Fridays with Rogers Partners

At our weekly meeting, Chris MacDonald discussed the decision of Heffernan v. John H. Keiffer Professional Corporation, 2020 ONSC 4174. In this case, Justice Daley provided his reasons for awarding costs to the defendants after the self-represented plaintiff’s action was dismissed for delay.

In his reasons, His Honour grappled with the question of at what time during a civil motion is a hearing deemed to have “commenced” under Rule 49 of the Rules of Civil Procedure, suchthat a defendants’ offer to settle is no longer open to acceptance. His Honour determined that defendants’ motion for the action to be dismissed for delay commenced when counsel for the defendants first addressed the court. It was at this point that the defendants’ offer to settle had expired.

Background

The defendants delivered an offer to settle the action on a without costs basis to the plaintiff on March 11, 2021. The offer to settle was to remain open for acceptance until one minute after the commencement of the motion to dismiss the action for delay.

The self-represented plaintiff submitted, without affidavit evidence, that he emailed an Acceptance of Offer to counsel for the defendants prior to the motion. This acceptance, he said, was not delivered due to technical issues with his email. The plaintiff sent another Acceptance of Offer at 10:36 a.m. on the morning of the hearing of the defendants’ motion on April 13, 2021.

The plaintiff took no issue with the fact that the defendants’ offer to settle complied with the requirements of Rule 49 of the Rules of Civil Procedure. It was served more than seven days before the hearing and did not expire before the commencement of the hearing.

Issues

1. Was the defendant’s offer open for acceptance at the time the plaintiff purported to have accepted it?
2. If the offer was not open for acceptance, what costs award to the defendants was fair and reasonable in the circumstances, given the defendants’ success in the action and on the motion?

Analysis

Issue 1: Was the defendant’s offer open for acceptance at the time the plaintiff purported to have accepted it?

In addressing this issue, Justice Daley considered the proper interpretation of Rule 49.10 (2) of the Rules, which provides:

(2) Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

To determine whether the offer was open at the time the plaintiff’s offer was supposedly delivered on the morning of the hearing, Justice Daley considered when the hearing of the motion to dismiss the action “commenced” under Rule 49.10(2).

In a previous decision by the Court of Appeal, the court determined that a trial commences within the context of Rule 49 when the evidence has been introduced. Citing this decision, Justice Daley concluded that in the context of a civil pretrial motion, the hearing commenced when counsel for the moving defendants first addressed the court, following which the plaintiff made his motion for an adjournment.

On this basis, the court concluded that the offer was timely and left open for acceptance until after the commencement of the motion. As a result, the plaintiff’s attempt to accept the defendants’ offer after the denial of the adjournment request was not a timely and effective acceptance of that offer.

The court further noted that in exercising its discretion with respect to costs, the plaintiff had in reality attempted to accept the defendants’ offer to settle when his adjournment request was denied, solely for the purpose of avoiding cost consequences. The court found that “the plaintiff never had a good faith intention whatsoever of responding to the defendants and as such he should remain responsible for the defendants’ reasonable costs in any event.”

Issue 2: If the offer was not open for acceptance, what cost award to the defendants is fair and reasonable in the circumstances, given their success in the action and on the motion?

The defendants sought partial indemnity costs, inclusive of disbursements and taxes, totaling almost $16,000. Justice Daley remarked that these costs were quite modest, reasonable and proportionate, particularly because the matter had been outstanding since 2012.

In ordering that the plaintiff said costs, Justice Daley stated that the plaintiff should reasonably have concluded that he would have had exposure to costs if he were unsuccessful in the action and motion.