Executive Summary: Key Legal and Evidentiary Issues

• Court exercised its discretion under the Courts of Justice Act and Rule 57 to determine fair and proportionate trial costs.

• Plaintiffs sought partial indemnity costs up to a settlement offer date, then substantial indemnity costs thereafter.

• Defendant opposed on grounds that plaintiffs abandoned most claims and costs were beyond reasonable expectations.

• Dispute over whether plaintiffs' settlement offer triggered cost consequences under Rule 49.

• Defendant failed to file a cost outline, weakening her argument on reasonableness.

• Court awarded plaintiffs $120,000 in costs, emphasizing fairness, conduct, and proportionality.

Facts and procedural history

The plaintiffs in this case were Radlett Holdings Inc. and the estate trustees of William Brian Geoffrey Humphries. They brought an action against the defendant, Yue Qiu Zheng (also known as Angela Zheng), involving a property located at 1 Mill Walk Court in Richmond Hill, Ontario. The plaintiffs had been acting in their capacity as estate trustees for a charitable beneficiary, with duties to maximize the value of the estate.

On June 26, 2025, the court granted the plaintiffs a declaration that the defendant holds a 60% interest in the property. However, after the substantive decision, the parties could not agree on the issue of costs, leading to this separate ruling.

Positions of the parties on costs

The plaintiffs requested costs on a partial indemnity basis until March 13, 2023—the date of their formal offer to settle—and substantial indemnity costs thereafter. They argued their offers were genuine, showed a willingness to compromise, and were comparable in principle to the trial result, even if not monetarily equivalent. They sought $162,091.72 in legal fees and $16,583.62 in disbursements.

The defendant objected, contending that most of the plaintiffs' claims had been abandoned, including significant monetary relief. She maintained that the declaratory relief ultimately obtained was only added in a late amendment to the claim. She argued that the plaintiffs’ offers were not genuine compromises and that a reasonable amount for costs should fall between $20,000 and $25,000. The defendant did not file a cost outline, relying on case law suggesting it wasn’t strictly necessary for the losing party.

Court's analysis

The court reviewed the discretionary factors under section 131 of the Courts of Justice Act and Rule 57, including the result of the case, the principle of indemnity, proportionality, and settlement offers. It found the plaintiffs had made good-faith efforts to resolve the case and had narrowed their claims as the litigation progressed. However, the offer to settle did not “meet or beat” the outcome at trial because it imposed a repayment deadline that was not part of the court’s judgment.

The absence of a cost outline from the defendant undermined her argument that the claimed costs were excessive. The court noted that the defendant had likely spent comparable or greater legal fees during a three-day trial, and without her own bill of costs, her objections were speculative.

Outcome and cost award

After weighing the complexity of the case, the conduct of the parties, the shifting nature of the relief sought, and the importance of proportionality and fairness, the court awarded the plaintiffs $120,000 in costs. This amount included disbursements and HST and was considered reasonable for the work performed during the litigation.