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Civil Litigation Dicta - Costs - Partial/Substantial/Full Indemnity. Quebec (Attorney General) v. Pekuakamiulnuatsh Takuhikan
In Quebec (Attorney General) v. Pekuakamiulnuatsh Takuhikan (SCC, 2024) the Supreme Court of Canada dismissed a Quebec Crown appeal, that from an allowing by the Federal Court of Appeal, and that from a dismissal of the action at the Federal Court - the action being grounded in the allegation that "Canada and Quebec were in breach of good faith, the obligations flowing from the honour of the Crown or any fiduciary obligation" over a contract whereby the band provided it's own police service and the governments funded it.
The court considered a solicitor-client costs request, grounded in the other side's behaviour. This was declined it as it was not behaviour occuring during the course of the various litigation proceedings, but misbehaviour occuring in the course of the events themselves:[239] The respondent also asked this Court to award costs against Quebec on a solicitor‑client basis. It argues that the appeal represents an exceptional circumstance because it had to [translation] “prolong legal proceedings to have the Appellant’s failure . . . sanctioned despite the fact that the Intervener [the Attorney General of Canada] did not seek to appeal the judgment sanctioning their concerted actions” (R.F., at para. 159). It says that following the usual rule would be contrary to the purposes of reconciliation.
[240] I cannot accept those arguments. In my opinion, this case does not involve exceptional circumstances within the meaning of the case law on costs. In exercising its discretion, the Court awards costs on a solicitor‑client basis where a party has displayed “reprehensible, scandalous or outrageous” conduct or where an appeal raises issues of general importance that go beyond the particular case of the successful party in the appeal (see, e.g., Montréal (City) v. Octane Stratégie inc., 2019 SCC 57, [2019] 4 S.C.R. 138, at para. 95). Here, there are no such circumstances that would justify exercising our discretion. There is nothing to suggest that Quebec acted in a reprehensible, scandalous or outrageous manner in connection with these judicial proceedings. Likewise, Pekuakamiulnuatsh Takuhikan has not shown that it has “no personal, proprietary or pecuniary interest in the litigation that would justify the proceedings on economic grounds” or “that it would not have been possible to effectively pursue the litigation in question with private funding” (Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331, at para. 140; see also Anderson v. Alberta, 2022 SCC 6, at para. 73). I would not depart from the usual rule on awarding costs. . Investigation Counsel PC v. Dorrett
In Investigation Counsel PC v. Dorrett (Div Court, 2024) the Divisional Court cites a leading case on 'substantial indemnity' cost awards:[39] In my view, the high test for substantial indemnity costs, as set out in S & A Strasser v. Richmond Hill (Town) (1990), 1990 CanLII 6856 (ON CA), 1 O.R. (3d) 243 (C.A.), has not been met. . Mascia v. Tri-Star Disaster Recovery Inc.
In Mascia v. Tri-Star Disaster Recovery Inc. (Div Court, 2024) the Divisional Court largely dismissed an appeal against a quantum meruit home renovation case, with a high substantial indemnity costs award.
Here the court considered a substantial indemnity costs award where the plaintiff had alleged fraud:[62] It is not our role to re-weigh the factors balanced by the trial judge in the exercise of his wide discretion. He relied on clear authority supporting a costs penalty against a party who alleges fraud and fails to prove it at trial.
[63] Moreover, the threat sent by counsel to Anthony Mascia just days before the trial commenced was reprehensible. The fraud claim so aggressively asserted could not even survive the first week of trial. Yet it was maintained for seven years and brandished as a weapon right up to the end. It deserves sanction in costs if not more. . Shannon v. Hrabovsky
In Shannon v. Hrabovsky (Ont CA, 2024) the Court of Appeal considers the proportions when assessing 'substantial indemnity' versus 'partial indemnity':[6] However, we are not satisfied that the amount the respondent seeks in costs is justified, even on an enhanced basis. The respondent appears to have calculated the figure she seeks by using a substantial indemnity rate that is the same as or higher than her counsels’ actual billing rates. As this court noted in Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771, 128 O.R. (3d) 64, at para. 57:[C]osts awarded on a substantial indemnity scale are to be determined on the basis of applying a factor of 1.5 to the amount of the partial indemnity costs as fixed (or that would otherwise have been fixed) in accordance with the Rules and Tariff A. See also r. 1.03 of the Rules of Civil Procedure, O. Reg. 575/07, s. 6(1). Since partial indemnity costs are ordinarily calculated using an hourly billing rate that is around 60 percent of counsel’s actual rate, and since the amounts awarded must generally be adjusted further to take into account the factors in r. 57.01(1) of the Rules, costs awards that are made on a substantial indemnity basis typically fall short of full indemnity recovery.
[7] In our view, it is appropriate in this case to estimate substantial indemnity costs as 80% of full indemnity costs: see Yan v. Hutchinson, 2024 ONCA 158, at para. 4. Therefore, we fix the respondent’s costs at $80,000 all inclusive, to be paid by the appellants.
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