IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140704

Docket: M122017

Registry:
Vancouver

Between:

Ivan Sergeevich
Pichugin

Plaintiff

And

Gabriela Ileana
Stoian

Defendant

Before:
The Honourable Mr. Justice Skolrood

Oral Ruling on Costs

[1]            
THE COURT: On May 28, 2014, I granted judgment in favour of the
plaintiff, Ivan Pichugin, for damages sustained in a motor vehicle accident
that occurred on July 24, 2010. The trial took place over five days from April
22 to 25 and 28, 2014.

[2]            
I awarded Mr. Pichugin $54,704 in total, comprised of $48,000 in non-pecuniary
damages, $2,949 for past wage loss and $3,755 in special damages. I declined to
award damages for loss of future earning capacity or for costs of future care.

[3]            
At the conclusion of my reasons, I stated that the plaintiff was
entitled to his costs at Scale B unless there were circumstances of which I was
unaware. The parties have now come before me to address the issue of costs.

[4]            
The plaintiff seeks an order for double costs of the trial based on an
offer to settle made to the defendant shortly before the trial commenced. For
her part, the defendant says that the action was subject to Rule 15-1, the fast
track rule, and that accordingly Rule 15-1(15) applies to limit the costs
available.

[5]            
The following chronology taken from the agreed statement of facts filed
by the parties on this application is relevant. The notice of civil claim was
filed on April 5, 2012. A notice of fast track action was filed by the
plaintiff on July 6, 2012. The notice of trial with a Rule 15-1 endorsement was
filed by the plaintiff on February 20, 2013, setting the matter for a four-day
trial commencing April 22, 2014.

[6]            
On March 20, 2014, the plaintiff provided an offer to settle in the
amount of $85,000 plus interest and party and party costs at Scale B. The offer
to settle was open for acceptance until 4:00 p.m. on April 3, 2014. On March
25, 2014, the plaintiff filed a requisition adding two additional days to the
trial time.

[7]            
On April 16, 2014, the plaintiff provided a new offer to settle pursuant
to Rule 9-1 in the amount of $55,000 plus interest and costs with the offer
open for acceptance until 10:00 a.m. on April 22, the first day of trial. Later
in the day on April 16, 2014, the defendant provided an offer to settle in the
amount of $29,600 plus costs and disbursements, which was open for acceptance
until 3:00 p.m. on April 17, 2014.

[8]            
At 5:22 p.m. on April 16, 2014 the plaintiff provided a new offer to
settle by e-mail in the amount of $45,000 plus costs and disbursements. In the
morning of April 17, 2014, the defendant asked the plaintiff for a bill of
costs, which was received late in the day on April 17. April 17 was the last
working day before the trial commenced as the Easter long weekend went from
Friday, April 18, to Monday April 21, 2014.

[9]            
Thus, the state of play in terms of offers to settle as of the opening
of the trial, was an offer to settle from the defendant in the amount of
$29,600 plus costs and disbursements made April 16, 2014, and an offer to
settle by the plaintiff for $45,000 plus costs and disbursements made late in
the day on April 16, 2014, which technically was April 17, 2014. The
plaintiff’s offer to settle was withdrawn on the morning of April 28, 2014, the
final day of trial.

[10]        
While the hearing of this trial took five days, rather than the three
days contemplated under Rule 15-1, there is no issue that the action was, in
fact, conducted as a fast track matter. As noted, the plaintiff issued a Rule
15-1 notice on July 6, 2013. As such Rule 14-1(1)(f) applies. That subrule
states that where a notice of fast track action has been filed, costs will be
governed by Rule 15-1(15) to (17). Those subrules in turn set the costs payable
in fast track actions as follows:

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

b)    if the time
spent on the hearing of the trial is two days or less but more than one day, costs
are set at $9,500; and

c)     if the
time spent on the hearing of the trial is more than two days, costs are set at
$11,000.

[11]        
Rule 15-1(15) does give the court a discretion to depart from these
amounts, and pursuant to Rule 15-1(16), the existence of an offer to settle is
one factor that the court may consider in exercising that discretion.

[12]        
The defendant acknowledges that because the trial took more than three
days, the plaintiff can recover costs over the $11,000 set out in Rule 15-1(15)(c).
Counsel points to a number of authorities in which the court has awarded costs
for additional days of trial in fast track matters at $1,500 per day. See, for
example, Peacock v. Battel, 2013 BCSC 1902 at para. 21. The defendant
says therefore that the proper award of costs in this case is $14,000, given
that the trial occupied five days.

[13]        
The question then becomes whether the plaintiff should recover double
costs for all or a portion of the trial given the offer to settle. Offers to
settle are governed by Rule 9-1. Rule 9-1(5) sets out the options available to
the court where an offer to settle has been made and Rule 9-1(6) identifies the
factors that the court will consider when making a costs award. Those factors
include:

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 any later date;

b)    the relationship
between the terms of the settlement offered and the final judgment of the
court;

c)     the
relative financial circumstances of the parties; and

d)    any other
factors the court considers appropriate.

[14]        
These factors must also be considered in light of the fact that an award
of double costs is a punitive measure to be awarded in circumstances in which a
litigant fails to accept an offer to settle which should have been accepted,
keeping in mind the objective of the costs rules to encourage early settlement
of disputes. See Hartshorne v. Hartshorne, 2011 BCCA 29, at paras. 25 –
27.

[15]        
Turning to the facts of this case, rather than analysing each of the
factors set out in Rule 9-1(6) separately, I think it is helpful to consider
those facts that weigh in favour of and those that weigh against an award of
double costs. Weighing in favour of the award is the relationship of the
plaintiff’s final offer to the amount awarded whereby the plaintiff beat his
offer by about $9,000 or 17 percent. The courts quite rightly have warned
against an overreliance on hindsight when considering the reasonableness of the
offer at the time it was made. Nonetheless it is a relevant factor under Rule
15-1(6)(b), and here that factor favours the plaintiff.

[16]        
The plaintiff notes that in their submissions on the proper quantum of
non-pecuniary damages, both the plaintiff and the defendant relied on the same
case law. This, says the plaintiff, should have enabled the defendant to gauge
the reasonableness of the plaintiff’s offer and to conclude that it fell within
a reasonable range. This point is bolstered by the fact that at the time of the
plaintiff’s final offer, all of the pre-trial fact finding was completed. Thus
the parties were in a good position to assess the relative strengths and
weaknesses of their cases.

[17]        
The principal factor weighing against an award of double costs is the
lateness of the plaintiff’s offer. While it is true that it was made at a time
when both parties knew their cases well, I agree with the defendant that the
timing of the offer left little time to properly assess it. This is
particularly so given that the plaintiff did not provide his draft bill of
costs, which was relevant to the defendant’s assessment of her overall
exposure, until after business hours on April 17, 2014. In this regard the
timing of the plaintiff’s offer was inconsistent with the objective of
encouraging early settlements.

[18]        
Taking all of the circumstances into account, it is my view that the
defendant should be penalized for not accepting the plaintiff’s final offer,
but not to the extent of awarding double costs for every day of trial. The
offer was late in coming, and further, one of the days of trial was less than a
half day and at least one other day was abbreviated. In the circumstances, to
award double costs for every day of trial would be unreasonable.

[19]        
That said, I agree with the plaintiff that the offer was one that the
defendant could properly have determined was within a reasonable range. By the
time the parties got to trial, the principal areas of dispute between them were
the plaintiff’s claim for loss of future earning capacity and the cause and the
impact of the plaintiff’s tinnitus. It should have been apparent to the
defendant that the plaintiff’s offer of $45,000 essentially removed any amount
for the lost earning capacity claim.

[20]        
In terms of the tinnitus, again the parties relied on the same case law,
which was two cases in which the court considered a claim for non-pecuniary
damages where the plaintiffs had tinnitus. While acknowledging that every case
turns on its own facts, those common cases should have allowed the parties to
narrow the range of likely damages to the point where an agreement was possible.
The $45,000 offered by the plaintiff was certainly within the acceptable and
likely range.

[21]        
In the circumstances, I think that a reasonable approach is to award the
plaintiff double costs for three days of trial. Using the $1,500 per day figure
for fast track matters set out in Peacock and other cases results in an
award of costs of $14,000, calculated in accordance with Rule 15-1(15), plus an
additional $4,500 for a total of $18,500.

[22]        
The parties will each bear their own costs of this application.

[23]        
Before closing, I want to thank counsel, Mr. Chandra and Mr. Marcoux,
for their courtesy and cooperation throughout this matter. The fact that they
came to this application with an agreed statement of facts and a joint book of
authorities reflects the manner in which this entire matter has been conducted
and they are to be commended for their approach.

“Skolrood
J.”