First among them that, ‘in matters of costs, a selfrepresented litigant is sometimes his own worst enemy’. If Lewis O’Keefe had been represented by counsel from the start, he would doubtless have been advised to concede his mortgage debt to Deutsche Bank but to contest the precise amount of principal and interest, which the judge thought open to question: Deutsche Bank AG, Toronto Branch v O’Keefe, 2012 ONSC 4496.

As it was, O’Keefe ran up unnecessary costs in his defence. On the other hand, to award costs against him on a substantial indemnity basis would be to rub salt in a self-inflicted wound, and there was evidence to suggest that the bank had ‘engaged disproportionate legal resources to refute Mr. O’Keefe’s manifestly weak defence’. The bank was also unable to rely on the standard charge terms in the mortgage documentation, under which O’Keefe had agreed to pay the bank’s costs of enforcement on a full indemnity scale. While a court will generally respect a contractual entitlement to costs, it retains the discretion to disregard an agreement in the face of inequitable conduct or special circumstances that would make the full award unfair or unduly onerous. In the circumstances, it was fair to make O’Keefe pay $38,000 in costs, rather short of the $80,000 the bank had asked for.

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