IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101104

Docket: 52544

Registry:
Nanaimo

Between:

Mike Milkovich

Plaintiff

And:

Insurance
Corporation of British Columbia

Defendant

Before:
Master Bouck

(Sitting
as Registrar)

Reasons for Decision

Introduction

[1]            
This is an assessment of party/party costs in what is commonly known as
a Part VII action.

[2]            
Because the action was largely completed before July 1, 2010, I will
refer in these reasons to Mr. Milkovich as the plaintiff rather than the
claimant.

[3]            
The defendant has presented a bill of costs following the plaintiff’s
filing of a notice of discontinuance. The tariff items in the bill are claimed
at Scale B. The items reflect those steps allowed under the Supreme Court
Rules in force until June 30, 2010.

[4]            
The plaintiff objects to a number of items claimed in the bill and
suggests that in any event, the bill should accord with the items and units
allowed under Appendix B to the Supreme Court Civil Rules.
Furthermore, Mr. Leverman submits that the costs should be assessed at Scale A.

Background

[5]            
Mr. Milkovich’s claim arises from his involvement in a single vehicle
motor vehicle accident. The plaintiff was a passenger in that vehicle. I am
told that Mr. Milkovich, who is now 63 years of age, suffered a brain
injury in that accident.

[6]            
The issue arose as to whether Mr. Milkovich was a “worker” at the time
of the accident and, thus, statute barred from relief under Part VII of the
regulations to the Insurance (Vehcile) Act , R.S.B.C.
1996,.c. 231, by virtue of s. 10 of the Workers Compensation Act, R.S.B.C.1996,
c. 492

[7]            
It was necessary to bring a tort action against the driver of the
vehicle in order for the Worker’s Comensation Appeal Tribunal (“WCAT”) to then determine
Mr. Milkovich’s status. The assessment of the costs in the tort action is
the subject matter of another decision.

[8]            
This action was commenced at the same time as the tort action but a
statement of claim was never filed. The defendant’s steps in the action were
limited to communications between counsel and with its client; filing an
appearance; and then later proceeding with this assessment.

[9]            
WCAT did indeed determine that Mr. Milkovich was a worker. Immediately
following that ruling, defence counsel forwarded to Mr. Leverman a consent
dismissal order for the endorsement and return for entry. Mr. Leverman
simultaneously filed a Notice of Discontinuance on April 1, 2010, making the
consent dismissal order unnecessary and redundant.

[10]        
Mr. Leverman says that he reached an agreement with former defence
counsel to keep all costs in this and the tort action to a minimum pending the
WCAT determination.

[11]        
When negotiations over the defendant’s proposed costs broke down,
defence counsel sought an appointment before the registrar. At the direction of
the court scheduler’s office, the parties were required to attend a pre-hearing
conference before a master or registrar before a date could be set for the
assessment.

[12]        
On June 28, 2010, defence counsel filed an appointment setting down a pre-hearing
for July 14, 2010. Master Taylor conducted the pre-hearing and set a date for
the assessment as October 13, 2010. A fee of $52 was incurred by the defendant
for the filing of the appointment for the pre-hearing.

[13]        
The defendant then took out a further appointment on August 17, 2010,
appending the second amended bill of costs. An $80 fee was incurred by the
defendant in filing that appointment.

[14]        
A third amended bill of costs was presented to me on the date of the
hearing.

The Issues

[15]        
The issues that arise from the parties submissions are these:

a.  At what Scale should the costs
be assessed?

b.  Does the tariff pre or
post-July 1, 2010 apply?

c.  Is the defendant entitled to
costs for item 34 when the action was resolved by a Notice of Discontinuance?

d.  Should agent’s fees be allowed
when delivery of documents for filing by regular mail would suffice?

e.  Is the defendant entitled to
costs related to attendance at a mandatory pre-hearing conference?

f.  Is the defendant entitled to recover
the filing and agents fees relating to the Notice of Change of Solicitor?

[16]        
The plaintiff also took issue with the defendant’s claim for costs
associated with attendance at a pre-hearing conference before Master Taylor in
July 2010. For reasons that will be further discussed below, the parties’
attendance at this pre-hearing conference is mandatory and thus not of the parties’
choosing. However, whether the disbursements associated with that attendance
are recoverable is another matter.

Discussion

What Scale Applies?

[17]        
Neither the Supreme Court Rules nor Appendix B stipulates the
scale of costs following a discontinuance. Accordingly, the registrar must fix
that scale: s. 2(7) of Appendix B.

[18]        
The defendant did not seriously dispute the plaintiff’s description of
this proceeding. Based on that description, the defendant’s costs will be
assessed at Scale A.

Which tariff applies?

[19]        
The plaintiff submits that the tariff in force as of July 1, 2010,
applies to this assessment. Such a ruling would be of benefit to the plaintiff
as the units presently allowed for correspondence, conferences and instructions
after the start of the proceeding but before trial are in the range of 1 to 30
as opposed to the minimum 10 units claimed in the defendant’s bill of
costs under the analogous item 1B. In this case, because the work involved in
the Part VII action was minimal, 1 or 2 units might be a reasonable allowance.

[20]        
The transitional provisions under Appendix B provide as follows:

Transitional — orders, settlements and costs before 2007

9 Appendix B of the Supreme Court Rules, B.C. Reg.
221/90, as it read on December 31, 2006, applies to

(a)  orders for costs made before
January 1, 2007,

(b)  settlements reached before
January 1, 2007 under which payment of assessed costs is agreed to,

(c)  costs payable on acceptance of
an offer to settle made under Rule 37, if that offer to settle was made before
January 1, 2007, and

(d)  all assessments related to
those orders, settlements and costs.

Transitional — orders, settlements and costs before [date]

10 Without limiting section 9, Appendix B of the
Supreme Court Rules, B.C. Reg. 221/90, as it read on June 30, 2010, applies to

(a)  orders for costs made after
December 31, 2006 and before July 1, 2010,

(b)  settlements reached after
December 31, 2006 and before July 1, 2010 under which payment of assessed costs
is agreed to,

(c)  costs payable on acceptance of
an offer to settle made under Rule 37 or 37B, if that offer to settle was made
after December 31, 2006 and before July 1, 2010, and

(d)  all assessments related to those orders, settlements
and costs.

[21]        
Mr. Leverman observes that there is no mention in those provisions of
costs flowing from discontinuances. It is submitted that the registrar must
apply the tariff in force at the time of the assessment. Mr. Leverman also
referred me to the decision of Laye v. College of Psychologists of British
Columbia (1998), 186 W.A.C. 201, 59 B.C.L.R. (3d) 349 (C.A.) for the
following proposition:

As a general rule, where
legislation fixes a new “scale” of costs [or level], the applicable level is
the level in place when the costs are assessed.

[22]        
Rule 36 of the Supreme Court Rules was in force when the notice
of discontinuance was filed. That Rule provided, in part:

Discontinuance by plaintiff

(1) At any time before an action is
set down for trial, a plaintiff may discontinue it in whole or in part against
a defendant by filing and delivering a notice of discontinuance in Form 26 to
each party of record.

Idem

(2) After an action has been set
down for trial, a plaintiff may discontinue it in whole or in part against a
defendant with the consent of all parties of record or by leave of the court.

Withdrawal by defendant

(3) A defendant may withdraw his or
her defence or any part of it with respect to any plaintiff at any time by
filing a notice of withdrawal in Form 27 and delivering a copy of it to each
party of record.

Costs and default procedure on discontinuance or
withdrawal

(4) Subject to subrule (2), a person wholly discontinuing an
action or wholly withdrawing his defence against a party shall pay the costs of
that party to the date of delivery of the notice of discontinuance or
withdrawal and if a plaintiff, liable for costs under this rule, subsequently
brings a proceeding for the same or substantially the same claim before paying
those costs, the court may order the proceeding to be stayed until the costs
are paid.

[23]        
Thus, the plaintiff’s obligation to pay the defendant’s costs arose on
April 1, 2010. The costs that the defendant would be entitled to claim as of
that date are those found in then Appendix B.

[24]        
Furthermore, to find otherwise, would be contrary to and inconsistent
with the transitional provisions.

[25]        
The clear intent of the transitional provisions is to ensure that costs
are assessed at the Scale and under the tariff in force at the time that the
costs obligation arose.

[26]        
There is indeed no reference in the transitional provisions to costs
flowing from discontinuances. I might speculate that this omission was
purposeful because no order is required for the assessment of costs in those
circumstances. It may be an inadvertent omission by the Lieutenant Governor
in Council. However, the logical extension of the plaintiff’s submission
would be that a party could not properly prepare a bill, let alone consider
what might be reasonable costs, until the day of the assessment. That could not
be the intent of the Rule makers. I also query whether the plaintiff would be
making the same submission had the allowance for Item IB (now 2) increased
rather than decreased.

[27]        
Accordingly, I find that the tariff in force as of April 1, 2010,
governs the items and units to be claimed.

Entitlement to Item 34

[28]        
It is apparent that negotiations did not lead to the discontinuance of
the action. Rather, the WCAT ruling determined the outcome of this proceeding.
Accordingly, this item is disallowed.

Agents Fees

[29]        
The plaintiff takes issue with the defendant’s use of agents for filing
documents when regular mail would suffice: Allen v. Homan (1998), 45
B.C.L.R. (3d) 211at para. 14.

[30]        
The defendant claims an agent fee in relation to the filing all of its
documents, including those documents that appear to be electronically filed.

[31]        
Agent’s fees have been allowed on assessments but there must be a
demonstrated necessity and propriety for such fees. As other registrars
recognize, there are less expensive methods of filing documents, including by
mail: McDougall v. British Columbia Society for the Prevention of the
Cruelty for Animals : 2004 BCSC 1026.

[32]        
In this case, the defendant has claimed a somewhat nominal and, in my
view, proper fee for electronic filing of documents. Although described as
agent’s fee, the charge is actually incurred when using “CSO” or court services
on-line. Those charges are allowed.

[33]        
For reasons discussed below, I find that the plaintiff is not to bear
the costs related to the filing of a notice of change of solicitor. The agent’s
fee of $38 related to this filing is disallowed.

Pre-Hearing Conference
Costs

[34]        
When this issue was first raised, Mr. Leverman was unaware that the
pre-hearing conference was a mandatory step in the assessment of these costs.
For clarity, a pre-hearing conference is required by the court for a variety of
reasons, not the least of which is to determine whether a non-resident master
or registrar will be assigned to conduct the hearing. Pre-hearing conferences on
costs assessments are mandatory if a matter is estimated to take one day or
more (or for a half day in a location other than a metropolitan area). For
counsel’s benefit, the information can be found on the court web-site under
advice for self-represented litigants. It is appreciated that the requirement
for the conference is not found under the Rules. Nonetheless, it is a
proper step in the proceeding for which the defendant incurred costs.

[35]        
However, in this case, the defendant filed two appointments: one for the
pre-hearing conference and another for the cost assessment itself. That was
unnecessary. The defendant could have filed one appointment setting out the
date for the pre-hearing conference with the additional notation that the date
for the assessment would be set following that conference. The assessment can
then be scheduled by filing a requisition. I am told by court staff that there
would be no charge for the filing of that requisition, presumably in
recognition that it is the court’s own policy that is compelling the litigants
to appear for the pre-hearing conference.

[36]        
Accordingly, the filing fee relating to the assessment itself ($80) is
disallowed.

Notice of Change of
Solicitor

[37]        
This charge of $38 relates to cost of filing a notice of change of
solicitor once private defence counsel is selected by the defendant. In my
view, this disbursement is more akin to overhead incurred by the defendant in
the management of its internal processes for file assignment. It is not a
disbursement necessary for the proceeding. Accordingly, the charge is
disallowed.

Result

[38]        
The defendant’s costs are allowed at $1,216.45. If any offer or offers
have been delivered pursuant to former s. 10 and now s. 8 of Appendix B, the
parties may provide written submissions via the court scheduler’s office on the
effect of such offers. If no submissions are received by 4 p.m. on November 15,
2010, I will endorse a certificate of costs accordingly.

                       “C.P.
Bouck”              

Master
C. P. Bouck