Costs In The Cause Where Success Divided Still Reflects Access To Justice Concerns

In two recent decisions, Fantl v. Transamerica Life Canada, 2013 ONSC 5198 (CanLII) ("Fantl") and Kang v. Sun Life Assurance Company of Canada, 2013 ONSC 4800 (CanLII), Justice Perell awarded costs in the cause for motions under the Class Proceedings Act, 1992 ("CPA") where he found that success was divided. Justice Perell found that neither proposed class proceeding "was a test case, raised a novel point of law or involved a matter of public interest" under s. 31 of the CPA that would warrant special consideration in awarding costs. Justice Perell affirmed that absent special consideration, costs in class action litigation follow the normal rules, and are intended to award successful litigants. His reasons suggest that the access to justice concerns underlying class action proceedings remain a relevant consideration and may be consistent with ordering costs payable in the cause where success is divided.

In Fantl Justice Perell found that the normal rule that a successful plaintiff on a certification motion should receive his or her costs forthwith does not apply where there is divided success on the motion. Both parties sought their costs forthwith and opposed costs in the cause, asserting that they had succeeded on the certification motion. Mr. Fantl was supported in his submissions by the Law Foundation of Ontario.

Mr. Fantl claimed for breach of an express or implied term of the contract and negligent misrepresentation relating to an investment instrument in 53 Transamerica insurance policies. On the certification motion, Justice Perell certified a class action for 5 of the 53 policies. Notably, the certification for those 5 policies was unopposed. Transamerica succeeded in opposing certification of the remaining 48 policies. Further, Mr. Fantl's tort and aggregate damages claims were not certified, and his claims for implied breach of contract were struck. As such, Justice Perell found that "Transamerica achieved a substantial substantive success in resisting Mr. Fantl's certification motion."

Perell J. acknowledged that a major policy goal of the CPA is facilitating access to justice, that the Legislature was aware that adverse costs awards could chill access to justice, and that, through s. 31 of the CPA, the Legislature signalled to the courts that they should be "alert to circumstances when it would be appropriate to make no costs award." However, he also noted that the Legislature had rejected a no-costs rule for class actions...