4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

The Plaintiff was awarded damages for breach of contract, but the parties were unable reach an agreement regarding Costs. The Plaintiff argued that it was entitled to double Costs on the basis of two unaccepted Offers extended to the Defendant, pursuant to Rule 4.29 and Calderbank v. Calderbank, [1975] 3 All ER 333 (CA) (“Calderbank”).

Master Mason noted that, under Rule 10.29(1), the successful party to an Application is entitled to a Costs award against the unsuccessful party. Additionally, Rule 10.31(1) allowed the Court to order one party to pay another party the reasonable and proper Costs that a party incurred or any amount that the Court considered to be appropriate. Rule 10.33 lists the factors which the Court may consider in making a Costs award. Finally, Rule 10.31(6) provides that the Court’s discretion is subject to any specific requirements with respect to what Costs are payable by whom. Master Mason also considered Rules 4.24 and 4.29 which relate to double Costs awards following a Formal Offer. With respect to a Calderbank offer, Master Mason stated that the defining feature was that, if it is not accepted, the party making the Offer reserved the right to disclose non-privileged communications about Costs to the Court.

Master Mason held that the Plaintiff’s initial Offer, which was issued by way of a letter marked “Without Prejudice” prior to the commencement of the Action, did not qualify as a Formal Offer within the meaning of the Rules, and noted that it was not clear from the letter that it would not be privileged at the Costs stage. The Plaintiff’s second Offer was also issued by way of a letter marked “Without Prejudice”, but was issued after the Action was commenced and after the Plaintiff had obtained Summary Judgment. The Offer was extended before the damages were awarded, but failed to meet the requirements of Rule 4.24(2) and also did not indicate that it would be referenced in Costs proceedings. Despite this, Master Mason stated that both Offers could still factor into the Costs award.

Master Mason held that the Plaintiff made two reasonable and genuine offers of compromise prior to and after the commencement of the Action. Each Offer carried a possibility of resolving the matter for significantly less than the full amount claimed and a savings of further Costs. On that basis, Master Mason ordered that the Defendants pay total fees of $6,000 under Schedule C, as well as enhanced Costs in the amount of $2,000. The Court also ordered disbursements paid in the amount of $1,000, and Costs in the amount of $750 for submissions related to the Costs Application.

View CanLII Details