Brendan Smith

The respondent, Sherbourne Residential, sought costs of $143,145.58 following the dismissal of the applicants' application regarding a $2 million parkland holdback.

The respondent sought substantial indemnity costs based on an offer to settle, but the court found the offer was made less than seven days before the hearing, precluding substantial indemnity under Rule 49.03.

Applying the principle of reasonableness and considering the fair expectations of the unsuccessful party, the court fixed costs at $75,000 on a partial indemnity basis.

The applicants sold a development property to the respondent.

The agreement of purchase and sale included a $2 million holdback in escrow to cover potential increases in parkland dedication requirements by the City of Toronto.

The applicants brought an application for a declaration that the conditions for the release of the holdback had been met, arguing that the City's new Official Plan Amendment did not specifically prescribe increased parkland requirements.

The court dismissed the application, finding that the Official Plan Amendment adopted by the City was sufficient to trigger the holdback provisions under the plain meaning of the contract.