The Alberta Court of Appeal decision of Chisholm v Lindsay
("Chisholm") released last month was expected to
reconsider an earlier Court of Appeal decision (Mahe v Boulianne
("Mahe")) on how informal settlement offers were to be
treated by the Court on the issue of costs.
In Mahe, the plaintiff commenced an action against the defendant
after the plaintiff was injured while working on the
defendant's farm. The defendant made a settlement offer to pay
$500,000 to the plaintiff. The offer was made "without
prejudice" but was not a formal settlement offer under the
Alberta Rules of Court ("Rules"). It was rejected by the
plaintiff. After trial, the plaintiff received a damage award of
$365,000. The defendant sought, and was awarded, double costs from
the time of the offer based on the informal offer.
The Court in Mahe held that offers of settlement are always
privileged, which means they cannot be entered into evidence as
admissions or otherwise. However, that privilege is subject to an
exemption. The Court found that "'without prejudice'
privilege is presumed to expire once the merits of the dispute have
been decided." Thus, settlement offers, including informal
ones that do not comply with the Rules, can be referred to when
costs are addressed.
In March 2014, the plaintiff in Chisholm brought an application
to have the Court of Appeal reconsider the Mahe decision. It is
rare for the Court of Appeal to agree to reconsider one of its
earlier decisions and notwithstanding that Mahe was only four years
old, leave was granted.
In Chisholm the plaintiff had suffered from injuries as a result
of a motor vehicle accident. Liability was not in dispute. The
trial judge awarded damages of $346,734. However, the defendant had
made two informal settlement offers of $350,000 and $360,000 and
sought to obtain costs since the plaintiff recovered an amount less
than what was offered. The trial judge concluded that she had the
discretion to consider the offers made by the defendant in
determining costs. She admitted the two offers into evidence but
exercised her discretion and denied the defendant any costs,
because the informal offers were made days before the trial
started. Instead, she awarded trial costs to the plaintiff.
At the Court of Appeal the plaintiff sought a declaration that
Mahe was no longer good law and that informal offers could not be
taken into account on costs. The defendant wanted the Court to
impose cost consequences against the plaintiff for not accepting
the informal offer.
Notwithstanding that leave was granted by the Court to
reconsider Mahe, when the Court of Appeal rendered its decision in
Chisholm, it specifically declined to reconsider Mahe. The Court of
Appeal found that the trial judge's reasons for denying the
defendant's costs were proper and the appeal was dismissed.
The Court stated that a reconsideration of Mahe on the facts of
Chisholm was inappropriate if not moot. As such, having had the
opportunity to state that informal offers cannot be taken into
consideration but refusing to do so, the result is that Mahe
remains good law and a trial judge is permitted to take into
account informal settlement offers when assessing costs in the
By Jamie Flanagan, Partner and Andrea MacLean, Summer Student
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Alberta is going through a difficult economic period. These times can be challenging and while owners struggle to get their business through the rough patch, they want to preserve the assets and capital they have built up.
Legal issues surrounding contaminated sites affects landowners, developers, realtors, as well as consultants and contractors working on the front lines. This webinar will provide a practical review of how the legislation is actually being used, recent court decisions, challenges with brownfield developments, and future changes.
Who Should Attend: This webinar will be of interest to developers, contractors, environmental and real estate consultants, realtors, owners or lessors of land which may be impacted, and municipalities.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).