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“Chandi is Binding” Registrar Allows Interest on Disbursement Claim

One of the developing areas of law relates to whether interest charged on disbursements are recoverable under the BC Supreme Court rules.  The BC Court of Appeal may weigh in on the subject but until that time, useful reasons for judgement were released noting that interest on disbursements can indeed be recovered.

In this week’s case (Franzman v. Munro) the parties could not agree on the reasonableness of many disbursements incurred in a personal injury claim which totaled approximately $90,000.  The interest for financing these disbursements came to over $5,000.   Although there was mixed success on some of the claimed disbursements the Court noted that the interest charged was a fairly claimed item.  In reaching this conclusion Master McDiarmid provided the following reasons:

[27]         I find that it was necessary for the plaintiff to incur significant disbursements in order to properly pursue her claim. I find as well that the arrangement she made with her lawyer was both necessary and proper.

[28]         We are constantly hearing how difficult it is for ordinary people to afford access to our courts. The fee agreement entered into between the plaintiff and her lawyer facilitated her having access to the courts. The interest rate charged by the law firm, that being essentially the interest it was paying on its operating line of credit (a way in which many law firms finance their operations) is reasonable.

[29]         Defendant’s counsel advised that Chandi is under appeal. Plaintiff’s counsel pointed out that the plaintiff has no ability to control whether that appeal will ever proceed, and the plaintiff should not be restricted from executing on its judgment, including costs, while awaiting the unknown result of an appeal.

[30]         Savage J., at paras. 35 and 36, gave a succinct and accurate analysis of comity and the principles enunciated in Re Hansard Spruce Mills, [1954] 4 D.L.R. 590 (BCSC), as follows:

[35] In Re Hansard Spruce Mills, Wilson J., as he then was, was asked to give a ruling that was at direct variance with the ruling of a fellow judge of the Supreme Court. In refusing to contradict the ruling of a judge of the same court, Wilson J. said:

The Court of Appeal, by overriding itself in Bell v. Klein, [1954] B.C.J. No. 152, has settled the law. But I have no power to overrule a brother Judge, I can only differ from him, and the effect of my doing so is not to settle but rather to unsettle the law, because, following such a difference of opinion, the unhappy litigant is confronted with conflicting opinions emanating from the same Court and therefore of the same legal weight. This is a state of affairs which cannot develop in the Court of Appeal.

Therefore, to epitomize what I have already written in the Cairney case, I say this: I will only go against a judgment of another Judge of this Court if:

(a)        Subsequent decisions have affected the validity of the impugned judgment;

(b)        it is demonstrated that some binding authority in case law, or some relevant statute was not considered;

(c)        the judgment was unconsidered, a nisi prius judgment given in circumstances familiar to all trial Judges, where the exigencies of the trial require an immediate decision without opportunity to fully consult authority.

If none of these situations exist I think a trial Judge should follow the decisions of his brother Judges.

Re Hansard Spruce Mills at 592.

[36] Re Hansard Spruce Mills has been cited in over 460 cases (and counting). It has a lengthy history of application in British Columbia courts and has been described as the “dominant approach” to judicial comity in Canada: Debra Parkes, “Precedent Unbound? Contemporary Approaches to Precedent in Canada” (2007) 32 Man. L.J. 135 at 160.

[31]         Chandi is binding on me. No restriction is placed on the award of interest as part of my assessment of costs. The interest claimed is both necessary and proper, and is claimed in a reasonable amount. It is allowed in full as claimed.

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