COURT FILE NO.: 45/04

49/04

62/04

DATE: 20040216

ONTARIO

SUPERIOR COURT OF JUSTICE

(DIVISIONAL COURT)

RE: CSFY Inc. and Your Dollar Store With More Inc. v. Creit Management Limited, Canadian Property Holdings (Ontario) Inc. and Empire D Enterprises Inc., Mt’n Springs Limited and First Professional Management Inc.

BEFORE: Swinton J.

COUNSEL: Alexandra Lev-Farrell for the Plaintiffs/Responding Parties

Benjamin Salsberg for Empire D

Jonathan Kulathungam for Mt’n Springs and First Pro

Joanna Board for Creit Management Limited and Canadian Property

HEARD: February 11, 2004

ENDORSEMENT

[1] The defendants all seek leave to appeal the costs order of Herold J. dated September 10, 2003 in which he denied costs to the successful defendants on a motion for an interlocutory injunction.

[2] It is well established that leave to appeal from an interlocutory costs order should be granted sparingly and only in the most obvious cases (Yakabuski v. Yakabuski Estate, [1998] O.J. No. 2870 (Div. Ct.) at paragraph 8).

[3] In my view, there is no conflicting decision of another court, so this motion falls to be decided under Rule 62.02(4)(b).

[4] The defendants argue that there is good reason to doubt the correctness of the decision. In determining that issue, the threshold question is whether the correctness of the order is open to serious debate.

[5] The decision whether to award costs is within the discretion of the judge. An appellate court should not interfere with that decision unless there is an error of principle. Nevertheless, absent special circumstances, a successful party has a reasonable expectation of obtaining an award of costs (Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (C.A.) at 6 (Quicklaw)).

[6] On releasing his decision on the merits, Herold J. indicated that he was not inclined to award costs because of a problem in Brampton of counsel intentionally underestimating the length of motions in order to get on a motions list. He went on to say that subject to good argument to the contrary, he would make no order of costs in order to do his part to eradicate this mischief. He described counsel as “joint venturers” who attempted to sandbag the Motions Court staff to get the matter listed. In his supplementary reasons on costs, he determined that costs should not be awarded to the successful defendants because they were in a joint venture with the plaintiffs to provide a misleading estimate. In those reasons, he applied the decision of O’Driscoll J. in CHML/CKDS v. Telemedia Communications Inc., 1988 4837 (ON SC), [1988] O.J. No. 1280 (H.C.J.).

[7] In my view, there is good reason to doubt the correctness of the decision. The initial estimate for the motion was two hours, a time discussed with Corbett J. at the time that the motion was booked. When the parties appeared before Herold J., he questioned the time estimate. The parties agreed that two and one half hours would be adequate, and times were allocated to each party – 45 minutes to the plaintiffs, 45 minutes to the Creit defendants, and 30 minutes each to the Empire D and First Pro defendants. The motion then went ahead. In fact, the plaintiff took two hours and fifteen minutes and Creit 70 minutes, while the other two defendants stayed within their 30 minute time frame. The defendants succeeded on the motion, but were denied costs. The motion was of particular importance to Empire D, as on an interim basis, it had been prevented from opening a new store.

[8] In CHML, O’Driscoll J. denied costs to a successful plaintiff on a motion, because counsel for the plaintiff misled him about the time required for the motion. The plaintiff was the moving party, and counsel told him that the motion, booked for one hour, would take longer after counsel had begun submissions and opposing counsel were there ready to proceed. The motion lasted more than four hours over two days. Counsel did not disclose that a full day had been set aside for the merits of the motion on a later date and that the appearance before O’Driscoll J. was supposed to deal with an adjournment on terms. Given the “flagrant” conduct of plaintiff’s counsel, costs were denied to the plaintiff, despite success on the motion.

[9] While Herold J. applied the decision in CHML, he appears to have extended the meaning of “special circumstances” for the denial of costs to a successful party beyond the holding in that case. Here, the parties appeared before him, and he discussed the length of the motion with them and allocated time before the motion began. There was some urgency to the motion. The parties proceeded with argument, and two of the successful defendants came within their allotted time frame. Counsel for the plaintiff, who was unsuccessful, greatly exceeded his allotted time. Herold J. makes no mention of these considerations in his reasons, and he denied costs on the basis that the parties jointly mislead the court staff in booking a two hour time slot. It appears that he felt it important to sanction the successful parties for this, given the systemic problem with misestimates of motion time in the region.

[10] In my view, there is good reason to doubt the correctness of the decision, as it appears to be a significant extension of CHML¸ because costs are denied to a successful party who has not misled the judge hearing the motion on the estimate of time.

[11] The second part of the leave test requires the moving parties to satisfy me that there is an issue of public importance relevant to the development of the law and the administration of justice that goes beyond the interests of the parties. In my view, they have done so. This order is not an issue of concern simply to these parties. There is an issue of importance here for counsel throughout the province as to the appropriate use of cost sanctions when time estimates in motions courts are wrong. Moreover, this is an issue on which the Divisional Court can give guidance to motions judges about the appropriate manner in which to deal with counsel’s misestimates of time.

[12] Therefore, leave to appeal is granted. If the parties can not agree with respect to costs of this motion, they may make brief written submissions within 30 days of the release of this endorsement.

Released: February , 2004

Swinton J.