IN
THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | Wittich v. Bob, |
| 2010 BCSC 431 |
Date: 20100331
Docket: M95401
Registry:
New Westminster
Between:
Karen Tina Wittich
Plaintiff
And
Gilbert G. Bob
Vera Virginia Bob and
Rodney Kenneth Wittich
Defendants
Before:
The Honourable Madam Justice Bruce
Reasons for Judgment
Counsel for the Plaintiff: | T. |
Counsel for the Defendant: | D. |
Place and Date of Hearing: | New |
Place and Date of Judgment: | New |
INTRODUCTION
[1]
This is an application for costs arising out of an action for damages
due to injuries suffered by the plaintiff in a motor vehicle accident. The
trial lasted 15 days between June 1, 2009 and December 4, 2009. I issued
judgment in favour of the plaintiff on December 15, 2009 in the amount of
$31,034.64: Wittich v. Bob, 2009 BCSC 1721. The plaintiffs action
against all defendants except for Mr. Wittich was dismissed.
[2]
It is not disputed that the defendant delivered a formal offer to settle
to the plaintiffs counsel on June 26, 2007 in the amount of $40,100 plus costs.
In addition, the parties agree that a second offer of settlement in the amount
of $65,000 plus costs was delivered to the plaintiffs counsel on March 4,
2009. The second offer expressly withdrew the first offer of settlement;
however, the defendant also reserved the right to bring all offers to the
attention of the court for its consideration in an application for costs.
[3]
The plaintiff delivered a formal offer of settlement to the defendants
counsel on April 21, 2009 in the amount of $196,000 plus costs and
disbursements to date. At trial, the plaintiff claimed damages of approximately
$847,000. The defendant maintained that the plaintiff was entitled to between
$20,000 and $25,000 in non-pecuniary damages, but no damages under any other
heading.
[4]
The defendant argues that he is entitled to his costs and disbursements
from and after the date of the first offer of settlement and that the plaintiff
is only entitled to costs up to this date. In the alternative, the defendant
argues he should be entitled to costs and disbursements from and after the date
of the second offer of settlement.
[5]
The plaintiff argues the court should exercise its discretion to deny
the defendant costs and disbursements after the date of either settlement offer
based on the criteria specified in Rule 37B, Rules of Court.
Alternatively, the plaintiff argues she should be entitled to her disbursements
until the conclusion of the proceedings.
[6]
The plaintiff applied to adjourn the assessment of costs until after the
appeal of my award of damages was heard. I dismissed this application on the
ground that it would be preferable for the Court of Appeal to address all
issues at the same time rather than necessitate a bifurcated hearing should the
plaintiff be denied her appeal on the merits. The plaintiff also applied to
adjourn the proceedings on the ground that the defendants affidavit, sworn by
Mr. Lester, was served late and included prejudicial and irrelevant material.
Counsel for the plaintiff, Mr. Spraggs, was particularly concerned with the
prospect of the court awarding personal costs against him as a result of the
material contained in the affidavit. I denied the plaintiffs adjournment on
this ground. Mr. Spraggs indicated that he was able to proceed on the Rule 37B
application regardless of the delay in receiving Mr. Lesters affidavit.
Further, the defendant assured the court that he was not seeking personal costs
against Mr. Spraggs. Lastly, I concluded that there was nothing surprising in
Mr. Lesters affidavit as it related to the Rule 37B application and thus an adjournment
was unnecessary. Any potentially prejudicial material in Mr. Lesters
affidavit, if related to the Rule 37B application, would not be considered by
the court.
[7]
I note that somewhat curiously Mr. Spraggs first took the position that
he required an adjournment to prepare an affidavit of the plaintiff in response
to Mr. Lesters affidavit. He argued that the correct procedure, in any event,
was to hear the defendants application under Rule 37B, issue an order, and
then leave it to the plaintiff to bring on an application to vary the order for
costs under Rule 37B. This submission led me to believe that I would be causing
substantial prejudice to Mrs. Wittich if I refused an adjournment. However,
given the fact that this application had been set down twice with the
concurrence of Mr. Spraggs, that his interpretation of the procedure under Rule
37B was completely unsupportable, and that he had failed to provide the
defendant with any notice of his application to adjourn, I concluded that an adjournment
in the circumstances should follow with an order of personal costs. The court
simply could not condone Mr. Spraggs conduct. Upon the pronouncement of this
order, however, Mr. Spraggs indicated that he was able to proceed with the Rule
37B application and any material he required was already before the court in
the trial record. We thus proceeded with the defendants application and no
order of personal costs was made against Mr. Spraggs.
RULE 37B
[8]
Rule 37B came into effect on July 1, 2008. It replaced the former Rule
37 and Rule 37A which provided mandatory rules in regard to the imposition of
costs in circumstances where either party had served a formal offer of
settlement on the other. The new Rule 37B broadened the courts discretion to
award costs in the face of an offer to settle. Rule 37B(4) provides that an
offer to settle may be considered by the court when exercising its discretion
in relation to costs. Rule 37B(5) describes the options available to the court
when an offer to settle has been made as follows:
(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, in whole or in part, 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 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 of the offer to settle.
(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 defendants costs in
respect of all or some of the steps taken in the proceeding after the date of
delivery of the offer to settle.
[9]
Rule 37B(6) articulates the factors the court may consider when
awarding costs under subrule (5). These include:
(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 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.
ARGUMENT
[10]
The defendant argues that both offers may be considered by the court
when assessing costs under Rule 37B. In support of this proposition the defendant
relies on Insurance Corp. of British Columbia v. Patko, 2009 BCSC 578, [2009]
B.C.J. No. 865, and Hutson v. Michaels of Canada ULC, 2009 BCSC 1587, [2009]
B.C.J. No. 2308. While Bains v. Indo-Canadian Times Inc. (1995), 57
B.C.A.C. 90, 38 C.P.C. (3d) 53 supports a contrary conclusion, the defendant
says it should not be followed because it was decided under the old rules.
[11]
The defendant argues that both the first and second offers were
reasonable and should have been accepted by the plaintiff. She had serious
pre-existing disabilities and was aware that the defendant disputed causation
in relation to the motor vehicle accident. In addition, at the time of the
first offer, the plaintiff knew that she would unlikely be able to return to
her job as a janitor regardless of the accident related injuries. Moreover, her
family doctors clinical records were in her possession prior to the first
offer and these records clearly outlined her pre-accident disabilities. While
Dr. Chan recommended surgery for a herniated disc, the plaintiff cancelled the
surgery as early as July 2005 because her symptoms had settled.
[12]
The defendant also argues that additional medical evidence showing
significant pre-existing and non accident-related injuries came to the
plaintiffs attention after the second offer to settle was delivered to the
plaintiff. These medical records include the consultation reports of Dr.
Davidson, a neurologist, and Dr. Taylor, an orthopaedic surgeon. These medical
reports indicated the numbness and tingling in the plaintiffs hands was
unrelated to the accident and had not been a problem for 18 months. Lastly, the
defendant argues the plaintiff had neurological reports that indicated no
residual deficits related to the accident.
[13]
The defendant points to the fact that both offers were considerably greater
than the damages recovered by the plaintiff at trial and well below what she
claimed. In addition, the defendant maintains the relative financial
circumstances of the parties are irrelevant because the plaintiff and
defendant, as a married couple, have the same economic situation. The
circumstances of the defendants insurer are irrelevant: Bailey v. Jang,
2008 BCSC 1372, 90 B.C.L.R. (4th) 125, Luzuka v. Chuang, 2009 BCSC 1424,
[2009] B.C.J. No. 2060, and Amba v. Paul, 2009 BCSC 60, 66 C.P.C. (6th) 100.
[14]
Other factors favouring an award of costs to the defendant include the
plaintiffs lack of candour at the trial when giving evidence of her injuries,
the difficulty the defendant experienced in attempting to have her medical
records disclosed, the fact that the defendant was forced to file the notice of
trial and incur the cost of court fees in the amount of $5,512, the plaintiffs
unnecessary opposition to Dr. Smiths report and refusal to consent to his
evidence by deposition, and the plaintiffs two unsuccessful applications
during the adjournment of the trial to essentially begin their case again with
new medical evidence after a lengthy adjournment.
[15]
The plaintiff argues the court should exercise its discretion to award
her costs until the date of judgment. In the alternative, she argues that her
costs and disbursements should be awarded up to April 9, 2009, and thereafter
she should be entitled to her disbursements. According to the plaintiff, the
defendant should not be entitled to costs. The plaintiff says the onus is on
the defendant to establish that the offers should reasonably have been
accepted: British Columbia Society for the Prevention of Cruelty to Animals
v. Baker, 2008 BCSC 947, [2008] B.C.J. No. 1635. She also relies upon A.E.
(Litigation guardian of) v. D.W.J., 2009 BCSC 505, 91 B.C.L.R. (4th) 372,
for the proposition that it is the circumstances existing at the time of the
offer, and not the known facts after the trial is concluded, that governs the
issue of reasonableness.
[16]
The plaintiff argues it was not reasonable for her to accept the first
offer because at that time there was very little medical evidence and she was
still in the acute stages of her injuries. The fact that the defendant offered
a significantly higher offer in March 2009 is an indication that the first
offer was too low based on the medical evidence produced after this date. The
plaintiff also argues that it was unreasonable to accept the second offer when
her discovery had not yet been held and the plaintiffs medical records were
not served until March 31, 2009. The important report of Dr. Maloon was not
received until April 2, 2009. Lastly, liability was not in dispute. Had the
plaintiff proven all her injuries at trial, the award would have been far
greater than the offers to settle.
[17]
The plaintiff argues the size of the offers in relation to the award at
trial is a neutral factor because the first offer was similar and the second
offer was close to double the award. In terms of the relative financial
position of the parties, the plaintiff says her poor economic situation should
govern. The defendants evidence confirmed the serious nature of the
plaintiffs injuries. Despite this evidence, counsel took instructions from
ICBC to defend the action on the basis that the plaintiff had no accident
related injuries. The plaintiff also argues that an award of costs to the
defendant will deprive her of any judgment and will result in a debt to ICBC
that is enforceable by a suspension of her drivers licence. In support of this
argument, the plaintiff relies upon Smagh v. Bumbrah, 2009 BCSC 623, 73
C.P.C. (6th) 70.
[18]
Lastly, the plaintiff says she should have had some time to consider the
defendants offer after receipt of Dr. Maloons report on April 2, 2009. She
argues seven days should be given in all of the circumstances: Arnold v.
Cartwright Estate, 2008 BCSC 1575, 86 B.C.L.R. (4th) 99.
DECISION
[19]
Turning to the factors for consideration under Rule 37B(6), I find it
would have been reasonable for the plaintiff to accept the second offer to
settle after she had an appropriate opportunity to consider Dr. Maloons expert
report. This report was delivered on April 2, 2009. A period of seven days to
consider the ramifications of this report is appropriate in the circumstances
and is supported by the authorities.
[20]
While there was medical evidence in existence at the time of the first
and second offers to settle that seriously jeopardized her claim that the symptoms
she was experiencing at that time were related to the motor vehicle accident,
her primary injury was the herniated disc diagnosed by Dr. Chan and confirmed
by the radiologists reports. This evidence showed that immediately prior to
the accident there were some degenerative changes in the spine and that
immediately after the accident there was a moderately severe herniated disc.
The symptoms of this injury varied over time and had actually settled on the eve
of the plaintiffs surgery. Nevertheless, the injury itself would likely have
led the court to award substantially greater non-pecuniary damages,
particularly because this injury would have prolonged the recovery period
indefinitely. It was only when the plaintiff received Dr. Maloons report that
it became apparent that the diagnosis of a herniated disc related to the
accident was seriously in question.
[21]
Once the plaintiff had notice of Dr. Maloons report, and had a
reasonable time to consider it, it should have been apparent to her that the
second offer was far closer to the possible range of damages she could expect
to be awarded at trial. The plaintiff had no intention of calling Dr. Chan as
an expert and could not rely on the radiologists reports as Rule 40 expert
reports. She proceeded to trial after this point in time knowing her evidence
was unlikely to be accepted in light of the expert opinion of Dr. Maloon. The
plaintiff took a calculated risk and must face the potential consequences of an
order for costs against her.
[22]
Turning to a comparison of the offers and the damages awarded at trial,
I find the first offer was close to the amount of the award. The second offer
was double the award. This factor supports an award of costs to the defendant
from and after the second offer.
[23]
Turning to the financial circumstances of the parties, it is clear that,
as a married couple, the plaintiff and the defendant have the same economic
position. The authorities are divided as to whether the circumstances of the
insurer should be considered as a relevant factor in an order for costs. In the
particular circumstances of this case, I find it is appropriate to consider the
insurers resources in comparison to the plaintiffs. The defendant Mr. Wittich
supported his wifes claim and testified that her pain and suffering after the
accident was considerable and prolonged; however, counsel for the defendant
took an entirely different position in argument. Thus it must be inferred that
counsel was taking instructions from the insurer and not the litigant.
[24]
The plaintiff is not a wealthy person. She has not worked for a
considerable period of time. The defendant has an income of less than $70,000
per year. I thus find that their economic circumstances are far less
substantial when compared to that of the insurer. It is also apparent that an
award of costs may deprive the plaintiff of the judgment awarded at trial.
These are factors in her favour.
[25]
Lastly, turning to the other factors raised by the defendant, I find
that some of these raise the spectre of an award of personal costs against Mr.
Spraggs and thus are beyond the scope of this application for Rule 37B costs.
In regard to pre-trial applications, the defendant is entitled to costs where
the orders were made in any event of the cause. The applications made by the
plaintiff during the adjournment of the trial are factors to be considered by
the court in making any award of costs and not simply factors to consider under
Rule 37B(6). The plaintiff was denied her application to adjourn the trial for
the purpose of producing further medical evidence and her application to
re-open her case. These applications caused the trial to be much longer than it
would otherwise have been and put the defendant to additional costs. Clearly,
the plaintiff is not entitled to an award representing the disbursements she incurred
in pursuing these applications. Otherwise, and except as set out below, I find
this to be a neutral factor under Rule 37B.
[26]
Considering the factors reviewed above as a whole, I find the plaintiff
is entitled to her costs and disbursements up to April 9, 2009, and thereafter
the defendant is entitled to his costs and disbursements. While the financial
circumstances of the plaintiff are a factor in her favour, the other factors are
either neutral or clearly favour the defendants application for costs. The
defendant is entitled to costs for any pre-trial application where the orders
were made for costs in any in event of the cause and which were decided in the
defendants favour. While the trial fees were paid after April 9, 2009, I find
it is appropriate that the parties share these costs. I order that the defendant
bear 75% of this disbursement and the plaintiff bear 25%. It is apparent that
the trial was substantially longer as a result of the plaintiffs successive
unsuccessful applications to adjourn the trial, to call rebuttal evidence, and
to re-open her case to present further medical evidence.
Bruce
J.