Cost Awards (Small Claims)

Ashton Hot Tubs And Fitness Inc. v RoMar Inc., 2007 CanLII 89314 (ON SCSM)

6. There is some controversy still about the interplay of s. 29 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and Rule 14.07 of the Small Claims Court Rules. A number of reported cases from this court consider failure to accept a settlement offer which is then exceeded at trial to be an example of “unreasonable behaviour in the proceeding” permitting the costs to exceed 15% under s. 29.[1] The effect of such reasoning is almost always the doubling of the costs otherwise determined. In my view, this line of reasoning does not fully account for the interaction between the statutory provision and the Rules.

7. Section 29 of the Courts of Justice Act:

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.

8. Rule 14.07 of the Small Claims Court Rules:

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 The offer was not withdrawn and did not expire before the trial.

(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 The offer was not withdrawn and did not expire before the trial.