graesser j

10.29: General rule for payment of litigation costs

Case Summary

The Plaintiffs unsuccessfully claimed against the Defendant mortgage corporation for a failure to disclose the interest requirements in a mortgage document. The Master awarded Costs on a solicitor-client basis and the Plaintiffs appealed.

Justice Graesser dismissed the Appeal after finding that the Defendant mortgagor had not contravened Section 6 of the Interest Act. Justice Graesser also reviewed the Costs award against the Plaintiffs, noting that the awarding of Costs in litigation is a discretionary matter. As a general rule, an award of solicitor-client costs is reserved for “rare and exceptional circumstances”. His Lordship also noted that, notwithstanding the general proposition that Costs are discretionary, the parties are able to agree by way of contract on the allocation of Costs. This Cost allocation provision is common in mortgage documents, and the parties are entitled to rely on clauses to that effect.

In the result, Graesser J. held that the defence of the Action by the Defendant was not contemplated in the contract, and overturned the Master’s Decision with respect to solicitor-client Costs. Instead, Costs were awarded in accordance with Column 2, of Schedule C.

View CanLII Details