COURT FILE NO.: CV-22-0124-00
DATE: 2022 05 17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
LIGHTBOX ENTERPRISES LTD.
David Altshuller and Eden Ifergan, for the Plaintiffs
Plaintiffs
- and -
2708227 ONTARIO INC. and 2708227 ONTARIO INC.,LIGHTBOX ENTERPRISES LTD., DONNELLY HOSPITALITY MANAGEMENT LTD., JEFFREY DONNELLY, SCOTT ROWE and REID OGDON
Adrienne Boudreau and Lauren Baker, for the Defendants
Defendants
In Writing
DECISION ON COSTS
P.A. DALEY J.
[1] The plaintiff brought a motion seeking various forms of injunctive relief as against the defendants, which was dismissed in accordance with my reasons for decision in: Lightbox Enterprises Ltd. v. 2708227 Ontario Inc., 2022 ONSC 1873.
[2] The defendants seek costs on a substantial indemnity basis or at an elevated level above partial indemnity costs for several reasons. These include that the plaintiff’s motion was ill-conceived, and it failed to adduce sufficient evidence of its claim relating to the alleged misuse of confidential information by the defendants.
[3] In response to the defendants’ position, the plaintiff disputes the defendants’ entitlement to costs above a partial indemnity level and further submits that the defendants’ case was over-lawyered and excessive time was spent in responding to the plaintiff’s motion.
[4] Further, the plaintiff asserts that as the defendants made what it describes as unfounded allegations of impropriety and fraud against the plaintiff, the successful defendants should be denied any costs with respect to this motion.
[5] Having been fully successful in responding to the plaintiff’s motion, the defendants are presumptively entitled to costs.
[6] Having considered the submissions and the costs outline of counsel on for the defendants, I cannot conclude that the defendants are entitled to costs more than proper partial indemnity costs on this motion.
[7] While the plaintiff’s motion can be described as ill-conceived and as well unsupported by a proper evidentiary record relating to the relief sought, in my view these shortcomings do not rise to reprehensible conduct that might otherwise have entitled the defendants to costs on an elevated basis. Thus, I have concluded that the defendants are entitled to partial indemnity costs.
[8] The defendants’ counsel incurred docketed partial indemnity fees including HST, of $45,240.23 relating to docketed time prior to the attendance on the motion, along with time spent in preparation and attending on the motion of $3,566.28. The defendants further incurred disbursements of $2,188.61 for costs totalling $50,995.12, inclusive of all taxes. The plaintiff’s counsel’s costs outline has docketed partial indemnity fees totalling $34,501.73, inclusive of HST which includes time docketed on attendance on the motion. The plaintiff had incurred disbursements of $5,382.57.
[9] Considering the factors set out in rule 57.01, the following factors favour the defendant:
(1) principle of indemnity;
(2) reasonable expectation of the parties as to what costs they might face if unsuccessful;
(3) importance of the issues at stake.
[10] As to the principle of indemnity, having considered the defendants’ costs outline, I am satisfied that the defendants’ counsel acted reasonably in allocating the legal work required to respond to the plaintiff’s motion in terms of the seniority of the lawyers involved and the hourly billing rates applicable. Furthermore, having considered the costs outline, I cannot conclude that there was any overlap or excessive time spent by the lawyers involved.
[11] As to the reasonable expectations of the plaintiff as to its cost exposure if unsuccessful, I am satisfied that the costs sought by the defendants should reasonably have been anticipated by the plaintiff given the serious nature of their injunction motion and the time that would necessarily be incurred by counsel for the defendants in responding to the motion.
[12] As to the importance of the issues at stake on the motion, had the plaintiff been successful in obtaining the injunctive relief sought, the defendants would essentially have been put out of business and as such the plaintiff’s motion was critical to the future of the defendant’s business.
[13] The plaintiff’s conduct and strategies as far as its motion was concerned also unnecessarily expanded the scope of the motion by seeking relief that was not available in terms of the court’s jurisdiction and as well by delivering an amended notice of motion seeking injunctive relief in relation to third-party suppliers and non-particularized so-called confidential information. This necessarily resulted in the defendants incurring additional legal costs in responding to the amended motion.
[14] Although the defendants in responding to the motion alleged fraud and dishonesty on the part of the plaintiff, no findings were made as to the merits of those allegations and as such the allegations were in no way determinative of the outcome of the motion. Thus, the allegations have no bearing on the defendants’ entitlement to costs.
[15] In the result, I am satisfied that the hourly rates and fees incurred by counsel for the defendants are fair, reasonable, and proportionate and at a level that the plaintiff should reasonably have expected to pay if unsuccessful on its motion. Therefore, the defendants are awarded partial indemnity fees and disbursements, inclusive of taxes in the sum of $50,995.12. The plaintiff shall pay to the defendants their costs in that amount within 30 days from the date of release of this endorsement.
DALEY J.
DATE: May 17, 2022
COURT FILE NO.: CV-22-0124-00
DATE: 2022 05 17
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LIGHTBOX ENTERPRISES LTD.
-and-
2708227 ONTARIO INC. and 2708227 ONTARIO INC. v. LIGHTBOX ENTERPRISES LTD., DONNELLY HOSPITALITY MANAGEMENT LTD., JEFFREY DONNELLY, SCOTT ROWE and REID OGDON
DECISION ON COSTS
DALEY J.
DATE: May 17, 2022