IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140218

Docket: M060430

Registry:
Vancouver

Between:

Louisa Kovac

Plaintiff

And

Dominic Moscone

Defendant

Before:
The Honourable Mr. Justice Harvey

Ruling on Costs

[1]            
The sole remaining issue in this proceeding is that of costs arising
from the 21-day trial which concluded in May 2011.  The only issue at trial was
the assessment of the plaintiff’s damages arising from a motor vehicle accident
which occurred in February 2004.  The plaintiff submitted her damages were well
in excess of $1 million.  The defendant submitted a range of $15,000 to $20,000
was appropriate.

[2]            
The results of the trial are detailed in reasons for judgment indexed as
Kovac v. Moscone, 2012 BCSC 845.

[3]            
The assessment of the plaintiff’s damages was substantially complicated
by the occurrence of a second accident at her workplace in January 2006. 
Following the motor vehicle accident, the plaintiff continued to teach
elementary school and returned, either wholly or in part, to many of her
pre-motor vehicle accident activities.  After the workplace fall, her capacity
for both vocational and avocational pursuits changed substantially.

[4]            
Ultimately, damages were assessed on the basis that the plaintiff sustained
a combination of soft tissue injuries and thoracic outlet syndrome as a result
of the motor vehicle accident. I concluded that the plaintiff’s other ongoing
symptoms, which were undeniably disabling, were as a result of the January 2006
workplace fall.  I awarded the plaintiff $75,000 in respect of non-pecuniary
loss but concluded that her claims for past wage loss, cost of future care and
loss of economic capacity were unrelated to the February 2004 accident.

[5]            
At the conclusion of my reasons for judgment I invited counsel to make
submissions on the matter of costs.

[6]            
Both parties had exchanged formal offers to settle.  The plaintiff’s
offer to settle was far in excess of that eventually awarded.  The defendant’s offer,
while close, fell short of the $75,000 award.

Position of the Parties

[7]            
The defendant suggests that he is entitled to costs of the proceeding on
the basis that the defendant, not the plaintiff, was substantially successful
in the proceeding.  He relies upon R.14-1(9) of the Supreme Court Civil
Rules in support of that proposition.

[8]            
Alternatively, the defendant says that the offer to settle ought to be considered;
he says I should award the defendant costs following delivery of the offer
despite the fact that the offer to settle was below what the court ultimately
awarded.

[9]            
Finally, if neither of those submissions find favour, the defendant says
R.14‑1(15)(b) is applicable and costs of the trial should be apportioned between
the plaintiff and defendant; the plaintiff should be awarded costs based upon
the proportion of time spent on issues on which the plaintiff was successful,
specifically evidence in support of the findings that resulted in the $75,000
award for non-pecuniary damages; the defendant should be awarded costs for the trial
time spent examining issues on which the plaintiff was unsuccessful –
specifically, her claim that the accident caused her to suffer post-traumatic
stress disorder and chronic pain syndrome resulting in past and prospective economic
loss, together with future medical costs.

[10]        
In response, the plaintiff submits that the ‘usual rule’ should
prevail.  The plaintiff says she was successful in obtaining a tangible result
in excess of that offered by the defendant and, given the nature of personal
injury claims, she ought not to be punished in costs for failing to prevail on
each head of damages.

[11]        
The plaintiff submits she is entitled to costs throughout. She argued
that it would be inappropriate to consider the offers to settle since the
plaintiff’s award exceeded the amount offered.

Discussion

[12]        
There is no question that significant trial time was spent presenting
evidence on matters upon which the defendant, not the plaintiff, ultimately prevailed.
I agree with the defendant’s submission that approximately half the days of
trial related to plaintiff’s claim for past and future claims for economic loss
and medical expense.

[13]        
Nonetheless, I agree with plaintiff’s counsel that the plaintiff
achieved a substantial degree of success in the proceeding and her damages were
assessed in excess of the defendant’s offer to settle.  She succeeded on the
disputed issue of whether or not she sustained thoracic outlet syndrome as a
result of the collision.  A significant amount of evidence from both lay and
expert witnesses was called in support of and against that proposition.

[14]        
Also, the defendant contributed to the lengthy trial by pursuing
unmeritorious issues.  The defendant went so far as to call Ann Crosby, an ICBC
adjuster who handled the plaintiff’s claim in its early stages, to suggest that
the plaintiff had concocted her complaints of hand pain and associated numbness
based upon the adjuster’s discussion of her own symptoms of hand numbness at
the time they met to discuss the plaintiff’s claim in November 2005.

[15]        
The plaintiff’s medical records, which were at all times available to
the adjuster prior to her meeting with the plaintiff, clearly indicated that
the complaints of hand numbness had been made to the plaintiff’s family doctor
well in advance of her meeting with the adjuster.

[16]        
Despite the fact that those records were provided to the defendant’s
counsel well in advance of the trial, the defence persisted with the theory of
concoction at trial when it was wholly without merit.

[17]        
I agree with the plaintiff’s submission that she achieved a substantial
award of damages in the proceeding in excess of that which she could have
settled the claim for.  I note that the plaintiff had to press this matter to
trial to achieve the award she did and succeeded in establishing that her
injuries were more substantial than was suggested by the defendant. In the
usual course, she would be entitled to costs of the proceeding, including all of
the trial days.

[18]        
Furthermore, I reject the defendant’s alternative argument that I ought
to consider the defendant’s offer to settle for an amount some $20,000 to $25,000
below that which was ultimately awarded.

[19]        
Rule 9-1 governs offers to settle and their impact on the matter of
costs:

(4) The court may consider an
offer to settle when exercising the court’s discretion in relation to costs.

[20]        
Rule 9-1(5) goes on to provide the cost options available when
considering the impact of an offer to settle made by the defendant(s). It
provides:

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.

[21]        
As noted above, the offer fell short of the damages awarded to the
plaintiff by approximately one-third.

[22]        
The language of R.9-1(5)(d) is inconsistent with the notion that I am
entitled to consider an offer which is proximate to, but less than, that which
was awarded, and nevertheless invoke the rule to provide the defendant with
costs of the trial.

[23]        
Rule 9-1(6) governs the considerations as to the application of R.9-1(5).
Subsection (a) specifies that one of the considerations is “whether the offer
to settle was one that ought reasonably to have accepted, either on the date
that the offer to settle was delivered or served or on any later date”.  Subsection
(b) notes that the court may consider “the relationship between the terms of settlement
offered and the final judgment of the court”.

[24]        
Here, the offer is not one which ought to have reasonably been accepted.
The plaintiff’s recovery exceeded the offer by almost 50%. In my view, the
defendant’s offer to settle, falling short of the amount awarded, does not
warrant departure from the usual rule that a successful plaintiff is entitled
to his or her costs.

[25]        
More problematic, however, is the issue of apportionment of costs
provided for in R.14-1(15).

[26]        
Rule 14-1(15) provides as follows:

The court may award costs

(a) of a proceeding,

(b) that relate to some particular
application, step or matter in or related to the proceeding, or

(c) except so far as they relate to
some particular application, step or matter in or related to the proceeding

and in awarding those costs the
court may fix the amount of costs, including the amount of disbursements.

[27]        
The defendant argues he is entitled to costs of the portion of the trial
which dealt with the plaintiff’s claims that the motor vehicle accident had
resulted in her permanent incapacity and warranted an award in excess of $1 million.

[28]        
Of the 21 days of trial, the defendant says that at least half of those
days were devoted to the pursuit of claims for heads of damage on which the
plaintiff failed to recover. That accords, more or less, my estimate of
approximately 10 days of trial being devoted to the plaintiff’s pursuit of
heads of damages which I found were not causally connected to the accident.

[29]        
In response to this submission, the plaintiff notes that courts have
been reluctant to apportion costs as suggested by the defendant in personal
injury claims.

[30]        
In O’ Ruairc v. Pelletier et al, 2005 BCSC 1001, the plaintiff in
a personal injury action claimed damages for past loss of income, special
damages, loss of capacity and future care.  Liability was a live issue in the
trial.  The plaintiff succeeded in establishing liability, injury and causation
but did not achieve the success he had hoped for on the issue of damages.  He
asserted he had suffered a mild traumatic brain injury and claimed for damages
totalling approximately $500,000.  The defendants responded that damages ought
to be in the range of $35,000 to $45,000.  The court awarded $83,600 in respect
of non-pecuniary loss, past loss of income and special damages but denied
claims for loss of capacity and future care.

[31]        
Despite the award of $83,600, an amount exceeding that suggested by the
defendants, the defendants argued they were substantially successful because
many of the plaintiff’s claims were denied and the amount of the award was much
closer to that suggested by the defendants at the trial’s commencement.

[32]        
Alternatively, the defendants argued that success was divided and, based
upon Rule 57(15) – the predecessor to R.14-1(15) – costs of the trial ought to
be apportioned; the defendants argued they should be awarded costs in respect
of trial time consumed by the pursuit of claims on which the plaintiff
ultimately failed.

[33]        
The defendants argued that the trial had been unnecessarily lengthened
by those unsuccessful claims and that much of the expert evidence tendered was unnecessary
to the result.

[34]        
Madam Justice Wedge had little difficulty in rejecting the defendants’ first
submission – that of substantial success entitling them to costs of the entire
litigation.  I have reached the same conclusion here.

[35]        
Wedge J. rejected the defendants’ submission that they ought to be
rewarded the costs associated with the portion of the trial related to the
plaintiff’s claim for future economic loss.  She described her reasons for this
conclusion as follows:

[35] I am also satisfied this is not an appropriate case in
which to apportion damages in accordance with the heads of damage on which the
plaintiff succeeded or failed. First, the issues in the case were not discrete
or severable. Second, there were several complicating factors in this case. The
plaintiff was just seventeen years of age at the time of the accidents.
Although the litigation was commenced less than a year after the Pelletier
action, eight years passed before it came to trial. Eight years in the life of
any individual is a long time, but in the life of an adolescent, it is even
longer. Much of the time at trial was spent examining the plaintiff’s life and
prospects before and after the accident. Not surprisingly, the defendants took
the position that many of the plaintiff’s difficulties after the accidents were
the expected difficulties of a teenager. The plaintiff took issue with that
proposition. The defendants also argued that the plaintiff’s difficulties
stemmed from a number of other causes, including the medical treatment he
received post-accident. Evidence from lay witnesses and experts was called by
both parties on these issues.

[36] The plaintiff alleged that he suffered a mild traumatic
brain injury in the accident, and the defendants denied that injury. While I
ultimately concluded the plaintiff’s difficulties stemmed from soft tissue injuries
and depression (both resulting from the accident) and not from a mild traumatic
brain injury, I also concluded that he experienced significant cognitive and
behavioural difficulties for a number of years post-accident.

[37] Due to the length of time that
passed before the trial of the actions, some of the opinions of experts were
overtaken by the plaintiff’s recovery and entry into the R.C.M.P. However, the
damages claims in the actions were interwoven. Witnesses were called to
establish the injury and its aftermath. Most witnesses testified concerning the
spectrum of issues – non-pecuniary loss, past wage loss, loss of capacity,
future care and special damages. The issues at trial were not discrete or
separable.

[36]        
In Dinyer-Fraser v. Laurentian Bank et al, 2005 BCSC 1432, a
claim in defamation, Madam Justice Ballance stated that the apportionment of
costs is limited to exceptional cases in which discrete issues can be clearly
delineated.  She said “[i]t is not a routine feature of litigation; rather, it is
reserved for relatively rare instances” (at para. 10).  Despite the plaintiff’s
failure to recover claimed future economic loss and aggravated damages,
Ballance J. awarded costs of the whole of the proceeding, including the full
costs of trial, to the plaintiff.

[37]        
The plaintiff referred me to a number of motor vehicle cases where the
issue of costs apportionment arose because the damages awarded were
significantly less than those claimed (DiFranco v. Sung, [1998]
B.C.J. No. 430 (S.C.); A.E. v. D.W.J., 2009 BCSC 505; and Payne
v. Lore, 2010 BCSC 1313).  Common among these cases is the fact that
the plaintiffs were unsuccessful in claims relating to one specific head of damage,
typically future losses.  In each of them the court declined to apportion the costs
of the trial.

[38]        
The result in the cases relied upon by the plaintiff stand in contrast
to Lee v. Jarvie, 2012 BCSC 1521. In Lee, Mr. Justice Gaul
considered the current R.14-1(15) as opposed to the language of R.57(15).

[39]        
Similar to the facts before me, Lee was a personal injury action
arising from a motor vehicle accident.  The plaintiff sought significant
damages under various headings, including loss of earning capacity and loss of
housekeeping capacity.

[40]        
The total claims advanced by the plaintiff exceeded $1 million.  A
substantial sum, ranging from $400,000 to $650,000, was sought in respect of
loss of future earning capacity.  The trial was estimated to take five days but
ended up occupying 14 days spread over 12 months.

[41]        
Ultimately, the plaintiff was awarded $50,200, an amount far below that
which was claimed.  The defendant sought apportionment of costs given their
successful defence of the claims for loss of earning capacity and loss of
housekeeping capacity.

[42]        
Gaul J. considered two cases, British Columbia v. Worthington
(Canada) Inc. et al (1988), 29 B.C.L.R. (2d) 145 (C.A.) and Sutherland
v. Canada (Attorney General), 2008 BCCA 27, and concluded that applications
to apportion costs are the exception, not the norm, in civil litigation and should
be relegated to relatively rare cases.  He noted the power to apportion costs
is discretionary and the exercise of that discretion must be done “judicially,
not arbitrarily or capriciously” (at para. 12).  Lastly, the exercise of the
discretion must be connected to circumstances of the particular case which
would “render it manifestly fair and just to apportion costs” (at para. 12).

[43]        
Gaul J. further found he was guided by a test set out in Sutherland
at para. 31 of that decision:

The test for the apportionment of costs under Rule 57(15) can
be set out as follows:

(1) the party seeking apportionment
must establish that there are separate and discrete issues upon which the
ultimately unsuccessful party succeeded at trial;

(2) there must be a basis on which
the trial judge can identify the time attributable to the trial of these
separate issues;

(3) it must be shown that apportionment would effect a just
result.

[44]        
After embarking on an extensive review of the authorities under R.
57(15), including many to which I have been referred by counsel for the
plaintiff, such as O’Ruairc, Difranco and Payne, Gaul, J.
attempted to reconcile the divergent results in apportionment applications when
he noted:

[38] The apparent divergence of
judicial approaches to the question of apportioning costs in personal injury
cases appears to hinge on the determination of the degree of success the
plaintiff enjoyed at trial and whether the trial was unnecessarily prolonged by
the pursuit of inflated or unrealistic claims. Where the court finds the
plaintiff was substantially successful at trial and there was no pursuit of
exaggerated claims, then apportionment of costs will less likely be granted.
However, where the court determines there was divided success, or finds there
was a distinguishable portion of the plaintiff’s claim that was unrealistically
pursued resulting in a more protracted proceeding, then subject to the guiding
principles articulated in Worthington and Sutherland,
apportionment of costs is a legitimate consideration.

[45]        
Gaul J. found that the heads of damages upon which the plaintiff was
successful were clearly distinguishable from those on which they failed.  He
found that the evidence tendered both in support of and against the contention
that the plaintiff suffered future losses occupied an identifiable portion of
the trial; the plaintiff failed to prove losses of past opportunity to earn
wages and loss of future earning capacity.  Only modest success was achieved in
relation to cost of future care.

[46]        
Further, and importantly in my view, Gaul J. made unfavorable commentary
upon the plaintiff’s credibility, finding her “less than forthright” in the
presentation of evidence in key areas (at para. 46).

[47]        
Gaul J. went on to apportion costs of the trial as between the plaintiff
and defendant on the basis of trial time related to the evidence called in
respect of the various issues.  He determined approximately seven of the 13
days in trial were attributable to the evidence and arguments addressing those
claims upon which the plaintiff was unsuccessful.  He concluded a 50%
apportionment of trial costs was appropriate.

[48]        
 The apportionment of costs in Lee was appealed on the basis that
the language of R.14-1(15) was more restrictive than that of its predecessor,
R. 57(15), and thus narrowed the ability of a trial judge to apportion costs.

[49]        
 In reasons indexed at Lee v. Jarvie, 2013 BCCA 515, Groberman
J.A., writing for the court, confirmed that the discretion to apportion costs
under R.14‑1(15) is as broad as it was under former R.57(15) and that the
discretion was still governed by the principles set out in Sutherland (at
para. 40).

[50]        
Having considered the authorities, I do not find this case to be one of
the exceptional or rare instances where costs apportionment should take place.  Although
the claims for future economic loss were discrete issues which occupied
identifiable portions of the trial, I am not of the view that apportionment
would affect a just result in the circumstances.

[51]        
Unlike in Lee, where the court found that the plaintiff pursued
inflated and unrealistic claims, all parties agreed that the plaintiff had
profound and disabling injuries.  I did not find that her injuries were
exaggerated; they were real and catastrophic.  As noted earlier, the assessment
of the plaintiff’s damages were complicated by the subsequent accident at her
workplace.

[52]        
I agree with Gaul J. that the divergence over apportionment of costs in
motor vehicle cases hinges on the “determination of the degree of success”
achieved at trial and whether the trial was “unnecessarily prolonged by the
pursuit of inflated or unrealistic claims” (at para. 38).

[53]        
Here the plaintiff’s claims were neither inflated nor unrealistic.  The
issue of causation was live throughout the trial.

[54]        
Furthermore, I made no finding similar to that in Lee as to the
plaintiff’s credibility.  Rather, I found her evidence and that of others who
relayed her complaints in the intervening period between the motor vehicle
accident and the workplace accident to be unreliable; therefore, the causal
connection between the motor vehicle accident and some of her injuries at trial
were not proven.

[55]        
The defendant spent considerable time attacking the plaintiff’s
credibility as opposed to her reliability through the evidence of Ms. Crosby,
when such an endeavour was premised upon nothing more than Ms. Crosby’s concern
that the plaintiff was mimicking her symptoms.

[56]        
Furthermore, the defendant was equipped with the ability, through its
offer to settle, to properly protect itself from the cost consequences of the
plaintiff’s failure on the issue of the causal connection between her
admittedly catastrophic injuries and the motor vehicle accident.

[57]        
The conclusion that apportioning the costs would not affect a just result
in the circumstances, as I have determined, does not necessarily entitle the
plaintiff to the full costs of the trial.  In Bailey v. Victory (1995),
4 B.C.L.R. (3d) 389, [1995] B.C.J. No. 526 (C.A.), the Court of Appeal found
that costs apportionment would have an unfair effect.  The Court held the
plaintiff “lost the battle he sought to fight on the ground which he chose”
which protracted the trial and he should “bear the consequences of that, but no
more” (at para. 35).  The Court found that in light of the fact that the
plaintiff proved liability and received an award substantially in excess of
what was advanced, it was fair to deny him costs for 3 days of trial.

[58]        
In my view, the trial could have been reduced to approximately 11 days
absent the plaintiff’s claims for losses flowing from the workplace accident.  Therefore,
I find the appropriate disposition of the issue of costs is to award the
plaintiff her costs but limit them to 11 days of trial as was done in Bailey
and Berston v. McCrea, [1996] B.C.J. No. 134 (S.C.).

[59]        
The plaintiff is entitled to the costs of this application.

“Harvey J.”