Sandy Hay

The appellants sought leave to appeal a motion judge's decision on costs, which had awarded partial indemnity costs of $450,000 to Pembina Pipeline Corp. and $500,000 to BluEarth Renewables Inc. The Court of Appeal for Ontario denied leave to appeal, finding that the motion judge's costs award was a discretionary decision entitled to deference.

The court concluded that there was no error in principle and the award was not plainly wrong, as the motion judge had properly considered factors such as the respondents' success, the complexity of the proceeding, the amounts at stake, and the conduct of the litigation.

The appellants, Greta Energy Inc. and Great Grand Valley 2 Limited Partnership, appealed a summary judgment dismissing their action against Pembina Pipeline Corporation and BluEarth Renewables Inc. The case involved the sale of bundled assets, some subject to Rights of First Refusal (ROFRs).

The appellants alleged that the respondents manipulated asset prices in bad faith to prevent the exercise of ROFRs, breaching duties of good faith and honest performance, inducing breach of contract, and conspiracy.

The Court of Appeal upheld the motion judge's findings that the respondents did not breach their duty of good faith, did not owe a fiduciary duty, did not conspire, and did not induce breach of contract, as their actions were commercially reasonable and not intended to "eviscerate" the ROFRs.

The appeal was dismissed.

This is a costs endorsement following successful summary judgment motions by the defendants.

The court determined the scale and amount of costs payable by the plaintiffs to the defendants.

The defendants sought substantial indemnity costs based on their offers to settle, which proposed dismissal of the action without costs.

The court found that such offers, while relevant, do not automatically attract substantial indemnity costs, and awarded partial indemnity costs, considering factors like success, complexity, amounts at stake, and litigation conduct.

The plaintiffs, who held a right of first refusal (ROFR) over certain wind farm assets, sued the vendor and the third-party purchaser, alleging they conspired to artificially inflate the purchase price allocation of the ROFR assets to discourage the plaintiffs from exercising their rights.

The plaintiffs sought damages for breach of the duty of good faith, breach of fiduciary duty, conspiracy, and inducing breach of contract.

On cross-motions for summary judgment, the court dismissed the plaintiffs' claims, finding that the vendor acted in good faith and the purchaser was entitled to act in its own commercial self-interest.

The court held that a difference in valuation or a strategic bid allocation does not, without more, constitute a breach of the duty of good faith or an intent to eviscerate the ROFR.