The Action was commenced by shareholders of a corporation claiming various wrongdoings by a corporation. Damages were sought in the amount of $179,000. The claim was summarily dismissed by a prior Application, pursuant to Rule 7.3, with no Costs awarded to the corporation. Both the decision to dismiss the Action and the Costs Award were appealed. The Appeal of the dismissal decision was dismissed, and the Appeal of the Costs Award was granted.

On the Appeal of the dismissal decision, Justice Renke reviewed the relevant case law and found that the Plaintiffs’ claim did not disclose a genuine issue requiring Trial. In particular, he found that the submissions of the Plaintiffs did not specifically address the causes of action raised in the Statement of Claim. Putting that aside, Justice Renke considered each of the causes of action raised by the Plaintiffs’ pleadings, and found that none provided a genuine issue for Trial.

In determining whether Costs should be awarded, and in what quantum, the Court considered Rules 4.24, 4.29, 10.29, 10.31, and 10.33. Pursuant to this, and the jurisprudence, Justice Renke determined that a successful party is prima facie entitled to Costs reflecting the reasonable and proper Costs the party incurred. The Court also considered whether there had been any Formal Offers to settle pursuant to Rules 4.24 and 4.29. It noted that the onus falls to the party seeking to rely on a Formal Offer to settle to prove it was reasonable and genuine.

Justice Renke determined that the Defendants were wholly successful and therefore entitled to Costs. He considered Formal Offers made, but found that only one of two Formal Offers were genuine and reflected an informed compromise, as the first offer was made only shortly after the Statement of Claim was filed, and was for a very small amount compared to the damages sought in the claim.

Justice Renke also considered informal Offers as, pursuant to Rule 10.33, they are relevant to the exercise of discretion regarding Costs, though they do not have the same automatic Costs consequence as a Formal Offer to settle. He found that the informal Offers made enhanced the proper Costs Award to be granted.

In determining the quantum of damages, the Court found that proper Costs should emanate from Schedule C. Renke J. granted Column 2 Costs, with a multiplier of 1.5 and a multiplier of 3 following the Formal Offer to settle and an additional 1.25 multiplier after the informal Offers to settle. He directed that a Bill of Costs be prepared pursuant to Rule 10.34.