10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

The Plaintiffs were unsecured creditors of Lightstream Resources Inc (“Lightstream”). The Defendants consisted of the officers and directors of Lightstream. Each group had separate counsel. Both groups applied for Summary Dismissal of the Plaintiffs’ claims. All of the Defendants were successful on that Application except for John Wright, the President and CEO of Lightstream, and one of the two officers. This was the reasons for a Decision on Costs.

Justice Hollins noted that per Rule 10.29, an unsuccessful party must pay the Costs of the successful party, subject to the Court’s discretion. Per Rule 10.31, Justice Hollins could assess those Costs as what was reasonable and proper, or in any amount Her Ladyship felt was appropriate, after considering the factors enumerated in Rule 10.33(1).

All the parties agreed that fees should be assessed under Column 5 of Schedule C and had identified the same line items for recoverable fees. However, the successful Defendants sought a 3x multiplier, and the Plaintiffs argued for a 1.5x multiplier. Justice Hollins did not accept the Plaintiffs argument that their successful defence of John Wright’s motion should decrease their liability for Costs of the Defendant directors — the liability of the directors and officers were based on different facts and their defenses were different. Her Ladyship noted that while there had been no litigation misconduct, this was an incredibly complex matter with a record of approximately 1700 pages of material and hearings that took place over three days. Accordingly, Justice Hollins thought a multiplier of 2.5x was appropriate for all items except for items 19 to 21 of Schedule C. Her Ladyship noted that the per Rule 10.31(2)(d), Costs do not include the fees of an expert unless ordered by the Court. Justice Hollins found that it was reasonable and proper that the Defendant directors recover the full Costs of expert fees. 

The defence of the former CFO of Lightstream was presented together with that of John Wright. The former CFO was successful in his defence and asked for 3x his Column 5 Costs divided in half to account for the fact his Costs were shared with John Wright. John Wright argued that there was mixed success, and no Costs should be awarded against him — Her Ladyship rejected that argument. John Wright also argued that since he remained a Defendant, the only Costs that should be awarded against him were those respecting his unsuccessful Application. Justice Hollins noted that in a case like this it was extremely difficult to separate the legal fees related to the underlying Action from those related to the Application and thought the best approach would be to award the Plaintiffs their Costs of all items to this point.

Ultimately, Justice Hollins awarded the Defendant directors Costs of 2.5x Column 5 of Schedule C, and their disbursements, including expert fees; the former CFO Costs of 2.5x Column C of Schedule C, and disbursements divided in half; and the Plaintiffs their Costs against John Wright at 2.5x Column 5 of Schedule C, and their disbursements.

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