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Tag: Rule 9

New Formal Settlement Offer Rule Treated the Same as the Old

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.


A further decision dealing with the consequences of formal settlement offers under the New BC Supreme Court Civil Rules was released today by the BC Supreme Court, New Westminster Registry.
In today’s case (Gregory v. ICBC) the Plaintiff was injured in a BC motor vehicle collision.  Prior to trial ICBC made a formal settlement offer of $164,000.  The Plaintiff rejected this offer and at trial was awarded just over $131,000.
ICBC brought an application seeking costs or double costs from the date of the offer onward.  Madam Justice Kloegman agreed that the Plaintiff ought to have accepted the formal settlement offer and accordingly deprived her of her costs and disbursements for the trial and awarded ICBC their costs and disbursements for steps taken shortly after delivery of the formal settlement offer.
In reaching this result the Court noted that Rule 9 (the New Formal Settlement offer rule) should be treated similarly to the old Rule 37B.  Specifically Madam Justice Kloegman noted that “The parties agree that it is likely that the new Supreme Court Rules apply to this application and, in any event, very little turns on whether or not the old or new Rules apply. ”
While ICBC was awarded post offer costs, they were not awarded double costs.  In reaching this decision the Court noted that ICBC’s financial ability to defend a lawsuit was “much greater than the (plaintiff’s) ability to prosecute” and that this factor must be taken into account in exercising judicial discretion under Rule 9.   In considering this factor Madam Justice Kloegman stated as follows “I will not order double costs to the defendant, which would be about $50,000, because the impact on the financial circumstances of the plaintiff and on the amount of her award at trial would be grievous. ”

Defendant Refused Costs at Trial For Failing to Consent to Small Claims Court Transfer

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized.


Reasons for judgement were released today addressing whether a Defendant who beat a formal settlement offer should be awarded costs.
In today’s case (Cue v. Breitkruez) the Plaintiff was involved in a rear-end collision.  He sued the rear motorist for damages.  Prior to trial the Defendant made a formal settlement offer for $1.  With liability being hotly contested the Plaintiff proposed that the case be transferred to Small Claims Court.  The Defendant refused to consent stating that “such a transfer would result in greater delay“.
At trial the Plaintiff’s case was dismissed with a finding that the Plaintiff was responsible for the collision.  (You can click here to read my summary of the trial judgement).  The Defendant then applied to be awarded double costs pursuant to Rule 9-1(5) because they beat their formal offer at trial.
Mr. Justice Smith dismissed the application noting that since Rule 14-1(10) generally restricts Plaintiff’s awarded an amount within the small claims court jurisdiction from being awarded trial costs that the Defendant should be refused costs for not agreeing to have the case heard in Provincial Court.  Specifically Mr. Justice Smith noted as follows:

7]             The matter remained in this court subject to an agreement to still limit the claim to what could be awarded in Provincial Court. Had my liability decision been different and the matter proceeded to an assessment of damages, Rule 14-1(10) would have been a bar to an award of any costs, other than disbursements, in favour of the plaintiff.  In my view, fairness requires that the same limitation apply to the successful defendant, particularly as the defendant did not agree to the proposed transfer to Provincial Court.

[8]             I therefore decline to award any costs to the defendant, other than disbursements.  There is therefore no need to consider the offer to settle because there are no costs to double.

BCCA Finds Courts Can Consider Insurance Under Rule 37B

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 45 Comments on BCCA Finds Courts Can Consider Insurance Under Rule 37B


Very important reasons for judgement were released recently by the BC Court of Appeal addressing a key factor under Rule 37B.
By way of brief introduction Rule 37B is the current rule dealing with formal settlement offers.   (Rule 37B will be replaced with Rule 9 next month but the new rule uses language that is almost identical to Rule 37B).
The Court can take formal settlement offers into account when awarding a party costs.  One factor the Court can consider in deciding whether to award costs or increased costs under Rule 37B is “the relative financial circumstances of the parties“.
In most personal injury lawsuits Defendants are insured such that they don’t have a significant financial stake in the outcome of the trial.  BC Supreme Court judges have been conflicted in whether insurance is a relevant consideration when viewing the financial circumstances of the parties.  Today the BC Court of Appeal addressed this issue for the first time.
In today’s case (Smith v. Tedford) the Plaintiff was injured in a motor vehicle collision.  Before trial the Plaintiff made a formal settlement offer.   Several days into trial the Defendant accepted the offer.   The parties could not agree on the costs consequences.  The trial judge awarded the Plaintiff costs to the time the offer was made and double costs for the time spent at trial.  (You can click here to read my post summarizing the trial judge’s reasons).  In doing so the Judge considered the fact that the Defendant was insured with ICBC as relevant to his ‘financial circumstances“.
ICBC, on behalf of the Defendant, appealed arguing that the Judge was wrong to consider insurance.   In a welcome development the BC Court of Appeal found as follows:
While I recognize arguments over the implications of a defendant’s insurance coverage being considered in relation to an award of costs may go back and forth, like the judge I consider precluding such from consideration renders an assessment of the parties’ relative financial circumstances, at least in a case of this kind, very artificial indeed. Clearly, with ICBC having assumed the defence, the financial ability to defend was much greater than the financial ability to prosecute, and that is of no small importance to considering whether and to what extent the financial circumstances of the parties, relative to each other, bear on an award of costs where, as here, there has been an offer of settlement made ten days before a trial for the assessment of personal injury damages which was not accepted until the seventh day of the trial.

Formal Settlement Offers and Strict Compliance with Rule 37B

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Reasons for judgement were released today considering whether strict compliance with Rule 37B is required for a Court to award a successful party Double Costs after beating a formal settlement offer at trial.
In today’s case (Eigeard v. Muench) the Plaintiff sued for personal injuries.  Prior to trial the Plaintiff made a written settlement offer to resolve the claim for $107,500.  The claim went to trial and the Plaintiff enjoyed success with a Jury awarding more than settlement offer.
The Plaintiff then asked the Court to award Double Costs under Rule 37B.  The Defendant objected arguing that the formal offer did not strictly comply with Rue 37B(1)(c)(iii) which requires formal offers to contain the following sentence:
“The ….[name of party making the offer]…. reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgment on all other issues in this proceeding.”
The Plaintiff argued that the Court still had the discretion to award double costs because “the defendant’s insurers are sophisticated and understood the content of the offer and there is no confusion.” and that “this was a legitimate attempt by the plaintiff to resolve the action.”
Madam Justice Hyslop disagreed and concluded that the Court did not have the discretion to award double costs in these circumstances.  The Court went onto summarize the applicable law as follows:
[16] In Roach, the exact words of Rule 37B(1)(c)(iii) were not contained in the offer to settle pursuant to Rule 37B. Despite this, the trial judge ordered double costs. This was one of the grounds of appeal.

[17]         The offer to settle was in the form of a letter directed to counsel. The letter set out an offer of settlement and then stated:

We reserve the right to bring this letter to the attention of the judge as a matter of costs in accordance with Rules 37 and 37A. [para. 32]

[18]         Madam Justice Prowse, writing for the Court, stated:

[35] It is not disputed that the terms of Ms. Roach’s offer substantially complied with the requirements of an offer under Rule 37B(1)(c): it was made in writing; it was delivered to Mr. Dutra (through his counsel); and it contained a sentence in terms similar to those set forth in subrule (1)(c)(iii). Nor is there any suggestion that Mr. Dutra was misled by the offer in any way, or that he believed that he could disregard the offer with impunity with respect to costs because it did not track subrule (1)(c)(iii) word-for-word. Rather, Mr. Dutra takes what appears to be the highly technical point that if an offer does not contain the exact wording set out in subrule (1)(c)(iii), it does not come within the definition of an “offer to settle” within the meaning of Rule 37B(1) and, therefore, cannot attract an award of double costs.

[19]         Madam Justice Prowse considered both a strict and relaxed interpretation of Rule 37B(1). In doing so, she reviewed the history of Rule 37 and the enactment of Rule 37B.

[20]         She concluded that the enactment of Rule 37B was a move away from strict compliance as was the situation of Rule 37. In considering the offer, Madam Justice Prowse stated at para. 52:

That said, I am also of the view that the wording of the offer must be substantially compliant with the wording of subrule 1(c)(iii) such that no reasonable person could be misled as to the intent of the offer or the fact that it was an offer within the meaning of Rule 37B. In other words, the offer must be in writing, the wording must make it clear what party is making the offer and to whom it is made, and it must include the fact that the party making the offer is reserving the right to bring the offer to the attention of the court in relation to costs after judgment on all other issues in the proceeding.

[21]         The court in Roach upheld the trial judge’s finding that the offer meant the requirements of Rule 37B. At para. 54, Madam Justice Prowse endorsed the trial judge’s admonition that:

…counsel would be well advised to ensure that the language of their offers complies precisely with subrule 1(c)(iii) (and, in future, Rule 9-1) to avoid any possibility of their offers being found deficient. In this case, the offer was made just days after the new rule came into effect. It may be that the same measure of flexibility will not be accorded to offers in the future which are non-compliant. That is especially so if it proves that flexibility in the application of the Rule undermines its purpose of encouraging settlement of disputes in a fair, timely and cost-efficient manner, in accordance with the object and spirit of the Rules as a whole.

Madam Justice Hyslop then dismissed the application for double costs with the following reasons:

[25]         The offer does not meet the criteria set out in Roach. Rules 37(22) and (37) address the consequence of accepting an offer. There is nothing in the offer of the plaintiff to suggest that the plaintiff intends to bring the offer to the trial judge’s attention as it relates to costs.

[26]         The court’s discretion under Rule 37B comes into play after the court determines whether the offer complies with Rule 37B(1)(c) and as interpreted by Roach.

[27]         I dismiss the plaintiff’s application for double costs. The defendant shall have costs of this application pursuant to scale B to be set off against the costs otherwise awarded to the plaintiff.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B so this case will likely retain its value as a precedent moving forward.

ICBC Ordered to Pay "Double Costs" In Breach of Insurance Case; Timing and Finances of Parties Considered

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 60 Comments on ICBC Ordered to Pay "Double Costs" In Breach of Insurance Case; Timing and Finances of Parties Considered

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, ordering ICBC to pay ‘double costs‘ after losing a breach of insurance claim.
In today’s case (Barsaloux v. ICBC) the Plaintiff was the owner of a vehicle that was stolen and subsequently recovered.  It was damaged beyond repair.  The Plaintiff had insurance with ICBC and applied for coverage.  ICBC refused to pay stating that the Plaintiff was in breach of his policy of insurance for making a false declaration about the identity of the vehicle’s principal operator.
The Plaintiff successfully sued ICBC and was awarded $13,850 in damages.   Prior to trial, the Plaintiff made a formal settlement offer of $13,700.  The Plaintiff applied to Court to be awarded double costs under Rule 37B.
ICBC objected arguing that the offer was made only two days before trial and therefore there was no reasonable opportunity to consider it.  Mr. Justice Smith disagreed and awarded the Plaintiff double costs.  In doing so the Court made the following useful comments about two notable issues under Rule 37B, timing of settlement offers and the financial disparity between the parties:

[17] I stress that ICBC was directly a party to this action. That distinguishes this case from Bailey v. Jang, 2008 BCSC 1372, where Hinkson J. declined to consider the relative financial positions of the plaintiff and ICBC where ICBC’s involvement was in its capacity as insurer for the named defendant.

[18]         The unequal position of the parties is not determinative because, as counsel for ICBC points out, the same situation will exist in any case where there is a coverage dispute between the corporation and a policy holder. However, I am also of the view that, in this case, ICBC used its position of strength to maintain what it should have known was an untenable, or at least an insufficiently considered, position…

[22]         In the circumstances, ICBC should have realized the weakness of its position well before trial. The offer to settle was the only means the plaintiff had to exert additional, although modest, pressure and to provide ICBC with a further opportunity to re-assess and reconsider its position in light of the evidence that existed. I find that it was an offer that ought reasonably to have been accepted.

[23]         That conclusion is not altered by the fact that the revised offer to settle was delivered only two days before trial. ICBC relies on Bailey, where the court said seven days was a reasonable period of time to consider an offer and ordered double costs for the period beginning seven days after delivery of the offer.

[24]         I do not read Bailey as stating anything more than what was a reasonable period for consideration of an offer on the facts of that case. Rule 37B sets no time limit for delivery of a settlement offer. In that regard, it differs from the former Rule 37, where an offer delivered less than seven days before trial attracted different consequences than one delivered earlier. In fact, Rule 37B(6)(a) specifically refers to an offer that ought reasonably have been accepted “either on the date that the offer to settle was delivered or on any later date” (emphasis added).

[25]         In the circumstances of this case, including the issues involved, the delivery date of the offer gave ICBC sufficient time to consider its position before trial. As said above, ICBC should have known well before the offer was delivered that it could not prove an essential part of what it was alleging. I find the plaintiff is therefore entitled to double costs for the trial of this action.

As readers of this blog are likely aware, Rule 37B will be replaced with Rule 9 on July 1, 2010 when the new BC Civil Rules come into force. The new rule uses language that is almost identical to Rule 37B which will likely have cases such as this one retain their value as precedents moving forward.

BC Court of Appeal to Consider Discretionary Costs Awards and Formal Settlement Offers

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After dozens of trial judgements which have applied Rule 37B (the current rule dealing with formal settlement offers which will be replaced with the almost identical Rule 9 on July 1, 2010), the BC Court of Appeal has agreed to hear what I believe will be their first case dealing with the application of this rule.
Reasons for judgement were published today on the BC Court’s Website where the BC High Court agreed to hear such an appeal.  In today’s case (Gehlen v. Rana) the Plaintiff was injured in a BC motor vehicle collision.  The Plaintiff sued.  Prior to trial ICBC made a formal settlement offer of $22,000.  The Plaintiff rejected this and proceeded to trial.  At trial a jury awarded just over $13,000 in damages.
In these circumstances the trial judge had the discretion to order that the Plaintiff pay the Defendant’s trial costs.    Mr. Justice Leask refused to do so and instead ordered that the Defendant pay the Plaintiff’s costs.   (You can click here to read my article discussing the trial decision).
The Defendant (through ICBC) asked for permission for the BC Court of Appeal to hear the case and they agreed to do so.  In deciding that this case merits an appeal the BC High Court reasoned as follows:

[3]             I am satisfied that the defendant has met the test for leave to appeal on both grounds, as that test is set out in Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp. (1988), 19 C.P.C. 3d 396 (B.C.C.A.) (Chambers). With respect to the merits of the appeal, I appreciate that an order for costs is a discretionary order to which an appellate court will give considerable deference. I am nevertheless satisfied that the first ground of appeal may be characterized as a question of law, and the second as an error in principle. In fact, counsel advises that leave has been granted in another appeal on the question of whether it is appropriate to adjust costs on the basis that one party chose a jury trial.

[4]             The issue is of significance to the parties as the order under appeal entitles the plaintiff to costs in the range of $47,000, while if the defendant is successful he will recover costs in the range of $8,000.

[5]             It is more difficult to see significance to the practice in this appeal, but I do not find that militates against granting leave. The defendant does say that this court has not had the opportunity to hear many cases that provide guidance on R. 37B and its interaction with R. 57(10).

[6]             Finally, being an order for costs at the end of the action there is no need to consider possible delay due to the appeal.

As I recently wrote, ICBC has asked the Court of Appeal to also consider the issue of ‘costs’ awards when Plaintiff’s receive a judgement below $25,000 at a BC Supreme Court trial and these appeals may be heard together.

Clarity from the BC High Court will be welcome on numerous issues regarding the effects of formal settlement offers and costs awards after trial and I will be sure to report the highlights of the decisions when they are pronounced.

Defendant Awarded Double Costs for Successfully Defeating Claim Where "Walk Away" Offer was Made

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized.


Rule 37B, the BC Supreme Court Rule dealing with formal settlement offers, continues to be shaped by the Courts.  One factor that is not yet firmly established is what effect a “walk away” offer made by a Defendant has after a Plaintiff’s claim is dismissed at trial.
When a party sues for damages in the BC Supreme Court and later decides that their lawsuit is likely going to lose at trial they can discontinue.  If this is done the Defendant is able to seek their costs at the time of discontinuance unless they waive this right.  A common strategy of Defendants when they are confident they will win at trial is to make a formal “walk away” offer where they waive their right to costs if the Plaintiff discontinues.  If the Plaintiff does not take the offer and goes on to lose at trial the Defendant may be entitled to ‘double costs’ which could easily add up to tens of thousands of dollars.  Reasons for judgement were released this week by the BC Supreme Court dealing with a walk away offer.
In this week’s case (Riley v. Riley) the parties were involved in a lawsuit involving the transfer of real-estate between family members.  (although this was not a personal injury case there is no reason why the Court’s reasoning cannot be used in the injury claims context).  Prior to trial the Defendant made a formal offer under Rule 37B for the Plaintiff to walk away from the lawsuit on a ‘no costs‘ basis.  The Plaintiff refused the offer, went to trial where her case was dismissed.  The Defendant then asked the Court to award ‘double costs‘ and Mr. Justice Greyell agreed to do so.  In concluding that this was a fair result the Court provided the following reasons:

[20] In MacKinlay v. MacKinlay Estate, 2008 BCSC 1570, Savage J. also considered the effect of Rule 37B when a nominal offer was made.  The issue was whether double costs should be awarded where the successful defendant had made a nominal offer to settle.  He held, at paras. 34-35:

[34]      While a nominal offer might be described as strategic, it was a strategy aimed at persuading the Plaintiffs to discontinue the proceeding, an outcome that is favourable as compared to the outcome the Plaintiffs obtained at trial.  Such an offer is one of the few tools in the arsenal of a defendant of relatively modest means which might exert pressure on a plaintiff pursuing an unmeritorious claim.

[35]      In this regard, albeit in the context of the former Rule, the Court of Appeal in Kurylo v. Rai 2006 BCCA 176, 53 B.C.L.R. (4th) 214, at ¶ 7 said:

…. When a defendant assesses his position in litigation of any kind he may consider that the plaintiff has no case and if the case goes to trial, will fail.  But the defendant may also be willing to make some minor offer which would carry with it the costs in the hope that the action will go away and that he will not, thereafter, incur large legal bills to establish his legal position that the plaintiff has no case.

[21] I see no logical distinction between a nominal offer and an offer such as that made by the defendant in this case.  The principle is the same.  One party is provided with an offer to settle and if not successful at trial in advancing its position relative to the offer it may be held accountable for costs of pursuing the matter to trial.

[22] The second factor referred to in Rule 37B(6) clearly favours the defendant.  The judgment upheld the position she outlined in the offer to settle.  Had the plaintiff accepted it he would have saved not only his legal costs but also the legal costs he must pay to the defendant as the successful party.

[23] There are no other relevant circumstances which bear on my determination of double costs.  The caution expressed by Hall J.A. in Catalyst Paper Corporation v. Companhia de Navegaçäo Norsul, 2009 BCCA 16, 86 B.C.L.R. (4th) 17, is applicable in this case.  Based on the considerations in the above paragraphs, I conclude the plaintiff shall pay double costs to the defendant.  Those double costs shall commence seven days from the date the offer was made.

As mentioned at the start of this article, the formal offer Rule is still being shaped and the result of a ‘walk away’ offer is still not certain.  To read a case where the Court refused to award double costs where a walk away offer was made you can click here.
In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B so the issue of the effect of ‘walk away’ offers will continue to be judicially shaped moving forward.

Plaintiff Awarded Double Costs for Beating Pre Trial Formal Settlement Offer; Relevance of ICBC Insurance Considered

Written by admin on . Posted in BC Supreme Court Costs Cases, Settlement Law, Uncategorized.


In my continued efforts to track the judicial development of Rule 37B, reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff double costs for the trial of her ICBC claim.  The contentious issue of the existence of Insurance as a potentially relevant factor was also considered.
In today’s case (Pham-Fraser v. Smith) the Plaintiff was injured in a BC motor vehicle collision.  Before trial the Defendant (insured with ICBC) offered to settle under Rule 37B for $115,000.  The Plaintiff responded with a formal settlement offer of $149,000.  Neither party accepted the respective offers and proceeded to trial where the Court awarded just over $400,000 in total damages (click here to read my previous post discussing the trial judgement).
The Plaintiff, having comfortably beat her formal offer, asked the Court to award double costs under Rule 37B.  In granting the motion Mr. Justice Greyell held as follows:

[24] The second factor referred to in Rule 37B(6) also operates in the plaintiff’s favour.  There is a wide difference between the offer to settle and the final judgment.  The judgment is almost three times the amount offered.  The plaintiff’s offer was made because she wished to avoid court and having to give her evidence.  Some of her evidence was of a private nature relating to matters she did not wish to talk about in the public forum of a court of law (that is, how the accident affected her work and home life, her marital relationship with her husband after the accident, and the fact she suffered from incontinence).

[25] It is not necessary to consider factors set out in Rule 37B(6)(c) and (d).  I do not accept the plaintiff’s submission I ought to consider that the defendants, being represented by ICBC, are in a “sophisticated” position in terms of providing settlement instructions and that this is a factor to be taken into account and operate in the plaintiff’s favour in exercising my discretion under the rule.   The plaintiff’s argument seems to me to simply be another way of putting a “deep pockets” argument forward: an argument the courts have thus far rejected as being a factor to be considered in determining whether to award costs under Rule 37B.

[26] After considering the factors which I do consider relevant under Rule 37B, I conclude the plaintiff is entitled to an award of double costs.

As previously discussed, the BC Supreme Court is inconsistent on whether a Defendant being insured is a relevant factor under Rule 37B and clarity from the Court of Appeal would be welcome.  While more cases than not have held that insurance is not a relevant consideration it is not yet clear that this is correct.  If the law was settled it would assist lawyers in advising their clients of the potential risks and benefits of trial.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.

ICBC Injury Claims and Formal Settlement Offers; What You Need to Know

Written by admin on . Posted in BC Injury Claims Media Archives, Settlement Law, Uncategorized.

When taking an ICBC or other BC personal injury claim to trial in the Supreme Court it is vital to understand the financial consequences that can be triggered when formal settlement offers are made. I have written dozens of articles on this topic and you can access these here.
Below is a brief video discussing some of the key factors you need to consider when reviewing ICBC’s formal settlement offer under the BC Supreme Court Rules and further the issues you should consider when making your own formal settlement offer. I hope this information is of assistance.

More on Rule 37B; Settlement Offers, Acceptance and the Discretion of the Court

Written by admin on . Posted in Civil Procedure, Settlement Law, Uncategorized.


Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, addressing whether the BC Supreme Court has discretion to make costs awards after a formal settlement offer is accepted that specifically addresses costs consequences.
In today’s case (Hambrook v. Sandhu) the Plaintiff was injured in a 2004 BC collision.  He sued for damages.  The defence lawyer (instructed by ICBC) made a formal offer to settle the case for $75,000 plus costs up to the time that the offer was made with the Defendant being entitled to costs thereafter.  (this offer was made under the old Rule 37 which has now been repealed).
The Plaintiff initially dismissed the offer and continued in the lawsuit.   Three days before trial the Plaintiff accepted the offer.  The parties could not agree on the costs consequences.  The Plaintiff argued that Rule 37B (the rule that governed at the time of acceptance) gave the Court discretion to award her costs up to the date the offer was accepted.   Mr. Justice Verhoeven disagreed and held that when a settlement offer is accepted that specifically spells out the costs consequences there is no discretion for the Court to exercise under Rule 37B.  The Court provided the following reasons:
[28] But it has also been held that a settlement agreement containing terms as to payment of costs leaves the court with no room for the exercise of discretion pursuant to Rule 37B:  Buttar v. Di Spirito, 2009 BCSC 72 at para. 17..

[30] Madam Justice Gerow held that the court had no discretion to award costs in the matter before her. She stated at para. 11:

[11]      Both parties advanced arguments that the court has discretion under Rule 37B to make an order regarding costs. However, it is my opinion that the court has no discretion to make an order regarding costs in this matter. Mr. Buttar accepted the offer put forth by the defendants, including the offer regarding costs, without reservation. It is my view that Rule 37B does not confer a discretion on the court to set aside an agreement that has been entered into between the parties regarding costs.

[31] On this basis, where a party has specified the costs consequences of acceptance of its offer to settle, within an offer to settle to which Rule 37B applies, and a settlement agreement results in accordance with the offer, the court does not retain a discretion to depart from the terms of the agreement.

[32] Put another way, it remains open to litigating parties to make an offer to settle within the meaning of Rule 37B and to specify the costs consequences of acceptance of the offer. In my view this is a positive result. It allows the parties to create their own bargain. It provides for certainty, and avoids the need for applications to court where a settlement agreement is reached, while preserving the court’s discretion in cases where no settlement occurs…

[37] In my view the agreement that the parties made was unambiguous. The defendants’ offer was clear in relation to the costs consequence of acceptance; the defendants would pay the costs until the date of the offer, and if the plaintiff were to accept the offer after that date, then the defendants would be entitled to costs after that date.

[38] After July 1, 2008, when the new rule came into effect, the defendants’ offer remained open for acceptance in accordance with its terms. The defendants had not withdrawn it or amended it. The new rule affected the costs consequences in the event that the offer was not accepted, and the court went on to render a judgment. That did not occur…

[61] The plaintiff will receive costs in accordance with Appendix B, Scale B, for the time leading to delivery of the defendants’ offer to settle. The defendants will receive costs following that date. No argument was presented to me that there should be any distinction between the tariff items and disbursements. The applicable costs will include both tariff items and disbursements.

In my continued efforts to get us all prepared for the New BC Supreme Court Civil Rules I will again point out that Rule 37B will be replaced with Rule 9 under the New Rules. The new rule uses language that is almost identical to Rule 37B which should help cases such as this one retain their value as precedents.