TRICO DEVELOPMENTS CORPORATION v EL CONDOR DEVELOPMENTS LTD., 2022 ABQB 251
4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
The Defendants and the Plaintiff sought direction from the Court with respect to costs issues arising from the Alberta Court of Appeal reversing a Trial Decision.
The issues were twofold. First, by Order in Council dated March 17, 2020, Schedule C of the Alberta Rules of Court was amended to increase recoverable costs effective May 1, 2020. The Court of Appeal Decision was issued after March 17, 2020, but before May 1, 2020. The first issue was, therefore, which version of Schedule C ought to apply in the circumstances. The second issue was whether the first of two Formal Offers made by the Defendants pursuant to Rule 4.24 was genuine, in the sense that it may entitle the Defendants to double costs pursuant to Rule 4.29.
With regard to the first issue, Rooke ACJ noted s. 3 of Schedule C states that the tariff applies whether the services described are provided before, at the time, or after the Rules come into force. Associate Chief Justice Rooke cited British Columbia v. Imperial Tobacco Ltd., 2005 SCC 49 which states that the general presumption against the retroactive application of legislation can be rebutted if retroactive effect is clearly expressed. In light of s. 3 of Schedule C, the Court therefore held that the amended Schedule C should apply.
With regard to the second issue, the Plaintiff argued that the Defendants’ first Formal Offer of $100 plus the Plaintiff’s Column 5 taxable costs and disbursements was not genuine and did not exhibit an element of compromise. The Court held that a Formal Offer will be genuine if: (1) it is reasonable and realistic in the circumstances present at the time it was served; (2) it includes an element of compromise; (3) it is made with a reasonable expectation that it will be accepted; and (4) it is not sole made as a no-risk litigation tactic.
The Court further held that a Formal Offer must always be considered in its context; here, the first Formal Odder was made after the Defendants had obtained a second valuation of the partnership units in dispute and after the Defendants had made an additional payment to the Plaintiff based on this valuation. The Formal Offer also accounted for the Plaintiff’s costs. The Court held that, in view of the Defendants’ ultimate success on Appeal, the Formal Offer was genuine.
Associate Chief Justice Rooke, therefore, ordered that costs be assessed based upon the amended Schedule C with double costs to the Defendants for all steps taken after service of the first Formal Offer.View CanLII Details