In a June 20 decision in 100 Bloor Street West Corporation v. Barry's Bootcamp Canada Inc., 2025 ONCA 2025, Justices David Paciocco, Patrick Monahan and Darla Wilson upheld a March 2024 decision by Superior Court Justice Markus Koehnen, sitting as motion judge, but allowed the costs appeal and reduced the award by 40 per cent — from $709,000 to $425,706.
The initial award represented costs arising from an injunction, an application and the motion under appeal — and stemmed in part from the motion judge’s finding that 100 Bloor’s litigation conduct was “reprehensible.” At one point, the decision noted, 100 Bloor had tried terminating the Barry’s Bootcamp lease in favour of a higher-paying tenant.
But the Court of Appeal found the costs amount unwarranted.
“Even if I had not found substantial indemnity costs to be inappropriate, I would have reduced the quantum of the award that the motion judge imposed as plainly wrong,” Justice Paciocco wrote for the panel.
“In terms of proportionality, the legal issues at stake in this case were not complex enough to warrant the costs that were ordered,” he added. “This case was essentially a disagreement over the interpretation of a lease agreement, concerning how a portion of the rent should be calculated and whether the tenant’s payments satisfied the lease obligations. It turned on a largely settled factual record. The documentary record was sizable, but certainly not extensive. The expert evidence had some complexity, but it was focused and readily understandable. The application and motions did not require significant court time. And the financial stakes reflected by the competing positions of the parties were not particularly high.”
Cynthia Kuehl, a partner with Lerners LLP who served as co-counsel for the appellant 100 Bloor Street West Corporation with Lerners colleague Gregory Cherniak, said that, although costs are discretionary, the decision is a reminder that the Court of Appeal will intervene if the quantum threatens to have a chilling effect on litigants.
“Even where the court is unhappy with litigants,” she said in an email to Law360 Canada, “parties have a right to advance their legal positions without fear that doing so will result in this type of costs award.”
According to facts detailed in the decision, it was the second Court of Appeal appearance in the longstanding legal battle between the appellant — the owner of 100 Bloor Street West in Toronto’s upscale Yorkville neighbourhood — and high-end fitness studio Barry’s Bootcamp, one of the building’s tenants and the respondent in the case.
The appeal at bar challenged the judge’s motion decision and associated costs decision in 100 Bloor St. West v. Barry’s Bootcamp et al., 2024 ONSC 1879, focusing on the method that 100 Bloor wanted to use to calculate what portion of the realty taxes on the building’s two-storey underground parking garage Barry’s Bootcamp should pay.
On the tenant’s motion, the motion judge declared that the terms of the lease required 100 Bloor to use a single methodology to calculate realty taxes attributable to both the leased premises and parking garage. The judge found that 100 Bloor’s mixed method was unreasonable and disproportionately burdened Barry’s Bootcamp, breaching 100 Bloor’s contractual obligation to make determinations reasonably.
100 Bloor appealed, arguing that the motion judge made extricable errors of law, including in interpreting the lease, by prejudicing and effectively predetermining the issue, and by finding that 100 Bloor exercised its discretion unreasonably.
The Court of Appeal rejected those arguments in the motion appeal. But on the costs appeal, it agreed in part with 100 Bloor’s assertions that the motion judge’s “real motive” finding — that the landlord was simply trying to replace Barry’s Bootcamp with a higher-paying tenant — was problematic and that the costs award was unreasonable.
Even though it was “acrimonious, pull-out-all-the-stops litigation between two well-heeled litigants,” wrote Justice Paciocco, “Barry’s bill of costs is problematic, on its face.”
“The number of lawyers and the hours spent per task are concerning,” he added. “Seven lawyers contributed more than 200 hours to Barry’s initial application and interim injunction motion, not including preparation for argument and submissions. Four lawyers spent close to 300 hours reviewing 100 Bloor’s application record, preparing the responding record, and conducting the limited cross-examinations that took place prior to the motion hearing.”
“Finally,” he added, “the costs award, if upheld, would have a chilling effect on litigation.”
The court also raised concerns about an $80,000 disbursement for “corporate counsel” made without supporting documentation. But because it was not raised by 100 Bloor, it added, it would not be appropriate to intervene.
Mark Dunn, a partner with Goodmans LLP who served as co-counsel for the respondent Barry’s Bootcamp Canada Inc. with Goodmans associate Julia Martschenko, was unable to comment.
Canadian courts have recognized in several decisions that rising legal costs themselves are a growing impediment to access to justice.
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