UCPR r 360(1) does not apply to costs incurred in defending a counterclaim merely because the plaintiff's offer to settle allowed for a set-off of the counterclaim. On appeal, indemnity costs require demonstration of unreasonable conduct or unusual circumstances beyond mere non-acceptance of a pre-trial offer, regardless of how favourable the ultimate judgment is compared to the offer. A successful plaintiff is not ordinarily denied costs because it failed on an alternative cause of action.
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