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In Brewers Retail v Campbell, 2022 ONSC 2795, Justice Morgan dealt with costs in “procedurally unusual circumstances”: the Financial Services Regulatory Authority (“FSRA”), Ontario’s pension regulator, was granted intervenor status to oppose a consent motion for certification for settlement purposes and sought its costs.

This was a class action in respect of a proposed class of employees and former employees of Brewers Retail Inc. (“Brewers”) who challenged aspects of their pension plan. The FSRA sought to oppose certification and proposed settlement and brought a motion requesting that the matter be stayed in favour of the jurisdiction of the Financial Services Tribunal, which had already deferred certain questions to the court in parallel proceedings. At the certification motion, Justice Morgan granted the FSRA intervenor status to consider its arguments on their merits. However, in the result, the court rejected all of the FSRA’s positions.

Here, the FSRA sought costs for its successful motion to intervene which was strenuously opposed. While acknowledging the general principle that parties should be partially indemnified where they are successful, Justice Morgan determined not to award any costs to the FSRA.

His Honour reasoned that the FSRA’s arguments on the motion for certification were blended with the balance of the proceedings and were unsuccessful as certification was granted. Moreover, the FSRA’s intervention caused the other cooperating parties to incur costs far above those of a motion on consent. Accordingly, the court ordered the FSRA to pay costs in the amount of $159,000 to Brewers and $51,000 to the respondent committee of pensioners, both of whom contended with the FSRA’s intervention.

This is a good decision. The settlement process is important, and courts need to hear objections from class members to make sure that proposed settlements are fair. However, it is strange to see a regulator that is not a class member getting in the way of resolving a case because of its purported impact on other non-class members (e.g., other pensioners across the province). Parties seeking intervenor status to oppose a consensual settlement should expect to pay costs to their opponents if their arguments are unsuccessful. At the same time, intervenors should not be chilled from making submissions where appropriate—but that is unlikely given the specific facts here, particularly that the action was being certified on consent for settlement purposes, that the intervenor was not a class member, and that it was opposing certification for settlement rather than the settlement itself.

Jared Rosenbaum is a lawyer in Siskinds’ Class Actions Department. If you have comments or questions about this article you can write to him at [email protected].

If you have a tip for a potential class action, you can call Siskinds at 1-800-461-6166; email [email protected]; or fill out the online information form at https://www.siskinds.com/class-actions/.

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