



COURT OF APPEAL FOR ONTARIO

CITATION: Stewart v. Toronto (Police
    Services Board), 2020 ONCA 460

DATE: 20200710

DOCKET: C65779

Brown, Huscroft and Trotter
    JJ.A.

BETWEEN

Luke Stewart

Appellant (Plaintiff)

and

The Toronto Police Services Board

Respondent (Defendant)

Davin Charney and Christopher Rapson,
    for the appellant

Kevin McGivney and Jonathan Thoburn,
    for the respondent

Winston Gee and Sarah Whitmore, for the
    intervenor Canadian Civil Liberties Association

Heard: December 17, 2019, with written cost
    submissions

On appeal from the judgment of Justice
    Bernadette Dietrich of the Superior Court of Justice, dated July 13, 2018, with
    reasons reported at 2018 ONSC 2785 and reasons for costs dated August 21, 2018,
    reported at 2018 ONSC 4790.

COSTS ENDORSEMENT


OVERVIEW

[1]

By reasons dated April 16, 2020, we allowed Mr. Stewarts appeal, set
    aside para. 1 of the trial judges Judgment, allowed Mr. Stewarts claim,
    granted him
Charter
damages in the amount of $500, set aside the award
    of costs made in para. 2 of the Judgment against Mr. Stewart, awarded him costs
    of the appeal in the amount of $20,000, and invited the parties to make written
    cost submissions if they could not agree on the costs below. The parties were
    not able to reach an agreement, and we have reviewed their written cost
    submissions.

[2]

Mr. Stewart seeks costs of the proceeding below on a substantial
    indemnity basis in the amount of $114,584.61. The Toronto Police Services Board
    (TPS) seeks its costs of the proceeding below in the amount of $25,000.

ANALYSIS

Mr. Stewarts claim for substantial indemnity costs

[3]

Mr. Stewart advances three arguments for granting him substantial
    indemnity costs: (i) his action was public interest litigation that warrants
    substantial indemnity costs; (ii) he achieved a result that was more favourable
    than the offer to settle that he made pursuant to r. 49 of the
Rules of Civil Procedure
; and (iii) the proper application
    of the r. 57.01 factors should result in an award of substantial indemnity
    costs. We are not persuaded by these arguments.

[4]

First, Mr. Stewarts action does not satisfy the criteria for awarding
    special costs on a substantial indemnity basis in cases involving public
    interest litigants as set out by the Supreme Court of Canada in
Carter v.
    Canada (Attorney General)
, 2015 SCC 5, [2015] 1 S.C.R. 331, at paras.
    137-140.

[5]

Carter
requires a litigant to satisfy
    two criteria for an award of public interest litigation special costs, the first
    of which is to demonstrate that his proceeding involved matters of public
    interest that are truly exceptional and he has no personal, proprietary or
    pecuniary interest in the litigation that would justify the proceeding on
    economic grounds: at para. 140. Mr. Stewart does not satisfy this first
    criterion. He had an encounter with members of the TPS that he alleged resulted
    in the violation of several of his rights guaranteed under the
Canadian
    Charter of Rights and Freedoms
. Mr. Stewart brought a civil suit seeking a
    remedy for those violations. But, as the Supreme Court observed in
Carter
at para. 137, [a]lmost all constitutional
    litigation concerns matters of public importance. While Mr. Stewart advanced
    important
Charter
claims, we do not regard the
    matters raised in his proceeding as truly exceptional, within the meaning of
Carter
.

[6]

Also, Mr. Stewart has not demonstrated that he has no personal,
    proprietary or pecuniary interest in the litigation that would justify the
    proceedings on economic grounds:
Carter
, at
    para. 140. On the contrary, the pleadings and history of this action show that
    Mr. Stewart had a personal and pecuniary interest in the litigation. He
    initiated the lawsuit in the Small Claims Court but then transferred it to the
    Superior Court of Justice. At trial, Mr. Stewart sought damages for the
    violation of his personal rights in the amount of $100,000 which, at the time,
    was the upper limit for a monetary claim in a simplified procedure action under
    the
Rules
. While Mr. Stewart reduced his request for damages during
    the appeal to $50,000, and then to $20,000, monetary damages as compensation
    for a wrong to his personal rights remained a key element of his claim. Accordingly,
    his action does not satisfy the
Carter
criteria
    for an award of substantial indemnity costs for public interest litigation.

[7]

Second, Mr. Stewart did not obtain a judgment that was as favourable or
    more favourable than the terms of his offer to settle dated May 6, 2014. The
    offer contained three main components: (i) payment to him of $5,000 for all
    claims and damages; (ii) payment of his partial indemnity costs and
    disbursement to the date of settlement; and (iii) a written statement from the
    TPS admitting the facts and liability alleged in certain paragraphs of his
    amended statement of claim. In the result, while this court set aside the
    dismissal of his action, the $500 in damages awarded to Mr. Stewart was far
    less favourable than the amount set out in his offer to settle.

[8]

In his cost submissions, Mr. Stewart states that securing an admission
    of liability from the defendants was the central issue in pursuing settlement,
    not compensation. Since the TPS was found liable for the
Charter
breaches alleged in the portions of the amended statement of claim identified
    in his offer to settle, Mr. Stewart contends that he obtained a judgment more
    favourable than his offer. While Mr. Stewart did succeed in his
Charte
r
    claims, the fact remains that the amount of damages awarded to him was
    substantially less than what he offered to settle for. As a result, Mr.
    Stewarts offer to settle does not engage the costs consequences set out in r.
    49.10(1).

[9]

Finally, Mr. Stewart contends that a proper application of the standard
    r. 57.01(1) factors justifies awarding him substantial indemnity costs. We do
    not agree. We see nothing in the litigation conduct of the TPS in the
    proceeding below that would merit an award of elevated costs.

Partial indemnity costs and the TPS offers to settle

[10]

Although
    Mr. Stewarts costs submissions focused on his claim for substantial indemnity
    costs, his bill of costs records that he incurred partial indemnity costs
    totaling $87,240.76 for the proceeding below. Given that Mr. Stewart ultimately
    succeeded in his action, as a successful litigant he would be presumptively
    entitled to costs on a partial indemnity basis.

[11]

However,
    the TPS made two offers to settle. The first, dated July 2, 2014 (the 2014
    Offer), offered to pay Mr. Stewart an all-inclusive amount of $5,000. The TPS
    made a second offer, dated August 4, 2017 (the 2017 Offer), about six months
    prior to the start of the trial, in which it offered to pay Mr. Stewart $10,000
    for all damages, together with prejudgment interest and partial indemnity costs
    to the date of the offer. The TPS submits that Mr. Stewart obtained a judgment
    less favourable than either of its offers to settle, with the result that Mr.
    Stewart is entitled to his partial indemnity costs to the dates of the offers
    and the TPS to its partial indemnity costs thereafter: r. 49.10(2).

[12]

Putting
    to one side the issue of whether the 2014 Offer continued in force following
    the making of the 2017 Offer, the record before us indicates that it is highly
    unlikely that Mr. Stewart failed to obtain a judgment less favourable than the
    all-inclusive amount of $5,000 offered in the 2014 Offer. Mr. Stewarts
    litigation stretched back to 2011. His bill of costs discloses that he incurred
    at least $4,500 in partial indemnity costs from 2011 until the date of the 2014
    Offer which, coupled with the $500 damage award, would result in a recovery
    greater than the $5,000 TPS 2014 Offer.

[13]

Of
    more consequence is the TPS 2017 Offer. Mr. Stewart obtained a judgment less
    favourable than the TPS 2017 Offer. Rule 49.10(2) provides that in such
    circumstances, the plaintiff, Mr. Stewart, is entitled to partial indemnity
    costs to the date the offer was served and the defendant, TPS, is entitled to
    partial indemnity costs from that date unless the court orders otherwise.

[14]

The
    TPS submits that its reasonable partial indemnity costs from the date of the
    2017 Offer through to the end of trial amounted to approximately $75,000.
    However, that amount is disproportionately high for this simplified procedure
    action in which the upper limit for claimed damages was $100,000. The TPS bill
    of costs discloses that its litigation team consisted of three lawyers, one law
    clerk, and an articling student. While a litigant is free to staff its
    litigation team as it sees fit, for the purposes of determining reasonable partial
    indemnity costs in a simplified procedure action, the hours claimed by the TPS
    are too high. On our review of the TPS bill of costs, reasonable partial
    indemnity costs for the period covered by the 2017 Offer would be in the neighbourhood
    of $40,000.

[15]

Nevertheless,
    even with that reduction of partial indemnity costs, the net result of a strict
    application of r. 49.10(2) would see Mr. Stewart pay the TPS about $8,000 to
    $10,000 in partial indemnity costs, assuming his pre-2017 Offer partial
    indemnity fees constituted approximately 40% of his overall fees.

[16]

Mr.
    Stewart submits that a costs award under which he was required to pay some
    amount to TPS would be a harsh result for a case in which an individual
    successfully enforced his constitutional rights.

[17]

We
    see merit in that submission.

[18]

Rule
    49.10(2) provides a presumption as to costs where an offer is not accepted and
    the discretion to depart from the presumption should be exercised in accordance
    with the purpose of the rule, which is to encourage parties to make reasonable
    offers to settle:
Barresi v. Jones Lang Lasalle Real Estate Services Inc.
,
    2019 ONCA 884, at para. 17. Departure from the general rule embodied in r.
    49.10(2) should occur only where, after giving proper weight to the policy of
    the general rule, the importance of reasonable predictability and the even
    application of the rule, the interests of justice require a departure:
Barresi
,
    at para. 18.

[19]

In
    our view, the present case is one where the interests of justice require a
    departure from the general rule in r. 49.10(2). Although Mr. Stewarts action
    did not meet the criteria for an award of public interest litigation special
    costs, the issues raised by his action will contribute to a better
    understanding of the interplay between
Charter
rights and permissible
    police crowd control techniques.

[20]

As
    well, it is significant that notwithstanding the fact that Mr. Stewart
    maintained his claim for a large amount of damages through to trial, his May 6,
    2014 offer to settle was a serious effort on his part to settle the action for
    a modest amount of damages coupled with an admission of liability from the TPS
    regarding conduct that Mr. Stewart ultimately succeeded in establishing
    violated his
Charter
rights.

[21]

In
    those circumstances, we conclude that it is in the interests of justice to
    depart from the cost presumption contained in r. 49.10(2) and to award Mr.
    Stewart costs of the proceeding below fixed in the amount of $25,000, inclusive
    of disbursements and applicable taxes.

DISPOSITION

[22]

The TPS shall pay Mr. Stewart his costs of the proceeding below
    in the amount of $25,000, inclusive of disbursements and applicable taxes.

David
    Brown J.A.

Grant
    Huscroft J.A.

Gary
    Trotter J.A.


