Background: The case dealt with disputes over mortgage-related costs and the extent of indemnity under the terms of the mortgage outside a foreclosure proceeding.

Legal Arguments/Issues:

• Indemnity Costs: Halifax Financial Corporation sought indemnity costs based on their mortgage agreement, which the debtors contended should be limited to costs assessed under the standard tariff.
• Judicial Discretion: The court examined whether its discretion to award costs was limited by previous court orders or the conduct of the debtors. It also explored the principles that should govern the exercise of such discretion.
• Exercise of Discretion: The case discussed if Halifax was entitled to indemnity or ordinary costs, focusing on whether the indemnity costs claimed were contemplated by the mortgage, and if judicial discretion in awarding costs was constrained by earlier decisions or debtor actions.

Total Amount of Costs/Award: Halifax Financial Corporation claimed indemnity costs totaling $147,438.25 for legal fees and disbursements from May 1, 2022, through October 12, 2023. The court concluded that ordinary costs were inadequate and awarded Halifax 50% of its costs on a solicitor and client basis. This decision allowed Halifax to recover approximately 80% of its actual legal costs incurred in collecting the debt.