Harold Bernard Cohen

The plaintiff condominium corporation sought leave to discontinue its action against a former employee defendant without costs, or alternatively with modest costs, following settlement of related litigation arising from a large fraud scheme.

The responding defendant sought costs exceeding $50,000.

The court applied Rule 23.05 of the Rules of Civil Procedure and the 'justified action test' governing costs on discontinuance.

While the plaintiff had a bona fide basis to commence the action because the defendant’s name appeared on loan documents, the defendant incurred some legal expenses in defending the claim.

The court rejected the majority of the claimed costs due to questionable docketing practices and excessive billing, and awarded partial indemnity costs of $5,000 as a condition of discontinuance.

The defendant brought a motion under rule 21.01(3)(d) of the Rules of Civil Procedure seeking dismissal of a defamation action as frivolous, vexatious, or an abuse of process.

The action arose from a letter alleging that the plaintiffs would be in a conflict of interest while representing a professional association in regulatory consultations.

The court held that allegations of conflict of interest could potentially be defamatory and that determining whether the statement was defamatory required resolution of contested facts.

Given significant factual disputes and the availability of defences such as qualified privilege and fair comment, the court found the claim raised real issues requiring trial.

The motion to dismiss was therefore denied.