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Mount Pleasant Costs Awarded Against Public Interest Litigants A decision on costs has been released by the Court of Appeal for Ontario in Friends of Toronto Public Cemeteries Inc. v Public Guardian and Trustee concerning the legal battle between Friends of Toronto Public Cemeteries Inc. and Kristyn Wong-Tam (collectively, the “FTPC”) and Mount Pleasant Group of Cemeteries (“MPGC”). The Court of Appeal had ruled in favour of MPGC on the substantive matters concerning the nature and governance of MPGC on May 5, 2020, finding that MPGC was not a charitable purpose trust subject to the Charities Accounting Act (“CAA”) and affirming that an investigation by the Public Guardian and Trustee (“PGT”) was not required. For further discussion of the Court of Appeal’s decision on the substantive matters see Charity & NFP Law Bulletin No. 473. In light of MPGC’s successful appeal and cross-appeal, it sought a total of $625,000 in costs from FTPC for the appeal, cross-appeal, and initial application. Although the PGT had been brought in as a respondent, MPGC did not seek costs from the PGT. FTPC, however, argued against costs on the bases that (i) they had brought the application solely in the public interest and for no personal gain; (ii) their application was successful on “the fundamental underlying issue in the case,” being the existence of a statutory trust, which was conceded by MPGC at the last minute; and (iii) they were successful against MPGC’s argument that FTPC had no standing. They also argued, in the alternative, that even if FTPC was not a public interest litigant, Ms. Wong-Tam was, and costs should not be awarded personally against her. The court followed a previous Court of Appeal decision in citing that the factors to be considered in determining whether an unsuccessful party should be exempt from paying costs because it was acting in the public interest include: “the nature of the litigants, whether the nature of the dispute was in the public interest, whether the litigation had any adverse interest on the public interest, and the financial consequences to the parties”. MPGC argued, among other reasons, that FTPC was not a public interest litigant because it was incorporated specifically for the purpose of this litigation and “does not rise above being an interloper or busybody.” It also argued that Ms. Wong-Tam joined the litigation in her personal capacity to provide standing to FTPC and was aware of her potential exposure for costs, particularly given that she and FTPC had an oral understanding and draft written agreement to indemnify her against adverse costs orders. The court found that there was an element of “NIMBYism (not in my back yard)” present in the litigation, given that residents near other MPGC cemeteries did not file any affidavits on the application. The fact that MPGC was a statutory trust, as eventually conceded by MPGC, was also “a factor that imports a public element.” Further, it found that the PGT had supported FTPC’s application, but not its request for an investigation under section 10 of the CAA. In the court’s view, “[a]ccess to justice would tend to favour treating the respondents as public interest litigants.” With regard to Ms. Wong-Tam, the court found that she had chosen to participate as an individual rather than in her capacity as a city councillor. Finally, the court found that the application judge had previously found that FTCP and Ms. Wong-Tam were public interest litigants for the purposes of standing, and found no reason to overturn the application judge’s decision on the matter. The court therefore found that FTPC and Ms. Wong-Tam, in her personal capacity, were public interest litigants, but this conclusion did not preclude a costs award against them. It was only a factor in determining the quantum of the award. Taking into account the importance of the issues, the proceedings’ complexity, and FTPC’s reasonable expectations as the unsuccessful party, the court considered that it was “fair and reasonable” to award $350,000 in costs to be paid by FTPC to MPGC. Further, given Ms. Wong-Tam’s secondary role in the litigation, and the fact that she had an unexecuted indemnity from FTPC, the court restricted her exposure to $10,000. This decision on costs is an important reminder of the high stakes and potential costs involved in litigation. Even where parties are identified as public interest litigants, courts may still award costs (and, as in this case, high costs) against such unsuccessful litigants, particularly where the surrounding circumstances deem it appropriate to do so. |
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