CITATION: Chandra v. CBC 2015 ONSC 6519
COURT FILE NO.: 06-CV-310261PD2
DATE: 20151113

SUPERIOR COURT OF JUSTICE - ONTARIO
RE: RANJIT KUMAR CHANDRA, Plaintiff
AND:

CANADIAN BROADCASTING CORPORATION, CHRIS 
CATHERINE MCISAACS, LYNN BURGESS, JACK STRAWBRIDGE and
MEMORIAL UNIVERSITY OF NEWFOUNDLAND, Defendants

BEFORE: Mr. Justice Graeme Mew
COUNSEL: Richard Bennett and Joseph fgh?omeni, for the Plaintiff

Christine Lonsdale and Kerr, for the Defendants Canadian Broadcasting
Corp, Chris O?Neill-Yates and Burgess

HEARD: 14 October 2015 (by telephone conference call)

COSTS ENDORSENIENT

Dr. Ranjit Kumar Chandra sued the Canadian Broadcasting Corporation and (ultimately)
two of its employees, Chris O?Neill-Yates and Burgess (the Defendants?) for
defamation and invasion of privacy. He sought $5,000,000 in general damages for libel,
$1,000,000 for aggravated damages, punitive damages of $5,000,000, $1,000,000 in general

damages for invasion of privacy and pecuniary damages in the amount of $125,000,000. A total
of$137,000,000.

After 56 days of trial, the jury concluded that the broadcast giving rise to the action was
defamatory of Dr. Chandra given the natural and ordinary meaning of the words it contained.
However, the jury accepted the defence of justification, ?nding that the words used in the
broadcast were true. The jury also concluded that the CBC Defendants had not, either
individually or collectively, intentional intruded, physically or otherwise, upon the seclusion of
Dr. Chandra, his private affairs or concerns in a way that would be highly offensive to a

reasonable person (in other words, the jury dismissed the plaintiff?s claim for invasion of
privacy).

The CBC Defendants seek costs, inclusive of disbursements and applicable taxes, of
$1,629,370.78.

The plaintiff argues that there should be no order as to costs.

- Page2 -

The parties were given the opportunity to make both written and oral submissions on the
issue of costs.

The CBC Defendants provided a comprehensive bill of costs. The plaintiff thereafter
requested and, ultimately, the CBC Defendants provided, redacted dockets and other supporting
information. I pause to observe that requiring the production of dockets where costs are to be
?xed by the court rather than assessed should be the exception rather than the rule. The ?xing of
costs should be a simpler, less expensive and more expeditious means of determining costs that
an assessment by an assessment of?cer. These bene?ts of fixing costs would quickly be eroded
if it became routine to require compete dockets or extensive supporting documentation. See for
example Fernandes Peel Educational Tutorial Services Ltd, 2015 ONSC 3753, per Lemon J.
at paras 39-41.

Notwithstanding this, the plaintiff then took issue with the extent of some of the
redactions. It was submitted by the plaintiff that I should receive unredacted copies of the
dockets to determine the appropriateness of the redactions. I declined to do so, not only because
there were more than 800 pages of invoices but, more importantly, because a signi?cant portion
of the costs claimed and, hence, the related invoices, pertained to the trial which I presided over
and which the plaintiff participated in. The docket entries, redactions notwithstanding, are, in my
view, suf?cient to inform both the plaintiff and the court as to the nature of the services
underlying the CBC Defendants? claim for costs.

Because of the volume of material provided by the CBC Defendants (in response to the
plaintiff requests) shortly before the hearing, the parties were also permitted to make brief post?

The plaintiff did not ?le a bill of costs. As .A. observed in Sit-tit}? Estate v.
Rotsrein, 2011 ONCA 491 106 OR. (3d) 161 at para 50:

 there is no requirement for the losing party, who is not seeking costs, to ?le a bill of
costs although it is preferable that he or she does so. However, if the losing party chooses
not to file a bill of costs, this is a factor that the judge, who is assessing costs, may take
into account when considering the reasonable expectations of the losing party.

Should Costs Be Fixed or Assessed?

[10] The plaintiff argued that the costs of the action should be referred to an assessment
of?cer. The plaintiff submitted that it would be unfair to request a trial judge to adjudicate the
issue of costs of steps that the parties took as long as nine years ago. Reference was made to the

decision of this court in EdperBrascan Corp. v. 1773 73 Canada Ltd. (2001), 53 OR. (3d) 331
(S.C.J.) at para. 15:

In order to do procedural and substantive justice, it would not be possible to
approach the matter on the summary basis which characterizes the ?xing of costs
in most cases. It would be necessary to conduct a proceeding akin to an
assessment and likely of a time-consuming nature. In such cases it is appropriate
to refer the costs for assessment.

- Page 3 -

[11] Standing against this position is the statement by the Court of Appeal in Zesta
Engineering Ltd. v. CIontier, 2002, 25577 (ONCA) at para. 4:

costs award should re?ect more what the court views as a fair and
reasonable amount that should be paid by the unsuccessful parties rather than any
exact measure of the actual costs to the successful litigant.

[12] In Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLlI
14579 (ON CA), 71 OR. (3d) 291, at para. 15, the Court of Appeal stated:

The motions judge concluded, correctly in my view, that there is now a
presumption that costs shall be fixed by the court unless the court is satis?ed that
it has before it an exceptional case. The appellants submitted to the motions court
and to this court that the case at bar is such a case. The motions judge, in deciding
that this was not an exceptional case, said [at para. 52]:

Only if the assessment process will be more suited to effect procedural and
substantive justice should the Court refer the matter for assessment. There must
be some element to the case that is out of the ordinary or unusual that would
warrant deviating from the presumption that costs are to be fixed. Neither
complex litigation nor signi?cant amounts in legal fees will be enough for a case
to be exceptional. The judge should be able to ?x costs with a reasonable review
of the work completed without having to scrutinize each and every docket. If that
type of scrutinizing analysis is required, then perhaps, the matter would fall within

exception and be referred .to       

[13] The editors of the 2016 edition of Carsweii Ontario Civil Practice comment, at page
1229:

?The changes to the costs regime in 2008 and 2005 were designed to radically
reduce the incidence of assessments. Under this system normally the court at the
end of the hearing fixes costs while retaining the right to order an assessment ?in
exceptional cases?. . 

[14] It would not be in the interests of judicial economy for me to refer this matter for
assessment. Although an assessment of?cer is no doubt better equipped, both technically and
temperainentally, to conduct a detailed assessment of costs, it is only in exceptional cases that
such process is preferable to a less precise but more expeditious and less expensive
determination of costs by the judicial of?cer responsible for the trial or other disposition of the
matter in question. As Then J. recently observed in Bozg'i Heritage Education ands Inc, 2015
ONSC 3451 at para 29:

It is in the public interest to af?rm the proposition that assessments should be a
rare occurrence in order to promote ef?ciency and costs savings to litigants by
requiring the court to fix costs if it is capable of doing so.

- Page 4 -

Applicable Principles

[15] The general principles to be applied in ?xing costs are conveniently articulated in Agius
v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 10?12, as follows:

[10] Cumming J. in DUCA Financial Services Credit Union Ltd. v. Boazo,
2010 ONSC 4601 at para. 5, described the ?normative approach? to an application
for costs:

Costs are in the discretion of the Court: 3. 131, Courts of Justice
Act, R.S.O. 1990, c. C43 and Rule 57.01 of the Rules of Civil
Procedure. In Ontario, the normative approach is first, that costs
follow the event, premised upon a two-way, or loser pay, costs
approach; second, that costs are awarded on a partial indemnity
basis; and third, that costs are payable forthwith, i.e. within 30
days. Discretion can, of course, be exercised in exceptional
circumstances to depart from any one or more of these norms.

[11] Fixing of costs is not merely a mechanical exercise in reviewing the
receiving party?s Cost Outline. In Andersen v. St. Jude Medical Inc. (2006), 264
D.L.R. (4th) 557, the Divisional Court set out several principles to be considered
in making an award of costs:

facts and circumstances of the case in relation to the factors set out in rule
5701(1): Boucher [Boacher v. Public Accountants Council for the
Province of Ontario (2004), 71 OR. (3d) 291], Moon [Moon v. Sher
(2004), 246 D.L.R. (4th) 440], and Coldmafic Re?'igerarion of Canada
Ltd. v. Levellek Processing LLC (2005), 75 OR. (3d) 638 (C.A.).

2. A consideration of experience, rates charged and hours spent is
appropriate, but is subject to the overriding principle of reasonableness as
applied to the factual matrix of the particular case: Boncher. The quantum
should re?ect an amount the court considers to be fair and reasonable
rather than any exact measure of the actual costs to the successful litigant:
Zesta Engineering Ltd. v. (2002), 119 A.C.W.S. (3d) 341 (Ont.
C.A.), at para. 4.

3. The reasonable expectation of the unsuccessful party is one of the
factors to be considered in determining an amount that is fair and
reasonable: rule 

4. The court should seek to avoid inconsistency with comparable awards
in other cases. ?Like cases, [if they can be found], should conclude with
like substantive results?: Mnrano v. Bank of Montreal (1998), 41 OR.
(3d) 222 (CA), at p. 249.

-Page5 -

5. The court should seek to balance the indemnity principle with the
fundamental objective of access to justice: Boucher.

[12] The Court of Appeal has identi?ed the overriding principle to be that the amount
of costs awarded be reasonable in the circumstances. In Davies v. CIarington
(rlr'imicgmliijd (2009), 100 OR. (3d) 66 Epstein .A. stated at paras. 5162:

As can be seen, the overriding principle is reasonableness. If the judge
fails to consider the reasonableness of the costs award, then the result can
be contrary to the fundamental objective of access to justice. Rather than
engage in a purely mathematical exercise, the judge awarding costs should
re?ect on what the court views as a reasonable amount that should be paid
by the unsuccessful party rather than any exact measure of the actual costs
of the successful litigant. In Boucher, this court emphasized the
importance of fixing costs in an amount that is fair and reasonable for the
unsuccessful party to pay in the particular proceeding at para. 37, where
J.A. said ?[t]he failure to refer, in assessing costs, to the
overriding principle of reasonableness, can produce a result that is
contrary to the fundamental objective of access to justice.?

Scale of Costs

[16]

As Mark Orkin in The Law of Costs, 2?d ed., loose~leaf (Aurora, Ont: Canada Law Book,

2010) reminds us (at para. 201) awarding costs is an exercise in balancing two principles:

[17]

required to bear the costs of either prosecuting or defending the action, and two,
that citizens will be unduly hesitant to assert or defend their rights in court if an
unsuccessful party is required to bear all of the costs of a successful one.

The principle of indemni?cation is no longer the only purpose of costs awards. There is

recognition that modern costs awards may encourage settlement, prevent (or at least discourage)
frivolous or vexatious litigation, or sanction behaviour that increases the expense of litigation.

[13]

The CBC Defendants seek their costs on a substantial indemnity basis. They advance a

number of arguments in suppo1t of that position including the following:

The jury found that the statements made in the broadcast, which included that the

plaintiff had engaged in scienti?c fraud and financial deception, were true. It follows that
the plaintist entire action was based on lies and deception.

The rates actually charged to the CBC by many of the fee earners involved were

substantially discounted and in many cases were equal to or less than the maximum rates
for partial indemnity costs set out in the Information for the Profession provided in 2005
by The Costs Subcommittee of the Civil Rules Committee
which rates, CBC Defendants
note, were said by the Court of Appeal in Inter-Leasing Inc. v. Ontario (Revenue), 2014
ONCA 683 to be ?out of date? too low).

-Page 6 -

The defendants offered to settle the action on a without costs basis on ISSeptember 2010,
following the decisions of the Supreme Court of Canada in Grant v. Torstar Corp, 2009
SCC 61 and Quart v. Cusson, 2009 SCC 62.

[19] The plaintiff argues that there should be no costs because of the salacious manner in
which the CBC told its story, including its repeated references to ?the secret life? of the plaintiff
and the plaintiff?s ?life of scienti?c fraud and ?nancial deception?. The nature, tone and content
of the broadcast justified the plaintiff?s decision to commence litigation in order to protect his
reputation.

[20] Furthermore, while the CBC Defendants were successful in their defence of the action,
the fact remains that the impugned broadcast as a whole was found to be primafacie defamatory.

[21] The plaintiff argues that in the event that the court awards costs to the CBC Defendants,
they should be determined on a partial indemnity scale with rates that re?ect a percentage of the
rates actually charged to the CBC Defendants? clients, regardless of the fact that those rates were
already discounted.

Consequences ofthe Jury ?s acceptance ofithe defence of justification

[22] Dr. Chandra alleged that the entire broadcast, which consisted of three 20 minute
segments broadcast on successive evenings, was defamatory. The words ?fraud? or ?fraudulent?
were frequently used in the broadcast in connection with Dr. Chandra.

I I [23] There is no question that the allegations made against Dr. Chandra in the broadcast were

serious. 'In'theeotnseaf his staging argument to thejury, counsel fOr'Dr. Chandra described  

client?s claim as a simple case about very damaging, malicious allegations of fraud and theft,
allegations which the CBC had not denied.

[24] Although the CBC Defendants ran the defences of justi?cation (truth), fair comment on a
matter of public interest and responsible communication, the jury?s acceptance of the defence of
justification as a complete answer to the plaintiff?s claim for defamation meant that it was not
necessary to take the jury?s verdict on the other defences.

[25] Even were I to agree with the plaintiff?s assertion that the sensationalist nature of the
broadcast justified the plaintiff vigorous prosecution of his action (which I do not), it would not
in my view warrant a departure from the usual rule that costs follow the event.

[26] I turn then to consideration of what the appropriate scale of costs should be.

[27] Hard-fought litigation that turns out to have been misguided does not necessarily invite
an award of substantial indemnity costs: Davies v. Claringron 2009 ONCA 722
100 OR. (3d) 66 at para. 45. On the other hand, ?malicious counter-productive

conduct? or the ?harassment of another party by the pursuit of fruitless litigation? may merit
sanction.

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[28] The CBC Defendants argue that the logical conclusion from the jury?s determination 
that Dr. Chandra?s entire action was ?improper, vexatious and based on hes and deception. It rs 
they say, ?undeniable that Dr. Chandra put forward his case in an attempt to rmslead the court .

[29] If a party intentionally misleads the court or fabricates evidence, it can be appropriate for
the court to exercise its discretion to award costs against that party on a substantial indemnity
scale. As stated by Callon J. in Morez'ra v. Dasr?lva (1977), 5 C.P.C. 73 (Ont. H.C.J.) at para. 14:

Taking the matter as a whole, it was the intention of the plaintiff to mislead the
Court and to deceive it with respect to the material facts. This to my mind is a
very elementary and fundamental abuse of the process of the Court and no
defendant should in those circumstances be put to any expense whatsoever in
defending herself from such claims. In the result, therefore, I hold that the
defendant is entitled to her costs on a solicitor and his own client basis so that she
will be completely indemnified for her costs of defending herself from the claims
in this action.

[30] In the present case, as in Moreira v. Dasiiva, there was (to borrow the phraseology of
Callon .), ?ample evidence adduced at trial to support the ?ndings of the jury? that the otherwise
defamatory broadcast was true.

[31] In coming to that conclusion, the jury evidently rejected the evidence of Dr. Chandra and
a number of other witnesses called by him that he had never committed scientific fraud or
financial deception. The jury presumably concluded that blood samples and documents, which

 DrChandra relied upon .to .supporthis assertion that hehad  

upon which certain papers he had written were based, were not what he claimed they were.

[32] There was also evidence that the plaintiff has frequently resorted to litigation, or threats
of litigation, against people who have criticised him. Indeed, when, during the course of the trial,
an issue arose as to whether there had been a breach of the deemed undertaking rule by reason of
the disclosure of documents obtained from an action brought by the plaintiff in Newfoundland,
counsel for the plaintiff was quick to advise that his clients intended to prosecute a claim for
contempt in the Newfoundland against those thought to be responsible, including the lawyers
acting for the CBC Defendants.

[33] The behaviour of the plaintiff in other litigation is not a relevant factor in the
determination of costs in this matter. However, a propensity to litigate or to threaten litigation,
particularly when done to intimidate or deter critics, can inform an assessment of the motivation
and purpose of a litigant and is, in my view, a relevant consideration in the present matter.

[34] The case prosecuted by the plaintiff against the CBC Defendants was comprehensive and
substantial. On many days the plaintiff had four lawyers in court, all actively engaged in the
advancement of his claim. Over the course of nearly three months the plaintiff mounted a
vigorous and often aggressive assertion of own his good character and repudiation of almost
every aspect of the defendants? broadcast. The journalists involved were roundly criticised.
Their methods and indeed their integrity were tenaciously challenged.

-Page8 -

[35] Tactically, Dr. Chandra played a high stakes game. The phrase ?live by the sword, die by
the sword? comes to mind.

[36] In the end, he failed abjectly.

[37] The consequences of that failure go well beyond the small fortune that he must have
spent on his own legal representation.

[38] The costs resulting from his action extend much further than the legal fees incurred by
the CBC Defendants. The journalists, whose professional integrity Dr. Chandra repeatedly
impugned, were present for much of the trial. And for 56 days of evidence and deliberations, the
case commanded the attention of the six members of the jury selected to try the case (as well as a
reserve juror selected with the agreement of and in accordance with a procedure agreed upon by
the parties and the court) and consumed the publicly funded resources of the court itself.

[39] Many of the considerations which have persuaded courts in other cases to make an award
of full indemnity or substantial indemnity costs (there is a distinction between these two scales,
as discussed below) are present in this case. They are factors which may properly be taken into
account by me in determining what is just and reasonable in all of the circumstances.

[40] Having done so, I have concluded that this case is one of those exceptional matters in
which an award of costs on a substantial indemnity scale is warranted. Many of the factors I
have made reference to in the preceding paragraphs militate in favour of such a determination.

 ..  3.0 inlight of. the. foregoing? mm b.1716?37i9i119

other two principal arguments advanced-by the CBC in support of its claim for costs On  

substantial indemnity scale.
Effect of the Discounted Rates for Legal fees charged to the CBC De?na?ams

[42] It is not unusual for clients who regularly utilise legal services to negotiate discounted
rates for the legal fees they pay.

[43] In 790668 Ontario Inc. v. D?Andrea Management Inc, 2015 ONCA 557, the Court of
Appeal held that it was an error in principle to award partial indemnity costs in the full amount of
the actual costs paid by a an insurer to the lawyers representing its insured on the basis that the
hourly rates charged by lawyers to the insurer were ?roughly two-thirds of those charged by

lawyers practising in this area with comparable experience?. Lauwers .A., at para. 23, noted
that:

While a court has discretion to determine the size of the discount to a party?s
actual costs when awarding partial indemnity costs, with due consideration of the
factors set out in 1111c 57.01(1) of the Rules ofCt?vil Procedure, R.R.O. 1990, Reg.
194, I am unable to see, on the facts in this record, a basis to depart from the
ordinary rule of thumb that partial indemnity costs should be about one-third less
than substantial indemnity costs.

- Page9 -

[44] I will return in due course to a consideration of the relationship between the actual costs
incurred by the CBC Defendants and the determination of costs on a partial and
substantial indemnity scale.

Offer to Settle

[45] Rule 49.10(2) of the Rules of Civil Procedure addresses the scenario where a defendant
makes an offer to settle and obtains a result after trial which is as favourable or more favourable
than the terms set out in the offer:

Rule 49.10(2) Where an offer to settle,

is made by the defendant at least seven days before the
commencement of the hearing;

is not withdrawn and does not expire before the
commencement of the hearing; and

is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable or less favourable than the
terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the
date the offer was served and the defendant is entitled to partial indemnity costs
from that date, unless the court orders otherwise.

"Iii Hill (3d) 243 the court   

held that the rationale of rule 49.10(2) does not ?t a case where a plaintiff is totally unsuccessful
because, without the rule, the defendant would normally be entitled to partial indemnity costs
throughout.

There are cases in which, after consideration of the decision in Sfrasser, the court has
exercised its discretion to award substantial indemnity costs from the date that a defendant made
an offer to ?drop hands? consent to a dismissal of the action without costs): see, for
example, Dunstan v. Flying Travel Plaza, 2007 44819 (ON SC).

[48] While a court, in exercising its discretion with respect to costs, may take into account any
offer to settle made in writing, the date the offer was made and the terms of the offer (Rule
49.13), it remains the case that an award of substantial indemnity costs will usually only be

warranted where there are exceptional circumstances: see, generally, Davies v. Claringron
2009 ONCA 722.

[49] Accordingly, while I agree that the existence of a ?drop hands? offer of settlement by the
CBC Defendants, made in a letter dated 13 September 2010, is relevant to the exercise of the
court?s discretion, 1 would not accede to the submission by the CBC Defendants that an award of

substantial indemnity costs should, in effect, automatically be made from the date of their offer
to settle.

- Page 10 -

Amount of Costs

[50] The plaintiff urges scrutiny, and reduction, of the amounts claimed by the CBC
Defendants on a number of grounds including, but not limited to, the following:

Duplication of work by fee earners;

What is portrayed as a claim for ?substantial indemnity? costs is, in fact, a claim for
?full indemnity? costs;

(0) Excessive amounts of time spent with respect to various steps in the litigation;

Charging for interlocutory proceedings where the CBC Defendants were either
unsuccessful or took no position;

Claiming costs (including disbursements) that have already been the subject of
interlocutory awards of costs

Claiming disbursements that are either not recoverable at all (eg. witness fees paid to
a witness who was not called) or which are excessive; and

The trial was littered with unnecessary and often unsuccessful objections or
interventions by the CBC Defendants which necessarily prolong the proceedings.

[51] I do not propose to deal with all of these points seriafim, but will focus on those that have

?particularly in?uenced my determination ofwhat is a fair and reasonable - -  -- - -- --  - --  

[52] I start by saying that I have not allowed costs associated with the CBC Defendants?
unsuccessful motion to strike the jury notice, a summary judgment motion which was never
launched and conduct monies paid to Dr. Barbara Roebothan, a witness who never testi?ed.

[53] For the avoidance of doubt, I have also not included in my determination of costs any
amount related to a security for costs motion which was brought before Master Abrams.

[54] Turning to the hours spent, issue is taken with the fact that the lawyers purport to
have spent nearly 3.5 times the number of hours preparing for trial than they did attending trial.
Given that there was over seven years of litigation before the trial, I do not ?nd that unusual. As
the plaintiff has not provided a bill of cost I am unable to gauge how the time spent by the CBC
Defendants? lawyers compares to that spent by the plaintiff lawyers.

[55] While, over the life of the case a considerable number of lawyers, clerks and students
have had involvement in the ?le, the vast majority of the work was done by the three lawyers
who appeared as counsel at trial. In that regard, I observed that there were rarely more than two
of those three lawyers present in court at any given time and, ?lrthermore, there was a
commendable and palpable division of responsibilities between those counsel which struck me as
indicative of a cost-effective use of lawyers time, rather than over-lawyerng or duplication of
effort.

?Page 11 -

[56] It would be fair to say that the trial was prolonged by a number of unnecessary motions
and procedural machinations instigated by both the plaintiff and by the CBC Defendants. Both
sides were also guilty of under-estimating the time that would be spent in the 
chief or cross?examination of witnesses. As a result, despite a number of witnesses being
removed from the parties? witness lists as the trial progressed, the total length of the trial
exceeded the estimates given by counsel during the trial management process and, consequently,

the trial required more of the court?s time and resources than had been budgeted for.
[57] I turn next to how substantial indemnity costs should be quantified.

[58] The bill of costs submitted by the CBC Defendants provides what are described as
?substantial rates?. The following description of these rates is provided:

?In this case, the substantial indemnity rates are greater than the rates paid by the
CBC Defendants. The CBC Defendants are seeking no more than that which was
actually charged to the CBC Defendants.?

[59] So what the CBC Defendants? lawyers effectively set out are their rates on a full
indemnity basis, i.e. what the CBC Defendants paid for the legal services provided.

[60] Even when determining costs on a full indemnity basis, ?such costs are to be reviewed by
the court and limited to those that have been reasonably incurred?: MacKimron v. Ontario
iiernicipal Employees Retirement Board, 2007 ONCA 874 88 OR. (3d) 269, at para.
92.

[6 .1.   ..  very. ?1,6661%. ?prdho??cem??t ?from. ?ier. bf Appeal in kagi . . Synergf .  ..  . 

(.2000) Inc, 2015 ONCA 771, addresses the relationship between partial indemnity costs,
substantial indemnity costs and the fees and disbursements actually incurred by the party in
whose favour costs are awarded:

[53] In seeking substantial indemnity costs, counsel appear to have proceeded
on the basis that substantial indemnity costs represent 90% of full indemnity.
While that may be so in some circumstances, we do not think that is an accurate
general principle of law.

[54] Counsel have referred us to two Superior Court decisions in which judges
have concluded that a substantial indemnity hourly rate may fairly represent 90%
of the full indemnity hourly rate. They have come to this conclusion based on the
premise that a fair partial indemnity hourly rate represents approximately 60% of
full indemnity. Applying a factor of 1.5 - the factor set out in the definition of
substantial indemnity costs in r. 1.03 the judges arrived at a substantial
indemnity hourly rate of 90% of full indemnity. See OGT Holdings Ltd. v. Startek
Canada Services Ltd, 2010 ONSC 1090; and Middleton v. Highlands East
(Mrmicz?palify 2013 ONSC 2027.

[55] It is well-established, however, that fixing costs of a proceeding or of a
step within a proceeding on a partial indemnity basis pursuant to Part I of Tariff A
of the Rules of Civil Procedure is not simply an exercise of multiplying hourly

- Page 12 -

rates by the amount of time expended. The court must balance the discretionary
factors set out in r. 5701(1) and, in the end, arrive at an amount that is reasonable
and fair in the circumstances and that bears some relationship to the amount that
an unsuccessful party could reasonably expect to pay: see Boucher v. Public
Accountants Council for the Province of Ontario (2004), 71 OR. (3d) 291 (C.A.),
at paras. 26, 37-38. . . ..

[56] Costs awarded on a substantial indemnity basis are not a function of full
indemnity rates, however, or of full indemnity costs where full indemnity rates are
reasonable. Under the Rules, substantial indemnity costs are a function of the
costs awarded on a partial indemnity basis. Rule 1.03 is quite clear on this:

?Substantial indemnity costs? mean costs awarded in an amount
that is 1.5 times what would otherwise be awarded in accordance
with Part I of Tariff A, and ?on a substantial indemnity basis? has a
corresponding meaning.

[57] In short, costs 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 ?xed (or that would otherwise have been ?xed) in accordance
with the Rules and Tariff A. . ..

[62] The effect of the applicable rules and jurisprudence, including 790668 Ontario Inc. v.
D?Andrea Management Inc, Akagt' v. Synergy Group (2000) Inc. leads me to conclude as

   

a. While as a general rule of thumb, paltial indemnity costs will often be fixed or
assessed in an amount that equates with 60% of full indemnity costs, this will not
always be so.

b. In determining how much to award for partial indemnity costs, a court must
balance the discretionary factors set out in r. 5701(1) and ultimately arrive at an
amount that is reasonable and fair in the circumstances and that bears some
relationship to the amount that an unsuccessful party could reasonably expect to
pay.

0. Substantial indemnity costs are not determined by reference to full indemnity
rates, or of full indemnity costs where full indemnity rates are reasonable, but,
rather, are a function of the amount determined for partial indemnity costs.

d. The application of the factor of 1.5 under Rule 1.03 is subject to the indemnity
principle (expressly referenced in Rule such that no award of costs
may exceed the legal fees and disbursements actually incurred by the party in
whose favour costs are awarded.

e. Costs on a full indemnity scale represent a complete indemnity for those costs that
have been reasonably incurred.

- Page 13 -

f. Costs on a full indemnity scale will usually, but not always, exceed substantial
indemnity costs, but substantial indemnity costs will never exceed full 
costs.

[63] In the present case, the ?substantial rates? incurred by the CBC Defendants or, to apply
the terminology used in Akagi, the ?full indemnity rates? - are, in my v1ew reasonable.

[64] In weighing the factors enumerated in Rule 57.01 in order to arrive at an amount that is
reasonable and fair in the circumstances and that bears some relationship to the amount that the
plaintiff could reasonably expect to pay, I have had particular regard to the high importance of
the issues involved to both sides, the amount in issue ($137,000,000 according to the plaintiff),
the ?drop hands? offer and the complexity of the issues (not so substantively complex as to cause
the case to be taken away from the jury, but complex from a case management perspective with
657 exhibits, over 30,000 pages of documents, challenging evidentiary and procedural issues.

[65] I have also considered the rates charged by the lawyers for the CBC Defendants which
compare favourably even with the outdated rates set out in the Information for the Profession.
Each of these factors I have mentioned weighs in favour of the CBC Defendants.

[66] As already noted, I have not had the benefit of information concerning the costs incurred
by the plaintiff against which I could gauge the reasonableness of the CBC Defendants? claims
(or the plaintiff?s reasonable expectations).

As previously indicated, after adjustments already conceded by the CBC Defendants

 during the courseef.submission.the .fvll..indaeait?00st 01? the CBC Defendants amount to

$1,629,370.78."

[68] When further adjustments are applied to re?ect costs which I have disallowed, namely
those pertaining to the CBC Defendants? unsuccessful motion to strike the jury notice
the summary judgment motion which was never launched ($1,090) and conduct
monies paid to Dr. Roebothan ($1,190) a deduction of $15,000 (which would allow for the
application of taxes on the fees element) is appropriate. So the rounded total for full indemnity
costs would be $1,614,000, of which approximately $1,383,412 represents fees (inclusive of

applicable taxes) and the remainder, approximately $230,588, represents disbursements
(inclusive of taxes).

[69] In my view, the application of the factors enumerated in Rule 57.01 to the determination
of partial indemnity costs (aside and apart from the circumstances that have led me to conclude
that an award of substantial indemnity costs is appropriate) would result in a lesser discount than
would ordinarily be the case. If I were awarding costs on a partial indemnity basis, I would for
those costs at $970,000 (inclusive of taxes) plus disbursements. This represents a discount of
approximately 30% against the full indemnity fees. Applying the substantial indemnity factor of
1.5 to that amount results in a figure that exceeds the CBC Defendants? fees on a full indemnity
basis, which would violate the indemnity principle. Accordingly substantial indemnity costs in
this case are limited to the CBC Defendants? reasonable full indemnity costs.

- Page 14 

[70] I therefore ?x the substantial indemnity costs of the CBC Defendants at $1,383,412 for
fees (which on this occasion corresponds with, but does not exceed, the full indenmity amount)
and $230,588 for disbursements for a total of $1,614,000.

[71] These costs are payable forthwith.

 

 

Graeme Mew J.

Date: 13 November 2015