Court File and Parties

Court File No.: CV-22-00677610-0000
Date: 2025-02-28
Court: Superior Court of Justice - Ontario

Re: Adams et al v. Body Plus Nutritional Products Inc. et al

Before: Associate Justice G. Eckler

Counsel:
Ian Matthews and Alicia Krausewitz, for the plaintiffs/moving parties
Neil Rabinovitch and Stefan Rus, for the defendants/responding parties

Costs Endorsement

Background

[1] The plaintiffs launched a motion for an Order striking out the statement of defence of the defendants pursuant to Rule 34.15(1)(b) of the Rules of Civil Procedure.

[2] In a decision released on December 31, 2024, this Court dismissed the plaintiffs’ request to strike out the statement of defence of the defendants Jamieson Wellness Inc. and Body Plus Nutritional Products Inc. in connection with the defendants’ failure to attend at their examinations for discovery on September 26-27, 2024.

[3] However, this Court awarded the plaintiffs costs thrown away incurred in connection with those missed examinations, awarding the plaintiffs $15,823.77. While the plaintiffs sought costs thrown away of $39,389.54, this Court determined that the amount ultimately awarded reflected the value of “preparation that has been wasted and that will have to be repeated”, observing that in the “specific factual circumstances present in the immediate case … the plaintiffs should not be presently required to bear the entire financial burden associated with these missed examinations”.

[4] This Court also made a finding that the plaintiffs’ launching of this motion, immediately after the defendants’ failure to attend at the examinations for discovery, without obtaining particulars relating to why the defendants failed to attend, was likely not the most time or cost efficient manner to address the issues raised in this motion. In this regard, the Court noted that the plaintiffs’ decision to proceed with the motion given the circumstances surrounding the failure of the defendants to attend at their examinations for discovery tied into the consideration of the issues of delay and increased costs of litigating this action.

[5] In its decision, the Court encouraged the parties to agree on the issue of costs. If the parties were not able to agree on costs, they were invited to make written submissions.

[6] The parties were not able to agree on the issue of costs. I received written costs submissions from the parties on January 21, 2025 (plaintiffs’ costs submissions), January 24, 2025 (responding costs submissions of the defendants) and January 27, 2025 (reply costs submissions of the plaintiffs).

[7] Pursuant to Rule 57.01(6), the plaintiffs filed a Costs Outline prior to the hearing of the motion. The defendants did not file a costs outline on the hearing date of the motion. However, after the Court released its decision, the defendants provided the Court with a Costs Outline on January 24, 2025, with their written responding costs submissions.

Plaintiffs’ Submissions

[8] Given the divided result in the motion, the plaintiffs submit that the appropriate costs disposition is that each party bear its own costs of the motion for three main reasons.

[9] First, the plaintiffs reference the circumstances of the motion. In this regard, the plaintiffs argue that their motion was brought after the defendants’ examinations for discovery, scheduled on dates offered by the defendants, were missed despite the Notices of Examination having been properly served twice on former counsel for the defendants (on August 9 and again on August 28, 2024). In the aftermath of non-attendance, despite the plaintiffs serving their motion record for discovery relief on October 2, now-former counsel for the defendants remained silent until multiple purported instances of counsel “inadvertence” were disclosed in an affidavit served on October 22, 2024. The affidavit was served on the same date that the plaintiffs served their factum in support of the October 31 motion. The plaintiffs argue that by this time, the plaintiffs had incurred substantially all of their costs associated with bringing the motion.

[10] The plaintiffs further submit that the defendants’ first and only offer to settle the motion was a without prejudice Rule 49 offer sent on October 24, 2024, after substantially all of the plaintiffs’ motion costs had been incurred. The defendants offered $7,500 on account of costs thrown away. It did not offer any amount for the costs of the motion, instead providing that any other costs be in the cause of the action. The plaintiffs argue that if this offer is the yardstick for determining “success” on the motion, the plaintiffs beat that offer by obtaining more than double the amount in costs thrown away. Against this backdrop, the plaintiffs argue that a costs disposition for each party to bear its own costs is quite reasonable.

[11] Finally, the plaintiffs argue that the defendants disclaimed an entitlement to costs on the hearing date of the motion. The plaintiffs submit that to now seek a costs disposition that awards them costs is unfair and ought not be permitted.

[12] In support of this argument, the plaintiffs rely on the decision of Nasir v. Grafton-Fraser Inc., 2014 ONSC 4697 at paras. 30-32 (“Nasir”) where although the plaintiff was successful on its motion and would ordinarily be entitled to costs, the court exercised its discretion and ordered that each party bear its own costs due to the plaintiff's initial stance of not seeking costs. I note that the facts in the immediate case are distinguishable from the facts in Nasir, as in Nasir, the plaintiff advised the court that no costs were being sought despite the fact that the plaintiff was successful on the motion. In the immediate case, the plaintiffs argue that the defendants advised the Court during the oral hearing of the motion that they would not be seeking costs of the motion regardless of the outcome. However, after the Court’s decision was released, the plaintiffs argue that the defendants resiled from their initial position and are now seeking costs.

[13] The plaintiffs also argue that if the Court agrees with the plaintiffs’ submission that each party ought to bear its own costs of the motion, it should therefore award a token amount of costs to the plaintiffs to account for the legal expense associated with what the plaintiffs believe are unnecessary costs submissions. The plaintiffs argue that this matter ought to have been resolved consensually. The plaintiffs have proposed this costs outcome to the defendants but they have not agreed.

Defendants’ Submissions

[14] The defendants’ position is that the defendants should be awarded costs of this motion. In support of this position, the defendants highlight the Court’s findings that the defendants were largely successful in responding to the relief sought in the motion. The defendants also reference the Court’s reasons for decision which called into question the necessity of the plaintiffs’ motion and the delay and expense it created.

[15] The defendants are asking for costs of the motion. Their position is that given that the catalyst for the motion was unfortunate errors by the defendants’ former counsel, the defendants seek only $15,823.77, representing roughly 34% of the actual legal fees incurred. The defendants argue that making such an award would recognize that neither party was blameless. In this regard, the defendants underscore that former counsel for the defendants inadvertently erred in respect of the cancelled examinations, and the plaintiffs were not justified in bringing the motion to strike and in refusing the offer to settle the motion which would have avoided much of the expense and delay caused by the motion.

[16] The defendants incurred $46,619.00 + HST in legal fees to urgently prepare for and argue this motion. This amount is generally comparable to the $37,840.50 + HST listed in the plaintiffs’ Costs Outline dated October 28, 2024.

[17] Taking into account the result of the motion, and the Court’s findings at paragraph 128 of its Reasons for Decision, the defendants submit that a modest costs award is appropriate.

Disposition

[18] In line with the plaintiffs’ written submissions, the Court also has a clear recollection of defence counsel indicating during his oral submissions that the absence of the defendants’ Costs Outline was due to the fact that the defendants would not be seeking costs if they were successful in the motion. The Court’s recollection is also echoed in bench book notes where the Court’s notes confirm defence counsel’s position that regardless of the outcome of the motion, the defendants would not be seeking costs.

[19] Consistent with this position, it is also noteworthy that the defendants did not bring a costs outline to the hearing as required pursuant to Rule 57.01(6) of the Rules of Civil Procedure. The defendants only delivered a costs outline on January 24, 2025, after the Court’s decision was released on December 31, 2024.

[20] Defence counsel’s position is that he does not recall waiving the right to seek costs and argues that the Court’s invitation to the parties in its Reasons to make brief written costs submissions in the event that they were unable to resolve the issue of costs is inconsistent with defence counsel having agreed to waive costs.

[21] In order to address this argument advanced by the defendants the Court can confirm that it was aware of defence counsel’s stated position that the defendants were waiving the right to seek costs when the Court invited counsel to attempt to agree on the issue of costs. At the time that the invitation was made, the Court considered that the plaintiffs enjoyed some success on the motion and might wish to seek costs related to the motion.

[22] Ultimately, I agree with the submissions of plaintiffs’ counsel and I find that counsel for the defendants did indeed relay the position to the Court that regardless of the outcome of the motion, the defendants would not be seeking costs. In my view, it would be unfair to allow the defendants to resile from their stated position of not seeking costs, after the decision was released by the Court.

[23] This is particularly so since the defendants did not serve a costs outline on the hearing date of the motion as required pursuant to Rule 57.01(6). This Rule provides that unless the parties have agreed on costs, every party who intends to seek costs for that step shall give to every other party involved in the same step, and bring to the hearing, a costs outline. There are several good reasons for this rule, one being that having to declare the amount of costs that a party will seek if successful on a motion, in advance of the motion being decided, encourages parties to be reasonable in terms of the costs being sought on a motion.

[24] It should be clear that in making this finding, I am not suggesting in any fashion that counsel for the defendants is attempting to mislead the court. Rather, I find that given the lengthy submissions of both counsel made on the hearing date of the motion and in light of the many issues raised and addressed at the hearing of the motion, counsel may not clearly recall making this particular submission to the court regarding costs.

[25] In any event, even if, on the hearing date of the motion, the defendants had submitted a costs’ outline and sought costs, this would not have altered my decision that no costs should be ordered flowing from this motion.

[26] Because the defendants were largely successful in opposing this motion, in the ordinary course, the defendants would be entitled to their costs, as costs generally follow the event. However, a court can exercise its discretion, particularly where a party is seeking the court’s indulgence, or where actions on the part of a party led to the bringing of a motion, as is the case here. (S.N. v. G[…] Inc. and P.T., 2014 ONSC 4697, para. 31) In assessing costs, the court is to consider Rule 57 factors including, inter alia, complexity, conduct of counsel in lengthening or shortening the hearing and what an unsuccessful party might expect to have to pay.

[27] In this regard, I have considered that while the defendants were largely successful on this motion, the launching of the motion itself was rooted in unfortunate errors made by the defendants’ former counsel. Moreover, the plaintiffs did have some moderate success with respect to the request for costs thrown away.

[28] Ultimately, in considering the circumstances surrounding the bringing of this motion, and after having reviewed and considered the costs submissions of both parties and having considered the factors in Rule 57.01 and section 131(1) of the Courts of Justice Act, I am of the view that it is fair, reasonable, proportionate and within the parties’ reasonable expectations that no costs shall be ordered payable to either party and each party shall bear its own costs.

ASSOCIATE JUSTICE ECKLER
DATE: February 28, 2025