4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award

Case Summary

The Plaintiff argued that they were successful in the final result of the underlying Decision and as such they should be entitled to costs pursuant to Column 3 of Schedule C, doubled for all items after its Formal Offer to Settle was served. The Defendant argued that they were entitled to an Award of Solicitor Client costs, on an enhanced scale, or alternatively, a 40-50% level of indemnification of their incurred expenses as the Plaintiff failed to prove its allegations of wrongful and fraudulent conduct and that the matter should have proceeded summarily.

Malik J noted that, pursuant to Rule 10.29, a successful party is prima facie entitled to costs from an unsuccessful party and that, in determining an appropriate quantum, the court considers the factors in Rule 10.33. His Lordship found that the Plaintiff’s claim was neither important in terms of the issues being litigated or complex and that the Plaintiff was successful on the ultimate issue of entitlement of the funds held in Court. Conversely, Malik J agreed that the matter should have proceeded summarily or, at most, in a one-and-a-half-day trial as opposed to the 5-day trial that took place. The fraud allegations against the Defendant were serious and were not proven — while His Lordship was not inclined to award the Defendant costs as a result of this, he was prepared to reduce the costs awarded to the Plaintiff.

Rule 10.31 grants the Court broad discretion to craft an award that is reasonable and proper, appropriate in the circumstances, or both. Justice Malik found that the Plaintiff’s reasonable costs should be fixed at a level of indemnification of 10% of its incurred expenses plus GST and disbursements. However, Rule 4.29(3) would grant the Plaintiff double the costs it would ordinarily be entitled to if a Formal Offer to Settle was reasonable. Accordingly, His Lordship found that the Plaintiff was entitled to a total level of indemnification of 20% for all items following service of its Formal Offer to Settle.

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