COURT FILE AND PARTIES

COURT FILE NO.: CV-11-427235
DATE: 20120821
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Vikram Vijh, 2207101 Ontario Inc., Salim Murdhani, 2208302 Ontario Inc., Ziad Ahmad, Omar Ghadieh, Mediterranean Food Group Ltd., Rehman Sareshwala, Maha Faisal Enterprise Ltd., Nancy Alaeddine, Nizam Alaeddine, Nizam & Nancy’s Restaurant, Riyaad Joomun, 2250771 Ontario Inc., Shafikhusein Adamjee, 2248883 Ontario Inc., Salim Dedanwala and Alif Foods Inc. Plaintiff / Moving Party

AND:

Mediterranean Franchise Inc., Sam’s Restaurant Inc. and Sam Hussein Defendants / Responding Parties

BEFORE: Justice Edward P. Belobaba

COUNSEL:
W. A. Chalmers for the Plaintiff / Moving Party (Riyaad Joomun and 2250771 Ontario Inc.)
H. Manis and D. Gray for the Defendants / Responding Parties

HEARD: June 22, 2012

costs award

[ 1 ] In a decision released on July 6, 2012 I dismissed the plaintiff’s motion for partial summary judgment. I concluded that the plaintiff-franchisee could not rescind the franchise agreement under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure) [1] after two years simply because the required disclosure document had been delivered (with the franchisee’s consent) by email rather than by registered mail or in person. The appropriate remedy was damages under s. 7(2) of the Act.

[ 2 ] I have now reviewed the parties’ costs submissions. The parties disagree about both scale and quantum.

[ 3 ] First, scale. The successful defendant argues for substantial indemnity based on two offers to settle, one delivered on March 8. 2012 and the other on July 5, 2012. The first offer, however, was premised on the court finding that the requisite disclosure document had been personally delivered - but no such finding was made. Hence, this offer cannot trigger the cost consequences urged by the defendant. The appropriate scale up to the date of the decision is partial indemnity. The second offer, directed to the costs award, was premised on the court finding that substantial indemnity was the appropriate scale, which as just noted, did not occur. Hence, neither offer is in any way significant. The appropriate scale throughout is partial indemnity.

[ 4 ] Next, quantum. On a partial indemnity basis, the defendant asks for about $24,000 for fees and disbursement excluding HST. The plaintiff responds that no costs should be awarded because the motion resolved a “novel question” of statutory interpretation, and if costs are awarded, the quantum should be no more than $7500.

[ 5 ] This was not a motion involving a “novel question” of statutory interpretation. It was a plaintiff’s motion for partial summary judgment that was easily dismissed because it involved a relatively straight-forward statutory interpretation that was driven more by common sense than by nuanced legal analysis. If there was any novelty, it was perhaps in the fact that the plaintiff seriously believed it could prevail on the facts presented. Costs should be awarded and the award should be more than $7500.

[ 6 ] When the motion was first heard, I asked both sides to provide me with an estimate of the costs award they would claim (on a partial indemnity basis) if they were successful. The plaintiff suggested $20,000 and the defendant $25,000. The plaintiff did not suggest $7500. I also note that the plaintiff acknowledged in its own costs submission that it had incurred costs on a partial indemnity basis of about $21,650.

[ 7 ] Having considered the factors set out in Rule 57.01(1) and the Court of Appeal’s admonition in Boucher [2] , I find it fair and reasonable to fix costs at $22,000 all-inclusive.

[ 8 ] Costs of $22,000 shall be paid by Mr. Joomun and 2250771 Ontario Inc., jointly and severally and forthwith, to the defendants.

Date: August 21, 2012 Belobaba J.

[1] S.O. 2000, c.3 (“the Act”).

[2] A judge’s primary obligation in fixing costs is to consider the factors set out in rule 57.01(1) and fix an amount that is fair and reasonable to the unsuccessful party in the particular proceeding rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council of Ontario, (2004) 71 O.R. (3d) 291 at para. 26 .