master schlosser

4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

A Rule 4.24 Formal Offer was made by the Defendants on November 3, 2015, wherein the Defendants offered to agree to a Discontinuance of the Action without Costs. The Offer was open for acceptance until January 5, 2016 and during this time period, the Statement of Defence was filed and the offerors provided documents in support of their position. The offerors also indicated that if the Offer was not accepted they would bring a Summary Judgment Application. The Defendants were successful in their Summary Judgment Application and sought Double Costs for their early Formal Offer under Rule 4.29.

Master Schlosser, referring to prior leading authority, stated that a Formal Offer must be genuine to be effective. It must be “reasonable and realistic” and incorporate an element of compromise. The times for assessing the reasonableness of the offerare when it was served and when it was open for acceptance. In this case, the Defendants’ Costs would have been nominal at the time the offer was made; however, over the time the offer was open, the offerors filed their defence and produced documents. While the element of compromise within the Offer was prospective at the time it was made, it became real as the Defendants were required to take steps over the time the Offer was open for acceptance. The Court also noted that the Plaintiff did not have a case against the Defendants when the Action commenced and could not put one together for the Summary Judgment Application. Further, Double Schedule C Costs would not indemnify the Defendants for their expenses. Master Schlosser awarded the Defendants Double Costs for all steps taken after service of the Formal Offer.

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