COURT OF APPEAL FOR ONTARIO

DATE: 20000501

DOCKET: C23819

COURT OF APPEAL FOR ONTARIO

ROSENBERG, FELDMAN AND MACPHERSON JJ.A.

B E T W E E N :

IMMOCREEK CORPORATION ) Morris Singer
) for the appellants
)
Plaintiff )
(Respondent))
)
and )
)
PRETIOSA ENTERPRISES LIMITED ) John Kelly
and RUDOLF STOLL ) for the respondent
)
)
Defendants )
(Appellants))
) Heard: December 2, 1999

On appeal from the judgment of Wilkins J. dated January 9, 1996

MACPHERSON J.A.:

INTRODUCTION

[1] The central issue in this appeal is the relationship between

corporate and personal liability in the field of investment

advice. This court has considered the relationship between

corporate and personal liability on a number of recent occasions:

see, for example, Scotia McLeod Inc. v. Peoples Jewellers Ltd.

(1995), 1995 1301 (ON CA), 26 O.R. (3d) 481 (C.A.); Adga Systems International Ltd.

v. Valcom Ltd. (1999), 1999 1527 (ON CA), 43 O.R. (3d) 101 (C.A.); Meditrust

Healthcare Inc. v. Shoppers Drug Mart (1999), 1999 2316 (ON CA), 124 O.A.C. 137;

460635 Ontario Ltd. v. 1002953 Ontario Inc. (1999), 127 O.A.C.

48; and NBD Bank, Canada v. Dofasco Inc. (1999), 1999 3826 (ON CA), 46 O.R. (3d) 514

(C.A.).

[2] In this appeal, the issue of the relationship between

corporate and personal liability arises in a pleadings context.

Specifically, what are the requirements for pleadings alleging

personal liability against a corporate director and officer in a

case where the formal legal arrangements were clearly between two

corporate entities?

A. FACTUAL BACKGROUND

(1) The parties and events

[3] The appellant Pretiosa Enterprises Limited (“Pretiosa”) and

the respondent Immocreek Corporation (“Immocreek”) entered into a

written agreement on October 18, 1997 under which Immocreek

retained Pretiosa to manage a portion of its investments on a

discretionary basis. The appellant Rudolf Stoll (“Stoll”) was a

director, officer and shareholder of Pretiosa. He had negotiated

the contract on behalf of Pretiosa with Dieter Lissmann

(“Lissmann”) who was the principal of Immocreek.

[4] Stoll had developed a technical investment tool utilizing a

computer programme which was being marketed by Pretiosa under the

name of the Stoll Monument System. It was understood by the

parties that Pretiosa would employ this system in making

investment decisions on Immocreek’s behalf.

[5] The contract between Pretiosa and Immocreek is a very

concise document - four paragraphs on a single page. The two

paragraphs that are relevant on this appeal provide:

Management fees are due and payable at the

end of each quarter and/or at the time of

termination. Should during one quarter the

management result be negative, fees are only

calculated after surpassing level where

previous profit participation was based upon.

…..

Pretiosa Enterprises Ltd. does not guarantee

that any investment(s) will result in a

profit. All investments based on our system

are at the sole risk of the client and

Pretiosa Enterprises Ltd. does not assume any

responsibility.

[6] The contract was in force from October 18, 1987 to March 16,

1990. During that time, Pretiosa made two sets of investments

which ultimately gave rise to this litigation. One set of

investments related to what the parties called “Delta shares”.

This was an investment in a small private start-up company which

was promoting the production of a revolutionary new type of

motor.

[7] The second set of investments was a series of purchases of

shares in Campeau Corporation in the autumn of 1989. The

purchases were as follows:

September 21, 1989 5000 shares at $14.50 each

September 22, 1989 3000 shares at $13.50 each

October 26, 1989 5000 shares at $8.75 each

October 27, 1989 5000 shares at $7.25 each

November 23, 1989 2000 shares at $5.375 each

[8] Both the Delta and the Campeau investments were disastrous.

The private company promoting the revolutionary new motor was a

complete sham. Immocreek lost the entire $67,500 Pretiosa

invested on its behalf in the “Delta shares”. Immocreek also

lost a substantial amount of money on the Campeau investment; in

essence, Pretiosa purchased Campeau shares at precisely the

period when Campeau Corporation was sliding into oblivion.

(2) The litigation

[9] Immocreek commenced an action against Pretiosa and Stoll in

1991. Initially, the action was limited to the “Delta shares”

transactions. Immocreek sought recovery of damages of $100,000

for breach of contract, negligence and negligent

misrepresentation.

[10] Later, Immocreek amended its Statement of Claim and sought

recovery of $167,807 which it claimed it lost on the Campeau

shares transactions. The stated legal basis for this additional

claim was breach of contract.

[11] Pretiosa and Stoll defended the action. On the question of

Stoll’s personal liability, the Statement of Defence provided:

3. The Defendant, Stoll states that he never acted in

his personal capacity with respect to his transactions

involving the Plaintiff and at all times acted on

behalf of the Defendant, Pretiosa Enterprises Inc.

[12] Pretiosa also made a counterclaim against Immocreek, seeking

$160,000 for unpaid management fees and $50,000 on profit sharing

and quantum meruit bases respecting two other transactions

unrelated to the Delta and Campeau transactions.

[13] The matter came on for trial before Wilkins J. The trial

lasted ten days. On January 9, 1996, Wilkins J. released his

judgment. He dismissed all of Immocreek’s claims arising out of

the “Delta shares” transactions, principally on the basis that

Lissmann, the principal of Immocreek, was fully aware of the

risky nature of the investment and approved it in any event.

[14] With respect to the Campeau shares transactions, the trial

judge dismissed Immocreek’s claims relating to the two September

1989 purchases. However, he found in favour of Immocreek in

relation to the three purchases of Campeau shares made by

Pretiosa in October and November 1989. The trial judge reasoned:

I am satisfied that although the 8,000 shares

in Campeau purchased in September may not

have been purchased under circumstances which

might have constituted a breach of contract

or a breach of the fiduciary relationship,

the continued retention of those shares based

upon a partial and wholly inadequate analysis

of the investment circumstances constituted a

breach of contract by Pretiosa and a breach

of the fiduciary duties owing from both

defendants to the plaintiff. In my view,

Stoll ought properly to have embarked upon a

full analysis of the fundamentals of the

corporation and it was wholly inadequate for

him to have based his investment decision on

a partial review of some of the concepts

related to that form of analysis.

…..

In making the purchases of October and

November, Stoll and Pretiosa acted in breach

of their fiduciary responsibilities to

Immocreek and, as a consequence, they are

responsible for the losses which were so

incurred. [Emphasis added.]

[15] With respect to Pretiosa’s counterclaim, the trial judge

dismissed it in relation to the profit sharing and quantum meruit

claims relating to the non-Delta and non-Campeau transactions.

However, he allowed the counterclaim on the management fee issue.

On that issue, the trial judge said:

Having regard to the conduct of Lissmann on

the subject of the preparation of statements,

it, in my view, little behooves Immocreek to

complain about the absence of statements of

account from Pretiosa during the currency of

the contractual agreement.

…..

… Having regard to the confusion surrounding

the preparation of accounts and the

differences of opinion between Dutoit and

Stoll, it is not unreasonable for Pretiosa

not to have rendered accounts until matters

could be straightened out.

This was not a circumstance where the failure

to create statements or accounts rendered the

calculation of the amounts owing for

management fees impossible. The bank

statements were provided. There was a method

of calculating the management fees owing. In

essence, all that was missing was the

rendering of a document comparable to an

invoice.

Under the circumstances, I find that there is

nothing in the conduct of the parties or the

communications between themselves to suggest

that Pretiosa would be paid anything less

than its earned management fees other than

the fact that Pretiosa surrendered any fees

for management of the plaintiff’s money

between November 1, 1987 and January 30,

1988. The contract provided that the

management fees would be due and payable

quarterly. There was no provision in that

document for the rendering of specific

invoices nor was there any requirement that

there be statements rendered. Good business

practice might suggest that the rendering of

a statement and an invoice would be more

likely to evoke payment than the failure to

do so but, in my view, the failure to render

the statements and provide invoices in no way

constituted a variation of the contractual

terms or an abandonment of the claims for

such fees as earned on a quarterly basis.

Having regard to the above finding, the

defendant shall be entitled to recover on its

counterclaim the amount of fees pursuant to

the provisions of the written contract

demonstrated to be owing from January 31,

1988 until March 16, 1990.

[16] In the result, the formal judgment of the court ordered both

Pretiosa and Stoll to pay Immocreek damages and pre-judgment

interest of $123,442.50. On the other hand, the court ordered

Immocreek to pay Pretiosa $48,358 representing management fees

and pre-judgment interest thereon.

[17] With respect to the main action, Immocreek chose not to

appeal the components of the trial judge’s decision relating to

the “Delta shares” and to the two September purchases of Campeau

shares. Initially, both Pretiosa and Stoll appealed the trial

judge’s decision relating to the Campeau shares. However, at the

appeal hearing Pretiosa abandoned its appeal, leaving only

Stoll’s appeal on this matter.

[18] With respect to the counterclaim, Pretiosa chose not to

appeal the trial judge’s decision respecting the profit sharing

and quantum meruit claims relating to non-Delta and non-Campeau

transactions. However, Immocreek appealed from the trial judge’s

decision that it owed Pretiosa management fees for the January

31, 1988 – March 16, 1990 period.

B. ISSUES

[19] There are two issues, one arising from the appeal and the

other from the cross-appeal:

1. Did the trial judge err in concluding that the defendant

Stoll was personally liable to Immocreek for breach of

fiduciary duty concerning the October and November Campeau

shares transactions?

2. Did the trial judge err in concluding that Immocreek was

contractually bound to pay management fees to Pretiosa for

the January 31, 1988 – March 16, 1990 period?

C. ANALYSIS

(1) The personal liability issue

[20] The trial judge found that the corporate defendant Pretiosa

was liable for breach of contract and breach of fiduciary duty

with respect to the Campeau shares transactions. Pretiosa

initially appealed this component of the trial judge’s decision,

but abandoned this ground of appeal at the appeal hearing. In my

view, this late decision by Pretiosa was wise. On the record

before the trial judge, his conclusion that Pretiosa breached its

contract with Immocreek was sound.

[21] The trial judge also held that the personal defendant Stoll

was liable to Immocreek on the Campeau shares issue. However,

his conclusion on this issue was grounded only in breach of

fiduciary duty. Stoll appeals this component of the trial

judge’s decision. Stoll’s principal argument is that Immocreek

did not set out this basis for liability in its pleadings and,

therefore, the trial judge erred in relying on it as the legal

basis on which to attach liability to Stoll.

[22] When Immocreek commenced its action against both Pretiosa

and Stoll, it initially claimed only in relation to the “Delta

shares” transactions. There was nothing in the original

Statement of Claim about the Campeau shares transactions. Later,

Immocreek amended its Statement of Claim to introduce a claim

relating to the Campeau shares. The new paragraphs in the

Amended Statement of Claim relating to this issue provided:

1.(e) Damages in the amount of $167,807.00

representing the loss suffered by the

Plaintiff on the sale of shares of Campeau

Corporation purchased on behalf of the

Plaintiff by the Defendant Pretiosa

Enterprises Inc. in breach of the contract

dated November 1, 1987;

…..

26. The defendant Pretiosa purchased the said

shares in negligent b reach of its

contract with the plaintiff wherein it

undertook to follow a conservative

investment policy designed to achieve

growth and income without the use of

leverage.

27. At all materials times, the defendant

Pretiosa knew or ought to have known that

the investment in Campeau Corporation

shares was contrary to the terms of the

said agreement.

28. At all material times, the defendant

Pretiosa knew or ought to have known that

the purchase of Campeau shares in the

period from September to November, 1989

constituted speculative aggressive

investment in a volatile and unpredictable

market.

29. In the period from September to November,

1989 investor reports available to the

defendant Pretiosa warned against the

purchase or holding of Campeau shares by

anyone other than speculative aggressive

sophisticated investors who were prepared

to suffer substantial loss in return for

the possibility of gain.

30. The defendant Pretiosa failed to advise the

plaintiff of the purchase of these shares

or the fact that the value of the shares

was decreasing on a weekly basis.

31. The defendant Pretiosa failed to take all

necessary steps to sell the said shares on

the basis of the market information

available to it and thereby reduce the loss

ultimately suffered by the plaintiff.

32. As a result of the breach by the Pretiosa

of the investment contract with the

plaintiff, the plaintiff suffered a direct

loss of $167,807.00 and the ultimate

disposition of the shares in the month of

March, 1990.

[23] Stoll contends that this pleading does not make out a proper

claim against him personally in two respects - there is nothing

about him in it, and there is nothing about breach of fiduciary

duty in it. On either basis, he submits, the trial judge erred

in finding him personally liable to Immocreek.

[24] Immocreek concedes that these paragraphs in the Amended

Statement of Claim, standing alone, would not justify the

imposition of personal liability on Stoll. However, Immocreek

contends that these paragraphs, coupled with some general

paragraphs from the original Statement of Claim, and one

paragraph from its Reply, are sufficient to capture Stoll. The

additional paragraphs on which Immocreek relies are paragraphs 4-

7 of the Statement of Claim and paragraph 2 of the Reply.

STATEMENT OF CLAIM

4. The defendant Rudolph Stoll (“Stoll”) was at all material

times a Director, Officer and Shareholder of the defendant

Pretiosa and the controlling mind and will of the said

corporation.

5. In or about the month of August or September, 1987 the

plaintiff, through its shareholder, Dieter Lissmann,

entered into discussions with the defendant Stoll

on behalf of the defendant Pretiosa with respect to

the management and investment by the defendants of the

funds of the plaintiff.

6. In the said discussions, the defendants specifically

represented to the plaintiff that the management of the

plaintiff’s funds by the defendants would be based upon a

conservative investment policy designed to achieve growth

and income without the use of leverage.

7. Acting in reliance upon the said representations, the

plaintiff entered into an agreement with the defendant Pretiosa

dated November 1, 1987 for the management by the defendants of

the plaintiff’s monies.

REPLY

2. With respect to paragraph 3 of the statement

of defence the plaintiff says that at all

material times the defendant Stoll was the

sole director, officer and shareholder and was

in fact the controlling mind and will of the

defendant Pretiosa Enterprises Inc. and that

he personally assured the plaintiff that he

would cause his company Pretiosa to make the

conservative investments referred to in the

statement of claim.

[25] There is no question that in some circumstances the

relationship between a financial advisor and an investor can give

rise to a fiduciary duty on the part of the financial advisor:

see Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 377. In that case, the

breach of fiduciary duty was specifically pleaded by the

plaintiff: see also Canada Trustco Mortgage Co. v. Bartlet &

Richardes (1991), 1991 7336 (ON SC), 3 O.R. (3d) 642 (Gen., Div.) aff’d (1996), 28

O.R. (3d) 768 (C.A.). The question is whether Immocreek’s

pleadings in the present case were sufficient to permit the trial

judge to address this legal issue.

(a) Pleadings re Stoll

[26] This court addressed the question of the personal liability

of officers and directors of corporations in four decisions in

1999: Adga Systems International Ltd. v. Valcom Ltd., supra;

Meditrust Healthcare Inc. v. Shoppers Drug Mart et al., supra;

460635 Ontario Ltd. v. 1002953 Ontario Inc. et al., supra; and

NDB Bank, Canada v. Dofasco Inc., supra. In Meditrust Healthcare

Inc., Labrosse J.A. reviewed the leading authorities and stated,

at p. 141:

[16] In ADGA, Carthy J.A. simply relied

upon the principles previously enunciated by

Finlayson J.A., in ScotiaMcLeod. Both

decisions stand for the proposition that a

claim in tort may proceed against directors,

officers and employees of corporations for

acts performed in the course of their duties,

provided that (1) the allegations of their

personal tortious conduct are property

pleaded and (2) the limited exception in Said

v. Butt, [1920] 3 K.B. 497, does not apply.

[Emphasis added.]

[27] I refer also to 46035 Ontario Ltd. v. 1002953 Ontario Ltd.

which, in my view, is quite similar to the present appeal. In

that case, there were alleged breaches of leases between the two

corporate parties. This led to actions and cross-actions by both

sides against their respective corporations and against one

Kallinikos, the sole shareholder and director of 460635 Ltd. The

only real issue on appeal was whether the trial judge erred in

holding Kallinikos personally liable on the basis of the

pleadings. This court held that the trial judge had erred on

this issue. Labrosse J.A. reasoned, at para. 8:

In the present case, it is not clear on the

face of the statement of claim that

Kallinikos was being sued in his personal

capacity. The allegations are general in

nature: they are against “the defendants”

(i.e. 460 and John Kallinikos). The

pleadings did not allege any negligence

against Kallinikos personally. Where the

pleading asserted that the defendants acted

tortiously, they did not assert that

Kallinikos acted in his personal capacity.

No attempt was made in the pleadings to

single out Kallinikos’ activity as an

individual. Pleadings of such a general

nature cannot properly serve as the basis for

an independent claim against Kallinkos in his

personal capacity. In my view, ‘properly

pleaded’ as it relates to personal liability

of corporate directors, officers and

employees must be read as ‘specifically

pleaded’, a separate claim must be stated

against the individual in his personal

capacity. [Emphasis added.]

[28] Applying Meditrust Healthcare Inc. and 460635 Ontario Ltd.,

I do not think that Immocreek has ‘specifically pleaded’ against

Stoll in a fashion sufficient to permit a judge to assign

personal liability to him. As in 460635 Ontario Ltd., some of

the Statement of Claim (e.g. paragraph 1) refers to “the

defendants” generally, without setting out any particulars of the

claim against Stoll personally. Moreover, in the Amended

Statement of Claim, where paragraphs 26-32 were added to raise

Immocreek’s claim relating to the Campeau shares, there is no

mention of Stoll. Indeed, in these paragraphs the claim is made

explicitly and only against the corporate defendant Pretiosa.

[29] The only pleading that even hints at a potential basis for

personal liability against Stoll is paragraph 2 of the Reply,

delivered prior to the amended claim in respect of the Campeau

shares. Putting aside the oddity of a crucial allegation by a

plaintiff being raised for the first time in its Reply, the

actual substance of this paragraph – the allegation that Stoll

“personally assured the plaintiff that he would cause his company

Pretiosa to make the conservative investments referred to in the

statement of claim” does not meet the standard of specificity of

pleadings enunciated by this court in its recent decisions.

(b) Pleadings re cause of action

[30] There is a second fundamental problem with Immocreek’s

pleadings. Unlike the pleadings in Hodgkinson v. Simms, supra,

nowhere in Immocreek’s pleadings is there a reference to breach

of fiduciary duty. It needs to be recalled that in its initial

Statement of Claim Immocreek made no claim concerning the Campeau

shares transactions. This claim was introduced through the

Amended Statement of Claim and is set out in some detail in

paragraphs 26-32. The only legal basis for the claim in these

paragraphs is breach of contract.

[31] In Kalkinis (Litigation Guardian of) v. Allstate Insurance

Co. of Canada (1998), 1998 6879 (ON CA), 41 O.R. (3d) 528 at 533-34 (C.A.),

Finlayson J.A. said:

It has long been established that the parties

to a legal suit are entitled to have a

resolution of their differences on the basis

of the issues joined in the pleadings: see

rule 25.06. The trial judge cannot make a

finding of liability and award damages

against a defendant on a basis that was not

pleaded in the statement of claim because it

deprives the defendant of the opportunity to

address that issue in the evidence presented

at trial.

See also: 460635 Ontario Ltd. v. 1002953 Ont. Inc., supra, at

pp. 50-51, and Vanek v. The Great Atlantic & Pacific Company of

Canada Limited and Beatrice Foods Inc. (1999), 180 D.L.R. (4th)

748 at 766 (Ont. C.A.).

[32] In my view, Immocreek’s pleadings fall afoul of these cases.

A cause of action grounded in breach of fiduciary duty is a

separate cause of action consisting of identifiable legal

components (e.g. special relationship, loyalty and

vulnerability): see Hodgkinson v. Simms, supra. There is nothing

in Immocreek’s pleadings dealing with these matters. Indeed, in

the most specific paragraph in its pleadings dealing with Stoll’s

personal liability, namely paragraph 2 of the Reply, the language

chosen might relate to a claim of negligent misrepresentation,

not a claim of breach of fiduciary duty.

[33] I make a final observation on the adequacy of the pleadings

issue. Following the argument of the appeal, we asked counsel

for further submissions as to whether the personal liability of

Stoll was raised in argument by counsel at the conclusion of the

trial. Those submissions appear to confirm that Stoll’s personal

liability for breach of fiduciary duty in relation to the Campeau

shares transactions was not argued before the trial judge. In

short, the closing arguments at trial reflected the pleadings -

the personal liability of Stoll was not a live issue in either

setting. It is true that there was no suggestion in this case

that the defendant Stoll was prejudiced in his presentation of

the case or that he would have led other evidence or presented

his argument differently had he been aware of the personal claim

against him in respect of the Campeau shares. However, based on

both the pleadings and on the oral argument, it appears that the

plaintiff’s pleadings accurately reflected its view of the action

that it was not pursuing a claim against the defendant Stoll

personally in respect of the Campeau shares. In those

circumstances, it is not unfair to hold the plaintiff to its

pleadings and argument at trial.

(c) Conclusion

[34] The initial discussions and negotiations took place between

Dieter Lissmann and Rudolf Stoll, two sophisticated businessmen.

They reached an agreement and entered into a formal contract.

For tax reasons, the contract was between two corporate entities

controlled by the two men. One of the normal consequences of

this type of arrangement, a consequence well-known to practically

every business person, is immunization against personal exposure

if the company does something wrong.

[35] In this case, Immocreek, which took advantage of its own

corporate identity, seeks to ignore Pretiosa’s corporate identity

to get at Stoll. This is not impossible. However, the case law

requires that if a party wants to seek damages for personal

liability in a case where its prima facie relationship is with a

corporation, the party must plead clearly the basis for such

relief. The pleadings must address specifically the cause of

action asserted against the personal defendant and why he or she

is being sued separately from the corporation. Immocreek’s

pleadings in this case failed on both counts. Hence, although

the trial judge was correct to impose liability on the corporate

defendant Pretiosa, he erred when he imposed joint liability on

the personal defendant Stoll.

(2) The Management Fee Issue

[36] Immocreek cross-appeals against the trial judge’s finding

that it was obligated to pay Pretiosa management fees for the

February 1, 1988 – March 16, 1990 period. For ease of reference,

I set out again the paragraph in the contract relating to

management fees:

Management fees are due and payable at the

end of each quarter and/or at the time of

termination. Should during one quarter the

management result be negative, fees are only

calculated after surpassing level where

previous profit participation was based upon.

The actual fee Pretiosa was permitted to charge was 10 percent

of profits from its investments on Immocreek’s behalf.

[37] Pretiosa never charged a management fee during the life of

the contract. Nor did it present an account when the contract

terminated on March 16, 1990. Instead it submitted an account,

based on the quarterly option, when it filed its Statement of

Defence and Counterclaim in this action.

[38] Immocreek submits that the fact that Pretiosa did not seek

management fees on a quarterly basis during the life of the

contract (there were profits in the early quarters) indicates

that Pretiosa chose not to receive those fees on a quarterly

basis, but elected instead to recover fees based on the profit,

if any, which had been made at the time of termination of the

contract. Since, at termination, the Immocreek account was in a

substantial loss position, no management fees are payable.

[39] The trial judge carefully reviewed the history of the

contract. He found that there was a great deal of confusion, and

even conflict, about how accounts were to be prepared and

rendered. He found as a fact that this issue was not resolved

until January 4, 1990. The trial judge observed:

Having regard to the conduct of Lissmann on

the subject of the preparation of statements,

it, in my view, little behooves Immocreek to

complain about the absence of statements of

account from Pretiosa during the currency of

the contractual agreement.

[40] The contract was terminated on March 16, 1990, less than a

quarter after January 4, 1990. Accordingly, the trial judge

concluded that both options for billing management fees were open

to Pretiosa. Its election of the quarterly option was permitted.

[41] I can find no fault with the trial judge’s reasoning or

conclusion on this issue. Hence, I would dismiss Immocreek’s

cross-appeal, subject to a minor variation. The parties to the

appeal are agreed that the trial judge awarded Pretiosa $3,887

more than it was entitled to receive by way of management fees.

DISPOSITION

[42] The trial in this matter lasted 10 days. The trial judge

wrote a careful and comprehensive 61-page decision dealing with a

large number of claims in the action and cross-action. The

parties chose not to appeal the vast majority of the trial

judge’s conclusions. Indeed, one defendant ultimately appealed

nothing. The plaintiff and the other defendant each appealed on

one issue. That is the context within which this appeal took

place.

[43] I would allow the appellant Stoll’s appeal on the issue of

personal liability.

[44] I would allow the cross-appeal, but only to the extent of

reducing the trial judge’s calculation of the management fees

owing to Pretiosa by $3,887.

[45] The appellant Pretiosa abandoned its appeal only at the

appeal hearing. Accordingly, the respondent was required to

prepare for this component of the appeal. The appellant Stoll

was successful on its appeal. The respondent Immocreek was

largely unsuccessful on its cross-appeal. It succeeded on a

relatively minor calculation issue which was agreed to by the

appellants. In these circumstances, each side (the appellants

were represented by the same counsel) should bear its own costs

of the appeal and the cross-appeal.

Released: May 1, 2000 “J.C. MacPherson J.A.

“I agree M. Rosenberg J.A.”

“I agree K. Feldman J.A.”

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