IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110420

Docket: M50219

Registry:
Nanaimo

Between:

Diane Elizabeth
Brooks-Martin

Plaintiff

And

James Martin,
MacNutt Enterprises Ltd. and John Doe

Defendants

Before:
The Honourable Mr. Justice D.A. Halfyard

Reasons for Judgment on the Issue of Costs

Introduction

[1]            
After a trial on the issue of liability only, I found the defendant
James Martin to be 70% at fault for the accident in which the plaintiff was
injured. I dismissed the action as against the defendant MacNutt Enterprises
Ltd. I found that the plaintiff was contributorily negligent to the extent that
she was 30% at fault for the accident. There is no dispute that the successful
defendant is entitled to its costs, but several issues relating to costs have
arisen.

The applications

[2]            
The plaintiff has applied for a “Sanderson” order which, if granted,
would require the defendant James Martin to pay directly to the defendant
MacNutt Enterprises Ltd., its costs of this proceeding. In the alternative, the
plaintiff seeks a Bullock Order which would require the defendant Martin to
reimburse her for paying the costs of the successful defendant. The defendant
James Martin opposes the plaintiff’s application, and submits that the
plaintiff should be required to pay the costs of the successful defendant. The
defendant MacNutt Enterprises Ltd. joins with the defendant James Martin, in
opposing the plaintiff’s application.

[3]            
The defendant James Martin has brought a formal application in support
of his position that the plaintiff should pay the costs of the defendant
MacNutt Enterprises Ltd.

[4]            
The defendant MacNutt Enterprises Ltd applies for an order that would
require the plaintiff to pay its costs of the proceeding at Scale B up to its
offer to settle on November 5, 2010, and at double Scale B from then until the
end of the trial. The plaintiff opposes this application on two grounds. First,
the plaintiff submits that the defendant James Martin should be required to pay
all costs of the successful defendant. Second, the plaintiff contends that, in
any event, there is no proper basis for ordering double costs.

[5]            
The defendant Martin takes no position on the issue of whether double
costs should be awarded to the defendant MacNutt Enterprises Ltd.

The plaintiff’s application for a Sanderson Order/Bullock Order

[6]            
The court’s power to make the order sought by the plaintiff is set out
in Rule 14-1(18), which states:

(18)  If the costs of one
defendant against a plaintiff ought to be paid by another defendant, the court
may order payment to be made by one defendant to the other directly, or may
order the plaintiff to pay the costs of the successful defendant and allow the
plaintiff to include those costs as a disbursement in the costs payable to the
plaintiff by the unsuccessful defendant.

[7]            
In order to justify the exercise of discretion in his or her favour, a
plaintiff must establish two elements, namely:

a)    that it was
reasonable for the plaintiff to have sued the successful defendant together
with the unsuccessful defendant; and

b)    that there was
some conduct on the part of the unsuccessful defendant (such as asserting that
the successful defendant was the culprit in the case or committing some act or acts
which caused the plaintiff to bring the successful defendant into the
litigation) which makes it just to require the unsuccessful defendant to pay
the costs of the successful defendant.

See Grassi v. WIC Radio Ltd. 2001 BCCA 376 at paras
32-34; Davidson v. Tahtsa Timber Ltd. 2010 BCCA 528 at paras 53-54.

[8]            
The first element is a threshold requirement for the exercise of the
court’s discretion. This question is looked at mainly from the perspective of
the plaintiff. But if the plaintiff has alleged independent causes of action
against the two defendants and if these two causes of action are not connected,
the plaintiff will not be able to meet the threshold test. See Robertson v.
North Island College Technical and Vocational Institute (1980), 26 B.C.L.R.
225 (C.A.) at paras 23-24; Davidson v. Tahtsa Timber Ltd. at para. 52.

Were the two causes of action interrelated?

[9]            
The plaintiff alleged that the defendant Martin negligently drove his
motorcycle in front of her motorcycle, directly into her path of travel,
without warning. She alleged that she had to steer to her right and forcefully
apply her brakes, in order to avoid a collision with the defendant Martin’s
motorcycle. It was further alleged by the plaintiff that, at the time she was
taking emergency evasive action, she encountered loose material on the roadway,
which caused her to lose control of her motorcycle and be injured as a result.

[10]        
The defendant Martin denied liability, and alleged that the plaintiff’s
negligence was the sole cause her losing control of her motorcycle and her
resulting injury. He admitted that he steered his motorcycle into the
plaintiff’s path of travel, but denies that this action caused the plaintiff to
lose control. He alleged that she lost control of her motorcycle solely because
she failed to keep a proper lookout and she was following too closely behind
him.

[11]        
The defendant Martin alleged in the alternative that the plaintiff’s
loss of control of her motorcycle was caused by her own negligence in
combination with the negligence of the defendant MacNutt Enterprises Ltd. (in
depositing loose material on Interurban Road and then failing to clean it off).

[12]        
It was the position of the defendant Martin that he encountered loose
material on the road surface, which was present as a result of the negligence
of the defendant MacNutt Enterprises Ltd., (“the defendant MacNutt”), and that
this loose material caused him to skid and temporarily lose control of his
motorcycle, which required him to steer to his right, in front of the
plaintiff, in order to regain control.

[13]        
The defendant MacNutt denied liability and alleged that the plaintiff’s
loss of control of her motorcycle was caused solely by her own negligence. The
alternative pleadings included the allegation that the accident was caused by
the combined negligence of the plaintiff and the defendant Martin. At trial, the
defendant MacNutt specifically denied that it owed a duty of care to the
plaintiff and denied that any loose material was present on the roadway, at the
location where the accident occurred.

[14]        
At the close of the plaintiff’s case at trial, counsel for the defendant
MacNutt made a no evidence motion. After argument, that application was
abandoned, but it was renewed after the defendant James Martin elected to call
evidence, presented evidence and closed his case. I dismissed the motion for
non-suit, on the ground that there was some evidence which, if accepted, could
support findings of all essential elements of the cause of action pleaded
against the defendant MacNutt.

[15]        
The defendant MacNutt challenged the credibility of the plaintiff and
the defendant at the trial, and argued that they had fabricated their evidence
to the effect that they had each lost control of their motorcycles because they
had skidded on loose material on the roadway.

[16]        
I did not accept the evidence of the plaintiff and the defendant Martin,
to the effect that there was loose material on the roadway which caused them to
lose control of their motorcycles. I also concluded that the plaintiff had
failed to prove that the defendant MacNutt owed her a duty of care, in that the
loose material that was being tracked out on to Interurban Road, originated
from Alan Road, which was a municipal road.

[17]        
However, in my opinion, the plaintiff has met the threshold test of
establishing that it was reasonable for her to sue MacNutt Enterprises Ltd.
together with James Martin. The two causes of action are interrelated to a
significant extent.

Does the conduct of the defendant Martin favour the making of a Sanderson
Order (or Bullock Order)?

[18]        
The plaintiff submits that the defendant Martin “pointed the finger” at
the defendant MacNutt. On behalf of the defendant Martin, it is submitted that
he only “pointed the finger” at the defendant MacNutt in the alternative to his
primary pleading, which was that the plaintiff was solely at fault for the
accident.

[19]        
It is true that the defendant Martin’s first line of defence was that
the plaintiff was solely responsible for her injury. But he admitted that he
steered in front of the plaintiff’s motorcycle, and sought to blame the
defendant MacNutt for causing him to make this manoeuvre. The defendant Martin
maintained this position throughout the trial and in final argument submitted
that he encountered loose material on the roadway which caused him to steer in
front of the plaintiff’s motorcycle (see paragraph 11(h)) of counsel’s final
argument in writing). In paragraph 11(p), counsel for the defendant Martin made
this argument:

Both the plaintiff and the
defendant James Martin indicate that their operation of their respective
motorcycles was affected by material on the roadway. There is evidence from
them and from another witness to indicate that there was material on the
roadway on that day, and there is evidence that material on this portion of
Interurban Road was a regular occurrence.

[20]        
In these circumstances, I conclude that the defendant Martin did, to a
significant extent, assert that the defendant MacNutt was “the culprit in the
case.”

[21]        
Counsel for the plaintiff pointed out that the defendant MacNutt also
sought to blame the defendant Martin for causing the plaintiff’s injury. But
the plaintiff joined the defendant MacNutt with her action against the
defendant Martin, from the outset. Having been so joined, it seems inconceivable
that the defendant MacNutt would not allege negligence on the part of the
defendant Martin, in the alternative.

[22]        
It was further submitted on behalf of the plaintiff that the defendant
Martin gave evidence on examination for discovery on
January 12, 2009, to the effect that his allegedly negligent
manoeuvre was caused by the presence of loose material on the roadway. I think
that conduct on the part of the defendant Martin gave some support for the
plaintiff’s decision to continue with her action against the defendant MacNutt.
But it is arguable that events in the months leading up to the trial in 2010
cast considerable doubt on the likelihood of success as against the defendant
MacNutt. Even so, the position that was taken by the defendant Martin put
significant pressure on the plaintiff to maintain her action against the
defendant MacNutt, at least up to early October, 2010. It is important to note
that, in his trial brief filed October 4, 2010, the defendant Martin
set out his position as being:

That the motor vehicle accident
which is the subject of this proceeding, and any resulting injuries and damage
for which the plaintiff claims compensation, are due solely to the negligence
of the plaintiff in the operation of her motorcycle.

[23]        
That position changed at the trial. The defendant Martin sought to blame
the defendant MacNutt for his own loss of control, and also for the plaintiff’s
loss of control of her motorcycle. On the other hand, I think it is a
reasonable inference that, if the plaintiff had discontinued her action against
the defendant MacNutt before trial, the defendant Martin would not have
attempted to prove that the negligence of the defendant MacNutt was the cause
of the plaintiff’s injury. This conclusion seems to be confirmed by the
defendant Martin’s offer to settle made on November 10, 2010, which
was for 50% of the agreed amount of damages (50% would be $500,000) and 50% of
costs incurred up to the date of the offer. Presumably counsel for the
defendant Martin would have known of the offer to settle made by the defendant
MacNutt, on November 5th (for $1.00 plus costs to date), so that the 50% offer
likely reflected counsel’s assessment of the contributory negligence of the
plaintiff.

[24]        
It has not been shown that the defendant Martin did anything to induce
the plaintiff to sue the defendant MacNutt. He did file pleadings in which he
alleged fault on the part of the defendant MacNutt, but this was in the
alternative to his main defence that the plaintiff’s negligence was the sole
cause of the accident. The defendant Martin did give evidence on discovery that
indicated he would seek to cast blame on the defendant MacNutt for his own actions
which the plaintiff alleged were negligent. However, he then filed a trial
brief which made no allegation of fault on the part of the defendant MacNutt. I
infer that it was simply a judgment on the part of counsel for the plaintiff to
advise the plaintiff to continue to trial against the defendant MacNutt. The
plaintiff has not shown that the defendant Martin’s conduct made that decision
reasonable or necessary.

[25]        
I conclude that the plaintiff cannot rely on any conduct on the part the
defendant Martin as being a sufficient reason for continuing to maintain her
claim against the defendant MacNutt, through trial.

[26]        
Counsel for the defendant Martin relies on the general rule in Rule
14-1(9) that “costs of a proceeding must be awarded to the successful party
unless the court otherwise orders.”  This is generally understood to mean that
the losing party (in this case, the plaintiff) pays the costs of the winning
party (in this case, the defendant MacNutt). It is said that this rule should
be applied here, because there are no proper grounds for the court to conclude
that the costs of the defendant MacNutt “ought to be paid” by the defendant
Martin.

[27]        
The authorities say that a trial judge’s discretion on this issue
continues to be very broad. See Davidson v. Tahtsa Timber Ltd. at para
49. Some relevant factors have been identified in the cases and, where they
exist, they must be taken into account. But the existence or non-existence of a
particular factor does not fetter the trial judge’s discretion. In the present
case, although it was suggested as a potentially relevant factor by counsel for
the plaintiff, I do not consider it of significance that both defendants are
separately represented by the same insurer.

[28]        
In all of the circumstances, I am not persuaded that the costs which the
defendant MacNutt is entitled to recover from the plaintiff ought to be paid by
the defendant Martin. The application of the plaintiff for a Sanderson order
(or a Bullock order) is dismissed. The plaintiff will be required to pay the
costs of the defendant MacNutt.

The application of the defendant MacNutt for double costs

[29]        
The defendant MacNutt claims double costs for the period from
November 5, 2010, onward, on grounds which include the fact that on
that date, the defendant MacNutt delivered an offer to settle the plaintiff’s
claim for payment of one dollar plus the plaintiff’s costs at Scale B up to
November 5, 2010. In his letter, counsel for the defendant MacNutt
set out eight reasons which were said to make the offer to settle a fair and
reasonable one. By its terms, the offer expired at 4:00 p.m. on the last
business day before trial. The plaintiff rejected this offer, on
November 8, 2010.

[30]        
The evidence shows that, as early as January 13, 2009, counsel
for the defendant MacNutt had expressed the opinion that, if any liability was
to arise from gravel or sand being on the road surface at the time of the
accident, it originated from Alan Road, and the plaintiff should be claiming
against the Municipality of Saanich. Counsel suggested on
January 13, 2009, that the action against MacNutt should be dismissed
by consent on the basis that defendant MacNutt would waive its right to any
costs or disbursements.

[31]        
Counsel for the defendant MacNutt made a similar proposal by letter
dated April 5, 2010, and also stated that he was intending to proceed
with an application for summary trial and final judgment with respect to the
plaintiff’s claim against the defendant MacNutt. A similar offer was repeated
by letter dated July 26, 2010, and again on
November 1, 2010. All of these offers were rejected by the plaintiff.
None of these offers to settle were made in accordance with the Rules of
Court. Then came the offer by the defendant MacNutt, dated
November 5, 2010.

[32]        
The offer to settle dated November 5, 2010, was an “offer to
settle” within the definition in Rule 9-1(1)(c). Rule 9-1(5) grants powers to
the court which include the following:

(5)        In a proceeding in which an offer to settle
has been made, the court may do one or more of the following:

.
. .

(b)        award double costs of all or some of the
steps taken in the proceeding after the date of delivery or service of the
offer to settle;

[33]        
Rule 9-1(6) states:

(6)        In making an order under sub-rule (5), the court
may consider the             following:

(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 served 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.

[34]        
Counsel have referred to a great many case authorities, in support of
their respective positions. I find it unnecessary to review these cases.

[35]        
Counsel for the plaintiff did not concede that the “relationship” factor
(b) favoured the defendant MacNutt, and submitted that factor (c) (the relative
financial circumstances of the parties) favoured the plaintiff. I think factor
(b) favours the position of the defendant MacNutt. Factor (c) may weigh in
favour of the plaintiff, but she has obtained a substantial damage award, and
so this factor could not, in my opinion, be decisive on this application. It
seems clear that the issue is whether the offer to settle made on November 5,
2010 “was one that ought reasonably to have been accepted” by the plaintiff. If
it was, then the factors favouring an award of double costs would outweigh the
opposing factors.

Was the offer to settle “one that ought reasonably to have been accepted”?

[36]        
On hindsight, it is obvious that the plaintiff should have discontinued
its action against the defendant MacNutt, before trial. Counsel for the
defendant MacNutt made a forceful submission to the effect that the case
against MacNutt was hopeless from the beginning, and that counsel for the
plaintiff should have realized this, long before trial (and certainly by
November 5, 2010). But I am unable to say that the claim of the plaintiff was
bound to fail. Counsel for the plaintiff was of the opinion that there was some
prospect of success against the defendant MacNutt. The dismissal of the motion
for non-suit indicates that counsel’s opinion had some foundation.

[37]        
One of the purposes of rule 9-1 is to promote settlement by imposing
significant costs consequences on a litigant who has refused to accept an offer
that ought reasonably to have been accepted. But an unsuccessful plaintiff “should
not be penalized for declining an offer that did not provide a genuine
incentive to settle in the circumstances.” See Giles v. Westminster Savings
and Credit Union 2010 BCCA 282 at para 88.

[38]        
The fact that the claim was dismissed does not establish that the
plaintiff ought to have accepted the offer to settle. See Bailey v. Jang
2008 BCSC 1372 at para 24. The strength of the plaintiff’s case against the defendant
MacNutt , and the likelihood of a trial judge finding some liability against
the defendant MacNutt, were, in my opinion, questions about which reasonable
lawyers could disagree. The particulars of the plaintiff’s case in negligence against
the defendant MacNutt appear to have been in a state of flux up until the time
of trial. Even when the plaintiff began alleging that the loose material was
being tracked out on to Interurban Road by the tires of trucks travelling from
the MacNutt yard along Alan Road, there was some evidence suggesting that the
defendant MacNutt may have accepted some responsibility for cleaning up
Interurban Road at and near the intersection of Alan Road. In the face of a one
dollar ($1.00) offer to settle, made on the eve of trial, counsel for the
plaintiff might understandably have advised against acceptance. In my view, counsel
could reasonably have concluded that the offer fell short of providing “a
genuine incentive to settle.”

[39]        
In the end, I am unable to conclude that the offer to settle made by the
defendant MacNutt on November 5, 2010 “was one that ought reasonably to have
been accepted” by the plaintiff. In all of the circumstances that exist in this
case, I am not persuaded that an award of double costs should be made against
the plaintiff. The application of the defendant MacNutt Enterprises Ltd. is
dismissed.

[40]        
In the result, the plaintiff shall pay to the defendant MacNutt
Enterprises Ltd. its costs of this proceeding at Scale B.

Costs as between the plaintiff and the defendant Martin

[41]        
Section 3 of the Negligence Act directs that the plaintiff shall
receive 70% of her costs of this proceeding, from the defendant Martin. But
that statute does not entitle the defendant Martin to receive 30% of his costs
of the proceeding, from the plaintiff, because he sustained no damage or loss.
See Bedwell v. McGill 2008 BCCA 526 at paras. 29-30 and 32.

[42]        
However, the defendant Martin was successful on the issue of
contributory negligence on the part of the plaintiff. In my opinion, the costs entitlement
of the plaintiff is defined solely by the Negligence Act. That statute
directs that the plaintiff shall recover 70% of her costs of the proceeding
from the defendant Martin. It seems to me that the Rules of Court relating to
costs should govern the issue of whether the defendant Martin should recover
any of his costs from the plaintiff. Rule 14-1(15) reads in part:

(15)      The court may award costs

. . .

 (b)        that relate to some particular application,
step or matter in or related to the proceeding . . .

[43]        
Up until July 1, 2010, the relevant sub-rule stated:

(15)      The court may award
costs that relate to some particular issue or part of the proceeding or may
award costs except so far as they relate to some particular issue or part of
the proceeding.

[44]        
I think that the issue of whether the plaintiff was contributorily
negligent is a “matter in or related to the proceeding” under the new rule, and
a “particular issue or part of the proceeding” under the previous rule. I
conclude that the court has the discretion to award costs of the contributory
negligence issue, to the defendant Martin. I am not suggesting that such costs
should be awarded, only that the court has jurisdiction to entertain such an
application under the Rules of Court.

[45]        
No submissions were made relating to what costs, if any, should be paid
by the plaintiff to the defendant Martin and I was not told whether that issue
was settled. It may be that the parties have reached agreement on that issue.
If so, nothing further needs to be said about it. I will leave it to counsel to
advise the trial scheduling manager as to whether further submissions will be
required.

[46]        
All parties will bear their own costs of the present application.

  
“Mr. Justice D.A. Halfyard”