Executive Summary: Key Legal and Evidentiary Issues

• Applicability of the Residential Tenancies Act, 2006 to a cottage occupied in a family campground and characterized as a seasonal lease by the Landlord and Tenant Board
• Legal sufficiency of the Board’s finding that the parties’ agreement was a seasonal lease excluded from the Act under s. 5(a)
• Impact of the appellants’ pursuit of an appeal and stay motion on the reasonableness and quantum of costs claimed by the respondents
• Determination of whether the respondents’ conduct or any “exceptional circumstances” justified substantial indemnity costs or a costs award in favour of the self-represented appellants
• Assessment of the reasonableness of the respondents’ counsel’s reduced hourly rate and overall bill of costs in light of the issues at stake
• Exercise of the court’s discretion under s. 131 of the Courts of Justice Act and Rule 57 to fix fair and proportionate partial indemnity costs at $5,000 inclusive of HST and disbursements

Background and facts

Alan Brooks and Marie C. Boucher occupied a cottage located at Hogan’s Haven Family Campground, a property owned and operated by Hogan’s Haven Family Campground and Archie Hogan. The parties’ relationship was structured through an agreement that the Landlord and Tenant Board (the Board) ultimately found to be a seasonal lease rather than a conventional residential tenancy. This characterization was central because, if correct, it meant that the Residential Tenancies Act, 2006 (the Act) did not apply to the arrangement. The appellants disagreed with the Board’s conclusion and maintained that they were tenants protected by the Act in respect of their occupation of the cottage. They pursued an appeal to the Divisional Court, arguing that the Board had erred in law in determining that their lease was seasonal and therefore excluded from the Act. Their position was bound up with their broader narrative that they were effectively residential tenants whose rights had been undermined. At an earlier stage, the appellants also sought a stay of the Board’s order, which required the respondents to incur additional legal costs responding to that interim relief. The respondents, for their part, took the position that the Board’s classification of the lease as seasonal was correct and that the statutory residential tenancy regime did not govern this relationship. They also disputed the appellants’ assertion that they had “lost” their cottage, pointing to evidence that the cottage had in fact been sold rather than forfeited purely as a result of the proceedings.

Procedural history and underlying merits

The Landlord and Tenant Board determined that the agreement between the parties was a seasonal lease and that, because of the exclusion in s. 5(a) of the Residential Tenancies Act, 2006, the Act did not apply to the appellants’ occupation of the cottage. The Board’s ruling effectively removed the dispute from the statutory residential tenancy protections on which the appellants had sought to rely. The appellants appealed that decision to the Divisional Court, advancing arguments that the Board had erred in law in reaching its conclusion on the nature of the lease and the applicability of the Act. A judge of the Superior Court of Justice, Justice Maranger, previously opined that the appeal lacked merit, although no costs were ordered at that time. Ultimately, the Divisional Court, per Justice A. Doyle, dismissed the appeal. The court held that the Board had not erred in law in finding that the parties’ agreement was a seasonal lease and that the statutory exclusion in s. 5(a) operated to render the Act inapplicable to the arrangement. As a result, the Board’s original conclusion—that the Residential Tenancies Act, 2006 did not apply to the appellants’ occupation of the cottage—was affirmed.

Positions of the parties on costs

After the dismissal of the appeal, the only remaining issue was costs. The respondents sought costs on a substantial indemnity basis in the amount of $8,308.89. They argued that the appellants had conducted themselves improperly, particularly by refusing to admit matters that ought reasonably to have been admitted and by pursuing an appeal and a stay motion that they said were devoid of merit. Relying on Rule 57.01(g) of the Rules of Civil Procedure, the respondents submitted that this refusal to make appropriate admissions and the appellants’ persistence in the litigation justified substantial indemnity costs. The respondents also maintained that the appellants’ settlement proposal was unrealistic and that their suggestion they had “lost” their cottage was not borne out by the evidence, which indicated instead that the cottage had been sold. The appellants, who were self-represented, opposed substantial indemnity costs and argued that they had a statutory right of appeal under the Act, which they had exercised in good faith. They pointed out that although Justice Maranger had commented that the appeal lacked merit, he did not order costs against them at that earlier stage. They further submitted that they had made a good faith offer to resolve costs for $5,000 payable to the respondents and referred to a previous offer intended to settle the matter more broadly. In the alternative, they argued that if costs were to be awarded at all, they should be assessed only on a partial indemnity basis and stayed pending a possible request for leave to appeal. The appellants also devoted considerable effort to the case, stating that they had spent approximately 380 hours preparing their materials. In a further alternative claim, they asserted that they themselves should receive costs because of what they described as exceptional circumstances: they accused the respondents of provoking the litigation by failing to enforce park rules, returning rent payments and issuing an eviction notice for non-payment, making a false trespass complaint to the police, and disconnecting vital services so as to render the cottage uninhabitable.

Legal framework for costs

Justice Doyle approached the costs issue under s. 131 of the Courts of Justice Act, which provides a broad discretion to award costs, and Rule 57.01(1) of the Rules of Civil Procedure, which sets out a non-exhaustive list of factors to be considered. Those factors include the result of the proceeding, the amounts claimed and recovered, the complexity of the proceeding, the importance of the issues, the parties’ conduct, any offers to settle, and the principle of reasonable expectations. The court also referred to Rule 57.01(7), which emphasizes that the court should adopt the simplest, least expensive and most expeditious process for fixing costs. In addition, Justice Doyle cited the principles articulated in Boucher v. Public Accountants Council for the Province of Ontario, where the Ontario Court of Appeal underscored that costs awards must be fair and reasonable, and that courts may consider how one party’s legal fees compare with the other’s in assessing the reasonable expectations of the parties. Against that backdrop, the court reaffirmed two key propositions: first, that fixing costs should be a straightforward exercise, not a mathematical accounting; and second, that there is a presumption in favour of partial indemnity costs unless exceptional circumstances justify a higher scale such as substantial or full indemnity. The mere fact that a party pursues its rights, even unsuccessfully, does not in itself amount to such exceptional circumstances.

Assessment of the parties’ conduct and the quantum of costs

After reviewing the parties’ costs submissions and their bills of costs, Justice Doyle concluded that this was an appropriate case to fix costs immediately rather than defer them or require a further assessment process. The respondents were clearly the successful party in the appeal, and the court held that costs should be fixed in their favour regardless of any potential future request for leave to appeal. The judge rejected the respondents’ argument that exceptional circumstances existed justifying substantial indemnity costs. While the appellants’ appeal lacked merit and they had pursued a stay of the Board’s order, their conduct did not rise to the level of misconduct warranting a departure from the ordinary partial indemnity scale. The court also considered the reasonableness of the respondents’ bill of costs. It noted that the respondents’ counsel had charged a reduced hourly rate that was appropriate in light of counsel’s years at the bar and relevant experience, and that the overall costs incurred were reasonable having regard to the issues at stake in the appeal and the procedural steps taken, including the stay motion. At the same time, Justice Doyle took into account the appellants’ effort to resolve the issue of costs by forwarding a settlement offer and the fact that they had devoted substantial personal time to the case. Balancing all the pertinent Rule 57.01(1) factors, the case law, and the particular circumstances of the litigation, the court fixed a single, inclusive figure for costs that it considered fair and proportionate.

Ruling on costs and overall outcome

In the result, the Divisional Court confirmed that the Board had not erred in law when it held that the parties’ agreement was a seasonal lease and that, under s. 5(a) of the Residential Tenancies Act, 2006, the Act did not apply to the appellants’ occupation of the cottage. The appellants’ appeal from the Board’s decision was dismissed, leaving intact the conclusion that the statutory residential tenancy protections were unavailable on these facts. Turning to costs, Justice Doyle exercised the court’s discretion under s. 131 of the Courts of Justice Act and Rule 57 to fix costs on a partial indemnity basis in favour of the successful party. The respondents, Hogan’s Haven Family Campground and Archie Hogan, were awarded a total of $5,000, inclusive of HST and disbursements, payable by the appellants, Alan Brooks and Marie C. Boucher. This $5,000 figure represents the complete monetary award in this endorsement; no additional damages or monetary relief were ordered beyond this costs award.