Representative Experience
Costs Cut to Half a Trial Despite a Favourable Judgment
Winning a lawsuit at trial does not guarantee recovery of its full cost. ATAC LAW acted for the construction manager awarded judgment, and the court limited its costs to half the trial after finding the property owner had substantially succeeded in resisting most of the claims.
Mike C. Stewart is a partner at ATAC LAW, a professional engineer, and counsel in construction disputes. He holds the…
View Mike's bioThe Dispute
A construction manager pursued an association that had hired it, seeking unpaid fees and a share of the profit the project was expected to earn. Years of litigation and a formal accounting reduced several of those claims well below what the manager first sought, though the manager still walked away owed money. Once that amount was fixed, a second dispute began over who would pay for the lawsuit itself, since a thirteen-day trial had ranged over issues well beyond what the manager ultimately recovered.
The Parties’ Positions
JM Bay Properties Inc. sought its costs of the action, relying on Rule 14-1(9) of the Supreme Court Civil Rules, under which costs follow the event unless the court otherwise orders. It argued that dismissal of some claims and recovery of a lesser amount than sought did not disentitle a successful party to its costs. It said it had enjoyed substantial success on the issues that consumed most of the thirteen-day trial: the actual cost of construction, its claim to a construction management fee and a rezoning work fee, and its claim for anticipated loss of profit.
Tung Cheng Yuen Buddhist Association resisted a full costs award, invoking the same rule’s exception for a case in which the court otherwise orders. It argued the result was one of divided success rather than substantial success for JM Bay. It pointed to the construction management fee, which JM Bay had claimed at 7.5 percent of an alleged $7.7 million construction budget but ultimately conceded should be based on actual costs of $60,000, reducing the certified fee to $4,500. It also pointed to the rezoning work fee, which the parties settled at $6,000 against a claim of over $40,000. It also relied on its success on the overhead component of the loss-of-profit claim, which held the eventual award to less than half of what JM Bay had sought at trial. Rather than seeking a costs order in its favour, Tung Cheng proposed that JM Bay recover only half its costs of the trial.
The Court’s Decision
The court’s reasons, JM Bay Properties Inc. v. Tung Cheng Yuen Buddhist Association, 2025 BCSC 2281, agreed with Tung Cheng that JM Bay had not enjoyed substantial success on its claims. Tung Cheng, the court found, had ultimately succeeded in resisting most of what JM Bay advanced. Looking at the matter in broad terms rather than parsing each issue, the court adopted Tung Cheng’s proposed approach: costs at Scale B for half of the thirteen-day trial and for one of the two days before Registrar Gaily, rather than for the whole proceeding. Each side bore its own costs of the interest and costs hearing itself, since Tung Cheng had not asked for costs despite prevailing there. JM Bay’s recoverable costs were halved despite the money judgment in its favour.
Key Lessons for Construction Managers and Project Owners
- Track which issues consumed trial time, not only the final judgment. JM Bay recovered money overall, but the court measured costs entitlement by which side had substantially succeeded on the issues that took up most of a thirteen-day construction trial, and found that had been Tung Cheng.
- Expect an inflated claim to work against a costs award. JM Bay’s construction management fee, pressed at 7.5 percent of an alleged $7.7 million budget, was assessed at $4,500, and that gap fed directly into the finding that JM Bay had not substantially succeeded.
- A party resisting a claim can propose its own costs compromise rather than opposing costs outright. Tung Cheng proposed JM Bay recover only half its trial costs instead of seeking its own costs order, and the court adopted that approach without finely parsing each issue.
- Address the costs of a later hearing separately from the trial. Each side bore its own costs of the interest and costs hearing, because Tung Cheng prevailed there but had not asked for costs of it.
The costs award in this hearing turned on which side substantially succeeded on the issues that consumed the trial. A similar action may resolve its costs differently.
ATAC LAW represents construction managers, contractors and project owners in construction disputes, including the costs that follow a trial or an assessment.
Mike C. Stewart acted for JM Bay Properties Inc. at the hearing that fixed interest and costs.