The dispute arose from a contractual agreement where Kinross and its subsidiaries purchased products from Cyanco.
Kinross sought declaratory relief to clarify that the agreement was limited to liquid sodium cyanide, which would allow them to source solid sodium cyanide elsewhere.
The court dismissed Kinross' action, leading to a dispute over costs.
Key Legal Issues:
Application of Contractual Cost Provisions:
Cyanco argued that under section 12.6 of the agreement, they were entitled to recover full indemnity costs.
Kinross argued that costs should be on a partial indemnity basis, especially as Cyanco's defenses and actions allegedly extended the litigation unnecessarily.
Full Indemnity vs. Partial Indemnity:
The court upheld the application of section 12.6, agreeing that the prevailing party (Cyanco) was entitled to all reasonable costs on a full indemnity scale.
Costs Involving U.S. Counsel:
Cyanco claimed costs for both Canadian and U.S. counsel, arguing U.S. counsel was necessary due to the cross-border nature of the business.
The court denied the costs for U.S. counsel, stating that Canadian law governed the agreement and their involvement was not necessary.
Assessment of Canadian Counsel’s Costs:
Kinross contended that Cyanco's legal fees were excessive.
The court determined that the fees were reasonable, considering the high stakes ("bet-the-company" litigation) involved.
Outcome:
The court awarded Cyanco $2,192,609.12 CAD in costs, covering full indemnity fees for Canadian counsel but excluding the fees for U.S. counsel.
