DATE: 20051202

DOCKET: C43360

COURT OF APPEAL FOR ONTARIO

RE:

JOHN PENNINGTON (Respondent) – and - JAMES HAWLEY, 1047733 ONTARIO LIMITED, 1330 RICHMOND ROAD INC., 1395716 ONTARIO INC., 1399 McPHILLIPS STREET INC., 22700 SOUTH TAMIAMI TRAIL INC., 5400 DIXIE ROAD INC., CANADIAN EQUITY RESOURCES CORPORATION, CANADIAN LONG TERM CARE CORPORATION, CANADIAN LONG TERM INVESTMENTS CORPORATION, FIRST EVEREST PROPERTIES CORPORATION, STEPPE FINANCIAL INC., STEPPE FINANCIAL PARTNERS INC., STEPPE TWO INC., STEPPE FINANCIAL PARTNERSHIP, 840316 ONTARIO LIMITED, 1162315 ONTARIO LIMITED, 155 BALMORAL AVENUE INC., 389762 ONTARIO LIMITED, 478181 ONTARIO LIMITED, 722496 ONTARIO LIMITED, and NORTH SHORE MERCANTILE CORPORATION Respondents (Appellant James Hawley)

BEFORE:

McMURTRY C.J.O., BLAIR J.A., and KOZAK J. (ad hoc)

COUNSEL:

Ronald S. Sleightholm for the appellant

Jack Berkow for the respondent

Arnie Herschorn, for the Liquidator, PricewaterhouseCooper Inc.

Barry Leon and Susan J. Kushneryk, for Chalmers Investment Corp. Ltd.

HEARD:

August 24, 2005

On appeal from the order of Justice James Farley of the Superior Court of Justice dated April 1, 2005.

C O S T S E N D O R S E M E N T

[1] On August 31, 2005 the court dismissed an appeal from the order of Justice Farley dated April 1, 2005, upholding the right of Chalmers Investment Corp. and Muhammed Huq, two limited partners in the Mayfield No. 1 and Mayfield No. 2 Limited Partnerships, to vote on the election of a new general partner. The parties have been unable to agree on costs, and counsel have made written submissions in that regard.

[2] We have considered those submissions and the following is our disposition with respect to costs.

[3] Counsel have sought the following amounts (all on a partial indemnity basis and inclusive of disbursements and GST):

For Chalmers: $35,656.26

For The Liquidator $14,754.53

For Pennington $ 7,225.71

[4] In fixing costs, as Armstrong J.A. noted in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at 299, “[o]verall . . . the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”. Here, in our view, that criteria is met by awarding costs, payable by Mr. Hawley, in the following amounts, plus disbursements and GST:

For Chalmers $17,000.00

For The Liquidator $ 8,000.00

For Pennington $ 5,000.00

[5] At the hearing before Farley J., Chalmers was awarded $15,000.00. We do not see any justification for significantly exceeding that amount on the appeal. The issues were somewhat complex, and undoubtedly of importance to Chalmers. However, for the most part, the issues that were decided in Chalmers’ favour were the same as those argued before the motion judge as well as before Sharpe J.A. on a motion for a stay in this court. Chalmers argues that Mr. Hawley’s application to submit fresh evidence on appeal (much of which it submits was available at the time of the motion) delayed matters and added significantly to the preparation time involved. Mr. Hawley disputes this, as does the liquidator. We accept that the fresh evidence motion likely added a certain amount of further preparation time, and conclude that it warrants a modest increase in the amount awarded from that awarded by the motion judge. As indicated, costs of the appeal are awarded to Chalmers in the amount of $17,000.00 plus disbursements and GST.

[6] Counsel for PwC was required to attend and participate in the appeal. He supported the position taken by Chalmers, but it was counsel for Chalmers who carried the burden of the response to the appeal. We think that $8,000.00 plus disbursements and GST is a fair amount to fix for costs in favour of the liquidator in the circumstances.

[7] Mr. Pennington did not participate in the argument before the motion judge and was not awarded costs at that level. We do not think it was unreasonable for Mr. Pennington to participate in the appeal in the circumstances, however, and while Mr. Berkow did not make lengthy submissions, he did support the Chalmers position. We fix costs to Mr. Pennington in the amount of $5,000.00 plus disbursements and GST.

[8] The foregoing costs are to be paid by Mr. Hawley. We make no order that they are to be paid out of his share of the liquidated assets.

“R. McMurtry C.J.O.”

“R.A. Blair J.A.”

“L.C. Kozak J.”