Court File and Parties

COURT FILE NO.: CV-21-00000075-0000 DATE: 20211210

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TRACEY LYNN KIRSTINE V. NEIL KIRSTINE, JEREMY ELLIS, CHRISTINE BRANDT, TONE VALERIOTE and DONNA SPARKS

BEFORE: Van Melle J.

COUNSEL: M.A. Cummings, for the Plaintiff J. Fischer, for the Defendants Neil Kirstine and Jeremy Ellis L. Book, for the Defendant Christine Brandt Tone Valeriote in person Donna Sparks in person

HEARD: November 25, 2021

ENDORSEMENT ON COSTS

[1] The plaintiff was successful in obtaining an interlocutory injunction. She was successful before Justice Sproat who granted a temporary interlocutory injunction and adjourned the motion for a full hearing. He also reserved the issue of costs to the hearing before me.

[2] I invited the parties to make submissions on costs and limited the submissions to 3 pages double-spaced (excluding costs outlines and relevant Offers to Settle). The submissions on behalf of the defendant Christine Brandt, were 4 pages without any explanation as to why she did not comply with my direction. No cost submissions were submitted by Tone Valeriote. Donna Sparks did not participate in the motion and filed no cost submissions.

[3] The plaintiff seeks costs of $67,819.20 plus disbursements of $7,964.36. She seeks costs on a partial indemnity basis to and including the Order of Justice Sproat dated May 14, 2021 and on a substantial indemnity basis after May 14, 2021. In her claim for substantial indemnity costs, she relies on the defendants’ breach of the order of Justice Sproat.

[4] The defendants Neil Kirstine and Jeremy Ellis argue that costs should be reserved to the trial judge. Christine Brandt argues that as well, but in addition submits that an Offer to Settle tendered by her should be taken into consideration. She seeks her costs of $16,860.16 on a partial indemnity basis from the date of the Offer to Settle.

[5] Neil and Jeremy submit that in assessing costs for interlocutory injunctions, costs should not necessarily follow the event as the dispute between the parties has yet to be determined.

[6] The defendants submit that costs should be reserved to the trial judge as the dispute between the parties has yet to be determined on its merits. Justice Strathy (as he then was) considered this issue in Precision Fine Papers Inc. v. Durkin 2008 CarswellOnt 3219, [2008] O.J. No. 2189, 168 A.C.W.S. (3d) 487 at paragraphs 15 to 18:

Rule 57.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which came into effect on January 1, 2002, provides in part that:

(1) On the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall,

(a) fix the costs of the motion and order them to be paid within 30 days

[16] In Intercontinental Forest Products SA v. Rugo, [2004] O.J. No. 4190 (Ont. Div. Ct.), the Divisional Court (Ferrier, Ground and Pitt, JJ.) referred to the principles concerning the disposition of costs on motions for an interlocutory injunctions expressed by Borins J. in Rogers Cable TV Ltd. v. 373041 Ontario Ltd., [1994] O.J. No. 1087 (Ont. Gen. Div.), at para 4:

Where it is clear that the granting of the interlocutory injunction will put an effective end to the proceedings it is appropriate for the court to make a costs order which reflects this fact and to fix the amount of costs. However, in a case such as this in which a trial is a virtual certainty the court will consider the usual alternatives: plaintiff’s costs in any event of the cause; plaintiff’s costs in the cause; costs in the cause; or costs reserved to the trial judge.

[17] The Divisional Court stated, however, at para 3:

It is our view that the Rogers Cable TV Ltd. decision does not establish a mandatory rule but that the residual discretion of the judge with respect to costs is preserved and that, in a particular case, the motions judge may determine to award costs on a motion for an interlocutory injunction payable forthwith, rather than reserving costs to the trial judge. We have been referred to authorities where the motions judge did so, in one case after specifically considering the principles enunciated in Rogers Cable TV Ltd. . See Rogers v. Sudbury (Administrator of Ontario Works), 57 O.R. (3d) 467.

Subsequent interlocutory injunction cases have reached a similar result: Erinwood Ford Sales Ltd. v. Ford Motor Co. of Canada Ltd., [2005] O.J. No. 2791, 6 B.L.R. (4th) 205 (Ont. S.C.J.); 1633406 Ontario Inc. v. McRae, [2005] O.J. No. 5592 (Ont. S.C.J.); London (City) v. Wonderland Power Centre Inc., [2007] O.J. No. 2670 (Ont. S.C.J.); Allstate Insurance Co. of Canada v. Larocque, [2008] O.J. No. 1444 (Ont. S.C.J.).

[7] The defendants submit as well that the conduct relied upon by the plaintiff for elevated costs relates to pre-litigation conduct. This submission ignores my findings that Justice Sproat’s order was breached by the defendants. In my endorsement I detailed the conduct that I found breached his order of Justice Sproat.

[8] The defendants submit that elevated costs are only appropriate where some aspect of conduct will not be addressed through damages. This is exactly what happened here. The defendants, including Christine Brandt, were found to have breached the order. The attitude of the defendants was aptly described by Jeremy Ellis in one of his affidavits where he said that the order [of Justice Sproat] went beyond what was contemplated by the partners and was profoundly unfair.

[9] The offer to settle served by Christine, was an offer to settle the proceeding, not the motion. There is also what appears to be an error, in paragraph 6 of the offer where Christine references payment of Tracey’s disbursements rather than her own. Perhaps as part of her offer, she is offering to pay the plaintiff’s disbursements. Her submission ignores the fact that on the motion, I found that Christine too had breached Justice Sproat’s order. If this matter proceeds to trial, Christine may be able to rely upon her offer to settle, but it is not applicable with respect to the interlocutory injunction.

[10] The defendants submit that the fees charged by plaintiff’s counsel are double those charged by counsel for Neil and Jeremy. The plaintiff’s counsel was called to the bar in 1985 while counsel for Jeremy and Neil was called to the bar in 2011. Often a moving party incurs more expense as their obligation in presenting a case involves more effort than responding to a case, particularly as the plaintiff has the burden of proof. I consider the way the defendants’ affidavits were drafted, failing to comply with the Rules of Civil Procedure.

[11] Counsel for Neil and Jeremy submits that the rates claimed by the plaintiff “do not accord with the Costs Bulletin which informs a full indemnity rate of $350/hr for Ms. Cummings’ experience”. I assume that counsel is referring to the "Information for the Profession" bulletin (the “Costs Bulletin") prepared by the Civil Rules Committee’s Costs Subcommittee. That particular document references $350 per hour as being appropriate on a partial indemnity basis. The Bulletin has advisory status only and I am not bound to follow it (See Davey v. Hill 2019 ONSC 13 at paragraph 13 and Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622 at paragraph 32). If I were to take the costs bulletin into consideration, it would have to be adjusted for inflation. The submissions do not contain that calculation.

[12] I have reviewed the cost outlines and in the circumstances find that it would be appropriate to order costs in favour of the plaintiff in the amount of $65,000 all inclusive. I take into consideration that full indemnity costs are usually somewhat less than 95% and partial indemnity costs are usually around 60% of full indemnity costs. I take into account the behaviour of the defendants. Seventy five percent of the costs are payable (jointly and severally) by Neil and Jeremy with the balance equally split (severally) among Tone Valeriote, Christine Brandt and Donna Sparks. The costs are payable within 30 days.

JUSTICE VAN MELLE DATE: February 17, 2022