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Special Costs for Reprehensible Conduct

Special Costs for Reprehensible Conduct

Kim v Choi 2019 BCSC 1792 brought an application for special costs against the defendant for alleged reprehensible conduct but the court refused special costs and reviewed the law re same.

Special costs may be awarded where the conduct of a party is reprehensible.

Reprehensible conduct includes conduct that is scandalous, or outrageous, or milder forms of misconduct that are deserving of reproof or rebuke. Garcia v . Crestbrook Forest Industries Ltd (1994) 119 DLR (4th) 740 at 747.

In Mayer v Osborne Contracting Ltd. 2011 BCSCX 914 at para. 11 the court set out those circumstances that warranted the attraction of special costs:

1) Where a party pursues a meritless claim and his reckless with regard to the truth;

2) where a party makes improper allegations of fraud, conspiracy, fraudulent misrepresentation, or breach of fiduciary duty;

3) where a party has displayed ”reckless indifference” by not recognizing early on that it’s claim was manifestly deficient;

4) where a party made the resolution of an issue, far more difficult than it should have been;

5) where a party who is in a financially superior position to others brings proceedings, not with a reasonable expectation of a favorable outcome, but in the absence of merit in order to impose a financial burden on the opposing party;

6) where a party presents a case so weak that it is bound to fail, and continues to pursue its meritless claim after it is drawn to its attention that the claim is without merit;

7) where a party brings a proceeding for an improper motive;

8) where a party maintains unfounded allegations of fraud or dishonesty;

9) where a party pursues claims frivolously or without foundation

Special costs are punitive and serve to chastise the offending party. Ip v ICBC (1994) 89 BCLR (2d) 251 at para.7

Special costs are the exception. Special cautioned not be awarded were the only issue is a party’s credibility. Moreover, a party who lies, falsifies evidence of attempts to deceive the court can be subjected to special costs. Hoffman v Percheson 2011 BCSC 1175 at paragraphs 19 – 23.

Special costs may also be awarded where a litigant makes allegations of fraud (or undue influence) without foundation. A prima facie case must exist before such a serious allegation is made

An allegation of fraud, willful misstatements, or other such claims made against a person casts a serious pall over his or her reputation in the community. Very careful consideration must be given by the defendant before making such serious allegations.

At the very least, a prima facie case must exist if it does not been special costs by way of chastisement is a reminder to the defendant to exercise better care in the future.

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