The Divisional Court released its decision in Fischer last week, in which the Court dismissed the Plaintiffs’ application for leave to appeal an October 2014 costs decision by Perell J. (the “2014 Costs Decision”).
The Plaintiffs sought leave to appeal the 2014 Costs Decision, which held that – in light of the novelty of the issues and pursuant to s. 31(1) of the CPA – each party should bear their own costs of the certification motion.
In particular, after denying class certification in January 2010, Perell J. released his (initial) costs decision in May 2010, directing that each party should bear their own costs in light of the novelty of the issues relating to preferable procedure.
The Plaintiffs, who subsequently appealed the denial of certification, but not the original costs order, were successful at all levels of appeal and received costs awards from each appellate court.
After the Supreme Court of Canada dismissed the Defendants’ appeal, the Plaintiffs requested that Perell J. revisit his original costs order in light of their subsequent success.
However, Perell J. maintained his original costs order that each party should bear their own costs in his 2014 Costs Decision.
The Divisional Court Decision
The Plaintiffs sought leave to appeal the 2014 Costs Decision, on the grounds that there was serious reason to doubt the correctness of the motion judge’s interpretation of s. 31(1) of the CPA. In particular, they challenged his rejection of their argument that s. 31(1) was intended to operate asymmetrically in favour of plaintiffs.
The Plaintiffs submitted that it is not open to a court, relying on s. 31(1) of the CPA, to reduce or deny a costs award to a successful plaintiff.
The Divisional Court dismissed the Plaintiff’s application for leave to appeal because:
there was no conflict in the case law such that leave should be granted; there was insufficient reason to doubt the motion judge’s decision; and there was no support for the proposition that s. 31 of the CPA is to be applied asymmetrically in favour of plaintiffs.
The Plaintiffs were required to pay the Defendants’ costs of the motion in the amount of $30,000.
Lessons on Symmetry
As previously discussed, Perell J. had earlier rejected the notion that there is an asymmetrical cost regime for class actions in Ontario in the context of his ruling in Holley v. The Northern Trust Company.
However, the Divisional Court’s decision in Fischer is the first appellate review of Perell J.’s remarks on the symmetry of s. 31(1) of the CPA, albeit in the context of a leave motion.
The Divisional Court held there was insufficient reason – or no reason, as suggested elsewhere in the judgment – to doubt the correctness of Perell J.’s refusal to apply asymmetry in favour of the Plaintiffs. This ruling is consistent with the recent trend in the case law which supports the proposition that s. 31 of the CPA is intended to apply symmetrically, and brings some clarity to the uncertain terrain of cost awards.
As discussed on this blog, the Law Commission of Ontario (LCO) is currently drafting a Class Actions Discussion Paper in which it will consider, among other things, potential reform of the cost regime for class proceedings in Ontario. The paper will be released for comment this summer.
While it remains to be seen whether the LCO project will ultimately result in reform or clarity of the existing costs regime, litigants must rely in the interim on trends in the common law (such as those discussed above). However, it must be borne in mind that costs awards are highly discretionary.