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More on the Reality of Insurance and Costs Consequences Following Trial

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


Update March 21, 2014 – the Trial Judgement with respect to the relevance of insurance and costs was upheld today by the BC Court of Appeal
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In 2010 the BC Court of Appeal confirmed that Judges can look at insurance when considering the “financial circumstances” of litigants when addressing costs consequences following trials where a formal settlement offer was made.  Further reasons were released last week by the BC Supreme Court, Victoria Registry, confirming that costs consequences should not be applied with the ‘fiction‘ of ignoring insurance.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003. At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Prior to trial the Plaintiff offered to settle for $750,000.  Neither Defendant accepted.  Damages at trial were assessed at just over $1.1 Million with the Defendants being jointly and severally liable.  The Plaintiff sought and was awarded double costs from the time of her offer onward.  In doing so Mr. Justice Johnston provided the following useful reasons addressing the reality of insurance and the risks of joint and several liability:

[33]Also relevant to consider is the fact that a well-funded party, such as MoTH,  faces higher risk with joint liability when other potentially liable parties have less means or no means with which to satisfy a possible judgment. In such circumstances, the well-heeled party may end up paying more than its proportionate share to the plaintiff if or when the impecunious party exhausts its ability to pay.

[34]This risk is balanced by the potential that the plaintiff might be held partly to blame for her losses, which would confine the well-funded party’s liability to its proportionate share of the loss through several liability: Leischner (Next friend of) v. West Kootenay Power, [1982] B.C.J. No. 1641…

[40]Quite apart from the fact that I am bound by the decision in Smith v. Tedford, its reasoning eliminates one fiction that ought not to complicate proceedings before a judge alone. That fiction is that there is no plan of universal compulsory automobile insurance in effect in British Columbia, mandated by statute, where the details of the coverage available are found in statute and regulation. If judges and others are presumed to know the law, there is little sense in requiring that judges ignore what the law provides when dealing with costs.

Government Housing Loan Potentially Leads to Private Law Duty of Care in Brain Injury Case

Written by admin on . Posted in BCSC Civil Rule 9, Uncategorized.


Reasons for judgement were released recently by the BC Supreme Court, Vancouver Registry, discussing whether a government home improvement loan can create a private law duty of care.
In last month’s case (Benoit v. Banfield) the Plaintiff suffered a serious brain injury when falling from a staircase built by the Defendant. The Defendant reportedly built the stair case “without handrails or guards“.
The construction was financed in part by a forgivable loan provided by the Canada Mortgage and Housing Corporation (“CMHC”). The loan was part of a program called the Canadian Home Renovation Plan. The money was to be advanced “upon satisfactory completion of the work” by the homeowner and CMHC was to conduct two inspections to ensure the work was “completed satisfactorily“.
The Plaintiff sued the homeowner and also the CMHC. The CMHC applied to dismiss the lawsuit arguing that their limited relationship to the plaintiff did not create a private law duty of care. Madam Justice Wedge disagreed and allowed the lawsuit to proceed. In doing so the Court provided the following reasons:

[39] In the present case, CMHC offered grants of up to $3,000 per applicant for a one-year period. The pool of funds from which to draw was limited in the amount of $30 million. Thus, even were one to consider the possibility of a duty of care to all loan recipients, the number of persons is not indeterminate. In the context of the present case, liability extends only to the class of persons who might reasonably be foreseen as users of the defective staircase in question.

[40] Thus, I conclude that on the facts as pleaded by the infant plaintiff, there is a reasonable prospect of successfully establishing proximity. The plaintiff’s claim is grounded in allegations of specific conduct by CMHC concerning the creation of the defective staircase and its negligent inspections.

[41] As noted by the Supreme Court of Canada in Imperial Tobacco at para. 47:

… where the asserted basis for proximity is grounded in specific conduct and interactions, ruling a claim out at the proximity stage may be difficult. So long as there is a reasonable prospect that the asserted interactions could, if true, result in a finding of sufficient proximity, and the statute does not exclude that possibility, the matter must be allowed to proceed to trial, subject to any policy considerations that may negate the prima facie duty of care at the second stage of the analysis.

[42] This case falls squarely within the circumstances described in that passage, and accordingly the motion to strike is dismissed.

Formal Settlement Offers and Costs Consequences: A "Broad Discretion"

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


Reasons for judgement were released last month by the BC Supreme Court, Vancouver Registry, discussing the broad discretion that Judges have respecting costs consequences following trial where formal settlement offers have been made.
In last month’s case (Ward v. Klaus) the Plaintiff was involved in a motor vehicle collision.  Prior to trial ICBC tabled a $493,000 settlement offer.  As trial neared the offer was increased to $595,000.  The Plaintiff rejected these offers and went to trial.  At trial the presiding judge awarded just over $434,000.
ICBC brought an application to be awarded post offer costs.  This would have created a ‘costs swing‘ of $149,000.  Mr. Justice Goepel ultimately stripped the Plaintiff of her post offer costs but did not make her pay the Defendants costs reducing the sting of her failure to best the formal settlement offer.  In demonstrating the ‘broad discretion‘ of Rule 9-1 Mr. Justice Goepel provided the following reasons:

[32] Since its inception in 2008, much ink has been spilled explaining the Rule. LexisNexis Quicklaw presently references some 231 decisions in which the Rule has been discussed. From the decisions, some broad principles of general application have emerged concerning how the Rule should be applied.

[33] It is now generally recognized that the Rule provides for the exercise of a broad discretion by trial judges and provides principles to guide in the exercise of that discretion: Roach v. Dutra, 2010 BCCA 264, 5 B.C.L.R. (5th) 95…

[53] For the reasons I have stated, it cannot be said that the plaintiff should have accepted either offer. That is, however, the beginning, not the end of the analysis. Unlike Rule 37 which mandated the outcome regardless of the circumstances, Rule 9-1 gives the court a broad discretion to determine the consequence of a successful offer to settle. While the Rule is intended to reward the party who makes a reasonable settlement offer and penalizing the party who fails to accept it, the several options set out in Rule 9-1(5) allows the court to determine with greater precision the penalty or reward appropriate in the circumstances.

[54] In this case, regardless of the merits of the plaintiff’s case, the defendant’s offers to settle cannot be ignored. To do so would undermine the purpose of the Rule. Having decided to proceed in the face of two not insignificant and ultimately successful offers to settle, the plaintiff cannot avoid some consequences. That said, in the circumstances of this case, to deprive the plaintiff of her costs and have her in addition pay the costs of the defendant would be too great a penalty. It would not be fair or just to require the plaintiff to pay the defendant’s costs after the date of the First Offer. Similarly, however, I find that the defendant should not pay the costs of the plaintiff after the delivery of the First Offer, which costs were only incurred because the plaintiff decided to proceed.

[55] Accordingly, I find that the plaintiff is entitled to her costs up to May 3, 2010. The parties will bear their own costs thereafter.

Criminal Guilty Plea Strips Defendant of Civil Liability Denial

Written by admin on . Posted in BCSC Civil Rule 9, Uncategorized. 47 Comments on Criminal Guilty Plea Strips Defendant of Civil Liability Denial


Typically it is an abuse of process for an individual to plead guilty to criminal charges and to then deny liability in a subsequent civil lawsuit arising from the same incident.  The BC Supreme Court Rules allow judges to strike pleadings denying previous admissions as an ‘abuse of process‘.  Reasons for judgement were released this week by the BC Supreme Court, Nelson Registry, demonstrating such a result.
In this week’s case (Plishka-Humphries (Guardian ad litem of) v. Bolen) the Plaintiff was assaulted and battered by the Defendant Bolen.  The Defendant plead guilty to aggravated assault as a result of the incident.  In a subsequent civil lawsuit the Defendant denied liability.  The Plaintiff brought an application for summary judgement which was granted.  In finding the Defendant civilly liable for the incident Mr. Justice McEwan provided the following reasons:
[11] The present case differs from Franco in that the defendant is not asserting a defence that parallels the position he took before the criminal court. In such circumstances a defendant’s position at least has the virtue of consistency. Here, the defendant seeks to give an exculpatory version of facts he has previously admitted…

[13] Here, however, at the sentencing proceeding, the defendant admitted the facts that the plaintiff alleges in the civil case. He now wishes to contradict those admissions. This is not a case of a careless plea, or a plea to a vague and uncertain set of facts.  Nor is it a case where there was a lack of incentive to dispute a minor charge. It is also not a case of new evidence. There was no hint or suggestion of a threat from the plaintiff, at the sentencing proceeding, let alone facts that could be characterized as a form of self-defence. There was, rather, a submission that he was taking responsibility and acknowledging the harm he had done. In the context of that hearing it appears that this was offered as a kind of mitigation.

[14] The transcript also contradicts the defendant’s suggestion that he pled guilty on his lawyer’s advice and not because he considered himself guilty. He stood in court while his lawyer represented variously that he was “deeply remorseful”, “wants to plead guilty”, “wants to announce his guilt” … “recognizes this,” that “[h]is reaction was wrong” or that he wanted to save the young man from going to trial, and “have some lawyer probing on–about ball bearings.”

[15] The material the defendant has presented does not raise a genuine issue to be tried. The Certificate of Conviction tendered in this case is roughly equivalent to proof of a formal admission. There is nothing arising from the circumstances in which the guilty plea was entered that casts doubt upon the defendant’s intention at the time, or his appreciation of what he was doing. There is no ambiguity in the facts that he admitted. The explanation he offers for sitting through the hearing on September 21st, 2005 while the case was, from his present perspective, grossly mischaracterized, is thoroughly unconvincing…

[17] There will therefore be judgment for the plaintiff on the issue of liability and a referral to the trial list on the issue of quantum.

For more on this topic you can click here to review a recent case where a careless driving guilty plea was a barrier to a civil denial of liability following a motor vehicle collision.

Insurance Policy Limits Relevant to Formal Settlement Offer Costs Analysis

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 7, BCSC Civil Rule 9.


In 2010 the BC Court of Appeal found that Judges could consider the existence of insurance when exercising costs discretion following a trial in which a formal settlement offer was made.  Last week reasons for judgement were released by the BC Supreme Court, Victoria Registry, expanding on this principle finding that the limits of insurance coverage were equally applicable.
In last week’s case (Meghji v. Lee) the Plaintiff suffered brain trauma after being struck by a motorist while walking in a marked cross-walk in 2003.  At trial the motorist was found 90% at fault for the crash with the Ministry of Transportation shouldering the remaining 10% for designing the intersection with inadequate lighting.
Following trial the Plaintiff applied for double costs as the trial result exceeded a pre-trial formal settlement offer she made.   The Defendant wished to place information relating to his insurance policy limits before the Court before a costs decision was made.  In finding this was appropriate Mr. Justice Johnston provided the following reasons:

[6] Rule 7-1(4) reads:

(4)        Despite subrule (3), information concerning the insurance policy must not be disclosed to the court at trial unless it is relevant to an issue in the action.

[7] Subrule (3) requires a party to list in his or her list of documents insurance policies that, generally speaking, might be available to satisfy a judgment in whole or in part should the judgment be entered.

[8] Mr. Lee has responded by arguing that the trial is over (subject, of course, to an application to re-open prior to entry of judgment), and even if the trial is not at an end, his policy limits are now relevant to an issue in the action, being costs. That relevance can fall under one or more of the considerations set out in Rule 9?1(6).

[9] Counsel for the Ministry of Transportation and Highways (MoTH) disagrees as to the relevance of Mr. Lee’s insurance limits.

[10] I have concluded that the amount of Mr. Lee’s automobile liability insurance limits is relevant to the considerations set out in Rule 9-1(6). The amount of available insurance could affect the question whether the offer was one that ought reasonably to have been accepted, and it could also affect the weighing of the relative financial circumstances of the parties.

[11] Counsel for Mr. Lee is authorized and directed to disclose the amount of Mr. Lee’s liability insurance limits operative at the time of the accident.

Formal Settlement Offers and Costs: A Matter of Discretion

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


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

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

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

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

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

Provincial Court BackLog Justifies Modest Injury Trials in BC Supreme Court

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


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

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

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

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

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

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

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

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

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

Social Host Lawsuit Involving "Disastrous" Injury Survives Summary Dismissal Application

Written by admin on . Posted in BCSC Civil Rule 9, ICBC Liability (fault) Cases, Uncategorized.


Important reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that given the right circumstances a ‘social host’ can be found negligent if one of their guests becomes impaired and subsequently causes a motor vehicle collision.
In this week’s case (Sidhu v. Hiebert) the three infant plaintiffs were injured in a motor vehicle collision.  They were passengers in their parents vehicle which was struck by another motorist.  There was evidence that the driver of the other vehicle was previously at a social party where he consumed alcohol.   There was also evidence that he had blood alcohol content high enough that he “would have had to drink between 20 and 26 ounces of hard liquor to produce such a result“.  The liquor was not necessarily all consumed at the social gathering.
One of the infant plaintiff’s was “disastrously injured”  with his spinal cord severed in the high cervical area.
The lawsuit was launched alleging negligence against not only the motorists but also the social host.  The social host brought an application for summary dismissal arguing that the 2006 Supreme Court of Canada judgement of Childs v. Desormeaux eliminated the possibility of success in social host lawsuits.  Mr. Justice Johnston disagreed and dismissed the Defendant’s motion.
The Court held that given the right circumstances social host lawsuits can succeed but given some conflicts in the evidence presented this specific case was inappropriate for summary disposition.  In dismissing the application Mr. Justice Johnston provided the following reasons:
[32] Whether a duty had been established on the face of it depended on the answer to this question: “What, if anything, links party hosts to third-party users of the highway?” (Childs, para. 24)…

[43] The court says at para. 31:

… However, where the conduct alleged against the defendant is a failure to act, foreseeability alone may not establish a duty of care. In the absence of an overt act on the part of the defendant, the nature of the relationship must be examined to determine whether there is a nexus between the parties. Although there is no doubt that an omission may be negligent, as a general principle, the common law is a jealous guardian of individual autonomy. Duties to take positive action in the face of risk or danger are not free-standing. Generally, the mere fact that a person faces danger, or has become a danger to others, does not itself impose any kind of duty on those in a position to become involved. [Emphasis in original.]

[44] I take from this passage that this aspect is also evidence-driven, in that whether there is a nexus between the parties will depend on the nature of any relationship revealed by the evidence. The passage also suggests that if there is more than a “mere fact that a person faces danger,” again revealed in the evidence, the general statement may not apply.

[45] The court in Childs summarized three situations where courts have in the past imposed positive duties to act: where a defendant has intentionally attracted and invited third parties to inherent and obvious risks created or controlled by the defendant; where there is a paternalistic, supervisory or controlling relationship between defendant and plaintiff; and where the defendant is engaged in a public function or commercial enterprise that implies responsibility to the public.

[46] I agree with counsel for Mr. Rattan that this case does not fit comfortably within any one of these three situations, but I also note that the Court in Childs at para. 34 said these were not strict legal categories, but serve to elucidate factors that can lead to positive duties to act.

[47] After pointing out that the three situations have in common the defendants’ “material implication in the creation of the risk or his or her control of a risk to which others have been invited,” and the reluctance of the law to infringe on the personal autonomy of someone in Mr. Hiebert’s position without good reason, the Court at para. 39 points out that someone in Mr. Rattan’s position might be expected or required by law to impinge on Mr. Hiebert’s autonomy only when he has a special relationship to the person in danger (not apparent here), or “… a material role in the creation or management of the risk.”…

[56] Because I am persuaded that this case should be decided on a full record of evidence at trial, I conclude that I should leave to trial the question of whether motorists can reasonably rely on a social host to not exacerbate an obvious risk by continuing to supply alcohol to an apparently impaired guest who the host knows will drive away from the party. It seems to me that justice requires that I allow the parties to develop the evidence and argument on a full trial.

[57] Mr. Rattan’s application is dismissed with costs in the cause.

This case is also worth reviewing for the Court’s discussion of whether a passenger in the alleged impaired driver’s vehicle could be found liable.  The Social host brought ‘third party’ proceedings against the motorists passenger arguing that if they are liable then the driver’s passenger should be as well.  Mr. Justice Johnston dismissed this allegation finding that even viewing the evidence in the most favourable light this allegation would fail.  The Court provided the following reasons:

[65] If I assume for the purposes of this application that the evidence showed that Mr. Braun and Mr. Hiebert arrived together at the party in an intoxicated condition, both continued to drink Mr. Rattan’s alcohol to excess at the party, and both left together at the end, in a more intoxicated condition than when they arrived – with Mr. Hiebert driving and Mr. Braun as his passenger – is there a possibility that the first branch of the Anns test might be satisfied? My answer is no.

[66] The language in Childs that might allow a court to conclude that a social host owes a duty of care to highway users injured by a driver who becomes impaired as a guest of the host does not go so far as to admit the possibility of a duty on a companion or fellow traveler who does no more than observe the risky behavior of the drinking guest, and perhaps acquiesce to an extent in the risk by drinking with and then accepting a ride home from the party with the drunken guest.

"Nominal" ICBC Offer Fails To Trigger Double Costs Award

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9. 59 Comments on "Nominal" ICBC Offer Fails To Trigger Double Costs Award


As previously discussed, BC has a true ‘loser pays‘ system which generally requires the loser of a lawsuit to pay the winners costs.  If a Defendant makes a formal settlement offer and defeats the Plaintiff’s lawsuit the Court has the discretion to award double costs.  Reasons for judgement were released recently by the BC Supreme Court, New Westminster Registry, refusing to make such an order in circumstances where the formal offer was little more than a walk-away offer.
In last week’s case (Habib v. Jack) the Plaintiff was injured while riding as a passenger in the Defendant’s bus.  The parties agreed on the value of the Plaintiff’s injuries but disagreed on the issue of fault.  Prior to trial ICBC made a formal settlement offer of $1,000.  The Plaintiff rejected this offer, proceeded to trial, and had her claim dismissed.
ICBC was awarded costs and asked the Court to award double costs pursuant to Rule 9-1(5).  Madam Justice Ross refused to do so noting that the offer was ‘nominal’ and that it was not unreasonable for the Plaintiff to have her day in court.  The court provided the following helpful reasons:

[15] The defendants submit that having regard to the factors enumerated in the Rule, the court ought to award double costs. Counsel submits that the offer was not nominal; it gave the plaintiff modest recovery and represented a willingness to compromise that the Rule is meant to foster. The offer was made at a time when the discoveries of both parties were complete and the evidence was known. The plaintiff’s position is that this was a nuisance offer and it cannot be said, without applying hindsight, that it ought to have been accepted.

[16] At the time the offer was made, it was clear that the plaintiff had suffered an injury. There was a dispute with respect to liability. Mr. Jack had limited recollection. The only two witnesses were Ms. Habib and Mr. Jack.

[17] In my view the offer was nominal given Ms. Habib’s injury. I agree with the observations of Burnyeat J. in Martin v Lavigne and Neufeld (Costs), 2010 BCSC 1610 at para. 13, that there are situations in which a nominal offer should have been accepted. However, in my view this is not such a case. It cannot be said that it was clear that the action had little chance of succeeding on the merits. Rather, there was a significant risk that the case would be lost on liability. This risk materialized and the action was lost at trial; however, in the circumstances it was not unreasonable for the plaintiff to reject the offer and proceed to trial.

[18] On balance I have concluded that this is not a case to make an order for double costs as sought by the defendants based upon the offer to settle. In the result, the defendants will have their costs.

More on Costs and the Flexibility of the New Rules of Court

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized. 52 Comments on More on Costs and the Flexibility of the New Rules of Court


(Update June 5, 2013- the underlying trial verdict was upheld in reasons for judgement released today by the BC Court of Appeal)
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As previously discussed, one of the best changes in the New Rules of Court is the ability for trial judges to have discretion in assessing costs consequences where one party bests their formal settlement offer at trial.
Generally where a Plaintiff fails to beat a Defence formal settlement offer they can be punished with a significant costs award.  Fortunately Rule 9-1 does not force a Court to this result and instead leaves some discretion in the process.   This discretion was demonstrated in reasons for judgement released last week by the BC Supreme Court, New Westminster Registry.
In last week’s case (Gatzke v, Sidhu) ICBC, on the Defendant’s behalf, made a formal settlement offer of $50,000.  The Plaintiff proceeded to trial and after a split finding of liability was assessed damages at “an amount to someting less than $10,000“.
ICBC brought a motion to be awarded post offer costs.  Mr. Justice Saunders refused to make this order instead simply ordering that the Plaintiff be deprived of her post offer costs and that the Plaintiff pay the disbursements associated with bringing the Defendant’s IME doctor to trial.  In reaching this result the Court provided the following reasons:

[14] …. Ordinarily, where a plaintiff obtains judgment for less than the amount offered in settlement, the legislative purpose of the Rule would be fulfilled by awarding the defendant its costs from the date the offer was made.  However, where there is a very significant gap between the judgment amount and the offer, it may be the case that a defendant is in a better position for having gone to trial, even taking its counsel’s fees into account.  This appears to have quite possibly been the case in the present circumstances.  The damages assessed, net of the plaintiff’s contributory negligence, are a small fraction of the offer.

[15]Defendants should not be discouraged from making generous settlement offers.  But where the end result is dramatically different than the offer resulting in a net savings to the defendant, a defendant found to be partially at fault can reasonably expect to bear some of the cost of obtaining that result.

[16]The plaintiff apparently has very limited financial means.  This factor, however, will be given the most weight where it is the subject accident, or other issue between the parties, which is responsible for the plaintiff’s circumstances.  That is not the case here.

[17]The defendants, on the other hand, were presumably being defended by the Insurance Corporation of British Columbia.  An insured defendant’s greater financial ability to defend is a factor which was described by the B.C. Court of Appeal in Smith v. Tedford, 2010 BCCA 302, as being a matter “of no small importance to considering whether and to what extend the financial circumstances of the parties, relative to each other, bear on an award of costs”.

[18]This appears to have been a case where both parties undertook a course of action based on an overestimation of the risk to the defendants.  There is no compelling case, in the circumstances, for awarding the defendants the entirety of their post-offer costs.  Given the plaintiff’s financial circumstances and the very modest damages, the purpose of the Rule will be met by awarding the plaintiff 30% of her costs to the date of the offer, and awarding the defendants only the disbursements incurred in association with the attendance at trial of their expert witness, Dr. Sovio.  Dr. Sovio’s attendance at trial was only required for cross-examination at the plaintiff’s request, and it is appropriate that this cost be borne by the plaintiff.  That amount is to be set off against the plaintiff’s award of damages.