CITATION: Halliday v. Bromley, 2026 ONSC 3667
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Robert Horne Halliday, Plaintiff
AND:
Mike Bromley, The Wolfe Island Trust Inc. and Slate Signs from Above Inc., Defendants
BEFORE: Mew J.
COUNSEL: G. Edward Lloyd, for the plaintiff
Joseph W. L. Griffiths, for the defendants
HEARD: In writing at Kingston
COSTS ENDORSEMENT
1This action arose from a dispute between two former friends concerning the ownership of eleven vacant lots on Wolfe Island. The plaintiff, Robert Halliday, transferred title of the properties to the defendant, Mike Bromley, and his company The Wolfe Island Trust Inc., during a period of financial distress. Mr. Halliday asserted that the transfers were not genuine sales but, rather, part of an oral trust agreement under which the defendants agreed to hold the lands for him and to return them upon request. The defendants maintained that the transactions were ordinary arm’s-length purchases carried out with their own funds, and denied the existence of any trust.
2Following a multi-day trial involving sharply conflicting evidence and significant credibility findings, the court found that the transfers were part of an arrangement under which the defendants held the properties in trust for the plaintiff, and that the defendants’ subsequent refusal to reconvey them engaged the equitable jurisdiction of the court (Halliday v. Bromley, 2026 ONSC 2399). The plaintiff was therefore granted declaratory relief, an order for reconveyance of the properties, and an accounting of funds advanced to the defendants in connection with the properties.
Governing Principles
3The plaintiff seeks partial indemnity costs of $1,101.75 up to the tendering of a first offer to settle on 4 February 2019, and substantial indemnity costs of $98,009.91 thereafter. In addition, assessable disbursements of $4,326.81 are claimed, for a total proposed costs award of $103,438.47.
4The defendants acknowledge that the plaintiff is entitled to a measure of costs. However, they argue that this action should have been brought under the Simplified Procedure, and, accordingly, that indemnification for fees should be capped at $50,000 in accordance with Rule 76.12.1(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Although, over the course of the litigation, the plaintiff communicated three different settlement proposals to the defendants, they say that none of those proposals qualify as a formal offer to settle, and, consequently, the costs consequences of a Rule 49 offer to settle do not apply. Alternatively, they argue that if the Simplified Procedure cap on costs is not applicable, the amounts claimed by the plaintiff are disproportionate and unreasonable in all of the circumstances.
5The court’s discretion with respect to costs is broad and is informed by the factors set out in s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and Rule 57.01 of the Rules of Civil Procedure, including the result, the importance and complexity of the proceeding, the conduct of the parties and any offers to settle.
6Costs generally follow the event: St. Jean v. Cheung (2009), 45 E.T.R. (3d) 171, 2009 ONCA 9, at para. 4. The plaintiff was entirely successful at trial, obtaining declaratory relief, reconveyance of the lands and an accounting. That success gives rise to a strong presumption that he is entitled to recovery of his costs.
Simplified Procedure (Rule 76)
7The defendants submit that the action ought to have proceeded under the Simplified Procedure, with the result that costs should be capped at $50,000.
8I do not accept that submission.
9For a start, this action was commenced in 2019. The $50,000 cap on fees imposed by Rule 76.12.1(1) does not apply in the case of actions commenced before 1 January 2020 (Rule 76.12.1(2)). Nevertheless, Rule 76.13 would permit the court to deny the plaintiff costs where there was no reasonable basis at any time to have expected to obtain a judgment of more than the threshold amount ($100,000 at the time of the commencement of this proceeding) exclusive of interest and costs.
10In the present case, the subject matter of the litigation was beneficial ownership of eleven parcels of real property on Wolfe Island. The evidentiary record includes reference to appraisals valuing the lots at far more than the $100,000 monetary threshold. Indeed, the defendants themselves advanced a settlement position requiring a payment to them of $500,000 in exchange for reconveyance. It can be said with confidence that the value of the claim well exceeds the Simplified Procedure threshold.
11Accordingly, Rule 76 and its associated costs consequences have no application.
Rule 49 Offers
12The plaintiff relies on three settlement offers made between 2019 and 2022.
13I agree with the defendants that the earlier offers in 2019 and 2020 do not comply with the formal requirements of Rule 49 for the reasons they identify.
14The position is different, however, with respect to the plaintiff’s offer dated 25 October 2022. That offer was sufficiently complete and certain in its terms, provided for mutual releases and disposition of the proceeding, addressed costs, and was capable of acceptance in a manner that satisfies the requirements of Rule 49.
15At trial, the plaintiff achieved a more favourable result than that offer. The defendants are therefore at risk of the costs consequences contemplated by Rule 49.10. In the ordinary course, this would justify an award of substantial indemnity costs from the date of the offer onwards.
Discussion
16This is not an ordinary case.
17I have found that the plaintiff’s prime motivation in transferring the property to the defendants was to place the lands beyond the reach of creditors arising from his financial difficulties, and that the defendants were aware of that purpose. The arrangement was therefore, at its core, an improper one. While it was enforceable in equity for the reasons given in the merits decision, it nonetheless reflects conduct that the court cannot ignore when exercising its discretion as to costs.
18Courts of equity do not sit to reward parties for engaging in transactions of this nature. The fact that the plaintiff ultimately succeeded in enforcing the trust does not erase the underlying impropriety of the arrangement that gave rise to the litigation.
19That said, the defendants are not without fault. I have found that Mr. Bromley knowingly participated in the impugned arrangement and subsequently sought to retain the properties in circumstances where he knew that he held them for the plaintiff.
20This is not a situation in which an innocent party is being asked to bear the costs consequences of another’s misconduct. The defendants attempted to take advantage of the very arrangement in which they have willingly participated.
21In these circumstances, two competing costs considerations arise: a) on the one hand, the plaintiff should not be fully indemnified for the costs arising out of an arrangement that was, in moral terms, highly problematic; b) on the other hand, the defendants should not be permitted to benefit from their attempt to appropriate the property in denial of the trust that I have found to have existed.
22The appropriate resolution is to recognise the plaintiff’s success by awarding costs, while at the same time declining to provide any enhanced recovery.
23Although I have concluded that the plaintiff’s 25 October 2022 offer satisfies the requirements of Rule 49, this is an appropriate case to “order otherwise” within the meaning of Rule 49.10. To apply the ordinary substantial indemnity consequences of that Rule would, in my view, be disproportionate, and would fail to reflect the broader equitable context of the dispute.
Disposition
24The plaintiff is entitled to his costs of this action on a partial indemnity basis throughout. I fix his partial indemnity costs, payable by the defendants Mike Bromley and The Wolfe Island Trust Inc., in the amount of $66,400 (inclusive of HST). In addition, he is entitled to payment of disbursements totalling $4,326.81, inclusive of HST, for a total costs award of $70,726.81.
Mew J.
Date: 22 June 2026