V. L. Vandergust

The court determined the appropriate costs award following earlier proceedings between a farming corporation and a contractor.

The defendant had previously made a timely offer to settle that was more favourable to the plaintiff than the ultimate decision, which weighed strongly in favour of a costs award to the defendant.

The court also recognized that the defendant achieved substantial success in reducing the applicable interest rate from 24% to 5%.

However, prejudice suffered by the plaintiff due to the defendant’s conduct prior to initiating the application justified a partial reduction of the defendant’s claimed costs.

The court therefore reduced the defendant’s claimed costs and ordered payment of the adjusted amount.

The defendant brought a motion under Rule 19.08 of the Rules of Civil Procedure to set aside a 2005 default judgment, but ultimately limited the relief sought to varying the contractual interest rate imposed by the judgment.

The court applied the three‑part test governing motions to set aside default judgments, including delay, explanation for the default, and the existence of an arguable defence.

While the defendant failed to adequately explain the delay and prejudice existed due to the passage of time, the court found an arguable defence regarding the 24% contractual interest rate claimed by the plaintiff.

Evidence showed the parties had a longstanding neighbourly farming relationship in which interest had never historically been charged and there was no clear agreement to pay interest at that rate.

The court concluded that the defendant had not agreed to the contractual interest and varied the judgment to apply interest at 5% per year instead.