SUPERIOR COURT OF JUSTICE - ONTARIO

2012 ONSC 1161

Court File No.: CV-11-431968
Date: [20120217]

RE: 2176693 ONTARIO LTD., SARAH E. BARBER, WILLIAM B. WATTERS, LINDA J. WATTERS, MATTHEW B. WATTERS, DAVID W.B. WATTERS and MICHAEL B. WATTERS

Plaintiffs

• and -

THE CORA FRANCHISE GROUP INC., CORA TSOUFLIDOU, NICHOLAS TSOUFLIDIS, YVAN COUPAL and DAVID POLNY

Defendants

Before: Hainey J.

Counsel:
Javad Heydary and Richard Hayles, for the Plaintiffs (Responding Parties)
Derek Ronde, for the Defendants (Moving Parties)

Heard: Written Submissions

ENDORSEMENT AS TO COSTS

[ 1 ] The Cora Franchise Group Inc. seeks substantial indemnity costs in the amount of $17,589.05 on the ground that it was entirely successful on the motion and had warned the plaintiffs that their claim for statutory rescission was without merit yet they refused to amend their pleadings thereby necessitating this motion.

[ 2 ] The plaintiffs submit that Cora is not entitled to its costs on a substantial indemnity basis because the motions involved novel issues of public importance and Cora’s success was divided since the plaintiffs were granted leave to amend their pleading. The plaintiffs argue that Cora should be awarded costs in the amount of $5,000, plus disbursements and H.S.T.

[ 3 ] The Ontario Court of Appeal has made it clear that substantial indemnity costs are reserved for “the rare and exceptional cases where a party’s conduct in the litigation is reprehensible and justifies the unusual sanction of substantial indemnity costs”. ( Hunt v. TD Securities Inc. (2003), 2003 3649 (ON CA) , 66 O.R. (3d) 481 (C.A.) and Drouillard v. Cogeco Cable Inc., [2007] O.J. No.2531 ). I am not satisfied that the plaintiffs’ conduct in respect of this motion was sufficiently unreasonable or reprehensible to justify an award of costs against them on a substantial indemnity basis. I agree with the plaintiffs that the arguments respecting the interpretation of the statutory rescission remedy under section 6(2) of the Wishart Act were both novel and a matter of public importance.

[ 4 ] I must arrive at a cost award that is fair and reasonable and in an amount that should have been within the reasonable expectation of the parties. In order to do so, I am of the view that costs should be assessed on a partial indemnity scale.

[ 5 ] I have carefully reviewed Cora’s Costs Outline on a partial indemnity basis and I find the amount claimed to be fair and reasonable and within the reasonable expectation of the parties. Accordingly, Cora is awarded costs on a partial indemnity basis in the amount of $12,000, payable by the plaintiffs.

HAINEY J.

Date: February 17, 2012