Executive Summary: Key Legal and Evidentiary Issues

• Dispute over a $1.1 million deposit following a failed real estate transaction.

• Central legal issue involved competing interpretations of contractual obligations between the parties.

• The defendant’s counterclaim alleged slander of title and abuse of process related to a certificate of pending litigation (CPL).

• The court evaluated whether the defendant’s conduct warranted special or uplifted costs.

• Plaintiff made a reasonable settlement offer that was not accepted, impacting the cost award.

• The trial assessed whether the counterclaim was based on malicious or unfounded allegations.

Facts and outcome of the case

Background of the dispute

The litigation arose from a failed real estate transaction between Epix Developments Ltd. and Epix Main Street Limited Partnership (collectively, Epix) as plaintiffs, and Bonnis Development Union Street Limited Partnership (Bonnis) as defendant. The core issue revolved around a $1.1 million deposit held in trust after the parties were unable to complete a commercial property deal.

Epix claimed entitlement to the return of the deposit, asserting that Bonnis repudiated the agreement. Bonnis counterclaimed, alleging that Epix’s use of a certificate of pending litigation (CPL) was improper and constituted slander of title and abuse of process. The counterclaim rested on Bonnis’ interpretation of the contractual terms, alleging that Epix filed the CPL to exert pressure and gain leverage in negotiating a better deal.

Proceedings and trial

The action commenced in March 2022. A 14-day trial was held, after which the court rendered judgment on August 29, 2025. The court dismissed Bonnis' counterclaim and found in favor of Epix, determining that the deposit should be returned to Epix. The court concluded that the counterclaim was based on a flawed interpretation of the parties’ agreements and lacked evidentiary support for allegations of dishonesty or malice.

Following the main decision, the court considered written submissions on costs. Epix sought various forms of elevated cost awards, including special costs, double costs, and uplifted costs.

Legal findings on costs and conduct

The court declined to award special costs, concluding that although Bonnis’ counterclaim was ultimately unsuccessful, it was not “obviously unfounded” or made with malice. The claim was based on a genuine, albeit incorrect, interpretation of the agreements and did not rise to the level of reprehensible litigation conduct.

However, the court found that Bonnis unreasonably rejected a reasonable offer to settle made by Epix on April 4, 2024. That offer would have resolved the dispute for the return of the deposit, mutual releases, and dismissal of the action. Given the advanced stage of litigation and the risks involved, the court determined that the offer ought to have been accepted. As a result, the court awarded double costs to Epix for all steps taken after the offer was made.

The court also considered whether to award uplifted costs (1.5x Scale B) for the period before the settlement offer. It found that although the litigation was lengthy and vigorously contested, the circumstances did not justify uplifted costs for the earlier period.

Final outcome

The court ruled entirely in favor of Epix. The plaintiffs were awarded $190,000 in damages and pre-judgment interest, as well as party-and-party costs at Scale B for the entire proceeding. Additionally, Epix was granted double costs for all litigation steps taken after April 4, 2024. Bonnis’ counterclaim was dismissed in its entirety.