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Interest on Disbursements Disallowed in Personal Injury Claim

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14.

Update November 17, 2014 – in Reasons released today the BC Court of Appeal overruled the below decisions and found interest on disbursements cannot be recovered.
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Update – May 17, 2013 – the below decision was overturned on Appeal.  You can click here to read about this development
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A very uncertain area of the law relates to recovery of interest on disbursements.  Last year the BC Court of Appeal declined to resolve this uncertainty.  Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, further weighing in on this inconsistent area of law finding that interest on disbursements is not recoverable.
In today’s case (MacKenzie v. Rogalasky) the Plaintiff was injured in a motor vehicle collision.  In the course of the lawsuit the Plaintiff borrowed $25,000 to finance the disbursements in his case. Following trial the interest on this loan was over $11,000.  The Plaintiff sought to recover this interest but Registrar Sainty declined to allow this claim.  In doing so the Court provided the following reasons:

[33]Based on all of the matters that I have considered — and I have had this matter under consideration for some time; I reviewed all of the submissions before coming here today and then today I have heard even more comprehensive submissions from counsel — I find that I am not bound by the decision of Mr. Justice Burnyeat in Milne. None of the decisions cited to me in favour of awarding interest, including Milne, are on all fours with the facts before me. Milne arose in the context of settlement of an action. Here, the matter was decided following a trial. Further, I find that Mr. Justice Burnyeat’s comments in Milne were obiter and are not binding on me. The case before me is also distinguishable from the decision of Registrar Cameron in Chandi as, in that case, counsel told the Learned Registrar that he was bound by Milne. His Honour was not given the benefit of the submissions I have had regarding the nature of that decision; nor of the impact of theCourt Order Interest Act on his decision. On that basis I may distinguish his reasons.

[34]That, of course, does not end the matter because the fundamental question still remains to be answered: Is this a disbursement that is recoverable by the plaintiff? I think that it is not on the basis of the arguments made by Mr. Parsons, most particularly those related to the impact of the Court Order Interest Act on claims of this nature.

[35]Firstly, a successful party’s right to claim disbursements does not actually arise until the action itself has been determined and so, until the judgment has been rendered, no entitlement arises to recover any costs or any disbursement. Accordingly there can be no right to claim any disbursement until the determination of the action.

[36]The decision in Milne was made without the benefit of the extensive argument that was before me, particularly the argument based on the application of the provisions of the Court Order Interest Act. That Act makes it clear that the legislature did not intend that interest be recoverable on disbursements.

[37]Nor can it be said that the object of costs (as compared to damages for a tortious act) is to return a party to his pre-litigation status and thus interest ought not to be recoverable. Costs are not intended to provide full indemnity to a successful party and the successful party is only entitled to recover necessary or proper disbursements at a reasonable amount. In my view it cannot be said that interest on disbursements is a necessary and proper adjunct of litigation. It is simply one of those unfortunate matters that arose in the circumstances of this particular plaintiff and I find it is not reasonable that the plaintiff recover it.

[38]So, for all of these reasons, I am going to disallow the plaintiff’s claim for interest paid to the third party lender in respect of the loan to fund the disbursements.

Costs and "Transitional Proceedings" in the BC Supreme Court

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 24, Uncategorized.


One of the notable changes under the new BC Supreme Court Civil Rules was an increase in Tariff Costs.  If a trial occurred under the former Rules of Court but the reasons for judgement are not delivered until after the new BC Supreme Court Civil Rules came into effect which Rules govern the costs award?  Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, addressing this question.
In this week’s case (X v. Y) the Plaintiff was injured in a 2005 motorcycle collision.  He worked as an undercover RCMP officer and as a result was given permission to have himself and witnesses referred to via initials in the reasons for judgement.  His injuries included a burst fracture in his mid-spine.  His claim for damages was successful at trial which took place under the former Rules of Court.   The reasons for judgement, however, were not released until after the new Rules came into force.
The Defendant agreed the Plaintiff was entitled to costs but argued the lesser costs under the former Rules should apply.  Madam Justice Dardi rejected this argument and awarded costs under the current Rules.  In doing so the Court provided the following reasons:

[10] Under the New Rules a transitional proceeding means a proceeding that was started before July 1, 2010.

[11] Supreme Court Civil Rule 24-1(2) states as follows:

A transitional proceeding is deemed to be a proceeding started under these Supreme Court Civil Rules.

[12] Supreme Court Civil Rule 24-1(14) states that:

If a step in a proceeding is taken before July 1, 2010, the former Supreme Court Rules apply to any right or obligation arising out of or relating to that step if and to the extent that that right or obligation is to have effect before September 1, 2010.

[13] Section 10 of Appendix B to the New Rules provides:

Without limiting section 9, Appendix B of the Supreme Court Rules, B.C. Reg. 221/90, as it read on June 30, 2010, applies to

(a) orders for costs made after December 31, 2006 and before July 1, 2010,

(b) settlements reached after December 31, 2006 and before July 1, 2010 under which payment of assessed costs is agreed to,

(c) costs payable on acceptance of an offer to settle made under Rule 37 or 37B, if that offer to settle was made after December 31, 2006 and before July 1, 2010, and

(d) all assessments related to those orders, settlements and costs.

[14] This proceeding is a transitional proceeding pursuant to Rule 24-1(2) and as such, the determination of costs is governed by Rule 14-1. Although the trial was commenced under the former Rules, the judgment in this matter was rendered on July 18, 2011. The defendants’ obligation to pay damages arose on that date. As there were no rights or obligations arising out of or relating to the trial that were to have effect before September 1, 2010, I cannot conclude that Rule 24-1(14) has any application to the determination of costs in this case.

[15] Furthermore, on a plain reading of Section 10 of Appendix B, Appendix B of the former Rules has no application to this case as there were no relevant offers or orders made prior to July 1, 2010.

[16] In the result I conclude that the New Rules govern the determination of costs in this proceeding.

Plaintiff Stripped of Costs for Failing to "Justify His Choice of Forum"

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized.

As previously discussed, the default position when a Plaintiff is awarded less than $25,000 following a Supreme Court trial is that they are not entitled to costs unless they show “sufficient reason” for suing in that forum.  Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing this and stripping a Plaintiff of costs who failed to justify his choice of forum.
In this week’s case (Quartey-Harrison v. Klusiewich) the Plaintiff was injured in a motor vehicle collision and following trial was awarded just over $18,000 in damages plus costs “if no submissions (respecting costs) have been received“.
Following this the Defendant provided written submissions arguing the Plaintiff should be deprived of costs because the claim could have been advanced in Provincial Court.  The Plaintiff did not respond to this submission.  Madam Justice Baker stripped the Plaintiff of his costs finding the onus was on him to justify his choice of forum.  The Court provided the following reasons:

[6] The burden is on the plaintiff to justify his choice of forum.  The court is to consider the circumstances at the time the action was commenced.

[7] In this case, Mr. Quartey-Harrison has made no submissions on costs and has offered no evidence on the issue of “sufficient reason” for bringing the proceeding in the Supreme Court.  In the circumstances, I do not think that I should speculate.

[8] In my view, the evidence at trial made it plain and obvious that no award for past or future loss of income or the capacity to earn income, was warranted, and that the mild whiplash type injury suffered by Mr. Quartey-Harrison was unlikely to result in an award in excess of the $25,000 monetary limit in Small Claims Court.

[9] I have carefully considered the submissions made by the defendants in respect of the defendants’ settlement offer but have concluded that Mr. Quartey-Harrison’s right to recover disbursements should not be nullified by the offer.

[10] In summary, each party shall bear its own costs, but the plaintiff is entitled to recover his disbursements from the defendants.

"Ill-Conceived" Dismissal Application Leads To Special Costs Award

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized.


Reasons for judgement were released yesterday by the BC Supreme Court, Vancouver Registry, punishing a Defendant in a personal injury lawsuit with a special costs order for bringing an “ill-conceived” motion to dismiss the Plaintiff’s lawsuit.
In yesterday’s case (Wood Atkinson v. Murphy) the Plaintiff suffered a bilateral wrist injury in a 2006 collision.  She sued for damages and the Defendant admitted fault for the crash.  In the course of the lawsuit the Defendant requested employment records relating to the Plaintiff.   The Plaintiff made reasonable efforts to obtain these but the Plaintiff’s employer “mistakenly failed to provide counsel with the Plaintiff’s complete employment file“.  The Court found that this failure was due “to repeated errors or internal miscommunication on the part of (the employer)“.
The Defendant obtained two Court Orders addressing the production of the sought records.  The Defendant then brought an application seeking the dismissal of the Plaintiff’s lawsuit for “material non-disclosure”.  In support of the application to dismiss the Defendant’s lawyer “swore an affidavit erroneously describing the orders“.
Associate Chief Justice MacKenzie dismissed the Defendant’s application and went on to award special costs for the “excessive and draconian” application.  In doing so the Court was critical of the Defendant’s erroneous summary of the disclosure court orders.   Madam Justice MacKenzie provided the following reasons:

[29] I have concluded in the circumstances that it is appropriate to award special costs to the plaintiff for the dismissal application.  It is the mechanism by which the Court expresses its disapproval of two aspects of defendants’ counsel’s conduct. The first aspect is his carelessness in erroneously deposing to the contents of the two orders in question and relying on them to make a very serious application to punish the plaintiff.  This error was a self-serving lack of attention to detail.

[30] Court orders are important. They give effect to the Rule of Law. Counsel cannot simply rely on their notes or fail to be accurate, especially after becoming aware of the disagreement or reservation of the other counsel. Although an application to the court is required to obtain a transcript of submissions at a CPC or TMC, the clerk’s notes are readily available. Indeed, plaintiff’s counsel obtained them to clarify the nature of the orders in question and provided them to defendants’ counsel.

[31] Secondly, it is clear that defendants’ counsel knew well before the hearing that the dismissal application was ill-conceived and was on notice that his version of the court orders was in question.  Nonetheless, he persisted with the application.

[32] An order dismissing a plaintiff’s claim for material non-disclosure is a very serious matter; the consequences for the plaintiff and her counsel would have been severe. This type of application requires a solid foundation of misconduct on the part of the plaintiff, especially considering that the defendants had already admitted liability for her injuries.

[33] The fact the defendants may have become aware of the file and the correct nature of the orders after defendants’ counsel had sworn his September 14, 2011 affidavit (for his application to dismiss filed the next day) is of no moment because he became aware of these matters well before the start of the hearing on September 26, 2011.  He pursued the application in any event.

[34] It is no answer to say that outside counsel was required nonetheless in order to address inconsistencies in counsels’ version of Ms. Tsang’s statements as to whether she had provided the complete file. Those hearsay issues are quite minor in the circumstances of all CBSA’s errors or miscommunications. Plaintiff’s counsel was put to a clearly unnecessary expense in the requirement to retain outside counsel to speak to plaintiff’s counsel’s affidavit. The application to dismiss the claim was misconceived and heavy handed.

[35] I have concluded it is appropriate to award the plaintiff special costs for the defendants’ application to dismiss her claim. The Court heard that application on the afternoon of September 26, 2011, the first of the three-day hearing. It is that day for which plaintiff’s counsel was obliged to retain outside counsel to speak to the affidavit that, amongst other things, corrected the errors in the defendants’ counsel’s version of the two orders.

Formal Settlement Offers and Costs: A Matter of Discretion

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized. 53 Comments on Formal Settlement Offers and Costs: A Matter of Discretion


As recently discussed, costs consequences following trial where a formal settlement offer is not beat is a matter of judicial discretion.  While the principles behind the exercise of that discretion are reasonably well formulated the costs results can be a little trickier to predict.  Two sets of reasons for judgement were released this week by the BC Supreme Court demonstrating this discretion in action.
In the first case (Khunkhun v. Titus) the Plaintiff advanced a personal injury claim in excess of one million dollars.  She claimed she suffered from “a significant and disabling vestibular injury” as a result of a collision.  The jury largely rejected the Plaintiff’s sought damages and awarded $45,000.
ICBC made a more generous settlement offer prior to trial which the Plaintiff did not accept (about 30% higher than the jury award).   As a result, Mr. Justice Willcock stripped the Plaintiff of her costs from the time of the offer onward.  The Court did not go so far as to order that the Plaintiff pay the Defendant costs finding that it would be unjust.  Mr. Justice Willcock repeated the following reasoning from Madam Justice Humphries in Lumanlan v. Sadler:
Given the significant injury to the plaintiff, which was caused by the defendant’s foolish and reckless behaviour, and the effect on the award of a further reduction for costs, even if not doubled, and taking into account all of the above considerations, in my view it would not be fair or just to require the plaintiff to pay ICBC’s costs after the date of the offer.
In the second case released this week (Mazur v. Lucas) the Plaintiff was awarded $538,400 following a jury trial to compensate her for injuries sustained in a collision.  ICBC appealed and succeeded in having a new trial ordered.
Prior to the second trial ICBC made a formal settlement offer of $300,000.  The Plaintiff rejected this and proceeded to trial again.   This time the jury came in lower awarding $84,000 in damages.
ICBC brought an application seeking costs for both trial.  The result of this would have been financially significant.    Madam Justice Humphries declined to allow this and instead awarded the Plaintiff costs for both trials despite not besting ICBC’s offer.  In exercising its discretion the Court provided the following reasons:
[62] This court has stated many times that parties should be encouraged to settle, and if unreasonable in not doing so, may be punished in costs.  As well, the fact that an award of costs against a party may wipe out their award of damages is not determinative.  However, given all the circumstances that existed at the time the offer was made which did not change throughout the trial, I am not persuaded that the plaintiff ought to be denied her costs on the basis that she ought reasonably to have accepted the offer that was made twelve days before the trial began.  Having in mind the amount of the first award, the narrow issue upon which a new trial was ordered, the amount of the second offer, and the expected similarity of the evidence at the second trial, the plaintiff was reasonable in deciding not to accept the offer and to have the action adjudicated by a second jury.
In addition to this final result, this case is worth reviewing for the Court’s discussion of advance payment orders.  Prior to the second trial ICBC paid the Plaintiff $250,000 in exchange for a stay of execution so the Plaintiff would not collect the damages from the Defendants personally.  Madam Justice Humphries found that an advance payment after judgement should not be factored into a costs assessment.  The Corut provided the following reasons:

[14] The defendants argue that the plaintiff should be deprived of her costs of the second trial as of December 24, 2009, the date on which the negotiated agreement was signed.  They cite cases dealing with situations in which awards at trial are less than an advance, and in which plaintiffs have been deprived of costs as of the date of the advance (McElroy v. Embelton (1996), 19 B.C.L.R. (3d) 1 (B.C.C.A.); Baxter v. Brown (1997), 28 B.C.L.R. (3d) 351 (B.C.C.A.).

[15] However, those cases are all advances before trial.  The basis on which the Court of Appeal in those cases concluded that the date of the advance was relevant to costs was because the plaintiff “had in hand more at the start of the action than the amount of the jury’s verdict.” (see McElroy).  The plaintiff, upon receipt of an advance, must realistically assess his or her claim knowing that proceeding to trial carries a risk in costs (Carey v. McLean, 1999 BCCA 222).

[16] This advance was one paid to avoid execution on an existing judgment, pending an appeal that would proceed regardless of whether the plaintiff wished to accept the money in final settlement of the action or not.  That option was not open to her.  The agreement signed by the plaintiff required repayment if a new trial were ordered and the results were not favourable to her, but did not give her the option of accepting the money and ending the proceedings.  This advance payment, unlike those in the cases cited by the defendant, is not the equivalent of an offer to settle.

[17] The date of the advance is not appropriately considered in these circumstances.

Provincial Court BackLog Justifies Modest Injury Trials in BC Supreme Court

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, ICBC LVI (Low Velocity Impact) Cases, ICBC Soft Tissue Injury Cases, ICBC Whiplash Cases, Uncategorized. 1 Comment on Provincial Court BackLog Justifies Modest Injury Trials in BC Supreme Court


Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff damages and costs for modest injuries following a motor vehicle collision.  Although the claim was straight-forward and damages were within the jurisdiction of the Small Claims Court, the Plaintiff was awarded costs with Mr. Justice Burnyeat finding that the Supreme Court’s summary trial process is a reasonable alternative to the backlog litigants face in Small Claims Court.
In today’s case (Parmar v. Lahay) the Plaintiff sustained a modest whiplash injury as a result of motor vehicle collision.  ICBC ran the “Low Velocity Impact” defence arguing no compensation should be awarded.  The trial proceeded summarily and took less than one day.  The Plaintiff’s evidence was accepted and non-pecuniary damages of $12,000 were awarded.
The Court went on to award costs despite the modest quantum.  In doing so Mr. Justice Burnyeat provided the following reasons:

[9] I cannot reach the conclusion that the legal or factual complexity of the case, the need for discovery of documents and examination for discovery, and the need for a judgment enforceable outside of British Columbia are applicable reasons why this action was commenced in the Supreme Court of British Columbia rather than in Provincial Court.  However, I am satisfied that the summary trial procedure available in the Supreme Court and the availability of costs makes the Supreme Court a preferable and justified forum for this Action.

[10] I take judicial notice that this case reached the Court for decision much more quickly than if the Action had been commenced in the Provincial Court.  In this regard, I take judicial notice of the absence of a considerable number of judges at the Provincial Court level and the backlog in hearing matters that the failure to appoint more judges has produced.

[11] I also take into account the ability of the Plaintiff to have costs awarded in this Court but not in Small Claims Court.  In that that regard, I adopt the reasoning of Harvey J. in Zale v. Colwell, 2010 BCSC 1040, where he states:

In each of the above three decisions [Spencer v. Popham, supra; Faedo v. Dowell, 2007 BCSC 1985; and Kanani v. Misiurna, 2008 BCSC 1274] the primary reason for awarding the plaintiff costs, in circumstances not unlike these facing the plaintiff here, was the consideration that given the need to retain counsel to battle an institutional defendant, a reasonable consideration in determining the forum is the matter of indemnity for the costs of counsel.  (at para. 14)

[12] I also adopt the statement of Humphries J. in Kanani, supra:

… in a situation where the defendant put the plaintiff to the proof of having suffered any injury at all, thus making her credibility a crucial issue at trial, it was reasonable for the plaintiff to require the assistance of counsel.  She was therefore justified in commencing the action in Supreme Court where she could hope to recover some of the costs it was necessary for her to expend in retaining counsel to recover the compensation to which she was found to be entitled. This reasoning has application here as well. (at para. 8).

[13] I take into account that it may well be economically unrealistic for counsel to be retained for up to three appearances in Small Claims Court where the damages sought are nominal.  This must be contrasted with the institutional defendant and its unlimited resources.  In an action in Supreme Court, counsel for a plaintiff is only required to appear once in Court if an application pursuant to Rule 9?7 of the Supreme Court Civil Rules is appropriate.  In the case at bar, the application has taken approximately one hour.

[14] In the circumstances, I am satisfied that the Plaintiff should be entitled to his costs throughout on a Party and Party (Scale B) basis.

Pre-Trial "Borrowing" Not Relevant in Costs Assessment

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized. 55 Comments on Pre-Trial "Borrowing" Not Relevant in Costs Assessment

Section 3 of BC’s Negligence Act reduces a Plaintiff’s entitlement to costs recovery to the same proportion as a Plaintiff’s degree of fault following a collision.   Reasons for judgement were released last month by the BC Supreme Court, Vancouver Registry, addressing the factors a Court can consider in deviating from this typical result and further finding that pre-trial borrowing is irrelevant to the Court’s analysis.
In last month’s case (Gowler v. Ngo) the Plaintiff was injured in two motor vehicle collisions.  Following a 13 day trial a Jury found the Plaintiff 50% at fault for the first of the collisions.  Damages of $250,000 were assessed and these were cut in half to take the Plaintiff’s degree of fault into consideration.  The Plaintiff’s costs for proceeding to trial were over $100,000.   Neither party beat their pre-trial settlement offer leaving the Court to apply section 3 of the Negligence Act.
Madam Justice Gray found it would be unfair to strip the Plaintiff of 50% of his costs given their magnitude and instead reduced the Plaintiff’s entitlement by 35%.  In doing so the Court provided the following reasons:

[14] The factors to take into account in considering the court’s discretion are discussed in my decision in Moses v. Kim, 2007 BCSC 1820. I will talk about the Court of Appeal decision in a moment, but I will ask that the reasons for judgment, if they are reproduced, will now include paragraph 13 of the Moses v. Kim decision.

[13]   The authorities demonstrate many factors the court has considered in exercising this discretion. Among them are the following:

(a)  the seriousness of the plaintiff’s injuries;

(b)  the difficulties facing the plaintiff in establishing liability;

(c)  the fact that in settlement negotiations the amount offered was substantially below the ultimate amount;

(d)  whether the plaintiff was forced to go to trial to obtain recovery;

(e)  the costs of getting to trial;

(f)  the difficulty and length of the trial;

(g)  whether the costs recovery available to the plaintiff, if costs are apportioned according to liability, will bear any reasonable relationship to the party’s costs in obtaining the results achieved;

(h)  the positions taken by the parties at trial, in particular whether the positions taken were appropriate and reasonable in the circumstances;

(i)  whether the defendants made any settlement offers;

(j)  the ultimate result of the trial; and

(k)  whether the plaintiff achieved substantial success that would be effectively defeated if costs were awarded pursuant to s. 3(1) of the Negligence Act…

[35] In my view, in this case the most important factors are the costs of proving damages for an injury of this type, the fact that there is a very significant claim for disbursements, and the fact that the amount of the award is $125,000 and the costs claimed are about $104,000.

[36] Mr. Mussio asked me to take into account some borrowing that Mr. Gowler did prior to the trial. In my view, that is not a factor I can take into account, nor can I take into account the legal fees, based on the decision of the Court of Appeal in the Moses v. Kim case.

[37] Looking at all the applicable factors, in my view it would be unjust to award the plaintiff only 50 percent of his costs. That is because his award would be so diluted by the need to pay his disbursements that he would not have a sufficient recovery. However, it is not a case where Mr. Gowler’s damages were so significant as in the Moses case.

[38] Looking at the cases and all the applicable factors, in my view, the appropriate award is that the plaintiff should recover 65 percent of his costs.

Interest on Disbursements Allowed in Significant Injury Claim

Written by admin on . Posted in BC Supreme Court Costs Cases, Uncategorized.

Update – May 17, 2013 – the below decision was upheld on appeal this week. You can click here to read about this development
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A developing area in BC relating to personal injury law is the ability of a Plaintiff to recover interest charged on disbursements.  Prosecuting personal injury claims, particularly claims with complex injuries, can be an expensive business.  Disbursements can quickly add up to tens of thousands of dollars.  These expenses are often financed through a line of credit which can accrue significant interest over time.
Although the BC Court of Appeal has yet to weigh in on this subject, it appears the law is shifting to allow interest on disbursements to be recovered in personal injury litigation in this Province.  Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, allowing such a result.
In today’s case (Chandi v. Atwell) the infant Plaintiff was severely injured in a 2004 collision.  The case settled for $900,000 plus costs and disbursements.  Following settlement ICBC took issue with many of the Plaintiff’s disbursements.  The parties had these assessed by the BC Supreme Court.  While some reductions were made the Court ultimately upheld many of the Plaintiff’s disbursements including a medico-legal assessment which alone cost almost $17,000.
The Plaintiff incurred over $25,000 in disbursement interest.  In allowing this expense the Court provided a useful summary of the law at paragraph 71 of the reasons for judgement with District Registrar Cameron coming to the following conclusion:
[73]         While the current state of the law mandates that I make some allowance for the interest expense in my view I am not bound to award full indemnity for the amount of interest charged to the Plaintiff. I am not bound by Basi v. Atwal and with the greatest of respect I decline to follow it.
[74]         In the law of costs it is still only in the relatively rare case that full indemnity is provided to the successful party. Only disbursements that are necessary and reasonable in amount are recoverable.
[75]         In my view the Registrar should endeavour, wherever possible, in assessing the amount to allow for a specific type of disbursement to strive for consistency unless the application of that principle would work a real hardship or unfairness in a particular case. To attain that consistency I will make an allowance for disbursement interest based upon Registrar’s rates with the calculation of the total amount to be akin to the calculation of interest payable on special damages pursuant to the relevant provisions of Court Order Interest Act.
For more on this topic you can click here to accessed my archived ‘interest on disbursement’ posts.  This case is also worth reviewing for the Court’s comments at paragraphs 49-53 on ‘transcription fees‘ finding that this is a disbursement of convenience, not necessity, and therefore not allowable.

Plaintiff Awarded $9,500 Costs Despite $4,000 Damage Assessement

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 1, BCSC Civil Rule 14, BCSC Civil Rule 15.


Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, with the “curious result” of costs recovery at over double the amount of assessed damages.
In last week’s case (Kargbo v. Chand) the Plaintiff was involved in a motor vehicle collision.  ICBC disputed both fault and injury.  At trial the Plaintiff’s claim was accepted and modest damages of $4,000 were awarded.  The Plaintiff sought her costs.  ICBC opposed arguing the Plaintiff did not have sufficient reason to sue in Supreme Court.
Earlier this year the BC Court of Appeal made it clear that more than the value of an ICBC Claim can be considered in deciding whether there is sufficient reason to sue in the Supreme Court.  Mr. Justice Williams went on to canvass factors other than value and concluded that the Plaintiff was entitled to $9,500 in costs under Rule 15-1(15).  The Court provided the following reasons:

[9] The problem ultimately reduces to this: If the Court determines that the plaintiff had sufficient reason for commencing or proceeding in the Supreme Court, she should be entitled to recover costs in accordance with Rule 15-1(15). If the Court finds that there was not sufficient reason for bringing the proceeding in this Court, then she is not entitled to recover her costs.

[10] In Reimann v. Aziz, 2007 BCCA 448, the Court of Appeal clarified that the issue has to be analyzed as at the point in time that the plaintiff initiated the action; there is no ongoing obligation to assess the quantum of claim.

[11] I have been provided with a number of decisions where judges of this Court have assessed the circumstances of cases to decide whether or not an order for costs is warranted. Obviously, the plaintiff bears the onus of establishing that there was sufficient reason for filing in the Supreme Court. It is not simply a matter of assessing the anticipated value of the claim. A number of factors have been identified in the cases as being relevant to the issue. These include the following (the list is not intended to be exhaustive):

1.         the legal or factual complexity of the case;

2.         the need for discovery of documents and examinations for discovery;

3.         the need for a judgment enforceable outside of British Columbia;

4.         a bona fide preference for a jury trial;

5.         access to the summary trial procedure available in Supreme Court; and

6.         the need for the plaintiff to have legal counsel, in light of the defendant’s denial of liability, dispute as to causation, injury or loss and allegations of contributory negligence, pre-existing conditions, previous causes and a failure to mitigate.

[12] In the present case, liability was denied and in the circumstances could reasonably have been expected to represent a challenge to prove. As well, the issue of damages had the real potential of being a problem. The plaintiff had a history of prior accidents and had been hospitalized shortly after the accident in question for matters not related to the accident. She was also injured in another more serious accident some several months after the accident at bar. It was the sort of case that a self-represented plaintiff would find daunting no doubt.

[13] Taking those considerations into account, it is my view that this plaintiff had sufficient reason for bringing her proceeding in the Supreme Court.

[14] As a parenthetical observation, it is true that a party such as this plaintiff could elect to pursue the claim in the Provincial Court with legal counsel, although the prospect of incurring the expense to do so without any right to recover court costs is a legitimate factor to consider. As well, where the plaintiff elects to bring suit in the Supreme Court, she runs the real risk of an adverse costs outcome if the action is unsuccessful.

[15] In the circumstances, it is my view that the plaintiff should be entitled to costs in accordance with the Rules of Court. I recognize that might appear to produce a curious result in that the award of costs is substantially greater than the damages that she recovered. However, if the matter is considered fairly and objectively and the relevant rule applied, that result follows.

[16] There is no question that the policy which underpins Rule 14-1(1) is to encourage parties with claims of modest value to bring their action in the Provincial Court, and to provide for a penalty against one who does not. That is consistent with the concept of proportionality which is a foundational consideration of the Court’s Rules.

[17] The clear default position will be that, with respect to claims where the award is less than $25,000, the plaintiff will not be entitled to an award of costs. Nevertheless, there will be situations where there is sufficient reason to bring the action in the Supreme Court. It will be for the Court to examine the circumstances of each particular case to determine whether or not there is sufficient reason.

For more cases addressing sufficient reasons to sue in Supreme Court you can click here to access my archived posts on this topic.

Third Party's Can Be Exposed To "Loser Pays" Costs Consequences

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 50 Comments on Third Party's Can Be Exposed To "Loser Pays" Costs Consequences

(Update February 9, 2012 – the below decision is under appeal with the BCCA granting leave to appeal on February 9, 2012)
Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, confirming that Third Party’s are not immune from BC’s ‘loser pays’ system.
This week’s case (Danicek v. Alexander Holburn Beaudin & Lang) involved a highly publicized lawsuit where the Plaintiff lawyer was awarded damages after being injured in a dance floor incident.  My previous posts can be accessed here for the full background.  This week the Court finalized some of the costs consequences following the trial.  In doing so Mr. Justice Kelleher provided the following comments adopting an Alberta judgement confirming that there is no reason why Third Party’s can’t be exposed to costs consequences following trial:

[15] The first issue is whether Lombard should be held liable to the plaintiff Ms. Danicek for the costs of the trial.

[16] There is no serious dispute that although Lombard was not a defendant but a third party, it may be liable in costs. It was put this way by Egbert J. in Sunburst Coaches Ltd v. Romanchuck;Ocean Accident and Guarantee Corporation Limited (Third Party) (1953) 9 W.W.R. (N.S.) 385 (Alta. S.C.) at 392, para. 19:

The third party, on its own application became a party to and actively defended the action, and by so doing made itself subject to the jurisdiction of this court as to costs. I see no reason why the plaintiff should not have judgment against the third party as well as against the defendants, for its costs computed in the manner aforesaid.

[17] Because of the other settlements in this action Lombard found itself the only party left to defend the claim.  Although Mr. Poole had admitted liability, Lombard contested both the liability of Mr. Poole and damages.  It was entitled to do so but faces the possibility of an award of costs either in its favour or against it, depending on the outcome of the lawsuit…

[23] The purpose of an award of costs is to indemnify successful litigants; deter frivolous proceedings and defences; encourage parties to deliver reasonable offers to settle; and discourage improper or unnecessary steps in litigation:  see Skidmore v. Blackmore (1995), 122 D.L.R (4th) 330, at para. 37.

[24] My conclusion is that the plaintiff is entitled to her costs in respect to Phase 1 of the trial against Lombard.  It was Lombard that decided to contest liability and quantum.  Ms. Danicek’s position was upheld on each of these issues.  Quantum far exceeded the settlements she had reached with Mr. Poole, Alexander Holburn and the other third parties.

[25] Lombard was not, ultimately, liable for the judgment against Mr. Poole.  This was because of the conclusion reached in the second phase of the trial that the Lombard policy did not provide coverage.  But that was not the issue in Phase 1 of the trial.  (There was evidence relevant to the coverage issue adduced at trial.  That is because witnesses were called at the first phase who had evidence to give in respect to the second phase.)  The issues decided in Phase 1 were liability of Mr. Poole and quantum of damages.

[26] In my view having in mind the principle of an award of costs, costs should be awarded against Lombard in respect of Phase 1 from the time that it filed a statement of defence.  The plaintiff was substantially successful on the issues involving Lombard in that part of the trial.