The Appellant commenced and later discontinued its claim against the Respondents. The Respondents applied to the Court for solicitor-and-own-client costs and were granted two-thirds of such costs by a Master. The Appellant appealed the costs award to a Justice.

As a preliminary issue, the Court dealt with the Respondents’ argument that the Appeal ought to be struck due to the Appellant’s failure to comply with the timelines regarding filing of the Notice of Appeal, filing and service of the Appeal Brief, and filing and service of the transcript of proceedings before the Master as required under Rule 6.14 and Civil Practice Note #2 (and in this case, a Procedural Order). The Court declined to strike the Appeal because this argument was first raised in the Respondents’ Appeal Brief rather than by separate Application.

The Court next set out the standard of review on appeal from a Master to a Queen’s Bench Justice. The Court stated that the standard of review is correctness. Justice Leonard also noted that the Appeal is on the record, but that new evidence that is relevant and material may be considered pursuant to Rule 6.14(3). Justice Leonard further noted that while the correctness standard applies, costs awards are discretionary and are normally entitled to deference.

The Appellant made several arguments: that the Master erred in the factors considered in making the costs award under Rule 10.33, including by considering pre-litigation conduct and by not adequately considering the Discontinuance; that, in the circumstances, the Master erred in awarding a percentage of assessed costs; and that the Master erred by awarding a percentage of assessed costs without evidence of the actual costs incurred.

Justice Leonard held that considering pre-litigation conduct was not an error, in particular because: (1) the Master did not award full indemnity costs based on pre-litigation conduct; and (2) the Master considered pre-litigation in addition to litigation conduct. The Court further held that the Master was alive to the effect of the Discontinuance and the steps that followed the Discontinuance and did not err in his consideration of those factors.

With respect to the awarding of a percentage, the Court held that that is an option expressly authorized under Rule 10.31 and that such option is not reserved for matters that are complex or protracted, as was argued by the Appellant. Finally, the Court held that the Master did not err in awarding a percentage of costs without evidence of the actual costs incurred. Justice Leonard explained that the Respondents were not required to provide evidence of their expenses at the Application. Rather, the Master was entitled to award a percentage of costs incurred, which costs would then be assessed pursuant to Rules 10.34 and 10.35.

Justice Leonard, therefore, dismissed the Appeal.