Thomas M. Muir

Following settlement of a motor vehicle injury action and discontinuance against two defendants who neither attended mediation nor contributed to the settlement, the court determined the costs consequences of the discontinuance.

The court held that those defendants were successful throughout, had consistently demanded costs, and there was no compelling basis to deny them partial indemnity costs merely because they had properly been named initially on the strength of the police report.

Applying the court's broad discretion under s. 131 of the Courts of Justice Act and Rule 57.01, and the fair-and-reasonable approach to fixing costs, the court reduced the amount sought and fixed costs at $20,000 inclusive of disbursements and taxes.

The appellants, a former condominium owner and a former management company, appealed a summary judgment dismissing their action against a condominium corporation and its directors for alleged misappropriation of funds.

The Court of Appeal upheld the dismissal against the participating defendants, agreeing that the appellants lacked standing because they had no direct interest in the corporation's funds.

However, the Court allowed the appeal regarding the non-participating defendants, as they had not sought summary judgment, and set aside the costs award because it was improperly made on a full indemnity basis without allowing the appellants to respond.