendant declined the offer to settle and took the position that it was unnecessary for the Plaintiff to bring the motion and it did not change the Defendant’s production timeline.
[27] In an email sent on February 16, 2023, Plaintiff’s counsel stated that if a timetable was agreed to, “then the only issue to be put before the court on April 12, 2023 will be that of costs.”
[28] As noted above, the Amended Discovery Plan was agreed to on February 22, 2023.
[29] The Plaintiff served a supplementary motion record on March 1, 2023, and a factum and book of authorities on April 3, 2023.
[30] Following the failure to confirm the April 12, 2023 hearing date and it being struck from the list, the Plaintiff served a motion record dated May 3, 2023 (which contained the materials that were filed for the April 12, 2023 motion), a responding motion record, a factum, and a compendium.
[31] The Defendant filed a motion record dated June 15, 2023. It contains an affidavit sworn by a paralegal employed by the Department of Justice. The affidavit describes the process faced by Correctional Service of Canada (“CSC”) in collecting relevant documents for litigation and vetting and redacting them for security and privacy reasons. The affiant states that the Defendant “generally requires significantly more time in cases involving CSC and federal penitentiaries to serve a list of documents than is provided for under the Rules.”
[32] The affidavit provides no explanation or specifics as to what the reason for delay in production was in this case. The Defendant produced 103 documents totaling nearly 400 pages.
[33] The Defendant did not seek costs of the abandoned April 12, 2023 motion and did not seek costs for the July 6, 2023 motion.
ANALYSIS
[34] Costs of a step in a proceeding are in the discretion of the court, as set out in section 131 of the Courts of Justice Act (Ontario). Rule 57.01 of the Rules of Civil Procedure sets out factors that the court may consider in exercising such discretion. The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, at paras. 24, 26, and 37-28).
[35] The Court must exercise its discretion “with a view to balancing compensation of the successful party with the goal of fostering access to justice” [emphasis added] (Janmohamed v. Dr. M. Zia Medicine Professional Corporation, 2022 ONSC 6561, at para. 9).
[36] Both parties take the position that I have the jurisdiction to order costs for the motion to strike, despite that motion being moot, abandoned under rule 37.10.1(4), and technically not before me at the July 6, 2023 hearing.
[37] Based on my review of the decisions cited in the parties’ submissions, I am satisfied that I have the jurisdiction to determine whether it is appropriate to award costs in favour of the Plaintiff.
[38] In Muskala v Sitarski, 2017 ONSC 2842, Justice Myers expressed the view that “costs generally should not be awarded when parties settle ‘except for costs’” (para. 5) and that “costs are an incident of the determination of the rights of the parties. They flow from a decision. They are not themselves intended to be the subject of the dispute” (para. 8).
[39] Justice Myers noted that there was a “general rule against awarding costs on a settlement”, but that there “may be exceptional cases where a settlement is reached and different considerations lead to a different outcome” (para. 12).
[40] In Kearney v. Hill, 2017 ONSC 6306, Justice P.J. Monahan (as he then was) reiterated that the “general rule is that where a proceeding is settled on all issues except for costs, the court is slow to make an award of costs against one of the parties” (para. 27). Justice Monahan noted that “there may well be exceptional circumstances where, despite the fact that a settlement is reached, it may nevertheless be appropriate to make an award of costs” (para. 28).
[41] In determining whether exceptional circumstances exist, the court is to look at the factors listed in rule 57.01(1), with a focus on the result, whether there were any written offers to settle, whether the conduct of any party “tended to shorten or to lengthen unnecessarily the duration of the proceeding, and whether any step in the proceeding was improper, vexatious or unnecessary.” (para. 31).
[42] I have reviewed the cases relied on by both parties as examples of situations where costs were and were not awarded in connection with motions that had settled.
[43] Based on my review of the case law and relevant statutory provisions, including subrules 1.04(1) and (1.1) of the Rules of Civil Procedure, I am satisfied that there are exceptional circumstances that warrant awarding costs in favour of the Plaintiff.
[44] While I appreciate that the collecting and preparing of documents for discovery by the Defendant may be difficult when the CSC is involved, in my view the Defendant’s actions unnecessarily lengthened the duration of this proceeding.
[45] The action was commenced on October 9, 2020. The Defendant served its statement of defence on March 12, 2021. It was not until January 30, 2023, almost two years later, that the Defendant served its initial list of documents.
[46] No specific details have been put forward as to why it took the Defendant over 25 months after the action was commenced to produce a list of documents.
[47] Section 27 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 provides that “Except as otherwise provided by this Act or the regulations, the rules of practice and procedure of the court in which proceedings are taken apply in those proceedings.”
[48] The Defendant has not argued that it is not bound by the Rules of Civil Procedure or that there is an applicable exemption in this case.
[49] Additionally, the Plaintiff raised with the Defendant the issue of mitigating costs and settling the amount of costs. The Defendant refused to do either.
[50] As noted by the Court of Appeal in Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310:
[43] The goal of Ontario’s civil justice system is to provide the public with the just, most expeditious, and least expensive determination of every civil proceeding on its merits… To achieve that goal, parties to every action must comply with their document disclosure and production obligations without the need for a court to intervene to compel their adherence. This court has stated, in regard to family law litigation, that a party’s fundamental duty to disclose financial information is automatic, immediate, and ongoing, and should not require court orders to obtain production…The same applies to civil actions. The fundamental obligation to disclose relevant documents and produce those that are not privileged should be performed automatically by a party, without the need for court intervention. [emphasis added]
[48] However, each time a party defaults on its disclosure and production obligations and requires the opposite party to seek the court’s assistance to remedy the default, two things happen. First, the cost of the litigation increases. Motions are not cheap; they add significantly to the overall costs of a civil case. Second, the final determination of the case on its merits gets pushed back, delayed by the need to bring a defaulting party into compliance with its disclosure obligations. [emphasis added]
[54] Parties who default on their documentary disclosure and production obligations impede the ability of our civil justice system to provide the fair, timely, and cost-effective adjudication of civil disputes on their merits. Their defaulting conduct promotes the culture of complacency towards delay decried by the Supreme Court, in the context of the criminal justice system… As well, such conduct undermines on-going efforts to shift the Canadian civil litigation culture in the direction of providing more accessible justice to the public. [emphasis added]
[51] Additionally, in Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, the Court of Appeal noted that “there is a strong public interest in promoting the timely resolution of disputes…The interest of litigants involved in the civil justice system in timely justice is obvious. Litigants are entitled to have their disputes resolved quickly so that they can get on with their lives. Delay multiplies costs and breeds frustration and unfairness” (para. 25).
[52] Taking into account these principles, in my view, it was not unreasonable for the Plaintiff, by July 2022, some 19 months after the action was commenced, to take steps to compel the Defendant to adhere to the discovery provisions of the Rules of Civil Procedure by bringing a motion to strike the defence under rule 30.08(2).
[53] Accordingly, the Plaintiff is entitled to costs in connection with bringing that motion.
[54] In terms of the quantum of the costs to be awarded, the Plaintiff seeks costs on a substantial indemnity basis. In my view, there is nothing in the materials before me that establishes that there has been “reprehensible, scandalous or outrageous conduct” on the part of the Defendant to warrant awarding costs on a substantial indemnity basis. As a result, costs should be awarded on a partial indemnity basis, as is generally the case (Laczko v. Alexander, 2012 ONCA 872, at para. 2).
[55] I have reviewed the Plaintiff’s Cost Outline dated March 31, 2023, wherein he seeks partial indemnity costs of $7,458 (all inclusive) and substantial indemnity costs of $9,898.80 (all inclusive). The Cost Outline does not include a breakdown of time spent on each of the materials prepared by counsel to the Plaintiff. It simply states that counsel spent 36 hours on matters dealing with the motion.
[56] The Cost Outline does not include an amount for counsel attending and arguing the motion. As well, the Cost Outline was not updated to include an amount for the preparation of written submissions as detailed above.
[57] In my view, in the circumstances, I conclude that it is fair, reasonable, and proportionate, and within the reasonable expectation of the parties, for the Defendant to pay costs to the Plaintiff in the amount of $6,500 all-inclusive within 60 days.
DISPOSITION
[58] I hereby order that the Defendant pay costs fixed in the amount of $6,500 (all inclusive) to the Plaintiff within 60 days of the date hereof.
[59] Order to go as electronically amended and signed by me.
Associate Justice Rappos
DATE: September 25, 2023