COURT FILE NO.: CV-21-00672135

DATE: 20220228

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Dr. Azim Parekh, Smiles First Corporation, and Dr Parekh Dentistry Professional Corporation, Plaintiffs

AND:

Dr. Ira Schecter, DR. Michael Schecter, Schecter Dentistry Professional Corporation, Dr. Vanessa Mendes, Dr. Joseph Fava, Dr. Charles Pine, and Dr. Joseph Fava Dentisty Professional Corporation, Jane Rubin, Defendants

BEFORE: Justice Mohan D. Sharma

COUNSEL: Paul J. Martin and Frank B. Portman, for the Plaintiffs/Moving parties

Paul Fruitman and Maya Bretgoltz, for the Defendant/Respondent Dr. Ira Schecter

HEARD: February 28, 2022

ENDORSEMENT

[1] The plaintiffs were successful in obtaining an interlocutory injunction restraining the defendant, Dr. Ira Schecter, from various activities in relation to the practice of dentistry: See Parekh et al v Schecter et al, 2022 ONSC 302. This is my cost decision from the interlocutory injunction motion.

[2] The plaintiffs seek $85,163.13 in partial indemnity costs, or $110,657.06 in substantial indemnity costs, both inclusive of disbursements and HST. The plaintiffs argue that they were wholly successful in enforcing restrictive covenants, which formed part of a purchase transaction of a dental practice with $4.3 million of that cost attributed to the practice’s goodwill. They argue the issue was complex, with three days of examinations, and 6,500 pages of material relied upon for the motion. The respondent filed 37 affidavits and much of his evidence and argument was rejected by the Court.

[3] The plaintiffs argue that costs of the interlocutory injunction should be determined now, and not reserved to be payable in the cause. They note that the respondent has admitted that the injunction motion would finally determine the case.

[4] The respondent argues that a significant amount of the costs claimed by the plaintiffs relate to the interim injunction, which was generally decided in favour of the respondent. He also argues there is no basis for costs to be awarded on a substantial indemnity basis. Furthermore, as there is a mandatory arbitration clause, the next stage of the dispute will proceed via arbitration (although the parties’ agreement preserved the Court’s authority to grant injunctive relief). As such, he argues that the Tribunal with authority to determine the parties underlying claim of damages can determine costs of the interlocutory injunction in any award it makes.

[5] The respondent cites authority for the proposition that it is unusual to award costs of an interlocutory injunction motion to a plaintiff before trial because there has been no final determination of the rights of the parties: See Accreditation Canada International v. Guerra, 2016 ONSC 6184, citing Robert J. Sharpe, Injunctions and Specific Performance (Toronto: Canada Law Book).

[6] Pursuant to s. 131(1) of the Courts of Justice Act, the Court has a broad discretion when determining the issue of costs. Rule 57.01(1) sets out the factors to be considered by the Court when fixing costs.

[7] The overall objective of fixing costs is to determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant: Boucher v Public Accountants Counsel for Ontario, 2004 14579 (ON CA), [2004] OJ. No. 2634 (C.A.). In determining costs, I must consider the factors set out in rule 57.01(1), as well as the principle of proportionality set out in rule 1.04(1.1). I keep in mind the Court should seek to balance the indemnity principle with the fundamental objective of access to justice.

[8] In my view, it is appropriate to make a cost award and not defer this issue to an arbitrator. I have had the benefit of reviewing and assessing the voluminous material filed, and there would be duplicative efforts if an arbitrator were to assess costs. The rationale for deferring costs pending a final determination of this issue, in my view, is not present in this case. The respondent has acknowledged that this injunction motion would finally determine the respondent’s ability to practice dentistry. A trial would likely be many months if not years from now, and the restrictive covenants in this case expire on October of 2023. Time was of the essence to protect the plaintiffs’ purchased goodwill. Any further determination of the rights of the parties, namely damages, will be distinct from the enforcement of the restrictive covenants.

[9] I agree that the plaintiffs have not advanced sufficient arguments for the imposition of substantial indemnity costs. The respondent was successful on the interim interlocutory injunction, however, much of the material on that motion was used and relied upon on the motion before me.

[10] Having considered the parties’ arguments, and all the factors relevant when ordering costs,

I order the defendant, Dr. Ira Schecter, to pay the plaintiffs costs of the interlocutory injunction motion fixed in the amount of $60,000, inclusive of HST and disbursements.

Justice Mohan D. Sharma

Date: February 28, 2022