Evans v. Canusa Automotive Warehousing Inc., 2015 ONSC 6406 (CanLII)

Released October 16, 2015 | CanLII

This endorsement on costs concerns the plaintiffs’ effort to escape an adverse costs award after their action was dismissed following the defendants’ successful summary judgement motion.  The plaintiffs requested there be no cost order on the basis of their impecuniosity, which they sought to substantiate by filing an affidavit stating they had accumulated debt and tax liabilities in excess of $260,000.00.  In the alternative, the plaintiffs sought an order allowing them, to pay $100.00 per month until the conclusion of another action in which they were involved.  The plaintiffs were unsuccessful and costs were ordered against them.

Emery J., explained that the general rule regarding costs is that they follow the event.  Citing Fong v. Chan, 1999 CanLII 2052 (ON CA) (“Fong“), he explained this is so in order to meet three purposes:

  1. to indemnify successful litigants for the cost of the litigation;
  2. to encourage settlements; and
  3. to discourage and sanction inappropriate behavior by litigants.

When economic hardship is considered, however, the authorities are divided.  In Myers v. Toronto (Metropolitan) Police Force [1995] O.J. No. 1321 (Div. Ct.), it was stated,

Because of the importance of avoiding a situation in which litigants without means could ignore the rules of the court, the trial judge acted reasonably in refusing to take into account the impecuniosity of the plaintiff.

In Baksh v. Sun Media,(Toronto) Corp., 2003 CarswellOnt 24, Master Dash stated:

For orders of the court to have any meaning they must be enforced. I am not satisfied by cogent evidence that the plaintiff is impecunious. Even if I were so satisfied, a party should not be able to set up his own impecuniosity as a shield against costs sanctions. To allow that would mean that a plaintiff could bring, resist, or appeal motions with no fear of consequences, and would emasculate the powers provided in rules 57.03(2) and 60.12…

On the other hand, in Baines v. Linett&Timmis Barristers & Solicitors, 2014 ONSC 3165 (CanLII), Perell J. refused to order costs against an impecunious party, writing,

I see no purpose to be served in the circumstances of this case in making a notional or symbolic costs award that, practically speaking, cannot be paid but gives lip service to the normal rule that the successful party is entitled to costs.

Finally, the Court in Sutherland v. Manulife Financial, 2011 ONSC 1170 (CanLII) reviewed the law concerning costs awards against impecunious parties and held such awards should be “rare”.

In this case, the plaintiffs’ claims were considered “ill-conceived and unfounded at law.”  Further,  they were “relatively sophisticated in business matters.”  Under these circumstances, Emery J. felt they were “prepared to litigate without regard to costs” and granting their request would require ignoring the first and third principles set out in Fong.

 

Read the full decision on CanLII

Michael Ettedgui
Written by

Michael practices exclusively in the field of personal injury law at Campisi LLP.

Michael was called to the Bar in 2014. He received his law degree from Osgoode Hall Law School, where he participated in various programs geared towards access to justice and practical legal education. In particular, Michael volunteered with unrepresented litigants at family court and was the student co-ordinator of Osgoode Hall's Pro Bono Students Canada chapter.

When he is not working, Michael enjoys spending time with his wife and three young children.