T-1245-97
B E T W E E N:
EFFEM FOODS LTD.
Plaintiff
- and -
H.J. HEINZ COMPANY OF CANADA LTD.
(LA COMPAGNIE H.J. HEINZ DU CANADA LTEE)
Defendant
REASONS FOR ORDER RESPECTING COSTS
ON INTERLOCUTORY INJUNCTION APPLICATION
(Delivered from the Bench at Toronto, Ontario
on Thursday, July 3, 1997, as edited)
ROTHSTEIN, J.:
This is an application for costs by the successful defendant on an interlocutory injunction application. I should commence by saying that although the interlocutory injunction was denied, I did not find the application was frivolous or vexatious.
Based upon the decision of the Federal Court of Appeal in Thurston Hayes Developments Ltd. et al. v. Horn Abbot Ltd. et al. (1985), 5 C.P.R. (3d) 124, I cannot grant the defendant's application. In that case the Court stated at page 126:
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As to the question of the award of costs in any event of the cause, to make such an award at this stage, necessarily assumes that the appellants are guilty of, or are likely to be found guilty of, the infringements alleged by the respondents and, should be penalized therefor despite the fact that it is quite possible that they may successfully defend the action at trial. We do not believe that to impose such a penalty is a proper exercise of a judicial discretion. It is more appropriate, in our view, for the award to be "costs in the cause". |
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This approach applies whether the plaintiff or defendant is successful on the interlocutory injunction application. In Toronto Dominion Bank v. Canada Trustco Mortgage Co. (1992) 40 C.P.R. (3d) 68 (F.C.T.D.), Strayer J. (as he then was) states at page 70:
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Counsel for the defendant in the present case sought to distinguish this decision on the basis that it involved a successful plaintiff rather than a successful defendant at the interlocutory injunction stage. It appears to me that the rationale expressed in the passage quoted above [from Thurston Hayes] would apply equally to a successful defendant, namely, that to grant him costs now assumes that he is going to succeed at trial. After trial it may well turn out that the plaintiff was fully justified in complaining of the defendant's activities. The Court of Appeal in its decision was, I believe, declining to treat the merits of the request for an injunction pending trial as separate from the merits of the action itself. On the basis of that rationale then the defendant should not normally have its costs on the interlocutory injunction regardless of the outcome of the case. |
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Counsel for the defendant argues that costs are a matter of discretion. While this is correct, Thurston Hayes says that it would not be a "proper exercise of a judicial discretion" to award costs on an interlocutory injunction application in any event of the cause, at least not where the application is not found to be frivolous or vexatious.
Having said this, the defendant does make a compelling case that the law of costs in respect of interlocutory injunctions is evolving and that there is a rationale for awarding costs on the interlocutory injunction motion irrespective of the outcome at trial. Counsel cites Henry J. in Apotex Inc. v. Egis Pharmaceuticals et al. (1990) 32 C.P.R. (3d) 559, (Ont. Ct., (Gen. Div.)) where at page 571 he states:
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The issue on the motion is discrete - it is whether to grant an interlocutory injunction. That issue is not the issue at trial and the decision made on the motion does not fetter the judge at trail. The motions judge is concerned only to assess whether the plaintiff (in this case) has a claim or a right that the court ought to protect until trial (the substantive issue), and that the choice of remedy (an injunction) as a matter of justice or convenience ought to be granted by a court of equity in the circumstances. It is my opinion that this is a discrete issue and one to which rule 57.03 can apply as can the judicial policy mentioned. This is particularly so when the remedy is granted or refused regardless of the outcome at trial, as in most cases the issues there will be tried on perfected evidence and on the basis of credibility of conflicting testimony. |
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The same policy was endorsed by Hoilett J. in Applied System Technologies, Inc. v. Sysnet Computer Systems, Inc. (1992), 41 C.P.R. (3d) 129, (Ont. Ct. (Gen. Div.)) where at page 131 he states:
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The emerging policy in the courts of fixing costs and making them payable forthwith is receiving, increasingly, the approbation of the court. Nowhere is that policy better exemplified than in the recent decision of Henry J. in Apotex Inc. v. Egis Pharmaceuticals (1991), 37 C.P.R. (3d) 335, 4 O.R. (3d) 321, 28 A.C.W.S. (3d) 26 (Gen. Div). Apart from endorsing the above policy, Henry J. addressed an equally important point, and, that is, in fixing costs the court is not purporting to assess costs; for reasons that should be axiomatic. The fixing of costs and making them payable forthwith is an instrumentality aimed at expedition. It serves as well the twin objective and the salutary purpose of focusing the minds of litigants on the cost of litigation. |
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While I think that the policies stated by Henry J. and Hoilett J. may well be modern thinking with regard to the awarding of costs in interlocutory injunction applications, I am bound by the decision of the Federal Court of Appeal in Thurston Hayes and, for that reason, in this case, costs will be awarded in the cause.
"Marshall E. Rothstein"
Judge
Toronto, Ontario
July 3, 1997
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-1245-97
STYLE OF CAUSE: EFFEM FOODS LTD.
- and -
| H.J. HEINZ COMPANY OF CANADA LTD. (LA COMPAGNIE H.J. HEINZ DU CANADA LTEE) |
DATE OF HEARING: JUNE 30, 1997
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER BY: ROTHSTEIN, J.
DATED: JULY 3, 1997
APPEARANCES:
Mr. Brian J. Casey
Mr. James J. Holloway
For the Plaintiff
Mr. Brian W. Gray
Mr. J. Alan Aucoin
For the Defendant
SOLICITORS OF RECORD:
Baker & McKenzie
BCE Place, Box 874
2100-181 Bay Street
Toronto, Ontario
M5J 2T3
For the Plaintiff
Blake, Cassels & Graydon
Box 25
Commerce Court West
Toronto, Ontario
M5L 1A9
For the Defendant
FEDERAL COURT OF CANADA
Court No.: T-1245-97
Between:
EFFEM FOODS LTD.
Plaintiff
- and -
| H.J. HEINZ COMPANY OF CANADA LTD. (LA COMPAGNIE H.J. HEINZ DU CANADA LTEE) |
Defendant
REASONS FOR ORDER
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