IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130726

Docket: M110296

Registry:
Vancouver

Between:

Jeffrey John Wilson

Plaintiff

And

Honda Canada
Financial Inc.,

Harpal Kaur Goria,
and Ronald Leigh Howe

Defendants

Before: The Honourable Madam
Justice Fitzpatrick

Reasons for Judgment

[1]            
This action involved a determination of the damages claimed by the
plaintiff Jeffrey Wilson arising from a motor vehicle accident on April 8,
2009. After a 4 day trial in May 2013, damages were awarded in the total sum of
$95,022.36 less an adjustment for certain taxes plus pre-judgment interest on
certain amounts: Wilson v. Honda Canada Financial Inc., 2013 BCSC 1137
(the “Reasons”).

[2]            
There was also an award of costs in favour of Mr. Wilson
unless the parties sought to make submissions to the contrary (para. 186).
The defence seeks a different order of costs in light of an offer to settle
delivered by them just prior to the trial. Both parties have now filed brief
submissions on the costs issue.

Discussion

[3]            
On April 22, 2013, approximately 6 weeks before
the trial, the defendants delivered an offer to settle Mr. Wilson’s claim pursuant
to Supreme Court Civil Rule 9-1. The offer was to fully and finally
settle the matter by payment of $121,800.13 over and
above previous amounts paid by the defendants.

[4]            
The defendants seek the following costs order pursuant
to Supreme Court Rule 9-1(5)(a) and (d):

a)       Mr. Wilson recover his
assessed costs and disbursements up to April 22, 2013;

b)       the defendants recover their assessed
costs and disbursements after April 22, 2013, and

c)       the costs of Mr. Wilson and the
defendants are to be set off as against the other.

[5]            
Mr. Wilson agrees that he should recover
his assessed costs and disbursements up to April 22, 2013 but that each party
should bear their own costs and disbursements after that date.

[6]            
The factors to be considered by the court are
set out in Rule 9-1(6):

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.

[7]            
The defendants rely on the comments of the court
in Martin
v. Lavigne, 2010 BCSC 1610 as to the legislative purpose of the Rule:

[7]        The
legislative purpose of Rule 9-1 is to encourage the early settlement of
disputes by rewarding the party who made a reasonable settlement offer and
penalizing the party who declines to accept such an offer: Mackenzie v. Brooks
et Alumni, [1999] B.C.J. No. 2411 (C.A.),
at para. 21; and Bailey v. Jang (2008),
90 B.C.L.R. (4th) 125 (S.C.) at paras. 15-17. The underlying reason for
the rules relating to costs is to discourage the prosecution of doubtful cases.
I am satisfied that any refusal to award double costs ignores the important
deterrent function of the Rules: Bowen Contracting Ltd. v. B.C. Log Spill
Recovery Co-operative Association, [2009] B.C.J.
No. 351 (S.C.) at paras. 49, 50 and 53; and Bailey, supra, at para. 39.

[8]            
The first question is whether the offer was one which
should reasonably been accepted by Mr. Wilson. The offer is to be considered as of the time when it was presented
and is not to be considered with the benefit of hindsight: A.E.
(Litigation guardian of) v. D.W.J., 2009 BCSC 505 at para. 55, aff’d
2011 BCCA 279.

[9]            
There is no dispute between the parties that at the time of
delivery of the offer, each party had all the information that they would have
needed to fairly and adequately assess the strengths and weaknesses of their
relative positions. Liability had been conceded by the defendants and only the assessment
of damages was to be considered at trial. All pre-trial procedures had been
completed, including discovery of documents and examination for discovery of Mr. Wilson.
All medical evidence, which was only to be introduced by Mr. Wilson, was
in hand and had been properly exchanged.

[10]        
The defendants had conceded that a fair amount
should be assessed with respect to non-pecuniary damages, past wage loss from Mr. Wilson’s
firefighter employment, future care costs and special damages. However, the
defendants also alleged that Mr. Wilson had failed to mitigate his losses
by essentially ignoring medical advice and undertaking a self-prescribed course
of treatment. The most contentious issues related to Mr. Wilson’s claim
for past wage loss with respect to his father’s company, Taja Investments Ltd.
(“Taja”), his claim for loss of earning capacity relating to Taja and his
substantial future care claim relating to his ongoing massage therapy. These
latter claims, which totaled $190,000, were rejected after trial.

[11]        
Mr. Wilson argues that he “genuinely
believed” that he had incurred a past and future wage loss because he was
unable to work for Taja. With respect, it can hardly be the case that honest
belief alone will avoid the intended effect of the Rule. This is similar
to my rejection of his honest belief as to disability where that belief was not
supported by any medical evidence: Reasons, para. 137. As set out
in the Reasons, there were numerous difficulties with Mr. Wilson’s
arguments regarding Taja, including the lack of proper documentation, lack of
medical evidence, and a rejection of his testimony on this issue (see paras. 120-146,
157-163). His claim for future massage therapy of $30,000 was also rejected for
the reason that no medical evidence supported that claim.

[12]        
Finally, Mr. Wilson’s evidence also
suffered from credibility problems particularly where not supported by other
credible evidence: Reasons, para. 42. Failure to anticipate
credibility issues will also not avoid the operation of the Rule: Gehlen
v. Rana, 2011 BCCA 219 at paras. 50-51.

[13]        
Mr. Wilson argues that he should not be
penalized for “guessing wrong”, citing Fan (Guardian ad litem of) v. Chana,
2009 BCSC 1497. However, it is clear from the comments of the court in
that case that there were difficult issues relating to the evidence and how any
offer could be dealt with, particularly given the involvement of the public
trustee. Similar difficulties do not arise in this case.

[14]        
I agree that a party is not required to “guess” about the
probable outcome; rather, he or she is required to fairly and objectively
assess the evidence intended to be adduced at trial and make a reasoned
decision about the relative merits of the claim or defence, having in mind a
certain amount of litigation risk. In essence, the party receiving the offer
must critically review the merits of the claim in relation to the amount
offered. As the court noted in Fan, quoting A.E.:

[62]      Regardless of the
merits of the plaintiff’s claim the defendant’s offer to settle cannot be
ignored, because to do so would undermine the purpose of the Rule. Having
decided to proceed in the face of a not insignificant and ultimately successful
offer to settle, the plaintiff cannot avoid some consequences.

[15]        
The offer amount, while not approaching the
amounts sought by Mr. Wilson, in all likelihood fairly assessed the claims
about which there was no dispute and added further amounts for the litigation
risk that the more contentious claims would go against the defendants. The
offer was, no doubt, also prepared recognizing the substantial cost to both
parties if the matter proceeded to trial. It cannot be understated that one of
the purposes of the Rule is to avoid costs of proceeding further in the
action: Martin, para. 8.

[16]        
I conclude that the offer should reasonably have
been accepted by Mr. Wilson shortly after it was made and that this factor
favours the defendants.

[17]        
The offer by the defendants was not nominal. I readily conclude that the offer amount substantially exceeded the judgment amount. This factor also favours
the defendants.

[18]        
The parties have also advanced arguments about the relative
financial circumstances of the parties. Mr. Wilson’s argues that there is
a significant financial disparity as between Mr. Wilson and ICBC. In Gonzales
v. Voskakis, 2013 BCSC 675, I summarized this argument and certain findings
in that case as follows:

[37]  It
is now well settled that the involvement of ICBC on behalf of the defendant is
a factor that may be considered: Smith v. Tedford, 2010 BCCA 302 at paras. 16‑19.
As with the first two factors, each case must be analyzed based on the
particular circumstances at hand. It therefore remains to be decided whether
this is a relevant factor and, if so, what weight should be given to it: Mazur
v. Lucas, 2011 BCSC 1685 at para. 53.

[38]  The
defence submits that the resources of ICBC are not a significant factor, citing
Hunter v. Anderson, 2010 BCSC 1591. In that case, the court held that
the insurance coverage did not create any unfair advantage leading to
unnecessary or protracted proceedings: para. 22.

[39]  In this case, I find
the reasoning in Hunter persuasive. I do not consider that ICBC’s
greater financial clout is a significant factor. It is easy to portray ICBC as
a large, well-funded corporation, able to run roughshod over less financially
secure plaintiffs. But it must be remembered that although ICBC is well-funded,
its resources largely come from the premiums of many individual insurers, who
expect that these funds will be managed for the benefit of the insurance system
as a whole. As such, costs either against or in favour of the defence must
reflect the decisions that are generally made in litigation — such as making an
offer to settle — in light of the benefits and detriments that the underlying
policy holders would have borne themselves. These policy holders should not be
penalized per se simply because they have insurance.

[19]        
Similarly, on this application, there is no evidence that ICBC’s
defence of the action created any unfair advantage in the litigation that would
justify Mr. Wilson’s position.

[20]        
In addition, Mr. Wilson presented no evidence on this
application concerning his own financial circumstances. Accordingly, the only
information available, which comes from the trial evidence, is that he is
gainfully employed as a firefighter with the City of Burnaby, earning
approximately $100,000 a year. He also seems to enjoy a fairly affluent
lifestyle.

[21]        
The defendants also point out that they propose that Mr. Wilson
recover costs to the date of the offer, which will include what are no doubt
substantial disbursements incurred relating to the various medical reports
tendered at trial.

[22]        
This third factor, the relative financial circumstances of the
parties, favours the defendants.

[23]        
Neither party raises any other factor for
consideration in relation to the costs issue.

[24]        
I conclude that all factors to be considered
under Rule 9-1(6) favour the costs award sought by the defendants.
Accordingly, Mr. Wilson will recover his assessed costs and disbursements
up to April 27, 2013, which is 5 days after the offer was sent in recognition
that some reasonable period of time would have been necessary to consider the
offer. Thereafter, the defendants will recover their assessed costs and
disbursements commencing April 28, 2013. After assessment of these respective
amounts, the parties shall set off the awards to
produce a net award.

“Fitzpatrick
J.”