ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 13-CV-488349
DATE: 20140313
BETWEEN:
WILLIAM J. SOLLOWAY
Applicant
– and –
KLONDEX MINES LTD.
Respondent
Lorne S. Silver and Colin Pendrith, for the Applicant
Young Park and John Zerucelli, for the Respondent
HEARD: In Writing
APPLICATION under Rules 14.05(3)(d) and (h) of the Rules of Civil Procedure
Perell, J.
REASONS FOR DECISION - COSTS
[1] In this Application, William J. Solloway sought a determination of his rights under a Release and Settlement Agreement made with the Respondent, Klondex Mines Ltd. The Release and Settlement Agreement was made in Ontario, and it was expressed to be governed by Ontario law.
[2] Klondex Mines disputed that Ontario had jurisdiction simpliciter to decide the Application, and it submitted that, in any event, Ontario was not forum conveniens.
[3] In reasons reported as Solloway v. Klondex Mines Ltd., 2014 ONSC 391, I stayed Mr. Solloway’s Application on terms that: (a) the stay shall be automatically lifted if Klondex Mines and Klondex Gold did not commence an action against Mr. Solloway in British Columbia or in Nevada within 60 days of the release of the Reasons for Decision; and (b) the stay should become permanent, if Klondex Mines and Klondex Gold commenced an action in British Columbia or Nevada within 60 days of the release of the Reasons for Decision.
[4] I held that if the parties could not agree about costs, they may make submissions in writing.
[5] Klondex Mines and Klondex Gold will be commencing an action in the State of Nevada by March 18, 2014, and as the successful party on the motion, Klondex Mines requests that this Court fix its costs on the high end of a partial indemnity scale in the amount of $56,231.27.
[6] Klondex Mines submits that Mr. Solloway’s conduct in responding to the motion, including his refusal to answer proper questions, was unreasonable and increased the costs of the proceeding. It says that the costs claimed are within the reasonable expectation of Mr. Solloway, who was advancing a claim worth more than $1.6 million.
[7] Mr. Solloway submits that in the particular circumstances of this case, he should not be ordered to pay costs but rather this is a proper case to award costs against the successful party.
[8] The particular circumstances relied on by Mr. Solloway were that, as I found in my Reasons for Decision, Ontario had jurisdiction simpliciter for his Application, and Ontario would have been an appropriate forum but for the fact that there were other connected outstanding claims and disputes between Mr. Solloway and Klondex Mines and Klondex Gold.
[9] The problem for the court was that the Application brought in Ontario was connected to other disputes and other parties not before the court, and while standing alone, Ontario was an appropriate forum for Mr. Solloway’s Application, Ontario was not the convenient forum for all the disputes between the parties.
[10] If all the connected matters were brought forward for adjudication, which seemed inevitable, then either British Columbia or Nevada would be the forum conveniens. The dilemma was that Klondex Mines and Klondex Gold had not actually commenced actions in either British Columbia or Nevada and they did not indicate in the extensive evidence filed for the jurisdiction motion in Ontario that they intended to commence proceedings.
[11] These circumstances explain why I made the Order that I did and Mr. Solloway argues that these circumstances justify that Klondex Mines be denied costs.
[12] Mr. Solloway submits that absent an assertion that Klondex Mines and Klondex Gold would commence proceedings, it was not reasonable for Mr. Solloway to expect that his Application would be heard other than in Ontario, and, thus, he had no reasonable expectation that he would be required to pay costs and, therefore, no costs should be ordered against him.
[13] He says that Klondex Mines and Klondex Gold should not be rewarded for their own failure to start proceedings in Nevada or British Columbia or to advise of their intention to do so. He says that Klondex Mines should pay him costs for their non-disclosure. He says that the appropriate award of costs is $22,099.26, all inclusive.
[14] Mr. Solloway submits that in any event, the costs sought by Klondex Mines are exorbitant and excessive and that in all the circumstances $15,000, all inclusive would be the appropriate award on a partial indemnity scale.
[15] While there is an initial attractiveness to Mr. Solloway’s argument, upon analysis his argument is not much more than in all the circumstances, it was not reasonable for him to expect that he would lose the motion, and, therefore, he should not be expected to pay costs. This is not a tenable argument.
[16] Mr. Solloway’s argument ignores the fact that Klondex Mines did win the motion and the fact that Klondex Mines and Klondex Gold had a dilemma of their own, in as much as until the status of the Ontario Application was determined, they ran the risk of commencing what would have been their Ontario counterclaim in another jurisdiction.
[17] In other words, had they brought proceedings in British Columbia or Nevada, Mr. Solloway would have just repeated his argument that Klondex Mines was just trying to highjack his Ontario Application.
[18] The long and short of it is that Mr. Solloway resisted and lost the motion. Thus, the normal principles that guide the court’s discretion about costs should apply.
[19] I, therefore, conclude that Mr. Solloway should pay costs on a partial indemnity scale and that the reasonable and fair costs award in all the circumstances is $42,000, all inclusive.
Perell, J.
Released: March 13, 2014
COURT FILE NO.: 13-CV-488349
DATE: 20140313
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
WILLIAM J. SOLLOWAY
Applicant
‑ and ‑
KLONDEX MINES LTD.
Respondent
REASONS FOR DECISION - COSTS
Perell, J.
Released: March 13, 2014