no163 - Hospice Vaughan Costs Case Comment

CHARITY LAW BULLETIN NO. 163Carters Professional Corporation / Société professionnelle Carters APRIL 28, 2009Barristers, Solicitors & Trade-mark Agents / Avocats et agents de marques de commerceEditor: Terrance S. CarterTHE EXPOSURE OF DIRECTORS TO COSTS INLITIGATION: A CASE COMMENTBy Barry W. Kwasniewski, B.B.A., LL.B.Assisted by Jeremy I. Tam, B.A., LL.B., Student-at-LawA. INTRODUCTIONOn February 6, 2009, Justice R.C. Boswell of the Ontario Superior Court of Justice released his costs 1endorsement in Alaimo v. Di Maio (“Alaimo”), litigation between former volunteer directors of a charity. From the perspective of charitable and non-profit organizations, the most pertinent aspect of the Court’s endorsement was the determination that the applicants, who were former volunteer directors of the charity Hospice Vaughan, were liable for the costs of litigation despite the fact that the litigation was generally related to the charity. In this regard, the result of the Court’s decision differs from the result of the Ontario Court of Appeal in The St. James' Preservation Society v. Toronto (City) (“St. James’ Preservation 2Society”) where the directors of a non-profit corporation were not held to be personally liable for the costs 3of litigation. However, in determining that the facts of the Alaimo case warranted costs to be ordered against the Applicants, the reasoning of Justice Boswell accords with the general principles of costs liability that were set ...