How difficult is it to obtain leave to appeal a costs order? Two
recent decisions from the Ontario Divisional Court show that it is
very difficult indeed.
Taken together, the recent decisions in Men at Work General Contractors Ltd. v.
Macdonald and Van v. Palombi show that a costs
order need not be supported by reference to the R. 57.01 criteria,
costs outlines prepared by counsel, or mathematical
equations. As long as the order is proportionate and
reasonable, leave to appeal will be denied.
The decision of Lederer J., in Men at Work, highlights
the difficulties inherent in any attempt to appeal a cost
order. On the one hand, cost orders are a matter of
discretion [citations omitted]:
Costs are, generally, considered to be a matter of discretion.
Appeals of cost orders are unusual:
Leave to appeal cost orders will be
granted only in the most obvious cases and very sparingly.
For leave to be granted, the judge must be shown to have acted on a
wrong principle, to have misapprehended significant facts or to
have made the determination in a non-judicial manner:
In order to succeed on an application
for leave to appeal, the Court must be persuaded that the Trial
Judge exercised his discretion on wrong principles. The
Applicant must show that there are strong grounds upon which the
appellate court could find that the judge erred in the exercise of
test of reasonableness applies:
In recent cases, the Ontario Court of
Appeal has emphasized that there is an 'overriding principle of
reasonableness' that must govern the judicial exercise of
On the other hand, while costs decisions are guided by R. 57.01
of the Rules of Civil Procedure, guidance is all that the
rule provides. The criteria mentioned in R. 57.01, such as the
amount claimed and the amount recovered in the proceeding, the
apportionment of liability, and the conduct of any party that
tended to shorten or to lengthen unnecessarily the duration of the
proceeding, do not need to be considered by the original decision
In Lederer J.'s view, the most important consideration in
any award of costs is proportionality, "that is, [the award
should] demonstrate some relationship to the complexity and value
of the issues involved." A proportionate costs award is not
necessarily a reflection of a "mathematical exercise",
nor is it a tally of hours worked on a given file.
On the same day as Lederer J's decision in Men at
Work, a decision by McKelvey J. in Van v. Palombi,
was rendered. Van v. Palombi involved a motion for
leave to appeal a costs decision relating to a long motion argued
on a family matter. As in Men at Work, leave was
The case starts the same way, with a restatement of the settled
law on deference to costs decisions. McKelvey J. then went on to
deal with the preliminary question whether leave to appeal a costs
order of a motion judge is required. In holding that leave
was required in this case, he noted that,
 ... The issue before the motion
judge was the entitlement and quantum of any cost award as well as
a request by the appellant for additional time to pay this
award. In my view, the issues before the motion judge on
costs did not extend beyond the usual terms associated with an
award of costs. Thus, the requirement for leave applies, and
the usual criteria regarding leave to appeal a costs order applies
to the facts of this case.
Relying on common law, he left the door open to cost order
appeals without leave in certain circumstances. One example
is where the cost order eliminates the ability of the defendant to
set off the debt against a larger judgment owed to it.
Where leave is required, it will be denied where a motion judge
appears to have reviewed relevant factors:
 ...the issue is not whether the
appellate court would have exercised its discretion
differently. Unless the motion judge made an error in
principle, or his decision was clearly wrong, his decision must be
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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