IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140417

Docket: M2131

Registry:
Powell River

Between:

Rudolphus Johannes
Franciscus Vander Maeden

Plaintiff

And:

Michael Francis
Condon and Donald Scott Hart

Defendants

– and –

Docket: M2380

Registry: Powell River

Between:

Rudolphus
Johannes Franciscus Vander Maeden
also known as Rudy Vander Maeden

Plaintiff

And:

Catherine
Anne Mander also known as Anne Mander

Defendant

Before:
The Honourable Mr. Justice G.R.J. Gaul
(By video conference)

Reasons for Judgment
Re:  Costs

[1]            
 

[1]            
The plaintiff, Rudolphus (Rudy) Vander Maeden launched two lawsuits as a
result of his involvement in two motor vehicle accidents. As he was entitled to
do, Mr. Vander Maeden chose to have his actions tried by a judge and
jury. With the consent of all parties, both actions were tried at the same time.

[2]            
Mr. Vander Maeden was successful in obtaining an award of
damages in one of his actions but not the other.

[3]            
Prior to trial, the defendants made a formal offer to settle that encompassed
both of Mr. Vander Maeden’s actions. The offer was greater than the global
award of damages at trial and the issue now before the court relates to costs.

Background Facts

[4]            
On 20 March 2009, Mr. Vander Maeden was a passenger in a pick-up
truck being driven by his friend, Michael Condon. As Mr. Condon was turning
his vehicle to cross a highway, it was struck broadside by an oncoming vehicle
driven by Donald Hart. Mr. Vander Maeden sustained injuries in the
collision, and on 14 October 2009 he launched a lawsuit against Mr. Condon
and Mr. Hart (the “First Action”).

[5]            
Two years later, on 5 May 2011, Mr. Vander Maeden had another accident
involving a motor vehicle. On that occasion, he walked behind a vehicle that Ms. Catherine Mander
was slowly backing out of her driveway. In order to avoid Ms. Mander’s vehicle,
Mr. Vander Maeden twisted his body and quickly moved out of the way. Although
his cane and Ms. Mander’s car came into contact, Mr. Vander Maeden
did not fall. On 3 November 2011, Mr. Vander Maeden initiated his
lawsuit against Ms. Mander (the “Second Action”).

[6]            
Mr. Vander Maeden was represented by the same legal counsel for
both of his actions. The defendants in both actions also were represented by
the same legal counsel.

[7]            
On 27 January 2012, all parties consented to both actions being
tried at the same time, starting on 10 April 2012.

[8]            
On 13 March 2012, counsel for Mr. Vander Maeden sent
defendants’ counsel an offer to settle both actions “on a combined basis in
exchange for payment of damages in the amount of $200,000 plus costs and
disbursements”.

[9]            
On 15 March 2012, the defendants’ counsel sent
Mr. Vander Maeden’s counsel an offer to settle both actions for a
total of $125,000. The offer was made “after taking into account Part 7
benefits paid or payable” pursuant to the relevant statutory provisions and any
“advances paid to date”. The settlement amount also incorporated court order
interest. On the issue of costs, the offer provided that the plaintiff would
receive his costs in each action on Scale B up to 15 March 2012, with
the defendants having their Scale B costs thereafter.

[10]        
On 5 April 2012, counsel for the defendants sent counsel for Mr. Vander
Maeden an email further explaining the defendants’ offer to settle and clarifying
why the defendants could not accept Mr. Vander Maeden’s offer to settle. Counsel
for the defendants explained that the $125,000 being offered represented
approximately $100,000 for non-pecuniary damages, $20,000 for future care costs
and $5,000 for special damages. At the conclusion of the email, counsel for the
defendants reiterated that if the award of damages at trial was less than the $125,000
offered, they would pursue orders denying Mr. Vander Maeden his costs of
the trial and ordering him to pay the defendants’ trial costs.

[11]        
Mr. Vander Maeden rejected the defendants’ offer to settle and the
trial of his two actions proceeded from 12 to 18 April 2012.

[12]        
Mr. Vander Maeden’s counsel made a number of inflammatory and
prejudicial statements during his closing submissions, and as a result I made an
order discharging the jury and directing that the proceeding continue as a
judge alone trial before me (see: 2013 BCSC 1810).

[13]        
In reasons for judgment indexed at 2013 BCSC 1389, I awarded
Mr. Vander Maeden $110,000 in non-pecuniary damages, $10,000 for future
care costs and $1,600 in special damages in the First Action. I was not
satisfied he had proved his claims for loss of past income, loss of future
capacity to earn income or his in-trust claim, and consequently those facets of
his action were denied. The total award of damages in the First Action was
$121,600. In the Second Action, I found Ms. Mander 50% responsible for the
accident of 5 May 2011, but because I also found that Mr. Vander
Maeden had suffered no consequential injuries or losses, I made no award of
damages.

Position of the Plaintiff

[14]        
Mr. Vander Maeden asserts he is entitled to his costs relating to
both actions. He contends the litigation was made particularly complex by the
number and magnitude of his pre-existing conditions and that it was not
possible for him to assess the quantum of his damages with “a complete degree
of accuracy”. Consequently, he argues it was not unreasonable for him to reject
the defendants’ offer to settle and proceed to have the court determine and assess
his damages.

Position of the Defendants

[15]        
The defendants submit that the offer to settle was a reasonable one that
Mr. Vander Maeden ought to have accepted. Moreover and in any event,
Ms. Mander asserts that she was the successful party in the Second Action
and therefore she should be awarded her costs.

[16]        
In the alternative, the defendants say they should be granted their
costs thrown away as a result of the jury’s involvement in the trial and its subsequent
discharge.

Discussion

Costs in the First Action – The Defendants’ Offer to Settle

[17]        
Rule 9-1 of the Supreme Court Civil Rules governs the issue
of costs where an offer to settle has been made. It is well established in the
jurisprudence that Rule 9-1 and its predecessors were designed to
encourage settlement by, among other things, rewarding a party who presents a
reasonable settlement and penalizing a party who declines to accept an offer to
settle that was better than the result obtained at trial (see: Bailey v.
Jang, 2008 BCSC 1372; Hunter v. Anderson, 2010 BCSC 1591; Gonzales
v. Voskakis, 2013 BCSC 675).

[18]        
More recently in Brewster v. Li, 2014 BCSC 463, Voith J.
explained that the object of Rule 9-1 is

[15]      …to promote reasonable
settlements and to attach some consequence to the failure of a party to accept
a reasonable settlement

[19]        
Rule 9-1(4) of the Supreme Court Civil Rules provides that a
court may consider an offer to settle when assessing the issue of costs. This
assessment entails the careful exercise of a judicial discretion that is very broad
but not unfettered (see: Paskall v. Scheithauer, 2014 BCCA 26, para. 83).

[20]        
Where an offer to settle has been made, the court may, pursuant to Rule 9‑1(5):

(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.

[21]        
Rule 9-1(6) sets out the following factors the court needs to
consider when assessing the impact of an offer to settle on the question of
costs:

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.

[22]        
The defendants argue that the most relevant factors to the case at bar are
(a) and (b). Mr. Vander Maeden agrees; however, as his
counsel referred to the other factors as well. I will address each one.

Should the
offer to settle have been accepted? (Rule 9-1(6)(a))

[23]        
In his written submissions, counsel for Mr. Vander Maeden
argued:

If the court’s award is
determined to be ‘reasonable’, then the Plaintiff achieved a result that was within
2.72% of being reasonable, and arguably achieved a reasonable result. The
result achieved by the Plaintiff was certainly within a ‘range of
reasonableness’ … the Plaintiff was not unreasonable in proceeding to court to
obtain a reasonable result, in the context of a large award for general damages
that is not an exercise of calculation or exact science…the range of
reasonableness could easily have included a result that was 2.72% higher than
that awarded by the court.

[24]        
In my opinion, the submission does not address the crucial question of
whether, in all of the circumstances, the offer was one that reasonably should
have been accepted. In Hartshorne v. Hartshorne, 2011 BCCA 29,
the court explained the proper approach to this question:

[27]      … 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 that the offer was open
for acceptance, it would have been reasonable for it to have been accepted: Bailey
v. Jang, 2008 BCSC 1372, 90 B.C.L.R. (4th) 125 at para. 24; A.E. v.
D.W.J. at para. 55. As was said in A.E. v. D.W.J., “The
reasonableness of the plaintiff’s decision not to accept the offer to settle
must be assessed without reference to the court’s decision” (para. 55).
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.

[25]        
Mr. Vander Maeden had approximately one month before the scheduled
start of the trial to consider the defendants’ offer. In the circumstances of
this case, I find that was ample time for him to consult with his legal counsel
and consider his options.

[26]        
In my view the defendants’ offer to settle had a clear rationale and an
appropriate relationship to the claims being made by Mr. Vander Maeden.
That is, it was not a “nuisance offer”. It provided a substantial amount for Mr. Vander
Maeden’s pain and suffering and other non-pecuniary damages. It also recognized
and compensated Mr. Vander Maeden for the future care costs he could
reasonably anticipate. Finally, the defendants’ offer reimbursed
Mr. Vander Maeden for the out‑of‑pocket special damages he had
incurred.

[27]        
The defendants’ offer could also be readily evaluated. Mr. Vander Maeden
knew he had serious and significant pre-existing medical conditions that were
wholly unrelated to either of the accidents. He also knew that he was unemployed
at the time of both accidents and that his employment prospects in the future
were likely limited given his disability. All of these factors were major impediments
to his claims for loss of past and future income. He also knew, or should have
known, that his need for future care was, to a great degree, one that existed
independently from the accidents.

[28]        
A comprehensive pre-trial consideration of the evidence Mr. Vander Maeden
intended to lead at trial combined with an objective assessment of the relative
strengths and weaknesses of his claims should have led him to conclude that the
defendants’ offer was one that ought to reasonably be accepted.

[29]        
In my view, this factor favours the defendants.

The
relationship between the offer and the award (Rule 9-1(6)(b))

[30]        
There is a very close relationship between the terms of the offer to
settle and the final judgment. While the monetary difference was a small amount
(i.e., $3,600), it is important to note that the offer specifically
acknowledged and addressed the three heads of damages of Mr. Vander
Maeden’s claims for which he received awards (i.e., non-pecuniary damages, cost
of future care and special damages). The offer did not purport to compensate
Mr. Vander Maeden for any of the other heads of damages that he unsuccessfully
advanced at trial.

[31]        
In my view, this factor weighs in favour of the defendants.

The
relative financial circumstances of the parties (Rule 9-1(6)(c))

[32]        
Mr. Vander Maeden is a 65-year-old widower who is legally blind. Although
I have no additional evidence touching upon his financial circumstances, I know
from the evidence at trial that his principal source of income is a modest monthly
disability pension.

[33]        
In his submissions, counsel for Mr. Vander Maeden stated that
Mr. Vander Maeden’s litigation costs commenced seven months after the first
accident, and that Mr. Vander Maeden “has carried significant legal
expenses for a significant period of time”. The amount of those expenses was
undisclosed. Counsel for Mr. Vander Maeden also indicated that the
defendants’ costs are approximately $42,000. How that figure was arrived at and
whether it represents all of the defence costs or just those after the offer to
settle was made is unknown to me.

[34]        
I have little to no evidence regarding the financial circumstances of
the defendants and that is probably because they were represented by their
insurer, the Insurance Corporation of British Columbia (“ICBC”). The fact that
the defendants had insurance coverage and were represented by counsel retained
by ICBC is a factor that can be considered in assessing the relative financial
circumstances of the parties (see: Smith v. Telford, 2010 BCCA 302). However,
this factor will generally only be of consequence when the defendant’s
insurance coverage creates an unfair advantage leading to a more protracted
proceeding and unnecessary costs for the plaintiff (see: Hunter, para. 22).

[35]        
There is no suggestion in the present case that ICBC used its
significant corporate resources to create an unfair advantage for the
defendants or to unnecessarily prolong the proceedings. Consequently, this
factor does not favour either party.

Any other
relevant factor (Rule 9-1(6)(d))

[36]        
Beyond those I have already addressed, I know of no other factors, nor
have counsel cited any, that are relevant to the issue of costs in this case.

Costs in the Second Action

[37]        
Rule 14-1(9) of the Supreme Court Civil Rules clearly establishes
that the “costs of a proceeding must be awarded to the successful party unless
the court otherwise orders”.

[38]        
Counsel for Mr. Vander Maeden argues that Mr. Vander Maeden “sustained
serious and complicated injuries as a result of the accidents and deserves
compensation”. In my view that submission is only partially correct. While Mr. Vander
Maeden did suffer significant injuries in the accident on 20 March 2009,
the same cannot be said of the accident on 5 May 2011. At trial, Mr. Vander Maeden
candidly acknowledged that he did not think his encounter with Ms. Mander’s
vehicle caused him any injuries. He also agreed that within a day or so he was
feeling “perfectly well”. Although I found Ms. Mander to be 50%
responsible for the 5 May 2011 incident with Mr. Vander Maeden, I
also concluded that he suffered no compensable damages. In my opinion, Ms. Mander
was the successful party in the Second Action.

[39]        
Mr. Vander Maeden’s two actions were not consolidated or joined. Instead
they were set down for hearing at the same time. In my view, counsel for
Ms. Mander is correct when he submits that Ms. Mander is entitled to any
of her costs that are directly associated with her defence, including the half
day of trial time that the Second Action consumed.

Decision

[40]        
Mr. Vander Maeden suffered major injuries on account of the motor
vehicle accident of 20 March 2009. He was successful in the First Action,
to the extent that he obtained monetary awards for non-pecuniary damages,
future care costs and special damages. His claims for loss of past income, and loss
of future capacity to earn income, and his in-trust claim, were denied.

[41]        
Mr. Vander Maeden suffered no compensable damages because of the
accident on 5 May 2011.

[42]        
In my opinion, a rigorous and objective examination of the evidence Mr. Vander
Maeden had marshalled in advance of the trial should have led him to conclude
that certain of his claims were tenuous and of questionable merit and would
likely result in no award of damages at trial. More importantly for the issue
of costs, that examination should have led Mr. Vander Maeden to conclude
that the defendants’ offer to settle was one he ought reasonably to have
accepted. There should, therefore, be cost consequences for his decision to
reject the defendants’ offer to settle.

[43]        
I accept that Mr. Vander Maeden has incurred significant costs
prosecuting his two actions. I also accept that the defendants’ costs are likely
to be sizeable as well.

[44]        
In my view, the question of costs in the Second Action is a relatively
simple one. Mr. Vander Maeden was not the successful party in that action and
consequently he is not entitled to his costs. Ms. Mander was the
successful party and therefore she is entitled to her costs.

[45]        
The more challenging issue relates to the First Action and the penalty
or consequence the court should impose on Mr. Vander Maeden for his rejection
of the defendants’ reasonable offer to settle. The assessment of damages in a
personal injury lawsuit is not a precise exercise aimed at reaching
mathematical certainty (see: Wepryk v. Juraschka, 2013 BCSC 804). The
award of damages Mr. Vander Maeden received at trial was very close to the
defendants’ offer to settle, and the order sought by the defendants will have a
significant financial impact on Mr. Vander Maeden.

[46]        
In resolving this issue, I have found the following the comments of Curtis J.
in Tompkins v. Bruce, 2012 BCSC 833 to be of assistance:

[30]      The purpose of cost
consequences of reasonable offers is to encourage settlement. On the other
hand, onerous cost penalties should not discourage the seriously injured from a
proper hearing and a chance to obtain a higher award, nor should they seriously
subtract from what the court has found is appropriate compensation for the
injury.

[47]        
In my opinion, denying Mr. Vander Maeden his costs in the First
Action after the date of the offer to settle gives effect to the principles
underlying Rule 9-1. It will have a financial impact on Mr. Vander
Maeden, however it is, in my view, a justifiable consequence for his having
rejected a reasonable offer to settle. On the other hand, ordering him additionally
to pay the defendants’ costs after the settlement offer was made would be unduly
punitive and severely detract from the appropriate compensation I found he was
entitled to in the First Action.

[48]        
Although the defendants did not obtain everything they sought on this
application, I find they have been the successful parties on the issue of
costs. Consequently, I see no reason why they should not get their costs of
this application.

Order

[49]        
For all of these reasons, I make the following order:

a)    The plaintiff is
entitled to his costs and disbursements in the First Action, up to and
including 15 March 2012.

b)    The plaintiff is
deprived of his cost and disbursements in the First Action after 15 March
2012.

c)     The
defendants in the First Action will bear their own costs of the trial.

d)    The defendants
in the First Action are entitled to their costs of the present application for
costs.

e)   
The defendant in the Second Action is entitled to her costs, including
one half-day of trial costs. Additionally, she is entitled to her costs of the present
application for costs, so long as they do not duplicate the costs awarded to
the defendants in the First Action.

”G.R.J. Gaul J.”