DIVISIONAL COURT FILE NO.: 477/13
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
PASSMORE INC.
Applicant
– and –
SAFEDESIGN APPAREL LIMITED, FIRE SERVICE MANAGEMENT LTD., 841599 ONTARIO LTD., WILLIAM R. SPARFEL, BLUEWING INVESTMENTS INC., PAUL N. SUMMERS, BRIAN W. JONES, and MCGOVERN HURLEY CUNNINGHAM LLP
Respondents
Jim Passmore, with leave, for the Applicant
Jeffrey M. McEown, for the Respondents
HEARD at Toronto: April 23, 2014
LEDERMAN J. (orally)
1The applicant, Passmore Inc. (“Passmore”) seeks leave to appeal the Costs Order of Newbould J. (and if leave be granted, to stay the Costs Order pending appeal).
2Passmore has been engaged in an oppression remedy action with the respondents.
3Pending the trial of that action Passmore brought an application under s.108(5) of the OBCA for production of certain documents.
4The respondents brought a motion to stay that application on the ground that the subject matter of the application is already before the Court in the oppression remedy action.
5The basis of Passmore’s application was that the documents sought have not been produced in the action; and secondly, concern over potential personal tax liability to Revenue Canada.
6Newbould J. accepted the respondents’ argument that any documents sought on Passmore’s application can be the subject of a motion in the existing action and are not properly the subject of a separate application.
7Newbould J. recognized that the concern about potential liability to Revenue Canada could be a legitimate reason for Passmore to pursue the application to seek production of documents under s.4.01 of the Unanimous Shareholders Agreement. He did not dismiss the motion for the stay, but rather, he adjourned those issues to the return of the application.
8He reserved the costs of the stay motion to the judge hearing the application.
9On the return of the application, which was heard before Newbould J. on October 4, 2013, he found no merit to Passmore’s concern about potential tax liability and dismissed the application.
10He awarded costs on a partial indemnity basis to the respondents for both the “motion partially heard” on August 6, 2013 and the application. He accepted the respondents’ Costs Outline as reasonable and fixed costs at $25,800 all inclusive, payable by Passmore.
11Passmore submits that:
(a) Newbould J. made a palpable and overriding error in principle in awarding costs to the respondents including costs of the stay motion for which the respondents were unsuccessful; and
(b) That the amount of costs awarded was excessive.
12As acknowledged by Passmore in argument, leave to appeal a costs order is granted sparingly, and only in the most obvious cases where there is an error in principle or if the costs award is clearly wrong.
13Here, Newbould J. found that one of the issues raised by Passmore on the motion to stay, namely production of documents that could be sought in the action, was groundless. Therefore, the respondents were partially successful on that motion. The balance of the motion to stay and the costs thereof were reserved to the hearing of the application.
14Newbould J. found at that time, there was no basis for the second ground raised by Passmore, that is, a concern about personal liability to Revenue Canada.
15Accordingly, he found that the respondents were, in essence, successful on the application and the motion to stay.
16There was no error in principle in awarding the costs of both the application and the motion to the respondents.
17The quantum of costs was determined by Newbould J., in his discretion, after consideration of the respondents’ Costs Outline, and there is nothing before this Court to suggest that the amount was excessive or disproportionate in the circumstances.
18There is therefore no basis to grant leave to appeal and this motion for leave is dismissed.
COSTS
19I have endorsed the Record, “For oral reasons delivered, the motion is dismissed. The respondents will have their costs fixed at $3,678 all inclusive, payable by Passmore Inc. within 30 days.”
LEDERMAN J.
Date of Reasons for Judgment: April 23, 2014
Date of Release: April 25, 2014
CITATION: Passmore Inc. v. Safedesign Apparel Ltd., 2014 ONSC 2532
DIVISIONAL COURT FILE NO.: 477/13
DATE: 20140423
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEDERMAN J.
BETWEEN:
PASSMORE INC.
Applicant
– and –
SAFEDESIGN APPAREL LIMITED, FIRE SERVICE MANAGEMENT LTD., 841599 ONTARIO LTD., WILLIAM R. SPARFEL, BLUEWING INVESTMENTS INC., PAUL N. SUMMERS, BRIAN W. JONES, and MCGOVERN HURLEY CUNNINGHAM LLP
Respondents
ORAL REASONS FOR JUDGMENT
LEDERMAN J.
Date of Reasons for Judgment: April 23, 2014
Date of Release: April 25, 2014