I beat my formal offer at trial. Will I be awarded double costs and double disbursements from the date of my formal offer? What if the Rule doesn’t specifically mention disbursements?
In a decision released this week, Justice Dley considered the issue of double costs after the plaintiff beat their formal offer at trial (Lafond v Mandair 2017 BCSC 1081). The plaintiff had formally offered to settle his claim for $300,000.00. His offer was not accepted, and he went on to be awarded something slightly more than $343,000.00 at trial. While the defence conceded that the plaintiff was entitled to double costs (having beaten his formal offer), the defence did not agree with the plaintiff’s proposition that double costs included double disbursements.
Faced with conflicting case law on this issue, Justice Dley reviewed Supreme Court Civil Rule 9-1(5)), which specifically mentions disbursements at some subpoints relevant to particular costs entitlements, but does not include mention of disbursements under the subpoint relevant to double costs after a formal offer is beaten. Justice Dley went on to find that ‘double costs’ does not include ‘double disbursements’:
[10] The lack of clarity in the wording used leaves much to be desired. The comments of Madam Justice Fitzpatrick in Gonzales, at para. 67, bear repeating:
[67] I acknowledge that the wording of Rule 9-1(5), in its reference to “disbursements” in subcategory (a) without an accompanying reference to “disbursements” in subcategory (d), is awkward and confounding. In my view, however, the fundamental purpose of the Rule — which, as stated by the Court of Appeal in Kendall and Skidmore, is to compensate for all “costs”, including disbursements — has not changed. One can only hope for some clarity on this issue by possible amendments to Rule 9-1(5).
[11] But for the decision in Gonzales, there would be no question that there could be no award for double disbursements because of the prior ruling in Moore.
[12] Gonzales is a compelling decision because it levels out the award of costs so as to include disbursements that are available under the other provisions of Rule 9-1(5). However, Moore is directly on point – double disbursements are not available.
[13] Moore is specific to the issue of double disbursements. Madam Justice Brown determined that the absence of any reference to disbursements in subsection (b) precluded an award for double disbursements. A further analysis of that provision confirms the same outcome.
[14] Double costs may be awarded for some or all steps taken after delivery of the offer to settle. A step in the proceeding is a formal step that moves the action forward: Canadian National Railway Company v. Chiu, 2014 BCSC 75 at para. 7.
[15] Incurring a disbursement is not a formal step as contemplated by the Civil Rules.
[16] I, therefore, conclude that under Rule 9-1(5)(b), double disbursements are not to be awarded as part of double costs. Thus, a successful offer to settle can be rewarded with an entitlement to double costs for tariff items, together with actual and reasonable disbursements.
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