What is the test for making a cost order against a person in financial distress?

Ontario, Canada


The following excerpt is from M.P.M. v. A.L.M., 2020 ONSC 3491 (CanLII):

In Sutherland v. Manulife, 2011 ONSC 1170 (S.C.J.), the court was faced with a request that the court refrain from making a costs order against a person in financial distress. At para. 9, D.M. Brown J. (as he then was) wrote: Where a court is faced with a request by a litigant not to award costs against her because of her impecunious financial position, a court must weigh two competing policy considerations. First, those with arguable claims (or defences) should not be denied access to their “day in court” solely because of their lack of financial resources. The Ontario Superior Court of Justice is not a court for the rich, but a court for all who live in this province or who have a claim connected to this province. On the other hand, the “loser pays” principle which informs this court’s costs regime reflects, in part, the important policy considerations that exposing a civil litigant to a potential costs award should prompt the litigant to conduct her case in a reasonable manner which avoids imposing unnecessary costs on the other party.

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