IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | Currie v. Taylor, |
| 2013 BCSC 1071 |
Date: 20130618
Docket: M116089
Registry:
New Westminster
Between:
Jason Michael
Currie
Plaintiff
And
Karen Lorraine
Taylor and
Daniel Allan Sharp
Defendants
Before:
The Honourable Mr. Justice Armstrong
Reasons for Judgment on Costs
Counsel for Plaintiff: | J.P. Prodor |
Counsel for Defendants: | V.R.K. Orchard, Q.C. D. Claassen |
Place and Date of Trial: | April 2 – 5, 2012 April 10, 2012 |
Written Submissions of the Plaintiff received: | November 21, 2012 |
Written Submissions of the Defendant received: | December 20, 2012 |
Place and Date of Judgment: | New Westminster, B.C. June 18, 2013 |
I.
introduction
[1]
This trial concerned the liability for a motor vehicle accident in June
2008. The trial was held on April 2 – 5 and 10, 2012 and judgment was given
October 23, 2012. The plaintiff was found to be 75% liable for the accident and
the defendants 25% liable. The defendant Taylor was the owner of the vehicle
driven by the defendant Sharp at the time of the accident.
[2]
The plaintiff seeks costs for the entirety of this action at two-thirds
of the amounts provided for in Scale B of the Supreme Court Civil Rules.
[3]
On March 12, 2012, the defendants offered to settle the plaintiffs
liability claim on the basis that the plaintiff was 59% liable for the accident
and the defendant was 41% liable.
[4]
The defendants submit that the plaintiff should recover 25% of his costs
up to the time of the defendants offer to settle and that the defendants should
receive 100% of their costs from the date of their offer until the end of the
trial.
[5]
The plaintiff is a 41 year old man who suffered extremely serious injuries
as a result of the car accident. The accident occurred on Highway 97 near
Vernon B.C. when the plaintiff entered the highway from an intersecting side
road and his vehicle was struck by the defendant Sharp. Reasons for judgment indexed
as 2012 BCSC 1553 outline the details of the collision.
II.
PositionS of the parties
[6]
The plaintiff argues that he is destitute and survives on a disability
payment from ICBC of approximately $1,100 per month. He lives in a derelict
residence in Vernon, B.C.
[7]
The plaintiffs Part 7 benefits pursuant to the Insurance (Vehicle)
Regulation, B.C. Reg. 447/83 have been extinguished.
[8]
After the defendants final offer to settle on March 12, 2012, the
plaintiff made a formal offer to settle on March 23, 2012. The offer proposed to
settle the liability issues at 75% in favour of the plaintiff and 25% in favour
of the defendants.
[9]
The defendants have presented a bill of costs to the plaintiff totalling
$30,000.32 which includes an account for an engineering expert in the sum of
$13,262.72. To date, the plaintiffs disbursements exceed $56,000. The
plaintiffs submissions did not disclose the portion of those disbursements
attributable to the liability aspect of the proceedings to date.
[10]
The plaintiff argues that in making an order for costs, the Court should
use its discretion to grant the plaintiff recovery of 66% costs of the entire
action.
[11]
The defendants argue that s. 3(1) of the Negligence Act, R.S.B.C.
1996, c. 333 limits their obligation to pay the plaintiffs costs to an
amount in proportion to their measure of the responsibility for the accident.
They argue the plaintiff has failed to demonstrate that such an award would be
unjust.
[12]
Second, the defendants argue that Rule 9-1 is intended to facilitate
settlements and reduce the cost of trials. The defendants argue their success
on this trial significantly exceeded their pre-trial offer and it would have
been reasonable for the plaintiff to have accepted that proposal. If the
defendants do not receive their costs incurred after making the offer, they
submit the goals of the rule in encouraging settlements will be threatened.
III.
ANALYSIS
[13]
The issues of trial costs in this case involve a consideration of s. 3(1)
of the Negligence Act and the apportionment of costs as a function of
the division of liability in a claim. The second step in the analysis involves
the consideration of Rules 9-1(4) to 9-1(6) and 14-1(9) of the Supreme Court
Civil Rules.
[14]
Section 3(1) of the Negligence Act states:
Unless the court otherwise
directs, the liability for costs of the parties to every action is in the same proportion
as their respective liability to make good the damage or loss.
[15]
Rule 14-1(9) is the usual rule governing costs. It states:
Subject to subrule
(12), costs of a proceeding must be awarded to the successful party unless the
court otherwise orders.
[16]
The impact of a settlement offer in this action is dealt with under the portions
of Rule 9-1(4) which provide:
The court may consider an offer
to settle when exercising the courts discretion in relation to costs.
[17]
Rule 9-1(5) provides:
(5) In a proceeding in which an offer to settle has
been made, the court may do one or more of the following:
(d) if the offer was made by a defendant and the
judgment awarded to the plaintiff was no greater than the amount of the offer
to settle, award to the defendant the defendant’s costs in respect of all or
some of the steps taken in the proceeding after the date of delivery or service
of the offer to settle.
[18]
This application also engages Rule 9-1(6) which outlines factors that
may be considered when making an order under Rule 9-1(5). The rule provides as
follows:
(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.
[19]
The plaintiff relies on the decision of this Court in Wong-Lai v. Ong,
2012 BCSC 1569 as support for the proposition that the analysis is a two-step
process starting with the Negligence Act and following with a
consideration of the Rules relating to costs. He argues that Wong-Lai
bears a close resemblance to facts in this case.
[20]
The plaintiff argues that Rule 14-1(9) stating that costs follow the
event does not apply in this case. The plaintiff relies on Moses v. Kim,
2007 BCSC 1820 and the summary of factors to be considered in exercising the
discretion when a party seeks costs on a different basis than is provided in
the Negligence Act. Gray J. said:
[13] The authorities demonstrate many
factors the court has considered in exercising this discretion. Among them are
the following:
(a) the
seriousness of the plaintiff’s injuries;
(b) the difficulties
facing the plaintiff in establishing liability;
(c) the fact
that in settlement negotiations the amount offered was substantially below the
ultimate amount;
(d) whether
the plaintiff was forced to go to trial to obtain recovery;
(e) the costs
of getting to trial;
(f) the
difficulty and length of the trial;
(g) whether
the costs recovery available to the plaintiff, if costs are apportioned
according to liability, will bear any reasonable relationship to the party’s
costs in obtaining the results achieved;
(h) the
positions taken by the parties at trial, in particular whether the positions
taken were appropriate and reasonable in the circumstances;
(i) whether
the defendants made any settlement offers;
(j) the
ultimate result of the trial; and
(k) whether the plaintiff achieved
substantial success that would be effectively defeated if costs were awarded
pursuant to s. 3(1) of the Negligence Act.
[21]
The plaintiff argues that it would be unjust in the
circumstances of this case to adopt the costs follow the event rule.
[22]
The defendants argue that the Court must consider
whether the plaintiff has met the onus of demonstrating an injustice if it is
ordered that the plaintiff is limited to 25% of his costs up to date of trial.
[23]
Where liability is divided but the defendant has
suffered no loss or damage, the defendant will be required to pay the same
proportion of the plaintiffs costs as the defendant is liable for the
plaintiffs damages but the plaintiff is not liable to pay any portion of the
defendants costs: Flatley v. Denike (1997), 32 B.C.L.R. (3d) 97 (C.A.).
[24]
The analysis of a request to depart from s. 3 of
the Negligence Act turns on the plaintiffs ability to persuade the Court
that assessing the costs in that proportion would be unjust: see Sartori v.
Gates, 2011 BCSC 419 at para. 104; Rimmer v. Township of Langley,
2007 BCSC 340 at para. 13.
[25]
In approaching these questions, the Court first
examines the liability for costs under the Negligence Act
followed by a separate analysis of issues arising under the Rules: Miller v.
Boughton, 2011 BCSC 632 at para. 22; Bedwell v. McGill, 2008 BCCA
526 at para. 29.
[26]
The parties made their submissions paralleling the
factors identified in Moses. I will deal with each partys submissions
under those headings.
A.
The seriousness of the plaintiffs injuries
[27]
The plaintiff argues that he has pleaded and
intends to prove the catastrophic extent of his injuries. The defendants argue
that the seriousness of the plaintiffs injuries is not relevant to this issue
because the trial was limited to the question of liability and thus, the extent
of the plaintiffs injuries should be a neutral factor. Mr. Currie
obviously suffered serious injuries that have dramatically changed his life. If
the seriousness of the injuries has any role to play in a cost analysis, it
does not matter if the litigation was focused solely on liability. The lawsuit
is about the plaintiffs pursuit of compensation for consequences of the defendants
negligence; it seems that this factor favours the plaintiffs position and is
not a neutral influence because it addresses the injustice of simple adherence
to s. 3(1) of the Negligence Act.
B.
The difficulties faced by the plaintiff in
establishing liability
[28]
The plaintiff argues that he faced significant
hurdles in adducing the evidence to prove the defendants negligence. He argues
that expert evidence was expensive to obtain, the defendants failed to testify,
and the defendants discovery evidence was confusing and contradictory. He
argues that these factors warrant a departure from the usual rule.
[29]
The defendants adopt the suggestion that the
plaintiffs case involved significant difficulties. They argue that the
difficulties inherent in the plaintiffs case militate against exercising
discretion to abandon the normal rule. They argue that the magnitude of those
difficulties should have motivated the plaintiff to abandon the action and
accept its offer of accepting 41% of the liability.
[30]
In this case, each party argued that the other was
100% liable for the collision.
[31]
In my view, the plaintiffs difficulties in
establishing liability were not out of the ordinary when considering the normal
challenges of proving fault in intersection collisions. The use of forensic
engineering evidence is common in these cases. There was abundant first-hand
evidence from witnesses to the accident that was helpful in the assessment of liability.
The plaintiff argues that the defendants evidence was completely unbelievable
and would have been exposed as untruthful if the defendant Sharp had testified
at trial. However, the plaintiff chose to tender only the defendants
contradictory discovery evidence as part of the plaintiffs case and, in so
doing put the question of the defendant Sharps recollection of the events in
issue. This strategy clouded the analysis. He could have called the defendant
as an adverse witness and simply cross-examined him under Rules 12-5(20) and
(26). This process would have enabled the plaintiff to deal directly with
issues touching on his credibility. In my view, the difficulties faced by the
plaintiff are a neutral factor in assessing costs under the Negligence Act.
C.
Was the amount offered in settlement substantially
below the ultimate amount
[32]
The defendants offer substantially exceeded the
plaintiffs judgment in the action. The plaintiff argues that while he may not
have been required to go to trial, the ultimate settlement was only 41% of the
value of the plaintiffs catastrophic injuries.
[33]
The defendants argue that the difference between
the judgment and their offer was substantial. The plaintiff argues that the
difference was modest but the amount recovered is more than 40% below the
defendants settlement offer. Although the defendants proposal would likely
have resulted in a reduction in the plaintiffs damages of several hundred
thousand dollars, his failure to accept the settlement will have compounded
that loss. In my view, the difference does not justify a variation to the rule.
D.
Whether the plaintiff was forced to go to trial to
obtain recovery
[34]
The defendants argue that the facts heavily favour
applying the presumption of costs set out the Negligence Act. The
plaintiff acknowledged that he was forced to allow her to obtain recovery; he
says that 41% offered was inadequate and the difference in the amount claimed
justified his attempt to achieve a better result. This factor weighs in favor
of the defendants position.
E.
The costs of getting to trial
[35]
The plaintiff claims this was obviously an
expensive trial, in which liability was hotly contested. He argues that the defendants
settlement offer and the plaintiffs damages are largely dependent on the
plaintiff’s expert evidence.
[36]
The defendants argue that the costs of completing
this liability trial should be a neutral factor in assessing the plaintiffs
claim of injustice.
[37]
Counsels assertion that the plaintiffs
disbursements exceed $56,000 is, without a breakdown of disbursements between the
liability and damages issue, not that helpful. It may be that most of these
disbursements addressed the liability issue as opposed to damages. I do not
know. The plaintiff obtained and used one expert opinion and relied on a second
report prepared by the RCMP traffic analyst.
[38]
I am unable to draw any conclusions from the
differences between the costs incurred by the plaintiff and the defendants.
This is a neutral factor.
F.
The difficulty and length of the trial
[39]
Although the plaintiffs claim required
considerable attention to detail, this trial was neither abnormally difficult
nor lengthy. This factor is neutral in my assessment of the plaintiffs claim
for a variance from the Negligence Act.
G.
Whether the costs recovery available to the
plaintiff, if apportioned according to liability, will bear any relationship to
the parties costs in obtaining the results achieved
[40]
Under this factor the plaintiff argues that he will
recover significant damages from the defendants with the liability
apportionment 25% in his favor. He argues that those damages would not have
been recovered if he had not commenced this proceeding and presented cogent
evidence supporting the claim. He suggests that the expert evidence needed for
the trial was a significant factor in the formation of the defendants settlement
proposal.
[41]
The defendants suggest that the plaintiffs expert
evidence will have no impact on the amount of damages that the plaintiff might
be awarded. In the face of the defendants offer, they argue that the
plaintiff’s refusal to accept a proposal resulted in a poor outcome for the
plaintiff and increased costs to both parties. This factor militates in favor
of the presumption in the Negligence Act.
H.
The positions taken by the parties at trial
[42]
The defendants argue that each party advanced a
reasonable position at trial and that this factor should be neutral in
assessing the plaintiffs pursuit of need of costs differing from the allocation
presumed in the Negligence Act. The plaintiff did not disagree and I
conclude that this factor supports the allocation of costs in proportion to the
defendants liability.
I.
Whether the defendants made any settlement offers
[43]
The defendants offered to settle the issues in the
trial by accepting 41% liability for the accident. The plaintiff offered to
accept 25% of the liability. The plaintiff argues that he achieved substantial
success in obtaining judgment and this factor should influence the Court to deviate
from the statutory presumption.
[44]
In my view, this factor is neutral in the
circumstances of this case.
J.
The ultimate result of the trial
[45]
The plaintiff argues that he obtained substantial
success in affixing liability to the defendants for his injuries. The defendants
argue that damages have yet to be determined and the only result pertinent to
the costs issue is the plaintiffs judgment that the defendants were only 25%
at fault; this was not substantial success in the trial. In my view the facts
relevant to this factor militate in the defendants favour and do not assist
the plaintiff.
K.
Whether the plaintiff obtained substantial success
that would effectively be defeated if costs were awarded pursuant to s. 3(1) of
the Negligence Act
[46]
The defendants argue that the plaintiffs outcome
would have been better if he had accepted the offer at 41%. As a result, they
say that this factor does not infer that an injustice will occur if the
plaintiff is restricted to costs at 25%.
[47]
The plaintiff argues that if he is denied costs at
66%, the disbursements alone will radically reduce his recovery. The evidence
is insufficient to support this conclusion.
[48]
In my view, the circumstances in Wong-Lai
are substantially different than those in Mr. Curries case. In Wong-Lai
the Court considered the s. 3(1) questions and concluded that:
a.
the trial dealt with liability and damages and the Court
did not think settlement of the liability issue would have obviated the need
for a trial on damages;
b.
the plaintiff did not act unreasonably in rejecting
the settlement offer due to the short amount of time that the offer was open
for acceptance; and,
c.
the judge was able to conclude that if the
plaintiff was required to bear 75% of the costs, the disbursements alone would
have reduced her recovery by 63%.
[49]
In this case, there is no breakdown of the amount of
the plaintiffs disbursements that relate to the liability portion of this
claim.
[50]
Mr. Curries claim was limited to the issue of
liability and did not involve the other issues of damages considered in Wong-Lai.
In this proceeding there were no ambiguities in the offer to settle that could
have influenced the plaintiff in declining the settlement proposal.
[51]
The defendants refer to this Courts decision in Rimmer,
which also considered a claim for costs on a liability only trial. In Rimmer
neither party made a settlement offer and following the trial the defendant was
found 60% responsible for the accident. In the absence of a settlement offer,
it was appropriate to leave the decision on liability to the trial court. In Rimmer
the Court applied the general rule set out in s. 3 of the Negligence Act.
In this case the plaintiff was in a better position than the plaintiff in Rimmer;
Mr. Currie could have accepted the offer and avoided a trial whereas the
plaintiff in Rimmer was compelled to proceed to trial to obtain a
remedy.
[52]
The defendants also rely on Heppner v. Zia, 2009
BCSC 369 which involved a fifteen day trial on liability and damages. The
plaintiff was found 50% liable and was awarded substantially lees damages than
he claimed at trial. Cohen J. concluded that the plaintiff had not achieved
substantial success that would be defeated by apportionment under the Negligence
Act.
[53]
In Sartori the plaintiff recovered judgment
for an amount exceeding the defendants offer. Wilson J. concluded that the
plaintiff would have recovered some damages if he had accepted the offer but
that the costs of trial were ordinary and the defendants offer was close to
the amount awarded. Accordingly, the Court did not deviate from the ordinary
rule of awarding costs proportionate to the damages.
[54]
In my view, Wong-Lai is distinguishable from
the facts of this case. The features of this case are more closely matched with
the facts in Rimmer. The effect of the defendants offer in this case
strongly favors adherence to the usual rule.
[55]
The plaintiff has not met his obligation to
demonstrate that the award of costs as prescribed by s. 3(1) of the Negligence
Act will result in an injustice. The factors addressed by the parties do
not, on balance, support a departure from the normal rule apportioning costs in
the same proportion as the findings in the plaintiffs favour. Accordingly, the
plaintiff will be entitled to 25% of his costs.
IV.
offer to settle
[56]
The second step in this assessment of costs
concerns the defendants claim to 100% of its costs following its offer to
settle on March 21, 2012. Rule 9-1(6) informs the Court on the factors to be
considered; it is a discretionary decision.
[57]
Rule 9-1(6) is a permissive clause; the Court can refuse
to consider a settlement offer if the plaintiff could have reasonably refused
the proposal: Dodge v. Shaw Cablesystems Ltd., 2009 BCSC 1765 at para.
18.
[58]
In Dodge, the Court concluded that the plaintiff could not
reasonably have accepted an all in offer which was open for only two days.
[59]
The plaintiff argues that the he acted reasonably
in declining to accept the March 12, 2012 offer. Mr. Currie argues that the
facts relating to the cause of the collision were difficult to determine and
that he proceeded to trial knowing that the opinion of Sergeant Nightingale,
the RCMP traffic analyst, might prevail. He said the assessment of the
reasonableness of his decision was not to be weighed in a hindsight analysis.
He argues that the assessment of the offer ought to be measured as at the time
it was received. The plaintiff notes the information and opinion evidence that
he had when the offer was received included Sergeant Nightingales report and the
opinion of the other expert, Dr. Amrit Toor. Both experts had given opinions helpful
to the plaintiffs case. He argues that the Court should accept that this
evidence reasonably influenced the plaintiff in rejecting the offer and that
the offer should not be considered a factor at this stage.
[60]
The defendants accept that the analysis under Rule
9-1 looks to the time that the offer was made or was open for acceptance. The defendants
argue that the plaintiff has admitted there were significant difficulties in
establishing liability. These difficulties began with the fact that the
plaintiff was a servient driver at a stop sign and about to enter a through
highway. Mr. Currie was obligated to yield to traffic on the highway that posed
a hazard. In analyzing his prospects before the trial he would have been aware
that he bore the burden of proof that he had not seen the oncoming vehicle
before impact. The defendants argue that these factors put the plaintiff in a
position where there was a substantial risk he could be found wholly at fault
for the accident and that the 41% liability offer ought reasonably to have been
accepted.
[61]
The plaintiff relies on Fan (Guardian ad litem
of) v. Chana, 2009 BCSC 1497, (varied on other grounds in 2011 BCCA 516) at
para. 19, where the Court suggested that leeway and relief be extended to
litigants who honestly but mistakenly assess the strength of their positions.
However, McEwan J. endorsed the view stated by Goepel J. in A.E. v. D.W.J.,
2009 BCSC 505 that the defendants reasonable offer cannot be ignored, because
to do so would undermine the purpose of the Rule.
[62]
Although the plaintiffs success was substantially
less than the defendants offer, I am satisfied that the plaintiff was not
unreasonable in declining to accept the offer made only 12 days before the
commencement of trial. He did not know at that stage that the defendant Sharp
would elect not to testify. Notwithstanding his option to call the defendant
Sharp as an adverse witness, this fact might have been an important
consideration as the defendants discovery evidence included somewhat
contradictory statements. When the offer was made, questions about the
defendants evidence together with the plaintiffs experts opinions
understandably gave him confidence that his chances of success were better than
41%. As McEwan J. said in Fan:
[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.
[63]
I am satisfied that the plaintiff was reasonable in
his expectation that the ultimate decision on liability could have exceeded
41%.
A.
The relationship between the offer and the final
result
[64]
It is clear that the plaintiffs success fell significantly
short of the defendants offer; I consider that factor to weigh in favour of
the defendants claim for costs from the date of the offer.
B.
Relative financial circumstances of the parties
[65]
The defendants accept that the plaintiff is
financially disadvantaged and that they are represented by an insurer. The
defendants bill of costs has been presented in the sum of $30,000.32 whereas
the plaintiff has disclosed an expenditure of disbursements exceeding $56,000.
The plaintiff has not provided a draft bill of costs and I accept that the
majority of those disbursements may relate to the issue of quantum. There is
simply insufficient evidence on this point to influence the decision.
[66]
However, I am guided by the comments of Sewell J. Wong-Lai
where he said:
[52] I have
also given consideration to the relative financial circumstances of the
parties. The plaintiff has very limited means. The defendants are covered by
insurance and in a very real sense it is the defendants insurer who is at risk
in this action. I am entitled to take this factor into consideration in
exercising my discretion: see Smith v. Tedford, 2010 BCCA 302, 7
B.C.L.R. (5th) 246. Given these circumstances, it is obvious that the relative
financial consequences of depriving the plaintiff of her costs are much greater
to the plaintiff than to the defendants.
[67]
I accept that there is a significant disparity
between the financial resources of the parties and that the plaintiff has very
limited means whereas the defendants are supported by an insurer and are at
little risk in this action.
[68]
I will not order the plaintiff to pay the
defendants costs after the delivery of their offer to settle. I have accepted
the plaintiffs arguments: there was a reasonable explanation for the
plaintiffs failure to accept the offer, the magnitude of the plaintiffs claim
is substantial, and there is a substantial discrepancy in the resources of the
parties.
[69]
Accordingly, the plaintiff will recover 25% of his costs
at Scale B until the date of trial. The defendants will not recover costs.
Armstrong
J.