IN THE SUPREME COURT OF BRITISH COLUMBIA

Date:  20151015

Docket:  M102282

Registry:
Vancouver

Between:

Thomas Jones
a.k.a. Thomas Jones Jr.

Plaintiff

And

Yankaia Arjun and
Yellow Cab Company Ltd.

Defendants

Before:
The Honourable Madam Justice Ballance

Ruling on Costs

[1]
In my Reasons for Judgment, indexed at 2013 BCSC 1313, I awarded the
plaintiff, Thomas Jones, damages totalling $268,420.20 in respect of injuries
he sustained in a motor vehicle accident that occurred on August 9, 2008 (the
“First Accident”).

[2]
Before the trial of this proceeding concerning the First Accident was
heard, Mr. Jones was involved in a subsequent motor vehicle accident on
June 23, 2011 (the “Second Accident”).  At the time of trial, he had not
commenced an action in respect of the Second Accident and did not do so until
after this trial was concluded.  His counsel advised that a Notice of Discontinuance
in respect of that proceeding was filed after pronouncement of judgment in this
matter.

[3]
Mr. Jones seeks an award of costs of this proceeding at Scale B
and disbursements through to June 1, 2012, being the date of service upon the
defendants of his offer to settle (the “Offer to Settle”).  He applies for double
costs after that date, together with costs of this application.

BACKGROUND

●  Divisible or Indivisible
Injuries

[4]
In light of the fact that Mr. Jones had been involved in two
accidents, the issue arose in this proceeding as to whether the injuries he
sustained were divisible or indivisible as between the two collisions.  That factual
determination was relevant to both the causation and damages: Moore v. Kyba,
2012 BCCA 361 at paras. 36 and 37.

[5]
At trial, Mr. Jones asserted that the injuries he suffered in the
Second Accident had aggravated the injuries inflicted upon him by the First
Accident.  He tendered expert medical evidence that supported his contention.  The
defendants did not call any expert medical evidence to contradict that expert evidence.

[6]
I concluded that Mr. Jones’s injuries were indivisible, stating at
paras.162 and 163 of my Reasons:

[162]  Drawing on Dr. le Nobel’s opinions,
I find that had the 2008 Accident not occurred Mr. Jones would
probably have been more resilient to the effects of the 2011 Accident, and that
the former made him more vulnerable to the effects of the latter.  The evidence
establishes that it is more likely than not that the 2011 Accident
significantly aggravated Mr. Jones’s compromised low back and other spinal
symptoms, including his neck and the region between his shoulder blades, and
the pain along his lower right side.  It also aggravated his headache symptoms
brought on by the 2008 Accident.  The probabilities of the situation indicate
that in all likelihood the exacerbation of these ongoing symptoms adversely
affected Mr. Jones’s downcast mood and low demeanour.

[163]  The evidence amply
establishes that the injuries flowing from the 2011 Accident merged with the
residual injuries of the 2008 Accident to create an injury that is not
attributable to one particular defendant and cannot be distinguished from one
another.  Put another way, the evidence does not support a finding that the
2011 Accident caused separate and divisible injuries to Mr. Jones.  To the
contrary, it forcefully compels the conclusion that the injuries flowing from
the 2011 Accident were indivisible from the injuries caused by the 2008
Accident and that together they constitute a single indivisible injury to Mr. Jones.

● Settlement Offers

[7]
Mr. Jones’s Offer to Settle, served on the defendants on June 1,
2012, was in the amount of $250,000 new money, plus costs and disbursements.
It was open for acceptance until June 29, 2012, which was the last business day
before the commencement of the first day of trial.

[8]
On June 5, 2012, the defendants served Mr. Jones with an offer to settle.
Their offer was in the amount of $129,678, plus costs and disbursements.  It
too was open for acceptance until June 29, 2012.

[9]
Both offers were confined solely to the settlement of this action
commenced in respect of the First Accident, and were both silent about any
claims that Mr. Jones might have arising from the Second Accident.

[10]
Neither side accepted the settlement offer presented by the opposing
party, and the matter proceeded to a seven day trial.

● Legal Framework

[11]
Rule 9-1 of the Supreme Court Civil Rules governs the
relationship between costs and formal offers to settle.  The court has a broad
discretion to determine whether cost consequences ought to flow in cases where
an offer to settle has been made: Maras v. Seemore Entertainment Ltd.,
2014 BCSC 1842.  The predominant rationale underlying Rule 9-1 is to promote
the early settlement of disputes.  It attempts to do so by empowering the court
to reward the party who has made a reasonable settlement offer, and to attach
consequences in the form of an unfavourable costs award to the party who
refuses to accept a reasonable settlement offer: Hartshorne v. Hartshorne,
2011 BCCA 29 [Hartshorne].

[12]
One of the cost options available to the court under Rule 9-1(5)(b)
is to award double costs of all or some of the steps taken in the proceeding
after the delivery or service of an offer to settle.  Rule 9-1(6) sets out
a list of considerations, including the catch-all provision of “any other
factor the court considers appropriate”, that the court may turn its mind to in
exercising its wide discretion under Rule 9-1(5).  They are:

(a)  whether
the offer to settle was one that ought reasonably to have been accepted, either
on the date that it 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.

[13]
Whether a settlement offer is reasonably capable of acceptance is not to
be evaluated with the benefit of hindsight or by reference to the ultimate outcome:
Bailey v. Jang, 2008 BCSC 1372 (S.C.); E.(A.) (Litigation guardian
of) v. J.(DEW.), [2009] B.C.J. No. 748, 91 B.C.L.R. (4th) 372
(S.C.); Hartshorne at para. 27.  The notion of reasonableness in
the context of Rule 9-1(6)(a) is to be considered by reference to the recipient’s
knowledge of the circumstances at the time that the offer was made and during
the period it was left open for acceptance: Martin v. Laving, 2010 BCCA
1610 [Martin].  In contrast, consideration of the balance of the relevant
factors under Rule 9-1(6) does engage hindsight: Lumanlan v. Sadler,
2009 BCSC 142, 2009 CarswellBC 300 (S.C.).

[14]
In Hartshorne, at para. 27, the Court of Appeal endorsed consideration
of the following factors in determining whether an offer ought reasonably to
have been accepted:

–
the timing of the offer;

–
whether the offer bore some relationship to the claim (as
distinct from being a “nuisance offer”);

–
whether the offer could be easily evaluated; and

–  whether
a rationale for the offer had been provided.

[15]
An offer that amounts to nothing more than a “shotgun offer” or an enticement
to the plaintiff to effectively walk away from the claim or otherwise qualifies
as a nuisance offer along the lines contemplated by the Court in Hartshorne,
does not truly provide an incentive to the plaintiff to settle.  It therefore does
not rise to an offer that a party ought to reasonably accept.

[16]
That is not to say, however, that an offer that is nominal will
necessarily be considered unreasonable; there are circumstances where a nominal
offer will be reasonably capable of acceptance: Martin at para. 13;
P.S.D. Enterprises Ltd. v. New Westminster (City), 2011 BCSC 1646; Habib
v. Jack, 2011 BCSC 1294.

[17]
A finding that the recipient acted reasonably in declining the offer does
not necessarily close the inquiry.  There is authority that double costs or
another costs award against the party who received the offer may still be warranted
in circumstances where the other informing factors, such as the relationship
between the proposed settlement terms and the outcome at trial, indicate that
the offer must be given a degree of weight: see, for example, Jackson v. Yusishen,
2014 BCSC 406; Wafler v. Trinh, 2012 BCSC 1708, aff’d 2014 BCCA 95.  That
said, this Court has recently remarked on the difficulty in conceiving of a
situation in which double costs should be awarded where it has been determined
that the recipient party ought not to have accepted the offer: CFI Trust
(Trustee of) v. Royal Bank of Canada, 2014 BCSC 53 at para. 6, 2014
CarswellBC 85 (S.C.).

DISCUSSION

[18]
The defendants dispute Mr. Jones’s entitlement to double costs,
despite the fact that he was awarded damages that exceeded the amount of the
Offer to Settle.  Their position is that he should only have his Scale B costs and
reasonable disbursements through trial, and they seek costs of this application.

[19]
The defendants’ principal argument disentitling Mr. Jones to double
costs focused on the factor of whether the Offer to Settle ought reasonably to
have been accepted.  Put broadly, they assert that it was not reasonably
capable of acceptance because it only contemplated the resolution of this proceeding,
being the action concerning the First Accident, and the ultimate award for
damages was for both actions.  Building on that, the defendants point out that
the Offer to Settle could have made it clear that the settlement proffered by Mr. Jones
was in satisfaction of his claims for injuries pertaining to both accidents,
thereby bringing it in line with the result achieved at trial.  They contend
that had they accepted the Offer to Settle in the absence of such a provision,
it would have been open to Mr. Jones to pursue his claim in respect of the
Second Accident after he received the settlement payment for the First Accident,
thereby raising the specter of a potential double recovery.  The defendants say
that, based on the foregoing, it was unreasonable to accept the Offer to Settle.

[20]
In my view, the defendants’ position must fail.

[21]
I would observe at the outset that the trial outcome appears to have
informed the defendants’ assessment of the reasonableness of the Offer to
Settle.  That is the wrong evaluative framework to apply when considering
whether a formal offer ought reasonably to have been accepted.  The
reasonableness of Mr. Jones’s Offer to Settle is to be determined from the
defendants’ perspective and with regard to their knowledge of the surrounding circumstances
from June 1 to 29, 2012, inclusive.

[22]
The report of Mr. Jones’s medical expert, Dr. le Nobel, a
physiatrist, was served upon the defendants on November 23, 2011, being slightly
better than six months before delivery of the Offer to Settle.  In his report, Dr. le
Nobel opined:

Absent the [First Accident and Second Accident] I feel [Mr. Jones]
would not as likely have had the reduction in productivity such as he has since
the [First Accident].

Absent the [First Accident], he would have likely been more
resilient to the effects of the [Second Accident].  Absent the motor vehicle
collisions he would have potentially been better able to cope with the
psychological and emotional challenges of his difficult marital relationship.

…

Absent the [First Accident and Second Accident] he would more
likely have been able to maintain his capacity for interacting with others at a
higher level than has been the case.

Thomas Jones suffered injuries to
his spine with the [First Accident].  His description today is of worse pain in
the lumbar spine following the [First Accident].  With the [Second Accident],
he had as well aggravation of his spine more intense in the cervical spine and
paraspinal areas.

[23]
Dr. le Nobel diagnosed Mr. Jones’s pain as chronic.  He
described the prognosis as guarded and opined that Mr. Jones would
continue to suffer and feel limited in his capabilities, most likely for the
next several years and possibly longer.  As mentioned, the defendants tendered
no medical evidence to contradict Dr. le Nobel’s opinions.

[24]
Dr. le Nobel’s report provided unchallenged medical evidence
sufficient to ground a finding at trial that the injuries Mr. Jones
sustained in the two collisions were a single indivisible injury.  It follows
that, several months before they received the Offer to Settle, the defendants
were alerted to the risk that this Court might make such a finding.  They must also
be taken to have appreciated that they were exposed to the risk that they alone
would be jointly and severally responsible to Mr. Jones in respect of
those indivisible injuries and that their entitlement to seek contribution and
indemnity from the driver of the Second Accident was not Mr. Jones’s concern.

[25]
At the time the defendants received the Offer to Settle, they had also
been served with the report of Mr. Jones’s economic expert, Darren Benning.
Mr. Benning had calculated Mr. Jones’s net past income loss at
$120,865 or $209,623, depending on the analytical approach adopted.  He also
applied two models to calculate Mr. Jones’s loss of future earning
capacity.  One formula yielded a loss of $339,600; the other, a loss of $577,320.

[26]
Within the relevant timeline the defendants had obtained an economic
report from their own expert, Kevin Turnbull.  Using two different formulae,
Mr. Turnbull calculated Mr. Jones’s net past income loss at $24,000
and $132,000, respectively.  Likewise relying on two approaches to calculate Mr. Jones’s
loss of future earning capacity, Mr. Turnbull’s evidence was Mr. Jones
would sustain a loss of $130,550 or $587,475, if tabulated to age 75.

[27]
Based on the reports of the economic experts, the defendants were also
aware of their exposure to the potentially significant magnitude of Mr. Jones’s
past and future loss which, of course, would be in addition to the quantum of
his non‑pecuniary damages.

[28]
Perhaps most telling of the pertinent circumstances bearing on the
contextual reasonableness of the Offer to Settle, is the defendants’ own conduct.
When they made their settlement offer just a few days after receipt of the
Offer to Settle, they did not seek a release from Mr. Jones with respect
to any claims he may have had relative to the Second Accident, or purport to
address such claims in any way.  The defendants’ assertion that the Offer to
Settle was not reasonably capable of acceptance because it did not contain such
a provision – a provision that the defendants themselves did not consider sufficiently
crucial for the purposes of making their own formal offer within the same time
frame – rings hollow and undermines the sway of their position on this
application.

[29]
Mr. Jones relies on the trial decisions in Bradley v. Groves,
2009 BCSC 1882, as well as the decision on appeal (indexed at 2010 BCCA 361) in
support of his submission that he is entitled to double costs regardless of the
indivisible injury issue.

[30]
The plaintiff in Bradley had been involved in two motor vehicle
accidents.  The trial was brought under the fast-track provision of Rule 66 and
dealt exclusively with the driver in the first accident.  As is the case here,
the driver in the second accident in Bradley had not been sued at the
time of trial.  The trial judge found that the injuries sustained by the
plaintiff in the two accidents were indivisible.  The defendant involved in the
first accident was liable to pay the entirety of the damages awarded to the
plaintiff flowing from both accidents.

[31]
Prior to trial, the plaintiff in Bradley had made an offer to
settle for an amount less than the sum awarded at trial.  The trial judge
awarded the plaintiff double costs under the tariff.  There is no suggestion in
the Bradley decision that the offer to settle addressed the plaintiff’s
potential claims in respect of the second accident.

[32]
On appeal, the defendant argued that the trial judge erred in awarding
the plaintiff double costs “under the tariff”, as opposed to double the default
Rule 66 fixed costs of the trial.  Plaintiff’s counsel conceded the point and
the Court of Appeal agreed.  The decision is noteworthy for our purposes in that
the Court of Appeal did not disturb the award of double costs per se
in circumstances where the trial judge had determined in a proceeding dealing
only with the first accident, that the injuries flowing from it and the second
accident were indivisible.

[33]
None of the authorities relied on by the defendants or their reference
to the remark made by the author of a paper titled, Formal Offers Under Rule
9-1 of the B.C. Supreme Court Rules (Continuing Legal Education
Society of British Columbia, 2011), nor the case cited in the accompanying
footnote, advanced their position on this application.

[34]
The Offer to Settle was articulated in clear language and was not a
nuisance offer by any measure.  Liability was off the table.  The defendants were
sufficiently aware of the case that Mr. Jones intended to present at trial
and of the risks they faced in light of the anticipated expert evidence.  They would
have recognized that the amount of the Offer to Settle fell within the range of
reasonable trial outcomes and they had an adequate opportunity to evaluate it
prior to trial.  The factor of the parties’ relative financial circumstances
was not addressed by the defendants and, in any event, I share Mr. Jones’s view
that it is not a significant factor in the case at hand.  There is no other
factor appropriate to the inquiry that would militate against making an award
of double costs in favour of Mr. Jones.

[35]
I conclude that, in all the circumstances, the Offer to Settle was one
that ought reasonably to have been accepted by the defendants.

[36]
Mr. Jones is entitled to his costs of this proceeding at Scale B, as
well as his disbursements, up to and including June 1, 2012, and to his double
costs plus disbursements from June 2, 2012 thereafter.  He is also entitled to
the costs of this application.

“Ballance
J.”