The plaintiff, ship chandler, had been successful at trial and was awarded damages of approximately $100,000 for unpaid invoices. The plaintiff now sought to recover its legal fees, which were recoverable pursuant to the terms of the contract. The defendant also sought costs on the basis that the plaintiff’s award did not exceed a settlement offer the defendants had made. Although the plaintiff claimed to have spent over $200,000 in legal fees, the Court assessed the reasonable legal fees at $35,000 as of the date of the defendant’s offer and said that in the absence of the defendant’s offer, it would have granted no more than $60,000 in total. The defendant was awarded its costs from the date of the offer but the Court only awarded the defendant’s costs at 1.5 times the tariff rate. The defendant was awarded approximately $160,000 in costs. The defendant was also given the right to set-off the costs owing to it against the judgement amount owing to the plaintiff. Subsequent to these costs orders, the plaintiff’s appeal was partially successful such that its award did exceed the defendant’s offer. The plaintiff therefore appealed the costs awards.
Decision: Appeal allowed.
Held: Due to the plaintiff’s success on appeal it is entitled to costs throughout. However, the trial Judge was prepared to award only $60,000 in recognition of the appellant’s conduct, and the appellate Court held it should give effect to the suggestion made by the trial judge.