Following the dismissal of the plaintiff's action at trial, the successful defendant sought substantial indemnity costs of $112,626.70.
The defendant argued that substantial indemnity was warranted because the plaintiff made unfounded allegations of improper conduct and because the defendant made a Rule 49 offer to settle that was more favourable than the trial outcome.
The court rejected both arguments, noting that the plaintiff's allegations had some basis and that Rule 49 does not automatically grant substantial indemnity costs to a defendant whose offer is beaten by a dismissal.
The court awarded the defendant partial indemnity costs fixed at $40,000, finding the claimed amount to be grossly excessive.
