Executive Summary: Key Legal and Evidentiary Issues

• Determination of whether the defendant, as successful moving party on a security for costs motion, should receive partial indemnity costs despite only limited success on the quantum of security ordered.
• Assessment of whether the plaintiffs’ written offers to post security for costs were “as favourable as” or “more favourable” than the eventual order, so as to trigger Rule 49.10 costs consequences.
• Consideration of how non-monetary and forward-looking terms in settlement offers affect their comparability to a court order for the purpose of Rule 49.10.
• Application of the court’s broad discretion under s. 131 of the Courts of Justice Act and Rules 57.01, 49.10 and 49.13 to craft a costs award that is fair, reasonable, and proportionate in light of divided success.
• Evaluation of the reasonableness and proportionality of the defendant’s claimed partial indemnity costs given the limited success on the motion and the plaintiffs’ near-miss offers.
• Balancing the principle that there is “no near-miss” policy under Rule 49.10 against the need to give meaningful weight to compliant or near-compliant offers under Rule 49.13 when fixing costs.

Background and nature of the dispute

This decision is a costs endorsement in the Ontario Superior Court of Justice in Goldmann et al v. Constable, following an earlier ruling on a motion for security for costs. The underlying merits of the action are not described in the endorsement, and the decision focuses exclusively on procedural and costs issues arising from the defendant’s motion for security for costs and the parties’ competing offers to settle that motion. The defendant moved for an order requiring the plaintiffs to post substantial security as protection for his legal costs through to trial, while the plaintiffs resisted the amount sought and proposed lower security through their offers.

The security for costs motion and initial order

In a prior decision released on January 9, 2026, the court granted the defendant’s motion for security for costs but did not award the full amount he sought. The defendant had requested $150,000, representing his partial indemnity costs through to trial. Instead, the court ordered the plaintiffs to post a total of $30,000 as security, in two stages: $10,000 payable within 30 days of the January 9 decision, and a further $20,000 payable within 10 days of the commencement of the first examination for discovery. The order expressly preserved the defendant’s right to return to court on new materials after examinations for discovery to seek further security, meaning the trial-through amount was left open for a future motion rather than fixed at this stage.

Settlement offers exchanged between the parties

Before and after the security for costs motion, both sides made written offers to settle the issue of security. On November 5, 2024, the plaintiffs served an offer to settle under which they proposed placing $50,000 in trust and posting further security before trial if necessary. Later, in the responding factum on the motion, they advanced a position that the matter could be resolved by placing $25,000 in trust up to examinations for discovery, effectively seeking to limit security to that amount for the pre-discovery phase.

The defendant, for his part, served his own offer on September 30, 2025, seeking $120,000 in security, without prejudice to his ability to request more security before trial. Throughout, his formal position on the motion remained that $150,000 should be posted as security. These competing proposals framed the dispute over whether any Rule 49 costs consequences should follow from the eventual order for $30,000 in staged security.

Positions of the parties on costs of the motion

Following the January 9 decision on security, the court invited the parties to resolve the question of costs of the motion, failing which they could deliver written submissions. Unable to agree, they did so. The defendant argued that he was the successful party on his security for costs motion and was presumptively entitled to his partial indemnity costs. He sought $11,443.01 in partial indemnity costs in accordance with his costs outline.

The plaintiffs advanced several alternative positions. First, they contended that their November 5, 2024 offer met the requirements of Rule 49 and triggered Rule 49.10 costs consequences. On this view, they said they had obtained a result that was as favourable as, or better than, their offer, entitling them to partial indemnity costs to the date of the offer and substantial indemnity costs thereafter. In the alternative, they argued that the defendant’s costs claim should be reduced or denied because he had not been entirely successful, having obtained only $30,000 in security compared to the $150,000 he had requested. They also argued, in a further alternative, that the defendant’s claimed costs were disproportionate to the issues and result.

Legal framework for costs discretion and offers to settle

The court began its analysis by confirming that costs are in the discretion of the court under s. 131 of the Courts of Justice Act, guided by the factors in Rule 57.01. Those factors include the principle of indemnity, the reasonable expectations of the unsuccessful party, and the complexity and importance of the issues. The court cited authority emphasizing that costs awards must be fair and reasonable, and that they reflect what is appropriate for the unsuccessful party to pay rather than a strict measure of the winner’s actual costs.

Turning to Rule 49, the court analyzed whether the plaintiffs’ offers could attract automatic costs consequences under Rule 49.10. The plaintiffs relied on case law confirming that a judgment need not be identical to an offer to be “as favourable as” or “more favourable” for Rule 49 purposes; the appropriate test is one of overall equivalence, taking into account both monetary and non-monetary terms. The court reviewed authorities such as Waxman v. Waxman, Hunger Project v. Council on Mind Abuse, and Rueter v. Fraser Estate, which address how comparability and favourability are assessed where offers include non-standard or non-monetary terms.

The court also cited Elbakhiet v. Palmer for the principle that uncertainty or lack of clarity in an offer may prevent a party from demonstrating that the judgment obtained is as favourable as, or more favourable than, the offer. Under Rule 49.10(3), the burden rests on the offeror (here, the plaintiffs) to show that their offer was as favourable or more favourable than the eventual order. This burden and the requirement for clarity became decisive in assessing whether the plaintiffs could rely on Rule 49.10’s automatic costs regime.

Application of Rule 49.10 to the plaintiffs’ offers

After considering the authorities, the court concluded that none of the plaintiffs’ offers attracted the automatic costs consequences under Rule 49.10. With respect to the plaintiffs’ proposal to resolve the motion by placing $25,000 in trust up to examinations for discovery, the court found that this was not equivalent to, or more favourable than, the order that ultimately required the plaintiffs to post $30,000 up to examinations for discovery. The order therefore represented a somewhat higher obligation than the $25,000 proposal, making it inaccurate to characterize the result as “as favourable as” or better than that offer.

Regarding the plaintiffs’ earlier $50,000 offer, the court noted that this proposal contemplated $50,000 in security for the period through to trial, with additional security to be posted if needed. The order, by contrast, focused on the amount up to examinations for discovery and expressly left open the question of security through to trial. Because the offer did not clearly specify how much of the $50,000 related to the pre-discovery phase, the court held that it was not possible to say that the plaintiffs had demonstrated equivalence or favourability as compared to the January 9 order for $30,000 to examinations. The plaintiffs therefore failed to meet their burden under Rule 49.10(3), and the strict Rule 49.10 cost-shifting regime was not triggered.

The court also reiterated that there is no “near-miss” policy under Rule 49.10. Even though the plaintiffs’ offers were close in effect to what the court ultimately ordered, the rule does not permit automatic consequences based on near-equivalence; instead, departure from Rule 49.10 occurs only in exceptional circumstances, which the court did not find present in this case.

Role of Rule 49.13 and the “spirit” of offers

Although Rule 49.10 did not apply, the court turned to Rule 49.13, which allows the court, when exercising its costs discretion, to take into account any written offer to settle, the date it was made, and its terms, even if it does not strictly meet the technical requirements of Rule 49. The court found that the plaintiffs’ offers complied with the “spirit” of Rule 49 and that the Ontario Court of Appeal has indicated such offers ought to be given considerable weight in fixing costs.

In this case, the plaintiffs’ offers were very close to the result ordered by the court, particularly in terms of the amount of security required up to examinations for discovery. This near-equivalence, while insufficient to invoke Rule 49.10, was significant for the court’s discretionary assessment under Rule 49.13 and contributed to a downward adjustment of the defendant’s recoverable costs.

Divided success and proportionality of costs

The court recognized that there had been divided success on the motion. The defendant achieved an order for security for costs, but only for $30,000 and only up to examinations for discovery, not the $150,000 to trial that he had requested. At the same time, the plaintiffs did not succeed in avoiding security altogether. The court concluded that, despite this divided outcome, the defendant remained the successful moving party because his motion for security was granted and the plaintiffs were ordered to post security.

However, the degree of success and the closeness of the plaintiffs’ offers to the ultimate order weighed heavily in calibrating the appropriate level of costs. The court held that the defendant’s partial indemnity costs should be reduced to reflect both his incomplete success and the plaintiffs’ reasonable, near-compliant offers. Prior authorities emphasizing that a party’s lack of “complete success” can justify a reduction in costs were applied, reinforcing the importance of proportionality and fairness.

Final costs award and overall outcome

In light of all these considerations—the discretionary nature of costs, the partial success of the defendant, the near-miss nature of the plaintiffs’ offers, and the need for a fair and proportionate result—the court concluded that the defendant should receive costs, but in a significantly reduced amount. The defendant’s requested partial indemnity costs of $11,443.01 were cut down, and the court fixed the plaintiffs’ obligation to pay the defendant’s partial indemnity costs of the motion at $3,500, inclusive of HST and disbursements, payable within 30 days of the release of this costs decision.

As a result, in the overall procedural outcome to this point, the defendant Constable is the successful party on the security for costs motion and the associated costs endorsement. The plaintiffs are required to post $30,000 in security for costs in staged payments and to pay $3,500 in costs of the motion, for a total monetary impact of $33,500 in favour of the defendant, recognizing that $30,000 is security (not yet a realized costs recovery) and $3,500 is an immediately payable costs award.