A June decision of Justice Turnbull was recently reported in which the Court sanctioned a plaintiff with rarely-seen “full indemnity costs” for making serious allegations of fraud and conspiracy, then dropping them on the eve of trial.

The plaintiff had borrowed $275,000 from one defendant in order to purchase a property from another defendant who acted on behalf of a third (corporate) defendant, which had obtained the subject property following a foreclosure suit. Shortly after the transaction, however, the plaintiff sued all defendants claiming fraud, conspiracy, and misrepresentation in their dealings with her, which she alleged had unlawfully converted $300,000 from her use. An additional $100,000 was claimed in punitive damages.

The defendants made written offers to settle in return for partial indemnity costs less $500, which were refused. They then brought a summary judgment motion, seeking to dismiss the claims.

On the eve of the hearing of the summary judgment motion, the plaintiff through counsel consented to the dismissal of the claims and a Consent Order followed dismissing the claims with costs to be assessed.

In holding the plaintiff liable for full indemnity costs, Justice Turnbull noted the early offers to settle made by all defendants, as well as the seriousness of the allegations that were made and abandoned, saying:

“Our Courts have often held that parties who make allegations of fraud or improper conduct which are seriously prejudicial to the character and reputation of a party, which prove to be unfounded, are often held liable to pay costs on a higher scale.” (at para 23)

In the result, both defendants were awarded similar full indemnity sums amounting to approximately 40 hours of work at $450 per hour, totaling about $17,000 (+HST) each.

Ref: Tingas-Demetriou vs. Dublin et al, 2016 ONSC 3414