How a Well-Timed Offer Turned a Modest Win Into a Full Recovery

The situation

Reza and Niloufar owned a modest bungalow in Fort Erie, bought a decade earlier when Reza was building his landscaping business and Niloufar was establishing herself as a hairdresser. In their second spring in the house, they noticed water pooling along the basement wall after every heavy rain. A contractor they hired, Meron, quoted them roughly $22,000 to excavate the foundation, apply a waterproof membrane and install new drainage tile along the base of the wall.

The work was completed over three weeks that summer. The invoice was paid in full. The following spring, the water came back — worse than before, with a visible crack running along the same wall and dampness spreading across the basement floor. Reza called Meron repeatedly. Meron came out once, said the crack was unrelated to the waterproofing work, and stopped returning calls after that.

Reza and Niloufar had a structural engineer inspect the foundation. The engineer's report concluded the drainage tile had been installed at the wrong depth and pitched in the wrong direction, so water was being funneled back toward the foundation instead of away from it. Fixing it properly — re-excavating, correcting the tile, repairing the crack and restoring the landscaping — was going to cost roughly $58,000, nearly triple what they had paid for the original job.

The legal problem

Reza and Niloufar came to Treadstone Law wanting to sue Meron for the cost of doing the work over properly. The claim itself was straightforward in principle: a contractor is expected to perform work to a reasonable standard, and if defective work causes damage that has to be fixed, the party who did the defective work is generally responsible for the cost of putting things right. The engineer's report gave them solid evidence that the original job had been done incorrectly.

The harder question was practical, not legal: even a clear win in court does not automatically mean a full recovery. Litigation in the Superior Court is expensive to run for both sides, and Ontario's cost rules do not simply hand the winner their legal bill. Instead, the court has discretion over costs, and that discretion is shaped heavily by formal settlement offers exchanged before trial — a mechanic that most homeowners have never heard of and that can swing the final result by tens of thousands of dollars.

Meron denied responsibility outright, arguing the crack was pre-existing settlement unrelated to the drainage work, and that in any event the couple had waited too long to raise it. With a claim in the tens of thousands of dollars and a contractor unwilling to negotiate meaningfully, Reza and Niloufar were facing a trial where winning the underlying argument and winning financially were not guaranteed to be the same thing.

What we did

1. Built the claim around the engineer's findings. The claim set out the original contract, the defective installation, and the cost of remediation, supported by the engineer's report and photographs of the crack and standing water. This gave the couple a documented, professionally-assessed figure to sue for rather than a rough estimate.
2. Addressed the delay argument early. Meron's lawyer raised the Limitations Act, 2002, which sets a strict window for starting a claim after a problem is discovered or ought reasonably to have been discovered. We showed that the couple had acted promptly once the crack and renewed flooding appeared, and that the claim was filed well within that window from that point — closing off what could otherwise have been a complete defence.
3. Made a formal written offer to settle early, not late. Roughly four months after the claim was filed — well before examinations for discovery were complete and long before a trial date was set — we delivered a formal offer to settle for $46,000, inclusive of the cost of corrective work. This is a specific tool under the Rules of Civil Procedure: an offer made in the proper form, kept open for acceptance, that carries real costs consequences later if the case proceeds to trial and the result the offering party achieves is better than what they offered to take.
4. Kept the offer open and did not chase settlement. Meron's lawyer responded with a counter-offer of $8,000, calling the couple's claim exaggerated. We advised Reza and Niloufar not to negotiate against themselves by lowering the number further, since the formal offer's value depended on it representing a genuine, reasonable assessment of the claim — not an opening bid.
5. Prepared for and ran a two-day trial. The engineer testified about the drainage tile's incorrect installation. Meron testified that the crack pre-existed the work, but could not explain the direction of the water pooling shown in the couple's photographs, which matched exactly what the engineer said a misdirected drainage system would produce.
6. Asked the trial judge to address costs separately once judgment was given. After the trial judge ruled in the couple's favour, we brought the earlier settlement offer to the judge's attention as part of the costs submissions — a step that only matters, and is only allowed to matter, once the underlying judgment is in and can be compared against what was offered beforehand.

The outcome

The trial judge found Meron liable for the defective installation and awarded Reza and Niloufar roughly $54,000 in damages — an amount the judge accepted was reasonably supported by the engineer's evidence, slightly below the full $58,000 claimed but comfortably above the $46,000 the couple had offered to accept four months into the case.

That gap mattered enormously. Because the judgment exceeded their own settlement offer, the rules governing offers to settle worked in the couple's favour: rather than being left to negotiate or absorb their own legal costs against a $54,000 award, they were entitled to costs calculated on an enhanced basis for the period after the offer was delivered, on top of the damages themselves. Meron, by contrast, had rejected a reasonable offer and gone to trial on a much lower counter-position, which the judge treated as a factor weighing further in the couple's favour when fixing the costs amount.

The final costs award, combined with the damages, meant Reza and Niloufar recovered close to the full cost of redoing the foundation work properly, once the numbers were added together — a result that would not have been available to them if no formal offer had ever been made, even with the identical trial outcome. Had they simply won at trial with no offer on the record, the costs the judge awarded would likely have been calculated on the lower, ordinary scale, leaving a real gap between the damages received and what the repair work actually cost — a gap that, on a claim this size, could easily have run into the thousands of dollars once both sides' legal costs over a two-day trial were accounted for.

It is worth being clear about what the offer did and did not do. It did not make the underlying case any stronger — the engineer's report and the trial evidence were what won the argument about liability. What the offer changed was the financial shape of that win. Without it, Reza and Niloufar would still have been vindicated in court, but a meaningful share of the $54,000 award could have gone toward their own unrecovered legal costs, leaving less in hand than the repair actually required. With it, the win and the recovery lined up.

The couple used the funds to have the foundation re-excavated and the drainage corrected by a different contractor the following spring, this time with a written warranty on the work. Meron paid the judgment, including the costs award, over the following several months.

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