IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101108

Docket: 50533

Registry:
Nanaimo

Between:

Mike Milkovich

Plaintiff

And:

Nick Bucan

Defendant

Before:
Master Bouck

(Sitting
as Registrar)

Reasons for Decision

Introduction

[1]            
These reasons address the assessment of party/party costs following the
claimant’s filing of a notice of discontinuance. The reasons may be read in
conjunction with Milkovich v. Insurance Corporation of British Columbia, 2010
BCSC 1567, which concerns the assessment of costs in a related action.

Background

[2]            
This personal injury action was commenced on June 20, 2007, and
discontinued in April 2010.  The claim relates to Mr. Milkovich’s involvement
in a motor vehicle accident at or near Prince George, B.C.

[3]            
The action was commenced out of the Nanaimo registry although the
plaintiff is a Prince George resident. While not specifically addressed in
the evidence, I presume that the Nanaimo registry was chosen to convenience the
plaintiff’s counsel. Mr. Leverman’s main office is in this city. However, he
also carries on a practice in Prince George through a “virtual office”.

[4]            
The trial of the action was to take place in Prince George.

[5]            
The plaintiff was injured in a single vehicle accident. Mr. Milkovich, a
now 63 year old gentleman, was a passenger in that vehicle.

[6]            
An issue immediately arose as to whether plaintiff’s claim for damages
was statute-barred based on WorkSafe BC’s finding that Mr. Milkovich was a
“worker” at the time of the accident.

[7]            
Mr. Leverman submits that commencing this action was a necessary prelude
to an appeal of that finding to the Workers Compensation Appeal Tribunal
(“WCAT”).

[8]            
Once pleadings were closed, the parties proceeded with written submissions
to WCAT addressing Mr. Milkovich’s status.

[9]            
Mr. Leverman reached an agreement with the first appointed defence counsel
to keep costs in both this tort action and the related Part VII action to a
minimum pending WCAT’s ruling. Some documents were exchanged, but apparently
all related to the WCAT determination.

[10]        
In late December 2008, Robert Brun, Q.C., assumed conduct of the defence
of both actions. Once appointed, Mr. Brun took the position that more fulsome disclosure
of medical and all other relevant documents should proceed while awaiting the
WCAT ruling.

[11]        
In addition, Mr. Brun scheduled an examination of the plaintiff in
Prince George. Mr. Leverman offered defence counsel the use of a boardroom
at no charge as a venue for that examination. However, Mr. Brun’s office
rejected this offer. The examinations of both the plaintiff and the defendant
took place in a rented room at the Inn of the North in Prince George.

[12]        
WCAT eventually determined that Mr. Milkovich was indeed a worker. Upon
receipt of that ruling, Mr. Brun’s office prepared a consent dismissal order
which was in turn delivered to plaintiff’s counsel. At the same time, Mr.
Leverman filed the notice of discontinuance making the consent dismissal order
redundant.

[13]        
On July 14, 2010, an associate from Mr. Brun’s office attended by
telephone for a pre-hearing conference on this assessment. As explained in Milkovich
v. Insurance Corporation of British Columbia, the pre-hearing conference
was mandatory.

[14]        
Together, the assessment of costs of this action and the Part VII action
occupied less than one-half of a day.

[15]        
The defendant has claimed for counsel’s travel to this assessment and for
the two days of examinations in Prince George.

[16]        
To their credit, counsel reached accommodation on some of the matters
initially in dispute. A third amended bill of costs is presented for
assessment.

The Issues

[17]        
As a preliminary matter, the plaintiff argued that the bill of costs
drawn by the defendant is incorrect in form and content. It is suggested that
the bill should be based on the tariff in effect after July 1, 2010. I reject
this argument for reasons set out in Milkovich v. Insurance Corporation of
British Columbia, supra. The tariff in place when the notice of discontinuance
was filed applies to the defendant’s claim for costs.

[18]        
The plaintiff further submitted that the registrar has discretion to fix
the scale of costs pursuant to s. 2(7) of Appendix B. The bill of costs has
been presented at Scale B. Plaintiff’s counsel did not strenuously argue that
the Scale should be otherwise for this action. Considering the factors set out
in s. 2(2) of Appendix B, I find that this action is one of ordinary
difficulty. Costs are appropriately assessed at Scale B.

[19]        
Therefore, the issues remaining between the parties are as follows:

1. Is the defendant entitled to
units under items 18 and 19 related to the WCAT submissions?

2. Is the defendant entitled to
claim travel costs for Vancouver-based counsel?

3. Should the plaintiff be required
to pay for a rented hotel boardroom when a no-charge venue was available for
the examinations for discovery?

4. Is the defendant entitled to
units and filing fees related to the pre-hearing conference?

5. Is the defendant entitled to
claim item 34 when the resolution of the claim was the result of filing of a
notice of discontinuance?

6. Is the defendant entitled to
claim for filing the notices of change of solicitor?

7. Is the defendant entitled to
claim for two attendances and two appearances with respect to the costs
assessments on October 13, 2010?

Discussion

[20]        
I will address each these issues in the ascending order of complexity.

Claim for Item 34

[21]        
Item 34 allows for 5 units for:

Negotiations, including
mediation, and process for settlement, discontinuance, or dismissal by consent
of any proceeding, if settled, discontinued, or dismissed by consent as a result
of negotiations.

[22]        
Defence counsel suggests that some communications led to the delivery of
the consent dismissal order and thus, the process outlined in item 34 was
engaged. Mr. Leverman says that there were no negotiations: WCAT issued its
ruling; the plaintiff filed a notice of discontinuance.

[23]        
I am persuaded that indeed, the resolution of this action had nothing to
do with negotiations but rather resulted solely from the WCAT ruling. The 5
units claimed by the defendant for item 34 are disallowed.

Inn of the North Room Rental

[24]        
Based on the evidence presented, I find that it was unnecessary to rent
a meeting room at this hotel when a no cost boardroom was available to conduct
the examinations. That room rental charge of $183.60 (plus applicable taxes) is
disallowed.

Filing of Notices of
Change of Solicitor

[25]        
In Milkovich v. Insurance Corporation of British Columbia, I
found that the filing of the notice of change of solicitor appointing private
defence counsel was an overhead of that defendant. Accordingly, the charges
related to this step were disallowed.

[26]        
I find that the appointment of private counsel by the defendant’s
insurer is similarly overhead of that insurer. The charges related to the
filing of the notice of discontinuance are disallowed.

Pre-Hearing Conference

[27]        
As determined in Milkovich v. Insurance Corporation of British
Columbia, the pre-hearing conference was a necessary step in the
proceeding. Accordingly, the tariff units related to that step are allowed.
However, the defendant could have avoided an additional $80 filing fee by
taking out one appointment, setting out the date of the pre-hearing conference
and then scheduling the assessment date by requisition (which, I am told by the
court staff, would not be subject to a filing fee). Thus, the $80 filing fee
for the appointment to assess costs is disallowed.

Preparation and Attendance
for the costs assessment on October 13, 2010

[28]        
Section 7 of the Appendix B addresses the apportionment of costs where
multiple proceedings have been ordered to be tried together or tried one after
another. That is not the circumstance here.

[29]        
The tariff does not specifically address the apportioning of costs in
related actions where the defendants are represented by the same counsel.

[30]        
Costs might be disallowed if duplicative or, alternatively, apportioned
between two actions if the costs claimant in the two actions is the same party:
Cook v. Lawson Oates Chrysler Ltd., [1991] B.C.J. No. 3534.

[31]        
In this case, while both defendants are represented by the same counsel,
those parties claim for costs are separate and distinct. I find that it was
necessary and proper to prepare for and attend at each assessment. The fact
that both assessments were completed in less than one-half day is not
determinative of the issue. A party could be compensated for a one-half
attendance if the matter is dealt with in five minutes.

WCAT Submissions

[32]        
The defendant has claimed items 18 and 19 for a total of 15 units
relating to the WCAT submissions. Items 18 and 19 provide as follows:

18  Preparation for an application or other matter referred
to in Item 19, for each day of hearing.

(a)  if unopposed 
4

(b)  if opposed 
5

19  Hearing of proceeding including originating application,
special case, proceeding on a point of law, interpleader or any other analogous
proceeding, and applications for judgment under Rules 18, 18A and 31 (6), for
each day.

(a)  if unopposed 
6

(b)  if opposed                                                                         10

[33]        
The defendant submits that the submissions to WCAT fit within “any other
analogous proceedings” under item 19. As authority for that proposition, the
defendant relies on Burton v. Williams, 2000 BCSC 987, and Dhanoa v.
Trenholme, 2009 BCSC 1787.

[34]        
Dhanoa v. Trenholme concerns an appeal from a master’s decision
to award only partial costs to a defendant when the plaintiff’s claim was
dismissed following a WCAT determination. This authority largely decides that the
successful defendant is entitled to all of its costs in those circumstances.
However, the court also discusses the general procedure in actions where a worker
v. worker defence is raised and whether that action is effectively stayed
pending a WCAT ruling (it is not). The defendant relies on this decision for
the court’s comment that “the WCAT proceeding is a step within the action
that is mandated by legislation” (my emphasis): para. 18.

[35]        
The decision of Burton v. Williams is less directly on point
since it addresses whether units could be claimed for preparation and
attendance at a mediation. This is no longer a live issue given amendments to
Appendix B allowing for such units. In that case, the successful party claimed
items 18 and 19 for attendance at the mediation. Master Baker allowed for
mediation related costs but under item 1. He did, however, discuss the
interpretation of “analogous proceeding” as used in item 19:

[4]        Is, therefore, a
mediation session, within the terms and application of Item 19, an “analogous
proceeding”? Since the term is preceded in the description of item 19 by
several specifically described processes, “analogous proceeding” should be
interpreted ejusdem generis, which limits any otherwise wide
interpretation of the term. Further, “analogous” is defined (Shorter Oxford
English Dictionary, 3^rd ed.) as: “having analogy: similar in
attributes, circumstances, relations, or uses …”. Applying these standards,
mediation sessions do not come within those processes or steps in litigation
contemplated by items 18 and 19. Each enumerated process or step involves two
elements not common to mediation that proceeds by consent or agreement.
Firstly, all of the listed processes are directed toward judgment by the
court. Secondly, and just as importantly, all of the steps require involvement
by compulsion under the Rules of Court with, of course, possible censure for
default. These elements distinguish consensual mediation from processes
considered by items 18 and 19.

[36]        
It may be that the WCAT determination is a necessary step in this
action. However, it does not necessarily follow that the successful party
should be compensated for taking that step under items 18 and 19. As determined
in Burton v. Williams, the process to which items 18 and 19 apply
results in a judgment of the court, not a tribunal or other decision
making authority. Furthermore, the tariff could not contemplate such a step as
items 18 and 19 require a determination as to whether the hearing took a one-half
day or full day. There is no hearing before WCAT and no record of the time
spent reaching its determination. In the result, the defendant’s claim for
items 18 and 19 is disallowed.

Counsel Travel Costs

[37]        
The plaintiff objects to paying any of the disbursements related to
travel by defence counsel to either Prince George or Nanaimo. It is submitted
that the costs were unnecessarily incurred as the defendant’s insurer could
have assigned counsel in Prince George to conduct the action (and examinations
for discovery) and used a Nanaimo agent to attend at the costs assessment
hearings.

[38]        
A party’s entitlement for costs for retaining “out-of-town” counsel has
been the subject matter of numerous decisions. The issue arises in various scenarios,
including where that non-resident counsel is retained by the party:

·      
because of a personal affiliation or connection; or

·      
upon the death or resignation of the original counsel; or

·      
through the auspices of a virtual or satellite office.

[39]        
The decisions cited by counsel appear, at first blush, to be
irreconcilable. Some of the earlier authorities place significant weight on the
fact that a pool of competent local counsel could have been retained by the
party. In those circumstances, the retention of out of town counsel was not
justified. Later decisions consider the availability of local counsel but that
factor is not determinative of the issue. Rather, the circumstances of the
action as a whole must be considered.

[40]        
In the oft-cited case of Allen v. Homan (1998), 45 B.C.L.R. (3d)
211 (S.C.) , (then) Master Chamberlist outlined the following principles:

41        With these various decisions in
mind, I am of the view that the following principles, inter alia, should be
utilized to determine whether or not costs associated with the retention of
out-of-town counsel should properly be visited upon the unsuccessful party:

1.         The
tariff of party and party costs is predicated on there being a traditional
review of all costs and disbursements claimed by the successful party and the
allowance of those items found to be reasonable and necessary in the particular
circumstances of the case before they are properly visited upon the defendant.

2.         The
particular circumstances of each case will determine if particular cost items
and related disbursements should be borne by the unsuccessful party.

3.         The
assessing officer’s review of Item 36 claims (out-of-town counsel) and related
disbursements should be no different than the assessing officer’s review of any
other item and related disbursement, the sole question being reasonableness and
necessity.

4.         Relative
to Item 36 and related disbursements, there should be no set rule that a
successful party will be denied indemnification relative to these costs unless
exceptional circumstances are shown to exist.

5.         The
reasonableness of the decision to encase out-of-town counsel must be
demonstrated by the party submitting the bill, the onus remaining with him or
her as it is with he or she demonstrating the necessity and reasonableness of
any other disbursement incurred in the prosecution of the case for which
indemnification from the unsuccessful party is claimed.

6.         In determining the
reasonableness of the submitting party’s decision to retain out-of-town
counsel, the assessing officer should objectively attempt to determine whether
or not the decision to retain the out-of-town counsel was reasonable and
necessary in all of the circumstances.

[41]        
And further:

49        Ultimately, the
question is — Is it reasonable in all of the circumstances of a particular
case to have costs associated with the retention of out-of-town counsel visited
upon the unsuccessful party?

[42]        
The issue in this case is somewhat complicated by the fact that while
this is a Nanaimo action, Prince George is the plaintiff’s home and where the
trial was intended to take place. Who then, would be the resident counsel? A
Nanaimo lawyer who could speak to applications locally and have easy access to
the court file; or a Prince George lawyer who could conduct examinations for
discovery and trial but would need to either apply to have any interlocutory
matters heard in Prince George or attend at Nanaimo for such steps (or
retain an agent — at additional cost under the tariff)?

[43]        
I am told that Mr. Brun was chosen to represent the defendant because of
his experience and expertise in making submissions to WCAT. In my view, this
fact alone does not justify the retention of this Vancouver counsel. While I
can take judicial notice of the fact that Mr. Brun is a senior and highly
regarded defence counsel, I can also take such notice of the fact that there
are highly regarded defence counsel in Prince George who could have dealt with
the WCAT submissions.

[44]        
The defendant relies on three decisions to support his entitlement for costs
related to Vancouver-based counsel’s travel: Almond v Brear, 2001 BCSC
1171, Brown v. Lowe, 2001 BCSC 105, and Pearson v. Epp, 2006 BCSC
1558.

[45]        
The facts outlined in Brown v. Lowe are analogous to the
circumstances of this case. The plaintiff commenced an action out of the
Nanaimo registry even though that locale had no connection to the plaintiff’s
residency or the cause of action. Rather, the only connection to the locale was
(as with this case) the fact that plaintiff’s counsel practiced near that
registry. The court found that it was proper for the defence to be represented
by an experienced Vancouver counsel particularly given the significant amount
of damages sought by the plaintiff.

[46]        
In this case, travel would be required regardless of the defendant’s
choice of counsel. This factor together with Mr. Brun’s expertise makes the
defendant’s choice of counsel reasonable. I also find that it was proper, if
not strictly necessary, for Mr. Brun’s law firm to conduct the
examinations for discovery and attend this costs assessment: McKenzie v.
Darke, 2003 BCSC 138.

[47]        
Accordingly, item 36 is allowed at 6 units. All disbursements related to
counsel’s travel are also allowed.

Summary

[48]        
In summary, the defendant’s costs are allowed at $7,169.33.

[49]        
The parties should advise the court scheduler’s office in Nanaimo in
writing as to whether any offers have been exchanged pursuant to former s. 10,
now s. 8, of Appendix B and the proposed impact of those offers. If no such
submissions are received by 4:00 p.m. on November 15, 2010, I will endorse the
certificate of costs accordingly.

                  “C.
P. Bouck”                

Master C. P. Bouck