IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150114

Docket: M116342

Registry:
Vancouver

Between:

Soukphavong
Saopaseuth

Plaintiff

And

Viengsamay
Phavongkham

Defendant

Before:
The Honourable Mr. Justice Bernard

Reasons for Judgment

A.       Overview

[1]            
On May 21, 2014, reasons for judgment were issued in Saopaseuth v.
Phavongkham, 2014 BCSC 887; thereafter, the parties were unable to reach
agreement regarding costs. By written submissions, the parties have raised the
following questions:

1.       Should
costs be assessed pursuant to Rule 15-1(15) of the Supreme Court Civil Rules,
B.C. Reg. 168/2009?

2.       Should
the plaintiff be awarded special costs pursuant to Rule 14-1(1)(b)(i)?

3.       Is
the plaintiff entitled to an award of double costs from February 20, 2014, the
date a formal offer to settle was delivered to the defendant?

[2]            
For the reasons which follow, the plaintiff’s costs claim is limited to
“fast track” costs calculated pursuant to Rule 15-1(15) and, as the trial
lasted seven days, the total costs award is $17,000.

B.       Background

[3]            
On February 15, 2011, the plaintiff, Soukphavong Saopaseuth, was injured
in a motor vehicle accident. The plaintiff filed a notice of civil claim on
December 2, 2011. The claim did not quantify damages. On February 22, 2012, the
defendant filed a response to civil claim, a notice of fast track action in
Form 61, and a notice to produce. Each of these documents bore the words
“Subject to Rule 15-1.”

[4]            
In June 2012, the parties reserved seven days for a trial to commence on
March 14, 2014. On August 1, 2012, an examination for discovery of the
plaintiff was conducted. It began at 10:10 a.m. and concluded at 12:50 p.m., with
two breaks. A trial management conference was held on February 13, 2014 in
front of Master Baker. The Master’s notes did not indicate that the parties
were proceeding with a fast track action.

[5]            
On February 20, 2014, the plaintiff made a formal offer to settle the claim
for $44,000 plus taxable costs and disbursements. On February 24, 2014, the
defendant made a formal offer to settle the claim for $30,000 with costs to be
paid to the plaintiff in accordance with Rule 15-1(15) (i.e., fast track costs).

[6]            
Neither of these offers was accepted and the matter proceeded to trial
on March 14, 2014. At trial, the plaintiff sought:

(a)      $50,000 for
non-pecuniary losses;

(b)      $5,557 for past wage
loss;

(c)      $45,656 for loss of
future earning capacity;

(d)      $17,400 for the cost
of future care; and,

(e)      $1,983 for special
losses.

[7]            
The trial consumed the seven days allotted and the plaintiff was
ultimately awarded: $30,000 for non-pecuniary losses; $5,557 for past wage loss;
$7,380 for the cost of future care; and $1,983 for special losses, for a global
award of $44,920.

[8]            
The parties agree that the plaintiff did not file any documents with the
endorsement “Subject to Rule 15-1”. The parties further agree that the
defendant neglected to endorse many documents with the phrase “Subject to Rule
15-1”; indeed, apart from the response to civil claim, notice of fast track
action, and notice to produce, the only other “document” submitted to the court
by the defendant with the “Subject to Rule 15-1” endorsement was counsel’s
written closing submissions.

[9]            
At no time during the proceedings did either party apply to the court
for an order that the action was, or was not, a fast track action.

C.       Relevant Supreme Court Civil Rules

Rule 9-1 – Offers to Settle

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

(5)        In a
proceeding in which an offer to settle has been made, the court may do one or
more of the following:

(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;

(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.

Rule 14-1 – Costs

(1)        If
costs are payable to a party under these Supreme Court Civil Rules or by order,
those costs must be assessed as party and party costs in accordance with
Appendix B unless any of the following circumstances exist:

(a)        the
parties consent to the amount of costs and file a certificate of costs setting
out that amount;

(b)        the
court orders that

(i)         the
costs of the proceeding be assessed as special costs, or

(ii)        the
costs of an application, a step or any other matter in the proceeding be
assessed as special costs in which event, subject to subrule (10), costs in
relation to all other applications, steps and matters in the proceeding must be
determined and assessed under this rule in accordance with this subrule;

(c)        the
court awards lump sum costs for the proceeding and fixes those costs under
subrule (15) in an amount the court considers appropriate;

(d)        the
court awards lump sum costs in relation to an application, a step or any other
matter in the proceeding and fixes those costs under subrule (15), in which
event, subject to subrule (10), costs in relation to all other applications,
steps and matters in the proceeding must be determined and assessed under this
rule in accordance with this subrule;

(e)        a
notice of fast track action in Form 61 has been filed in relation to the action
under Rule 15-1, in which event Rule 15-1 (15) to (17) applies;

(f)         subject
to subrule (10) of this rule [where sum recovered is within small claims
jurisdiction],

(i)         the
only relief granted in the action is one or more of money, real property, a
builder’s lien and personal property and the plaintiff recovers a judgment in
which the total value of the relief granted is $100,000 or less, exclusive of
interest and costs, or

(ii)        the
trial of the action was completed within 3 days or less,

in which event, Rule 15-1 (15) to
(17) applies to the action unless the court orders otherwise.

Rule 15-1 – Fast Track Litigation

(1)        Subject
to subrule (4) and unless the court otherwise orders, this rule applies to an
action if

(a)        the
only claims in the action are for one or more of money, real property, a
builder’s lien and personal property and the total of the following amounts is
$100,000 or less, exclusive of interest and costs:

(i)         the
amount of any money claimed in the action by the plaintiff for pecuniary loss;

(ii)        the
amount of any money to be claimed in the action by the plaintiff for
non-pecuniary loss;

(iii)       the
fair market value, as at the date the action is commenced, of

(A)       all
real property and all interests in real property, and

(B)       all
personal property and all interests in personal property

claimed in the action by the plaintiff,

(b)        the trial of the action
can be completed within 3 days,

(c)        the parties to the
action consent, or

(d)        the
court, on its own motion or on the application of any party, so orders.

(2)        If this rule applies to an action,

(a)        any party may file a
notice of fast track action in Form 61,

(a.1)     the
filing party must serve a copy of the filed notice of fast track action on each
of the other parties of record, and

(b)        the
words "Subject to Rule 15-1" must be added to the style of proceeding,
immediately below the listed parties, for all documents filed after the notice
of fast track action is filed under paragraph (a) or the court order is made
under subrule (1) (d), as the case may be.

(11)      Unless
the court otherwise orders, in a fast track action the examinations for
discovery of a party of record, including any person referred to in Rule 7-2
(1) (b) who is examined in relation to that party of record, by all parties of
record who are adverse in interest must not, in total, exceed in duration

(a)        2 hours, or

(b)        any
greater period to which the person to be examined consents.

(13)      If a
party to a fast track action applies for a trial date within 4 months after the
date on which this rule becomes applicable to the action, the registrar must
set a date for the trial that is not later than 4 months after the application
for the trial date.

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

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

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

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

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

D.       Plaintiff’s Position

[10]        
The plaintiff argues that costs should follow the event and should be
assessed as special costs pursuant to Rule 14-1(1)(b)(i). Alternatively, the plaintiff
argues that costs be assessed as party and party costs in accordance with
Appendix B up to the date of the plaintiff’s formal offer, and as double costs
thereafter, pursuant to Rule 9-1(5)(b).

[11]        
In relation to the claim for special costs, the plaintiff has not
clearly articulated the alleged conduct warranting an order of special costs;
however, it is alleged that the defendant was responsible for increasing the
costs of the proceedings by:

(a)      setting a trial date
two years in advance;

(b)      extending
the time and cost of the examination for discovery of the plaintiff;

(c)      indulging
in lengthy and repetitive cross-examinations of the plaintiff, the plaintiff’s
general physician, and the plaintiff’s expert;

(d)      requiring a seven day
trial, rather than a three day trial; and

(e)      arguing
the issue of “fringe medicine” rather than focusing on the actual terms of the
diagnosis provided by the plaintiff’s expert.

[12]        
The plaintiff also suggests that ICBC manipulated its financial
advantage over the plaintiff.

[13]        
The plaintiff contends that Rule 15-1 did not apply to make this a fast
track action for the following reasons:

(a)      the
notice of civil claim did not seek damages for $100,000 or less (as it did not
quantify damages);

(b)      the plaintiff never
endorsed any documents with “Subject to Rule 15-1”;

(c)      the plaintiff never
consented to a fast track action;

(d)      the
defendant failed to include the words “Subject to Rule 15-1” on many filed
documents in violation of Rule 15-1(2)(b), thus barring the defendant from seeking
relief under Rule 15-1;

(e)      the
trial was set at a date more than four months after the application for the
trial date in violation of Rule 15-1(13);

(f)       the trial was set for
seven days;

(g)      the
examination for discovery of the plaintiff was not limited to two hours, in
violation of Rule 15-1(11); and,

(h)      the absence of a fast
track court order.

[14]        
The plaintiff disputes that Rule 14-1(1)(f)(i) applies to the claim.
Rule 14-1(1)(f)(i) provides that the lump sum cost limits set out in Rule
15-1(15) apply where the only relief granted is money and the plaintiff
recovers a judgment of $100,000 or less. He contends that the language of this
provision implies that it only applies to “claims where the court is
adjudicating on contract or debt issues and is not required to make complex
determinations such as those involving conflicting expert opinions and
testimony, and determinations of possible future loss”. He submits that the
case at bar was not a simple proceeding involving only contract issues or
issues of law. The plaintiff did not cite any authority for this interpretation
of Rule 14-1(1)(f)(i).

[15]        
The plaintiff seeks double costs from the date of the plaintiff’s formal
offer. The plaintiff argues that it was a reasonable offer that should have
been accepted, and that there were significant incentives for the defendant to
have accepted the offer. In addition to the savings in trial costs, the
plaintiff asserts that it was only during the trial testimony of Dr. Armstrong
[a medical expert retained by the plaintiff] that the plaintiff’s non-pecuniary
damage assessment was reduced. The plaintiff seems to suggest that as the
defendant could not have known this information when they declined to accept
the plaintiff’s formal offer, the defendant was unreasonable in not accepting
an offer when the damages could reasonably have been much greater.

E.       Defendant’s Position

[16]        
The defendant argues that the lump sum costs limits set out in Rule
15-1(15) apply where a notice of fast track action has been filed (Rule 14-1(1)(e)),
or where the amount awarded at trial is $100,000 or less. He says both these
criteria are present in the case at bar; thus, the plaintiff is limited to
$11,000 for costs.

[17]        
The defendant submits that there is a burden on the plaintiff to
establish that special circumstances warrant a departure from the cost limits
set out in Rule 15-1(15); moreover, he says the onus was on the plaintiff to
bring an application or seek an order at the trial management conference that
the action be removed from the fast track procedures. In support of this
proposition, the defendant cites Majewska v. Partyka, 2010 BCCA 236 [Majewska]
and Travelbea v. Henrie, 2012 BCSC 2009.

[18]        
Although the defendant’s primary contention is that the plaintiff is
limited to $11,000 in costs, he cites Peacock v. Battel, 2013 BCSC 1902 [Peacock]
in support of the proposition that fast-track costs may be increased where such
is warranted by special circumstances. In this regard, he suggests that the
proper amount of increased fast track costs, if special circumstances exist,
would be $1,500 for each additional day of trial after three days.

[19]        
The defendant denies that the plaintiff’s formal offer was one that
ought reasonably to have been accepted. He says, firstly, that the plaintiff’s
formal offer was flawed by offering to settle for $44,000 plus taxable costs
and disbursements. In this regard, he says that as the proceedings are governed
by Rule 15-1, the plaintiff should have clearly indicated that he was seeking
“fast-track costs”. Secondly, he says the plaintiff’s formal offer provided no
meaningful benefit to the defendant because it demanded an amount nearly
equivalent to the plaintiff’s award at trial. In support of this assertion he
cites Gichuru v. York, 2012 BCSC 1385 [York].

[20]        
The defendant also cited Meghji v. Lee, 2012 BCSC 379 for the
proposition that contingency fee agreements assist in reducing the financial disparity
between an individual and an insurer.

F.       Discussion

Issue #1 – Should costs be assessed pursuant to Rule 15-1(15)?

[21]        
Rule 15-1(15) sets lump sum cost limitations on fast track actions. Rule
15-1(15)(c) sets an $11,000 costs limit for trials lasting longer than two
days, if the Rule applies. There are, broadly speaking, two scenarios in which
this action could become subject to the lump sum cost rule:

(1)      An
action that meets the criteria in Rule 15-1(1) is subject to Rule 15-1(15). An
action will meet the criteria in Rule 15-1(1) if it is a money judgment
amounting to $100,000 or less, the trial can be completed within 3 days, the
parties to the action consent to the application of the fast track rules, or
the court orders that the action be governed by the fast track rules.

(2)      An
action that meets the criteria in Rule 14-1(1)(e) or (f) is subject to Rule
15-1(15). An action will meet the criteria in Rule 14-1(1)(e) if a notice of
fast track action in Form 61 has been filed in relation to an action under Rule
15-1. An action will meet the criteria in Rule 14-1(1)(f) if the only relief
granted in the action is money and the total value of the relief granted is
$100,000 or less.

[22]        
If the claim meets the criteria of either Rule 15-1(1) or 14-1(1)(e) or
(f), then, unless the court otherwise orders, the plaintiff will be limited to
$11,000 for costs. I will now address whether either Rule applies to the claim.

Does Rule 15-1(1) apply to the claim?

[23]        
Rule 15-1(2)(a) provides that any party may file a notice of fast track
action in Form 61. In this case, the defendant filed a notice of fast track
action in Form 61 on February 22, 2012. In Narain v. Gill, 2012 BCSC
1468 [Narain] at para. 17, Justice Meiklem held that filing a
notice of fast track action does not turn an action into a fast track action;
rather, any party may file the notice “if [Rule 15-1] applies to an
action” (emphasis in original). The filing of a notice of fast track action
does not convert an action into a fast track action unless one of the four
criteria set out in Rule 15-1(1) applies.

[24]        
The four criteria for fast track application under Rule 15-1(1) are disjunctive:
see Musgrove v. Elliot, 2014 BCSC 40 [Musgrove] at para. 18;
Varga v. Shin, 2012 BCSC 1643 [Varga] at para. 27. If,
therefore, any one of (a) through (d) of Rule 15-1(1) applies to the claim then
it is a fast track action and fast track costs ought to be awarded.

[25]        
As for the monetary criteria set out in Rule 15-1(1)(a) (i.e. $100,000
or less), it is the total amount of money claimed for pecuniary loss and
non-pecuniary losses that determines whether the sub-rule applies: Narain
at para. 17. In the case at bar, it is noteworthy that the plaintiff did
not quantify damages in his notice of civil claim, and at trial claimed an
amount greater than $100,000.

[26]        
Rule 15-1(1)(c) provides that the fast track rules apply where the
parties to the action consent to such. In Musgrove at para. 21, Justice
Johnston held that this sub-rule does not require overt consent; rather, he
found that acquiescence may establish the requisite consent for an action to be
governed by the fast track rules. Musgrove involved a motor vehicle
accident for an unspecified amount of damages. The defendant filed a notice of
fast track action in Form 61. After trial, the plaintiff argued that the claim
was not governed by Rule 15-1 on the basis that he never overtly agreed that
his claim did not exceed the $100,000 limit, and that he never delivered a
document acknowledging that his actions were subject to Rule 15-1 pursuant to
the endorsement provisions required by the rule.

[27]        
Johnston J. found that the plaintiff acquiesced in the application of
Rule 15-1 by: (a) participating in his own examination for discovery on the
basis that it was limited to two hours (as allowed in Rule 15-1(11)(a)); (b)
agreeing to an expansion to a further two hours of discovery (as provided in
Rule 15-1(11)(e)); and, (c) failing to remove the action from the fast track
process at the case planning conference. Notably, the presiding Master at the
case planning conference indicated that the action was a fast track action. At para. 20,
Johnston J. described what a party served with a notice in Form 61
should do:

At a minimum, when a party is
served with a notice in Form 61, that party should be expected to turn their
mind to whether they agree that the action should proceed under the fast track
regime, and, if they do not agree, to say so reasonably promptly and not lie in
the weeds to see how things turn out with respect to costs.

[28]        
It is also notable that the defendant in Musgrove had not been
consistent in ensuring that all documents filed by the defendant bore the
endorsement required by Rule 15(2)(b) and this inconsistency did not affect
whether the fast track rules applied; moreover, it was held that Rule 15-1(13),
which states that the registrar must set a date within four months of an
application for a trial date, is permissive.

[29]        
In Majewska at para. 34, Justice Neilson stated that parties
to a fast track action are not compelled to remain in the fast track process;
they are entitled to consent to removing the case from the fast track process,
or may obtain a court order to that effect. In Majewska the plaintiff
had twice asked the defendant to consent to having the action removed from the
fast track process and had been twice rebuffed. At para. 36, Neilson J.A.
stated the proper response for the plaintiff was to apply for removal from fast
track litigation. As the plaintiff chose not to take that step, she had no
basis for complaint that her costs were limited to fast track costs. It is
noteworthy that in Majewska, the plaintiff had acknowledged, at some
point during the proceedings, that the action was governed by the fast track
process.

[30]        
Having due regard to the foregoing, I am satisfied that none of the
criteria in Rule 15-1(1) existed to make the claim a fast track action. Three
of the four criteria obviously do not apply. Firstly, the court never ordered
that Rule 15-1 applied to the action; secondly, the trial was set for more than
three days; and thirdly, the plaintiff did not claim a total amount of $100,000
or less, either in pleadings or at trial. The remaining criterion is consent
and the live issue is whether the plaintiff consented to the application of
Rule 15-1. Here, the defendant filed a notice of fast track action in Form 61
on February 22, 2012. I am not persuaded that the plaintiff either overtly
consented to, or acquiesced in, the applicability of Rule 15-1. In this regard,
I take into account the following: (a) the plaintiff did not file any documents
with the endorsement “Subject to Rule 15-1”; (b) the defendant repeatedly
omitted the required endorsement of “Subject to Rule 15-1” from his filed
documents; (c) the presiding Master at the trial management conference did not
note that the action was a fast track action; (d) the plaintiff was examined
for longer than two hours, and there is no suggestion that counsel for the
defendant obtained the plaintiff’s consent to do so; (e) the trial was set for seven
days – a duration more than double the three days contemplated in Rule
15-1(1)(3); and, (f) the trial was set at a date more than two years after the
defendant filed the notice in Form 61.

[31]        
While none of the foregoing factors are determinative, taken together
they do not suggest that the plaintiff was treating the action as a fast track
action and I am not satisfied he consented to it by acquiescence, or otherwise.

[32]        
As none of the four criteria in Rule 15-1 existed, the mere filing of a
notice in Form 61 did not convert the claim into a fast track action, and there
was no onus on the plaintiff to apply to the court to have the action removed
from a track it was never on.

Does Rule 14-1(1)(e) or (f) apply to the claim?

[33]        
Whether or not Rule 15-1(1) applied to the claim is not determinative of
the issue, as if the circumstances in either Rule 14-1(1)(e) or (f) exist, then
the fast track costs rules apply. Rule 14-1(1)(e) provides that the fast track costs
rules apply where a notice of fast track action in Form 61 has been filed in
relation to the action under Rule 15-1. As it has been found that the claim is
not an action under Rule 15-1, this provision is not applicable. However, Rule
14-1(1)(f) is apposite. It provides that the fast track costs rules apply where
the only relief granted in the action is a money judgment in which the total
value of the relief granted is $100,000 or less. In this regard, in Axten v.
Johnson, 2011 BCSC 1005 at para. 27 Justice Ker stated that “Rule
14-1(1)(f) places actions that should have been fast-tracked but were not, under
the fast track costs schema.”

[34]        
Rule 14-1(1)(f) was also discussed at a costs hearing in front of
Registrar Sainty in Varga. In that case, the plaintiff was injured in a
motor vehicle accident and claimed over $400,000 in damages. Prior to trial,
the plaintiff accepted a settlement offer from the defendant of $65,000 “with
costs to be assessed or agreed”. The parties were unable to agree on costs.

[35]        
In Varga, Registrar Sainty held that while the action was not
declared to be a “fast track” action, it was subject to the fast track costs
provisions of Rule 15-1(15) because the settlement amount was less than
$100,000. At para. 29, Registrar Sainty further stated that it was open to
the plaintiff to seek an order prior to trial that the costs provisions of Rule
15-1(15) would not apply to the action. As the plaintiff had not sought such an
order, the action attracted costs pursuant to Rule 15-1(15).

[36]        
In Codling v. Sosnowsky, 2013 BCSC 1220 [Codling], the
plaintiff was injured in a motor vehicle accident and was awarded damages of
$70,764 at trial. At para. 8, Justice N. Smith held that while the
action was not conducted as a fast track action, Rule 14-1(1)(f) dictated that
costs had to be awarded on the basis of Rule 15-1(15).

[37]        
It is notable that in each of Johnson, Varga, and Codling,
the claims were for damages incurred in motor vehicle accidents.

[38]        
In the case at bar, the only relief granted was a money judgment for
$44,920. The quantum awarded is clearly captured within the legislative scheme
for fast track costs. The plaintiff submits that Rule 14-1(1)(f) only applies
to “claims where the court is adjudicating on contract or debt issues”, but
cited no authority for this assertion. There is clear judicial authority for
applying Rule 14-1(1)(f) to claims for damages incurred in motor vehicle
accidents and I am satisfied that the plaintiff’s damage award falls squarely
within the meaning of Rule 14-1(1)(f)(i) as a judgment for less than $100,000.
That rule provides that costs are to be assessed pursuant to the lump sum
amounts set out in Rule 15-1(15).

[39]        
If the plaintiff did not wish to be limited to the amounts set out in
Rule 15-1(15), it was open to him to seek an order before trial that the cost
limits in that rule would not apply to his claim.

[40]        
Having due regard for the foregoing, I am satisfied that the cost
limitations in Rule 15-1(15) apply to the claim pursuant to Rule 14-1(1)(f)(i).
Rule 15-1(15)(c) limits the amount of costs to which a party to a fast track
action is entitled to $11,000 where the trial lasted longer than two days.
Costs are, therefore, limited to $11,000 here, unless special circumstances
justify something greater.

Do special circumstances exist which entitle the plaintiff to additional
costs?

[41]        
The plaintiff has not sought additional fast track costs to compensate
for the additional four days of trial, as his argument was restricted to the
inapplicability of the fast track rules; nonetheless, the defendant has
recognized the court’s discretion to increase the amount of fast track costs
where special circumstances warrant it.

[42]        
In Majewska at para. 29, Neilson J.A. stated that there is
discretion to award costs beyond the limits established in the former fast
track rule if there are special circumstances, and where such an award is
justified, costs should be calculated using the fast track cost limits as a
point of reference, rather than the usual tariff. In Peacock at paras. 17-18,
Justice Affleck held that it is open to a court to “otherwise order” (within
the meaning of Rule 15-1(15)) in cases where special circumstances warrant a
departure from the limits set out in Rule 15-1(15), and that “special
circumstances have been held to apply in cases where the trial took longer than
the maximum amount of days referenced in the fast track rule, or the action was
complex or where a reasonable offer to settle was made but not accepted.”

[43]        
In Peacock, Affleck J. addressed the tabulation of additional
costs where special circumstances justifying a departure from the limits in
Rule 15-1(15) exist:

[20]      Madam
Justice Neilson [in Majewska] held that the formula set out in Anderson
v. Routbard, 2007 BCCA 193 should be applied to determine what amount
should be awarded. This formula involves first determining what portion of the
lump sum provided for in the Rule is for pre-trial and trial costs. Madam
Justice Neilson calculated this by taking the amount enumerated for a one day
or less trial and subtracting it from the amount allowed for a two day or more
trial. The difference is then multiplied by the number of days that the trial
went over (paras. 31, 39). She concluded:

[39]      I
would therefore allow the appeal, and calculate costs under R. 66(29) as
follows. Under the present limits of $5,000 and $6,600 I take the pre-trial
portion of costs to be $3,400, and $1,600 as representative of each day of
trial…

[44]        
Similarly, in Lam v. Chiu, 2013 BCSC 1281 [Lam] at para. 51,
Justice Gray outlined how additional costs are tabulated pursuant to Rule
15-1(15):

The current Rule 15-1(15) provides for a lump sum award of $8,000
for one day or less of trial, $9,500 for two days, and $11,000 for three days
or more. Applying the approach in Majewska, $6,500 would be attributable
to pre-trial costs, with $1,500 for each day of trial.

[45]        
At para. 62, Gray J. awarded $11,000 for the first three days of
trial, and $1,500 per day for the following 8.5 days of trial time. Notably,
Gray J. found that four trial days had been wasted time arising from an error
by both parties and, thus, did not award the plaintiff additional costs for two
trial days.

[46]        
The awarding of an additional $1,500 for each day of trial exceeding
three days, where special circumstances exist, appears to have become an
accepted judicial practice: see Peacock at para. 23; Arrowmark
Contracting Ltd. v. JDP Construction Ltd., 2013 BCSC 2307 [Arrowmark]
at para. 15.

[47]        
Despite the plaintiff’s lack of submissions on this point, I am
satisfied that there are special circumstances in this case that justify such
an additional costs award. In this regard, I have taken into account that the
trial was set by the parties for seven days, was run efficiently, and lasted
seven days. The quantification of damages was relatively complex, insofar as
there was conflicting expert evidence as to the extent of the plaintiff’s
injuries. These additional costs are to be determined with reference to the
lump-sum amounts; accordingly, I conclude that the plaintiff is entitled to
$1,500 per day for each of the four additional trial days.

Issue #2 – Should the plaintiff be awarded special costs pursuant to Rule 14-1(1)(b)(i)?

[48]        
In relation to the availability of an award of special costs where a
party is only entitled to fast track costs, Gray J. stated the following in Lam:

[82]      The law
is not clear about whether an award of special costs is available in a case
under the Fast Track process. In Majewska, Neilson J.A. remarked as
follows at para. 38 in obiter dicta:

I acknowledge there may be
situations that justify a departure from such costs. I anticipate these would
be “exceptional” circumstances rather than “special” circumstances, and might
include situations deserving of special costs or solicitor client costs,
however, such matters must be left for another day.

[83]      An
award of special costs is unusual even in cases not governed by the Fast Track
rule…

[49]        
Special costs are awarded where the conduct of a litigant was
“reprehensible” and they are awarded only in the “clearest of cases”: York
at paras. 6, 8. In Mayer v. Osborne Contracting Ltd., 2011 BCSC
914, Justice Walker helpfully summarized when special costs may be awarded:

[8]        Special
costs are awarded where a litigant engaged in reprehensible conduct. The
purpose of an award of special costs is to chastise a litigant. Special costs
are punitive in nature and encompass an element of deterrence. A wide meaning
is given to the word “reprehensible”. The term represents a general and all
encompassing expression of the applicable standard for an award of special
costs. “Reprehensible” conduct includes conduct that is scandalous, outrageous,
or constitutes misbehaviour, as well as milder forms of misconduct that in a
court’s view deserves reproof or rebuke. In determining whether the conduct of
a party is reprehensible, courts may consider whether the conduct complained of
is a type from which it should seek to dissociate itself: Garcia v.
Crestbrook Forest Industries Ltd. (1994), 119 D.L.R. (4th) 740 at 745 – 747
(C.A.); Stiles v. B.C. (W.C.B.) (1989), 38 B.C.L.R. (2d) 307 at
311 (C.A.); Leung v. Leung (1993), 77 B.C.L.R. (2d) 314 at para. 5
(S.C.); International Hi-Tech Industries Inc. v. FANUC Robotics Canada Ltd.,
2007 BCSC 1724 at para. 6; and Fullerton v. Matsqui (District)
(1992), 74 B.C.L.R. (2d) 311 at para. 23 (C.A.).

[9]        In
Garcia at 747, Lambert J.A. described the standard to be met in order to
justify an award of special costs:

… it is my opinion that the
single standard for the awarding of special costs is that the conduct in
question properly be categorized as “reprehensible”. As Chief Justice Esson
said in Leung v. Leung, the word “reprehensible” is a word of wide
meaning. It encompasses scandalous or outrageous conduct but it also
encompasses milder forms of misconduct deserving of reproof or rebuke.
Accordingly, the standard represented by the word “reprehensible”, taken in
that sense, must represent a general and all encompassing expression of the
applicable standard for the award of special costs.

[10]      The
need for courts to disassociate themselves from misconduct is so important that
special costs may be awarded even when the successful party does not have to
pay legal fees. In Fullerton at para. 29, the Court of Appeal
stated that “[s]ince the rationale for the award is to penalize, it matters not
that the successful party does not have any legal fees to pay”.

[11]      Special costs may be
ordered in the following circumstances:

(a)        where
a party pursues a meritless claim and is reckless with regard to the truth;

(b)        where
a party makes improper allegations of fraud, conspiracy, fraudulent
misrepresentation, or breach of fiduciary duty;

(c)        where
a party has displayed “reckless indifference” by not recognizing early on that
its claim was manifestly deficient;

(d)        where
a party made the resolution of an issue far more difficult than it should have
been;

(e)        where
a party who is in a financially superior position to the other brings proceedings,
not with the reasonable expectation of a favourable outcome, but in the absence
of merit in order to impose a financial burden on the opposing party;

(d)        where
a party presents a case so weak that it is bound to fail, and continues to
pursue its meritless claim after it is drawn to its attention that the claim is
without merit;

(e)        where
a party brings a proceeding for an improper motive;

(f)         where
a party maintains unfounded allegations of fraud or dishonesty; and

(g)        where
a party pursues claims frivolously or without foundation.

See: Garcia at 748; International Hi-Tech at paras. 7-13;
Webber v. Singh, 2005 BCSC 224 at para. 28; McLean v.
Gonzalez-Calvo, 2007 BCSC 648 at paras. 26, 29; Buchan v. Moss
Management Inc., 2008 BCSC 1286 at paras. 11-12; and Edwards v.
Bell, 2004 BCSC 399 at paras. 12, 43-45.

[50]        
Here, the plaintiff has not alleged reprehensible conduct; rather, he
submits that the defendant increased his costs by:

(a)      setting a trial date
two years in advance;

(b)      extending
the time and cost of the examination for discovery of the plaintiff;

(c)      indulging
in lengthy and repetitive cross-examinations of the plaintiff, the plaintiff’s general
physician, and the plaintiff’s expert;

(d)      requiring a seven day
trial, rather than a three day trial; and

(e)      arguing
the issue of “fringe medicine” rather than focusing on the actual terms of the
diagnosis provided by the plaintiff’s expert.

[51]        
Special costs are rarely awarded, and I am far from satisfied that the
plaintiff has shown there is a case for them here. The plaintiff has not
demonstrated there is any merit to the allegations of misconduct or to the
suggestion that the defendant manipulated Rule 15-1 by deliberately increasing
the plaintiff’s costs and trying to limit the plaintiff to fast track costs.

Issue #3 – Is the plaintiff entitled to an award of double costs?

[52]        
In the alternative to his claim for special costs, the plaintiff seeks
an order that costs be assessed as party and party costs in accordance with
Appendix B up to the date the offer to settle was delivered, with double costs
being assessed thereafter.

[53]        
Notwithstanding the conclusion that the plaintiff is not entitled to
special costs and is limited to fast track costs, there may be entitlement to
double costs for the period following delivery of the plaintiff’s formal offer.

[54]        
The defendant advanced two arguments disputing that he should have
accepted the plaintiff’s formal offer. I will address each of these, in turn.

Was the plaintiff’s offer flawed by failing to specify “fast track costs”?

[55]        
The defendant contends that the plaintiff’s formal offer was “fatally
flawed” as it did not indicate that the plaintiff was seeking fast track costs.
No authority was cited for this position, and there is no suggestion that the
offer was otherwise deficient. If the offer to settle was not flawed then the
Court may consider the offer in determining the proper costs of the action.

[56]        
An offer to settle must be clear and unambiguous. For an offer to be
clear and unambiguous, the costs consequences must also be clear and
unambiguous: see Elsen v. Elsen, 2011 BCSC 1011 at para. 44;
however, the court is generally hesitant to find ambiguity where a party raises
it as an issue for the first time after trial. This was discussed by Justice
Skipp in Ballen v. Ballen, 2000 BCSC 261 [Ballen]:

[16]      The
plaintiff then seeks an order that she be entitled to all of her costs of the
proceeding and a further order that the defendants’ offer to settle pursuant to
Rule 37 was of no force and effect.

[17]      Counsel
for the defendant referred to Falls v. Falls (1995), 13 B.C.L.R.
(3d) 369. In that case Vickers J. referred to his decision in Morck v. Soragnese
(1994), 87 B.C.L.R. (2d) 263 and to a passage therefrom at page 270 as
follows:

The test of whether there has
been compliance lies in the answer to two simple questions. Could the person
receiving the offer have been in any doubt as to its terms. If so, was there a
burden on that person to clarify its terms prior to acceptance.

[18]      I
note that the defendants made an offer to settle herein and no objection was
made by the plaintiff at that time to that offer being ambiguous and on the
contrary the plaintiff speedily countered with an offer to settle on November
26, 1999, escalating from $225,000.00 to $400,000.00.

[21]      Counsel
for the defendants then referred to Carlson v. Stewart (1999),
(BCSC) wherein Taylor J. as he then was set out the approach to be taken to
determine whether an offer to settle is ambiguous. The germane excerpt from his
reasons is as follows:

The offer to settle by a
defendant must be unambiguous and this court should be reticent to conclude
ambiguity particularly with that issue is only raised by the plaintiff after
the trial.

[22]      Here
the plaintiff, through her counsel, made no inquiry as to the terms of the
offer nor did her counsel complain about ambiguities. As observed by Boyle J.
in Keller v. Whyte (1996), BCJ No. 705 (BCSC) at paragraph 11…

The strength goes out of the
protest when no response was made at all.

To that observation I add,
"when the only response is a counter offer".

[23]      I have concluded
that there is no merit to the plaintiff’s submissions.

[57]        
A similar conclusion was reached in Gill v. Gill, 2004 BCSC 1261 [Gill]
at para. 12, where Justice Cole held that a claim of ambiguity carries
little weight when there was no request for clarification of the offer, or
claim of ambiguity, until after the trial.

[58]        
In the case at bar, the defendant received the plaintiff’s formal offer
on February 20, 2014. The defendant then submitted a counter-offer which was
not accepted by the plaintiff. The defendant never sought to clarify how
“taxable costs” were to be assessed, nor did he assert that the offer to settle
was ambiguous until after the trial.

[59]        
Having regard to the approach taken in Ballen and in Gill,
I am satisfied that the defendant should not be permitted to rely on the
alleged ambiguity. In all the circumstances, I find that the plaintiff’s offer
was not flawed.

Should the Court order double costs?

[60]        
The defendant also argues that double costs should not be awarded on the
basis that the plaintiff’s formal offer provided no meaningful benefit to the
defendant because it demanded an amount nearly equivalent to the plaintiff’s
award at trial.

[61]        
Rule 9-1(5) permits a court to award double costs for all or some of the
steps taken in the proceedings after the date of delivery or service of an
offer to settle. Rule 9-1(6) lays out the considerations the court should take
into account in determining whether to grant double costs:

9-1(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.

[62]        
Rule 15-1(16) provides that a court, in exercising discretion as to
costs under Rule 15-1(15), may consider settlement offers as defined in Rule
9-1; thus, double costs are available in fast track cases: see Majewska
at para. 39; Gichuru v. Pallai, 2013 BCCA 60 at paras. 39-40; Lam
at para. 60.

[63]        
In York, the legal principles applicable to awarding double costs
were summarized as follows:

[25]      An
award of double costs is “a punitive measure against a litigant for that
party’s failure, in all of the circumstances, to have accepted an offer to
settle that should have been accepted”: Hartshorne v. Hartshorne, 2011
BCCA 29, at para. 25 [Hartshorne].

[26]      On the
question of whether the offer was one which the plaintiff ought reasonably to
have accepted, the factors to consider are: (a) the timing of the offer; (b)
whether the offer is related to the claim; (c) how easily the offer could be
evaluated; and, (d) whether a rationale was provided for the offer: Hartshorne,
at para. 27.

[27]      The
court is to assess the reasonableness of the rejection of the offer without
reference to the ultimate decision after trial: Cairns v. Gill, 2011
BCSC 420, at para. 18.

[28]      Applications
for double costs have been dismissed where the offer in question has “provided
little incentive for the plaintiff to settle” or where the offer fell short of
providing “a genuine incentive to settle”: Oh v. Usher, 2010 BCSC 122,
at para. 10; and Brooks-Martin v. Martin, 2011 BCSC 497, at para. 38.

[29]      The
relationship between the offer and the final judgment of the court is “an
independent factor to be considered in deciding whether a double costs award
should be made”: Hartshorne, at para. 30.

[64]        
In Lam at para. 73, Gray J. stated “[i]t may not be
reasonable to accept an offer that does not provide a meaningful element of
compromise… An offer is more likely to result in double costs where it provides
a significant benefit beyond merely avoiding a potential adverse costs award.”
As to what constitutes a “meaningful element of compromise” or a “genuine
incentive to settle”, both Lam and Arrowmark are instructive.

[65]        
In Lam, the plaintiff offered to settle the claim for $99,000. At
that time, the plaintiff’s total claim was for about $113,900. The settlement
was rejected, and the plaintiff was ultimately awarded $100,000 at trial. At para. 76,
Gray J. held that “[a]ccepting either 88 or 87 percent of the total claim…did
not adequately reflect the risk that Mr. Lam’s evidence would be rejected
at trial.”

[66]        
In Arrowmark, the plaintiff offered to settle a claim for
$38,000. The total amount claimed – and ultimately awarded at trial – was just
over $40,000. At para. 19, Justice Bowden held that a settlement
representing 95% of the amount claimed did not provide a meaningful element of
compromise.

[67]        
As to the third and fourth factors outlined in Hartshorne (i.e.,
how easily the offer could be evaluated, and whether a rationale was provided
for the offer), Barnes v. Lima, 2014 BCSC 1475 [Barnes] is
instructive. In Barnes, the plaintiff made a formal offer to settle for
$60,000. At trial, the plaintiff was awarded $7,214 more than that offer. In
deciding that the offer was not one that the plaintiff ought reasonably to have
accepted, Justice G.C. Weatherill emphasized the paucity of information
contained in the offer:

[10]      On
the eve of the trial, the defendant had a legitimate defence to the plaintiff’s
claim, particularly his claim for loss of capacity which in his earlier
communications to the defendant the plaintiff had indicated was significant. The
plaintiff did not break his settlement offer into its components and provided
the defendant with no ability to assess how much of it was to compensate the
plaintiff for his loss of capacity claim. At the time the offer was
communicated, there was a reasonable possibility that the plaintiff would not
recover anything for that claim, which ultimately proved to be the case. It
was reasonable for the defendant to wish to test the plaintiff’s position that
his inability to work overtime at Carter Motors was due to the accident and not
to other factors such as his marriage, particularly in the absence of
supporting documentation.

[11]      Moreover,
most of the plaintiff’s injuries were soft-tissue in nature. He had a
pre-existing right shoulder injury. There were live issues regarding whether
the plaintiff’s T-4 vertebra fracture had healed and, if so, when, as well as
the plaintiff’s credibility relating to the extent that his injuries had
affected his life. Parties should not be unduly deterred from bringing
meritorious, but uncertain, defences because they fear a punishing costs order:
Currie v. McKinnon, 2012 BCSC 1165 at para. 20.

[Emphasis
added.]

[68]        
The foregoing suggests that the court is more likely to find that an
offer ought reasonably to have been accepted where the offer was broken into
its constituent elements. This is of particular importance where certain heads
of damage are hotly contested; moreover, Barnes indicates that the
rejection of an offer to settle is less likely to attract an award of double
costs where there are “live issues”. This is consistent with Arrowmark,
as Bowden J. emphasized at para. 19 that “[t]here were issues dealt with
in the trial that meant the outcome of the trial would not have been readily
determinable.”

[69]        
Rule 9-1(6)(c) provides that a court may consider the relative financial
circumstances of the parties. In Radke v. Parry, 2008 BCSC 1397 [Radke],
Justice Boyd emphasized the greater financial resources of ICBC in granting an
award of double costs. At para. 42 she said:

It is also clear that there is
a substantial disparity in financial circumstances between the parties. The
defendants, represented by ICBC, had substantially greater resources to finance
a trial than the individual plaintiff. Had the defendants accepted the
plaintiff’s initial reasonable offer, the plaintiff would not have had to incur
the significant costs associated with nearly two weeks of trial.

[70]        
Notably, in Radke, the award offered at trial was double the plaintiff’s
offer to settle.

[71]        
Having regard to the foregoing, I am not persuaded that an award of
double costs would be appropriate. While the defendant had greater financial
resources than the plaintiff, other considerations militate against an award of
double costs.

[72]        
I am not satisfied that the plaintiff’s formal offer was one that the defendant
ought reasonably to have accepted. The offer was not broken down into its
constituent elements and it was, therefore, difficult to evaluate. The
plaintiff’s claim was under five heads of damage; therefore, a breakdown would
have greatly assisted the defendant in evaluating the offer. Also, as in Barnes,
the defendant had a legitimate defence to the plaintiff’s claim; indeed, the
plaintiff sought $45,656 for loss of future earning capacity at trial and was
ultimately awarded nothing under this head of damage.

[73]        
As to whether the plaintiff’s formal offer provided the defendant with a
genuine incentive to settle or not, the offer was for $44,000 and the plaintiff
ultimately sought $120,596 at trial. The latter amount had not been set out in
the pleadings and was not quantified until the start of the trial. There was,
therefore, an insufficient basis for the defendant to evaluate whether the
$44,000 offer was a genuine compromise or not.

[74]        
The ultimate award was $44,920. Rule 9-1(6)(b) permits the court to
compare the offer to settle with the final judgment. Here, the award was greater
than the offer by only $920, or approximately 2%. This marginal difference
suggests that little weight should be given to this factor.

[75]        
As already observed, the defendant had legitimate defences to the claim
and the damages for non-pecuniary damages were significantly reduced by new
information that was elicited from the plaintiff’s expert witness in his trial
testimony. The plaintiff also recovered nothing for his claim of lost earning
capacity. It is noteworthy that there was competing expert evidence that made
quantifying damages difficult. I am satisfied that in view of these matters an
award of double costs would unduly punish the defendant for mounting a
meritorious defence.

G.      Conclusion

[76]        
The plaintiff is entitled to fast track costs pursuant to Rule 15-1(15).

[77]        
The plaintiff is also entitled to additional costs in recognition of the
special circumstances in this trial; namely, the four additional trial days.

[78]        
Neither special costs nor double costs are appropriate for the reasons
given.

H.       Disposition

[79]        
The plaintiff shall have his costs, as follows: $11,000 for pre-trial
costs and the first three days of trial, plus $1,500 per day for the additional
four days of trial.

[80]        
The global costs award is $17,000 plus disbursements and taxes.

“The
Honourable Mr. Justice Bernard”