Court File and Parties
Court File No.: CV-20-00646347-0000 Date: 2024-04-05 Superior Court of Justice - Ontario
Re: Ginoogaming First Nation, Plaintiff And: His Majesty the King in Right of Ontario, Defendant
Before: Associate Justice G. Eckler
Counsel: Michael Malouf, Self-Represented Party and non-lawyer Representative for The Quaternary Mining & Exploration Company Limited and Hardrock Extension Inc. Breanne Martin and Rachel Garrett, for the Plaintiff/Responding Party
Heard: January 22nd, 2024 by videoconference
Endorsement
1This is a motion by the defendants Michael Malouf, The Quaternary Mining and Exploration Company Ltd. (“Quaternary”) and Hardrock Extension Inc. (“Hardrock”) for an Order pursuant to Rule 23.05(1) of the Rules of Civil Procedure, for the plaintiff to pay the defendants’ costs on a substantial indemnity basis in the amount of $38,309.70 payable within 30 days as well as costs of this motion on a substantial indemnity basis.
Overview of the Facts
[2] The Plaintiff, Ginoogaming First Nation, “Ginoogaming” commenced an action on November 4th, 2020 (the “Action”) against His Majesty the King in Right of Ontario (“Ontario”), the Director of Exploration, William Kerr and the moving parties, Mr. Malouf and his two companies, The Quarternary Mining & Exploration Company Ltd. (Quarternary”) and Hardrock Extensions Inc. (“Hardrock”). [3] The moving party, Michael Malouf is the acting President of Quaternary and Hardrock and has worked as a prospector in the Geraldton-Longlac area since 1979. He lives in Geraldton and has represented himself throughout this proceeding and was granted leave to represent Quaternary and Hardrock as both companies are impecunious. [4] In June 2019, Ontario issued an exploration permit ( the “Ferau Permit”) to Quarternary purporting to allow it to conduct mining exploration activities within Wiisinin Zaahgi’igan (the “Ferau Project”). The other mineral exploration permit involves the defendant Mr. Kerr. The Ferau Permit purported to allow Quaternary to conduct mechanized drilling, stripping, pitting and trenching, line cutting and geophysical surveys as part of the Ferau Project located within the heart of Wiisinin Zaahgi’igan, which the Plaintiff describes as a keystone area of cultural and spiritual significance to Ginnoogaming and its members. [5] The Action pertains to these two mineral exploration permits relating to this area which, as noted, the plaintiff describes as a unique area of profound cultural and spiritual significance within Ginoogaming’s traditional territory called Wiisinin Zaahgi’igan. [6] Ginoogaming’s Indian Reserve is located near Longlac in northwestern Ontario. Its traditional territory centres on Long Lake and the tributaries that feed into it and the Wiisinin Zaahgi’igan is a Sacred Area south of the lake. [7] Ginoogaming initiated the Action on November 4th, 2020, after Mr. Malouf notified Ontario of his intention to proceed with the Ferau Project on or about May 29, 2020, which was forwarded to Ginoogaming on or about June 1, 2020. [8] In its initial Action, Ginoogaming sought, among other things: a) a declaration recognizing its existing Aboriginal and Treaty rights to use and protect, and conduct traditional and spiritual activities within, Wiisinin Zaahgi’igan; b) a declaration that Ontario and Quarternary have unjustifiably infringed such rights by permitting and conducting mineral exploration in Wiisinin Zaahgi’igan, respectively; c) interim, interlocutory, and permanent injunctions restraining Ontario from issuing permits or permissions under the Mining Act in relation to activity in Wiisinsin Zaahgi’igan, and restraining Quarternary and Mr. Kerr from proceeding with activities within Wiisinin Zaahgi’igan; and d) damages and interest from Ontario and Quarternary for infringement of Ginoogaming’s Aboriginal and Treaty rights. [9] On February 1, 2021, Mr. Malouf filed a Statement of Defence on behalf of himself, Quarternary, and Hardrock. Ontario has yet to file a Statement of Defence. [10] Aside from the injunction proceedings described below, this action is in its infancy. Ontario has not yet filed a statement of defence. Moreover, documentary productions have not yet been exchanged, nor have examinations for discovery been scheduled. [11] While Mr. Malouf and his companies were affected by the Action, the plaintiff’s position is that Ontario is the primary defendant and against whom most of the relief is sought. [12] On September 10, 2020, Justice Myers ordered that Mr. Malouf, Quarternary, and Hardrock were prohibited from engaging in any exploration activities within the Ferau Project area until Ginoogaming’s motion for an interlocutory injunction was decided (the “2020 Injunction”). [13] On June 1, 2021, Justice Vella extended the interim injunction restraining Quarternary and Hardrock from engaging in any exploration activities in relation to the Ferau Project (the “2021 Injunction”). Ginoogaming was successful against Mr. Malouf’s companies, but not against Mr. Malouf. Mr. Malouf sought $115,598.60 in costs on a substantial indemnity basis. Justice Vella found that the parties would bear their own costs on the motion, given the divided success in the matter. [14] Quarternary’s mining exploration permit expired on June 20, 2022, and Ontario has not issued another permit to Mr. Malouf or his companies in relation to the Ferau Project. [15] Ginoogaming sought a new interlocutory injunction against Mr. Malouf and his companies on September 2, 2022 (the “2022 Withdrawn Injunction”). Justice Vella denied Ginoogaming’s requested adjournment on January 27, 2023, and Ginoogaming withdrew its application. The 2021 Injunction was dissolved on February 9, 2023. [16] After denying Ginoogaming’s adjournment request, Justice Vella invited Mr. Malouf to make submissions on costs. Mr. Malouf sought costs on a substantial indemnity basis in the amount of $44,383.50 plus disbursements of $470.33. Justice Vella found that the time and disbursements Mr. Malouf claimed were excessive. She found the materials did not permit her to quantify the amount of pay or profits Mr. Malouf lost as a result of the time and effort he invested in the matter by way of opportunity costs. She rejected Mr. Malouf’s use of an hourly rate of $140.00. Justice Vella also rejected Mr. Malouf’s claim that Ginoogaming had “acted in bad faith during the course of this motion.” [17] Ultimately, Justice Vella found that Mr. Malouf had “only demonstrated a modest unquantified lost opportunity cost” and awarded him $2000 inclusive of HST and disbursements “as reflecting a reasonable allowance for his efforts with respect to this motion”. (2022 Withdrawn Injunction Costs Order at para. 14)
Change of Venue Motion
[18] On June 14, 2023, Mr. Malouf, on Quarternary’s behalf, brought a change of venue motion in writing to transfer the action from Toronto to Thunder Bay. Justice Nieckarz heard submissions on June 29, 2023. Ginoogaming opposed both the motion and that it be heard in writing. Ginoogaming requested that the matter be adjourned to the fall. [19] On July 6, 2023, Justice Nieckarz agreed with Ginoogaming that some oral argument may be required. She ordered a one-hour oral hearing because there were only two parties participating and the issues were relatively simple from a legal perspective. Justice Nieckarz ordered the hearing to take place on August 17, 2023 via Zoom. Ginoogaming was ordered to serve their responding materials by August 3, 2023.
Discontinuance and This Costs Motion
[20] On July 27, 2023, Ginoogaming served a notice of discontinuance, removing Mr. Malouf, his companies, and William Kerr as defendants. On August 1, 2023, Ginoogaming filed an Amended Statement of Claim removing Quarternary, Hardrock, Mr. Malouf, and Mr. Kerr as defendants. The Amended Statement of Claim no longer sought any damages or injunctions against the removed defendants. [21] On August 1, 2023, Ginoogaming wrote to the Ontario Superior Court of Justice requesting that the change of venue motion be struck from the hearing list as the action had been discontinued against Quarternary. [22] On August 2, 2023, Mr. Malouf wrote to the Ontario Superior Court of Justice objecting to the discontinuance and request to strike the change of venue motion. He also wrote to Justice Nieckarz’s judicial assistant requesting an “emergency case conference.” [23] On August 9, 2023, Justice Fitzpatrick held a case conference. He struck the change of venue motion for being moot as Ginoogaming had discontinued the action. [24] On August 28, 2023, Mr. Malouf served Ginoogaming with this costs motion, seeking an award of costs granted on a substantial indemnity basis in the amount of $38,309.70 including disbursements and fees.
The Parties’ Positions in Respect of Costs
[25] Mr. Malouf’s position is as follows: a) The plaintiff should be required to pay costs of the action and of this motion on a substantial indemnity basis. A marked departure from the usual scale of costs, using the substantial indemnity rate is necessary in this case, in order for the Court to reprimand the plaintiff for its conduct throughout this action. b) In pursuing its action against the Prospectors, the plaintiff had no bona fide claim against them, the litigation against the Prospectors was frivolous and vexatious, the plaintiff cannot justify their conduct over the past three years and there are no exceptional circumstances that justify the plaintiff escaping costs. c) Costs should be awarded in the amount of $38,309.70 including disbursements and court fees. Broken down, the moving party is seeking fees of $36,382.50, court filing fees of $1,017.00 and disbursements of $910.20. d) In calculating his costs, Mr. Malouf has used an hourly rate of $140 based partially on his lost opportunity costs for the work he would have performed in his usual vocation as a prospector, if not for the plaintiff’s litigation, accounting for the time and resources that he has spent over the past three years defending the Prospectors. e) Mr. Malouf submits that the costs noted above, are incurred as a result of the following: i. Preparing a statement of defence between August 18th, 2020 and February 3rd, 2021; ii. Preparing for a Change of Venue motion which would have proceeded on August 17th, 2023 in Thunder Bay if not for the plaintiff’s discontinuance; iii. Preparing for this motion; iv. Appearing in court on June 29th 2023 and August 9th, 2023; v. Forty-nine (49) emails with the plaintiff; vi. Court filing fees from the Change of Venue motion and this motion; vii. Disbursements between March 23rd, 2022 and August 9th, 2023. [26] The Plaintiff’s position is as follows: a) The law and facts support that Mr. Malouf should bear his own costs. The plaintiff submits that it had a bona fide cause of action as against Mr. Malouf and his companies, and denies that the plaintiff’s cause of action was frivolous or vexatious. b) The discontinuance of the action against Mr. Malouf and his companies was justified. The plaintiff submits that it did not discontinue immediately upon the Ferau permit expiring. However, it did discontinue at the early stages of this Action. Only Mr. Malouf and his companies have filed a statement of defence and neither case planning nor documentary discovery has commenced. c) Much of the activity in this Action has been regarding the two injunction applications which have already been the subject of cost decisions. d) Most of the remainder of the legal costs being claimed by Mr. Malouf have been the result of his own motions. e) Mr. Malouf has not met the test for self-represented litigant costs.
Rule 23.05 (1) and Entitlement to Costs
[27] Rule 23.05(1) of the Rules of Civil Procedure permits a party to make a motion respecting the costs of an action that has been discontinued and provides as follows: If all of part of an action is discontinued, any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of an action. [28] In October 2009, Rule 23.05 was amended such that there is no longer a prima facie entitlement of the defendant to costs of the discontinued action. Rather, pursuant to section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, the costs of a discontinued action, on a motion brought by any party, are within the discretion of the court, as are all costs of or part of an action. Digiuseppe v. Todd, 2012 ONSC 1028, 2012 O.J. No. 706 (S.C.J.) at paras. 18-21 [29] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 sets out a number of factors for the court to consider in exercising its discretion and the overriding principle is reasonableness. Bulloch-McIntosh v. Browne, 2011 ONSC 1210 at para. 16. [30] Determining whether to award the defendants costs requires a very fact specific analysis of the circumstances giving rise to the initiation of the action and its discontinuance. The Court has complete discretion to fashion a costs award that is in the interests of justice: Digiuseppe v. Todd, 2012 ONSC 1028, 2012 O.J. No. 706 (S.C.J.) at paras. 18-21 and Enerworks Inc. v. Glenbarra Energy Solutions Inc., 2016 ONSC 4291 at paras. 11 and 12. [31] Moreover, on a motion for costs under Rule 23.05, the court is further required to consider whether the plaintiff has satisfied the court that the material filed on the motion “discloses a bona fide cause of action, that is not frivolous and vexatious and which the plaintiff had some justification to commence, having regard to the conduct of the defendant”. Enerworks Inc. at parag.13 and Digiuseppe at parag.22. In this regard, the plaintiff must show that there was some evidence to justify commencing the action even if at an early stage it is not possible to say whether the action will succeed. The analysis should not speculate on what the result may have been. Enerworks Inc. at parag.13 and Digiuseppe, supra, at paras.22 and 24. [32] The court may determine that the plaintiff had a bona fide claim when it commenced the action. However, that by itself does not absolve the plaintiff of the potential cost consequences of a discontinued action. [33] In Digiuseppe v. Todd, 2012 ONSC 1028, 2012 O.J. No. 706 (S.C.J.) at para. 28, it was held that there is nothing in Rule 23.05(1) that adds to, or subtracts from, the court’s discretion to award costs or its obligation to consider the general principles under Rule 57.01 when exercising that discretion.
Whether the Defendant as a Self-Represented Litigant is Entitled to Recover Costs
[34] In Fong v. Chan and Benarroch v. Fred Tayar & Associates PC, 2019 ONCA 228, the Ontario Court of Appeal confirmed that self-represented litigants are not entitled to costs calculated on the same basis as litigants who retain counsel. [35] In Benarroch v. Fred Tayar & Associates PC, 2019 ONCA 228, (paras. 27, 32, 33 and 35) the Ontario Court of Appeal confirmed that in order to be eligible for costs, self-represented litigants must establish that:
- They incurred an opportunity cost by foregoing paying (or remunerative) work to prepare for the case, and
- The work claimed must exclude the work the litigant, as a client, would have performed in the event he had a lawyer. [36] In Benarroch, at para. 32, the Ontario Court of Appeal also confirmed that a self-represented litigant will not have fees assessed on the basis of an hourly lawyer's rate. Therefore, in this case, the relevant consideration is the amount of pay or profits that Mr. Malouf actually lost while performing work to defend the action that is "over and above the normal involvement of a client" (Benarroch, para. 27). [37] The Court of Appeal in Benarroch, quoting from Fong, further clarified that where the self-represented litigant is able to satisfy the court that he forewent paying work, and is claiming work that would have been done by a lawyer and not in his capacity as a client, the resulting lost opportunity costs "should be 'only a moderate' or 'reasonable' allowance for the loss devoted to preparing and presenting the case". Fong explained that, where a litigant is self-represented, some compensation may be awarded for lost opportunity costs, even in the absence of payments made to a lawyer. That compensation, however, is not for the time and effort that any litigant would have devoted to the case. It is only for the work done by the self-represented litigant over and above the normal involvement of a client, and provided it concerns work that would ordinarily be accomplished by a lawyer. The self-represented litigant must also show that an opportunity cost was incurred because some remunerative activity was foregone. (Benarroch para. 27)
Discussion
[38] I am satisfied that the materials filed disclose that the plaintiff’s action is indeed a bona fide cause of action that is not frivolous or vexatious which the plaintiff had some justification to commence, having regard to the conduct of the defendant. Digiuseppe v. Todd, 2012 ONSC 1028, 2012 O.J. No. 706 (S.C.J.) at paras. 22 to 24. [39] The record before me contains an Affidavit of Chief Sheri Taylor, of Ginoogaming First Nation which provides some important context in terms of the basis for commencing this Action. In this regard, the Affidavit of Chief Taylor states inter alia as follows: This Action is the only means left to Ginnogaming to ensure that Wiisinin Zaahgi’igan – as Ginoogaming’s heartbeat, place of worship and sacred area, which has historically played a unique role in preserving our people’s cultural identify – is not desecrated through mechanized drilling, stripping, pitting and trenching for mining purposes. [40] Ginoogaming included Mr. Malouf and his companies as defendants because they would be bound by the Court’s decision. Ginoogaming sought, among other things, an interim, interlocutory and permanent injunction against “Quarternary and any representative, servant, agent, officer, or invitee of same” from proceeding with the Ferau Project or other activity in Wiisinin Zaahgi’igan. Ginoogaming successfully obtained an interim injunction against Mr. Malouf and his companies in 2020 and against the companies in 2021. [41] In my view, this clearly supports that the plaintiff had some justification to commence this action. Moreover, there is further evidence in the record before me which confirms that the plaintiff’s action is a bona fide cause of action. In particular, on June 1st, 2021, the Plaintiff obtained an interim injunction restraining Mr. Malouf, Quaternary and Hardrock from engaging in any exploration activities in relation to the Project Ferau Permit. At the hearing of the interim injunction motion, Mr. Malouf argued that the Plaintiff ought not to have proceeded by Action and instead ought to have proceeded by way of Judicial Review. In granting the interim injunction, the Honourable Justice Vella disagreed with Mr. Malouf in this regard and made a finding that an Action was the appropriate proceeding: In this regard, Justice Vella stated as follows: However, as I have already discussed, in Ktunaxa, the Supreme Court of Canada stated that in these types of cases where, in particular, unproven Aboriginal rights are in issue (in his case spiritual rights) then a judicial review application is not the right way to proceed. Rather, an action is the appropriate proceeding. This is the procedure Ginoogaming has followed. Ginoogaming First Nation v. Her Majesty the Queen In Right Of Ontario et al. 2021 ONSC 5855 at para. 126. [42] In this same decision, Justice Vella found that “This litigation raised issues of public importance that deserve to be resolved with the benefit of a full evidentiary record at trial”. Ginoogaming First Nation v. Her Majesty the Queen In Right Of Ontario et al. 2021 ONSC 5855 at para. 165. [43] I therefore conclude, based on the record before me that the Plaintiff has demonstrated that the Action commenced as against the moving parties in this motion discloses a bona fide cause of action, that is not frivolous and vexatious and which the Plaintiff had some justification to commence. [44] With respect to the costs being sought by Mr. Malouf, I also agree with the plaintiff’s submissions that much of the activity in this Action has been regarding the two injunction applications which have already been the subject of costs decisions. [45] In support of Mr. Malouf’s claim for costs in this motion relating to the discontinuance of the action against him and his companies, Mr. Malouf has presented to this Court the same evidence which he presented to Justice Vella in the costs submissions relating to the withdrawn injunction. In particular, in support of his lost opportunity costs for this motion, Mr. Malouf has submitted a record of invoices and billings from a surface stripping program that he performed for the prospectors in 2016. Mr. Malouf requests that this Court consider these invoices from 2016 as examples of the calibre of his materials and his experiences over the past three years to find that his claimed hourly rate of $140 is reasonable in the circumstances. [46] As Justice Vella found, I also find that the materials before me do not permit me to quantify the amount of pay or profits Mr. Malouf lost as a result of time and effort that he invested in this matter by way of an opportunity costs. Ginoogaming First Nation v. His Majesty the King In Right Of Ontario et al. (29 May 2023) Toronto (ONSC) at paras. 10. [“2022 Withdrawn Injunction Costs Endorsement”] [47] As did Justice Vella, I must also reject Mr. Malouf’s use of an hourly rate of $140.00, which as noted by Justice Vella, appears to have been extracted to be akin to a lawyer’s hourly rate, as opposed to suggesting that this was a stipulated contractual hourly rate forming his lost opportunity costs. (2022 Withdrawn Injunction Costs Endorsement, supra, at parag.11) [48] The record before me does not support Mr. Malouf’s assertions that the plaintiff acted in bad faith during the course of this litigation. I also note that Justice Vella rejected Mr. Malouf’s same suggestion that the plaintiff acted in bad faith during the course of the 2022 Withdrawn Injunction motion. (2022 Withdrawn Injunction Costs Endorsement, supra, at para.12)
The Scale of Costs
[49] Mr. Malouf has sought costs on a substantial indemnity basis. Substantial indemnity costs, often referred to as solicitor and client costs, should only be awarded if there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties. Digiuseppe, supra, at para.37. [50] There is no basis, on the record before me to award costs to Mr. Malouf on a substantial indemnity basis. In this regard, there is no evidence of any conduct on the part of the plaintiff which would permit this court to make an award for costs on a substantial indemnity basis.
Disposition on Costs
[51] It is clear that Mr. Malouf has put in a significant amount of work into this case. However, in my view, Mr. Malouf has only demonstrated a very modest unquantified lost opportunity cost. Where there is little evidence of lost opportunity costs, any amount the court may decide to make will likely be a nominal amount. (Benarroch, supra, para.35.). [52] Mr. Malouf seeks costs relating to 141.3 hours spent preparing his statement of defence. The plaintiff suggests that Mr. Malouf was not the target defendant and that it was open to Mr. Malouf to not spend time preparing a statement of defence as one was not demanded of him. However, the plaintiff confirmed during oral submissions that there is no evidence in the record before me that indicates that Mr. Malouf was specifically advised that he was not required to file a defence. Given that Mr. Malouf is not represented by counsel, it makes some sense that he might have felt obligated to file a statement of defence. [53] Mr. Malouf suggests that he spent 149.5 hours on the change of venue motion. However, the plaintiff points out that Mr. Malouf spent 44 hours on this change of venue motion after the plaintiff served him with the notice of discontinuance. I agree with the plaintiff that any time spent after the service of the notice of discontinuance ought not to be considered. While I find that it was not unreasonable for Mr. Malouf to launch this motion prior to the notice of discontinuance being served, I also find that the number of hours spent on this motion is excessive. [54] Based on the record before me, Mr. Malouf has only demonstrated a very modest unquantified lost opportunity cost relating to time spent on preparing a statement of defence and for preparing the change of venue motion. Mr. Malouf is not entitled to costs relating to the various injunction proceedings as costs have already been addressed relating to those matters. I also find that Mr. Malouf should bear his own costs relating to work undertaken following the service of the notice of discontinuance which he objected to. (Benarroch, supra, para.35.). [55] I am also mindful of the Ontario Court of Appeal’s approval of the comments of Rouleau J.A. in Banerroch, who suggested that lump sum costs awards may be preferable in order to avoid transforming costs hearings into complex proceedings where the self-represented claimant is called upon to account for every minute of the day and prove every penny of revenue: at para.18. (Girao v. Cunningham, 2021 ONCA 18 at para. 13) [56] Having regard to the legal principles outlined at paragraphs 27 to 37 of this decision as well as the principles enunciated in Rule 57.01 and in light of my findings on the issues outlined above, I award costs to the moving defendants in the amount of $3,500 all in-inclusive of HST and disbursements, reflecting a reasonable allowance for Mr. Malouf’s efforts with respect to the preparation of the statement of defence and change of venue motion. (Benarroch, supra, para.35.). [57] For clarification, this figure of $3,500 includes HST and the disbursements claimed by Mr. Malouf relating to the court filing fee for the change of venue motion and as explained below, relating to the court filing fee for this motion. [58] I note that Mr. Malouf disclosed during oral submissions that in advance of this motion, the plaintiff made an offer to settle this motion for $2000.00 plus HST. I disregarded this information when rendering this decision. However, I did factor in the disclosed offer when making the final determination for this motion and the figure of $3,500 includes a nominal amount of $200.00 for Mr. Malouf’s costs of this motion plus $339.00 representing the court filing fee for this motion, given that he was more successful than the offer made by the Plaintiff. [59] The costs amount of $3,500.00 is fixed and payable within 30 days from the issuance of this endorsement. (Rule 57.03(1)(a)).
Released: April 5, 2024 Associate Justice G. Eckler