Fact that defendants agreed to pay high amount to monitor not determinative of what was reasonable

Plaintiff monitor, on behalf of creditors, pensioners and retirees of A Ltd., brought oppression action under Companies’ Creditors Arrangement Act, involving A Ltd. as applicant in proceedings. E defendants and GIP objected to monitor as proper complainant arguing it was A Ltd. that should be party by way of derivative action, however, monitor was held to be proper complainant and was authorized and directed to take oppression action with A Ltd. named as party and entitled to participate as advised. E defendants agreed with overall total of $1.7 million to be paid to monitor. A Ltd. sought costs against E defendants on partial indemnity basis around $1.7 million including disbursements for ediscovery document review; GIP sought costs against monitor on partial indemnity scale of $750,156.18 on basis that relief sought by monitor at various times in one form or another would have affected GIP security. E defendants were ordered to pay legal fees of $425,000 inclusive of HST and disbursement claim of $1,138,384.19 for total costs of $1,138,809.19; No order as to costs for claim against monitor by GIP. E defendants significantly understated A Ltd.’s role. E defendants acknowledged document review production was carried on for monitor but disagreed with quantum. It was assumed that legal fee portion was around $1.3 million taken size of disbursements claimed by monitor, however, size of fees paid to monitor’s counsel did not necessarily mean total fees for both monitor and A Ltd. should be same or some fraction of fees paid. E defendants` actions, including companies in Europe and India ran show that ended up in litigation and while they knew what had happened, collective plaintiffs had to figure it out. Consideration needed to be given that if total fees of monitor and A Ltd. were too high, that it could be fault of monitor’s counsel. Fact that E defendants agreed to pay high amount to monitor was not determinative of what was reasonable. Monitor acknowledged that if only position taken by GIP was scope of relief, they were entitled to costs but GIP took broader attack, including whether monitor had standing to bring action, contending they had veto provision in was commercially reasonable and fair value of transaction was established, none of which was established. GIP appealed oppression decision and requested appellate court order that it was error to find that monitor was proper complainant or to find oppression of A Ltd. and thus it was contended that GIP could not say it was wholly successful. Success was divided between monitor and GIP and no order was made to costs.

Ernst & Young Inc. v. Essar Global Fund Ltd et al (2017), 2017 CarswellOnt 12508, 2017 ONSC 4017, Newbould J. (Ont. S.C.J.); additional reasons (2017), 2017 CarswellOnt 4049, 2017 ONSC 1366, Newbould J. (Ont. S.C.J. [Commercial List]).