OMAR v ALI, 2014 ABQB 599


4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
10.31: Court-ordered costs award
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

Shortly after the relationship between the parties broke down, the Applicant applied to vary a Court Order concerning parenting time. Prior to the Application being heard, the Applicant sent the Respondent a Formal Offer to Settle that dealt with all of the issues in dispute between the parties. The Respondent did not respond to the Offer. The Order received by the Applicant was more favourable than what he would have received if his Offer was accepted. The Applicant argued for double Costs pursuant to Rule 4.29. Justice Veit stated that while Courts should support the sound policy underpinning this Rule, double Costs should not be awarded unless the litigant can comply strictly with the requirements under Rule 4.29(1) or (2). Justice Veit determined that Rule 4.29 requires that the result must be equal to or better than the Offer in its entirety. Because the Application only dealt with two of four issues between the parties, the Applicant did not satisfy the requirements of Rule 4.29.

The Applicant argued that the Respondent should have made a counter-offer to specifically address the two issues heard during the Hearing when it became clear that the Hearing would not deal with all four issues. Veit J. dismissed this argument, stating that unless the offeror includes a counter-offer mechanism into the Offer itself, the offeree can only accept the Offer or do nothing. The Rule does not anticipate a counter-offer.

The Court further considered the Applicant’s entitlement to double Costs based on Rule 10.31. Justice Veit concluded that the discretion to award “appropriate costs” must be exercised judicially, considering ordinary Cost outcomes. Although Rule 4.29(1) establishes a presumption in favour of ordering double Costs, the Court held that the Judgment simply did not equal or better the Applicants Offer. Moreover, although Rule 4.29(4)(e) could be interpreted to mean that the litigant is entitled to double Costs under a “special circumstance” when he or she failed to comply with the “equal or better” requirement by a minimal amount, the Applicant here did not even come close. The Applicant did not have a “real” Offer in this case, and was only entitled to party and party Costs pursuant to Schedule C.

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