COURT FILE NO.: CV-14-504072

DATE: 20190910

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sang Thi Tran and 1835068 Ontario Ltd., Plaintiffs

AND:

Bloorston Farms Ltd., Defendant

BEFORE: Chalmers, J.

COUNSEL: E. Tingley, for the Plaintiffs

E. Brousseau, for the Defendant

HEARD: July 25, 2019

ENDORSEMENT

OVERVIEW

[1] The Plaintiff Sang Thi Tran (“Sang”), through her corporation 1835068 Ontario Ltd. (“183”), operated a Vietnamese restaurant called Gingers (the “Restaurant”). The Restaurant was located on the ground floor at 252 Carlton Street, Toronto (the “Building”).

[2] The Defendant, Bloorston Farms Ltd. (“Bloorston”) purchased the Building in February 2014. Shortly after the purchase, Bloorston made changes to the minimum and additional rent to be paid by the Plaintiffs. The Plaintiffs refused to pay the increased amounts. Bloorston took the position that the Plaintiffs were in breach of the lease and terminated the tenancy.

[3] The Plaintiffs bring this action for damages arising out of the termination of the lease. Bloorston brings this motion for summary judgment dismissing the Plaintiffs’ action and granting judgment on its counterclaim for lost rent and other losses related to the Plaintiffs’ failure to pay the increased rental amounts.

[4] For the reasons that follow, I am satisfied that there is no genuine issue requiring a trial. I dismiss the Defendants’ motion and grant summary judgment in favour of the Plaintiffs.

BACKGROUND FACTS

[5] On July 24, 2006, Hieu Tran (“Hieu”), Sang’s sister, entered into a lease with the then owners of the Building; the Estate of John Pomer and the Estate of Lilian Pomer, (the “Lease”). Hieu, through her corporation, 1286184 Ontario Ltd. (“128”) operated the Restaurant at this location starting in 2006.

[6] The Pomer Estates assigned their interest in the Lease to 1793530 Ontario Inc. (“179”) on April 9, 2009.

[7] In 2010, Hieu decided to transfer the Restaurant to her sister, Sang. On October 18, 2010, Hieu incorporated 183 on behalf of Sang. Sang was the sole shareholder of 183. Hieu then transferred the restaurant business to 183. At the time of the transfer, Hieu advanced $137,227 to 183 to assist in running the Restaurant. Sang and Hieu have both deposed in their affidavits that this amount was a capital infusion into the Restaurant and not a loan.

[8] The Lease provides that the leased premises are approximately 1200 square feet. The minimum rent for the period November 1, 2007 to October 31, 2008 was $2,800 per month, (“Minimum Rent”). The Minimum Rent increased by $100 per month for each successive year. The Lease expired October 31, 2016.

[9] In addition to Minimum Rent, the tenant is required to pay additional rent which included utilities, maintenance, insurance premiums and property taxes, (“Additional Rent”). With respect to property taxes, the landlord had the right to determine the assessment value of the leased premises, “acting reasonably”. In determining the assessment value, the Lease provides that the landlord is to bear in mind the following:

• The current principles of assessment;

• Previous assessments; and,

• The proportionate share of the rental area of the premises is to the total rentable area of the Building.

[10] Prior to the commencement of each Lease year, the landlord is to provide a bona fide estimate of Additional Rent for the coming year. The tenant is required to pay the estimated amount in equal monthly installments. During the year, the landlord, may, “acting reasonably”, re-estimate the amount of Additional Rent and adjust the monthly installment for the balance of the year. At the end of the lease year there is an adjustment to take into account the actual costs incurred.

[11] Before Bloorston purchased the Building in March 2014, the property tax component of the Additional Rent was based on the proportionate share of the area of the leased premises to the total rentable area of the Building. This was 26.77%.

[12] On December 1, 2010, the 179 (landlord), Sang (new tenant) and Hieu (old tenant) entered into a lease amending agreement (the “Amendment”). The Amendment provides that the rentable area of the premises is 1,120 square feet. The Minimum Rent was adjusted. For the year November 1, 2010 to October 31, 2011, the Minimum Rent was reduced from $3,200 a month to $2,987 per month. The Amendment provides that the Minimum Rent will increase by approximately $93 a month for each successive year. All other terms and conditions of the Lease remained in effect.

[13] From December 1, 2010 to April 1, 2014, Sang operated the Restaurant at the Building through her corporation 183. Although Sang remained the tenant, all revenues and expenses were realized by 183. Sang, through 183 paid the Minimum Rent which was set out in the Amendment and the Additional Rent as determined by the landlord at the beginning of each lease year.

[14] On March 6, 2014, Bloorston purchased the Building from 179. In advance of the closing, Sang executed a Tenant’s Acknowledgement in February 2014 (the “Acknowledgement”). In the Acknowledgement, Sang confirmed that the Lease was valid and subsisting, that she was the tenant and was conducting business in accordance with the Lease. There is a handwritten note at the bottom of the Acknowledgement that a proposed renovation to the storefront will result in a reduction of the leasable space by 75 square feet. There is no reference in the Acknowledgment that there will be any change to the Minimum Rent following the renovation.

[15] Before closing, Bloorston retained Jedd Jones Architect Ltd. (“Jedd Jones”) to measure the rental area of the leased premises. Jedd Jones issued a certificate dated February 27, 2014, which provides that the rentable area occupied by the Restaurant is 1,274 square feet.

[16] By e-mail sent March 7, 2014, (one day after the closing of Bloorston’s purchase of the Building), Bloorston wrote to Sang to advise her of the change in ownership and to provide a copy of the architect’s certificate. There is no reference in the e-mail of an intention to increase the Minimum Rent. In the e-mail, Bloorston advises that there will be a reassessment of the Additional Rent that is to be paid in 2014.

[17] By e-mail sent on March 19, 2014, Bloorston advised Sang that based on the rentable area as calculated by Jedd Jones, the Minimum Rent was being increased from the amount set out in the Amendment ($3,266/month for the period November 1, 2013 to October 31, 2014) to $3,715.83/month. Bloorston also advised that the Additional Rent was being increased to assign 60% of anticipated water consumption to the Restaurant. Bloorston also advised that the property tax allocation for the Restaurant was being increased from 26.77% to 43.59%.

[18] On April 1, 2014, Bloorston sent Sang two invoices;

(a) Invoice #15 for $7,361.35 which consisted of the new Minimum Rent of $3,715.83 per month plus the new Additional Rent which was based in part on a property tax allocation of 43.59%;

(b) Invoice #16 for $215.83 which was the pro-rated difference between the new Minimum Rent for the remainder of March 2014 and $4,615.83 which was the difference between the new Additional Rent and what Sang paid for the period from January to March 2014.

[19] On April 3, 2014, Bloorston, through its lawyer, wrote to Sang advising that she owed $6,633.79 and demanded payment by April 15, 2014, failing which it would take the position that she is in default of the Lease.

[20] On April 3, 2014, Sang, through her lawyer, wrote to Bloorston to dispute the changes to the Minimum and Additional Rent. It was noted that the Amendment fixed the Minimum Rent at $3,266 per month. With respect to the Additional Rent, Sang took the position that the increase did not satisfy the requirement in the Lease that in assessing the Additional Rent, the landlord is required to act reasonably. With respect to the property taxes, Sang noted that the Restaurant occupied 26.77% of the rentable area of the Building, and that an increase of the share of the property taxes by over 60% did not meet the requirement in the Lease that the landlord “bear in mind” the proportionate share that the rentable area is to the total rentable area of the Building. Sang stated that she will continue to pay the Minimum Rent and Additional Rent she had been paying.

[21] Sang wrote a cheque April 1, 2014 in the amount of $5,114.09 for the Minimum Rent as set out in the Amendment and the Additional Rent as assessed at the beginning of the lease year. This cheque was written on the account of 183. Bloorston cashed the cheque.

[22] On April 25, 2014, Bloorston terminated the Lease. The locks were changed. Sang was permitted to return for brief periods of time over the course of three days to remove the equipment. Sang was required to close the Restaurant and remove all chattels by May 5, 2014.

[23] Sang issued the Statement of Claim on May 13, 2014 in which she sought, among other things, a return of the deposit of $5,088 together with accumulated interest, as well as damages arising out of the breach of the Lease. Sang was the only Plaintiff when the Claim was first issued. The Claim was later amended to add 183 as a Plaintiff.

[24] Bloorston took the position that Sang was in breach of the Lease because the owner of the Restaurant was 183 and this fact had not been disclosed to the landlord. In addition, Bloorston argued that Sang was in breach of the Lease because she failed to seek the consent of the landlord to assign or sublet the Lease to 183.

[25] In December 2016, Bloorston brought a motion for summary judgment to dismiss the action. Bloorston argued that Sang did not suffer any damages because the Restaurant was not owned by her and was instead owned by 183. The motion was heard by Justice Lederer. By endorsement dated February 6, 2017, he adjourned the Defendant’s motion to allow Sang time to move to amend the Statement of Claim to plead that she is entitled to damages for the loss of the value of her shares in 183.

[26] The Plaintiffs’ motion to amend the Statement of Claim was heard by Justice Lederer on May 12, 2017. He allowed the amendment. He dismissed Bloorston’s motion for summary judgment, without prejudice to its right to bring a further Summary Judgment motion should the action as amended, warrant it.

[27] Bloorston brings this summary judgment motion seeking a dismissal of the Plaintiffs’ action for the following reasons:

(i) Sang was in breach of the Lease because she failed to pay the increased Minimum and Additional Rent, and for her failure to advise the landlord that the Restaurant was owned by 183;

(ii) Damages for diminution of the value of shares are not recoverable and even if recoverable, Sang has not adequately proved her damages.

[28] Bloorston is also seeking an order granting judgment in its favour on the counterclaim.

[29] Both parties agree that there are no genuine issues requiring a trial and this is an appropriate case for summary judgment. Bloorston acknowledges that although the Plaintiffs did not bring a cross-motion for summary judgment, the court may grant judgment in favour of the Plaintiffs: Hunter-Rutland Inc. v. Huntsville (Town of), 2015 ONCA 353, at para. 5.

ANALYSIS

i) Breach of the Lease Agreement

(a) Minimum and Additional Rent

[30] Bloorston argues that the Amendment changed the terms of the Lease in that the Minimum Rent was based on $35 per square foot for the rental period from November 1, 2013 to October 31, 2014. Therefore, when the rentable area was determined by the architect to be 1,274 square feet, the Minimum Rent increased to $3,715.83 a month.

[31] Bloorston relies on the fact that the Amendment sets out a table of the Minimum Rent for 1200 square feet and the new amount based on 1120 square feet. In both cases, the Minimum Rent was based on $35 per square foot for the period November 1, 2013 to October 31, 2014. Bloorston argues that the parties proceeded on a shared assumption that the Minimum Rent would be on a square footage basis. As a result, when the architect re-estimated the square footage, the tenant was required to pay a higher Minimum Rent.

[32] I do not accept the position advanced by Bloorston. The Amendment sets out the specific rental amounts for the balance of the term of the Lease. Although there is reference to the square footage of the leased premises in the Amendment, there is no specific term which provides that the Minimum Rent is based on square footage.

[33] I also note that the Lease and the Amendment do not provide a mechanism for adjusting the Minimum Rent based on a recalculation of the square footage of the leased premises. In the absence of the consent of the tenant, the amount of Minimum Rent is fixed by the Amendment.

[34] Sang also relies on the doctrine of estoppel by convention. The following criteria forms the basis of this doctrine:

(i) The parties’ dealings must have been based on a shared assumption of fact or law;

(ii) A party acted in reliance of the shared assumption; and

(iii) It would be unfair to allow a party to depart from the common assumption: Ryan v. Moore [2005] 2 SCC 53 at para. 59.

[35] I am satisfied that from the time of the Amendment to April 2014, the parties shared the assumption that the leased premises consisted of 1120 square feet. Both parties proceeded on the basis that the Minimum Rent would be the amount set out in the Amendment. It would be unfair to allow the landlord to depart from this shared understanding.

[36] It is my view that there is no basis for Bloorston to increase the Minimum Rent as of March 1, 2014. The Amendment sets out a fixed amount of Minimum Rent for each lease year. The Lease and Amendment do not specifically state that Minimum Rent is to be based on square footage, and there is nothing in the Lease or Amendment which allows the landlord to increase the rent based on an architect’s measurement of the premises. Finally, the doctrine of estoppel by convention applies in the circumstances of this case.

[37] I therefore find that the Minimum Rent that applied at the time of termination was $3,266 per month. Sang was paying this amount and therefore was not in breach of the Lease.

[38] The procedure for determining the Additional Rent is set out in s.2(4) of the Lease. At the beginning of each lease year, the landlord estimates the Additional Rent for the coming year. The Additional Rent is based on the expenses related to the premises for utilities, maintenance, insurance and property taxes. The tenant is to pay the estimated Additional Rent in equal monthly installments. At the end of the lease year, the actual expenses are determined and there is a recalculation and adjustment of the Additional Rent.

[39] The Lease allows for a change to the Additional Rent during the lease year at s.2(5) of the Lease. The landlord may, “acting reasonably”, re-estimate the amount of the Additional Rent and fix the monthly installments for the balance of the year. At issue is whether Bloorston was “acting reasonably”, when it purported to adjust the Additional Rent retroactive to January 2014.

[40] Before Bloorston purchased the Building, the property tax portion of the Additional Rent was based on the proportion of the leased premises to the total leased area of the Building. The proportion was 26.77%. After its purchase of the Building, Bloorston purported to change how the property taxes were calculated. Bloorston determined that the Restaurant should pay a higher share of the property taxes on the basis that it occupied the ground floor and had a visible location.

[41] I note that allocating property tax because the tenant occupied the ground floor and a more visible location in the Building, is not a basis set out in the Lease. The Lease provides that the landlord is to allocate property tax bearing in mind the proportionate share of the rentable area of the leased premises to the total rentable area of the Building.

[42] I am of the view that Bloorston was not “acting reasonably” when it purported to change the Additional Rent for reasons not set out in the Lease.

[43] In any event, I find that the landlord, having chosen to allocate the property taxes based on the proportionate share of the leased premises, cannot change its method of allocation.

[44] In OGT Holdings Ltd. v. Startech Canada Services Ltd., [2009] 89 RPR (4th) 89 (Ont. SCJ), the lease provided that the landlord could calculate the allocation of property taxes in one of two different ways; either based on proportionate assessment or assessed value. The landlord in that case elected to calculate the property taxes based on assessed value. The landlord then attempted to change how it calculated property taxes. The Court held that the landlord cannot change its method of calculation:

I conclude as well that in this case, the landlord made an election, an election upon which the respondents relied and, indeed, agreed to. When the landlord elected to calculate realty taxes on the basis of the assessed value option, that election was final. The landlord therefore, cannot now resile from that election. As submitted by counsel for the respondents, “the landlord is not permitted to unilaterally re-elect to gain some advantage” [citations omitted]: OGT Holdings, at para. 25.

[45] Before Bloorston purchased the Building, the landlords calculated Additional Rent based on a proportionate property tax allocation. This allocation was relied on by the tenants, and Bloorston cannot unilaterally change the method of calculation.

[46] I find that Bloorston was not “acting reasonably” when it increased the Additional Rent because it changed the way in which the property tax was allocated to the premises. Sang continued to pay the Additional Rent as estimated at the beginning of the Lease year and therefore was not in breach of the Lease.

(b) Assignment of Lease to 183

[47] Bloorston takes the position that Sang was in breach of s.4 of the Lease because she assigned the Lease to 183 without first obtaining the consent of the landlord. Sang did not assign the Lease to 183. At all times, Sang was the tenant and personally responsible for the payment of rent. I am satisfied that Sang was not in breach of s.4 of the Lease.

[48] Bloorston also argues that Sang was in breach of s.10(1)(e)(iii) of the Lease, which provides that the premises are not to be used by any other person, or for any other purpose than as provided for in the Lease, without the written consent of the landlord.

[49] Sang operated the Restaurant continuously from December 1, 2010 to April 1, 2014. Over that period, rent cheques were drawn on the account of 183. There is no evidence that the landlord 179, took any issue with respect to the involvement of 183. In addition, the rent cheque dated April 1, 2014 was drawn on the account of 183 and cashed by Bloorston.

[50] At all material times, Sang used the premises to operate the Restaurant. The use and purpose of the premises did not change and therefore there was no need to obtain the written consent of the landlord. In any event, Bloorston was aware of the involvement of 183 and made no objection when it received and cashed the rent cheque dated April 1, 2014. I am satisfied that Sang was not in breach of s.10(1)(e)(iii) of the Lease.

[51] I therefore conclude that Sang was not in breach of any of the terms of the Lease. I find that Bloorston wrongfully terminated the lease as of April 25, 2014 and is liable for the damages that flow from the wrongful termination.

ii) Damages for the Diminution of the Value of Shares

(a) Sang’s Entitlement to Claim for the Loss of Value of Shares

[52] Upon the termination of the Lease, the Restaurant was required to close. As a result, the shares in 183 became worthless. Sang was the sole shareholder of 183. Bloorston takes the position that Sang is not entitled to damages for the loss of value of her shares.

[53] Bloorston first made this argument on the Summary Judgment motion which was heard by Justice Lederer on December 1, 2016. Bloorston argued that Sang’s action should be dismissed on the basis that she cannot make a claim for the diminution in the value of her shares of 183.

[54] As stated above, Justice Lederer allowed the Plaintiffs to amend the Statement of Claim to plead that Sang is entitled to damages for the loss of the value of her shares. With respect to Bloorston’s argument that Sang did not have a right to make such a claim, Justice Lederer stated as follows:

This sets up what to my mind would be an unfortunate possibility. The defendant, the new landlord, could buy a property, arbitrarily increase the rent, back date those increases and escape any liability for a breach of the lease which, in turn, destroyed the restaurant business that was active on the property. The defendant may well argue that the loss of the right to sue arose from the failure of the plaintiffs to inform the landlord of the occupancy of the premises by the corporation that operated the business. This seems disproportionate. It is not as if the landlord was unaware of the restaurant and the fact that taking over the property and changing the locks, in the face of the rent being called for by the lease having been paid, would cause damage and loss to someone. The landlord would be saved from liability for harm caused by its action: Tran v. Bloorston, 2017 ONSC 864, at para. 19.

[55] I share the concerns expressed by Justice Lederer.

[56] Bloorston argues that a shareholder has no independent right of action based on a diminution in the value of the shares caused by damage to the corporation. Bloorston relies on the rule in Foss v. Harbottle (1843), 67 E.R. 189 (Eng V.C.), and the decision of the Ontario Court of Appeal in Meditrust Healthcare Inc. v. Shoppers Drug Mart, 2002 CaswellOnt 3380.

[57] In Meditrust, the Plaintiff owned a national mail-order pharmacy business which it operated through a number of subsidiaries. Meditrust alleged that Shoppers Drug Mart conspired to destroy its mail-order business. The Meditrust subsidiaries were not plaintiffs in the action. The defendant brought a summary judgment motion to dismiss the claim of Meditrust on the basis that the claim could only be asserted by the subsidiaries. The motion was successful. The motions court judge held that the damages were sustained by the subsidiaries and not Meditrust and therefore the claim was barred.

[58] In dismissing the appeal, the Court of Appeal noted that the rule in Foss v. Harbottle does not preclude an individual shareholder from making a claim for a direct loss:

The rule in Foss v. Harbottle does not, of course, preclude an individual shareholder from maintaining a claim for harm done directly to it. Again, in Hercules, Justice La Forest explained the limit of the rule at 214:

One final point should be made here. Referring to the case of Goldex Mines Ltd. v. Reveill (1974), 7 O.R. (2d) 2216 (C.A.), the appellants submit that where a shareholder has been directly and individually harmed, that shareholder may have a personal cause of action even though the corporation may also have a separate and distinct cause of action. Nothing in the foregoing paragraph should be understood to detract from this principle. …:, Meditrust, at para. 16.

[59] In Meditrust, the plaintiff argued that the rule in Foss v. Harbottle, should be reconsidered in light of the House of Lords’ decision in Johnson v. Gore Wood & Co. (2000), [2001] 1 All ER 481. The Court of Appeal found that Meditrust failed to establish that the proposition set out in Johnson, applied in the circumstances of the case.

In Johnson, Lord Bingham admittedly put a gloss on the rule in Foss v. Harbottle when he stated the following proposition at 503: “Where a company suffers loss but has no cause of action to sue to recover that loss, the shareholder of the company may sue in respect of it (if the shareholder has a cause of action to do so), even though the loss is a diminution in the value of the shareholding.” But, to rely on this proposition to claim the loss in the value of its shares, Meditrust must at least show that it has a cause of action and the subsidiaries do not. This, Meditrust has failed to do. Therefore, in my view, Meditrust cannot maintain its claim for damages resulting from the loss in the value of its shares in its subsidiaries: Meditrust at para. 43.

[60] The Meditrust decision was considered by this court in Quadrangle Group LLC et al. v. Attorney General of Canada, 2015 ONSC 1521. The Plaintiff invested in a corporation based on representations made by the Defendants. The representations proved to be false and the company failed. The Plaintiffs brought an action against the Defendants for the loss of the value of their shares in the corporation. It was admitted by the parties that the corporation did not have a claim against the Defendants. The Defendants in Quadrangle brought a motion pursuant to R. 21 of the Rules of Civil Procedure to dismiss the action on the basis that the Plaintiffs could not claim for the loss of the value of their shares. In dismissing the motion, Justice Newbould found that where the company suffers a loss but has no cause of action to recover that loss, the shareholder may sue for the loss of the value of the shares: Quadrangle Group, at para. 22.

[61] In the case at bar, the corporate entity, 183 was not a party to the Lease and therefore it has no cause of action against Bloorston. Although 183 has no right of action, Sang, as the party to the Lease, has a cause of action for its breach. Sang was the sole shareholder of 183. The only business operated by 183 was the Restaurant. The loss of the Restaurant caused by the improper termination of the Lease by Bloorston resulted in Sang losing her business.

[62] I am of the view that this case falls within the exception set out in Johnson and Quadrangle in that Sang has a cause of action against Bloorston, and 183 does not. As stated by Justice Lederer:

This would be consistent with a claim reliant on the understanding found in Johnson v. Gore Wood & Co. that a reduction in the value of shares, where the company can make no claim, may sustain an action brought in the name of a shareholder (see para. [25] above (fn. 21). In the normal course such a claim would be considered to be derivative but where the corporations cannot make the claim there is nothing for it to be derivative of: Tran v. Bloorston, at para. 29.

[63] I find that Sang has a valid claim for the loss of the value of the shares in 183 caused by the termination of the Lease.

(b) Amount of Damages

[64] Each party filed expert reports with respect to the loss of value of Sang’s shares in 183.

[65] Bloorston submitted the report of Nancy Rogers dated March 4, 2019. She valued the shares of 183 at $3,387, at the time of the termination of the Lease. She treated the amount paid by Hieu at the time she transferred the business to Tran in the amount of $137,227 as a loan and therefore it did not form part of the value of the company.

[66] Sang submitted the report of Ephram Stulberg, dated January 8, 2018. He valued her shares at between $78,000 and $165,000. He treated the amount paid by Hieu as a capital payment and therefore this amount forms part of the value of the company.

[67] Other than the treatment of the payment made by Hieu, there is very little difference between the experts as to the value of the company. The issue turns on whether the payment was a loan, in which case it is deducted from the value of the company or if it forms part of capital and is therefore not deducted. This is noted by Ms. Rogers:

… the main difference between our conclusion of value and MDD’s value results from the fact that MDD has not deducted from its value considerations the $137,227 due to Ms. Tran’s sister, Hieu Tran. … Once this amount is deducted from MDD’s conclusion of value, MDD’s conclusion of value of Ms. Sang Tran’s interest in 183 is similar to that determined by N. Rogers.

[68] Both Sang and Hieu deposed in their affidavits that the payment was not a loan. Hieu testified that the money was provided to Sang to assist her in the Restaurant. The uncontradicted evidence from her is that no interest is being charged on the $137,227 and that it is not repayable.

[69] I find that based on the evidence before me, the money advanced by Hieu was not a loan. It therefore formed part of the capital of the company and is to be included when determining the value of 183 at the time the lease was terminated by Bloorston.

[70] Bloorston’s expert determined the value of the company at $3,387. When the amount advanced by Hieu is added, the value of the shares in 183 is $140,614. I am satisfied that this was the value of Sang’s shares in 183, at the time Bloorston terminated the tenancy.

[71] In addition to the amount for the value of the company, Sang is entitled to a return of her deposit which is currently being held by Bloorston. Sang in her Statement of Claim, the amount claimed for the deposit is $5,088.

(c) Costs

[72] The Plaintiffs are entitled to their costs of the action. The parties each submitted Cost Outlines at the conclusion of argument. The Plaintiffs’ Cost Outline is in the amount of $50,500.08 inclusive of fees on a partial indemnity basis, disbursements and HST. Bloorston’s Cost Outline in is the amount of $92,139.10 inclusive of fees on a partial indemnity basis, disbursements and HST.

[73] The costs to which the Plaintiffs are entitled must be fair and reasonable, and within the expectation of the parties: Boucher v Public Accountants Council (Ontario) (2004) 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.).

[74] I am of the view that the costs claimed by the Plaintiffs are reasonable in all of the circumstances. I note that the amount set out in Bloorston’s Cost Outline is significantly higher than the amount claimed by the Plaintiffs. Therefore, the costs claimed by the Plaintiffs, must have been within the reasonable expectations of Bloorston if it was unsuccessful on the summary judgment motion.

[75] I therefore fix the Plaintiffs’ costs in the amount of $50,500.08, inclusive of fees, disbursements and HST.

DISPOSITION

[76] I dismiss Bloorston’s motion for summary judgment and grant judgment in favour of the Plaintiffs in the following amounts:

(a) Damages arising out of the termination of the lease: $ 140,614

(b) Return of the deposit: $ 5,088

Total: $145,702

(c) Pre-Judgment interest on the amounts set out above, in accordance with the Courts of Justice Act, R.S.O. 1990 c. C.43, s. 129, from April 25, 2014.

(d) Costs, inclusive of fees, disbursements and HST: $ 50,500.08

[77] Bloorston’s counterclaim is dismissed.

Chalmers, J.

Date: September 10, 2019