SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FC-03-915-2
RE: LEILING ZHENG
-and-
XIAOLONG JIANG
BEFORE: J. Mackinnon J.
COUNSEL:
Anthony Sean Jones, for the Applicant
Xiaolong Jiang, self-represented
DATE HEARD: By written submissions
E N D O R S E M E N T R E G A R D I N G C O S T S
[ 1 ] Both parties seek costs of this seven day trial. The respondent is not entitled to costs. He was not successful at trial. The real issue is the amount of costs that are to be awarded to the applicant who was clearly the successful party.
[ 2 ] The applicant is seeking close to full recovery costs on the basis of an offer that she made in May 2011 that she says was still open for acceptance when the trial began. This offer was more advantageous to the respondent than the trial judgment. Virtually all of the trial preparation was completed after that offer, which accounts for the major portion of the claim for $84,434 in costs.
[ 3 ] Rules 18(5) , (7) and (9) of the Family Law Rules , O. Reg. 114/99 [ FLR ], provide as follows:
WITHDRAWING AN OFFER
(5) A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted.
OFFER EXPIRES WHEN COURT BEGINS TO GIVE DECISION
(7) An offer may not be accepted after the court begins to give a decision that disposes of a claim dealt with in the offer.
ACCEPTING AN OFFER
(9) The only valid way of accepting an offer is by serving an acceptance on the party who made the offer, at any time before,
(a) the offer is withdrawn; or
(b) the court begins to give a decision that disposes of a claim dealt with in the offer.
[ 4 ] The May 2011 offer did not contain an expiry date and the applicant did not serve a notice of withdrawal in relation to it. However, in May 2012, the applicant did deliver another offer that was less favourable to the respondent. Pursuant to her May 2011 offer, the respondent would have received $125,398 from the house proceeds, less $19,540 to satisfy his child support obligations. Without referring to the May 2011 offer, the applicant’s subsequent offer was reduced to $102,930, less $25,000. The applicant’s position is that the effect of rule 18(5) of the Family Law Rules is that the first offer was not withdrawn before trial. I disagree. In my view, the second offer implicitly withdrew the prior more generous offer with the effect that it was not open for acceptance when the trial began and, therefore, does not attract the costs consequences of FLR rule 18(14).
[ 5 ] The issue of whether a written offer with no set expiration date can be implicitly withdrawn by a subsequent offer has been dealt with in relation to the Rules of Civil Procedure , R.R.O. 1990, Reg. 194. Rule 49.04(1) of the Rules of Civil Procedure is similar to FLR rule 18(5) and states as follows: “ An offer to settle may be withdrawn at any time before it is accepted by serving written notice of withdrawal of the offer on the party to whom the offer was made.”
[ 6 ] The Ontario Court of Appeal in York North Condominium Corp. No. 5 v. Van Horne Clipper Properties Ltd. (1989), 1989 4375 (ON CA) , 70 O.R. (2d) 317 (C.A.), held that a written offer can only be withdrawn in writing and not by an oral offer. The issue was further considered by the Ontario Court of Appeal in Diefenbacher v. Young (1995), 1995 2481 (ON CA) , 22 O.R. (3d) 641 (C.A.), where the court stated by way of obiter , at paras. 16-17:
The appellants argue that the second offer is implicitly a withdrawal of the first offer and thus that the first offer should be ignored in making an award of costs under rule 49.10.
The trial judge’s hesitancy over this issue can be readily understood. There is no clear answer found in the language of Rule 49 of the Rules of Civil Procedure . It is clear from rule 49.04 that a notice of withdrawal must be in writing, but this could be by implication in the second written notice. Such an implication would be plain if a plaintiff made a higher demand in the second notice. On the other hand, there is nothing in Rule 49 to prevent two offers from being outstanding at one time and, although an earlier offer by a plaintiff of a higher amount than the second offer might appear to be irrelevant to the defendant, it would arguably be still outstanding.
[ 7 ] In Kocsis v. Chippewas of Mnjikaning First Nation , [1999] O.J. No. 1608 (Sup. Ct.) , the court proceeded on the basis that although a notice of withdrawal must be in writing, the withdrawal can be implied in the second written offer especially in circumstances, such as we have here, where the second written offer makes a higher demand in order to settle. This view is supported by the Divisional Court in Mills v. Raymond (1997), 1997 16258 (ON SC) , 36 O.R. (3d) 62 (Div. Ct.), at paras. 4-6 :
Rule 49.04(1) provides that, “An offer to settle may be withdrawn at any time before it is accepted by serving written notice of withdrawal ...”
The word used is “may” not “ must ”. I do not read the rule as mandating the service of a written notice of withdrawal as the only way of ending an open offer to settle.
The rule does not provide, and there is no reason to read into it a provision, that an original offer is to continue outstanding despite the extending of a new offer by the same offering party.
[Emphasis in original.]
[ 8 ] In Mortimer v. Cameron (1994), 1994 10998 (ON CA) , 17 O.R. (3d) 1 (C.A.), the Ontario Court of Appeal confirmed that in some circumstances a subsequent offer may, by necessary implication, constitute the withdrawal of a previous offer. At para. 63, the court in Mortimer stated: “This will occur where, for instance, the subsequent offer requires payment of a greater sum than the sum stipulated in the previous offer.” In Love v. Acuity Investment Management Inc. , 2011 ONCA 130 (C.A.), the court restated this point. Where the second offer reduced the amount that had previously been offered the other party, the Court of Appeal succinctly stated, at para. 30: “Unless the second offer was intended to revoke the first, there was no point in the respondent making it.”
[ 9 ] It is also noteworthy that while FLR rule 18(9) specifies that the only valid way to accept an offer is by service of an acceptance, i.e. in writing, rule 18(5) does not say that the only valid way to withdraw an offer is by serving a notice of withdrawal. This use of language is consistent with the case law outlined above.
[ 10 ] The respondent submits that I should also find that the May 2011 offer was retracted by offers included in settlement conference briefs, subsequently delivered by the applicant. FLR rule 17(23) precludes me from having regard to offers or information contained in a settlement conference brief. Nonetheless, the May 2011 offer did remain open for acceptance until the subsequent offer was made. It is a very important factor in assessing the applicant’s claim for costs because it was much more favourable to the respondent, as compared to the trial judgment.
[ 11 ] The applicant has raised other issues with respect to the amount of costs that are related to the respondent’s conduct during the proceedings. In my view, an award of partial recovery costs at the higher end of the range is appropriate to respond to these issues. I also note that while this trial did encompass seven days, without the requirement for a translator, it would have been a three to four day trial. The preparation, then, corresponds to a trial of that shorter duration.
[ 12 ] Having reviewed the bills of costs that have been submitted and based on the foregoing reasons, I fix the costs payable by the respondent to the applicant at $63,750 all inclusive. This amount is ordered to be paid to the applicant from the respondent’s share of the net proceeds of sale of 6 Astoria Crescent Ottawa, ON.
J. Mackinnon J.
RELEASED: November 28, 2012
COURT FILE NO.: FC-03-915-2
SUPERIOR COURT OF JUSTICE - ONTARIO RE: LEILING ZHENG -and- XIAOLONG JIANG BEFORE: J. Mackinnon J. COUNSEL: Anthony Sean Jones, for the Applicant Xiaolong Jiang, self-represented ENDORSEMENT REGARDING COSTS J. Mackinnon J.
RELEASED: November 28, 2012