IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130619

Docket: M114285

Registry:
Vancouver

Between:

Nada Wattar

Plaintiff

And

Haoran Lu and
Nissan Canada Inc.

Defendants

Before:
The Honourable Mr. Justice N. Smith

Supplementary Reasons for Judgment

[1]            
In reasons for judgment dated April 10, 2013, I found the plaintiff and
the defendant were equally at fault for the motor vehicle accident in which the
plaintiff was injured. The plaintiff was awarded half of her assessed damages
and the resulting amount fell short of a formal offer to settle that the
defendant had made before trial. The defendant now seeks costs consequences of
the plaintiff’s rejection of that offer.

[2]            
This action went to trial for three days beginning February 12, 2013. The
net award to the plaintiff was $26,000 (not including a small amount of agreed-upon
special damages). On November 22, 2012, the defendant offered to settle for $27,500.
The defendant says the plaintiff should receive 50 per cent of her costs to the
date of the offer and that he should receive 100 per cent of his costs from
that date.

[3]            
The accident at issue occurred at the intersection of First Avenue and
Rupert Street in Vancouver. The plaintiff and the defendant gave conflicting
evidence about what happened and no independent witnesses were called.

[4]            
The plaintiff said she was driving through the intersection, having
entered it just as the traffic light turned from green to yellow, and was
struck by the defendant making a left turn. There were three traffic lanes in the
plaintiff’s direction and she testified she had been in the one closest to the
centre. The defendant maintained that the plaintiff had been in the curb lane,
entered the intersection on a red light after traffic in the other lanes had
stopped, and hit his vehicle as he had almost completed his left turn.

[5]            
I did not fully accept the evidence of either party. I found that the
plaintiff had been in the curb lane and entered the intersection on a yellow,
if not a red light. However, I found that the defendant had not completed as
much of his left turn as he testified to and that he had attempted to complete
his turn without ascertaining that it could be done safely. In the result, I
found both of them negligent and divided liability equally.

[6]            
This was a fast track action subject to Rule 15-1. The costs provisions
in that rule are:

Costs

(15) Unless the court otherwise orders or the parties
consent, and subject to Rule 14-1 (10), the amount of costs, exclusive of
disbursements, to which a party to a fast track action is entitled is as
follows:

(a) if the time spent on the
hearing of the trial is one day or less, $8 000;

(b) if the time spent on the
hearing of the trial is 2 days or less but more than one day, $9 500;

(c) if the time spent on the
hearing of the trial is more than 2 days, $11 000.

Settlement offers

(16) In exercising its discretion under subrule (15), the
court may consider an offer to settle as defined in Rule 9-1.

[7]            
Rule 9-1 governs offers to settle generally and includes the following:

Cost options

(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.

Considerations of court

(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.

[8]            
The purpose of the Rule 9-1 is to encourage settlement by “rewarding the
party who makes a reasonable settlement offer and penalizing the party who declines
to accept such an offer” (See: Hartshorne v. Hartshorne, 2011 BCCA 29 at
para. 25).

[9]            
Prior to 2008, a plaintiff who failed to obtain a judgment in excess of
an offer to settle had to bear the costs consequences, no matter how marginal
the difference might have been. That provision was replaced by the predecessor
of Rule 9-1, which gives the court a broad discretion.

[10]        
In some cases, the fact that a judgment falls short of
an offer by only a small amount may be a reason to decline to give effect to
the offer in awarding costs. In Wepryk v. Juraschka, 2013 BCSC
804 (“Wepryk”) the court said at para. 19

The assessment of damages in a
personal injury case is not a matter of mathematical certainty. Damages are
assessed, not calculated. The plaintiff and her counsel cannot be faulted for
having regarded the April 19, 2012 offer of $83,500 as being one which would
likely be exceeded if they went to trial. Although the final judgment was for
slightly less, it might just as easily have been slightly more.

[11]        
However, this case differs from Wepryk and similar cases because
any settlement offer had to be considered in the context of a serious liability
issue. The plaintiff knew that her evidence on how the accident happened would
be contradicted in almost every material particular by the evidence of the
defendant. In weighing the settlement offer, the plaintiff had to consider the
risk that her action might be dismissed if the court fully accepted the
defendant’s evidence. The offer was one that acknowledged the risk faced by
both sides and I find that, in the circumstances, it was one that ought
reasonably to have been accepted.

[12]        
Rule 9-1(5)(c) refers to awarding or denying costs “in respect of some
or all of the steps taken” after the offer to settle. That assumes costs for
each step in the proceeding being assessed according the tariff in Appendix B
of the Rules. It cannot be applied directly to a fast track action
because Rule 15-1 provides for a lump sum award of costs. The only clearly
identifiable step is the trial–costs are $8,000 for a one day trial, $9,500
for a two day trial and $11,000 for trial lasting more than two days. It is
therefore assumed that $1,500 represents the costs of each day of trial,
including preparation (See: Duong v. Howarth, 2005 BCSC 128).

[13]        
This was a three-day trial. In the absence of an offer to settle, the
plaintiff would have been entitled to half of her costs, or $5,500, to reflect
the division of liability. That would include $2,250, representing half of the
costs attributable to three days of trial ($1,500 times three, divided by two).
That is the proper amount by which to reduce the plaintiff’s costs as a
consequence of her refusal to accept the settlement offer.

[14]        
Counsel for the plaintiff argues that the plaintiff should recover all
of her disbursements related to damages because she was substantially
successful on that issue, but for the reduction resulting from the liability
finding. I cannot accept that argument because the offer clearly encompassed a
reasonable assessment of the plaintiff’s damages, discounted for the
substantial liability risk. Acceptance of the settlement offer would have made
it unnecessary for the plaintiff to prove her damages at trial.

[15]        
The plaintiff is therefore entitled to costs of $3,250, plus one half of
her disbursements to the date of the offer. In view of the modest award and the
relatively small gap between the offer and the judgment, I do not consider it
appropriate or necessary to further punish the plaintiff with an award of any
portion of the defendant’s costs.

“N.
Smith J.”