Ontario Superior Court of Justice

Court File No.: CV-22-00682375-0000
Date: 2025-03-20

Between

First Walden Holdings Inc., Kris Ferguson and Walden Electrical Ltd.
Applicants

– and –

Brendon Fenton, Nicholas Gatien and PowerNorth Utility Contractors Inc.
Respondents

Harvin D. Pitch and Adam Brunswick, Lawyers for the Applicants
Joseph Groia and Cheyenne Parsons, Lawyers for the Respondents

Heard: In writing

Reasons for Decision on Costs

G. Dow

Background

[1] This matter proceeded before me on November 13, 2024 with my Reasons released January 17, 2025 (2025 ONSC 359). I awarded the applicants a total of $399,441.90, inclusive of interest, on the basis they qualified as a complainant under Section 245 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16. Thus, they had available the remedies under Section 248.

[2] Significant portions of the relief sought by the applicants were not granted. I urged the parties to agree on costs, noting there appeared to be divided success, which raised whether the parties ought to each bear their own costs. If not, I set deadlines of February 14, 2025 and March 14, 2025 for limited written submissions. I acknowledge receipt of those submissions and the need to determine costs.

Submissions on Costs

[3] The applicant seeks its partial indemnity costs of $104,417.50 inclusive of partial indemnity fees, HST and disbursements. I would note the respondents' agreement that the quantum sought was reasonable. In this regard, the respondents claimed, if successful, $118,946.06 inclusive of partial indemnity fees, HST and disbursements (see paragraph 7 of the respondents' written submissions).

[4] The respondents opposed the awarding of costs in favour of the applicants, instead proposing each party bear their own costs. It does so on the basis of divided success, the key issue being my not granting the applicants’ request for 45% of the ownership and profits of the respondent, PowerNorth Utility Contractor Inc. (“PowerNorth”).

[5] The applicants first rely on a respondent Rule 49 Offer to Settle dated November 6, 2024 but served at 5:36 pm (thus being less than seven days before the hearing and outside the application of Rule 49.10) which was for payment of only $252,228.16, all inclusive, in support of its submission that success was not divided and the applicants achieved an award greater than what was offered.

[6] The applicants also raised (at paragraph 10 of its written submissions) that this was not an “exceptional circumstance where the Court’s discretion under Rule 49.13 to consider any offer to settle ought to apply for the purpose of taking a more holistic approach”. This would appear to anticipate the respondents’ reliance on its earlier Offer to Settle, made March 9, 2023, to pay the applicants $500,000, all inclusive, which was withdrawn August 15, 2023.

[7] The applicants also relied on two decisions in support of their submission “it is not appropriate to require that the parties bear their own costs simply because there is some divided success” (at paragraph 11 of its written submissions). I do not interpret the portion of the decisions relied on to support the applicants’ position.

Analysis of Authorities

[8] Indeed, in Richard Sherk et al v. Marl Sherk, Bent Nail Holdings Inc., et al, 2016 ONSC 2409, paras 14-18 being relied upon, paragraph 14 begins: “I recognize that in some cases, where there is divided success, the court frequently requires each party to bear their own costs.” The decision then goes on to explain why the Judge chose not to exercise that discretion. I find it not appropriate to award costs in this matter.

[9] In the other decision relied on, Crawford Chondon v. Fields, 2021 ONSC 3131, paras 10-13, the Judge begins, at paragraph 13: “When I consider the result of the case, the Defendant was substantially successful and she should be entitled to most of her costs, on a partial indemnity basis, for this matter.” While I agree with that statement, I find the matter before me raised different considerations, in particular (relying on Rule 49.13) a five month opportunity during the litigation to accept an outstanding Offer to Settle and achieve an equal, if not better, result than what occurred.

Scope of Relief Sought

[10] In addition to the background cited above, the key issue was the applicants' attempt to obtain 45% of the ownership and profits of the respondent, PowerNorth, which failed. In fact, in its factum (which I would have expected to have distilled and narrowed the relief being sought), the applicants simply repeated its request for “an Order for the entirety of the relief set out at subparagraphs 1a. through 1o. of the Notice of Application”. That is, the applicants were seeking 15 separate orders which included:

• various declaratory relief;
• appointment of the applicant, Khris Ferguson as a director of PowerNorth;
• issuance of shares representing 45% of the issued shares of PowerNorth;
• appointment of a Receiver or equitable winding-up;
• damages in the amount of $5 million for breach of contract, breach of trust, breach of fiduciary and/or equitable duties and unjust enrichment; and
• substantial indemnity costs.

The applicants did abandon their claim for $1 million for punitive, exemplary and aggravated damages during submissions.

Conclusion

[11] To that end, and relying on the discretion afforded under Section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and the factors to consider under Rule 57.01, I conclude and agree with the respondents’ submission that success was divided and the appropriate order made is that each party shall bear their own costs.

G. Dow

Released: March 20, 2025