SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Castlefield Event Theatre Inc., Plaintiff/Respondent

AND:

Capitol Place Inc., Capitol Place (2012) Inc., Nigel Axton, Sherry May, and Marc Talbot d.b.a. Eastmond Security, Defendants/Moving Parties

BEFORE: F.L. Myers J.

COUNSEL:
Jill M. Knudsen, for the Defendants/Moving Parties

Patrick Bakos, for the Plaintiff/Respondent

HEARD: Written Submissions

COSTS endorsement

[1] In my Endorsement dated May 21, 2014, ONSC 3108, I dismissed the defendants’ motion that sought to compel the plaintiff to disentangle its business from that of the defendants in an orderly fashion. As tempting as it was to impose a cooperative outcome on parties who are anything but cooperative, I found myself constrained by the law from doing so. The defendants were not able to establish urgency or irreparable harm among other things to support interim relief.

[2] The plaintiff seeks substantial indemnity costs under Rule 49.10(1) because it delivered an offer to settle the motion in which it offered to agree to a dismissal of the motion without costs. The plaintiff argues that pursuant to Rule 49.10(1) it “is entitled to partial indemnity costs to May 12, 2014, and substantial indemnity costs from May 12, 2014, and on.” Ignoring that the rule is not a matter of entitlement but discretion even when it applies, it plainly does not apply to a motion brought by the defendants.

[3] Here, the matter is a motion with costs governed by Rule 57.03. I do have authority to take the offer to settle that was made into consideration under Rule 49.13. The plaintiff was the responding party on the motion. It offered a dismissal without costs. Technically, it has not yet beaten its offer as I have dismissed the motion, but I have not yet determined the costs. Moreover, the plaintiff did not lose less than it offered. It made multiple concessions during the motion with the result that much of what the defendants sought on the motion was agreed upon consensually. I was clear in my Endorsement that I took counsels’ commitments on both sides into account in determining to dismiss the motion.

[4] Finally, it is also relevant that this lawsuit appears to stem from the plaintiff’s arrival at the defendants’ premises with an insistence that it is entitled to take over the defendants’ business on its own terms. It decries the applicability of the pre-existing management agreement despite multiple admissions made by Mr. Commisso under cross-examination that the plaintiff succeeded to the management agreement. It is common ground that the management agreement was terminated as a lead-up to the closing of a transaction between the plaintiff and the corporate defendant that did not close. The plaintiff was excluded from the premises thereafter. If the plaintiff has no rights under the management agreement, then the defendants may well be entitled to the relief that they claimed although not by urgent interim motion.

[5] In the circumstances, it seems to me that I should exercise my discretion to order that the costs of the motion, which I fix at $15,000, be payable in the cause.

[6] In their submissions, both parties complain that the other has not complied with outstanding obligations. The plaintiff has not yet paid the costs ordered in my Endorsement of April 22, 2014 ONSC 2544. Those costs are to be paid within ten (10) days failing which the defendants may move to strike the plaintiff’s pleadings under Rule 60.12. If the defendants have not delivered the property that they agreed to deliver within ten (10) days, then the plaintiff may move before a Master under Rule 44. There is no order requiring this delivery as yet; however, my Endorsement of May 21, 2014 is quite clear on these matters.

F.L. Myers J.

Date: June 9, 2014