The right of a mortgagee to add to his mortgage debt costs incurred by him in preserving the mortgage property or protecting the mortgage security is based on the maxim that he who seeks equity must do equity and not upon an implied contract on the mortgagor's part to pay such costs (y). On the other hand, the right of a mortgagee to the costs of and incidental to an action for redemption or foreclosure arises out of the mortgage contract itself, and can be lost only by such inequitable conduct on the part of the mortgagee as to amount to a violation or culpable neglect of duty under the contract (z).

The general rule is that costs are in the discretion of the court or judge; and no order as to costs only which by law are left to the discretion of the court is subject to appeal except by leave of the court or judge making the order, but the may be brought without leave until after the expiration of the time after which according to the notice the power is to be exercised. See chapter 31, Sale under Power of Sale, Sec. 340.

(x) Sandon v. Hooper, 1843, 6 Beav. 246; cf. In re Wallis, Ex parte Lickorish, 1890, 25 Q.B.D. 176, at p. 181. But according to modern practice a claim for possession, a claim for immediate payment and a claim for foreclosure or sale may all be combined in one action, and the court is inclined to regard as vexatious the bringing of two actions where one action would have sufficed. See chapter 24, Action for Foreclosure or Sale, Sec. 232.

(y) Supra, Sec. 323.

(z) Detillin v. Gale, 1802, 7 Ves. 583, 18 R.C. 502; Cotterell v. Stratton, 1872, L.R. 8 Ch. 295; Bank of New South Wales v. O'Connor, 1889, 14 App. Cas. 273; Confederation Life Association v. Leier, 1908, 1 S.L.R. 131; Heath v. Chinn, [1908] W. N. 120.

The right of a mortgagee to costs arises out of the mortgage contract, and unless that right has been forfeited for one or more of the reasons that will be discussed presently the mortgagee 's costs are not in the discretion of the judge. If, therefore, the judge wrongfully deprives the mortgagee of his costs on the ground that he had forfeited his right arising out of the contract the mortgagee has a right of appeal (b).

It would appear that a mortgagor has no right of appeal from an order negativing misconduct and allowing the mortgagee his costs, for if the mortgagee has been guilty of misconduct his costs then become costs within the discretion of the judge and there is no appeal from the order without the judge's leave (c).

A mortgagee may be deprived of his costs, or even ordered to pay costs, if he resists the right to redeem, makes unfounded claims, improperly refuses to account or causes vexatious delays and unnecessary costs (d). A mortgagee who took a deed absolute in form, intended to operate as security, and then denied the right to redeem setting up the deed as constituting an absolute purchase, was ordered to pay the costs of the action for redemption (e). Where in a foreclosure action the mort-

(a) Ontario Judicature Act, R.S.O. 1914, c. 56, ss. 24, 74. (b) Charles v. Jones, 1886, 33 Ch.D. 80; Turner v. Hancock, 1882, 20 Ch.D. 303.

(c) Charles v. Jones, supra; cf. In re Beddoe, Downes v. Cottam, [1893] 1 Ch. 647.

(d) Detillin v. Gale, 1802, 7 Ves. 583, 18 R.C. 502; Cotterell v. Stratton, 1878, L.R. 8 Ch. 295; Cottrell v. Finney, 1874, L.R. 9 Ch. 541; National Bank of Australasia v. United Hand-in-Hand, etc. Co. 1879, 4 App. Cas. 391; Bank of New South Wales v. O'Connor, 1889, 14 App. Cas. 273; Kinnaird v. Trollope, 1889, 42 Ch.D. 610; Bryson v. Huntington, 1877, 25 Gr. 265; Miller v. Brown, 1882, 3 O.R. 210; Graham v. Ross, 1883, 6 O.R. 154.

(e) LeTarge v. DeTuyll, 1852, 3 Gr. 595; Livingston v. Wood, gagee made unfounded charges of fraud against the mortgagor he was disallowed the costs occasioned by his improper conduct (f).

A mortgagee will not be deprived of costs merely because he bona fide claims more than is due to him (g). Where in a redemption action the mortgagee claimed $905 to be due and the balance due was found to be $1.32, it was held that as the defendant had advanced his claim honestly and under a reasonable belief that the sum claimed was due he was entitled to the benefit of the rule that a mortgagor coming to redeem is liable for the costs if the balance is found in favour of the defendant (h).

A claim by a mortgagee to consolidate securities which is not allowed is not misconduct so as to disentitle him to costs (i), but where the mortgagor made a definite offer to redeem and the mortgagee unreasonably refused the offer setting up a groundless claim to consolidate another mortgage, it was held that as the mortgagee's refusal was the sole cause of the litigation he must pay to the mortgagor the costs of the. action (i).

If the mortgage debt has been paid off before action, or if the amount due is tendered by the mortgagor or by anyone representing him or by a subsequent encumbrancer, and the mortgagee refuses the tender or proceeds after payment, he will be liable for the costs, but a mere offer to pay the amount due and costs without an actual tender will not be sufficient

1880, 27 Gr. 515; England v. Codrington, 1758, 1 Eden 169; Douglass v. Culverwell, 1862, 4 DeG. F. & J. 20; National Bank of Australasia v. United Hand-in-Hand, etc. Co., supra.

(f) West v. Jones, 1851, 1 Sim. N.S. 205.

(g) Hodges v. Croydon Canal Co., 1840, 3 Beav. 86; Cotterell v. Stratton, supra; Cottrell v. Finney, supra; In re Watts, Smith v. Watts, 1882, 22 Ch.D. 5; Stone v. Lickorish, [1891] 2 Ch. 363; Thomas v. Girvan, 1897, 1 N.B. Eq. 314; Daigneau v. Dagenais, 1903, 5 O.L.R. 265.

(h) Little v. Brunker, 1880, 28 Gr. 191.

(i) Stark v. Reid, 1895, 26 O.R. 257; see Bird v. Wenn, 1886, 33 Ch.D. 215.

(j) Squire v. Pardoe, 1891, 66 L. T. 243, C.A.

A mortgagee sold under his power of sale for the sum of $5517, the whole of which he claimed to be entitled to keep. The mortgagor brought action for an account and for payment of the surplus, and it was found on the reference that the sum of $136 was due to the mortgagor. It was held that the general rule that a mortgagee is entitled to his costs did not apply, this not being an action for foreclosure or redemption, but a case of the defendant receiving money for the plaintiff and being sued therefor, and the mortgagor was declared to be entitled to his costs of suit (l).

A mortgagor, before bringing an action for an account, should, however, make a demand for an account, otherwise he may be disallowed his costs, especially if he makes charges which he fails to substantiate (m).

Where the mortgagees refused to assign their mortgage under s. 3 of the Mortgages Act (n) to the nominee of the mortgagor on the ground that subsequent mortgagees had not assented, and ah application was made to the court for an order directing them to execute an assignment, they were ordered to pay the costs occasioned by their refusal (o).

In Ontario under an order of reference the master may report special circumstances (p), and if in a mortgage action it is claimed that the mortgagee has disentitled himself to costs or made himself liable to pay costs, the disposition of the costs may be reserved until after the master has made his report. The master should report any circumstances bearing on the question of costs (q).

(k) See chapter 25, Action for Redemption, Sec. Sec. 254, 255. (l) Boulton v. Rowland, 1883, 4 O.R. 720. (m) Beatty v. O'Connor, 1884, 5 O.R. 747. (n) See chapter 20, Right to Assignment of Mortgage, Sec. 192. (o) Queen's College v. Claxton, 1894, 25 O.R. 282. (p) Rule 410. See chapter 27, Accounting between Mortgagor and Mortgagee, Sec. 293.

If, as is usually the case, the mortgagee is entitled to the costs of a foreclosure or redemption action, the costs are the ordinary party and party costs (r). They include the costs of discharge or reconveyance, or of a vesting order where such order was not rendered necessary by the wilful default of the mortgagee (s).

The procuring of a copy of evidence taken in the master's office for use on the argument before the master may be taxed and allowed in proper cases. The following items in a defendant 's bill in a redemption action were held to be taxable in reference to taking of mortgage accounts in the master's office: (1) attendance by the other party's solicitor on inspection of productions; (2) counsel fee advising on evidence; (3) letter to client to call after service of notice of intention to cross examine on affidavit; (4) attending and copying entries in books of account produced; (5) attendance of client going over accounts and surcharge of plaintiff and considering and advising on; (6) attendance of plaintiff's solicitor going over accounts and discussing and making list of such as can and cannot be agreed upon and admitted; (7) the issue of a new subpoena for witnesses to be examined upon a day subsequent to that for which they were originally subpoenaed and brought into the master's office; (8) attendance by client and advising after arrangement made to proceed with case on a certain day; (9) perusal of accounts and considering and taking instructions for supplemental accounts; (10) counsel fee on reference (t).

(q) Simpson v. Home, 1880, 28 G-r. 1; Hayes v. Hayes, 1881, 29 Gr. 90.

(r) In re Queen's Hotel, [1900] 1 Ch. 792.

(s) Webb v. Crosse, [1912] 1 Ch. 323.

(t) Plenderleith v. Parsons, 1907, 15 O.L.R. 397.

Where a subsequent encumbrancer institutes proceedings to redeem prior encumbrancers and foreclose subsequent encumbrancers and the mortgagor, his costs are added to his mortgage debt and do not take priority over earlier charges (u), but if a subsequent encumbrancer takes proceedings the result of which is to secure a fund for the benefit of all encumbrancers, his costs, in so far as the prior encumbrancers have had the benefit of them, will take priority over the other encumbrances (v).

Where a defendant in an action for foreclosure or redemption disclaims in such a manner as to show that he never had and never claimed an interest, or if he had an interest that he had disclaimed or offered to disclaim before the action was begun, he is entitled to his costs (w). If he neither disclaims or offers to disclaim until he puts in his defence he is not entitled to his costs (x).

If a person is properly made a defendant as being interested in the mortgaged property the plaintiff is not required to apply to him in order to ascertain whether or not he claims an interest; but the plaintiff is entitled to a disclaimer from him if he claims no interest (y). If a defendant puts in a defence instead of a disclaimer he will not be allowed costs (z).

When a person is served with an appointment to attend upon proceedings in the master's office and neglects to attend such non-attendance shall be treated as a disclaimer (a), and if such person appears and disclaims he is not entitled to costs (b).

(u) Wright v. Kirby, 1857, ,23 Beav. 463.

(v) Ford v. Earl of Chesterfield, 1856, 21 Beav. 426; Batten, Proffitt & Scott v. Dartmouth Harbour Commissioners, 1890, 45 Ch.D. 6x2.

(w) Teed v. Carruthers, 1842, 2 Y. & C.C.C. 31; Ford v. Earl of Chesterfield, 1853, 16 Beav. 516; Earl of Cork v. Russell, 1871, L.R. 13 Eq. 210.

(x) Cash v. Belcher, 1842, 1 Hare 310; Grigg v. Sturgis, 1846, 5 Hare 93.

(y) Maxwell v. Wightwick, 1866, L.R. 3 Eq. 210.

(z) Bradley v. Borlase, 1858, 7 W.R. 125.

(a) See chapter 24, Action for Foreclosure or Sale, Sec. 238.