Even Under A Contractual Right To Indemnification, Fees Must Be Reasonable

On June 6, 2014, Justice Brown of the Ontario Superior Court of Justice (Commercial List) released additional reasons¹ to his decision in Romspen Investment Corp. v. 6711162 Canada Inc., 2014 ONSC 2781, centred on the cost submissions made by counsel to Romspen Investment Corp. ("Romspen"). Despite a contractual provision in a mortgage agreement that gave the applicant, Romspen, a right to full indemnity costs from the respondents, Justice Brown found that the legal fees incurred by counsel to Romspen were unreasonable. Justice Brown ordered that the legal fees be reduced to an amount of $53,393.50 from the original amount of $86,135 reflected in the Bill of Costs submitted by counsel to Romspen.