SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-09-394294
DATE: 20130121

RE: ALI SHIRAZIE, AAMER SHIRAZIE, 2193671 ONTARIO INC., Applicants

AND:

CCC FRANCHISE CORPORATION, MICHAEL B. MILLER, MS ONE CORP., INPROBUS FRANCHISE CONSULTANTS, AZIZALIKANJEE, CLAUS ETZLER, Respondents

BEFORE: STEWART, J.

COUNSEL:
Simon J. Adler, for the Applicants

Michael B. Miller, In Person

Michael B. Miller and M. Arbutina for the Respondents CCC Franchise Corporation, MS One Corp., Inprobus Franchise Consultants and Azizali Kanjee

HEARD: In Writing

ENDORSEMENT

[1] In my decision of October 10, 2013, I invited counsel for the parties to deliver written submissions as to interest and costs if these subjects could not be agreed upon by them. I now have received and considered written submissions as to costs.

[2] The Applicants seek costs on a substantial indemnity basis in the amount of $213,829.96 inclusive of fees, disbursements and taxes. Alternatively, they seek $154,561.19 representing costs claimed on a partial indemnity scale.

[3] The Respondents agree that the Applicants, having been successful in obtaining significant relief following trial, are entitled to an award of costs. They submit that a fair and reasonable assessment on a partial indemnity basis would result in an award of costs to the Applicants of approximately $125,000.00.

[4] The amount recovered by the Applicants as damages was the agreed-upon amount of $400,000.00. The Applicants’ claims for additional damages for negligence and/or other breaches of the Act and/or punitive damages were dismissed.

[5] All parties agree that the litigation was characterized by civility and reasonable co-operation on both sides of the dispute, which is commendable. There is no suggestion that the conduct of any party caused delay or excessive expense to the proceedings.

[6] In asking for substantial indemnity costs, the Applicants rely on two offers to settle made early in the dispute. One was for settlement in return for a payment of $450,000.00 plus reduced costs on a partial indemnity basis. The second was for settlement in return for a payment of $225,000.00 for damages plus an indemnity for liabilities of the Applicants to third parties which totaled in excess of $250,000.00. In my view, neither of those offers represents a compromise more advantageous to the Respondents than that achieved at trial.

[7] Although it is regrettable that the Respondents did not make a formal offer to settle pursuant to the Rules in response to either of these offers, that was their judgment at the time and perhaps their ultimate misfortune. They should not be penalized as a result by an order for increased costs.

[8] I do not consider that the fact this Application was brought under the Act or the objectives of the Act require an award of costs on a substantial indemnity basis in this case. Rather, the issues were such that an award to the Applicants of costs on a partial indemnity basis is appropriate and the goals of the legislation will be furthered, and not thwarted, by such a disposition.

[9] When the factors under Rule 50.10 are taken into account including the lengthy nature of the trial, the considerable importance of the issues to the parties, the fair degree of complexity of the issues and the evidence and the time required to be spent by counsel in preparing for and attending at trial, and having considered the Respondents submissions and concerns with respect to the reasonableness of that time, I am of the view that the fair and appropriate and reasonable amount to order for costs is $150,000.00, inclusive of all disbursements and applicable taxes. The Respondents shall therefore pay that amount to the Applicants as costs.

[10] Counsel for the Applicants requested the opportunity to address the issue of interest on a further submission. That issue may be the subject of supplementary written submissions if the parties cannot agree on the appropriate calculation for interest. Should it be necessary, the Applicants may deliver further written submissions within 15 days of today’s date and the Respondents may deliver any submissions they wish to make within 15 days thereafter.

STEWART, J.

Date: January 21, 2013