Class actions, by their very nature, mandate the extra procedural step of a certification motion. As a result, a class proceeding is generally longer than a standard civil proceeding and can be significantly more complex. When certification motions and costs of certification are appealed this leads to even longer and more expensive steps in the litigation before the discovery stage is reached. All of these steps can be significant draws on the parties' resources. As a result, the law surrounding costs, i.e. who bears the burden of financing the different steps, may be even more significant. In class actions, rulings on costs awards must also take into account one of the fundamental goals of the Class Proceedings Act, 1992, that of access to justice.
In Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City)1 the representative plaintiffs appealed a portion of the certification order, the class definition, arguing that a limitation period should not have been applied to restrict the composition of the class. After successfully receiving leave to appeal and a successful appeal, the Divisional Court remitted the matter to the case management judge for a rehearing. The successful representative plaintiffs sought costs of the appeal and the leave motion. The Divisional Court refused to do so and ordered that costs of the appeal and of the motion for leave to appeal be determined as part of the overall costs of the certification motion.
The representative plaintiffs obtained leave to appeal the Divisional Court's costs order to the Court of Appeal. In 2013 ONCA 254, the Court of Appeal found that the Divisional Court was plainly wrong in its refusal to award costs. The Court of Appeal held that the success of the appeal was not divided as argued by the defendants. The representative plaintiffs were successful on the limitations issues and the fact that the matter was returned to the case management judge for a rehearing as opposed to granting the representative plaintiffs' an order certifying the action did not detract from that success. Further, it was only because of the success of the representative plaintiffs' appeal that the issues raised by the defendants needed to be addressed.
The general rule is that where an appeal is successful and results in a rehearing, costs are to be awarded to the appellant and should not depend on the outcome of the rehearing. Notably, this general rule is not inflexible and costs remain in the discretion of the court. However, in this case, the Court of Appeal held that the Divisional Court had erred by not applying the general rule. The Court of Appeal held it was important to separate the appeal from the certification motion. The costs incurred for the appeal and leave to appeal were stand-alone costs incurred by litigants who wanted their day in court.
The Court of Appeal also noted that it would not be appropriate for the appellants, the representative plaintiffs, to carry the financial burden of their successful appeal by delaying recovery of costs until the outcome of the certification motion or until final disposition of the action as this would not promote access to justice. The Court of Appeal found that the Divisional Court should have awarded costs and, in the circumstances, chose to fix those costs on a partial indemnity basis.
1Lerners LLP is solicitor of record for the plaintiffs in this action.
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