Third Eye Capital Corp. v. Dianor Resources Inc.

CITATION: Third Eye Capital Corp. v. Dianor Resources Inc., 2016 ONSC 7112

COURT FILE NO.: CV-15-11080-00CL

DATE: 2016-11-21

SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

B E T W E E N:

THIRD EYE CAPITAL CORPORATION

Applicant

and

RESSOURCES DIANOR INC. / DIANOR RESOURCES INC.

Respondent

BEFORE: Newbould J.

COUNSEL: Stuart Brotman and Dylan Chochla, for the Receiver of Dianor Resources Inc.

Shara N. Roy, for the Applicant

Daniel Matson, for 2350614 Ontario Inc.

Nicholas Kluge, for the Monitor of Essar Steel Algoma Inc.

ENDORSEMENT

[1] On October 5, 2016 I granted the motion by the receiver for an order approving a sale of the Ontario assets of Dianor Resources Inc. ("Dianor") to Third Eye Capital Corporation ("Third Eye"). 2350614 Ontario Inc. ("235Co.") did not oppose the sale but took the position that the transfer was subject to royalty rights it said it has. I also dismissed a cross-motion by 235Co for relief including a claim for payment alleged to be owing under the Repair and Storage Lien Act and a claim that Third Eye, Dianor and the receiver vacate premises allegedly owned by 235Co.

[2] I ordered that the receiver and Third Eye were entitled to their costs. The receiver and 235Co. have settled the receiver's costs. This endorsement deals with the costs claimed by Third Eye and by the Monitor of Essar Algoma.

[3] Third Eye claims costs on a substantial indemnity basis. I see no grounds to award costs on this scale. Third Eye is entitled to costs on a partial indemnity basis.

[4] 235Co. says that Third Eye is entitled only to costs of the cross-motion as the motion by Third Eye was necessary in any event to support the request for a vesting order. I do not agree. The motion was not brought by Third Eye but by the receiver. More importantly, it would have gone unopposed but for the position taken by 235Co. that it was entitled to royalty rights, a position that was not successful. Third Eye is entitled to its costs of the motion and cross-motion.

[5] Third Eye seeks fees of $26,803 plus disbursement of $3,205 which includes applicable HST. 235Co. says that the costs of Third Eye should be allowed at $6,500 inclusive of fees, disbursements and HST. That position is wholly untenable. It would amount to awarding fees of $3,200 inclusive of HST. 235Co. has filed a cost outline listing fees at approximately $6,200. There is no docket evidence and the fees seem somewhat inadequate. However, whether or not the cost outline of 235Co. is accurate, it is little evidence of what a reasonable amount of fees for Third Eye should be.

[6] The work done by the lawyers for Third Eye does not appear at all excessive for what was involved, and the work was appropriately delegated. The billing rates for counsel were quite reasonable for Toronto lawyers and they were discounted by 10%. Third Eye seeks only the incremental costs it incurred as a result of 235Co.'s opposition to the receiver's motion and in responding to 235Co.'s motion. It carried most of the burden of refuting the relief sought by 235Co. and in supporting the relief sought by the receiver. As well, no costs of its expert Dr. William Roscoe are claimed, and they could have been.

[7] 235Co. was responsible for much of the work required to be done on behalf of 235Co. In oral argument points were conceded by counsel for 235Co. that could have shortened matters had they been earlier conceded. The issues were varied and of great importance to Third Eye and to the other stakeholders, including the Monitor of Essar Algoma who stood to lose $150,000 if 235Co. was successful in its position.

[8] I am to be guided by the factors in rule 57.1, including what 235Co. could reasonably expect to pay if it lost the motion and cross-motion, and to consider what a reasonable amount of fees is to be awarded as costs. In my view, having reviewed the matter, a reasonable amount of fees inclusive of HST is $26,500. This amount plus disbursements of $3,205 are to be paid by 235Co. to Third Eye as costs of the motion and cross-motion within 30 days.

[9] The Monitor of Essar Algoma seeks costs of $3,537 plus HST totaling $3,996.81. This amount is modest and is approved. 235Co. is to pay these costs to the Monitor of Essar Algoma within 30 days.

Newbould J.

Date: November 21, 2016