IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140113

Docket: M99946

Registry:
New Westminster

Between:

Jarnail
Chico Minhas

Plaintiff

And

Alexander
David Sartor aka Alex Sartor

Defendant

Before:
The Honourable Madam Justice Baker

Reasons for Judgment on Costs

[1]            
The trial of this action proceeded intermittently for 25 days during the
period January 10, 2011 to May 4, 2011.  On May 30, 2012 I delivered Reasons
for Judgment awarding the plaintiff, Mr. Minhas, damages in the amount of
$76,653.

[2]            
The action arose out of a claim by Mr. Minhas for damages for
personal injuries alleged to be caused by a motor vehicle accident that
happened on October 25, 2005.  The defendant, Mr. Sartor, admitted
that the collision was caused by his negligence, but alleged that
Mr. Minhas was also negligent in failing to wear a seatbelt, and that the
plaintiff’s negligence had contributed to the nature and severity of his
injuries.  The defendant also disputed the type, severity and duration of
injuries that Mr. Minhas alleged had resulted from the accident.  In
particular, the defendant disputed the plaintiff’s assertion that he had
suffered a traumatic brain injury as a result of the accident or as a result of
a severe respiratory infection following jaw surgery some months after the
accident.

[3]            
As the Reasons for Judgment state in paragraph 3, at trial the plaintiff
was seeking an award in excess of $3 million while the defendant’s position was
that the award should be $45,000 before a reduction of 20% for contributory
negligence.

[4]            
The Reasons for Judgment are lengthy, comprising 114 pages and I do not
propose to review the findings in detail in these Reasons, but will summarize
some of the conclusions.

[5]            
At paragraph 152 of the Reasons for Judgment I stated my conclusion that
the force of the impact between Mr. Sartor’s small vehicle and
Mr. Minhas’s larger vehicle was relatively minor.  The evidence of the
defendant’s accident reconstruction expert, which I accepted, was that the
velocity change experienced by Mr. Minhas’s vehicle when it collided with
Mr. Sartor’s vehicle was likely less than 6 km/h and that the velocity
change experienced by the Minhas Jeep when it struck a pole immediately
following the collision with the Sartor vehicle was likely less than 19 km/h. 
The damage to the Jeep Mr. Minhas was driving was very minor – according
to evidence filed at the costs hearing, the repairs to the Jeep cost only $518.

[6]            
I concluded that the plaintiff did not suffer a brain injury as a result
of the accident or as a result of a respiratory infection following jaw
surgery.  I assessed damages at $95,816, with non-pecuniary loss assessed at
$70,000; past loss of income at $20,000, special damages of $4,466 and $1,350
for cost of future care.  I reduced the total award by 20% to reflect my
finding that the plaintiff had not been wearing a seatbelt when the collision
occurred, was negligent in failing to do so, and that by failing to wear his
seatbelt had contributed to his loss.  The ultimate award, after adjustment,
was $76,653.

[7]            
In the final two paragraphs of my Reasons following trial, in relation
to costs, I stated:

[461]    In the normal course the plaintiff, having obtained
judgment against the defendant, would be entitled to his costs and I would
consider Scale B to the appropriate scale.  However, there may be factors that
have not been disclosed to the court such as offers of settlement that should
be considered in relation to costs.  The parties may have other submissions
they wish to make about costs based on the outcome of the trial.

[462]    The parties are at
liberty to make submissions in writing about costs if they wish to do so; or
may arrange with Trial Scheduling to appear before me to make oral submissions….

[8]            
As there were factors the parties wished to draw to the court’s
attention in relation to costs, counsel arranged to appear before me on
February 22, 2013 to make submissions about costs.

[9]            
Affidavit evidence provided to the court at the costs hearing – the
affidavit of Ms. Kadey, a paralegal employed by defendant’s counsel –
revealed that shortly before the commencement of trial the parties exchanged
settlement offers.  The parties and their counsel had participated in formal
mediation on December 22, 2010 without success.  On December 24, 2010, two days
after the mediation and approximately 14 days before the scheduled dated for
commencement of the trial, Mr. Minhas’s counsel delivered to defendant’s
counsel a formal offer to settle the action for a payment to the plaintiff of
$1.8 million, plus taxable costs and disbursements.

[10]        
On December 29, 2010, Mr. Sartor’s counsel delivered to
Mr. Minhas’s counsel a formal offer in writing to settle the action by a
payment to Mr. Minhas of $275,000 plus costs and disbursements to the date
of the offer.  The offer was stated to be open for acceptance until 4:00 p.m.
on the last business day before the commencement of the first day of trial. 
The offer specifically stated that the defendant reserved the right to bring the
offer to the attention of the court for consideration in relation to costs.

[11]        
The defendant’s offer was not accepted by Mr. Minhas.  No counter
offer was made.

[12]        
Mr. Minhas is seeking to recover costs on Scale B for the entire
action, including the trial and all other steps taken after December 29, 2010. 
He relies on Rule 9-1(5)(c).

[13]        
The defendant, Mr. Sartor, concedes that Mr. Minhas, having
obtained an award of damages at trial, is entitled to his costs, to be assessed
on Scale B, for the period from the commencement of the action to December 29,
2010, the date on which Mr. Sartor’s offer of settlement was delivered to
Mr. Minhas’s counsel.

[14]        
Mr. Sartor’s position is that the defendant should be awarded
double costs for all steps taken by him in the proceeding after December 29,
2010.  On this point, Mr. Sartor relies on Rule 9-1(5)(d).

[15]        
In the alternative, Mr. Sartor seeks an order that the plaintiff
pay special costs to the defendant for all steps taken after delivery of the
defendant’s offer to settle, pursuant to Rule 14-1.  In the further
alternative, Mr. Sartor seeks an order that Mr. Minhas pay the
defendant "single" costs on Scale B plus disbursements, for all steps
taken by the defendant after December 29, 2010.

THE RULES

[16]        
Rule 14 is the general rule in relation to costs.  Rule 14-1(9) provides
that the costs of a proceeding must be awarded to the successful party unless
the court otherwise orders.  Rule 9-1, the Rule governing Offers to Settle, may
result in a departure from the general rule in relation to costs.

[17]        
For ease of reference subrules 4, 5 and 6 of Rule 9-1 are set out here:

Offer may be considered in relation to costs.

(4)        The court may consider an offer to settle when
exercising the court’s discretion in relation to costs.

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.

[18]        
Subrules 14-1(1)(b)(i) and (3) give the court the discretion to award
special costs and sets out specific factors to be taken into account by the
assessing officer in the assessment of special costs.

THE LAW

[19]        
There are many British Columbia decisions that speak to the rationale
for requiring an unsuccessful litigant to pay some (or in certain
circumstances, all) of the successful parties’ legal fees and disbursements.

[20]        
As summarized in Giles v. Westminster Savings and Credit Union,
2010 BCCA 282, at page 32, the reasons include deterring frivolous actions or
defences; encouraging conduct that may reduce the length and expense of
proceedings and discouraging conduct that will have the opposite effect; and
encouraging litigants to settle whenever possible, which meets the objective of
reducing expense for the parties but also freeing up scarce judicial
resources.  The prospect of an award of costs should encourage litigants to
carefully assess the strengths and weaknesses of their cases at the outset and
throughout the course of the proceedings and to encourage parties to abandon or
discontinue actions with little prospect of success.

[21]        
The underlying rationale for the attachment of costs consequences to
offers of settlement are based on some of the same factors referred to in the
preceding paragraph and the over-arching object of the Rules of Court, which is
to "…secure the just, speedy and inexpensive determination of every
proceeding on its merits."  Rule 1-3(1).  Parties are encouraged to make
reasonable settlement proposals and to accept same.  The potential costs
consequences of making or declining a settlement proposal encourage parties to
make offers; and to seriously consider offers made.

[22]        
Subrules 9-1(5)(a) and (b) are identical to Rule 37B(5)(a) and (b) – the
predecessor to the current Rule, that came into force on July 1, 2008.  It was
intended to restore a degree of discretion that was missing from the previous
Rules 37 and 37A.  Rule 37B(5) was amended on July 1, 2009 to add
paragraphs (c) and (d).  Amended Rule 37B(5) and Rule 9-1(5) are identical in
wording and effect.  Both were intended to give the court broad discretion to
formulate an appropriate award of costs in circumstances where an offer or
offers of settlement have been made.

[23]        
The court may award a party costs even though that party had earlier
rejected a settlement offer that would have resulted in greater recovery than
the award made at trial.  At the other end of the spectrum, the court may
penalize a party who has rejected a reasonable settlement offer by an award of single
or double costs against that party.

[24]        
Bailey v. Jang, 2008 BCSC 1372, was decided under the provisions
of Rule 37B as the Rule was prior to amendment in 2009.  In Bailey,
the plaintiff was seeking damages for personal injury resulting from a motor
vehicle accident.  The plaintiff was claiming over $1 million in damages but
had offered to settle her claim for $160,000 plus costs.  The defendant offered
to pay $35,000 to settle the plaintiff’s claim, but this offer was rejected. 
Following trial, the jury dismissed the plaintiff’s claim, holding that the
plaintiff had failed to prove that the defendant’s negligence caused the
accident.  The trial judge (now Chief Justice Hinkson) awarded the defendants
double costs commencing seven days after the date the defendant’s offer was
received by the plaintiff.  Justice Hinkson found that the plaintiff’s decision
to reject the defendant’s offer was not unreasonable.  He concluded that the
plaintiff’s difficult financial circumstances were insufficient reason to
decline an award of double costs.  He rejected the plaintiff’s submission that
the defendant should be disentitled to costs because the defendant had
insurance.

[25]        
Despite having found that the plaintiff’s rejection of the defendant’s
offer was not unreasonable, Justice Hinkson wrote, at paragraph 39:

I conclude that the refusal of an
award of double costs…would completely ignore the important deterrent function
of the Rules.

[26]        
In Giles v. Westminster Savings and Credit Union, cited earlier,
the trial judge had declined to award double costs to a successful defendant
whose pre-trial offer of settlement had been declined.  In that case, the Court
of Appeal inferred, the trial judge had concluded that the defendant’s
settlement offer was not one that reasonably should have been accepted by the
plaintiffs, although the plaintiffs’ claims were ultimately dismissed.

[27]        
The trial judge awarded the defendants 100% of their pre-trial costs,
85% of their trial costs (he found that success on some issues had been
divided) and 90% of their post-trial judgment costs.  The trial judge ordered
that the plaintiffs be severally liable for a per capita share of the
costs awarded to the successful defendants.

[28]        
The plaintiffs appealed the award of costs against them, contending that
they should not be liable to pay any of the defendants’ costs.  The defendants
cross-appealed, submitting that the trial judge erred in refusing to award
double costs for steps taken after the defendants made their pre-trial
settlement offer.  The appeal and cross-appeal in Giles were governed by
the provisions of the previous Rules, in particular, Rule 37B.

[29]        
The Court of Appeal rejected the plaintiffs’ appeal from the award of
costs against them, but also dismissed the defendants’ appeal in relation to
the claim for double costs.

[30]        
At paragraph 89 of the Reasons, the Court of Appeal said:

I appreciate there are no
mandatory factors under Rule 37B(6) and that trial judges have discretion to
take into account whatever factors they consider appropriate in a given case. 
However, the ultimate discretion as to double costs must be exercised in a
just, principled, and consistent way.  One of the goals of Rule 37B is to
promote settlement by imposing consequences on parties who have refused to
accept an offer that ought reasonably to have been accepted.  While it may not
invariably be the case, I consider that it would be generally antithetical to
that goal to penalize an unsuccessful plaintiff with double costs for
proceeding to trial in the face of an unreasonable offer.  Virtually all
litigation comes with a degree of risk.  When faced with settlement offers,
plaintiffs must carefully consider their positions.  However, they should not
be cowed into accepting an unreasonable offer out of fear of being penalized
with double costs if they are unable to "beat" that offer.  Put
somewhat differently, plaintiffs should not be penalized for declining an offer
that did not provide a genuine incentive to settle in the circumstances.

[31]        
The Court went on to say that when an offer made by a defendant has been
"reasonably" refused, the fact that the plaintiff’s action is
ultimately dismissed "…is not a consideration with respect to double costs". 
para. 89.

[32]        
In Hartshorne v. Hartshorne, 2011 BCCA 29, the Court of Appeal
upheld an award of double costs made in favour of the respondent wife following
a family law trial that involved claims for spousal and child support, as well
as division of assets.  Prior to trial, the respondent wife had made a
comprehensive and detailed offer to settle, which, had it been accepted, would
have resulted in the appellant husband paying less to the respondent wife than he
was ordered to pay following trial (and despite some success on the husband’s
part on appeal).  In paragraph 25 of their decision, the Court of Appeal noted
that an award of double costs penalizes a litigant for the failure to have
accepted an offer that should have been accepted.  After referring to the
factors for consideration in subrule 9-1(6), the Court said, in paragraph 27:

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 the offer
was open for acceptance, it would have been reasonable for it to have been
accepted

[33]        
After emphasizing that the reasonableness of the decision to decline the
offer must be assessed without reference to the award obtained at trial; the Court
went on to say:

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.

[34]        
The Court of Appeal considered the appellant husband’s submission that
the trial outcome was more favorable to him than acceptance of the offer would
have been.  The Court rejected this submission, although based on its
calculations, the difference was not substantial.  The value of the offer made
by the wife to the husband was $396,000 and the Court of Appeal calculated the
value of the award to the husband at trial was $338,000, at best.

[35]        
The Court concluded that there were other factors that supported the
award of double costs to the respondent wife, namely blameworthy conduct on the
part of the appellant husband in refusing to increase his child support during
a period of years despite an increase in his Guidelines income.

[36]        
In Danicek v. Li, 2011 BCSC 444, Justice Kelleher dealt with an
application by the defendant for double costs. In Danicek, the plaintiff
had first been injured in a fall at a nightclub and was later involved in a
motor vehicle accident.  She alleged that the motor vehicle accident had
exacerbated a headache disorder caused by the earlier fall.  The plaintiff
received a significant award against the defendants in the two actions related
to the fall in the nightclub that were heard at the same time as the motor
vehicle accident trial.

[37]        
Prior to trial, the plaintiff offered to settle her personal injury
claim against the defendants in the motor vehicle accident action for $1.9
million.  The defendants offered to pay $500,000.  Ultimately Justice Kelleher
awarded the plaintiff only $10,595 for damages resulting from the motor vehicle
accident.  Justice Kelleher concluded that it was reasonable for the plaintiff
to decline the defendant’s $500,000 offer because there was a substantial risk
that she would be undercompensated if she had accepted the offer, especially if
the Court had concluded that the injuries suffered in the fall and the injuries
suffered in the motor vehicle accident were indivisible.  He noted also that
even if the motor vehicle accident trial had settled, the other trials (of the
two actions related to the dance floor fall) would still have proceeded.

[38]        
The Court noted the significant discrepancy between the amount offered
and the ultimate award.  He found no evidence that the plaintiff was
financially disadvantaged in comparison to the defendant.

[39]        
Justice Kelleher noted that lack of candour on the part of a party
against whom costs are sought is a relevant consideration, relying on McIsaac
v. Healthy Body Services Inc., 2010 BCSC 1033.  Justice Kelleher had found
that Ms. Danicek was not a reliable reporter of her symptoms.  He noted
there were many examinations for discovery over a period of several years,
which explained some of the discrepancies in her testimony, but:

…on some occasions her answers on
discovery or in cross-examination go beyond error. (para. 37).

[40]        
Taking all of the factors into account, Justice Kelleher declined to
make an award of double costs against the plaintiff.  He found she had suffered
significant injuries (in the two actions arising from the fall in the nightclub
she had been awarded $5.9 million) and she had not acted unreasonably in
rejecting the defendants’ offer.

[41]        
There are other decisions in which a party’s lack of candor, dishonesty,
or exaggeration were considered relevant factors in assessing costs, including McIsaac,
the decision referred to by Justice Kelleher in Danicek; Brown v.
Lower, 2002 BCCA 7; and Lakhani v. Elliott, 2010 BCSC 281.

THE SUBMISSIONS

[42]        
The defendant’s principal submission in this case is that the plaintiff
should pay to the defendant double costs for all steps taken in the proceedings
after the delivery of the defendant’s offer on December 29, 2010 pursuant to
Rule 9-1(5)(b).

[43]        
Defendant’s counsel points to the very large discrepancy between the
amount claimed by the plaintiff (in excess of $3 million) and the amount
awarded following trial; and the dishonesty, lack of candor and exaggeration on
the part of Mr. Minhas displayed not only at trial, but also on
examination for discovery, and in the information he, and on occasion some members
of his family provided to treating and assessing physicians, health care
providers and expert witnesses.

[44]        
Plaintiff’s counsel, on the other hand, submits that an award of double
costs against the plaintiff in this case would be unjust; that such an award
will have a "chilling effect" on other plaintiffs; and that the
prospect of a punitive cost award will unduly deter counsel from agreeing to take
similar cases to trial.

ANALYSIS AND DECISION

[45]        
As the following analysis will demonstrate, I am not persuaded that this
is a case in which the court could justly exercise its discretion pursuant to
Rule 9-1(5)(c) to award the plaintiff costs of the proceedings after December
29, 2010.

[46]        
It is true that the plaintiff succeeded at trial in the sense that an
award of damages was made.  That some award would be made was, however, a
foregone conclusion.  Mr. Sartor admitted that his negligence caused the
accident and that Mr. Minhas had suffered soft tissue injury as a result
of the collision.  It was clear from the outset, therefore, that an award of
damages would be made.

[47]        
The defendant Mr. Sartor succeeded, however, on every other aspect
of the claim advanced by the plaintiff save only that the court found that
there was a causal relationship between the accident injuries and
Mr. Minhas’s decision to have jaw surgery some months later.  Although
finding that the accident injuries aggravated facial pain caused by a
pre-existing condition, the court rejected Mr. Minhas’s claim that his jaw
had been fractured as a result of the accident, or that the surgery he
underwent was to repair a fracture.  The court found, as the defendant
contended, that the jaw surgery was done to realign the jaw in order to correct
a pre-existing TMJ problem.

[48]        
The court concluded the plaintiff failed to prove that he had suffered a
traumatic or hypoxic brain injury; or that the accident had caused a jaw
fracture, hearing loss, impaired ability to smell, vertigo, dental
malocclusion, leg fracture, diabetes, depression, anxiety or alcoholism.  The
court concluded the plaintiff failed to prove that he had been totally or
permanently disabled from employment, or that he would need to live in a supervised
residential facility for persons with acquired brain injury.

[49]        
In summary, the defendant succeeded at trial in relation to every issue
of any significance that was in dispute, save one, and even on that issue, the
defendant succeeded in showing only that the accident injuries were a
contributing factor.

[50]        
For the same reasons, this is a case, in my view, where the court should
not merely deprive the plaintiff of his costs, but should award costs to the
defendant of the steps taken in the proceeding after December 29, 2010.  The
defendant was the "successful party" at trial despite the fact that
the plaintiff was awarded some damages.  The real issue in relation to costs is
whether the defendant should recover double costs after date of delivery of his
offer; or only single costs.

[51]        
Both counsel told the court that they had not found a case in which an
award of double costs has been made in favour of a defendant except in cases in
which the plaintiff’s claim has been dismissed in its entirely.

[52]        
Defendant’s counsel submits, however, and I agree, that subrule
9-1(5)(b) does not expressly limit an award of double costs to actions in which
the plaintiff’s entire claim has been dismissed.  An award of double costs was
considered in both Danicek and in McIsaac despite the plaintiffs
in those cases having obtained an award at trial.

[53]        
In Giles v. Westminster Savings and Credit Union, cited earlier, at
para. 89, the Court of Appeal said:

I am also of the view that when
an offer made by a defendant for the purpose of achieving a pre-trial
settlement is reasonably refused, the mere fact that the action is ultimately
dismissed in its entirety is not a consideration with respect to double costs

[54]        
By necessary inference, that Court acknowledged that an award of double
costs may be made in a case in which the plaintiff’s claim is not dismissed in
its entirety.

WAS THE OFFER TO SETTLE ONE THAT OUGHT REASONABLY TO HAVE BEEN
ACCEPTED?

[55]        
I turn to the first factor identified in subrule 9-1(6) – whether the
offer to settle was one that ought reasonably to have been accepted.

[56]        
Neither Mr. Minhas nor his counsel filed an affidavit deposing to
Mr. Minhas’s reasons for rejecting the defendant’s offer.  Plaintiff’s
counsel did file the affidavit of Abigail Shaw, an employee of plaintiff’s counsel,
but only for the purpose of putting certain exhibits before the court.  Thus
there is no affidavit evidence before the court setting out the factors
Mr. Minhas or his counsel took into account in deciding to decline the
defendant’s offer.

[57]        
Much of the plaintiff’s written and oral submissions on the issue of
costs consisted of re-arguing the plaintiff’s claims.  Some of these
submissions rely on evidence that was disbelieved, testimony the court held was
inadmissible (because of lack of notice to the defendant), and submissions that
were rejected at trial.  Although otherwise not helpful, the submissions do
indicate that Mr. Minhas’s counsel remains convinced of the validity of at
least some of the claims advanced by Mr. Minhas despite the dismissal of
those claims.  His sincerity cannot be doubted.

[58]        
For reasons not adequately explained, plaintiff’s counsel included in
the affidavit materials presented at the costs hearing a report from a
physician – Dr. Armstrong – that had been obtained long after the Reasons
for Judgment were issued (the report is dated February 13, 2013).  In my view,
this report and the opinions expressed in it are irrelevant to any issue I must
decide in relation to costs.

[59]        
Although not discussed in the plaintiff’s submissions about costs, one
factor identified in some of the cases about costs is the contrast between the
quantum of the plaintiff’s claim and the amount offered in settlement.  In this
case, the plaintiff’s claim was a very large one.  At trial plaintiff’s counsel
sought an award in excess of $3 million.  The plaintiff’s settlement offer was
for $1.8 million.  The defendant’s offer was $275,000.

[60]        
This is not a case where a plaintiff has maintained a very large claim
despite having offered to accept a significantly lesser amount by way of
settlement.  In Bailey v. Jang, cited earlier, the plaintiff had
advanced a claim in excess of $1 million but had offered to accept $160,000 in
settlement.  At paragraph 22 of Justice Hinkson’s Reasons, he said:

Based on her offer compared to
the position taken by her counsel at trial, the plaintiff was clearly prepared
to take a considerable gamble to achieve a significant award…the discount the
plaintiff was prepared to accept in order to settle the claim does not support
the conclusion that she had confidence in the likelihood of securing a sizeable
award at trial.  That, in my view, is one of the factors against which the
reasonableness of her refusal to accept the defendants’ offer to settle must be
assessed.

[61]        
In its settlement offer, the defendant did not relate the amount offered
to specific heads of damages, or offer a rationale for the figure offered; and
no specific breakdown or rationale was offered in the defendant’s submissions
about costs.  The defendant’s Mediation Summary did not refer to any proposed
settlement figure.  The Summary did, however, set out the claims advanced by
the plaintiff that were disputed by the defendant, which were all of the claims
except the claim for minor soft tissue injury.

[62]        
$275,000 cannot be considered to be only a "nominal" or "nuisance"
offer.  I am satisfied it was a genuine offer based on the defendant’s
assessment of the likely outcome at trial and the expense the defendant would
incur in going to trial.

[63]        
It is fair to note that the plaintiff, in his counsel’s letter offering
to settle for $1.8 million, did not provide any breakdown or explanation
of how he had arrived at that figure.  In his submissions about costs,
plaintiff’s counsel said that the figure was based on the plaintiff’s position
that as a result of the plaintiff’s brain injury, he had become incapable of
living independently and would need to reside in a supervised residential
setting.

[64]        
I have difficulty accepting that the plaintiff, in particular, but also
his counsel, believed in December 2010 that the court would make an award for
the cost of future care based on the assumption that Mr. Minhas would
leave the home he shared with his mother, wife and children and reside in a
supervised residential facility for persons with acquired brain injury. 
Mr. Minhas had been living independently for more than five years
following the accident.  There was no reasonable prospect that he would be
found to be incapable of managing himself or his affairs and no reasonable
prospect, in my view, that he would voluntarily admit himself to a residential
care facility.

[65]        
The presence or absence of a rationale or explanation for how the amount
offered and rejected had been calculated by the offeror is a factor referred to
in some of the authorities in relation to an assessment of the reasonableness
of rejection of the offer.  In Hartshorne v. Hartshorne, cited earlier,
the Court of Appeal noted that Justice Leask, in the decision appealed from,
had considered as a relevant factor that the offer had "…provided
sufficient information to permit the appellant to understand the content of the
offer".  (para. 28).  The Court of Appeal agreed that this was a
relevant consideration.

[66]        
Based on the testimony of Mr. Minhas and his relatives, he had done
little or no work after the accident happened in 2005, other than some work for
his brother-in-law and a contractor/friend who worked for his brother-in-law. 
A significant part of Mr. Minhas’s claim for damages  was based on the
premise that but for the accident, Mr. Minhas would have earned $29,000
annually in the six years prior to trial and would have earned $40,000 annually
in the year 2011 and following years.  Given Mr. Minhas’s employment
history, he and his counsel ought to have realized that the claim that
Mr. Minhas would have earned $40,000 annually but for the accident, was
unrealistic and inflated.

[67]        
If the court was persuaded that Mr. Minhas’s problems with alcohol
abuse were caused or contributed to by his injuries, it was reasonable to
assume that the awards for cost of future care and non-pecuniary damages would
reflect the negative impact that the alcohol abuse was having on
Mr. Minhas’s relationships with his spouse, mother, brother, children and
friends.  The defendant had alerted the plaintiff and his counsel to the fact
that the defendant would allege that Mr. Minhas had a history of alcohol
abuse pre-dating the accident.  In the defendant’s Mediation Summary, the
defendant referred to the fact that prior to the accident Mr. Minhas had
five 24-hour driving suspensions for drinking and driving.

[68]        
Mr. Minhas and his counsel ought to have foreseen that even if the court
concluded that Mr. Minhas had suffered a mild traumatic brain injury, and
in light of the fact that he would not be able to introduce evidence that he
even attempted to find employment after the accident, an award of $275,000 was
within in the range of damages a court would award.

[69]        
In oral submissions by plaintiff’s counsel about costs, but not in the
plaintiff’s written Submission Regarding Costs, plaintiff’s counsel provided
the court with personal information about his health that seemed to imply that
he may not have provided the plaintiff with competent advice about the
defendant’s settlement proposal.  Plaintiff’s counsel told the court that he
had been dealing with chronic back pain since the 1990s; had had sleeping
problems since 2003; had surgery on his back in 2007 during which two herniated
discs, one of which should not have been removed, had been removed; and had
injured his shoulder as a result of a fall down some stairs sometime prior to
commencement of the trial in January 2011.  During his submissions on costs,
plaintiff’s counsel drew a rough pencil sketch of some steps and offered the
sketch to the court.  He said it was a sketch of the steps where he had fallen.

[70]        
When asked what use the court could make of the information about his
health problems; and whether counsel was essentially submitting that the
plaintiff had not received competent advice about the defendant’s settlement offer,
counsel for Mr. Minhas said that he was not saying that, but was saying
that during the period of the time the defendant’s offer was outstanding, he
(plaintiff’s counsel) was not completely well.

[71]        
I have concluded that there is no use I can make of the personal
information provided by plaintiff’s counsel in oral submissions.  If counsel
believed that he had provided inadequate advice to Mr. Minhas about the
defendant’s settlement offer, he could have provided affidavit evidence to that
effect and arranged for other counsel to represent Mr. Minhas at the costs
hearing.  As noted earlier, there is no affidavit evidence outlining what
consideration the plaintiff (or his counsel) gave to the defendant’s offer.  I
do not even know whether the plaintiff requested or obtained advice from his
counsel before deciding to reject the offer.  What the advice was, if advice
was given, would of course be entitled to solicitor-client privilege.  There is
no admission that in hindsight the decision to decline the offer was a poor
decision or that if plaintiff’s counsel had been completely well he would have
given the plaintiff advice other than that he did give, if he gave any.

[72]        
In the plaintiff’s Application Response and in the plaintiff’s
Submission Regarding Costs, the submitted that Mr. Minhas rejected the
Defendant’s offer and proceeded to trial because three expert doctors had
formed the opinion that Mr. Minhas had suffered a brain injury as a result
of the collision.  From this, I infer that Mr. Minhas and his counsel were
of the view that if Mr. Minhas succeeded in proving that the accident had
caused a traumatic brain injury, he would likely recover an award of damages in
excess of the $275,000 offered by the defendants.  At trial, the plaintiff
advanced a second hypothesis – that Mr. Minhas had suffered (or also
suffered) hypoxic brain injury as a result of a respiratory infection
contracted following the jaw surgery.  Adequate notice of this theory of the
case had not been provided to the defendant and the evidence permitted to be
adduced at trial did not substantiate this claim.

[73]        
As noted in my Reasons for Judgment, the report of one of the three
expert witnesses to whom counsel is referring – Dr. Ancill – was seriously
flawed for reasons not entirely attributable to misinformation provided by
Mr. Minhas and his relatives.  I would have thought the serious
shortcomings in Dr. Ancill’s methods and reports would have been obvious
to Mr. Minhas’s counsel before they were thoroughly canvassed in
cross-examination.  Dr. Ancill’s methods had been the subject of negative
comment in earlier decisions by other judges of this Court.

[74]        
Psychologist Dr. Hearn’s reports contained serious internal
inconsistencies that were obvious upon a reading of his reports.

[75]        
One of the three experts on whose opinions the plaintiff intended to
rely – Dr. Cameron – had provided the opinion that Mr. Minhas did not
suffer hypoxic brain injury following surgery.  There can be no doubt that
plaintiff’s counsel knew that Dr. Cameron’s opinion seriously undermined
the plaintiff’s claim of hypoxic brain injury.  Counsel for Mr. Minhas
told the court that in advance of trial he had consulted a senior personal
injury lawyer for advice about whether, in view of Dr. Cameron’s damaging
opinion, he should refrain from calling Dr. Cameron as a witness.

[76]        
Thus the plaintiff (or his counsel) knew, when the defendant’s offer was
open for acceptance, that two of the plaintiff’s experts would contradict each
other on the issue of hypoxic brain injury.

[77]        
In paragraph 39 of the plaintiff’s written submission about costs,
plaintiff’s counsel has noted that the opinions of Drs. Ancill, Hearn and
Cameron were rejected because the court found that the witnesses had relied on
information provided by the plaintiff and close relatives, and the court found
that all of these witnesses lacked credibility.  There were other reasons, as
the lengthy Reasons for Judgment set out, but essentially this submission by
plaintiff’s counsel is accurate.

[78]        
In paragraph 39, the plaintiff’s submission continued:

Since the issue of assessing
credibility is subjective and is conducted by the Trial Judge, the Plaintiff
was unable to foresee that the reports of Dr. Ancill, Dr. Cameron and
Dr. Hearn … would be rejected by the Trial Judge.

[79]        
With this submission I cannot agree.  In my view, the problems with
credibility – in particular, the problems with the credibility of
Mr. Minhas as a witness – were foreseeable because they are based on
objective evidence.  The problems with Mr. Minhas’s credibility had in fact
been identified and emphasized by defendant’s counsel at the mediation on
December 22, 2010 and are referred to in the Defendant’s Mediation Summary, a
copy of which had been given to plaintiff’s counsel at the December 22, 2010 mediation.

[80]        
In this case, there was no objective medical evidence of brain injury
and there was evidence that Mr. Minhas’s behaviour immediately following
the accident was inconsistent with brain injury – at least with a brain injury
of the severity alleged by the plaintiff.  At paragraphs 162 and 163 of the
Reasons for Judgment I set out the assumptions on which the medical opinions of
brain injury were founded.  In paragraph 164 I set out the conclusion that only
two of the several assumptions were established by reliable evidence presented
at trial and those two were equally consistent with other explanations.

[81]        
Mr. Minhas and his counsel knew – must have known – that in
relation to the issue of brain injury, as well as many of the other claims
advanced by Mr. Minhas, the credibility of Mr. Minhas’s testimony and
the reliability of the information he had provided to the plaintiff’s expert
witnesses, would be key.

[82]        
Mr. Minhas and his counsel knew, at the time the defendant’s offer
was received, that the defendant had plenty of ammunition at his disposal in
relation to Mr. Minhas’s credibility, or lack thereof.  Included in
Ms. Kadey’s affidavit is a copy of the Mediation Summary prepared by
defendant’s counsel.  In paragraph 5 of that Summary, defendant’s counsel
stated that the history of injury provided by Mr. Minhas as well as his
account of what had occurred during and following the accident had "changed
dramatically" over time.  In paragraph 12 of the Mediation Summary,
defendant’s counsel pointed out that Mr. Minhas’s pre-employment history
was "sporadic" and that he had been dismissed from employment several
times in the years immediately prior to the accident; information that
contradicted Mr. Minhas’s portrayal of himself.  Mr. Minhas’s history
of employment earnings (or lack thereof) was also set out in detail in the
defendant’s Mediation Summary, as well as references to his appalling driving
record and his criminal conviction for uttering threats.

[83]        
The defendant’s Mediation Summary specifically noted in paragraph 16
that the brain injury diagnosis was based "…upon incorrect facts and
assumptions arising from the ever changing version of events given by Mr. Minhas".

[84]        
The defendant’s statement in paragraph 16 could not have come as a
surprise to Mr. Minhas and his counsel.  Mr. Minhas and his counsel
knew, in December 2010, that Mr. Minhas had, in the years following the
accident, given numerous conflicting versions of the accident and of his
symptoms following the accident, both to treating and assessing health care
personnel.  They knew, therefore, that at least some of the plaintiff’s medical
witnesses had relied on a version of events that would necessarily have to be
rejected at trial if one of the other versions provided by Mr. Minhas was
accepted.

[85]        
Mr. Minhas must have known that his past conduct, including
criminal convictions, numerous driving offences, and his history of rejected
compensation claims, would raise issues about his credibility.  At paragraph
103 of my Reasons, I set out a summary of the conduct that had occurred prior
to the accident that cast doubt on Mr. Minhas’s credibility.  At
paragraphs 104 to 109, I referred to post-accident conduct also casting doubt
on Mr. Minhas’s credibility.

[86]        
Even if one assumes that Mr. Minhas and his counsel may have
underestimated the tenacity of defendant’s counsel in researching some of the
information about Mr. Minhas’s past that was presented at trial, both
Mr. Minhas and his counsel knew that in addition to the inconsistent
reports given by Mr. Minhas to doctors and other health care providers
post-accident, Mr. Minhas had given inconsistent testimony during the
several installments of his examination for discovery.

[87]        
In summary, in considering whether the offer to settle was one that
ought reasonably to have been accepted, I am satisfied that Mr. Minhas and
his counsel knew that Mr. Minhas’s claim to have suffered a brain injury could
only succeed if Mr. Minhas was found to be a credible historian and
witness; that the defendant intended to robustly challenge Mr. Minhas’s
credibility; and that the court would be provided with objective evidence, as
well as inconsistent testimony on discovery, from which it would be reasonable
to conclude that Mr. Minhas was an unreliable historian and witness.

[88]        
I stated earlier that one of the issues at trial was the question of
contributory negligence raised by the defendant’s allegation that
Mr. Minhas was not wearing his seatbelt when the accident happened.  On
this issue, the defendant had obtained an expert opinion report prepared by an
accident reconstruction engineer opining, among other things, that
Mr. Minhas had probably not been wearing his seatbelt.  The plaintiff and
his counsel knew, when considering the defendant’s offer, that they had no
opinion evidence to counteract the defendant’s expert on the issue of
mitigation.  Mr. Minhas must also have known, in my view, that his
assertion that he was sure that he was wearing his seatbelt because he always
wore his seatbelt when driving would be readily contradicted by his driving record
which included several convictions for failure to wear a seatbelt.

[89]        
Having considered all of the aforementioned factors, I conclude that the
defendant’s offer is one that ought reasonably to have been accepted.

THE RELATIONSHIP BETWEEN THE SETTLEMENT OFFERED AND THE FINAL
JUDGMENT OF THE COURT

[90]        
I turn to the second consideration set out in Rule 9-1(6) – the
relationship between the terms of settlement offered and the final judgment of
the court.

[91]        
The authorities indicate, although not universally, that the
relationship between the amount offered and the amount awarded at trial is not
to be taken into account in relation to the determination of "reasonableness"
in Rule 9-1(6)(a) because that would require the court to use "hindsight";
but is instead to be taken into account as a discrete consideration, pursuant
to Rule 9-1(6)(b).  In this case, the total damages awarded to Mr. Minhas
following trial – $76,653 – amounted to less than one-third of the $275,000
figure the defendant had offered to pay to settle the claim.

THE RELATIVE FINANCIAL
CIRCUMSTANCES OF THE PARTIES

[92]        
I have already referred to the plaintiff’s work history.  He had started
a new job only days before the accident happened.  For some years, and at time
of trial, Mr. Minhas and his wife lived in a house owned by
Mr. Minhas’s mother.  Mr. Minhas’s mother and younger brother also
lived in the home and eventually Mr. Minhas’s two children were added to
the household.  The evidence at trial was that except for a few occasions on
which Mr. Minhas did work for his brother-in-law or a friend –
Mr. Deol – he had not been gainfully employed after the accident.  This
evidence was not entirely convincing and, as with most other aspects of
Mr. Minhas’s testimony, there were inconsistencies.  Mr. Minhas
testified, for example, that he had continued to contribute a significant
amount each month to the household expenses but did not explain the source of
the funds.  Mr. Minhas’s wife was working part time in a grocery store at
time of trial.  Mr. Minhas’s brother testified that he and his mother had
provided Mr. Minhas or his wife with financial assistance from time to
time.

[93]        
Mr. Sartor was only 20 years old when the accident happened.  At
time of trial he was working as a mechanic for a bus company, a job he had
started in 2008.  The vehicle he was driving at the time the accident happened
was a 21-year-old Honda Accord.  Nothing in this information indicates
Mr. Sartor is financially advantaged in comparison to Mr. Minhas.

[94]        
Earlier authorities, including some of the cases cited earlier, held
that the fact that a defendant will be indemnified by an insurer is not a
relevant consideration.  That view has evolved, however.  In Smith v.
Telford, 2010 BCCA 302, at para. 19, Justice Lowry wrote:

While I recognize arguments over
the implications of a defendant’s insurance coverage being considered in
relation to an award of costs may go back and forth, like the judge below I
consider precluding such from consideration renders an assessment of the
parties’ relative financial circumstances, at least in a case of this kind,
very artificial indeed.  Clearly, with ICBC having assumed the defence, the
financial ability to defend was much greater than the financial ability to
prosecute and that is of no small importance to considering whether and to what
extent the financial circumstances of the parties, relative to each other, bear
on an award of costs where, as here, there has been an offer of settlement made
ten days before a trial for the assessment of personal injury damages which was
not accepted until the seventh day of the trial.

[95]        
The circumstances in Smith v. Telford were quite different than
in the case at bar.  However, I consider that I may take into account the fact
that Mr. Sartor has had the benefit of counsel provided by his insurer and
will not, so far as the evidence before me indicates, personally bear the
burden or enjoy the benefit of any costs award I may make.

[96]        
I am not persuaded, however, that in this case the insurer used its
financial strength to take any unfair advantage; or that the plaintiff was
unable, by reason of relative financial disadvantage, to fully prosecute his
claim.  The numerous claims of various kinds advanced by the plaintiff meant
that evidence was required from experts in a number of medical and dental
specialties.  The plaintiff engaged numerous experts which obliged the
defendant to retain his own array of experts.

[97]        
There can be no doubt, in my view, that depriving Mr. Minhas of
costs after December 29, 2010 will have a significant financial impact on him
and that costs to the defendant, if set off against the award of damages and
costs made in Mr. Minhas’s favour will significantly reduce, if not
nullify, the award of damages, resulting in Mr. Minhas receiving little or
no compensation for his legitimate injuries.

[98]        
Neither counsel provided the court with draft bills of costs so to some
extent this is speculation but I consider it to be informed speculation.  I
consider it a reasonable if not inevitable prospect that an award of double
costs to the defendant for all steps taken after December 29, 2010, which
included the 25-day trial with numerous expert witnesses, will result in
Mr. Minhas owing money to the defendant.  Based on the evidence at trial,
it appears that Mr. Minhas has no assets to which the defendant could look
to satisfy the debt and he was not employed at time of trial.  If he does
acquire assets, however, or become regularly employed, the defendant could
execute against those assets, or garnish his wages.  It is probable that
Mr. Minhas’s wife, children and mother will, unfortunately, suffer
collateral damage as a result of any order for costs made against
Mr. Minhas.

[99]        
In Dempsey v. Oh, 2011 BCSC 627, Justice Myers considered a
submission by a plaintiff that a denial of his costs would wipe out the benefit
of the modest award made at trial.  At paragraph 19, Justice Myers stated:

The plaintiff also submitted that
if he is denied his costs, his modest recovery will be eradicated and that if
he is ordered to pay the defendant’s costs he will end up owing it money.  The
plaintiff says that was not the intent of the Rules.  I do not agree.  It is
not the court’s function to ensure that a plaintiff makes a net recovery from
an action when it has ignored a reasonable offer.  That would defeat the
purpose of the Rule and does not accord with common sense.

ANY OTHER FACTOR THE COURT
CONSIDERS APPROPRIATE

[100]     Counsel
for the defendant submitted that if an award of double costs is not warranted
in the circumstances of this case, such an award may never be made.  In this
submission he was referencing the court’s adverse comments in relation to the
conduct of Mr. Minhas and some of his family members as witnesses at
trial.  In particular, counsel referred to paragraphs 110 to 113 of the Reasons
for Judgment in which I stated my conclusion that Mr. Minhas demonstrated
at trial that he was both an unreliable and dishonest witness; that he was not
only careless with the truth, but also told deliberate lies.  In paragraph 104
of the Reasons for Judgment I also set out my conclusion that Mr. Minhas
asked a former supervisor to provide false information to ICBC about the hourly
wage Mr. Minhas had been earning prior to the accident.

CONCLUSION

[101]     Having
considered all of the circumstances, I am of the view that this is a case in
which an award of double costs should be made to the defendant for all steps
taken in the proceeding after the offer of settlement was made.  I consider it
reasonable, however, to take into account that a plaintiff may need a few days
to consider an offer of settlement.  Accordingly, I order that the plaintiff
recover his costs on Scale B and disbursements up to and including January 2, 2011. 
The defendant shall have double costs, based on Scale B, and disbursements,
from and

after January 3, 2011.  The defendant shall have costs of
the costs hearing and preparation for same on Scale B, but not as double costs.

"BAKER J."