IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110819

Docket: M070249

Registry:
Vancouver

Between:

Randhir Singh
Garcha

Plaintiff

And

Mukhtiar Singh
Gill

Defendant

Before:
The Honourable Mr. Justice Cohen

Ruling re: Costs

Introduction

[1]            
In my reasons for judgment issued December 19, 2008, (2008 BCSC 1756) I
found that the plaintiff, a chiropractor in private practice, had proven on the
balance of probabilities that the defendant was solely responsible for the
accident and should be held 100% liable for the plaintiff’s personal injuries.

[2]            
I also found that the appropriate award for the plaintiff’s
non-pecuniary damages claim was $25,000.  However, under the damages head the
most contentious item during the litigation centred on the plaintiff’s claim
for past income loss.  On this item, at paras. 93 – 98, I found, as follows:

[93]      In my view, the plaintiff’s claim for past income
loss falls far short of satisfactorily assessing the actual or even approximate
income loss he sustained as a result of the accident.  In this regard, I turn
to the defendant’s analysis which I think appropriately identifies the flaws
under this head of the plaintiff’s claim for damages.

[94]      As the evidence unfolded at trial it showed some
important inconsistencies from the claim set out in the plaintiff’s letter of
July 14, 2006.  First, on March 25, 2005, the day of the accident, according to
the evidence at trial and the exhibits the plaintiff treated six patients.  The
plaintiff was able to reschedule all of the other patients, save one.  Thus,
the plaintiff’s income loss for March 25^th appears to be only one
patient.

[95]      Second, while I am satisfied that the plaintiff did
not work on March 26^th, a Saturday, his record for this date was
modified after the fact by him and therefore any income loss for this day is
inadequately supported by reliable record keeping.  I do not conclude that the
modification of the record should cast any negative credibility finding on the
plaintiff. In this regard, I accept his explanation for the modification. 
However, the result of the modification renders the evidence in support of any
actual loss of income for this day somewhat less than reliable.

[96]      The plaintiff’s claim that from March 28, 2005
until April 25, 2005, he worked 50% of his normal workload was clarified at
trial.  The plaintiff explained that that he did not actually reduce his
patient visits by 50%, but rather he could not perform his practice at the same
level as before the accident and had to substantially adjust his techniques for
treatment of his patients.  He said that he scheduled more frequent breaks, did
not take walk-in patients, and let patients do the exercises on their own. 
This same explanation apparently applies to his claim that from April 25, 2005
to May 1, 2005, he practiced at 75% of his normal workload.

[97]      However, the defence did a thorough analysis of the
plaintiff’s patient numbers and fees for different periods of time so as to
make a comparison with the period during which income loss is being claimed by
the plaintiff.  The analysis shows quite a different picture than that put
forward by the plaintiff and casts significant doubt on the reliability of the
plaintiff’s claim of income loss based on a reduced workload, and certainly
does not support his assertion that he suffered a loss of 150 patient visits as
he estimated.  Rather the analysis indicates that the plaintiff was working at
close to full patient capacity during the period he claims that he lost income
due to his accident injuries.

[98]      In the result, I find
that the plaintiff has failed to prove on a balance of probabilities that he is
entitled to the amounts he claims under either of the approaches he has
submitted in support of his claim.  What his claim amounts to is essentially
his best guess of past income loss with no evidence that satisfactorily
supports his estimate.  In my opinion, while I think that the plaintiff is
entitled to some past income loss, I find that the amount of his actual income
loss is at best modest, and I fix his award for past income loss at $3,500.

Applicability of Rule 66

[3]            
By way of background, the plaintiff’s action proceeded to trial pursuant
to the former Rule 66 (the “Rule”) under the fast track litigation provisions
which stipulated as follows:

(1)  The object of this rule is to provide a speedier
and less expensive determination of certain actions the trial of which can be
completed within 2 days.

…

(8)  This rule ceases 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.

(9)  In exercising its discretion under subrule (8)(b),
the court must take into account

(a)        the
likelihood that a trial of the action will occupy more than 2 days, and

(b)        whether it is reasonable in the
circumstances to continue the action under this rule.

[4]            
The first issue I must decide is whether the award of costs to the
plaintiff should be calculated using the limits set out in subsection 29 of the
Rule which provided, as follows:

(29)  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.

[5]            
The trial commenced on May 28, 2008, but did not complete within two
days and was reset for continuation on October 27, 2008, for a further five
days.

[6]            
By way of further background, in November 2007 the defendant made an
offer to settle pursuant to the former Rule 37 in the amount of $19,000 plus
costs.  On May 20, 2008, the plaintiff made an offer to settle pursuant to Rule
37 in the amount of $22,499 plus costs.

[7]            
In my opinion, the award of costs to the plaintiff is not bound by the
provisions of the Rule.

[8]            
The defendant’s position is that he continued to be of the belief that
the action could be heard within two days until either the day before or the
morning of the trial.  He asserted that on the day prior to the commencement of
the trial, counsel for the plaintiff for the first time addressed the issue of
the trial length, a matter first raised by defence counsel, over one year
earlier, in his letter to plaintiff’s counsel dated April 27, 2007, wherein he
said, as follows:

We note that your office has set
this matter down in the fast track program and are representing to the court
that the trial will take 2 days or less. Kindly therefore provide the
following:

·       
Trial witness list with time estimates;

·       
Provision of all expert reports that the plaintiff intends to rely
upon at trial;

·       
Summary of claims;

·       
As requested, particulars re claims of past income loss and
special damages. The foregoing is necessary for our review of this matter from
a trial management standpoint so that we may consider whether or not the matter
is properly within Rule 66.

We reserve the right to trial by
jury should it turn out this matter is not appropriate for Rule 66.

[9]            
The defendant submitted that it was not until the morning of the first
day of trial that the plaintiff confirmed that the trial would last longer than
two days.

[10]        
The plaintiff submitted that on May 27, 2008, his counsel discussed with
defence counsel the potential witnesses and the time estimates associated with
each witness and that subsequently counsel forwarded a trial agenda to defence
counsel.  Thus, he submitted, both parties were aware prior to the commencement
of the trial that it could not complete in two days.

[11]        
The defendant relies most heavily on the decision in Majewska v.
Partyka, 2010 BCCA 236 as a complete answer to the plaintiff’s position on
this issue.  In that case, at paras. 18- 29 and 34-36, Neilson J.A. held, as
follows:

[18]      In Reid v. Insurance Corp. of British Columbia,
2000 BCSC 1334, Shaw J. affirmed that the objective of R. 66 was to keep
the costs of litigation low. While he recognized the discretion inherent in
R. 66(29), it was his view that judges should not depart from the
costs limits set out in that sub-rule unless “special circumstances” existed
that made it unjust to award the capped costs. He accordingly declined to order
double costs for a defendant who had delivered an offer to settle under
R. 37.

[19]      The decision in Reid led to the enactment of
R. 66(29.1), which clearly permits the court to consider a settlement
offer as a “special circumstance” in exercising its discretion as to costs
under the rule. Many decisions have now recognized that an offer to settle or a
trial extending beyond two days are special circumstances that justify an award
of costs that exceeds the limits in R. 66(29). These cases, however, have
not demonstrated a unified approach as to how those costs should be calculated.

[20]      In some cases in which a R. 37 offer was the
only special circumstance, trial judges have ordered costs under the usual
tariff, including double costs for items occurring after the date of the offer,
but set a cap of twice the amount provided in R. 66(29). These cases
suggest, however, that if there are additional special circumstances, such a
cap may not be appropriate: Bishop-Austin v. Brown, 2004 BCSC 944, 34
B.C.L.R. (4th) 355; Linekar v. Andreko, 2004 BCSC 1244, 34 B.C.L.R.
(4th) 142.

[21]      In Girvan v. Raffele, 2002 BCSC 1105, 4
B.C.L.R. (4th) 52, the judge used a more complicated formula. He directed the
plaintiff to prepare one bill of costs under the usual tariff as if no offer
had been delivered, and a second bill of costs that recognized her entitlement
to double units for those steps taken after the offer was made. He then used
the difference between those amounts as a percentage increase to be applied to
the fixed costs under R. 66(29) to calculate the award of costs.

[22]      Other decisions, such as that before us, have directed
that all costs be calculated under the usual tariff. Some judges have justified
this approach by finding that the case should not have been brought under
R. 66 due to its complexity and the time taken to hear it: Kailey v.
Kelner, 2008 BCSC 224; Schnare v. Roberts, 2009 BCSC 656.

[23]      In other cases where the trial exceeded two days
judges have simply awarded the maximum available under R. 66(29): Bove
v. Lauritzen, 2009 BCSC 1698, Laroche v. MacPhail, 2007 BCSC 1451; Lopez
v. VW Credit Canada Inc., 2008 BCSC 320.

[24]      Finally, some judges have used the amounts provided
in R. 66(29) as the reference point for adjusting costs upward. In Duong,
at paras. 17-19, Macaulay J. awarded more than the R. 66(29) limit
because the plaintiff had “beaten” an offer delivered by the defendant 10 days
before trial. He did so, however, by breaking down the amounts in
R. 66(29), which were at that time $3,600 and $4,800, into pre-trial and
trial costs. He took the $1,200 difference between those figures as representative
of the cost of one additional day of trial. He then subtracted $1,200 from the
$3,600 provided for a one day trial, and found the balance of $2,400 reasonably
represented pre-trial costs. Because the offer to settle had not been delivered
until just before trial, he declined to double the pre-trial portion of the
costs, but awarded $4,800 for trial costs, representing double costs for two
days of trial calculated at $1,200 per day.

[25]      Mr. Justice Macaulay’s approach has been adopted in
other cases: Bowen v. Martinec, 2008 BCSC 104; Park v. Arthur,
2007 BCSC 1365. It was also considered and adopted by this Court in Anderson.
In Anderson, the plaintiff’s R. 66 action had been dismissed
at trial. The defendant had delivered an offer to settle, but the trial judge
found it was uncertain and did not comply with R. 37. On appeal, this
Court set aside that decision, and then dealt with the question of how costs
should be calculated. The defendant sought costs at Scale 3 under the usual
tariff at that time, and double costs from the date of the offer.

[26]      Prowse J.A., writing for the Court, stated the
issues were whether the Court was bound to apply R. 37 and award double
costs and, if so, whether those costs should be determined by reference to the
fixed costs set out in R. 66, or under the usual tariff. On the first
point, she affirmed that R. 66(29.1) gave the court discretion to depart
from the costs fixed by R. 66(29) if an offer has been made under Rules 37
or 37A.

[27]      As to how those costs should be calculated, Madam
Justice Prowse acknowledged the variety of approaches set out in the cases,
rejected the defendant’s position, and adopted the method used by Macaulay J.
in Duong. She stated:

[46] …If [a settlement offer under
R. 37] is the only special circumstance, however, it is reasonable to expect
that the court’s discretion would generally be exercised to award double costs,
as was the case in Duong.  This is so because, as earlier
indicated, the fixed costs under Rule 66 are designed to reflect the costs that
would normally flow in an action which can be heard in one or two days, and the
need to encourage settlements by penalties in costs is present in these
actions, just as in the case of ordinary actions.  Thus, I agree with
Macaulay J.’s suggested approach to the exercise of discretion where a Rule 37
offer is the only special circumstances before the court.

[47]      I also agree with
Macaulay J. that the intent of the Rule was to avoid the necessity of a
taxation and that it would frustrate that intent to order a taxation of costs
under the Rule.  For that reason, his approach to double costs also makes
sense.  Rather than have double costs assessed under Appendix B and then
taxed, Rule 66 provides a mechanism whereby double costs can be given effect
without the necessity of taxation.  That methodology is described by
Macaulay J. in the passage quoted from his reasons for judgment at para. 40, supra.

[28]      Since the offer to settle had been delivered early
in the action, Madam Justice Prowse calculated the costs by doubling the limit
of $4,800 in R. 66(29), and then deducted a ten percent discount for work
done before the offer had been received. She acknowledged this was an arbitrary
process, but reiterated that it best reflected the intent of the rule by
avoiding taxation yet giving significant credit to the defendant for making an
early offer to settle.

[29]      Thus, Anderson established two principles.
First, it confirmed that there is discretion to award costs beyond the limits
in R. 66(29) if there are special circumstances. Second, where such an
award is justified, it affirmed that costs should be calculated using those
limits as reference points, rather than under the usual tariff.

…

[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.

[35]      In this case, the plaintiff twice approached the
defendant to consent to removing the action from R. 66. When the defendant
refused, she did not pursue it by applying for removal even when, at the outset
of trial, it appeared certain the trial would last more than two days. The
trial judge considered this and stated:

[6]        In the circumstances of
this case and in particular the relatively short period of time between the
issuance of the notice of trial and the trial, I do not think that the failure
to make an application to take the matter out of Rule 66 should persuade me to
exercise my discretion against the plaintiff. I note that if I were to rely on
the failure to make an application to remove the case from Rule 66, I would be
inviting parties to make a formal application to have cases removed from Rule
66 whenever they were concerned about the effect that the failure to make such
an application might have on a subsequent award of costs pursuant to Rule 37.

[36]      In my view, that
comment demonstrates the need for predictable consequences in the conduct of
litigation. I am unable to agree with the trial judge that applications for
removal from R. 66 in such circumstances are undesirable. Here, if the
plaintiff was concerned that R. 66 was no longer appropriate, the proper
response was to apply for removal from 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).

[12]        
The position of the defence is that applying the decision in Majewska
to the facts in the instant case restricts the plaintiff’s costs to those
permitted by the Rule.

[13]        
The main premise for this contention is that it was the plaintiff who
chose to proceed under the Rule, that he secured the benefits of the Rule and
made no attempt at any point in the process to remove the action from the Rule,
yet now wishes to avoid the cost implications flowing from the Rule.

[14]        
The plaintiff’s position is that defence counsel’s aggressive
cross-examination of the plaintiff on his credibility, the fact that the trial
spilled over two days and that the defence appreciated the cost implications of
a Rule 37 offer were all circumstances that empowered the court to depart from
the Rule 66 provision on costs.

[15]        
In my opinion, this is not a case which should be determined with
guidance from the result in Majewska.  It is clear to me, that although
no formal application was made by the plaintiff to remove the action from the Rule,
the court’s disposition of the circumstances faced by the parties on the
opening day of trial was tantamount to an order that the action be removed from
the Rule.  In my opinion, to find otherwise would permit the defence to take
advantage of an outcome with which the defence not only agreed, but in fact
jointly sought from the court.

[16]        
On the opening day of trial, plaintiff’s counsel raised the fact that
the action was commenced pursuant to the Rule, explaining that late in the day
counsel exchanged their time estimates of the direct and cross-examinations of
the witnesses.  Counsel explained further that based on these time estimates
the parties would require 16 to 17 hours of court time to complete the case
which translated into a three or four day trial.  He also explained that the
parties’ preference was to proceed for two days and then continue with the
balance of the trial at a date to be set for the continuation of the evidence.

[17]        
In my view, it is very significant to note that defence counsel did
“echo” plaintiff’s counsel’s comments and went on to express the strong
preference of the defence to proceed for two days and then continue at a later
date to be set.  Defence counsel went on to explain some of the background
regarding witness issues which underpinned his strong preference, and then
concluded with the following submission:

The — I think on balance — of
course, my friend’s quite right; this is subject to your discretion. But on
balance, the parties have prepared for trial to start today, so it wouldn’t be
helpful to either party, in my submission, for the trial not to start today.
And there’s always a wane of interest in that respect. But I think we are ready
to proceed today. We may as well so we’ll avoid unnecessary costs of having to
duplicate trial preparation efforts at some future point if the case simply
adjourned generally. …

[18]        
Based on counsels’ submissions about the length of time required for completion
of the evidence, I said that I was content to get underway with the trial which
had by this time, by consent in my view, expanded from being a two day to an
estimated three or four day trial. This fact was clearly known to both sides
and there was no opposition from the defence regarding the fact that the action
had been commenced pursuant to the Rule, nor a submission to continue the
action under the Rule.

[19]        
In my opinion, this case can be distinguished from the facts in Majewska
where prior to trial the plaintiff had asked the defendant to consent to a
removal of the action from the Rule, to which the defendant refused, after
which the plaintiff did not pursue the matter, even at the outset of the trial,
when it appeared certain that the trial would last more than two days.  Here, while
prior to the trial the parties did not make a formal application or file a
consent order to remove the action from the Rule, it is my view that the
position taken by the parties at the opening of the trial can fairly be
characterized as a consent application by them to remove the action from the
Rule.

[20]        
Thus, in all of the circumstances, I find that the Rule does not apply
to the action.

Chronology of Events

[21]        
There is a lengthy and somewhat tortuous history to this litigation, much
of which has a direct bearing on the issue of costs.  The following is a
chronology of the events surrounding the production of documents in relation to
the plaintiff’s claim for past income loss:

1.         The plaintiff sustained injuries in a motor
vehicle accident which took place on March 25, 2005.

2.         In July 2006 the plaintiff submitted an income
loss to ICBC claiming a loss of $7,461. This claim was part of a settlement
proposal made by the plaintiff at a point in time when he was unrepresented by
counsel.

3.         The plaintiff retained counsel in December 2006.

4.         The plaintiff commenced his Rule 66 action in
January 2007, claiming inter alia loss of earnings.

5.         As required by the Rule, plaintiff’s counsel
prepared a list of documents. The list did not include identification of the
plaintiff’s business or financial records. In Part II of the list, the
plaintiff stated that he was not aware of the existence of any other documents
relating to the matters in issue in the action which then or earlier had been
in his possession.

6.         At trial, plaintiff’s counsel informed the court
that he had prepared the list of documents. In re-examination, the plaintiff
testified that he played no role in the preparation of the list.

7.         The plaintiff agreed that he had his calendars in
his possession and control when the list was prepared. He confirmed that even
though these documents were in his possession and control at the time, they
were not listed and he did not produce them. Similarly invoices, tax returns
for 2005 onwards and bank synoptics were not listed.

8.         Plaintiff’s counsel did not request the
plaintiff’s business records until after the plaintiff’s examination for
discovery in January 2008.

9.         The defence prepared a demand for discovery and
notice to produce documents dated April 19, 2007. On April 27, 2007 defence
counsel wrote to plaintiff’s counsel and stated as follows:

We enclose here with the following
documents:

…

2. Demand for Discovery of
Documents and Notice to Produce

…

In addition, we will require strict
compliance with Rule 26 and Rule 66(11) and expect the plaintiff to produce all
documents in his possession or control (or which have been) which bear on the
issues in the action, being your client’s alleged injuries and their effect on
the plaintiff, including but not limited to personal documents, letters,
photographs, videotapes, notes as well as the usual medical and employment
related documents. …

…

To be very clear, it is not enough
for you to make disclosure of only those documents that happen to be in your
file. Rather, your client has a positive obligation to search his records and
produce all relevant documents in his possession and control and disclose those
which have been.

…

10.       The plaintiff was cross-examined about the above
letter. He could not recall if he was made aware in the spring of 2007 that the
defence had made the requests outlined in the letter. When he was asked if he
produced any documents in the spring of 2007 he replied, “When I was asked to
produce documents, I did”.

11.       By letter dated May 18, 2007, defence counsel wrote
to plaintiff’s counsel, as follows:

…Your client has made very
limited disclosure of business and financial records. We require compliance
with Rule 26 and 66 (11). Specifically, we require that your client make
disclosure of his appointment calendar for the period January 1, 2005 to June
30, 2005. Furthermore, we require your client’s billings and source documents
for same for the period of January 1, 2005 to June 30, 2005.

We ask for your cooperation in
obtaining the following documents: Records of Dr. Sidhu for the period of
December 12 2006, to the present and the Medical Services Plan print-out for the
period of November 30, 2006. We ask that you obtain these records on our behalf
and agree to reimburse you for your costs obtaining the same. Please confirm
that you will cooperate in this regard.

12.       The plaintiff was asked in cross-examination about
this letter and testified:

Q: ….Were you aware of that
request made by the defence, May 18th, 2007?

A: I can’t recall on May 18th that
request was made.

Q: Did you make any effort to
produce what was asked for, the appointment calendar and the billings, at that
time in the spring of 2007?

A: I can’t recall going back that
far.

13.       Defence counsel again wrote to plaintiff’s counsel
about disclosure of business records on July 10, 2007, requested the
plaintiff’s business records for the period of his disability and for 6 months
on either side. In cross-examination the plaintiff could not recall being made
aware of this request and could not recall making any effort to produce
documents during the summer of 2007.

14.       On January 8, 2008, defence counsel wrote again to
the plaintiff’s counsel requesting particulars of past income loss, special
damages and all relevant business records. In cross-examination the plaintiff
could not recall if he received notice of this request. The defence submits
that it delivered a Notice to Admit on January 20, 2008, seeking admissions as
to no past or future income loss but the plaintiff refused to make such
admissions although on the first day of trial the plaintiff abandoned his claim
for future income loss.

15.       At the plaintiff’s discovery on January 24, 2008,
defence counsel requested that the plaintiff produce certain business and tax
records. These requests were summarized and emailed to plaintiff’s counsel
immediately following the discovery. In re-examination, the plaintiff testified
that his counsel’s request for production of documents occurred after his
discovery.

16.       The defence brought a motion in late January 2008
for disclosure of documents which triggered some disclosure by the plaintiff
which he considered had satisfied his disclosure requirements. The defence
disagreed, and on February 12, 2008, the defence obtained an order for
disclosure as well as costs of the motion. The plaintiff testified in
cross-examination that he was not made aware that the defendant had attended in
court to secure an order for the plaintiff to produce records that the defence
had been seeking for almost a year.

17.       The defence submits that on the same day as being
granted the order, defence counsel emailed plaintiff’s counsel about the order
of Master Young. The plaintiff testified that he could not recall if he had
complied with the order.

18.       The defendant submits that he brought another
motion for an order for production of documents and delivered the motion to
plaintiff’s counsel on March 10, 2008. The plaintiff then disclosed certain tax
records by letter dated March 13, 2008 and again on March 14, 2008. The
plaintiff sought an adjournment of the motion but the defendant declined to
consent. On March 17, 2008, the plaintiff made some further disclosure but the
defence did not consider the disclosure sufficient.

19.       In an affidavit sworn March 18, 2008, plaintiff’s
counsel’s assistant, Ms. Sona Ircha, deposed, on information and belief from
plaintiff’s counsel, that the plaintiff had provided his counsel with all
business records in his possession and control pursuant to the February 2008
order and that the documents were provided to the defence by the plaintiff’s
counsel’s letter dated March 17, 2008.

20.       In re-examination, the plaintiff testified that the
“first time” his counsel requested documents from him was in March 2008 and
when requested he produced them.

21.       Defence counsel attended in court on March 19, 2008
for dismissal of the plaintiff’s claim or enforcement of the February 2008
order. Plaintiff’s counsel attended as well. The defendant obtained an order
for compliance with the February order and further production as well as costs
of the motion.

22.       In cross-examination, the plaintiff had no
recollection of this order and could not recall if he complied with it or not.

23.       On March 26, 2008, plaintiff’s counsel informed
defendant’s counsel that the Supplemental List of Documents was in the process
of being finalized. On the same date plaintiff’s counsel swore in an affidavit
that the plaintiff’s list was an accurate reflection of the documents the
plaintiff had given his counsel.

24.       On March 26, 2008, plaintiff’s counsel delivered
two boxes of documents. On April 8, 2008, defence counsel wrote to plaintiff’s
counsel requesting the plaintiff’s journal entries. These were not produced by the
plaintiff; rather the defence counsel obtained these records directly from the
plaintiff’s accountant.

25.       In addition to the letter of April 8, 2008, defence
counsel wrote again on April 11 and May 16, 2008. In his letter of May 16th,
defence counsel requested documents, including source documents in respect of
the plaintiff’s business records and an affidavit verifying his business
records. On May 22, 2008 defence counsel wrote again to plaintiff’s counsel
requesting the plaintiff’s affidavit and setting down a motion for hearing on
May 27, 2008. The plaintiff asserted that by May 27th the defence had agreed
that the plaintiff had fully complied with the order of Silverman J. and was
abandoning its motion relating to production of business records. The defendant
disputes this assertion. His counsel takes the position that the motion was
apparently on the hearing list but some unknown individual contacted the
registry to have the motion taken off the list. Defence counsel asserted that
no one at his office called the registry to this effect. In any event,
plaintiff’s counsel and a lawyer from defence counsel’s office addressed the
Court.

26.       The plaintiff’s Delta clinic records were again
requested by the defence on May 27, 2008. Further requests were made on June 6
and 11, 2008. The defence wrote directly to Dr. D. Banwait, with whom the
plaintiff shared a clinical practice, on July 2 and 4, 2008, but according to
her the calendars were not in her possession but were in the possession of
plaintiff’s counsel.

27.       Further requests were
made of the plaintiff’s counsel on October 20 and 22, 2008 for the Delta clinic
calendars which were provided to defence counsel on October 22nd.

[22]        
In light of the above, I turn to the issue of whether the plaintiff is
entitled to special or double costs.

Special Costs

[23]        
The plaintiff’s claim for special costs is based essentially on his
position that the tone of defence counsel’s cross-examination of him was
inappropriate, and that defence counsel alleged the plaintiff had tailored
documents and falsely reported his expenses on income tax returns, none of
which assertions had been pleaded.  The plaintiff submitted that the
cross-examination attacked his integrity, as opposed to simply attacking the
reliability or weight to be given to his testimony.

[24]        
The plaintiff cited the decisions in Garcia v. Crestbrook Forest
Industries Ltd., 1994 CanLII 2570 (BCCA); Paz v. Hardouin, 1996
CanLII 1439 (BCCA); Pacific Hunter Resources v. Moss Management Inc., 2009
BCSC 1049; O’Connell Electric Ltd. v. British Columbia Hydro and Power
Authority, 2006 BCSC 1632; Pocuca v. Gutiu, 2007 BCSC 490, to
support his contention of entitlement to an order for special costs for the
following reasons:

1.       The defendant’s approach at trial was akin to
the “milder forms of misconduct which could simply be said to be deserving of
reproof or rebuke” and form the basis of an award of special costs;

2.       The defendant’s allegations of dishonest
conduct can attract a special costs order as if fraud had been pleaded;

3.       The defendant made unfounded allegations of
fraud against a practicing professional which can attract special costs; and,

4.       The
evidence with respect to the allegations consumed a substantial amount of time.

[25]        
I agree with the defence that none of the authorities cited by the
plaintiff support the relief he seeks, as the ratio they stand for is that
pleading and maintaining unfounded allegations of fraud or other serious
misconduct is reprehensible conduct that can attract special costs.  In the
instant case, there was no such plea and challenging the credibility of the
plaintiff does not rise to allegations of fraud or serious misconduct.

[26]        
I have reviewed the transcript references relating to the complaints
made by the plaintiff about the tone and intent of the cross-examination.  In
my opinion, the cross-examination of the plaintiff, when considered in the
context of his evidence, satisfies me that the questioning was neither improper,
inappropriate or unnecessarily aggressive.  While the court chose not to accept
the invitation of defence counsel to make a finding of a lack of credibility in
relation to the plaintiff’s evidence in support of his past loss of income
claim, the questions and answers which gave rise to the invitation cannot serve
as a foundation for a finding of an improper attack on the plaintiff’s
credibility.  Simply put, the court assessed the plaintiff’s evidence as a
whole and at the end of the day reached the conclusion that although the
plaintiff was not an incredible witness, his evidence on certain points
relating to his past loss of income claim was less than reliable.

[27]        
Thus, I find that the plaintiff has failed to establish grounds for an
order of special costs.

Double costs

[28]        
The plaintiff sought, in the alternative, costs on the usual tariff to
May 20, 2008, and double costs thereafter.

[29]        
As earlier outlined, the defendant delivered an offer to settle in the
amount of $19,000 to the plaintiff on November 22, 2007 pursuant to Rule 37.  On
May 12, 2008, the plaintiff sent the defendant a settlement proposal following
the completion of the plaintiff’s examination for discovery and receipt of a
medical report from the plaintiff’s family doctor.

[30]        
The defendant did not respond to the settlement proposal and on May 20,
2008, the plaintiff delivered an offer to settle to the defendant pursuant to
Rule 37 in the amount of $22,499.  Defence counsel advised plaintiff’s
counsel that the defendant was unwilling to negotiate beyond the defendant’s
offer to settle.  This offer, claimed the plaintiff, would result in a
significant set-off in costs and disbursements against the plaintiff if the
offer were accepted prior to the trial.

[31]        
The former Rule 37(23) provided, as follows:

If the plaintiff has made an
offer to settle a claim for money, and it has not expired or been withdrawn or
been accepted, and if the plaintiff obtains a judgment for the amount of money
specified in the offer or a greater amount, the plaintiff is entitled to costs
assessed to the date the offer was delivered and to double costs assessed from
that date.

[32]        
On July 1, 2008, Rule 37 was repealed, and was replaced by Rule 37B
which provided, in relevant part, as follows:

Rule 37B(1)

In this rule, “offer to settle” means

(a)        an offer to settle
made and delivered before July 2, 2008 under Rule 37, as that rule read on the
date of the offer to settle and in relation to which no order was made under
that rule …

[33]        
The plaintiff submitted that his offer fell within the definition of
Rule 37B(1)(a).  He cited the decision in Abma v. Paul, 2009 BCSC 60
where the court interpreted Rule 37B, as follows:

Rule 37B

[10]      On July 1, 2008, Rule 37B was enacted, Supreme
Court Rules, B.C. Reg. 221/90, as am. by B.C. Reg. 130/2008; it replaced
Rules 37 and 37A.  The relevant sections of Rule 37B are:

Offer may be considered in relation
to costs

(4)        The court may consider
an offer to settle when exercising the court’s discretion in relation to costs.

Cost options

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

(a)        deprive
a party, in whole or in part, of costs to which the party would otherwise be
entitled in respect of the steps taken in the proceeding after the date of
delivery of the offer to settle;

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

Considerations
of court

(6)        In making an order under
subrule (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 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.

[11]      Unlike Rule 37, Rule
37B gives the court a wide discretion concerning the costs order it should make
in circumstances where an offer to settle has been made.

[34]        
The plaintiff submitted that his offer to settle delivered to the
defendant on May 20, 2008 was reasonable and ought to have been accepted by the
defendant given that it was made following the examinations for discovery of
the parties, enabling the parties to assess risk on liability, and following
receipt of the plaintiff’s family doctor’s medical legal report enabling the
parties to assess quantum.  The plaintiff also noted that the defendant had eight
days before the trial to consider the plaintiff’s offer.  He referred to the
decision in Radke v. Parry, 2008 BCSC 1397 at para. 38, where Boyd J.
said, as follows:

[38] …The goal has been and
remains to encourage the early settlement of disputes “… by rewarding the
party who makes an early and reasonable settlement offer, and by penalizing the
party who declines to accept such an offer”. …

[35]        
I agree with the defence analysis that the plaintiff’s offer ought not
to have been accepted both because of the lateness of the offer, and the fact
that acceptance of the offer would have meant that costs previously earned by
the defence would be unjustly lost – two interrelated factors.

[36]        
The accident occurred in March 2005.  While the plaintiff was apparently
ready to settle with the defendant in July 2006, his claim did not settle at
that time.  The plaintiff retained counsel in December 2006, but no offer to
settle was made by the plaintiff until May 2008.  As the defence pointed out,
and I find, proper disclosure of documents was not forthcoming when the defence
nonetheless made an effort to settle the action in November 2007 in the amount
of $19,000.  In the absence of a response to the offer, the defence continued
to incur litigation expense – examinations for discovery were conducted, there
was an independent medical examination and several applications to the court
before the plaintiff made his offer to settle in May 2008, an offer for an
amount marginally above the earlier offer of the defendant.

[37]        
In my opinion, the defence has correctly analyzed the principles of the
authorities dealing with the awarding of costs, and I accept the defence
contention that the plaintiff has failed to establish any justification for his
delay in making his offer to settle.  As the defence stated, “A litigant should
not be punished for failing to accept an opponent’s eleventh hour [offer] when
that litigant made bona fide efforts to resolve the matter at a much earlier
date and had since incurred otherwise unnecessary costs, some of which were
ordered to be paid by the plaintiff in any event [of the cause]”.

[38]        
I also agree with the defence, and find, that the chronology of events
establishes that there was a significant and entirely unjustified
non-disclosure of documents by the plaintiff forcing the defendant to attend in
chambers on numerous occasions to apply for disclosure of first party business
records that should have been produced in a timely fashion without the need for
the defendant to incur this expense.  Moreover, had the defendant accepted the
plaintiff’s offer made under Rule 37, he would have been precluded from receiving
costs already ordered payable to him by the plaintiff: see Tomkin v. Tingey,
2000 BCSC 1133 and Icecorp v. Nicolaus, 2006 BCSC 25.  In Tomkin
at para. 11, the court said, as follows:

[11] Can the defendants tax
their costs for the two pre-offer motions in which it was ordered that they
were entitled to costs in any event of the cause? I think not. The wording of
Rule 37(22)(b) is clear. It makes no mention of pre-offer costs being
recovered by the defendants. The defendants made the offer knowing the interlocutory
history of the case and the wording of the rule. It was implicit in the fact of
their offer under R. 37 that they were foregoing costs on those
interlocutory matters for which rulings on costs had been made in their favour.
It is also arguable that no event of the cause has occurred to give rise to
those costs being taxable by the defendants.

[39]        
In the instant case, the plaintiff’s offer to settle was not made to
reflect the defendant’s entitlement to costs ordered prior to the offer.  As
the defendant asked, rhetorically, “Why should the defendant have accepted such
an offer?  Why should the court punish the defendant for refusing to accept
such an offer?  Is suggesting that the defendant should have accepted the offer
and thereby foregone previous court orders for costs consistent with the clear
intention of those previous court orders of sanctioning the plaintiff for his
unreasonable conduct?”

[40]        
I accept the contention of the defence, and find that given the
background to the plaintiff’s conduct of the litigation, the plaintiff’s offer
was not given in the context of encouraging the early settlement of the
litigation and the defendant should not be penalized for declining to accept
the plaintiff’s offer, particularly given that the plaintiff has fallen far
short of satisfying the onus to demonstrate that his offer to settle ought to
have been accepted by the defendant.  As aptly stated by the defendant, “Would
awarding double costs to the plaintiff for his ongoing and sustained failure to
produce documents, refusal to entertain an early, reasonable settlement in the
fall of 2007 and delivery of a late offer 8 days before trial encourage the
orderly conduct of litigation and the policy of early, reasonable offers to
settle?” The answer is that given by the defence: “… the time and expense of
both the trial and several months of litigation could have been avoided had the
plaintiff accepted the defence offer which was only a few thousand dollars
less, or, alternatively, countered at that time with the plaintiff’s offer
which would have been accepted as per the affidavit of Maria Gahan [the ICBC
adjuster]”.

[41]        
Thus, for the reasons expressed above, I find that an award of double
costs to the plaintiff is not appropriate.

Apportionment of Costs

[42]        
I find that the defendant is entitled to an order for an apportionment
of costs.

[43]        
The test for whether or not an apportionment of costs should occur is
set out in Sutherland v. The Attorney General of Canada, 2008 BCCA 27:

[31]      The test for the apportionment of costs under Rule
57(15) can be set out as follows:

(1)        the party seeking
apportionment must establish that there are separate and discrete issues upon
which the ultimately unsuccessful party succeeded at trial;

(2)        there must be a basis on
which the trial judge can identify the time attributable to the trial of these
separate issues;

(3)        it must be shown that apportionment would effect
a just result.

[44]        
First, I am satisfied that the issue of past income loss is a discrete
issue.  I am further satisfied that an apportionment of costs of 70% to the
plaintiff and 30% to the defendant, as submitted by the defendant, is fair in
the circumstances of this case, given the amount for past income loss awarded
to the plaintiff, when compared with his claimed amount; the fact that the
plaintiff abandoned his claim for future income loss at the commencement of the
trial; and, the inordinate amount of time which had to be spent by the defence
prior to the trial to secure proper disclosure of the plaintiff’s business
records.  There is no doubt from the chronology of the events preceding the
trial that the plaintiff’s failure to provide full and timely document
production of his business records had a large impact on the conduct of the
proceedings leading up to and during the trial.

Costs of the Costs Proceedings

[45]        
Finally, with respect to the issue of the costs of the costs litigation,
I am satisfied upon a review of the chronology of events surrounding this phase
of the litigation that the defendant is entitled to an order for party and party
costs payable by the plaintiff, in any event of the cause.

Summary

[46]        
In summary, I make the following orders:

(1)           
Rule 66 does not apply to the action;

(2)           
The plaintiff is not entitled to an order for special or double costs;

(3)           
The party and party costs of the action are apportioned 70% to the
plaintiff, and 30% to the defendant; and,

(4)           
The party and party costs of the costs proceedings are awarded to the
defendant, payable by the plaintiff, in any event of the cause.

“B.I. Cohen J.”
The Honourable Mr. Justice B.I. Cohen