TransAsia Private Capital Ltd. v. Export Development Canada, 2023 ONSC 2698

Court File and Parties

COURT FILE NO.: CV-20-644390-00CL DATE: 20230403 SUPERIOR COURT OF JUSTICE – ONTARIO (COMMERCIAL LIST)

RE: TRANSASIA PRIVATE CAPITAL LTD. in its capacity as manager for or on behalf of Asian Trade Finance Fund and Asian Trade Finance Fund 2, sub-funds of TA Asian Multi-Finance Fund and TA PRIVATE CAPITAL SECURITY AGENT LTD., Applicants/Responding Parties/Moving Parties by Cross-Motion

AND

EXPORT DEVELOPMENT CANADA, Respondent

BEFORE: Kimmel J.

COUNSEL: George Pollack and Chenyang Li, for the Applicants/Responding Parties/Moving Parties by Cross-Motion, TransAsia Private Capital Ltd. and TA Private Capital Security Agent Ltd. Michael D. Schafler and Ara Basmadjian, for UD Trading Group Holding PTE Limited, Moving Parties/Proposed Intervenors Rahul Shastri and Kristie Stitt, for Rutmet Inc., Moving Party/Proposed Intervenor Jamie MacDonald and Erika Woolgar, for the Respondent, Export Development Canada Harry Mann, for the Non-Parties/Responding Parties by Cross-Motion, Triton Metallix PTE. Limited and AP International FZC

HEARD: October 4, 2022 (Supplementary Written Cost Submissions Dated January 16, 23, and 27, 2023)

COSTS ENDORSEMENT

[1] In reasons dated December 16, 2022 (TransAsia Private Capital Ltd. v. Export Development Canada, 2022 ONSC 7126) I dismissed the motions and cross-motions that I heard on October 4, 2022 in this matter (the “December Endorsement”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the December Endorsement.

[2] The motions that were pending, and dismissed were as follows:

a. Motions by Rutmet Inc. (“Rutmet”) and UD Trading Group Holding Pte. Limited (“UD Trading”), UIL Singapore Pte. Limited, UIL Malaysia Limited, UIL Commodities DMCC, and Prateek Gupta (collectively, the “UD Group”) seeking leave to intervene in this application, for an order consolidating this proceeding with their existing actions and for this application to be converted into an action so that these proceedings could all be tried together or one after the other (the “Intervention/Consolidation Motions”).

b. A cross-motion by TransAsia Private Capital Ltd. (“TransAsia”) and TA Private Capital Security Agent Ltd. (together, “TAP”) seeking a stay of what it described as abusive re-litigation by Rutmet and an order prohibiting Rutmet and the UD Group from further interfering with this application without leave of the Court pursuant to rr. 2.1.02(3) and 37.16 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Vexatious Litigants Cross-Motion”).

[3] Instead of granting the requested orders, upon the court’s own motion and initiative, this application, the third-party claims in the Supplier Actions and the Rutmet Action were all ordered stayed pending the determination of the Substantive Disputes between the parties already pending in the Foreign Guarantee Proceeding in either Singapore or Dubai, and the third-party claims against TAP in the Supplier Actions (actions commenced by former suppliers, Triton Metals Pte. Limited and AP International FZC against Rutmet), insofar as they depend upon the determination of any of the Substantive Disputes, were also stayed (the “Stay Order”).

[4] The December Endorsement indicated as follows with respect to costs:

[72] While there may be matters about which the court is unaware, based strictly on the issues raised and the outcome, the court would at this stage be inclined to order that the parties each bear their own costs of these motions. However, if there are issues that remain to be determined by the court regarding the costs of these motions, any party that is requesting that costs be paid to them shall deliver a brief written costs submission of no more than 4 pages double spaced (also attaching their cost outline(s) previously delivered…

[5] The UD Group delivered a cost submission requesting that TAP pay 50% of either their substantial indemnity costs (indicated to be $130,000) or, alternatively, their partial indemnity costs (indicated to be $90,000). The UD Group was the only party that initially requested costs.

[6] The UD Group’s request for costs is based on their perspective of the motions. In their assessment, they were successful in defeating the Vexatious Litigants Cross-Motion against them and they considered the outcome of the Intervention/Consolidation Motions to be neutral (the court instead having made the Stay Order on its own motion). In the latter respect, the UD Group considers that the Stay Order is more aligned with their objective in having brought the Intervention/Consolidation Motions, which was to ensure that the Substantive Issues (also raised in other proceedings to which they are parties) were not disposed of in this application without their involvement.

[7] TAP’s position is that the parties should all bear their own costs of the Intervention/Consolidation Motions and the Vexatious Litigants Cross-Motion, or it seeks, in the alternative, that it be awarded partial indemnity costs of $85,446.09 in the cause as against UD Group. TAP suggests that its primary position is the obvious outcome in a situation such as this, where motions by both sides were dismissed, although TAP would say that, if anything, it was successful in achieving its objective in these motions which was to prevent the UD Group from intervening in Ontario proceedings and attempting litigate the Substantive Disputes and to enable the Foreign Guarantee Proceedings to continue uninterrupted. TAP further argues that it would be unfair to award costs for an outcome that no party suggested.

[8] TAP also points out that shortly after the December Endorsement in this matter was released a judgment was rendered by the courts of Singapore in favour of TAP on the merits of the parties’ dispute (the “Singapore Judgment”). In the result, the courts of Singapore have now determined on the merits of the Substantive Disputes that UD Trading Group Holding Pte. Ltd. is liable to TAP for breach of the corporate guarantee in an amount of more than US$60 million, plus interest and costs.

[9] TAP argues that the outcome of the Singapore Judgment, in which it has now prevailed in the substance of its dispute with the UD Group, will inform this application (and other proceedings, based on the doctrine of res judicata (issue estoppel). Further, in the Singapore Judgment, the Singapore court held that UD Trading’s allegations “are not factually sustainable and are thus frivolous or vexatious.” This, TAP says, would support its alternative request for costs to be awarded to it in the cause on the theory that TAP has now been vindicated on one of the foundations of its Vexatious Litigants Cross-Motion that was dismissed.

[10] UD Group counters that the Singapore Judgment is the result of a pleadings motion that is under appeal and is not relevant to this court’s determination of costs. They argue that awarding costs in the cause goes against the requirement under r. 57.03 of the Rules of Civil Procedure for the court to dispose of the issue of costs following each event, and point out that the case relied upon by TAP for this otherwise exceptional costs outcome (in the cause) was a leave to appeal decision which raises different considerations.

[11] I agree that the Singapore Judgment is not a relevant or appropriate consideration in the determination of the costs of the motions I heard and disposed of before the Singapore Judgment was rendered. I also agree that this is not an appropriate case in which to order costs in the cause, especially because the UD Group is not even a party to this application.

[12] However, I do not see the Vexatious Litigants Cross-Motion as a free-standing motion for which costs should be awarded independent of the Intervention/Consolidation Motions. Considered in context, the Vexatious Litigants Cross-Motion was rolled up into TAP’s response to the Intervention/Consolidation Motions; if TAP succeeded in defeating the Intervention/Consolidation Motion then it also wanted to put an end to further attempts to litigate the Substantive Disputes that had effectively been stayed in Ontario by prior court orders pending the outcome of the Foreign Guarantee Proceedings, the granting of which relief technically required TAP to bring a cross-motion.

[13] The court’s initial inclination in the December Endorsement to award no costs (or for each party to bear their own costs) of the motions was based on the fact that no motions succeeded because the court decided, instead, to make the Stay Order. While the court would have granted some relief to UD Group and Rutmet to avoid the Substantive Disputes being determined on their merits in this application without their participation, and that is ultimately what UD Group says it was attempting to achieve, the UD Group was asking for more than that by the totality of the relief that was sought on the Intervention/Consolidation Motions, so even that theoretical “success” was less than absolute.

[14] I agree with TAP that it would be unfair for the court to order TAP to pay the UD Group’s costs of the UD Group’s motion that was dismissed. Or put another way, there are no compelling factors that would cause me to order TAP to pay the UD Group’s costs of their dismissed Intervention/Consolidation Motion.

[15] Having considered the submissions of the UD Group and TAP, no other party having sought costs, and there being no other r. 57 or 49 factors identified for consideration, I have determined that all participating parties shall bear their own costs of the Intervention/Consolidation Motions and the Vexatious Litigants Cross-Motion.

[16] This endorsement and the orders and directions contained in it shall have the immediate effect of a court order without the necessity of a formal order being taken out.

Kimmel J. Date: April 3, 2023