COURT OF APPEAL FOR ONTARIO
DATE: 2001-08-08 DOCKET: C30940
BETWEEN:
978011 ONTARIO LTD.
Plaintiff (Appellant)
- and -
CORNELL ENGINEERING COMPANY LIMITED
Defendant (Respondent)
BEFORE: WEILER, ROSENBERG and MacPHERSON JJ.A.
COUNSEL: Brian P. Bellmore and Karen M. Mitchell, for the appellant John P. Brown and Patrick Hill, for the respondent
HEARD: November 16, 2000
On appeal from the judgment of Justice Maurice Cullity dated October 19, 1998.
REASONS ON COSTS
WEILER J.A.:
[1] The court consented to receiving additional submissions from counsel with respect to costs. The appellant (plaintiff) submits it is entitled to the costs of trial on a solicitor-and-client scale from January 7, 1977 to the date of judgment pursuant to rule 49.10 as a result of its offer to settle and the results of the case before this court.
[2] The offer to settle served by the appellant on January 7, 1977 is as follows:
The Plaintiff and Defendants by Counterclaim offer to settle this proceeding on the following terms:
- a. Payment by the Defendant Cornell Engineering Company Limited to the Plaintiff 978011 Ontario Limited of $5,354.87 for unpaid salary, GST, and out of pocket expenses;
b. Payment by the Defendant Cornell Engineering Company Limited to the Plaintiff 978011 Ontario Limited of $99,000.00 and GST on same in the amount of $6,930.00;
c. The parties shall each bear their own costs;
d. Execution and delivery of mutual releases by the parties; and
e. The action and counterclaim shall be dismissed without costs on consent.
If the Offer to Settle as set out in paragraph 1 above is not accepted on or before January 15, 1997 at 5:00 p.m., it is hereby withdrawn and the Plaintiff and Defendants by Counterclaim offer to settle this proceeding on the following terms:
- a. Payment by the Defendant Cornell Engineering Company Limited to the Plaintiff 978011 Ontario Limited of $5,354.87 for unpaid salary, GST and out of pocket expenses;
b. Payment by the Defendant Cornell Engineering Company Limited to the Plaintiff 978011 Ontario Limited of $99,000.00 and GST on same in the amount of $6,930.00;
c. Payment by the Defendant Cornell Engineering Company Limited of the Plaintiff/Defendant by Counterclaim’s [sic] costs to the date of settlement of judgment on a party and party basis to be assessed or agreed upon;
d. Execution and delivery of mutual releases by the parties; and
e. The action and counterclaim shall be dismissed on consent.
The offer to Settle as set out in paragraph 2 above shall expire ten minutes after the commencement of the trial unless withdrawn prior thereto.
[3] The first paragraph pertains to an offer that expired on January 15, 1997 at 5:00 p.m. if not accepted. This offer was not accepted. It is not a rule 49.10 offer because it expired before the commencement of the hearing.
[4] The second paragraph contains an offer that expired ten minutes after the commencement of trial unless withdrawn before that time. This offer was not withdrawn and it was also not accepted. It is a rule 49.10 offer. The respondent (defendant) submits that the offer to settle was ambiguous, uncertain and incapable of acceptance. The basis for this submission is paragraph 2.c. which provides for payment of costs, “to the date of settlement or judgment”. In my opinion, the objection of the defendant has been settled by the recent decision of this court in Rooney (Litigation Guardian of) v. Graham, released on March 27, 2001. The majority of the court held that:
… in evaluating a rule 49 offer any “uncertainty” that arises from a provision for costs should only be relevant in deciding whether the party relying on the offer has met its burden of proof under rule 49.10(3). In other words, uncertainty or lack of clarity in an offer may prevent a party from showing that the judgment it obtained was “as favourable as the terms of the offer to settle, or more or less favourable, as the case may be.” See Schumacher v. Toronto-Dominion Bank (1997), 1997 CanLII 12423 (ON SC), 153 D.L.R. (4th) 187 (Ont. Gen. Div.); aff’d (1999), 1999 CanLII 3727 (ON CA), 173 D.L.R. (4th) 577 (Ont. C.A.).”
[5] The rationale in Rooney, supra, is equally applicable to the instant case. The appellant has met its burden of proof under rule 49.10. Accordingly, the objection of the respondent that the offer was incapable of acceptance must be dismissed.
[6] The second objection raised by the respondent is that the appellant failed to obtained the relief sought in the offer because, in its offer, the appellant sought mutual releases and the payment of $5,354.87 owing for unpaid wages plus expenses and this relief was not awarded. This objection is without merit. It is uncontested that the respondent paid the amount of $6,640.04 in satisfaction of the appellant’s claim for unpaid salary and out-of-pocket expenses after the offer and prior to trial and this effectively met that condition of the offer to settle. In a similar vein, the resolution of the issues by the court supplanted the requirement for mutual releases.
[7] I would amend the judgment granted by ordering that the appellant is entitled to its costs on a party-and-party basis to July 15, 1997 and, thereafter, on a solicitor-and-client basis to the date of judgment. Costs of the appeal are on a party-and-party basis.
Released: August 8, 2001 “KMW”
(signed) “Karen M. Weiler J.A.”
(signed) “I agree M. Rosenberg J.A.”
(signed) “I agree J. C. MacPherson J.A.”