Executive Summary: Key Legal and Evidentiary Issues

• Both parties agreed that costs should be awarded to 1000069368 Ontario Inc. on a partial indemnity scale, with the only dispute being the quantum.
• 1000069368 Ontario Inc. claimed $36,293.96 in total costs, inclusive of HST and disbursements, while 2700688 Ontario Inc. argued the claim was excessive and proposed $17,713.37 instead.
• Courts have broad discretion in fixing costs under s. 131(1) of the Courts of Justice Act, guided by the factors in Rule 57.01(1) of the Rules of Civil Procedure.
• Proportionality and the balance between the indemnity principle and access to justice are key considerations in the cost-fixing exercise.
• Applicants' costs are commonly higher than respondents' because applicants bear the burden of building their case while also responding to defences raised.
• Complexity in both law and fact, compounded by the respondent's separate application raising new issues, justified the applicant's higher cost claim.

Facts of the case

This matter concerns a costs endorsement issued by Justice Paul B. Schabas of the Ontario Superior Court of Justice following the resolution of two consolidated applications — Court File Nos. CV-25-00750842 and CV-25-00753700. On March 16, 2026, the court granted the application of 1000069368 Ontario Inc. ("10000") and dismissed the application of 2700688 Ontario Inc. ("2700"): 1000069368 Ontario Inc. v. 2700688 Ontario Inc., 2026 ONSC 1576. 

Applicable legal framework

The court's authority to award costs flows from s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which confers broad discretion on the court. Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors to be considered. The court is also required to apply the principle of proportionality and to balance the indemnity principle against the objective of facilitating access to justice. The governing standard, as stated in Boucher v. Public Accountants Counsel for Ontario (2004), 71 O.R. (3d) 291 (C.A.), is that the amount fixed must be fair and reasonable for the unsuccessful party to pay in the particular circumstances.

Court's reasoning and analysis

Justice Schabas noted that the awarding of costs is not an exact science and that the court need not conduct a line-by-line analysis of billing records, citing Boucher and several other decisions. The court found the application to have had some complexity in both law and fact, made more so by the respondent's own application, which raised a number of new issues. Justice Schabas accepted the well-established principle that applicants' costs are often considerably higher than respondents' costs, as applicants must construct their case while simultaneously responding to defences — a dynamic present in this proceeding. The court found the disparity between the parties' respective cost outlines to be explained by these circumstances, and that the respondent ought reasonably to have anticipated a costs bill of the magnitude claimed.

Ruling and overall outcome

Justice Schabas awarded costs in favour of 1000069368 Ontario Inc. — the successful party — in the total amount of $36,293.96, inclusive of HST and disbursements. This amount corresponds to the full quantum sought by the applicant, comprising $31,680.00 in fees, $4,118.40 for HST, and $495.56 for disbursements. The endorsement was dated May 26, 2026.