Court File and Parties

COURT FILE NO.: CV-16-1532 DATE: March 10, 2017 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2184472 Ontario Inc., Applicant AND: 1637601 Ontario Limited and 147 Dunlop Street East Inc., Respondents

BEFORE: THE HONOURABLE MADAM JUSTICE M. E. VALLEE

COUNSEL: Mr. H. Dorsey, for the Applicant Mr. J. Cook, for the Defendant 1637601 Ontario Limited Mr. J. Dare, for the Defendant 147 Dunlop Street East Inc.

HEARD: In Writing

Costs Endorsement

[1] The applicant 218 (Escrow) brought a motion for an interim injunction to restrain 163 (the Landlord) from leasing premises to 147 and to restrain 147 from opening a restaurant in the premises. The main issue was between Escrow and the Landlord. Accordingly, the Landlord was the primary respondent. The respondent 147 participated at the hearing but to a much lesser degree. Escrow was unsuccessful on the motion.

[2] The Landlord requests substantial indemnity costs of $17,031.80 all inclusive. It did not provide an amount for partial indemnity costs. If it had, the amount would likely be $13,551.28. 147 requests partial indemnity costs of $8,475 all inclusive. Escrow states that it should not pay any costs. Alternatively, costs should be reserved to the judge who hears the interlocutory injunction or the trial. If costs are payable at this stage, Escrow states that 147 should be awarded no more than $2,580 plus HST and the Landlord should be awarded no more than $2,550 plus HST.

[3] The parties raise an issue regarding a term of an adjournment and the events that followed. The first return date for the application was November 8, 2016. Both parties requested an adjournment to December 6, 2016. Escrow states that 147 undertook, as a term of the adjournment, that it would not open for business prior to December 6, 2016. Shortly after the matter was adjourned, 147 recanted from its undertaking and stated that it would open its business within 10 days. Escrow states that it had to arrange an emergency motion date prior to the end of the 10 day period. The motion was heard on November 17, 2016.

[4] In its submissions, the Landlord is silent with respect to the undertaking issue. The Landlord simply states that:

On or about November 9, 2016, the applicant’s counsel rescheduled the hearing to November 17, 2016 without 163 Ontario’s consent as per the attached email correspondence at Tab C. 163 Ontario incurred substantial costs over an extremely short period of time in order to respond to the application and could not finalize its materials until the eve of the return of the applicants rescheduled hearing.

[5] The respondent 147 is completely silent in its submissions on the undertaking issue.

[6] Both respondents served and filed their costs submissions first in accordance with my directions. Escrow then filed its submissions. The respondents were permitted to serve and file reply submissions, but did not do so. They did not deny that 147 recanted on the undertaking. Therefore, I will assume that 147 did recant.

[7] Escrow complains that the respondents served their materials only one day prior to the hearing which did not permit Escrow to carry out cross-examinations. Escrow suggests that the respondents’ materials were served at the last minute to prevent Escrow from being able to properly reply and/or cross-examine. Escrow could have brought this issue to the court’s attention on the hearing date and could have requested a brief adjournment to review and consider the materials along with an order restraining 147 from opening the restaurant during that brief adjournment. It did not do so. Therefore, it cannot complain that it was denied an opportunity to fully consider the respondents materials and its course of action.

[8] 147’s recanting from its undertaking put Escrow in the position of having to schedule an emergency hearing date. The Landlord complains that Escrow rescheduled the hearing date without its consent. When faced with a date that was only four business days away, it had to scramble to prepare, serve and file its materials. The Landlord states that it “incurred substantial costs over an extremely short period of time in order to respond to the application and could not finalize its materials until the eve of the return of the applicant’s rescheduled hearing.” The Landlord’s complaint about Escrow’s rescheduling the hearing date without its consent rings hollow because 147’s recanting put Escrow in this position.

[9] I do not agree with Escrow’s submission that costs should be reserved to the judge who hears the continuation of the injunction or presides at trial. The respondents are entitled to costs of this motion regardless of whether the matter is ultimately fully adjudicated.

[10] The Landlord requests substantial indemnity costs. It states that the application had little merit. While Escrow was unsuccessful in obtaining a temporary order, there is no evidence that it brought the motion in bad faith or for any improper purpose. There was no reprehensible, scandalous or outrageous conduct on Escrow’s part. No special grounds exist that would warrant substantial indemnity costs. The fact that a proceeding may have had little merit is not a basis for awarding substantial indemnity costs.

[11] As noted above, based on its request for substantial indemnity costs, the Landlord’s position on partial indemnity costs likely would be $13,551.28. 147 requests partial indemnity costs of $8,475 all inclusive. The Landlord’s costs outline does not contain any details. It merely shows the hours of two lawyers, being 39.80 combined, and one law clerk, being 3.90 as well as their hourly rates. It does not contain any details with respect to various aspects of work done or the time spent to do them. 147’s bill of costs is detailed. It sets out the time spent on various items. It also indicates that counsel spent 25 hours and a paralegal spent five hours.

[12] I find that the hours spent by both respondents are excessive and more than Escrow would have expected to pay in the event that it was unsuccessful. Additional hours may have been spent because the respondents had to scramble to prepare, serve and file their materials. As noted above, Escrow did not cause this situation.

[13] In fixing an amount for costs, the overriding principles are fairness and reasonableness. See Boucher v. Public Accountants, 71 O.R. (3d) 291 (CA). In my view, a fair, reasonable and proportionate costs award for this motion is $11,500 for the Landlord and $5,950 for 147, both amounts all inclusive. Accordingly, the applicant Escrow shall pay to the Landlord 1637601 Ontario Limited $11,500 and shall pay to 147 Dunlop Street Inc. $5,950 within 30 days.

VALLEE J. Date: March 10, 2017