Court File and Parties

COURT FILE NO.: CV-22-00680874-0000 DATE: 2022-07-25

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BARRY’S BOOTCAMP CANADA INC., Plaintiff AND: 100 BLOOR STREET WEST CORPORATION, Defendant

BEFORE: VERMETTE J.

COUNSEL: Mark Dunn, Joe Latham and Kirby Cohen, for the Plaintiff Howard Wolch, for the Defendant

HEARD: In writing.

ENDORSEMENT AS TO COSTS

[1] On May 16, 2022, I released an endorsement granting the Plaintiff’s motion for an interlocutory injunction restraining, enjoining and prohibiting the Defendant or anyone acting on its behalf or under its instruction from exercising or purporting to exercise any right to re-enter the premises leased by the Plaintiff from the Defendant until the hearing of a related Application brought by the Defendant (2022 ONSC 2962). The hearing of the Defendant’s Application was subsequently scheduled for August 11, 2022.

[2] The parties were not able to agree on costs and have delivered costs submissions.

Positions of the parties

a. Position of the Plaintiff

[3] The Plaintiff seeks substantial indemnity costs in the amount of $132,910.87 or, in the alternative, partial indemnity costs in the amount of $88,713.91.

[4] The Plaintiff submits that costs can be ordered payable immediately on interim and interlocutory injunctions, even though the merits of the case have not yet been determined. It states that this is particularly true where the case for an injunction is strong.

[5] The Plaintiff argues that the motion was entirely the result of choices made by the Defendant. According to the Plaintiff, the Defendant knew that its choices would force the Plaintiff to seek an urgent injunction, and that urgent, business critical litigation is expensive. The Plaintiff’s position is that the Defendant should bear the costs of its choices.

[6] The Plaintiff states the following in support of its claim for costs on a substantial indemnity basis:

The Landlord has been high-handed and unreasonable from the outset of these proceedings. It claimed that it wanted to bring this matter before the Court, but specifically tried to stop Barry’s from doing exactly that. On May 6, 2022, Barry’s advised that it planned to bring an urgent motion for an injunction, and asked the Landlord not to take steps to re-enter the premises until it could be heard. The Landlord refused and tried to lock Barry’s out that night. This, and the conduct described above, warrants an elevated costs award. [Emphasis in the original.]

[7] The Plaintiff also argues that the Defendant further complicated matters by tendering evidence that was either inadmissible or entitled to no weight, and that this imposed further cost on the Plaintiff.

[8] With respect to the issue of quantum, the Plaintiff submits that the amount of costs that it is seeking is reasonable given the importance of the issue for the Plaintiff and the urgent nature of the motion. The Plaintiff notes that it would have suffered irreparable harm had the Defendant prevailed. In the Plaintiff’s view, three lawyers were required on the file because it was forced to operate under significant time pressure and multiple affidavits were needed to address the issues.

b. Position of the Defendant

[9] The Defendant submits that the normal costs award for an interlocutory injunction motion is costs in the cause and there is no reason to deviate from this practice in this case. The Defendant argues that it is preferable to reserve costs to the judge hearing the matter on the merits because doing so permits the court to have the benefit of hindsight and to avoid the possible injustice of awarding costs to a party for having succeeded in obtaining an order to protect their position pending a final disposition when the outcome of that final disposition reveals that the successful party’s position was not worthy of having been protected. The Defendant points out that the interlocutory injunction was not a final determination of the issues between the parties given that the Defendant has a pending Application to enforce its right against the Plaintiff under the commercial tenancy agreement and the Commercial Tenancies Act, R.S.O. 1990, c. L.7 and to regain possession of the leased premises.

[10] In the alternative, the Defendant submits that the costs sought by the Plaintiff are excessive and disproportionate and there is no justification to award costs on a substantial indemnity basis. On the issue of the scale of costs, the Defendant states that it did not engage in any reprehensible conduct. With respect to quantum, the Defendant argues that the amount sought is neither fair nor reasonable. It points out that the costs sought by the Plaintiff are almost three times greater than those incurred by the Defendant in responding to the motion. The Defendant’s Costs Outline reflects that the Defendant’s costs are $47,725.47 on a substantial indemnity basis and $31,863.66 on a partial indemnity basis. Further, in the Defendant’s view, there was no justification for the Plaintiff to be represented by three lawyers on its motion as the matter in dispute was not complex.

Discussion

[11] In Intercontinental Forest Products SA v. Rugo, 2004 33353(Ont. Div. Ct.), the Divisional Court stated the following with respect to costs on a motion for an interlocutory injunction:

[2] […] Certain principles with respect to the disposition of costs on a motion for an interlocutory injunction were stated by Borins J. in Rogers Cable T.V. Ltd. v. 373041 Ontario Ltd., [1994] O.J. No. 1087 (Gen. Div.) as follows at paragraph 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.”

[3] It is our view that the Rogers Cable 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. See Rogers v. Sudbury (Administrator of Ontario Works) (2001), 2001 28087 (ON SC), 57 O.R. (3d) 467.

[4] All such decisions however were rendered prior to the coming into force on January 1, 2002 of Rule 57.03(1), which states in part:

“On 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.”

[5] The new Rule by its terms applies to motions for an interlocutory injunction. The new Rule does not however, in our view, detract from the residual discretion of the motions judge in determining what costs order would be just. In making such determination, the judge on a motion for an interlocutory injunction should consider the principles in Rogers Cable that, in the usual case where a trial is a virtual certainty, the award of costs should be reserved to the trial judge.

[12] Given that there is no invariable rule and that the court retains discretion with respect to costs, there are interlocutory injunction cases where costs were awarded in the cause, and other cases where costs were ordered payable forthwith. The exercise of discretion in a particular case depends on the circumstances of the case. See Accreditation Canada International v. Guerra, 2017 ONSC 932 at para. 14 (Div. Ct.).

[13] In my view, the costs of this interlocutory injunction should be payable in the cause. It is a “virtual certainty” that the merits of this case will be decided by the court as the Defendant’s Application will be heard very shortly on August 11, 2022. Further, most of the evidence filed on the motion for an interlocutory injunction (and, consequently, a very significant portion of the costs incurred) related to the merits of the case and the issue of the payment of realty taxes under the lease. In the circumstances of this case, I conclude that the preferable course is to reserve the costs to the judge who will hear the Application so as to allow the court to have the benefit of hindsight and avoid the possible injustice of awarding costs to a plaintiff for having succeeded in obtaining an order to protect its position pending the determination of the rights of the parties when the outcome of the case reveals that that plaintiff’s position was not worthy of having been protected: see Quizno’s Canada Restaurant Corporation v. 1450987 Ontario Corp., 2009 31599 at paras. 9-10 (Ont. S.C.J.)

Conclusion

[14] Accordingly, I am exercising my discretion to order that the costs of the motion are reserved to the judge who will hear the Defendant’s Application.

Vermette J.

Date: July 25, 2022