RALPH DAWE APPELLANT AND: RYAN MORGAN RESPONDENT, 2023 NLCA 11

IN THE COURT OF APPEAL OF NEWFOUNDLAND AND LABRADOR Citation: Dawe v. Morgan, 2023 NLCA 11 Date: April 13, 2023 Docket Number: 202101H0025 BETWEEN: RALPH DAWE APPELLANT AND: RYAN MORGAN RESPONDENT Coram: L.R. Hoegg, G.D. Butler and F.J. Knickle JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador, General Division 201801G4295 Appeal Heard: December 14, 2022 Judgment Rendered: April 13, 2023 Reasons for Judgment by: Hoegg J.A. Concurred in by: Butler and Knickle JJ.A. Counsel for the Appellant: John C. Crosbie and Paul B.

Sheppard Counsel for the Respondent: Bob Buckingham Authorities Cited: CASES CITED: Burton et al. v. Global Benefit Plan Consultants Inc. et al. (1999), (NL SC), 183 Nfld. & P.E.I.R.86 (NFSC (TD)); Hobbs v. Hobbs, 2013 NLTD(G) 130, 341 Nfld. & P.E.I.R. 122; Steele v. Rendell, 2017 NLCA 36, 1 C.A.N.L.R. 790;

Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6, [2013] 1 S.C.R. 271; Hiscott v. Hall, 2015 NLCA 1, 361 Nfld. &P.E.I.R. 141; Mega Roofing and Waterproofing Ltd. v. Dobbin (N.D.) Ltd. et al. (1996), (NL SC), 143 Nfld. &P.E.I.R. 14 (NFSC (TD)); Rendell v. Steele, 2016 NLTD(G) 44, 380 Nfld. & P.E.I.R. 60, aff’d 2017 NLCA 36, 1 C.A.N.L.R. 790; Finnv. St. John’s (City), 2007 NLCA 46, 268 Nfld. & P.E.I.R. 13; Henley Estate (Re), 2023 NLSC 48; Barresi v. Jones Lang Lasalle RealEstate Services Inc., 2019 ONCA 884. STATUTES CONSIDERED: Judicature Act, RSNL 1990, c. J-4,

section 32. RULES CONSIDERED: Rules of the Supreme Court, 1986, SNL 1986, c. 42

Schedule D, rule 20A. Hoegg J.A.: INTRODUCTION [1] This appeal concerns the effect of a rule 20A offer to settle under the Rules of the Supreme Court, 1986, SNL 1986, c. 42,Schedule D. The offer was made by the appellant Ralph Dawe to the respondent Ryan Morgan prior to the hearing of Mr. Morgan’soriginating application. His application sought an order permitting him to remove two derelict vehicles from property in Port de Grave,Newfoundland and Labrador, and that Mr. Dawe reimburse him for the expense of so doing. [2] Mr. Morgan did not accept Mr. Dawe’s rule 20A offer to settle and Mr. Dawe did not revoke it.

Mr. Morgan’s application washeard, but the Judge who heard it passed away before rendering his decision. The parties subsequently applied to have the applicationreheard by another judge, and the Judge reheard it by reviewing the affidavits and memoranda filed by the parties, and listening to theaudio recordings of the cross-examinations of the affiants and the arguments of counsel in the original hearing, in accordance with theprovisions of

section 32 of the Judicature Act, RSNL 1990, c. J-4. Mr. Morgan’s Application to Remove Mr. Dawe’s Vehicles [3] Ownership of the property on which the vehicles were located was in dispute, and it was not established in Mr. Morgan’sapplication. Neither was Mr. Morgan able to demonstrate that he and his predecessors had engaged in acts of possession of sufficientquality and duration to support an action in trespass against Mr. Dawe. Accordingly, the Judge had no basis upon which to order theremoval of the vehicles from the property upon Mr. Morgan’s application. The Judge dismissed Mr.

Morgan’s application, and awardedMr. Dawe his column 3 costs under the Rules of the Supreme Court, 1986. Mr. Dawe’s Application for Rule 20A Costs Upon Dismissal of Mr. Morgan’s Application [4] Mr. Dawe, having made a rule 20A offer to settle more than seven days prior to the original hearing, then applied to the Judgefor an order replacing the original costs order with an order awarding him (Mr. Dawe) double party and party costs in accordance withthe presumption in rule 20A.08(2.1). [5] The Judge dismissed Mr. Dawe’s application, maintained the original costs order respecting Mr.

Morgan’s application, andordered Mr. Dawe and Mr. Morgan to each bear their own costs respecting Mr. Dawe’s application. [6] In dismissing Mr. Dawe’s application, the Judge found that Mr. Dawe’s offer to settle met the formal requirements of rule20A. However, he went on to consider whether Mr. Dawe’s offer triggered the cost consequences of the rule, saying: The offer essentially required Mr. Morgan to give up his asserted claim that Mr.

Dawe remove the vehicles from the property in returnfor nothing more than the waiver of costs that would otherwise have been due on discontinuance. (Transcript of Proceedings, April 12, 2021, at 3, lines 22-25, at 4, lines 1-2 [Decision]) [7] The Judge referred to Mr. Dawe’s offer as nominal and one that contained no element of compromise (Decision, at 6, lines 2-11). The Judge quoted from Burton et al. v.

Global Benefit Plan Consultants Inc. et al. (1999), (NL SC), 183 Nfld.& P.E.I.R. 86 (NFSC (TD)), a trial decision which states, at paragraph 55, that if a rule 20A.08 offer is nominal or does not contain anelement of compromise, the party making the offer should not benefit from any presumptive rule of entitlement to post-offer costs on“some other greater basis” than party and party costs (Decision, at 5-6). Burton pertained to a very different factual situation under aprevious version of rule 20A. Rule 20A.08(2.1), under which Mr. Dawe claims, came into force years later, in 2012.

The quantum ofelevated damages is now specified to be “double party and party costs”. [8] The Judge also referenced rule 20A.10, saying that it gives a court discretion to override the presumption of double party andparty costs in the rule. He then reasoned that when a rule 20A offer to settle does not contain an element of compromise, is nominal, orotherwise requires capitulation, the basis of post offer costs entitlement:

… should be determined on the basis of the interest of justice and fairness after consideration of all the relevant circumstances. These circumstances will include at least the nature of the claim, the merits of the claim and any defence and any opportunity for resolution which can be attributed solely to the offer. ( Decision , at 6, lines 8-15) The Judge then identified the question before him to be whether it was “just and fair” to award Mr. Dawe his double party and party costs ( Decision , at 6, lines 16-18). [ 9 ] In determining whether it was just and fair to grant Mr.

Dawe’s application, the Judge distinguished Hobbs v. Hobbs , 2013 NLTD(G) 130, 341 Nfld. & P.E.I.R. 122 , a case similar to this case, reasoning that Mr. Dawe had “a real choice [to remove the vehicles] … from the property at no loss to him, other than perhaps the expense of moving them, which he would no doubt ha[ve] to incur at some point in the future anyway…” ( Decision , at 9, lines 1-9). [ 10 ] The Judge concluded that it was just and fair to leave his original costs order in place, and exercised his discretion to dismiss Mr. Dawe’s application. [ 11 ] Mr. Dawe appeals the Judge’s decision.

ISSUES [ 12 ] On appeal, Mr. Dawe alleges that the Judge made three errors of principle in dismissing his rule 20A application. First , he says that the Judge erred in principle in finding that Mr. Dawe’s offer did not contain an element of compromise. Second , he says that the Judge erred in principle in reasoning that Mr. Dawe ought to have capitulated to Mr. Morgan’s application despite the Judge not being able to so order. Further on this point, Mr. Dawe alleges the Judge considered factors irrelevant to the issue before him. Third , Mr.

Dawe argues that the Judge erred in principle by making a decision which is inconsistent with the policy goals of rule 20A. [ 13 ] For the reasons that follow, I would allow Mr. Dawe’s appeal. STANDARD OF REVIEW [ 14 ] The standard of review respecting cost awards is settled law. Cost awards are discretionary. However, such discretion must be exercised judicially and according to principle. Costs awards should only be set aside on appeal if they result from error in principle or if they are plainly wrong ( Steele v. Rendell , 2017 NLCA 36 , 1 C.A.N.L.R. 790 , at para. 10 , relying on Sun Indalex Finance, LLC v.

United Steelworkers , 2013 SCC 6 , [2013] 1 S.C.R. 271, at para. 247 ). See also Hiscott v. Hall , 2015 NLCA 1 , 361 Nfld. & P.E.I.R. 141, at paras. 6-13 . ANALYSIS Rule 20A Offers to Settle [ 15 ] Simply put, rule 20A is designed to foster the settlement of litigation. It encourages litigants to take a hard look at the viability of their positions by making or accepting offers to settle, thereby settling their differences and sending to judicial adjudication only matters which truly require it.

Offers to settle made under rule 20A.08 presume that if a litigant does not accept an offer to settle made to them under the rule, they do so knowing that a double party and party costs order will likely be made against them if judicial determination is less favorable than the terms of the offer. [ 16 ] Rule 20A.08(2.1), on which Mr. Dawe relies, reads:

(2.1) Unless ordered otherwise, when (

a) an offer to settle was made by a defendant (

i) at least 7 days before the commencement of the trial or hearing of the proceeding, and (ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where the plaintiffs claim is dismissed, the defendant shall be entitled to party and party costs plus taxed disbursements to the date of service of the offer to settle and thereafter to double party and party costs plus taxed disbursements. Rule 20A.08(2.1) addresses Mr. Dawe’s exact situation, that being that he, a defendant, made a rule 20A offer to settle to Mr. Morgan, a plaintiff, respecting Mr. Morgan’s claim. Mr. Dawe did not revoke the offer and Mr. Morgan did not accept it. Given that Mr. Morgan’s claim was dismissed after judicial determination, the rule states that Mr.

Dawe “shall” be entitled to double party and party costs from the date of service of his offer to settle. [ 17 ] Rule 20A.10 provides a judge with some discretion as to costs: Notwithstanding the provisions of this rule, the court, in exercising its discretion as to costs, may take into account any offer to settle made in writing, the date the offer to settle was served, the terms thereof and any other relevant matters. The discretion this rule affords is limited, as will be discussed below.

Did the Judge Err in Finding that Mr. Dawe’s Offer Did Not Contain an Element of Compromise? [ 18 ] Mr. Dawe maintains that the Judge erred in finding that Mr. Dawe’s offer did not contain an element of compromise. I agree. [ 19 ] Mr. Dawe’s offer was to forego the costs he would be entitled to if Mr. Morgan discontinued his application before its hearing. We do not know what these costs would be, but we do know that costs respecting the proceedings had been incurred. The Judge characterized Mr. Dawe’s offer as nominal.

Whether costs incurred to the date of an offer to settle are nominal depends on the context of the particular litigation and the circumstances of the parties involved. What constitutes a nominal offer in one case may not be a nominal offer in another. In any event, given the nature of this litigation, its protracted history, and the circumstances of the parties that can be garnered from the record, the costs involved in this litigation cannot be characterized as nominal to either party. [ 20 ] The Judge found that Mr.

Dawe’s offer did not contain an element of compromise, and he distinguished it from the rule 20A offer to settle in Hobbs . In Hobbs , the trial court found that applicant Bernard Hobbs’s rule 20A offer to settle, which was to forego costs incurred to date if respondent Alexander Hobbs would remove the barrier to Bernard Hobbs’s access to his land, contained an element of compromise.

The Court reasoned that there was nothing else that Bernard Hobbs could offer to Alexander Hobbs to encourage him to focus on the viability of his position and the risk of litigating it ( Hobbs , at para. 18). [ 21 ] It is hard to see how the parties’ situation in this case differs from that in Hobbs . In Hobbs , it was open to Alexander Hobbs to consider the viability of his position and capitulate by removing the fence he erected, in exchange for Bernard Hobbs’s offer to forego the costs to which he would be entitled were Alexander Hobbs to simply remove the fence at that point in the litigation.

In this case, it was open to Mr. Morgan to consider the viability of his position and capitulate by withdrawing his application, thereby avoiding paying Mr. Dawe’s costs to date, and also, importantly, alleviating the risk of a double party and party costs order against him if his (Mr. Morgan’

s) application was dismissed. Like Bernard Hobbs, there was nothing else Mr. Dawe could offer to Mr. Morgan to encourage him to focus on the viability of his application and the risk of litigating it. Mr. Dawe’s offer to forego his costs incurred to the date of his rule 20A offer was his compromise — it is what he gave up to encourage Mr. Morgan to focus on the viability of his position. [ 22 ] Similarly, in Steele , the applicant Mrs. Rendell made a rule 20A offer to settle to the respondent Mr. Steele which required Mr. Steele to capitulate by acknowledging Mrs.

Rendell’s title to the property and agreeing to pay her costs capped at a lesser amount than would otherwise be owing on a discontinuance. Mrs. Rendell’s compromise was to forego her total costs incurred to date by offering to settle for a lesser, capped amount. This offer was ruled by the trial judge to be a valid rule 20A offer to settle under rule 20A.08(1), and his decision was upheld by this Court. [ 23 ] This case, like Hobbs and Steele , involved a property dispute rather than money damages.

In such cases there is often no compromise, other than foregoing or capping costs, available, which could serve to focus the parties on the viability of their positions and the risks of litigation. This is not to say that foregoing or capping costs are only compromises in cases which involve property disputes.

Rather, the fact that these cases both involved property disputes serves to illustrate that in principle, offers to forego or cap costs do contain an element of compromise and can be valid rule 20A offers to settle, which attract the costs consequences of the rule. [ 24 ] In any event, there is nothing in rule 20A that suggests that an offer devoid of compromise displaces the presumption of double party and party costs.

While such a consideration may have some relevance in special cases involving significant liquidated damages when considering whether the case is exceptional under rule 20A.10, it does not trigger the exercise of residual discretion under rule 20A.10. [ 25 ] Accordingly, the Judge erred in finding that Mr. Dawe’s offer to forego costs did not contain an element of compromise. Mr. Dawe’s offer did contain a compromise. Further, the Judge’s finding of no compromise did not authorize him to override the presumption in rule 20A.08(2.1) and engage in a fairness and justice analysis under rule 20A.10.

Did the Judge Err in Dismissing Mr. Dawe’s Application Because He Did Not Capitulate to Mr. Morgan’s Request? [ 26 ] In exercising his discretion under rule 20A.10, the Judge stated the question before him to be whether it was “just and fair” to award Mr. Dawe double party and party costs. In considering this question, the Judge reasoned that Mr. Dawe “did have a real choice” to “completely obviat[e] the necessity of [the] proceeding” ( Decision , at 9, lines 1-22). The choice the Judge stated that Mr. Dawe had, and by implication ought to have made, was to capitulate to Mr.

Morgan’s application by moving his vehicles even though the Judge could not order them to be removed. [ 27 ] Parties in a litigation always have the choice to capitulate, with or without costs implications. Such choices are exercised by the parties, unencumbered by judicial opinion. In this case, the Judge opined that Mr. Dawe should have capitulated to Mr. Morgan’s application to remove the vehicles even though the Judge had no legal basis to order him to do so, and despite dismissing Mr. Morgan’s application. It is not clear why the Judge so reasoned. [ 28 ] Capitulation in a legal proceeding is not unusual.

Moreover, it informs the rationale of rule 20A offers to settle. The rationale is that when faced with an offer to settle which involves the offeree’s capitulation, the offeree, after a hard look at their position, may realize that they should capitulate because the risk of losing and having to pay double party and party costs is not one they are prepared to take. However, that is not this case. In this case, Mr. Morgan made no offer to settle, so Mr. Dawe did not have to consider whether to capitulate. This was reaffirmed by the Judge’s decision that Mr. Morgan was not permitted to remove the vehicles.

By making his offer to settle to Mr. Morgan, Mr. Dawe, confident but of course not certain of his legal position, was urging Mr. Morgan to take a hard look at his position, in the hope that he would realize its weakness and capitulate, not the other way around. [ 29 ] In reasoning that Mr. Dawe ought to have capitulated even though the Judge could not order him do so, the Judge stated that the vehicles were derelict, that Mr.

Dawe would not suffer any loss “other than perhaps the expense of moving them” ( Decision , at 9, lines 7-8), and that capitulation “would not in any way have constituted a concession regarding ownership of the land and Mr. Dawe could easily have removed the vehicles but advised Mr. Morgan that he was maintaining the claim to that portion of the land” ( Decision , at 9, lines 12-17).

[30] The Judge’s consideration of the state of the vehicles, the cost to Mr. Dawe of removing them, and their effect on title to theproperty was irrelevant to Mr. Dawe’s offer to settle and whether he should be awarded double party and party costs. [31] The Judge’s reasoning that Mr. Dawe’s failure to capitulate displaced the presumption that Mr. Dawe would be awardeddouble party and party costs under rule 20A.08(2.1), and that it triggered his exercise of discretion under rule 20A.10, is no basis fordenying Mr. Dawe’s entitlement to double party and party costs under the rule.

It is not for a judge to say that a defendant ought to havecapitulated to a plaintiff’s claim when the judge dismisses the plaintiff’s claim. Such reasoning is not engaged by the rule and is plainlywrong. Did the Judge Err by Contravening the Policy of Rule 20A? [32] Rule 20A.08(2.1) stipulates that when the requirements of the rule are met, a defendant making such an offer “shall” be entitledto double party and party costs from the date of service of the offer.

The language is mandatory; it creates a presumption that if therequirements set out in the rule are established, double party and party costs from the date the offer is served will follow. [33] In Steele, Justice White explained the policy behind rule 20A offers to settle by quoting from Mega Roofing and WaterproofingLtd. v.

Dobbin (N.D.) Ltd. et. al. (1996), (NL SC), 143 Nfld. & P.E.I.R. 14 (NFSC (TD)): [26] Rule 20A provides that a party who refuses a formal offer to settle, proceeds to trial, and receives a less favourable outcome thanthe offer, will pay increased costs (double costs unless otherwise ordered) from the date of the offer. The underlying policy wasexplained by Orsborn J. in his often-cited decision Mega Roofing and Waterproofing Ltd. v. Dobbin (N.D.) Ltd. (1996), (NL SC), 143 Nfld. & P.E.I.R. 14 (Nfld.

T.D.) at p. 17: Rule 20A is one of a group of new rules recently enacted with a view to streamlining the civil trial process. These rules… are intended …to focus the parties’ attention on the primary issues in dispute, to encourage and facilitate pretrial settlement, and to send to a full trialonly those issues or disputes which properly require for their adjudication the full trial process.

Part of this regime for encouragingsettlements contemplates that adverse costs consequences will result if a party fails to accept an offer which is less than the amountultimately awarded. … (Emphasis in original.) [34] In Rendell v. Steele, 2016 NLTD(G) 44, 380 Nfld. & P.E.I.R. 60, aff’d 2017 NLCA 36, 1 C.A.N.L.R. 790, Burrage J. had alsoquoted from paragraphs 21-25 of Mega Roofing to explain the rationale of rule 20A.

At paragraph 33, he stated: Following a review of the policy underlying the costs consequences of the rule respecting offers to settle … Orsborn J. in Mega Roofing& Waterproofing Ltd., stated: [21] It is clear that, across Canada, the imposition of severe and adverse costs consequences is seen as necessary in order to encouragethe making and acceptance of reasonable settlement offers prior to trial. [22] The decisions previously referred to confirm that this objective will only be achieved through a consistent and predictableapplication of the costs rule.

Obviously, parties making and considering a settlement offer need to know all the economic parameters ofthe offer, including the costs consequences of proceeding to trial and judgment. Other jurisdictions have chosen to promote consistencyand predictability by specifying the extent of the consequences, with a residual judicial discretion for 'special reason'. The intention isthat the exercise of discretion will be the exception rather than the rule; the normal costs consequence will be the award of a stipulated'deterrent'. [23] ...

The intention of the rule will be served only if, in the case of a defendant's failure to accept an offer and the plaintiff's greaterrecovery at trial, the cost consequences visited on the defendant by the trial judge are both severe and predictable. [24] A party, either plaintiff or defendant, who receives a pre-trial offer to settle should consider most seriously the reasonableness ofthe offer against that party's assessment of the likely outcome of the trial. … [25] Faced with an offer to settle, a party must objectively assess the economics of proceeding further. … A party may decide toaccept the offer or to itself make an offer.

If, having assessed the offer, it chooses to do nothing, that choice carries with it the implicitdetermination that the party is satisfied that it will achieve a better result at trial. This is the party's own determination to make — itknows the strengths and weaknesses of its case. But such a determination also indicates that the party is willing to accept the risk ofproceeding further. There is a willingness to accept the consequences of being wrong.

A party who has offered to settle should not bearthe expense of proceeding to trial because of the other party's over-optimistic assessment of its case. (Emphasis in original.) [35] In Steele, this explanation of the policy of the rule was endorsed, except for the word “severe”, which had been criticized bythis Court in Finn v. St.

John’s (City), 2007 NLCA 46, 268 Nfld. & P.E.I.R. 13, and which in any event has been overtaken by theamendments to rule 20A.08 which now presume the costs consequences of the rule to be double party and party costs. [36] In Steele, White J.A. also referenced rule 20A.10, which gives a judge residual discretion to modify application of the rule in“special cases” (para. 30).

However, he made clear that this discretion should be exercised rarely, quoting with approval JusticeBurrage’s explanation of why in Rendell: [30] Although trial judges have a discretion to modify the application of the rule in special cases, the trial judge explained why thisdiscretion should rarely be exercised: [35] … [P]redictability as to the cost consequences from the failure to accept an offer of settlement is a cornerstone to the Rule. This

predictability enables the party faced with an Offer to Settle to objectively assess the economics of proceeding further. … The predictability of the cost consequences means that in all but the most unusual circumstances the Court should adhere to the costs set forth in the Rule, which in this case is double party and party costs. [ 37 ] In Finn , this Court also recognized that the objective of settlement will not be met unless the presumptions in rule 20A.08 offers to settle are applied (paras. 75, 80).

See also the recent decision in Henley Estate (Re) , 2023 NLSC 48 , at paragraph 37 , wherein the trial court stated, “While the Court retains its jurisdiction to make an award that is less than that prescribed by the Rules , its discretion is constrained and should be exercised in only the clearest of cases”. [ 38 ] In

summary, rule 20A is designed to foster the settlement of litigation by encouraging litigants to take a hard look at the viability, including the merits and legality of their positions, or their “strengths and weaknesses” and “the economics of proceeding further” (per Orsborn J. in Mega Roofing , at para. 25 , and Burrage J. in Rendell , at para. 35 ). When faced with a rule 20A offer to settle, a litigant is meant to take such a hard look at their position in the knowledge that an adverse outcome following judicial determination would likely involve a double party and party costs order against them.

In this way, litigants are encouraged to settle their differences and send to judicial adjudication only matters which truly require it. [ 39 ] Once the requirements set out in the rule are established, costs consequences should follow in all but exceptional cases ( Steele , at para. 30 ). If they do not, the incentive to settle, which is the purpose of the rule, is defeated, and the rule is frustrated.

It is for this reason that the rule must be applied in a consistent and predictable fashion, and why the residual discretion in rule 20A.10 must be exercised rarely, and only in exceptional, or “special cases” (per White J.A. in Steele , at para. 30 ). The exercise of such discretion in exceptional cases must be for relevant reasons and in accordance with the purpose and rationale of the rule. The same approach was taken in Barresi v.

Jones Lang Lasalle Real Estate Services Inc. , 2019 ONCA 884 , at paragraphs 17-19 , respecting application of Ontario’s very similar presumptive offer to settle rule, and the necessity of fettering the discretion to overrule it. [ 40 ] In this case, the Judge’s decision does not comport with the rationale of rule 20A. His findings were that Mr. Dawe’s offer was nominal and contained no element of compromise, and that he should have capitulated to Mr. Morgan’s application. They were erroneous findings that did not warrant the Judge exercising his residual discretion to override the presumption in the rule.

CONCLUSION [ 41 ] In the result, the Judge erred in dismissing Mr. Dawe’s rule 20A application. Accordingly, the Judge’s decision must be set aside. REMEDY [ 42 ] It now falls to this Court to determine whether Mr. Dawe’s rule 20A offer to settle should attract the cost consequences of rule 20A.08(2.1). [ 43 ] As the Judge found, Mr. Dawe’s offer to settle met the requirements set out in the rule. By not accepting Mr. Dawe’s offer and proceeding to judicial determination of his application, Mr. Morgan assumed the risk of having to pay Mr.

Dawe’s double party and party costs pursuant to rule 20A.08(2.1) if his application were dismissed. Given that it was dismissed, the presumption in the rule that double party and party costs be awarded to Mr. Dawe should follow, unless the case is exceptional, such that displacing the presumption is justified, and bearing in mind that the discretion in rule 20A.10 must be rarely exercised. [ 44 ] Mr. Morgan has not argued that his case is exceptional, and neither does it so appear.

His argument on appeal is simply that costs are discretionary and that this Court should not interfere with the Judge’s discretionary decision to deny Mr. Dawe his double party and party costs. His position fails to recognize the rationale of the rule, that it is presumptive, and that the exercise of residual discretion in rule 20A.10 to overcome the presumption must be rare, for relevant reasons, and only in special or exceptional cases. [ 45 ] Given that this case is not special or exceptional, I see no reason to deny Mr.

Dawe his double party and party costs from the date of service of his offer to settle in accordance with the presumption in rule 20A.08(2.1). Accordingly, I would allow Mr. Dawe’s appeal and award him his double party and party costs on Column 3, plus taxed disbursements, in accordance with rule 20A.08(2.1). COSTS ON APPEAL [ 46 ] Mr. Dawe argues that he should be awarded solicitor-client costs if his appeal to this Court is successful. I do not agree. First, rule 20A does not, on its face, apply to proceedings in this Court. Second, and importantly, while it is so that Mr.

Morgan’s position was ill-thought-out and unsound in law, and that he took the risk of an adverse ruling and a double party and party costs award against him by proceeding with his application in the court below, his response to Mr. Dawe’s appeal in this Court did not exhibit reprehensible or other conduct that would justify an award of solicitor-client or other enhanced costs against him. Accordingly, I would award Mr. Dawe his party and party costs on appeal in accordance with Column 3. DISPOSITION [ 47 ] In the result, I would allow Mr.

Dawe’s appeal, and award him his party and party costs on Column 3 to the date of service of his rule 20A offer to settle, his double party and party costs on Column 3 thereafter to the date of the conclusion of Mr. Morgan’s application in the Supreme Court of Newfoundland and Labrador, General Division, and his Column 3 costs on appeal, plus his taxed disbursements throughout. _________________________ L. R. Hoegg J.A.

I concur: _____________________________ G. D. Butler J.A. I concur: _____________________________ F. J. Knickle J.A.