Court File and Parties

CITATION: 100 Bloor St. West v. Barry’s Bootcamp et al. 2024 ONSC 1879 COURT FILE NO.: CV-22-00680935 DATE: 20240328

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: 100 BLOOR STREET WEST CORPORATION, Applicant

AND:

BARRY’S BOOTCAMP CANADA INC. operating as BARRY’S BOOTCAMP and BBC HOLDINGS, LLC, Respondents

BEFORE: Koehnen J.

COUNSEL: Mark Dunn, Joe Latham, Kirby Cohen for the respondents, moving parties Stephen Longo, Jamie G. Walker for the responding party applicant

HEARD: December 6, 2023

Endorsement

[1] This motion arises out of an application that I decided in 2022, which is indexed as 100 Bloor Street West Corp. v. Barry’s BootCamp et al., 2022 ONSC 5054, aff’d at 2023 ONCA 247.

[2] The motion arises out of a fractious landlord-tenant relationship between 100 Bloor Street West Corporation as landlord (the “Landlord”) and Barry’s Bootcamp Canada Inc. and its parent company, BBC Holdings, LLC as tenant (the “Tenant”). As the applicant’s name suggests, the Tenant leases a unit of a larger building located at 100 Bloor St. W. in downtown Toronto (the “property”).

[3] Three issues arise for determination on this motion: (i) the proper method of calculating the respondents’ taxes on the premises they lease from the applicant: (ii) the proper calculation of occupancy expenses for the leased premises; and (iii) costs of the application and this motion.

[4] I find that the Landlord has calculated the Tenant’s realty tax allocation improperly by using two inconsistent methods rather than a single consistent method as the lease requires. Although occupancy expenses for the leased premises were supposed to be the subject of this motion, the Landlord’s new counsel says it was not aware of that. As an indulgence to the Landlord’s counsel, I will not address that issue here but will remain seized of it. With respect to costs, the Landlord shall pay the Tenant its costs of the application and this motion on a substantial indemnity scale which I fix at a total of $709,017.39 including HST and disbursements including HST and disbursements payable within 30 days.

(i) The Tax Calculation

[5] In my reasons on the application, I found that Article 6.3 of the lease provided that if the realty taxes on the property are separately assessed against individually leased premises, then the Tenant will pay realty taxes equal to the amount of the assessment for the premises it leases. If realty taxes are not separately assessed against individually leased premises, then Article 6.3 of the lease provides:

… the Landlord shall determine, in its sole and unfettered discretion, the portion of Realty Taxes attributable to the Leased Premises using such method of determination which the Landlord shall choose.

[6] The City does not issue separate assessments for the different components of the property. Instead, the Landlord receives a single tax bill for the property and then allocates taxes to the Tenant and other component parts of the property.

[7] In the lead up to the application, the Landlord had calculated the Tenant’s taxes based on the proportion that the Tenant’s square footage of retail space constituted of the total retail space on the property. This amounted to 11.878% of the retail space. The Tenant objected to this calculation because, in the Tenant’s view, it would have them paying more for realty taxes than they ought to. The Tenant came to this view because the retail space it occupied was less valuable than the retail space occupied by other tenants. The other tenants have premises facing on to Bloor Street in a section of high-end retail premises often referred to by realtors as the “mink mile”. The Tenant’s premises are on the second floor of the building and have no access from Bloor Street. The Tenant’s premises are accessed from the back of the building or through an interior courtyard.

[8] The Tenant proposed that realty taxes should be calculated based on what was referred to as the “working papers method”. The working papers method uses the working papers of the Municipal Property Assessment Corporation (“MPAC”), the body that calculates realty taxes in Ontario. MPAC calculates the tax bill for the property by attributing a value to each of its component parts in its working papers and then aggregating those values to come up with the property value for purposes of assessment. MPAC then multiplies that value by the tax rate to arrive at the tax applicable to the property as a whole.

[9] The MPAC working papers indicate that the value of the premises the Tenant occupies amount to between 4.06% and 5.06% of the value of the property. As a result, ascribing taxes based on 5% of value would result in a significantly lower tax bill for the Tenant than ascribing taxes based on 11.878% of the square footage of the retail space.

[10] In my earlier reasons I found that both the proportionate share and the working papers approaches were reasonable and commonly used methods. Given that the lease gave the landlord “sole and unfettered discretion” about how to calculate the taxes, I found that the Landlord was entitled to use the proportionate share method if it wanted to do so.

[11] A related issue in the application which is also relevant to this motion is the responsibility for realty tax attributable to the underground parking garage at the property. At the time of the application, the Landlord had charged the retail tenants for all of the realty tax that was attributable to the parking garage. I found that the Tenant’s lease precluded the Landlord from charging the Tenant any taxes for the parking garage. As a result, the Landlord was required to calculate the taxes attributable to the parking garage and remove those from the tax bill before allocating taxes to the Tenant. This arises from Schedule “H” of the lease which provides:

4. Parking Notwithstanding anything contained herein to the contrary, the Tenant hereby acknowledges and agrees that the Leased Premises does not include a license or any other interest whatsoever in any parking facilities on or adjacent to the Lands and/or the Development and that same is not included in the Rent paid pursuant to the terms hereof.

[12] Rent is defined in Article 2.1 (aaa) as meaning: “all payments and charges payable” under the lease, “including without limitation, the Base Rent and Additional Rent.” Additional Rent is defined in Article 2.1 (a) of the Lease as meaning, among other things, Occupancy Costs. Occupancy Costs are in turn defined in Article 5.3 of the Lease as including the Tenant’s Share of realty taxes. As a result, the end effect of paragraph 4 of Schedule “H” is that realty taxes referable to the parking garage cannot be included in the realty taxes the tenant is required to pay.

[13] The Landlord has now re-calculated the Tenant’s taxes. The Tenant objects to the calculation.

[14] As before, the Landlord has charged the Tenant realty taxes based on its 11.8% proportionate square footage of the retail space which I found the Landlord was entitled to do.

[15] Before attributing any taxes to the Tenant, the Landlord was required to remove taxes attributable to the parking garage. When the Landlord calculated the taxes attributable to the parking garage, however, it used the working papers method. This has the net effect of ascribing a much higher portion of the overall tax bill to the Tenant than would have been the case if the Landlord had used a proportionate calculation based on square footage for both the parking garage and the Tenant’s space.

[16] The total retail space comes to 56,314 ft.² of which the Tenant occupies 6,689 ft.² or 11.88%. The parking garage occupies 28,000 ft.². Thus the total square footage of the property comes to 84,314 ft.² of which the tenant occupies 6,689 ft.² or 7.93%. Using the square footage approach, the parking garage’s proportionate share of taxes would have been 33.2%. Using the working papers method, the taxes attributable to the parking garage are 5.3% because, in MPAC’s working papers, the parking garage accounts for 5.3% of the value of the property’s value.

[17] In my view, the Landlord’s method of calculating taxes is not appropriate. It in effect is mixing and matching calculation methods to come up with the maximum tax rate attributable to the Tenant.

[18] Although the Landlord has “sole and unfettered” discretion about the method to use to calculate realty taxes, the lease also requires the Landlord to act reasonably in exercising that discretion. More specifically, section 6 of Schedule H to the lease provides:

The Landlord agrees that whenever in this Lease and any schedule thereto its consent, approval, authorization, determination or opinion is referred to, such consent, approval or authorization shall not be unreasonably withheld or delayed and such determination and opinion shall be made and given on a reasonable basis.

[19] In my view, the Landlord’s calculation of taxes is not reasonable.

[20] Section 6.3 of the lease which gives the Landlord the ability to calculate realty taxes provides:

the Landlord shall determine, in its sole and unfettered discretion, the portion of Realty Taxes attributable to the Leased Premises using such method of determination which the Landlord shall choose

[21] The lease allows the Landlord to use “such method” as it may choose. It does not allow the Landlord to use such “methods” as it may choose.

[22] Article 6.3 requires the Landlord to use a single method to calculate taxes attributable to the Tenant and use that same method in all components of the calculation. Calculation of the Tenant’s realty tax bill involves a single calculation exercise. That calculation has two parts: calculating taxes attributable to the parking garage and then calculating taxes attributable to the Tenant’s space. A single calculation should use a single method. The Landlord seeks to use the working papers method for the first part of the calculation but then use the proportionate square footage method for the second part of the calculation. This in effect, has the tenant paying for taxes that would be attributable to the parking garage had the Landlord used a single, consistent method of calculation. I note here that the landlord strenuously resisted the working papers method during the application. The Landlord cannot have it both ways.

[23] The Landlord raises several arguments in opposition to this view.

[24] The Landlord first argues in paragraph 45 of its factum that its interpretation is supported by Clause 2.1(vv) of the lease which defines Proportionate Share and provides that it must be calculated as the percentage that the Tenant’s rentable area forms of the total retail component.

[25] I do not follow the logic of that argument. The definition of Proportionate Share in clause 2.1 (vv) has nothing to do with the calculation of taxes. The concept of Proportionate Share is used in the lease to attribute operating expenses. This becomes clear in section 5.3 of the lease which provides that the Tenant shall pay “the Tenant’s share of Realty Taxes and the Tenant’s Proportionate Share of Operating Expenses…” In other words, operating expenses must be determined by proportionate square footage. Taxes can be determined on another basis but do not have to be. It makes sense to attribute operating expenses like heating, electricity, cleaning costs etc. based on square footage because those expenses are directly related to size. Although realty tax can be seen as being related to size, it can also be seen as relating to value. Indeed, the fact that s. 5.3 speaks of charging the Tenant its share of realty taxes and not its Proportionate Share leaves it open to use one of a variety of possible methods.

[26] The Landlord then argues further in paragraph 45 of its factum that “because Clause 1.4 defines the Retail Component as the first two (2) levels of the property and does not include any below-grade space, the realty taxes attributable to the leased premises and parking garage cannot be calculated using the same methodology since the latter is entirely below-grade.” (Emphasis in original)

[27] Once again, I do not understand the logic of the argument. The fact that the retail component of the property is defined as the first two levels in no way means that taxes attributable to the parking garage “cannot” be calculated using the same method as is used for the retail premises.

[28] The Landlord argues further that using the proportionate square footage calculation for the parking garage would lead to an absurd result. It would have approximately 32% of the tax burden attributed to the parking garage when it reflects only 5.3% of the value of the building. If that is absurd, it is an absurdity of the Landlord’s own making. The Landlord could avoid the problem by adopting the working papers approach for both the parking garage and the Tenant’s premises.

[29] Although the Landlord now complains about the disparity between value and tax burden, the Landlord was content to impose a disproportionate burden on the Tenant. During the application, it was common ground that the Tenant’s space amounted to between 4.06% and 5.06% of the building’s value. The parking garage holds 5.3% of the building’s value. It is therefore worth more than the Tenant’s premises. However, on the Landlord’s allocation of taxes, $160,000 would be attributed to the parking garage and $339,000 would be attributed to the Tenant. In other words, the tenant would be faced with a tax bill twice as large as the parking garage even though its premises are worth less.

[30] The Landlord then argues that parking garages are valued using the income approach to value which involves applying a certain price per parking stall. The Landlord points out that even the Tenant’s expert agreed that the income approach was appropriate to value parking garages. This income approach leads to the parking garage’s valuation in the MPAC’s working papers. Once again, the inconsistency is of the Landlord’s own making. The Tenant’s expert supported the income approach not just for parking garages but also for the retail spaces because it led to the working papers approach, which he felt was the more appropriate method on which to calculate realty taxes.

[31] Although the Landlord advocates the working papers approach for the parking garage because it is based on the value that MPAC ascribed to the parking garage, its counsel admitted in oral argument that MPAC has also ascribed a value to the Tenant’s premises in its working papers.

[32] If the landlord does not like the result of having to use the proportionate square footage method as the single consistent method to calculate the Tenant’s taxes, it has the choice of reverting to the working papers method. It must, however, use one method for the entire calculation.

(ii) Calculation of Occupancy Costs

[33] The issue concerning occupancy costs arises out of Article 5.9 of the lease. It provides that the Tenant is obligated to pay occupancy costs each year based on the Landlord’s projected expenses. The landlord is then required to deliver a reconciliation to the Tenant no later than 90 days following the Landlord’s receipt of its final realty tax bill and insurance invoice. The reconciliation reconciles the projected expenses to actual expenses. In the event of a deficiency, the Tenant is obliged to pay the difference. In the event of a surplus, the Landlord can either refund the amount to the Tenant or give the Tenant a credit on its rent account.

[34] On the application, the Landlord asked me to terminate the tenancy because, among other things the Tenant had allegedly not paid its occupancy costs. I dismissed that claim finding that the Landlord had not complied with its obligations under the lease to deliver a proper reconciliation and set up a timeline by which the Landlord was required to do so.

[35] In its factum, the Tenant asks for a declaration that it does not owe any further amounts on account of occupancy costs for the period covered by the reconciliation that the Landlord delivered on September 16, 2022.

[36] The Landlord objects to this relief because it says that the Tenant did not ask for it in its notice of motion. The Landlord submits that a notice of motion must state the precise relief being sought. [1]

[37] The Tenant says its request for relief responds to a notice of motion that the Landlord had delivered in advance of the case conference at which this motion was scheduled. In that notice of motion, the Landlord asked that the tenant be ordered to pay $902,000 in occupancy costs. In my endorsement of November 16, 2022 I declined to schedule a motion as the Landlord requested because the Landlord’s counsel was “unable to explain the breakdown of his client’s expense claims and explain how the tax claim incorporates the directions contained in my reasons.” I ordered a further case conference for December 16, 2022 to give the parties time to resolve the issues. There was no resolution by December 16, 2022 as a result of which I scheduled the motion. While I would have thought that it was implicit in my endorsement of December 16, 2022 that the motion would deal with all outstanding issues, the endorsement does not specifically say that. Counsel for the Landlord, who is different than counsel who argued the application and who attended the two case conferences, says they thought the only issue to be addressed on the motion was the tax calculation. I am inclined to give Landlord’s counsel the benefit of the doubt and will not address operating expenses in these reasons, even though in my view, the motion was scheduled to address them.

[38] That said, I note that the Landlord appears to have taken the position in discussions with the Tenant that once it produces a document that it refers to as a “reconciliation,” that is the end of its obligation. I disagree. The Landlord cannot simply produce incomprehensible documentation, call it a reconciliation and demand payment of occupancy costs. What the Tenant has directed me to in its record as the Landlord’s purported reconciliation is, to my eyes, incomprehensible. As noted, the landlord’s own counsel could not explain it at the case conference of November 16, 2022. In addition, the Tenant has raised a number of significant issues concerning the reconciliation and its accuracy in paragraphs 53 to 65 of its factum.

[39] The lease obliges the landlord to “keep proper and sufficient records and accounts of all Occupancy Costs.” Presumably those records are there to ensure that Occupancy Costs are properly calculated. A tenant is, in the appropriate circumstances, entitled to access those records to satisfy itself that it is being charged proper occupancy costs. In the circumstances of this case, where the occupancy cost question has gone unanswered for several years, where the purported reconciliation is incomprehensible and where the tenant has raised legitimate questions about the charges, the tenant is entitled to a detailed examination of those costs.

(iii) Costs

[40] This cost order addresses costs of both the application and this motion.

[41] On the application the Landlord seeks costs on a partial indemnity scale which it asks me to fix at $126,470.65. It says it is entitled to costs because it succeeded on the application by obtaining a ruling that it was entitled to charge the Tenant taxes on a proportionate share basis which the Landlord says the Tenant had “steadfastly objected to pay.”

[42] In my view, the Landlord is not entitled to costs of the application; rather, the Tenant is entitled to costs of the application on a substantial indemnity scale. The reasons for this require some background to the application.

[43] The differences over tax calculations and occupancy costs were relatively long-standing between the parties. The Tenant had tried to resolve those differences through discussion as early as 2020. The Landlord asked that those discussions be postponed until its appeal of a tax assessment had been completed. The Tenant complied. After the tax appeal was resolved, the Tenant again raised the issue. At that point, the Landlord promised that it would provide the Tenant with “options” to address the tax issue. The Landlord never did so.

[44] Instead, on April 26, 2022 the Landlord, without any forewarning, demanded payment of approximately $1 million for taxes and operating expenses within 5 days failing which it would terminate the lease and evict the Tenant. This forced the Tenant to retain around-the-clock security guards to prevent an eviction and to obtain an interlocutory injunction in very short order. Vermette J. granted the injunction but left costs to be determined in the cause.

[45] The main issue on the application before me was whether the Landlord was entitled to terminate the lease. I dismissed the Landlord’s application to do so. By the time the application was argued, it had become clear that the Landlord’s motivation to terminate the lease had nothing to do with tax calculations or unpaid occupancy costs. Rather, the Landlord had received a better offer for the Tenant’s premises from Harry Rosen, a well known, high end men’s clothier. In my reasons dismissing the Landlord’s application to terminate the lease, I noted at paragraph 64:

… I am also troubled by the Letter of Intent with Harry Rosen. In the absence of any further explanation from the Landlord, I infer from the record before me that the notice of termination was not motivated by any breach of the lease on Barry’s part but was motivated by a presumably better offer for the premises from Harry Rosen.

[46] In that light, the application before me was not truly about tax calculations. Tax calculations were merely the tool for the Landlord to achieve its real goal: replace the Tenant with Harry Rosen.

[47] In addition to the issue of whether the Landlord could terminate the lease, the initial application also involved a determination of whether the Tenant should pay any taxes on account of the parking garage, whether realty taxes should be calculated based on proportionate square footage or the working papers method and whether the Tenant was obliged to pay the occupancy costs that the Landlord demanded.

[48] I found that the lease precluded the Landlord from claiming any realty taxes referable to the parking garage from the Tenant.

[49] With respect to the calculation of realty taxes, I found that the discretion that the lease afforded the Landlord allowed it to calculate taxes on the basis of square footage. Although the Landlord “succeeded” on that one issue, the issue turns out to have been a ruse. The Landlord did not disclose on the application that it intended to use two inconsistent methods to calculate the Tenant’s realty taxes: the working papers method to back out the taxes referable to the parking garage but the proportionate share method for the balance of the calculation. Given the result on this motion, I would expect the Landlord to recalculate taxes entirely on the working papers method. Bluntly put, the argument on this issue during the initial application was a waste of the court’s and the Tenant’s time.

[50] With respect to occupancy costs, I dismissed the Landlord’s claim because it had not complied with its own obligations under the lease to provide a reconciliation of estimated to actual costs. The Landlord has still not complied with its obligations under the lease with respect to occupancy costs.

[51] The Landlord argues that substantial indemnity costs are reserved for reprehensible conduct. I agree. In my view, the Landlord’s conduct has been reprehensible and is worthy of deterrence and denunciation through an elevated costs order.

[52] The Landlord lured the Tenant into a state of complacency about taxes and costs, changed course without notice, tried to evict the tenant, tried to change the locks on the Tenant’s premises (a step thwarted by the Tenant’s security guards), devised a series of legal arguments as ruses to evict the tenant, and then pursued a strategy of slicing and dicing legal issues so that the court did not have the full picture when deciding the issues it did. That amounts to reprehensible conduct.

[53] The tenant seeks costs of the application on a substantial indemnity scale which it asks me to fix at the $508,560.06 plus disbursements of $125,706.30 for a total of $634,266.36.

[54] I turn now to the factors set out in rule 57.01 relevant to awarding costs.

[55] The Tenant was, in effect, entirely successful on the application. As noted above, although the Tenant was technically unsuccessful on the issue of proportionate tax calculation, that issues appears to have been a ruse and I expect the Landlord to reverse course and now adopt the working papers method if it is acting in a financially rational manner.

[56] The application was made complex by the Landlord. The true underlying issue was simple: Can a landlord evict a tenant with a valid lease simply because the landlord has received a better offer for the premises? The answer to that is obviously no. No court hearing was required to answer that question. The landlord hid that true question behind a series of more complex issues that required a close analysis of lease language and expert reports dealing with proper valuation methods.

[57] The issue was of vital importance to the Tenant. The Tenant had invested $2 million into outfitting the premises. Not only would the tenant have lost that investment had it been evicted, it would also have lost a desirable location for a business that targets the financial demographic that the Tenant does.

[58] As already noted, the Landlord engaged in a series of steps that unnecessarily lengthened the proceedings. It failed to disclose the full picture to the court. Had the Landlord disclosed the full picture to the court and revealed that it intended to apply two inconsistent methods when calculating the Tenant’s realty tax burden, the result on the application would have been different on the tax calculation issue and this motion could have been avoided.

[59] In my view, the Landlord’s conduct in trying to evict the tenant and forcing an injunction was improper, vexatious and unnecessary. Its subsequent conduct in failing to disclose the full picture to the court was equally so.

[60] For all the foregoing reasons, an award on a substantial indemnity scale is warranted.

[61] Turning to the quantum of the cost award. The amount of costs sought on the application is high. That said, an injunction is an expensive proceeding, especially for the moving party. The application in its entirety was hotly contested. The parties filed 3 fact affidavits and four expert affidavits. Each witness was cross examined. Both parties filed detailed factums. Argument took a full day.

[62] Not only did the Tenant incur significant legal fees, it also had to incur the costs of security guards on the premises to prevent the Landlord from changing the locks which the Landlord attempted to do and which the security guards thwarted.

[63] The Landlord argues that the Tenant’s costs are unreasonable and that costs must be awarded in an amount that is within the reasonable expectations of parties. The Landlord points to the size of the Tenant’s legal team. It included a lawyer with 31 years experience, a second lawyer with 15 years experience, a third lawyer with 14 years experience, a fourth lawyer with 7 years experience and a fifth lawyer with one years experience. The Landlord submits that this is beyond an opponent’s reasonable expectations of what it may have to pay on account of costs.

[64] I note that the lawyer with 15 years experience appears to have docketed only 1.2 hours on the file. The most senior lawyer on the file did not have a speaking role during the application. I would be inclined to remove his time from the costs for the application itself. I allow his time for the injunction because injunctions are brought under more urgent circumstances that require more manpower. By the time the injunction hearing was over this became more of an ordinary course application which did not require the same degree of manpower that an injunction does. The most senior lawyer’s time comes to $46,457.46 including HST. If I deduct his time, costs and disbursements come to $587,808.90. I award the Tenant costs in that amount for the application and the injunction leading to it.

[65] Turning to the costs of this motion, the landlord submitted a costs outline with fees of $39,561.75 on a partial indemnity scale and $57,715.20 on a substantial indemnity scale. The Tenant submitted a costs outline coming to $93,206.41 on a partial indemnity scale and $138,003.40 on a substantial indemnity scale.

[66] The Tenant has been entirely successful on the motion and should be awarded its costs. In my view, costs of the motion should also be awarded on a substantial indemnity scale. As can be gleaned from my earlier comments, this motion was not necessary. Had the Landlord given the court the full picture on the application of how calculate the Tenant’s tax liability, the issue could have been dealt with then and there and this entire motion would have been unnecessary.

[67] Further, this motion was additionally wasteful because of a case conference I held on December 16, 2022. In the endorsement arising out of that case conference I stated:

17. As noted in the case conference, I would urge the parties to take a significantly more pragmatic view of the need for the motion. The motion will be costly and time-consuming. Unless the landlord has a crisp, clear explanation of why it should be permitted to use inconsistent methods to attribute taxes to various parts of the building for purposes of calculating Barry’s tax liability, it is likely to fail on the motion. The landlord was unable to do so at today’s case conference even though it was told in advance that it would be required to do so and even though it knew of the issue before the case conference. The fact that this method of calculating taxes on the parking lot is a common method is in all likelihood irrelevant. What matters is the way Barry’s lease says taxes should be calculated and whether the landlord should be entitled to apply different methodologies to different parts of the building.

[68] The Landlord nevertheless proceeded in insisting that a motion be argued to address the issue but had no crisper or clearer explanation for its position at the motion than it did at the case conference.

[69] With respect to the quantum of costs for the motion, I note again that the most senior lawyer has time on the file but played no role in oral argument. I would deduct his time which, with HST, comes to $16,794.91. That reduces the Tenant’s total cost to $121,208.49.

[70] I recognize that even that reduced costs amount may seem disproportionate given that, as noted above, the tax issue was directionally between a tax allocation of approximately $160,000 or $339,000. Courts have, however, recognize that litigation over smaller amounts is disproportionately expensive, especially when the dispute involves issues that take more time to simplify and reduce to their essence.

[71] For the foregoing reasons I award costs of the motion in favour of the Tenant which I fix on a substantial indemnity scale at $121,208.49.

Disposition

[72] For the reasons set out above, I award the Tenant its costs on a substantial indemnity scale which I fix at $587,808.90 for the injunction and the application and at $121,208.49 for the motion for a total payment of $709,017.39 payable within 30 days.

[73] To avoid any further separation of issues with respect to operating expenses, I will remain seized of that issue. If either party requires a hearing to address that issue they may contact my judicial assistant to schedule a case conference to discuss the issue and, if necessary, schedule a motion.

[74] In the event the Landlord seeks to collect further amounts from the Tenant on account of the disputed operating expenses, the Landlord is required to deliver an easily understandable reconciliation of projected to actual expenses. To the extent the Tenant reasonably requires supporting documentation, the Landlord is required to provide it. In addition, the Landlord will be obliged to explain the reconciliation in paragraphs 53 - 65 of its factum.

[75] In closing, I recognize that the costs award here is high. In my view it is nevertheless appropriate. The Tenant has been put to extraordinary costs unnecessarily. The Landlord chose to play “hardball.” That has resulted in a waste of both party and judicial resources. That is behaviour that the courts must to discourage. The only means of doing so is through meaningful cost awards. The Landlord is a sophisticated party. It should know that “hardball” is a risky endeavour that can backfire. To the extent that the Landlord is unhappy with the result, it is entirely the author of its own misfortune.

Date: March 28, 2024 Koehnen J.

Footnotes

[1] Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. 37.06; Codispodi v. Billard, 2017 ONSC 6456, paras 19-21.