MacQueen et al. v. Nova Scotia et al., 2014 NSCA 96

• Judge: Oland, Farrar and Bryson, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: January 17, 2014
• Jurisdiction: Nova Scotia
• Citations: 2014 NSCA 96;(2014), 352 N.S.R.(2d) 152 (CA)

MacQueen v. N.S. (2014), 352 N.S.R.(2d) 152 (CA);

    1112 A.P.R. 152

MLB headnote and full text

Temp. Cite: [2014] N.S.R.(2d) TBEd. OC.032

The Attorney General of Canada, representing Her Majesty the Queen in right of Canada (appellant) v. Neila Catherine MacQueen, Joseph M. Petitpas, Ann Marie Ross, Kathleen Iris Crawford, Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia (respondents)

(CA392560)

Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia (appellants) v. Neila Catherine MacQueen, Joseph M. Petitpas, Ann Marie Ross, and Kathleen Iris Crawford, and The Attorney General of Canada representing Her Majesty the Queen in right of Canada (respondents)

(CA 393200; 2014 NSCA 96)

Indexed As: MacQueen et al. v. Nova Scotia et al.

Nova Scotia Court of Appeal

Oland, Farrar and Bryson, JJ.A.

October 22, 2014.

Summary:

The plaintiffs sued for redress for alleged contamination of their persons and homes caused by the operation of a steel plant and coke ovens. Only Nova Scotia and Canada remained as defendants. The plaintiffs obtained an order certifying the claim as a class proceeding and determining the class boundaries (see 311 N.S.R.(2d) 354; 985 A.P.R. 354). The Attorney General of Nova Scotia obtained leave to appeal (see 324 N.S.R.(2d) 102; 1029 A.P.R. 102) and appealed.

The Nova Scotia Court of Appeal, in a decision reported at 338 N.S.R.(2d) 133; 1071 A.P.R. 133, allowed the appeal and set aside the certification order. The plaintiffs filed a motion for directions on their intended motion for reconsideration of the Court of Appeal's decision. They asserted that the Court of Appeal might have reached a different conclusion had it applied the reasoning in two decisions of the Supreme Court of Canada that were issued after the Court of Appeal's decision. At the hearing of the motion for directions, the Attorney General disputed the court's jurisdiction to hear the motion for reconsideration. The chambers judge ordered the parties to file written submissions on the jurisdiction issue to the panel of the Court of Appeal that had rendered the decision that the plaintiffs wished to have reconsidered.

The Nova Scotia Court of Appeal, in a decision reported at 348 N.S.R.(2d) 211; 1100 A.P.R. 211, held that the intended motion for reconsideration would not proceed to a hearing on its merits. The parties made submissions on costs and disbursements for the certification motion, the appeal and the intended motion for reconsideration.

The Nova Scotia Court of Appeal determined the issues.

Editor's note: Prior proceedings in this matter were indexed as MacQueen et al. v. Ispat Sidbec Inc. et al. and are reported at 246 N.S.R.(2d) 213; 780 A.P.R. 213; 253 N.S.R.(2d) 188; 807 A.P.R. 188; 274 N.S.R.(2d) 101; 874 A.P.R. 101; 319 N.S.R.(2d) 215; 1010 A.P.R. 215, and 379 N.R. 399.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - The Nova Scotia Court of Appeal stated that "While it is true that Courts and commentators alike acknowledge the risks of adverse costs awards undermining the purpose of class proceedings legislation, the 'loser pays' principle continues to apply in the certification context. It is departed from only after consideration of the facts and conduct of the parties. More often consideration of these factors results in a reduction of quantum rather than an order requiring both parties to bear their own costs." - See paragraph 14.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - The plaintiffs sued for redress for alleged contamination of their persons and homes caused by the operation of a steel plant and coke ovens - Only Nova Scotia and Canada remained as defendants - The plaintiffs obtained an order certifying the claim as a class proceeding and determining the class boundaries - The certification order was set aside on appeal - The Nova Scotia Court of Appeal, in determining costs for the certification motion, stated that the case engaged the public interest in terms of the environmental and health concerns raised by emissions from the steel works over an extended period - The issue of liability for those emissions had significance for the community beyond the proposed class - Further, the small value of individual claims had ramifications for access to justice in light of the finding that a class action was not the preferable procedure - Although the intended behaviour modification was neither urgent nor a matter of criminal law, access to justice was still a legitimate costs consideration - However, the court rejected the plaintiffs' assertion that there should be no costs award or, alternatively, a nominal award - That would not be fair and reasonable given the complexity of the certification proceedings - The court concluded that costs should be reduced by 25% which resulted in costs of $300,000 to Canada and $225,000 to Nova Scotia - That provided a partial indemnity award to the successful parties - The award was not so great as to have a chilling effect on class action proceedings - The court also applied the 25% discount to disbursements - See paragraphs 7 to 40 and 56 to 59.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - The plaintiffs sued for redress for alleged contamination of their persons and homes caused by the operation of a steel plant and coke ovens - Only Nova Scotia and Canada remained as defendants - The plaintiffs obtained an order certifying the claim as a class proceeding and determining the class boundaries - The plaintiffs had an indemnity agreement insuring them against an adverse costs award - At issue was whether access to justice considerations were not engaged or should be given lesser significance in light of the indemnity agreement - The Nova Scotia Court of Appeal stated that access to justice was broader than the plaintiffs' individual circumstances - Third parties who might be willing to undertake the costs of a potentially meritorious represented action, would be unwilling to do so if they ran the risk of crippling costs being awarded against them - In practice, representative plaintiffs were almost invariably funded by an outside party with an ability to absorb the costs - If such arrangements were to alleviate the access to justice concern, that factor in the analysis would, in effect, become illusionary - Access to justice remained an appropriate and relevant factor - See paragraphs 33 to 40.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - The plaintiffs sued for redress for alleged contamination of their persons and homes caused by the operation of a steel plant and coke ovens - Only Nova Scotia and Canada remained as defendants - The plaintiffs obtained an order certifying the claim as a class proceeding and determining the class boundaries - The motions judge made a lump sum costs award of $400,000, exclusive of disbursements, to be divided equally between Nova Scotia and Canada - He referred to Tariff C amounts in support of the figured arrived at - The certification order was set aside on appeal - The plaintiffs asserted that the costs awards for the motion should be reduced because of the defendants' conduct in the litigation - The defendants both referred to the motions judge's costs award - Canada did so by importing the $400,000 costs award in its entirety as a reflection of its reasonable expectations - Nova Scotia applied a multiplier of $8,000 ($2,000 x 4, to account for complexity) to 32 days for the motion and then applied a 20% increase to resulting amount to arrive at $300,000 - The Nova Scotia Court of Appeal stated that potential problems existed with the defendants' approaches in terms of asymmetry of awards to plaintiffs and defendants and the potential for public interest and access to justice concerns to affect the awards - There was also some merit to the plaintiffs' assertion that there was concern with Nova Scotia's approach because of the motions judge's finding that the defendants had increased the complexity of the certification hearing as a result of their merit-based approach - However, the motions judge's more favourable statements and the apparent value of at least some of the resulting evidence mitigated against a form of reduction for evidence going to the merits - It served no useful purpose to precisely attempt to allocate responsibility for the added costs that might have been incurred as a result of the parties' approach to the certification motion - However, the court considered the factor in determining the appropriate award for disbursements - See paragraphs 41 to 55.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - An order certifying a class action was reversed on appeal - The defendants (Canada and Nova Scotia) submitted that applying the 40% Tariff to the trial costs would result in an excessive costs award on appeal - The defendants each sought costs of $50,000 - Canada requested that amount inclusive of disbursements - Nova Scotia sought its disbursements ($1,107.26) on the top of the $50,000 - The Nova Scotia Court of Appeal agreed that applying the 40% Tariff would be excessive - The court considered that this was a complex appeal, submissions were heard over three days, a tremendous amount of material was filed and substantial time was spent in preparation for the appeal hearing - However, there was considerable overlap in the grounds of appeal argued by Canada and Nova Scotia which resulted in economies to the parties - It would be unfair to saddle the plaintiffs with $100,000 in appeal costs, particularly where the parties' submissions and arguments were very similar - The court concluded that an appropriate lump sum award was $30,000 to each defendant inclusive of disbursements - See paragraphs 93 to 101.

Practice - Topic 7020

Costs - Party and party costs - Entitlement to - Successful party - General principles - [See first Practice - Topic 210.3 ].

Practice - Topic 7021

Costs - Party and party costs - Entitlement to - Successful party - Exceptions - Conduct - [See first Practice - Topic 210.3 ].

Practice - Topic 7029.5

Costs - Party and party costs - Entitlement to - Successful party - Exceptions - Public interest or test case - [See second Practice - Topic 210.3 ].

Practice - Topic 7053.1

Costs - Party and party costs - Entitlement to party and party costs - Class or representative actions - [See first, second, third and fourth Practice - Topic 210.3 ].

Practice - Topic 7117

Costs - Party and party costs - Special orders - Lump sum in lieu of taxed costs - [See fifth Practice - Topic 210.3 ].

Practice - Topic 7134

Costs - Disbursements - Delivery and service charges - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants sought $7,649.83 for printing - The Nova Scotia Court of Appeal stated that the supporting affidavit did not set out whether the printing costs were incurred internally or paid to outside sources - Although the affidavit stated that all the disbursements were paid by the defendant, the court was left to ponder who they were paid to, at what rate and why the expense was necessary - Some printing would have been necessary - The court allowed $3,500 for the disbursement - See paragraph 71.

Practice - Topic 7137

Costs - Party and party costs - Disbursements - Travelling expenses - Counsel - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants sought $22,925.72 for travel relating to the certification hearing - The Nova Scotia Court of Appeal stated that although there was some information provided respecting the individuals travelling and their destination, there was a lack of particularity regarding why the travel was necessary - For example, there was no explanation why three counsel had to travel to New York to prepare an expert for his discovery examination - Nor was there any explanation why it was necessary to have two trips, one to New York and one to Florida, by two counsel to instruct the expert - Some travel was necessary to obtain and instruct experts - The lack of detail made it difficult to determine what was reasonable - The court allowed $12,500 for travel expenses - See paragraphs 67 to 69.

Practice - Topic 7140

Costs - Disbursements - Costs of reports - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants (Nova Scotia) sought to recover amounts paid for expert fees - The Nova Scotia Court of Appeal stated that although Nova Scotia had provided invoices associated with their experts, there was no time breakdown respecting the particular services that were provided nor was there any evidence as to why it was necessary to incur that level of fees at the certification hearing - The court was satisfied that a portion of the amount claimed was a proper disbursement - The preparation of experts' reports and the attendance at discovery were properly claimed disbursements - However, it was difficult to determine how much time was spent on those activities - The court allowed $65,000 for one group of experts and $30,000 for a second group, which was approximately 50% of the amounts claimed - The court denied expert fees claimed for services detailing 32 hours at $120 per hour for map production consulting services as the court was left to guess at what those services consisted of and why they were necessary - See paragraphs 80 to 84.

Practice - Topic 7141

Costs - Disbursements - Costs of expert advice - [See Practice - Topic 7140 ].

Practice - Topic 7141

Costs - Disbursements - Costs of expert advice - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants (Canada) sought disbursements of $74,458.31 for one expert and $38,279.15 for a second expert - The Nova Scotia Court of Appeal stated that although a supporting affidavit provided some evidence of the work completed by the experts, it was more of a narrative of the services provided - The affiant provided the hourly rates for the experts, but there was no detailed breakdown of the services provided, when the experts provided the services, or the amount of time expended in providing the services - The experts' invoices were not included - Nor was there any explanation why it was necessary to incur the substantial fees in relation to the certification motion - There was also the motions judge's finding that the certification motion was more complex as a result of the defendants merit-based approach - The court concluded that Canada had not proven that all of the experts' fees were necessary - The court awarded $40,000 in total for the fees in recognition that the evidence would have been of some benefit in determining the issues on the certification motion - See paragraphs 62 to 66.

Practice - Topic 7146

Costs - Party and party costs - Disbursements - Trial transcripts - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants sought $22,586.93 for transcripts of the proceedings - The Nova Scotia Court of Appeal allowed the claim - In light of the length and complexity of the certification motion, it was reasonable and necessary for the defendant's counsel to obtain transcripts - See paragraph 73.

Practice - Topic 7150.4

Costs - Disbursements - Items not recoverable as disbursements - An order certifying a class action was reversed on appeal - Submissions were made on costs - Both defendants claimed disbursements relating to the webcasting of the certification proceedings - The Nova Scotia Court of Appeal refused to allow anything for the disbursements where it was not satisfied that they were necessary or reasonable in the circumstances - See paragraphs 72 and 89.

Practice - Topic 7150.7

Costs - Disbursements - Delivery and service charges - An order certifying a class action was reversed on appeal - Submissions were made on costs - One of the defendants sought $1,778.84 for courier services - The Nova Scotia Court of Appeal stated that there was no evidence as to why it was necessary to use courier services as opposed to some other less expensive mode of delivery - Due to the nature of the proceedings, the court accepted that some courier services were necessary and allowed $500 for the disbursement - See paragraph 70.

Practice - Topic 8326

Costs - Appeals - Costs of appeal - General principles - [See fifth Practice - Topic 210.3 ].

Cases Noticed:

Pearson v. Inco Ltd. et al. (2006), 208 O.A.C. 284; 79 O.R.(3d) 427 (C.A.), refd to. [para. 15].

Ruffolo et al. v. Sun Life Assurance Co. of Canada, [2007] O.T.C. Uned. O85; 90 O.R.(3d) 59 (Sup. Ct.), refd to. [para. 16].

Morrison Estate v. Nova Scotia (Attorney General) (2012), 323 N.S.R.(2d) 37; 1025 A.P.R. 37; 2012 NSSC 386, refd to. [para. 19].

McCracken v. Canadian National Railway Co., [2012] O.T.C. Uned. 6838; 2012 ONSC 6838, refd to. [para. 20].

Rosen v. BMO Nesbitt Burns Inc., [2013] O.T.C. Uned. 6356; 2013 ONSC 6356, refd to. [para. 21].

Kerr et al. v. Danier Leather Inc. et al., [2007] 3 S.C.R. 331; 368 N.R. 204; 231 O.A.C. 348; 2007 SCC 44, refd to. [para. 24].

McCracken v. Canadian National Railway Co., [2010] O.T.C. Uned. 6026; 2010 ONSC 6026, refd to. [para. 33].

McCracken v. Canadian National Railway Co., [2012] O.A.C. Uned. 652; 2012 ONCA 797, refd to. [para. 35].

Pauli et al. v. ACE INA Insurance Co. et al. (2004), 354 A.R. 348; 329 W.A.C. 348; 2004 ABCA 253, leave to appeal denied (2004), 332 N.R. 398 (S.C.C.), agreed with [para. 37].

Caputo et al. v. Imperial Tobacco Ltd. et al., [2005] O.T.C. 160; 74 O.R.(3d) 728 (Sup. Ct.), refd to. [para. 50].

Attis et al. v. Canada (Minister of Health) et al., [2007] O.T.C. Uned. 770 (Sup. Ct.), affd. (2008), 254 O.A.C. 91; 93 O.R.(3d) 35; 2008 ONCA 660, leave to appeal denied [2009] 1 S.C.R. v; 396 N.R. 397; 260 O.A.C. 394, refd to. [para. 52].

DeFazio et al. v. Ontario (Minister of Labour) et al., [2007] O.T.C. Uned. 922 (Sup. Ct.), refd to. [para. 53].

Smith v. Inco Ltd. (2013), 313 O.A.C. 156; 2013 ONCA 724, leave to appeal denied [2014] S.C.C.A. No. 36, refd to. [para. 57].

Armoyan v. Armoyan (2013), 337 N.S.R.(2d) 365; 1067 A.P.R. 365; 2013 NSCA 136, refd to. [para. 95].

Authors and Works Noticed:

Cassels, Jamie, and Jones, Craig, The Law of Large-Scale Claims - Product Liability, Mass Torts, and Complex Litigation in Canada (2005), pp. 370 to 373 [para. 17].

Jones, Craig, Theory of Class Actions (2003), pp. 22 to 25.

Counsel:

Paul Evraire, Q.C., Angela Green and Melissa Chan, for the Attorney General of Canada;

Agnes MacNeil and Alison Campbell, for the Attorney General of Nova Scotia and Sydney Steel Corporation;

Raymond F. Wagner, Q.C., C. Scott Ritchie, Q.C., Michael Robb and Michael Dull, for Neila Catherine MacQueen, Joseph M. Petitpas, Ann Marie Ross and Kathleen Iris Crawford.

This matter was heard by way of written submissions received on January 17, 2014, and February 7, 2014, by Oland, Farrar and Bryson, JJ.A., of the Nova Scotia Court of Appeal. Farrar, J.A., delivered the following decision for the court on October 22, 2014.