Following the dismissal of the plaintiff's action after a two-week trial, the defendants sought costs on a substantial indemnity basis from the date of their offer to settle.
The plaintiff argued for a significantly lower amount and opposed substantial indemnity.
The court determined that Rule 49.10(2) of the Rules of Civil Procedure, which provides for substantial indemnity costs, applies when a plaintiff obtains a judgment less favourable than an offer, not when their action is dismissed.
Furthermore, the court reiterated that substantial indemnity costs, outside of Rule 49.10, are reserved for cases involving egregious misconduct, which was not present here.
Consequently, the court awarded the defendants costs on a partial indemnity basis in the amount of $150,000, inclusive of disbursements and HST, after making adjustments for an expert fee.
