CITATION: LQD Ottawa Inc. v. Liquid Nutrition Group Inc., 2016 ONSC 1833

COURT FILE NO.: 13-58876

DATE: 2016/03/15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LQD Ottawa Inc. and LQD Glebe Inc., Plaintiffs

AND

Liquid Nutrition Group Inc. and Liquid Nutrition Franchising Corporation, Defendants

BEFORE: Madam Justice B.R. Warkentin

COUNSEL: Arthur Ayers, Counsel for the Plaintiffs

Jeff G. Saikaley, Counsel for the Defendants, LNGI and LNFC, and the proposed Defendants, Greg Chamandy, Chantal Chamandy, LNCI and LNI

Christopher J. Thiesenhausen, Counsel for the proposed Defendant, Mr. Glenn Young

HEARD: via written submissions

REASONS ON COSTS

[1] In paragraph 35 of my Endorsement dated February 12, 2016, I found in favour of the proposed Defendant, Mr. Glenn Young and directed the parties to make written submissions on Costs within 20 days of that Endorsement if they were unable to resolve the issue of Costs.

[2] Counsel for Mr. Young is seeking substantial indemnity costs of $9,910.28. He also set out his costs on a partial indemnity basis which he has calculated to be $6,082.64. Counsel for the Plaintiffs agrees that Mr. Young’s should be entitled to some costs but argued that the award should be nominal; claiming that counsel for Mr. Young should have consented to adding him as a party, but instead waited until the expiration of the limitation period to claim the limitation period had expired; the defence was ultimately successful on this motion.

[3] An award of costs is a matter in the discretion of the judge by virtue of s. 131(1) of the Courts of Justice Act, which provides:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.

[4] Rule 57.01 allows the court to take into account “any other matter relevant to the question of costs.” Read in conjunction with s. 131 of the Courts of Justice Act, the court therefore has wide discretion.

[5] The Ontario Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 OR (3d) 291 (Ont CA) at para 37).

[6] It is the position of counsel for Mr. Young that although the proceeding was not complex, it was of significant importance to Mr. Young and therefore warranted the time and effort expended to prepare for this motion. By correspondence in September 2015, counsel for Mr. Young informed the Plaintiffs’ counsel that the limitation period had expired, that they would vigorously defend any motion to add him as a party and would be seeking substantial indemnity costs.

[7] Counsel for Mr. Young has submitted that this correspondence should be considered in the same fashion as an offer to settle and that the costs should be awarded jointly and severally against the Plaintiffs and their principal, Mark MacDonald because the Plaintiff corporations are not active corporations.

[8] Counsel for the Plaintiffs argued that the motion was necessary because there is conflicting jurisprudence regarding when a limitation period expires and therefore the parties required a judicial determination of this issue.

[9] Having considered the issues in this proceeding, I find that the quantum of costs should be on a partial indemnity scale. I am not prepared to make an order that the costs be awarded jointly and severally against Mr. MacDonald. There was no evidence presented regarding the financial circumstances of the Plaintiff corporations, nor a rationale as to why such an exceptional order should be granted.

[10] I therefore award costs to the proposed defendant, Mr. Glenn Young payable by the Plaintiffs in the amount of $6,082.64 inclusive of HST and disbursements.

Madam Justice B. R. Warkentin

Released: March 15, 2016

CITATION: LQD Ottawa Inc. v. Liquid Nutrition Group Inc., 2016 ONSC 1833

COURT FILE NO.: 13-58876

DATE: 2016/03/15

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

LQD Ottawa Inc. and LQD Glebe Inc.

Plaintiffs

AND

Liquid Nutrition Group Inc. and Liquid Nutrition Franchising Corporation

Defendants

REASONS ON COSTS

Warkentin J.

Released: March 15, 2016