ICBC Law

I’ve written many times about the fact that the BC Supreme Court Rules give trial judges a discretion to award a successful plaintiff Court Costs even if the amount awarded falls in the Small Claims Court’s Jurisdiction.

Two recent cases were released today by the BC Court of Appeal demonstrating that ICBC is interested in having the circumstances in which these awards are made limited.

In the first case (Morales v. Neilson) the Plaintiff was injured in a BC Car Crash and sued for damages.  At trial he was awarded just over $12,000.  The trial judge went on to award the Plaintiff costs despite the fact that the judgement was for an amount within the small claims courts financial jurisdiction.  ICBC asked permission to appeal but this was refused with the BC High Court holding that the Judge appropriately applied the test for discretionary costs.

The second case, however, had the BC Court of Appeal more interested.  In this case (Gradek v. DaimlerChyrster Financial Services Canada Inc.) the trial judge awarded a Plaintiff under $10,000 in total compensation as a result of a BC collision.  The Court went on to award the Plaintiff costs.  (You can click here to read my summary of the trial decision regarding costs).  ICBC asked the Court of Appeal to intervene arguing that the trial judge was wrong in considering the ‘procedural advantages‘ available in the BCSC as factors which give a plaintiff ‘sufficient reason‘ to sue in that Court when the case is worth clearly less than $25,000.  The Court of Appeal agreed to hear the case noting that this is an important issue for ICBC. Specifically the BC High Court held as follows:

[7] The issue on which the appeal is sought to be brought is a pure issue of law. It is one of statutory construction, the question being the meaning of the words “sufficient reason” in the context of Rule 57(10). The language of Rule 57(10) does not, on its face, limit “sufficient reason” to a consideration of the anticipated quantum of damages.  Even so, while I would not describe the appellant’s case as a very strong one, it does seem to me that it is arguable that “sufficient reason” contemplates jurisdictional questions (particularly the quantum of damages), and not procedural advantages.  In my view, there is sufficient merit in the appeal to warrant a hearing before a division of the Court.

[8] The issue of how the Supreme Court is to determine whether a matter is brought in that court for “sufficient reason” is a matter of general importance in litigation, particularly given that the monetary limit for Small Claims Court has expanded to $25,000. There will now be a sizable number of cases that fall below the Small Claims limit.

[9] The case is of significance to the defendant in this matter; from a practical standpoint, it is an institutional defendant involved in many cases. The case is, however, of limited significance to the plaintiff.  While the costs award is a significant proportion of the entire award received by the plaintiff, the costs of defending the appeal may significantly exceed the amount in issue.

[10] This concern is mitigated, however, by the fact that the appellant is prepared to abide by an order that it will pay the respondent’s costs on Scale 1 in any event of the appeal (it is acknowledged that the respondent would be free to argue before the Court that a higher level indemnity should be awarded).

[11] In the circumstances, I am satisfied that leave ought to be grant and that a division of the Court should hear this matter. Leave is granted. The appellant will be responsible for the respondent’s costs in any event of the appeal.

I will be sure to write about the BC Court of Appeals decision in this case once it is released.