The Court was called to determine the appropriate Costs Award for the Action. The Plaintiff had initially brought the Action to remove the Defendant as the arbitrator under an arbitration agreement on the basis of a reasonable apprehension of bias. Following the commencement of the Action, the Defendant resigned as arbitrator. Given that the Action was now moot, the Court struck the Action in its entirety. The Parties could not agree on Costs following the striking of the Action.

The Plaintiff was of the view that they were the successful party given that the Defendant ultimately resigned as arbitrator, and as such were entitled to Costs. The Defendant took the position that their defence of the Action was necessary due to the serious nature of the allegations of bias, and noted that the Plaintiff unnecessarily prolonged the proceedings by failing to comply with Court Orders and rejecting reasonable offers to settle. As such, the Defendant argued that a Costs Award would be inappropriate notwithstanding their functional success.

Justice Marion noted that the Rules provide the Court with considerable discretion in setting reasonable and proper costs awards, and reviewed the relevant principles. The Court also noted that the Action had an additional consideration in that the Defendant was providing their services as an arbitrator, and that case law supported a view that arbitrators should not be put at significant personal financial risk in carrying out their duties.

Ultimately, the Court reviewed the facts of the Action, including its relative complexity, importance, and the conduct of the Parties, and ordered the Parties to bear their own Costs.