SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
COURT FILE NO.: CV-12-9556-00CL
DATE: 20130816
RE: Meridian Gold Holdings II Cayman Ltd. and Minera Meridian Peru S.A.C., Appellants
AND:
Southwestern Gold (Bermuda) Ltd. and Minera Del Suroeste S.A.C., Respondents
BEFORE: L.A. Pattillo J.
COUNSEL:
Benjamin Zarnett and Lauren Butti, Counsel, for the Appellants
Alexander Ross, Jonathan Levy and Aaron Kreaden, Counsel, for the Respondents
COSTS ENDORSEMENT
[1] On January 15, 2013, I released reasons for decision allowing the Appellants’ Meridian Gold Holdings II Cayman Ltd. and Minera Meridian Peru S.A.C. (Minera Meridian) appeal, in part, and remitting the matter back to the arbitrator to determine the remedy in accordance with my directions.
[2] In the absence of the parties agreeing on costs, I have received written costs submissions which I have reviewed and considered.
[3] The dispute between the parties arose from a right of first offer contained in letters of understanding entered into by Minera Meridian and the respondent Minera Del Suroeste S.A.C. (Minosa) concerning certain mining concessions in Peru. In December 2009, as part of a larger share purchase transaction with a third party, the appellants entered into a cesión minera which is a specific type of assignment of a mining concession under Peruvian law.
[4] The arbitrator held that by entering into the cesión minera, the respondents breached both the right of first offer provision in the letters of understanding and fiduciary duties which the arbitrator found they owed to Minosa. He directed that the rights disposed of to the third party should be transferred to Misosa and the cesión minera cancelled.
[5] The appellants sought and obtained leave to appeal the arbitrator’s decision on the following grounds:
Did the arbitrator err in finding that Minera Meridian’s entry into the cesión minera triggered the right of first offer under the letters of understanding?
Did the arbitrator err in finding that Minera Meridian breached its fiduciary duties as a partner or otherwise by entering into the cesión minera? And
Did the arbitrator err in granting the remedy that he did?
[6] In deciding the appeal, I held that based on his factual findings, the arbitrator was correct in concluding that the right of first offer was triggered when Minera Meridian decided to enter into the cesión minera with the third party. I further held, however, that the arbitrator erred in concluding that the relationship between the parties was one of partnership and that Minera Meridian owed fiduciary duties to Misosa over and above those contained in the letters of understanding. Finally, I held that the remedy the arbitrator ordered was not rationally connected to the breach and accordingly was an error in law. I directed that the matter be remitted back to the arbitrator for a determination of the remedy in accordance with my directions.
[7] The appellants submit that they enjoyed substantial success on the appeal and are accordingly entitled to their costs. In that regard, they seek partial indemnity costs of $44,436.55 made up of fees of $38,161 and disbursements of $1,314.42 plus applicable taxes.
[8] The respondents also submit that they were substantially successful on the appeal and seek partial indemnity costs totalling $52,920.55, made up of fees of $40,995.00, disbursements of $836.20 plus applicable taxes.
[9] In my view, success was clearly divided on the appeal. While the respondents were successful in upholding the arbitrator’s finding that the right of first offer had been breached, the appellants were successful in overturning the arbitrator’s remedy. Both issues were significant and important to both parties. As I noted in my reasons for decision at paragraph 44, my holding in respect of the third issue regarding the arbitrator’s broader finding of partnership and fiduciary duty was of no effect given his finding that the right of first offer was breached. Nevertheless, it was still an important issue in respect of the relationship between the parties.
[10] While I consider that the amounts claimed by both parties as outlined in their Costs Outlines to be reasonable given the issues on appeal, their complexity and the length of the argument, in my view the appropriate disposition in respect of the costs of the appeal is for each party to bear their own costs. Accordingly, there will be no order as to costs.
L. A. Pattillo J.
Released: August 16, 2013