IN
THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100202

Docket:
M101460

Registry: New Westminster

Between:

Heather Diana Foster

Plaintiff

And

Stephen Juhasz and

Jennifer R. Castle also known as
Jennifer Rene Castle

Defendant

Before: The Honourable Mr. Justice Crawford

Reasons for Judgment re Costs

[1]            
The plaintiff applies for costs after a jury
trial that took place in New Westminster from November 30, 2009 to December 4,
2009.

[2]            
The applications are:

1.       For double costs following from an offer of settlement made
on October 16, 2009;

2.       Additional costs for failure to admit or give admissions
pursuant to notices to admit under Rule 31 of the Rules of Court.

Background

[3]            
The plaintiff sustained back, neck, and shoulder
injuries in a car accident that occurred on May 14, 2006. She was obliged to
stop her vehicle on the Upper Levels highway near the Capilano exit due to the
traffic stopping ahead of her. Mr. Juhasz drove his motor vehicle into the rear
of the plaintiff’s vehicle causing substantial damage.

[4]            
Ms. Foster was then aged 50 and was a Federal
Government employee. She subsequently moved to the Canada Border Services
Agency and worked as a dispatcher clerk which requires her to work in 11 hour
shifts on a four on/four off rotation. She missed some two weeks of work prior
to trial.

[5]            
The jury award was: general damages $200,000;
past lost earnings $1,839.24; future lost of earning capacity $100,000; future
care $150,000; and special damages $6,366.55.

Double Costs

[6]            
The plaintiff’s offer made October 16, 2009 was
accompanied by a detailed 12‑page brief setting out a claim for
$285,939.57, but stated the plaintiff would settle for $214,455.68 plus costs
and disbursements.

[7]            
Plainly, the jury award far exceeded the offer.

[8]            
The statutory factors to consider are:

(a)        whether
the offer to settle was one that ought reasonably to have been accepted, either
on the date that the offer to settle was delivered or on any later date;

(b)        the
relationship between the terms of settlement offered and the final judgment of
the court;

(c)        the relative financial
circumstances of the parties;

(d)        any
other factor the court considers appropriate: Rule 37B(6).

[9]            
The defendants said in their affidavit they had a
$200,000 insurance policy from their insurer, State Farm, and the offer
exceeded their ability to accept it. As well, the offer was $14,000 more than
their insurance coverage and they were still facing the plaintiff’s passenger’s
claim. The defendants said they had no means to settle, as they are a young
married couple and have no assets.

[10]        
Counsel for the defendants further argued that
the defendants had a meritorious and arguable case on the facts themselves. Citing
Deacon v. Barron, 2009 BCSC 637, counsel submitted the defence position
did have merit and it was a reasonable expectation that the judgment would be
within policy limits. The jury award, especially in terms of loss of capacity
and costs of future care, was so high as to be unexpected. As to the financial
circumstances of the defendants, it was submitted that they were of very
limited means and the judgment reflected a financial disaster for them. The
plaintiff, on the other hand, has retained her employment, has obtained a
significant trial judgment and has a reasonable expectation that the balance of
the judgment will be obtained under UMP coverage from ICBC.

[11]        
The defendants argued they were in an impossible
situation to accept the offer in light of their policy limit problems, a
special circumstance unique to them, and not circumstances contemplated by the
Rule.

[12]        
It was submitted the intention of the double
costs is to deter unreasonable conduct: see Brown v. Lowe, 2002 BCCA 7,
and that the defendants’ conduct of the trial was not irrational or
unreasonable. Double costs would not have been a deterrent in the defendants’
submission. As well, there was no evidence before the court as to whether or
not costs would be borne by the insurer or the defendants.

[13]        
The plaintiff noted the detailed brief
accompanying the offer of October 16, 2009. It was noted a jury had been chosen
and it was a risk factor for the parties i.e. that a jury is less
predictable than a judge whose prior judgments might give some indication of
potential decision-making.

[14]        
While I accept the policy limits may have been a
factor in not accepting the offer, it does not answer the question why a rational
counter-proposal was not made by the defendants. There was no comment made by
the defendants as to the reasonableness or otherwise of the plaintiff’s offer.
Rather, the position was taken that the defendants had a meritorious case to
present on the issues which could result in an award under policy limits. If
that was so, then a sensible and rational defendant could have sat down and
appraised the plaintiff’s case. For instance an assessment of general damages
at $60,000, past wage loss at $2,000, future lost earning capacity at $35,000,
and $25,000 for future care could be made. That would not have been
unreasonable and at least if not accepted, might have created a pathway to
settlement. Such an offer pales in comparison to the jury award, especially the
future income capacity and future care components. More so in that I recall
directing the jury to be moderate. I am obliged to say the jury’s award was far
beyond the evidence on these aspects.

[15]        
However, I do not accept the argument that the defendants
were in an impossible situation in terms of accepting the offer. They chose
their own level of insurance, and their choice was, with respect, a very low one
given current potential liabilities for motor vehicle owners. I accept
counsel’s belief that there were reasonable arguments to advance as to the
amounts of the plaintiff’s claims. It was not unreasonable to think a jury, in
light of the small past income loss, might not give a large future lost income
award. As to the reasoning of the jury on the future care aspect, that cannot
be fathomed. But no direction is given to a jury on the quantum of general
damages, save in catastrophic cases.

[16]        
The motion for judgment was not contested by the
defendants at trial. Counsel does say the case is under appeal, so the quantum
may not be settled. I agree with Humphries J. that while consideration
should be given to the result, the court’s discretion is not to be driven by
“hindsight analysis”: see Lumanlan v. Sadler, 2009 BCSC 142.

[17]        
Another aspect is deterrence. The difference in the
offer and the final award is a factor, as is the failure of the defendants to
make a sensible counter-offer. It was not a case where the plaintiff would not
obtain a reasonable award. It was a case to be carefully assessed and the usual
avenues for settlement explored. A reasonable counter-offer would show a
sensible stance being taken by the defendants before trial. That course was not
chosen.

[18]        
Under the previous rule, double costs would have
been automatic. Now there is consideration of whether or not the offer could be
reasonably accepted.

[19]        
While there may have been some grounds for not
accepting the offer, no response was made, the defendants choosing to “keep
their powder dry” for trial. In the circumstances, the plaintiff is entitled to
her double costs, which I allow for preparation for trial, examination for
discovery, and the trial. I do not allow costs for the notices to admit which I
now address.

Notice to Admit

[20]        
The plaintiff claims additional costs under Rule
31 for the defendants’ failure to properly reply to notices to admit. Some
seven notices to admit were forwarded by the plaintiff to the defendants
between October 26 and November 7, 2009.

[21]        
The tone was set for the exchange of documents
between the parties by the defendant’s notice to admit, dated October 15, 2009.
It contained the report of one of the plaintiff’s doctors, Dr. Sadowski, and
was simply a letter from Dr. Sadowski, a specialist in neurology, to Ms. Foster’s
family doctor, Dr. Sundvick, dated December 4, 2007. It reads:

Dear Dr.Sundvick:

The MRI on this woman’s cervical spine is
unremarkable. There is no evidence of cord signal or cord compression and even
the foramina are unremarkable. I think her symptoms are not likely to be
neurologically based and probably musculoskeletal as suggested previously.

Yours sincerely,

H.A. Sadowski,
M.D.

[22]        
The defendants’ notice to admit required admission
of:

1.         On
or about December 4, 2007, Dr. H.A. Sadowski, sent the letter attached hereto
as Schedule “A” to Dr. S. Sundvick.

2.         As at December 4, 2007, Dr. Sadowski
was of the opinion that:

(a)        The
Plaintiff’s November 4, 2007, MRI of her cervical spine was unremarkable.

(b)        The
said MRI showed no evidence of cord signal or cord compression.

(c)        The
said MRI demonstrated that the cervical foramina were unremarkable.

(d)        The
Plaintiff’s symptoms were not likely neurologically based, and were probably
musculoskeletal.

[23]        
The plaintiff’s response was:

TAKE NOTICE that in response to a Notice to
Admit dated the 15th day of October 2009, issued by the Defendants, the
Plaintiff is unable to admit what may be in the mind of another, therefore the
Plaintiff:

1.         denies
the facts alleged in paragraphs 1 and 2 in the Notice to Admit; and

2.         denies the
authenticity of the document attached as Schedule “A” to the Notice to Admit.

[24]        
The intent of the notice was to save calling Dr.
Sadowski as a witness, for his report simply said that on the MRI he could not
find any neurological basis for the plaintiff’s complaints. Plaintiff’s counsel
then followed up with a barrage of notices to admit which I will not
bother to enumerate.

[25]        
Interestingly, plaintiff’s counsel made
reference to the sensible comments of Collin Campbell J. of the Superior Court
of Ontario in the Advocates Society Journal, (Spring 1999), namely:

Few lawyers seem
to use the notice to admit as a tool to reduce the cost of litigation
eliminating the need to prove certain facts which might otherwise be costly or
time-consuming. The inexperienced lawyer will often use the notice to admit as
an interim step, putting everything possible within the notice and simply
adding to the time, cost, and confusion in responding. An experienced lawyer
will isolate those few factors that are important from a strategic and
cost-efficient perspective. Many lawyers are concerned not to tip their hand as
to their case. On the other hand, a good lawyer may want to alert the other
side to a fatal flaw in that side’s case. The lawyer who knows what he or she
is doing will at least consider what the notice to admit can do and weigh its
effectiveness. A less competent lawyer does a disservice to the client by not
even considering the notice.

[26]        
Plaintiff’s counsel stated he was using the notice
to admit as a tool to get the defendants to consider settlement.

[27]        
It was not done to “isolate those few factors
that are important from a strategic and cost efficient perspective”. Indeed I
did not recall any argument from plaintiff’s counsel as to what time might have
been saved at trial had any of the facts in the notices to admit been admitted.

[28]        
The intention of Rule 31 is neatly summarized in
Blake v. Gill (1997), 35 B.C.L.R. (3d) 34 where a policeman had to
be called from Newfoundland to give evidence on matters that could have been
disposed of in the notice to admit. The award for additional costs therefore
related to the time spent by the policeman in court plus the costs of the policeman’s
attendance.

[29]        
In my opinion the plaintiff’s solicitor
triggered the negative responses from the defendants, the barrage of notices to
admit was not necessary, and worse, ended with a most unprofessional letter
from plaintiff’s solicitor to the defendants’ solicitor.

[30]        
In the result there will be no costs awarded for
the plaintiff’s notices to admit.

“The
Honourable Mr. Justice Crawford”