Tag: Rule 9-1

Double Costs Denied Following Modest Besting of Formal Settlement Offer

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, denying a Plaintiff double costs after modestly beating a pre-trial formal settlement offer.
In today’s case (Barnes v. Lima) the Plaintiff was injured in a collision and sued for damages.  The morning before trial the Plaintiff tabled a $60,000 formal settlement offer.  ICBC rejected this offer and proceeded to trial where damages just over $67,000 were assessed.  The Plaintiff applied for double costs although the Court did not award these finding it was reasonable not to accept the last minute offer.  In reaching this decision Mr. Justice Weatherill provided the following reasons:
[2]             The action arose from injuries sustained by the plaintiff in a motor vehicle accident. It was commenced on September 18, 2012. It was a fast track action commenced under Rule 15-1 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the “Rules”). The trial was heard on June 24 to 26, 2014. It lasted 3 days. My Reasons for Judgment were pronounced on July 11, 2014, indexed as 2014 BCSC 1282. The plaintiff was awarded $67,214.19.
[3]             On June 23, 2014, the morning before commencement of the trial, the plaintiff communicated a formal offer to settle the claim for $60,000 plus reasonable disbursements. The offer was stated to be open for acceptance until that same afternoon at 4 p.m. The defendant did not respond to that offer, although it had responded to earlier settlement offers from the plaintiff including by making his own formal offer to settle for $39,651.69 plus funding for 12 active rehabilitation sessions…
[9]             I have considered how the offer compares to the amount ultimately awarded after trial. The award at trial was only $7,214.19 more than the plaintiff’s offer. As matters transpired, it turned out to have been a reasonable offer, although it was a short-fuse offer made on the eve of trial. It should have been made weeks earlier. Be that as it may, it was straight forward and contained no ambiguities. Counsel for the defendant candidly acknowledged that his client had sufficient time before the trial in which to consider it. However, the fact that the award at trial was greater than the offer is not determinative: Ward v. Klaus, 2012 BCSC 99 at para. 46. The reasonableness of a decision not to accept an offer to settle must be assessed not by reference to the award that was ultimately made but rather the circumstances existing when the offer was open for acceptance: Ward, at para. 36.
[10]         On the eve of the trial, the defendant had a legitimate defence to the plaintiff’s claim, particularly his claim for loss of capacity which in his earlier communications to the defendant the plaintiff had indicated was significant. The plaintiff did not break his settlement offer into its components and provided the defendant with no ability to assess how much of it was to compensate the plaintiff for his loss of capacity claim. At the time the offer was communicated, there was a reasonable possibility that the plaintiff would not recover anything for that claim, which ultimately proved to be the case. It was reasonable for the defendant to wish to test the plaintiff’s position that his inability to work overtime at Carter Motors was due to the accident and not to other factors such as his marriage, particularly in the absence of supporting documentation.
[11]         Moreover, most of the plaintiff’s injuries were soft-tissue in nature. He had a pre-existing right shoulder injury. There were live issues regarding whether the plaintiff’s T-4 vertebra fracture had healed and, if so, when, as well as the plaintiff’s credibility relating to the extent that his injuries had affected his life. Parties should not be unduly deterred from bringing meritorious, but uncertain, defences because they fear a punishing costs order: Currie v. McKinnon, 2012 BCSC 1165 at para. 20.
[12]         In addition, the plaintiff provided the defendant with several photographs of the plaintiff’s carpentry skill but gave no explanation for how he intended to rely upon those photographs until after his settlement offer had expired.
[13]         The court has a broad discretion when determining the issue of costs: Ward at para. 33.
[14]         In my view, having considered all of the foregoing circumstances, the offer was not one that the defendant ought reasonably to have accepted.
 

"Walk Away" Offer Fails to Trigger Double Costs in Liability Trial

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing a defence application for double costs after a Plaintiff’s personal injury claim was dismissed.
In this week’s case (Miller v. Emil Anderson Co. Ltd.) the Plaintiff was involved in a motor vehicle collision alleging that an unidentified vehicle contributed to the incident.  Prior to trial the Defendant made a formal settlement offer of $1 which “expressed the defendants’ belief that the Court would conclude that Mr. Miller had suffered no compensable injury.”
Ultimately the Plaintiff’s claim was rejected with the Court concluding that “memory and perception of the key events preceding his loss of control of his vehicle were not reliable.”.  Despite this the Court found the walk-away offer was not reasonable as the plaintiff had a sincere belief in his perception of the event and that “ had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit“.
In dismissing the Defendant’s request for double costs Madam Justice Ballance provided the following reasons:
[15]                      In the present case, Mr. Miller proceeded upon his hypothesis as to how the accident occurred, including the purported role of another vehicle.  He tendered no expert evidence in the field of engineering and/or accident reconstruction in support of his theory.  In weighing the evidence, I concluded that Mr. Miller had not proved his case on a balance of probabilities.  In reaching that conclusion, I found that his memory and perception of the key events preceding his loss of control of his vehicle were not reliable.
[16]                      Despite the frailties in Mr. Miller’s testimony and his faulty recall of events, I did not doubt that Mr. Miller’s perception of events, including his theory as to how the accident occurred, was sincere.  He did not attempt to mislead or deceive the Court.  Had he accepted the defendants’ offer, he would have been giving up, without adjudication, a claim that he believed had merit.  A belief that was neither groundless nor frivolous…
[18]                      The Offer is to be considered in the context of a serious liability issue where neither side called expert engineering or accident reconstruction evidence in relation to the pivotal issue of what had caused the accident.  Mr. Miller was aware that he and the defendants held conflicting versions of the material events and that there was a risk that, if the Court found that the evidence did not support his case, his action would be dismissed.  However, it does not follow that the nominal Offer ought reasonably to have been accepted by Mr. Miller at any time.  As was the case in Stuart, the Offer provided nothing to Mr. Miller in relation to the claim itself and proffered little meaningful benefit to him.
[19]                      The evidence indicates that Mr. Miller was in his early 70s at the time of the accident and was retired or semi-retired from prospecting.  Beyond that, there was no cogent evidence of his financial circumstances and I am therefore unable to agree with his counsel’s submission that it was clear he is impecunious.
[20]                      Although Mr. Miller ultimately failed to make out his case on a balance of probabilities, I would not characterize his refusal to accept the Offer as unreasonable.
[21]                      Weighing the pertinent factors and giving the most weight to the fact that I am unable to say that it was unreasonable for Mr. Miller to refuse the Offer, I consider it a fair exercise of my discretion to decline to order double costs.  An award of costs at Scale B in favour of the defendants is appropriate in this case and will likely be of significant consequence to Mr. Miller.
[22]                      Accordingly, the defendants’ application for double costs is dismissed.  They will have their costs at Scale B.

Defendant Fails "To Recognize The 'Capital Asset” Approach"; Ordered To Pay Double Costs

Update August 5, 2015 – The below damages for Diminished Earning Capacity were overturned by the Court of Appeal and a new trial was ordered on the issue.
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Reasons for judgement were released today by the BC Supreme Court, Penticton Registry, ordering a Defendant to pay double costs for refusing to accept a bested pre-trial formal settlement offer.  In reaching this result the Court was critical in the Defendant’s failure to appreciate the ‘capital asset’ approach in assessing diminished earning capacity awards.
In this week’s case (Ostrikoff v. Oliveira) the Plaintiff was injured in a 2009 collision.  Prior to trial the parties exchanged a variety of formal settlement offers with the Plaintiff’s last offer coming in at $325,000 and the Defendant’s last offer being $100,000.  The matter proceeded to trial where damages of over $550,000 were assessed.  The Plaintiff was awarded post offer double costs and in finding the Defendant should have accepted the Plaintiff’s offer the Court provided the following comments:
[11]         The plaintiff, on the other hand, marshalled a combination of both expert and lay evidence.  The essence of the plaintiff’s case was that the plaintiff was involved in unique and highly skilled work which had a significant physical component and that the plaintiff’s chronic pain and physical impairments threatened both his business and his sole means of livelihood.  The uncontradicted expert evidence was that the plaintiff was not a suitable candidate for retraining. 
[12]         All of this was known to the defendant well before the trial began.  Expert reports had been delivered from orthopaedic surgeons, treating physicians, a functional capacity evaluator, a vocational consultant, a cost of care consultant, and an economist (regarding future loss multipliers).  No rebuttal reports were prepared by the defendants and much of the evidence was uncontradicted at trial.
[13]         Plaintiff’s counsel provided the defendant with a detailed rationale for the quantum of the first settlement offer in the amount of $325,000 made on March 8, 2013.  The nature and structure of the claim became obvious at that point, if it had not already been obvious beforehand.  Service of the plaintiff’s expert reports would have alerted the defendant to the possibility of a very significant claim being presented and possibly succeeding at trial. 
[14]         The only submission made by the defendant in defence of its refusal to accept the plaintiff’s settlement offer is that there was an absence of any “documented pecuniary loss” and of any expert or other reliable evidence supporting any pecuniary loss, whether past or future.  The submission, and indeed the defence’s entire approach to both the case and the settlement offer, fails to recognize the “capital asset” approach to assessment of damages for both past and future earning capacity in circumstances where the financial loss is not easily measurable. 
[15]         In my opinion, the February 17, 2014 settlement offer made by the plaintiff was reasonable and one that ought reasonably to have been accepted by the defendant before the commencement of trial.  A careful assessment of the strength of the plaintiff’s case on the eve of trial, having regard to the expert reports and the proposed lay testimony, as well as the principles of damages assessment in chronic pain cases involving potentially significant loss of capacity would have, and should have, resulted in a conclusion that a recovery at trial of sums in excess of the offer was a realistic prospect.  Instead, relying almost exclusively on tactics limited to cross-examination and putting the plaintiff to strict proof of his case, the defendant chose to proceed to trial to see what might happen.  Defendants are free to litigate the case in such fashion as they consider appropriate.  But as stated in Hartshorne, above, “[l]itigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”.
[16]         For these reasons, I exercise my discretion to award party and party costs to the plaintiff under Scale B up to February 17, 2014, and double that scale for all steps taken in the proceeding thereafter.
 

Excessive Delay Strips Defendant of Double Costs Entitlement

In what I believe is the first case addressing this factor, reasons for judgment were released today by the BC Supreme Court, Kelowna Registry, looking to the timeliness of  a costs application as a factor in deciding costs consequences following a trial with a formal settlement offer in place.
In this week’s case (Bay v. Pasieka) the Plaintiff was involved in a collision and sued the Defendant for damages.  The case had “frailties” and prior to trial the Defendant made a nominal formal settlement offer of $1.  The Plaintiff rejected this offer and proceeded to trial.  A jury dismissed the claim.  The Defendant sought double costs and Mr. Justice Butler would have awarded these but did not due to excessive delay in bringing the Defendant’s application.  In reaching this conclusion the Court provided the following reasons:
 [1]             On January 27, 2010, following a two-day trial, the action of the plaintiff, Laurie-Ann Bay, against the defendant, Todd Pasieka, was dismissed. I ordered that the issue of costs be adjourned with liberty to the parties to apply to the court if an agreement could not be reached. Three-and-a-half years after the trial, the defendant now applies for costs. The defendant seeks costs at Scale B and double costs from November 14, 2006, the date an offer to settle was made, to the present. The plaintiff says that each party should bear their own costs…
[30]         While some delay is understandable, the delay in this case far exceeded a reasonable limit. Excessive delay is, of course, contrary to the object of the Rules as set out in Rule 1-3(1): to secure “the just, speedy, and inexpensive determination of every proceeding on its merits.” By waiting so long to deal with the issue of costs, the defendant undoubtedly increased the cost of dealing with the issue for both parties and delayed the final resolution by years. It would be wrong to accept the delay without imposing any consequence on the defendant. It is in the interests of the court and of the parties to resolve disputes as soon as they arise to promote efficient use of court time. The inordinate delay in bringing this application is not acceptable.
[31]         In Xerox, Finch J. found that a party alleging prejudice has the evidentiary burden of showing that prejudice. While the evidence presented does not establish significant prejudice, the plaintiff has established that the defendant’s delay in pursuing a costs award caused her and her counsel difficulty in responding to the application in as fulsome a manner as she would have been able to had the defendant sought costs soon after trial. Similarly, it is much more difficult for the court to consider the costs claim so long after the trial has concluded.
[32]         I find that the defendant has not provided a suitable reason for the inordinate delay in bringing this application. The plaintiff has been prejudiced as a result of this delay and the court has been inconvenienced.
[33]         Without the delay in the application, I would have found that the defendant was entitled to double costs from the date of Mr. Pasieka’s examination for discovery. The plaintiff should have known from that time forward her claim was weak and should have accepted the offer. However, given the inordinate delay, I decline to make that order. Instead, I order that the defendant is entitled to costs at Scale B throughout.
 

The Contractual Nature of Accepted Formal Settlement Offers

As previously discussed, when a formal settlement offer dealing with costs consequences is accepted the BC Supreme Court had no discretion to make a different order with respect to costs.  Reasons for judgement were released this week confirming this principle.
In this week’s case (Tomas v. Mackie) the Defendant made a formal settlement offer $77,400.   The offer included the usual term that, if accepted, the Plaintiff would be entitled to reasonable costs and disbursements up to the date of the offer and the Defendant would be entitled to their costs and disbursements from that time onward.
The Plaintiff accepted the offer 13 days after it was derived.  During this period further costs were incurred.  The Plaintiff argued that the Defendant should be responsible for these as the Plaintiff should have the benefit of a reasonable period of time to consider the offer.  District Registrar Cameron was sympathetic to this argument but ultimately disagreed noting there is no judicial discretion to deviate from the terms of the accepted formal offer.  In reaching this conclusion the Court provided the following reasons:
[9]             Mr. Loewen submitted that the acceptance of the settlement offer constituted a binding agreement and as a result the court has no discretion to vary the terms of that agreement under Rule 9-1 or 14-1 of theSupreme Court Civil Rules.
[10]         Mr. Loewen referred to a number of authorities in support of his argument that clearly were not before Registrar Sainty…
[14]         Applying these authorities, it is clear that I do not have the discretion to vary the terms of the settlement agreement made by the parties and they should obtain a date from the Registry for the assessment of both the Plaintiff’s and the Defendants’ costs pursuant to Rule 14-1 of the Supreme Court Civil Rules.
 

"All-Inclusive" Formal Settlement Offers Can Trigger Costs Consqeunces

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, finding that an “all inclusive” formal settlement offer is capable of triggering costs consequences.
In today’s case (Wettlaufer v. Air Transat A.T. Inc.) the Plaintiff sued for damages after an “aircraft touched down and then braked, an unsecured food cart struck, with force,(struck) the back of the plaintiff’s seat.”.   Prior to trial the Defendant made an offer, inclusive of costs and disbursements, of $250,000.  The Plaintiff rejected this offer, proceeded to trial and sought damages of over $1 million.  Much of the Plaintiff’s claimed damages were rejected with an award of approximately $110,000.
The Plaintiff argued the all inclusive offer should not trigger costs consequences.  Mr. Justice Funt disagreed finding there is no prohibition to formal offers which have costs and disbursements built into them.  In reaching this decision the Court provided the following reasons:
[18]         The present Rules of Court provide greater discretion to the Court and avoid the formulaic approach reflected in the older rules set forth above.  Justice Masuhara in Dodge v. Shaw Cablesystems, 2009 BCSC 1765, described the rationale for the rejection of all-inclusive offers under Rule 37 (the old rule in Helm):
[22]      The old Rules provided a complete code which determined the costs consequences of an offer to settle:  Cridge v. Harper Grey Easton, 2005 BCCA 33 at para. 20, 37 B.C.L.R. (4th) 62.  Under the old Rule 37(24)(a), if the defendant made a monetary offer to settle which the plaintiff did not accept, and the plaintiff obtained a judgment equal to or less than the settlement amount, the defendant was entitled to costs from the date the offer was delivered.  With such rigid cost consequences from which the judge had no discretion to depart, the rationale for the rule against “all-in” offers in Helm was engaged.  Where the judge was unable to discern what part of the settlement offer was for costs and what part was for discharge of the action, the judge could not precisely evaluate whether or not the plaintiff obtained judgment more favourable than the settlement offer, leading to potentially drastic consequences.
[Footnote omitted.]
[19]         In his October 18, 2012 letter, defendant’s counsel, Mr. Dery, rejected the plaintiff’s offer to settle for $996,025 plus taxable costs and countered with the $100,000 all-inclusive offer.  The plaintiff did not provide a bill of costs and disbursements.
[20]         Absent a bill of costs, the defendant’s further all-inclusive offer of $250,000 is understandable.  Most litigants seeking to resolve a dispute prefer finality.
[21]         With Helm decided on the significantly different rules, the Court is not bound by the rule in Helm that all-inclusive offers cannot be considered.  The Court’s consideration of the $250,000 all-inclusive offer accords with the text, context and purpose of the current Rule 9‑1.
 

BC Court of Appeal Discusses Discretionary Costs in Face of Formal Settlement Offers

Reasons for judgement were released this week by the BC Court of Appeal addressing the current landscape of judicial discretion when awarding costs in cases with formal settlement offers in play.
In this week’s case (Wafler v. Trinh) the Plaintiff was injured in a 2005 collision.  Prior to trial ICBC made three formal settlement offers, the final being $222,346.  The Plaintiff rejected this offer and proceeded to trial.  A jury assessed damages at $70,000 and after appropriate deductions this resulted in judgement of over $53,000.  ICBC applied for post offer costs.  Mr. Justice Voith did not agree that such a result was appropriate but did strip the Plaintiff of post offer costs and disbursements.  Given that the trial lasted 10 days this is a significant financial consequence.
ICBC appealed arguing “the purpose of the appeal on costs was to reverse what he described as a trend in the trial court wherein plaintiffs who succeed in “beating” an offer to settle are routinely awarded double costs but defendants who have made an offer to settle that was rejected but well within the claim value are deprived an order of costs. The defendant says this is unjust. In other words, the defendant submits there should be significant consequences to plaintiffs who fail to accept a reasonable offer.”
The BC Court of Appeal dismissed the appeal finding the trial judge fairly exercised his discretion.  In reaching this conclusion the Court provided the following reasons:
[79]         Pursuant to Rule 14-1(9) of the Supreme Court Rules, Mr. Wafler, as the successful party, is entitled to his costs unless the court orders otherwise. Pursuant to Rule 9-1(4), the court may consider an offer to settle when exercising its discretion in relation to costs. Rule 9-1(5) enumerates the orders the court may make. In making an order under subrule (5), the court may consider the factors listed in subrule (6).
[80]         The purpose for which costs rules exist, as stated in Giles v. Westminster Savings and Credit Union, 2010 BCCA 282, was referred to by the trial judge at para. 18 of his reasons (reproduced at para. 50 above).
[81]         I do not quarrel with the general proposition that a plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs, even in circumstances in which it cannot be said that the plaintiff should have accepted the offer. To do otherwise would undermine the importance of certainty and consequences in applying the Rule. The importance of those principles was emphasized by this court in Evans v. Jensen, 2011 BCCA 279:
[41]      This conclusion is consistent with the importance the Legislature has placed on the role of settlement offers in encouraging the determination of disputes in a cost-efficient and expeditious manner. It has placed a premium on certainty of result as a key factor which parties consider in determining whether to make or accept an offer to settle. If the parties know in advance the consequences of their decision to make or accept an offer, whether by way of reward or punishment, they are in a better position to make a reasoned decision. If they think they may be excused from the otherwise punitive effect of a costs rule in relation to an offer to settle, they will be more inclined to take their chances in refusing to accept an offer. If they know they will have to live with the consequences set forth in the Rule, they are more likely to avoid the risk.
[82]         That said, under the present Rule, unlike its predecessor which mandated the result, it is for the trial judge to determine in any particular case the nature and scope of whatever sanctions are to be applied. The permissive wording in Rules 9-1(5) and (6) indicates the legislature intended to preserve the historically discretionary nature of costs awards, including an award of costs where an offer to settle has been made.
[83]         In my opinion, the judge adequately considered the factors under Rule 9-1(6) which were relevant in this case. Most significantly, the defendant’s contention that the plaintiff in this case did not suffer any consequences from his failure to accept the offers to settle ignores the fact that, as a successful party, he was deprived of his costs and disbursements from December 21, 2011, approximately six weeks before the jury’s verdict made on February 3, 2012. The verdict followed a ten day trial. Thus, the impact of the judge’s costs order was to deprive Mr. Wafler of taxable costs for the preparation of and attendance at a ten day trial, together with disbursements incurred after the offer, which presumably included fees for attendance by experts.
[84]         In these circumstances, I do not think it can be fairly said that the plaintiff in this case was not penalized for his failure to accept the defendant’s offer. In my view, the costs order reflected the underlying purpose of Rule 9-1.
[85]         In the result, I would dismiss the cross-appeal.
 

Costs Following Unsuccessful "Considerable Gamble To Achieve A Significant Award"

Update – July 13, 2015 – the below decision was overturned today by the BC Court of Appeal for several reasons and a new trial was ordered.  In reaching this conclusion the court noted it was improper for the Court to make a present value calculation when considering a formal offer to settle.  The Court provided the following reasons:

[53]         I agree with the appellant that the judge erred in adjusting the initial offer to reflect its 2013 value. This approach is not supported in law. As a result, the amount that the appellant was awarded ($51,300) exceeded the formal offer ($50,000) and the judge had no basis to award costs to the defendants pursuant to Rule 9-1(5)(d).

[54]         The trial judge also erred in applying the incorrect standard to determine which party was successful. The appellant was clearly the successful party in the action, as that standard is described in Loft. Though the appellant was not awarded the entire amount in damages that she sought, she established liability under a cause of action – as in Loft, by way of the defendants’ admitting liability and conceding some damages – and she obtained a remedy. The defendants did not obtain a dismissal of her case, either with respect to liability or damages.

[55]         Thus the order for costs could not have been sustained in any event of the appeal.

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Reasons for judgment were released this week by the BC Supreme Court, Vancouver Registry, addressing costs consequences following a jury trial.
In this week’s case (Han v. Park) the Plaintiff was injured in a 1999 collision that the Defendant admitted fault for.  The litigation had a “somewhat tortured history” finally coming to trial in October 2013.    The Plaintiff sought damages of over $2 million.  Following a 14 day trial a jury assessed damages at $51,300.
In 2002 ICBC tendered a formal settlement offer of $50,000.  When coupled with advances paid the offer slightly exceeded the ultimate jury award.  Given the duration of time that passed the Court was also presented with economic evidence adjusting the offer for inflation indicating it was worth about $61,100 in 2013 dollar terms.  In any event the Court was asked to assess costs consequences flowing from this formal offer.  In finding that costs should be used as a remedy where a litigant takes “a considerable gamble to achieve a significant award” the Court ordered the Plaintiff pay the Defendant’s costs from 2004 onward.  In reaching this conclusion Madam Justice Fitzpatrick provided the following reasons:
[69]         Like the plaintiff in Bailey v. Jang, 2008 BCSC 1372, aff’d 2011 BCCA 146, Ms. Han took a considerable “gamble to achieve a significant award” and lost: paras. 22, 38. Given that the majority of the time at trial was spent on her unsuccessful attempt to persuade the jury of her disability, one can only describe her as being substantially unsuccessful at trial. Accordingly, even without the application of Rule 9-1, Ms. Han would have faced meritorious arguments by the defence that a costs award should reflect that result and my conclusions below are also consistent with an analysis in this context.
[70]         She conducted herself in this litigation so as to ignore the considerable efforts of the defendants to gather evidence regarding the extent of her injuries, all at considerable cost to them. The early efforts of the defendants were geared to either provide a proper basis for a negotiated settlement or to provide the necessary evidence for a trial. All the while Ms. Han entirely failed to muster any medical opinion evidence that she either knew or should have known would be needed to support her claims at the end of the day. She refused to respond to any settlement offer until the eve of the trial.
[71]         Ms. Han’s intractable position must nevertheless be considered in the face of the July 2002 offer to settle. By this time, over three years had gone by and one would have thought that she would be in a position to critically consider her position. The offer fully addressed the position of the defendants that no brain injury had occurred. The premise of the offer was not contradicted by any medical opinion evidence obtained by Ms. Han. Even if she had chosen, strangely, to rely on the medical evidence of the defendants, by no later than May 2004, Dr. O’Shaughnessy had emphatically concluded that no disability or brain injury had resulted from the accident.
[72]         In the above circumstances, Ms. Han’s position was not an “honest but … mistaken view” per Fan, nor did she have a “meritorious, albeit uncertain claim” per A.E.
[73]         The defence calls Ms. Han “delusional” and while the remark is uncharitable, it is not far from the mark. Ms. Han has purposely conducted this protracted litigation where there was no basis in the evidence upon which to conclude other than that she had suffered a relatively straightforward soft tissue injury. Despite that, 14 years of litigation has gone by, no doubt at great cost to the defendants and to those who have financially supported this litigation on behalf of Ms. Han.
[74]         I conclude that Ms. Han is entitled to her taxable costs, including disbursements, of the action to May 2004. The defendants are entitled to their taxable costs, including disbursements, from June 2004 which will include this application to determine costs. Both costs awards will be on Scale B.

Revocation of a Formal Settlement Offer "Can Be Oral or Written"

Reasons for judgement were published last week by the BC Supreme Court, Vancouver Registry, confirming a formal offer to settlement made under the BC Supreme Court Rules can be revoked verbally or in writing.
In last week’s case (Ladret v. Stephens) the Plaintiff was injured in a collision and sued for damages. Prior to trial the Plaintiff made a formal offer to settle for $75,000.  A series of informal offers were then made by the parties before the trial commenced which was ultimately adjourned as no judge was available.   Following the passage of some time defence counsel gave notice that they were accepting the $75,000 formal offer.  The Plaintiff opposed this acceptance arguing the offer was revoked.  Mr. Justice Greyell agreed and provided the following reasons:
[29]         It is my view that that offer was not open for acceptance. It is my view, based on the facts that have been placed before me, that the offer of $75,000 had been withdrawn expressly during the telephone conversation and that the defendants in accepting that offer proceeded to do so on the mistaken belief that the withdrawal of the offer had to be in writing to be effective.
[30]         I am supported in that finding by the following paragraph in an e-mail sent by the defendants to Mr. Gourlay, a portion of which reads:
The crux is your formal did not stipulate an expiration and you did not revoke it. As such, it was open for acceptance by the defendants. As it was drafted, it was open for acceptance up until judgment. Although not required by Rule 9-1, if you intended to revoke your formal you would have to do so in writing.
[31]         The case law is clear that a revocation can be oral or written. The question is whether such revocation is clearly and unequivocally given, citing Janzen v. Janzen, 2011 BCSC 1146, 2011 B.C.J. No. 1605.
[32]         In my view, given the contents of the April 22nd discussion between Ms. Owen-Blas and Mr. Gourlay, it was clear the offer of $72,500 had been revoked, that offer in itself revoking the $75,000 prior offer.

"Genuine Belief" in Entitled Damages Will Not Avoid Formal Settlement Offer Costs Consequences

In a fairly routine exercise of the Court’s discretion, reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, ordering a Plaintiff to pay the Defendant’s trial costs for failing to best a pre-trial formal settlement offer in a personal injury claim.
In this week’s case (Wilson v. Honda Canada Financial Inc.) the Plaintiff was involved in a 2009 rear end collision.  Fault was not at issue.   Although the Court found that there “are serious issues regarding (the Plaintiff’s) credibility”  Madam Justice Fitzpatrick concluded the Plaintiff suffered a variety of soft tissue injuries, some of which remained symptomatic on an intermittent basis at the time of trial.  Six weeks prior to trial the Defendant made a formal settlement offer of just over $121,000.  The Plaintiff sought an award well above this at trial but many of the claimed damages were rejected with the court assessing damages about $25,000 below the formal settlement offer.
The Defendant sought post offer costs and these were granted.  In finding that a Plaintiff’s “honest belief” in entitlement to damages does not avoid the costs consequences intended by the Rules of Court, Madam Justice Fitzpatrick provided the following reasons:
[11]         Mr. Wilson argues that he “genuinely believed” that he had incurred a past and future wage loss because he was unable to work for Taja. With respect, it can hardly be the case that honest belief alone will avoid the intended effect of the Rule. This is similar to my rejection of his honest belief as to disability where that belief was not supported by any medical evidence: Reasons, para. 137. As set out in the Reasons, there were numerous difficulties with Mr. Wilson’s arguments regarding Taja, including the lack of proper documentation, lack of medical evidence, and a rejection of his testimony on this issue (see paras. 120-146, 157-163). His claim for future massage therapy of $30,000 was also rejected for the reason that no medical evidence supported that claim.
[12]         Finally, Mr. Wilson’s evidence also suffered from credibility problems particularly where not supported by other credible evidence: Reasons, para. 42. Failure to anticipate credibility issues will also not avoid the operation of the Rule: Gehlen v. Rana, 2011 BCCA 219 at paras. 50-51.
[13]         Mr. Wilson argues that he should not be penalized for “guessing wrong”, citing Fan (Guardian ad litem of) v. Chana, 2009 BCSC 1497. However, it is clear from the comments of the court in that case that there were difficult issues relating to the evidence and how any offer could be dealt with, particularly given the involvement of the public trustee. Similar difficulties do not arise in this case.
[14]         I agree that a party is not required to “guess” about the probable outcome; rather, he or she is required to fairly and objectively assess the evidence intended to be adduced at trial and make a reasoned decision about the relative merits of the claim or defence, having in mind a certain amount of litigation risk. In essence, the party receiving the offer must critically review the merits of the claim in relation to the amount offered. As the court noted in Fan, quoting A.E.:
[62]      Regardless of the merits of the plaintiff’s claim the defendant’s offer to settle cannot be ignored, because to do so would undermine the purpose of the Rule. Having decided to proceed in the face of a not insignificant and ultimately successful offer to settle, the plaintiff cannot avoid some consequences.
[15]         The offer amount, while not approaching the amounts sought by Mr. Wilson, in all likelihood fairly assessed the claims about which there was no dispute and added further amounts for the litigation risk that the more contentious claims would go against the defendants. The offer was, no doubt, also prepared recognizing the substantial cost to both parties if the matter proceeded to trial. It cannot be understated that one of the purposes of the Rule is to avoid costs of proceeding further in the action: Martin, para. 8.
[16]         I conclude that the offer should reasonably have been accepted by Mr. Wilson shortly after it was made and that this factor favours the defendants…
[24]         I conclude that all factors to be considered under Rule 9-1(6) favour the costs award sought by the defendants. Accordingly, Mr. Wilson will recover his assessed costs and disbursements up to April 27, 2013, which is 5 days after the offer was sent in recognition that some reasonable period of time would have been necessary to consider the offer. Thereafter, the defendants will recover their assessed costs and disbursements commencing April 28, 2013. After assessment of these respective amounts, the parties shall set off the awards to produce a net award.

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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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