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The "Heavy Burden" of BC's Loser Pays System

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14. 47 Comments on The "Heavy Burden" of BC's Loser Pays System

I have frequently highlighted BC’s loser pays system where a losing litigant is typically ordered to pay costs to the opposing side.   Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that this result can be harsh and is typically unyielding to factors such as sympathy and financial hardship.
In this week’s case (Laktin v. (Vancouver) City) the Plaintiff was shot three times by police officers rendering him paraplegic.  He sued however his claim was ultimately dismissed following a 5 week jury trial.   Vancouver sought their costs from the Plaintiff who opposed the application arguing financial hardship.  Mr. Justice Pearlman noted the loser pays system does not yield to financial concerns in and of themselves.  In awarding costs the Court noted as follows:
[24]         The plaintiff says that the defendants should be denied their costs on the basis that his life was permanently and catastrophically altered by the event of January 21, 2006 and his future care and financial support are now in jeopardy. Mr. Laktin argues that the costs of a five-week trial will impose an onerous financial burden, which the plaintiff lacks the means to satisfy.  I accept that Mr. Laktin is in difficult financial circumstances, and that an order requiring him to pay costs to the defendant will be a real and heavy burden for him.  While I have a great deal of sympathy for the plaintiff, the case law clearly establishes that the unfortunate personal circumstances and financial hardship of a litigant are not, standing alone, factors warranting a departure from the general rule that costs follow the event: Morris at para. 36; Chen at para. 11;Vesuna v. British Columbia (Transportation), 2011 BCSC 1618 at para. 8.
[25]         In Robinson v. Lakner (1998), 159 D.L.R. (4th) 191, the Court of Appeal, reversing the decision of the trial judge who had limited the costs payable to the successful defendant to $1,500 because the plaintiff was in difficult financial circumstances, held at para. 5, that “financial hardship in itself is not a sound basis for departing from the usual rule with respect to costs”. 
[26]         In Cowherd v. Fraser Valley Health Region et al, 2004 BCSC 698 at para. 5, Madam Justice Ballance cited Brown v. Blacktop Cabs Ltd. (1997), 43 B.C.L.R. (3d) 76 (C.A.); Zelenski Estate v. Fairway(1998), 60 B.C.L.R. (3d) 76 (C.A.); Churchland v. Gore Mutual Insurance Co. (unreported), September 23, 1999, No. S09912, Vancouver (S.C.); and Robinson for the principle that “in general, the unfortunate personal circumstances and characteristics of a litigant are not to be taken into account by the court in exercising its discretion in making an award of costs”.
[27]         In Morris at para. 38, Madam Justice Ker concluded that the court is unable, on any principled basis to take the plaintiff’s financial circumstances into account in determining whether to award costs.
[28]         At para. 39, Her Ladyship cited the following passage from the Reasons for Judgment of Greyell J. in Chen at para. 15:
[39]  To do otherwise would lead to inconsistent and no doubt unreasonable results. As Greyell J. so eloquently noted in Chen at para. 15:
[15] To conclude otherwise would undermine the rationale underlying Rule 14-9 and would likely lead to the promotion of litigation rather than to promote the “winnowing” function described by Hall J.A. in Catalyst Paper. It would lead to a collapse of the general principle discussed in the authorities and result in the unacceptable proposition that costs in each case would be measured not by a party’s success but by the personal financial circumstances of the litigants.
[29]         I conclude that the plaintiff’s difficult personal circumstances and financial hardship, standing alone, do not provide grounds for the Court to depart from the normal rule that costs should follow the event…
[49]         I conclude that there are no special circumstances in this case that would warrant a departure from the general rule that costs should follow the event.
[50]         Accordingly, the defendant, City of Vancouver, will have costs of this action at Scale B, together with its reasonable disbursements.
 

BCCA – Obtaining Judgement Below Amount Sought Is Not a Proper Reason to Deprive Costs

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 60 Comments on BCCA – Obtaining Judgement Below Amount Sought Is Not a Proper Reason to Deprive Costs

Reasons for judgement were released last week by the BC Court of Appeal confirming that a party who is awarded damages below the amount sought, even if significantly so, is not a reason in and of itself for depriving the party of costs.
In last week’s case (Loft v. Nat) the Plaintiff was injured in a motor vehicle collision and sued for damages.  At trial the Plaintiff sought substantial damages of over $1.8 million.  The Plaintiff’s claims were largely rejected with damages just over $60,000 being awarded.  The trial judge found that the Defendants had been largely successful and ordered that the Plaintiff pay the Defendants costs.  The Court of Appeal found this was plainly an error.  In reaching this conclusion the Court provided the following reasons:
[46]        Pursuant to Rule 14-1(9), costs in a proceeding must be awarded to the successful party unless the court otherwise orders. At its most basic level the successful party is the plaintiff who establishes liability under a cause of action and obtains a remedy, or a defendant who obtains a dismissal of the plaintiff’s case: Service Corporation International (Canada) Ltd. (Graham Funeral Ltd.) v. Nunes-Pottinger Funeral Services & Crematorium Ltd., 2012 BCSC 1588, 42 C.P.C. (7th) 416.
[47]        In this proceeding Mr. Loft was awarded damages for injuries he had suffered in the motor vehicle accident. The respondents had denied liability until shortly before trial. Although the damage award was far less than sought, Mr. Loft was the successful party. The fact that he obtained a judgment in an amount less than the amount sought is not, by itself, a proper reason for depriving him of costs: 3464920 Canada Inc. v. Strother, 2010 BCCA 328, 320 D.L.R. (4th) 637.
[48]        The trial judge’s stated reason for awarding costs to the respondents was that the respondents had been largely successful in all areas of the claim. With respect, that decision is wrong in principle and cannot stand. I note that on the hearing of the appeal the respondents did not suggest otherwise.
[49]        The fact that a party has been successful at trial does not however necessarily mean that the trial judge must award costs in its favour. The rule empowers the court to otherwise order. The court may make a contrary order for many reasons. One example is misconduct in the course of the litigation: Brown v. Lowe, 2002 BCCA 7, 97 B.C.L.R. (3d) 246. Another is a failure to accept an offer to settle under Rule 9-1. A third arises when the court rules against the successful party on one or more issues that took a discrete amount of time at trial. In such a case the judge may award costs in respect to those issues to the other party under Rule 14-1(15): Lee v. Jarvie, 2013 BCCA 515. Such an order is not a regular part of litigation and should be confined to relatively rare cases: Sutherland v. Canada (Attorney General), 2008 BCCA 27, 77 B.C.L.R. (4th) 142; Lewis v. Lehigh Northwest Cement Limited, 2009 BCCA 424, 97 B.C.L.R. (4th) 256. Whether a judge will order otherwise in any particular case will be dependent upon the circumstances of that individual action.
[50]        Costs are very much a matter of the trial judge’s discretion. In the circumstances of this case, the basis upon which that discretion was exercised was in error. That said, the trial judge remains in the best position to determine the proper costs order and to what extent, if any, the offer to settle that was made in this case should impact on costs. On the hearing of the appeal both parties suggested that if the costs appeal was allowed, costs should be referred back to the trial judge.
[51]        I would allow the costs appeal and refer the matter of costs back to the trial judge for a further determination.
 

Late Formal Settlement Offers Still Capable of Triggering Costs Consequences

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9.

Two judgement were released this week by the BC Supreme Court demonstrating that formal settlement offers made late in the litigation process are still capable of triggering costs consequences.
In the first case (Dennis v. Fothergill) the Plaintiff was injured in a motor vehicle collision and sued for damages.   The Defendant made a formal settlement offer for $279,000 days before the start of trial.  Following trial global damages of just over $48,000 were awarded.  The Plaintiff argued that no costs consequences should be triggered, in part, due to the timing of the late formal settlement offer.  Madam Justice Bruce disagreed and awarded the Defendants costs and disbursements from the date of the offer onward and stripped the Plaintiff of her costs and disbursements of the trial.  In addressing the timing of the offer the Court provided the following reasons:
[30]         The plaintiff had three days to consider the offer and, while her counsel was out of town at the time the offer was served, she had an opportunity to speak with him by telephone prior to its expiry. The offer was straightforward and did not involve complicated calculations that would have required further time to consider and evaluate. Counsel deposes that the plaintiff’s alcohol consumption was interfering with his ability to obtain instructions from her at the time of the offer; however, the plaintiff’s mental health or state of sobriety was not of such a serious nature that it led counsel to apply for an adjournment of the trial that began within days of the offer. At no time was the Court advised that the plaintiff was unable to testify or appear for her trial due to mental health concerns.
[31]         I find the terms of the offer were clear and unambiguous. The amount of Part 7 benefits and the possible income tax holdback was nominal compared to the amount of the defendant’s offer to settle. The offer was also expressed to be “new money”, which meant in addition to Part 7 benefits paid to the plaintiff in advance of trial. The offer of settlement was clearly not a “nuisance offer” that could be easily dismissed by the plaintiff.
[32]         For these reasons, I find the plaintiff ought reasonably to have accepted the offer of settlement.
In the second case (Brewster v. Li) the Plaintiff was injured in a 2008 collision.   The parties exchanged a series of formal settlement offers, the most relevant of which being a defence offer of $450,000 made 4 days prior to trial.  At trial the Plaintiff sought damages of approximately $1,750,000.  Much of the sought damages were not awarded with a judgement of just over $418,000.
The Plaintiff argued that no costs consequences should accrue.  Mr. Justice Voith disagreed and stripped the Plaintiff of post offer costs and disbursements.  In addressing timing of the offer the Court provided the following reasons:
[25]         The timing of the Last Offer is also relevant. There is no requirement in Rule 9–1, as there was in earlier Rules, that an offer be made within a specific time from the start of trial. In several cases judges have used seven days as a reasonable time to consider an offer; see for example Bailey at para. 39; McIsaac v. Healthy Body Services Inc., 2010 BCSC 1033 at para. 87; Gonzales at para. 51.
[26]         It is clear, however, that this issue is largely driven and governed by context. In Bennett, where the defendant made an offer that was open for two days, Madam Justice Dardi succinctly said:
[34]      Mr. Bennett submits that the Second Offer should be given no force and effect because it was received “some two clear working days before the commencement of the trial.” Rule 37B does not contain the same seven-day notice provision as its predecessor. No inflexible “seven-day” rule is imposed by the Rules; rather every case must be judged on its own facts: Dodge v. Shaw Cablesystems Ltd., 2009 BCSC 1765. The proper issue for consideration is whether, in all the circumstances, the offeree had a reasonable opportunity to consider the offer: Uppal v. Rawlins, 2010 BCSC 11.
[35]      The Second Offer was made shortly before trial. The impact of the lateness of the offer was tempered by Mr. Bennett’s awareness of the settlement negotiations that had previously occurred between counsel. Given Mr. Bennett’s personal knowledge of the material facts as referred to above and his representations to the CRA in April 2005 that he had no interest in the Property, I find that neither the timing of the offer nor the late disclosure of the income tax information negatively impacted his ability to meaningfully evaluate the Second Offer. In all the circumstances, I find that as of November 19, 2008, Mr. Bennett was in a position to reasonably evaluate the Second Offer, that the two days were reasonably sufficient time for him to do so, and that he should have accepted the Second Offer.
[27]         In Enviro West, Madam Justice Boyd considered that an offer which was only open for less than two days provided the plaintiff with adequate time to properly consider the offer. She was influenced both by the fact that the defendants had made an earlier offer that “was not far different” from its last offer and by the fact that the plaintiff was “a sophisticated litigant” (at para. 55).
[28]         In Uppal v. Rawlins, 2010 BCSC 11, Mr. Justice Grauer dealt with an offer that was open for 51 hours and said:
[20]      In this case, although the offer was open for only a relatively short period of time, it was presented just before trial, when all discovery of documents and examinations for discovery had been completed, and when the issues had been fully aired in a Rule 18A application for judgment brought by the defendants. That application was dismissed because the chambers judge found that the case was not suitable for determination by summary trial given the credibility issues. Nevertheless, the position of the defendants was made abundantly clear to the plaintiffs. There would be no surprises at trial. Moreover, the perjury and forgery of the plaintiff Navjeet Uppal had been exposed, and the defendants had obtained admissions on discovery that had seriously imperiled the plaintiffs’ case.
[21]      In all of these circumstances, I have no hesitation in concluding that the offer was one that ought reasonably to have been accepted within the 51 hours or so during which it was open for acceptance. Had the plaintiffs accepted it, they would have saved $26,000 that they will now lose, they would have received $40,000 that they will not now get, they would have saved the time and expense of many days of trial, and they would have avoided all their additional liability for costs.
[29]         Finally, in Wright v. Hohenacker, 2009 BCSC 996, Madam Justice Fisher considered that four days was a reasonable time to weigh an offer in circumstances where the parties “were exchanging offers for a week before” (para. 17).
[30]         In this case counsel for Ms. Brewster emphasized the plaintiff’s emotional frailty. He argued, and she deposed, that she had only been examined for discovery a week or so before the Final Offer was made, that that process had been upsetting to her and further that when she received the Last Offer she felt “doubtful, angry and bullied”.
[31]         Though Ms. Brewster may have felt these things, there was no objective reason to feel bullied. Similarly, the fact that her examination for discovery only took place shortly before the trial does not appear to have been through any fault of the defendant.
[32]         Having said this I do accept that receiving two different offers, which replaced an earlier offer, in close succession and without any explanation, late on the Friday before the week in which the trial started, had the prospect to confuse and be more difficult to deal with. I further accept, having seen Ms. Brewster give evidence, that she would have been somewhat fragile emotionally on the eve of trial.
[33]         Accordingly, different aspects of the considerations raised by Rule 9–1(6)(a) favors each of the parties. On balance, therefore, this consideration is neutral…
[39]         I return to where I started. The dominant object that animates Rules 9–1(5)–(6) is the promotion of reasonable settlements. The plaintiff’s position, that she be awarded the costs of the trial notwithstanding the Last Offer, completely ignores this object.
[40]         I consider that a result which properly gives effect to Rule 9-1(4) and which properly reflects the additional considerations that I have identified, would be to deprive the plaintiff of all of her costs, including all disbursements, after February 11, 2013. This result accords with the result arrived at by the court, for example, in each of Tompkins at paras. 28-31 and Wafler at para. 41.

Doubling Up On Rule 15 Costs

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 15. 71 Comments on Doubling Up On Rule 15 Costs

When two Rule 15 claims are joined for the purposes of trial the Court has discretion with respect to the costs parties are entitled to.  Reasons for judgement were released today by the BC Supreme Court, Victoria Registry, addressing this and awarding the Plaintiff two sets of costs.
In today’s case (Harvey v. Tooshley) “by order of the court, the trials in these actions were to be heard at the same time. The two actions were settled for a global figure about four days before the commencement of trial.”.  The parties could not agree on costs with ICBC arguing “ there ought to be a reduction in the fees claimed in each action to reflect the savings and efficiencies achieved by having these matters joined for the purposes of trial.”.  Master Bouck disagreed and ordered that the Plaintiff receive two sets of costs.  In reaching this conclusion the Court provided the following reasons:
30]         It is now well established that the registrar has some discretion to reduce the lump sum fee portion of costs allowed under Rule 15-1 if the action is settled before trial. That discretion is said to be a “rough and ready” exercise and allows the registrar to consider the steps been taken to the date of settlement. Nevertheless, the registrar is not expected to parse out those steps as if the tariff to Appendix B applies.
[31]         The approach by assessing officers has been to make some reduction for the costs that might be attributed to attendance at trial and allow the balance as so-called preparation costs. Assessing officers have allowed $6,500 for these preparation costs, whether the matter settled three months before or on the eve of trial. The court has endorsed this approach: Christen v. McKenzie, 2013 BCSC 1317.
[32]         Moreover, this approach is consistent with the purpose of Rule 15-1 which is to provide a simplified and streamlined litigation process, including the costs assessment process.
[33]         The plaintiff is entitled to two sets of costs, regardless of the efficiencies accomplished by joining these actions for trial: Peacock v. Battel, 2013 BCSC 1902.
[34]         I allow the sum of $6,500 in fees for each action.

ICBC Advance Payment Does Not Have "Any Bearing" on Costs Order

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

Reasons for judgement were released today by the BC Supreme Court, Kelowna Registry, addressing whether an ICBC tort advance has any effect in a costs order following a trial.
In today’s case (Jackson v. Yusishen) the Plaintiff was injured in a 2009 collision.  Prior to trial the Plaintiff received a $5,000 advance from ICBC.  Although various offers were made during the course of the proceedings at the start of trial the Defendant had a formal settlement offer of $100,000 and the Plaintiff’s formal offer was for $2 million.
After a lengthy jury trial the Plaintiff’s claim was largely rejected and damages of $5,000 were assessed.  Mr. Justice Betton awarded the Plaintiff costs up to the time that ICBC made their formal offer and ordered that both parties bear their own costs thereafter.  In finding that the advance of damages had no bearing in the costs assessment the Court provided the following reasons:
[14]         The plaintiff had requested an advance and received a $5,000 advance on June 4, 2013. When the advance was provided, the attached letter contained the following:
…The advance is to be applied first towards any heads of damage which will attract pre-judgment court ordered interest.
..
[49]         I will comment briefly on the advance payment of $5,000. This was not an offer to settle in accordance with the formal requirements of Rule 9-1. It does have the practical effect of making the appropriate order here a dismissal of the plaintiff’s claim. I do not find that it has any bearing on my order as to costs in the circumstances here.
 

BC Court of Appeal Discusses Discretionary Costs in Face of Formal Settlement Offers

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9.

Reasons for judgement were released this week by the BC Court of Appeal addressing the current landscape of judicial discretion when awarding costs in cases with formal settlement offers in play.
In this week’s case (Wafler v. Trinh) the Plaintiff was injured in a 2005 collision.  Prior to trial ICBC made three formal settlement offers, the final being $222,346.  The Plaintiff rejected this offer and proceeded to trial.  A jury assessed damages at $70,000 and after appropriate deductions this resulted in judgement of over $53,000.  ICBC applied for post offer costs.  Mr. Justice Voith did not agree that such a result was appropriate but did strip the Plaintiff of post offer costs and disbursements.  Given that the trial lasted 10 days this is a significant financial consequence.
ICBC appealed arguing “the purpose of the appeal on costs was to reverse what he described as a trend in the trial court wherein plaintiffs who succeed in “beating” an offer to settle are routinely awarded double costs but defendants who have made an offer to settle that was rejected but well within the claim value are deprived an order of costs. The defendant says this is unjust. In other words, the defendant submits there should be significant consequences to plaintiffs who fail to accept a reasonable offer.”
The BC Court of Appeal dismissed the appeal finding the trial judge fairly exercised his discretion.  In reaching this conclusion the Court provided the following reasons:
[79]         Pursuant to Rule 14-1(9) of the Supreme Court Rules, Mr. Wafler, as the successful party, is entitled to his costs unless the court orders otherwise. Pursuant to Rule 9-1(4), the court may consider an offer to settle when exercising its discretion in relation to costs. Rule 9-1(5) enumerates the orders the court may make. In making an order under subrule (5), the court may consider the factors listed in subrule (6).
[80]         The purpose for which costs rules exist, as stated in Giles v. Westminster Savings and Credit Union, 2010 BCCA 282, was referred to by the trial judge at para. 18 of his reasons (reproduced at para. 50 above).
[81]         I do not quarrel with the general proposition that a plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs, even in circumstances in which it cannot be said that the plaintiff should have accepted the offer. To do otherwise would undermine the importance of certainty and consequences in applying the Rule. The importance of those principles was emphasized by this court in Evans v. Jensen, 2011 BCCA 279:
[41]      This conclusion is consistent with the importance the Legislature has placed on the role of settlement offers in encouraging the determination of disputes in a cost-efficient and expeditious manner. It has placed a premium on certainty of result as a key factor which parties consider in determining whether to make or accept an offer to settle. If the parties know in advance the consequences of their decision to make or accept an offer, whether by way of reward or punishment, they are in a better position to make a reasoned decision. If they think they may be excused from the otherwise punitive effect of a costs rule in relation to an offer to settle, they will be more inclined to take their chances in refusing to accept an offer. If they know they will have to live with the consequences set forth in the Rule, they are more likely to avoid the risk.
[82]         That said, under the present Rule, unlike its predecessor which mandated the result, it is for the trial judge to determine in any particular case the nature and scope of whatever sanctions are to be applied. The permissive wording in Rules 9-1(5) and (6) indicates the legislature intended to preserve the historically discretionary nature of costs awards, including an award of costs where an offer to settle has been made.
[83]         In my opinion, the judge adequately considered the factors under Rule 9-1(6) which were relevant in this case. Most significantly, the defendant’s contention that the plaintiff in this case did not suffer any consequences from his failure to accept the offers to settle ignores the fact that, as a successful party, he was deprived of his costs and disbursements from December 21, 2011, approximately six weeks before the jury’s verdict made on February 3, 2012. The verdict followed a ten day trial. Thus, the impact of the judge’s costs order was to deprive Mr. Wafler of taxable costs for the preparation of and attendance at a ten day trial, together with disbursements incurred after the offer, which presumably included fees for attendance by experts.
[84]         In these circumstances, I do not think it can be fairly said that the plaintiff in this case was not penalized for his failure to accept the defendant’s offer. In my view, the costs order reflected the underlying purpose of Rule 9-1.
[85]         In the result, I would dismiss the cross-appeal.
 

Double Costs Application Allowed To Proceed Despite Entered Order Addressing Costs

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In interesting reasons for judgement released today by the BC Supreme Court, Chilliwack Registry, Chief Justice Hinkson determined that a double costs application could proceed despite the entry of an order addressing costs.
In today’s case (Keller v. Pearson) the Plaintiff was injured in a collision and sued for damages.  Prior to trial ICBC offered to settle the case for $70,000.  The Plaintiff rejected the offer and proceeded to trial where the case was dismissed with costs payable to the Defendant.  The Court did not address the consequences of the formal offer.  An order was entered which read “The Plaintiff shall pay the Defendants’ costs in this action, subject to the Plaintiff being at liberty to request to reappear before the Court to make submissions in respect of same.”.
The Defendant then sought double costs relying on their pre trial formal offer.  The Plaintiff argued the Court was functus officio.  Mr. Justice Hinkson disagreed and provided the following reasons addressing the narrow exception to address costs following an entered order:
[10]         The plaintiff contends that it is he, and he alone, who was permitted by the entered order to reappear before the Court to make submissions as to costs, and that the defendants have no basis upon which to advance any submissions with respect to double costs.
[11]         While it may have been open to the defendants to make submissions seeking double costs before the entry of the order, the order addresses their entitlement to costs, subject only to the plaintiff’s request to reappear before the Court. No such request has been made by the plaintiff, and the defendants’ entitlement to costs in the matter has been determined by the summary trial judge.
[12]         In Buschau v. Rogers Communications Inc., 2004 BCCA 142 at paras. 26–27, 237 D.L.R. (4th) 260, Newbury J.A. stated:
[26]      …The Court also had the power to amend the entered order on the basis that it contained an error in expressing the manifest intention of the Court. As stated by Rinfret J. for the Supreme Court of Canada in Paper Machinery, [[1934] S.C.R. 186]:
            The question really is therefore whether there is power in the Court to amend a judgment which has been drawn up and entered. In such a case, the rule followed in England is, we think — and we see no reason why it should not also be the rule followed by this Court — that there is no power to amend a judgment which has been drawn up and entered, except in two cases: (1) Where there has been a slip in drawing it up, or (2) Where there has been error in expressing the manifest intention of the court (In re Swire [(1885) 30 Ch. D. 239]; Preston Banking Company v. Allsup & Sons, [[1895] 1 Ch. 141]; Ainsworth v. Wilding, [[1896] 1 Ch. 673]). [at 188; emphasis added.]
Paper Machinery has been cited on numerous occasions by Canadian courts, including this court in R. v. Blaker (1983), 46 B.C.L.R. 344, at 347, and in Racz v. District of Mission (1988) 22 B.C.L.R. (2d) 70. In the latter case, the Court set aside a “consent dismissal order” entered by a solicitor who had acted without authority. The Court found that it had inherent jurisdiction to correct what would otherwise be an abuse of process and ruled that it was not necessary to require the plaintiff to bring a fresh action in order to set the order aside. On this point, the Court agreed with Chief Justice Sinclair in Morstad v. Quintal (1980) 14 Alta. L.R. (2d) 369 (Q.B.), who had said that [at p. 371]:
… it must surely be within the inherent jurisdiction of this court to grant the relief sought by the plaintiff on the present motion without the necessity of going through the sterile routine of commencing a separate action, a proceeding which would not result in the bringing forth of additional facts or otherwise advancing the administration of justice.
Hutcheon J.A. in Racz noted that in Morstad, the order nisi as entered had been “based on a mutual mistake of fact.” (At 73.)
[27]      Even if the error in the order was not a “clerical” one or an error arising from an “accidental slip or omission” within the meaning of Rule 41(24), then, the court below had the inherent jurisdiction to correct the order insofar as it did not reflect its manifest intention. In the absence of any evidence that the respondents had taken any irrevocable step in reliance on the order, or would suffer undue prejudice were it corrected, I conclude that the Court should have exercised this jurisdiction and corrected its order. In my view, it cannot be in the interests of justice for the respondents to rely on that order to retain a sum to which they have no entitlement in principle.
[13]         I am unable to see that either of the two exceptions discussed in Paper Machinery apply in this case. I am advised that the entered order was drafted by counsel for the defendants.  There is no suggestion that there was any “slip” in drawing it up, nor does it evidence any error in expressing the manifest intention of the court. There is no suggestion before me that Smart J. was asked to order double costs, and there is no basis upon which it could be argued that he intended to do so.
[14]         Nor is this a situation such as that dealt with by Mr. Justice Burnyeat in GC Parking Ltd. v. New West Ventures Ltd. et al, 2004 BCSC 1700, 9 C.P.C. (6th) 245, where after an order awarding costs on Scale 3 against the defendants was made, the order entered made no reference to costs as the plaintiff specifically advised the defendants that it intended to make further submissions respecting an alleged entitlement to double costs. In that circumstance, Burnyeat J. held at para. 17 that:
[17]      The court can be functus officio where the entered order accurately deals with matters which were dealt with in the Reasons for Judgment but retain jurisdiction to deal with matters which were not set out in the entered order but which were dealt with in the Reasons for Judgment. Bavelas v. Copley, [2000] B.C.J. (Q.L.) No. 523 (B.C.S.C.) dealt with an order entered with respect to liability and damages but not with respect to costs. Drost J. held that the entry of the order rendered the court functus offico “except with respect to the issue of costs” (at para. 20).
[15]         While I respectfully agree with this statement by Burnyeat J., in the case before me, the entered order reflected the disposition of costs as set out in the reasons for judgment.
[16]         However, in Smart v. McCall Pontiac Buick Ltd., 2001 BCSC 467, [2001] B.C.J. No. 682, special costs were awarded to the plaintiff in a written judgment, and an order was entered providing for special costs. An application was then brought by the plaintiff for double costs based upon an offer to settle made by the plaintiff. Mr. Justice McKinnon reasoned that despite the entered order, he could hear the plaintiff’s application for double costs arising from the defendants’ failure to take advantage of an offer, which was substantially below the amount awarded, as he was unaware of the offer to settle and unentitled to know about it when delivering his reasons for judgment.
[17]         I am unable to distinguish the factual underpinnings in Smart from those in this case. Despite the entry of the order in this case, based upon the principle of judicial comity discussed in Re Spruce Hansard Mills Ltd., [1954] 4 D.L.R. 590, 34 C.B.R. 202, I find that I am obliged to hear the defendants’ application for double costs.
 

Double Costs Ordered After Baseball Brawl Lawsuit Dismissed

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9.

Earlier this year the BC Supreme Court dismissed a lawsuit following a fight between two adults at a Pee Wee baseball game.  Prior to trial the Defendant made several fairly modest settlement offers, one of which was a formal offer giving the Court the discretion to award double costs.  In finding it was unreasonable for the Plaintiff to reject the offer and proceed to trial Madam Justice Watchuk (Charland v. Cloverdale Minor Baseball Association) provided the following reasons ordering the Defendant to pay double costs:
[17]         Mr. Wheeler submits that the offers were offers which ought reasonably to have been accepted.  There is now general agreement on the law that, “in determining whether the offer to settle ought reasonably have been accepted the court does not consider the final result…  The reasonableness of a decision not to accept an offer must be assessed … [by] the circumstances existing when the offer was open to acceptance:” [Ward at para. 36]. 
[18]         The first offer of $3000, although not a formal offer under the Rules, was made on March 13, 2012.  It canvassed the minor injuries set out in Mr. Charland’s records, and noted that there was not the required supporting letter to substantiate the amount of an offer which had been made by Mr. Charland.
[19]         On June 8, 2012, a formal offer to settle in the amount of $5000 was served on counsel for Mr. Charland.  It was open until five minutes after the commencement of the trial.
[20]         Discoveries of Mr. Charland were held in late July 2012.  On August 2, 2012, counsel for Mr. Wheeler wrote to plaintiff’s counsel expressing reasons why Mr. Charland’s case was problematic.  Those reasons, the credibility of Mr. Charland and the nature and extent of his injuries, were later the subject of findings made at the trial which supported the position of Mr. Wheeler.
[21]         At that time, previous offers were retracted and a “nuisance offer” of $250 was formally made.
[22]         Mr. Wheeler submits that the fact that the final offer was reduced significantly following discoveries should have no effect on the determination of whether double costs are appropriate in this case.  I agree.
[23]         It was incumbent on Mr. Charland to “make a careful assessment of the strength or lack thereof of [his] case at the commencement and throughout the course of the litigation” [Hartshorne at para. 25].  Mr. Charland had knowledge, particularly after his Discovery, of the evidentiary problems in his case.  He chose to proceed to trial despite knowledge of those problems.  In light of that knowledge at the time the $5000 offer was made, and in light of the heightened knowledge at the time the nominal offer of $250 was made, his decision not to accept the offers was not reasonable.
[24]         As in Riley, Mr. Charland ought reasonably to have anticipated that his claim would be dismissed at trial.
[25]         With regard to the other factors listed in Rule 9-1(6), the relationship between the terms of settlement offered and the final judgment of the court may be considered by the court.  The second and final offers were more favourable to Mr. Charland than the decision of the court since his claim was dismissed with costs.
[26]         The court may also consider the relative financial circumstances of the parties.  Little is known regarding this factor.  It appears from the evidence that both parties have similar financial circumstances.  Both have legal costs arising from the litigation.
[27]         There are no other factors raised by Mr. Wheeler and, in the absence of submissions from Mr. Charland, no other factors that the court considers appropriate to take into account.
[28]         On consideration of the factors set out in Rule 9-1(6), I conclude that Mr. Wheeler is entitled to double costs from the date of the first formal offer, June 8, 2012. 
 

Costs Following Unsuccessful "Considerable Gamble To Achieve A Significant Award"

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized.

Update – July 13, 2015 – the below decision was overturned today by the BC Court of Appeal for several reasons and a new trial was ordered.  In reaching this conclusion the court noted it was improper for the Court to make a present value calculation when considering a formal offer to settle.  The Court provided the following reasons:

[53]         I agree with the appellant that the judge erred in adjusting the initial offer to reflect its 2013 value. This approach is not supported in law. As a result, the amount that the appellant was awarded ($51,300) exceeded the formal offer ($50,000) and the judge had no basis to award costs to the defendants pursuant to Rule 9-1(5)(d).

[54]         The trial judge also erred in applying the incorrect standard to determine which party was successful. The appellant was clearly the successful party in the action, as that standard is described in Loft. Though the appellant was not awarded the entire amount in damages that she sought, she established liability under a cause of action – as in Loft, by way of the defendants’ admitting liability and conceding some damages – and she obtained a remedy. The defendants did not obtain a dismissal of her case, either with respect to liability or damages.

[55]         Thus the order for costs could not have been sustained in any event of the appeal.

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Reasons for judgment were released this week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a jury trial.
In this week’s case (Han v. Park) the Plaintiff was injured in a 1999 collision that the Defendant admitted fault for.  The litigation had a “somewhat tortured history” finally coming to trial in October 2013.    The Plaintiff sought damages of over $2 million.  Following a 14 day trial a jury assessed damages at $51,300.
In 2002 ICBC tendered a formal settlement offer of $50,000.  When coupled with advances paid the offer slightly exceeded the ultimate jury award.  Given the duration of time that passed the Court was also presented with economic evidence adjusting the offer for inflation indicating it was worth about $61,100 in 2013 dollar terms.  In any event the Court was asked to assess costs consequences flowing from this formal offer.  In finding that costs should be used as a remedy where a litigant takes “a considerable gamble to achieve a significant award” the Court ordered the Plaintiff pay the Defendant’s costs from 2004 onward.  In reaching this conclusion Madam Justice Fitzpatrick provided the following reasons:
[69]         Like the plaintiff in Bailey v. Jang, 2008 BCSC 1372, aff’d 2011 BCCA 146, Ms. Han took a considerable “gamble to achieve a significant award” and lost: paras. 22, 38. Given that the majority of the time at trial was spent on her unsuccessful attempt to persuade the jury of her disability, one can only describe her as being substantially unsuccessful at trial. Accordingly, even without the application of Rule 9-1, Ms. Han would have faced meritorious arguments by the defence that a costs award should reflect that result and my conclusions below are also consistent with an analysis in this context.
[70]         She conducted herself in this litigation so as to ignore the considerable efforts of the defendants to gather evidence regarding the extent of her injuries, all at considerable cost to them. The early efforts of the defendants were geared to either provide a proper basis for a negotiated settlement or to provide the necessary evidence for a trial. All the while Ms. Han entirely failed to muster any medical opinion evidence that she either knew or should have known would be needed to support her claims at the end of the day. She refused to respond to any settlement offer until the eve of the trial.
[71]         Ms. Han’s intractable position must nevertheless be considered in the face of the July 2002 offer to settle. By this time, over three years had gone by and one would have thought that she would be in a position to critically consider her position. The offer fully addressed the position of the defendants that no brain injury had occurred. The premise of the offer was not contradicted by any medical opinion evidence obtained by Ms. Han. Even if she had chosen, strangely, to rely on the medical evidence of the defendants, by no later than May 2004, Dr. O’Shaughnessy had emphatically concluded that no disability or brain injury had resulted from the accident.
[72]         In the above circumstances, Ms. Han’s position was not an “honest but … mistaken view” per Fan, nor did she have a “meritorious, albeit uncertain claim” per A.E.
[73]         The defence calls Ms. Han “delusional” and while the remark is uncharitable, it is not far from the mark. Ms. Han has purposely conducted this protracted litigation where there was no basis in the evidence upon which to conclude other than that she had suffered a relatively straightforward soft tissue injury. Despite that, 14 years of litigation has gone by, no doubt at great cost to the defendants and to those who have financially supported this litigation on behalf of Ms. Han.
[74]         I conclude that Ms. Han is entitled to her taxable costs, including disbursements, of the action to May 2004. The defendants are entitled to their taxable costs, including disbursements, from June 2004 which will include this application to determine costs. Both costs awards will be on Scale B.

BC Supreme Court Continues to Have Broad Discretion of Costs Awards Following Trial

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14. 53 Comments on 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’s 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:
[37]        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:
[1]        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), “It is a principle of statutory interpretation that every word of a statute must be given meaning: ‘A construction which would leave without effect any part of the language of a statute will normally be rejected.” (See also Communities Economic Development Fund v. Canadian Pickles Corp. [1991] 3 S.C.R. 388 at 408; R. v. Kelly [1992] 2 S.C.R. 170 at 188; Hosseini v. Oreck Chernoff 1999 BCCA 386, 65 B.C.L.R. (3d) 182, at para. 27.).
[38]        The words “application” and “step” cover all procedural fragments of a proceeding. If “matter” were intended to be confined to a procedural event in litigation, it would cover no ground not already covered by “application” and “step”. I am therefore not persuaded that a “matter” must be a discrete procedure.
[39]        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.
[40]        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:
[30]      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.
[31]      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.
[41]        The trial judge explicitly addressed each of the three factors in Sutherland, and I am substantially in agreement with his analysis.
[42]        The issues upon which he awarded costs to the defendants were distinct issues in the litigation. While I acknowledge the appellant’s 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 “separate and discrete” issues in the litigation. They were appropriately compartmentalized by the judge.
[43]        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.
[44]        Finally, on the issue of whether the costs award is a “just result”, 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.