Court File and Parties

COURT FILE NO.: CV-22-00682382-0000 DATE: 20230126 ONTARIO SUPERIOR COURT OF JUSTICE

RE: Victoria Sanders, by her Litigation Guardian, Sian Rawkins, Plaintiff -and- Anant Jain, Anant Jain Law Professional Corporation, Canada's Choice Investments Inc., 12212382 Canada Inc., Centum Smart Mortgages Inc., Ecohome Financial Inc., Summitt Home Services Gp Inc., Crown Crest Capital Management Corp., Alexander Carter, Silver Fund Mortgage Investment Corp. and 2684180 Ontario Inc., Defendants

BEFORE: Robert Centa J.

COUNSEL: Kent Elson and Amanda Montgomery, for the plaintiff Eli Karp, for the defendant Canada's Choice Investments Inc.

HEARD: January 25, 2023 (in writing)

Endorsement

[1] On January 9, 2023, I granted an injunction in favour of Victoria Sanders to restrain Canada's Choice Investments Inc. and 12212382 Canada Inc. from taking any steps to enforce their mortgage on Ms. Sanders home until the trial of this action: Sanders v. Canada’s Choice Investments Inc., 2023 ONSC 195.

[2] I was satisfied that Ms. Sanders made out a strong prima facie case both that the mortgage was unconscionable and that she was induced to enter into the mortgage through fraudulent misrepresentations. In my view, Ms. Sanders would suffer irreparable harm if the injunction was not granted, and the balance of convenience favoured protecting her interests. I found that granting the injunction was in the interests of justice.

[3] The parties were not able to resolve the issue of costs and I have now received submissions from Ms. Sanders and CCI.

Submissions of Ms. Sanders

[4] Ms. Sanders seeks $75,740.16 in costs of the motion, inclusive of HST and disbursements. This figure represents legal fees calculated on a partial indemnity scale until the date of an offer to settle the motion made on July 29, 2022, and on a substantial indemnity scale thereafter.

[5] Ms. Sanders submits that she should receive her costs because she was the successful party. She submits that the decision was extremely important to her and that the motion involved complex legal issues, five affidavits, an expert house valuation opinion, two cross-examinations, an examination under rule 39.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, and three volumes of evidence.

[6] She submits that a costs award of this magnitude was within the reasonable expectation of CCI and is comparable to awards in other cases: 9925350 Canada Inc. v. Kevito Ltd., 2021 ONSC 5551; Parkland Corporation v. SRAA Inc., 2021 ONSC 3342. She submits that CCI’s conduct added unnecessary costs to the proceeding by inappropriately refusing to answer questions on cross-examination, delivering documents and answers to undertakings late, and declining to agree to a motion schedule that would permit the cross-examinations to serve as the examinations for discovery.

[7] Ms. Sanders submits that she made two offers to settle the motion and that she then obtained a better result on the motion. Finally, she notes that she is the less resourced, more vulnerable party.

Submissions of CCI

[8] CCI submits that the costs of the motion should be reserved to the trial judge. CCI submits that this is typically the case where a party successfully obtains an injunction.

[9] CCI also submits that the costs sought by Ms. Sanders are disproportionate, that the material she filed contained “improper evidence” that was unnecessary for the disposition of the motion. CCI disputes that the motion was complex and that the claim for costs is “excessive relative to the expectations” of CCI.

Decision

[10] Fixing costs is a discretionary decision under section 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at paras. 59 to 66, the Court of Appeal for Ontario restated the general principles to be applied in the court’s exercise of its discretion to award costs. In exercising my discretion, I may consider the factors listed in rule 57.01. These factors include the result achieved, the amounts claimed and recovered, the complexity of and importance of the issues in the proceeding, the principle of indemnity, the reasonable expectations of the unsuccessful party, as well as any other relevant matter.

[11] Rule 57.03 provides that costs of a contested motion should be fixed and ordered to be paid within 30 days unless the court is satisfied that a different order would be more just. I am to make a costs order that is fair and just depending on the circumstances of the case before me: Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (C.A.), at para. 24.

[12] A successful party is normally entitled to an award of costs on a successful motion. The cost consequences of a motion for an interlocutory injunction, however, are often treated differently than other motions. In Injunctions and Specific Performance (Toronto: Thomson Reuters Canada) (November 2021), at §2:42, the Hon. Robert J. Sharpe explained the unique aspects of a motion for an interlocutory injunction:

Where the defendant successfully resists the plaintiff's motion for an interlocutory injunction, costs may be awarded forthwith. It has been held that where the motion was groundless and based upon unfounded allegations of fraud, deceit and conspiracy, it may be appropriate for the court to fix the costs on a solicitor and client scale and require that they be paid forthwith. On the other hand, it would be unusual to award costs of an interlocutory injunction motion to the successful plaintiff prior to trial. As there has been no final determination of the rights of the parties, but rather an order to protect the plaintiff's position pending trial, the preferable course is to reserve the question of costs to the trial judge.

[13] In Quizno’s Canada Restaurant Corporation v. 1450987 Ontario Corp., Perell J. exercised his discretion and declined to make an order for costs in favour of a plaintiff who had succeeded in obtaining an interlocutory order stating:

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.

[14] In the recent decision of Capital SCL v. Spotless Consultancy, 2022 ONSC 4192, Morgan J. granted and then extended a world-wide Mareva injunction against the defendants based on allegations that the defendant participated in a $2.8 million fraud of the plaintiff. Justice Morgan found that the Mareva had not put an end to the proceedings or that the interlocutory injunction the issues in the action with finality. Justice Morgan observed that the defendant’s assets were now subject to the Mareva injunction until trial, which protected the plaintiffs if they were ultimately successful at trial. In those circumstances, Morgan J. ordered that the costs of the motion be in the cause.

[15] I agree with the approaches taken by Perell and Morgan JJ: CDW Canada Inc. v. Ali, 2022 ONSC 4907; see also: Tillsonburg Foamtec Inc. v. Free, [2005] O.J. No. 2255 (Sup. Ct. J.); Penn-Co Construction Canada (2003) v. Constance Lake First Nation, [2008] O.J. No. 3733 (Sup. Ct. J.); Erinwood Ford Sales Ltd. v. Ford Motor Co. of Canada Ltd., [2005] O.J. No. 2791 (Sup. Ct. J.); Rogers Cable TV Ltd. v. 373041 Ontario Ltd., [1994] O.J. No. 844 (Gen. Div.).

[16] Much of the material used on this motion may be used in subsequent steps in this litigation. In addition, if Ms. Sanders is successful in proving unconscionability at trial, she will have access to a wide range of equitable remedies. The trial judge will be able to consider how to fix the costs of this motion considering the findings at trial.

[17] For these reasons, and without accepting the validity of CCI’s other submissions, I exercise my discretion and order that the costs of the motion before me be in the cause.

Robert Centa J. Date: January 26, 2023