The parties were unable to agree on issues concerning the appropriate Costs award to be granted following a Trial in a personal injury Action in which one of the Plaintiffs, Petz, received a Judgment in the amount of $76,028 for general damages, loss of income, and special damages.

The Defendant served two Formal Offers to settle on Petz pursuant to Rule 4.24 which sets out the requirements for Formal Offers to settle. Both of the Formal Offers were in the proper form as prescribed in Rule 4.24(2) and exceeded the Judgment awarded after Trial. The Plaintiff acknowledged service of both Formal Offers. Justice Sullivan noted that even though the Plaintiff succeeded at Trial, the award granted was less favourable than either of the Defendant’s Formal Offers to settle. Sullivan J. noted that Rule 4.29 provides that when a defendant makes a Formal Offer to settle that is not accepted and a Judgment or Order in the Action is made that is equal to or more favourable to the Defendant than the Formal Offer, the Defendant is entitled to Costs for all steps taken in the Action after service of the Formal Offer.

Sullivan J. held that, while Costs are always discretionary, and there is no absolute entitlement to the Costs set out in Schedule C, there was no reason to deviate from Rule 4.29(2) and therefore awarded Costs to the Defendant from the date of the first formal offer to settle.