DATE: 20060502
DOCKET: C35392
COURT OF APPEAL FOR ONTARIO
WEILER, AUSTIN* and LASKIN JJ.A.
B E T W E E N :
SHELANU INC.
Benjamin Zarnett
for the appellant
Plaintiff Respondent)
- and -
F. Scott Turton
for the respondents
PRINT THREE FRANCHISING CORPORATION
Defendant (Appellant)
AND B E T W E E N :
PRINT THREE FRANCHISING CORPORATION
Plaintiff by Counterclaim (Appellant)
-and-
SHELANU INC., BRIAN DESLAURIERS and MARY DESLAURIERS
Defendants by Counterclaim (Respondents)
Heard: August 26, 2002
On appeal from the order of Justice Ian V. B. Nordheimer of the Superior Court of Justice dated October 31, 2000.
S U P P L E M E N T A R Y R E A S O N S
WEILER J.A.:
[1] These supplementary reasons resolve the issues regarding settlement of the order in Shelanu v. Print Three Franchising Corp., reasons reported at (2003), 2003 52151 (ON CA), 64 O.R. (3d) 533 (C.A.).
[2] The amount of the judgment awarded to Shelanu, taking into consideration the royalty rebates that should have been paid, is $208,632.26.
[3] Prejudgment interest awarded to Shelanu is $36,324.87 calculated from May 8, 1997. Shelanu did not receive pre-judgment interest for the period prior to May 8, 1997 on payments that should have been made to it in the years 1995 and 1996. On the other hand, it will receive pre-judgment interest on payments that only accrued during 1997, 1998 and 1999. Thus, I would not interfere with the date from which pre-judgment interest is to be calculated.
[4] The amount allowed on the counterclaim is $94,200. That amount should be not reduced by the amount of the royalty fees Mr. Kim paid on his sales.
[5] Print Three is entitled to receive pre-judgment interest on its counterclaim calculated at 5% from October 16, 1999.
[6] This order requires us to review the costs award made at trial. The trial judge awarded one set of costs for both the appeal and cross‑appeal as the issues were intertwined. The amount Shelanu is now entitled to receive is less than the amount for which it offered to settle its claim at trial and, as a result, it is no longer entitled to the costs that were awarded on a solicitor and client basis. Having regard to this court's criticism of the distributive costs approach in Armak Chemicals Ltd. v. Canadian National Railway Co. (1991), 1991 7060 (ON CA), 5 O.R. (3d) 1 (C.A.), and the court's decision on costs in Pearson v. Inco Ltd., 2006 7666 (ON CA), [2006] O.J. No. 991, reaffirming the principle that a distributive costs award is to be avoided, I would order that the respondents are entitled to have their costs of trial assessed on a party and party basis. The quantum of those costs is to be assessed bearing in mind the guidance in rule 57.01.
RELEASED: May 2, 2006 ("JL")
"Karen M. Weiler J.A."
"I agree John Laskin J.A."
*Justice Allan McNiece Austin retired from the Court of Appeal on March 7, 2003.