slatter, o'ferrall and veldhuis jja

4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
10.30: When costs award may be made
14.88: Cost awards

Case Summary

The parties requested a Ruling on the Costs consequences that should follow from the disposition of their Appeal. The Trial Judge found in favour of the Respondents. In subsequent reasons the Appellants were ordered to pay the Respondents their assessed Costs on Column 3 of Schedule C, doubled after the date of a Formal Offer, but the Respondents’ claim for solicitor and client Costs was rejected. The Appeal was subsequently allowed and the Respondents were ordered to pay damages to the Appellants. The Court stated that departures from the presumptions in Rule 14.88 are sometimes required, for example where the Trial Judgment is reversed, or Formal Offers have been made, or where other circumstances dictate a different Costs Order. Preliminary directions as to Costs, such as those found in the Reasons resolving the Appeal, can be varied if further information is brought forward, for example the existence of Formal Offers. Costs can be spoken to at any time pursuant Rule 10.30(1). The Appellants were successful on the Appeal, and there was no basis on which to deny them their assessed Costs. Further, since the Trial Decision was reversed, the Appellants were also entitled to Costs of the Trial in accordance with Rule 10.29.

The Appellants argued that they were entitled to solicitor and client Costs based on a covenant in a real estate contract which was at issue. The parties had agreed that the contract provided that the successful party may claim solicitor and client Costs on a full indemnity basis. The Court agreed and concluded that, since the Appellants were entitled to solicitor and client Costs, it was not necessary to assess the impact of any offers that were made pursuant to Rule 4.29(4)(a).

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