Litigants can occasionally “ win the battle, but still lose the war”.
This can occur in situations like where the plaintiff wins the case, but the court finds that the plaintiff did not suffer damages, so a nominal amount is awarded.
Where no actual damages are proven, the remedy for a proven breach is nominal damages.
In Davidson v. Tahtsa Timber Ltd., 2010 BCCA 528, Kirkpatrick J.A., for the court, summarized the principle as follows:
[43] Unfortunately, the trial judge did not have cited to him the law relating to nominal damages, undoubtedly because the appellant held an optimistic view of success. In State Vacuum Stores of Canada Ltd. v. Phillips, [1954] 3 D.L.R. 621 at 630, 12 W.W.R. (N.S.) 489 (B.C.C.A.) [State Vacuum Stores], this Court stated:
On the question of nominal damages I feel the attention of Wood J. could not have been directed to the legal principle that, failing proof of substantial damages, he could and in the circumstances should have given nominal damages. There can be no serious doubt about this. In United Shoe Mfg. Co. v. Brunet, [1909] A.C. 330 at p. 345, Lord Atkinson said this: “As the respondents have broken their contract, the appellants must, despite the finding of the jury that they sustained no damage, be entitled to nominal damages, but to nothing more.”
And in McGee v. Clark (1927), 38 B.C.R. 156 at p. 160, Macdonald J.A. stated the point in this way: “As to consequential relief, it must be based upon breach of contract, and the resultant damages proven. None were proven and only nominal damages can be obtained. But as pointed out by the Earl of Halsbury in The “Mediana”, [1900] A.C. 113 at p. 116, the term ‘nominal damages’ does not necessarily mean ‘small damages’. I would place the amount at $50.”
[44] In my opinion, the appellant, having succeeded in establishing that he was wrongfully dismissed, was entitled to an award of nominal damages that I would fix at $100. This amount is consistent with the nominal award granted in State Vacuum Stores and the discussion of the amount of nominal damages by Waddams at para. 10.20. Since he did not pursue a claim for nominal costs as a “mere peg on which to hang costs” (per Maule J., Beaumont v. Greathead (1846), 2 C.B. 494 at 499), I would find that the appellant is entitled to an award of costs at scale B against Tahtsa.
[27] These cases suggest to me that a chambers judge charged with the hearing of an application for dismissal of an action for want of prosecution is bound to consider the following:
(1) the length of the delay and whether it was inordinate;
(2) any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances;
(3) whether the delay has caused serious prejudice to the defendant in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be readied for trial after its reactivation by the plaintiff; and
(4) whether, on balance, justice requires dismissal of the action.
[28] I consider the fourth question to encompass the other three and to be the most important and decisive question.
[29] I would not attempt to state what reasons for the delay might serve as an excuse for the plaintiff. In some cases, for example, negligence of the plaintiff’s lawyer might amount to an excuse, in others it might not. Whether the reason for the delay amounts to an excuse will depend on the circumstances of the particular case.
A court action was commenced in 2001 and the court process was not served on the defendant.The plaintiff served an amended statement of claim is September 0f 2002, but did not renew the writ of summons ( now Notice of Claim), within the one year he had to do so, without valid reasons.
[13] Rule 3(2) of the Supreme Court Civil Rules provides the court with jurisdiction to renew an original notice of civil claim for a period of not more than 12 months, where the defendant named in the notice of civil claim has not been served within the 12 months in which the original notice of civil claim was in force. The present Supreme Court Civil Rules came into effect July 1, 2010. Rule 3-2(1) applies to renewal of the writ of summons filed in accordance with the former Supreme Court Rules, pursuant to the current transitional pleadings rule, Rule 24-1.
[14] Rule 9(1) governed renewal of an original writ of summons under the former Supreme Court Rules. The terms of Rule 9(1) of the former rules are substantially the same as the terms of Rule 3-2(1) of the current Supreme Court Civil Rules. Accordingly, principles relating to the former Rule continue to apply.
[15] In an application to renew a writ of summons, the basic question facing the court is: what is necessary to see that justice is done? If refusal to renew the writ would do an obvious and substantial injustice to the plaintiff, while to permit it is not going to work any substantial injustice to the defendant, or prejudice to the defendant’s defence, then the writ should be renewed: Bearhead v. Moorhouse (1978), 87 D.L.R. (3d) 52 (B.C. C.A.), quoting Culliton C.J.S. in Simpson v. Sask. Govt. Insur. Office (1967), 65 D.L.R. (2d) 324 (Sask. C.A.).
[16] In Bearhead, the Court of Appeal affirmed the chambers decision of McTaggert L.J.S.C., in which the learned judge set out five factors relevant to the exercise of discretion, within the context of the overall issue:
1. Whether the application to renew was made promptly;
2. Whether the defendant had notice of the claim before the writ expired;
3. Whether the defendant has been prejudiced;
4. Whether the failure to effect service was attributable to the defendant;
5. Whether the plaintiff, as opposed to his solicitors, was at fault.
[17] These factors were repeated and affirmed in the more recent decision of the Court of Appeal in Fast Fuel Services Ltd. v. Michelin North America (Canada) Inc., 2008 BCCA 216, at para. 9.
[18] These factors will be considered in turn.
B. Was the application to renew made promptly?
[19] The plaintiff argues that it cannot be said that he did not make the application to renew promptly, as he was not aware that the writ of summons he served in September 2002 had expired until he received the defendant’s May 3, 2012 application to dismiss his claim. He brought his application to renew the writ on May 28, 2012. Thus he argues that he acted promptly. In making this argument the plaintiff relies upon the comments of Lowry J.A. for the Court, in Fast Fuel Services Ltd. at para. 16:
That said, the relevant time in considering delay on an application to renew a writ, brought after the writ has expired, is the time elapsed from the date the plaintiffs learned the writ had not been served to the date of the application.
[20] However, in my view, in the circumstances of this case the plaintiff himself is responsible for the fact that he was not aware that the writ was expired at the time he served it.
[21] According to the plaintiff, about a month after he filed the claim in August 2001, a lawyer, Mr. Macaulay, offered to review the filed claim for him. Mr. Macaulay advised him that the claim required amending in order to properly plead the claims, and he agreed to prepare an amendment for the plaintiff, without charge. The plaintiff says that he did not receive the amended statement of claim until about one year later. He then filed the document and served it. He recalls that when he attended Mr. Macaulay’s office to pick up the amended statement of claim, Mr. Macaulay said, “I had to do something with the amended claim before I could serve it on Mimi. I now recall that I was supposed to renew the amended claim before I could serve Mimi.”
[22] There is no direct evidence from Mr. Macaulay on these matters. However, what is clear on the plaintiff’s evidence is that he was advised by Mr. Macaulay that there was something he had to do with respect to the “amended claim” before it was served. The plaintiff did not make further inquiries then, or at any time since then.
[23] Moreover, when the defendant did not file an appearance or statement of defence, the plaintiff could have applied for default judgment. Had he done so, in the circumstances, the defendant would have moved to set aside the judgment on the basis of the expired writ. Thus, the plaintiff would have learned of the expiry of the writ many years ago. Instead, the plaintiff allowed the claim to languish for 9 ½ years.
[24] In the circumstances, therefore, the plaintiff ought to have known long ago that the writ of summons had expired prior to its service. The law favours a party who acts promptly. However, in my view, it cannot fairly be said that the plaintiff’s application to renew the writ of summons was made promptly, in any real sense.
C. Did the defendant have notice of the claim before the Writ expired?
[25] There is conflicting affidavit evidence on this question. The plaintiff contends that after he filed the claim, he telephoned the defendant and told her that he had filed the claim. He says that “she told me that she never wanted to see or hear from me again.” The defendant says that she did not become aware of the proceedings until the plaintiff delivered the writ of summons and amended statement of claim to her in September 2002. She denies that he advised her by telephone or otherwise that he had filed or intended to file a claim in relation to the estate.
[26] Unsurprisingly, there is no corroborative evidence one way or another. I am however skeptical about the plaintiff’s assertion. It is made for the first time in his affidavit sworn May 28, 2012, more than 10 years after the alleged phone call. The assertion is made in response to the application of the defendant filed with the Court May 3, 2012, which asserted that the writ of summons and statement of claim expired prior to service. The plaintiff’s evidence about the telephone call seems convenient.
[27] Even if I accept that the plaintiff said something in a telephone conversation about a claim being made, the content of the notice that the defendant received is questionable. The plaintiff asserts only that he “told her that he had filed the claim.” He does not indicate what, exactly, “the claim” was. This was not a situation where a defendant has received a draft or unfiled pleading, or a letter from a solicitor setting out the substance of proposed claims. On the plaintiff’s evidence, all the defendant would have known is that a claim, presumably relating to the estate, was being made. In my view, the circumstances are somewhat akin to those in Davies v. Bakk,2002 BCSC 1605, where the plaintiff alleged he was injured by the defendant in a cross check in a hockey game. While both parties were being restrained by linesmen, the plaintiff told the defendant he was going to sue him, and he repeated the comment to the defendant’s teammates later on, in the dressing room. Master Bolton held that in the circumstances there was no reason why the defendant should have taken this as anything more than an idle threat made in the heat of the moment.
[28] For the purposes of this application, and on the evidence available, I am not prepared to find that the defendant had notice of the claim before the writ expired.
[29] However, the defendant had knowledge of the claim in September 2002, within a month of the expiry of the original writ of summons.
D. Has the defendant suffered prejudice?
[30] The relevant delay is the delay which impairs the defendant’s ability to mount an adequate defence: Seeliger v. Eagle Ridge Hospital, 2007 BCCA 582. The basic objective is to see that justice is done: Seeliger at paras. 37-39.
[31] The defendant argues that she has been severely prejudice by the delay.
[32] I find that there is actual prejudice by the delay, as measured from September 2002, when the plaintiff ought to have been aware, if he was not actually aware, that the writ of summons had expired, to May 28, 2012, when he filed his application to renew the writ of summons.
[33] In this context, I observe that the claims of the plaintiff primarily relate to events taking place from 1993 to 2001, when Waldtraut died. Some evidence material to the plaintiff’s claims would relate to the period prior to 1993. Some significant events were already well in the past as of 2002.
[34] In 2008, the defendant disposed of some of the deceased’s papers, because she could not think of any reason to hold onto them.
[35] More significantly, a material witness has died. Mr. Erik Unheim was the deceased’s financial advisor and confidant from 1980 until 2010, when he died. The defendant deposes that Mr. Unheim was aware of the many requests for money made by the plaintiff to the deceased and the stress that it caused her. She deposes that he would have been a key witness for the defence, and would have been able to testify to the deceased’s financial holdings, the nature and amounts of loans made by her to the plaintiff, the deceased’s relationship with the plaintiff, and the deceased’s intentions as regards what should happen to her assets on her death. Mr. Unheim’s role is in fact mentioned in the original statement of claim that the plaintiff drafted and filed in August 2001. The plaintiff, in his responding affidavit, does not deny that Mr. Unheim would have been a material witness.
[36] The defendant alleges that she and other material witnesses would have significantly faded memories. In that respect she refers to the deceased’s lawyer, Mr. Larry Flater, who assisted the deceased with the transfer of the Langley property in joint names, the sale of the Langley property, the acquisition of the Princeton property, and the deceased’s will. Mr. Flater is now retired. The defendant refers to two other witnesses who also would be able to testify regarding the deceased’s intentions, but who could be expected to have faded memories. In response, the plaintiff argues that based upon the defendant’s own affidavit, it is apparent that she continues to have a good memory, and access to at least some relevant documents.
[37] On the evidence, I accept that the defendant has established actual prejudice arising out of the delay in the application to renew the writ of summons. In particular, as noted Mr. Unheim would have been a material witness and he is now deceased. I accept as well that other witnesses, including the defendant herself, may have faded memories with respect to the material circumstances.
E. Was the failure to effect service attributable to the defendant?
[38] That plaintiff concedes that the failure to effect service was not attributable to the defendant.
F. Whether the plaintiff, as opposed to his solicitor, is at fault
[39] In my view, the plaintiff is at fault for failing to effect service within the year in which the writ of summons was in effect. It was the plaintiff’s decision to wait to have an amended statement of claim prepared by Mr. Macaulay before serving the writ of summons. In his first affidavit, the plaintiff contends that he phoned Mr. Macaulay every so often to find how the amendment of the claim was coming along. He says that Mr. Macaulay indicated to him that he had been very busy and had not started it yet. However in his subsequent affidavit, the plaintiff says that although he did not hear from Mr. Macaulay for several months, and he did not want to bother him because he was not charging him for the work. As noted, there is no direct evidence from Mr. Macaulay about the matters in question. Even if I accept the evidence of the plaintiff, although he did not appreciate its significance, nonetheless he was content to allow a year to go by without serving the writ of summons. Moreover, on the plaintiff’s evidence, when he obtained the amended statement of claim from Mr. Macaulay, he was told that there was something that he needed to do before he could serve it. He says, “I now recall that I was supposed to renew the amended claim before I could serve Mimi.” Although he says that he did not understand Mr. Macaulay’s advice, it would have been a simple matter to ask Mr. Macaulay what was meant. Mr. Macaulay would certainly have told him that what was required was an application to court to renew the writ.
[40] In the circumstances, the plaintiff has not established that any fault on the part of his solicitor led to the writ of summons not being served within time.
G. What is necessary to see that justice is done?
[41] It cannot be said that refusal to renew the writ would do an obvious and substantial injustice to the plaintiff. He has been dilatory, in the extreme. As I will set out in greater detail below, I do not accept the excuses he offers for his dilatory conduct. In my view, in these circumstances the plaintiff is fully at fault for creating the circumstances that presently exist. The plaintiff simply delayed making his claims until many years had gone by, until it suited him to advance them. It also cannot be said that permitting the amendment is not going to work any substantial injustice to the defendant, or prejudice the defendant’s defence. The defendant is prejudiced with respect to answering the claims, on the merits, and is also prejudiced in simply having to face claims relating to her property after such a long delay.
H. Conclusion regarding application to renew writ of summons
[42] The application of the plaintiff to renew the writ of summons is denied.
Wiseman v. Perrey, 2013 BCSC 904 is a decision containing a good summary on various aspects of costs, ranging from offers to settle, special costs, and the apportionment of costs between parties who have been ” largely successful” at trial.
The general rule is that costs follow the event and that the successful party is entitled to receive assessed costs and disbursements.
There were two court a tigons tried at the same time in the Wiseman case. In one the defendant was mostly successful, and in the other, the defendant was entirely successful.
The Law on Apportionment of Costs
In Chaster (Guardian ad litem) v. LeBlanc (2008), 51 C.P.C. (6th) 184 (B.C.S.C.), Hinkson J., as he then was, approved and followed the test set out in Fotheringham v. Fotheringham (2001), 13 C.P.C. (5th) 302 (B.C.S.C.), appeal refused [2002] B.C.J. No. 1872, where Bouck J. stated:
Gold [Gold v. Gold (1993), 82 B.C.L.R. (2d) 180 (B.C.C.A.)] now seems to say that substantial success in an action should be decided by the trial judge looking at the various matters in dispute and weighing their relative importance. The words “substantial success” are not defined. For want of a better measure, since success, a passing grade, is around 50% or better, substantial success is about 75% or better. That does not mean a court must descend into a meticulous mathematical examination of the matters in dispute and assign a percentage to each matter. Rather, it is meant to serve as a rough and ready guide when looked at all the disputed matters globally.
Application of the Gold Principle and Rule 57(9) to this Action
Based on the above interpretation of Rules 57(9), 57(15) and Gold, a decision to award or not award costs after a trial might follow a four step inquiry.
1. First, by focusing on the “matters in dispute” at the trial. These may or may not include “issues” explicitly mentioned in the pleadings.
2. Second, by assessing the weight or importance of those “matters” to the parties.
3. Third, by doing a global determination with respect to all the matters in dispute and determining which party “substantially succeeded,” overall and therefore won the event.
4. Fourth, where one party “substantially succeeded,” a consideration of whether there are reasons to “otherwise order” that the winning party be deprived of his or her costs and each side then bear their own costs.
(at paras. 45-56)
[28] Of similar effect are the decisions in Citta Construction Ltd. v. E. Lane Holdings Ltd. et al., [2004] B.C.J. No. 392, Chaster, supra, and Moro v. El Mantari, [2010] B.C.J. No. 811.
[29] In Mawdsley v Meshen (2011), 22 B.C.L.R. (5th) 168 , Ballance J. stated:
The definitive authority is Sutherland v. The Attorney General of Canada, 2008 BCCA 27. There, the Court of Appeal surveyed the authorities, including its important earlier decision in B.C. (Gov’t.) v. Worthington (Canada) Inc., [1989] 1 WWR 1, 29 B.C.L.R. (2d) 145 (C.A.). In Worthington, the Court of Appeal had clarified that the purpose of apportioning costs is to effect a just result between the parties where proceedings have been prolonged by issues which the party, who would otherwise be entitled to costs, has lost.
Returning to Sutherland, at para. 31, the Court of Appeal set out the test for the apportionment of costs:
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.
(at paras. 42-43)
Failing to Prove Allegations of Undue Influence Can Lead to Special Costs awarded against the plaintiff as the courts view claims of undue influence seriously as it is a form of civil fraud.
Special costs may be awarded as a means of discouraging and chastising a litigant whose conduct is considered by the Court to be reprehensible: Stiles v. B.C. (W.C.B.) (1989), 38 B.C.L.R. (2d) 307, 39 C.P.C. (2d) 74 (C.A.).
Reprehensible conduct is broadly defined. It encompasses within its scope a range of misconduct from scandalous and outrageous at one extreme, to milder forms of misconduct warranting judicial rebuke: Garcia v. Crestbrook Forest Industries Ltd. (1994), 119 D.L.R. (4th) 740, 9 B.C.L.R. (3d) 242 (C.A.).
An allegation of fraud in a civil lawsuit carries connotations of criminal-like deceit, trickery and dishonesty. The potential for harm to one’s reputation that such an accusation carries cannot be overstated. It is a most serious claim.
For these reasons, a failed allegation of fraud will more readily justify an award of special costs against the maker than other types of unproven allegations. Still, the one does not automatically follow the other. Whether unfounded accusations of fraud amounts to sufficiently reprehensible conduct inviting chastisement by the court depends on the particular circumstances: 307527 B.C. Ltd. v. Langley, 2005 BCCA 161; International Hi-Tech Industries Inc. v. FANUC Robotics Canada Ltd., [2007] B.C.J. No. 2541, 49 C.P.C. (6th) 233 (S.C.).
A party who fails to prove a claim of undue influence may also be at risk of being ordered to pay the special costs of the other parties on the reasoning that undue influence stops “just short of fraud”: Hamilton v. Sutherland, [1992] 5 W.W.R. 151, 68 B.C.L.R. (2d) 115 (C.A.); Bates; Sanguinetti v. Korpiel, [1998] B.C.J. No. 2669 (S.C.); Kouwenhoven; McLean v. Gonzalez-Calvo, 2007 BCSC 648; Stanton.
That risk may also present itself to a plaintiff who pursues unsubstantiated and unfounded allegations of lack of capacity: Benekritis v. Benekritis, [1998] B.C.J. No. 171. In fact, the two often appear as twin allegations in probate litigation aimed at invalidating a will.
The test of “reprehensible conduct” for an award of special costs was stated by Lambert J.A. in Stiles v. British Columbia (Workers’ Compensation Board) (1989), 38 B.C.L.R. (2d) 307 at 311 (C.A.):
The principle which guides the decision to award solicitor-and-client costs in a contested matter where there is no fund in issue and where the parties have not agreed on solicitor-and-client costs in advance, is that solicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement. The words “scandalous” and “outrageous” have also been used.
Offers to Settle are a well entrenched litigation tool that is used to make offers to the opposing side, that if rejected, and the winning party “beats” the offer, then the winning party is entitled to increased costs to be awarded to them from the losing party, after the date of the offer.
Rule 37B used to govern offers to settle, but while the wording is the same, it is now Rule 9-1 (1) c and it states:
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.”
Case law has held that to be a valid offer to settle wiyjin the Rules of Court, then the offer must use the wording of the section, including the right to bring the offer to the attention of the trial Judge.
Roach v. Dutra (2010), 5 B.C.L.R. (5th) 95 (C.A.); Wormell v. Hagen, [2009] B.C.J. No. 2236; and Eigeard v. Muench, [2010] B.C.J. No. 1229, are the cases on point
In Roach, Prowse J.A. on behalf of the Court undertook an extensive review of the rule dealing with costs and concluded:
… I am also of the view that the wording of the offer must be substantially compliant with the wording of subrule 1(c)(iii) such that no reasonable person could be misled as to the intent of the offer or the fact that it was an offer within the meaning of Rule 37B. In other words, the offer must be in writing, the wording must make it clear what party is making the offer and to whom it is made, and it must include the fact that the party making the offer is reserving the right to bring the offer to the attention of the court in relation to costs after judgment on all other issues in the proceeding. (at para. 52)
[9] While the decision in Roach, supra, dealt with the former Rule 37B(1)(c)(iii), that rule is identical to the present Rule 9‑1(1)(c)(iii) and, accordingly, I am bound by the decision reached by the Court in Roach.
[10] In Wormell, Goepel J. also dealt with an offer which did not contain the wording required under Rule 37B(1)(c)(iii). In adopting the decision of Powers J. in Lau v. Rai (2009), 72 C.P.C. (6th) 112 (B.C.S.C.) to come to the conclusion that the offer did not constitute an “offer to settle” as defined under the Rule, Goepel J. concluded that the third party’s application for double costs should be dismissed. In Eigeard, Hyslop J. was of a similar opinion and concluded: “There is nothing in the offer of the plaintiff to suggest that the plaintiff intends to bring the offer to the trial judge’s attention as it relates to costs.” (at para. 25).
The party receiving an “offer to settle” is entitled to receive the “warning” that the offer will be brought to the attention of the Court. The possibility that costs will be awarded provides an additional incentive for the party receiving an offer to settle to consider the offer seriously. There should be no doubt that costs may be awarded whether or not the party receiving the offer to settle is ultimately successful.
– See more at: http://www.disinherited.com/blog/offers-settle#sthash.WKEcN9tM.dpufaOffers to Settle are a well entrenched litigation tool that is used to make offers to the opposing side, that if rejected, and the winning party “beats” the offer, then the winning party is entitled to increased costs to be awarded to them from the losing party, after the date of the offer.
Rule 37B used to govern offers to settle, but while the wording is the same, it is now Rule 9-1 (1) c and it states:
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.”
Case law has held that to be a valid offer to settle wiyjin the Rules of Court, then the offer must use the wording of the section, including the right to bring the offer to the attention of the trial Judge.
Roach v. Dutra (2010), 5 B.C.L.R. (5th) 95 (C.A.); Wormell v. Hagen, [2009] B.C.J. No. 2236; and Eigeard v. Muench, [2010] B.C.J. No. 1229, are the cases on point
In Roach, Prowse J.A. on behalf of the Court undertook an extensive review of the rule dealing with costs and concluded:
… I am also of the view that the wording of the offer must be substantially compliant with the wording of subrule 1(c)(iii) such that no reasonable person could be misled as to the intent of the offer or the fact that it was an offer within the meaning of Rule 37B. In other words, the offer must be in writing, the wording must make it clear what party is making the offer and to whom it is made, and it must include the fact that the party making the offer is reserving the right to bring the offer to the attention of the court in relation to costs after judgment on all other issues in the proceeding. (at para. 52)
[9] While the decision in Roach, supra, dealt with the former Rule 37B(1)(c)(iii), that rule is identical to the present Rule 9‑1(1)(c)(iii) and, accordingly, I am bound by the decision reached by the Court in Roach.
[10] In Wormell, Goepel J. also dealt with an offer which did not contain the wording required under Rule 37B(1)(c)(iii). In adopting the decision of Powers J. in Lau v. Rai (2009), 72 C.P.C. (6th) 112 (B.C.S.C.) to come to the conclusion that the offer did not constitute an “offer to settle” as defined under the Rule, Goepel J. concluded that the third party’s application for double costs should be dismissed. In Eigeard, Hyslop J. was of a similar opinion and concluded: “There is nothing in the offer of the plaintiff to suggest that the plaintiff intends to bring the offer to the trial judge’s attention as it relates to costs.” (at para. 25).
The party receiving an “offer to settle” is entitled to receive the “warning” that the offer will be brought to the attention of the Court. The possibility that costs will be awarded provides an additional incentive for the party receiving an offer to settle to consider the offer seriously. There should be no doubt that costs may be awarded whether or not the party receiving the offer to settle is ultimately successful.
Ng v Ng 2013 BCSC 1492 discusses in detail the law relating to special costs, as claimed by the winning party in the previous litigation where the family of Kenny Ng, who had been in a coma for 7 years, in their unsuccessful attempt to prevent the committee of Kenny from cutting off his life support.
The court rejected the claim for special costs, which likely would have well exceeded $100,000 and instead ordered costs on scale B which will be more likely in the range of $15,000.
[12] Rule 14-1(9) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules] provides:
Costs to follow event
(9) Subject to subrule (12), costs of a proceeding must be awarded to the successful party unless the court otherwise orders.
[13] The Patients Property Act, R.S.B.C. 1996, c. 349 provides pursuant to s. 27: Costs
27 The costs of all proceedings under this Act are in the discretion of the court.
[14] While costs generally follow the event, there are circumstances where costs
may still be awarded to the unsuccessful party.
[15] In Lee v. Lee Estate (1993), 84 B.C.L.R. (2d) 341 (S.C.), the plaintiff, Michael Lee, claimed that he was the son of the testator and that he was entitled to a share of the estate. Genetic testing proved that he was not related to the testator and his claim was dismissed. Mr. Lee claimed special costs from the estate. At paras. 12 – 14, Master Horn found:
An order for costs in favour of a completely unsuccessful party against a completely successful party is a most exceptional order. The general rule is that costs follow the event and while a court may depart from this rule, any departure is usually in the way of depriving a successful party of costs and not of awarding costs to an unsuccessful party. In either case, the usual rule should not be departed from simply because an unsuccessful party did not expect to lose. [Citations omitted]
In probate or administration actions or in proceedings for the construction of wills, the rule may be more frequently departed from. In such cases where the validity of a will or the capacity of the testator to make a will or the meaning of a will is in issue, it is sometimes the case that the costs of all parties are ordered to be paid out of the estate. This is upon the principle that where such an issue must be litigated to remove all doubts, then all interested parties must be joined and are entitled to be heard and should not be out of pocket if in the result the litigation does not conclude in their favour. The estate must bear the cost of settling disputes as a cost of administration. … The question to be asked in such case is whether the parties were forced into litigation by the conduct of the testator or the conduct of the main beneficiaries.
But the case is different where the litigation does not relate to the validity of the will or the capacity of the testator or the construction of the will. Actions brought under dependants relief legislation presume the validity of the will and the capacity of the testator and that his intentions are clear. There are not doubts to be settled. The remedies provided by such legislation are directed to the maintenance and support of the dependants of the testator and are based on public policy. The legislation does not invalidate the will, it merely permits the court to vary the provisions made by the testator. So an unsuccessful action under such legislation cannot be said to have been caused by a testator, or to be have been necessary to enable the estate to be distributed. The action does not benefit the estate.
[Emphasis added.]
[16] According to Lee, in considering whether costs are payable from the estate to an unsuccessful party, the court must consider whether the petitioner was forced to bring the petition
Despite Master Chamberlist’s focus upon the motive of the petitioners in Re Bush, the analysis still turns on whether the application was necessary in any event. The motive of a party in bringing the application is not a determinative factor. In Janzen v. Janzen (2002), 45 E.T.R. (2d) 99, [2002] O.J. No. 1372 (S.C.), Mr. Justice Aitken concluded that the patient’s wife was the appropriate guardian in an application brought by a sibling of the patient to be named as guardian. In deciding which party was entitled to costs, Aitken J. noted that all of the parties to the litigation were motivated by their concern for the patient’s wellbeing. Despite that, Aitken J. held the sibling’s application was unnecessary for the following reasons:
[4] Under s. 20(1) of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Schedule A, in the absence of a court order, the spouse of an incapable person is considered to have a higher right than a sibling to give or refuse consent to medical treatment on behalf of the incapable person. The assumption presumably is that in the normal course, a spouse will have been more intimately involved than a sibling in the recent life of the incapable person, will know the wishes of the incapable person, and will act in a way that is respectful of those wishes and that will meet have strong reasons to do so or be prepared to pay all or part of the spouse’s legal costs necessitated by the litigation.
[5] In this case, I consider it significant that Edward Janzen’s siblings were not prepared to listen to the opinion of several doctors who were telling them there was no possibility of recovery of brain functioning by Edward. The difficulty Edward’s siblings had in accepting this terrible news and their acting in a way which they considered in Edward’s best interests does not insulate them from the cost consequences of unsuccessful and more importantly unnecessary litigation.
[19] He ordered the siblings pay a significant amount of the wife’s costs. best interests of the spouse
Special Costs
Legal Framework
[37] I recently reviewed the law with respect to special costs in Westsea Construction Ltd. v. 0759553 B.C. Ltd., 2013 BCSC 1352. My conclusions on the state of the law of special costs in Westsea are relevant to the issues in this case and I have summarized those conclusions here.
[38] The leading authority for special costs in British Columbia is the Court of Appeal’s decision Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (C.A.). In that decision, Mr. Justice Lambert determined the threshold for awarding special costs is “reprehensible” conduct. He held at para. 17:
Having regard to the terminology adopted by Madam Justice McLachlin in Young v. Young, to the terminology adopted by Mr. Justice Cumming in Fullerton v. Matsqui (District), and to the application of the standard of “reprehensible conduct” by Chief Justice Esson in Leung v. Leung in awarding special costs in circumstances where he had explicitly found that the conduct in question was neither scandalous nor outrageous, but could only be categorized as one of the “milder forms of misconduct” which could simply be said to be “deserving of reproof or rebuke”, it is my opinion that the single standard for the awarding of special costs is that the conduct in question properly be categorized as “reprehensible”. As Chief Justice Esson said in Leung v. Leung, the word reprehensible is a word of wide meaning. It encompasses scandalous or outrageous conduct but it also encompasses milder forms of misconduct deserving of reproof or rebuke. Accordingly, the standard represented by the word reprehensible, taken in that sense, must represent a general and all-encompassing expression of the applicable standard for the award of special costs.
[39] Lambert J.A. recognized that the meaning of “reprehensible” conduct was still quite broad. He found that in order for a special costs award to be justified, the circumstances had to be exceptional. He continued at paras. 23 and 25:
However, the fact that an action or an appeal “has little merit” is not in itself a reason for awarding special costs. … Something more is required, such as improper allegations of fraud, or an improper motive for bringing the proceedings, or improper conduct of the proceedings themselves, before the conduct becomes sufficiently reprehensible to require an award of special costs.
…
If the proceedings are taken, not in the reasonable expectation of a satisfactory outcome, but in order to impose the burden of the proceedings themselves on the opposing party in circumstances where one party is financially much stronger than the other, then the absence of merit, coupled with the improper motive, is in my opinion a combination which may well amount to reprehensible conduct sufficient to require an award of special costs.
[Emphasis added.]
[40] Garcia instructs that the purpose of a special costs order is to chastise a litigant and to distance the court from the conduct at issue. Special costs are not compensatory: Grewal v. Sandhu, 2012 BCCA 26 (leave to appeal refused, [2012] S.C.C.A. No. 120) at para. 106.
[41] In Westsea, I suggested that the legal standard of reprehensibility has at times been difficult to apply in cases where the misconduct is of a milder form. As a consequence, reprehensibility has been found even where there are no exceptional circumstances, or as Lambert J.A. termed it, “something more”.
7] The law is quite clear that unsuccessful allegations alone cannot support an order for special costs. I note the reasons of Lambert J.A. in Garcia excerpted above.
[58] As found by Mr. Justice Joyce in Hung v. Gardiner, 2003 BCSC 285:
[16] In order to justify an award of special costs, it is not sufficient simply to establish that the plaintiff’s allegations of bad faith and malice were not proven. It is necessary to show that the plaintiff acted improperly in making or maintaining the allegations in this proceeding or otherwise acted improperly in the manner in which she conducted the litigation before special costs will be awarded. It must be shown, not just that the allegation was wrong, but that it was obviously unfounded, reckless or made out of malice. The matter must be considered from the point of view of the plaintiff at the time she made or maintained the allegations (see Native Citizens Fisheries et al. v.
James Walkus, (July 10, 2002) 2002 BCSC 1030).
2009 BCSC 194 Romans Estate v. Tassone discusses the different forms of proving a will- when the validity of the will is in issue, the executor must prove the will in solemn form, by calling the requisite witnesses involved in the wills preparation, along with lay witnesses and medical evidence when necessary.
At Pages 7 of 8 the court states:
VI. Proof of the Will in Common Form or Solemn Form
[48] Often proof of a will in common form is all that is required for the administration of an estate where there is a will. Proof in common form, however, does not conclusively determine the will to be the valid last will of a person.
[49] Proof of the will in solemn form provides some protection for the will, in that it will not later be set aside, unless obtained by fraud or a later will is found: Tristam& Cootes Probate Practice (27th Edition, 1989, p. 572. As noted by the authors of the British Columbia Probate & Estate Administration Manual, 2nd Edition, 2008 Update, at p. 18-17, “[t]he safeguarding effect of a grant in solemn form is an application of the principle of res judicata to what is a judgment in rem”.
[50] 17 Halsbury’s Laws (4th) para. 866 says:
If there is any doubt as to the validity of a will or any apprehension that there may be opposition to it, it is open to the executor, or if there is no executor the person entitled to administration with the will annexed, to prove it in solemn form.
[51] In Trites v. Johnson, [1945] B.C.J. No. 76, [1945] 3 W.W.R. 100 (B.C.S.C.) Macfariane J., as he then was observed that “In a case of this kind where the validity of a will has once been called in question I think it is the duty of the executors to prove the will in solemn form of law….” Proof in solemn form was required even where the party originally requesting such had withdrawn their objection.
[52] In the circumstances, in my view probate in common form is not sufficient in light of the issues raised in the Conveyance Action and in light of the information that is brought before the court in the Probate Action. If the will is proven in solemn form, or per testes, it must be proven in open court, upon notice to all interested persons, and will not be admitted to probate unless the court is satisfied of the due execution of the will, the testator’s knowledge and approval of its contents, his capacity and non-revocation: Osterhoff on Wills and Succession, 6th Edition, 2007, Thomson, Carswell, p. 44. If the will is proven in solemn form then the issue regarding the caveat will be moot.
Rule 7-5of the Rules of Court ( previously Rule 28) governs such application.
Rule 7-5 (1) states:
If a person who is not a party of record to an action may have material evidence relating to a matter in question in the action, the court may order that the person be examined on both on the matters in question in the action, and either before or after the examination, order that the examinee party pay reasonable lawyers costs of the person relating to the application and the examination.
An order cannot be made under this rule when the witnesses are resident out of province.
Sinclair v March 97 BCLR (3d) 17 ( CA) stated that the scope of inquiry under this rule is not limited to the issues between the parties as defined in the pleadings, but includes all it is generally relevant between the parties.
Coates v Triance 2010 BCSC 294 held that the fact that a witnesses willing to proceed by written questions and answers is not a complete answer to an application under this rule when the witness has been unresponsive. The fact that a witness says that he has no recollection is no barrier, especially when the witnesses key to material events. The scope of the examination will but not be limited to questions for which there were not responsive answers.
Preus v Miller 1986 BCD Civ 3629-01 BCSC, held that the applicant must satisfy the court that the information sought may relate to matters in issue, and that it is not “ a fishing expedition”, that there are no compelling reasons why the order should not be made, and that it is based on the probative value of the evidence as opposed to any embarrassment or adverse effects it may be caused. This rule is discretionary would all be used to compel a person such as a probation officer disclose information obtained during a pre-trial inquiry.
Hearsay evidence is generally more admissable than in any other area of the law.
Modonese v Delac 2011 BCSC 82, affirmed by the Court of Appeal at 2011 BCCA 501, provides a summary of the law re hearsay evidence.
Hearsay: General Principles
[79] The Supreme Court of Canada has repeatedly endorsed a principled approach to the admissibility of hearsay evidence. This approach is set out in R. v. Khelawon, 2006 SCC 57 at para. 2, [2006] 2 S.C.R. 787 [Khelawon]:
… When it is necessary to resort to evidence in this form, a hearsay statement may be admitted if, because of the way in which it came about, its contents are trustworthy, or if circumstances permit the ultimate trier of fact to sufficiently assess its worth. If the proponent of the evidence cannot meet the twin criteria of necessity and reliability, the general exclusionary rule prevails. The trial judge acts as a gatekeeper in making this preliminary assessment of the “threshold reliability” of the hearsay statement and leaves the ultimate determination of its worth to the fact finder.
[80] As set out in R. v. Mapara, 2005 SCC 23 at para. 15, [2005] 1 S.C.R. 358, and repeated in Khelawon, the framework for assessing hearsay evidence is as follows:
(a) Hearsay evidence is presumptively inadmissible unless it falls under an exception to the hearsay rule. The traditional exceptions to the hearsay rule remain presumptively in place.
(b) A hearsay exception can be challenged to determine whether it is supported by indicia of necessity and reliability, required by the principled approach. The exception can be modified as necessary to bring it into compliance.
(c) In “rare cases”, evidence falling within an existing exception may be excluded because the indicia of necessity and reliability are lacking in the particular circumstances of the case.
(d) If hearsay evidence does not fall under a hearsay exception, it may still be admitted if indicia of reliability and necessity are established on a voir dire.
[81] There are three important points to keep in mind when applying the principled approach to hearsay:
1. The onus is on the party tendering the hearsay evidence to establish necessity and reliability on a balance of probabilities: Khelawon at para. 47.
2. The principled approach should not be compartmentalized, but rather should be considered as a continuum between necessity and reliability. In particular, “there may be instances where the necessity is so great – such as where the declarant is dead – that some elasticity on the issue of reliability may be given”: Roussin v. Bouzenad, 2005 BCSC 1719 at para. 14, [2005] B.C.J. No. 2682.
3. The principled approach is not based on fixed criteria, but is applied case-by-case by identifying the relevant concerns and factors in determining admissibility.
(b) Traditional Exceptions
[82] In Pasko v. Pasko, 2002 BCSC 435, 100 B.C.L.R. (3d) 354 [Pasko], a dispute arose as to the admissibility of statements made by deceased parents to their children in connection with a dispute over whether property had been gifted to certain of the children. Halfyard J. noted at para. 10 that there is an “exception to the hearsay rule which permits evidence to be given of statements made by deceased persons as to their present state of mind (including intention), which statements need not be against interest, provided that the deceased person’s state of mind is relevant to an issue in the case.”
[83] Pursuant to this exception, Mr. Justice Halfyard admitted statements relating to the deceased parents’ intentions to confer a gift, made before and at the time of the two transactions in question.
[84] Following Pasko, if I am wrong in concluding that the statements concerning Regina’s intention to divide her assets equally are not admissible pursuant to s. 5 of the WVA, they ought to be admitted pursuant to this exception to the hearsay rule.
[85] Declarations of mental or emotional state are also an established exception to the rule against hearsay. In R. v. Smith, [1992] 2 S.C.R. 915, 94 D.L.R. (4th) 590 [Smith cited to S.C.R.], the Court held that the state of mind exception to the hearsay rule permits reception of evidence to prove the declarant’s state of mind, but not the truth of the factual assertion which may be contained in it. Statements attributed to a deceased declarant tending to show her state of mind, namely a fear of the defendant, are admissible under this exception to the hearsay rule: R. v. Evans, 2002 BCSC 1674 at para. 35, [2002] B.C.J. No. 3100.
[86] Accordingly, the statements attributed to Regina concerning her fear of the defendant and her fear of upsetting him are admissible pursuant to this exception.
[87] The defendant also objects to the admission of things he said out of court; for example, that he was heard in the background using abusive language, attempting to have his wife, Vera Delac, cease telephone contact with the plaintiff. If the plaintiff did hear the defendant make such statements, they are admissible at trial. In Jones v. Ma, 2010 BCSC 866, 6 B.C.L.R. (5th) 137, Ehrcke J. stated:
9 That issue was specifically addressed by the Ontario Court of Appeal in R. v. Foreman (2002), 62 O.R. (3d) 204 (C.A.). In that case Doherty J.A., delivering the judgment of the Court, said at pages 215 to 216:
Admissions, which in the broad sense refer to any statement made by a litigant and tendered as evidence at trial by the opposing party, are admitted without any necessity/reliability analysis. As Sopinka J. explained in R. v. Evans [1993] 3 S.C.R. 653, at page 664:
The rationale for admitting admissions has a different basis than other exceptions to the hearsay rule. Indeed, it is open to dispute whether the evidence is hearsay at all. The practical effect of this doctrinal distinction is that in lieu of seeking independent circumstantial guarantees of trustworthiness, it is sufficient that the evidence is tendered against a party. Its admissibility rests on the theory of the adversary system that what a party has previously stated can be admitted against the party in whose mouth it does not lie to complain of the unreliability of his or her own statements. As stated by Morgan, “[a] party can hardly object that he had no opportunity to cross-examine himself or that he is unworthy of credence save when speaking under sanction of oath” (Morgan, “Basic Problems of Evidence” (1963), pp. 265-6, quoted in McCormick on Evidence, ibid., p. 140). The rule is the same for both criminal and civil cases subject to the special rules governing confessions which apply in criminal cases. [Emphasis in original].
10 I agree with that statement of the law. It was adopted by our Court of Appeal in R. v. Terrico, 2005 BCCA 361. Admissions made by one party to litigation are generally admissible if tendered by the opposing party, without resort to any necessity/reliability analysis.
(c) The Principled Approach
[88] The statements referred to above under headings “a” and “e” (the physical altercation and the evidence that Regina did not know what Marko had asked her to sign) do not appear to neatly fit under any of the established exceptions to the hearsay rule. I now turn to a consideration of the “principled approach” to hearsay.
(i) Necessity
[89] The principle of necessity does not mean that the hearsay evidence must be necessary in order for a party to prove his or her case. As described by the Court in Smith at 933, the criterion of “necessity” refers to the necessity of the hearsay evidence to prove a fact in issue. To satisfy necessity, the party adducing the evidence must prove that hearsay is the only available means of putting that evidence before the court. Necessity is obviously made out in this case. If Regina’s statements are to be adduced at all, they can only be presented in hearsay form because of her death.
(ii) Reliability
[90] When assessing the reliability of a hearsay statement, the court should adopt a functional approach. Starting from the premise that hearsay statements are presumptively inadmissible, it should then search for indicia of trustworthiness sufficient to displace the general exclusionary rule. In each case, the focus of the inquiry must be on the particular dangers arising from the hearsay nature of the evidence: R. v. Blackman, 2008 SCC 37 at para. 42, [2008] 2 S.C.R. 298.
[91] This requirement can be satisfied in one of two ways: First, where there is an absence of any real concern about the truth of the statement because of the circumstances in which the statement was made; and second, where the truth and accuracy of the evidence can be sufficiently tested by means other than contemporaneous cross examination: Khelawon at paras. 62-63.
[92] All relevant factors and the context should be considered, including the presence of supporting or contradictory evidence in appropriate cases.
[93] In Anderson v. Anderson, 2010 BCSC 911, 58 E.T.R. (3d) 291 [Anderson], the pivotal issue in the trial was similar to that raised in the present case: Did the deceased gift the defendant the legal and beneficial interest in property absolutely through an inter vivos transfer? Accordingly, the actual intention of the deceased at the time of the transfer was of fundamental importance. On the issue of hearsay pertaining to this issue, Dardi J. held:
57 The reporting of some of the Deceased’s statements by interested parties raises a concern regarding the reliability of those statements. This evidence must be carefully scrutinized. Adopting the approach in Stephens v. Austin, 2003 BCSC 341, I have nevertheless determined that the Deceased’s statements adduced in evidence meet the threshold requirement of reliability. I conclude that the fact that some of the witnesses relating the statements are interested parties may be adequately dealt with in the determination of the weight to be attributed to any particular statement.
58 In my view, the real issue with some of the evidence and the weight to be accorded to it is whether the statements were in fact made by the Deceased. The Court must first find on a balance of probabilities that the statement was made before it goes on to determine the treatment and weight of such evidence: Creutz v. Winther Estate, 2007 BCSC 1463. In essence, this assessment turns on the reliability of the various witnesses: Halfpenny v. Holien (1997), 37 B.C.L.R. (3d) 186 (S.C.).
[94] Regina had no motive to fabricate the two statements attributed to her. They were not self-serving. The statements at issue were made in the context of everyday intimate conversations between close relatives and friends, which is an accepted indicator of reliability: R. v. Pasqualino, 2008 ONCA 554 at para. 43, 233 C.C.C. (3d) 319. The defendant has pointed to no evidence that would contradict these statements. Accordingly, the statements possess sufficient hallmarks of threshold reliability to justify admission under the principled exception.
Litigants can occasionally “ win the battle, but still lose the war”.
