Costs: The Standard of Review

Costs: The Standard of Review

The BC Court of Appeal in Giles v Westminster Savings Credit Union 2010 BCCA 282 reviewed the standard of awarding costs and the various purposes for an award of costs.

The case was recently followed in Kyle Estate v Kyle 2017 BCSC 752 which stated inter alia  that the discretion to order the payment of double costs must be exercised in a just, principled and consistent way: Giles v. Westminster Savings Credit Union (2010, 5 B.C.L.R. (5th) 252 at para. 88 and such an order is permissive, not mandatory: Buttar v. Di SpiritoI, 2009 BCSC 72 at para.

Standard Review of Costs

72      Before considering the various challenges to the trial judge’s costs orders, I note that such orders are discretionary and appellate review is limited in scope. As Arbour J. stated in Hamilton v. Open Window Bakery Ltd. (2003), 2004 SCC 9, [2004] 1 S.C.R. 303 (S.C.C.), “[a] court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong”: para. 27. More recently, in Victoria (City) v. Adams, 2009 BCCA 563, 313 D.L.R. (4th) 29 (B.C. C.A.), this Court said:

[180] The general rule with respect to costs is that they follow the event and are assessed on a party and party basis unless the court otherwise orders: Rules 57(9) and 57(1) of the Rules of Court. Courts retain the discretion to depart from the general rule where the circumstances justify a different approach: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 at para. 22. It is a broad discretion, and this Court will only interfere “if there is misdirection or the decision is so clearly wrong as to amount to an injustice”: Agar v. Morgan, 2005 BCCA 579 at para. 26.

Misdirection may include making an error as to the facts, taking into consideration irrelevant factors, or failing to take into account relevant factors, all of which would amount to an error in principle: Sutherland v. Canada (Attorney General), 2008 BCCA 27, 77 B.C.L.R. (4th) 142 (B.C. C.A.) at para. 24.

73      However, the discretion with respect to costs is not wholly unencumbered. As Mr. Justice Seaton stated in Royal Trust Corp. of Canada v. Clarke (1989), 35 B.C.L.R. (2d) 82 (B.C. C.A.) at 88:

Costs are in the discretion of the court, but it does not follow that the judge is to do whatever pleases him at the moment. Rules and decisions offer guidance that should ensure that different judges in similar cases make similar decisions.

74      The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

• “Deterring frivolous actions or defences”: Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 37 B.C.L.R. (2d) 2 (B.C. C.A.), leave ref’d, [1988] 1 S.C.R. ix;

• “To encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”: Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 (B.C. C.A.) at para. 28;

• “Encouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases: Bedwell v. McGill, 2008 BCCA 526, 86 B.C.L.R. (4th) 343 (B.C. C.A.) at para. 33;

• “To have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”: Catalyst Paper Corp. v. Companhia de Navegação Norsul, 2009 BCCA 16, 88 B.C.L.R. (4th) 17 (B.C. C.A.) at para. 16.

75      Lastly, it must be also remembered that “the person who seeks to displace the usual rule [as to costs] has the burden of persuading the judge that the rule should be displaced”: Grassi v. WIC Radio Ltd. 2001 BCCA 376, 89 B.C.L.R. (3d) 198 (B.C. C.A.) at para. 24.


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