In MacFarlane v. Gustafson, 2024 BCCA 400, the injury claimant sought personal injury damages arising from a serious car accident injury. The claimant made a reasonable offer before trial which was rejected. One key matter concerned the trial judge’s decision to award double costs to the claimant under Rule 9-1(1)(c) of the Supreme Court Civil Rules. The defendant challenged this costs award, arguing that the trial judge erred in principle by considering a previous settlement offer that had been withdrawn and by failing to recognize the reasonableness of the defendant’s decision not to accept the plaintiff’s $3.4 million offer.
Context of the Double Costs Award
Before trial, the claimant made a formal settlement offer of $3.4 million plus costs. This offer, though initially open for acceptance was revoked less than one month later and replaced with a substantially higher offer of $4.7 million plus costs and a contribution towards the Health Care Costs Recovery Act (HCCRA) claim. The defendant never accepted the $3.4 million offer. Instead, she made several counteroffers, all significantly lower than $3.4 million and none that would have resolved the HCCRA issue. Ultimately, the trial proceeded, and the eventual judgment far exceeded the amounts the defendant had been willing to pay.
The Trial Judge’s Reasoning on Costs
The trial judge considered the relevant legal principles, including the factors set out in Rule 9-1(6). These factors typically include the timing of the offer, the relationship between the offer and the final judgment, and any other matter the court deems appropriate. The judge concluded that the plaintiff’s offer was one the defendant should have reasonably accepted. Even though the $3.4 million offer was eventually revoked, the judge reasoned that the defendant had a meaningful window of time in which to accept it. There was no persuasive evidence that the defendant would have accepted it but for its revocation. Moreover, informal discussions suggesting the possibility of a lower settlement did not guarantee that the plaintiff would actually commit to a reduced figure. The judge emphasized that it was the formal, written offer that mattered—not informal, aspirational negotiations.
Consideration of Revoked Offers
The defendant argued that, since the $3.4 million offer had been withdrawn before its expiry date, it should not be considered. The judge rejected this contention. He noted that the Supreme Court of British Columbia has on numerous occasions considered revoked offers in assessing costs consequences. Under Rule 9-1(6)(d), the court may consider “any other factor” it deems appropriate, which includes previously made offers, even if withdrawn. The key question is whether, in all the circumstances, it would have been reasonable for the defendant to accept the offer before it was revoked.
Conclusion on Double Costs
Having concluded that it was unreasonable for the defendant not to have accepted the $3.4 million offer, the trial judge awarded double costs to the claimant from a specific date onward. On appeal, the Court of Appeal deferred to the trial judge’s discretion and reasoning. It found no error in principle and affirmed the double costs award. The appellate court reiterated that substantial deference is owed to a trial judge’s costs determination and that the trial judge’s approach, including consideration of the revoked offer, was both lawful and appropriate under the circumstances.
