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Comment on Ontario v. Rothmans Inc.


Ontario v. Rothmans Inc. |  (WestlawNext Canada)
2014 CarswellOnt 8352 |  (Westlaw Canada)
Ontario Superior Court of Justice

Litigation under the Tobacco Damages and Health Care Costs Recovery Act, 2009 took an unusual turn in the case Ontario v. Rothmans.  The defendants withdrew their motion to strike the statement of claim, which they had attacked on the basis that it disclosed no cause of action.  Only a matter of parliamentary privilege remained at issue at the hearing.  The defendants nevertheless sought costs, in the significant amount of approximately $300,000. A jurisdictional conflict involving many of the defendants had delayed the proceedings for a period of years, finally being denied review by the Supreme Court of Canada.  More importantly, by the time the dismissal motion resumed, the Crown had made substantial amendments to its statement of claim.   The defendants maintained that these amendments entitled them to costs. 

As unique as the circumstances surrounding the costs dispute were, Conway J. exercised his judicial discretion by utilizing basic first principles: “I will consider what relief the defendants sought on the motions and whether the Fresh Claim effectively granted that relief.” No judicial determination of the issues of the motion itself had been made.  The amendments set out certain specifics and pleaded additional material facts in support of the Crown’s tort claims, but these did not address all the defendants’ complaints.  Moreover, important complex issues remained unresolved, including whether the Crown was required to plead all the elements of the common law torts of misrepresentation and conspiracy.  The defendants were not entitled to costs.

Four of the defendants had sought to have the statement of claims against them dismissed without leave to amend.  The judgment does not specifically set out the portions of the pleadings to which the defendant objected, or the exact manner the amendments affected their position.  However, when the relief sought excludes amendment, and a motion is withdrawn in response to an amended claim, it is possible that these defendants should have been aware success would not be total.  

Lastly the case addressed wither the Crown was required to advise the defendants that it intended to amend its claim.  If the claimed costs of $300,000 was a reasonable estimate, one can sympathize with the defendants.  However, the fresh claim had been delivered before the required deadline.  The Crown could not have known the defendants would withdraw their entire motion as a result of the new claim, as issues had been left unresolved.  Nor could the Crown be required to file its amended claim before all the defendants had filed their own materials, so that it knew the case it had to meet.    

No costs were awarded in favour of either party.  Given that no defendant was released from the proceedings, that not all amendments sought were made and that significant legal issues remained outstanding, it may be that the result was very positive for the defendants, and they should be grateful that distributive costs orders are not the norm.  The case remains an interesting example of the considerations involved when a party withdraws a motion but still seeks its costs.  
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