DAY v WOODBURN, 2020 ABQB 75
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
This was a Decision regarding costs following Renke J’s dismissal of the Plaintiff’s Action. The main issue on the Application was whether the Defendant (“EPS”) should receive double Costs for litigation steps following its Formal Offer to Settle, pursuant to Rule 4.29. The Court determined that, although the Plaintiff’s Action was defeated, EPS should not be awarded double Costs, as its Formal Offer to Settle was not “genuine” enough, as defined by the case law.
The parties agreed that an award of Costs falls within a Trial Judge’s discretion, pursuant to Rules 10.29(1), 10.31 and 10.33. The parties also agreed that an offer to settle must be “genuine” for it to attract double Costs. The Court reviewed the criteria for a “genuine offer”, citing Shelley J. in Bruen v University of Calgary, 2018 ABQB 650.
Amongst other factors, a genuine offer to settle should: (1) contain an element of compromise; (2) realistically reflect the merit of the parties’ relative positions at the time of the offer; and (3) be made with a reasonable expectation of acceptance rather than solely to invoke double Costs later. An offer to settle is likely to be found genuine where at the time of offer, the offeror has already incurred substantial legal costs, and where the Action has no obvious merit. An offer to waive Costs is less likely to be genuine when it is “made at an early stage of litigation, where there has been minimal disclosure and questioning”.
In its assessment of genuineness, the Court asked whether the Formal Offer to Settle in this case reflected an objective view of the relative merits of the parties’ positions. The Court found that EPS’ offer to settle did not properly reflect the merits of the parties’ positions at the time of offer. Amongst other things, the admissibility of certain evidence had not yet been resolved, there was video evidence that could have supported the Plaintiff’s contentions, and on the evidence, one reasonable potential outcome of the Trial could have been that the Plaintiff’s claim was meritorious: “when the offer was made and while it was open, the outcome of the case was unpredictable and dependent entirely on evidence, credibility of witnesses, and fact-finding at trial”.
Ultimately, the Court found that a genuine offer would have included some compensation beyond EPS foregoing its Costs. The Court did not award EPS double Costs, but did award Costs to EPS under Column 2 of Schedule C.View CanLII Details