Court File and Parties

COURT FILE NO.: CV-21-00664676

DATE: 20210909

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: STEPHEN BARBER, Plaintiff

– and –

CANNAPHARMARX, INC., CANNAPHARMA CANADA CORP. (formerly known as HANOVER CPMD ACQUISITION CORP.), ALTERNATIVE MEDICAL SOLUTIONS INC., and JUST IN TIME CAPITAL INC., Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Brendan Clancy, for the Plaintiff

Jessica Kuredjian, for the Defendants, CannaPharmaRx, Inc., Cannapharma Canada Corp. (formerly known as Hanove CPMD Acquisition Corp.), alternative Medical Solutions Inc.

Sharoon Gill, for the Defendant, Just In Time Capital Inc.

HEARD: Costs submissions in writing

COSTS EnDORSEMENT

[1] The Plaintiff brought an unsuccessful motion for an injunction to prevent a sale of a property from the Defendants, CannaPharmaRx, Inc., Cannapharma Canada Corp. (formerly known as Hanove CPMD Acquisition Corp.) (collectively “CannapharmaRX”), to the Defendant, Just In Time Capital Inc. (“Just In Time”).

[2] As the successful party, CannapharmaRX is entitled to its costs of the motion. Just In Time participated only minimally in the motion and has not made any costs submissions.

[3] Counsel for CannapharmaRX seeks costs on a substantial indemnity basis in the amount of $20,900 (using round numbers). She also seeks disbursements in the amount of $3,153 (Cdn.) representing the cost of consulting with U.S. counsel for CannapharmaRX who was apparently closely involved in the transaction at issue. In addition to that, CannapharmaRX’s counsel seeks $4,208.24 (U.S.) representing the per diem cost of having delayed the closing due to the Plaintiff’s unsuccessful motion.

[4] Counsel for the Plaintiff submits that costs should be on a partial indemnity basis, payable in the cause. He states that the debt claimed by the Defendant is well documented and essentially admitted by CannapharmaRX, and so there is a reasonable prospect of success at trial. He makes the point that this motion was an interlocutory matter and that the evidence and other work that went into the motion will have further use as part of the evidentiary record and preparation when the matter gets to trial.

[5] Plaintiff’s counsel may be correct in stating that his client has a reasonable prospect of success at trial. I make no prediction as to how the trial will go, but that is not the issue here. What is relevant at this stage is whether the injunction motion was brought with any reasonable prospect of success. I can say without hesitation that it was not. It was obvious all along that the Plaintiff had a money claim rather than a property claim, and that there were no legally valid grounds to enjoin the property transaction at which the motion took aim.

[6] The fact that the Plaintiff may one day be successful in obtaining judgment on its money claim does not mean that an injunction was a reasonable thing to seek. In fact, by emphasizing what the Plaintiff sees as the self-evident nature of the monetary debt, counsel is effectively stating precisely why this was a futile attempt at an injunction. The injunction was really an attempt at obtaining pre-judgment enforcement of the debt.

[7] Counsel for CannapharmaRX has provided me with case law demonstrating that substantial indemnity costs are called for where it was evident prior to the motion that the motion would not succeed and should not have been brought. In the context of summary judgment motions, “the test of whether the cost sanctions contained in Rule 20.06 should be applied is simply finding one way or the other on the question of whether the bringing of the motion was ‘reasonable’”: Innovative Automation Inc. v. Candea Inc., 1995 CanLII 7088 (Gen Div).

[8] In my view, the same test applies apply in guiding the court’s exercise of discretion in fixing the costs of an unsuccessful injunction. The point is covered by Rule 57.01(1)(f) and (g) of the Rules of Civil Procedure. There, courts are guided to exercise their discretion by taking into account, among other things, whether any step in the proceeding was unnecessary or mistaken. Bringing a misguided injunction motion falls under that principle.

[9] The one request by CannapharmaRX’s counsel that gives me pause is the request for compensation for the several days’ delay in closing the real estate deal. I do not doubt that delay equates to extra expense, and that the expense has been accurately calculated here on a per diem basis. However, I am skeptical that in the context of a costs ruling I have the authority to make an award of this nature. It is a request for compensation for a loss suffered by a party, but not truly a request to cover the costs of the motion in the usual meaning of that term.

[10] “Costs” cover the legal expense of bringing or defending a proceeding, not other types of losses that might be engendered by the proceeding. The per diem loss claimed by CannapharmaRX may be compensable (although I venture no opinion and make no ruling in that regard), but if so it should be as a counterclaim rather than a costs request.

[11] The Plaintiff shall pay CannapharmaRX costs in the all-inclusive amount of $24,000.

Date: September 9, 2021 Morgan J.