The Plaintiffs sought an adjournment of their Trial on May 29, 2015, which was denied. The Plaintiffs then discharged their counsel. Their new counsel applied for an adjournment on June 1, 2015, which was also dismissed. The Plaintiffs subsequently withdrew their Claim and the Defendants sought indemnity Costs.

Justice Moreau considered Rules 10.31, 10.33 and prior leading authority relating to indemnity and solicitor-client costs, noting that solicitor-client costs are a departure from the standard award of partial indemnity or party-party Costs; they are rare and exceptional. Justice Moreau noted that solicitor-client Costs awards are necessarily punitive in nature. They are awarded to condemn malicious, oppressive or high-handed misconduct. Justice Moreau noted that the amount claimed and the amount recovered ought to be considered when assessing a Costs award. Further, the Court must assess the conduct within the Action and not the conduct that gave rise to the Action.

Justice Moreau held that elevated Costs were appropriate in the circumstances, but that indemnity costs of $300,000 for a $34,000 claim would not be an appropriate remedy, despite counsel withdrawing their claim on the eve of Trial. The conduct complained of was not egregious or reprehensible. Justice Moreau awarded the Defendants Costs based on Schedule C, Column 1 for the steps leading to Trial and for one half day of Trial, as well as Costs associated with two unsuccessful adjournment Applications and the preparation of Briefs. Moreau J. also considered thrown-away Costs, noting that these Costs included only the “disbursements and reasonable fees for work that has been rendered useless” as a result of an adjournment. Thrown-away Costs were awarded for Trial preparation, but a discount was applied because the Defendants received compensation under their successful Counterclaim.