Legal Blog

Dismissal without costs entitles Defendant to substantial indemnity

Thursday, November 01, 2007

This was an action brought for damages in the amount of one million dollars for complex medical issues.

The outcome of Dunstan v. Flying J Travel Plaza [2007] O.J. No. 4089 is unfortunate. The Defendants had served an offer to settle on the terms the action be dismissed without costs. The offer was made on February 26, 2007.

The offer was not accepted by the Plaintiffs and the matter went to trial and the Plaintiffs received nothing. At this point the Defendant argued for substantial indemnity costs to be applied to their costs from the date of their February 26, 2007 offer as per Rule 49 of Ontario's Rules of Civil Procedure.

The trial judge did not allow the Defendant to recover substantial indemnity costs pursuant to Rule 49 because, the Defendant did not exceed its offer to settle and the Plaintiff received nothing. "In this case, Dunstan did not recover a judgment of any value."

Nonetheless, the trial judge did still allow for costs to be recovered by the Defendant on a substantial indemnity and partial indemnity basis. The trial judge did this pursuant to Rule 57 that allows the court discretion to consider numerous factors when assessing costs.

In the end the Plaintiff was to pay the Defendant 70,000.00 plus GST plus disbursements of $30,000.00 inclusive of GST.

This is a serious award against the Plaintiff who likely is not able to pay.