The Plaintiffs abandoned their Action against the Defendants. The parties were unable to agree to the amount of Costs that the Defendants were entitled to. The individual Plaintiff maintained that party and party Costs based on Schedule C were appropriate. The Defendants argued for solicitor and client Costs.

Graesser J. noted that it has become common for successful parties to seek solicitor and client Costs, in part perhaps because Schedule C Costs have not been updated since the year 2000, and have not kept up with the rate of inflation. However, unless a party is entitled to such Costs pursuant to a statute or contract, Graesser J. noted there must be “exceptional circumstances” to award solicitor and client Costs. Justice Graesser referenced Rule 1.2, stating that a Court’s exercise of discretion when granting a remedy or imposing sanctions must be “proportional to the reason for granting or imposing it”.

Graesser J. held that this was not a case where the award of solicitor and client Costs was justified. Unlike cases where solicitor and client Costs were justified because of a failed attempt to impugn a witness’ honesty or integrity, there were no allegations pertaining to honesty and integrity in this case, and the “litigation misconduct” did not rise to the level necessary to “push the exercise of discretion” to award solicitor and client Costs.

Graesser J. awarded Costs assessed on the basis of three times Column 5 of Schedule C. In addition, to account for inflation, Grasser J. held that the basic column numbers listed therein should be increased to 135 percent.