Ward v Ward, 2011 ABQB 465

Court of Queen ’ s Bench of Alberta Citation: Ward v Ward, 2011 ABQB 465 Date: 20110714 Docket: 0403 05210, 0403 05178 Registry: Edmonton Between: Cory Ward by His Next Friend Gerald William Ward Jr. Plaintiffs - and - Gerald William Ward and James Matthew Dixon Defendants And Between Docket No.: 0403 05178 James Dixon Plaintiff - and - Gerald William Ward Defendant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice A.B. Moen

_______________________________________________________ I. Introduction [ 1 ] On October 15, 2010, I rendered a decision in this matter after a trial spanning about two weeks. There were two actions which I heard together. In one of the trials, James Dixon was a defendant and in the other he was the plaintiff. I found the Defendant, James Dixon, not liable for any damages to Cory Ward. I found the Defendant, Gerald William Ward, to be liable for injuries suffered by the Plaintiffs, Cory Ward and James Dixon in each of the two actions.

I then assessed the damages that were suffered by both Plaintiffs. [ 2 ] In the action in which James Dixon is Plaintiff, he is entitled to his costs to be taxed. [ 3 ] There are different issues in the action in which he is a defendant. [ 4 ] Normally, costs would be awarded to the successful party. Given that James Dixon was successful in the action in which he was a defendant, one of two, he is entitled to his costs.

However, in this case, the Plaintiff, Cory Ward, applies to have the Defendant, Gerald Ward, pay James Dixon’s costs rather than Cory Ward paying those costs. [ 5 ] I will review the circumstances of the case to determine if Gerald Ward should be liable for the entire costs of the action including James Dixon’s costs. II. Discussion [ 6 ] The facts as I find them for this costs application are as follows: 1. The Defendant, Gerald Ward, had an automobile liability insurance policy with policy limits of $200,000.00. 2. On January 4, 2008, Gerald Ward advised counsel for all parties about the statutory limits.

He also urged plaintiff’s counsel (for Cory Ward and for James Dixon) to value their claims to deal with those limits. At that point in the litigation it was or should have been apparent to the parties that the damages to be awarded to those two individuals in the event that Gerald Ward was found liable would be substantially more than $200,000.00. 3. On July 27, 2009, the Defendant, Gerald Ward, offered to pay the plaintiffs, Cory Ward and James Dixon, the full policy limits of $200,000.00 plus taxable costs. 4.

On October 5, 2009, the Defendant, Gerald Ward, also provided a sworn Statutory Declaration to the Plaintiffs in both actions which Declaration shows that Gerald Ward has no assets. 5. The Defendant Gerald Ward had no memory of the collision and suffered significant injuries in the collision, including a brain injury. Therefore, according to a medical legal letter from his doctor, Gerald Ward had no real possibility of earning any income in the future. 6. Gerald Ward was called as a witness at the trial but he had no memory of the collision. His evidence up to the time of the

collision was helpful at trial but was not very detailed. 7. Counsel for Gerald Ward at the commencement of the trial advised the court that he could not concede liability but was callingno evidence on the issue and made no argument that he was not liable. In the costs application, counsel argued that it is well known thatan insurer cannot concede liability were policy limits may not be sufficient to pay a damages award, as conceding liability exposes theinsured person, in this case Gerald Ward, to a judgment against him in excess of limits. 8.

The Defendant James Dixon had no memory of the collision and, in fact, believed that the Gerald Ward vehicle had come acrossthe road in front of him. He had memory of events leading up to the collision. A. Cory Ward v. Gerald Ward and James Dixon [7] In this action, that is, Cory Ward v. Gerald Ward and James Dixon, I found Gerald Ward to be 100% liable for the collision.I found that he made a left hand turn in front of James Dixon when it was unsafe to do so. I found that Dixon was driving as a reasonablyprudent driver in the circumstances of the road conditions and weather that day.

I found that Cory Ward had failed to meet his burden ofproving that the dominant driver, that is James Dixon, was negligent. [8] Therefore, in the normal course I would award James Dixon as successful Defendant his costs of this action. Further, I wouldaward the costs of the action attributable to Gerald Ward in favour of Cory Ward. [9] Cory Ward asks me to award all costs of the action against the unsuccessful Defendant, Gerald Ward. Cory Ward is asking,in effect, for a Bullock or Sanderson order, that is an order compelling the Defendant, Gerald Ward, to pay the costs of the successfuldefendant James Dixon.

The successful Defendant, James Dixon, also says that this is a suitable case for a Bullock order. [10] Gerald Ward disagrees. [11] Further, there are some issues with respect to specific items of costs that are claimed by Cory Ward against Gerald Ward. 1. Bullock or Sanderson Order [12] It is open to a court to order an unsuccessful defendant to pay the costs of a successful defendant but such an award must beexercised judicially and must be just in the circumstances: Seon v. Chan [1997] S.J. No. 430 at para. 7 citing Badger v.

Surkan (1972), (SK CA), 32 D.L.R. (3d) 216 (SKCA) at pp 228 and 229. [13] The test for suitability of a Bullock or Sanderson order is set out in: Allen v. University Hospitals Board, 2000 ABQB 965 atpara. 6; Simpson v. Bender (AB KB), [1996] 5 W.W.R. 96 at para. 9; Rioga v. Mockle, 2005 ABQB 425 at para. 10and 11: a. It must have been reasonable according to the facts for the plaintiff to sue the successful defendant; b. There must not be a good reason to deny the successful defendant its costs; and c.

As between the co-defendants, the unsuccessful defendant must have been wholly responsible for the action. [14] Further, with respect to the unsuccessful defendant being responsible for the action, if a liable defendant will not admit itsliability, the co-defendant's costs may be the responsibility of the unsuccessful defendant. This is so where the court finds that the liabledefendant is 100% liable for the collision: Dhingra v. Pham 2004 ABQB 973.

[ 15 ] In Dhingra Car C hit Car B from behind which in turn hit Car A (Plaintiff's car) from behind. But for the hit by Car C to Car B, Car B would not have hit Car A. The Court found Car C completely liable for the collision. There was a successful application for Car C to pay the costs of Car B (the successful Defendant).

In that case, it was obvious that Car B had no liability for the collision and it should have been obvious to Car C that it was wholly liable for the collision. [ 16 ] In a Bullock order, the unsuccessful defendant is ordered to pay the plaintiff the costs which the plaintiff is responsible for paying to the successful defendant. In other words, the plaintiff may claim as a disbursement against the unsuccessful defendant the costs that plaintiff must pay the successful defendant. In a Sanderson order, the unsuccessful defendant must pay the successful defendant its costs directly.

Such orders are made where a plaintiff has reasonably sued two defendants but one of the defendants is completely successful at trial in defeating the claim against it: Dhingra at para. 16 . [ 17 ] The court in determining whether a Sanderson or a Bullock order should be granted must review the behaviour of all of the parties to the action: Dhingra at para. 18 . a.

It must have been reasonable according to the facts for the plaintiff to sue the successful defendant [ 18 ] In determining the reasonableness of the Plaintiff in this case suing James Dixon, I must "guard against the false clarity of hindsight.": Dhingra at para. 20 . In that case, Veit J. found that it was reasonable for the Plaintiff to sue both of the cars behind him including the one that hit him directly.

Until the evidence unfolded it would not have been prudent for Dhingra not to include Car B as a defendant in the action. [ 19 ] Cory Ward knew or ought to have known that the Defendant, Gerald Ward, was going to be wholly or partly liable for the collision. There was no issue on the facts known to Cory Ward prior to the trial that Gerald Ward would not be found at least partially liable. [ 20 ] In this case, it was also reasonable for the Plaintiff to sue James Dixon, the successful defendant.

The accident reconstruction experts as set out in my reasons left some room for Cory Ward to believe that James Dixon was not driving in a prudent fashion given the weather. There was limited evidence as to the driving patterns of both Defendants as neither of them could remember the circumstances of the collision, both of them having suffered serious injury themselves. Therefore, it was prudent on the part of the Plaintiff, Cory Ward, to sue the Defendant, James Dixon as he could have been on the facts, partly liable for the collision. b.

There must not be a good reason to deny the successful defendant its costs [ 21 ] There was no reason given to me by any party that the successful Defendant, James Dixon, ought not to be awarded his costs in the action in which he was the successful Defendant having been found 0% liable. c. As between the co-defendants, the unsuccessful defendant must have been wholly responsible for the action [ 22 ] Here, I must determine if Gerald Ward was wholly responsible for the action. That is, was it unreasonable for Gerald Ward not to admit before the trial that he was 100% liable?

Was it solely his responsibility that the trial proceeded in the face of evidence that the Plaintiff was not going to prove its claim against James Dixon? [ 23 ] The use of the word "action" in this part of the test has created some confusion in my mind given the decision in Dhingra . In that case, Veit J. found that one of the two defendants was wholly (ie 100%) liable for the collision: at para. 31. As such, Veit J found, the unsuccessful defendants should prima facie be responsible for the costs of the successful defendant.

In her case, she found that the unsuccessful defendants had not rebutted that presumption and were, therefore, responsible for the costs of the successful co-defendant.

[ 24 ] Gerald Ward takes a different view of the matter. He takes the view that I should look at the action and not the collision for guidance on this part of the test. I am inclined to agree with Gerald Ward in this regard. Therefore, I will review how the action unfolded as to whether the unsuccessful defendant could reasonably have caused the trial to be avoided. [ 25 ] Gerald Ward was found 100% liable for the collision after a trial in which there were two accident reconstruction experts who gave evidence.

However, the question I will ask is whether it was Gerald Ward who caused the action to go all the way to the trial. He was certainly found liable for the collision. The collision occurred in March 2002. The trial was held in late 2009. [ 26 ] On July 27, 2009, the Defendant, Gerald Ward, offered to pay the limits of his insurance policy ($200,000.00) plus reasonable taxable costs shortly before this matter was scheduled to go to trial.

It ought to have been clear to Cory Ward (and to James Dixon) that Gerald Ward was going to be unable, by virtue of his insurance policy or his assets or his future ability to work, to pay the magnitude of damages that Cory Ward had suffered and would likely be awarded at trial. [ 27 ] On July 29, 2009, the Defendant, James Dixon, served a formal offer on the Plaintiff which offer was to accept a discontinuance on a without costs basis from Cory Ward. [ 28 ] On October 13, 2009, James Dixon through his counsel wrote to Cory Ward's counsel concerning the offer by Gerald Ward to the Plaintiff to pay the limits of the policy.

In that letter, Dixon offered not to pursue a claim for contribution and indemnity against Gerald Ward with regard to costs of the action in exchange for an admission by Gerald Ward of 100% liability. That letter pointed out that Dixon, if completely successful at trial - as set out in the formal offer - would seek double costs against Gerald Ward (pursuant to the Calderbank principle). [ 29 ] On that same day, October 13, 2009, Gerald Ward through his counsel responded by letter. That letter took the position that the offer by Dixon to Gerald Ward would be of no effect for costs purposes.

Counsel pointed out that it would have to be the Plaintiff that accepted the offer. Further, counsel pointed out that the reason the matter was going to trial was because the Plaintiff, Cory Ward, believed that he could fix even a small liability on Dixon thereby making Dixon liable for the vast majority of the damages given that Dixon had no issue of insurance limits. [ 30 ] I agree with Gerald Ward that he could not accept the offer made by Dixon. Only the Plaintiff, Cory Ward, could do that.

Therefore, the fact that Gerald Ward did not accept Dixon's offer I find to be irrelevant to my discussion on this issue. [ 31 ] It appears to me that Cory Ward made a strategic decision to proceed with the trial on the basis that he could fix some liability on the co-defendant, James Dixon, and for this reason proceeded with the trial. Gerald Ward was obligated to stay in the action because he was facing personal liability given that his insurance did not cover the potential damages. The lawyer representing Gerald Ward was, of course, the lawyer for the insurance company that had the limits.

The insurance company could not accept 100% liability because this would expose Gerald Ward personally to the balance of the damages, which were potentially very large. [ 32 ] The reason that James Dixon was in the trial was not because Gerald Ward was keeping him in but rather that the Plaintiff was keeping him in. Even if Gerald Ward had admitted 100% liability, it was for the Plaintiff to accept the offer made by Dixon.

Cory Ward would not do that as it would mean that he had no chance of gaining a large damages award from Dixon in the event the court found Dixon partially liable for the collision. [ 33 ] It would be manifestly unfair now to award the successful co-defendant Dixon's costs to be paid by the Defendant Gerald Ward given that had Cory Ward chosen to accept the offer made by Gerald Ward before the trial was to proceed, Gerald Ward would not have had to defend the action. Gerald Ward knew that he was going to be found liable, at least in part.

The only unknown was whether Cory Ward could prove that James Dixon was liable in part for the collision. Had Cory Ward proved that James Dixon was even 1% liable, then James Dixon's insurance policy could have funded the balance of the judgment, given that James Dixon was fully insured. [ 34 ] There was nothing argued or proved by Cory Ward that if he had accepted the offer made by Gerald Ward, that Cory would have been prejudiced or by Cory advising the court at the beginning of the trial that the issue of liability was simply whether James

Dixon contributed to the collision. It would have been completely unrealistic for Cory Ward to think that Gerald Ward could have shown at a trial that he was not at all liable for the collision. Given the limitation of funds, a finding of joint and several liability between Gerald Ward and James Dixon would have made no difference to the damages that Gerald Ward could pay. [ 35 ] The Dhingra decision can be distinguished on the facts. In that case it was or should have been obvious that Car A was entirely liable for the collision and by its actions made it impossible for the Plaintiff (Car

C) or the other defendant (Car

B) to settle as between them. The trial proceeded with Car B forced to defend.

In that case Veit J. granted a Sanderson order in which the unsuccessful defendant was ordered to pay the costs of the successful defendant. [ 36 ] Gerald Ward was the unsuccessful defendant but he was not responsible for the action although he was completely responsible for the collision. [ 37 ] Therefore, on the third part of the test, the unsuccessful defendant was not wholly responsible for the action. [ 38 ] I find that this is not a suitable case for a Bullock or Sanderson order and do not order Gerald Ward to pay the costs of his successful co-defendant, James Dixon. [ 39 ] Cory Ward is to pay the costs of James Dixon in the action in which James Dixon was a successful defendant. [ 40 ] I have one item for which James Dixon is going to be responsible which I discuss below. 2.

Miscellaneous Costs Issues a. Second Counsel fee [ 41 ] The Defendant, James Dixon, asks for a second counsel fee. The Plaintiff opposes that application. [ 42 ] I dismiss the application for second counsel fee. [ 43 ] The issues were straightforward. The major issue addressed by Dixon was whether he could be fixed with liability. There was one expert put forward by Dixon - an accident re-constructionist for the liability issue. It was left to Gerald Ward to put in evidence with respect to the damages portion of the trial. b.

Costs of Don Pohl as expert for James Dixon [ 44 ] The Defendant, James Dixon, claims the costs of the accident re-construction expert, Don Pohl, for the time he spent in trial observing other witnesses and listening to the evidence. [ 45 ] Cory Ward objects to this disbursement. [ 46 ] Dixon says that the real case was about whether he was liable for the collision.

[ 47 ] Nevertheless, it was not necessary for Pohl to observe the other witnesses. Therefore I disallow the cost of his time spent watching other witnesses which amounts to $4,420.00. c. Discovery [ 48 ] The Defendant Gerald Ward asks for clarification of time spent in discoveries. It appears that there are four items where the questioning took less than a full half day and one item that took a full half day. I am awarding half days where counsel had to go to a discovery and take

part in discoveries of his client or one of the other parties. Therefore, for the five one-half days of discovery, there will be costs awarded for each of those as one-half days. d. Written argument by James Dixon [ 49 ] The Defendant, James Dixon, claims the cost of preparing written argument. The Court did not ask for written argument. There is no doubt that written argument is nice to have but that is not the test. Further, there was oral argument that took two days of trial time. I deny the claim for the cost of a written argument. e.

The disbursement of the Plaintiff expert, Peter Keith [ 50 ] The Defendant, Gerald Ward, disputes the engineering fees claimed by the Plaintiff, Cory Ward, as being excessive. Gerald Ward does so on the basis that the first report prepared by Peter Keith was not useful given that the first accident scenario turned out to be wrong. That first scenario was that the Gerald Ward vehicle had gone straight across the intersection.

The correct scenario was that the Gerald Ward vehicle had made a left hand turn in front of the Dixon vehicle. [ 51 ] Unfortunately, the information given to Peter Keith, based on statements made to the police in part by Dixon, was incorrect.

It was this evidence upon which Keith relied for his first report. [ 52 ] The costs of the reports claimed by Cory Ward is $15,337.84 and for his attendance at trial to give evidence it was $8,208.82. [ 53 ] Gerald Ward asks this court to reduce that amount payable by $10,000.00 to account for the error in the original Keith report. [ 54 ] I agree with the Defendant, Gerald Ward, that he should not be responsible for paying for the whole of the expert's fee given that it was the Defendant, James Dixon, who set Keith on the first wrong path.

Dixon did so by his statement to the police and by putting this in issue in his Statement of Defence. [ 55 ] Therefore, I am ordering James Dixon to pay to the Plaintiff, Cory Ward, $10,000.00 on account of the Keith expert evidence. I reduce the amount payable by Gerald Ward to Cory Ward for the disbursement for the Keith evidence by $10,000.00. Neither Cory Ward nor Gerald Ward should be responsible for costs that can be put wholly at the feet of the Defendant, James Dixon. f. Travel costs for Cory Ward [ 56 ] Cory Ward may only claim costs for travel for one day in which he appeared as a witness.

He may not claim for those days in which he sat in at the trial as Plaintiff. g. Costs for binders and supplies

[ 57 ] It is virtually impossible for a trial to proceed, unless electronic, without the production of a great deal of paper organized into binders. Therefore this is a legitimate cost of the trial. h. James Dixon costs [ 58 ] James Dixon is only permitted a fee of $1,000.00 for pleadings. This is to be paid by Cory Ward. [ 59 ] Further, there was a formal offer by the Defendant, James Dixon. He was entirely successful, the case against him being dismissed. Therefore, Rule 174(1) and (1.1) applies.

Dixon is entitled to double costs excluding disbursements from the date of the formal offer. [ 60 ] However, those costs are only to be calculated with respect to the liability portion of the trial. He did not participate in the damages portion of the trial. B. James Dixon v Gerald Ward [ 61 ] James Dixon is entitled to his costs as he was the successful Plaintiff. However, I have not heard argument on the specifics of the costs that he is claiming as Plaintiff.

I note that it was open to James Dixon, knowing that there were limits on the insurance policy and that Gerald Ward was impecunious, to accept the offer by Gerald Ward and put an end to this action. Therefore, He may not be entitled to all costs associated with the trial. Costs leading up to the trial are legitimate costs that may be claimed by James Dixon as Plaintiff on a taxation. However, the costs of the trial may not be payable. If the parties cannot come to an agreement on those costs, they may attend before me to argue. Heard on the 13 th day of December, 2010.

Dated at the City of Edmonton, Alberta this 14 th day of July, 2011. A.B. Moen J.C.Q.B.A. Appearances: Howard K. Poon and Ben Wiebe Chadi & Company for the Plaintiff, Cory Ward Joseph Sheplawy Joseph P Sheplawy Barrister & Solicitor

for the Plaintiff, James Dixon Jerri Cairns Parlee McLaws LLP for the Defendant, Gerald William Ward Sigurd Delblanc and Robert D. Muller Bryan & Company for the Defendant, James Dixon