Burton et al. v. Global Benefit Plan Consultants Inc. et al., (1999) 183 Nfld. & P.E.I.R. 86 (NFTD)

• Judge: Orsborn, J.
• Court: Supreme Court of Newfoundland and Labrador (Canada)
• Case Date: July 28, 1999
• Jurisdiction: Newfoundland and Labrador
• Citations: (1999), 183 Nfld. & P.E.I.R. 86 (NFTD)

Burton v. Global Benefit (1999), 183 Nfld. & P.E.I.R. 86 (NFTD);

    556 A.P.R. 86

MLB headnote and full text

Temp. Cite: [1999] Nfld. & P.E.I.R. TBEd. NO.022

Vincent Burton, Kenneth Thomas, Ford Hibbs and Cliff Brett, as Trustees (plaintiffs) v. Global Benefit Plan Consultants Inc. (first defendant) and Global (GMPC) Holdings Inc. (second defendant) and Walter Jefferson (third defendant) and Morrison Williams Investment Management Limited (fourth defendant) and Moss, Lawson & Co. Limited (fifth defendant) and Global Benefit Plan Consultants Inc. (third party) and Global Benefit Plan Consultants Inc. (second third party) and Morrison Williams Investment Management Limited (third third party) and Vincent Burton (fourth third party)

(1997 St. J. No. 3034)

Indexed As: Burton et al. v. Global Benefit Plan Consultants Inc. et al.

Newfoundland Supreme Court

Trial Division

Orsborn, J.

November 17, 1999.

Summary:

The plaintiffs were trustees of a pension fund. They claimed against the fifth defend­ant (Moss, Lawson) as a constructive trustee for its role as a securities trader in selling shares at greater than fair market value from a separate union fund to the pension fund. Moss, Lawson applied under rule 14.24(1)(a) to strike the statement of claim as against it on the ground that it did not disclose a cause of action.

The Newfoundland Supreme Court, Trial Division, in a judgment reported 178 Nfld. & P.E.I.R. 169; 544 A.P.R. 169, struck the statement of claim as against Moss, Lawson. It was plain and obvious that the claim against Moss, Lawson as constructive trustee could not succeed. Moss, Lawson had previ­ously made a nominal offer to settle ($1), which the plaintiffs had not accepted. Moss, Lawson applied under rule 20A for solicitor-client costs from the date of the unaccepted offer. The plaintiffs submitted that, inter alia, a nominal offer was not an offer within the contemplation of rule 20A.

The Newfoundland Supreme Court, Trial Division, held that the nominal offer consti­tuted an offer to settle under rule 20A, but that the court retained a discretion not apply the presumptive rule of solicitor-client costs after the date of the offer. Although the plaintiffs' claim lacked merit, since the offer could only be accepted by capitulation and the outcome of the application to strike was to a reasonable degree uncertain, the interests of justice and fairness made it appropriate to award Moss, Lawson only party and party costs both before and after the settlement offer.

Practice - Topic 7241

Costs - Party and party costs - Offers to settle - General (incl. what constitutes) - The plaintiffs claimed over $360,000 against five defendants - One defendant made a nominal offer to settle ($1), which was not accepted - The statement of claim was subsequently struck as against the defendant for not disclosing a cause of action - The defendant sought solicitor-client costs from the date of the offer under rule 20A, where the plaintiffs failed to obtain judgment more favourable than the offer - The Newfoundland Supreme Court, Trial Division, stated that an element of compromise was not necessary before an offer was considered an offer to settle under rule 20A - If the defendant believed that a claim had no merit, there was no policy reason why the defendant should have to pay or give up part of the claim in order to obtain the costs benefits of rule 20A - The general rule of solicitor-client costs from the date of the offer was to encourage the making and acceptance of realistic settlement offers - However, there was no presumption of solicitor-client costs after an unaccepted settlement offer that required the receiving party to capitulate or accept only a nominal amount - The mak­ing of nominal offers solely to secure a costs advantage should not be encouraged -Although the plaintiffs' claim lacked merit, since acceptance required capitula­tion and the outcome of the application to strike was reasonably uncertain, the court awarded the defendant only party and party costs after the settlement offer.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See Practice - Topic 7241 ].

Practice - Topic 7247.1

Costs - Party and party costs - Offers to settle - Costs to successful defendant - [See Practice - Topic 7241 ].

Cases Noticed:

Mega Roofing and Waterproofing Ltd. v. Dobbin (N.D.) Ltd. et al. (1996), 143 Nfld. & P.E.I.R. 14; 448 A.P.R. 14 (Nfld. T.D.), refd to. [para. 9].

Data General (Canada) Ltd. et al. v. Mol­nar Systems Group Inc. et al. (1991), 52 O.A.C. 212; 6 O.R.(3d) 409 (C.A.), refd to. [para. 17].

Kletchko v. Gerhard, [1985] 1 W.W.R. 95 (Sask. Q.B.), refd to. [para. 21].

Vaughan (Town) v. Alta. Surety Co. (1992), 3 C.L.R.(2d) 209 (C.A.), refd to. [para. 33].

364511 Ontario Ltd. v. Darena Holdings Ltd. et al. (1999), 120 O.A.C. 280 (C.A.), refd to. [para. 33].

Trilwood Investments Ltd. et al. v. Bruce Agra Foods Inc. (1999), 117 O.A.C. 317 (C.A.), refd to. [para. 33].

Walker Estate et al. v. York Finch General Hospital et al. (1999), 118 O.A.C. 217 (C.A.), refd to. [para. 33].

Phase Three Properties Ltd. v. 529952 Ontario Ltd. et al. (1996), 15 O.T.C. 73 (Gen. Div.), refd to. [para. 43].

Garofalo v. Canada Safeway Ltd. (1998), 66 O.T.C. 241 (Gen. Div.), refd to. [para. 43].

Taggart v. Brancato Construction Co., [1995] O.J. No. 1112 (Gen. Div.), refd to. [para. 44].

Marcelli v. Helliwell, [1995] O.J. No. 3122 (Gen. Div.), refd to. [para. 44].

Harley v. Harley (1989), 62 Man.R.(2d) 167 (Q.B.), refd to. [para. 47].

Counsel:

Geoffrey Brown, for Moss, Lawson & Co.;

Jason Hickman, for the plaintiffs.

This matter was heard on July 28, 1999, before Orsborn, J., of the Newfoundland Supreme Court, Trial Division, who delivered the following judgment on Novem­ber 17, 1999.