



COURT OF APPEAL FOR ONTARIO

CITATION: Subway Franchise Systems of
    Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 243

DATE: 20210414

DOCKET: C67852

Brown, Zarnett and Thorburn
    JJ.A.

BETWEEN

Subway Franchise Systems of Canada, Inc.,
    Subway IP Inc., and

Doctors
    Associates Inc.

Plaintiffs (Appellants)

and

Canadian Broadcasting Corporation,
    Charlsie Agro,

Kathleen Coughlin, Eric Szeto
and Trent
    University

Defendants
    (Respondents)

William C. McDowell, Sana Halwani
, Paul-Erik Veel and Brendan F. Morrison, for the appellants

Christine Lonsdale, Gillian Kerr and
    William Main
, for the respondents Canadian Broadcasting
    Corporation, Charlie Agro, Kathleen Coughlin and Eric Szeto

Heard: June 25, 2020 by video conference

On appeal from the order of Justice Edward
    M. Morgan of the Superior Court of Justice, dated November 22, 2019, with
    reasons reported at

2019 ONSC 6758
.

COSTS ENDORSEMENT

[1]

By reasons dated January 18, 2021, this court allowed the appeal of
Subway Franchise Systems of Canada, Inc., Subway IP Inc., and
    Doctors Associates Inc. (Subway) and
held that the appellants were
    entitled to partial indemnity costs: 2021 ONCA 26, at paras. 109-110. The panel
    has considered the parties written cost submissions.

[2]

Subway seeks partial indemnity costs of $61,291.30, all-inclusive.

[3]

The respondents,
Canadian Broadcasting Corporation,
    Charlsie Agro, Kathleen Coughlin, and Eric Szeto (CBC), make two submissions:

(i)

They ask this court to reconsider its award of partial
    indemnity costs to Subway in light of the decisions of the Supreme Court of
    Canada in
1704604 Ontario Ltd. v. Pointes Protection Association
,
    2020 SCC 22, 449 D.L.R. (4th) 1, (
Pointes
)
    and
Bent v. Platnick
, 2020 SCC 23, 449 D.L.R. (4th) 45, (
Bent
) and find that Subway is not entitled to its costs
    of the appeal under the usual costs rule set out in the anti-SLAPP regime;
    and

(ii)

If
    this court maintains its award of partial indemnity costs to Subway, the
    appropriate award of costs should be in the range of $17,000.

[4]

For the reasons that follow, we do not disturb our award of partial
    indemnity costs of the appeal to Subway.

[5]

Under cost regime set out in s. 137.1 of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43, the presumptive entitlement to costs depends upon whether
    the judge dismisses the proceeding in response to the motion. If a judge
    dismisses a proceeding under s. 137.1, the moving party (i.e. the defendant) is
    entitled to costs of the motion and proceeding on a full indemnity basis
    unless the judge determines that such an award is not appropriate in the
    circumstances: s. 137.1(7). However, if the judge does not dismiss a
    proceeding, the responding party (i.e. the plaintiff) is not entitled to costs
    on the motion unless the judge determines that such an award is appropriate in
    the circumstances: s. 137.1(8).

[6]

In
Pointes
and
Bent
, the Supreme Court considered the application
    of the s. 137.1 costs regime to the appeals heard by that court:
Pointes
,
    at para. 129;
Bent
, at para. 179.

[7]

In
Pointes
, the motion judge had
    dismissed the defendants s. 137.1 motion and allowed the plaintiffs action to
    proceed. This court allowed the defendants appeal and dismissed the
    plaintiffs action. The Supreme Court reached the same conclusion as this court
    and upheld the dismissal of the plaintiffs action: at para. 97. The Supreme
    Court awarded the respondents  i.e. the defendants  party-and-party costs as
    per this Courts ordinary practice. In the result, that cost award followed
    the s. 137.1(7) cost regime to the extent of awarding costs to the defendants
    who had succeeded in dismissing the plaintiffs action. However, the Supreme
    Court did not apply s. 137.1(7)s presumptive entitlement to full indemnity
    costs, instead awarding costs on a lower scale: at para. 129. The reasons in
Pointes
do not explain why full indemnity costs were not awarded, suggesting that on an
    appeal the quantum of costs awarded lies within the discretion of the appellate
    court.

[8]

In
Bent
, the motion judge had allowed the defendants s. 137.1
    motion and dismissed the plaintiffs action. This court reversed, dismissed the
    defendants s. 137.1 motion, and allowed the plaintiffs action to proceed. The
    Supreme Court dismissed the defendants appeals, affirmed the dismissal of the
    defendants s. 137.1 motion, and allowed the plaintiffs action to proceed: at
    para. 175.

[9]

This court awarded the plaintiff, Dr. Platnick, partial indemnity costs
    of the appeal in the amount of $20,000:
Platnick v. Bent,
2018
    ONCA 851, 83 C.C.L.I. (5th) 308, at para. 5.  The Supreme Court dismissed the
    appeals from this court: at para. 178. The Supreme Court did not award any
    costs of the appeals to it, stating, at para. 179:

With regard to costs, as I said in
Pointes Protection
,
    the legislature expressly contemplated a costs regime for s. 137.1 motions.
    Indeed, s. 137.1(8) sets out a default rule that when a s. 137.1 motion is
    dismissed, neither party shall be awarded costs, unless a judge determines that
    such an award is appropriate in the circumstances. Here, no such award would
    be appropriate: I do not take Ms. Bents s. 137.1 motion to be an instance of
    frivolous motion practice to delay Dr. Platnicks defamation claim against her;
    rather, Ms. Bents use of s. 137.1  especially given the substantial
    uncertainty due to the lack of judicial guidance at the time of serving the
    motion  was a
bona fide
use of this new
    mechanism. I would award no costs.

[10]

In
Pointes
and
Bent
the Supreme Court considered the s. 137.1
    cost regime when dealing with the costs of the appeal to that court. However,
    in
Pointes
, that court departed from the presumption contained in s.
    137.1(7). This court, in its decision in
Pointes
, stated that the discretion
    to award the costs of an appeal should have due regard to the policy underlying
    the cost regime created by s. 137.1(7) and (8):
1704604 Ontario
    Ltd. v. Pointes Protection Association
, 2018 ONCA 853, 23 C.P.C.
    (8th) 350. Accordingly, under either approach, when considering the issue of
    the costs of an appeal, the discretion of the appellate court must be informed
    by the policy found in ss. 137.1(7) and (8).

[11]

In
    the present case, two factors led us to exercise our discretion to award Subway
    partial indemnity costs of its appeal. First, this has been expensive
    litigation and Subway has had to incur significant costs on both the motion
    below and the appeal in order to clear the way for the trial of its action on
    the merits. Second, the hearing of CBCs s. 137.1 motion took place slightly
    over a year after this court had released its decisions in
1704604 Ontario
    Ltd. v. Pointes Protection Association
, 2018 ONCA 685, 142 O.R. (3d) 161,
    and five other appeals involving s. 137.1. As the parties acknowledged before
    this court, the Supreme Court largely affirmed this courts approach in
Pointes
with some minor modifications:
Subway
, at
    para. 11. Accordingly, unlike the
Bent
case, the parties had the
    benefit of substantial judicial guidance on the operation of s. 137.1 long
    before CBCs motion was heard. Given those circumstances, Subway was entitled
    to some costs of its successful appeal.
[1]

[12]

As to the quantum, we conclude that an award of partial indemnity
    costs of the appeal in the amount of $40,000, all-inclusive, constitutes a fair
    and reasonable award in the circumstances, and we order CBC to pay Subway that
    amount within 30 days of the release of these reasons.

David
    Brown J.A.

B.
    Zarnett J.A.

J.A. Thorburn
    J.A.





[1]

A
    similar result was reached in another post-
Pointes/Bent
decision of this
    court:
Sokoloff v. Tru-Path Occupational Therapy Services Ltd.
, 2020
    ONCA 730, 452 D.L.R. (4th) 712, costs reported at 2020 ONCA 849.


