Court File and Parties

COURT FILE NOS.: 31-2675583 DATE: 20221118

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: IN THE MATTER OF THE PROPOSAL TO CREDITORS OF CONFORTI HOLDINGS LIMITED, A CORPORATION INCORPORATED UNDER THE ONTARIO BUSINESS CORPORATIONS ACT, R.S.O. 1990, C. B.16

BEFORE: Justice Cavanagh

COUNSEL: Clifton P. Prophet and Thomas Gertner, for the Moroccanoil, Inc. R. Brendan Bissell, for Crowe Soberman Inc. in its capacity as trustee to the proposal to creditors proceeding of Conforti Holdings Ltd.

HEARD: By written submissions

COSTS ENDORSEMENT

[1] Morrocanoil, Inc. (“Morrocanoil”) was the successful party on a motion by Crowe Soberman Inc. (the “Proposal Trustee”) in its capacity as Proposal Trustee of Conforti Holdings Limited (“CHL”) for an order directing the Proposal Trustee not to undertake the adjudication of Morrocanoil’s proof of claim in these insolvency proceedings.

[2] Morrocanoil seeks costs of this motion on a partial indemnity scale in the amount of $40,470.16 including taxes and disbursements. Morrocanoil submits that the factors in rule 57.01 of the Rules of Civil Procedure including, in particular, (a) the importance of the issue; (b) the complexity of the proceeding; and (c) the reasonable expectation of the parties, support the costs award sought.

[3] Morrocanoil submits that the jurisdiction motion was of significant importance to Morrocanoil and that the motion raised complicated issues relating to the scope of the single proceeding model, the summary nature of a claims procedure under the BIA, and the inherent jurisdiction of the Court. Morrocanoil submits that the costs claimed are proportional and appropriate in the circumstances.

[4] The Proposal Trustee does not dispute that Morrocanoil is entitled to partial indemnity costs. The Proposal Trustee submits that the quantum of costs sought by Morrocanoil is disproportionate to the issues at stake and the time spent on the motion.

[5] The Proposal Trustee submits that the proper disposition of costs is that the costs of the motion for directions, which would be in favour of Morrocanoil in the result, and the costs of a separate motion to approve a proposal by CHL, which would be in favour of the Proposal Trustee in the result, should set each other off such that no cost should be owing.

[6] I do not agree that it would be proper for me to decide the costs of these two motions together. The motions were heard separately and involved discrete issues.

[7] The Proposal Trustee’s Bill of Costs on a partial indemnity scale for the jurisdiction motion includes a claim for costs in the amount of $14,649.32. The Proposal Trustee submits that it was not within its reasonable contemplation that the costs for this motion would exceed $40,000 for a two hour motion argued on a written record.

[8] The Proposal Trustee submits that costs of this motion be awarded to Morrocanoil and payable by the Proposal Trustee on a partial indemnity scale in the amount of $15,000.

[9] The motion was important to the parties. Moroccanoil’s position was that it would take materially longer and be more expensive to have its claim adjudicated in the U.S. than under the BIA in Canada. The motion involved issues of some complexity.

[10] I have reviewed Morrocanoil’s Costs Outline. In my view, the time spent by counsel on the work described is not more than would be reasonable for this motion. The hourly rates claimed are 60% of actual hourly rates. I am satisfied that the amount claimed is within the range of costs that the Proposal Trustee could reasonably expect to pay if the Proposal Trustee’s motion was not successful.

[11] I fix costs to be paid by the Proposal Trustee to Moroccanoil in the amount of $40,470.16 inclusive of HST and disbursements.

Cavanagh J.

Date: November 18, 2022