4.29: Costs consequences of formal offer to settle

Case Summary

This was a Costs Decision that involved a self-represented Plaintiff who had been involved in a motor vehicle accident. The Plaintiff sought over $1,000,000 in damages and was awarded $129,558.08. This was less than a Formal Offer made by the Defendant in the amount of $160,000, which was rejected by the Plaintiff. The issues were whether the Plaintiff was entitled to Costs, and what the effects of the Formal Offer were on Costs owed to the Defendant.

The Defendant, who was represented by legal counsel, argued that the Plaintiff was not entitled to Costs and that this should have been a simple Trial regarding quantum that was unnecessarily drawn out. The Plaintiff, amongst many other things, had filed 37 Affidavits and rejected five Formal Offers without ever making a counter-offer. Justice Burns expressed concern that the Defendant took advantage of the Plaintiff procedurally. The Plaintiff thought that he had to file “update” Affidavits and the Defendant questioned him on each one. After considering the relevant case law, Justice Burns found that the Plaintiff was entitled to Costs.

The Defendant noted that they had sent five Formal Offers to settle, three of which exceeded the amount that the Plaintiff won at Trial, and therefore the Defendant argued that it was entitled to enhanced Costs. Her Ladyship noted that enhanced Costs may be awarded where the conduct of a litigant fell short of what was expected of a responsible litigant. After considering the conduct of both parties, Justice Burns declined to grant the Defendant enhanced Costs. Instead, Her Ladyship granted the Defendant Costs from August 26, 2014: from the day of the first Formal Offer that exceeded the Judgment onwards, pursuant to Rule 4.29(2). The Plaintiff was granted Costs for the time before August 26, 2014.

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