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Federal Court
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Cour fédérale
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PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
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and
TORONTO PORT AUTHORITY, CITY CENTER AVIATION LTD., REGCO HOLDINGS INC., PORTER AIRLINES INC., and ROBERT J. DELUCE
and
PORTER AIRLINES INC.
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Plaintiff
Defendants
Plaintiff by Counterclaim
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REASONS FOR ORDER AND ORDER AS TO COSTS
[1] These reasons and order pertain to the requests made by the various parties to these proceedings that the Court fix liability for and the quantum of costs payable as a result of the various discontinuances that have been filed by each of them in these proceedings.Both the action and the counter-claim now have been discontinued. Only the question of costs remains outstanding.
[2] The present proceedings are only a part of ongoing legal battles between one or more of these parties in this Court and in the Ontario Superior Court. On July 21, 2010 in proceedings T-488-10 and T-692-10 in this Court I gave Reasons for Judgment (2010 FC 774) in which I outlined a number of the events relating to the disputes that some of these parties have been litigating relating to the operation of an airport at Toronto Island as administered by the Toronto Port Authority (TPA) and commercial access to that airport by Porter Airlines, Air Canada and Jazz Air.
[3] Some of the events in respect of the litigation between the parties include:
The
February 23, 2006 - Jazz commenced an action in the Ontario Superior Court (06-CV-306679 PD3) naming Toronto Port Authority (TPA) and Porter (in fact a number of related entities and an individual) as defendants.
February 27, 2006 - Spence J. of the Ontario Superior Court dismissed an injunction application brought by Jazz (2006 Carswell Ont. 3111).
May 24, 2006 - Spence J. issued brief reasons as to costs (2006 Carswell Ont 6104). He awarded Porter $160,000 before GST in respect of the injunction application.
October 26, 2007 - Porter counterclaimed against Air
October 16, 2009 – Morawetz J. of the Ontario Superior Court made an Order discontinuing the main action brought by Jazz and staying the counterclaim brought by Porter until final disposition of this present Federal Court action T-1427-06 with costs to be addressed separately.
June 9, 2010 – Morawetz J. issued a Costs Endorsement. He awarded Porter costs in the amount of $145,000 inclusive of taxes and disbursements and TPA the sum of $130,000 inclusive of taxes and disbursements. This award was in respect of the discontinuance of the main action only. In making this Order Morawetz J. stated that he was aware that proceedings had been taken in the Federal Court and that some of the work done for the
Porter’s counterclaim as against Air
Federal Court Proceedings T-488-10 and T-692-10
March 31, 2010 – Air
April 13, 2010 – At Air
May 1, 2010 – Air
July 6 & 7, 2010 - The two applications were heard together on an expedited basis.
July 27, 2010 – Judgment was given dismissing both applications, costs to be spoken to.
Contemporaneous with the release of these reasons and order, reasons and order as to costs in T-488-10 and T-692-10 will be released.
An appeal has been taken by Air
Federal Court Proceedings T-431-06
March 3, 2006 – Jazz filed an application for judicial review in the Federal Court (T-431-06) naming TPA and a number of Porter affiliates as respondents.
June 6, 2006 – Prothonotary Milczynski gave Reasons and an Order, on a motion brought by TPA and Porter, converting the application to an action. She called the application a “square peg made to fit a round hole” (2006 FC 705).
July 20, 2006 - Rouleau J. dismissed an appeal from Prothonotary Milczynski’s Order. On November 27, 2006 Rouleau J. awarded costs of the appeal to Porter in the sum of $30,000 inclusive of disbursements.
On November 29, 2007 Rouleau J. awarded costs of the appeal to TPA in the sum of $30,000 inclusive of disbursements.
August 8, 2006 – Jazz discontinued this action.
March 8, 2010 – Prothonotary Milczynski awarded costs in the sum of $100,000 to each of TPA and Porter for the discontinued action.
Federal Court Proceedings T-1427-06
(the proceedings at issue here)
August 8, 2006 – this proceeding was brought as an application for judicial review. T-1427-06 by Jazz naming TPA as respondent.
September 6, 2006 – at the request of Porter the Court added Porter (several related parties) as intervenors in the application.
February 1, 2007 – Prothonotary Milczynski struck out the application.
June 12, 2007 – Hugessen J. heard an appeal from the above Order. He allowed the appeal and directed that the proceedings proceed by way of an action with costs to be spoken to.
June 29, 2007 – Jazz filed a Statement of Claim naming TPA and Porter as defendants.
September 28, 2007 – Hugessen J. issued an Order with Reasons as to the costs respecting his earlier Order. He awarded TPA and Porter each the sum of $50,000.00 stating “...the Court must make it clear that it will not allow its processes to be abused...”
October 26, 2007 – Porter filed a Defence to the action together with a counterclaim against Air
March 10, 2009 – Prothonotary Milczynski granted an Order at the request of TPA and Porter, staying this action until final disposition of the
October 14, 2009 – On an appeal from Milczynski P.’s Order I was advised that Jazz would be discontinuing its
October 30, 2009 – I awarded Porter costs and disbursements in the sum of $31, 679.32 plus GST and TPA costs and disbursements in the sum of $11,042.47 plus GST. In my reasons, paragraph 14, I stated that I had found the conduct of Jazz to be abusive.
March 29, 2010 – Jazz discontinued this action as against TPA and Porter – the counterclaim by Porter remained.
March 29, 2010 – I ordered that the trial date fixed in this action remain as scheduled, January 17, 2011 without prejudice to any party to seek costs against Jazz in respect of its discontinuance.
May 14, 2010 – Porter discontinued its counterclaim as against Air
Each of Jazz, Air
ISSUES
[4] The issues relate to the awarding of costs in this proceeding T-1427-06 arising by reason of:
Jazz’s discontinuance of the main action as against TPA and Porter.
Porter’s discontinuance of its counterclaim as against Air
[5] Taking the claims of the respective parties at their highest:
TPA requests the sum of $478,271.00 from Jazz, inclusive of disbursements.
Porter requests the sum of $788,155.43 from Jazz, inclusive of disbursements.
Air
Jazz requests the sum of $397,431.50 from Porter, inclusive of disbursements.
[6] The parties against whom costs are sought argue that no costs or only a nominal sum should be awarded.
ANALYSIS
[7] All parties submit that I should dispose of the issues as to costs. Rule 402 of the Federal Courts Rules provides that in the event of a discontinuance of a proceeding, the party against whom the proceeding was taken is entitled to costs:
COSTS OF DISCONTINUANCE OR ABANDONMENT – Unless otherwise ordered by the Court or agreed by the parties, a party against whom an action, application or appeal has been discontinued or against whom a motion has been abandoned is entitled to costs forthwith, which may be assessed and the payment of which may be enforced as if judgment for the amount of the costs had been given in favour of that party.
[8] Rule 400 provides the Court with full discretionary power as to the amount and allocation of costs and provides for a number of factors which may be taken into consideration, including sub- rule 400(3)(o) any other matter:
DISCRETIONARY POWERS OF THE COURT -
(1) The Court shall have full discretionary power of the amount and allocation of costs and the determination of by whom they are to be paid.
...
(3) Factors in awarding costs – In exercising its discretion under subsection (1), the Court may consider
...
(o) any other matter that it considers relevant.
[9] Each of the parties has provided the Court with lengthy submissions, regrettably filled with rhetoric, much of which is unhelpful. What is particularly of concern is the submission by Jazz and Air
[10] Therefore, in establishing what costs should be awarded to a party against whom an action or counterclaim has been discontinued, I have determined that I will be guided by the following:
Costs should be awarded in respect of work done and disbursements made in this proceeding T-1427-06 only.
To the extent that costs have already been awarded in this proceeding, no further award or “top-up” should be made.
To the extent that costs and disbursements have been incurred respecting the issues raised in the Porter counterclaim, which issues (and more) remain live issues before the Ontario Superior Court, those costs have not been “thrown away”. The Ontario Court should be free to make an appropriate disposition as to costs respecting all issues upon final determination of proceedings in that Court.
The overlapping issues in the several actions in this Court, as well as the Ontario Court, make it difficult, if not impossible, given the lack of proper evidence, to sort out what costs and disbursements have properly been incurred in these proceedings (T-1427-06) as opposed to one or more of the other proceedings.
The litigation in the present proceedings, as well as the other proceedings, has been highly tactical, probably a tribute to the forensic skills of the barristers involved, but not a credit to the legal system. More than nominal costs should be awarded, but given the constraints previously recited, the amounts should not be overly large.
[11] With these factors in mind, I have looked at the proceedings at hand:
The defendants in the main action, TPA and Porter, have received cost awards in respect of various Court proceedings, as enumerated, up to October 30, 2009.
Porter sought to enter these proceedings as a party respondent or intervenor and, when the proceedings were converted to an action, Porter became a defendant and, in that role, counterclaimed.
It was appropriate for Porter to counterclaim in this action, given the state of doubt as to whether this action or the
Air
To the extent that there were expenditures by any party unique to the proceedings in this Court that have not otherwise been compensated, they relate to relatively minor pleading and procedural issues.
Given the lack of specificity and evidence, it is impossible to assess an exact or even roughly approximate sum to each party’s efforts not otherwise compensated or compensable.
DISPOSITION
[12] In the result, I approximate that the uncompensated, or in the case of the
[13] Therefore, I award:
To TPA, costs in the sum of $10,000.00, plus disbursements in the sum of $10,000.00, to be paid by Jazz forthwith by reason of Jazz’s discontinuance of the main action.
To Porter, costs in the sum of $10,000.00, plus disbursements in the sum of $10,000.00, to be paid by Jazz forthwith by reason of Jazz’s discontinuance of the main action.
To Jazz, costs in the sum of $10,000.00, plus disbursements in the sum of $10,000.00, to be paid by Porter forthwith by reason of Porter’s discontinuance of its counterclaim. However, this award is to be offset by the above award to Porter, as a result of which neither party shall pay the other any sum of money for costs or disbursement.
To Air
[14] The costs and disbursements awarded include applicable taxes. There will be no additional costs or disbursements arising by reason of this Order.
ORDER
FOR THE REASONS provided:
THIS COURT ORDERS that costs shall be awarded in the manner set out in the Disposition provided in the Reasons.
“Roger T. Hughes”
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1427-06
STYLE OF CAUSE: JAZZ AIR LP (Plaintiff) v. TORONTO PORT AUTHORITY, CITY CENTER AVIATION LTD., REGCO HOLDINGS INC., PORTER AIRLINES INC., and ROBERT J. DELUCE (Defendants) and PORTER AIRLINES INC. (Plaintiff by Counterclaim) v. AIR CANADA AND JAZZ AIR LP (Defendants to the Counterclaim)
SUBMISSIONS IN WRITING (COSTS)
AND ORDER AS TO COSTS: HUGHES J.
WRITTEN REPRESENTATIONS BY:
SOLICITORS OF RECORD:
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