DATE: 20030930 DOCKET: C38094 & C38140

COURT OF APPEAL FOR ONTARIO

RE:

THE LAW SOCIETY OF UPPER CANADA and THE LAWYERS' PROFESSIONAL INDEMNITY COMPANY (Plaintiffs(Respondents)) - and - ERNST & YOUNG, CLARKSON GORDON, ZITTRER, SIBLIN, STEIN, LEVINE, TILLINGHAST, a TOWERS PERRIN COMPANY and TOWERS PERRIN INC. (Defendants(Appellants))

BEFORE:

MCMURTRY C.J.O., CARTHY and BORINS JJ.A.

COUNSEL:

Patricia D.S. Jackson and Cynthia L. Tape for the appellants Ernst & Young, Clarkson Gordon and Zittrer, Siblin, Stein, Levine

Claude R. Thomson, Q.C., Ronald J. McCloskey and Berkley D. Sells for the appellants Tillinghast, a Towers Perrin Company and Towers Perrin Inc.

Benjamin Zarnett and Joe Conforti for the respondents

HEARD:

January 22 and 23, 2003

On appeal from the judgment of Justice John D. Ground of the Superior Court of Justice dated April 5, 2002, reported at (2002), 2002 49466 (ON SC), 59 O.R. (3d) 214.

COSTS ENDORSEMENT

[1] We have had the opportunity to consider the submissions on costs delivered by the parties.

[2] In our view, the submissions of counsel for the respondents, the Law Society of Upper Canada ("LSUC") and the Lawyers' Professional Indemnity Company ("LPIC"), correctly state the principles on which costs should be awarded, with the result that we would award the LSUC and LPIC their costs of the motions before Ground J. and the appeal.

[3] The functional result of the decision of the majority of this court allowing the appeals and the cross?appeal of the LSUC and LPIC is that all of the claims of the LSUC and LPIC will proceed to trial. The appellants did not obtain the dismissal of any of the respondents' claims. Accordingly, costs should follow the event, the event being that the appellants brought motions, and appeals from the result of the motions, seeking the summary dismissal of the respondents' claims, yet they did not obtain the dismissal of the claims, or any part of them.

[4] As for the costs of the motions, the motion judge awarded the respondents 80 per cent of their costs of the motions, reflecting the appellants' success in obtaining summary judgment dismissing the respondents' interest claim. He fixed costs of the motion in the amount of $36,791.75 against each appellant. Given the result of the appeal, the appellants were entirely unsuccessful on the motions with the result that the respondents should be awarded 100 per cent of their costs of the motions. On the basis of the amount fixed by the motion judge, the costs payable by each appellant is revised to $43,799.70.

[5] As for the costs of the appeal, we would fix the costs on a partial indemnity basis in the amount requested by the respondents in their bill of costs, rounded to $50,000 inclusive of GST payable equally be each appellant. Given the special fee arrangement between the respondents and their counsel, the amount of costs is reasonable. As well, the appellants do not object to the amount of costs requested in the respondents' bill of costs.

"R. Roy McMurtry C.J.O." "J. J. Carthy J.A." "S. Borins J.A."