Executive Summary: Key Legal and Evidentiary Issues

• Ernst & Young LLP successfully obtained summary judgment on the ground that the claim was statute-barred.

• The dispute then focused on the appropriate amount and scale of costs following the judgment.

• Plaintiffs argued the motion was narrow and simple, but the court found the issues were more complex and warranted full legal preparation.

• The court evaluated the impact of a formal written settlement offer made by Ernst & Young under Rule 49.

• Substantial indemnity costs were awarded from the date the offer was made, despite Ernst & Young being a defendant.

• Plaintiffs were ordered to pay $125,000 in costs, deemed fair and reasonable in the circumstances.

Background and parties involved

The plaintiffs—Jasvinder Singh, Raghbir Singh, Kulwant Singh, J&K Shopping Centre Inc., J&K Properties Inc., and Taj Supermarket—filed an action against multiple defendants, including Chaitons LLP, Stephen Schwartz, and Ernst & Young LLP. The claims involved serious allegations, including professional impropriety, and sought damages in connection with professional services rendered. Ernst & Young LLP brought a motion for summary judgment on the basis that the plaintiffs’ claim was barred by the expiry of the applicable limitation period.

Summary judgment decision and aftermath

On May 5, 2025, the Ontario Superior Court granted summary judgment in favour of Ernst & Young, dismissing the action against it. The court found that the claim had not been brought within the time required by Ontario’s limitations legislation. Following this ruling, the parties could not agree on costs. A timetable was established for written submissions, and the court was asked to fix costs.

Factors influencing the court’s cost decision

In awarding costs, the court applied section 131 of the Courts of Justice Act and the factors listed under Rule 57.01 of the Rules of Civil Procedure. The court noted that Ernst & Young was fully successful and entitled to costs based on the principle of indemnity. It rejected the plaintiffs’ argument that the motion was simple and did not require significant legal effort. Instead, the judge accepted that Ernst & Young had to address multiple legal issues, particularly concerning the limitation period, and found their work was helpful and efficiently presented.

Effect of the Rule 49 settlement offer

Ernst & Young had made a written offer to settle in August 2023, offering a without-costs dismissal within 20 days and a with-costs dismissal thereafter. The offer remained open past the commencement of trial and ultimately matched the outcome at summary judgment. Although Rule 49.10(1)(c) did not apply directly—since Ernst & Young was a defendant—the court exercised its discretion under Rule 49.13 and Rule 57.01 to treat the offer as a significant factor in awarding costs on a higher scale.

Outcome and implications

The court awarded Ernst & Young $125,000 in costs, inclusive of fees, disbursements, and HST. This figure reflected partial indemnity costs up to the date of the settlement offer and substantial indemnity costs thereafter. The court concluded this amount was fair and reasonable, especially considering the plaintiffs’ rejection of a reasonable early offer and the seriousness of the allegations made. The decision illustrates the cost consequences of unsuccessful litigation where a valid limitations defence exists and underscores the importance of timely and realistic settlement offers.