Barry v. Anantharajah, 2025 ONCA 603 (CanLII)

• Victoria Edwards


• 10 Oct 2025

Full decision

In Barry v. Anantharajah, the Ontario Court of Appeal upheld a trial judge’s decision to award $300,000 in costs to a plaintiff who recovered just over $16,000 in damages.

Background

On December 9, 2014, Jacqueline Barry was struck by a vehicle while crossing a pedestrian street. She sued the driver, Punithavathi Anantharajah, seeking over $1 million in damages for physical and psychological injuries. The matter proceeded to a jury trial in January 2024.

The jury awarded the plaintiff:

• $24,166 in general damages
• $26,000 in special damages for past income loss
• 0% for future care and other claims

The plaintiff was found 15% contributorily negligent and after applying the statutory deductible under the Insurance Act, her net recovery was $16,160.50.

Despite the modest award, the trial judge granted Barry $300,000 in costs.

Issues on Appeal

The defendant appealed the costs award, arguing:

1. The trial judge erred in finding that the plaintiff was more successful; and
2. The costs award was disproportionate to the damages recovered.

The Court of Appeal dismissed the appeal, affirming the trial judge’s discretion and reasoning.

Key Legal Principles and Trial Judge’s Reasoning

The trial judge applied Rule 57.01(1) of the Rules of Civil Procedure, which requires consideration of a number of factors, including but not limited to:

• The result in the proceeding
• Offers to settle
• The complexity and importance of the issues
• The conduct of the parties

The trial judge found the plaintiff more successful than the defendant, noting that the defendant made no monetary offer before trial, the jury awarded damages despite the defendant’s request for zero compensation and the defendant’s litigation strategy was aggressive and reflected outdated stereotypes about mental health injuries.

The trial judge citedWray v. Pereira, 2019 ONSC 3354 (CanLII) emphasizing that when a defendant “plays hardball” by offering nothing, they risk bearing the costs if the plaintiff recovers anything. She also referencedPersampieri v. Hobbs and Corbett v. Odorico, where courts awarded substantial costs despite modest damages, particularly when insurers refused reasonable settlement offers.

Analysis: Deference and Proportionality

J.A. Pepall, writing for the court, reaffirmed that costs awards are “quintessentially discretionary” under s. 131(1) of the Courts of Justice Act. The appellate court will only interfere if there is an error in principle, or if the award is plainly wrong.

The court found no error in principle, even if the trial judge’s emphasis on the lack of settlement offer was arguably problematic. There were independent bases for the award:

• Barry was found to have suffered damages.
• The defendant was liable for 85% of the accident.
• The case involved complex medical and psychological evidence.

On proportionality, the court acknowledged that while the costs exceeded the damages, the issues were important and complex. The trial judge had reduced the award by $100,000 to account for proportionality and duplication for utilizing two senior counsel.

Implications for Personal Injury Lawyers

This case offers several strategic lessons:

1. Settlement offers matter: Defendants who make no monetary offer before trial take a significant risk. Even modest awards can trigger substantial cost consequences if the refusal to settle is deemed unreasonable.

2. Mental health injuries are serious: Courts are critical of defence strategies that minimize psychological harm. Personal injury lawyers should ensure mental health claims are well-supported by expert evidence and treated with the same seriousness as physical injuries.

3. Proportionality is not determinative: While proportionality is a relevant factor, it does not override other considerations like complexity, conduct and the principle of indemnity. Plaintiffs should not be undercompensated for legitimate costs simply because their damages are modest.

4. Insurer conduct under scrutiny: Although not relied on by the trial judge, s. 258.5 of the Insurance Act requires insurers to attempt to settle claims expeditiously. Courts may consider non-compliance when awarding costs.

Conclusion

Barry v. Anantharajah reinforces that costs awards are not purely mathematical. They reflect broader principles of fairness, access to justice and the conduct of parties. Adopting a hardball litigation strategy invites significant cost consequences even in cases with modest damages awards.