Court File and Parties

COURT FILE NO.: CV-20-651668 DATE: 20230623 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: COFFEE TIME (2015) CORPORATION, Plaintiff AND: 1685247 ONTARIO LIMITED and KHURSHEED A. CHOWDHRY also known as KURSHEED CHOWDDHRY, Defendants

BEFORE: Cavanagh J.

COUNSEL: James Quigley, Counsel, for the Plaintiff Khursheed A. Chowdhry, in person and representing 1685247 Ontario Ltd.

READ: June 23, 2023

Costs Endorsement

[1] On June 2, 2023, I released my endorsement on the plaintiff’s motion for summary judgment. I granted judgment in favour of the plaintiff for: (a) payment of $4,432.29 for advertising fees and royalty fees under a Franchise Agreement; (b) payment of interest on this amount pursuant to the Franchise Agreement at the rate of 24% per annum from the dates of non-payment of such fees; and (c) payment of rent arrears under a month-to-month sublease in the amount of $24,889.52.

[2] The plaintiff submits that, as the successful party, it is entitled to costs of this action on a partial indemnity scale in the amount of $17,190.

[3] The Defendant Khursheed Chowdhry is self-represented. At the hearing of this motion, Mr. Chowdhry was granted leave to represent the corporate defendant on this motion. I did not receive responding costs submissions from Mr. Chowdhry.

[4] On its motion for summary judgment, the Plaintiff claimed the amount of $241,382.18 inclusive of interest at the rate of 24% per annum to May 1, 2023.

[5] The claim for payment of rent under the sublease was based on monthly rent of $7,287.82. Invoices for monthly rent in this amount were sent by the plaintiff. After additional evidence was allowed following supplementary written submissions, it was clear that the monthly rent under the sublease had been reduced as a result of a lease amending agreement made with the head landlord. I found that the monthly rent was reduced to $5,578.68 beginning September 2017. This affected the calculation of the amount of arrears of rent under the sublease. In its supplementary written submissions, the plaintiff also agreed that in calculating its claim for arrears of rent under the sublease, it had failed to account for the rent deposit in the amount of $6,405.68. This reduced the plaintiff’s claim for payment of rent arrears.

[6] I also found that the sublease does not provide for payment of contractual interest on rent arrears, and I disallowed the plaintiff’s claim for interest on such arrears pursuant to the rate provided for in the Franchise Agreement (24%).

[7] A considerable amount of time was spent in relation to the proper calculation of rent arrears under the sublease. This time could have been avoided, or reduced substantially, if the plaintiff had accepted that the amount of monthly rent had been reduced and checked to verify that a rent deposit had been paid and given effect to the rent deposit in the calculation of the amount claimed.

[8] Among the factors in rule 57.01 of the Rules of Civil Procedure to be taken into consideration in the exercise of the Court’s discretion to award costs are (i) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding, and (ii) a party’s refusal to admit anything that should have been admitted. I find that these factors are relevant to the plaintiff’s failure to accept that the amount claimed for rent arrears under the sublease was excessive and that the sublease does not provide for contractual interest.

[9] Rule 57.05 of the Rules of Civil Procedure provides that if a plaintiff recovers an amount within the monetary jurisdiction of the Small Claims Court, the court may order that the plaintiff shall not recover any costs.

[10] The monetary jurisdiction of the Small Claims Court is $35,000. The amount of the judgment, even if contractual interest on the franchise fees is added, is less than $35,000. [1] In my view, this action should have been brought in Small Claims Court.

[11] I take these considerations into account and exercise my discretion not to award costs of this action to the plaintiff.

Cavanagh J. Date: June 23, 2023

[1] Interest on $4,432.29 at 24% from June 2018 (the month of the first arrears of fees under the Franchise Agreement) to April 2023 (59 months) is $5,230.10. When this amount is added to the amounts awarded to the plaintiff, the total amount recovered by the plaintiff would be $34,551.91. Although I have not calculated it, the actual amount owing under the judgment is less than this amount because the arrears of fees claimed under the Franchise Agreement is for the months of June, July, and August 2018, so interest on the July arrears would be calculated for 58 months, and interest for the August arrears would be calculated for 57 months. I have not yet been provided with an approved form of Judgment that includes the calculations of interest.