Rule 15 Costs Cap Applied to Settlement of a Non-Rule 15 Claim
Further to my previous posts on this topic (which can be found here and here), reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, finding that the Rule 15 costs cap can apply to a personal injury claim litigated outside of the fast track when a settlement below $100,000 is achieved.
In the recent case (Varga v. Shin) the Plaintiff was injured in a 2006 collision. The plaintiff initially sought significant damages over $422,000 and the case was prosecuted in the usual course. It was never put into the fast track rule. Prior to trial the case settled for $65,000 plus costs “to be assessed or agreed“. The parties could not agree on the costs consequences with the defendant arguing that the Rule 15 cap should apply. Registrar Sainty agreed and in doing so provided the following reasons:
[27] I prefer Ms Taylor’s submissions in relation to the application of the costs provisions of R. 15-1. In my view, this action, even though it was not declared to be a “fast track” action, is subject to the costs provisions of R. 15-1(15). I agree with Ms Taylor’s submissions that R. 15-1(1) is exclusive and not inclusive. In my opinion, if a matter settles for less than $100,000, R. 15-1(15) applies to the costs of the action. This is made clear, in my view, by the addition to the Rules of R. 14-1(1)(f). That subrule effectively fast tracks actions that were not fast tracked but should have been (see Axten, supra, and Affleck v. Palmer, 2011 BCSC 1366). The cases cited by Mr. Warnett (listed above) were all, in my view, decided per incuriam: without reference to either R. 15-1(1) or 14-1(1)(f) in relation to the issue of costs.
[28] This interpretation is in keeping with the object of the Rules: “to secure the just, speedy and inexpensive determination of every proceeding on its merits”
(R. 1-3(1)) and the proportionality provisions set out in R. 1-3(2).
[29] Finally, I note that Mr. Warnett also suggested that, if the defendants wished the provisions of R. 15-1(15) to apply to the action, they ought to have applied to place it into fast track and as they did not do so, they should not be allowed to limit the plaintiff’s costs to the costs allowed under R. 15-1(15). This suggestion cuts both ways however. Just as it was open to the defendants to seek an order bringing the matter into fast track, it was also open to Mr. Warnett to seek an order (even at the trial management conference) that R. 15-1 not apply to the action. He did not do so and as the action is by operation of the Rules a fast track action, it attracts costs per R. 15-1(15).
[30] As I have found that the action falls within the provisions of R. 15-1(15), thus the plaintiff is entitled to some proportion of the $6,500 “cap” available (see Duong v. Howarth, 2005 BCSC 128; and Anderson v. Routbard, 2007 BCCA 193 [Anderson]). In order to avoid a re-attendance before me (or some other registrar) to determine how much of that cap the plaintiff may claim, I am going to employ some “rough and ready justice” (see Anderson, at paragraph 49 and Cathcart v. Olson, 2009 BCSC 618 at paragraph 19) to this matter. I will set the amount at the full $6,500, plus tax. This matter settled some 15 days before trial. Likely a good deal of the trial preparation had occurred up to the settlement. It is therefore appropriate that the plaintiff receive the full amount of the cap: see Gill v. Widjaja, 2011 BCSC 951 (Registrar), aff’d 2011 BCSC 1822.