Ho J

4.24: Formal offers to settle
10.28: Definition of “party”
10.29: General rule for payment of litigation costs
10.33: Court considerations in making costs award
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

The Plaintiff had sought to enforce a right of first refusal in respect of a parcel of land against two groups, defined in the Decision as the “Ames Defendants” and the “Cammaert Defendants”. The Cammaert Defendants’ former lawyer was also named as a Third Party. The Action against the Ames Defendants was dismissed in Master’s Chambers, and that Decision was upheld on Appeal. The parties were then unable to reach an agreement respecting Costs.

The Ames Defendants argued they were entitled to Costs as the successful party, and that double Costs should be awarded from the date of service of their Formal Offer pursuant to Rule 4.24. They argued that the Cammaert Defendants and Third Party should be jointly and severally liable for Costs, and that an enhanced Costs award should be made against the Third Party because he had unsuccessfully alleged land titles fraud. They also submitted that Costs should be awarded pursuant to Column 4 of Schedule C, due to the value of the land at issue.

The Cammaert Defendants and Third Party both argued that Costs should be awarded against the Plaintiff only. The Cammaert Defendants emphasized that the Plaintiff was the only named Respondent in the Summary Dismissal Application, and that the Ames Defendants had recognized in writing that the Cammaert Defendants were not parties to the Application and not “adverse in interest” to them. The Third Party similarly argued that, based on the wording of Rule 10.29, the Court is limited in awarding Costs in favour of the successful party “against the unsuccessful party” to an Application.

The Plaintiff argued that the Ames Defendants should be entitled to one set of Costs jointly as against the Plaintiff, Cammaert Defendants, and Third Party; and acknowledged that the Ames Defendants’ Formal Offer would have Costs ramifications due to Rule 4.24. The Plaintiff further argued that Costs should be awarded based on Column 1 of Schedule C, since its claim was not a monetary one.

The Plaintiff, Cammaert Defendants, and Third Party each also argued that if Costs were to be awarded against them, deductions should be made to account for the fact that counsel for the Ames Defendants had failed to appear for a matter in Master’s Chambers.

In determining whether the Cammaert Defendants and Third Party should be considered “unsuccessful parties” liable to pay Costs, Justice Ho considered Rule 10.28, which defines the word “party”. Her Ladyship determined that since the Cammaert Defendants and Third Party each participated in the appealed Application, they were “parties” and may be subject to a Costs award for the purposes of Rule 10.29. Her Ladyship explained that the “expansive” definition of “party” in Rule 10.28 was consistent with the factors set out in Rule 10.33, and the Court’s overall discretion respecting Costs.

Next, Her Ladyship considered whether the Third Party should be subject to an “enhanced” Costs award due to his unfounded allegations of land titles fraud. Her Ladyship explained that the Court has discretion to award enhanced Costs where serious or unfounded allegations of fraud are made, but declined to do so because the claim was not an unreasonable one, and had been raised by other parties in the Action as well. Lastly, Justice Ho determined that Costs should be awarded in accordance with Column 4 of Schedule C, since the land at issue had been appraised at a value of $540,000 to $560,000. The Plaintiff was also required to pay additional Costs to the Ames Defendants based on the Formal Offer that was served upon it pursuant to Rule 4.24. Costs were discounted by $500 to account for the Ames Defendants’ failure to appear in Masters Chambers on one occasion.

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