Executive Summary: Key Legal and Evidentiary Issues

• Costs fixed on a partial indemnity basis after the application was dismissed and the counterapplication granted, with reasonableness as the overriding principle.

• A Rule 49 offer (Jan 15–31, 2024) that would have avoided costs for the applicant if accepted was deemed reasonable and weighed against her in the costs analysis.

• Inclusion of the lender (CPNBL) as a party and advancing a potential short-sale theory were found unnecessary and unreasonable, increasing costs exposure.

• The proceeding’s complexity—competing applications, multiple affidavits, cross-examinations, and factums—supported higher, proportionate costs.

• Complaints about an unadmitted 2012 email carried no weight; the court found it irrelevant and inadmissible for decision-making.

• Proportionality and access-to-justice considerations guided the final quantum: $16,000 to Gadomski and $2,500 to CPNBL, payable within 30 days.

__________________________________________________________________________________________________________________________________________________________________________________________

Background and facts
The court addressed costs following the dismissal of the estate trustee’s application and the granting of the respondents’ counterapplication (referenced as 2025 ONSC 3365). The litigation concerned a property purchased for $310,000 in 2012; the applicant sought 50% of its present value but recovered nothing after the outcome. The matter was heard in writing before Justice Hurley. Parties agreed costs should be on a partial indemnity basis, with the respondents seeking $16,588.93 (Gadomski) and $4,190.17 (CPNBL), while the applicant proposed only $5,000 payable to Gadomski. The court noted the applicant’s positions included unnecessarily naming CPNBL and suggesting a sale below the mortgage balance—positions found unreasonable on the facts.

Submissions on costs
At a prior case conference, parties were directed to exchange costs outlines stating what they would seek if successful and what they would pay if unsuccessful. The applicant’s outline sought $21,101.50 if successful but only $5,000 if unsuccessful; Gadomski’s set $16,580.93 if successful and $15,000 if unsuccessful; CPNBL listed $4,190.17. The court also considered a January 15, 2024 Rule 49 offer from Gadomski: if the applicant transferred the estate’s interest in the property and he arranged to discharge her mortgage liability, she would pay no costs if she accepted by January 31, 2024. The judge characterized that offer as reasonable. The applicant’s argument that Gadomski unreasonably refused admissions about a 2012 email failed, as the court indicated the email was neither relevant nor admissible. All parties agreed the issues were important; the court accepted CPNBL’s assessment that the proceeding was reasonably complex, given competing applications and extensive affidavits, cross-examinations, and factums.

Court’s analysis
Applying Rule 57.01 factors, the judge found the amount at stake significant (the applicant sought half of the property’s current value and recovered nothing). No party engaged in improper conduct that lengthened the proceeding. The applicant’s attempt to limit costs exposure to Gadomski alone lacked justification since CPNBL was compelled to respond with its own record, factum, and compendium. Central to the analysis was the principle of reasonableness and proportionality, with the court citing appellate guidance that costs should be fair and reasonable for the unsuccessful party to pay, not a mathematical replication of actuals. The judge emphasized that the applicant’s $5,000 figure appeared arbitrary and inconsistent with her own “successful party” costs position. The reasonable, unaccepted Rule 49 offer and the unnecessary inclusion of CPNBL further supported a higher award to the successful respondents.

Disposition
Balancing all relevant factors, the court fixed costs at $16,000 inclusive (HST and disbursements) in favour of Gadomski and $2,500 all-inclusive in favour of CPNBL, payable by the applicant within 30 days.