Offers to Settle (SCSM) - Re: Defendant Wins

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Date Retrieved:	2024-04-26
CLNP Page ID:	2035
Page Categories:	[Small Claims Court Procedures]
Citation:	Offers to Settle (SCSM) - Re: Defendant Wins, CLNP 2035, <https://rvt.link/2e>, retrieved on 2024-04-26
Editor:	Sharvey
Last Updated:	2022/12/30

Courts of Justice Act, R.S.O. 1990, c. C.43

29 An award of costs in the Small Claims Court, other than disbursements, shall not exceed 15 per cent of the amount claimed or the value of the property sought to be recovered unless the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behaviour in the proceeding. R.S.O. 1990, c. C.43, s. 29; 2006, c. 21, Sched. C, s. 105 (2).

O. Reg. 258/98: RULES OF THE SMALL CLAIMS COURT

14.05 (1) An offer to settle may be accepted by serving an acceptance of an offer to settle on the party who made it, at any time before it is withdrawn or before the court disposes of the claim in respect of which it is made. O. Reg. 78/06, s. 30.

(2) An offer by a plaintiff to settle a claim in return for the payment of money by a defendant may include a term that the defendant pay the money into court; in that case, the defendant may accept the offer only by paying the money into court and notifying the plaintiff of the payment. O. Reg. 258/98, r. 14.05 (2).

(3) If a defendant offers to pay money to a plaintiff in settlement of a claim, the plaintiff may accept the offer with the condition that the defendant pay the money into court; if the offer is so accepted and the defendant fails to pay the money into court, the plaintiff may proceed as provided in rule 14.06. O. Reg. 258/98, r. 14.05 (3).

(4) If an accepted offer to settle does not deal with costs, the plaintiff is entitled,

(a) in the case of an offer made by the defendant, to the plaintiff’s disbursements assessed to the date the plaintiff was served with the offer;

(b) in the case of an offer made by the plaintiff, to the plaintiff’s disbursements assessed to the date that the notice of acceptance was served. O. Reg. 258/98, r. 14.05 (4).

14.06 If a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,

(a) make a motion to the court for judgment in the terms of the accepted offer; or

(b) continue the proceeding as if there had been no offer to settle. O. Reg. 258/98, r. 14.06.

14.07 (1) When a plaintiff makes an offer to settle that is not accepted by the defendant, the court may award the plaintiff an amount not exceeding twice the costs of the action, if the following conditions are met:

1. The plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer.

2. The offer was made at least seven days before the trial.

3. The offer was not withdrawn and did not expire before the trial. O. Reg. 258/98, r. 14.07 (1).

(2) When a defendant makes an offer to settle that is not accepted by the plaintiff, the court may award the defendant an amount not exceeding twice the costs awardable to a successful party, from the date the offer was served, if the following conditions are met:

1. The plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer.

2. The offer was made at least seven days before the trial.

3. The offer was not withdrawn and did not expire before the trial. O. Reg. 258/98, r. 14.07 (2).

(3) If an amount is awarded under subrule (1) or (2) to a self-represented party, the court may also award the party an amount not exceeding $500 as compensation for inconvenience and expense. O. Reg. 78/06, s. 31.

Brander v Backstage Bar and Grill Inc, 2014 CanLII 6613 (ON SCSM)

[12] Section 29 of the Courts of Justice Act limits an award of costs, other than disbursements, to 15 per cent of the amount claimed “unless the court considers it necessary in the interests of judgment to penalize a party or the party’s representative for unreasonable behavior in the proceeding.” Rule 19 of the Rules Of The Small Claims Court provides for awarding a successful party reasonable broadly-defined “disbursements”, reasonable “representation fees” and up to $500.00 “compensation for inconvenience and expense”. The last is for the benefit of only self-represented parties. Rule 19.02 limits the power to award Rule 19 costs to the 15 per cent in section 29 of the Courts of Justice Act. Of course the statute governs the rule in the event of conflict.

[13] On a plain reading of section 29 the limit of 15 per cent can rise to accommodate a penalty for “unreasonable behavior in the proceeding.” That was the view of Winny D.J. in Beatty v. Reitzel (2008) CarswellOnt. 1364, [2008] O.J. No.953. “In the proceeding” has often been held to include pleadings and even the motive for commencing a proceeding.

Rooks v Park’N Fly, 2019 CanLII 69700 (ON SCSM)

[9] The “general rule” of costs is that the unsuccessful party pays the costs. Rule 19.01(1) of the Rules of the Small Claims Court (Courts of Justice Act, Ontario Regulation 258/98) (“Rules”) states:

A successful party is entitled to have the party’s reasonable disbursements, including any costs of effecting service or preparing a plaintiff’s or defendant’s claim or a defence and expenses for travel, accommodation, photocopying and experts’ reports, paid by the unsuccessful party, unless the court orders otherwise.

[10] The overriding principle and the power to award costs is inherent in all courts, arising from the statutory authority given to judges as set out in section 131 Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”):

131.(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[11] A “limiting factor” pertaining to the Small Claims Court is found in s. 29 the CJA which, on the face of it, limits an award of costs:

An award of costs in the Small Claims Court, other than disbursements, shall not exceed 15 per cent of the amount claimed or the value of the property sought to be recovered unless the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behaviour in the proceeding. [Emphasis added in bold]

[12] S.29 of the CJA should not be viewed as an “impediment,” as many perceive it, but rather as a “check valve.” In other words, if judges want to award costs above the 15% limit of the original claim, they can, but they must make appropriate findings. (I note that disbursements and prejudgment interest are excluded from the 15% limit.)

1604966 Ontario Limited v Andsign International Management Inc, 2013 CanLII 54052 (ON SCSM)

60. With respect, I completely agree that regulations cannot trump statutes. If my reasons in Beatty, supra, suggest otherwise then they were less clear than I intended. The concept which I sought to apply, relying on Warwick v. Gore Mutual Ins. Co. (1997), 1997 CanLII 1732 (ON CA), 32 O.R. (3d) 76 (C.A.), was the need for harmonious interpretation of regulation and statute which are part of a single legislative scheme. My conclusion was that double costs under rule 14.07 could be applied in tandem with a penalty costs order under s. 29. But in the result it appears that the court in Propane Levac, supra, agreed that penalty costs under s. 29 and cost consequences under rule 14.07 could be applied in tandem.

61. The net effect of these various pronouncements of the Divisional Court is in my respectful view clear. The Small Claims Court’s discretion to award double costs under rule 14.07 can be applied in tandem with its jurisdiction to make a penalty costs award under s. 29, where the double costs would amount to more than 15% of the amount claimed. I found the case at bar to be an appropriate case for that approach based on Andsign’s failure to accept the plaintiff’s offer to settle and based also on the way it has dragged this proceeding out. I note that while it resisted the plaintiff’s request for reimbursement of the deposit held by the realtor, Andsign itself made no defendant’s claim of its own for payment of those funds from the realtor.

62. The plaintiff’s request was for a representation fee of $750, doubled to $1,500, plus disbursements of $1,095 as set out in the costs outline filed. I allowed the representation fee as asked, plus disbursements rounded down to $1,000 to allow for some solicitor-client or overhead items. The all-inclusive award was $2,500 payable by Andsign to the plaintiff.