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Administrative - Costs. 1353837 Ontario Inc. v. The Corporation of the City of Stratford
In 1353837 Ontario Inc. v. The Corporation of the City of Stratford (Div Ct, 2026) the Divisional Court dismissed an appeal, here brought against a "costs award ... of the Ontario Land Tribunal (the “Tribunal”) under s. 32(2) of the Expropriations Act, R.S.O.1990, c.E.26 (the “Act”)".
Here the court extensively considers the tribunal's costs award, and - interestingly - the [then] adoption (in the tribunal's Rules) of cost aspects of the civil Rules of Civil Procedure [R49]:[22] The relevant portions of the Act that were under consideration are as follows:32 (1) Where the amount to which an owner is entitled upon an expropriation or claim for injurious affection is determined by the Tribunal and the amount awarded by the Tribunal is 85 per cent, or more, of the amount offered by the statutory authority, the Tribunal shall make an order directing the statutory authority to pay the reasonable legal, appraisal and other costs actually incurred by the owner for the purposes of determining the compensation payable, and may fix the costs in a lump sum or may order that the determination of the amount of such costs be referred to an assessment officer who shall assess and allow the costs in accordance with this subsection and the tariffs and rules prescribed under clause 44 (d). 2017, c. 23, Sched. 5, s. 35.
(2) Where the amount to which an owner is entitled upon an expropriation or claim for injurious affection is determined by the Tribunal and the amount awarded by the Tribunal is less than 85 per cent of the amount offered by the statutory authority, the Tribunal may make such order, if any, for the payment of costs as it considers appropriate, and may fix the costs in a lump sum or may order that the determination of the amount of such costs be referred to an assessment officer who shall assess and allow the costs in accordance with the order and the tariffs and rules prescribed under clause 44 (d) in like manner to the assessment of costs awarded on a party and party basis. 2017, c. 23, Sched. 5, s. 35. ....
Standard of Review
[40] Section 31 of the Act provides that an order of the Tribunal may be appealed to this court on a question of law or fact or both.
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[42] As to the exercise of the Tribunal’s discretion in ordering costs, the exercise of discretion is not reviewed on a correctness standard and is afforded significant deference: see Shergar at para. 22 and Popack v. Lipszyc (2016), 129 O.R. (3d) 321, [2016] O.J. No. 857, 2016 ONCA 135 (C.A.), at para. 25.
[43] The Court of Appeal in Shergar (decided post-Vavilov) continued to rely on the reasoning set out in Popack which held that discretionary orders under appeal involve balancing of competing interests.In most cases, the existence of a discretion implies that different judges can reasonably arrive at different results. Consequently, appellate courts will defer to the exercise of discretion at first instance absent a clearly identifiable error in the application of the law, a material misrepresentation of the relevant evidence, or a result that is clearly wrong in the sense that it is not defensible on the application of the relevant law to the facts. ... [44] The Court of Appeal in Konig v. Hobza, 2015 ONCA 85 at para. 44 confirmed that the Supreme Court of Canada in Hamilton v. Open Window Bakery Ltd., 2004 1 S.C.R. 303, 2004 SCC 9 at para. 27 made it clear that an appellate court will not interfere with discretionary costs awards generally unless the award reflects an error in principle or is plainly wrong.
[45] Courts have confirmed that it will intervene in costs decisions of other administrative tribunals only if the tribunal made an error in principle or its decision was plainly wrong. Casella v. Ontario College of Chiropodists, 2024 ONSC 899 at para. 27; Kitmitto v. Ontario (Securities Commission), 2024 ONSC 1412 at para. 170; Kennedy v. College of Veterinarians, 2018 ONSC 3603 at para. 24; The Law Society of Upper Canada v. Watson, 2026 ONCA 372 at para.38
[46] 135 submits that the Tribunal’s costs decision is also subject to significant deference by reason of s. 13(4) of the Ontario Land Tribunal Act, 2021, S.O., c.4 which provides as follows:13(4) Unless the Tribunal’s failure to comply with the rules, or its exercise of discretion under the rules in a particular manner, causes a substantial wrong that affects the final disposition of the proceeding, neither the failure nor the exercise of discretion is a ground for setting aside a decision of the Tribunal on an application for judicial review or on appeal. [47] The “rules” referred to in s. 13(4) in our view refer to the practice and procedural rules the Tribunal is authorized to implement under s. 13(1) which provides as follows:13(1) The Tribunal may make rules governing its practices and procedures, including rules that,
a) provide for and require the use of hearings or of practices and procedures that are alternatives to traditional adjudicative or adversarial procedures;
b) provided for specified circumstances in which participation in mediation or other dispute resolution processes by parties to a proceeding is mandatory;
c) provide for and require notice to be provided in any particular manner;
d) authorize the Tribunal to combine two or more proceedings or any part of them, or hear two or more proceedings at the same time;
e) authorize a Tribunal to appoint a person from among a class of parties to a proceeding to represent the class where, in the opinion of the Tribunal, the parties have a common interest; or
f) govern the making of orders under section 10 and the exercise of powers under the orders. [48] The Tribunal’s costs award under appeal before this Court was not made in the exercise of its discretion under its practice and procedure rules but rather under s. 32 (2) of the Act, as set out above and therefore s.13(4) does not apply.
[49] Accordingly, I have considered this appeal from the Tribunal’s costs award on the basis of whether the Tribunal made an error in principle or was plainly wrong.
Analysis
[50] The City’s position is that the Tribunal erred in the interpretation and application of Rule 49.10. Rule 49.10 (2) of the Rules of Civil Procedure provides that where a defending party achieves a better result at trial than the amount of its Rule 49 offer, the plaintiff is entitled to its partial indemnity costs to the date of the offer and the defending party is entitled to its costs incurred from the date of the offer forward, unless the court orders otherwise.
[51] The City submits that because the City’s offers to settle exceeded the ultimate compensation award and because of 135’s unreasonable conduct and failure to accept the City’s offers, the Tribunal ought to have awarded the City its costs of the entire proceedings and disentitle 135 to any of its costs.
[52] The City submits that the Tribunal departed from a long line of Rule 49 cases without a principled basis in making what it states was an unprecedented order of costs, which nullifies the effectiveness of Rule 49 offers as a reliable tool to encourage settlement. For the reasons below, I disagree.
[53] The Tribunal, following Shergar, properly recognized the differences between the costs regimes for civil proceedings and expropriation proceedings, balancing the indemnity principle and the efficiency principle as noted above.
[54] Rule 26.29 of the Ontario Land Tribunal Rules of Practice and Procedure states that if an offer to settle is made and is not dealt with in the Act, the Rules of Civil Procedure apply.
[55] A similar provision was applicable at the time of the Shergar decision under r. 141 of the Ontario Municipal Board Rules.
[56] The City in its factum referred to the jurisprudence dating back to 1976 in Re Rotenberg et al. and Borough of York (No.2) 1976 Canlii 735 (Ont. C.A.) whereby the courts and the Tribunal have applied the costs framework of Rule 49.10 to expropriation cases including awarding costs, usually on a solicitor client basis, to the date of the municipality’s settlement offer.
[57] The facts in Shergar also involved a claimant’s unreasonable conduct in delaying the compensation proceeding and its refusal to accept the City’s offer of compensation that far exceeded the ultimate award made. Similar to the Tribunal decision in Shergar, the Tribunal in this case awarded costs to 135 on a solicitor-client basis until the date of the City’s Rule 49 June 15, 2018, offer in keeping with the jurisprudence under the Act.
[58] The Tribunal in this case noted that the Tribunal in Shergar did not apply Rule 49.10, which would have provided that Shergar receive only partial indemnity costs to the date of the City of Windsor’s Rule 49 settlement offer, and that the City receive its partial indemnity costs from that date forward. That reasoning and decision was upheld by this Court and the Court of Appeal at para. 38. The Tribunal in this case similarly concluded it was entitled to draw upon Rule 49.10 (2) to inform its analysis, but it need not or should not follow it rigidly or formulaically.
[59] This Court in Shergar at paras. 105 and 106 confirmed that the Tribunal’s discretionary authority to award costs under ss. 32(1) and 32(2) is not constrained or fettered in any manner nor does any conflict arise between the terms of these provisions and Rules 49.10 and 57.01.
[60] Accordingly, there was no error in principle in the Tribunal’s award to 135 of its solicitor-client costs up to and including the date of the City’s Rule 49 June 15, 2018, offer nor was that decision plainly wrong.
[61] I come to the same conclusion with respect to the Tribunal’s decision to award 135 its costs on a partial indemnity basis after the date of that offer.
[62] As noted above, the Tribunal’s discretion to make that costs award was not constrained or fettered in any manner. It considered, but in its discretion, departed from the provisions of Rule 49.10, finding that 135 should only be entitled to partial indemnity costs thereafter because of its unreasonable conduct rather than no costs. The Tribunal also ordered that the City was entitled to its costs on a partial indemnity basis for the entire proceeding, not just from its June 15, 2018, settlement offer.
[63] It did so for two reasons. The first was on the basis that 135’s refusal to accept the City’s proper settlement offer of June 15, 2018, and its unreasonable conduct throughout the proceeding were not as egregious as the facts in Shergar such that it should be denied any costs after that date.
[64] That reason should not be considered in isolation. The second and perhaps more significant reason was because the Tribunal found it was more appropriate to address and effectively sanction 135’s unreasonable and wasteful conduct by awarding the City its costs payable by 135 throughout the entire proceeding on a partial indemnity basis and not just from the date of its Rule 49 offer of June 15, 2018.
[65] Rule 49.10 (2) would not normally allow the City its costs before the date of its June 15, 2018, offer. The Tribunal found that it was objectively reasonable for 135 not to accept the City’s first September 11, 2009 offer as it was made jointly to 135 and four other entities, it was unclear and deficient given the mathematical error, and 135’s expert report was extremely critical of the City’s Bower Appraisal including the amount of the cost of remediation being significantly less. In addition, that offer made before the commencement of the expropriation proceeding would not be an offer that falls within this Rule. Scanlan v. Standish, (2001) 2002 CanLII 20549 (ON CA), 57 O.R.(3d) 767, 155 O.A.C. 96 (C.A.).
[66] The second January 13, 2010, offer of the City was not a final offer and was subject to adjustment and reimbursement by 135 if the compensation award was less than the amount advanced. The City’s June 27, 2013, offer was revoked in October 2017.
[67] The City has not established any error in principle or that the Tribunal’s decision was plainly wrong in its finding that 135’s conduct resulting in delays in the expropriation proceedings was less egregious compared to the facts found in Shergar. There was adequate support for those findings on the evidence before it. The Tribunal noted that the initial Vice Chair Jacobs’ decision found that the delays in the proceedings were occasioned by both parties, not just 135, as well as delays beyond the control of either of them or the Tribunal. The Tribunal noted that the strong opposing forces of the parties prevented an expeditious conclusion of the lis between them.
[68] The Tribunal recognized at para. 140, as conceded by 135, that all the aggravating factors in Shergar need not be present before costs are not awarded to 135 and/or against it in favour of the City. In my view, the Tribunal did not conclude as the City submitted, that 135 could only be denied costs after the City’s June 15, 2018, offer under Rule 49.10 if the facts were as egregious as those in Shergar.
[69] Rather, what is apparent is that the Tribunal decided it was more appropriate in this case to address 135’s unreasonable conduct by awarding 135 its costs after the June 18, 2018 offer on a reduced partial indemnity basis but at the same time requiring 135 to pay the City’s costs on a partial indemnity basis from the outset until the date of that offer and also thereafter for the balance of the proceeding.
[70] The result in effect required 135’s entitlement to only partial indemnity costs after the date of that offer to be offset to some extent by its obligation to pay the City’s partial indemnity costs incurred before that date because of its unreasonable conduct, neither of which was normally contemplated by Rule 49.10.
[71] Accordingly, the Tribunal did consider the unreasonable conduct of 135 throughout the proceeding including not accepting the City’s Rule 49 offers of June 15, 2018, and April 13, 2021, and, in its discretion, reasonably sanctioned 135 by making the costs order it did.
[72] Lastly, the City did not object to the submissions that the Tribunal had discretion to award costs concurrently to both 135 and the City and on their respective costs motions.
[73] I find the City has not established that the Tribunal’s costs decision falls outside of the range of possible acceptable outcomes which are defensible in respect to the facts and law.
[74] The Tribunal in its discretion was entitled, on the evidence before it, to address the issue of 135’s unreasonable conduct when assessing costs under s. 32(2) of the Act by reducing its post June 15, 2018 costs to partial indemnity costs only, and simultaneously requiring 135 to pay the City’s costs throughout the entire proceeding on a partial indemnity basis.
[75] The Tribunal’s decision is to be afforded significant deference even though this Court or other Tribunal members could have reasonably arrived at a different result. I do not find that the discretionary costs award reflects an error in principle or is plainly wrong. . The Jos. Rashotte Company Limited v. Quinte Conservation Authority
In (Div Ct, 2026) the Divisional Court considered a party's unusual request for costs from the tribunal, here in a JR context:[17] I have considered the principles governing costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Section 131(1) provides:Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid. [18] The Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) confirmed that costs are fundamentally discretionary and that the objective is to fix an amount that is fair and reasonable in the circumstances rather than simply indemnifying a successful litigant for actual expenses incurred.
[19] The starting point in most civil proceedings is the determination of success and the application of the factors set out in Rule 57.01 of the Rules of Civil Procedure. However, judicial review proceedings involving administrative tribunals engage additional considerations that have developed through the jurisprudence. There is no dispute in this case that the QCA Board acts as an administrative tribunal in respect of appeals of development permit refusals and in that function is governed by the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22.
[20] The basic principle relating to costs against an administrative tribunal is set out as follows:It has been recognized ... that, contrary to the normal practice, costs do not necessarily follow the event where administrative or quasi-judicial tribunals are concerned. They may be awarded only in unusual or exceptional cases, and then only with caution…where the tribunal has acted in good faith and conscientiously throughout, albeit resulting in error, the reviewing tribunal will not ordinarily impose costs.
See: Donald J.M. Brown & John M. Evans, Judicial Review of Administrative Action in Canada (Toronto: Thomson Reuters Canada, 2009), para. 5:47. [21] This text has also been cited by the Divisional Court in Reynolds v. Ontario (Alcohol and Gaming Commission, Registrar), 2019 ONSC 7057 (Ont. Div Crt.) at para. 4:It is true that costs are not normally awarded to or against an administrative tribunal that does not participate in a defense of the merits of its decision. As stated in Donald J.M. Brown and The Honourable John M. Evans in Judicial Review of Administrative Action in Canada, “[g]enerally unless the agency is acting in a proper adversarial role, an administrative tribunal will neither be entitled to nor ordered to pay costs” (at para. 5:2560 (2019)). [22] In Faruk v. The Landlord and Tenant Board, 2023 ONSC 2191, at paragraph 73, the Divisional Court acknowledged that the proceedings had been caused by a failure on the part of the administrative tribunal in question. However, the Court emphasized that, as a general rule, it does not award costs against an administrative tribunal because of errors it has made. It is inevitable that administrative tribunals will make mistakes, but a costs order is not necessarily an appropriate response to those errors.
[23] The courts have recognized that administrative tribunals occupy a distinctive role within the justice system. Their function is adjudicative rather than adversarial. Consequently, tribunals ordinarily neither recover nor pay costs when their decisions are challenged through judicial review proceedings. ....
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[29] .... The law remains focussed on the fact that costs are not awarded against an administrative tribunal except in certain circumstances. Examples cited are where the administrative tribunal cast itself in an adversarial position, breached the rules of procedural fairness, was the initiator of the litigation in question or where bias has necessitated a new hearing.
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[33] The QCA’s position concerning prematurity and jurisdictional issues was a legal position available to it. As several authorities have recognized, the advancement of procedural or jurisdictional arguments does not, by itself, constitute adversarial conduct sufficient to justify a costs award against a tribunal: see Weyerhaeuser Company Limited v. Ontario (Human Rights Commission), 2007 CanLII 65623 (ON SCDC) at para. 24.
[34] In the end, I am not satisfied that this is one of the cases where the interests of justice require a departure from the ordinary rule. The Applicant seeks costs because it ultimately obtained the relief it sought. However, the jurisprudence concerning administrative tribunals makes clear that the usual "costs follow the event" principle does not apply with the same force in judicial review proceedings involving adjudicative bodies. Even where tribunal decisions are set aside, courts have exercised restraint in awarding costs absent adversarial conduct or other exceptional circumstances.
[35] In addition, I consider my discretion under s. 131 of the Courts of Justice Act and considering the relevant factors under Rule 57.01 of the Rules of Civil Procedure. I conclude that this is an appropriate case for no order as to costs. The Respondent acted in its adjudicative capacity. The judicial review was resolved without a determination on the merits. The QCA did not assume an adversarial role. No exceptional circumstances have been established that would justify departing from the general rule applicable to administrative tribunals. . City of Ottawa v. MacEwen Petroleum Inc.
In City of Ottawa v. MacEwen Petroleum Inc. (Ont Div Ct, 2026) the Ontario Divisional Court allowed an appeal, this regarding "whether a business claiming compensation for the expropriation of property was entitled to interest on legal fees prior to the date of the tribunal order fixing its legal costs".
The entire case [34 paras] is relevant to issues of administrative tribunal jurisdiction over interest and costs in the Expropriations Act (Ont) context.
. Kitmitto v. Ontario (Securities Commission)
In Kitmitto v. Ontario (Securities Commission) (Div Court, 2024) the Divisional Court considers (and dismissed) related appeals from two Capital Markets Tribunal (CMT) decisions, one respecting 'merits' and one respecting 'sanctions' [under Securities Act (SA), s.10(1)], here addressing SA 76 "which prohibits insider trading and tipping" ['Part XVIII - Continuous Disclosure ' ('Trading where undisclosed change' and 'Tipping')].
Here the court states an appellate SOR for an administrative tribunal costs award:[170] An appeal court will interfere with a tribunal’s costs award only if the tribunal made an error in principle or was plainly wrong: Kennedy v. College of Veterinarians, 2018 ONSC 3603 (Div. Ct.), at para. 24, citing Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.
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[185] On a similar basis, contrary to the submissions of Mr. Kitmitto and Mr. Goss, I see no basis for concluding that the Tribunal made an error in principle or was plainly wrong in its exercise of discretion in fixing and allocating costs. At para. 91, the Tribunal explained the rationale for its costs allocation, based on the conduct of the respective parties and the extent to which OSC staff was successful in proving its allegations against them. The Tribunal did not err in doing so. . Casella v. Ontario (College of Chiropodists)
In Casella v. Ontario (College of Chiropodists) (Div Court, 2024) the Divisional Court, in assessing an appeal from a cost award, applied the same SOR to an administrative tribunal as to civil litigation:27. The standard of review that applies to an appeal of a costs award is one of considerable deference. A costs award should be set aside on appeal only if the adjudicator made an error in principle or was plainly wrong: Kennedy v. College of Veterinarians, 2018 ONSC 3603, at para. 24, citing Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27. . Nathalie Xian Yi Yan v. College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario
In Nathalie Xian Yi Yan v. College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario (Div Court, 2022) the Divisional Court allowed a high costs order at the tribunal hearing, considering that it was appropriate in a professional disciple matter:[77] Ms. Yan also claims that the costs award ordered by the Discipline Committee was excessive.
[78] The hearing in this matter took place over seven days. The College’s costs in this case totaled approximately $122,580, which were comprised of the investigation costs, the prosecution’s legal costs, independent legal counsel’s costs, and the various hearing costs, including Panel member expenses and the costs of the court reporter.
[79] The Committee has broad and discretionary jurisdiction to award costs under the Code. It is appropriate for it to make costs orders against members who have engaged in misconduct so that the profession does not have to bear the weight of the expense of discipline proceedings through membership fees (Reid v College of Chiropractors of Ontario, 2016 ONCA 779 at para 24, aff’g 2016 ONSC 1041 [Reid (ONSC)).
[80] The Panel ordered Ms. Yan to pay a costs award of $65,000, being just over half of the College’s actual costs. The Panel considered relevant factors, including the relative success of the College, Ms. Yan’s conduct during the hearing process, the principle that costs are not punitive, and the impact of the costs order on Ms. Yan.
[81] The costs awarded in this case fall either within the range of or well below similar cases. In Walia v College of Veterinarians of Ontario, 2018 ONSC 6189 at paras 28, 31, leave to appeal to CA refused, (28 January 2019), leave to appeal to SCC refused, (27 June 2019), $142,000 was awarded to the College for an 11-day hearing. In Reid v College of Chiropractors of Ontario, 2016 ONSC 1041, at paras 216–218, 225–226, 234–236, $166,194 was awarded to the College for a 5-day hearing. In Clokie v The Royal College of Dental Surgeons of Ontario, 2017 ONSC 2773 at paras 58–59, 61, 74–75, $318,207 was awarded to the College for a 6-day hearing.
[82] For these reasons, I find the Panel’s decisions on penalty and costs were reasonable and that this ground of appeal should also be dismissed. . Dell v. Zeifman Partners Inc.
In Dell v. Zeifman Partners Inc. (Div Ct, 2020) the Divisional Court considered cost issues emanating under authority of the Statutory Powers Procedures Act:[2] The Farming and Food Production Protection Act, 1998, S.O. 1998, c. 1 (the “Act”) establishes a statutory scheme to shield farmers from liability in nuisance for disturbances caused by “normal farm practices”, a term defined by the Act. The Board adjudicates disputes under the Act, and, in particular, determines whether an agricultural operation meets the “normal farm practice” standard.
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[28] Following the release of the merits decision, both parties submitted requests for costs under s. 17.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (the “SPPA”) and the Board’s Rules.
[29] Subsections 17.1(1) and (2) of the SPPA provide that a tribunal may order a party to pay all or part of another party’s costs on two conditions: the tribunal has made rules respecting the award of costs, and the conduct or course of conduct of a party against whom costs are awarded has been “unreasonable, frivolous or vexatious or a party has acted in bad faith.”
[30] The Board has enacted rules respecting the award of costs in accordance with s. 17.1 of the SPPA. Subsection 66(1) of the Board’s Rules provides that a party may seek costs where it believes that another party “has acted clearly unreasonably, frivolously, in a vexatious manner, or in bad faith, considering all of the circumstances.” Subsection 66(8) sets out a non-exhaustive list of conduct that can be found to be “clearly unreasonable, frivolous, vexatious or bad faith”. According to s. 66(9) of the Rules, if the party requesting costs has also conducted itself in an unreasonable manner, the Board has discretion to deny costs or reduce the quantum of a costs award.
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[46] As a starting point, it is important to emphasize that an award of costs is discretionary. Moreover, this Board has a limited authority to award costs. In order to make a costs award, it must find that the party against whom costs are sought has acted in a manner that is unreasonable, frivolous, or vexatious or the party has acted in bad faith. Even then, the Board can deny costs or reduce the quantum of costs to a party who has acted unreasonably. As the Board noted in its costs decision, its jurisprudence has established that no party has a right to costs, and costs awards are rare (Dubois v. Burkhardt (No.1), 2010 ONNFPPB 55 (CanLII)).
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