Court File and Parties

COURT FILE NO.: CV-17-00569542 DATE: 20180904 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AZMOON TRADING INC., Plaintiff/Moving Party AND: CAFFE DEMETRE FRANCHISING CORP., CAFFE DEMETRE (MISSISSAUGA) INC., CAFFE DEMETRE ENTERPRISES INC. and GARY STEVEN THEODORE, Defendants/Responding Parties

BEFORE: P. J. Monahan J.

COUNSEL: David S. Altshuller and Lara Di Genova, for the Plaintiff/Moving Party John H. McNair, for the Defendants/Responding Parties

HEARD: April 17, 2018

Supplementary Costs Endorsement

[1] On May 15, 2018, I dismissed the motion for an injunction brought by the Plaintiff, Azmoon Trading Inc., against the Respondent, Caffe Demetre Franchising Corp. I also found that Caffé Demetre was entitled to its costs on the motion.

[2] On August 27, 2018, I awarded Caffe Demetre its partial indemnity costs in the amount of $41,670.61. However, although Azmoon Trading had filed cost submissions with the Court, those submissions were not brought to my attention prior to the release of my Costs Endorsement. I have now had a chance to review Azmoon Trading’s costs submissions and considered whether, in light of those submissions, I would alter my costs award dated August 27, 2018.

[3] Azmoon Trading argues, amongst other things, that in light of the fact that the parties incurred relatively similar costs associated with the motion, and that the litigation between the parties is ongoing, it is fair and reasonable that each party bear their own costs at this stage. This submission is inconsistent with my original endorsement in which I indicated that Caffe Demetre, as the successful party, was entitled to its costs on the motion. In any event, the fact that the parties may have incurred relatively similar costs does not dis-entitle the successful party from its presumptive entitlement to costs.

[4] Azmoon Trading also raises concerns with respect to particular costs incurred during the course of the litigation, which it attributes to Caffe Demetre. For example, when the matter came before me on February 1, 2018, Azmoon Trading sought an adjournment on the basis that it had entered into an agreement to sell its franchise to a third party. Café Demetre initially objected to the adjournment but at the hearing of the motion ultimately consented. Azmoon Trading argues that Café Demetre should have consented to the adjournment in advance and therefore should not be entitled to recover its costs associated with this appearance.

[5] While it is true that Azmoon Trading obtained the adjournment on February 1, 2018, this was granted by the Court for the benefit of Azmoon Trading, in light of the fact that it had entered into an agreement to sell its franchise on January 30, 2018, just prior to the scheduled hearing of the motion. The adjournment was appropriate since, if the transaction contemplated by the sale agreement had been completed, the injunction application would have become moot. That said, I do not believe that Café Demetre’s position in initially opposing the adjournment was unreasonable given the fact that there was no certainty that the transaction contemplated by the sale agreement would actually be completed. Azmoon Trading had entered into conditional agreements for the sale of its franchise in the past and those transactions had not closed. In fact the proposed sale that was contemplated by the January 30, 2018 agreement was not completed and it was necessary for the parties to return and argue the injunction motion in April 2018. I therefore do not believe it would be appropriate or fair to deprive Caffe Demetre of its costs in preparing for the appearance on February 1, 2018, which in any event were very modest. [1]

[6] Azmoon Trading also takes issue with the fact that Caffe Demetre elected to retain counsel from London, Ontario, which resulted in additional disbursements, mainly in the form of travel-related expenses. The additional costs identified by Azmoon Trading in this regard amounted to $3984.14.

[7] As counsel for Azmoon Trading himself points out, the overall objective in fixing costs under the Courts of Justice Act is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario. [2]

[8] In this case, the partial indemnity fees paid to counsel by the two parties were virtually identical. (While Caffe Demetre’s fees were $32,397.54, Azmoon Trading’s were $32,728.50.) In accordance with the principles articulated in Boucher, I see no basis to reduce the fees component of the costs payable to Caffe Demetre.

[9] This leaves the question of whether it is reasonable to order Azmoon Trading to reimburse Caffe Demetre for the increased disbursements associated with the fact that it retained counsel in London, Ontario rather than Toronto. I am unaware of any principle whereby a party to litigation is required or expected to retain counsel in the municipality where a matter is being argued, or risk negative cost consequences. In fact, the general rule is that parties should be free to retain counsel of their choice and it is not uncommon for counsel to be retained to argue matters in different parts of the province. There are no doubt a variety of reasons for this practice, including the fact that there are generally efficiencies in retaining counsel with expertise or prior background in a matter even if that counsel is located in a different part of the province. Members of the Ontario bar are licensed and qualified to appear in any court in the province. I see no basis for discouraging or penalizing a party who decides to retain counsel who may reside outside of the municipality in which the matter is being argued, even if that results in an increase in the disbursements required.

[10] Of course this is subject to the overall principle of reasonableness as articulated by the Court of Appeal in Boucher. In this case the additional disbursements incurred by counsel for Caffé Demetre were relatively modest in light of the total costs of the litigation. Azmoon Trading initiated an unsuccessful injunction application, which caused Caffe Demetre to bear those costs. The overall cost award is clearly an amount that ought to have been within the reasonable expectation of Azmoon Trading, since it is very similar to Azmoon Trading’s own costs. Accordingly, I do not believe it would be appropriate to reduce the costs payable to Caffé Demetre based on the fact that its counsel incurred additional disbursements associated with travel between London and Toronto.

[11] I therefore see no basis to modify my earlier costs award, and would confirm that Azmoon Trading is required to reimburse Caffe Demetre for its costs on a partial indemnity scale, in the amount of $41,670.61, within 30 days of August 27, 2018.

P.J. Monahan J. Date: September 4, 2018

Footnotes

[1] According to the costs outline submitted by Caffé Demetre, its costs associated with the appearance on February 1, 2018 were $1337.70. [2] (2004) , 71 O.R. (3rd) 291 (C.A.).