CITATION: Sharma v. Sharma et al., 2026 ONSC 2771

COURT FILE NO.: CV-20-00003510-0000

DATE: 2026-05-13

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RAKESH KUMAR SHARMA, and VIDIT SHARMA, and SHREYAS SHARMA in their capacity as ESTATE TRUSTEES FOR THE ESTATE OF KULDIP RANI SHARMA

Plaintiffs

• and -

THE ESTATE OF KULDIP RANI SHARMA, deceased, MUKHESH SHARMA, JEEVAN KUMAR SHARMA, and AVNEET SHARMA, and AMIT SHARMA in their capacity as ESTATE TRUSTEES FOR THE ESTATE OF KULDIP RANI SHARMA

Defendants

COUNSEL: R. Kaushal, and G. Sangha, for the Plaintiffs D. Bhatia, for the Defendants

HEARD: In Writing

COSTS ENDORSEMENT

LEMAY J

[1] I have been case-managing this matter for some time. In January of this year, I had thought that we would proceed to a pre-trial. The Defendants/Respondents had changed counsel a few days before the January appearance, which unfortunately created an issue as the Plaintiffs/Applicants argued that there was a conflict that would prevent the Defendants/Respondents from using the services of their proposed counsel, Mr. Dheeraj Bhatia. On March 23rd, 2026, I released reasons (2026 ONSC 1712) in which I found that Mr. Bhatia was, indeed, in a conflict and removed him from the record.

[2] I am now required to fix the costs of the motion to remove Mr. Bhatia from the record.

Preliminary Issue

[3] There is an issue that must be addressed first. Mr. Bhatia made the responding costs submissions on behalf of the Defendants/Respondents in this case. Mr. Bhatia has been removed from the record. It is improper for him to communicate with the Court, in any way, in respect of this matter, other than to make submissions (if asked) on whether costs should be awarded against him personally.

[4] For efficiency reasons, I am going to accept the submissions and view them as having been made by the Defendants/Respondents personally. However, going forward I note the following:

a) Mr. Bhatia has no standing to make any submissions of any sort in this proceeding. Should he attempt to do so again, I will likely view it as a matter requiring me to cite Mr. Bhatia in contempt.

b) The Defendants/Respondents need to either serve notices that they are all acting for themselves or appoint a new lawyer. Those notices must be served within thirty (30) days of today's date.

[5] Any further concerns in respect of these two issues should be addressed at the next hearing date. In particular, in terms of whether the Defendants/Respondents are looking to appoint new counsel, I expect that this matter will move relatively promptly towards a resolution. As a result, they would be well advised to choose new counsel promptly if they are going to be represented.

[6] I should also note that Mr. Bhatia failed to follow my directions in terms of the length of the costs submissions. I directed that they be only two (2) single-spaced pages, and I received submissions of four single-spaced pages. While this is a more minor issue, it is indicative of a counsel who either does not understand the Court's directions or is not prepared to follow those directions.

Positions of the Parties

[7] The Plaintiffs/Applicants seek full indemnity costs in the sum of $18,400.36 for this motion. Full indemnity costs are sought on the basis that the Plaintiffs/Applicants made an offer to settle and that the Defendant/Respondents' conduct in terms of reappointing Mr. Bhatia was improper. In the alternative, the Plaintiffs/Applicants seek either substantial, or in the further alternative, partial indemnity costs. These costs are sought jointly against counsel.

[8] The Defendants/Respondents argue that, if costs are awarded, they should only be awarded on a partial indemnity basis, that the amounts claimed are duplicative and that the bill of costs is "vague", particularly in respect of the dockets for research and should be substantially reduced. Finally, the Defendants/Respondents argue that costs should not be payable by Mr. Bhatia personally.

Issue #1- Costs Against Mr. Bhatia

[9] The basis for the claim for costs against Mr. Bhatia personally is the fact that he accepted this retainer when he should have known that he was in a conflict of interest and could not accept the retainer.

[10] The authority for awarding costs against a solicitor is found in Rule 57.07, which allows the Court to impose costs on the lawyer personally where that lawyer's "conduct results in costs being incurred unreasonably or wasted". However, costs against a solicitor personally are a very rare remedy.

[11] In Galganov v. Russell Township, 2012 ONCA 410, the Court set out the two-part test that had previously been adopted in Carleton v. Beaverton Hotel, 96 O.R. (3d) 391 at para. 24. First, the Court must be satisfied that the lawyer's conduct falls within rule 57.07(1) in the sense that it caused costs to be incurred unnecessarily.

[12] The second step requires the exercise of discretion. In exercising that discretion, the Court of Appeal noted in Galganov (at para. 22):

[22] The second step is to consider, as a matter of discretion and applying the extreme caution principle enunciated in Young, whether, in the circumstances, the imposition of costs against the lawyer personally is warranted. The "extreme caution" principle, as stated in Young, means that "these awards must only be made sparingly, with care and discretion, only in clear cases, and not simply because the conduct of a lawyer may appear to fall within the circumstances described in [r]ule 57.07(1)": Carleton, at para. 15.

[13] In support of their position, counsel for the Plaintiffs/Applicant cite the decision of Dore v. Barreau du Quebec, 2012 SCC 12, [2012] 1 S.C.R. 395. I have reviewed that decision, and I see nothing in it that addresses the obligation of a solicitor to pay costs of a civil action personally. Dore was a case regarding improper communications and discipline of a barrister for comments made to a judge about the judge's conduct in court. Dore also does not address the issue of whether a baseless allegation of perjury is misconduct on the part of counsel.

[14] This brings me to the facts of this case. I have considerable sympathy for the Plaintiff/Applicants' view that Mr. Bhatia should not have accepted this retainer. Notwithstanding the arguments Mr. Bhatia made, it should have been obvious to him (and communicated to his clients at the outset) that there was a very high likelihood, bordering on certainty, that he would be removed from the record.

[15] However, the question of whether Mr. Bhatia properly advised his clients as to whether he should take this file is not a matter for me to determine. That matter is between Mr. Bhatia and the Defendants/Respondents. On the record I have before me, I cannot tell whether these costs were incurred unnecessarily because of Mr. Bhatia's conduct, or whether he properly advised his clients that they were highly likely to lose this motion.

[16] I also note that additional Court time would be consumed by considering costs against Mr. Bhatia personally, as he would be entitled to make his own submissions separately from his former client on these issues: Rule 57.07(2), Rules of Civil Procedure. The question of whether Mr. Bhatia should pay these costs personally is a matter between him and his former clients.

[17] For these reasons, I conclude that costs should not be awarded against Mr. Bhatia personally.

Issue #2- The Scale of Costs

[18] The Plaintiffs/Applicants seek costs on a full, or substantial, indemnity basis for two reasons. First, on the basis that the Plaintiffs/Applicants made an offer to settle. Second, on the basis of the Defendants/Respondents' conduct. I will deal with each issue in turn.

Offer to Settle

[19] The Plaintiffs/Applicants' counsel started their offers by advising Mr. Bhatia that they would object to him acting in this matter. Mr. Bhatia, and his clients, were warned of this objection before Mr. Bhatia came back on the record. Plaintiffs/Applicants' counsel followed this position up with a formal offer to settle that was served on February 5th, 2026, and contained the following terms:

a) Mr. Bhatia and his firm would be removed as counsel of record and would remain removed until the end of the action.

b) If the offer to settle was accepted before 5:00 p.m. February 10th, 2026, then the Defendants/Respondents would pay costs in the sum of $3,500.00.

c) If the offer to settle was accepted after 5:00 p.m. on February 10th, 2026, then the Defendants/Respondents would pay costs on a partial indemnity basis.

[20] The Defendants/Respondents argue that, in order to be entitled to costs on the substantial indemnity scale, the Plaintiffs have to have "materially beaten a settlement offer." I did not see any case cited for this proposition. The costs consequences under Rule 49 can be triggered by an offer that does not contain a meaningful element of compromise. The only risk with that type of "hardball" offer is that it may be grounds for the Court to exercise its discretion to deny substantial indemnity costs: Data General (Canada) Ltd. v. Molnar Systems Group Inc., (1991) 6 O.R. (3d) 409.

[21] In this case, the issue was a binary one. As a result, one would not expect there to be any element of compromise in the Rule 49 offer that was made, except as it pertains to costs. This brings me to the issue of the costs provision in the offer to settle, and whether that provision takes this offer outside of the ambit of Rule 49.

[22] In Rooney (Litigation Guardian) v. Graham, 53 O.R. (3d) 685, the Court was faced with an offer that had "reasonable party-and-party costs, as assessed by an assessment officer or agreed upon, up to the date of the offer, and afterwards reasonable solicitor-and-client costs as assessed or agreed upon." The Court found that this was a valid Rule 49 offer.

[23] More recently, in Cobb v. Long Estate, 2017 ONCA 717, the Court explained the holding in Rooney as follows (at paras. 150 and 151):

[150] This court concluded that Rooney's offer to settle was a valid r. 49 offer and upheld the trial judge's order applying r. 49.10. The appellant's main ground of appeal was that, by including a provision for ongoing solicitor-and-client costs, Rooney's offer was not an offer to settle under r. 49 and therefore could not attract the costs consequences of r. 49.10. Laskin J.A., writing for the majority, with Carthy J.A. dissenting on this point, rejected that submission. The court recognized that a provision for ongoing party-and-party (i.e., partial indemnity) costs is "in some measure" uncertain, but such provision alone does not invalidate an offer that otherwise complies with r. 49.

[151] In my view, the defendant's offer in this case was a valid r. 49 offer and it exceeded the plaintiff's judgment. In the ordinary course, it should follow that the plaintiffs would be entitled only to their partial indemnity costs to the date of the offer and the defendant to its partial indemnity costs thereafter.

[24] This case is different than Cobb, in that in the case before me it is the Plaintiff that has made the offer rather than the Defendant. As a result, if the costs consequences of Rule 49 are triggered, the Plaintiff/Applicants would be entitled to their partial indemnity costs up to the date of their offer and, if they exceed their offer, to substantial indemnity costs thereafter.

[25] In this case, the Plaintiffs put a specific amount of costs that was to be paid if the offer was accepted up to the deadline of February 10th, 2026. The question that I must determine is whether the Plaintiffs exceeded this offer, in that they would have been entitled to more than $3,500.00 all-inclusive in costs. If the answer is no, then the costs consequences under Rule 49 would not be triggered.

[26] Having reviewed the bill of costs, I conclude that the Plaintiffs would have exceeded this offer if costs had been assessed as of 5:00 p.m. on February 10th, 2025. The appropriate way to assess the quantum of the costs that the Plaintiff would have been entitled to is to look at the Plaintiff's costs up to the point that the offer was served on February 6th, 2026. At that point, the costs including disbursements and HST would have been $6,028.55. A partial indemnity amount of $3,500 all inclusive is quite reasonable in the circumstances and would have been awarded if requested. Indeed, somewhat more would likely have been given.

[27] This brings me back to the observation about discretion in Rule 49 offers. Although there is room to exercise my discretion to find that the consequences of Rule 49 are not triggered by the offer made to settle this motion, I am of the view that those cost consequences should be triggered. The Plaintiffs/Applicants took a reasonable position on the motion that they had brought, and the Defendants/Respondents should have, as I have said elsewhere, known that they were going to lose this motion.

[28] As a result, I conclude that the Plaintiffs/Applicants are entitled to be paid partial indemnity costs up to February 6th, 2026, and full indemnity costs thereafter. I would, subject to the remaining issues, fix those costs in the all-inclusive sum of $13,500.00.

Conduct of the Defendants/Respondents

[29] The quantum of costs would increase if I were to determine that the conduct of the Defendants/Respondents had been so inappropriate as to attract an order of substantial (or even full) indemnity costs throughout. I will now consider that question.

[30] I have been critical of the Defendants/Respondents for re-retaining Mr. Bhatia in this matter. It should have been clear to the Defendants/Respondents that the Plaintiffs/Applicants' motion to remove Mr. Bhatia from the record was going to be successful. This motion was a waste of time and money.

[31] That said, the larger question of whether costs should be awarded on a higher scale absent an offer to settle has been comprehensively canvassed in Davies v. Clarington (Municipality of) et. al., 2009 ONCA 722, 100 O.R. (3d) 66 at paras 28-31:

[28] The first issue is whether the trial judge erred in relying on the February 2005 offer as justification for an elevated costs award. This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

[29] In Young v. Young, [1993] 4 S.C.R. 3, [1993] S.C.J. No. 112, at p. 134 S.C.R., McLachlin J. described the circumstances when elevated costs are warranted as "only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties".

[30] The same principle was expanded upon in Mortimer v. Cameron (1994), 17 O.R. (3d) 1, [1994] O.J. No. 277 (C.A.), at p. 23 O.R., where Robins J.A., speaking for the court, set out the restricted circumstances in which a higher costs scale is appropriate with reference to Orkin, at para. 219. [page75 ]

An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of a party in the litigation. The principle guiding the decision to award solicitor-and-client costs has been enunciated thus:

[S]olicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement.

[31] The narrow grounds justifying a higher costs scale were further reinforced by Abella J.A. in McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), 59 O.R. (3d) 97, [2002] O.J. No. 1536 (C.A.) where, at para. 39, she said:

Apart from the operation of rule 49.10 (introduced to promote settlement offers), only conduct of a reprehensible nature has been held to give rise to an award of solicitor and client costs. In the cases in which they were awarded there were specific acts or a series of acts that clearly indicated an abuse of process, thus warranting costs as a form of chastisement. See, also, Walker v. Ritchie, [2005] O.J. No. 1600, 197 O.A.C. 81 (C.A.), at para. 105, vard 2006 SCC 45, [2006] 2 S.C.R. 428, [2006] S.C.J. No. 45. [Footnote omitted.]

[32] Although the conduct of the Defendants/Respondents in re-retaining Mr. Bhatia was questionable, I am of the view that it does not rise to the very high level of misconduct requiring solicitor and client costs throughout the motion. For these reasons, I reject this argument and would not adjust the amount of costs upwards on account of it.

Conclusion

[33] For the foregoing reasons, I find that the cost consequences of Rule 49 have been triggered, justifying solicitor-and-client costs for some portion of the litigation of this motion. I reject the argument that the Defendants/Respondent's conduct justifies an award of elevated costs throughout.

Issue #3- The Quantm of Costs

[34] The Defendants/Respondents have pointed to a number of small issues in respect of the bill of costs submitted by the Plaintiffs/Applicants. These amounts include one entry that may possibly be a duplication, one entry where two counsel reviewed the same decision and a couple of other minor issues.

[35] I am not prepared to make any adjustment at all to the quantum of costs claimed by the Plaintiffs/Applicants on account of these issues for two reasons. First, both the rates and the time claimed by the Plaintiffs/Applicants are more than reasonable, and the costs sought by the Plaintiffs/Applicants are well within the reasonable expectations of the parties. Second, the Court should not be engaged in a line-by-line review of the bills of costs submitted by the parties. The setting of costs should be a more holistic exercise than what the Defendants/Respondents are engaged in.

[36] For these reasons, I conclude that the Defendants/Respondents should pay to the Plaintiffs/Applicants the sum of $13,500.00 inclusive of HST and disbursements.

Conclusion

[37] For the foregoing reasons, I order that the Defendants/Respondents are jointly and severally liable to pay costs in the sum of $13,500.00 inclusive of HST and disbursements within thirty (30) calendar days of today's date.

[38] In this respect, I note the Defendants/Respondents' submission that "the actual amount of costs to be awarded may be reserved until trial". I reject that submission. In my view, the costs of this matter should be fixed and payable promptly. The Defendants/Respondents took an unreasonable position on this motion and unnecessarily ran up the Plaintiff/Applicants' costs. They should not be permitted to delay the payment of these costs, and they should not be permitted to wait until the funds held in trust are paid out either.

[39] As a final matter, I note that the parties have a further appearance before me by ZOOM for a case conference. That remains fixed for May 21st, 2026, by ZOOM at 9:30 a.m. I remain seized of this matter.

LEMAY J

Released: May 13th, 2026

CITATION: Sharma v. Sharma et al., 2026 ONSC 2771

COURT FILE NO.: CV-20-00003510-0000

DATE: 2026-05-13

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RAKESH KUMAR SHARMA, and VIDIT SHARMA, and SHREYAS SHARMA in their capacity as ESTATE TRUSTEES FOR THE ESTATE OF KULDIP RANI SHARMA

Plaintiffs

• and -

THE ESTATE OF KULDIP RANI SHARMA, deceased, MUKHESH SHARMA, JEEVAN KUMAR SHARMA, and AVNEET SHARMA, and AMIT SHARMA in their capacity as ESTATE TRUSTEES FOR THE ESTATE OF KULDIP RANI SHARMA

Defendants

COSTS ENDORSEMENT

LEMAY J

Released: May 13th, 2026