COURT FILE AND PARTIES

COURT FILE NOS.: CV-12-9692-00 CL,
CV-12-9691-00 and CV-12-1572-00

DATE: 20120712

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Gurinder Singh Brar, Brar Health Services, Gerald Longval, G. Longval Pharmacy Ltd. Jayantkumar Patel, Jay Vee Drugs Ltd. Praghjot Singh Dhanoa, 946398 Ontario Ltd. Muhammad Ashraf and Zain Pharmaceutical Products Inc. Milad Bosta and 157176 Ontario Ltd., George Idemudia and Pharmagreen Drugmart Inc., Plaintiffs

AND:

Zellers Inc., Defendant

AND BETWEEN:

Nina Hanif and 1537749 Ontario Ltd., Plaintiffs

AND:

Zellers Inc. and Michael Jorgenson, Defendants

AND BETWEEN:

Havinder Takhar and 1426072 Ontario Ltd., Applicants

AND:

Zellers Inc., Respondent

BEFORE: L. A. Pattillo J.

COUNSEL:
Gerhard A. Pyper , for the plaintiffs except Praghjot Singh Dhanoa and 946398 Ontario Ltd.

John L. O’Kane , for the plaintiffs Praghjot Singh Dhanoa and 946398 Ontario Ltd. and the applicants Havinder Takhar and 1426072 Ontario Ltd.

Eliot N. Kolers, Alexander D. Rose and Mel Hogg , for the Defendants/Respondent

COSTS ENDORSEMENT

Introduction

[ 1 ] On April 27, 2012, I dismissed the plaintiffs’ and applicants’ motions for injunctions restraining Zellers Inc. (Zellers) from using, selling or disposing of information pertaining to the pharmacies or patients of the pharmacies belonging to the plaintiffs/applicants and operated in Zellers’ stores.

[ 2 ] The injunctions were sought in two separate actions and an application which were commenced against Zellers.

[ 3 ] I have now received costs submissions on behalf of the plaintiffs, the applicants and Zellers.

[ 4 ] The plaintiffs in Action CV-12-9691-00CL (the “Hanif Action”) and the plaintiffs in Action No. CV-12-9692-00CL (the “Brar et al. Action”), except for Prabhjot Singh Dhanoa (“Dhanoa”) and 946398 Ontario Ltd. seek their costs of their motions in the total amount of $48,073.79 made up of fees on a substantial indemnity basis of $40,002.00 including HST and disbursements of $8,071.79. In support of their claim for substantial indemnity costs, these plaintiffs point to alleged improper conduct on Zellers part as set out in an affidavit of the plaintiffs’ counsel’s legal assistant filed with their costs submissions.

[ 5 ] Harvinder Takhar (“Takhar”) and 1426072 Ontario Limited, the applicants in Application No. CV-12-1572-00 (the “Takhar Application”) were represented separately on the motions and submit that given the issues engaged on the motion, no order of costs should be made.

[ 6 ] Dhanoa and 946398 Ontario Ltd., plaintiffs in the Brar et al. Action, retained counsel for Takhar after the hearing of the motion to make costs submissions and also submit that the court should exercise its discretion and order no costs.

[ 7 ] Zellers claims costs on a partial indemnity scale totaling $113,966.22 made up of fees and HST of $104,758.97 and disbursements of $9,207.25.

Entitlement

[ 8 ] Zellers was successful on the motion and is entitled to its costs on a partial indemnity basis.

[ 9 ] The plaintiffs in the Hanif Action and the Brar et al Action are not entitled to costs of the motion. They lost. As noted, the basis for their claim for substantial indemnity costs relates to Zellers alleged conduct. In my view, the allegations raised are not relevant to costs and are totally inappropriate and improper. The alleged conduct of Zellers is conduct which occurred after the injunction motions were concluded and therefore has no bearing on the costs of the motions. Further, Zellers has had no opportunity to respond. I also have a concern that they are put forward in an affidavit from a legal assistant and not a party who has direct knowledge of the allegations raised. Accordingly, it is my view the allegations raised are not proper costs submissions.

[ 10 ] It is submitted on behalf of Dhanoa and Takhar and their companies that no costs should be ordered because of the novel nature of some of the issues and the important public interest in patient privacy rights which was raised. While some of the issues on the motion may not have been raised before, I do not consider them so “novel” that Zellers should be denied its costs of the motion. The claims asserted are, in essence, breach of contract claims involving an interpretation of the plaintiffs’ and applicants’ agreements with Zellers. While patient privacy rights were raised, it was really the plaintiffs’ and applicants’ contractual rights that were at issue.

[ 11 ] Further, although I was prepared to accept that the plaintiffs’ alternative claims concerning the impact of their obligations under both the Personal Health Information Act 2004 , S.O. 2004, c. 3, Sched A and the Drug and Pharmacies Regulation Act , R.S.O. 1990, c.H4 on their agreements with Zellers raised a serious issue under the first branch of the injunction test, the threshold to meet that test is not very high. Meeting that test does not, by itself, establish the type of “novel” argument which would justify an award of no costs.

[ 12 ] The plaintiffs brought a significant motion against Zellers. They barely passed the first test for injunctive relief and did not succeed on either of the remaining two. In the circumstances, I do not consider that an order of no costs would be appropriate in this case.

[ 13 ] Takhar and 1426072 Ontario Limited further submit that because the Takhar Application was transferred from Brampton and added to the other two actions to be heard together for reasons of urgency, efficiency and economy, their involvement did not increase Zellers’ costs and they should accordingly be relieved of any liability for costs.

[ 14 ] While Takhar and 1426072 Ontario Limited are to be commended for bringing their motion together with the plaintiffs, it cannot relieve them from liability for costs. They filed material on the motion and made submissions in support of the granting of an injunction. Having lost the motion, they, like the plaintiffs in the other two actions, are liable for Zellers’ costs.

Quantum

[ 15 ] No submissions have been made on behalf of the plaintiffs in the Hanif Action (except Dhanoa and his company) or the Brar et al Action in respect of the quantum of costs claimed by Zellers.

[ 16 ] Dhanoa and Takhar and their companies take issue with both the fees and disbursements claimed on behalf of Zellers. They point out that Zellers’ Bill of Costs seeks to recover costs for a total of 430.21 lawyer hours which equates to almost 18, 24 hour days. They submit that the file did not require four lawyers and a student at the hearing. They further take issue with all the lawyers claiming hourly rates at the upper end of the range of their respective experience categories regardless of year of call. Finally they take issue with some of the disbursements claimed, including a filing fee, staff overtime, taxis and business meals.

[ 17 ] An injunction is an intense, compact proceeding which can and often does consume many lawyer hours over a very short time period. Parties who commence such proceedings must understand the risk of a substantial cost award against them if they do not succeed. The claim against Zellers, while not complicated was significant and important to all parties. That being said, and while I do not fault Zellers’ counsel for staffing the file as they did or spending the time they did, in my view, the full amount of the time spent cannot be passed on to the plaintiffs/applicants. In my view, Zellers should not recover for more than two counsel at the hearing. Further, I agree that the hourly rates claimed are inappropriately at the high end of the experience ranges. Finally, I also agree that there is no basis to award the unwarranted disbursements identified by Dhanoa and Takhar.

[ 18 ] In the end result, and having regard to the above comments, in my view a fair and reasonable amount for Zellers’ costs of the injunction is $75,000.00 inclusive of disbursements and applicable taxes.

Apportionment

[ 19 ] As noted, the injunction motion involved two actions and one application. In total nine individuals and their companies sought injunctive relief. It is submitted on behalf of Dhanoa and Takhar and their companies that the practical and reasonably fair distribution of costs is to divide the total costs award by nine and each individual plaintiff would be severally responsible for 1/9 of the costs awarded.

[ 20 ] Allocating cost awards amongst unsuccessful parties is not the usual course in this court. Generally, a cost award against multiple parties is made against all jointly and severally. Such an order ensures that the successful party does not have to chase each party for their respective share of the costs. Given that the plaintiffs and applicants all sought the same injunctive relief, I see no reason to depart from the general practice in this case.

Conclusion

[ 21 ] In the result, Zellers is entitled to its costs of the injunction motions on a partial indemnity basis, fixed at $75,000.00 inclusive of disbursements and applicable taxes, payable by the plaintiffs in the Hanif Action and the Brar et al Action and the applicants in Takhar Application forthwith.

L.A. Pattillo J.

Released: July 12, 2012