SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Castlefield Event Theatre Inc., Plaintiff

AND:

Capitol Place Inc. et al, Defendants

BEFORE: F.L. MYERS J.

COUNSEL:
P. Bakos, for the Moving Party

J. Knudsen, for the Respondent

HEARD: April 22, 2014

endorsement

[1] The plaintiff seeks an interim injunction and declaration (if such a thing exists) enforcing its right to continue to hold events at the defendants’ venue, the Capitol Event Theatre. The plaintiff claims to be entitled to run events and use the theatre on its own terms upon payment of $49,000 per month pursuant to an oral agreement with the defendants reached in November or December. The plaintiff claims it was evicted April 1, 2014 and the defendants have put at risk third-party events including a wedding scheduled for this weekend. The plaintiff served its material this morning.

[2] The plaintiff’s material supports an inference that it may have taken an assignment of a prior written agreement between the prior manager and the defendants. But the plaintiff disavows that interpretation. It says it has an unconstrained right to use the defendants’ premises upon payment of its fee no matter what the plaintiff may choose to do or what the defendants as landowners (actually tenants) might reasonably require.

[3] The plaintiff’s material is brief and is very incomplete. The defendant produced an affidavit detailing a year of negotiations. The plaintiff did not mention, for example, that it stopped its post-dated cheque for March fees as a negotiating tactic. The plaintiff did not mention either that the parties entered into an LOI in March that the plaintiff refused to complete. The plaintiff has been dispossessed since at least March 9, 2014.

[4] The plaintiff came to new counsel last week. Mr. Friedman for the plaintiff insisted that his client be let back into the premises or else this urgent motion would ensue. However, the matter is not urgent. The plaintiff was dispossessed over one month ago. The parties have continued to co-exist because the defendants have agreed to let the plaintiff in on a per diem basis since April 1, 2014 subject to ongoing agreements between the parties. That is the status quo. I cannot unwind events to before the parties terminated the pre-existing management agreement and the plaintiff decided to stop its cheque.

[5] The plaintiff’s damages are monetary in nature. It is not clear how the plaintiff took over the business from the former manager. But I am not satisfied that the plaintiff risks loss of goodwill or irreparable loss of a valuable business. The authority which the plaintiff cites for the proposition that harm to customers may be irreparable harm actually says the opposite (Quality Pallets, 2007 03712 (ON SC) at paragraph 22). A mere bald claim that the business may be lost is not cogent evidence of irreparable harm.

[6] Even if there is an issue as to the existence and breach of an oral agreement (and I am dubious on this point) I do not see irreparable harm to the plaintiff or that the balance of convenience favors an Order. The court could not reasonably fashion terms for the parties to co-exist under. The order sought is actually closer to a mandatory order and the tests for that type of relief are not nearly met.

[7] The plaintiff has not claimed an injunction or an interlocutory injunction in its statement of claim. Mr. Bakos asks me to order an amendment to the pleading. I decline because the statement of claim needs more amendments than just that. Counsel has not begun to tell the story in the current pleading. The plaintiff is free to amend under rule 26 as it determines.

[8] Finally, the plaintiff fixed its draft undertaking in damages after hearing from Pollak J. that its first version was deficient. In light of the history between the parties, I would not accept the bald undertaking without security in any event.

[9] Motion adjourned to Motion Scheduling Court on a date to be set by the parties and the Motion Co-ordinator.

[10] The defendants seek costs on a substantial indemnity basis. The plaintiff has played hardball and must expect the same in return. See Henry J. in Apotex v. Egis. But there is no wrongdoing sufficient for substantial indemnity costs. The defendant produced a 52-page affidavit. This length was required because the plaintiff brought the matter on an urgent basis so the defendant was required to anticipate instead of having notice and knowing what it had to respond to. Costs to the defendants, jointly and severally, on a partial indemnity basis fixed at $10,000 payable forthwith.

F.L. Myers J.

Date: April 22, 2014