Wittman v. Blackbaud, Inc.

2021 BCSC 1917 Wittman v. Blackbaud, Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Wittman v. Blackbaud, Inc., 2021 BCSC 1917 Date: 20211001 Docket: S207965 Registry: Vancouver Between: Stefan Wittman Plaintiff And Blackbaud, Inc. and Blackbaud Canada, Inc. Defendants Brought under the Class Proceedings Act, R.S.B.C. 1996, c. 50 Before: The Honourable Madam Justice Ahmad Reasons for Judgment as to Costs Counsel for the Plaintiff: M. Good S. Turner S. Jaworski Counsel for the Defendants: M. Feder, Q.C. K. Booth K. Marsh Written Submissions Received: Vancouver, B.C. September 8, 2021 Place and Date of Judgment: Vancouver, B.C. October 1, 2021 Introduction [1] By notice of application dated March 24, 2021, the defendants, Blackbaud, Inc. and Blackbaud Canada, Inc. (together, "Blackbaud") sought an order staying this action pursuant to the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 (the "Stay Application") on the basis that the matter is properly determined by way of arbitration. [2] By oral reasons for judgment delivered on August 11, 2021, I dismissed the Stay Application and directed that the parties provide me with their written submissions as to costs. They have done so. [3] The plaintiff, Stefan Wittman and Blackbaud agree that the costs of the Stay Application should be awarded to the successful party and should be paid at the conclusion of the proceeding. Mr. Wittman, however, argues

that costs should be payable in any event of the cause. Blackbaud argues that costs should be payable in the cause. [4] These are my reasons on their costs submissions. Legal Framework [5] Section 37 of the Class Proceeding Act, R.S.B.C. 1996, c. 50 precludes the court from awarding costs to any party on an application for certification or to any party to a class proceeding, except in certain circumstances. [6] However, prior to certification, the ordinary rules for the awarding of costs apply: British Columbia v. Apotex Inc., 2020 BCSC 1335 [Apotex] at para. 9. [7] The general rule is that costs go to the successful party of a motion, but are not payable until after the conclusion of the trial, and only if that party is awarded costs at trial: Rules 14-1(9), (12) and (13) of the Supreme Court Civil Rules, B.C. Reg. 168 / 2009; Araya v. Nevsun Resources Ltd., 2017 BCSC 336 [Nevsun] at paras 20-21. [8] However, Rules 14-1(9) and 14-1(12) expressly allow the court to "order otherwise". While the court does have discretion to depart from the presumptive rule and order costs of an interlocutory application in any event of the cause, that discretion must be exercised judicially, not arbitrarily or capriciously and special circumstances are required: Gichuru v. Smith, 2014 BCCA 414 at para. 100; Nevsun at para. 21. [9] The types of special circumstances that might justify an order of costs in any event of the cause include deterrence of "unnecessary or unreasonable conduct" by the unsuccessful party: Martel v. Wallace, 2008 BCSC 436 at para. 28 [10] The onus of establishing special circumstances is on the party who seeks to deviate from the general rule: Nevsun at para.

33. Discussion and Analysis [11] The starting position on this assessment is the general rule that costs are awarded to the successful party on an application in the cause. The question to be determined is whether any "special circumstances" exist to justify or warrant a departure from that rule and, in particular, to justify an award of costs in any event of the cause. [12] Mr. Wittman does not allege unnecessary or unreasonable conduct on the part of Blackbaud, nor is there any evidence of any. Instead, to establish that special circumstances exist, Mr. Wittman relies solely on the decision in Apotex in which costs of a sequencing application were ordered in any event of the cause. [13] Like the Stay Application, the Apotex sequencing application was also made in a proposed class proceeding. However, in my view, the circumstances giving rise to the award of costs in any event of the cause are otherwise distinguishable. [14] In making the costs award it did, it was significant to the court that the issue to be decided on the sequencing hearing was a discrete one. Justice Brundrett found at para. 28: [28] The sequencing hearing dealt with a serious question to be decided on a discrete issue. The result will not be later revisited at the certification hearing or trial, and if the plaintiff is successful in having the case certified, it is likely that no order for costs will

follow. I order that costs be payable to the plaintiff in any event of the cause. [15] By contrast, in Nevsun, the court considered a costs application in which the issues argued on five preliminary applications were not discrete from the issues to be determined in the action. [16] Of the applications made in Nevsun, one was for a stay of the proceedings pursuant to Rule 21-8(2) and section 11 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c.

28. The issue on the costs application was whether costs should be paid forthwith and in any event of the cause. The court concluded that they should not. [17] The fact that the preliminary applications, including the stay application, were not discrete matters separate from the action factored into that decision. Justice Abrioux (then of this court) found at para. 35: [35] I also do not agree with the plaintiffs that the Preliminary Applications on which they were successful were discreet matters, separate and distinct from the action itself. Although I decided that the action should proceed in British Columbia, the evidence led and the issues argued on the applications remain in issue and to be determined at the trial. [18] I do not accept, as Mr. Wittman argues, that the Stay Application is discrete from the issues yet to be decided in this action, as was the case in Apotex. In my view, the circumstances of this case align with the circumstances in Nevsun. [19] The Stay Application is one of three applications that Blackbaud intends to make in these proceedings, the other two being: a) an application for an order dismissing or staying the action against Blackbaud, Inc. on the basis that this court has no jurisdiction over it, pursuant to Rule 21-8 and the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (the "Jurisdiction Application"); and, b) an

application for summary judgment in dismissing the action pursuant to Rule 9-6 (the "Summary Judgment Application"). [20] It has filed the same evidentiary record for those applications as it did for the Stay Application because, as it argues, the facts and legal issues on all three applications overlap. It made the same argument on the sequencing application. As I set out in my reasons on that application, indexed at Wittman v. Blackbaud, Inc., 2021 BCSC 415 at paras 73 to 84, I agree. [21] For example, a central issue in all applications is the nature of the relationship between Blackbaud and Mr. Wittman. Other overlapping issues include the terms and significance of Blackbaud's contract with its customers. Those same facts and issues may also be raised on the certification application. [22] In other words, I do not accept, as Mr. Wittman argues, that the Stay Application is discrete from the issues yet to be determined on the Jurisdiction Application, the Summary Judgment Application or the certification application. The application is distinguishable from the decision in Apotex, and similar to the decision in Nevsun, in that meaningful way. [23] In Nevsun, the following were factors against ordering that costs be paid forthwith and in any event of the cause: · "[T]he evidence led and the issues argued on the applications remain in issue and to be determined at the trial"; ·

The proceeding was in the early stages; and · There was no litigation misconduct or impropriety by the defendant: Nevsun at paras 34 and 35. [24] The court awarded costs in the cause. [25] For those same reasons, I also conclude that there are no special circumstances in this case to depart from the normal costs rule in respect of the Stay Application. Conclusion [26] Costs of the Stay Application are awarded to Mr. Wittman in the cause. [27] Costs of this application are awarded to Blackbaud in the cause. "Ahmad J."