Executive Summary: Key Legal and Evidentiary Issues

• The court evaluated costs following partial success in a summary judgment motion on a contractual dispute.

• Rule 49.10 of the Rules of Civil Procedure applied due to a formal offer to settle served by the Plaintiff.

• The Defendant accepted liability but challenged the reasonableness of the Plaintiff’s claimed costs.

• The legal test centered on what a losing party would reasonably expect to pay, not the actual fees charged.

• Partial and substantial indemnity rates were analyzed based on timing and conduct.

• The court adjusted the Plaintiff’s claimed costs downward due to the simplicity of the case and limited procedural steps.

Facts and procedural background

Esquire Rose Investments Corporation initiated a legal action against Mathew Moxness for breach of contract, seeking damages of $93,500. The dispute arose from a failed commercial transaction in which the Defendant was alleged to have defaulted. The Plaintiff moved for summary judgment and was partially successful; the court awarded $80,000 in damages on May 27, 2025. The Plaintiff then sought an order for costs.

Both parties made written submissions on costs following the judgment. The Plaintiff sought $17,409.23 in costs, calculated on a mixed basis: partial indemnity until February 1, 2024, and substantial indemnity thereafter. The basis for this distinction was a formal offer to settle made under Rule 49 of the Rules of Civil Procedure. The offer proposed a $60,000 settlement and was open for acceptance until February 1, 2024. The Defendant acknowledged the offer and its implications under Rule 49.10 but argued the costs claimed were excessive for a relatively straightforward case.

Legal framework and analysis

The court outlined the discretion provided under section 131(1) of the Courts of Justice Act to award costs. It emphasized the purpose of modern costs rules: to indemnify successful litigants, promote settlement, and deter litigation misconduct. Rule 57.01 provided the framework for evaluating the appropriate amount, considering the complexity of the case, conduct of parties, and proportionality of costs.

Justice Nieckarz accepted that Rule 49.10(1) applied, entitling the Plaintiff to partial indemnity costs up to February 1, 2024, and substantial indemnity thereafter. However, the court found that the total hours billed—91 hours by lawyers and 8.2 by law clerks—were excessive given the simplicity of the proceedings. There had been no discoveries, cross-examinations, or affidavits of documents. Only a 1.5-hour motion and pleadings were completed, with no significant documentary complexity.

The Plaintiff argued that the Defendant had not provided a competing Bill of Costs, and the affidavit work was necessary. Nonetheless, the court found that many of the law clerk tasks were administrative and that one affidavit ultimately had limited evidentiary value. The Defendant was also successful in reducing the Plaintiff’s damages claim by $13,500, which further impacted the fairness of the final cost amount.

Outcome

The court concluded that the Plaintiff was entitled to costs but reduced the amount sought. Justice Nieckarz fixed the total payable costs at $14,000, inclusive of fees, disbursements, and HST. This amount reflected a fair and reasonable balance between indemnifying the Plaintiff and recognizing the limited complexity and procedural steps in the case.