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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.

Court Holds Rule 15 Costs Cap Can Apply to Trials Prosecuted Outside of the Fast Track

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 15, BCSC Civil Rule 7. 44 Comments on Court Holds Rule 15 Costs Cap Can Apply to Trials Prosecuted Outside of the Fast Track


Reasons for judgement were released last week by the BC Supreme Court, Chilliwack Registry, addressing whether the Rule 15 Costs ‘cap‘ can apply to non-Rule 15 lawsuits that proceed to trial but result in judgement below $100,000.  In short the Court ruled that the cap should apply in these circumstances.
In last week’s case (Affleck v. Palmer) the Plaintiff sued the Defendants for damages.  The claim was not filed under the fast track provisions of Rule 15.  The case proceeded by way of summary trial under Rule 9-7 and was successful.  The judgement is unclear of the damages awarded but they were apparently over $25,000 under $100,000.  The summary trial lasted one day.
The Plaintiff brought an application for lump sum costs of $8,000 under Rule 15-1(15).  Mr. Justice Brown agreed that this was appropriate even though the lawsuit was not filed under the provisions of Rule 15.  In reaching this conclusion the Court provided the following reasons:

[4] Rule 14-1(1)(f) states that costs payable under the Civil Rules or by court order must be assessed as party and party costs under Appendix B, unless:

…

(f)         subject to subrule (10) of this rule,

(i)         the only relief granted in the action is one or more of money, real property, a builder’s lien and personal property and the plaintiff recovers a judgment in which the total value of the relief granted is $100,000 or less, exclusive of interest and costs, or

(ii)        the trial of the action was completed within 3 days or less,

in which event, Rule 15-1(15) to (17) applies to the action unless the court orders otherwise.

[5] There are other exceptions under Rule 14-1(1), but subsection (f) is the significant one in this case. Rule 14-1(10), which pertains to plaintiffs who recover in this Court a sum within the jurisdiction of the Provincial Court, does not apply in this case.

[6] Rule 15-1(15)(a) states a party in a fast track action is entitled to costs of $8,000, exclusive of disbursements, if the time spent on the hearing is one day or less, unless the court orders otherwise or the parties consent.

[7] I agree with the plaintiffs that although they had proceeded by way of summary trial and did not file a notice of fast track action, the wording of Rule15-1(1) governs and the action qualifies as a fast track action under Rule 15-1(1)(a) or 15-1(1)(b).

[8] As the plaintiffs point out, because they claimed various forms of relief under the Business Corporations Act, S.B.C. 2002, c. 57 [Business Corporations Act], it is arguable they were claiming more than monetary relief. Even so, the action still completed under Rule 9-7 in less than one day.

[9] The plaintiffs submit it would be appropriate for me to order $8,000 in costs. This represents the amount payable in a fast track action; and, despite the fact that the plaintiffs proceeded by way of summary trial under Rule 9-7, the plaintiffs submit an order for $8,000 in costs is appropriate in this case. I find the $8,000 set out in Rule 15-1(15)(a) is appropriate in this case.

This case is also a useful precedent because as set out in paragraph 8 the Court suggests that Rule 15 applies regardless of quantum provided the trial takes three days or less.

This case is worth reading in conjunction with the recent case of Johnson v. Axten which held that the Rule 15 costs cap can apply to pre-trial settlements of under $100,000 even if the case was not prosecuted under the fast track rule.

Silence Means Loser Pays

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 66 Comments on Silence Means Loser Pays


If a BC Supreme Court Judgement is silent with respect to costs following trial the default Loser Pays system kicks in as a result of Rule 14-1(9).  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, discussing this default position.
In last week’s case (Habib v. Jack) the Plaintiff’s personal injury lawsuit was dismissed following trial. The trial Judge’s reasons did not set out any costs order.  The Defendant sought their costs but the Plaintiff opposed this arguing that silence on costs in the trial judgement makes the issue ‘res judicata’.  Madam Justice Ross disagreed and provided the following short but useful reasons:
[9] The plaintiff’s res judicata argument has previously been considered and rejected by this court. In Graham v. Great West Life et al., 2004 BCSC 1544, Sinclair Prowse J. considered the argument that silence in earlier reasons for judgment regarding costs is tantamount to an order that there will not be an order for costs. After reviewing the authorities she found that if reasons are silent, by operation of Rule 57(9), there is a presumption that costs will follow the event unless either party objects to the order being framed in that manner, in which case an application for costs should be made to the court. The present Rule 14-1(9) contains the same presumption.

More on ICBC's Subrogated Costs Rights (Or Lack Thereof)

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 48 Comments on More on ICBC's Subrogated Costs Rights (Or Lack Thereof)

Earlier this year the BC Supreme Court released reasons for judgement finding that when a Defendant succeeds in a lawsuit and is awarded costs the order is for their benefit not their insurer.  In short the Court held that ICBC has no subrogated right to costs awards under section 84(1) of the Insurance (Vehicle) Act.  Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, taking an opposite view of this issue.
In this week’s case (Habib v. Jack) the Plaintiff was injured while riding on a bus.  She sued the bus driver and bus company but had her claim dismissed at trial.  The Defendant was awarded costs with Madam Justice Ross giving ICBC the benefit of this costs award.  The Court provided the following brief reasons:
In the result, the defendants will have their costs. Under s. 84(1) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231, the Insurance Corporation of British Columbia (“ICBC”) is subrogated to its insured and is entitled to recover the costs to which the insured would be entitled. Accordingly, ICBC is entitled to recover the costs awarded to the defendants.
Given the contradictory recent court findings on this issue I suspect the BC Court of Appeal will be asked to weigh in on the topic of insurers subrogated rights to costs following the successful defence of a lawsuit.

Plaintiff Ordered To Pay 30% of Defendant's Trial Costs for Failed Wage Loss Claim

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


One of the exceptions to BC’s general rule that ‘costs follow the event‘ is that a party can be ordered to pay their opponents costs relating to a distinct issue at trial.  This was demonstrated in reasons for judgement released last week in the context of an ICBC claim.
In last week’s case (Garcha v. Gill) the Plaintiff was injured in a 2005 motor vehicle collision. Following trial the Plaintiff’s damages were assessed at just over $30,000.  The Plaintiff had sought damages for loss of income although this portion of his claim was largely unsuccessful.  The Defendant applied to be paid a portion of the trial costs.  Mr. Justice Cohen agreed that the Defendant was entitled to this relief as the wage loss claim was “the most contentious item during the litigation“.  In ordering the Plaintiff to pay 30% of the costs the Court provided the following reasons:







[42] I find that the defendant is entitled to an order for an apportionment of costs.

[43] The test for whether or not an apportionment of costs should occur is set out in Sutherland v. The Attorney General of Canada, 2008 BCCA 27:

[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.

[44] First, I am satisfied that the issue of past income loss is a discrete issue.  I am further satisfied that an apportionment of costs of 70% to the plaintiff and 30% to the defendant, as submitted by the defendant, is fair in the circumstances of this case, given the amount for past income loss awarded to the plaintiff, when compared with his claimed amount; the fact that the plaintiff abandoned his claim for future income loss at the commencement of the trial; and, the inordinate amount of time which had to be spent by the defence prior to the trial to secure proper disclosure of the plaintiff’s business records.  There is no doubt from the chronology of the events preceding the trial that the plaintiff’s failure to provide full and timely document production of his business records had a large impact on the conduct of the proceedings leading up to and during the trial.







No "Principled Basis" To Award ICBC Costs Following Trial in Place of Defendant

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


As previously discussed, the BC Supreme Court has a “loser pays” system.  In short this means that the losing party generally has to pay the winning sides costs.  Since most personal injury lawsuits are defended by ICBC (or other insurance companies) do they get the benefit of a costs award when they are on the winning side of a lawsuit or do the costs get paid to the insured Defendant?  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing this interesting issue.
In last week’s case (Wong v. Lee) the Plaintiff sued for damages following a motor vehicle collision.  The lawsuit was dismissed with Jury finding that the Defendant was not responsible for the crash.  Ultimately the Plaintiff was ordred to pay the Defendant costs.  ICBC argued the costs award should be in their favour (presumably to make it easier to exercise their collections rights under the Insurance (Vehicle) Act).  Madam Justice Dardi refused to make this order finding that there is no ‘principled basis’  to do so.  The Court provided the following reasons:
[35] The defendants contend that any costs awarded to them ought to be paid directly to ICBC, who is not a party to this proceeding. The defendants acknowledge that there does not appear to be any authority directly on point.


[36] The paramount principle to be derived from the authorities is that any discretionary exceptions to the usual costs rules must be made judicially: Bailey v. Victory (1995) 4 B.C.L.R. (3d) 388, 57 B.C.A.C. 23 (C.A.) at para. 13.

[37] The defendants primarily anchor their submissions on s. 84(1) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 [formerly s. 26 of the Insurance (Motor Vehicle) Act]. Section 84(1) of the Insurance (Vehicle) Act provides as follows:

84  (1) On making a payment of benefits or insurance money or assuming liability for payment of benefits or insurance money, an insurer

(a) is subrogated to and is deemed to be the assignee of all rights of recovery against any other person liable in respect of the loss, damage, bodily injury or death of a person to whom, on whose behalf or in respect of whom the payment of benefits or insurance money is made or to be made, and

(b) may bring action in the name of the insured or in its own name to enforce the rights referred to in paragraph (a).

[38] On a plain reading of s. 84(1) of the Insurance (Vehicle) Act, the provisions pertain to the statutory subrogation issues between the insured and the insurer, which issues were not before me in this litigation. It is axiomatic that this subsection is not determinative of the dispute between the plaintiff and the defendants in this case. An award of costs to ICBC, who is not a party to this proceeding, would constitute a departure from the usual rule that the defendants who were the successful parties in this litigation be awarded costs. In my view, these statutory provisions do not establish a basis for an order displacing the usual rule…

[44] While the Court of Appeal in Perez v. Galambos, 2008 BCCA 382, recognized the jurisdiction to make a costs award in relation to a non-party, the Court observed that such an award is unusual and exceptional, and should only be made in “special circumstances” (at para. 17). The Court stated that a non-party who is funding litigation can be liable for costs as the real litigant if they have put forward an insolvent party as a “man of straw” to avoid liability for costs or if the non-party has promoted the litigation improperly so as to be liable for the tort of maintenance. The Court in Perez declined to order that the insurer who defended the action pay the costs of the successful plaintiff. Since the facts in this case are clearly distinguishable from those in Perez, that case does not assist the defendants. Moreover, I also note that neither counsel brought it to the Court’s attention that this decision was reversed by the Supreme Court of Canada and the issue of costs was left to the parties to resolve or, in the alternative, remanded back to the Court of Appeal for further consideration. It does not appear that there has been any further consideration by the Court of Appeal.

[45] In their submissions the defendants also cite Qureshi (Guardian ad litem of) v. Nickerson (1991), 77 D.L.R. (4th) 1, 53 B.C.L.R. (2d) 379 (C.A.). However, in my view there is no principle to be derived from Qureshi that supports the defendants’ submission that ICBC should be entitled to an award of costs in this case. In that case, the plaintiff argued that the defendant had not incurred any costs in his successful defence of a medical malpractice claim because those costs had been paid on his behalf by the Canadian Medical Protective Association. The Court of Appeal found that there was no contract of indemnification and no right of subrogation between the defendant and the Canadian Medical Protective Association. The Court concluded that in the absence of a right of subrogation, and having not incurred any liability for fees and disbursements in defending the claim, the defendant was not entitled to a costs award against the plaintiff.

[46] In summary on this issue, I am not persuaded that in the circumstances of this case, there is any principled basis upon which this Court should order that the plaintiff pay costs to the non-party ICBC.


"Special Costs" Clause Takes the Teeth Out of ICBC's Formal Settlement Offer

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, BCSC Civil Rule 9, Uncategorized.


I’ve written many times about the risks and consequences formal settlement offers can create in the course of a personal injury lawsuit.  Interesting reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, refusing to give ICBC double costs after the dismissal of a lawsuit because of a ‘special costs‘ clause in their formal offer.
In this week’s case (Wong v. Lee) the Plaintiff was injured in a 2003 motor vehicle collision.  She sued her driver but the lawsuit was dismissed with a Jury finding the driver was not negligent.  Typically such a result obligates the Plaintiff to pay the Defendant’s costs due to the BC Supreme Court’s Loser Pays system.
Prior to trial ICBC made a formal settlement offer of $60,000.  In these circumstances the Court has the discretion to award ‘Double Costs‘.  ICBC, on the Defendant’s behalf, asked for the Court to make such an order.  Madam Justice Dardi refused, however, finding that the ‘special costs’ clause which is contained in many of ICBC’s formal settlement offers operates to create uncertainty in the settlement process.  The Court provided the following useful reasons:








[27] The plaintiff’s overarching submission is that the inclusion of para. 6 in Appendix A of the Offer to Settle is fatal to the defendants’ application for double costs. The Offer to Settle was subject to the conditions in Appendix A which provides in para. 6 as follows:

Nothing in this offer detracts from the Defendants’ right to seek special costs against the Plaintiff or his counsel above and beyond the Defendants’ entitlement to costs under this offer. Neither the making nor the acceptance of this offer shall be deemed a waiver or estoppel by the Defendants in respect to any reprehensible or improper conduct on the part of the Plaintiff and / or his counsel in respect of this proceeding. [Emphasis added.]

[28] Based upon these terms, even if the plaintiff had accepted the Offer to Settle, the defendants nonetheless would have been at liberty to pursue the plaintiff for special costs. Thus, there was a potential risk that the acceptance of the offer may not have ended all of the outstanding disputes between the parties.

[29] The Court of Appeal, in discussing Rule 9-1(5) in Evans v. Jensen, 2011 BCCA 279, articulated at para. 35 that “the most obvious and accepted intent of this Rule, namely to promote settlement by providing certainty to the parties as to what to expect if they make, or refuse to accept, an offer to settle”. The Court reasoned as follows:

[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.

[42]      This certainty in terms of the result of either making, accepting or refusing to accept an offer is also more conducive to the overall object of the Rules, which is “to secure the just, speedy and inexpensive determination of every proceeding on its merits”.

[30] It clearly emerges from the authorities that an important objective of offers to settle under the Rules is to bring certainty and finality to litigation. The reservation of the defendants’ right to seek special costs from the plaintiff after the acceptance of the offer is antithetical to this objective. It cannot be said that the Offer to Settle provided a genuine incentive to settle. As was stated inGiles v. Westminster Savings and Credit Union, 2010 BCCA 282 at para. 88, “plaintiffs should not be penalized for declining an offer that did not provide a genuine incentive to settle in the circumstances”.

[31] In short, para. 6 in Appendix A of the Offer to Settle militates against an award of double costs…





[34] In weighing all of the factors, the most significant being the inclusion of para. 6 in Appendix A of the Offer to Settle, I conclude that the plaintiff should not be required to pay double costs.



ICBC Under "No Obligation" To Advise You of Your Legal Rights

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

As previously discussed ICBC adjusters often operate in a legally permissible conflict of interest.  When dealing with ICBC it is important to know that “your” adjuster has no obligation to advise you of your legal rights regarding a claim for compensation against the at fault motorist.  This was demonstrated in reasons for judgement released this week by the BC Supreme Court, New Westminster Registry.
In this week’s case (Morris v. Doe) the Plaintiff was injured in a hit and run collision.  She sued ICBC under s. 24 of the Insurance (Vehicle) Act although the claim was dismissed at trial with Madam Justice Ker finding that the Plaintiff failed to make all reasonable efforts to identify the at-fault motorist.
The Plaintiff was ordered to pay ICBC costs following trial.  The Plaintiff opposed arguing this would “financially cripple” her and that such a result would be unfair because ICBC failed to advise the Plaintiff of the steps she needs to take to make a successful claim for compensation.  Madam Justice Ker rejected this argument finding that the law imposes no duty on ICBC adjusters to do so.  In upholding the costs award against the Plaintiff the Court provided the following reasons:











[8] During his oral submissions, counsel for the plaintiff argued that costs ought not to be awarded against the plaintiff as the defendant, the Insurance Corporation of British Columbia (“ICBC”), through its adjusters ought to have advised the plaintiff of the importance of immediately obtaining legal advice on the steps she needed to take to satisfy the unidentified motorist provisions of the Act.  Counsel appears to argue that it is this failure and circumstance connected with the case that renders it manifestly unfair to award costs against the plaintiff in this case, citing Currie v. Thomas Estate (1985), 19 D.L.R. (4th) 594 (B.C.C.A.) at para. 47 and the reference therein to the speech of Viscount Cave in Donald Campbell & Co. v. Pollack, [1927] A.C. 732 (H.L).

[9] No statutory authority or case authority was provided to support the proposition that ICBC through its employees has a duty to provide a potential plaintiff with a warning that it is in their interests to obtain legal advice.  Indeed, counsel recognized and seemed to suggest that the law, although not there yet, ought to be moving in that direction. ..

[51] It is clear from the decisions cited in my original judgment dismissing the action that ICBC has no obligation to advise a plaintiff of the nature of the steps they need to take in order to satisfy the court they have taken all necessary and reasonable steps to ascertain the identity of the offending unidentified driver.

[52] I do not understand the jurisprudence or the governing statutory provisions to place any sort of positive obligation on ICBC through its employees to either advise a plaintiff of the steps they must take to ascertain an unknown driver’s identity or of the need to obtain independent legal advice on this provision.

[53] I cannot accede to counsel’s suggestion that ICBC or an insurer has a positive obligation to advise an insured of the need to obtain legal advice.  To do so would fundamentally change the nature of the contractual relationship between the insurer and insured and place the insurer in a position of quasi-authority requiring it to provide an element of legal advice, something adjusters and claims managers may not be well suited to do and may create a host of unanticipated and unforeseen consequences.

[54] While the comments of Barrow J. in Tessier are compelling as to the fairness that at least notifying a plaintiff of the provisions of the Act would appear to create, the fact of the matter is that there is no statutory authority mandating that ICBC advise or alert a potential plaintiff of the provisions of s. 24(5) of the Act.

[55] Moreover, the jurisprudence since 2003, and most recently re-stated in Wah Fai Plumbing, establishes that denying a successful litigant its costs based on pre-litigation conduct or for reasons that appear to impose quasi-liability on the successful party and sanction non-actionable conduct is not an appropriate or principled application of the costs rules.

[56] I must say again that, in this case, I have a great deal of sympathy for the unsuccessful plaintiff, particularly in light of ICBC’s failure to set her straight at the outset when it was apparent she did not understand the process.  However, by the time the statement of defence was issued in October 2007, it would have been clear to the plaintiff and her counsel that her case was in peril, or definitely not nearly as strong as initially believed.













If all of this seems unfair you can click here to read my views regarding a solution to this conflict of interest.

Interest on Disbursements: The Uncertainty Continues

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

The BC Court of Appeal released reasons for judgement today in a case addressing the recoverability of interest on disbursements in personal injury lawsuits.  It was anticipated that the Court would set out a firm answer to this issue.  Unfortunately the question remains unanswered as the BC Court of Appeal held that “this is not the right case to address the issue“.
In today’s case (Milne v. Clarke) the Plaintiff was injured in a motor vehicle collision.  The case settled but following this the parties could not agree whether the interest charges on disbursements for private MRI’s were recoverable.  Ultimately Mr. Justice Burnyeat held that this was a recoverable disbursement finding as follows:
[9] The law in British Columbia is that interest charged by a provider of services where the disbursement has been paid by counsel for a party is recoverable as is the disbursement.  The interest charge flows from the necessity of the litigation.  If the disbursement itself can be assessed as an appropriate disbursement, so also can the interest owing as a result of the failure or inability of a party to pay for the service provided.  In order to obtain the M.R.I., it was necessary to pay not only the $975.00 cost but also the interest on any unpaid balances that were not paid immediately.  The cost plus interest was the cost of obtaining the M.R.I.  The claim for interest should have been allowed.
ICBC appealed this as a test case hoping to get a firm answer from the BC Court of Appeal.  The Appeal was dismissed with the Court finding that there was insufficient material before them to address the issue.  The Court provided the following reasons:





[13] There is, as Mr. Justice Frankel observed, divergent authority on the recoverability of interest on disbursements under Rule 57(4) (now Rule 14-1(15)).  There may be different answers to that question depending upon the circumstances of the charge, the time and purpose for which the charge was incurred, and the circumstances that caused counsel to pay the bill, but this must be a question for another case.  It is clear from the fresh evidence that in this case the recoverability of the interest paid by counsel requires an interpretation of the settlement agreement.  One question is whether the amount in issue is properly characterized as a claim for special damages rather than disbursement, and is thus captured within the agreed sum.  Another question is whether, on a correct interpretation of the settlement agreement, the amount in issue is recoverable as “a necessary and reasonable disbursement”.  The judge, having been presented with the case as an application of Rule 57(4), did not deal with either of these issues.

[14] To look at it another way, it was intended that this appeal would be concerned with the recoverability of interest as a disbursement under Rule 57(4).  On the material before us, the case turns on the characterization of the charge as a disbursement or special damages, and the interpretation of several terms of the settlement agreement, on only one of which the law on Rule 57(4) might be a reference point, and even there is not directly engaged.

[15] In our view this is not the right case to address the issue raised in the leave application.  While that issue is of interest to the profession, its answer must await a case that directly engages the rule, in the context of a proper factual matrix rather than a hypothetical.






Access to Discovery and Summary Trial "Sufficient Reason" to Sue in Supreme Court

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


As previously discussed, a litigant who receives less than $25,000 in damages following a Supreme Court trial is dis-entitled to costs unless they have ‘sufficient reason’ to sue in the Supreme Court.  Reasons for judgement were released today canvassing this area of law.
In today’s case (Mehta v. Douglas) the Plaintiff was injured in a motor vehicle collision.  He sued and following trial was awarded just over $18,000 in damages.  ICBC argued the Plaintiff should not be awarded costs because he did not have sufficient reason to sue in the Supreme Court.  Mr. Justice Harris disagreed and found that access to examinations for discovery and summary trials were were sufficient for commencing the lawsuit in the Supreme Court.  In awarding the Plaintiff costs the Court provided the following reasons:

[9] I accept the submissions of the plaintiff. In my view, the plaintiff required counsel to present her case. It would be unjust to deny her costs that would permit her partially to defray the expense of retaining counsel. Although it would have been difficult to predict at the outset whether this matter would prove to be suitable for summary determination, the availability of examinations for discovery and the possibility of summary trial are both factors that in the circumstances of this case are sufficient to justify starting the action in this court. The availability of these procedures and their potential to promote a proportionate and efficient use of resources is something that would be known at the outset. In my view, it would be unjust to deprive the plaintiff of costs in circumstances where knowing of those procedures she has subsequently used them efficiently.

[10] Although the plaintiff did not initially plead the injuries that ultimately formed the primary basis of the summary trial, I accept that it is appropriate to be cautious in assessing what could reasonably be predicted as the quantum for a damages claim when the action is started, particularly in the case of an infant. While on the facts that were known concerning the minor nature of the plaintiff’s soft tissue injuries and the speed with which they had resolved, it would have been unlikely that the award would exceed the small claims jurisdiction, but the exact value of the claim nevertheless could not be predicted accurately. Given the uncertainties facing the plaintiff at the time she started the action, it was not unreasonable to start it in this court.

[11] Taking all of these factors into account, I am of the view that the plaintiff had sufficient reason to start this action in this court and accordingly she is entitled to her costs in accordance with Schedule B.