IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120315

Docket: 04-2102

Registry:
Victoria

Between:

Selina
Meghji

Plaintiff

And:

Jamin
Lee and Her Majesty the Queen in Right of
The Province of British Columbia
(Provincial Ministry of Transportation and Highways)

Defendants

Before:
The Honourable Mr. Justice Johnston

Reasons for Judgment

On Costs and Application to Re-open case
and Deduction for Pharmacare

[1]          
The parties were granted leave to make
additional submissions on the impact of the PharmaCare program on damages for
future medication costs. In separate reasons, judgment
was varied in paras. 324 and 325 so that damages for future medication costs
are not reduced to account for the existence of PharmaCare coverage.

[2]          
By consent, pre-judgment interest on special
damages was fixed at $2,373.94 and on past wage loss at $9,415.90. Tax gross-up
and management fees were awarded to the plaintiff at the agreed sum of
$18,800.00.

Costs

[3]          
This action arises out of a motor vehicle
accident in January 2003.

[4]          
The plaintiff was a pedestrian struck by a vehicle
driven by the defendant Mr. Lee in an intersection where the lighting was
designed, installed and maintained by the defendant Ministry of Transportation
and Highways (“MoTH”).

[5]          
The trial had been set for May 28, 2007, but was
adjourned at the request of the plaintiff so that she could obtain independent
legal advice. The plaintiff was ordered to pay costs of that application in any
event of the cause.

[6]          
At that time the trial was set for 20 days, but
counsel had suggested during the adjournment application that it could take as
much as six to six and one-half weeks. The trial length was eventually reserved
at 35 days.

[7]          
Liability and damages were in issue. The
principal liability issues were whether the defendant MoTH would be liable to
the plaintiff arising out of the design, construction, or maintenance of the
lighting at the intersection where the accident occurred, and whether the plaintiff
should bear any responsibility for her own injuries. One of the damages issues
that consumed a fair amount of trial time was whether the plaintiff’s injuries
included a mild traumatic brain injury.

[8]          
On March 24, 2009, the plaintiff offered to
accept $750,000 in settlement of her claims in a form that complied with the Rules.
Neither defendant accepted this offer.

[9]          
The trial started on June 1, 2009, and
proceeded, in fits and starts, for some 63 days over the next 20 months.

[10]       
On August 15, 2011, judgment in an amount
somewhat over $1,150,000 was granted to the plaintiff.

[11]       
She now seeks ordinary costs to March 24, 2009, and
double costs thereafter, all at Scale C.

Double Costs

[12]       
Rule 9-1(4)–(6) provides:

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

(5)        In
a proceeding in which an offer to settle has been made, the court may …:

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

(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.

[13]       
While the factors listed under subsection (6)
are stated to be discretionary, it would be unwise to consider the issue
without reference to them.

(a)       Was
the settlement offer one that ought reasonably to have been accepted, when made
or at any time later?

[14]       
This is to be considered without reference to
the final judgment: Cairns v. Gill, 2011 BCSC 420, at para. 18, citing Bailey
v. Jang, 2008 BCSC 1372, at para. 24; McIsaac v. Healthy Body Services
Inc., 2010 BCSC 1033, at para. 69.

[15]       
One purpose of costs awards is to encourage
parties to pay attention to reasonable offers of settlement when made, and,
conversely, to deter parties from rejecting reasonable offers in order to
gamble on a more favourable result at trial.

[16]       
Another purpose or function of costs awards is
to:

…encourage conduct that reduces the
duration and expense of litigation, and to discourage conduct that has the
opposite effect. Thus, although it is true that costs are awarded to indemnify
the successful litigant for legal fees and disbursements incurred, it is also
true that costs are awarded to encourage or to deter certain types of conduct (Skidmore
v. Blackmore (1995), 2 B.C.L.R. (3d) 201, 122 D.L.R. (4th) 330 (B.C.C.A.).

[17]       
The excerpt above refers specifically to the
costs provisions of former Rule 37, but has had general application since Bailey
v. Jang, 2008 BCSC 1372 (regarding former Rule 37B), and Martin v.
Lavigne, 2010 BCSC 1610 (regarding current Rule 9-1).

[18]       
Plaintiff’s counsel says her offer was
reasonable in part because her physical injuries alone, with the attendant
claims for loss of income and earning capacity, and cost of care, should have
given the defendants ample reason to accept her offer.

[19]       
The defendants have differing positions on this.

[20]       
The defendant Lee points to medical evidence
that indicated good recovery from the physical injuries years before the settlement
offer. Mr. Lee argues that it was reasonable for him to believe that the
plaintiff’s claims for loss of earning capacity would not attract damages as
high as those awarded at trial largely because her earnings at the time of
trial were comparable to her earnings in the years before the accident.

[21]       
Mr. Lee also says that he could not accept the
plaintiff’s offer in part because:

 1.         He believed the evidence showed that the
plaintiff was partly responsible for her injuries;

 2          The defendant MoTH would not participate; and

 3.         His policy of automobile insurance carried a
limit of $200,000, to which he was unable to add.

[22]       
As to the first reason, Mr. Lee had faith that
the evidence would show the plaintiff to have been partly responsible for the
accident. He attempted to establish this through evidence of witnesses who
described the colour of the signals at the intersection and their estimates of
the length of time the signals showed that colour, and relating this to a video
reconstruction of a vehicle approaching the intersection from the north as well
as his own evidence of his approach from the east and path to the point of
impact. Ultimately, the argument that the plaintiff was partly responsible for
her own injuries was based on an evidentiary foundation too weak to support its
weight.

[23]       
A defendant in Mr. Lee’s position must weigh the
costs consequences of rejecting an offer against the chances that such
evidence, and arguments based on it, will overcome a plaintiff’s direct
evidence. Moreover, he must weigh these risks while bearing in mind who carries
the burden of proof of contributory negligence: the defendant. Double costs are
a potential consequence of misjudging the balance.

[24]       
As to the third reason, there was evidence at
trial concerning Mr. Lee’s circumstances, including that he was living in his
father’s home at the time of the accident, driving an older car in poor repair,
and working at a job not likely to generate savings or capital, that could lead
me to a proper inference that he had little ability to contribute toward a
settlement from his own resources.

[25]       
Thus, says his counsel, Mr. Lee, who could not
afford to add to his insurance limits, could not have accepted the plaintiff’s
offer without a substantial contribution from his co-defendant MoTH.

[26]       
As to insurance limits, the defendant Lee points
to Rule 7-1(3), which requires a party to disclose in a list of documents an
insurance policy that may be available to satisfy damages awarded in an action,
or indemnify any part of such judgment.

[27]       
Rule 7-1(4) provides that information about the
insurance policy must not be disclosed to the court at trial unless relevant to
an issue in the action.

[28]       
As indicated in a separate ruling, I consider
the insurance limits to be relevant to the issue of costs.

[29]       
Mr. Lee’s argument presupposes that he could not
accept the plaintiff’s offer unless he were able to pay the amount sought. This
argument ignores the fact that the effect of acceptance of an offer to settle
is a judgment in the amount of the offer.  Mr. Lee was able at any time to
accept the offer and suffer the judgment in that amount.

[30]       
Mr. Lee ought reasonably to have accepted the
offer within a reasonable time after it was made.

[31]       
MoTH argues that its ability to settle was and
is constrained by the Crown Proceedings Act, R.S.B.C. 1996, c. 89, s.
14, not to accept an offer that was not in the public interest. Section 14
states:

14.       (1)        If a claim is made
against the government and the Attorney General certifies, either before or
after proceedings authorized by this Act have been commenced, that

 (a)        the Attorney General considers
that the claim, if pursued, could result in an order referred to in section 13(4)
for the payment of money by the government, and

 (b)        it is in the public interest to
settle the claim in an amount set out in the certificate,

 the
Minister of Finance must pay that amount to the person making the claim.

[32]       
With respect, this argument begs the question
whether it is not in the public interest to accept an offer in order to avoid
the risk of a greater loss at trial. The section seems more intended to
establish that the Attorney General has the authority to settle claims and to
bind the Minister of Finance to those settlements. I do not view s. 14 as
putting MoTH in any significantly different position regarding settlement
offers than ordinary litigants.

[33]       
Also relevant to consider is the fact that a well-funded
party, such as MoTH,  faces higher risk with joint liability when other
potentially liable parties have less means or no means with which to satisfy a
possible judgment. In such circumstances, the well-heeled party may end up
paying more than its proportionate share to the plaintiff if or when the
impecunious party exhausts its ability to pay.

[34]       
This risk is balanced by the potential that the
plaintiff might be held partly to blame for her losses, which would confine the
well-funded party’s liability to its proportionate share of the loss through
several liability: Leischner (Next friend of) v. West Kootenay Power,
[1982] B.C.J. No. 1641.

[35]       
When the plaintiff made her offer to settle,
there was a fair potential that her damages would exceed the amount of the
offer. The evidence on which the defendants relied in their plea of
contributory negligence was weak. MoTH knew or ought to have known of its risk
arising from the lighting at the intersection. The offer was one that MoTH
ought reasonably to have accepted within a reasonable time after it was made.

(b)       The
relationship between the offer and the final judgment

[36]       
The offer was $400,000 less than the award. That
should be sufficient under this heading. However, MoTH argued that its ten
percent liability would amount to just over $115,000 in damages if it were
several only, well under the amount the plaintiff offered to accept. In its
Statement of Defence, at para. 8, MoTH pleaded contributory negligence.

[37]       
Whether considered under this heading or
generally, this argument does not seem to recognize the risk that MoTH might be
held jointly liable. In that case, only a finding of some liability on the part
of the plaintiff might have come to MoTH’s aid, and allowed it to avoid its
present predicament.

(c)       The relative financial
circumstances of the parties

[38]       
There are authorities that say that the court
should not take into account that Mr. Lee was insured, and his insurer paid for
his defence: Bailey v. Jang, 2008 BCSC 1372, at para. 33; Abma v.
Paul, 2009 BCSC 60, at para. 32; Lumanlan v. Sadler, 2009 BCSC 142,
at para. 41.

[39]       
Other authorities have taken the existence of
ICBC and its role in defending claims for damages flowing from motor vehicle
accidents into account: Radke v. Perry, 2008 BCSC 1397, at para. 42; Smith
v. Tedford, 2010 BCCA 302, at para. 19.

[40]       
Quite apart from the fact that I am bound by the
decision in Smith v. Tedford, its reasoning eliminates one fiction that
ought not to complicate proceedings before a judge alone. That fiction is that
there is no plan of universal compulsory automobile insurance in effect in
British Columbia, mandated by statute, where the details of the coverage
available are found in statute and regulation. If judges and others are
presumed to know the law, there is little sense in requiring that judges ignore
what the law provides when dealing with costs.

[41]       
Another possible fiction, one not dealt with by
the authorities cited, is that plaintiffs such as Ms. Meghji, whose own
financial resources are meagre, are ill-equipped to finance complex litigation,
putting them at the mercy of defendants well‑funded by insurers or
taxpayers.

[42]       
That was once true. Before contingency fee
arrangements were permitted, and before counsel began to fund disbursements on
behalf of clients, litigants financed their actions including legal fees. But as
the evidence in this case showed, counsel now may go beyond merely funding
disbursements and may take an active role in a plaintiff’s medical management.

[43]       
It would be a mistake to assume that all
lawyer-client relationships fit this model. However, inferences fairly arising
from evidence in each case may lead to a conclusion that counsel has provided
significant financial support to a plaintiff of apparently modest means in
assembling a case.

[44]       
In this case, it was apparent from the evidence,
including that of Dr. Grimwood, that Ms. Meghji’s medical management was
intermingled with her trial preparation, and that counsel was paying for
medical examinations, for some treatment, and for some of the goods and services
recommended by the occupational therapist, Ms. Edwards.

[45]       
While counsel’s pockets may not be anywhere near
as deep as those of ICBC or the Province of British Columbia, this plaintiff
was not without resources with which to make her case.

[46]       
While ICBC and MoTH obviously have far greater
resources than the plaintiff and her counsel, there is a limit to what even a
profligate litigant can spend on personal injury litigation. It is neither
necessary nor advisable to delve into the respective disparities between the
financial ability of plaintiff’s counsel and either or both of ICBC and the
Province for purposes of this costs award.

[47]       
On the evidence led at trial, which suggested
greater resources to the plaintiff than appear at first glance, I do not
consider that the factor of disparity in financial circumstances favours the
plaintiff’s application for double costs by very much, if any at all.

(d)       Any
other factor the court considers relevant

[48]       
Some effort has been spent by counsel in arguing
whether Mr. Lee’s insurance limits can and should lead the court further into
areas such as negotiations among parties leading to the offer on which a double
costs order is sought, or the tactical decisions, made by the parties on the
advice of counsel, that led to this application.

[49]       
I agree with counsel for Mr. Lee that settlement
discussions which preceded the offer in question are largely irrelevant. The
intricate steps in the ballet revealed by the submissions, although of
undeniable importance to the parties then and now, have no place in a costs
determination under Rule 9-1.

[50]       
As neither defendant claimed over against the
other, any jockeying between them relating to the plaintiff’s offer to settle
is of no concern to this plaintiff’s applications.

[51]       
The plaintiff shall have her costs from the
defendants, jointly as well as severally, to the date of her offer to settle,
and double costs thereafter.

Scale of Costs – B or C?

[52]       
The plaintiff seeks costs at Scale C, arguing
that this case was a matter “of more than the ordinary difficulty” in the words
of Appendix B, 2(2)(c), of the Rules.

[53]       
The cases decided under the predecessor rule
remain applicable: Slocan Forest Products Ltd. v. Trapper Enterprises Ltd.,
2010 BCSC 1494. Several decisions since the current three Scales were adopted
in 2007 have applied these factors listed by R.D. Wilson J. in Mort v.
Saanich School Board No. 63, 2001 BCSC 1473, at para. 6:

(a)        the length of the trial;

(b)        the
complexity of the issues involved;

(c)        the
number and complexity of pre-trial applications;

(d)        whether
or not the action was hard fought with little or nothing being conceded along
the way;

(e)        the
number and length of Examinations for Discovery;

(f)        the
number and complexity of Experts’ Reports; and

(g)        the extent of
the effort required in the collection and proof of facts.

See also Kinloch (Guardian ad litem of)
v. Edmonds, 2008 BCSC 1684, at para. 43; Craigdarroch Holdings Ltd. v.
Syscon Justice Systems Canada Ltd., 2010 BCSC 1712, at para. 27; and Danicek
v. Li, 2011 BCSC 444, at para. 40.

(a)       Length
of trial

[54]       
Measuring difficulty by length of trial can be
an exercise in ambiguity: relatively straightforward issues assume complexity
as a function of the time taken to explore them; conversely, the time spent
exploring an issue, or, for example, cross-examining an expert on matters
within his or her field of expertise, is not necessarily a function of the issue’s
difficulty. While counsel should be commended for briefing themselves so as to
conduct knowledgeable cross-examinations of experts, they should not be rewarded
for time spent scoring points in an exercise where the returns diminish by the
hour.

[55]       
This trial was originally estimated at 20 days,
grew to 35, and lasted over 60 days. While no one party appears more to blame
than another for the length of the trial, none is entirely blameless for having
gone so much longer than estimated.

[56]       
It is also fair to say that the trial went
longer than necessary to fully canvass the evidence and issues. This is a case
where length of trial does not favour scale C costs, but rather is a factor
that militates against the higher scale. Shortly put, in this case, the higher
scale ought not reward any party for inefficiency.

(b)       The complexity of the issues
involved

[57]       
The issues of liability and damages were not
more complex in this case than many other motor vehicle accident cases. The
remarks of Master Bolton in Aikenhead v. Higgs (1992), 65 B.C.L.R. (2d)
340 (S.C.) at paras. 9 and 10, are apposite:

 But, in my view, personal injury
litigation so predominates on the civil lists of this jurisdiction that it is
reasonable to use it as the archetype of litigation against which other
categories of cases may be measured; it is not unreasonable to suppose, when the
rules on the scales and units of costs were formulated and are periodically
reviewed, that the draftspeople would have in mind a typical personal injury
case when abstract consideration of various steps in the litigation process are
being quantified in probable duration and valued in dollars and cents.

 In
the circumstances, I conclude that personal injury litigation, generally, tends
to be of average difficulty and importance for the purposes of App. B, s. 2,
and that the particular case now before me is a fairly typical personal injury
case. It follows that costs should be taxed on scale 3.

[58]       
This is an appropriate point to mention that the
cases decided before the five scales of costs were collapsed into three in 2007
should be considered with some caution in some respects.

[59]       
That is, it was perhaps easier to grant that a
case was more than ordinarily complex in deciding whether to grant costs on
scale 4 instead of 3, but not so complex as to warrant costs on scale 5. Now,
assuming that scale B represents ordinary difficulty, it should perhaps cover a
broader range than ordinary difficulty did under the former rules. Otherwise,
the range of “more than ordinary difficulty” becomes so broad that there is
little on which to base a principled distinction of ordinary from more than
ordinary.

(c)       The number and complexity of
pre-trial applications

[60]       
This factor has little support here.

(d)       Whether or
not the action was hard fought with
little or nothing being conceded along the way

[61]       
This factor also has little support here.

(e)       The number and length of
examinations for discovery

[62]       
This factor does not militate in favour of cost
on a higher scale. It took a relatively long time to bring this matter to
trial. Such a delay usually involves updating the discovery of a plaintiff.
Therefore, relative to the time elapsed between the incident and trial, neither
the number nor length of discoveries in this case were beyond what might
ordinarily be expected.

(f)        The
number and complexity of experts’ reports

[63]       
Some of the experts prepared more than one
report, perhaps because of delays in bringing the matter to trial. The
plaintiff tendered three neuropsychological opinions, and each defendant
tendered one. Neuropsychological opinions appear resistant to any attempt to
make them easily understood.

[64]       
In addition, the reports and charts dealing with
the lighting at the intersection were necessarily technical and thus complex.

[65]       
This factor favors costs at a higher scale.

(g)       The extent of the effort
required in the collection and proof of facts

[66]       
I accept that MoTH produced a large number of
documents relevant to the design, maintenance, redesign and reconfiguration of
the intersection and its attendant lighting. While the effort needed to obtain
these documents from MoTH may not have been out of the ordinary, the review and
analysis of these documents required considerable effort.

[67]       
Otherwise, there did not appear from the trial
to have been more than the usual effort required to obtain and prove the facts
surrounding the impact between Mr. Lee’s vehicle and Ms. Meghji, or to prove
Ms. Meghji’s injuries and losses.

[68]       
I conclude that on balance, costs at Scale B are
appropriate in this case.

                “R.T.C.
Johnston, J.”           

The
Honourable Mr. Justice Johnston