Negotiated Settlement Means No Costs Award

BarristerAfter several motions and a series of settlement discussions, the parties were able to settle all the issues in their family dispute and ultimately, signed a settlement agreement.

However, after the settlement the respondent, Mr. Dwyer, asked the court to award costs to him in the range of $27,000 to $35,000 representing a partial indemnity of his legal fees.

His former wife disagreed, positing that costs could not be awarded since the parties had settled their differences outside of a trial. She cited the case of Ball v. Ball 2014 ONSC 5754 where the court said:

“I accept the following summary statement from Orkin, The Law of Costs, 2nd Ed. (2014 Looseleaf) at paragraph 403: “Costs are generally not appropriate for a consent order on the reasoning that the order was not made as a result of adjudication on the merits of the application.” Without adjudication it can be very difficult to know who has had success. As noted in Barber vs. McGee, [2013] O.J. No. 4657 (O.C.J.) at paragraph 23:

Consideration of success is the starting point in determining costs. However, any attempt to determine a “winner” or “loser” in a settlement, is in most cases, complex if not impossible. … Unless there are compelling reasons to do so, costs in the circumstances of the settlement between parties ought not to be awarded by the court.”

Based on the material filed, the court said that it could spend hours and hours trying to determine which rendition of the facts provided by each party were accurate and chose instead to apply the principle found in Ball, declining to order costs.

The reality is that outside of a trial or a chambers application it is nigh impossible for a judge to determine who was reasonable, what positions ought to have been advanced, and when, and generally the conduct of the litigation….all factors that come into play in a costs decision.

Where parties settle their cases, the norm is to either negotiate costs as part of the settlement, or more commonly agree that each party will pay their own costs. Day v. Dwyer 2018 ONSC 5018

Lawdiva aka Georgialee Lang

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