IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120606

Docket: M070137

Registry:
Vancouver

Between:

Wayne Robert
Tompkins

Plaintiff

And

Tawnya Ley Bruce

Defendant

And

Insurance
Corporation of British Columbia

Third
Party

Before:
The Honourable Mr. Justice Curtis

Reasons on Deductions from

Trial Award and Costs

[1]            
Wayne Robert Tompkins was badly injured in a motor vehicle collision
June 3, 2006.  In a judgment following trial, Mr. Tompkins was awarded the
following:

Part 7 Deductions

[2]            
Section 83 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231,
provides:

83  (1) In this section and in section 84, "benefits"
means benefits

(a) within the definition of
section 1.1, or

(b) that are similar to those within
the definition of section 1.1, provided under vehicle insurance wherever issued
and in effect,

but does not include a payment made pursuant to third party
liability insurance coverage.

(2) A person who has a claim for damages and who receives or
is entitled to receive benefits respecting the loss on which the claim is
based, is deemed to have released the claim to the extent of the benefits.

(3) Nothing in this section precludes the insurer from
demanding from the person referred to in subsection (2), as a condition
precedent to payment, a release to the extent of the payment.

(4) In an action in respect of bodily injury or death caused
by a vehicle or the use or operation of a vehicle, the amount of benefits paid,
or to which the person referred to in subsection (2) is or would have been
entitled, must not be referred to or disclosed to the court or jury until the
court has assessed the award of damages.

(5) After assessing the award of damages under subsection
(4), the amount of benefits referred to in that subsection must be disclosed to
the court, and taken into account, or, if the amount of benefits has not been
ascertained, the court must estimate it and take the estimate into account, and
the person referred to in subsection (2) is entitled to enter judgment for the
balance only.

(6) If, for the purpose of this
section or section 84, it is necessary to estimate the value of future payments
that the corporation or the insurer is authorized or required to make under the
plan or an optional insurance contract, the value must be estimated according
to the value on the date of the estimate of a deferred benefit, calculated for
the period for which the future payments are authorized or required to be made.

Part 7 Accident Benefits

[3]            
The relevant Regulations provide as follows:

80 (1)  Where, within 20 days after an accident for
which benefits are provided under this Part, an injury sustained in the
accident totally disables an insured who is an employed person from engaging in
employment or an occupation for which the insured is reasonably suited by
education, training or experience, the corporation shall, subject to section
85, pay to the insured for the duration of the total disability or 104 weeks,
whichever is shorter, the lesser of the amounts determined under paragraphs (a)
and (b):

…

84 (1)  Subject to section 85 and subsection (2) of
this section, where, within 20 days after an accident for which benefits are
provided under this Part, an injury sustained in the accident substantially and
continuously disables an insured who is a homemaker from regularly performing
most of the insured’s household tasks, the corporation shall compensate the
insured for the period of the disability or 104 consecutive weeks, whichever is
shorter, for reasonable expenses incurred by the insured to hire a person to
perform the household tasks on the insured’s behalf, subject to a maximum
amount per week as set out in section 2 of Schedule 3.

(2)  No compensation is payable under this section in respect
of household tasks performed by a member of the insured’s family.

86 (1)  Where an injury for which disability benefits
are being paid to an insured under section 80 or 84 continues, at the end of
the 104 week period, to disable the insured as described in the applicable section,
the corporation shall, subject to subsections (1.1) and (2) and sections 87 to
90, continue to pay the applicable amount of disability benefits to an insured
described in section 80 or 84

(a) for the duration of the
disability, or

(b) until the insured reaches 65
years of age,

whichever is the shorter period.

…

(4)  Where an insured is receiving other disability payments
as defined in section 81 and under the terms of the contract for payment of
those other disability payments the payments are reduced by any amount received
under the Canada Pension Plan or the Quebec Pension Plan, the
reduction of disability payments under subsection (2) shall be prorated.

(5)  Where an insured who is an employed person returns to
work but, because of injuries suffered in the accident, is incapable of earning
the amount of his present disability benefits, the corporation will pay the
difference between his disability benefits and the amount the insured is
presently earning through his employment.

88 (1)  Where an insured is injured in an accident for
which benefits are provided under this Part, the corporation shall, subject to
subsections (5) and (6), pay as benefits all reasonable expenses incurred by
the insured as a result of the injury for necessary medical, surgical, dental,
hospital, ambulance or professional nursing services, or for necessary physical
therapy, chiropractic treatment, occupational therapy or speech therapy or for
prosthesis or orthosis.

(2)  Where, in the opinion of the corporation’s medical
adviser, provision of any one or more of the following is likely to promote the
rehabilitation of an insured who is injured in an accident for which benefits
are provided under this Part, the corporation may provide any one or more of
the following:

(a) funds to the insured once
during the lifetime of the insured for the acquisition by the insured of one
motor vehicle equipped as necessary and appropriate to its use or operation by
the insured, the choice of make or model of vehicle to be in the sole
discretion of the corporation;

(b) funds to the insured once
during the lifetime of the insured for alterations to the insured’s residence
that are necessary to make the residence accessible to and usable by the
insured, the style and cost of the alterations to be in the sole discretion of
the corporation and the alterations to be limited to necessary ramps, a
necessary lift, necessary bathroom alterations and, where the insured is a
homemaker or a person who lives alone, necessary kitchen alterations

(c) reimbursement to the insured
for the costs of attendant care, other than care provided by a member of the
insured’s family, where the insured has returned to and is residing in the
community but is not capable of performing some or all of the tasks necessary
to sustain an independent lifestyle, the amount of the reimbursement to be
limited to the lesser of

(i)  the monthly cost of a group
residence, including a long term care facility, that would be appropriate to
the care needs of the insured as determined by the rehabilitation team, and

(ii)  the monthly cost of attendant
care required by the insured as a result of injuries from the motor vehicle
accident, the level and type of which will be determined by the rehabilitation
team using the same standards and criteria applied under the Long Term Care
Program of the Continuing Care Division of the ministry of the minister
responsible for the administration of the Continuing Care Act;

(d) reimbursement to the insured for costs incurred from
time to time by the insured for the purchase and reasonable repair, adjustment
or replacement of one or more of the following items:

(i)  a wheelchair;

(ii)  a medically prescribed bed
for other than hospital use;

(iii)  bowel and bladder equipment;

(iv)  aids for communication,
dressing, eating, grooming and hygiene;

(v)  transfer equipment;

(vi)  a ventilator;

(e) funds to the insured for
vocational or other training that

(i)  is consistent with the
insured’s pre-injury occupation and his post-injury skills and abilities, and

(ii)  may return the insured as
nearly as practicable to his pre-injury status or improve the post-injury
earning capacity and level of independence of the insured;

(f) funds for any other costs the
corporation in its sole discretion agrees to pay.

(3)  Before incurring an expense or obligation under
subsection (2) for which the insured intends to request payment by the
corporation, the insured shall obtain written approval from the corporation and
the corporation may, before giving its approval, require the insured to submit
such information as it considers necessary to assist it in making a decision.

(4)  The corporation is not liable to insure, repair, replace
or maintain a motor vehicle acquired by an insured under subsection (2) (a)
except in the course of an approved repair resulting from a subsequent claim
for insured loss or damage to the vehicle.

(5)  The amount by which the liability of the corporation
under this section is limited is the amount set out in section 3 of Schedule 3.

(6)  The corporation is not liable for any expenses paid or
payable to or recoverable by the insured under a medical, surgical, dental or
hospital plan or law, or paid or payable by another insurer.

(7)  The maximum amount payable by the corporation under this
section for medical, surgical, dental, nursing or physical therapy services or
for chiropractic treatment, occupational therapy or speech therapy listed in
the payment schedules established by the Medical Services Commission under the
Medicare Protection Act is the amount listed in the payment schedules for that
service, treatment or therapy.

(8)  The corporation is not
liable to pay for more than 12 physical therapy treatments for an insured for
each accident unless, before any additional treatment is given, the
corporation’s medical advisor or the insured’s medical practitioner certifies
to the corporation in writing that, in his opinion, the treatment is necessary
for the insured.

89 For the purpose of section
88 (1), any dispute between the corporation and an insured as to whether or not
an expense is reasonable, shall be submitted to arbitration under the Commercial
Arbitration Act.

[4]            
The parties have agreed that the amount of $75,552.33 is to be deducted
for past wage loss benefits already paid, and $84,587.73 for benefits payable
for future loss of income.  The parties have also agreed that the $40,000
advanced before trial shall be deducted from the judgment to be entered.

[5]            
The deductions for Part 7 benefits sought by the Third Party are set
forth as follows:

[6]            
It is agreed that the $850 awarded for installation of hand controls in
a future vehicle is not deductible as the benefit is payable only once and was
paid before trial.  It is also agreed there is no deduction from the award for
yard work because there is no benefit payable for yard work.

[7]            
Section 83 of the Act requires a deduction where the claimant
“receives or is entitled to receive benefits respecting the loss”.  Subsection
(5) requires that “if the amount of benefits has not been ascertained, the
court must estimate it …” and subsection (6 )requires that “If … it is
necessary to estimate the value of future payments … the value must be
estimated according to the value on the date of the estimate of a deferred
benefit, calculated for the period for which the future payments are authorized
or required to be made.”

[8]            
In determining the award to be made at trial, the Court does not of
course know what will happen in the future and a judgment may include awards
for amounts that are not necessary or perhaps advisable but never incurred. 
For example, a court may award a sum for counselling because in the opinion of
the court, counselling would be an appropriate and reasonable care expense in
the future, but if the plaintiff having received the award chooses not to take
counselling, no amount would be recovered under the Part 7 benefits.  What
appears to be a reasonable and necessary expense at the date of trial may prove
to be unnecessary in the future.  What the court is instructed to deduct are
benefits received or to which there is an entitlement.

[9]            
Mr. Tompkins, in this case, carries extended health insurance through
the Public Education Benefits Trust.  That plan appears to cover the following
items in the trial award:

[10]        
Under s. 88(6) of the Regulations, ICBC is not liable to pay any
amount payable by another insurance company.  Amounts that are payable by other
insurance companies are therefore not deductible as benefits payable under Part
7.  I accept the plaintiff’s position that the $20,550 is payable under Mr.
Tompkins’ extended benefits plan and find therefore there is no amount to be
deducted for that figure as a benefit payable under Part 7.

[11]        
With respect to the award for $35,000 for assistance with household
chores, the Corporation provided housekeeping services for a period of time but
terminated that assistance prior to trial and has not paid for or provided any
such assistance since.  It is not known whether Mr. Tompkins will actually pay
for housekeeping services in the future, nor whether he would be reimbursed
under Part 7 if he did.  In my estimation, no amount will be paid or payable to
Mr. Tompkins in the future for assistance with housekeeping under Part 7 and
accordingly, I make no deduction from that award.

[12]        
I accept the plaintiff’s submission that ICBC is unlikely to choose to
make voluntary payment as it may under Part 7 toward the services covered by
the $5,000 award for a fitness program, including consultation with a personal
trainer or kinesiologist and make no deduction for a Part 7 benefit from that
amount.

[13]        
The plaintiff concedes that Part 7 benefits will be payable in the
future for the following:

[14]        
I agree with the plaintiff’s submission that neither the personal care
aids, nor the heating or ice packs are likely to be payable as expenses for
medical services or treatment and make no deduction for those amounts.

[15]        
Estimating the amount of the $6,400 that will be received in benefits
and the present value of the payment of those benefits over time, I fix the
deduction for Part 7 benefits paid or payable in this case at $5,000.

COSTS

[16]        
Liability in this case was found against the defendant and Mr. Tompkins
has succeeded in being awarded substantial damages.

[17]        
Rule 14-1(9) states:

Subject to subrule (12), costs of
a proceeding must be awarded to the successful party unless the court otherwise
orders.

[18]        
The Third Party in this case seeks an order that costs be awarded to
ICBC from October 6, 2011 when an Offer to Settle that it submits ought
reasonably to have been accepted was delivered.  The trial commenced November
28, 2011.

[19]        
The October 6, 2011 Offer states in part as follows:

The Third Party ICBC  offers
to settle this action in its entirety on terms that upon acceptance of this
offer to settle:

(a) the plaintiff will be entitled to payment by the
Third Party of $950,000.00 new money (the "Settlement Payment"); and

(b) the parties will be entitled to costs in
accordance with this offer to settle (the "Settlement Costs").

The Settlement Payment (a) is
offered after taking into account Part 7 benefits paid or payable, pursuant to
section 25 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 (in
respect of policies in force before June 1, 2007) and/or pursuant to section 83
of the Insurance (Vehicle) Act   R.S.B.C. 1996, c. 231 (in respect of policies
in force on or after June 1 2007); (b) is offered after taking into account any
advances paid to date (which includes tort advances in the amount of $40 000
00, special damages in the amount of $8,041.72 Part 7 medical and rehabilitation
benefits in the amount of $90,618.79, Part 7

homemaking costs in the amount
of $15,154.40 and temporary total disability payments in the amount of $77,159.94;
(c) includes court order interest, and (d) excludes the Settlement Costs.

On acceptance of this offer,
the parties agree that subject to the terms and conditions of Appendix A:

1.  The plaintiff is entitled to his costs of the
action at Scale B and necessary and reasonable disbursements to the date of
delivery of this offer assessed in accordance with Rule 14-1 of the Supreme
Court Civil Rules, B.C. Reg. 168/09 (the "Civil Rules"); and

2.  The
Third Party is entitled to its costs of the action at Scale B and necessary and
reasonable disbursements from the date of delivery of this offer assessed in
accordance with Rule 14-1 of the Civil Rules.

[20]        
The amount awarded to the plaintiff after deduction is as follows,
(subject to some minor adjustments for the gross up and management fees):

[21]        
 The $950,000 Offer was in addition to the $40,000 advanced; the
$75,552.33 paid for past wage loss; the $84,437.36 payable for future wage loss
and the $5,000 payable for Part 7 benefits consequently to compare the results,
the value of the offer was:

[22]        
In the result, the plaintiff turned down an offer of $1,140,000 and
recovered $851,000 net after trial.

[23]        
Rule 9-1 concerning the cost consequence of offers to settle provides as
follows:

(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 do one or more of the following:

(a) deprive a party of any or all
of the costs, including any or all of the disbursements, to which the party
would otherwise be entitled 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;

(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;

(c) award to a party, 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, costs to which the party would have been
entitled had the offer not been made;

(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.

(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.

[24]        
The Third Party estimates its costs and disbursements to be $73,221 and
the plaintiff estimates his costs and disbursements at $86,373.97.

[25]        
In the case of Hartshorne v. Hartshorne, 2011 BCCA 29 at para. 27,
the court held:

 The first factor –
whether the offer to settle was one that ought reasonably to have been accepted
– is not determined by reference to the award that was ultimately made. Rather,
in considering that factor, the court must determine whether, at the time that
the offer was open for acceptance, it would have been reasonable for it to have
been accepted: Bailey v. Jang, 2008 BCSC 1372, 90 B.C.L.R. (4th) 125 at
para. 24; A.E. v. D.W.J. at para. 55. As was said in A.E. v. D.W.J.,
“The reasonableness of the plaintiff’s decision not to accept the offer to
settle must be assessed without reference to the court’s decision” (para. 55).
Instead, the reasonableness is to be assessed by considering such factors as
the timing of the offer, whether it had some relationship to the claim (as
opposed to simply being a “nuisance offer”), whether it could be easily
evaluated, and whether some rationale for the offer was provided. We do not
intend this to be a comprehensive list, nor do we suggest that each of these
factors will necessarily be relevant in a given case.

[26]        
In the case of Fan (Guardian ad Litem) v. Chana, 2009 BCSC 1497,
McEwan J. stated at para. 19:

 The reintroduction of
judicial discretion in costs certainly serves the ends of justice. Costs should
be a penalty for unreasonable conduct in the litigation, not a penalty for
failing to guess the outcome. In this regard, Courts must, I think, extend some
leeway to litigants holding honest but, ultimately, mistaken views of their
claims. It is generally better that such expectations be disposed of at law,
rather than discouraged.  The public should not be given the impression that
there is no reasonable access to a legal resolution.  It must be recognized
that some people will only be comfortable if they “hear it from the judge.”
This should be a valid option for those who seek it, not a form of deemed
unreasonableness.  As such, inducements to settle, and to avail oneself of
alternate dispute resolution, ought to complement rather than obstruct judicial
determinations.

[27]        
In the Fan case, however, McEwan J. found, “It is disturbing to
find that a matter has come to trial on a costly series of opinions, founded on
premises that a rudimentary effort at fact checking would reveal to be
dubious.”  The award in the Fan case was $31,721.42 and the offer of
settlement $75,000.  The plaintiff was allowed costs to the date of the offer
and the defendant thereafter (with some adjustments).

[28]        
When the offer in this case was received on October 6, 2011, the
plaintiff and his counsel were in possession of the information necessary to
make a realistic assessment of the potential recovery.  Naturally, there is no
mathematical certainty in those matters and differing courts may give differing
amounts.  The plaintiff and his counsel would clearly have contemplated a range
of possible recoveryies.  The plaintiff, of course, hopes for the high end of
the range and the paying party the low − settlements are often made somewhere
in between.

[29]        
The offer in this case was reasonable on the facts of the case as they
were known to the parties.  It could reasonably have been accepted as being
within the range of possible recovery, although likely it would not have been
thought by either party at the high end of the range.  The amount of the Offer
was reasonable as was its timing: the information necessary to assess the claim
was in the possession of the parties, yet there was plenty of time to give
careful consideration to the matter before the November trial date.  On the
other hand, Mr. Tompkins was seriously injured.  He and his counsel’s view of
the matter was that it was worthwhile going to court in the hope of getting a
significantly higher award.  It cannot be said that such a decision was
unreasonable at the time.

[30]        
The purpose of cost consequences of reasonable offers is to encourage
settlement.  On the other hand, onerous cost penalties should not discourage
the seriously injured from a proper hearing and a chance to obtain a higher
award, nor should they seriously subtract from what the court has found is
appropriate compensation for the injury.

[31]        
Considering the factors set out in the Rules, it is my opinion
that the interests of justice are best served in this case by awarding Mr.
Tompkins his costs and disbursements up to and including October 31, 2011, but
disallowing them after that date, with the Third Party to bear its own costs. 
There is then a consequence for not accepting a reasonable Offer, but the
consequence is not unduly punitive in the circumstances.

“V.R. Curtis J.”