In Davies v. The Corporation of the Municipality of Clarington, Madam Justice J.E. Ferguson of the Ontario Superior Court was fixing costs in an action in which one of the defendants, “Blue Circle”, had been successful in having the claim against it dismissed at trial. Although she did not refer to the recent decision of Mr. Justice Robert Smith in Dunstan v. Flying J Travel Plaza, Her Honour came to a similar decision as had been made in Dunstan: she awarded costs to the defendant on a substantial indemnity basis because it had offered to consent to a dismissal without costs.
In this case, there had originally been a number of other parties. After the evidence had been called at a trial which, in total, lasted over ten weeks, some of the defendants settled with the plaintiff. The only question that Ferguson J. ultimately had to decide (apparently at the instance of the settling defendants) was whether Blue Circle had any liability. She concluded that it did not. As a result, Blue Circle’s costs were sought from the settling defendants, not from the plaintiffs.
Blue Circle had offered to consent to a dismissal without costs in 2002, but that offer had remained open for only 30 days. It made a second offer to settle on a without costs basis on February 1, 2005 and that offer was open until trial. It was the second offer that gave rise to the order for substantial indemnity costs.
As Justice Smith had done in Dunstan v. Flying J, Justice Ferguson considered the Court of Appeal’s 1990 decision in S & A Strasser Ltd. v. Richmond Hill (Town), where the Court held that “the discretion to award substantial indemnity costs to a successful defendant was found in the general language of 57.01(1) which defined the principles for the award of costs”.
The settling defendants argued that S & A Strasser Ltd. could be distinguished because it had not dealt with costs of a crossclaim, as was the case here. Her Honour rejected this argument, saying, “I see no reason why I should not exercise my discretion and award costs on a substantial indemnity basis from the date of the offer and forward.”
She also awarded partial indemnity costs prior to the date of the offer.
The decision is also of some interest because Justice Ferguson dealt with a number of types of disbursements and ruled on whether or not each was recoverable. These included couriers, transportation, meals, agent’s fees, etc.