DATE: 20021004
DOCKET: C35525 and C35555

COURT OF APPEAL FOR ONTARIO

RE: WASSERMAN, ARSENAULT LIMITED and THE SUPERINTENDENT OF BANKRUPTCY (Applicants/ Respondents) v. MARSHALL BRYAN SONE; MARSHALL SONE RECEIVER & TRUSTEE LTD.; ANNE LYNN SONE; RUMANEK & COOPER LTD.; CANADIAN IMPERIAL BANK OF COMMERCE; THE ATTORNEY GENERAL OF CANADA; ROSENBERG, SONE; GEARY AND COMPANY LIMITED, TRUSTEE OF THE ESTATE OF ALLAN S. ROSENBERG, A BANKRUPT; OSLER, HOSKIN & HARCOURT; WARREN SHELLY SONE, MARSHALL BRYAN SONE and PAMELA NANCY SCHWARTZBERG AS EXECUTORS AND TRUSTEES OF THE ESTATE OF ABRAHAM SONE; WARREN SHELLY SONE, MARSHALL BRYAN SONE and PAMELA NANCY SCHWARTZBERG AS EXECUTORS AND TRUSTEES OF THE ESTATE OF DOROTHY SONE and CITADEL GENERAL INSURANCE COMPANY (Respondents/Appellants)

BEFORE: WEILER, ABELLA and GOUDGE JJ.A.

COUNSEL:
George Glezos and Juliane Park For the appellant Rumanek & Cooper Ltd.
Graham F. Alloway and Calvin J. Ho For the appellant Canadian Imperial Bank of Commerce
Daniel R. Dowdall, Alex A. Ilchenko and James Tumbridge For the respondent the Guardian, Wasserman Arsenault Ltd.
William J. Burden and John N. Birch For the respondent the Superintendent of Bankruptcy

HEARD: February 7 and 8, 2002

On appeal from the order of Justice James M. Farley of the Superior Court of Justice dated December 15, 2000, reported at (2000) 2000 22507 (ON SC), 22 C.B.R. (4th) 153.

ADDENDUM ON COSTS

[1] This court’s reasons for judgment in this matter were released on April 8, 2002. The court has now received and reviewed the written submissions of parties as to the appropriate disposition of the costs of the appeal. Three issues arise from these submissions: 1) should only one of the successful respondents be awarded its costs; 2) how should the award for partial indemnity be calculated; and 3) how should the burden of costs be split between the two unsuccessful appellants. For the reasons that follow, we would award only the respondent Guardian, Wasserman Arsenault, its costs, on a partial indemnity basis for all time billed, with 75% to be paid by Rumanek & Cooper, and 25% to be paid by the C.I.B.C.

[2] Both appellants, Rumanek & Cooper, and the C.I.B.C., submit that the respondent Superintendent of Bankruptcy should be denied any costs on the basis that its role in the appeal was minor and duplicative of the Guardian’s. We agree with this submission. Counsel for the Guardian was the lead counsel for the respondents. The Superintendent adopted the submissions of the Guardian concerning all substantive legal issues. It was not necessary for the Superintendent’s counsel to have separately prepared materials lacking any separate analysis of the substantive issues. Under these circumstances, the Superintendent should not be awarded its costs of the appeal.

[3] Both of the respondents submit that based on the low hourly rate they had negotiated with their solicitors (which is less than the maximum hourly rate allowable under the partial indemnity costs grid), they should be awarded full indemnity. They assert that this amount would still be less than the appellants would expect to pay under the partial indemnity costs grid. Rumanek & Cooper submit that the respondents should be entitled to only partial, not full indemnity. We agree with this submission. There is no principled basis arising from the conduct of the parties in this case which could justify a costs award on the basis the respondents submit.

[4] The costs grid scheme, which came into force on January 1, 2002 pursuant to O. Reg. 284/01, includes two scales of costs: partial indemnity and substantial indemnity. Partial indemnity means just that – indemnification for only a part, or a proportion, of the expense of the litigation. In Lawyers’ Professional Indemnity Co. v. Geto Investments Ltd., [2002] O.J. No. 921 (S.C.J.), Nordheimer J. wrote at para. 16:

As a further direct consequence of the application of the indemnity principle, when deciding on the appropriate hourly rates when fixing costs on a partial indemnity basis, the court should set those rates at a level that is proportionate to the actual rate being charged to the client in order to ensure that the court does not, inadvertently, fix an amount for costs that would be the equivalent of costs on a substantial indemnity basis when the court is, in fact, intending to make an award on a partial indemnity basis.

[5] The degree of indemnification intended by an award of partial indemnity has never been precisely defined. Indeed, a mechanical application of the same percentage discount in every case where costs are awarded on a partial indemnity scale would not be appropriate. In fixing costs, courts must exercise their discretion, with due consideration of the factors set out in rule 57.01(1), in order to achieve a just result in each case. We are fixing costs on a partial indemnity scale in the amount of $30,000 all inclusive.

[6] Based on the number and complexity of the issues raised in the appeal that related to each of the appellants, costs are apportioned 75% against Rumanek & Cooper, and 25% against the C.I.B.C.

Signed:
“Karen M. Weiler J.A.”
“R.S. Abella J.A.”
“S.T. Goudge J.A.”