CITATION: Accreditation Canada International v. Guerra 2017 ONSC 932

COURT FILE NO.: 16-67194

DATE: 2017/02/08

SUPERIOR COURT OF JUSTICE – ONTARIO – DIVISIONAL COURT

RE: ACCREDITATION CANADA INTERNATIONAL and ACCREDITATION CANADA, Plaintiffs

AND

JOSE LUIS CABEZAS GUERRA c.o.b. as ACCREDITATION COUNCIL CANADA aka ACCREDITATION COUNCIL CANADA INTERNATIONAL, EFFICIENCY ON HEALTH SERVICES CANADA INC., BIEU (MARTY) VAN HUYNH, JANE DOE and JOHN DOE, Defendants

BEFORE: Aitken J.

COUNSEL: Todd J. Burke and Zac DeLong, Counsel for the Plaintiffs

Kumail Karimjee, Counsel for Jose Luis Cabezas Guerra

Ken J. Birchall, Counsel for Efficiency on Health Services Canada Inc. and Bieu (Marty) Van Huynh

HEARD: Written Submissions (at Ottawa)

ENDORSEMENT RE MOTION FOR LEAVE TO APPEAL

Nature of Motion

1The Plaintiffs, Accreditation Canada International and Accreditation Canada, seek leave to appeal to the Divisional Court from the costs order of Patrick Smith J., dated October 4, 2016, wherein Smith J. ordered “costs in the cause”, thereby reserving to the trial judge the costs on the Plaintiffs’ successful motion for an interlocutory injunction (Accreditation Canada International v. Guerra, 2016 ONSC 6184).

2In bringing this motion for leave to appeal, the Plaintiffs rely on both r. 62.04(a) and (b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

3For the reasons that follow, the motion for leave is denied.

Analysis

Jurisdiction

4An appeal lies to the Divisional Court from an interlocutory order of a judge of the Superior Court of Justice, with leave (Court of Justice Act, R.S.O. 1990, c. C. 43, s. 19(1)(b)). The costs order of Smith J. was an interlocutory order because it was associated with an interlocutory order (Yakabuski v. Yakabuski Estate, 1988 CarswellOnt 537 (Div. Ct.), at para. 4). Leave to appeal to the Divisional Court under s. 19(1)(b) of the Courts of Justice Act must be obtained from a judge other than the judge who made the interlocutory order (r. 62.02(1)).

Grounds for Leave

5Under r. 62.02(4), leave to appeal to the Divisional Court shall not be granted unless:

(a) There is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) There appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

Are there conflicting decisions?

6In rendering his decision on costs, Smith J. relied on the views expressed by Sharpe, J.A. in his text Injunctions and Specific Performance, at p. 2-91, and on Quizno’s Canada Restaurant Corporation v. 1450987 Ontario Corp (Ont. Sup. Ct.), where Perrell J. stated at para. 10:

Where a plaintiff succeeds in obtaining an interlocutory injunction it is the preferable (although not inevitable) course to reserve costs to the trial judge, which is to say to make costs in the cause. This is the preferable course because it allows the court to have the benefit of hindsight and to avoid the possible injustice of awarding costs to a plaintiff for having succeeded in obtaining an order to protect his or her position pending trial when the outcome of the trial reveals that that plaintiff’s position was not worthy of having been protected.

7As noted by Smith J. in para. 11 of his decision on costs, this approach to costs following the granting of an interlocutory injunction was adopted in many decisions predating Quizno’s, and it has been followed subsequently.

8However, there are two cases, also at the level of the Superior Court of Justice, where in circumstances arguably similar to those existing in this case, the courts have taken the position that it is preferable to make an award of costs following the granting of the interlocutory injunction.

9The first is Precision Fine Papers Inc. v. Durkin, 2008 CarswellOnt 3219 (Sup. Ct.), where Strathy J. held that costs were to be awarded forthwith on the basis of the following findings:

• The plaintiff had not simply established a serious issue to be tried, but also a strong prima facie case;

• The misconduct of the defendants was egregious;

• The plaintiff had to engage in lengthy and expensive investigations and litigation procedures in order to expose the defendants’ misconduct; and

• The plaintiff had been substantially successful on the most important issues related to the injunction motion.

10Smith J. made findings of fact in this case similar to those made in Precision.

11In Verge Insurance v. Sherk, 2013 ONSC 7855 (Sup. Ct.), Quinn J. held that a plaintiff’s costs on an injunction motion are to be paid forthwith where the injunction component of the action is effectively spent and where there is nothing meaningful left to litigate in respect of that form of relief. Considering the length of the restrictive covenant at issue in these proceedings and the length of time that has transpired and is likely to transpire until this action is tried, this is a case where the injunction aspect of the action may not be dealt with at trial in any prospective fashion.

12Thus, we have Smith J. following Quizno’s and the line of cases consistent with its approach, but we also have two other cases with facts similar to those in this case which take the opposite approach when considering the appropriate timing of a costs order following the granting of an interlocutory injunction.

13The critical point, however, is that a costs ruling on a motion is a discretionary decision and it is not the role of an appeal court to substitute its exercise of discretion for that of the hearing judge, unless in exercising his or her discretion, the hearing judge applied incorrect principles. That was not the case here. Smith J., after accurately reciting the law relating to costs, exercised his discretion to follow the normal procedure following interlocutory injunctions by ordering costs in the cause. Of import, he also noted:

The written submissions that are before me contain conflicting positions on several important issues that are relevant to the fixing of costs including: legal and factual complexity, conduct of Mr. Cabezas, duplication of lawyers’ time, improper time and excessive [sic time] spent on cross-examinations, proportionality of the award sought. It is not possible to make an order that would be fair and just without further evidence.

14This is a situation where different judges, in different fact situations, exercised their discretion in such a way that different results followed. It is not a case of a conflict in the law.

Is there good reason to doubt the correctness of the order in question?

15In his reasons regarding costs, Smith J. made it clear that he understood the framework regarding costs set out in the Courts of Justice Act and in the Rules of Civil Procedure. He exercised his discretion in a fashion consistent with the normal practice relating to costs following a successful motion for an interlocutory injunction. Whether or not I, any panel hearing an appeal from this order, or another judge hearing this matter firsthand would have exercised discretion in a different fashion is irrelevant.

Disposition

16Leave to appeal is denied.

17Costs relating to the motion for leave to appeal the costs order of Smith J. are reserved to the trial judge.

Aitken J.

Date: February 8, 2017

CITATION: Accreditation Canada International v. Guerra 2017 ONSC 932

COURT FILE NO.: 16-67194

DATE: 2017/02/08

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RE: ACCREDITATION CANADA INTERNATIONAL and ACCREDITATION CANADA, Plaintiffs

AND

JOSE LUIS CABEZAS GUERRA c.o.b. as ACCREDITATION COUNCIL CANADA aka ACCREDITATION COUNCIL CANADA INTERNATIONAL, EFFICIENCY ON HEALTH SERVICES CANADA INC., BIEU (MARTY) VAN HUYNH, JANE DOE and JOHN DOE, Defendants