IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110909

Docket: M131973

Registry:
New Westminster

Between:

Marianna Gatzke

Plaintiff

And:

Mandeep Sidhu,
Dharminder Sidhu,

Audrey Strong and
Peter Markey

Defendants

Before:
The Honourable Mr. A. Justice Saunders

Reasons on Costs

[1]          
In Oral Reasons for Judgment pronounced June 17, 2011, indexed at 2011 BCSC
988, I found the plaintiff 70% at fault for a motor vehicle collision, and
awarded her 30% of her damages, which I assessed at $31,500, plus physiotherapy
user fees.  It appears that the total damages payable to the plaintiff may
amount to something less than $10,000.  Pursuant to s. 3 of the Negligence
Act, RSBC 1998 c. 333, the plaintiff would be entitled to 30% of her
costs throughout.

[2]          
The defendants Mandeep and Dharminder Sidhu, however, made an offer to
settle prior to trial, in the form required by Rule 9-1, and therefore seek
payment of their costs in respect of steps taken after delivery of the offer.  The
offer, which was dated March 4, 2011, was in the amount of $50,000.

[3]          
Had that offer been accepted, the plaintiff stood to obtain 100% of her
costs up to the date the offer was delivered.

[4]          
Rule 9-1 of the Rules of Court addresses the subject of offers to settle.
The following subrules apply to the present circumstances:

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 more of the following:

. . .

(d) if the offer was made by a
defendant and the judgment awarded to the plaintiff was no greater than the
amount of the offer to settle, award to the defendant the defendant’s costs in
respect of all or some of the steps taken in the proceeding after the date of
delivery or service 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 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.

[5]          
The legislative purpose of Rule 9‑1 is to encourage the early
settlement of disputes, through rewarding the party who has made a reasonable
settlement offer and penalizing the party who has declined to accept:  Mackenzie
v. Brooks, 1999 BCCA 623.

Ought the Offer Reasonably to Have Been Accepted

[6]          
With respect to liability, the circumstances of the accident were such
that a split in liability was a real possibility.  There was no explanation
tendered by the plaintiff as to why the defendant driver would have turned left
into the path of the oncoming plaintiff to counter the driver’s evidence that
the plaintiff was signalling a right turn.

[7]          
With respect to damages, the plaintiff was relying solely upon the
opinion of her family physician, Dr. Budau.  The deficiencies in Dr. Budau’s
opinion are discussed in the judgment.  Dr. Budau had not seen the plaintiff
for more than three years.

[8]          
None of the physicians who have had the plaintiff under their care since
then have opined that her knee problems are attributable to the accident.  In
July 2009 she had seen a general practitioner, Dr. Smith, complaining of
swelling in her knee.  Dr. Smith’s note of that visit reads:

This is a difficult patient who
is convinced that the swelling in her knee is as a result of the MVA.  This is
not so.  Her MRI of the knee is completely normal, and she has obvious
varicosities of the lateral side of the knee.  She will be referred to a
general surgeon for sclerotherapy of the vein.

[9]          
The plaintiff’s counsel obtained a report of a Dr. Schweigel on
June 6, 2011, too late to be used at trial.  That report stated that the
plaintiff probably had some mild chondromalacia on the under surface of the
patella.  There is no indication, in the materials provided to me, that Dr. Schweigel
attributed this to the accident.

[10]       
Given my findings regarding the limited extent of the knee injury
suffered in the accident, my Reasons for Judgment did not discuss in detail the
plaintiff’s evidence of her post-accident difficulties in maintaining steady
employment.  As I found, the evidence did not establish that her difficulties
were due to her knee complaints.

[11]       
The evidence, over all, was such that there was a very real possibility
of the plaintiff only obtaining a modest damages award.

[12]       
On behalf of the plaintiff, it is said that acceptance of the offer
would have left the plaintiff in dire financial circumstances.  The offer,
however, would have provided the plaintiff with a substantial sum of money and
payment of all of her costs to the date that the offer was made.

[13]       
The offer was very generous, and ought to have been accepted.

Relationship Between the Offer and the Judgment Amount

[14]       
This factor is a two-edged sword.  Ordinarily, where a plaintiff obtains
judgment for less than the amount offered in settlement, the legislative
purpose of the Rule would be fulfilled by awarding the defendant its costs from
the date the offer was made.  However, where there is a very significant gap
between the judgment amount and the offer, it may be the case that a defendant
is in a better position for having gone to trial, even taking its counsel’s
fees into account.  This appears to have quite possibly been the case in the
present circumstances.  The damages assessed, net of the plaintiff’s
contributory negligence, are a small fraction of the offer.

[15]       
Defendants should not be discouraged from making generous settlement
offers.  But where the end result is dramatically different than the offer
resulting in a net savings to the defendant, a defendant found to be partially
at fault can reasonably expect to bear some of the cost of obtaining that
result.

Relative Financial Circumstance of the Parties

[16]       
The plaintiff apparently has very limited financial means.  This factor,
however, will be given the most weight where it is the subject accident, or
other issue between the parties, which is responsible for the plaintiff’s
circumstances.  That is not the case here.

[17]       
The defendants, on the other hand, were presumably being defended by the
Insurance Corporation of British Columbia.  An insured defendant’s greater
financial ability to defend is a factor which was described by the B.C. Court
of Appeal in Smith v. Tedford, 2010 BCCA 302, as being a matter “of no
small importance to considering whether and to what extend the financial
circumstances of the parties, relative to each other, bear on an award of costs”.

Conclusion

[18]       
This appears to have been a case where both parties undertook a course
of action based on an overestimation of the risk to the defendants.  There is
no compelling case, in the circumstances, for awarding the defendants the
entirety of their post-offer costs.  Given the plaintiff’s financial
circumstances and the very modest damages, the purpose of the Rule will be met
by awarding the plaintiff 30% of her costs to the date of the offer, and
awarding the defendants only the disbursements incurred in association with the
attendance at trial of their expert witness, Dr. Sovio.  Dr. Sovio’s
attendance at trial was only required for cross-examination at the plaintiff’s
request, and it is appropriate that this cost be borne by the plaintiff.  That
amount is to be set off against the plaintiff’s award of damages.

“A. Saunders J.”