Defendants Need to Move Quickly for Costs When Plaintiffs Unilaterally Discontinue a Lawsuit

Most lawsuits end in one of two ways; the court makes a determination on the merits (whether it be a trial or by way of motion), or the parties reach a settlement.

However, there is a provision in our Rules of Civil Procedure that permits a plaintiff to unilaterally discontinue its lawsuit against a defendant, provided the lawsuit has not advanced past the stage of exchanging the claim and the defences (known more technically as the “close of pleadings”).

Even where the plaintiff unilaterally discontinues its claim, the defendant is entitled to ask the court for some of the legal costs it incurred in connection with the lawsuit. Our Rules provide that the defendant is required to make this request within 30 days of the lawsuit being discontinued.

In a recent case, a defendant brought a motion for costs almost a year and a half after the plaintiff unilaterally discontinued its lawsuit. As the defendant was well outside the stipulated 30 day period, it requested the court’s permission to bring the motion.

Master Dash noted that there was no existing caselaw pertaining to requests to bring these types of motions outside of the 30 day window. He canvassed the caselaw associated with requests for extensions for time to bring motions under other Rules, specifically those dealing with extensions to set a lawsuit down for trial, to craft a new legal test.

The result is that defendants moving for legal costs outside of the 30 day window are obligated to demonstrate that the plaintiff has not been prejudiced by the delay in bringing the motion and they must provide satisfactory evidence to explain the delay. Master Dash noted that the onus of explaining the delay will grow stronger with the passage of time since the discontinuance.

In the instant case, the defendant was unable to provide any explanation for the lengthy delay. Master Dash indicated that if the defendant had moved promptly, or explained the delay, he would have awarded the defendant $3,500 plus HST in costs. While this may not be a significant amount of money, it is money that the defendant would have been entitled to if it had simply brought its motion promptly.

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