The receiver's pre-trial offer was a bargain. Saying no got expensive
A BC receiver chasing money for creditors just won a costs penalty against a developer that refused to settle - then lost at trial.
The Supreme Court of British Columbia ruled on June 5, 2026 that Boffo Developments (Smithe) Ltd. and Boffo Investment Corp. must pay double costs to Smithe Residences Ltd. - a company in receivership, with MNP Ltd. acting as receiver - covering the period from December 31, 2024 through the end of trial (Smithe Residences Ltd., by its receiver, MNP Ltd. v Boffo Investment Corp., 2026 BCSC 1034).
The penalty traces back to a single rejected offer. On December 30, 2024, days before trial, the receiver offered to settle the action for $5 million. The defendants turned it down and countered the next day at $4,550,000. The case went to a 28-day trial instead, and the court found the Boffo companies jointly and severally liable for $5,945,162 in damages plus $861,482.58 in prejudgment interest.
Justice J. Walker found the $5 million offer was one the defendants should reasonably have accepted. The fact that their own counteroffer landed so close to it, the court said, showed the offer was a serious attempt to settle and not a nuisance number. Under British Columbia's civil rules, when a party refuses a settlement offer it reasonably should have accepted and then does worse at trial, the court can award that party's opponent double costs from the date of the offer.
For anyone funding or overseeing litigation - including the creditors standing behind a receivership - the ruling is a clean illustration of settlement risk. Refusing a credible offer and pressing on to trial does not just risk a loss on the merits. It can add a doubled costs bill on top of the judgment.
The receiver did not win everything it asked for. It also sought costs at the higher Scale C, reserved for cases of more than ordinary difficulty, pointing to the 28-day trial, more than 20 witnesses including seven experts, and 29 pretrial applications over roughly seven and a half years. The plaintiff described the defence as a "scorched earth approach to litigation" and accused the defendants of trying to "starve out and outspend" a receiver.
Justice Walker was not persuaded. While accepting the case was hard-fought and that the defendants were at times obstructive, the judge noted the parties had filed an agreed statement of facts and joint document books, and that objections at trial were focused. The Scale C application was dismissed, with costs to be assessed on the standard Scale B.
The defendants lost their own bid too. They had asked the court to deny the plaintiff a third of its costs, arguing the receiver pressed unproven allegations of bad faith and accounting misconduct and threatened to damage their reputation. Justice Walker declined, finding the plaintiff's conduct was not deserving of rebuke through special costs.
The plaintiff filed its claim on December 29, 2017. Roughly eight and a half years later, the receiver leaves with its judgment, prejudgment interest, and a double-costs award - assessed, in the end, on the ordinary scale.
