Berry v. Pulley was the first class proceeding in Canada to
proceed to trial with a defendant class. As previously described
here2, the action arose out the acquisition of Air
Ontario by Air Canada and a dispute between the pilots of these two
airlines about the preparation of an integrated seniority list.
Ultimately, the defendants were successful and the action was
In Berry v Pulley et al, 2013 CanLII
547793, Justice Pepall ruled on the costs to be
awarded for the trial. The trial had taken place over the course of
several months. During the trial there were more than 43 volumes of
documents, evidence was read-in from about 30 transcripts, and
testimony was heard from approximately 20 witnesses.
Ordinarily, costs follow the event. This principle applies
equally in class proceedings. The defendants claimed $1.5 million
in costs. The plaintiffs submitted that if awarded, the reasonable
amount for costs and disbursements inclusive of HST would be
$477,787.57. After hearing submissions, Justice Pepall concluded
that the defendants, despite being successful at trial, were not
entitled to any costs and the plaintiffs and defendants were
ordered to bear their own costs.
Justice Pepall's decision was an exercise of the inherent
discretion of the court to determine the costs of and incidental to
a proceeding or a step in a proceeding conferred by s.131 of the
Courts of Justice Act.
In reaching her determination, Justice Pepall rejected the
plaintiffs' arguments based on factors specific to costs in
class proceedings as set out in s. 31(1) of the Class Proceedings
Act, 1992, ("CPA"). Justice Pepall found that the
litigation did not involve significant matters of public interest
and was not a test case. In addition, although there were
some novel points of law throughout the course of this litigation,
the costs associated with determining these issues had been
addressed through previous dispositions. At trial, the parties
differed on the application of the law to the facts. In this
regard, the action did not raise a novel point of law.
Further, while there were procedural novelties that may have had a
bearing on costs, Justice Pepall was not persuaded that the action
raised a novel point of law sufficient to invoke the application of
s. 31(1) of the CPA.
While Justice Pepall recognised that costs ordinarily follow the
event and that offers to settle were made, Justice Pepall chose to
exercise her discretion to not award any costs due to the
defendants' conduct during the litigation. Justice Pepall
described this conduct as "shabby and high-handed".
While not wishing to repeat all of the findings that she had
made at the common issues trial, Justice Pepall was highly critical
of the fact that the defendants had committed to a merger of the
seniority lists and binding arbitration but later worked to prevent
implementation of the arbitral award and list. Justice Pepall also
made particular note of her finding at the common issues trial of
the actions of certain of the defendant subclasses that constituted
an illegal act.
Parties to litigation should take careful heed of the fact that
it is not in every case that the successful party will be able to
recover some of its costs from the unsuccessful party. The court
retains ultimate discretion and the manner in which parties conduct
themselves is a significant factor to be considered in the award of
costs. Unacceptable conduct, may, as here, lead to a finding
that the successful party is not deserving of a costs award.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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