Executive Summary: Key Legal and Evidentiary Issues

• Dispute arises from a mortgage enforcement action in which the plaintiff sought to set aside a Registrar’s dismissal order but failed on that motion.
• Enforceability of a mortgage “Standard Charge Terms” clause allowing recovery of solicitor-and-client (full indemnity) legal fees governed the scale of costs for the mortgagee defendant.
• The court considered when full indemnity and substantial indemnity costs are appropriate, including the limits of contractual costs clauses versus the court’s discretion to ensure fairness and proportionality.
• Unsubstantiated allegations of fraud, dishonesty, criminal conduct and conspiracy made by the plaintiff against the defendants were treated as aggravating conduct justifying substantial indemnity costs.
• The adequacy and structure of the defendants’ bills of costs were scrutinized, leading the court to adjust the claimed amounts to what was fair, reasonable and proportionate.
• Ultimately, the defendants, as the successful parties, obtained significant costs awards totaling $85,000 against the plaintiff for both the motion and the entire action.

Background and parties
This case arises from a mortgage enforcement action in the Ontario Superior Court of Justice between the plaintiff, Rosemary Beach, and the defendants, David Zigelstein and Jay Leider. The underlying proceeding was characterized by the court as essentially a simple mortgage enforcement action in which the defendants sought to realize on the security granted under a mortgage (also referred to as a “Charge”) granted by Ms. Beach. Over the life of the litigation, Ms. Beach levelled serious allegations against both defendants, including fraud, dishonesty, criminal conduct and conspiracy, putting directly in issue their integrity and professional reputations. These allegations were particularly significant for Mr. Leider, a long-standing lawyer, and also for Mr. Zigelstein, a seasoned businessman.
 

Procedural history and motion
The action became bogged down and delayed, in part because Ms. Beach did not give the case the attention and priority the court considered essential. Ultimately, a Registrar’s dismissal order was made on August 2, 2024, effectively terminating the action for delay. Ms. Beach later brought a motion to set aside that dismissal order. On January 29, 2026, Associate Justice Wiebe released Reasons for Decision dismissing the plaintiff’s motion, thereby leaving the Registrar’s dismissal order in place and confirming that the defendants were successful on the motion. In anticipation of the outcome, the court had previously set a schedule for written costs submissions. The defendants, Messrs. Zigelstein and Leider, filed bills of costs and written submissions seeking their costs not only for the motion, but also for the entire proceeding. Ms. Beach did not file any costs outline or written submissions at any stage, despite having clear opportunities and timelines to do so.
 

Mortgage terms and entitlement to full indemnity costs
A central legal issue concerned the effect of a contractual costs clause contained in the mortgage’s “Standard Charge Terms 200033.” Paragraph 8 of those Standard Charge Terms provided that legal fees “as between solicitor and client” (i.e., on a full indemnity basis), together with related expenses, incurred in proceedings taken in connection with, or to realize upon, the security given in the Charge, would be added to the mortgage and payable by the mortgagor. The court accepted that by agreeing to this mortgage, Ms. Beach had contractually committed to indemnify Mr. Zigelstein for his full legal costs in proceedings connected with enforcing the mortgage security. While courts retain a general discretion over costs to ensure fairness, reasonableness and proportionality, appellate and Superior Court authorities recognize that this discretion is narrow when sophisticated parties have agreed to specific costs regimes in their contracts, particularly in mortgages. In reliance on this principle, and given the clear mortgage wording, the court held that Ms. Beach had agreed that Mr. Zigelstein could recover full indemnity costs in relation to this proceeding, subject only to a fairness and proportionality check at the quantum stage.
 

Conduct of the plaintiff and substantial indemnity costs
Another key issue concerned the impact of Ms. Beach’s litigation conduct, especially the serious but unproven allegations of fraud, dishonesty, criminal conduct and conspiracy she made against the defendants while allowing the case to languish. The court noted that such allegations impugn reputation and significantly complicate what otherwise would have been a straightforward mortgage enforcement action. Ms. Beach then failed to prosecute her claims diligently and, even at the late stage of the motion to set aside the dismissal order, did not provide evidence to substantiate her serious accusations. The court observed that Ontario case law has consistently frowned upon unsubstantiated allegations of dishonesty, illegality and conspiracy, and has used substantial indemnity costs as a response to such conduct. In line with those authorities, the court treated Ms. Beach’s conduct as a factor justifying an elevated costs award in favour of Mr. Leider in particular, whose professional reputation as a lawyer had been directly impugned. Her continuing refusal to address the issue of costs through any submissions also counted against her.
 

Assessment of the bills of costs and adjustment of quantum
In fixing the amount of costs, the court closely examined the defendants’ bills of costs. Both bills tracked hours spent and changing hourly rates over the course of the action, but the court found the documents somewhat unhelpful because they grouped broad categories of work without clearly breaking down the time devoted to specific tasks. For Mr. Zigelstein, the bill showed a substantial amount of legal work billed at higher hourly rates than those reflected in Mr. Leider’s bill, even though the nature of the work was not materially different. The overall hours recorded for Mr. Zigelstein were as high as or higher than those for Mr. Leider, even though the court viewed Mr. Leider as the more active defendant, including because he drove the motion for summary judgment that generated the key interlocutory steps advancing the action. Taking all this into account, and while accepting that the mortgage entitled Mr. Zigelstein to full indemnity costs, the court concluded that his claimed figure of $57,906.29 in full indemnity costs was not fair, reasonable or proportionate. Using the rates and hours in Mr. Leider’s bill as a guide, the court fixed a reduced yet still full-indemnity award of $50,000 for all of Mr. Zigelstein’s costs in the action and on the motion. Turning to Mr. Leider, the court applied Rule 1.03 of the Rules of Civil Procedure, which defines substantial indemnity costs as 1.5 times partial indemnity costs. On the figures provided, Mr. Leider’s partial indemnity costs were $26,516.17, which would yield $39,774.25 on a strict 1.5-times calculation. However, he only claimed $36,158.41 in substantial indemnity costs, a figure the court considered reasonable given both his rates and his effort to allocate work among lawyers and clerks at lower rates. The court did find, again, that his bill could have been clearer in itemizing hours spent on particular tasks and applied a modest downward adjustment. It therefore awarded him $35,000 in substantial indemnity costs for the motion and the action as a whole.
 

Overall outcome and costs consequences
The court held that both defendants, David Zigelstein and Jay Leider, were entirely successful on the plaintiff’s motion to set aside the Registrar’s dismissal order and were also effectively the successful parties in the broader action. In light of the mortgage terms, Ms. Beach’s conduct and the applicable costs principles, Associate Justice Wiebe ordered Ms. Beach to pay full indemnity costs to Mr. Zigelstein in the amount of $50,000 and substantial indemnity costs to Mr. Leider in the amount of $35,000, both in respect of the motion and the action. Recognizing the size of the combined award, the court granted Ms. Beach sixty days from the date of the order to pay these amounts. In total, the successful defendants obtained a combined costs award of $85,000 in their favour, with no damages component addressed in this particular decision and no other monetary relief quantified beyond these costs.