Optilinx Systems Inc. v. Fiberco Solutions Inc., 2015 ONSC 180
COURT FILE NO.: CV-14-513272
DATE: 20150108
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
OPTILINX SYSTEMS INC.
Plaintiff
– and –
FIBERCO SOLUTIONS INC., MARIO FORESTA and ANDREW CANNON
Defendants
Jeffrey Radnoff for the Plaintiff
Dennis Buchanan for the Defendants
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] The Plaintiff, Optilinx Systems Inc., brought a motion for an interlocutory injunction to restrain two former employees, the Defendants, Mario Foresta and Andrew Cannon, and Mr. Foresta’s new company, Fiberco Solutions Inc., from providing goods and services for a one year period to Cogeco and Allstream, which are two of Optilinx’s major customers. I dismissed Optilinx’s motion; see 2014 ONSC 6944.
[2] The Defendants now seek costs on a substantial indemnity basis in the amount of $14,811.19, all inclusive, or alternatively $10,599.11, all inclusive, on a partial indemnity basis. The Defendants also seek an order under rule 39.02(4)(b) that they not be obliged to pay for the partial indemnity costs for their cross-examinations of Optilinx’s witnesses, Nick Conforti and Ryan Marshall. The Defendants seek to be paid the costs associated with their having been cross-examined by Optilinx.
[3] In response, Optilinx submits that there should be no abrogation of rule 39.02(4)(b) with the result that the costs of the respective cross-examinations will offset one another. Further, Optilinx submits that there is no basis for an award of substantial indemnity costs, and it submits that the appropriate partial indemnity award, if any, in the circumstances of this case, is $2,775, all inclusive.
[4] Optilinx submits that there actually should be no order as to costs or costs should be in the cause because Mr. Foresta was not forthright in explaining his departure from employment and in his starting up a competing business. Optilinx submits that taking its grievances to court was reasonable and that it was understandable that it would sue and also seek interlocutory relief.
[5] The Defendants justify their claim for substantial indemnity costs and relief under rule 39.02(4)(b) largely by impugning the motives of Optilinx. They submit that in seeking an interlocutory injunction, Optilinx was using the court system as a weapon to insulate itself from competition in the fibre optics business and to maliciously attempt to crush a potential rival in that marketplace.
[6] The Defendants also complain that Optilinx ran up the costs of the interlocutory motion by initially seeking a very intrusive interlocutory injunction only to substantially reduce its request hard upon the hearing of the motion.
[7] In the circumstances of this case, I think that it is fair and appropriate to make the unsuccessful party, Optilinx pay, for all of the Defendants’ costs, including the costs of the cross-examinations, on a partial indemnity basis without any offset for the costs of the cross-examinations of Optilinx’s witnesses.
[8] However, I do not see any proper basis to award costs on a substantial indemnity basis. There was nothing egregious about the litigation conduct of Optilinx, and remembering that an interlocutory injunction motion does not decide the merits of the case, as far as I can determine, Optilinx brought what turned out to be a weak and unsuccessful interlocutory motion in good faith that it had a reasonable chance to obtain an interlocutory injunction.
[9] Optilinx knew or ought to have known that it ran the risk of paying partial indemnity costs that might be substantial given that it could be reasonably expected that the Defendants, whose livelihood was threatened, would put up a substantial and vigorous defence of the interlocutory motion.
[10] This is not a case where it would be appropriate to order costs in the cause, and the costs should be payable forthwith, but it is a case in which the Defendants should be awarded their reasonable partial indemnity costs for a very significant interlocutory motion.
[11] Having reviewed the Defendants’ costs submissions and their claim for disbursements, I, therefore, fix the Defendants’ costs on a partial indemnity basis at $10,000, all inclusive, payable forthwith.
Perell, J.
Released: January 8, 2015
CITATION: Optilinx Systems Inc. v. Fiberco Solutions Inc., 2015 ONSC 180
COURT FILE NO.: CV-14-513272
DATE: 20150108
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
OPTILINX SYSTEMS INC.
Plaintiff
– and –
FIBERCO SOLUTIONS INC., MARIO FORESTA and ANDREW CANNON
Defendants
REASONS FOR DECISION - COSTS
PERELL J.
Released: January 8, 2015