IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20160225

Docket: M103571

Registry:
Vancouver

Between:

Chelsey Gillian
Hall-Smith

Plaintiff

And

Brian H. Yamelst,
Jacqueline Tina Yamelst,
George C. Teed and Kami Cabs Ltd.

Defendants

Before:
The Honourable Madam Justice Dillon

Reasons for Judgment
on Costs

Introduction

[1]            
Following the trial of this action and judgment rendered (Hall-Smith
v. Yamelst, 2015 BCSC 1640 (Hall-Smith)), costs were ordered to
follow the event, except if either party wanted to speak to the matter (at
para. 77). The defendants seek to deny the plaintiff her costs for several
reasons including: (a) because she should have accepted an offer to settle made
on January 13, 2015 (Rule 9-1(5)); (b) because she recovered a sum within the
jurisdiction of the Provincial Court (Rule 14-1(10)); and (c) in the
alternative, the plaintiff should be denied her disbursements related to that
part of her claim that was unsuccessful (Rule 14-1(15)).

Facts

[2]            
This action arises from a motor vehicle accident on February 25, 2009.
The plaintiff was in a taxi that was hit from behind at low speed by a vehicle
driven by one of the defendants. Liability was admitted before trial and the
plaintiff was awarded $24,187 in damages: $20,000 for non-pecuniary damages and
$4,187 for special damages.

[3]            
The defendant made an offer to settle on January 13, 2015 that expired
on February 27, 2015 (the “January offer”). The offer read in part:

The Defendants Brian H. Yamelst,
Jacqueline Tina Yamelst, George C. Teed, [and] Kami Cabs Ltd. in Action Number
M103571, and Heather Mahaffy and Samuel Mahaffy (prospective
defendants in relation to the December 4, 2014 accident) offer to settle
this action in its entirety and any and all claims arising from the
December 4, 2014 accident… . The Defendants reserve the right to bring
this offer to the attention of the court for consideration in relation to costs
after the court has pronounced judgment on all other issues in the proceeding.
[Emphasis in original.]

Issues

[4]            
The issues to be decided here are:

(a)   Should
the January offer lead to cost consequences following its delivery?

(b)   Was
there sufficient reason for bringing the proceeding in the Supreme Court such
that the plaintiff is entitled to her costs despite the fact that she recovered
a sum within the jurisdiction of the Provincial Court?

(c)    Should
the plaintiff be denied her disbursements related to her unsuccessful claims
for past income loss, loss of housekeeping capacity, costs of future care, and
loss of earning capacity?

(a) Should the January offer lead to cost consequences following its
delivery?

[5]            
This is a two-fold issue. First, was the January offer a valid offer
under Rule 9-1(1)? Second, if the offer was valid, should this Court
exercise its discretion and deprive the plaintiff of her costs and award the
defendants their costs following the offer’s delivery?

[6]            
Rule 9-1(1) defines an “offer to settle” as follows:

(1)  In this rule, "offer to settle" means

(c)     an offer to settle made after July 1, 2008 under
Rule 37B of the former Supreme Court Rules, as that rule read on the date of
the offer to settle, or made under this rule, that

(i)    is made in writing by a party to a proceeding,

(ii)    has been served on all parties of record, and

(iii)   contains the following sentence: "The
[party(ies)], [name(s) of party(ies)], reserve(s) the right to bring this offer
to the attention of the court for consideration in relation to costs after the
court has pronounced judgment on all other issues in this proceeding."

[7]            
Subrule (4) stipulates that the court may consider an offer to settle
when exercising its discretion as to costs. Subrule (5) lists costs options
following an offer to settle. Subrule (6) provides a list of considerations for
the court in making an order under subrule (5). Rule 9-1 and its predecessor,
Rule 37B (B.C. Reg. 130/2008), are substantially the same.

[8]            
The plaintiff argues that the January offer is invalid because no
proceeding had been commenced with respect to the December 2014 accident at the
time that the offer was open and because it is a global offer to settle claims
from unrelated accidents, one of which was not the subject matter of this
proceeding.

[9]            
A pre-litigation offer is not an “offer to settle” as that term is
defined in Rule 9‑1 because “[t]here must first be a proceeding and
then an offer to settle before Rule 37B or Civil Rule 9-1 applies” (Bomford
v. Wayden Transportation Systems Inc., 2010 BCSC 1721 at para. 14; see also
Hutson v. Michaels of Canada, ULC, 2009 BCSC 1587 at para. 12). Thus,
the January offer will not be a Rule 9-1 offer in any proceeding arising from
the December 2014 accident. However, that is irrelevant for this proceeding,
which had been commenced when the January offer was made. As a result, the
January offer was not a pre-litigation offer with respect to this proceeding,
and therefore is not invalid for this reason.

[10]        
The offer is also not invalid because it is a global offer to settle
claims from unrelated accidents, one of which was not the subject of this
proceeding. Rule 9-1(1)(c) list three requirements for an “offer to
settle”: the offer must (i) be made in writing by a party to the proceeding;
(ii) be served on all parties of record; and (iii) contain the sentence
maintaining the option to bring the offer to the attention of the court for
consideration in relation to costs after judgment. The January offer met all of
these requirements. The fact that the offer was made by parties and non-parties
does not alter the fact that it was made by parties to the proceeding.

[11]        
The former Rule 37 (B.C. Reg. 55/93, repealed B.C. Reg. 130/2008) was a
strict and complete code and did not allow for judicial discretion, except as
specifically provided in the rule (Cridge v. Harper Grey Easton, 2005
BCCA 33 at paras. 23-24, leave to appeal to S.C.C. refused [2005] 2 S.C.R.
vii). Former Rule 37(31) provided that, except in an action for
defamation, “if several defendants are sued jointly, a plaintiff may not make
an offer to settle except jointly to all defendants, and a defendant may not
make an offer to settle except jointly with all other defendants”. The former
Rule 37A (B.C. Reg. 198/2003, repealed B.C. Reg. 130/2008) allowed for
judicial discretion on costs, but only applied in the limited circumstances
where an offer could not have been made under Rule 37 (Roach v. Dutra,
2010 BCCA 264 at para. 48 (Roach)). Global offers made by or to multiple
parties in respect of separate actions, even those tried together, were not
valid offers to settle under the former Rules 37 and 37A (Canadian Forest
Products Ltd. v. B.C. Rail Ltd., 2005 BCCA 460 at para. 26 (Rule 37); Cao
(Guardian ad litem of) v. Schroeder, 2005 BCCA 351 at para. 7 (Rule 37A)).

[12]        
When Rule 37B was introduced, it heralded a “return to reliance on
judicial discretion with respect to costs” (Hix v. Ewanchuk Estate, 2008
BCSC 1258 at para. 16). Rule 9-1 represents a “clear movement away from
the narrowly formulated, rigidly applied approach” to costs under the former
Rule 37 and “provides for the exercise of a broad discretion by trial judges
and provides guiding principles to apply in the exercise of that discretion” (Roach
at para. 50). It was intended to “ameliorate the effects of the rigid
application of Rule 37” adopted by the courts (Roach at para. 52). As a
result, the law on global offers under Rule 37 is of little assistance (Towson
v. Bergman, 2009 BCSC 978 at para. 61 (Towson)).

[13]        
Global offers have been considered valid under Rule 9-1, even where the
parties are different, the actions were not heard together, or the offer
included claims for which no proceeding had been commenced (Towson; Aspen
Enterprises Ltd. v. Quiding, 2009 BCSC 50 (Aspen Enterprises Ltd.); Glen
Labby Contracting Ltd. v. Advanced Energy Systems I Limited Partnership,
2009 BCSC 1501 (Glen Labby Contracting Ltd.); Jampolsky v. Shattler,
2013 BCSC 373 (Jampolsky)). The Court of Appeal in Roach
expressed no opinion on whether global offers to settle multiple proceedings
were valid under Rule 9-1 and left the issue for another day (at para. 53).

[14]        
In Towson, a global offer from the lone plaintiff to settle two
actions was found to be valid under former Rule 37B. The actions were heard
together but arose from unrelated motor vehicle accidents. Gray J. wrote at
para. 61 that “Rule 37B places no restrictions on the court’s discretion in
relation to global settlement offers. … Pursuant to Rule 37B, the consideration
for the court pertaining to global settlement offers is whether the offer was
one that ought reasonably to have been accepted.”

[15]        
A global offer made with respect to multiple actions not heard together
was considered in Aspen Enterprises Ltd. Aspen Enterprises and two other
companies brought separate actions against the Quidings. Two of the three
actions were to be heard together but the third was set for trial the following
year. Shortly before the first trial, the Quidings made a global offer to
settle all three actions. The Quidings argued that the offer was valid because
Rule 37B did not require that an offer apply to “one or more of the claims in
the proceeding”, and because Rule 37B was broader in application than the
former Rule 37 (at para. 16). While she did not expressly accept these
arguments, Fenlon J., as she then was, went on to consider whether the offer
ought to give rise to cost consequences, implying that she considered the offer
valid. She ultimately held the offer ought not to have been reasonably accepted
because no plaintiff could compel the others to accept (at para. 19).

[16]        
A global offer was considered when it included claims not subject to any
legal proceedings in Glen Labby Contracting Ltd. The plaintiff offered
to settle the proceeding on condition that the defendants abandon their
counterclaim as well as any claims relating to environmental issues. The
defendants’ counterclaim involved claims against the plaintiff for causing
environmental damage at a construction site, but the offer to settle went
beyond the pleadings (at para. 12). Ultimately, Verhoeven J. declined to
exercise his discretion under Rule 37B to award the plaintiff double costs because
it was not possible to assess whether the judgment was more favourable than the
offer (at paras. 13-15). While Justice Verhoeven said that he did not consider
the defendants’ argument that the offer was non-compliant with Rule 37B (at para.
16), the fact that he dismissed the application for double costs based on the
factors in what is now Rule 9-1(6) suggests that he considered the offer valid.

[17]        
In Jampolsky, a global offer was made by four sets of defendants
in four separate unrelated motor vehicle accident actions that were to be heard
together. The court held that Rule 9-1, like Rule 37B, places no restrictions
on the court’s discretion in relation to global settlement offers (at para.
44). The court found that the offer was one that ought to have been accepted by
the plaintiff (at para. 70).

[18]        
The goal of providing trial judges with a broad discretion in relation
to costs and offers to settle would be undermined by taking a narrow view of
what offers can be considered under Rule 9-1. While that might have been
necessary under the former Rule 37, the discretionary nature of Rule 9-1
suggests that the focus of the court should shift from whether an offer can be
considered at all, to whether the offer ought to attract cost consequences. The
purpose and enactment history of Rule 9-1 and judicial interpretation of
that rule to date support the conclusion that global offers can be considered
under the rule.

[19]        
It follows that the January offer was not an invalid offer under Rule
9-1 for the reason that it included an offer to settle claims from an unrelated
accident.

[20]        
Since the offer was valid, should this Court exercise its discretion and
deprive the plaintiff of her costs and award the defendants their costs
following the offer’s delivery?

[21]        
Rule 9-1 provides for a broad discretion in awarding costs based on
offers to settle. Rule 9-1(5)(a) allows the court to deprive a party of costs
following an unaccepted offer to settle. Rule 9-1(5)(d) allows the court to
award a defendant costs if they made an offer for an amount greater than the
judgment. Rule 9-1(6) lists a number of factors the court may consider in
making a costs award following an 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.

[22]        
In considering whether the offer ought reasonably to have been accepted,
the court should ask “whether, at the time that the offer was open for
acceptance, it would have been reasonable for it to have been accepted” (Hartshorne
v. Hartshorne, 2011 BCCA 29 at para. 27 (Hartshorne)). Factors
include the timing of the offer, whether it had some relationship to the claim,
whether it could be easily evaluated, and whether some rationale for the offer
was provided (ibid). The onus is on the offeror to show that the offer ought
reasonably to have been accepted (BCSPCA v. Baker, 2008 BCSC 947 at
para. 36).

[23]        
Here, there is simply not enough information from which to conclude that
the January offer ought reasonably to have been accepted. This proceeding did
not address the December 2014 accident. While the plaintiff indicated at some
point that no injury resulted from two motor vehicle accidents in 2014 (Hall-Smith
at para. 41), this is insufficient to find that the January offer ought
reasonably to have been accepted while it was open for acceptance from January
to February 2015. The fact that the offer was only open for acceptance until about
three months after the December 2014 accident suggests that the offer ought not
to have been accepted. It is doubtful that the plaintiff could properly assess
any potential claim for the December 2014 accident by February 2015. Overall,
it cannot be concluded that the January offer ought reasonably to have been
accepted.

[24]        
Notwithstanding that the plaintiff indicated that there was no injury
from the December 2014 accident, there is still insufficient information to
ascertain the relationship between the terms of settlement offered and the
final judgment because the judgment only relates to a part of the January
offer. As stated in Glen Labby Contracting Ltd. at para. 13,
“[b]ecause the offer to settle included a demand for settlement of matters not
within the scope of the pleadings, it is not possible to evaluate whether the
plaintiff received a result at trial which is more favourable than the terms
set out in [the] offer”. It cannot be concluded that the terms of the January
offer were more favourable than the judgment.

[25]        
The factor of relative financial circumstances of the parties is neutral
here, in the absence of evidence.

[26]        
As to other factors that the court considers appropriate, a party’s
blameworthy conduct, including a lack of candour, may be considered under this
rule (Hartshorne at para. 35; McIsaac v. Healthy Body Services Inc.,
2010 BCSC 1033 at para. 80). In this case, the plaintiff’s lack of credibility about
the nature of her injuries does favour depriving her of her costs (Hall-Smith
at para. 50). However, in the circumstances I do not think this factor
overwhelms the other factors which suggest that the plaintiff should not be
deprived of her costs.

[27]        
Accordingly, the plaintiff will not be deprived of her costs and the
defendants will not be awarded their costs due to the January offer.

(b) Was there sufficient reason for bringing the proceeding in the Supreme
Court such that the plaintiff is entitled to her costs despite the fact that
she recovered a sum within the jurisdiction of the Provincial Court?

[28]        
Subrule 14-1(10) provides:

Costs in cases within small claims jurisdiction

(10) A plaintiff who recovers a
sum within the jurisdiction of the Provincial Court under the Small Claims
Act is not entitled to costs, other than disbursements, unless the court
finds that there was sufficient reason for bringing the proceeding in the
Supreme Court and so orders.

[29]        
The burden is on the plaintiff to establish eligible circumstances that
are persuasive and compelling to justify “sufficient reason” (Gehlen v. Rana,
2011 BCCA 219 at para. 37 (Gehlen)). The test is objective (Gehlen
at para. 32).The point in time for consideration of whether a “sufficient
reason” exists is the time at which the action is initiated (Reimann v. Aziz,
2007 BCCA 448 at para. 44 (Reimann)).

[30]        
While the list of factors for consideration is not closed, factors
commonly considered under this subrule that are potentially relevant to this
case include: (a) the likely quantum of the claim; (b) whether the assistance
of counsel was reasonably required; (c) whether documentary discovery or
examinations for discovery were reasonably necessary; and (d) the suitability
of the summary procedures available in Supreme Court (see generally Spencer
v. Popham, 2010 BCSC 683 at paras. 9-12 (Spencer)).

[31]        
For the reasons below, I conclude that factors (a), (b), and (c) all
gave the plaintiff a sufficient reason to bring her claim in Supreme Court.

[32]        
While “sufficient reason” is not limited to the likely quantum of the
claim, it is often the most important factor (Gehlen at para. 37). If
there is a “real concern” that the plaintiff’s total damages will exceed the
Small Claims limit there is sufficient reason for bringing the claim in Supreme
Court, even if the case might be described as “weak” (Jensen v. Shek (1994),
24 C.P.C. (3d) 182 at 184, [1994] B.C.J. No. 325 (S.C.)). The time for
consideration of the likely quantum is the time at which the action was
commenced, and there is no ongoing obligation to re-assess the quantum of a
claim (Reimann at para. 44). However, parties are expected to properly
investigate their claims and anticipate potential issues before commencing an
action (Mohamadi v. Tremblay, 2009 BCSC 1583 at para. 60). Generally, a
generous approach is taken in finding sufficient reason based on likely
quantum, particularly in personal injury actions, because it is difficult for
plaintiff’s counsel to estimate the appropriate range of quantum at the
initiation of the action (Mak v. Eichel, 2009 BCSC 47 at para. 23; Mehta
v. Douglas, 2011 BCSC 714 at para. 10 (Mehta)).

[33]        
The plaintiff was awarded $24,187, just within the small claims
jurisdiction. Given the difficulty of estimating quantum of damages at the
outset of the action and factoring in issues of credibility, it was reasonably possible
that damages could have exceeded $25,000. The matter of quantum of damages gave
sufficient reason to bring the action in the Supreme Court.

[34]        
Where the plaintiff reasonably requires counsel to obtain a just result,
the plaintiff is justified in bringing an action in Supreme Court where he or
she can hope to recover some of his or her costs in retaining counsel (Faedo
v. Dowell, 2007 BCSC 1985 at para. 36 (Faedo); Gradek v.
DaimlerChrysler Financial Services Canada Inc. and Fletcher, 2010 BCSC 356
at para. 43, aff’d 2011 BCCA 136 (Gradek)). Generally, the assistance of
counsel may be required where: (a) the plaintiff is unable to competently
represent himself due to his limited abilities such as, for example, limited
English language skills (Gradek) or being an infant (Mehta); (b)
the defendant is an institutional defendant that is normally represented by
counsel so that the plaintiff may reasonably require counsel to present his or
her case without being overmatched (Gradek at para. 42; Ostovic v.
Foggin, 2009 BCSC 58 at para. 42 (Ostovic); Faedo at
para. 34; Zale v. Colwell, 2010 BCSC 1040 at paras. 14-15); or (c) the
case is legally or factually complex as in a case where liability is denied (Spencer
at para. 25) or where credibility is seriously in issue (Faedo at para.
36). However, the mere desire to retain counsel is not in and of itself a sufficient
reason to commence the action in Supreme Court (Spencer at para. 14).

[35]        
Here, counsel was reasonably required. The plaintiff had very limited
personal skills and was undergoing drug rehabilitation shortly after the
accident. The defendants were represented by institutional lawyers. The case
was somewhat complex because the defendants’ initial response to civil claim denied
liability, causation and damages and alleged pre-existing injuries, independent
causes and contributory negligence.

[36]        
The need for document discovery or examinations for discovery may be a
sufficient reason to bring an action in Supreme Court (Icecorp International
v. Nicolaus, 2007 BCCA 97 at para. 27 (Icecorp International),
citing Kuehne v. Probstl, 2004 BCSC 865 at para. 22).

[37]        
The need for discovery is often a “sufficient reason” in motor vehicle
accident claims, especially where liability or causation is disputed (Ostovic
at para. 41; Sanderson v. Van Humbeck, 2013 BCSC 1546 at para. 13).

[38]        
Here, the defendants’ response to civil claim raised issues that
indicated that pre-trial discovery would be important and likely warranted
bringing the action in the Supreme Court.

[39]        
Finally, the availability of the summary processes available in Supreme
Court may constitute a sufficient reason for bringing an action in Supreme
Court (Icecorp International at para. 27; Mehta at para. 8; Parmar
v. Lahay, 2011 BCSC 1628 at para. 9).

[40]        
This action was commenced as a fast track action under Rule 15-1,
although it was eventually removed from Rule 15-1. Since the relevant point in
time for consideration of whether a sufficient reason existed is the time at
which the action was commenced, the fact that this action was suitable for Rule
15-1 is a relevant factor. However, I would not give it much weight.

[41]        
In conclusion, the plaintiff had sufficient reason to bring her claim in
the Supreme Court because: when the action was commenced, there was a
reasonable possibility that damages would exceed $25,000; the plaintiff’s
limited abilities, the institutional representation of the defendants, and the
complexities of the case required a lawyer to present the plaintiff’s case; and
the complexity of the case meant that discovery was reasonably necessary. The
plaintiff will not be denied her costs under Rule 14-1(10).

(c) Should the plaintiff be denied her disbursements related to her
unsuccessful claims for past income loss, loss of housekeeping capacity, costs
of future care, and loss of earning capacity?

[42]        
The defendants seek an apportionment of costs pursuant to Rule 14-1(15).
The plaintiff was unsuccessful in her claims for past income loss, loss of
future earning capacity, loss of housekeeping capacity, and costs of future
care (Hall-Smith at paras. 58-66 and 71-76). The defendants do not seek
to apportion costs of the trial because of this lack of success but want to
deny the plaintiff reimbursement for disbursements to pay the experts, Derek
Nordin, who performed a vocational assessment, and Russell McNeil, an
occupational therapist.

[43]        
Rule 14-1(5) provides for the determination of the necessity of
incurring a disbursement by a Registrar. It says:

Rule 14-1 – Costs

Disbursements

(5) When assessing costs under subrule (2) or (3) of this
rule, a registrar must

(a) determine which disbursements have been necessarily or
properly incurred in the conduct of the proceeding, and

(b) allow a reasonable amount for those disbursements.

[44]        
The Registrar’s discretion to disallow disbursements in whole or in part
is well established and may be the subject of appeal to this Court (Salsman
v. Planes, 2014 BCSC 1726 at paras. 7-11). The Registrar is more
experienced than this Court with disallowance of disbursements and will assess
costs and disbursements here in any event. In this circumstance, the question
of disallowance of the Nordin or McNeil disbursement is best left to the
Registrar.

Conclusion

[45]        
The plaintiff is entitled to her costs on Scale B, including the costs
of the costs hearing, and necessary or proper disbursements to be assessed.

“Dillon J.

________________________________

The Honourable Madam Justice Dillon