IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130523

Docket: M103879

Registry:
Vancouver

Between:

Lyle Mills

Plaintiff

And

Balbir Singh Powar
and Randhir Kaler

Defendants

Before:
The Honourable Madam Justice Ross

Reasons for Judgment

Introduction

[1]            
The defendants apply to have the plaintiff’s action dismissed as the
claim is barred pursuant to ss. 10 and 257 of the Workers Compensation
Act, R.S.B.C. 1996, c. 492. The defendants seek costs of the action
including the application.

[2]            
The plaintiff consents to the dismissal of the action. The plaintiff
submits that each side should bear their own costs or that, in the alternative,
costs payable to the defendants should be fixed at $2,000.

Facts

[3]            
The action arises from a motor vehicle collision which occurred on
October 9, 2008 on the Lougheed Highway near Pitt River Road in Coquitlam. The
plaintiff, Lyle Mills was travelling home after a work-related meeting. He
planned to stop off on the way to pick up laundry and flowers for his wife.

[4]            
The defendant, Randhir Kaler was driving a Kenworth dump truck and rear
ended the vehicle driven by Mr. Mills. Mr. Kaler was travelling to dump a load
of gravel at the time.

[5]            
Mr. Mills suffered injuries in the collision. Liability was not at
issue.

[6]            
It appears that Mr. Mills told ICBC at the time of his initial report
that he had been on his way home at the time of the accident. ICBC was aware
that his vehicle was rated for business. On October 10 and 28, 2008, an ICBC
adjuster spoke to Mr. Mills and advised that there may be a possibility of
Workers’ Compensation Board (WCB) coverage.

[7]            
Mr. Mills submitted a statement to ICBC on November 6, 2008 but it did
not contain any information relevant to the resolution of the WCB issue.

[8]            
On November 7, 2008, plaintiff’s counsel wrote to ICBC, the defendants’
insurer, to advise that he had been retained on behalf of Mr. Mills and to
request various documents and information. The letter stated in part:

“Your position on whether a
worker-worker or section 257 defence is applicable. If I do not hear from you
with respect to a potential worker-worker or section 257 defence, I will assume
that such a defence will not be pursued and will take the position that you are
estopped from pursuing this defence in the future.”

[9]            
ICBC responded to the letter on January 8, 2009 but did not respond to
the query with respect to the WCB issue. ICBC made tort and Part VII payments.
If the claim was under the jurisdiction of WorkSafeBC, the plaintiff would have
no claim for Part VII benefits.

[10]        
Pursuant to s. 55(2) of the Workers Compensation Act, Mr.
Mills had one year from the date of the collision to file a claim with WorkSafeBC.
By the one year anniversary, ICBC had not given any indication that it intended
to pursue a worker-worker defence. However counsel did file a provisional claim
with WorkSafeBC on Mr. Mills’ behalf.

[11]        
On November 5, 2009, ICBC adjuster Susan Morrow wrote to counsel
requesting a statement which addressed details concerning the use of his vehicle
at the time of the collision and other information that would be relevant to
the WCB issue. In response, counsel forwarded the provisional claim and earlier
statement and indicated that he would provide additional information in due
course.

[12]        
Mr. Mills saw Dr. Mark Adrian on January 6, 2010 for an independent
medical examination.

[13]        
In July 2010, Ms. Morrow repeated the request and sought clarification
of the status with WCB. Counsel responded that a provisional application had
been made to WCB and that no ruling had been requested. Counsel asked ICBC to
advise if it intended to pursue a ruling with respect to the WCB issue from the
Workers’ Compensation Appeal Tribunal (WCAT).

[14]        
The request for information from Mr. Mills was repeated in an email
dated August 4, 2010 with no response to counsel’s question concerning an
intention to seek a ruling.

[15]        
A notice of civil claim was filed on August 5, 2010. A response to civil
claim was filed on February 3, 2011. The response to civil claim alleged that
both parties were workers, the plaintiff was in the course of employment and
that the cause of action is barred by the provisions of s. 10 of the Workers
Compensation Act.

[16]        
Mr. Mills saw Dr. Adrian for a follow up assessment on February 14,
2011.

[17]        
On April 26, 2011, counsel sent an email to the ICBC adjuster requesting
that if ICBC intended to pursue a worker-worker defence, the matter be referred
to the tribunal immediately.

[18]        
On May 12, 2011, a notice of trial was filed, setting the matter down
for a three-day trial commencing October 3, 2012.

[19]        
On June 29, 2011, defendants’ counsel wrote to WCAT requesting a
determination and a section 257 certificate.

[20]        
Thereafter, the plaintiff did not seek a stay of the civil proceedings
while the application proceeded before WCAT. Additional steps taken in the
litigation included scheduling and conduct of examinations for discovery of the
plaintiff and defendant, amendment of the pleadings consequent upon the advice
that the defendant Powar was not the driver of the vehicle as the plaintiff had
been previously advised, service of the expert report of Dr. Adrian and conduct
of the examination for discovery of the defendant.

[21]        
The proceedings before WCAT were prolonged due at least in part to
repeated requests by the defendants’ counsel for extension of time to file
submissions. The submissions were to have been provided by March 28, 2012. In
the end they were not provided until July 9, 2012, by which time the expert
report had been served.

[22]        
WCAT had not provided its determination prior to September 21, 2012 and,
consistent with the direction given at the trial management conference, the
trial was adjourned.

[23]        
On December 14, 2012, the parties were provided with an unentered copy
of the WCAT decision and certificate pursuant to s. 257. The panel
concluded that Mr. Mills was a worker within the meaning of the Act and that
his injuries suffered in the motor vehicle accident arose out of and in the
course of Mr. Mills’ employment.

Legal Principles

[24]        
The applicable Rules provide as follows:

Costs to follow event

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

Costs arising from improper act or omission

 (14)      If anything is done or omitted improperly or
unnecessarily, by or on behalf of a party, the court or a registrar may order

(a)  that any costs arising from
or associated with any matter related to the act or omission not be allowed to
the party, or

(b)  that the party pay the costs
incurred by any other party by reason of the act or omission.

Costs of whole or part of proceeding

 (15)      The court may award costs

(a)  of a proceeding,

(b)  that relate to some
particular application, step or matter in or related to the proceeding, or

(c)  except so far as they relate
to some particular application, step or matter in or related to the proceeding

and in awarding those costs the
court may fix the amount of costs, including the amount of disbursements.

[25]        
The issue of costs being awarded in relation to a successful WCAT
defence was addressed in Dhanoa v. Trenholme, 2009 BCSC 1787. In that
case Mr. Justice Cole concluded that the defendant as the successful party was
entitled to costs, having found nothing arising from the defendant’s conduct in
the litigation that provided a proper judicial basis to deny costs. He observed
that pleading a s. 10 defence does not itself stay the litigation but that
the plaintiff was at liberty to make an application for a stay during the
proceedings until the issue was decided.

[26]        
Mr. Justice Cole made reference to the following description found in R.L.L.
v. R.L., 2001 BCCA 386 at para. 31, of the sort of conduct that would
provide a basis for the exercise of the discretion to depart from the rule:

Exceptions to the rule that costs
follow the event include misconduct of the parties.  Such misconduct includes
dishonest, reprehensible, discreditable, unmeritorious, unwarranted, callous,
or reckless conduct.

[27]        
The same conclusion was reached in McKay v. Marx, 2012 BCSC 484.
Madam Justice Dorgan stated at paras. 30-33:

Finally, it is settled law that in order to depart from the
general rule that costs follow the event, the court, while acting judicially,
must find the defendants (in this case) engaged in disreputable conduct.

The evidence of conduct falls short of that necessary to make
such a finding. While it appears that the plaintiff was bounced between the
WCAT and ICBC, I cannot conclude such circumstances imbue the defendants with a
callous, reckless or dishonest approach in and to the litigation. Each party
took reasonable steps to move the litigation along, given that a stay of
proceedings was neither sought nor ordered.

The circumstances in which the plaintiff found himself are
unfortunate and they garner some sympathy. However, the authorities explicitly
prohibit this court from denying costs by exercising discretion out of a sense
of fairness or sympathy or a comparison of the relative economic strength of
the parties.

In summary, the defendants
successfully pled a s. 10 Workers Compensation Act defence and are thus the
substantially successful party – the winner of the event. The evidence as
presented falls short of demonstrating such reprehensible conduct on the part
of the defendants that would allow the court, in the exercise of its
discretion, to depart from the general rule. Accordingly, the defendants are
entitled to costs.

[28]        
In Wilson v. Paskalidis, 2003 BCSC 1170, another case involving a
successful s. 10 defence, Mr. Justice Slade concluded that costs would not
be awarded to the defendant for the following reasons:

I find, for the following reasons, that costs will not be
awarded in favour of the defendant:

1.         The decision of the
plaintiff to pursue the action was reasonable.  The defendant had by her
actions, notwithstanding her plea of relying on the Workers’ Compensation
Act, clearly communicated her position that she was not acting in the
course of her employment on the date of the accident.  The response of the
Workers’ Compensation Board to her provisional application for entitlement to
benefits became known to the plaintiff in the course of discovery, and the
rejection of her claim gave a sound basis for the plaintiff’s belief that his
claim could be vindicated only in this legal proceeding.

2.         The conduct of the case for the defendant was, in
context, discreditable.  Despite the defendant’s plea of reliance on the Workers’
Compensation Act, timely disclosure of documents relevant and highly
material to that plea, was not made.  Further, the appeal of the initial
determination by the Workers’ Compensation Board dated June 27, 2000, was
delayed for almost one year with knowledge that the plaintiff was diligently
taking steps in the litigation in preparation for trial.

Discussion

[29]        
The plaintiff submitted that the defendants’ conduct in this case was
unmeritorious, unwarranted and reckless. Counsel submitted that ICBC was asked
early on if a worker-worker defence would be pursued. Counsel submitted that
the purpose of asking for ICBC’s position on the worker-worker defence was to
“bring transparency to the litigation” and to allow counsel to properly advise
the plaintiff about the risks of the litigation.

[30]        
Counsel submitted that if he had been told that the defence was going to
be advanced, the approach to the litigation would likely have changed and a
more “bare bones “ approach would likely have been adopted.

[31]        
Counsel noted that there was no response to the request and instead ICBC
made Part VII payments. Counsel submitted that this conduct indicated to the
plaintiff that no worker-worker defence would be claimed. Counsel submitted
that to then advance the claim when it did was unmeritorious, unwarranted and
reckless because it prejudices the plaintiff who at that point had little
choice but to advance his civil claims. Counsel submitted that the
discreditable conduct included in addition the delay in advancing the claim
before WCAT.

[32]        
There is no question that ICBC did not respond to the repeated queries
concerning whether it would be advancing a s. 10 defence. However, the
plaintiff was certainly alive to the issue. At the outset, the adjuster did
raise the possibility on two occasions with the plaintiff. A provisional claim
was filed on behalf of the plaintiff preserving his rights under the WCB
regime. While the adjuster failed to respond to counsel’s queries, there was
also a failure on the part of plaintiff’s counsel to respond to the repeated
requests made by the adjuster for information that would be relevant to that
issue.

[33]        
Once the issue of the s. 10 defence was raised in the response to civil
claim, there was again considerable delay on the part of the defendants with
respect to the process before WCAT. I agree that in the absence of a stay of
proceedings, and with a trial date set, the plaintiff had little choice but to
carry on with the litigation and preparation for trial. However, it was open to
the plaintiff to apply for a stay of proceedings pending the disposition of the
application before WCAT. No such application was brought.

[34]        
In this case, like McKay, the plaintiff’s circumstances are
unfortunate. However as Dorgan J. noted, the authorities prohibit the court
from denying costs by exercising discretion out of a sense of fairness or
sympathy. In my view the evidence falls short of establishing discreditable
conduct that would justify the court in exercising its discretion to depart
from the general rule.

[35]        
In the result, the defendants are entitled to their costs of the action.

“Ross J.”