McDonald, Bielby and Wakeling JJA

4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
14.59: Formal offers to settle
14.88: Cost awards

Case Summary

The Defendant and Appellant to an Appeal (“PrimeWest”), applied to settle Costs following its unsuccessful Appeal. PrimeWest’s Appeal was related to Trial Costs which were awarded to the Plaintiff/Respondent (“Pillar”) on a full indemnity basis.

The Court of Appeal noted that Rule 14.88(3) creates a rebuttable presumption that Costs of an Appeal are awarded on the same basis as the Judgment appealed from. The Court noted that the parties had cited conflicting authority on whether full indemnity Costs should follow an Appeal where there was no misconduct of the unsuccessful party on the Appeal, but there had been misconduct meriting such Costs in the Decision appealed from. The Court observed that where the Appellant’s conduct was of a sufficiently egregious nature at Trial (for example where the party is held in Contempt of Court), full indemnity Costs should also follow on Appeal. However, the Court held that PrimeWest’s conduct at Trial did not meet the standard of being held in Contempt, and, referring to leading prior authority, ruled that this was a case where the schedule of Costs on the Appeal should be varied from the Costs awarded at Trial.

The Court then noted that Pillar had served a Formal Offer, which was bettered in the result. The Court of Appeal noted that Rule 4.29 applies to Appeals through the operation of Rule 14.59(4), and that all steps subsequent to the service of the Formal Offer were therefore doubled.

Finally, PrimeWest argued that it had been successful on two interlocutory Applications within the Appeal and should therefore be entitled to a setoff for Costs of those Applications. With respect to the Application for permission to Appeal, the Court ruled that no setoff was appropriate; if it were otherwise, every unsuccessful Appellant would get Costs of their leave Application no matter how unlikely the Appeal. Further, without the successful leave Application, there would have been no Appeal, and thus no Costs. With respect to PrimeWest’s Application relating to permissible evidence in the Appeal, the Court noted that Costs were reserved at the time of the Application to be determined by the Appeal Panel on the full Appeal. The Court interpreted the direction as Costs to be awarded in the cause: since PrimeWest ultimately lost on Appeal, it should not be awarded the Costs for the Application relating to permissible evidence on Appeal.

The Court of Appeal ruled that PrimeWest was to pay Pillar Costs of the Appeal, pursuant to Schedule C, to be doubled for all steps taken following the Formal Offer made by Pillar. 

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