IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20111104

Docket: M055601

Registry: Vancouver

Between:

Arshdeep Chandi,
by his father and guardian ad litem, Jaswinder Chandi

Plaintiff

And

Ebenezer Garvey Atwell,
Harjinder Dhanju,

Harjit Kaur
Chandi, Mandy Hoi Man Chung and Chun Hang Wu

Defendants

Before:
District Registrar Cameron

Reasons for Decision

INTRODUCTION

[1]            
This is an assessment of the infant Plaintiff’s costs in respect of a
personal injury action that settled on April 20, 2010 for the sum of $900,000
plus taxable costs and disbursements in advance of the trial that was set for
fifteen days commencing on May 31, 2010. The settlement was approved by Mr.
Justice Leask on February 8, 2011.

[2]            
On July 10, 2004 the Plaintiff was five years of age and was a lap
belted back seat passenger in a 1995 Honda Accord that was being operated by
his uncle. Their vehicle was in the midst of making a left turn in the
intersection of 49^Th Avenue and Knight Street in the City of
Vancouver when it was struck by a southbound vehicle.

[3]            
The records from the Emergency Room at Children’s Hospital on July 10,
2004 in part say the following about the Plaintiff in the immediate aftermath
of the accident:

This is a five year old boy who
was hit by a car …He was a rear seat passenger in the middle. He was hit from
the right side. He was wearing a seatbelt. There was no loss of consciousness. His
nose was bleeding. There was no neck pain. The chief complaint is abdominal
pain.

[4]            
A medical report one year post accident dated July 29, 2005 authored by
Dr. Derryck Smith who was the Plaintiff’s  treating psychiatrist and the Head
of the Department of Psychiatry at BC Children’s Hospital included the
following comments and observations:

After the accident, Arshdeep lost interest in playing with
other children. He only wants to play with his sister at school. His energy is
low or as he puts it “not much strong.”

This boy does not like to travel in the car. He has bad
dreams about motor vehicle accidents and his nose bleeding. He is very
sensitive to bad news.

He also experiences feelings of anger about him and his
family being injured. This is out of character .He punched some other children
at school.

This young boy appears quite solemn, withdrawn, and quiet. He
cried while being interviewed. He does not appear to be much engaged. It was
hard to get him interested in playing….

This young man appears to be
suffering from both depression and post-traumatic stress disorder secondary to
a motor vehicle accident in which he and other members of the family were
injured.

[5]            
In his October 29, 2005 report , Dr. Smith commented that:

Arshdeep would benefit from weekly
psychotherapy provided by either a child psychiatrist, child psychologist or
mental health team.

[6]            
In a report dated December 6, 2005 Dr. Smith documented his continuing
treatment of Arshdeep and noted that he continued to have problems with
concentration, nightmares and poor learning outcomes at school. Dr. Smith
offered a definitive diagnosis of post-traumatic stress disorder and major
depression. He recommended that other medical professionals be engaged to
investigate and assist with necessary treatment for Arshdeep.

[7]            
According to various caregivers since the accident Arshdeep had
changeable moods, anxiety, was easily upset and had outbursts where he threw things
and argued with his siblings. He appeared to be withdrawn and was destructive
towards his own possessions. At school when he was angry, he broke pencils and
chewed paper. Over time these behaviours improved and they became less frequent
and/or less severe.

[8]            
The parties appeared before me to assess costs. During the course of the
hearing they reached agreement on all of the tariff items and many of the
disbursements. The Defendants put in issue the accounts of a number of medical
professionals retained on behalf of the Plaintiff including Dr. Smith, Dr. Du,
Dr. Lindberg, Dr. Gibbens, Dr. Purtzki, Dr. Kaushansky, and Optimum Therapy
Rehabilitation Services Inc. The Defendants also put in issue claims for a
report from the Vocational Consulting Group, the cost of “specialist” legal
advice respecting a trust agreement, photocopying and two transcription fees. Lastly,
the parties were at issue over whether or not the Plaintiff should be provided
with any allowance for disbursement interest charges incurred respecting the expert
reports and evaluations obtained to support his case.

THE ASSESSMENT

[9]            
   In Wheeldon v. Magee, 2010 BCSC 491, Master Bouck
(sitting as a Registrar) confirmed the fundamental principles to be applied on
an assessment of costs as follows:

[20] The assessment of party/party costs is an
objective exercise.

[23] The assessment of disbursements is governed
by Rule 57(4) [now 14-1(5) which although worded slightly differently have not
changed in principle in my opinion]:

(4)        In addition to determining the fees that are to
be allowed on an assessment under subrule (1) or (3), the registrar must

(a)        Determine which expenses and disbursements have
been necessarily or properly incurred in the conduct of the proceeding, and

(b)         Allow a reasonable amount for those
expenses and disbursements.

[24] It is trite law that where a disbursement is
in issue, an affidavit of justification is an indispensible requirement.

[25]      With respect to fees charged by experts,
the assessing officer may rely on experience in determining whether the charges
of those experts are reasonable in the circumstances: Ham v. Khan, 2010
BCSC 205. However, the best evidence to present to the assessing officer will
include detailed invoices showing the hours spent by the expert and that
individual’s hourly rate. This evidence should come directly from the expert
who may then be subject to cross-examination on the affidavit’s contents. It is
often helpful to have evidence of comparable charges applied in the expert’s
area of expertise.

[26]  Experts’ charges may be disallowed or
reduced for a variety of reasons, including when the cost is unreasonable,
compared to the evidence of other similar experts; the expert’s report
includes, improperly, extensive narrative; and when the suggested damages
reported by the expert are “preposterous” in the view of the court. [Emphasis
added.]

Bell v. Fanzine (No. 2) (1981), 32 B.C.L.R. 322 (S.C.)
(see also Lederman v. Prince George (City), 2000 BCSC 697 for a synopsis
of this decision)

[27]  With respect to the necessity and propriety
of a report, the assessing officer is not to “step into the shoes of the trier
of fact” but rather must focus “on whether in the circumstances, it was a
proper expenditure to fully and properly prepare the case for trial”: Freaked
v. Wilson, 2000 BCSC 695; Morrissette v. Smith (1990), 39 C.P.C. (2d)
30. I observe that in this case, the trial judge has already rejected the
suggestion that the impugned charges of the experts be disallowed in their
entirety based on the jury’s verdict.

[28]  Nonetheless, an
expert’s charges will be significantly discounted if not disallowed in their
entirety if their evidence is “nothing more than counsel could have done in
argument”: Moore v. Dhillon, [1992] B.C.J. No. 3055.

[10]        
The test for whether a disbursement is allowable is set out in Van
Deale v. Van Deale 56 B.C.L.R. 178 (C.A.), where the Court of Appeal held,
at paragraph 11:

The proper test, it seems to me,
from a number of authorities referred to us this morning is whether at the time
the disbursement or expense was incurred it was a proper disbursement in the sense
of not being extravagant, negligent, mistaken or a result of excessive caution
or excessive zeal, judged by the situation at the time when the disbursement or
expense was incurred.

[11]        
The onus of proof of the necessity and propriety of the disbursement rests
on the party presenting the bill for review.

[12]        
I am also guided by the following extract from the decision of Registrar
Sainty in Fairchild v. Vancouver Coastal Health Authority 2011 BCSC 616
where the learned Registrar says:

[134] I am mindful in making my decision about Dr.
Boyle’s fees of the decision of Master Horn (as Registrar) in McKenzie v.
Darke, 2003 BCSC 138 wherein his Honour said, at para. 21:

Taxing officers ought not to second guess a competent
counsel doing a competent job, solely on the grounds that other counsel might
have been more sanguine or less cautious in determining how the job should be
done.

[135] Having noted that, however, I should also
note that there is one very important difference between the former Supreme
Court Rules (under which Master Horn’s decision was made) and the current Supreme
Court Civil Rules.  That difference is that is under current Rule
14-1(2)(b) a registrar assessing costs is specifically directed to consider
Rule 1-3, which provides:

1-3(1)   The object of these Supreme Court Civil Rules
is to secure the just, speedy and inexpensive determination of every proceeding
on its merits.

 (2) Securing the just, speedy and inexpensive determination
of a proceeding on its merits includes, so far as is practicable, conducting
the proceeding in ways that are proportionate to

(a)        the amount involved in the proceeding,

(b)        the importance of the issues in dispute, and

(c)        the complexity of the proceeding.

[136] Thus under the Supreme Court Civil Rules
I must consider proportionality. Master Baker (sitting as a registrar) noted
this specifically in Stapleton v. Charambidis, 2010 BCSC 1642 at
paragraph 32:

But fourthly and significantly, there are the new Rules of
Court and their emphasis on proportionality.  Much of the thrust of the
quest for proportionality is, of course, directed to steps and processes in the
litigation itself as in, for example, the discovery of documents, limitations
on examinations for discovery and, indeed, the necessity at an early stage for
an overall litigation plan.  But surely this proportionality must, in
appropriate circumstances, extend to disbursements expended by the
parties. 

[137] What is also the case however is that, even
under the former Supreme Court Rules the case law made it clear that a
registrar was required to assess whether a given disbursement was extravagant
or the result of excessive caution or zeal. In making that determination, a
consideration of proportionality would inevitably be involved. In McKenzie
v. Darke, supra, Master Horn distinguished between the words
"necessary" and "proper" in Rule 57(4). He wrote:

 Rule 57(4)   provides that necessary or proper
disbursements and expenses shall be allowed.

 There is a difference between a disbursement
which is necessary and a disbursement which is proper. A "Necessary"
disbursement is one which is essential to conduct the litigation. A
"proper" disbursement is one which is not "necessary" but
is reasonably incurred for the purposes of the proceeding. (For these
propositions, see Fraser & Horn, Conduct of Civil Litigation in British
Columbia ss. 28.28 and 28.30).

THE MEDICAL EXPERTS

[13]        
In his very able submissions Mr. Harris said

“there are too many experts
stating the same things, and some of the experts did not being value to the
table. It is submitted that the experts that brought value to the case were Dr.
Kaushansky and Dr. Smith. The other experts-Dr. Gibbens, Dr. Lindberg, and Dr.
Du-did not. In the case of Dr. Lindberg and Dr. Du, their roles in treatment
overlapped; they were asked to provide reports that reiterated the hypothesis
of concussion and brain damage and added nothing to the picture. Dr. Kaushansky
stated that his involvement was similar to the involvement of Dr. Gibbens, but
with more detail.”

[14]        
Mr. Harris also submitted that

“the case needed an expert
quarterback. It did not have one. What it had was a number of experts, being
directed by Plaintiff’s counsel without any apparent overall plan other than
the exigencies of the situation, being asked to write report after report, and
being asked to review all of the other reports that the other experts had
written, attend conferences and team meetings, and provide follow up reports,
in a manner that lacked direction and ran up costs needlessly.”

[15]        
In his equally able submissions, Mr. Krekovic submitted”

We do not agree that this case
required a medical expert “quarterback”. It may be appropriate in certain
situations to retain someone to fill that function or it may be appropriate
that the lawyer quarterback the medical aspects of the case with the guidance
of key experts. If Plaintiff’s counsel had delegated the responsibility of
quarterbacking the medical aspects of the case to a single expert, defence
counsel would be entitled to make the submission that Plaintiff’s counsel
shirked his responsibility to the client and in the process let disbursements
get “out of control” without exercising any of the supervisory functions
expected of counsel. The Defendants cannot have it both ways……Medical evidence
needs to be obtained before moving ahead with choosing someone to be the
quarterback. All this in the context that it was for years the Defendant’s
position that Arshdeep did not sustain significant injuries in the crash and
that problems at school were related to learning disorders, language
difficulties and cultural barriers that  pre existed the crash.”

[16]        
While there may be cases where choosing a medical “quarterback” will
expedite matters I do not believe that was necessary in this case .From my
review of the evidence, I do not find that there was any lack of cohesion in
the decisions that were made by counsel for the Plaintiff in the gathering of
expert reports during the course of this litigation.

[17]        
In his Affidavit of justification sworn on September 13, 2011, counsel
for the Plaintiff, Michael Hoogbruin, said:

A central issue in this case was
whether or not Arshdeep sustained a brain injury. If the trier of fact found
that Arshdeep did sustain a brain injury during the Collision, Arshdeep’s award
for future care and income loss could be far greater than if Arshdeep was
suffering from psychiatric/emotional disorders exclusively.

[18]        
I now turn to consider the involvement of each of the experts that was
questioned by the Defendants.

Dr. Smith

[19]        
In June 2005 the Plaintiff’s treating paediatrician referred him to Dr.
Smith knowing that he was a psychiatrist specializing in the treatment of
children.

[20]        
There was no challenge of the hourly rates charged by Dr. Smith .He
authored two reports, one addendum, and seven letters spanning the period from
October 2005 to April 2010.

[21]        
I find that these reports were all necessary and proper for the
Plaintiff to obtain as Dr. Smith had a primary role in the care and treatment
of the Plaintiff and his opinions were undoubtedly of importance in arriving at
a settlement of the case.

[22]        
I allow the amount claimed being $7507.50

Dr. Gibbins

[23]        
Mr. Hoogbruin retained Dr. Gibbins following receipt of advice from Dr.
Smith that the Plaintiff needed psychological testing. In his Affidavit he put
it this way:

I felt that I needed the medical
legal opinion of a child psychologist to determine causation for Arshdeep’s
cognitive and attention problems and to explain their significance. I retained
Dr. Christopher Gibbins in January 2006. He had been recommended by Dr. Smith.

[24]        
Dr. Gibbins is a registered Psychologist providing psychodiagnostic
assessment services for children from infancy to age 18.  He conducted an assessment
of the Plaintiff on February 17 and March 20, 2006.

[25]        
Dr. Gibbins provided a preliminary report on April 2, 2006 and a revised
report on August 8, 2006. I find it was reasonable and necessary to obtain
these two reports. There was no challenge to his hourly rate and I will allow
the amount claimed for them being $3,487.50. Dr. Gibbins   wrote an updated
report dated March 30, 2010. I find it was reasonable to obtain that report but
I agree with the objection raised by Mr. Harris to the hourly rate of $412 for
this report. Dr. Gibbins charged a 50% premium on his regular hourly rate
because he was instructed by counsel for the Plaintiff to prepare the report on
very short notice. I reduce the amount to be allowed for this report from
$2990.92 to $1495.46.

Dr. Du and Dr. Lindberg

[26]        
The evidence disclosed that Drs. Du and Lindberg were treating
psychologists and together had continuity of care. Plaintiff’s counsel
submitted that it was necessary and proper to obtain a medical legal report
from each of them to guard against an adverse inference being drawn if reports
were not commissioned from them.

[27]        
In this case where there were conflicting medical opinions going to the
root of the Plaintiff s ongoing cognitive and behavioural difficulties I agree
that it was necessary to obtain reports from these two doctors.

[28]        
Once more there was no challenge to the hourly rate and I will allow the
amounts claimed being $3095.00 for Dr. Du and $4040.00 for Dr. Lindberg.

Dr. Kaushansky

[29]        
Mr. Hoogbruin said the following about his decision to retain Dr.
Kaushansky:

Given that Dr. Gibbins found
Arshdeep’s injuries and functional impairments to be consistent with
neurological injury, he recommended a neuropsychological assessment to more
fully investigate his visual processing, executive functioning and other
potentially affected areas. I retained Dr. Kaushansky, Neuropsychologist, for a
neuropsychological assessment of Arshdeep subsequent to Dr. Smith’s and Dr.
Gibbins.

[30]        
Dr. Kaushansky has practiced as a registered psychologist in British
Columbia since 1989 having completed a Ph.D at Simon Fraser University in
Psychology and Education. His speciality is in Neuropsychology, assessing
children and adults with varying neurological disorders and he regularly plans
rehabilitation programs to improve the functioning of his patients both at home
and in the community. He also holds a Master’s degree in Special Education.

[31]        
Mr. Harris cross examined Dr. Kaushansky but was quick to complement him
on his qualifications and for the significant help he provided to the
Plaintiff. Again there was no challenge to his hourly rate.

[32]        
In his questioning, Mr. Harris sought to establish that there was
duplication of effort in the testing done by Dr. Kaushansky and some of the
other psychologists and psychiatrists already involved in the case. I gleaned
from Dr. Kaushansky  that he considered the involvement of the other medical
professionals was warranted  and that each brought a helpful perspective to the
treatment plan for the Plaintiff

[33]        
In reviewing the amount claimed for the expert opinions authored by Dr.
Kausahansky there has been an appropriate reduction to his accounts for his
invoices that are properly recognized as being related to treatment and
counselling:

In reflecting upon the value of Dr. Kaushansky’s principal
report dated February 15, 2010, in his Affidavit Mr. Hoogbruin said:

Dr. Kaushansky provided a report
on February 15, 2010. This report was, in my opinion, instrumental to the
successful settlement negotiations , formed the basis upon which the future
cost of care and future loss of income claims were formulated and would have
been instrumental in rebutting at trial, the evidence of both Drs. Zoffman and
Joschko.

[34]        
Mr. Hoogbruin was not challenged on this opinion on cross examination
and in keeping with the authorities I have referenced I am not going to “second
guess” him. I allow the disbursement  for Dr. Kaushansky in the sum of
$16,961.40

Optimum Therapy Rehabilitation Services Inc. (Optimum)

[35]        
Mr. Hoogbruin explained the retainer of Ms. Nazneen Chow from Optimum
and the purpose behind her two reports as follows:

Based on the evidence that Arshdeep had suffered a permanent
mental deficit and a delay in intellectual and emotional   development, I
concluded that there was a care component of the Plaintiff’s claim that needed
to be assessed.

I retained Ms. Chow to provide a report, the purpose of which
was to ensure the provision of necessary and reasonable medical needs,
equipment and services that will allow Arshdeep to maintain the quality of life
that he would have continued to lead but for the injuries he received in the
collision.

Ms. Chow makes a number of recommendations in her March 17,
2010 report regarding services, equipment and supplies Arshdeep is likely to
need to bring his independence level and quality of his life to his pre-injury
status.

On April 6, 2010 Ms. Chow
prepared an addendum to her initial report on my instructions to consider the
impact on her opinion of the reports of Derek Nordin, Dr. Jacqueline Purtzki,
Dr. Tracey Lindberg and Dr. Christopher Gibbins.

[36]        
I am satisfied that it was both reasonable and necessary for Plaintiff’s
counsel to obtain these reports to fully support a claim for the expected cost
of  future care.

[37]        
No objection was taken to the hourly rate of Ms. Chow and I will allow
the sum claimed for her two reports amounting to $3295.70. While Ms. Chow
submitted some additional invoices for her travel time, document review and for
medical legal consultation they are not referred to or claimed by Mr. Hoogbruin
in his Affidavit and I as such I will not allow them.

Dr. Purtzki

[38]        
Mr. Hoogbruin retained Dr. Purtzki rather “late in the day” and he
offers his explanation for doing so as follows:

In my discussions with Dr. Gibbins and Dr. Smith leading up
to Dr. Joschko’s neuropsychological evaluation of Arshdeep, it became clear to
me that they could not state that on a balance of probabilities that Arshdeep
was more intelligent prior to the accident than post.

Though I was prepared on the available evidence to argue at
trial that Arshdeep had indeed suffered a mild traumatic brain injury that was
responsible for his ongoing cognitive  deficiencies, I recognized that the
medical evidence for this position was not strong.

It also became apparent to me at the end of 2009 that the
issue of future care for Arshdeep had not been thoroughly canvassed by
Arshdeep’s treating doctors and that Dr. Kaushansky  and Dr. Gibbins’
recommendations in this area would be centered on their narrow area of
expertise.

I therefore decided in December 2009 to bring in an expert in
the area of adolescent and young adult rehabilitation who could opine on the
matter of Arshdeep’s brain injury and his future care needs as related to his
brain injury. I thought it reasonable and necessary to retain someone with a
physiatry practice that involves the evaluation of children with brain
injuries.

I decided to retain Dr.
Jacqueline Purtzki, a medical doctor specializing in Paediatric Physical
Medicine and Rehabilitation, who works at the Sunny Hill Health Centre for
Children, part of BC Children’s Hospital, in the area of paediatric brain
injury and neuromotor rehabilitation.

[39]        
Mr. Harris challenged both the necessity and the propriety of retaining
Dr. Purtzki.  He also questioned her hourly rate of $470 and the amount of time
she spent in the preparation of her report.

[40]        
Dr. Purtzki was carefully cross examined .I was left impressed with her
expertise and specific qualifications which are not held by many other doctors
in Canada .I was also impressed with her clear insight into the Plaintiff’s condition
. However, I am concerned that her retainer was as   “a result of excessive
caution or excessive zeal, judged by the situation at the time when the
disbursement or expense was incurred.” referring to Van Deale, supra.

[41]        
It is clear from the record that by late 2009 there were medical reports
from a number of eminently qualified experts on both sides of this case.
Understandably Plaintiff’s counsel faced with establishing the nature and
extent of the Plaintiff’s injuries referable to the motor vehicle accident was
searching for what I might call “the silver bullet” when he retained Dr. 
Purtzki. In my view this was not a case where one side or the other would find
that “silver bullet” no matter how many experts were consulted.

[42]        
Mr. Harris also urged me to either disallow the disbursement for Dr.
Purtzki entirely or failing that only allow  one half of the amount sought on
the footing that there were  too many experts retained by Plaintiff’s counsel
of a similar specialty.

[43]        
I am not persuaded that the retainer of Dr. Purtzki can be attributed to
being   “one expert too many in the same specialty.  Distilling the injuries
suffered by the Plaintiff was a complex matter that did not lend itself to an
easy or definitive diagnosis.

[44]        
Taking this all into account, I will exercise my discretion to allow 50%
of the amount recognizing that the advice and recommendations made by Dr.
Purtzki will be of significant value in managing the Plaintiff’s future care
even though on balance I have concluded her retainer was made out of excessive
caution. I allow $9126.00 for Dr. Purtzki being 50% of the amount on the
Plaintiff’s amended Bill of Costs.

The Vocational Consulting Group (VCG)

[45]        
Mr. Hoogbruin retained Mr. Derek Nordin of VCG for the following
expressed reasons:

[46]        
It was clear to me from reading the reports of Drs. Smith, Kaushansky
and Gibbins, that Arshdeep was going to suffer some vocational impairment in
the future. However, I did not have an expert that could opine on the extent of
this impairment with sufficient clarity as to satisfy the trier of fact on the
issue of future income loss.

[47]        
No challenge was made to Mr. Nordin’s qualifications or his hourly rate
for the services he provided.

[48]        
I am satisfied that in a case such as this where the Plaintiff would
have been ten years old by the scheduled trial date that a report opining as to
his vocational prospects would be of considerable value to the Court. I will
allow this disbursement as presented in the amended Bill of Costs in the amount
of $3495.00

OTHER DISBURSEMENTS

Transcription fees

[49]        
These disbursements were incurred with two service providers and amount
to $3116.74.

[50]        
These providers transcribed clinical records, witness interviews and
generated a chronology for the reader. Plaintiff’s counsel submitted that often
a doctor’s clinical notes are “largely indecipherable.” and the transcription
ensures that there is an accurate record for any expert witness to refer to and
may also result in less time being spent in document review by the experts.

[51]        
Mr. Harris pointed out that even with a transcribed record all of the
expert witnesses were still asked to refer back to the original records in the
preparation of their opinions. He questioned whether there was in fact any cost
savings to be made.

[52]        
I agree with Mr. Harris. The transcription service is clearly a
convenience -but- convenience is considered a luxury in the law of costs: Hall
(Guardian ad litem of) v. Strocel [1983] B.C.J. No. 506(S.C.) and I

[53]        
I disallow these disbursements.

J. Thomas Law Corporation Trust Agreement

[54]        
In this case the guardian ad litem chose to have the settlement funds
administered by a private trustee and to act as a co-trustee without
compensation. This course was chosen as it reflected that the trust structure
was more flexible than a structured settlement in respect of providing for care
costs and other unforeseen matters.

[55]        
The Plaintiff’s law firm did not have within its complement a lawyer who
was experienced in the law of trusts and recognizing that it was crucial to
create a trust document that suited the Plaintiff’s needs an outside lawyer
with expertise was retained to prepare the trust document  for a fee of
$5000.00

[56]        
While it was clearly in the Plaintiff’s best interests to ensure that
the trust document was “done right.” I must determine whether these additional
legal fees are properly visited on the Defendants.

[57]        
In Baiden v. Vancouver (City) Police Department 2010 BCCA 375
Madam Justice Neilson said:

[25] The limited
authority on this issue in this province supports the view that if counsel
retains another lawyer to perform a specialized function due to his or her own
lack of experience, it does not follow that such fees are recoverable from the
opposing party, but remains a matter between the original lawyer and his
client: Noble v. Wong, Bell v. Fantini (1981), 32 B.C.L.R. 322
(S.C.). That is a practical and appropriate approach, and should have been
followed here. Outsourcing portions of legal work during litigation and then
permitting recovery of that lawyer’s fees as a disbursement undermines the
policy of party and party costs. While there may be cases in which this can be
justified, they would be limited and exceptional.

[58]        
I do not consider this to be an exceptional case and I disallow this
disbursement.

Photocopies

[59]        
Plaintiff’s counsel has claimed the sum of $8713.00 for photocopying
comprising nearly 35,000 copies.

[60]        
Mr. Krekovic asked that I keep in mind that this was a document
intensive case that spanned a period of almost six years and involved many
treating and examining expert witnesses. He said that  all of the medical
experts had to be kept up to date and provided with copies of all of the
documentation that was being collected .He also noted that copying was required
for the purposes of obtaining approval of the settlement from the Public
Guardian and Trustee and this Court.

[61]        
Mr. Harris pointed out that some records could have shared amongst the
experts and for the purposes of some of the experts not all of the records
needed to be reproduced.

[62]        
Since at least Sovani v. Jin 2006 BCSC 855 2006 was decided by
District Registrar Blok (as he then was) it has been the practise of the
Registrar to take a practical approach to an award for photocopying. I quote 
the oft repeated words of the learned Registrar :

[4] The
assessment of photocopying costs is typically a rough-and-ready exercise, which
is very much in accordance with the comments of the English Court of Appeal in
a case called Re Eastwood, [1974] 3 All E.R. 603 (C.A.), where the Court
said that the assessment of costs was a matter of rough justice insofar as it
admitted of much sensible approximation, or words to that effect.  That is
exactly what registrars must apply when assessing photocopying expenses or
considering the volume of photocopying claimed in a case.  Thus it is not
an exercise of arithmetic or math or the examining of photocopying machinery
expenses or matters of that sort, but is often looking at an array of binders,
a collection of banker’s boxes, assessing what copies were needed for experts,
what document discovery was involved, whether there was a jury such that they
required individual copies, and all those sorts of matters, and applying
experience gained from numerous other cases, to arrive at a sensible
approximation of the volume of necessary copy work.

[5] It is that approach that I typically apply in assessing
photocopying.  I also tend to assess it in a way that discourages counsel
from assuming that wholesale photocopying can be undertaken without fear of
non-recovery at the end of the day, as it is, I think, a universally held view
from the bench that there is so much paper these days that anything that can be
done to reasonably discourage excessive photocopying ought to be done.

[63]        
Doing my best to provide a fair and reasonable
amount for photocopying I will allow $5000.00

Postage and Courier charges

[64]        
There are two minor disbursements totaling
$16.24 that appear not to have been addressed by the parties although they both
appear on the amended Bill of Costs.

[65]        
These charges are spoken to in the Affidavit
evidence that was part of the record and I will allow them as claimed.

Disbursement Interest

[66]        
Both counsel provided very helpful written argument on this topic that
has been the subject of some fairly recent judicial consideration.

[67]        
In this case the amount sought to be recovered to make the Plaintiff
”whole” for his obligation to pay interest on  the disbursements that were
incurred on his behalf amounts to $25,668.92

[68]        
To put this issue in perspective I reproduce some of the Plaintiff’s
written submissions as follows:

The Disbursement Funding Options

29. The various potential disbursement funding options
include: law firm financing, client financing, conventional bank or credit
union financing, disbursement provider financing, companies specializing in
funding disbursements, Coast Capital Credit Union (“Coast Capital”), or a
private lender.

30. Funding disbursements through conventional banks
and most credit unions is not practical given they do not recognize personal
injury files as security upon which to borrow, severely limiting the possible
funds available to borrow.

31. Many law firms, including this Firm, cannot
properly finance necessary disbursements on all their personal injury files.
Many clients are living paycheque to paycheque prior to their injuries. After a
car crash many are often so disabled as a result of their injuries that they
cannot work, either for a protracted period of time or permanently. After a
crash many have difficulty just making ends meet. They have difficulty making
mortgage payments or rent, car payments, children’s school expenses, putting
food on the table, etc. The vast majority cannot afford to fund tens of
thousands of dollars of disbursements. Many do not own homes and those that do
own homes do not have much equity in the homes so they have limited means of
borrowing to fund disbursements.

[Binder 6, Hoogbruin Affidavit #4, pages 2 – 8, paragraphs 3
– 27, page 20, paras. 83 -84, Exhibit 10, page 96.]

32. Since funding disbursements through conventional
banks and credit unions, Firm funding, and client funding are all not practical
solutions, the remaining possibilities are disbursement provider financing,
companies specializing in funding disbursements, Coast Capital, or a private
lender.

33. In some instances a disbursement provider, such as
an expert physician, may agree to examine the client, provide an expert report,
render an account, and agree to wait for payment of the account until the
conclusion of the case. The expert and the Firm would enter into an agreement
that the expert would be entitled to interest from the date of the rendering of
the account to the date of payment. The interest rate usually agreed upon is
10%. The only such disbursement providers on the Arshdeep Chandi file were
Associated Economic Consultants and Lax Specialise.

34. Canadian companies specializing in lending money
to lawyers or their clients to fund disbursements include: Bridge Point
Financial Services Inc., Rhino Legal Finance Inc., and Sea hold Investments
Inc.

35. Bridge Point Financial Services Inc. has
approximately 450 law firms across Canada using their financing services and Sea
hold Investments Inc. have over 200 law firms accessing their financing
services, mostly in New Brunswick, Ontario and British Columbia.

36. Bridge Point Financial Services Inc., Rhino Legal
Finance Inc., and Sea hold Investments Inc. charge effective annual interest
rates varying from 18.8% to 44.2%. Interest rates tend to be higher when the
loan is nonrecourse and when the loan is directly to the crash victim as
opposed to the law firm.

[Binder 6, Hoogbruin Affidavit #4, pages 9 – 10, paragraphs
36 – 39, Exhibit 1, page 1; Exhibit 2, page 4.]

37. Coast Capital Credit
Savings Credit Union [“Coast Capital”] was unique among banks and credit unions
in that it would lend money to lawyers giving some recognition to personal
injury files as security for the loan. However, Coast Capital has recently advised
they are terminating the disbursement funding program. The program is ending,
in part, because it was not sufficiently profitable and tracking the loans was
expensive and time-consuming. Prior to discontinuance of the program
approximately 40 British Columbia law firms were accessing the program.

[69]        
In this case after the Coast Capital option disappeared the law firm
arranged to finance the required disbursements for the Plaintiff’s case through
a private lender who charged 12% interest compounded annually.

[70]        
The contingency fee agreement in this case obligated the Plaintiff to
pay for disbursement interest whether that interest might be owing to the law
firm or a third party funding source.

The Case Law

[71]        
Returning to the Plaintiff’s brief:

71. The following are, as best as we can determine, in
order, the British Columbia cases which touch on the subject issue:

a) Greene v. Troje (6 October 1991), Courtenay
Registry No. 860009 (B.C.S.C.) (unreported)

b) Moore v. Dhillon, [1992] B.C.J. No. 3055 (QL)
(B.C.S.C.)

c) Hudniuk v. Warkentin (29 August 2002), New
Westminster Registry No. S058003 (B.C.S.C.) (unreported)

d) Sovani v. Jin(25 April
2006), Vancouver Registry No. B981465 (B.C.S.C.)(unreported)

e) McCreight v. Currie,
[2008] B.C.J. No. 2494

f) Milne v. Clarke, 2010
BCSC 317

g) Basi v. Atwal et. al.,
(6 December 2010), Vancouver Registry No. M070135 (B.C.S.C.)

h) Milne v. Clarke BCCA
322, [2011] B.C.J. No. 1345 (QL)

Canadian Courts and the
Recoverability of Financing Costs

72. In McCreight
the Supreme Court of British Columbia considered whether interest charged by a
company for CDs of MRI imaging scans purchased by the plaintiff in preparation
for trial where recoverable. Master Young held that they were and reasoned as
follows:

“This item is for CDs of the imaging scans plus interest. I
have already authorized the expense for Canadian Magnetic Imaging, therefore,
the copying of those images seems to be reasonable. The interest charged is a
separate issue. The defendant says that he had no choice but to charge that
interest. The plaintiff really had no choice but to pay the interest given that
she did not have the funds to be retaining experts and paying for their costs
up front. I suppose the defendant’s choice was that the defendant could have
offered to pay for the report up front once it was disclosed to him, but no
offer was forthcoming. Given that this was the only way to finance the
obtaining of a report, I find this to be a reasonable expense and will allow
it.”

[McCreight v. Currie, 2008 BCSC 1751, [2008] B.C.J.
No. 2494 (QL), page 22, para. 51]

73. Master Young focused on the “reasonableness” of
the expense and the fact the defendant could have paid for the report up front
when it was disclosed to them but chose not to. Her reasoning implies that defendants
will have an obligation to pay for financing costs when: (i) they are put on
notice that a plaintiff will be incurring costs; (ii) the costs are
‘reasonable” and are relevant to the prosecution of the claim; and (iii) the
defendant is in a position to pay for those costs but chooses not to do so.

74. Master Young’s decision in McCreight was
subsequently upheld in Milne v. Clarke.  In Milne the plaintiff
sought recovery for interest costs that he incurred for M.R.l scans. Master
Tokarek rejected the plaintiff’s claim for the recovery of interest. His
decision was appealed to the Supreme Court of British Columbia where Mr.
Justice Burnyeat reversed Master Tokarek’s finding and allowed the recovery of
interest by finding:

“The law in British Columbia is that interest charged by a
provider of services where the disbursement has been paid by counsel for a
party is recoverable as is the disbursement. The interest charge flows from the
necessity of the litigation. If the disbursement itself can be assessed as an
appropriate disbursement, so also can the interest owing as a result of the
failure or inability of a party to pay for the service provided.”

[Milne v. Clarke, 2010 BCSC 317, page 5, para. 9.]

75. Mr. Justice Burnyeat considered the earlier
decisions of Greene v. Troje, Moore v. Dhillon, Hudniuk v. Warkentin, and
Sovani v. Jin and states:

“[5] In opposing the application of the Plaintiff, the
Defendants rely on a number of decisions. In Sovani v. Jin, Supreme
Court of British Columbia Action No. B98 14765 (Vancouver Registry) (an April
25, 2006 Ruling by Registrar Blok) the issue was the interest cost charged to
the plaintiff by his counsel for the carrying of disbursements by the counsel.
Counsel had made arrangements with his financial institution to carry or to
provide financing for disbursements where his clients could not pay them. The
exact cost of the interest charged was passed on to the client by counsel.
Before ruling that such interest would not be allowed, Registrar Blok referred
to three decisions:

(a) Greene v. Troje an unreported October 16, 1991
decision (Courtenay Registry No. 86009) where the Learned Registrar denied a
claim for disbursements that had been charged by providers stating at page 3:

The reason for incurring those interest charges flows
not from the necessities of litigation, but from the necessities of this
litigant. That is not something ways [sic] caused by the defendant. It might be
argued that the impecuniosity of the plaintiff flows from the wrong committed
by the defendant, but I have no evidence as to that.
(at para. 3);

(b) Moore v. DhiIIon, [1992] B.C.J. No. 3055 where
Master Wilson, as he then was, stated that the outlay of interest money to the
counsel was necessary but he could not accept the proposition that the outlay
was an “expense” or a ‘disbursement” or a “charge” as those words were used in
Rule 57(4) and Rule 57(8) concluding that it was not a “charge” or an “expense”
but that: “… it is in the nature of damages.” (at para. 448);

(c) In Hudniuk v. Warkentin (Supreme Court of British
Columbia Action No. S058003 – New Westminster Registry – August 29, 2002 oral
ruling) the issue was whether the question of whether disbursement interest as
a head of damage should be an issue put to a jury. After noting that he was not
bound by the decision in Moore v. DhiIIon, Pitfield J. stated:

…these disbursements were incurred in the course of the
solicitor/client relationship. They are recoverable, if at all, as costs on the
taxation thereof. In that regard, unless the rules have been changed so that Moore
v. DhiIlon has been overruled, the present law is that interest on unpaid
or overdue disbursements is not recoverable any more than it should be
recoverable as a head of damages on unpaid fees.”

[Mime v. Clarke, 2010 BCSC 317, page 3— Sovani v.
Jin, (25 April 2006), Vancouver Registry No. B981465 (B.C.S.C.), Greene
v. Troje (6 October 1991), Courtenay Registry No. 860009 (B.C.S.C.), Moore
v. Dhillon, [1992] B.C.J. No. 3055, Hudniuk v. Warkentin (29 August
2002), New Westminster Registry No.  S058003 (B.C.S.C.)]

76. Mr. Justice Burnyeat, after considering these
decisions states:

“[8] I find that the Learned Registrar erred in principle.
The December 29, 2009 decision was clearly wrong. First, even if the Learned
Registrar was not bound by the decision in McCreight, I am not bound by
the decision reached by the Learned Registrar herein. I am satisfied that the
statement set out in McCreight accurately represents the law in British
Columbia. Second, the decision in Hudniuk relates to the question of
whether disbursement interest is a head of damage and not to the question of
whether it is recoverable as costs on an assessment.”

[Milne v. Clarke (BCSC), supra, page 4, para.
8.]

The Court went on to state:

“[9] The law in British Columbia is that interest charged by
a provider of services where the disbursement has been paid by counsel for a
party is recoverable as is the disbursement. The interest charge flows from the
necessity of the litigation. If the disbursement itself can be assessed as an
appropriate disbursement, so also can the interest owing as a result of the
failure or inability of a party to pay for the service provided.”

[Milne v. Clarke (BCSC), supra, page 5, para.
9]

Thus, reasoning in Sovani v. Jin, relating to whether
the necessity of disbursement interest was linked to the tortious wrongdoer,
has been overruled.

77. The British Columbia Court of Appeal dismissed the
appeal but without providing guidance to the profession, stating:

“[15] In our view this is not the right case to address the
issue raised in the leave application. While that issue is of interest to the
profession, its answer must await a case that directly engages the rule, in the
context of a proper factual matrix rather than a hypothetical.”

[Milne v. Clarke, 2011 BCCA 322, page 5, para. 15.]

78. The Court of Appeal was concerned that the there
was insufficient evidence concerning whether the MRI at issue was a special
damage or a disbursement, and evidence that could assist in the interpretation
of the unique language of the settlement agreement in that case.

[Milne v. Clarke, (BCCA) supra, pages 4 – 5.]

79. Between the Supreme Court decision in Milne v .Clarke
and the Court of Appeal decision comes the decision of Basi v. Atwal. In
Basi v Atwal Registrar Bolton, in deciding that interest charged
directly by lawyers pursuant to an agreement they have with their own bank is a
recoverable disbursement, and thus indirectly the responsibility of the client,
stated:

“THE COURT: Well, on the matter of principle, I am satisfied
that interest is chargeable here. I will be frank. I must say that I am rather
surprised that this issue is coming to me to be dealt with now, for the first
time that I can recall. When I first started my career as a Registrar, back in
1981, the prevailing interest rates were about 20 percent. Now when I am in,
what I might call the twilight of my career as a Registrar, and interest rates
are practically zero, here comes the issue.

[1] I will confess, also, that I thought that there was some
authority against allowing interest, on the theory that an unsuccessful
defendant, or any unsuccessful party, I guess, cannot be expected to pay
interest resulting from the impecuniosity of the successful party. But that is
only a vague recollection. I am not going to do the research myself. And that
principle is clearly contradicted by a very recent decision of Mr. Justice
Burnyeat, which is of course binding on me. In that decision, Milne v.
Clarke [2010], B.C.S.C. 317, the learned judge quite clearly says that the
successful party is entitled to interest on a specific disbursement where the
provider of the service in question had charged interest to counsel for that
party.

[2] I see no reason in principle to distinguish this
decision on the basis that in the Milne case, the interest has been
charged by the provider of the service to the law firm and, therefore,
indirectly to the client, whereas here the interest is being charged directly
by the lawyers pursuant to an agreement they have with their own bank.”

[Basi v. Atwal et. a!., (6 December 2010), Vancouver
Registry No. M070135 (B.C.S.C.), page 2, para. 1 -21

“[5] So to summarize: first of all, I accept that the
principle of allowing interest is one that the law recognizes, at least since
this decision of Mr. Justice Burnyeat. Secondly, I am satisfied that the
accounting that would be required to satisfy the court that the charge does
relate specifically to this particular file, has been properly done. Thirdly, I
am satisfied that the interest rate being charged by the bank is reasonable. I
should add that here the interest being charged to the unsuccessful litigant is
slightly less than the amount being charged by the bank, simply because that is
an agreement that the law firm had with its own client, but I prefer to address
the issue as a matter of principle on the basis of the somewhat higher fee
being charged by the bank itself.”

[Basi v. Atwal, supra, page3, para 5.]

And later in the Judgement:

“[25] Just one addition, if I may. I took more time to read
the decision of Mr. Justice Burnyeat that led me to allow the interest claim
this morning. At this morning’s session I did not really get much beyond the
penultimate paragraph where I found what I take to be the ratio of the case:

The law in British Columbia is that interest charged by a
provider of services where the disbursement has been paid by counsel for a
party is recoverable as is the disbursement.

[26] 1 have two further comments to make. First of all, as a
matter of fairness or philosophy, I agree absolutely with Judge Burnyeat. I
think that it ought to be allowed.”

[Basi v. Atwal, supra, pages 8 – 9, paras.25 – 26]

Registrar Bolton then noted the reasoning in Greene v.
Troje and stated:

“It does seem to me that this is a novel development that
might be worthy of even going straight to the Court of Appeal, but that is up
to counsel. For the time being, I am bound by the Mi/ne decision and the
interest is allowed.”

[Basi v. Atwal, supra, page 9, para 27.]

80. In Moore v. DhiIIon, while not allowing the
recovery of interest the court did state that the outlay of interest money was
necessary:

“I accept Mr. Cope’s argument that the outlay of this
interest money was necessary.”

[Moore v. Dhillon, supra, tab 12, page 54, para 441]

81. In a New Brunswick case, Bourgoin v. Ouellette,
[2009] N.B.R.(2d) TBEd. FE.013, 2009 CanLIl 27242 (N.B.Q.B.) the plaintiff
obtained financing from a third party litigation funder at an effective
interest rate of 32.9% per annum. The funds were used to pay for the cost of
disbursements. Justice Cyr considered the very high cost of interest relative
to rates charged by banks and the interest rate allowed on judgments under the
Rules of Court for New Brunswick (7.0% per annum) and ultimately allowed the
plaintiff to recover the full cost of interest pursuant to s.2 (14) under the
Rules of Court of New Brunswick as being “necessary and reasonable”.

87. In British Columbia the financial circumstances of
a litigant are a factor when assessing reimbursement for litigation expenses.
Recently, the Court of Appeal has ruled that an insurer’s resources should be
taken into consideration when determining the “relative financial
circumstances” of a party for the purpose of determining costs after an offer
to settle has been made. The court of appeal has also ruled that the “capacity
to bear the costs of the proceeding” is a relative factor when assessing
special costs.

“Clearly, with ICBC having assumed the defence, the
financial ability to defend was much greater than the financial ability to
prosecute, and that is of no small importance to considering whether and to
what extent the financial circumstances of the parties, relative to each other,
bear on an award of costs…,”

[Smith v. Tedford, 2010 BCCA 302, pages 6-7, paras
16– 19.]

[72]        
In his brief Mr. Harris properly conceded that I am bound by the
decision of Mr. Justice Burnyeat in Milne v. Clarke .He urged me not to
follow the decision of Master Bolton (sitting as Registrar) in Basi v. Atwal
that awarded the relatively high commercial rate of interest arguing that to do
so would result in the potential for “wild swings in the interest rate” brought
to bear by outside lenders from unconventional sources at high and fluctuating
rates.  The amount charged to the Defendant, in such circumstances, would be
the rate at which the Plaintiff’s lawyer is able to borrow. He went on to
postulate that this would create considerable uncertainty and could result in a
considerable increase in the cost of litigation.

[73]        
While the current state of the law mandates that I make some allowance
for the interest expense in my view I am not bound to award full indemnity for
the amount of interest charged to the Plaintiff. I am not bound by Basi v.
Atwal and with the greatest of respect I decline to follow it.

[74]        
In the law of costs it is still only in the relatively rare case that
full indemnity is provided to the successful party. Only disbursements that are
necessary and reasonable in amount are recoverable.

[75]        
In my view the Registrar should endeavour, wherever possible, in
assessing the amount to allow for a specific type of disbursement to strive for
consistency unless the application of that principle would work a real hardship
or unfairness in a particular case. To attain that consistency I will make an allowance
for disbursement interest based upon Registrar’s rates with the calculation of
the total amount to be akin to the calculation of interest payable on special
damages pursuant to the relevant provisions of Court Order Interest Act.

[76]        
I am indebted to both counsel for their submissions and I leave to them
the calculation of the total amount due for the purposes of the issuance of the
certificate. To ensure there is no dispute over the amount due I would ask both
counsel to endorse the draft certificate.

“District Registrar
Cameron”