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Tag: Sanderson Orders

Sanderson and Bullock Orders: Rule 14-1(18)

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 105 Comments on Sanderson and Bullock Orders: Rule 14-1(18)

(Please note that the BC Court of Appeal granted leave to Appeal the below discussed decision.)
When a Plaintiff sues 2 parties and succeeds only against one the Court had a discretion under former Rule 57(18) to order that the unsuccessful defendant pay the successful defendants costs.  Depending on the way a court goes about doing this will label the result a “Sanderson Order” or a “Bullock Order“.  This rule has been reproduced in the New Rules of Court at Rule 14-1(18) and the first judgement I’m aware of considering this discretion under the New Rules was released last week by the BC Supreme Court, Nanaimo Registry.
In last week’s case (Brooks-Martin v. Martin)  the Plaintiff was injured in a 2005 collision in Saanich, BC.  The Plaintiff was travelling in the “C” position behind a motorcycle operated by her husband who was travelling in the “A” position.   Her husband unexpectedly cut in front of her.  In trying to avoid a collision with her husband she lost control, fell down onto the road and was injured.

(Accident Reconstruction Software courtesy of SmartDraw)
At trial Mr. Justice Halfyard found the Defendant 70% at fault and the Plaintiff 30% at fault.  The Plaintiff also sued another Defendant although they were found faultless.  The Plaintiff asked for a Sanderson order to minimize her costs consequences following trial although this application was dismissed.  Prior to doing so Mr. Justice Halfyard provided the following test required to get a Sanderson or Bullock order:

[6] The court’s power to make the order sought by the plaintiff is set out in Rule 14-1(18), which states:

(18)  If the costs of one defendant against a plaintiff ought to be paid by another defendant, the court may order payment to be made by one defendant to the other directly, or may order the plaintiff to pay the costs of the successful defendant and allow the plaintiff to include those costs as a disbursement in the costs payable to the plaintiff by the unsuccessful defendant.

[7] In order to justify the exercise of discretion in his or her favour, a plaintiff must establish two elements, namely:

a) that it was reasonable for the plaintiff to have sued the successful defendant together with the unsuccessful defendant; and

b) that there was some conduct on the part of the unsuccessful defendant (such as asserting that the successful defendant was the culprit in the case or committing some act or acts which caused the plaintiff to bring the successful defendant into the litigation) which makes it just to require the unsuccessful defendant to pay the costs of the successful defendant.

See Grassi v. WIC Radio Ltd. 2001 BCCA 376 at paras 32-34; Davidson v. Tahtsa Timber Ltd. 2010 BCCA 528 at paras 53-54.

[8] The first element is a threshold requirement for the exercise of the court’s discretion. This question is looked at mainly from the perspective of the plaintiff. But if the plaintiff has alleged independent causes of action against the two defendants and if these two causes of action are not connected, the plaintiff will not be able to meet the threshold test. See Robertson v. North Island College Technical and Vocational Institute (1980), 26 B.C.L.R. 225 (C.A.) at paras 23-24; Davidson v. Tahtsa Timber Ltd. at para. 52.

ICBC Injury Claims, Settlement Offers, Rule 37B, Sanderson Orders…

Written by admin on . Posted in BC Supreme Court Costs Cases, Civil Procedure, ICBC Liability (fault) Cases, Jury Trials, Uncategorized.

Where to begin…
Important reasons for judgement (Burdett v. Mohamed) were released on Friday by the BC Supreme Court, Vancouver Registry addressing a host of topics in the context of BC personal injury litigation.
By way of background the Plaintiff was a passenger in a 2002 motor vehicle accident.  She was riding in a vehicle operated by Mr. Mohamed and this vehicle collided with a vehicle operated by a Mr. Samuel.
The Plaintiff suffered various injuries including a traumatic brain injury.
The Defendant Mohamed was charged with Dangerous Driving and was deemed to be in breach of his insurance policy.  Accordingly, ICBC, Mr. Mohamed’s insurer defended the claim as a ‘statutory third party.’
There was reason to believe that Mohamed was solely responsible for the collision however the Plaintiff’s lawyer sued both Mohamed and Samuel.  The reason being was concern about limited insurance coverage.  Mohamed only had $1 million in insurance coverage.  The Plaintiff was not the only injured party and when sharing this money with the other claimants the Plaintiff was concerned she would be significantly undercompensated if this was the extent of her recovery.
ICBC made an offer to the various claimants to “get together to divide among themselves the $1,000,000 third party liability (coverage).”   This offer was not accepted and the Plaintiff proceeded to trial.
Prior to trial the Plaintiff made a formal offer to settle her claim against Mohamed for $1.5 million.  The Defendant Samuel made a formal offer to the Plaintiff to ‘walk away’ on a costs free basis.  After a lengthy trial the case against Samuel was dismissed, the Jury found Mohamed responsible for the Plaintiff’s injuries and the Plaintiff 20% contributorily negligent for her own injuries.   After this reduction in liability the Plaintiff was awarded over $1.8 million in damages.
The Court was asked to decide, amongst other things, whether the Plaintiff should be awarded double costs against Mohamed, whether Samuel should be awarded double costs against the Plaintiff and whether the Mohamed should pay to Samuel any costs the Plaintiff is exposed to.
Rule 37B – Is it reasonable to go to trial for a claim exceeding the Defendants insurance coverage?
The Plaintiff was awarded double costs for beating her formal offer of settlement against Mohamed.  In coming to this decision the Court had to grapple with an area of law that is still open to debate, specifically, when considering whether to award double costs can a court consider the insurance coverage available to the parties?
There are cases that go both ways on this topic and the law is not yet set in stone.  Usually Plaintiff’s argue that this is a relevant consideration and Defendants argue it is not.  Interestingly, here it was ICBC that was arguing the presence of insurance could be “the central factor driving the Court’s analysis under Rule 37B.”.  The Defendant submitted that the Plaintiff was unreasonable in going to trial “knowing of the third party liability policy limits“.
Madam Justice Boyd “entirely reject(ed) this submission.”   Specifically the Court held as follows:
[36] In my view, having never received an actual offer of settlement from the Third Party, it was reasonable for the plaintiff to choose to proceed to trial in this case.  She could expect that she would recover judgment against at least Mohammed and Dubois.  The judgment would also likely be in excess of the policy limits.  While the quantum of the judgment actually recovered would not exceed her pro rata share of the insurance funds (the calculation of which depended on settlements reached or judgments obtained by Maxwell and Sahota), she would still be left with the ability for the next ten years to pursue execution on the judgment against Mohammed and Dubois.  While the Third Party apparently insists that any such judgment will be dry, there is simply no evidence one way or another to confirm that likelihood.  It should also be noted that had the insurance monies been paid into court, and had the three claimants reached some agreement as to an appropriate division of the funds, the Third Party could not have enforced any requirement for a release of her claim against either Mohammed or Dubois.
Can a “Walk Away” offer trigger Double Costs under Rule 37B?
A ‘walk away’ offer is one where a Defendant, confident of winning at trial, offers that if the Plaintiff discontinues the lawsuit pre-trial that the Defendant will waive their entitlement to costs.  The Defendant Samuel made exactly such an offer to the Plaintiff.  The Plaintiff rejected this offer and went to trial.  The Plaintiff indeed was unsuccessful against Samuel.  Samuel asked for an order of Double Costs for beating their formal offer.
Madam Justice Boyd sided with the Defendants and granted the order for double costs.  The Court held that while not automatic, a walk away order is capable of triggering double costs and here it was appropriate to do so.  Specifically the court held as follows:
[56] My own impression is that faced with the grim realities of the other defendants’ limited insurance coverage, the plaintiff made a calculated decision to pursue a claim of very doubtful merit against Samuel, realizing that she would realize a substantial benefit even if Samuel’s liability was limited to a small percentage.  But for the insurance situation, I am confident that the Samuel offer would have been accepted early on by the plaintiff.  ..

[60] As Hinkson J. noted in Bailey v. Jang, 2008 BCSC 1372, the underlying purpose of the offer to settle provisions survived the repeal of Rule 37 and the implementation of Rule 37B.  That purpose is to encourage conduct which reduces both the duration and the cost of litigation, while also discouraging the conduct which has the opposite effect.

[61] I conclude that all of these factors weigh in favour of the defendant Samuel recovering double costs.

The Sanderson Issue:

When a Plaintiff sues 2 parties and succeeds only against one (which was the case here) the Court has a discretion under Rule 57(18) to order that the unsuccessful defendant pay the successful defendants costs.  This is called a “Sanderson Order”.

Here the Plaintiff, not wanting to have the ‘double costs’ order eat into into the limited $1,000,000 of insurance coverage applied for a Sanderson Order.  Madam Justice Boyd granted the order and required Mohamed to pay  Samuel’s court costs.  Vital in this decision was the fact that ICBC, in their Third Party Statement of Defence, alleged that Samuel was negligent in causing the collision.

In reaching this decision the Court held as follows:

[66] This raises the issue, was it reasonable for the plaintiff to have sued and continued her action against the defendant Samuel?  I accept that at the outset, given the evidence of the eyewitness to the effect the Dubois vehicle (driven by Mohammed) had fishtailed back and forth across the road before its collision with the oncoming Samuel vehicle, it was reasonable for the plaintiff to have joined Samuel as a defendant to the action.  However, after the receipt of the many engineering reports which overwhelmingly laid the blame on Mohammed and absolved Samuel of any negligence, was it reasonable for the plaintiff to have continued her action against Samuel?  …

[70] In my view, faced with ICBC’s plea that Samuel caused or contributed to this accident, the plaintiff had no choice but to continue her claim against Samuel.

[71] In all of these circumstances, I exercise my discretion under Rule 57(18) and find that a Sanderson order is appropriate in the case at bar, thus requiring the defendants Mohammed and Dubois to pay the costs which the plaintiff would otherwise pay to the successful defendant Samuel.

The lesson to be learned here is that if a Defendant is going to allege that another party is responsible for a car crash they should do so with caution.  The Plaintiff is free to bring them into the lawsuit and if the claims are not successful ultimately it is the Defendant who may be on the hook for the extra court costs.

Not Done Yet…

One last point.  A companion set of reasons was also released in this case on Friday addressing tax gross ups and management fees.   You can find that decision here.