Costs on Dismissal of Proceedings: Section 137.1(7)

• Author: David A. Potts; Erin Stoik
• Pages: 311-323

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Costs on Dismissal of Proceedings: Section 137.1(7)

LEGISLATION

The sections on costs are a def‌ining and pivotal feature of this legislation.

The legislation may be summarized from the defendants’ perspective as:

“heads, I win” (s 137.1(7)), “tails, you lose” (s 137.1(8)).

Courts of Justice Act, RSO 1990, c C.43:

Costs on Dismissal

137.1 (7) If a judge dismisses a proceeding under this section, the moving party

is entitled to costs on the motion and in the proceeding on a full indemnity

basis, unless the judge determines that such an award is not appropriate in

the circumstances.

PURPOSE OF SECTION .

General Purpose

Ontario Court of Appeal

In Fortress Real Developments Inc v Rabidoux, 2018 ONCA 686 at paras 60–64,

the Ontario Court of Appeal made the following comments on the general

purpose of section 137.1(7):

[60] Section 137.1(7) does two things. First, it creates a starting point for the

motion judge’s determination of costs when the defendant (moving party)

has been successful in dismissing the action on a s. 137.1 motion. Section

137.1(7) directs that the motion judge start from the premise that the defend-

ant should receive costs on both the motion and in the proceeding on a full

indemnity basis.