IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110214

Docket: M114699

Registry:
New Westminster

Between:

Perry Edward
Johnson

Plaintiff

And

Clifford Elvin
Axten and Daimler Chrysler

Financial Services
Canada Inc.

Defendants

Before:
Master Keighley

Reasons for Judgment

[1]            
This action arises from a motor vehicle accident, which occurred on
November 30, 2006 and was commenced August 19, 2008, pursuant to the provisions
of Rule 68 of the former Supreme Court Rules.

[2]            
With the consent of all parties, Rule 68 ceased to apply to this action
on May 7, 2010. In due course, the matter was set for trial for five days,
commencing January 31, 2011.

[3]            
Following an unsuccessful mediation, the parties were able to achieve
settlement of the claim. By the terms of the settlement, the plaintiff received
the sum of $90,000.00, “plus assessable costs and disbursements”. The
plaintiff’s Part 7 claim was left open for a further 90 days to allow direct
funding of a chronic pain program.

[4]            
On December 10, 2010, the plaintiff delivered his Bill of Costs, drawn
in accordance with Appendix B of the Supreme Court Civil Rules. It appears from
Affidavit #1 of Keith Rudance, an ICBC claims manager, that discussions with regard
to costs took place directly between Mr. Brooks, counsel for the
plaintiff, and Ms. Angela Wall, the adjuster having conduct of the file.  Mr. Brooks
and Ms. Wall were unable to agree on the basis for determination of the
plaintiff’s costs and agreed that an assessment would be scheduled before the
registrar. Ms. Wall took the position the defendant was limited to a
proportion of costs payable under Rule 15-1(15) as the amount of the
settlement was under $100,000.00. The defendants offered $6,500.00 plus
disbursements: the plaintiff claims $11,950.00 plus disbursements. Claimed
disbursements are significant, amounting to $27,796.06.

Issue

[5]            
Is a plaintiff who settles his or her claim prior to trial for a sum
less than $100,000.00 limited to costs payable pursuant to Rule 15-1(15)?

The Rules

[6]            
Sec. 2(4) of appendix B to the Supreme Court Civil Rules appears, at
first glance, to provide a ready solution to the matter in issue on this
application. This section provides:

If, after December 31, 2006, a
settlement is reached under which payment of assessed costs is agreed to or an
order for costs is made, and if no scale is fixed or agreed to in that
settlement or order, the costs must be assessed under Scale B, unless a party,
on application, obtains an order of the court that costs be assessed under
another scale.

[7]            
On reflection, however, the scope of this section appears to be
restricted to determine the scale, rather than the basis for costs. In other
words, the section presumes that there is no dispute as to the application of Appendix
B, as there is in this case. It is noteworthy that Rule 14-1(1) provides in
part:

If costs are payable to a party under these Supreme Court
Civil Rules or by order, those costs must be assessed as party costs in
accordance with Appendix B unless any of the following circumstances exist:

(a)               
the parties consent to the amount of costs and file a certificate of
costs setting out that amount;

(b)               
the court orders that

(i)     the costs
of the proceeding be assessed as special costs, or

(ii)    the costs of an
application, a step or any other matter in the proceeding be assessed as
special costs in which event, subject to subrule (10), costs in relation to all
other applications, steps and matters in the proceeding must be determined and
assessed under this rule in accordance with this subrule;

(c)               
the court awards lump sum costs for the proceeding and fixes those costs
under subrule (15) in an amount the court considers appropriate;

(d)               
the court awards lump sum costs in relation to an application, a step or
any other matter in the proceeding and fixes those costs under subrule (15), in
which event, subject to subrule (10), costs in relation to all other
applications, steps and matters in the proceeding must be determined and
assessed under this rule in accordance with this subrule;

(e)               
a notice of fast track action in Form 61 has been filed in relation to
the action under Rule 15-1, in which event Rule 15-1 (15) to (17) applies;

(f)                
subject to subrule (10) of this rule,

(i) the only relief granted in the
action is one or more of money, real property, a builder’s lien and personal
property and the plaintiff recovers a judgment in which the total value of
the relief granted is $100,000 or less, exclusive of interest and costs, or

(ii) the trial of the action was completed within 3 days or
less, in which event, Rule 15-1 (15) to (17) applies to the action unless the
court orders otherwise. (Emphasis added)

[8]            
Rule 15-1(15) provides:

(15) Unless the court otherwise orders or the parties
consent, and subject to Rule 14-1 (10), the amount of costs, exclusive of
disbursements, to which a party to a fast track action is entitled, is as
follows:

(a)            
if the time spent on the hearing of the trial is one day or less, $8
000;

(b)            
if the time spent on the hearing of the trial is 2 days or less but more
than one day, $9 500;

(c)            
if the time spent on the hearing of the trial is more than 2 days,
$11 000.

[9]            
The defendants say that the combined effects of these provisions is to
disentitle a party who settles a claim for less than $100,000.00 from claiming
costs other than those provided for in Rule 15-1(15).

[10]        
Essentially, the defendant’s position requires reading of “recovers a
judgment” in Rule 14-1(f) as including “enters into a settlement”, or wording
to similar effect.

[11]        
The plaintiff says that the plain meaning of the rule requires its
interpretation to refer to only judgments, not settlements.

Discussion

[12]        
Counsel has been unable to provide me with any authority strictly on
point: not surprising since Rule 15-1 has only recently come into effect.

[13]        
Ms. Deane-Cloutier has, however, referred me to several decisions
which she submits should be of assistance.

[14]        
The first is the case of Majewska v. Partyka, 2010 BCCA 236, 2010
CarswellBC 1208 (C.A.) in which the trial judge had awarded Scale B costs
following a trial under then Rule 66. The object of that rule was to provide a
speedier and less expensive determination of actions, the trial at which could
be completed within two days. The rule applied to an action if an endorsement,
in Form 137, was added to or attached to the statement of claim or statement of
defence filed in the action. At issue in the Majewska case was the scope
of the trial judge’s discretion to award costs other than those fixed by then Rule
66(29) which read:

Unless the court orders otherwise or the parties consent, and
subject to Rule 57 (10), the amount of costs, exclusive of disbursements,
to which a party is entitled is as follows:

(a)    
if the time spent on the hearing of the trial is one day or less, $5
000;

(b)    
if the time spent on the hearing of the trial is more than one day, $6,600.

[15]        
The court held that the question of whether the trial judge’s discretion
with respect to costs was fettered by Rule 66(29) required an examination of
the rule in its entire context and reading of it in its ordinary grammatical
sense, harmoniously with the scheme and object to the Rule and the Rules in
general. The court noted the object of Rule 66 and further noted that the
provision of lump sum costs served the object of the speedier and less
expensive resolution of disputes and was not designed to deprive a successful
litigant of costs but rather to save the parties the cost of an assessment,
referring in that regard to the decision of Macaulay J. in Duong v. Howarth,
2005 BCSC 128, 2005 CarswellBC 223 BCSC. The court noted that the enactment of
Rule 66(29.1) allowed the court to consider a formal settlement offer as a
“special circumstance” in determining whether the costs limitation in Rule
66(29) should be applied.

[16]        
In the Majewska case and two other decisions referred to by Ms. Deane‑Cloutier:
Bowen v. Martinec, 2008 BCSC 104, 2008 CarswellBC 149 and Cathcart v.
Olson, 2009 BCSC 618, 2009 CarswellBC/267, the parties remained “within” Rule
66 as none of the events contemplated by Rule 66(8), which reads:

(8)  This rule cases to apply to an action if

(a)  the parties to the action file
a consent order to that effect

(b)  the court, on its own motion
or on the application of any party, so orders, or

(c)  none of the parties to the
action applies for a trial date within 4 months after the date on which this
rule becomes applicable to the action.

prevented further application of
the rule.

[17]        
The Majewska case does, however, contain this helpful observation on the
issue of “opting out” of Rule 66, at para. 34:

Moreover, it is important to
recognize that parties to a R. 66 action are not compelled to remain in the
fast track process. If the spectre of “special circumstances” emerges at any
time during the action, whether in the form of complex issues, offers to
settle, increased trial time, or any other situation, the parties may consent
to removing the case from R. 66, or obtain an order to that effect under R.
66(8). Thus, if a concern arises that costs under R. 66(29) will not be
adequate, this can be remedied by taking appropriate action during the
proceeding.

and at para. 36:

“Here, if the plaintiff was
concerned that R. 66 was no longer appropriate, the proper response was to
apply for removal from the fast track litigation. If she chose not to take that
step, she should have no basis for complaint that her costs are limited by R.
66(29).”

[18]        
In other words, a party who opted out of Rule 66 prior to trial was not
limited by Rule 66(29). It is noteworthy that Rule 68, which governed this
action prior to the parties “opting out” contained no limitation on costs. Also
noteworthy is that Rule 15‑1 as well as the case with its
predecessors, provides for opting out of the provisions for the Rule and in
this case the parties did so.

[19]        
Ms. Deane-Cloutier says that although Rule 15-1 does not, on its
face, contemplate settlement, neither did Rule 66(29), but that did not prevent
the court from holding that the subrule applied to settlement of cases governed
by the Rule. That submission, with respect, ignores however the very clear
statement of the Court of Appeal in Majewska: that once Rule 66 ceased to apply
to an action, a party would not be limited to costs recoverable under Rule
66(29).

Conclusion

[20]        
The plaintiff’s costs will be assessed pursuant to Schedule B of the
Supreme Court Civil Rules. While I agree that Rule 15-1(1) provides that cost
limitations apply to cases which were not “fast tracked” but should have been (regardless
of the intentions of the parties), the rule nonetheless provides that even if
otherwise applicable, it will not apply to cases where the court has ordered
that it will cease to apply. The court did so here, with the consent of the
parties and, as a result, the cost limitation set out in Rule 15-1, does not
apply.

Costs

[21]        
The plaintiff will have the costs of this application.

“Master
Keighley”