





CITATION: Indalex Limited (Re), 2011 ONCA 578



DATE: 20110907



DOCKET: C52187 & C52346



COURT OF APPEAL FOR ONTARIO



MacPherson, Gillese and Juriansz JJ.A.



BETWEEN



In the Matter of the
Companies Creditors
          Arrangement Act
, R.S.C. 1985, c. C-36, as amended

And in the Matter of a Plan of Compromise or
          Arrangement of Indalex Limited,           Indalex Holdings (B.C.) Ltd.,
          6326765 Canada Inc. and Novar Inc.



Applicants/Respondents



Andrew J. Hatnay and Demetrios Yiokaris for the Former Executives,
          appellants



Darrell L. Brown for the United Steelworkers, appellants



Mark Bailey for the Superintendent of Financial Services



Hugh OReilly and Adam Beatty for Morneau Sobeco Limited
          Partnership, Intervenor



Fred Myers and Brian Empey for Sun Indalex Finance, LLC



Ashley Taylor and Lesley Mercer for the Monitor,
      FTI Consulting Canada ULC



Harvey Chaiton and George Benchetrit for George L. Miller, the
          Chapter 7 Trustee of the Bankruptcy Estates of the US Indalex Debtors



On appeal from the orders of Justice Colin Campbell of the
          Superior Court of Justice, dated February 18, 2010.



COSTS ENDORSEMENT



[1]

The court released its reasons for decision in this matter on April 7,
    2011 (the Decision).  In the Decision, the court indicated that if the parties
    were unable to agree on costs, they could make brief written submissions on the
    same.  Despite extensive efforts to settle costs, no settlement was reached and
    the parties duly made written submissions.  This endorsement follows due consideration
    of those submissions.

[2]

Morneau Shepell Ltd., the Ontario Superintendent of Financial Services
    and the Retirees reached an agreement in respect of the payment of the
    Retirees legal fees and disbursements.  The court approves the agreement. 
    Therefore, it orders that:


i.

the Retirees full indemnity legal fees and disbursements in the amount
      of $269,913.78 shall be paid from the fund of the Executive Plan attributable
      to each of the 14 Retirees accrued pension benefits.  Specifically, such costs
      shall be allocated among the 14 Retirees in relation to their pension
      entitlement from the Executive Plan and will not be borne by the other three
      members of the Executive Plan, who are not appellants;

ii.

the $269,913.78 amount shall be paid to Koskie Minsky LLP in trust on
      the first day of October, 2011;

iii.

the costs of these proceedings ordered in favour of the Retirees shall
      be paid to the fund of the Executive Plan and once received, the amount shall be
      allocated among the 14 Retirees in relation to their pension entitlement from
      the Executive Plan.


[3]

The USW sought an order to the same effect in respect of the Salaried
    Plan.  We decline to make that order because the USW is in a materially
    different position than the Retirees.  The Retirees are beneficiaries of the
    pension fund.  The individual represented  Retirees, who comprise 14 of 17
    members of the Executive Plan, have consented to the payment of costs from
    their individual benefit entitlements.  Those who have not consented will not
    be affected by the payment.  By contrast, the USW is the bargaining agent (not
    a beneficiary) for only 7 of the 169 beneficiaries of the Salaried Plan, none
    of whom have been given notice of, or consented to, the payment of legal costs
    from the Salaried Plan.  It is also significant that we are not dealing with
    surplus pension funds as the Salaried Plan is underfunded.

[4]

We make no order as to costs of the underlying motions.  We understand
    that the conventional approach in
CCAA
proceedings is to rarely make costs
    orders, with the result that each party bears its own costs.  There are sound
    policy reasons that underlie this approach, which include the reality that as a
    result of the situation of the insolvent company, the amount of funds available
    for distribution is limited and parties ought not to expect to recover their
    litigation costs: see
Canadian Asbestos Services Ltd. v. Bank of Montreal
,
    [1993] O.J. No 1487, at para. 31 (Gen. Div.) and
Re Calpine Canada Energy
    Limited
, [2008] A. J. No. 965, at para. 1.  We see no reason to depart from
    the usual practice.

[5]

As for costs of the appeal, we make no order for or against the Monitor
    due to its prior agreement with the Retirees and the USW in which the parties
    agreed not to claim against one another for the costs of the leave to appeal
    motion or the appeal.

[6]

The Retirees argue that the court should award costs of the motion for
    leave to appeal, the motion for intervenor status and the appeal on a
    substantial or full indemnity basis.  We see no reason to depart from the
    courts normal practice of awarding costs on a partial indemnity basis.

[7]

Thus, the Retirees and the USW, as the successful parties, are each
    entitled to their costs on a partial indemnity basis from Sun Indalex and the
    U.S. Trustee, payable jointly and severally.  We fix those costs at $40,000,
    inclusive of applicable taxes and disbursements.  The payment of costs in
    favour of the Retirees shall be done in accordance with para. 2(iii) above.

[8]

In making this order, we are mindful of the submissions of Sun Indalex
    and the U.S. Trustee that any costs award should be payable by the Canadian
    Debtors [Indalex].  However, we are not persuaded that we should depart from
    the usual practice in which the unsuccessful parties pay the costs of the
    successful parties.

[9]

Orders to go in accordance with these reasons.

J.C. MacPherson J.A.

E.E. Gillese J.A.

R.G. Juriansz J.A.


