Court File and Parties

COURT FILE NO.: CV-21-00658971-0000 DATE: 20210816 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 9925350 Canada Inc. and Hong Thuy Thi Nguyen, Plaintiffs – AND – Kevito Ltd., Defendant

BEFORE: E.M. Morgan J.

COUNSEL: Lloyd Hoffer and Lauren Parker, for the Plaintiffs Allan Dick and Daniel Hamson, for the Defendant

HEARD: July 2, 2021

COSTS ENDORSEMENT

[1] On July 12, 2021, I issued my reasons for judgment in which I granted the Plaintiffs an interlocutory injunction restraining the Defendant from terminating or acting on the termination of the Plaintiffs’ franchise business. Counsel for both sides have now provided me with written submissions on costs.

[2] Costs are discretionary under section 131 of the Courts of Justice Act, with guidance for the exercise of that discretion provided by Rule 57.01 of the Rules of Civil Procedure. The first item under that Rule is the principle of indemnity for the successful party, in accordance with which the Plaintiffs deserve their costs of the motion. They were entirely successful in achieving the Order that they sought.

[3] Defendants’ counsel submit that as this was an interlocutory matter, costs should be reserved to the trial judge. They state that a trial is “inevitable” in the circumstances of this case.

[4] I do not know why a trial is more inevitable here than anywhere else – settlement or summary judgment is always possible, and one never knows what will materialize and what the partis’ calculations with respect to the action will be down the road. In any case, Plaintiffs’ counsel point out that the action is at a very early stage and that the Defendants have not yet pleaded. Deferring the costs to the trial judge poses the risk of, in effect, eliminating a costs award. Costs of this motion may by then have long become water under the bridge.

[5] Counsel for the Plaintiff have filed a Costs Outline indicating that they seek, using round figures, partial indemnity costs in the amount of $95,000 plus disbursements and tax for a total of $115,500. While I have no doubt that this is an accurate reflection of the partial indemnity value of the time put in by Plaintiffs’ counsel, it is rather high for a one-day injunction motion

[6] On the other hand, the stakes were very significant for the Plaintiffs. Rule 57.01(1)(d) mandates that I take into account the importance of the issues. Had the Plaintiffs not been successful, their business would have been lost.

[7] Counsel for the Defendant contend that, in comparison to other injunction motions, a costs award of roughly half of what the Plaintiffs seek would be reasonable. It is difficult, however, to compare cases in this way, as complex motions are inevitably unique and difficult to hold up against each other. Further, Defendant’s counsel have not submitted a Costs Outline of their own, and so I do not know how the Defendant’s costs would compare with the Plaintiffs’. Those two sets of course flow from the very same motion and so would be directly comparable.

[8] Rule 57.01(1)(0.b) indicates that courts should take into account “the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.” That amount is typically gauged by comparing the successful party’s request with the unsuccessful parties’ costs bill. Again, in the absence of any indication from the Defendant as to how much it incurred in costs, it is difficult to make this calculation or to take the Defendant’s expectations into account.

[9] I am willing to reduce the Plaintiffs’ costs request a bit to bring it closer to what I consider the norm in other interlocutory injunction motions of this length, complexity, and importance to the parties. However, I do not agree with Defendant’s counsel that half the Plaintiffs’ request would make for a reasonable award. Plaintiffs’ counsel put in a substantial amount of work in this motion, and it showed in the result. I do not want to be taken as in any way second guessing that effort.

[10] The Defendant shall pay the Plaintiffs costs in the amount of $95,000, inclusive of all disbursements and HST. This amount is payable within 30 days of today.

Date: August 16, 2021 Morgan J.