COSTS ENDORSEMENT

[1] In a decision released September 2, 2016, I declined to issue an interlocutory injunction sought by the applicant, 2198572 Ontario Inc., (the “Tenant”) which operates a restaurant in a plaza owned by the respondent First Land (Overlea) Inc. (“Landlord”). This is the decision on costs. There are two main issues: (1) timing of costs, and (2) quantum, if costs are to be fixed now.

[2] Context is important in this decision. An interim injunction restraining the Landlord from proceeding with a two of five proposed additions to the plaza was issued on July 5, 2016, and continued thereafter on consent. I held that the interim injunction did not extend to the site servicing work which was the subject of the interlocutory injunction argued before me. The site servicing work would benefit both the three uncontested additions, and the two contested additions. Whether or not a permanent injunction should issue to restrain the two contested additions will be the subject of argument on the application in December, 2016. However, there is no issue that the three uncontested additions may be constructed, and the site servicing work which was the subject of the interlocutory injunction argued before me was necessary to proceed with the three uncontested additions.

Timing of Payment of Costs

[3] The Tenant submits that on an interlocutory injunction such as this, where “there is a certainty that the action will be dealt with through a final order at the hearing of the application,” costs should be reserved to the application judge. The Tenant relies on the statement of Borins J. (as he then was) in Rogers Cable TV Limited v. 373041 Ontario Limited, [1994] O.J. No. 1087 (S.C.J.) as follows:

Where it is clear that the granting of the interlocutory injunction will put an effective end to the proceedings, it is appropriate for the court to make a costs order which reflects this fact and to fix the amount of costs. However, in a case such as this in which a trial is a virtual certainty, the Court will consider the usual alternatives; plaintiff’s costs in any event of the cause; plaintiff’s costs in the cause; costs in the cause; or costs reserved to the trial judge.

[4] I note that the Rogers Cable decision predated the 2002 coming into force of paragraph 57.03(1)(a) of the Rules of Civil Procedure, which requires the court to fix the costs of a contested motion and order them paid within 30 days unless the court is satisfied that a different order would be more just. I agree, however, that the court does retain a residual discretion to make a different order where it would be more just.

[5] The Tenant also relies on Fernicola (In Trust) v. Creview Development Inc., 2009 CanLII 75 (ON SC), where Trotter J. adopted the Rogers Cable reasoning and directed that costs be reserved to the trial judge where the decision on the merits did not effectively terminate the litigation.

[6] The Tenant also sought to have costs deferred on the basis that while it was successful on the interim and consent interlocutory injunctions, costs of those injunctions will not be assessed until the application in December, leading to imbalance.

[7] The Landlord noted that the rationale for deferring the costs decision does not apply where an injunction is denied (Abdullah v. Maziri, 2016 ONSC 5046; Longyear Canada, ULC v. 897173 Ontario Inc., 2008 Carswell Ont 464). The Landlord also relied on Andrejs Management Inc. v. Bourdignon, 2015 ONSC 7452, where Akhtar J. declined to reserve costs to the trial judge following a decision to refuse to grant an interlocutory injunction, and stated at para. 4:

The presumption is that costs of a motion shall be paid forthwith: Rule 57.03 of the Rules. This principle is even more pertinent in the context of interlocutory injunctions: Cana International Distributing v. Standard Innovation Corp., 2011 ONSC 752, at para. 7. I see no reason to depart from that practice in this case. Cases of injunctive relief seeking to bar opposing sides from continuing what might otherwise be there normal day-to-day activity should always be subjected to a costs order following the motion. Parties should not be able to seek such influential relief without considering the spectre of a costs order in the event that they are unsuccessful.

[8] I agree with the submissions of the Landlord, and adopt the decision of Akhtar, J. on this issue. The issues in the site servicing injunction were separate and distinct from the issues relating to the two contested additions to the plaza. Regardless of whether the Tenant succeeds or fails on the application in December, the Landlord will be able to proceed with the three uncontested additions. The timing of the site servicing injunction was critical, given the Landlord’s plans to proceed with the three uncontested additions. Pursuant to Rule 57.03, I find that costs should be fixed and payable within thirty days of the date of this decision.

Quantum of Costs

[9] The Landlord has submitted a Bill of Costs, seeking recovery in the total sum of $36,263.52 inclusive of HST in respect of the site servicing injunction. The Landlord filed five affidavits, including affidavits of a parking expert and a project manager responsible for overseeing the construction. Three affiants were cross-examined. Parties filed facta, and argued for a full day before me.

[10] Costs are sought on a partial indemnity basis until the date of the offer to settle, and a substantial indemnity basis thereafter.

[11] The Tenant raised a concern with possible duplication of costs, arguing that “in examining the bill of costs submitted by the Respondent, much of the activity claimed for is not related or is only partially related to the motion heard by Your Honour and the bulk of it relates to the application in general.” However, other than this bald statement, no particular issues with any items were raised. On the other hand, Mr. Magonet, Landlord’s counsel, has stated:

In calculating our client’s costs, and to avoid any issue that the costs being sought for the (site servicing injunction) encompass any costs in relation to the injunction application generally, I confirm that the costs are only being sought from August 1, 2016, and in relation to work undertaken in respect of the (site servicing injunction) exclusively.

[12] I have reviewed the bill of costs, Mr. Magonet’s assurance to the Court, and the failure of the Tenant to point to any specific items, and am prepared to find that the work was expended in relation to the site servicing injunction.

[13] Fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. The discretion is to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure, including the principle of indemnity, the expectations of the unsuccessful party, and the complexity of the issues. Overall, the court is required to consider what is “fair and reasonable”, with a view to balancing compensation to the successful part with the goal of fostering access to justice (Boucher v Public Accountants Council (Ontario), 2004 CanLII 14579, (2004), 71 O.R. (3d) 291 (Ont. C.A.), at paras 26, 37.) In addition, the principle of proportionality informs the balancing of interests in deciding whether an award of costs is “fair and reasonable”: see Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, at paras. 126-7.

[14] This was high stakes litigation of great importance to both sides of the dispute. The Tenant takes no issue with the rates claimed by the Landlord. Typically a comparison of the costs sought by the parties assists in determining what amount was reasonably within the reasonable contemplation of the losing party. Counsel for the Tenant has not provided his Bill of Costs, which makes it difficult to evaluate this issue. There are no submissions that the conduct of the parties unnecessarily lengthened the proceedings or resulted in unnecessary costs.

[15] I have considered the submissions of the parties and the factors described above, including the principle of proportionality, in order to determine what is “fair and reasonable” in the circumstances with a view to balancing compensation of the successful party with the goal of fostering access to justice. I find that it is fair and reasonable to award the sum of $28,000.00 in costs, inclusive of taxes and disbursements, to the Respondent Landlord payable within 30 days by the Applicant Tenant.

Kristjanson J.

Date: October 27, 2016

2198572 Ontario Inc. v. First Land (Overlea) Ltd., 2016 ONSC 6749

Case Summary

COSTS ENDORSEMENT

Timing of Payment of Costs

Quantum of Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1