Executive Summary: Key Legal and Evidentiary Issues

• Scope of a mortgagee’s entitlement to solicitor-client costs in foreclosure where the mortgage promises “full indemnification” but court assessment still governs.
• Proper use of the $5,500 “benchmark” from Home Trust Company v Haughian as a flexible guideline, not a fixed tariff automatically recoverable in every foreclosure.
• Adequacy of evidentiary support for claimed legal fees, including the need for detailed proof of actual work done and time spent, not merely a generic invoice.
• Distinction between true disbursements (out-of-pocket expenses) and in-house law firm charges improperly characterized as disbursements.
• Treatment of appraisal costs, particularly the non-recoverability of pre-leave appraisal expenses unless expressly allowed at the leave stage.
• Court’s use of its discretion to sanction mortgagee’s counsel for disingenuous cost claims by disallowing items and reducing otherwise recoverable solicitor-client fees.

Facts of the case

Royal Bank of Canada (RBC), as mortgagee, commenced foreclosure proceedings in respect of a residential property in Saskatchewan after the mortgagor, Joseph Bennett, defaulted under a mortgage loan. Leave to commence the foreclosure action was granted on February 29, 2024, and no order was made at that time for pre-leave costs. An Order Nisi for Sale by Real Estate Listing was granted on October 24, 2024, authorizing a judicial sale of the mortgaged land. The property was ultimately sold under an Order Confirming Sale granted by Chief Justice Popescul on August 28, 2025, for $291,000. From the sale proceeds, the court-supervised distribution paid out property tax arrears, real estate commissions, the selling officer’s fee, and the balance of RBC’s mortgage loan. After those payments, a surplus of $11,801.81 remained and was paid into court. RBC then applied for assessment of its solicitor-client costs and for an order that those costs be paid out of the funds in court. No one appeared for the defendants, Mr. Bennett or the Bank of Montreal, at the hearing of the costs application on February 5, 2026. RBC supported its claim with an Affidavit of Solicitor from its counsel, Mr. Kroczynski, sworn January 20, 2026, and a firm statement of account. RBC sought a lump sum of $5,500 for “Judicial Sale proceedings,” plus taxes, as well as disbursements of $1,100.91 and property management charges of $472.50, for a total of $7,678.41 in recoverable costs for the foreclosure proceeding.

Mortgage terms and entitlement to costs

The mortgage agreement contained a broad costs recovery clause. The mortgagors agreed in section 22.4 of the Mortgage – Residential Fixed Rate, dated December 28, 2011, to pay RBC “all reasonable expenses and costs” incurred to enforce the mortgage, including “legal fees (on a solicitor and his or her own client basis) and disbursements on a full indemnification basis.” This wording confirmed that the relationship between mortgagor and mortgagee was one of full indemnity in principle, allowing RBC to look to the mortgagor for reasonable solicitor-client costs and related expenses. However, the court emphasized that even where the mortgage contains this kind of solicitor-client costs provision, it has consistently held that mortgagees cannot expect to recover every dollar charged by their lawyers. The court’s jurisdiction under Rule 11-20 of The King’s Bench Rules requires costs to be assessed, and the court regularly uses a standard or benchmark amount for routine foreclosure proceedings to promote consistency and transparency. That benchmark, recently discussed and increased in Home Trust Company v Haughian to $5,500, remains subject to the court’s discretion and is not a binding tariff.

Court’s analysis of legal fees

RBC’s counsel took the position that, because this was a standard judicial sale foreclosure that reached an Order Confirming Sale, the proceeding should “attract recoverable costs in the amount of $5,500.00” in line with Haughian. The supporting statement of account, however, only provided a long, generic description of professional services—such as reviewing bank instructions, conducting registry searches, preparing the demand letter, drafting and serving court materials, attending court, corresponding with parties and others, and handling sale proceeds—followed by a single line item of “SOLICITOR’S FEES: $5,500.00.” The materials did not indicate any actual time records, hourly rates, or itemized work entries for lawyers or paralegals. The court noted that whatever a law firm’s internal billing arrangements may be, a party seeking assessment of solicitor-client costs must adduce evidence of the actual legal fees incurred with enough detail to allow the court to determine what portion is properly recoverable from the opposing party or from sale proceeds. The foreclosure itself was described as very uneventful. There were four court appearances in total, including the leave application and the later cost assessment hearing. The Statement of Claim was issued June 4, 2024, defaults were noted in July 2024, the Order Nisi was granted October 24, 2024, and the Order Confirming Sale issued on August 28, 2025. Mr. Bennett appeared in chambers only for the first two applications, and no steps were adjourned or made more complex than usual. In light of the modest procedural history and the superficial evidence respecting fees, the judge indicated that, but for other concerns, a discretionary award of $4,500 in legal fees—$1,000 below the $5,500 benchmark from Haughian—would have been appropriate for this routine foreclosure. However, as discussed below, the court found issues with RBC’s disbursement claims that warranted a further reduction as a sanction.

Court’s analysis of disbursements and appraisal costs

Turning to disbursements, the court reiterated that disbursements are expenses that the law firm actually incurs on the client’s behalf, such as invoices from process servers, appraisers, or other third parties. Under Rule 11-18(3), disbursements (other than court fees) cannot be allowed unless supported by affidavit evidence proving they were made. The court had recently stressed in Toronto-Dominion Bank v Stefaniszyn that merely listing disbursements in the law firm’s invoice is not enough; underlying invoices from process servers, bailiffs, and appraisers must be tendered to verify the expenses. In RBC’s invoice, disbursements included “Process Serving Engagement Fees” of $170 and “Attendance at Local Registrar’s Office” of $120. No independent invoices for these items were filed, and when the court queried them, counsel later explained by letter that they were fixed charges “akin to office administration/file opening and photocopying charges” levied as disbursements, with no external billing. The judge found that there were no third-party invoices because these were not true out-of-pocket expenses at all; rather, they were additional in-house fees for services already covered by the legal work. They overlapped with tasks included in the $5,500 fee description (such as “arranging all service of process” and “all attendances at Court”). Further, process serving in this action was minimal: only the Statement of Claim required personal service; the remainder of the documents were served by email. The court held that such charges did not qualify as disbursements and that claiming them as recoverable from the surplus sale proceeds was disingenuous. This conduct was described as vexatious, oppressive, fraudulent, or otherwise inequitable, justifying a reduction of costs under established case law on mortgagee cost misconduct. The court therefore disallowed the $170 and $120 “disbursements,” totaling $290, and imposed an additional sanction by further reducing the solicitor’s fees from the $4,500 the court would otherwise have awarded, down to $3,500. The court also scrutinized the $472.50 in “property management charges” from Veranova Properties Limited, described as “Appraisal db” or “Appraisal fee.” It was unclear at first whether these charges related to appraisals done before or after leave to commence foreclosure. Counsel’s later explanation confirmed that there was an appraisal and fee dated September 26, 2023 (pre-leave) and an appraisal and fee dated September 26, 2024 (post-leave). An affidavit filed for the leave application had already disclosed that RBC incurred appraisal costs of $236.25 and was not seeking pre-leave costs. Consistent with authority that pre-leave appraisal costs are not recoverable unless expressly allowed when leave is granted, the court limited recovery to $236.25 for post-leave appraisal costs and disallowed the balance.

Ruling and outcome

In the result, the court formally assessed RBC’s solicitor-client costs in the foreclosure action. RBC was entitled to recover solicitor’s fees of $3,500, plus PST and GST, instead of the $5,500 it claimed. Taxable disbursements were assessed at $130.41, plus PST and GST, while non-taxable disbursements were fixed at $659.48. These amounts are to be paid out of the surplus sale proceeds held in court, and counsel was authorized to file a revised order for the judge’s review to reflect these figures. RBC is therefore the successful party on the costs application and in the foreclosure proceeding overall. The court, however, made clear that the award was deliberately reduced to sanction improper disbursement claims and to reinforce the need for transparent, evidentiary support for solicitor-client costs. The total principal amount awarded to RBC for fees and disbursements is $4,289.89, with PST and GST to be added on the solicitor’s fees and taxable disbursements. Because the judgment does not specify the precise tax amounts applied, the exact tax-inclusive total in RBC’s favour cannot be determined from the decision alone.