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)