Date: 20041126
Docket: T-1491-00
Citation: 2004 FC 1667
Vancouver, British Columbia, Friday, the 26th day of November, 2004
Present: THE HONOURABLE MR. JUSTICE HARRINGTON
BETWEEN:
MICHAEL J. CULHANE
Plaintiff
- and -
ATP AERO TRAINING PRODUCTS INC.,
REILLY JAMES BURKE
Defendants
REASONS FOR ORDER AND ORDER
[1] Mr. Culhane's action against the Defendants came to trial and was dismissed by O'Keefe J. "with costs to the defendants". Those costs were presented at $81,897.85 and allowed by Charles E. Stinson, Assessment Officer, at $61,285.49. In reaching that amount, he doubled costs in accordance with Federal Court Rule 420 on the basis that the Defendants made a written offer to settle which was not revoked and which, if accepted, would have achieved a better result for the plaintiff than the trial did.
[2] Mr. Culhane is dissatisfied with the assessment and has brought forward a motion for review in accordance with Rule 414. This is that review.
[3] There are some matters which should be disposed of at the outset as not being relevant. Mr. Culhane says that O'Keefe J.'s reasons show that the action was not frivolous. The judgment is subject not only to an appeal, but to a cross appeal. I need only focus on the fact that the action was dismissed with costs.
[4] The unrevoked offer was made on 23 February 2001, and was the follow up on an earlier offer that day which had been rejected. The unrevoked offer was that each of the two defendants pay the plaintiff $5.00. The earlier offer was that they each pay the plaintiff $5.00, but that the plaintiff pay the defendants' costs, which obviously would have left the plaintiff out of pocket.
[5] In order for Rule 420 to come into play, there must be strict adherence to its terms. Very often an offer is made to avoid the expense of trial. Consequently, an offer which is open for a considerable period of time, but revoked just prior to or at the opening of trial, does not satisfy Rule 420 and does not entitle the successful party to double costs automatically. See the concurring reasons of Letourneau J.A. in Francosteel Canada Inc. v. African Cape (The), [2003] 4 F.C. 284). In this case, the offer was open for more than three years and not revoked before judgment.
[6] The offer is criticized as not representing a compromise, a factor which has been mentioned in some of the case law. The rule does not specifically state that compromise is a necessary element. In any event, the forbearance of future costs in this case did represent, in my view, a considerable compromise. This point was noted by Mr. Stinson in the following words:
The Defendants were not prepared to surrender any part of their position, but their removal of costs in the second February 23, 2001offer might be seen by some as compromise of some consequence, depending on one's opinion of the generosity of the partial indemnity permitted by the Tariff.
That is exactly how I see it. A "slackening of costs" is in itself "an ingredient of compromise" as noted by Blais J. In Kirgan Holding S.A. v. Ship Panamax Leader (2003), 227 F.T.R 200.
[7] Had I been taxing this matter directly, I would not have exercised my discretion and reduced the costs as is permitted under Rule 420. It follows that I will not invoke Rule 414 to interfere with Mr. Stinson's assessment. It is well established that, even if a judge has a different view, he or she should not interfere with the decision of an assessment officer unless there has been an error in principle, which shows in the reasoning or is implied because the result is so unreasonable. (Wilson v. Canada (2000), 196 F.T.R. 99, Dawson J.)
ORDER
UPON MOTION for a request that a judge review the award of costs of Charles E. Stinson, Assessment Officer, dated 28 October 2004, such review being restricted to the application of Rule 420 (doubling of costs) to said assessment;
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