Andrew J. MacDonald

This costs decision addresses the allocation of costs for a distribution motion concerning competing claims over preserved funds in a complex fraud and investment scheme case.

The Trial Parties, who succeeded at trial on fraud, breach of fiduciary duty, conspiracy, and unjust enrichment claims, sought to recover their judgment from preserved funds.

The Settling Parties, who had reached settlement agreements with the defendants before trial, sought equitable liens and constructive trusts over the same preserved funds.

The court awarded costs to the Trial Parties against the Settling Parties, finding that the Settling Parties had deliberately delayed enforcement of their settlements and improperly sought to benefit from the Trial Parties' litigation efforts without bearing the associated costs and burdens.

The appellants sought a permanent stay of the plaintiffs' action, arguing that the plaintiffs' failure to immediately disclose a settlement agreement with a former defendant, Sean Antonello, fundamentally altered the litigation landscape.

The Court of Appeal for Ontario dismissed the appeal, affirming the motion judge's finding that the settlement did not significantly change the adversarial relationship between the parties.

The court held that the motion judge's determination was entitled to deference and that the drafting of affidavits by plaintiffs' counsel and a non-disparagement clause did not, by themselves, demonstrate an improper cooperative relationship.

The applicant brought an application under section 23 of the Solicitors Act for a declaration that legal services provided by the respondent lawyer in an underlying veterinary malpractice action were rendered on a pro bono basis.

The respondent argued the oral retainer was a contingency fee arrangement and billed the applicant $34,000 after the action settled.

The court found that the respondent failed to discharge the heavy onus of proving the terms of the oral retainer over the client's understanding.

The court declared the services were provided pro bono and ordered the return of fees previously paid.

Following a successful civil Charter action against police defendants, the plaintiff sought substantial indemnity costs after obtaining modest damages and declaratory relief.

The defendants argued that no costs should be awarded because the plaintiff recovered less than $100,000 and should have proceeded under the Simplified Procedure.

The court held that it was reasonable for the plaintiff to proceed under the ordinary procedure given the need for full discovery and cross-examination to establish credibility and Charter violations.

The court further found troubling litigation conduct by the defendants, including problematic testimony and evidentiary issues relating to video recordings.

Balancing the factors under Rule 57.01 and access to justice considerations, the court awarded substantial indemnity costs to the plaintiff.

The defendant brought a motion seeking a stay of a civil action on the basis that the plaintiff had initiated a parallel complaint before the Canadian Human Rights Commission arising from substantially the same facts.

While courts sometimes allow simultaneous civil and human rights proceedings, they may also prevent duplicative litigation as an abuse of process.

Before the motion was decided on the merits, the Commission issued a report recommending that the human rights complaint be held in abeyance pending the outcome of the civil action, effectively eliminating the basis for the stay motion.

The court dismissed the motion without prejudice to it being brought again if the administrative complaint were revived.

The plaintiff was awarded partial indemnity costs for defending the motion.

The defendant moved for security for costs under Rule 56.01(1)(c) of the Rules of Civil Procedure on the basis that a prior costs order contained in a consent judgment remained partially unpaid.

The court held that even where the technical requirements of the rule are met, the court retains discretion to refuse security for costs after considering all relevant circumstances, including the merits of the claim.

The court clarified that the role of the merits under Rule 56.01(1)(c) falls on a continuum between the standards applicable under Rule 56.01(1)(a) and Rule 56.01(1)(e).

On the evidence, the plaintiffs demonstrated a good likelihood of success in their action to set aside a consent judgment based on alleged undisclosed liabilities in a share purchase transaction.

In light of the strength of the plaintiffs’ case and the absence of responding evidence from the defendant, ordering security for costs would be unjust.