CITATION: Gutoskie v. Cybulski, 2026 ONSC 2226

COURT FILE NO.: CV-21-84

DATE: 2026/04/14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kenneth Gutoskie, Plaintiff

AND

Kevin Cybulski and Joanne Cybulski, Defendants

BEFORE: The Honourable Justice N. Somji

COUNSEL: Stanford Cummings, Counsel, for the Plaintiff

Allison Russell, Counsel, for the Defendants

HEARD: Partial oral submission December 1, 2025;

Written Cost submissions filed by January 16, 2026

costs ENDORSEMENT

Introduction

1The Defendant Kevin Cybulski is a 62-year-old quadriplegic confined to a wheelchair as a result of an accident that occurred in 1998. He lives on a fixed income, and the co-Defendant Joanne Cybulski is his primary caregiver. Since 2008, they jointly own a seasonal 150-acre rural property (the “Cybulski property”) which was previously owned by Mr. Cybulski’s parents.

2In September 2021, the Defendants listed the Cybulski property for sale for $300,000. They received a purchase offer for $290,000 on September 15, 2021. On/around that same day, the Plaintiff, Kenneth Gutoskie, commenced an action under the ordinary procedure against the Cybulskis. Mr. Gutoskie is Mr. Cybulski’s first cousin and owns a property adjacent to the Cybulskis which he purchased in 2010 (the “Gutoskie property”). Within two days of filing his claim, Mr. Gutoskie offered to purchase the Cybulski property for $210,000, which was $90,000 less than the listing price and $80,000 less than the offer they had received.

3In his Statement of Claim (“SOC”), the Plaintiff sought a constructive trust over 100% of the Cybulski property or equitable compensation of $300,000 for a gravel roadway he built across the north end of the Cybulski property (“roadway”) together with an equitable easement over the roadway. He asserted that he built the roadway with the Defendants’ knowledge and an understanding that he would be able to eventually buy their property. At the time Mr. Gutoskie purchased his property, it was accessible only over an unopened road allowance owned by the Township of Killaloe, Hagarty & Richards (the “Township”). In fact, the listing for the Gutoskie property stated that “access is through unopened road allowance, can get part way with 4 x 4 and partly with ATV. Not easy to find!!” Mr. Gutoskie built the roadway to allow for vehicular access to his own property.

4In their Statement of Defence (“SOD”), the Defendants argued that they never contracted Mr. Gutoskie to build the roadway, never received receipts or requests for payment, and never promised Mr. Gutoskie a right of way on their land or the right to purchase their property in exchange for constructing such a roadway. The Cybulskis have their own road by which to access their property. They assert the roadway was built for Mr. Gutoskie’s own benefit.

5In their SOD, the Defendants explain that Mr. Cybulski’s disability does not allow him to monitor the expanse of property in the same way another owner might. Rather, the Defendants rely on the kindness of friends and neighbours to assist them with the maintenance of their property, and in exchange, the Cybulskis allow such persons to hunt and use the cabin on their land. Furthermore, the roadway was built without a proper permit, involved extraction of natural fill and organic materials from their land, and has negatively impacted their property value. In their SOD, the Cybulskis argued that the Plaintiff could not rely on his own trespass onto their property in pursuit of an equitable remedy. As part of their defence, the Defendants brought a crossclaim for trespass and damages.

6At the same time as he served his SOC, Mr. Gutoskie also served a Motion for a Certificate of Pending Litigation (“CPL”), scheduled to be heard on October 1, 2021, effectively rendering the Cybulskis unable to sell their property. Justice James dismissed the CPL motion on December 22, 2022, but issued a temporary injunction and timetable for litigation.

7Two years later, in March 2023, Mr. Gutoskie reduced his claim against the Cybulskis to a request for a 75% constructive trust over the Cybulski property or compensation of $75,000 and requested that the action be converted to a simplified procedure pursuant to r. 76 of the Ontario Rules of Civil Procedure R.R.O. 1990, Reg. 194 (the “Rules”). The Defendants were agreeable to conversion provided that it did not prejudice their claim for costs. Hooper J endorsed the conversion to the simplified procedure but noted that it would be without prejudice to any costs submissions the parties wish to make at the end of trial.

8After four and half years of litigation consisting of three motion hearings, four pre-trial conferences, a mid-trial pre-trial, three trial management conferences, three attempts to get the matter to trial, five case conferences and seventeen endorsements/decisions, the matter settled in the final days leading up to a peremptory trial scheduled for December 1, 2025. The parties filed Minutes of Settlement agreeing to the dismissal of the Plaintiff’s claim and the Defendants’ counterclaim with costs to be determined by a judge among other terms (“Settlement”).

9As part of the Settlement, the parties agreed that costs were payable to the Cybulskis subject to any arguments Mr. Gutoskie wished to make for set off costs he incurred on the counterclaim and the Cybulski’s response to set off. Counsel for the Cybulskis highlights that her clients would not have agreed to the dismissal of the claim and counterclaim without these express terms regarding costs.

10This decision addresses the Cybulskis’ request for costs in the amount of $121,298.36 as the successful party in the claim against them. This figure is based on a request for either partial, substantial, and full indemnity costs for various portions of the litigation since commencement.

11Mr. Gutoskie does not dispute a costs award to the Cybulskis, but argues that the claim is one, excessive, two, doesn’t properly account for his costs in defending against the counterclaim, and three, exceeds the cap of $50,000 for proceedings under the simplified procedure. He argues that to award costs in the amount requested would have a chilling effect on future litigants in reaching a settlement.

12The issue to be decided is what is a fair and reasonable costs award to the Cybulskis.

13Following the Settlement, each party was provided an opportunity to provide a 12-page written submission and supporting exhibits with the Defendant provided an additional right of Reply. In arriving at my decision, I have relied on the written submissions and supporting exhibits filed by the parties which totalled 389 pages.

Analysis

14Courts have broad discretion to determine by whom costs should be paid and the quantum: s. 131(1) Courts of Justice Act, R.S.O. 1990, c. C.43, as am.

15Section 131 states that:

131 (1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

16While the merits of the claim and crossclaim were not adjudicated by the court, the commencement of the action and multiple proceedings thereafter constitute steps in the proceeding which would entitle the court to exercise its discretion to determine costs.

17In exercising their discretion, judges may consider the factors set out in r. 57.01(1). These factors include the success of the parties, the amount an unsuccessful party could reasonably expect to pay, amounts claimed, amounts recovered, apportionment of liability, importance of the issues, complexity of the proceedings, the experience of counsel and rates charged, and the conduct of the parties. I address these factors below.

A. Success of the Parties

18Mr. Gutoskie claimed a constructive trust and an equitable easement over a portion of the Cybulskis’ property. Mr. Gutoskie’s claim has been dismissed. Mr. Gutoskie has recovered none of the relief sought. The Cybulskis were entirely successful in defending Mr. Gutoskie’s claim against them. It was important for the Cybulskis to protect their property, a significant asset. Mr. Gutoskie does not dispute that the Cybulskis are entitled to costs but disputes the quantum.

B. Any Offer to Settle made in Writing

i. Offers Made by the Cybulskis

19On December 13, 2021, even before Mr. Gutoskie’s CPL motion was heard and before defending the action and issuing their counterclaim, the Cybulskis served an offer to settle on Mr. Gutoskie whereby they were prepared to consent to an application for Mr. Gutoskie to the appropriate municipal authority for an easement over that portion of the roadway encroaching onto the Cybulskis’ property. If Mr. Gutoskie was not successful, the Cybulskis would agree to treat the roadway as an access point for which Mr. Gutoskie could pay an annual fee negotiated every five years, among other terms. In that original offer, the Cybulskis made clear that that they would be seeking contribution toward their legal fees on a partial indemnity basis.

20This initial offer in December 2021 would certainly have been a better outcome for Mr. Gutoskie such that he would have obtained some of the relief he was seeking. It would also have prevented the Defendants’ from incurring four years of litigation costs in defending the action. As the Defendants pointed out in that initial offer, the proposal was a reasonable resolution to the litigation but also of importance to the Cybulskis because it would allow them to sell the property and obtain the proceeds necessary for a new wheelchair for Mr. Cybulski.

21The Cybulskis made different versions of the 2021 offer in May and September 2022 and again on December 14, 2023. In all these subsequent offers, the Defendants maintained their request for costs on a partial indemnity basis for fees incurred since the start of litigation.

22From January 2024 to September 2024, the parties negotiated and entered into a Pre-Settlement Agreement dated September 24, 2024. This Pre-Settlement Agreement set out terms and conditions whereby the Cybulksis would support Mr. Gutoskie’s application to the Township to allow him to build a road along the Township’s open road allowance. As discussed further below, it was termed a “Pre-Settlement Agreement” as it constituted a “pathway” toward settlement. On October 3, 2024, the Township refused Mr. Gutoskie’s application.

23The Defendants also made two further formal offers to settle. On December 2, 2024, the Cybulskis made a time-limited offer (up to December 20, 2024) for Mr. Gutoskie to purchase their property for close to market value of $325,000 along with payment to the Cybulskis in the amount of $75,000 all inclusive of damages, taxes, interest, and legal fees. As the Defendants pointed out, the proposal offered several benefits to both parties. Mr. Gutoskie would have to take no further steps with the Township for an easement application or for permission to construct an access road along an open road allowance. In addition to having an unencumbered roadway to his property, Mr. Gutoskie would have access to the logging available on the Cybulski property estimated at $100,000. The Defendants would be able to conclude the litigation with recovery of at least a portion of their legal fees and would finally receive and be able to utilize proceeds from the sale of their property.

24On February 26, 2025, the Cybulskis made a r. 49 offer to settle the matter whereby the claim and the counterclaim would be dismissed, the injunction lifted, and Mr. Gutoskie would pay the Cybulskis their legal fees on a partial indemnity basis from the commencement of the litigation plus disbursements and HST through to the date of the acceptance of the offer. The offer noted that if the parties could not agree on the amount of costs within 10 days of the offer’s acceptance, the costs would be fixed or assessed by the court. This offer remained available for acceptance until the start trial which at the time was scheduled to proceed in March 2025. The trial date was subsequently adjourned to December 1, 2025.

25None of the Defendants’ earlier offers were accepted.

26Counsel for Mr. Gutoskie argues that the costs amount sought is excessive because it does not reflect what the parties were willing to settle for in September 2024. More specifically, he states that in the Pre-Settlement Agreement dated September 24, 2024, the parties agreed that Mr. Gutoskie would apply to the Township for permission to build a road on the unopened road allowances north of both the parties’ properties, the Cybulksis would not oppose the application, and the claim and counter claim would be dismissed with payment of only $9,000 to the Cybulskis for their disbursements.

27The Pre-Settlement Agreement does not address the issue of legal costs, but only compensation to the Cybulskis for “disbursements” of $9,000. I note that this is highly distinct from all the other settlement offers made by the Cybulskis, including as early as December 2021, where they insisted on recuperating at least a portion of their legal fees.

28Even if, however, the Cybulskis were prepared to forego costs in September 2024 in the hopes of a resolving the matter, this does not mean that if the conditions for settlement did not materialize, the Cybulskis were bound by those terms thereafter. Settlements almost always constitute a time-limited compromise by a party in the hopes of resolution, and this was a compromise which the Cybulskis were prepared to make at a particular point in time, especially coming off the heels of judicial settlement conferences held earlier that year. More importantly, the Pre-Settlement Agreement specified that if the Township did not approve Mr. Gutoskie’s application, the matter would not settle and would proceed to trial on March 17, 2025. Consequently, I find that Mr. Gutoskie knew or ought to have known that if the Township declined his request for a roadway, the matter was not settled, would proceed to trial, and both parties would be entitled to re-open the issue of costs.

29In addition, I disagree with Mr. Gutoskie’s counsel that the costs amounts since September 2024 were inflated or that Mr. Gutoskie would not have been aware of the Cybulskis’ rising legal costs. When Mr. Gutoskie requested the action be converted to a proceeding under the simplified procedure, counsel for the Cybulskis Ms. Allison Russell wrote to Mr. Gutoskie’s former counsel, Mr. Richard Murphy, on March 8, 2023. She advised him that by the time Mr. Gutoskie had advised of his intention to amend his claim to seek only $75,000 in damages and to seek a conversion to the simplified procedure, her client had already completed all steps in the litigation on an expedited basis. Consequently, she would seek to recuperate those costs even if the claim were converted to the simplified procedure.

30Similarly, in counsel’s correspondence to Mr. Murphy on December 14, 2023, there are additional references to consideration for an easement in the amount of $65,000 based on a percentage of the Cybulskis’ legal fees spent to date. Even in their December 2024 offer to settle, after the Township had refused Mr. Gutoskie’s application, the Cybulskis requested $75,000 for legal fees and disbursements. Finally, the dates and times of when legal fees were incurred is well documented in the detailed Bill of Costs provided by counsel for the Cybulskis. In short, while the expectations of an unsuccessful party are to be considered in the costs’ assessment, I find based on counsels’ communications throughout the litigation and the Defendant’s repeated offers to settle, the quantum of costs sought should not have come as any surprise to Mr. Gutoskie.

31I find the evidentiary record filed indicates that Mr. Gutoskie purchased his property either knowing or being wilfully blind to the fact that he did not have vehicular road access to his own property. He took no steps to procure an easement or obtain permission from the Township in advance of his purchase to construct a roadway along the Township’s open road allowance to give him vehicular access. I find the Defendants’ offers to settle demonstrate thoughtful, reasonable, and empathetic efforts to resolve the issues in litigation while also ensuring Mr. Gutoskie could have reasonable access and enjoyment to his property.

32I find the Defendants offers were made early and repeatedly. They are consistent with the modern rules of costs and r. 49.13 which states that “the court, in exercising its discretion with respect to costs may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.” If the Defendants’ offers had been accepted, it would have avoided potentially years of litigation and significant litigation costs to the Defendants.

ii. Offers made by Mr. Gutoskie

33During the litigation, Mr. Gutoskie served the Cybulskis with six offers to purchase their property. However, each offer was for significantly less than the listed value of the Cybulski property. On September 17, 2021, Mr. Gutoskie offered $210,000, which was $90,000 less than the listed price. Even after receiving a valuation for the Cybulski property from a realtor at $349,000, Mr. Gutoskie proceeded to make an offer to purchase it for $275,500. Mr. Gutoskie continued to make three more offers at this same price notwithstanding the increased litigation costs to the Cybulskis.

34I find that Mr. Gutoskie’s offer were not meaningful offers to settle the matter. Rather, I find these offers were attempts to procure the Cybulski property at less than fair market value, while at the same time making the Cybulskis absorb the costs of defending a lawsuit that he initiated as a result of his own lack of foresight when purchasing his own property.

C. The Complexity of the Proceeding

35Mr. Gutoskie advanced claims of constructive trust, equitable estoppel, and unjust enrichment. These are complex claims. In addition, Mr. Gutoskie’s claim alleged historical issues requiring the Cybulskis to call witnesses to address the historical use of the lands.

36The issue was important to the Cybulskis given the property was a significant asset for them, and Mr. Gutoskie’s initial claim was for compensation of $300,000, the entirety of the property value as per the listing at the time and which if acceded to, would have left the Cybulskis with nothing.

37Furthermore, while Mr. Gutoskie requested to proceed to the simplified procedure, this was two years after having commenced the claim under the ordinary procedure and having scheduled a motion within two weeks of initiating the claim. The conversion did not necessarily result in reducing the number of legal proceedings. As stated at the outset, there were multiple legal proceedings and appearances before the court over the course of 4 ½ years.

D. Conduct of the Parties

38Mr. Gutoskie commenced the action under the ordinary procedure. Only after the matter was set down for trial did he seek to amend his claim by 75% and request a conversion to the simplified procedure. By this time, as noted in correspondence between counsel, the Cybulskis had already undergone significant litigation costs in defending the action and preparing for trial. The Cybulskis were required to shift their litigation strategy and re-prepare for trial under the simplified procedure which required, among other things, the exchange of affidavits of evidence in chief in advance. While this conduct was not necessarily unreasonable, it did contribute to the Defendants’ legal costs.

39Furthermore, after the trial commenced before Hooper J, there was an attempt for the parties to come to a settlement through a mid-trial pre-trial held before another judge. A settlement was reached at the mid-trial pre-trial on January 9, 2024, but Mr. Gutoskie refused to finalize the settlement until he obtained approval from the Township for an application to build a road. This contributed to further delays and litigation costs.

40Thereafter, there was a Pre-Settlement Agreement as referenced above which specified that if Mr. Gutoskie did not obtain approval from the Township, the matter would proceed to trial on March 17, 2025. On that date, Mr. Gutoskie sought and was granted an adjournment to December 1, 2025. On October 31, 2025, he sought yet another adjournment of that trial date which was refused. The matter was resolved in the final days preceding trial. These adjournment requests resulted in delays and increased litigation.

41I recognize, however, that the Defendants also sought an adjournment of one trial date on May 19, 2022, due to a medical emergency.

42The Defendants argue that Mr. Gutoskie engaged in improper, vexatious, or unnecessary conduct warranting a portion of costs on a full-recovery basis. More specifically, they argue that one, the parties agreed to a Consent Order on October 8, 2021, which limited access to the roadway to Mr. Gutoskie and his immediate family members pending the hearing of the CPL motion. Mr. Gutoskie failed to inform his guests of this Consent Order. One of his guests attended onto the Cybulskis property and locked the Cybulskis onto their property requiring them to contact Mr. Gutoskie for assistance. Two, Mr. Gutoskie set up cameras on the Township’s unopened road allowance directed at the Cybulskis’ property without notice to the Cybulskis. Three, Mr. Gutoskie undertook work on the roadway contrary to the Order of James J. dated December 23, 2021. The Defendants view these as breaches of court orders.

43While I agree that the events constituted breaches of court orders, I am not persuaded that Mr. Gutoskie’s conduct was at all times intentional. Upon review of the correspondence exchanged between counsel, it was clear that tensions had developed between the parties after Mr. Gutoskie brought his claim and issues arose around managing Mr. Gutoskie’s access onto the Cybulski property. However, the correspondence suggests that when Mr. Gutoskie’s counsel brought these breaches to Mr. Gutoskie’s attention, he agreed to deal with them as promptly as he could.

44In addition, I am not satisfied that Mr. Cybulski’s initial refusal to grant a two-day extension for the Cybulksis to serve a Response to a Request to Admit in exchange for another concession was unreasonable. The issue was resolved between the parties.

E. Reasonableness of Costs Request, Experience of Counsel, and Rates Charged

45Since commencement of the litigation, the Cybulskis’ legal team billed 397.5 hours with total legal fees amounting to approximately $189,534. Total disbursements were $14,575.79.

46Counsel has subtracted $64,433 from the legal fees as a courtesy discount.

47The Cybulskis seeks costs of $121,298 inclusive of disbursements and HST.

48Counsel for the Cybulskis filed a detailed Bill of Costs identifying the hours billed for different segments of the legal proceedings since commencement of the action. The Bill of Costs sets out a breakdown of the hours worked by each counsel on the legal team, their hourly rates, and the costs amount requested on a partial, substantial, or full indemnity basis.

49Ms. Russell was lead counsel for the Cybulskis. She was called to the Bar in 2005 and charged an hourly rate of $315 from September 2021 until March 30, 2025 which was later increased to $370 per hour. I find lead counsel’s rates are more than reasonable for her plus 20-years of experience. Other associates and articling students were charged lower rates which were both reasonable and commensurate with their experience.

50Ms. Russell provided the following table of costs for various segments of the proceedings.

Fees	Amount
Fees for CPL Motion on a partial indemnity basis except for the fees related to the cross-examinations on the motion pursuant to Rule 76.04(1).2 and 76.13 which proceeded under the ordinary procedure.	$13,728.99
Fees for cross-examinations on the motion on a substantial indemnity basis pursuant to Rule 76.13.	$4,796.10
Fees from January 2022 to May 19, 2022 on a partial indemnity basis except for fees related to the extra time required for the examination for discovery of Mr. Gutoskie, the preparation of witness statements, and preparing for and attending at the pre-trial under the ordinary procedure.	$10,616.46
Fees related to the examination for discovery of Mr. Gutoskie, the preparation of witness statements, and preparing for and attending at the pre-trial under the ordinary procedure on a substantial indemnity basis pursuant to Rule 76.13.	$25,651.80
Fees from May 20, 2022 to January 9, 2024 on a partial indemnity basis The matter moved from the ordinary procedure to simplified procedure on March 8, 2023.	$25,619.90
Fees from January 10, 2024 to December 2025 on a full indemnity basis as costs akin to costs thrown away	$14,087.00
Subtotal (exclusive of HST)	$94,500.25
HST;	$12,285.03
Total:	$106,785.28
Disbursements incl. HST:	$14,513.08
Total:	$121,298.36

51It is apparent from the breakdown of the legal fees, that the bulk of the billings were incurred before the conversion to the simplified procedure in March 2023.

52Counsel for Mr. Gutoskie argues that the hours worked and quantum requested is excessive for a matter that did not proceed to trial. I disagree for two reasons. First, counsel for Gutoskie did not provide a Bill of Costs demonstrating what Mr. Gutoskie has himself spent in legal fees over 4 ½ years to demonstrate that the total amount billed was excessive. Mr. Gutoskie was represented by counsel for all of the litigation except for a 10-month period between January and November 2025 when he self-represented. Where one party attacks another party’s claim for costs as being excessive, it can be useful for the court to have the bills of all counsel because the court is entitled to consider the relative expenditures of time by adversaries on opposite sides of a proceeding to determine the quantum of costs to be awarded: Risorto v. State Farm Mutual Automobile Insurance Co. (2003), 2003 43566 (ON SC), 64 O.R. (3d) 135 (S.C.) at para. 10 (also cited by the Ontario Court of Appeal in Pinder Estate v. Farmers Mutual insurance Company (Lindsay), 2020 ONCA 413, at para. 142).

53Second, Counsel for Mr. Gutoskie has not delineated what aspects of the billings are excessive. In Tab A to the Cybulskis’ Bill of Costs, there is a 20-page detailed description of the of the work done by each member of the legal team. Upon review of the Bill of Costs, I find the work was necessary for the multiple settlement negotiations as well as preparation for case conferences, pre-trials, motions, and trial over a period of 4 ½ years.

54Mr. Gutoskie argues that the costs amount claimed does not account for his own costs in defending the counterclaim which was dismissed as part of the Settlement. However, Mr. Gutoskie did not file a Bill of Costs demonstrating what costs he incurred in defending the counterclaim. Neither the Defendants nor the court can be expected to calculate an appropriate amount of set off for defending the counterclaim in the absence of a Bill of Costs. The only costs Mr. Gutoskie’s counsel identifies for set off for are one, $3,000 for the expense of preparing costs submissions and two, $8,750 for the expense of a survey undertaken by Mr. Gutoskie.

55With respect to the expense in preparing costs submissions, I do not know the rates charged by Mr. Gutoskie’s counsel. Counsel for the Cybulskis spent five hours (approximately $2,000) preparing costs submissions, exclusive of Reply submissions. I find each counsel should be responsible for preparing costs submissions and accordingly, I have subtracted $2,000 from the costs claimed by the Cybulskis.

56With respect to the survey disbursement, I note that it was determined from the survey that the majority of the roadway was on land that did not belong to the Cybulskis but formed part of the Township’s open road allowance. This information cuts both ways. On the one hand, it reduced the portion of Cybulskis’ property upon which Mr. Gutoskie had trespassed. On the other hand, it confirmed that the roadway still trespassed onto the Cybulskis’ property, and furthermore, it was not for the Cybulskis but for the Township to determine if the remaining roadway was permissible along the open road allowance. I agree that a portion of the Defendants’ survey cost should be set off, but not the entirety because the survey also benefitted Mr. Gutoskie, and he would have, in all likelihood, had to incur the expense for his various application(s) to the Township. For this reason, I find that a set off of $3000 is fair and reasonable.

57Counsel for Mr. Gutoskie also argues that because the Cybulskis agreed to proceed under the simplified procedure in March 2023, they are not entitled to claim costs over and above $50,000 because r. 76.12.1 caps costs under the simplified procedure to $50,000 and disbursements to $20,000, both sums exclusive of HST. I respectfully disagree for the following reasons.

58First, while the Cybulskis did agree to converting the matter to a simplified procedure, it was on condition that it would not prejudice their claim for the costs they had incurred since the start of litigation under the ordinary procedure. As already explained, at the time of conversion, Ms. Russell wrote to Mr. Gutoskie’s former counsel that if the matter were to proceed under the simplified procedure, she would be seeking to recuperate her clients’ costs incurred to date. Ms. Russell specifically stated in her correspondence:

If this matter is to proceed under Rule 76, my clients will also require an order form the Court that addresses these costs concerns such that they are not precluded by rule 76.12.1 and Mr. Gutoskie’s obligations under rule 76.13 are determined in advance of trial.

59Second, in granting the request to convert, Hooper J. endorsed that it would be without prejudice to the Cybulskis’ costs submissions at the end of trial. Her Honour’s endorsement states:

The trial is proceeding under Rule 76 although the defendants note that the matter was commenced originally under the ordinary rules and is now only proceeded under Rule 76 because of a late amendment by the plaintiff, reducing the amount claimed from $300,000 to $75,000. While the defendants are not opposing the more streamlined approach of Rule 76 trial, the defendants’ participation in the process under Rule 76 is without prejudice to any costs submissions the parties wish to make at the end of trial.

60Third, pursuant to r. 76.13(1), the party whose pleadings are amended shall pay, on a substantial indemnity basis, the costs incurred by the opposing party up to the date of the amendment that would not have been incurred had the claim originally complied with the Rule. Here, the action was set down for trial and pre-tried before Mr. Gutoskie amended his pleadings, and consequently the Cybulskis are not precluded by r. 76.12.1 from seeking costs on a substantial indemnity basis: Rule 76.13(1); Rule 26.01; see also Hewitson Holdings Inc v. Bur-Met Contracting and Concrete Walls, 2021 ONSC 3197, at para 5; 58-67; Crawford v. Standard Building Contractors Limited, 2020 ONSC 5767, at para 19.

61Fourth, I disagree with Mr. Gutoskie’s counsel’s suggestion that r. 76.13(1) does not apply because the costs that were incurred under the ordinary procedure were “akin” to procedures that would have been available to the Cybulskis under the simplified procedure and thereby subject to a cap. The simple fact is that these proceedings were not initiated under the simplified procedure. Furthermore, the court has discretion to award costs for billings incurred prior to conversion to simplified procedure: Crawford, at para 22. If Mr. Gutoskie felt that the costs incurred before the conversion should have been fixed, he ought to have addressed the issue when he sought counsel’s consent and the court’s leave to convert the matter. He did not do so.

62Finally, in support of his position, Mr. Gutoskie relies on the decision in Layton v. Canadian Dental Hygienists Association, 2025 ONSC 2156. In that case, Smith J found that “both parties had been responsible for escalating a simple property dispute into an outright neighbourly war”: at para. 11. Mr. Gutoskie’s counsel argues that there is similarly “ample blame for each party in this unfortunate litigation.” I respectfully disagree.

63I find the case of Layton is distinguishable. One, Mr. Gutoskie’s access to his own property was an issue that arose from his own lack of foresight, and there is no evidence that the Defendants were “at war with him.” The Defendants were simply attempting to sell their property in 2021 when Mr. Gutoskie initiated an action against them which precluded them from doing so. Two, as already noted, the Defendants were empathetic to Mr. Gutoskie’s situation and made reasonable offers to resolve the matter and facilitate his attempts to obtain permission from the Township to build himself a vehicular access road to his property. Three, in Layton the matter was commenced under the simplified procedure, the 76.13(1) exception was not in play, and there was no judicial endorsement, as there is here, entitling the Cybulskis to seek costs incurred upon moving to a simplified procedure.

64I find the decision of Lachapelle v. St. Laurent Automotive Group Inc., 2025 ONSC 2879, cited by Mr. Gutoskie’s counsel is similarly distinguishable. In that case, Roger J addressed the extent to which he could exceed the $50,000 cap in a case that proceeded entirely under the simplified procedure and where r. 76.13(1) was not in play. Here the bulk of the costs being sought relate to billings before the conversion to the simplified procedure in March 2023. While I do not have the precise breakdown after March 2023, the above-noted table specifies that the portion of costs sought after May 2022 is approximately $39,000 which is below the cap.

65For all these reasons, I find that the Cybulskis are not subject to the $50,000 cap set out under r. 76.12.1 and are entitled to seek costs incurred since the commencement of the litigation.

66Counsel for Mr. Gutoskie has not specified which of the above-noted apportionments for partial, substantial, or full indemnity basis as set out in the above-noted table he specifically opposes. Given my finding that the $50,000 cap does not apply, I find the claims and apportionments are properly made in accordance with the Rules for costs and the nature of this litigation except for the request for full-recovery costs in the final year.

i. Costs for the CPL Motion

67The Cybulskis seek costs of the CPL Motion which was brought under the ordinary procedure on a partial indemnity basis except for those fees related to cross-examinations which the Cybulskis seek on a substantial indemnity basis pursuant to rr. 76.04(1).2 and 76.13(1). The CPL was not granted. Costs were ordered in the cause. I find the request to be reasonable and in accordance with the Rules.

ii. Costs for January 2022 to May 19, 2022

68Save for some exceptions as set out above, the Cybulskis seek costs under the ordinary procedure from the commencement of the action to the May 19, 2022, pre-trial on a substantial indemnity basis. Mr. Gutoskie commenced the action under the ordinary procedure. Between October 2021 and May 2022, the parties cross-examined on affidavits, argued the CPL motion on December 22, 2021, exchanged affidavits of documents, completed examinations for discovery, exchanged answers to undertaking, witness lists and witness statements and requests to admit. I find the amounts billed reasonable and warranted under r. 76.13(1).

69Furthermore, on March 31, 2022, Mr. Gutoskie set the action down for trial, and the parties attended a pre-trial on May 19, 2022. It is understandable in these circumstances that the Cybulskis were moving quickly to defend against the claim because it precluded them from selling their property. This was addressed by Hooper J in her endorsement wherein she stated that should the Defendants ultimately succeed in their counterclaim, and the injunction is lifted, there could be subsequent damages suffered due to delay in selling the property and the parties would have a right to agree on the damages pursuant to a r. 55 Reference.

iii. Costs for May 2022 to January 2024

70The Cybulskis seek costs from May 2022 to January 2024 on partial indemnity basis except for some fees undertaken while they were still operating under the ordinary procedure up to March 2023. Those fees include the extra time required to examine Mr. Gutoskie, the preparation of witness statements, preparing for and attending at the pre-trial under the ordinary procedure which they seek on a substantial indemnity basis pursuant to r. 76.13(1). I find the request to be reasonable.

iv. Costs for January 2024 to Present

71The Cybulskis seek full-recovery costs from January 10, 2024 to present.

72As explained in Legacy Leather International Inc. v. Ward, 2007 2357, (Ont S.C.), at para. 9, costs thrown away are intended to indemnify a party for steps taken in the litigation that were reasonably necessary but rendered useless by the conduct of the other party. This often arises where a trial is postponed. Not all preparation constitutes costs thrown away as some may be recuperated if and when the trial proceeds. It is for the court to determine what costs are actually rendered useless.

73There are three components the court must consider to make out a claim for costs thrown away: (i) whether the step for which costs thrown away are claimed was reasonably necessary; (ii) whether the fees and/or disbursements for the step were wasted or rendered useless; and (iii) if the conduct of the other party occasioned the wasted or useless costs. The presence of all three elements does not guarantee an award of costs thrown away as costs of any step in a proceeding remain in the discretion of the court: Moskowitz v. Toronto Transit Commission 2023 ONSC 5535, at para. 9; see also Mesta et al v. Hechani et al, 2024 ONSC 2497, at paras. 8-9.

74Here, I find the Cybulskis entered into good faith negotiations following the first day of trial before Hooper J on January 9, 2024. However, Mr. Gutoskie would not finalize a settlement that flowed from those mid-trial negotiations until he obtained approval from the Township. The Cybulskis then made further efforts to finalize the matter by negotiating a Pre-Settlement Agreement which also did not resolve the matter as the Township declined Mr. Gutoskie’s application. Mr. Gutoskie requested to adjourn the trial scheduled for March 2025 further delaying matters. In these circumstances, I find that the costs incurred by the Cybulskis after January 9, 2024 were reasonably necessary and made in good faith, but ultimately rendered useless by the conduct of Mr. Gutoskie, For this reason, I find these costs ought not to fall under the rule 76.12.1 cap and warrant an elevated costs award: r. 57.01(4)(c)(d). I find that it would be fair and reasonable for the Defendants to recover substantial indemnity costs for this portion of the litigation in the amount of $ 12,678.30.

75No arguments were made with respect to Mr. Gutoskie’s ability to pay costs.

Conclusion and Order

76The fixing of costs is not a mechanical exercise. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, rather than the fixed amount of actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26.

77Here, against the total amount claimed, I have offset $2,000 for defence preparation of costs (each side being responsible for preparation of its own submissions), offset $3,000 for the costs of Mr. Gutoskie’s survey, and reduced the costs for the final year of litigation by $2,000. Notwithstanding that Mr. Gutoskie has failed to file a Bill of Costs, I have credited him $4,000 for costs related to defending the counterclaim.

78Having considered that the Defendants were the successful party, the conduct of the parties, the complexity of the issues, what an unsuccessful party might expect to pay after 4 ½ years of litigation, the work performed, the reasonableness of the rates charged, and the offsets claimed, I find a fixed costs award of $110,000 is fair and reasonable in this case.

79There will be an Order that Mr. Gutoskie pay costs to the Cybulskis in the fixed amount of $110,000 within 30 days.

Somji J

Released: April 14, 2026

CITATION: Gutoskie v. Cybulski, 2026 ONSC 2226