COURT FILE NO.: 637/03

DATE: 20041006

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, GROUND AND PITT JJ.

B E T W E E N:

INTERCONTINENTAL FOREST PRODUCTS SA and DRVNA INDUSTRIJA VRBOVSKO

Plaintiffs (Respondents)

• and -

LORENZO GIOVANNI RUGO (a.k.a. LAWRENCE JOHN RUGO), EUROSEAT LTD., PARIS NOSÉ , VALMAR NOSÉ, MARVAL SEATING LTD., AMIN AMLANI, ANA BASIC, WILLS TRANSFER LIMITED and AQUARIUS SHIPPING (QUEBEC) INC.

Defendants (Appellants)

AND BETWEEN:

LORENZO GIOVANNI RUGO, AMIN AMLANI and ANA BASIC

Plaintiffs by Counterclaim

• and -

INTERCONTINENTAL FOREST PRODUCTS SA and DRVNA INDUSTRIJA VRBOVSKO

Defendants by Counterclaim

Robert Frank and Erik Penz, for the Respondents

Stephen Victor, Q.C. and

Chad Johnson, for the Appellants Lorenzo Giovanni Rugo and Euroseat Ltd.

HEARD: October 6, 2004

ground J.: (Orally)

1This is an appeal from an order of Justice Backhouse, on a motion for an interlocutory injunction, awarding costs of the motion to the plaintiff, payable within thirty days. The issuance of the injunction did not finally resolve the issues between the parties or bring the proceeding to an end.

2The standard of review of a costs order of a motions or trial judge is that, costs always being in the discretion of the judge, the order will be interfered with only in extremely limited circumstances. Certain principles with respect to the disposition of costs on a motion for an interlocutory injunction were stated by Borins J. in Rogers Cable T.V. Ltd. v. 373041 Ontario Ltd., [1994] O.J. No. 1087 (Gen. Div.) as follows at paragraph 4:

“Where it is clear that the granting of the interlocutory injunction will put an effective end to the proceedings it is appropriate for the court to make a costs order which reflects this fact and to fix the amount of costs. However, in a case such as this in which a trial is a virtual certainty the court will consider the usual alternatives: plaintiff’s costs in any event of the cause; plaintiff’s costs in the cause; costs in the cause; or costs reserved to the trial judge.”

3It is our view that the Rogers Cable decision does not establish a mandatory rule but that the residual discretion of the judge with respect to costs is preserved and that, in a particular case, the motions judge may determine to award costs on a motion for an interlocutory injunction payable forthwith, rather than reserving costs to the trial judge. We have been referred to authorities where the motions judge did so, in one case after specifically considering the principles enunciated in Rogers Cable. See Rogers v. Sudbury (Administrator of Ontario Works) (2001), 2001 28087 (ON SC), 57 O.R. (3d) 467.

4All such decisions however were rendered prior to the coming into force on January 1, 2002 of Rule 57.03(1), which states in part:

“On hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall,

(a) fix the costs of the motion and order them to be paid within 30 days.”

5The new Rule by its terms applies to motions for an interlocutory injunction. The new Rule does not however, in our view, detract from the residual discretion of the motions judge in determining what costs order would be just. In making such determination, the judge on a motion for an interlocutory injunction should consider the principles in Rogers Cable that, in the usual case where a trial is a virtual certainty, the award of costs should be reserved to the trial judge.

6In the case at bar, it is implicit in Backhouse J.’s reasons that in exercising her discretion, based on the factors set out in paragraph 47 of the respondent’s factum, she determined that no different order would be more just and accordingly fixed the costs and ordered the costs payable within thirty days. Those factors are as follows:

(a) Rugo’s conduct in denying several important allegations and then subsequently admitting to them, which unnecessarily lengthened the proceedings;

(b) the admission by Rugo that he retained the Respondents’ property valued at approximately $180,000 (U.S.), which was a “self-help” remedy;

(c) the admissions by Rugo that he cashed cheques without authorization, incorporated and did business through Euroseat Ltd. while the Respondents were selling their product under the “Euroseat” brand name, and resold the Respondents’ products for a profit;

(d) the finding of an element of fraud with respect to Rugo’s conduct;

(e) the substantial success achieved by the Respondents;

(f) that the Respondents’ path in obtaining the relief was difficult, lengthy and expensive;

(g) that the relief sought and won by the Respondents was significant;

(h) that the Respondents have a very strong case;

(i) the late service of supplementary responding material outside of the timetable set by Justice Lang; and

(j) the service of two motions (security for costs and change of venue) without proper notice, which had no urgency and which were made returnable at the same time as the interlocutory injunction motion.

7In our view, even accepting the principle that in the usual case of an interlocutory injunction motion costs are reserved to the trial judge, these factors provided a reasonable basis for Justice Backhouse exercising her discretion in fixing costs and ordering them payable within thirty days; we see no reason to interfere with that exercise of discretion by Justice Backhouse

8The appeal is dismissed.

FERRIER J.

9For oral reasons delivered this day, the appeal is dismissed. On the question of costs: In view of the novelty of the issue as expressed in the Reasons for Judgment of C. Campbell J. on the application for leave, we are of the view that costs should be awarded to the plaintiffs/respondents in the cause and we fix those costs for the leave application and the appeal at the total sum of $35,000.00, including disbursements and GST. I have endorsed the record: “Costs to the plaintiffs/respondents in the cause fixed at $35,000.00, including disbursements and GST.”

FERRIER J.

GROUND J.

PITT J.

Date of Reasons for Judgment: October 6, 2004

Date of Release: October 12, 2004

COURT FILE NO.: 637/03

DATE: 20041006

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, GROUND AND PITT JJ.

B E T W E E N:

INTERCONTINENTAL FOREST PRODUCTS SA and DRVNA INDUSTRIJA VRBOVSKO

Plaintiffs (Respondents)

• and -

LORENZO GIOVANNI RUGO (a.k.a. LAWRENCE JOHN RUGO), EUROSEAT LTD., PARIS NOSÉ , VALMAR NOSÉ, MARVAL SEATING LTD., AMIN AMLANI, ANA BASIC, WILLS TRANSFER LIMITED and AQUARIUS SHIPPING (QUEBEC) INC.

Defendants (Appellants)