BC Supreme Court Continues to Have Broad Discretion of Costs Awards Following Trial
Reasons for judgement were released today by the BC Court of Appeal addressing the discretion of judges in making costs awards following trial under the new Rules of Court.
In today’s case (Lee v. Jarvie)¬†the Plaintiff¬†was involved in a rear-end collision in 2004. ¬†Fault for the crash was admitted. ¬†At trial the Plaintiff sought substantial damages in the range of $800,000. ¬†Much of the Plaintiff‚Äôs claim was¬†rejected at trial¬†but damages of just over $50,000 were assessed.
Following trial the Court awarded each party 50% of their costs to be set off against one another and denied many of the Plaintiff’s disbursements. ¬†The Plaintiff appealed arguing the Court did not have the authority to make such a costs order under the new rules of Court. ¬†The BC Court of Appeal disagreed and found that a trial judge’s discretion with respect to costs is “at least as broad” as it was under the former rules. ¬†In reaching this decision the Court provided the following reasons:
¬†¬†¬†¬†¬†¬†¬†¬†Interpreting Rule 14-1(15) as only allowing costs to be awarded in respect of specific procedures would run afoul of the principle that Newbury J.A. identified in the opening of her reasons for judgment inGreater Vancouver Regional District v. British Columbia (Attorney General), 2011 BCCA 345:
¬†¬†¬†¬†¬†¬†¬† One of the well-known rules that guide Canadian judges in the interpretation of statutes is that wherever possible, the court should strive to give meaning and effect to every word used in an enactment. As stated in¬†Maxwell on the Interpretation of Statutes¬†(12th¬†ed., 1969), ‚ÄúIt is a principle of statutory interpretation that every word of a statute must be given meaning: ‚ÄėA construction which would leave without effect any part of the language of a statute will normally be rejected.‚ÄĚ (See also¬†Communities Economic Development Fund v. Canadian Pickles Corp.  3 S.C.R. 388 at 408;¬†R. v. Kelly¬† 2 S.C.R. 170 at 188;¬†Hosseini v. Oreck Chernoff¬†1999 BCCA 386, 65 B.C.L.R. (3d) 182, at para. 27.).
¬†¬†¬†¬†¬†¬†¬†¬†The words ‚Äúapplication‚ÄĚ and ‚Äústep‚ÄĚ cover all procedural fragments of a proceeding. If ‚Äúmatter‚ÄĚ were intended to be confined to a procedural event in litigation, it would cover no ground not already covered by ‚Äúapplication‚ÄĚ and ‚Äústep‚ÄĚ. I am therefore not persuaded that a ‚Äúmatter‚ÄĚ must be a discrete procedure.
¬†¬†¬†¬†¬†¬†¬†¬†In my view, the canons of construction referred to by the plaintiff do not cast doubt on the conclusion that Rule 14-1(15) allows a judge to award costs in respect of a discrete issue in litigation.
¬†¬†¬†¬†¬†¬†¬†¬†I am satisfied that the discretion to award costs with respect to an issue in a proceeding is at least as broad under Rule 14-1(15) as it was under former Rule 57(15). Under that rule, the discretion was governed by the principles discussed by Finch C.J.B.C. in¬†Sutherland v. Canada (Attorney General), 2008 BCCA 27 at paras. 30 and 31:
¬†¬†¬†¬†¬†¬†British Columbia v. Worthington (Canada) Inc.¬†is the leading case with respect to the application of Rule 57(15). It affirms that under Rule 57(15) the Court has full power to determine by whom the costs related to a particular issue are to be paid. As Esson J.A. states in¬†Worthington, the discretion of trial judges under Rule 57(15) is very broad, and must be exercised judicially, not arbitrarily or capriciously. There must be circumstances connected with the case which render it manifestly fair and just to apportion costs.
¬†¬†¬†¬†¬† The test for the apportionment of costs under Rule 57(15) can be set out as follows:
(1) the party seeking apportionment must establish that there are separate and discrete issues upon which the ultimately unsuccessful party succeeded at trial;
(2) there must be a basis on which the trial judge can identify the time attributable to the trial of these separate issues;
(3) it must be shown that apportionment would effect a just result.
¬†¬†¬†¬†¬†¬†¬†¬†The trial judge explicitly addressed each of the three factors in¬†Sutherland, and I am substantially in agreement with his analysis.
¬†¬†¬†¬†¬†¬†¬†¬†The issues upon which he awarded costs to the defendants were distinct issues in the litigation. While I acknowledge the appellant‚Äôs argument that there was some minor overlap between evidence going to general damages and evidence going to loss of income, this did not prevent the issues from being ‚Äúseparate and discrete‚ÄĚ issues in the litigation. They were appropriately compartmentalized by the judge.
¬†¬†¬†¬†¬†¬†¬†¬†The judge identified the time attributable to the separate issues at trial at paragraphs 68-71 of his costs reasons. There is no basis for interfering with his findings in those paragraphs.
¬†¬†¬†¬†¬†¬†¬†¬†Finally, on the issue of whether the costs award is a ‚Äújust result‚ÄĚ, the trial judge comprehensively dealt with problems with the evidence in his trial judgment. He further dealt with the factors that led to the length of the trial in his costs judgment. The trial judge identified the factors that led him to find his costs award to be a just result. The reasons are cogent, and I would not interfere with his decision.