ROYAL BANK OF CANADA v SIMMER

This costs decision followed a prior decision granting Summary Judgment in favour of the Plaintiff, Royal Bank of Canada (“RBC”), on defaulted credit facilities and dismissing the Defendants’ Counterclaim.

RBC sought solicitor-client costs based on contractual indemnity provisions in the lending agreements, as well as contractual interest. The Court held that while such provisions support full indemnification, they did not oust the Court’s discretion to award costs in a principled and proportionate manner. Justice Devlin emphasized that costs must reflect proportionality and the conduct of the parties.

Devlin J. found the Defendants’ Counterclaim was meritless and time-barred, and it had significantly increased the complexity and cost of the litigation, while RBC’s recordkeeping contributed to inefficiencies. Although RBC’s legal accounts were generally reasonable, Justice Devlin found that the total costs claimed were disproportionate to the amounts in issue. Applying a discretionary reduction for proportionality and inefficiencies, the Court awarded reduced costs rather than full contractual indemnity.

Regarding the interest claimed, Justice Devlin held that the amounts claimed formed part of the contractual debt and were not subject to reduction. Devlin J. rejected the Defendants’ argument that interest should be abated due to delay, holding that interest continued to accrue regardless of the litigation.

In the result, the Court awarded RBC reduced solicitor-client costs and granted the contractual interest claimed. No award of costs was granted for the Costs Application.