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Court Costs

Discontinuing an action/abandoning an application – presumptive rules on costs

A party may pursue litigation for many reasons. These may include redressing financial harm, stopping harmful conduct, enforcing rights and many others. Just as there are many reasons to start a lawsuit, there are also many reasons why a plaintiff or applicant may want to end the litigation that they started.

One of the key moments in settlement takes place when the parties decide whether to have their action discontinued or dismissed.  It is advisable for both the client and the lawyer for the defendant to remember that the notice of discontinuance may not mean that the litigation is ended. Subrule 23.04(1) states:

The discontinuance of all or part of all or part of an action is not a defence to a subsequent action, unless the order giving leave to discontinue or a consent filed by the parties provides otherwise.

So to ensure that the action is over and the defendant never has to deal with the allegations raised in further litigation either there has to be an order dismissing the action or the discontinuance itself should include a clause that the action is discontinued with prejudice.

Aside from ending the litigation through settlement, the plaintiff or an applicant can end the litigation at any time during the proceeding.

A civil action can be ended by the plaintiff by filing a notice of discontinuance. An applicant can end an application by filing a notice of abandonment.

However, anyone who has been served with the claim or application, and who has responded to it, can ask the court to award them costs as compensation for the costs they incurred in responding to the proceeding. The following Rules apply:

ACTIONS: Rule 23.05(1) of the Rules of Civil Procedure provides that “If all or part of an action is discontinued, any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of the action”.1

APPLICATIONS: Rule 38.08(3) of the Rules provides that when “an application is abandoned or is deemed to have been abandoned, a respondent on whom the notice of application was served is entitled to the costs of the application, unless the court orders otherwise.”2

The following are four general principles in the law of costs that the court will consider when addressing costs of an abandoned or discontinued proceeding:

  1. The court has discretion to fix costs;3
  2. In exercising this discretion, the court may consider the factors set out in Rule 57.01 of the Rules of Civil Procedure;4
  3. Ultimately, in fixing an amount for costs, the overriding principles are fairness and reasonableness;5
  4. Costs are determined on a case by case basis.6

When you discontinue or abandon a court proceeding, the presumptive rule is that the court will award costs against you.7 However, there are circumstances where the court will allow you to end the proceeding without requiring that you compensate the other party for their costs. What are those circumstances?

To be relieved from costs, you must satisfy the court on a balance of probabilities that you (1) had a bona fide cause of action, (2) that it was not frivolous or vexatious, and (3) that there was some justification for commencement of the claim whether or not it can be said that the action/application may or may not ultimately succeed.8

In evaluating the circumstances, the court will also assess the circumstances surrounding the abandonment.9

So, to determine if you will be relieved from costs, the court must engage in a very fact-specific analysis of the circumstances that led to the initiation of the lawsuit and its discontinuance/abandonment.

For example, in Blenkhorn v. Mazzawi, the plaintiffs were permitted to discontinue their actions without costs. The court determined that the plaintiffs properly commenced their claim to “avoid the expiry of a limitation period and for no improper or vexatious purpose.”10 The court also determined that they “ought not to be penalized for discontinuing claims that have required little, if any, participation by the defendants in defending their claims.”11

The above tests and considerations are also applicable in estates litigation.

In estates litigation, the modern approach to fixing costs is “to  carefully scrutinize the litigation, and, unless the court finds that one or more public policy considerations applies, to follow the cost rules that apply in civil litigation.”12 Considerations include whether the litigation arose as a result of the actions of the testator or those with an interest in the residue of the estate or whether the litigation was reasonably necessary to ensure the proper administration of the estate.  If there were reasonable grounds to question the execution of the will or the testator’s capacity in making the will, it is in the public interest that such questions be resolved without costs to those questioning the will’s validity.13

For example, in Morley v. Morley, the court permitted the applicants to discontinue their application without costs, departing from the general rule provided in Rule 38.08 (3) because it determined the following:14

  • The applicants were justified in issuing the application as they had exhausted other measures and were concerned that another person was unduly controlling their parents.
  • Commencing the application was not an unreasonable investigative tool for someone who feared that her elderly parents, who were refusing all contact with her, might be unduly controlled, especially given that a poor relationship with the respondent limited the options to independently verify the parents’ intentions.
  • Although some of the relief sought in the application might not have been available, the materials filed disclose a bona fide cause of action that is not frivolous or vexatious.
  • The application was discontinued promptly- shortly after the applicants attended a case conference which permitted them to obtain independent verification of their parents’ intentions.

The above factors are only some of the considerations a court may take into account when determining if it is appropriate to allow a plaintiff or applicant to discontinue or abandon a proceeding without cost consequences. As stated above, these types of analyses are very fact specific. But the courts are always happy to see litigation resolved or otherwise brought to a conclusion. As such, the courts may be willing to give plaintiffs and applicants the benefit of the doubt and not award costs, especially if the respondents or defendants were not put to significant expense prior to the discontinuance or abandonment.

  1.   Rules of Civil Procedure, RRO 1990, Reg 194, r 23.05(1)
  2.   Rules of Civil Procedure, RRO 1990, Reg 194, r 38.08(3)
  3.   Courts of Justice Act, RSO 1990, c C.43, s 131(1)
  4.   Bouragba v. Conseil Scolaire de district de l’est de l’Ontario, 2021 ONSC 1749 (CanLII), at para 6; Deshevy v. Deshevy, 2018 ONSC 6851 (CanLII), at para 22
  5.    Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), at paras 37-38
  6.   Golda Developments Inc. v. Dawe, 2008 CanLII 26260 (ON SC), at para 21
  7.   Brahma v. HR Services, 2022 ONSC 2645 (CanLII), at para 26
  8.   Provincial Crane v. AMCA International Ltd1990 CarswellOnt 369 at para 5; Golda Developments Inc. v. Dawe, 2008 CanLII 26260 (ON SC), at para 20; Morley et al. v. Morley et al., 2013 ONSC 1595 (CanLII), at para 33
  9.   Carriere Industrial Supply Ltd. v. 2026227 Ontario Inc., 2013 ONSC 1016 (Ont. S.C.J.) at para 9; Morley et al. v. Morley et al., 2013 ONSC 1595 (CanLII), at para 35
  10.   Blenkhorn et al. v. Mazzawi et al., 2010 ONSC 699 (CanLII), at para 28
  11.   Blenkhorn et al. v. Mazzawi et al., 2010 ONSC 699 (CanLII), at para 28
  12.   Deshevy v. Deshevy, 2018 ONSC 6851 (CanLII), at para 23; Canada Trust v. Gooderham, 2005 CanLII 21091 (ON CA), at  paras 78-80
  13.   Deshevy v. Deshevy, 2018 ONSC 6851 (CanLII), at para 23; Canada Trust v. Gooderham, 2005 CanLII 21091 (ON CA), at  paras 78-80
  14.   Morley et al. v. Morley et al., 2013 ONSC 1595 (CanLII), at paras 40-44

The author of this blog is Lucinda Bendu. Lucinda is an associate at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

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This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
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