Ash v. Corp. of Lloyd's

1992 Carswell Ont 450, 7 C.P.C. (3d) 372, 95 D.L.R. (4th) 766, 9 O.R. (3d) 755 at 761, 60 O.A.C. 241 at 261, 95 D.L.R. 766

Ash v. Corp. of Lloyd's

C. WILLIAM ASH, C. RUSS BAILEY, MARGARET D. BAILEY, RAY BEDNARZ, RONALD D.BESSE, JAMES E. BIGGAR, SUSAN BIGGAR, FRED BODNAR, RAYMOND BOZEK, VIOLET BOZEK,W. TERRENCE BREITHAUPT, RICHARD BURRI, ROBERT CARROLL, SANDRA CERONI, LOUISCERONI, PETER CLARKE, THOMAS N. DAVIDSON, WERNER DINGFELD, GARY ELLIOTT, JOHNGIBSON, BRADLEY HART, RUTH HART-STEPHENS, HAROLD HIGGINBOTTOM, DIANA HOGARTH,MURRAY HOGARTH, R. LAIRD JENNINGS, EDWARD KSIAZEK, JACQUELIN LEVIN, LAWRENCELEVIN, ANTHONY MARKOWSKI, BARBARA ANN MARTIN, GIAN-CARLO A. MASON, SEANMCDONOUGH, DAVID MCKEE, THOMAS S. MEDLAND, SHERIDAN MONTFORT, JAY B. MOYER,MURRAY NICHOLSON, MURRAY O'NEIL, WILLIAM H. OVERELL, GEORGE PAKOZDI, PETER J.PALMER, STEPHEN F. PALMER, JANE PERRIN, WILLIAM E. PERRIN, MAX H. PICKFIELD,HAL PRINGLE, CLAUDIUS RAMPRASHAD, E.R. REYNOLDS, ROBERT L. ROBINSON, ERNESTROMAIN, HENRI ROTSAERT, SIMONE ROTSEART, PAUL SAUNDERS, RUTH M. SIMPSON,FLORENCE SMITH, IAN TAYLOR, SHARON THIBODEAU, BRIAN TIMMIS, DIANA WALKER, KEITHWALKER, JOHN BRIAN WEBSTER, GARNET WEBSTER, FREDA WEBSTER, NEIL WEBSTER, GRAHAM WRIGHT, WM. YOUNG, MARY LYNN BEAVEN, MICHAEL HEAD, SANDRA HEAD, AND WARRENHURST (plaintiffs (appellants)) v. CORPORATION OF LLOYD'S and BANK OF NOVASCOTIA, CANADA TRUST, CANADIAN IMPERIAL BANK OF COMMERCE, CITIBANK CANADA, HONGKONG BANK OF CANADA, ROYAL BANK OF CANADA and TORONTO-DOMINION BANK and CTCREDIT CORPORATION (defendants (respondents))

C. WILLIAM ASH et al. (plaintiffs (respondents)) v. CORPORATION OF LLOYD'S etal. (defendants (appellants))

Ontario Court of Appeal

Carthy, Osborne and Abella JJ.A.

October 6, 1992

Heard: June 9-11, 1992

Supplementary Reasons for Judgment: October 6, 1992

Docket: Doc. CA C9113

Counsel: Alan J. Lenczner and Glenn A. Smith, for plaintiffs as appellants and respondents.

R. Bruce Smith and Douglas Alderson, for Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank as appellants and for Citibank Canada, Hongkong Bank of Canada and CT Credit Corporation as respondents.

Martin Sclisizzi, for appellant Bank of Nova Scotia.

Peter Howard and Marjo MacMullin, for respondent Corporation of Lloyd's.

Subject: Civil Practice and Procedure; International; Contracts

Conflict of Laws --- Contracts -- Choice of law -- Where contract specifying law.

Conflict of Laws --- Contracts -- Choice of law -- Forum conveniens -- General.

Injunctions --- Availability of injunctions -- General.

Costs -- Costs of particular proceedings -- Interlocutory proceedings -- Motions and applications -- Motion for injunction to enjoin payment on letters of credit where underlying transaction alleged to be fraudulent -- Cross-motion to stay action and motion -- Action and motion stayed against some but not all defendants -- Appeal allowed in part -- Costs of motion awarded on party-and-party basis -- For motion, defendants awarded one set of costs divided into four.

Costs -- Costs of appeals -- Action for rescission of agreement -- Exclusive jurisdiction clauses in favour of England -- More substantial connection with England -- Ontario action stayed -- Appeal allowed in part -- Costs of appeal awarded as one set of costs because one factum filed and counsel for respondents splitting submissions.

The parties made submissions as to costs. The banks submitted that they were entitled to costs on a solicitor-and-client basis because a reimbursement agreement executed by the plaintiffs entitled the banks to recover all expenses in connection with the letters of credit. The plaintiffs opposed on the grounds that these proceedings were not a demand for payment on the indemnity agreements. The plaintiffs submitted that for costs of the appeal, there should be one set of costs to the respondents because there was one factum filed and counsel split submissions.

Held:

The costs of the motion should be to the banks on a party-and-party basis. There should be one set of costs to the banks on the successful appeal. There should be no change as to the costs of the original motion by Lloyd's. The order made on the motion of the Bank of Nova Scotia was varied. The order made on the motion of the financial institutions was varied. The plaintiffs were to pay the costs of the motion and the action to the three banks on a party-and-party basis.

These proceedings were not a demand for payment on the indemnity agreements. The force and effect of the indemnity agreements was not before the court. Costs throughout should be on a party-and-party scale.

Regarding costs of the appeal, there should be one set of costs to the financial institutions and banks because one factum was filed and counsel split the argument.

Regarding the costs of the original motions, there should be no change to the order made on the motion by Lloyd's. The order made on the motion of the Bank of Nova Scotia was varied on appeal to provide for a permanent stay and the costs of the motion and action should be paid to that defendant on a party-and-party basis by the plaintiffs. The order should be amended so as to result in one set of costs for that motion being divided into four with several obligations for payment.

Ajudication on costs of appeal dated July 28, 1992, reported 7 C.P.C. (3d) 364, ante, (sub nom. Ash v. Lloyd's Corp.) 9 O.R. (3d) 755 (C.A.), and of original motion before McKeown J. which resulted in orders dated November 15, 1991, reported 7 C.P.C. (3d) 343, ante, 87 D.L.R. (4th) 65, (sub nom. Ash v. Lloyd's Corp.) 6 O.R. (3d) 235 (Gen. Div.) granting permanent stay of proceedings against defendant Lloyd's, and granting permanent stay of action against three defendant banks or financial institutionshaving presence in Ontario but not in England, and from order refusing to grant stay of proceedings against four chartered banks, who had presence in both Ontario and England.

The judgment of the court was delivered by Carthy J.A. (Suplementary Reasons, October 6, 1992):

1 These reasons are further to those released on July 28, 1992 [reported 7 C.P.C. (3d) 364, ante, (sub nom. Ash v. Lloyd's Corp.) 9 O.R. (3d) 755 (C.A.)] and in response to written submissions as to costs in this court and on the original motions [reported (1991), 7 C.P.C. (3d) 343, ante, 87 D.L.R. (4th) 65, (sub nom. Ash v. Lloyd's Corp.) 6 O.R. (3d) 235 (Gen. Div.)].

2 The banks ask that they be paid costs throughout on a solicitor-and-client basis on the strength of reimbursement agreements signed by the plaintiffs which entitle the banks to recover all expenses in connection with the letters of credit. I agree with counsel for the plaintiffs that these proceedings do not constitute a demand for payment on the indemnity agreements. Their force and effect is not before us and it is not appropriate to apply their terms as if they had been the subject of adjudication on the merits. Costs throughout should, therefore, be on a party-and-party scale.

3 As to costs of the appeal, the plaintiffs submit that there should be only one set of costs to the financial institutions and banks as respondents to the unsuccessful appeal as all were represented by one counsel.

4 It is further submitted that there should be only one set of costs awarded to the banks on the successful appeal as one factum was filed and counsel split the argument. I agree, and the earlier reasons should be read as amended in these two respects, and also to include the costs of the motion before the Chief Justice of Ontario.

5 As to the costs of the original motions there should be no change to the order made on the motion by the Corporation of Lloyd's; the order made on the motion of Bank of Nova Scotia has been varied on appeal to provide for a permanent stay and the costs of the motion and action should be paid to the Bank of Nova Scotia on a party-and-party basis by the plaintiffs named in the order under appeal; the order made on the motion of the financial institutions and banks has been varied in part on the appeal and the provision as to costs in para. 4 of that order should be varied to provide that the plaintiffs named therein shall pay the costs of the motion and action of the three banks on a party-and-party basis. This will result in one set of costs for that motion being divided into four with several obligations for payment.

Order accordingly.