10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award

Case Summary

Following a Trial scrutinizing a verbal agreement for the purchase of property, Madam Justice Hughes heard the parties’ submissions on Costs.  The Plaintiffs argued that because they were successful at Trial, they were entitled to full indemnity Costs, or alternatively, either a multiple of Schedule C Costs, or Schedule C Costs enhanced by 35% inflation.

The Defendants posited that the parties should bear their own Costs, since both experienced similar levels of success on their Statements of Claim and Counterclaims. On this line of argument, the Defendants submitted that the Plaintiffs’ $2 million-dollar damages claim was dismissed, although their underlying request to dismiss a wrongfully filed caveat was allowed, while the Defendants’ $1.7 million-dollar Counterclaim was dismissed, yet their claim for unjust enrichment was allowed. Alternatively, the Defendants argued that enhanced Costs were inappropriate, as the Plaintiffs’ misconduct in directing a witness to lie under oath during Trial should preclude any Costs Award.

Madam Justice Hughes ultimately held that the Plaintiffs were entitled to Costs, as they were the successful party pursuant to Rule 10.29. This conclusion was justified in that the most germane issue at Trial was whether the impugned verbal agreement was properly characterized as a partnership, as the Defendants argued, or whether it was a mere verbal agreement, which the Defendants had breached by failing to make their share of financial contribution. Having ruled against the Defendants on this issue, Her Ladyship attributed success to the Plaintiffs.

Madam Justice Hughes then assessed various factors found in Rule 10.33 including the complexity of the case, efforts made by both parties at streamlining the litigation, settlement offers made by the Plaintiffs, and the fact that the Defendants did not plead fraud or conspiracy in their Statement of Claim, and found these factors to militate in favour of enhanced Costs.

However, Her Ladyship then considered the Plaintiffs’ misconduct in attempting to deceive the Court at Trial, and found that pursuant to Rule 10.33(2)(g), such behaviour did warrant a varying of the Costs Award. Based on the discretion conferred by Rule 10.31(1)(b) to vary any Costs Award, the Court found that a lump sum Costs Award was suitable in light of the aforementioned deceit.

View CanLII Details