The Plaintiff filed an Originating Application seeking injunctive relief against the Defendant companies (the “Injunction Application”). The Defendants also made an interim Application to Compel Undertakings (the “Undertakings Application”). The Defendants were not successful on the Undertakings Application, and the Injunction Application was ultimately abandoned. The Defendants sought Costs of the Action.

The Defendants argued that the Court should award McAllister costs between 40-50%, claiming that the compensation in Schedule C of the Rules would not adequately cover their expenses in defending against the Injunction Application. The Defendants asserted that enhanced costs are warranted under Rule 10.33 due to the serious and complex nature of the Claim, which was not pursued efficiently and was ultimately abandoned. Conversely, the Plaintiff argued that the 50% discount in item 7(3) of Schedule C should apply, as the Injunction Application was neither frivolous nor vexatious. The Plaintiff also contended that neither party achieved relative success since the Injunction Application was abandoned.

The Court found that, since the Plaintiff commenced and subsequently withdrew the Action, the Defendant companies were deemed successful for costs purposes. However, Justice Neufeld clarified that this did not mean that the Defendants were entitled to recover costs related to the unsuccessful Undertakings Application.

Justice Neufeld highlighted that Rule 10.31(1)(b)(ii) allows the Court to grant lump-sum costs, which can be advantageous when the Court is confident that such an award would adequately compensate the parties without necessitating further disputes over detailed legal bills and expenses. Neufeld J. noted that the Defendants incurred substantial legal fees exceeding $275,000.99 to defend against the Plaintiff’s abandoned Injunction Application, making this an appropriate situation for the Court to award a total of $75,000, representing just over 25% of the incurred fees and disbursements.