Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether there was an agreement to transfer a family-related business to the plaintiffs and whether unjust enrichment damages are recoverable.
• Assessment of whether the plaintiffs met the test for interim and interlocutory injunctions and continuation of a certificate of pending litigation over real property.
• Consideration of the defendants’ alleged conduct, including attempts to lay criminal charges and to liquidate assets, and whether such conduct is “egregious.”
• Evaluation of the extent and necessity of extensive litigation steps (including cross-examinations and investigations) to protect the plaintiffs’ claimed interest in business assets.
• Determination of which party was substantially successful on the key interim and interlocutory issues, guiding whether costs should follow the event.
• Fixing the appropriate quantum of costs on a partial indemnity basis under Rule 57.01, including what the unsuccessful defendants could reasonably have expected to pay and which disbursements (such as transcript costs) should be reserved to trial.

Background and parties

The litigation arises out of a dispute within the Frei family concerning control of, and interests in, a business and its assets. On one side are the plaintiffs, Carlo Frei, Sven Frei and Tannenfels Company Inc., who claim that there was an agreement under which the business would be transferred to them. On the other side are the defendants, Evelyn Frei, Ulrich Frei, Frei Family Holdings Inc. and European Warmblood Stallion Zentrum Inc., who continue to control the disputed assets and oppose the plaintiffs’ claims. The plaintiffs allege that the business and related property were to be transferred to them and that, absent such transfer or compensation, the defendants have been unjustly enriched. Central disputed issues to be tried include whether a binding agreement to transfer the business existed and whether the plaintiffs are entitled to damages for unjust enrichment based on their contributions and expectations.

Interim and interlocutory relief

Against this backdrop, the plaintiffs sought urgent protective relief to prevent dissipation of the business assets before trial. Initially, Gorman J. granted an interim injunction and a certificate of pending litigation (CPL) over certain real property on October 22, 2024. Those orders temporarily restrained the defendants from dealing with the business assets and preserved the status quo. At a later stage, Justice ten Cate heard the interlocutory motion. In reasons released on October 23, 2025 (a separate decision cited as Frei v. Frei, 2025 ONSC 6014), the court held that the interim injunction and CPL should continue in force until trial. In that earlier decision, Justice ten Cate found that there were clearly serious issues to be tried, namely whether there was an enforceable agreement to transfer the business to the plaintiffs and whether they could recover damages for unjust enrichment. The court therefore concluded that continuation of the injunction and CPL was warranted on an interlocutory basis. As part of the procedural management of the case, Gorman J. had reserved the costs of her interim motion to the judge hearing the interlocutory motion, and Justice ten Cate’s October 23 decision in turn left the costs question to be determined separately.

Allegations about conduct and evidentiary context

The evidentiary record before the court on the interlocutory and costs motions included allegations that the defendants, in response to a demand letter, attempted to have one of the plaintiffs charged criminally and may have tried to liquidate assets of the business. While Justice ten Cate emphasized that it remains for the trial judge to determine whether the defendants’ conduct was “egregious,” the existence of some evidence of these attempts was relevant to the court’s assessment of the seriousness of the situation and the need for robust interim protection of the assets. The plaintiffs also had to undertake extensive litigation steps, including investigations and cross-examinations, to obtain sufficient information about the defendants’ handling of the business and its property. Those steps, while costly, were treated as reasonably necessary to protect any potential interest the plaintiffs might ultimately prove at trial.

Costs principles on interlocutory injunction motions

The December 15, 2025 decision in Frei v. Frei, 2025 ONSC 7017 is a stand-alone ruling on costs arising from both the interim and interlocutory motions. Justice ten Cate began from the general rule in Ontario that a successful party is presumptively entitled to costs and that costs usually follow the event unless there is good reason to depart from this principle. The court noted that there is no mandatory requirement to leave all costs questions on interlocutory injunctions to the trial judge. Instead, a motions judge retains discretion to fix costs where appropriate. In exercising that discretion, courts commonly award costs where: the trial on liability is not highly probable; the plaintiff has made out a strong prima facie case; the defendants’ conduct appears particularly blameworthy; the plaintiff has been forced to incur significant effort and expense to expose or restrain misconduct; or the plaintiff has been substantially successful on the main issues in dispute. Justice ten Cate also pointed out that a motions judge is often better placed than the eventual trial judge to assess the time and resources expended on the motion and to fix fair costs for that phase of the proceeding.

Application of costs factors and assessment of success

Turning to this case, the court identified several reasons why it was appropriate to fix costs immediately rather than defer them to trial. First, there was no question that the issues to be tried are serious, including the alleged agreement to transfer the business and the unjust enrichment claim, and while the grant of an injunction was not absolutely inevitable, it was highly likely given the record. Second, although whether the defendants’ conduct was egregious is ultimately a matter for trial, the existing evidence of attempts to lay criminal charges against one of the plaintiffs and potential asset liquidation was relevant to the equities of the costs decision. Third, the plaintiffs had been required to engage in extensive litigation in order to safeguard any potential interest they might have in the business assets. Fourth, and most importantly for costs, the plaintiffs had been successful in obtaining both interim and interlocutory relief: they secured orders prohibiting the defendants from disposing of assets without providing relevant information to the plaintiffs, and the CPL over the real property was continued. Against that background, Justice ten Cate concluded that the plaintiffs were “largely successful” at both the interim and interlocutory stages and that an immediate award of costs in their favour was warranted.

Quantum of costs and final outcome to date

In quantifying costs, the court applied Rule 57.01, including the specific factor that requires consideration of what costs an unsuccessful party could reasonably have expected to pay for the steps in question. The plaintiffs sought partial indemnity costs of $66,665.59 plus disbursements of $8,025.37, supported by a costs outline. The defendants did not attack the reasonableness of these amounts directly, nor did they file their own comparison, but argued instead that any costs should be “in the cause” or at the low end of the scale. Justice ten Cate rejected the suggestion that costs be left entirely to the result at trial, finding that the plaintiffs’ substantial success on the important interim issues justified a concrete award now. However, the court also moderated the plaintiffs’ request to arrive at a figure that reflected reasonable expectations for interlocutory costs. The court awarded the plaintiffs costs of $50,000 on a partial indemnity basis plus $339 in disbursements, for a total of $50,339, while reserving the question of who should ultimately bear the cost of the cross-examination transcripts to the trial judge. As matters stand on the decisions available, the plaintiffs are the successful party on the interim and interlocutory motions, have secured continuation of the injunction and certificate of pending litigation until trial, and have obtained a total monetary award in their favour to date of $50,339 in costs, with no damages yet determined and the allocation of transcript expenses explicitly left for the trial court to decide.