Double Court Costs Awarded to Winning Party
In our previous blog re Hamilton Estate v. Jacinto, the trial judge dismissed the plaintiffs action against the defendant.
The plaintiffs had sought to recover a residential property that had been purchased in joint tenancy between their father, now deceased, and his 2nd wife, the defendant.
Six months prior to the trial the defendant made a former offer to settle in the amount of $200,000, inclusive of court order interest, but exclusive of costs.
The court examined the various efforts that had been made to settle the litigation.
Those efforts ranged from an initial offer of $100 to the sum of $300,000, 2 1/2 years before trial, but to be paid over 5 year period, no interest, and each side bearing their own costs.
That offer was countered by the plaintiff at $500,000 payable forthwith.
The parties took part in a full day mediation that was unsuccessful.
The trial took 14 days to complete.
The defendant contends that the offer She made was generous given her financial circumstances.
The court examined the factors to be analysed in deciding whether to exercise of discretion to court costs.
The issue had recently been considered in Hartshorne v. Hartshorne 2011 BCCA 29, and can be summarized briefly as follows:
“An award of double costs is a punitive measure against a litigant for that party’s failure, and all of the circumstances, to have accepted an offer to settle that should have been accepted. Litigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”
“The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying the successful litigant, those purposes have been described as follows by this court:
-deterring frivolous actions or defences;
-to encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect;
-Encouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases;
-Require litigants to make a careful assessment of the strength or lack thereof in their cases at the commencement and throughout the course of the litigation;
In the Hamilton v. Jacinto decision the court determined that the litigation was a winner takes all case: either the property would be returned as a trust asset, or by reason of the exercise of undue influence, or would remain the property of the defendant.
The court determined that the offer was a substantial one made 6 months before the trial, giving the plaintiff ample time to consider the offer..
The value of the house was in excess of $600,000, although it had been purchased for about $500,000.
The offer of $200,000 represented approximately 30% of the value of the claim advanced.
The court determined that the plaintiff’s case was risky and the defence offer was substantial.
The plaintiffs ought reasonably to have accepted the defendants offer.
The defendants were awarded costs for one week after the offer was presented, up to and including the end of trial.