Executive Summary: Key Legal and Evidentiary Issues

• Central issue concerned whether the City of Cranbrook’s $80,000 pre-trial offer to settle triggered enhanced (double) costs consequences after the plaintiffs’ claim was dismissed.
• The court assessed, under Rule 9-1, if the plaintiffs acted unreasonably in rejecting the offer, considering timing, trial length, and the plaintiffs’ own $200,000 valuation of the claim.
• A key evidentiary gap was the absence of any affidavit from the plaintiffs explaining their reasons for refusing the offer, leaving only an objective assessment of their conduct.
• The judge weighed the stark disparity between the offer and the ultimate result—complete dismissal of the claim with cost liability—when determining the costs order.
• Authorities on the punitive nature of double costs and the policy of encouraging early, reasonable settlement heavily influenced the court’s exercise of discretion.
• No exact dollar figure for costs was fixed; instead, the court set the scale and period of costs, awarding ordinary costs to the City up to March 25, 2025 and double costs thereafter.

Factual and procedural background

This case arises from civil proceedings in the Supreme Court of British Columbia between two plaintiffs, Ronald Arthur Robert Olson and #0973275 BC Ltd. (also known as RJO Developments), and the Corporation of the City of Cranbrook. The dispute proceeded to a full nine-day trial before the Supreme Court in Cranbrook, British Columbia. In reasons for judgment released on November 3, 2025, the trial judge dismissed the plaintiffs’ claim in its entirety. Although the underlying merits decision is not reproduced in the excerpt provided, it is clear that the plaintiffs advanced what the court considered a viable civil claim against the City, and that the City vigorously defended the action. The materials for the costs decision show that, before trial, the City sent two letters in September 2024, ahead of an earlier trial date that did not proceed. In those letters, the City identified what it regarded as significant weaknesses in the plaintiffs’ case. Later, the City incorporated those earlier letters by reference into a formal offer to settle made in March 2025. Various witnesses at trial reportedly observed that the letters from the City were unusual in their experience, indicating that the factual matrix involved correspondence by the municipal defendant that stood out from ordinary practice. However, the precise causes of action (for example, contract, tort, or statutory wrongs) and the specific factual allegations underpinning the original claim are not set out in the costs reasons and therefore cannot reliably be detailed here.

The pre-trial offer to settle

The central factual development for the costs ruling was the defendant’s formal offer to settle. On March 25, 2025—approximately two months before trial—the City of Cranbrook offered to settle the action for $80,000. The offer remained open for acceptance until April 11, 2025. It expressly reserved the City’s right to bring the offer to the court’s attention for the purposes of costs after judgment on all other issues. In form and content, this was clearly an offer designed to engage Rule 9-1 of the Supreme Court Civil Rules, the British Columbia regime that governs offers to settle and their consequences in relation to costs. In the offer letter, the City relied on and incorporated its earlier 2024 correspondence that spelled out perceived weaknesses in the plaintiffs’ case. Those earlier letters, combined with the monetary figure in the March 2025 offer, served as a warning that the City viewed the plaintiffs’ position as significantly vulnerable. The plaintiffs did not accept the $80,000 offer. They proceeded to trial, maintaining an assessment of their claim at approximately $200,000. After a nine-day hearing, their claim was dismissed in full, and no damages were awarded. The post-trial dispute then narrowed to a single question: how the court should exercise its discretion on costs in light of the unaccepted offer.

Governing rules on costs and offers to settle

The court grounded its analysis in two main provisions of the Supreme Court Civil Rules. First, Rule 14-1(9) establishes the default position that costs must be awarded to the successful party unless the court orders otherwise. This rule reflects the basic “loser pays” principle in British Columbia civil litigation, subject to the court’s discretion. Second, Rule 9-1 governs offers to settle and sets out the discretionary tools available to the court when an offer has been made but not accepted. Under Rule 9-1(4), a court may consider an offer to settle when exercising its discretion regarding costs. Rule 9-1(5) then enumerates a series of options, including depriving a party of costs after the offer date, awarding double costs from that date, maintaining ordinary costs notwithstanding the offer, or awarding a defendant its costs after the offer if a plaintiff’s judgment does not exceed the offer. The factors the court may consider under Rule 9-1(6) form the framework for this decision. They include whether the offer ought reasonably to have been accepted at the time; the relationship between the offer and the final judgment; the relative financial circumstances of the parties; and any other appropriate factor. The judge also reviewed leading appellate guidance, including Hartshorne v. Hartshorne and subsequent decisions, which stress that double costs are a punitive measure intended to encourage reasonable settlement behavior and to penalize parties who unreasonably decline reasonable offers. The broader policy objectives behind costs rules—deterring frivolous litigation, encouraging efficiency, promoting settlement, and forcing ongoing risk assessment—played a central role in the judge’s reasoning.

Whether the offer ought reasonably to have been accepted

The first and often most significant factor under Rule 9-1(6) is whether the offer was one that the offeree ought reasonably to have accepted at the time it was open, not with the benefit of hindsight after trial. The plaintiffs argued that their rejection of the $80,000 offer was reasonable. They pointed to the fact that they had commenced what they saw as a reasonable proceeding, that most of the trial preparation had already been done by March 2025, that $80,000 was low compared with their $200,000 valuation, and that the case was not clear-cut for either side. The City countered that commencing a viable claim does not immunize a plaintiff from double costs and that the plaintiffs still faced significant, additional expense: there were two months before trial and a lengthy nine-day hearing ahead. The judge accepted the defendant’s analysis. In the court’s view, while there had been no specific finding as to the monetary value of the claim, $80,000 likely represented close to 50 percent of the plaintiffs’ best-case scenario. In the context of significant litigation risk and a non-obvious outcome, accepting a substantial, pre-trial compromise would have been reasonable. The judge also distinguished authorities cautioning against routinely awarding double costs to defendants where plaintiffs recover less than a defence offer. Those concerns target cases in which the plaintiff still obtains some positive judgment. Here, by contrast, the plaintiffs recovered nothing because their claim was dismissed. The court cited commentary in The Conduct of Civil Litigation in British Columbia, along with decisions such as Martin v. Lavigne and Neufeld (Costs), for the proposition that where a plaintiff’s claim is dismissed in its entirety after a reasonable defence offer, double costs may often be expected unless there is a good reason to depart from that result. A notable evidentiary point was the absence of any affidavit from the plaintiffs explaining their subjective reasons for rejecting the offer. Without sworn evidence on their state of mind, the judge could only conduct an objective assessment. On the totality of the circumstances—size and timing of the offer, remaining costs exposure, and ultimate dismissal—the court concluded that it was unreasonable for the plaintiffs not to accept the City’s March 25, 2025 offer.

Relationship between the offer and the final judgment

The second factor under Rule 9-1(6) compares the terms of the offer with the actual result at trial. Counsel for the plaintiffs emphasized that the underlying circumstances of the case were unusual, in particular the two letters sent by the City that witnesses said were unique in their experience. The judge, however, emphasized that the focus of this factor is the relationship between the offer and the judgment, not the novelty of the factual background. On that metric, the disparity was stark. The City offered $80,000 to resolve the matter. The plaintiffs rejected it, went to trial, and obtained no recovery at all. Instead, their claim was entirely dismissed and they became liable to pay at least ordinary costs to the City. The defendant cited cases such as P.H. v. Canada (Attorney General), where even an offer to waive costs has been held sufficient to justify double costs after an unaccepted offer. Here, the offer involved a substantial payment to the plaintiffs. Against the eventual outcome—dismissal with costs—the court found that the offer was significantly more favorable than the judgment, strongly supporting an award of double costs in the City’s favor.

Relative financial circumstances and other considerations

The third enumerated factor is the parties’ relative financial circumstances. The judge noted that courts tend to give this factor weight where the financially stronger party has used its resources to distort the litigation process or to gain an unfair advantage over a weaker opponent. Even assuming some disparity between the plaintiffs (an individual and a development company) and the municipal defendant, there was no evidence that the City exploited any financial superiority in an abusive or oppressive way. The City’s use of an offer to settle under Rule 9-1, supported by substantive correspondence outlining perceived weaknesses in the claim, was fully consistent with the policy goals of the costs rules rather than a distortion of the process. As to any residual or “other” considerations under Rule 9-1(6)(d), none were identified that would justify denying or softening the double costs consequences. The plaintiffs had not adduced evidence of hardship, improper pressure, or other equitable factors that might have led the court to temper the cost sanctions.

Final costs order and overall outcome

In the result, the court held that the Rule 9-1(6) factors, considered collectively, favored a double costs award for the defendant. The key drivers of this conclusion were the objective unreasonableness of rejecting the $80,000 offer in light of the plaintiffs’ litigation risk and remaining cost exposure, the stark contrast between the offer and the ultimate dismissal of the claim, and the absence of any evidence of abusive financial leverage or other compelling countervailing considerations. Accordingly, the judge ordered that the City of Cranbrook is entitled to ordinary, party-and-party costs at scale B up to March 25, 2025, and double costs from March 25, 2025 to the date of the costs reasons. Substantively, this means the plaintiffs recover no damages at all; their claim has been dismissed on the merits and they must pay the City’s costs on an enhanced basis for a substantial portion of the litigation. The successful party in the overall proceedings is the Corporation of the City of Cranbrook, and while it clearly obtains an advantageous costs order (ordinary costs to March 25, 2025 and double costs thereafter), the exact total monetary amount in its favor cannot be determined from this decision alone because the reasons specify only the scale and time period of costs, not the final dollar figure.