Costs and Sufficient Reason to Sue in the Supreme Court: Clarity from the BCCA

Welcome reasons for judgement were released today by the BC Court of Appeal addressing when a Plaintiff has ‘sufficient reason‘ for suing in the BC Supreme Court.  In short the top BC Court ruled that trial judges can look beyond the value of a claim when addressing this topic.  This issue is important because generally a Plaintiff who succeeds in a Supreme Court lawsuit but is awarded below $25,000 (the current monetary jurisdiction of the BC Provincial Court) will be deprived of costs unless they have ‘sufficient reason‘ for suing in the Supreme Court.
In today’s case (Gradek v. DaimlerChryster Financial) the Plaintiff was injured in a 2006 collision.  His lawsuit was successful and he was awarded damages of just over $9,000.  The trial judge also awarded costs of $6,600.  In doing so the trial judge made the following useful findings when individuals sue an insured defendant:

[42]      The plaintiff is who he is.  As such, he would have had extraordinary difficulty presenting a case on his own.  While the defendant, represented by the insurer, suggested that in Provincial Court it might, at times, be represented by an adjuster, in my view, whether the defendant was represented by an adjuster or a lawyer the plaintiff would have been outmatched.

[43]      In my opinion the plaintiff required counsel to obtain a just result. Costs are not awarded in Provincial Court.  [Emphasis added.]

ICBC Appealed this order arguing that a court can only look at the likely value of a claim when deciding whether there is sufficient reason to sue in the BC Supreme Court.  The Court of Appeal disagreed and dismissed the appeal.  In doing so the Court provided the following useful reasons addressing the scope of ‘sufficient reasons‘ under Rule 14-1(10) of the Civil Rules:

[16]        The words “sufficient reason” are not defined in the Rules of Court.  In their ordinary and grammatical sense, they do not suggest a specific limitation in terms of application, although it is clear that “any reason” will not do.  The reason has to be “sufficient”, but there is nothing in the Rule to suggest that it has to be connected solely to the quantum of the claim.  On the other hand, the words do not connote the exercise of a discretion, with its attendant deferential standard of review.  That point was made by this Court in Reimann v. Aziz, 2007 BCCA 448, 72 B.C.L.R. (4th) 1, at para. 13:

[13]      At the outset, I observe that the application of Rule 57(10) does not involve an exercise of discretion.  For a plaintiff who recovers a sum within the jurisdiction of the Small Claims Court to recover more than disbursements, the court must make a finding that there was sufficient reason for bringing the action in the Supreme Court.

[17]        In support of its position, the appellant relies on the nature and purpose of the legislative scheme which, he submits, reflect an intention on the part of the Legislature to confine the meaning of the words “sufficient reason” to reasons relating only to quantum as assessed at the outset of the claim.  In that respect, it is common ground that the primary purpose of denying costs in the Supreme Court to those with monetary claims of $25,000 or less is to encourage claimants to bring their claims in Small Claims Court, with its simplified procedures and greater accessibility to judicial dispute resolution.  Litigating in the Supreme Court when the amount of money involved is relatively small can be prohibitive for both the “winner” and the “loser”.

[18]        I am in general agreement with the appellant’s submission in its factum (at para. 33) that the object of the small claims procedures set out in the Small Claims Act, R.S.B.C. 1996, c. 430 and Rules, B.C. Reg. 261/93 is “to provide parties, and lay litigants, in particular with an easily understandable, flexible, and less costly alternative to the Supreme Court”.  I am also prepared to accept that, in most cases, the pre-trial procedures, including pre-trial disclosure of documents and expert reports, mediation services, settlement conferences and recovery of such reasonable expenses as interpreter fees, provided in the Provincial Court, will enable the parties to proceed in a cost-efficient manner to a just result.  But, that will not always be the case.  In this instance, for example, the trial judge was satisfied that Mr. Gradek’s circumstances required the assistance of counsel to obtain a just resolution of his claim.  It is implicit in his reasons that he considered that it would be unjust to find that Mr. Gradek require counsel to properly present his claim, on the one hand, and to deny him costs which would partially offset the expense of retaining counsel, on the other.  It was on this basis, in part, that he found there was “sufficient reason” within the meaning of Rule 57(10) to bring the action in the Supreme Court with its attendant relief for the successful party in costs.

[19]        Without endorsing all of the factors relied on by the trial judge as constituting “sufficient reason” in this case, I am satisfied that there may be circumstances which may constitute sufficient reason for bringing an action in the Supreme Court, thereby triggering its costs provisions, despite the fact that it is apparent from the outset that the award will fall within the monetary jurisdiction of the Provincial Court.  It is open to a defendant who believes that the claim should not have been brought in the Supreme Court to apply under s. 15 of the Supreme Court Act, R.S.B.C. 1996, c. 443, to have the matter transferred to the Provincial Court.  Alternatively, if the matter proceeds in the Supreme Court, it is open to the defendant to ask that a successful plaintiff be denied costs on the basis that there was not sufficient reason to bring the action in the Supreme Court in the first instance.

[20]        I accept that the narrow interpretation of the words “sufficient reason” advocated by the appellant would provide greater certainty to litigants in knowing the consequences of proceeding in Supreme Court where the matter falls within the Small Claims monetary limit.  But I agree with the trial judge that if the Legislature had intended to limit the scope of the words “sufficient reason” to the extent suggested by the appellant, it could readily have done so.  While I am satisfied that the words, “sufficient reason” should not be interpreted in an expansive manner, but with restraint, I am also satisfied that they must be read in such a way that a trial judge is not forced to deny a party costs where he is satisfied, as here, that justice can only be achieved as between the parties by an award of costs to the successful party.