Southwest’s Application for an Interim Injunction was dismissed, and the parties subsequently made submissions on Costs. The Respondents sought an award of 50% of their solicitor and client fees, whereas Southwest argued for Costs in the cause or, in the alternative, Schedule C Costs or, in the further alternative, a percentage award of the Respondents reasonable solicitor and client Costs.

Southwest argued that the Rule 10.33 factors weighed in favour of Costs in the cause or reduced Costs due to the importance of the issues, the necessity of bringing the Application, and the absence of misconduct. The Court, however, was not persuaded by this argument, noting the presumption in Rule 10.29 that a successful party is entitled to costs. Further, while it was reasonable for Southwest to commence the Action and seek an injunction, this was not a sufficient reason to depart from the presumptive rule.

The Court noted that Rule 10.31 also provides alternatives for awarding costs, including awarding Schedule C costs, awarding all or part of the reasonable and proper costs, or awarding a percentage of assessed costs. The Court held that Schedule C costs would be inadequate in the circumstances, representing only 5% of the Respondents’ solicitor and client Costs. In the result, the Court found that it was appropriate to award a lump sum of $92,500, representing approximately 45% of the Respondents’ reasonable and proper Costs.