In Muskala v. Sitarski, 2017 ONSC 2842, Myers J. held that, in his view, costs generally should not be awarded when parties settle “except for costs.” In expressing criticism of consent orders where costs remain unresolved, he made several observations, as follows: (a) If parties are willing to settle and “throw the dice” on costs, then the parties are actually willing to settle without costs; (b) If the goal of asking for costs is only to “poke the other side in the eye en passant”, then that is not an action conducive to settlement; (c) Costs are not themselves the subject of a parties’ dispute, but rather are an incident of the determination of the parties’ rights, flowing directly from the court’s decision; and (d) Where parties have settled their dispute, there is usually no way for the court to make necessary findings of fact to support a costs determination, such as assessing whether parties’ respective positions were reasonable. A party’s reasons for settling is typically unknown to the court. A defendant may well have good defences, but choose to consent for other reasons such as establishing their bona fides or buying peace.
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