“Subrule 24(1) creates a presumption of costs in favour of the successful party. There are two schools of thought regarding the appropriate approach to determination of a litigant’s success. Some judges have held that settlement offers are the yardstick by which success at trial should be measured: Lawson v. Lawson, 2008 CanLII 23496 (ON SC), at para. 7. Others have held that success should be measured by comparing the outcome at trial with the relief sought by the parties in the litigation, rather than with the terms of any offers: Lazare v Heitner, 2018 ONSC 4861, at para. 16; Guo v. Li, Li and Zhang, 2020 ONSC 2435, at para. 17. I agree with the latter approach.
Success should be measured by comparing the positions of the parties on the issues litigated with the orders made. For the reasons articulated by my colleague Kurz, J. in DeSantis v. Hood, 2021 ONSC 5496, at paras. 40 to 53, I find that offers to settle are not a factor in the determination of success in a proceeding. As will be explained below, settlement offers are nevertheless an important consideration in assessing both liability for costs and quantum of costs.”