Court File and Parties

Citation: Polo v. Conforti, 2017 ONSC 732 Court File No.: CV-15-11091-00CL Date: 2017-03-24 Superior Court of Justice - Ontario

Re: Mario Polo, Applicant And: Dominic Conforti, Fernando Conforti, Sergio Conforti and ConPolo Villa Inc., Respondents

Before: Mr. Justice H.J. Wilton-Siegel

Counsel: Patricia L. McLean, for the Applicant Shawna Sosnovich, for the Respondents

Heard: In Writing

Costs Endorsement

[1] In this proceeding, Mario Polo ("Polo") commenced an application seeking the appointment of a receiver to sell the property of ConPolo Villa Inc. ("ConPolo"), and to wind up ConPolo on the grounds of oppressive behaviour by Domenico Conforti, Fernando Conforti, Sergio Conforti and ConPolo (collectively, the "Confortis") (the "Polo Application"). The Confortis responded by bringing an application alleging oppressive conduct by Polo (the "Conforti Application").

[2] Both applications were adjourned indefinitely in accordance with minutes of settlement dated February 2, 2016 (the "Minutes"), on which date the hearing of the two applications had been scheduled. The Minutes provided that costs of the applications were to be determined by the Court on the basis of written submissions of the parties. This Endorsement sets out the Court's determination of costs with respect to each application in turn.

[3] The Polo Application was brought outside of, but as a companion to, other proceedings addressing the separation of the long-standing relationship between Polo and the Confortis. It dealt specifically with Polo's interest in a villa property owned by ConPolo. While it may have been the case that Polo had to bring the Polo Application in order to get a resolution of the disposition of the property, neither party achieved success in respect of this application. Instead, the parties resolved upon a process for determining a price at which the Confortis would purchase Polo's interest in the property subject to certain adjustments.

[4] Given such circumstances, I conclude that each party should bear their own costs of the Polo Application.

[5] The Conforti Application was brought in response to the Polo Application. The essence of the application was that Polo engaged in oppressive activity relative to the Confortis in failing to honour an alleged agreement among the parties regarding their respective contributions toward the property and in seeking an order for the sale of the property pursuant to the Polo Application.

[6] The Court did not make a formal determination on the merits of the Conforti Application. For this reason, I do not think it would be appropriate to award any costs on a substantial indemnity basis.

[7] On a review of the record, I think a number of the factual accounting issues raised by the Confortis that they say are owing pursuant to the alleged agreement would need to be determined in arriving at the net payment to Polo after the property is sold. However, in the absence of such determination, in assessing the proportionality of this costs award, I cannot conclude that any net payment to Polo will be minimal, as the Confortis suggest.

[8] More significantly, I do not see how the Confortis could have succeeded in their oppression claim, given Polo's status as a minority shareholder of ConPolo and the consequent absence of any activity on his part falling within paragraphs 248(2)(a), (b) or (c) of the Business Corporations Act, R.S.O. 1990, c. B.16 upon which to ground such a claim. The commencement of this application therefore had the effect of lengthening the proceeding to no useful effect.

[9] On the other hand, Polo also appears to have lengthened the proceedings, which were effectively treated as a single proceeding, by cancelling scheduled examinations and providing a more detailed supplementary responding affidavit outside of the agreed-upon timelines. This action also increased the costs of the Confortis.

[10] Based on the foregoing, I conclude that Polo is entitled to an award of costs on a partial indemnity basis in respect of Conforti Application, adjusted to reflect the effect of his delay of the proceedings.

[11] With respect to quantum, Polo seeks costs on a partial indemnity basis of $18,858.06, inclusive of disbursements and HST. In their costs outline, the Confortis sought costs for the Conforti Application of $16,230.21 on a partial indemnity basis, inclusive of disbursements and HST. I take this to be an indication of the reasonable expectations of the Confortis. It is also consistent with the level of complexity of the proceeding and the extent to which each party chose to cross-examine the other.

[12] Based on the foregoing, I find fair and reasonable costs of the Conforti Application to be $10,000 inclusive of disbursements and HST, to be payable forthwith by the Confortis to Polo.

Wilton-Siegel J.

Date: March 24, 2017