Ontario Civil

Civil Procedure

Lack of service on solicitors of offer to settle did not render offer nullity

Principals of plaintiff agreed with principal of defendant that they would jointly purchase factory and convert it into self-storage facility. Plaintiff was incorporated for purpose of acquiring and converting property for joint venture. Principals of plaintiff agreed to put up entire purchase price and plaintiff would become sole owner of property pending completion of project. Parties entered into put/call agreement where plaintiff could force defendants to purchase property through put and defendants could force plaintiff to sell property through call. Agreement provided that if parties could not agree on purchase price then agreed upon appraiser would be retained and in absence of manifest error, appraiser’s determination of fair market value would bind parties. Plaintiff exercised put. Appraiser concluded that fair market value of property was $7.3 million but defendants refused to accept appraisal. Plaintiff brought this action. Defendants attempted to introduce report of different appraiser but trial judge excluded evidence of defendants’ appraiser and made mid-trial ruling that appraiser parties agreed to did not make manifest error in arriving at fair market value. Trial judge awarded plaintiff specific performance of put/call agreement. Plaintiff was awarded costs of $415,000 plus HST, partly on substantial indemnity basis based on offer to settle. Defendants appealed. Appeal dismissed. Trial judge did not err in finding that lack of formal service on defendants’ solicitors of plaintiff’s offer to settle did not render offer nullity. Trial judge was entitled to take offer to settle into account in determining costs. Trial judge was entitled to exercise discretion to increase amount based on defendants’ conduct that unnecessarily prolonged trial. There was no basis for interfering with quantum of costs awarded.

Matthew Brady Self Storage Corp. v. InStorage Limited Partnership (Dec. 3, 2014, Ont. C.A., Doherty J.A., R.A. Blair J.A., and M. Tulloch J.A., File No. CA C57707) Decision at 236 A.C.W.S. (3d) 620 was affirmed.  247 A.C.W.S. (3d) 715.

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