Tag: Loft v. Nat

ICBC Formal Offers Seeking to Pay FMEP Deemed Not Reasonable

Update October 6, 2015 today the BC Court of Appeal overturned the below reasoning finding “In my view, the judge erred in principle in finding that the reference in the offer to settle to ICBC’s obligation to remit settlement monies in the amount alleged to be owed by the plaintiff for arrears of support to FMEP rendered the offer not one that the plaintiff ought reasonably to have accepted.”
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Interesting reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, finding that it is not reasonable for a Plaintiff to accept a formal settlement offer from a Defendant insured with ICBC where ICBC will first pay off debts the Plaintiff allegedly owes to the Family Maintenance Enforcement Program.
In today’s case (Loft v. Nat) the Plaintiff was injured in a motor vehicle collision and sued for damages.  At trial the Plaintiff sought substantial damages of over $1.8 million.  The Plaintiff’s claims were largely rejected with damages just over $60,000 being awarded.  Prior to trial the Defendant made two formal settlement offers, one for $125,000 and the second for $150,000.  Both offers contained the following term:
The defendants confirm that this offer is made with the acknowledgement that the Insurance Corporation of British Columbia (“ICBC”) has been served with a Notice of Attachment and/or Requirement to Pay and is therefore obligated to first pay to Family Maintenance Enforcement Program (“FMEP”) from the Settlement Payment in this matter. The defendants and /or ICBC are required to first meet any obligation to FMEP before paying monies to the plaintiff in relation to the Settlement Payment, pursuant to the Family Maintenance Enforcement Act, R.S.B.C. 1996, c. 127 and amendments and regulations thereto.
Mr. Justice Jenkins held that the offers were not reasonable on the basis that ICBC was not formally a debtor to the Plaintiff and as such deductions on the basis of the FMEP Notice of Attachment were not reasonable.  The court reasoned as follows:

[13]         The plaintiff also submits that the Notice of Attachment and/or Requirement to Pay should not have been included in the offers to settle as those documents were issued to ICBC, not to the defendants, and ICBC was not and would not become obligated to pay the settlement amount or the amount of any judgment. The Family Maintenance Enforcement Act, R.S.B.C. 1996, c. 127 provides for a notice of attachment in s. 15 (1) which states:

15 (1)   If the debtor has at any time defaulted in a payment required under a maintenance order, the director may serve a notice of attachment in the prescribed form on a person who is indebted or likely to become indebted to the debtor.

A “debtor” under the Act is defined as:

“debtor” means a person required under a maintenance order to pay maintenance;

[14]         The plaintiff submits that service of the Notice of Attachment and/or Requirement to Pay on ICBC would not attach the settlement funds, if one of the offers had been accepted, as ICBC would not have been indebted to the plaintiff. According to the wording of the settlement offers, it was the defendants who had offered to pay the plaintiff the settlement funds. ICBC was obligated to indemnify the defendants and had no obligation to pay the plaintiff the settlement amount upon acceptance of an offer to settle…

[31]         I am unable to make a costs award in favour of the defendants on the basis of the defendants’ two offers to settle as I conclude they were not offers that ought reasonably to have been accepted on the dates the offers were made. I accept both submissions put forward by the plaintiff in this regard. Even if the plaintiff was inclined to accept one of the offers to settle, the condition included in the offers relating to the Notice of Attachment and/or Requirement to Pay from FMEP should not have been a term of the offer. ICBC was not and would not have been indebted to Mr. Loft. ICBC was not a party to the action and its obligation was only to indemnify the defendants for negligence if the court awarded damages to Mr. Loft. As well, the offers of settlement were made by the defendants, not ICBC, and the defendants had no obligation to ICBC if one of the offers was accepted.

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

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

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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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