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Tag: Third Party Costs

Third Party's Can Be Exposed To "Loser Pays" Costs Consequences

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 14, Uncategorized. 50 Comments on Third Party's Can Be Exposed To "Loser Pays" Costs Consequences

(Update February 9, 2012 – the below decision is under appeal with the BCCA granting leave to appeal on February 9, 2012)
Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, confirming that Third Party’s are not immune from BC’s ‘loser pays’ system.
This week’s case (Danicek v. Alexander Holburn Beaudin & Lang) involved a highly publicized lawsuit where the Plaintiff lawyer was awarded damages after being injured in a dance floor incident.  My previous posts can be accessed here for the full background.  This week the Court finalized some of the costs consequences following the trial.  In doing so Mr. Justice Kelleher provided the following comments adopting an Alberta judgement confirming that there is no reason why Third Party’s can’t be exposed to costs consequences following trial:

[15] The first issue is whether Lombard should be held liable to the plaintiff Ms. Danicek for the costs of the trial.

[16] There is no serious dispute that although Lombard was not a defendant but a third party, it may be liable in costs. It was put this way by Egbert J. in Sunburst Coaches Ltd v. Romanchuck;Ocean Accident and Guarantee Corporation Limited (Third Party) (1953) 9 W.W.R. (N.S.) 385 (Alta. S.C.) at 392, para. 19:

The third party, on its own application became a party to and actively defended the action, and by so doing made itself subject to the jurisdiction of this court as to costs. I see no reason why the plaintiff should not have judgment against the third party as well as against the defendants, for its costs computed in the manner aforesaid.

[17] Because of the other settlements in this action Lombard found itself the only party left to defend the claim.  Although Mr. Poole had admitted liability, Lombard contested both the liability of Mr. Poole and damages.  It was entitled to do so but faces the possibility of an award of costs either in its favour or against it, depending on the outcome of the lawsuit…

[23] The purpose of an award of costs is to indemnify successful litigants; deter frivolous proceedings and defences; encourage parties to deliver reasonable offers to settle; and discourage improper or unnecessary steps in litigation:  see Skidmore v. Blackmore (1995), 122 D.L.R (4th) 330, at para. 37.

[24] My conclusion is that the plaintiff is entitled to her costs in respect to Phase 1 of the trial against Lombard.  It was Lombard that decided to contest liability and quantum.  Ms. Danicek’s position was upheld on each of these issues.  Quantum far exceeded the settlements she had reached with Mr. Poole, Alexander Holburn and the other third parties.

[25] Lombard was not, ultimately, liable for the judgment against Mr. Poole.  This was because of the conclusion reached in the second phase of the trial that the Lombard policy did not provide coverage.  But that was not the issue in Phase 1 of the trial.  (There was evidence relevant to the coverage issue adduced at trial.  That is because witnesses were called at the first phase who had evidence to give in respect to the second phase.)  The issues decided in Phase 1 were liability of Mr. Poole and quantum of damages.

[26] In my view having in mind the principle of an award of costs, costs should be awarded against Lombard in respect of Phase 1 from the time that it filed a statement of defence.  The plaintiff was substantially successful on the issues involving Lombard in that part of the trial.

New Rules of Court Update: Discontinued Lawsuits and Third Party Costs

Written by admin on . Posted in BC Supreme Court Costs Cases, BCSC Civil Rule 9, Uncategorized. 58 Comments on New Rules of Court Update: Discontinued Lawsuits and Third Party Costs


Reasons for judgement were released today by the BC Supreme Court, Chilliwack Registry, interpreting and applying Rule 9-8(5) for what I believe is the first time.  (It’s worth pointing out, however, that this rule reads almost identically to the former Rule 36(5)).  This rule deals with the entitlement of a Third Party to costs when a Plaintiff discontinues a lawsuit.
In today’s case (Patterson v. Williams) the Plaintiff sued two Defendants for personal injuries sustained when a dog knocked her over.  The Defendants denied fault and issued Third Party Proceedings against another dog walker seeking contribution and indemnity.
Ultimately the Plaintiff settled the claim, signed a release in favour of the Defendants and discontinued the lawsuit.  The Third Party then brought a motion asking that the Defendants pay the Third Party’s costs.  The Third Party relied on Rule 9-8(5) which reads as follows:
(5)  If a plaintiff discontinues the whole or any part of an action in which a person has been joined as a third party, the third party, if the discontinuance disposes of the claim against the third party, is entitled to costs and may apply to the court for a direction as to who should pay them.
Mr. Justice Sigurdson dismissed the motion finding that a discontinued lawsuit does not automatically dispose of Defendant claims against a Third Party.  The Court provided the following reasons:

[11]         The third party says that the notice of discontinuance disposes of the third party claim, as it was for contribution and indemnity only and did not include an independent claim. This was so, in the third party’s submission, because the specific wording of the third party notice made the third party claim conditional both on the plaintiff not being contributorily negligent and on the defendant being found liable. According to the third party, these conditions cannot now be satisfied because of the discontinuance.  Mr. Nossal also argues that there is no ongoing claim against the third party because the terms of the Release are on so-called “B.C. Ferry Agreement terms” (British Columbia Ferry Corp. et. al. v. T&N plc. et .al. (1993), 86 B.C.L.R. (2d) 353 (S.C.); (1995), 16 B.C.L.R. (3d) 115 (C.A.)) that prevent recovery from a third party.

[12]         I think that this application for costs must fail.  While the Release may limit the liability of the defendants and prevent successful third party proceedings against them, the notice of discontinuance itself does not prevent the defendants from continuing third party proceedings against Ms. Parker.

[13]         I do not think it can be said that the filing of the notice of discontinuance by the plaintiff disposes of the claim against the third party by the defendants.

[14]         The claim for contribution is a substantive right that continues to exist notwithstanding a settlement: see A.R. (Al) Smith Ltd. v. Turner, [1984] B.C.J. No. 3107, [1985] 2 W.W.R. 424 (B.C. Co. Ct.), and Canada v. Foundation Co. of Canada, [1980] 1 S.C.R. 695.

[15]         Moreover, I do not think that the precise terms of the third party notice can be determinative of this application, as the defendants are at liberty to apply to amend the terms of the third party notice.

[16]         Even if the terms of the Release do prevent the defendant from continuing third party proceedings against the third party, which I question, that is a matter of the interpretation of the Release, not something that flows from the filing by the plaintiff of the notice of discontinuance itself.

[17]         Accordingly, the application by the third party for costs is dismissed, with costs.