Legal Blog

“Exceptional Circumstances”: Court Examines the Issue of Costs Awards in the Context of Settlement

Kearney v. Hill 2017 Ont SCJ

Two daughters were battling over a POA and ultimately the estate of their mother. They settled all of their substantive differences at a mediation, but left the issue of costs to be argued by way of motion. The judge noted that, as a general rule, a court prefers not to award costs against one of the parties after a settlement because there could be many motivating factors to enter into a settlement and the reasonableness or unreasonableness of a party’s position may depend on a myriad of factors. In essence, it is difficult to determine who won. The judge referenced the position of Myers J. in which he noted that costs were an incident of the determination of the rights of parties and not intended, of themselves, to be the subject of a dispute. However, the judge held that, in this case, there were exceptional facts. He also noted, quite correctly, that if costs could not be resolved after a dispute was resolved, the parties might not resolve the dispute at all. One daughter and her counsel took unreasonable positions and were the primary drivers of the length, acrimony, and excessive cost of the litigation. The judge awarded $75,000 against that daughter.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.