IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130307

Docket: M135027

Registry:
New Westminster

Between:

Rui Nemoto, an
Infant by her Mother and Litigation Guardian,

Sanae Nemoto and
the said Sanae Nemoto

Plaintiff

And

Paramjit S.
Phagura, Wells Fargo Equipment Finance Company/

Societ de
Financement D’Equipement Wells Fargo and

BBD Trucking &
Excavating Ltd.

Defendants

Before:
The Honourable Mr. Justice N. Smith

Supplementary Reasons for Judgment

[1]            
In reasons for judgment dated December 3, 2012, I awarded the plaintiff
non-pecuniary and special damages totalling $27,023.75 for injuries in a motor
vehicle accident. I am now informed that award was $300 less than the amount
contained in a formal offer to settle that the defendants delivered one week
before trial. The defendants now apply for an order depriving the plaintiff of
her costs and awarding the defendants costs from the date of the offer.

[2]            
The possible effects of a formal offer to settle and the matters for the
court to consider in exercising its discretion are set out in the Supreme
Court Civil Rules, B.C. Reg. 168/2009, Rules 9-1 (5) and (6):

Cost options

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

(a) deprive a party of any or all
of the costs, including any or all of the disbursements, to which the party
would otherwise be entitled in respect of all or some of the steps taken in the
proceeding after the date of delivery or service of the offer to settle;

(b) award double costs of all or
some of the steps taken in the proceeding after the date of delivery or service
of the offer to settle;

(c) award to a party, in respect of
all or some of the steps taken in the proceeding after the date of delivery or
service of the offer to settle, costs to which the party would have been
entitled had the offer not been made;

(d) if the offer was made by a
defendant and the judgment awarded to the plaintiff was no greater than the
amount of the offer to settle, award to the defendant the defendant’s costs in
respect of all or some of the steps taken in the proceeding after the date of
delivery or service of the offer to settle.

[am. B.C. Reg. 119/2010, Sch. A, s.
21.]

Considerations of court

(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.

[3]            
The plaintiff in this case obtained a judgment that fell short of the
defendants’ offer by a difference of about one per cent. Prior to 2008, a
plaintiff in that position had to bear the costs consequences, no matter how
marginal the difference might have been. Rule 37(24) (a) of the former Rules
of Court, B.C. Reg. 221/90 read:

(24) If the defendant has made an offer to
settle a claim for money and the offer has not expired or been withdrawn or
been accepted,

(a) if the plaintiff obtains judgment for
the amount of money specified in the offer or a lesser amount, the plaintiff is
entitled to costs assessed to the date the offer was delivered and the
defendant is entitled to costs assessed from that date

[4]            
Rule 37 was replaced in 2008 by Rule 37(B), which has
been continued as the present Rule 9-1. The change gave the court a
broad discretion on costs following an offer to settle. The relationship
between the offer and the final judgment, which had been the sole and
determining factor under Rule 37(24), became only one of four factors for the
court to consider. Indeed, one of the additional factors–whether the offer
ought reasonably to have been accepted–is to be considered without regard to
the final judgment. In Hartshorne v. Hartshorne, 2011 BCCA 29, the Court
of Appeal said:

[27] The first factor – whether
the offer to settle was one that ought reasonably to have been accepted – is
not determined by reference to the award that was ultimately made. Rather, in
considering that factor, the court must determine whether, at the time that the
offer was open for acceptance, it would have been reasonable for it to have
been accepted: Bailey v. Jang, 2008 BCSC 1372, 90 B.C.L.R. (4th) 125 at
para. 24; A.E. v. D.W.J. at para. 55. As was said in A.E. v. D.W.J.,
“The reasonableness of the plaintiff’s decision not to accept the offer to
settle must be assessed without reference to the court’s decision” (para. 55).
Instead, the reasonableness is to be assessed by considering such factors as
the timing of the offer, whether it had some relationship to the claim (as
opposed to simply being a “nuisance offer”), whether it could be easily
evaluated, and whether some rationale for the offer was provided. We do not
intend this to be a comprehensive list, nor do we suggest that each of these
factors will necessarily be relevant in a given case.

[5]            
In personal injury cases, a major consideration for the court at trial
and for the parties considering settlement is the extent to which the
plaintiff’s evidence is supported or contradicted by medical evidence. In this
case, the plaintiff relied on the evidence of a family physician, Dr. Arora,
and a psychological counsellor, Dr. Harada. The defendants produced no medical
evidence.

[6]            
Dr. Arora did not become the plaintiff’s family doctor until two and a
half years after the accident. More than another year went by before he learned
of the accident and was asked to prepare a report. Nevertheless, based on his
review of records and the plaintiff’s recollection, Dr. Arora was able to
conclude that the plaintiff had suffered soft tissue injuries to the neck,
lower back and right forearm, with symptoms that became “chronic and
intermittent” over the next three and half years.

[7]            
Dr. Harada did not see the plaintiff until almost two years after the
accident, but diagnosed a mild generalized anxiety disorder from which the
plaintiff was fully recovered by the time of trial.

[8]            
Clearly, the plaintiff and her counsel had sufficient information to
know that they would likely recover damages for what would be characterized as mild
to moderate soft tissue injuries. However, the possible range for such awards
can still be a wide one and the plaintiff was not able to narrow that range
with reference to any medical evidence that the defendant would be relying on. I
repeat here what I said in Paskall v. Scheithauer, 2012 BCSC 1859 (“Paskall”):

[32] In order to determine whether an offer is reasonable and
ought to be accepted, the plaintiff must be able to consider it in relation to
the evidence expected at trial and the apparent range of possible outcomes. In
a personal injury case, that exercise usually includes consideration of
conflicting medical opinions, along with the possibility and likely
consequences of the court preferring certain opinions over others. Plaintiff’s
counsel who is relying on an opinion from Dr. X can advise his or her client of
the reduction in damages that may result from the court rejecting the evidence
of Dr. X and accepting the opinion of Dr. Y that is being relied on by the
defendant.

…

[34] The onus of proof at trial is on the plaintiff. The
defendant is under no obligation to produce medical evidence and may rely
entirely on cross-examination of the plaintiff and the plaintiff’s medical
experts to support an argument that the plaintiff has failed to prove damages.
That is what defence counsel chose to do in this case, apparently with great
success.

[35] But the onus of proof at
trial is not necessarily relevant to the question of whether an offer made
before trial “had some relationship to the claim” or “could be easily
evaluated”. In choosing to defend this case in the way he did, the defendant
also chose not to provide the plaintiff with evidence on which she could judge
the reasonableness of the offers to settle.

[9]            
Paskall involved a jury trial, so the result was inherently less
predictable than in a trial before a judge alone. But even when the trial is to
be before a judge alone, the complete absence of medical opinion evidence from
the defence makes it difficult for a plaintiff to assess the reasonableness of
a settlement offer.

[10]        
A further complication arose in this case from the fact the plaintiff
was 17 years old at the time of trial. That means a settlement based on the
formal offer would have required the consent of the Public Guardian and Trustee
(“PGT”) pursuant to s. 40 (7) of the Infants Act, R.S.B.C. 1996, c.223. The
absence of defence medical evidence may have made it more difficult for
plaintiff’s counsel to persuade the PGT of the appropriateness of the
settlement.

[11]        
 In any case, the PGT’s views could not likely have been obtained in the
week between the date of the offer and the date of trial, requiring an
adjournment of the trial. The plaintiff had to consider the delay that would
have been involved in proceeding to trial at a later date in the event, however
unlikely, the PGT was not prepared to consent.

[12]        
In these circumstances, I cannot say that the offer ought reasonably to
have been accepted and I decline to give effect to it in the matter of costs.

[13]        
This was a fast track action under Rule 15-1 and the applicable costs
are set out in Rule 15-1 (15):

(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.

[14]        
This was a three-day trial and the plaintiff is entitled to costs as
provided in Rule 15-1(15)(c).

“N.
Smith, J.”