What is the test for awarding substantial indemnity costs for pre-litigation conduct that is at the very heart of the proceedings?

Care must be taken not to award substantial-indemnity costs as a punishment for pre-litigation conduct that is “at the very heart of the proceedings and, as such, is compensable in damages.” To do so is to award costs “twice for the same wrongdoing”: see Hunt v. TD Securities Inc., supra, at para. 130. A similar sentiment was expressed in Grillo, supra, at para. 21, where partial-indemnity costs were awarded: While the conduct of the defendants at the time of their departure from the law firm and immediately thereafter may well attract censure, I have concluded that it would not be appropriate to award substantial indemnity costs to condemn that conduct because other remedies are available . . . The actions of the defendants may ultimately result in an award of damages under several heads that would reflect the court’s denunciation of their conduct. It seems to me that this issue is best addressed on a full evidentiary record, following trial.