Costs Awarded To Plaintiff Following Successful Part 7 Action of "Limited Monetary Value"


As previously discussed, if a Plaintiff successfully sues in the BC Supreme Court and is awarded damages under $25,000 (the current monetary limit of the BC Small Claims Court) the Plaintiff will not be entitled to costs unless they had ‘sufficient reason‘ for suing in Supreme Court.  Useful reasons for judgement were released today by the BCSC, New Westminster Registry, addressing this issue after a Part 7 Benefits trial.
In today’s case (Derbyshire v. ICBC) the Plaintiff was injured in a motor vehicle collision.   She was employed as a commercial painter and as a result of the crash became disabled from her own occupation.  She was insured with ICBC who provided one week of disability benefits and then refused to reinstate these.
The Plaintiff’s treating GP and a rheumatologist supported the fact that the Plaintiff was disabled.  ICBC obtained an ‘independent medical examination report‘ from an orthopaedic surgeon who concluded that the Plaintiff “should have been able to have resumed her previous level of activity” within 8 weeks of the crash.
The Plaintiff sued in the Supreme Court and ultimately was successful with Mr. Justice Saunders finding that ICBC was wrong in cutting off the Plaintiff’s rehabiliaiton and disability benefits.  The total value of the Plaintiff’s claim by the time of trial was well below $25,000 however the Court went on to award costs finding that Plaintiffs suing for on-going benefits under Part 7 have sufficient reason to sue in the Suprene Court.   Mr. Justice Saunders provided the following reasons:
I accept what Mr. Cabanos says regarding the apparent, at this point, potentially limited monetary value of the claim being within the jurisdiction of the Provincial Court, but Mr. Milne is quite correct that the test for costs is whether it was appropriate to bring this action and this application in Supreme Court.  In my view, it was appropriate given the indeterminate size of the total benefits that could be granted to the claimant over the entire course of her disability and it was further appropriate with respect to the summary disposition mechanisms that are available in this court, the alternative in Provincial Court only being a full trial.

The High Cost of Losing an ICBC Injury Claim


I’ve written many times about the significant costs a party can be exposed to for being on the losing end of a BC Supreme Court lawsuit.  Reasons for judgement were released today further demonstrating this reality under the New BC Supreme Court Rules.
In today’s case (Chen v. Beltran) the young Plaintiff entered an intersection against a red light on his skateboard.  He was struck by a vehicle operated by the Defendant and sustained injuries.  He sued for damages but his claim was dismissed with the Court finding him entirely at fault for the accident.
Rule 14-1(9) of the BC Supreme Court Rules typically requires a losing party to pay costs to a successful party.  ICBC relied on this section and requested that their costs of over $75,000 be paid by the Plaintiff’s family.   The Plaintiff opposed arguing that no costs should be awarded.  One of the reasons advanced by the Plaintiff was that such an order would “financially cripple the (plaintiff’s) family“.
Mr. Justice Greyell rejected this argument.  The Court, while disallowing some of the most significant disbursements claimed by the Defendant, did go on to order that the Plaintiff pay the Defendant’s costs.  In rejecting the “financially crippling” argument Mr. Justice Greyell reasoned as follows:
[11] The first basis upon which the plaintiff says the defendants should be denied costs is that Allan suffered significant injuries in the Accident and will require ongoing medical and psychological care throughout his life.  His ongoing care will involve significant cost to both his parents.  Allan’s parents have already incurred substantial debt to prosecute the lawsuit, have limited financial resources and will have difficulty providing for Allan’s future care even if they are successful on this application.  The plaintiff says that an order for costs will financially “cripple” the family.  While I have great sympathy for Allan’s parents the case law is clear that the financial circumstances of a litigant, standing alone, are not to be taken into consideration as a factor in the awarding of costs…

[14]         It is clear based on the above authorities that this Court is unable, on any principled basis, to take the plaintiff’s financial circumstances into account in determining whether to award costs.

[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.

It is worth noting that this result should be contrasted with cases decided under Rule 9-1(5) where the Court does have a discretion to consider a party’s financial circumstances following trial where a formal offer of settlement was made.
Today’s case demonstrates the real world expenses that can be associated with losing an ICBC Claim in the BC Supreme Court.  It is vital to gauge these costs and the risks of trial prior to putting a case before a Judge or Jury.

More Than Lawyer's Say Needed For MRI's to be Recoverable Disbursements


Further to my previous post on this topic, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, discussing when an MRI is a reasonable disbursement in a personal injury lawsuit.
In today’s case (Farrokhmanesh v. Sahib) the Plaintiff was injured in two BC collisions.  He sued for damages and settled his claims prior to trial.  However, the parties could not agree on whether some of the Plaintiff’s disbursements were reasonable.  The parties applied to the Court to resolve the issue and Registrar Sainty held that the Plaintiff’s privately retained MRI was not a recoverable disbursement.  The Plaintiff appealed this ruling.  Mr. Justice Ehrcke dismissed the appeal and in doing so made the following comments about MRI’s in personal injury lawsuits:

[33]         The applicant submits that the Registrar erred in principle by saying that there must be a medical reason for ordering the MRI. In my view, the applicant’s submission seeks to parse the Registrar’s decision too finely. In reviewing the Decision of the Registrar with the appropriate level of deference, it would be wrong to focus on a single word or a phrase taken out of the context in which it occurs.

[34]         When read in context, the Registrar’s reason for disallowing the cost of the MRI is that she found it was not necessarily or properly incurred. In coming to that conclusion, she took into account that no medical professional had advised counsel of the probable utility of an MRI in the particular circumstances of this case. Mr. Fahey had deposed in para. 11 of his affidavit that he was unaware of the plaintiff exhibiting any objective signs of injury when he ordered the MRI scans.

[35]         I am unable to find that the Registrar acted on a wrong principle in disallowing the cost of the MRIs in this case, and I would not interfere with her Decision.

To be on the safe side it is a good idea to have a treating medical practitioner requesting an MRI or other diagnostic test to maximize the chance that these expenses will be recoverable disbursements.

Lump Sum Costs and the New BC Supreme Court Rules


Reasons for judgement were released today by the BC Supreme Court, Kamloops Registry, finding that the new Civil Rules give the BC Supreme Court the power to award lump sum costs without the need for taxation.  Madam Justice Adair held that this power was not available under the former rules absent party consent.
In today’s case (Madock v. Grauer) the Plaintiffs sued the Defendants for damages.  At trial one of the Defendant’s was ordered to pay $5,000 in damages.  The parties could not agree on the cost consequences that followed and applied to the trial judge to address this issue.   Madam Justice Adair ultimately held that the Plaintiff was entitled to costs and fixed these at $11,000.  In doing so the Court provided the following reasons about the ability of trial judges to award lump sum costs:

[47]         Under Rule 14-1(15), “The court may award costs (a) of a proceeding . . . and in awarding those costs the court may fix the amount of costs, including the amount of disbursements.”  This Rule is to be contrasted with its counterpart in the old Rules, Rule 57(13), which provided, and I am going to emphasize the first few words:

With the consent of the parties, the court may fix a lump sum as the costs of the whole proceeding, either inclusive or exclusive of disbursements and expenses.

A key change in the new Rule is that consent of the parties is no longer necessary, before the court can fix lump sum costs.

The Court went on to use the new concept of ‘proportionality‘ and found that this was an appropriate case to order lump sum costs.  Madam Justice Adair provided the following reasons:

[49]         I have concluded that these siblings and Mr. Grauer would not be well-served by having a forum – namely, taxation of costs – in which they can continue to litigate over the late Mr. McKenzie’s estate.  Moreover, prolonging litigation among these parties is, in my opinion, out of all proportion to the amount involved, the importance of the issues in dispute and the complexity of the proceeding.  Rather, it is now time for finality.  The costs consequent on my judgment following the trial must also be in some rational proportion to the amount ultimately recovered, which was $5,000.  The costs – indeed the double costs – that the plaintiffs suggest in their submissions they should be awarded are out of all proportion to what would be reasonable.

[50]         I have therefore concluded that, in this case, orders should be made for lump sum costs under Rule 14-1(15)

The Price of Passing the Buck: Dismissed Third Party Claims and Costs Consequences


As previously discussed, when Plaintiffs lose a lawsuit in the BC Supreme Court the Defendants are typically each entitled to recover their ‘costs‘.   For this reason Plaintiffs need to take care in selecting the Defendants to their lawsuit.  The same principle holds true for Defendants who don’t accept blame for their actions and unsuccessfully try to pass the buck by dragging a ‘Third Party’ into a lawsuit.  Reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, demonstrating this general principle.
In this week’s case (Vedan v. Stevens) the Plaintiff sued the Defendant for personal injuries.  The Defendant denied fault and blamed the Plaintiff.  The Defendant also filed a “Third Party” claim against two individuals arguing they may be at fault and brought them into the lawsuit.  Ultimately Madam Justice Beames found that both the Plaintiff and the Defendant were at fault for the Plaintiff’s injuries but that the Third Parties were faultless.
The Third Party brought a motion seeking an order requiring the Defendants to pay their costs.  The Defendant argued that these should be the Plaintiff’s responsibility.  Madam Justice Beames disagreed and ordered that the Defendant pay the Third Party’s costs.  In reaching this typical result the Court provided the following reasons:

[7]             With respect to who ought to pay the third parties’ costs, the general rule is that a defendant who has unsuccessfully brought third party proceedings should be responsible for the third parties’ costs: Wilson v. INA Insurance Co. of Canada, [1998] B.C.J. No. 2174 (B.C.C.A.) at para. 37; Milina v. Bartsch, [1985] B.C.J. No. 2789 (S.C.) at para. 4.

[8]             As McLachlin J. (as she then was) said in Milina:

[5]        There may be situations where, on the peculiar facts of the case, fairness requires that an unsuccessful plaintiff bear a successful third party’s costs. Courts have held that such an order may be appropriate where one or more of the following situations was present:

1.         Where the main issue litigated was between the plaintiff and the third party…

2.         Where the third party was brought or kept in the matter by reason of the act or neglect of the plaintiff…

3.         Where the case involves a string of contracts in substantially the same terms for the sale of goods…

4.         Where the third party proceedings follow naturally and inevitably upon the institution of plaintiff’s action, in the sense that the defendant had no real alternative but to join the third party…

[9]             The defendant argues that this situation is very similar to that of Norman (Guardian ad litem of) v. McMillan, 2004 BCSC 384 in which the court found that the defendant fell within the exceptions in paragraphs 2 and 4 of Milina. In my view, the decision in Norman is distinguishable. There, the defendant was found completely blameless for the accident, which had initially been commenced when the plaintiff’s mother was his guardian ad litem. It had been her decision to commence the unsuccessful action against the defendant in the first instance. Certain steps that were taken in the action led the trial judge to conclude that defence counsel had a proper basis for alleging negligence on the part of the third party and the trial judge accepted that the third party, or her counsel, had employed tactics amounting to an attempt to make an end run around the defendant.

[10]         I am not satisfied that there is anything in this case which takes it out of the general rule. Consequently, the defendant will bear the third parties’ costs as assessed.

New Rules Caselaw Update: Costs and "Substantial Success" in the BC Supreme Court


The New BC Supreme Court Rule 14-1(9) states that a successful party in a proceeding “must be awarded” costs unless the court otherwise orders.  The former Rule 57(9) dealt with this issue although it had slightly different wording.
Today reasons for judgement were released, for what I believe is the first time, dealing with and interpreting the new rule.
In today’s case (Aschenbrenner v. Yahemich) the Plaintiffs sued the Defendants for trespass, nuisance, defamation and other matters.  Ultimately they succeeded in some of their claims and were awarded just over $5,500 in total damages.  The Plaintiffs applied for an order of costs.  The Defendant opposed arguing that the costs award would be worth more than the awarded damages.
Ultimately Mr. Justice Metzger sided with the Plaintiffs and awarded them most of their costs.  In doing so the Court adopted authorities developed under the former rules.  Mr. Justice Metzger provided the following reasons discussing when a party is entitled to costs under Rule 14-1(9):

[12] Rule 14-1(9) of the Supreme Court Civil Rules states that:

(9)        Subject to subrule (12), costs of a proceeding must be awarded to the successful party unless the court otherwise orders.

[13] While the Rule itself does not include the term “substantial success” under the former Rule 57(9), it was held to be a necessary and sufficient condition for an award of costs under Rule 57(9) that success in the outcome of the trial be “substantial”: see Gold v. Gold, 82 B.C.L.R. (2d) 180, 32 B.C.A.C. 287.

[14] In Fotheringham v. Fotheringham, 2001 BCSC 1321 at para. 18, 108 A.C.W.S. (3d) 786, appeal to C.A. refused, 2002 BCCA 454, 172 B.C.A.C. 179, Bouck J. stated that a trial judge has absolute and unfettered discretion with respect to costs, but it ought not to be exercised against a successful party except for some good reason in connection with the case.

[15] Mr. Justice Bouck canvassed the factors to be considered with respect to Rule 57(9), and at para. 45 stated:

[45] Gold now seems to say that substantial success in an action should be decided by the trial judge looking at the various matters in dispute and weighing their relative importance. The words “substantial success” are not defined. For want of a better measure, since success, a passing grade, is around 50% or better, substantial success is about 75% or better. That does not mean a court must descend into a meticulous mathematical examination of the matters in dispute and assign a percentage to each matter. Rather, it is meant to serve as a rough and ready guide when looked at all the disputed matters globally.

[16] Mr. Justice Bouck then sets out a four step inquiry to determine whether or not to award costs after a trial at para. 46:

1.         First, by focusing on the “matters in dispute” at the trial. These may or may not include “issues” explicitly mentioned in the pleadings.

2.         Second, by assessing the weight or importance of those “matters” to the parties.

3.         Third, by doing a global determination with respect to all the matters in dispute and determining which party “substantially succeeded,” overall and therefore won the event.

4.         Fourth, where one party “substantially succeeded,” a consideration of whether there are reasons to “otherwise order” that the winning party be deprived of his or her costs and each side then bear their own costs.

(See also: Citta Construction v. Elizabeth Lane Holdings Ltd., 2004 BCSC 280, 129 A.C.W.S. (3d) 46 at para. 7.)

[17] Substantial success is not determined by counting up the number of issues and allocating success on each, or by comparing the dollar amounts, but by assessing success in the major issues of substance (Cohen v. Cohen, 1995 Carswell 608, 15 R.F.L. (4th) 84 (B.C.C.A.) at para. 4; Reilly v. Reilly, [1996] B.C.J. No. 1244 (S.C.); Rattenbury v. Rattenbury, 2001 BCSC 593, [2001] B.C.J. No. 889 at paras. 22-24, 33). Substantial success means success on 75% of the matters globally taking into account the weight of the issues and their importance to the parties. A court should compare the pleadings and the submissions with the actual results obtained by the parties (Rattenbury at para. 24.).

[18] In cases where one party achieves substantial success, the courts may award a portion of the substantially successful party’s costs. For example, in Newstone v. Newstone, [1994] B.C.J. No. 139, 2 R.F.L. (4th) 129 (C.A.), an award of one-half costs to a party was upheld where “[s]uccess, if it could be called that, lay more with the wife than with the husband …” One-half costs were also upheld in Rolls v. Rolls, [1996] B.C.J. No. 292, 20 R.F.L. (4th) 232 (C.A.), on the ground that such an award would not create an imbalanced judgment as much as would a full award. InCohen v. Cohen, a spouse was awarded 75% of her costs after success on her reapportionment claim, which was the largest and most time-consuming issue.

[19] The four step test identified by Bouck J. applies not only to matrimonial cases, but also to all types of cases where Rule 14-1(10) has application (Chaster (Guardian ad litem of) v. LeBlanc, 2008 BCSC 47, 164 A.C.W.S. (3d) 43 at para. 34).

[20] Where success is divided such that there is no substantially successful party, the parties may have to bear their own costs (Mari v. Mari, 2001 BCSC 1848, [2001] B.C.J. No. 2979).

[21] On a global view of the outcome of this litigation I find that the plaintiffs were substantially successful.

Defendant Refused Costs at Trial For Failing to Consent to Small Claims Court Transfer


Reasons for judgement were released today addressing whether a Defendant who beat a formal settlement offer should be awarded costs.
In today’s case (Cue v. Breitkruez) the Plaintiff was involved in a rear-end collision.  He sued the rear motorist for damages.  Prior to trial the Defendant made a formal settlement offer for $1.  With liability being hotly contested the Plaintiff proposed that the case be transferred to Small Claims Court.  The Defendant refused to consent stating that “such a transfer would result in greater delay“.
At trial the Plaintiff’s case was dismissed with a finding that the Plaintiff was responsible for the collision.  (You can click here to read my summary of the trial judgement).  The Defendant then applied to be awarded double costs pursuant to Rule 9-1(5) because they beat their formal offer at trial.
Mr. Justice Smith dismissed the application noting that since Rule 14-1(10) generally restricts Plaintiff’s awarded an amount within the small claims court jurisdiction from being awarded trial costs that the Defendant should be refused costs for not agreeing to have the case heard in Provincial Court.  Specifically Mr. Justice Smith noted as follows:

7]             The matter remained in this court subject to an agreement to still limit the claim to what could be awarded in Provincial Court. Had my liability decision been different and the matter proceeded to an assessment of damages, Rule 14-1(10) would have been a bar to an award of any costs, other than disbursements, in favour of the plaintiff.  In my view, fairness requires that the same limitation apply to the successful defendant, particularly as the defendant did not agree to the proposed transfer to Provincial Court.

[8]             I therefore decline to award any costs to the defendant, other than disbursements.  There is therefore no need to consider the offer to settle because there are no costs to double.

Mild Soft Tissue Injury Valued at $4,000; BC Supreme Court Rule 14 Discussed

Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, addressing the value of non-pecuniary damages (money for pain and suffering and loss of enjoyment of life) for a mild soft tissue injury.
In this week’s case (Brar v. Kaur) the Plaintiff was involved in a 2006 rear end collision.  Prior to trial the responsible motorist admitted fault for the crash.  The matter proceeded to court under the “summary trial” rule where the evidence was presented by affidavits.   The evidence established that the Plaintiff suffered a fairly minor soft tissue injury in the crash.  Mr. Justice Truscott awarded the Plaintiff $4,000 for his non-pecuniary damages and in doing so made the following comments about the severity of the injury and the difficulty in valuing a case without hearing live testimony from the Plaintiff:
[42] It is near to impossible to assess credibility on a summary judgment application supported only by affidavits. The plaintiff’s injuries were only soft tissue injuries caused by a very minor accident and those complaints were subjectively based and not objectively verifiable. Accordingly the Court must be cautious in accepting his complaints as proven.

[43]         However Dr. Sandhu does not suggest in his report the plaintiff is not to be believed on his complaints or even suggest that he is exaggerating. He appears to have accepted the plaintiff’s complaints as legitimate and consistent with the mechanism of the accident and I likewise am prepared to accept the complaints of the plaintiff as stated in his affidavit and as reported to Dr. Sandhu.

[44]         I am prepared to conclude that the plaintiff sustained mild soft tissue injuries to his neck and back areas. While Dr. Sandhu says the plaintiff was fully recovered in six months I observe that Dr. Sandhu’s last report of complaints from the plaintiff was on May 17, 2007, only five months after the accident. Thereafter it does not appear the plaintiff saw Dr. Sandhu again until over one year later and then it was for unrelated issues…

[54] I award the plaintiff $4,000 for non-pecuniary damages as his injuries lasted slightly longer than the injuries of the plaintiffs in Saluja and Bagasbas.

This case is also the first that I am aware of to apply the New BC Supreme Court Rule 14-1(10).  This rule prevents a Plaintiff who is awarded below $25,000 from being awarded costs unless they have “sufficient reason” to sue in the Supreme Court.  Mr. Justice Truscott held that the Plaintiff did not have sufficient reason to sue in the Supreme Court because “he could never have reasonably expected to obtain an amount in excess of the Small Claims jurisdiction“.

Mr. Justice Truscott applied this rule consistently with precedents developed under the old Rule 57(10) which reads identically to the new rule.  I should also point out that the BC Court of Appeal is expected to address the issue of whether Plaintiff’s in ICBC claims worth below $25,000 have sufficient reason to sue in the Supreme Court due to the “institutional” nature of ICBC and this upcoming judgement should add welcome clarity to this area of the law.

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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