Executive Summary: Key Legal and Evidentiary Issues

• Discretionary costs principles under s. 131 Courts of Justice Act and Rule 57.01(1), including fairness, reasonableness and proportionality, governed the fixing of costs on the competing motions.
• The defendants’ stay motion based on alleged abuse of process failed on the evidence, leading the court to reject the “extreme remedy” of staying the Crown’s action while still granting certain alternative procedural relief to TBL.
• The court scrutinized the plaintiff’s costs dockets (including issues such as entries for “began preparation of appeal materials” and undated time records) and reduced the claim, in part, for unnecessary work and mixed success.
• Temagami Barge Limited’s challenge that the plaintiff’s costs were “grossly excessive” was weakened because TBL filed no comparable bill or dockets, so its attack on quantum was characterized as an “attack in the air.”
• The court weighed conduct that unnecessarily lengthened the TBL motion (including how the plaintiff distinguished between “getting instructions and getting input”) as a factor justifying a reduction, but not a complete denial, of costs to the plaintiff.
• Applying the distinction between partial, substantial and full indemnity costs, the court held these motions were not among the “rare and exceptional” cases warranting substantial indemnity and instead fixed an all-inclusive partial indemnity award of $20,000 in favour of the plaintiff, payable by TBL.

Background and parties

His Majesty the King in Right of Ontario, as represented by the Minister of Natural Resources, is the plaintiff in this long-running civil proceeding. The defendants relevant to this costs decision are Temagami Barge Limited and the Estate of Raymond Joseph Delarosbel (together referred to as “TBL”), along with a separate defendant, Clifford Foster Lowery. The underlying action itself is not described in detail in this costs addendum, but it is a civil dispute involving the provincial Crown and private parties, likely connected in some way to natural resources or related activities given the Minister’s involvement. What is before the court in this document is not the merits of the case, but the allocation and quantum of costs on particular interlocutory motions.

Motions leading to the costs dispute

Two key motions gave rise to the costs ruling described in this addendum. First, TBL brought a motion seeking to stay the plaintiff’s action on the basis of alleged abuse of process. This was characterized by the plaintiff as an “extreme remedy,” and the judge ultimately agreed that the evidentiary record did not justify the drastic step of staying the action. The stay motion therefore failed. At the same time, the court granted some of the alternative procedural relief requested by TBL on its motion, which suggests that while the defendants did not obtain the ultimate remedy, they achieved at least partial procedural success. Second, there was a separate motion by the plaintiff to dismiss the action as against the defendant, Clifford Lowery. The court decided to defer that dismissal motion until after Mr. Lowery’s examination for discovery was completed. As a result, the plaintiff obtained what the defendants described as only a “mixed result” on its dismissal motion. In this costs addendum, no party is seeking costs against Mr. Lowery, and he is not seeking costs from any other party; he therefore plays no active role in this particular costs determination.

Prior costs decisions and context

The costs ruling is also framed against a background of earlier costs decisions in the same litigation. Counsel for the plaintiff and TBL refer to two prior addenda on costs issued in 2023 and 2024. Those prior awards help inform the parties’ “reasonable expectations” as to what costs might be payable on these more recent motions. The judge notes that the reasonable expectations of the parties, while relevant, cannot dominate the analysis or be used to artificially inflate costs in a way that would undermine access to justice. Instead, the court must perform a fresh, critical assessment of the relevant Rule 57.01(1) factors and then step back to ensure that the figure is fair, reasonable and proportionate for the losing party to pay.

Legal framework governing costs

The decision sets out the statutory and common law framework for civil costs in Ontario. Section 131 of the Courts of Justice Act gives the court broad discretion over “the costs of and incidental to a proceeding or a step in a proceeding,” including by whom and to what extent they are to be paid. This discretion is described as “quintessentially discretionary,” but informed by established principles. Traditionally, costs serve to provide partial—occasionally full—indemnity to the successful party for legal expenses, while also encouraging settlement, deterring frivolous claims or defences and discouraging unnecessary steps that prolong litigation. Rule 57.01(1) of the Rules of Civil Procedure lists a non-exhaustive set of factors the court may consider: the result, any offers to settle, the amounts claimed and recovered, apportionment of liability, complexity, importance of issues, and the conduct of parties that has shortened or unnecessarily lengthened the proceeding, among others. The addendum also recites leading appellate authorities (including Boucher, Restoule, Apotex and Whitfield) confirming that: costs awards need not match actual fees incurred; they must be objectively fair and proportionate; and partial indemnity, substantial indemnity and full indemnity represent distinct levels of compensation, with the latter two reserved for rare or exceptional cases absent applicable settlement offers. The judge emphasizes a two-part methodology: first, a critical examination of the relevant factors and of the specific costs claimed; and only then a “step back” to ask whether the final figure is fair and reasonable in all the circumstances. Skipping the first, analytical stage would be an error.

Positions of the parties on the scale and quantum of costs

The plaintiff sought substantial indemnity costs for both motions in the amount of $30,336. Its counsel relied on several core factors: the importance of the issues (particularly the drastic, unsuccessful stay sought by TBL), the principle of indemnity taking into account counsel’s experience, hourly rates and hours spent, what an unsuccessful party could reasonably expect to pay for these steps, and the conduct of the parties insofar as it either shortened or unnecessarily prolonged the proceedings. In contrast, TBL argued that no costs should be awarded to the plaintiff at all. Alternatively, if any costs were payable, they should be on a partial indemnity rather than substantial indemnity scale, with the plaintiff’s claimed amount described as “grossly excessive.” TBL contended that simply failing on a stay motion is not, without more, a basis for substantial indemnity and that nothing in its own conduct warranted such an elevated scale. TBL also criticized specific aspects of the plaintiff’s dockets: the absence of date entries, a time entry for “began preparation of appeal materials” that should not be recoverable on these motions, the total hours claimed for the two plaintiff’s lawyers, and the allocation of time between the stay motion and the dismissal motion where the plaintiff had only mixed success. Additionally, TBL pointed to certain conduct it attributed to the plaintiff—particularly how the plaintiff distinguished between “getting instructions and getting input”—as having unnecessarily lengthened TBL’s motion and as grounds for denying costs altogether.

Court’s assessment of conduct, expectations and “excessive” costs

The judge accepted that some conduct by the plaintiff did contribute to an unnecessary lengthening of the TBL motion. While this did not justify denying costs entirely, it was treated as a factor warranting a downward adjustment of the plaintiff’s claim. The court agreed that the alleged abuse of process issue and the potential stay of the action were important, but reiterated that the mere failure of a stay motion does not, by itself, trigger substantial indemnity. The court further noted that TBL’s assertion that the plaintiff’s claim was “grossly excessive” lacked evidentiary support because TBL had not provided its own bill of costs or counsel dockets for comparison. In reliance on prior authority, the judge described such a bare assertion—unsupported by TBL’s own time records—as essentially an “attack in the air.” Where one party alleges “unwarranted over-lawyering” or excessive costs, a comparative view of both sides’ expenditures can be a relevant consideration in assessing reasonableness, even if not determinative. At the same time, the court stressed that partial indemnity costs are not tied to a fixed percentage of full indemnity costs; rather, they are a flexible portion, generally more than 50% but less than 100%, adjusted case by case according to the Rule 57.01(1) factors. The distinction between scales must be preserved so that a nominal “partial indemnity” award does not, in substance, reimburse a party at near-substantial or full indemnity levels except in rare, exceptional circumstances.

Decision on the scale of costs

Having reviewed the docketing report and the circumstances of both motions, the court concluded that this was not one of the “rare and exceptional” cases warranting substantial indemnity. The plaintiff’s request for substantial indemnity was therefore rejected. Instead, the judge applied the principles of partial indemnity, taking into account the complexity and importance of the issues, the mixed nature of the plaintiff’s success, the absence of evidence of TBL’s own costs, the conduct of the plaintiff that lengthened the motion, and the broader proportionality and access-to-justice concerns highlighted in the appellate case law. The court reiterated that the overarching aim is not to match the plaintiff’s actual legal spend but to fix an amount that is fair and objectively reasonable for the unsuccessful party to pay in the circumstances.

Outcome and monetary award

After performing a detailed analysis of the factors and then stepping back to test the global result, the court fixed a single, all-inclusive costs award for both motions. The judge ordered that Temagami Barge Limited and the Estate of Raymond Joseph Delarosbel (collectively TBL), as the unsuccessful party on the key relief sought, pay the plaintiff’s costs in the amount of $20,000 on a partial indemnity basis. This sum is intended to cover fees, disbursements and applicable taxes for these motions, and is payable within 30 days. In this costs addendum, there is no award of damages on the merits of the underlying action; the only quantified amount is this costs award. Accordingly, the successful party in this decision is the plaintiff, His Majesty the King in Right of Ontario as represented by the Minister of Natural Resources, and the total monetary amount ordered in its favour under this addendum is $20,000 in all-inclusive costs.