Superior Court of Justice - Ontario

COURT FILE NO.: CV-12-454927

DATE: 20140729

RE: Andrew Faas, Plaintiff

– AND –

Barbara Coloroso, Defendant

AND RE:

Barbara Coloroso, Plaintiff by Counterclaim

– AND –

Andrew Faas, Iceberg Navigation Inc. and Tate Publishing & Enterprises, LLC, Defendants to the Counterclaim

BEFORE: Justice E.M. Morgan

COUNSEL: Ronald Lachmansingh, for the Plaintiff, Andrew Faas, and for the Defendant to the Counterclaim, Iceberg Navigation Inc. Robert Rueter and David Barbaree, for the Defendant and Plaintiff by Counterclaim, Barbara Coloroso

HEARD: July 28, 2014

ENDORSEMENT

[1] The Defendant, Barbara Coloroso (“Coloroso”), brought a motion for an interim and interlocutory injunction prohibiting publication and further distribution of a book by the Plaintiff, Andrew Faas (“Faas”), and his company, the Defendant, Iceberg Navigation Inc. (“Iceberg”). She contends that the book contains large portions taken from her work in violation of copyright.

[2] The injunction motion did not proceed. Faas and Iceberg now seek costs of the abandoned motion under Rule 37.09(3) of the Rules of Civil Procedure.

[3] On July 26, 2013, Coloroso purchased a copy of Faas’ book, The Bully’s Trap, by ordering a copy from the website of its publisher, Tate Publishing & Enterprises, LLC. She alleges that numerous passages in the book were lifted directly from her own published works on the subject of bullying. She also contends that Faas’ book was already published and was being marketed by the publisher. A published version of the book formed an exhibit to the injunction motion.

[4] Coloroso, through counsel, wrote to Faas’ counsel on August 23, 2013 setting out her complaints. Faas’ counsel responded on August 29, 2013 suggesting that a revised manuscript would be forthcoming. He stated that Faas would give Coloroso one week to review what was a 309 page book and to satisfy herself that there were no further copyright concerns. However, the promised revised manuscript did not materialize, or at least not in the timely way that Coloroso expected.

[5] Coloroso served her Motion Record for an interim and interlocutory injunction on September 12, 2013. Included in this record was a draft amended pleading containing an extensive, 35 page Schedule particularizing the many parts of Faas’ book which Coloroso alleged copied her work. The Schedule sets out, in side-by-side format, the sentences and paragraphs in Faas’ book and the pages in Coloroso’s published writings from which the challenged portions of Faas’ book were allegedly taken.

[6] It is not my role here to adjudicate the merits of the injunction or the claim. However, counsel for Coloroso submits that the question of costs of an abandoned motion necessitates at least a consideration of whether it was reasonable to bring the motion in the first instance. With that in mind, I have reviewed the Motion Record and responding material. Judging from the Schedule produced by Coloroso and other material in the record, Faas’ copying of her work appears extensive and flagrant.

[7] In late September 2013, Faas served a Responding Record which contained a revised manuscript version of his book. Coloroso’s counsel wrote to Faas’ counsel pointing out that while Coloroso would review the revised manuscript, he noted that there were a large number of pages missing from the copy contained in the Responding Record. The complete revised manuscript was finally provided to Coloroso’s counsel in February 2014.

[8] Coloroso submits that the revised manuscript did eliminate many of the problems with the initial version of the book, but still contained a number of passages that were copied, or only slightly re-worded, from her own writings. The extent of the infringements was the subject of further affidavit material and extensive cross-examinations that lasted through the spring of 2014.

[9] After a number of adjournments and an appearance at motions scheduling court on March 11, 2014, the motion for an interlocutory injunction was set down to be heard on its merits on July 18, 2014. A month prior to the motion date, on June 17, 2014, counsel for Coloroso wrote to counsel for Faas seeking to confirm the motion date, and proposing certain terms in return for which the motion would be withdrawn. Counsel for Faas responded the same day, indicating that Faas intended to produce yet a further revised version of his book. The letter provides, in its crucial part:

His [i.e. Faas’] intentions are to publish The Bully’s Trap, but to allow you an adequate opportunity to raise any concerns about copyright infringement so that he will have an opportunity to address them before publication. The version that he publishes will obviously not be the earlier version that was previously made available for sale by Tate Publishing, nor will it be the earlier versions attached at Tabs 2 and 4 of our Supplementary Motion Record. It will be the latest version of The Bully’s Trap, which I will provide you with shortly, and which may be further revised prior to publication to address any remaining concerns by your client or to make any other necessary editorial changes.

[10] Counsel for Coloroso wrote again the following week, on June 23, 2014, explaining that in light of the assurances contained in the June 17^th letter from counsel for Faas, Coloroso would not proceed with the injunction motion. He stated, “My client intends to proceed with her claim for injunctive relief at trial and any issues related to the motion for an interlocutory injunction and the need for it at the time it was brought can be addressed at that time.”

[11] Counsel for Faas takes the position that Faas is entitled to costs of the motion abandoned by Coloroso. Counsel for Coloroso responds that the trial judge is the more appropriate person to consider costs after a full record is established.

[12] An appearance of one hour was scheduled to argue costs. However, when it became clear that the parties were filing a large volume of material from the underlying injunction motion, they made an appointment at motions scheduling court in order to obtain a longer hearing.

[13] The matter came up in motions scheduling court on July 17, 2014. Stinson J. issued an endorsement indicating that the motion for an interlocutory injunction for breach of copyright was not proceeding. He set a hearing date of July 28, 2014 for costs to be argued, and set out three costs-related issues to be determined:

a) whether costs of the interlocutory injunction motion should be payable now or reserved to the trial judge;

b) if costs are payable now, the quantum of costs; and

c) the costs of the appearance at the motion to argue costs.

[14] Rule 37.09 of the Rules of Civil Procedure provides:

(1) A party who makes a motion may abandon it by delivering a notice of abandonment.

(2) A party who serves a notice of motion and does not file it or appear at the hearing shall be deemed to have abandoned the motion unless the court orders otherwise.

(3) Where a motion is abandoned or is deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to the costs of the motion forthwith, unless the court orders otherwise.

[15] In Phasecom Systems Inc v Systems 2 Communications Inc., [2005] OJ No 46, at para 7, Ducharme J. noted that a unilateral decision by the moving party not to proceed with a motion is effectively an abandonment. He further pointed out at para 8, citing Ledore Investments Ltd. v Murray (2002), 58 OR (3d) 627, at para 14 (SCJ), that the responding party should ordinarily get costs unless the moving party satisfies the court that it deserves relief from the costs consequences of its actions.

[16] Counsel for Faas submits that what counsel for Coloroso is trying to do is, in effect, adjourn the injunction motion to trial. Citing the judgment of Norheimer J. in TDL Group Ltd. v 1060284 Ontario Ltd., 2000 CarswellOnt 4599, at para 36, he argues that, “[b]y definition, the relief that is being sought [in an interlocutory injunction] is for the purpose of protecting matters pending the trial”. He argues that an adjournment of an interlocutory matter to the trial judge is therefore conceptually impossible.

[17] Faas’ counsel further submits that Coloroso’s abandonment of the motion came late in the day, after substantial costs had already been incurred. He analogizes this case to GasTOPS Ltd. v Forsyth, 1998 CarswellOnt 4730, where at para 6 the Court found that, “abandonment did not take place until the defendants had filed all of their responding material including their expert’s report and until extensive cross-examinations on the affidavits had taken place.” In support of this proposition, he has tendered a Costs Outline seeking just over $89,000 on a partial indemnity scale and $130,000 on a substantial indemnity scale.

[18] Counsel for Coloroso responds by arguing that, in the first place, no costs have been thrown away. A similar point was made forcefully by Nordheimer J. in TDL Group, at para 41, where he stated that, “a considerable portion of the costs associated with the injunction motion will benefit the parties in terms of the overall proceeding since some of the cross-examinations can clearly form part of the discoveries to be held and others have provided, particularly to the defendants, an opportunity to obtain the evidence of potential witnesses under oath which opportunity they would not normally have.”

[19] I am not in a position to make any case management order, but I do encourage the parties and their counsel to economize to the extent possible. It would be helpful if counsel would use best efforts to come to an agreement that the cross-examinations and affidavits can stand as a form of discovery going forward. This material may have to be supplemented somewhat, but there is no reason for it to be repeated.

[20] It is Coloroso’s position that the motion and its withdrawal were both justified under the changing circumstances of this case. Counsel analogizes the situation to that in Botany Hill Developments Ltd. v. Oakville, [2012] OJ No 333, where the court faced an injunction motion brought against a municipality that was rendered moot by virtue of an order issued by the city authorities. At para 25 of Botany, the Court specifically contrasted a case in which the moving party unilaterally abandoned a motion with its own case in which the responding party was the cause of the changed circumstance leading to the abandonment:

Unlike in that case where no acceptable explanation for the withdrawal of the injunction motion was proffered by the plaintiffs, nor had they provided any indication that the action would be pursued further, in this case the determination of causation and responsibility remains a live question in an ongoing proceeding where the plaintiff, Botany Hill, continues to seek compensation from the Town.

[21] Counsel for Coloroso submits that the same logic applies to the present motion. The interlocutory motion was not adjourned to the trial, but the question of a permanent injunction will be a live one at trial. Furthermore, counsel submits that the aim of the interlocutory injunction was achieved by the assurances given by Faas’ counsel on June 23, 2014. Quoting Botany, at para 26, he argues that this is “a case where [Faas] claims that [Coloroso] has abandoned its claim, when the reality is that it was its own conduct that caused at least the interim injunction to become moot.”

[22] The cases where costs are awarded against a moving party for a deemed abandonment of a motion tend to be those where there was either an impropriety or the motion was ill-advised in the first place. On the other hand, costs are generally not awarded against an abandoning party where “[t]he applicants were justified in issuing the application… the materials disclosed a bona fide cause of action that was not frivolous or vexatious”: Morley v Morley, 2013 ONSC 1595 (Master).

[23] Counsel for Coloroso submits that the record here demonstrates that there was a compelling and cogent basis for bringing the injunction at the time it was brought. I agree. As indicated above, even without engaging in a full adjudication of the merits it is apparent that Coloroso had a serious copyright concern at the outset.

[24] While Faas partly conceded the copyright problems at the outset of the controversy, and has been reasonable in now providing assurances to Coloroso, the dynamics of the dispute were such that the parties did not come to their temporary resolution until just last month. I do not blame either party for the duration of the controversy. Litigation is frequently a moving target for both sides. It sometimes takes time for the process to work its way through to a consensual solution, even a temporary one.

[25] Coloroso’s withdrawal of the motion is premised on the parties having achieved a solution that they can each live with pending trial; it will be up to the trial judge to make the ultimate decision as to whether an injunction is warranted. In my view, this is an appropriate case for the trial judge to determine the costs of the aborted interlocutory motion. That judge will also be in the best position to determine how much of the time and effort spent on the motion was useful at trial and how much was thrown away.

[26] Counsel for Faas submits that if no costs are awarded to Faas under Rule 37.09(3), it was in any case reasonable to seek them given the case law thereunder that suggests that costs to the responding party are the rule, not the exception. I agree with that submission. Coloroso may have been justified in seeking the injunction in the first instance; but once the hard fought motion was withdrawn, Faas was justified in at least requesting costs.

[27] Costs of the interlocutory injunction motion are reserved to the trial judge. There will be no costs of this motion for costs.

Morgan J.

Date: July 29, 2014