Executive Summary: Key Legal and Evidentiary Issues

• The Divisional Court dismissed a motion for leave to appeal an order of Schabas J. dated February 18, 2026.
   
• Costs became the central focus of the endorsement, since leave motions rarely receive written reasons following a 2017 procedural change.
   
• A 2017 precedent, 2265535 Ontario Inc. v. Vijayant Sood, set the normal benchmark for partial indemnity costs on a leave motion at roughly $5,000.
   
• Inflation and the passage of time justified adjusting that benchmark upward to approximately $7,000 for a streamlined leave process.
   
• Respondents sought substantial indemnity costs of $53,176.52, far exceeding the moving parties' proposed partial indemnity figure of $6,734.57.
   
• Ultimately, the panel rejected the elevated indemnity basis and fixed costs at $7,000, all inclusive, payable to the respondents.
   

Facts of the case

This endorsement arises from a motion for leave to appeal brought before the Divisional Court of the Superior Court of Justice for Ontario. The moving parties — 2748204 Ontario Inc. operating as Flex Home Loans, Michael Yosher, Shalby Investments Inc., Albert Kshoznicer, and Barbara Kshoznicer — sought leave to appeal an order of Schabas J. dated February 18, 2026. The responding parties were Joan Syphus, Clemisford Syphus, Ian Bickerton (by his litigation guardian, David Bickerton), and John Doe #1-500. The motion was heard in writing by a panel comprising Matheson, Koehnen, and Schreck JJ., with Michael Gayed appearing for the moving parties and David Sterns and Ida Morra-Caruso appearing for the responding parties. The panel dismissed the leave motion and confined its written reasons largely to the resulting dispute over costs.

Policy and legislative provisions at issue

Since a rule change in 2017, the Divisional Court, like the Court of Appeal and the Supreme Court of Canada, does not normally give reasons on a motion for leave to appeal. The panel departed from that practice here specifically to address costs. It relied on guidance the same court gave in 2017 in 2265535 Ontario Inc. v. Vijayant Sood, which described the normal expectation for costs on a leave motion as partial indemnity costs in the range of $5,000, subject to the court's discretion to order more or less. The panel treated that guidance as the governing framework, while updating the figure to account for the time elapsed since it was set.

Reasoning and analysis

The panel reasoned that, given the passage of time, an amount closer to $7,000 now better reflects the narrow scope of the leave test and the streamlined nature of a leave motion. It noted that a leave motion typically challenges a decision already fully briefed on the merits, so the existing motion materials should assist in preparing leave materials, keeping costs modest as a general rule. Against that backdrop, the moving parties proposed partial indemnity costs of $6,734.57, while the respondents sought substantial indemnity costs of $53,176.52, with their own partial indemnity figure set at $32,157.39. The panel considered the respondents' submissions on the merits of the motion, the number of issues raised, and the allocation of over 80 hours of work to a student alongside roughly 40 hours billed by lawyers. It found the respondents' costs claim grossly disproportionate even measured on a substantial indemnity basis and declined to apply that enhanced basis. The panel also acknowledged that, although the motion failed, the underlying decision carries serious consequences for the moving parties — a factor weighed in keeping the costs award restrained rather than punitive.

Ruling and overall outcome

The Divisional Court dismissed the motion for leave to appeal Schabas J.'s order of February 18, 2026. The respondents were the successful party on the motion. The panel awarded them costs of $7,000, all inclusive, considerably less than either the substantial indemnity figure or the partial indemnity figure they had sought, and near the moving parties' own proposed amount.