This was a Costs Decision resulting from an unsuccessful Appeal of an interlocutory Order.

Prior to the Appeal, the Respondent formally offered settlement pursuant to Rules 4.24 and 14.59 in exchange for consent to a discontinuance on a without Costs basis. Steps were taken between the time of the offer and its expiration, during which time the Appellant did not accept the offer. Following its success in the Appeal, the Respondent sought double Costs, pursuant to Rules 4.29, 14.59 and 14.88.

The Appellant opposed the Respondent’s request on the basis that the offer was not a Formal Offer within the meaning of the Rules as it related to settlement of an interlocutory issue and not the Action itself, the offer did not contain a sufficient and identifiable compromise, and the Appellant raised concern that a double Costs award carried the potential for over-indemnification. The Court disagreed with all three bases.

Noting Rule 1.2 and policy preference in favour of negotiated resolution over litigation, the Court held that the applicable Rules applied whether a Formal Offer is made in respect of the entire Action or an interlocutory component thereof. Noting that the Formal Offer in issue was made in contemplation of steps ultimately taken, resulting in litigation costs to the Respondent, the Court further held that the offer contained a sufficient and identifiable compromise and satisfied the elements of a Formal Offer. Finally, noting the absence of evidence demonstrating over-indemnification, the Court held that it should not exercise its discretion not to award double Costs in view of the mere possibility of that outcome.

In the result, the Court granted double Costs in favour of the Respondent.