Bulkley Valley Credit Union Petitioner And: David Stuart Jellett v. Phyllis Theresa Irene Jellett, 2012 BCSC 1509

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Bulkley Valley Credit Union v. Jellett, 2012 BCSC 1509 Date: 20121012 Docket: 16191 Registry: Smithers Between: Bulkley Valley Credit Union Petitioner And: David Stuart Jellett and Phyllis Theresa Irene Jellett Respondents Corrected Judgment: The cover page of the judgment was corrected on October 15, 2012, as counsels name were reversed. Corrected Judgment: The cover page of the judgment was corrected on October 18, 2012 by adding Madam Justice. Before: The Honourable Madam Justice M.

Koenigsberg Reasons for Judgment (In Chambers) Counsel for the Petitioner: D.A. Giddings Counsel for the Respondents: E.L. Crocker Place and Date of Hearing: Smithers, B.C. September 10, 2012 Place and Date of Judgment: Smithers, B.C.

October 12, 2012 [ 1 ] This is an application by the respondents David Stuart Jellett and Phyllis Theresa Irene Jellett for an order that pursuant to Rule 22-7(10) of the Supreme Court Civil Rules (the “ Rules ”) that the petitioner the Bulkley Valley Credit Union (the “BVCU”), having failed to file its bill of costs for assessment is not entitled to costs. [ 2 ] And, that the BVCU release the mortgage and the certificate of pending litigation over the respondents named lands.

Facts [ 3 ] The respondents are the owners of the following lands and premises upon which the BVCU is the holder of a registered charge by way of mortgage: PID: 006-402-372 Lot 11, District Lot 2092, Range 5, Coast District, Plan 9077; PID: 005-211-441 Lot 1, Block 40, District Lot 622, Range 5, Coast District Plan 1005 PID: 005-211-450 Lot 2, Block 40, District Lot 622, Range 5, Coast District Plan 1005 PID: 005-211-484 Lot 3, Block 40, District Lot 622, Range 5, Coast District Plan 1005 PID: 005-211-492

Lot 4, Block 40 District Lot 622, Range 5, Coast District Plan 1005 PID: 005-089-956 Lot 4, Block 27 District Lot 622, Range 5, Coast District Plan 1005 PID: 005-089-972 Lot 5, Block 27 District Lot 622, Range 5, Coast District Plan 1005 (the "Lands"). On November 18, 2011 the BVCU caused a petition for foreclosure on the Lands to be issued. [ 4 ] On December 16, 2011, the BVCU obtained an Order Nisi for the amount required to redeem the Lands plus the assessed costs of the BVCU. [ 5 ] On or about July 4, 2012 the BVCU provided the respondents with a draft bill of costs for $6,145.98.

On July 12, 2012 the respondents agreed to pay the BVCUs costs forthwith after taxation and requested the BVCU

schedule an appointment to settle the bill of costs. [ 6 ] On July 25, 2012 the respondents delivered payment of the amount required to redeem the Lands (the "Payment") on the undertaking that the BVCU pay out the mortgage over the Lands and provide proof of the release of the certificate of pending litigation over the Lands.

The respondents provided the BVCU with notice to assess their costs pursuant to Rule 21-7(10) of the Rules. [ 7 ] The BVCU returned the Payment and refused to pay out the mortgage or to release the certificate of pending litigation. [ 8 ] On July 27, 2012 the respondents again delivered payment of the amount required to redeem the Lands on the undertaking that the BVCU pay out the mortgage in favour of the BVCU and that upon assessment of the bill of costs to provide a registerable discharge to the certificate of pending litigation.

Counsel for the respondents undertook to pay the BVCU's costs upon assessment. [ 9 ] On July 31, 2012 the BVCU filed a bill of costs in the Supreme Court registry for $6,885.18 (the "Bill of Costs") and provided the respondents with a copy. [ 10 ] On July 31, 2012 the respondent informed the BVCU that filing the bill of costs did not constitute compliance with Rule 21- 7(10) and that they would only accept service of an appointment to settle the bill of costs as constituting compliance with Rule 21-7(10). [ 11 ] The BVCU has refused to file their bill of costs for assessment and has refused to release the mortgage in favour of the BVCU or the certificate of pending litigation from title to the Lands. [ 12 ] The sole issue before this Court is whether Rule 21-7(10) of the Rules require a petitioner to file with the court within 14 days of receiving notice a Form 49 requesting an appointment to have costs assessed as contended for by the respondents or filing the bill of costs without a request for appointment to have the costs assessed is full compliance.

Legal Analysis [ 13 ] There do not seem to be any cases on this point directly. The case law provided by counsel skirt this exact issue. Some of the cases deal with the issue of failing to provide a bill of costs entirely. [ 14 ] Thus, I have consulted a combination of statutory

interpretation and case law dealing with the purpose of the rule to come to a conclusion. [ 15 ] Rule 21-7(10) of the Rules , in full, states:

(10) A respondent wishing to redeem may, on paying to the petitioner the amount due under the mortgage, serve notice on the petitioner to assess costs, and if, within 14 days after service of the notice, the petitioner has not filed a bill of costs for assessment, the petitioner is not entitled to costs. [ 16 ] There are three key elements to this rule: 1. A respondent who is redeeming the mortgage must pay the petitioner the amount due under the mortgage. 2. The respondent must then serve notice on the petitioner to assess costs. 3.

The petitioner must then file a bill of costs for assessment within 14 days of service of notice. [ 17 ] The first stage requires payment to actually be made to the petitioner. This is confirmed in Royal Bank of Canada v. Grant Bruce Clement Household Realty Corp. , [1983] B.C.J.

No. 397 (S.C.) , where Hutchinson J. held that this rule only applies once the respondent has actually been paid the amount due. [ 18 ] The second stage requires notice from the respondent to the petitioner to assess costs. [ 19 ] These two stages have been met in the current case: the BVCU received payment on July 25 and 27, 2012 and had been provided notice by the respondents to settle the bill of costs on July 12, 2012.

[20] It is the third stage that is at issue in this case. The question is whether “filed a bill of costs for assessment” requires a petitionerto simply file a bill of costs (Form 62) or to also apply for an appointment for an assessment (Form 49). As there is no case law directlyon point on this matter, it turns to statutory

interpretation. [21] A plain reading of the provision, in context, suggests that the petitioner must apply for an appointment through Form 49. Theinclusion of the words “for assessment” would be unnecessary if the provision simply meant providing a bill of costs in Form 62. Forassessment should be interpreted to add meaning to the provision, which suggests it refers to an assessment under Rule 14-1(21). [22] This

interpretation is also consistent with Form 62 itself, which in its notes states: “This form is normally attached to anappointment to have the costs assessed; the appointment must be served.” (Emphasis in original). [23] This is also consistent with its usage in the Rules. The use of the word assessment throughout the Rules is in reference to anassessment before a registrar. For example: • As defined in the

definitions, a ““registrar’s hearing” means an inquiry, an assessment , an accounting, a review of a bill, anexamination of an agreement or an assessment of a bill of costs”. • A judgment debtor seeking to have the cost of enforcement assessed does so before a registrar (Rule 13-2(24)). • For the assessment of sheriff’s fees, the person seeking an assessment must obtain an appointment from the registrar to do so(Rule 14-1(24)).

It appears that nearly every reference to “assessment” within the Rules refers to an assessment conducted by a registrar or the court. [24] In addition, this is consistent with the use of the term “bill of costs for assessment” in case law (in different contexts). [25] In Muller v. Workman et al, 2004 BCSC 90, the court held that “[t]he onus of proof rests on the party submitting the bill ofcosts for assessment to establish in the affirmative that the disbursement is reasonable …”, in reference to assessment through a registrar. [26] In McDougall v.

BCSPCA, 2004 BCSC 1026 at para. 2, Master Hyslop stated the following: The plaintiff has yet to present her bill of costs for assessment. At this hearing, I urged that she do so as soon as possible. I understandthat the plaintiff and the defendant's counsel have had discussions concerning the plaintiff's bill of costs and it may be that this matter isresolved by consent. A “bill of costs for assessment” and a “bill of costs” were considered by the court to be two different things. [27] This

interpretation is consistent with the purpose of the provision noted in Coast Capital Savings Credit Union v. PanoramaPlateau Gardens Ltd., 2007 BCSC 970. Citing Drifter Motor Motel Ltd. v. Rupert Management Ltd., [1983] B.C.J. No. 1882, MasterCaldwell held that the purpose of the provision was to provide a respondent that is redeeming his or her mortgage to have a finalcalculation of the amount owing to the petitioner. Requiring that the petitioner file for an assessment by the registrar would further thisaim by providing a concrete tally of the amount of costs owing to the petitioner. The absence of this would not provide any closure to therespondent. [28] Finally, this

interpretation is consistent with the previous version of the provision, which provided that the petitioner file a “billof costs for taxation”. Taxation of costs was defined by Huddart J. in Uram v. Uram (1985), (BC SC), 66 B.C.L.R. 236as “the process of ascertaining and charging up the amount of costs in an action to which a party is legally entitled, or which are legallychargeable”.

This specifically refers to the process by which the court determines whether a bill of costs is reasonable and is not simplya bill provided by one party to the other (as would be the case if the provision simply required the filing of Form 62).

Conclusion [29] On the whole, it appears “filing a bill of costs for assessment” specifically refers to filing Form 49 requesting an appointmentfor the assessment of costs. [30] In the result, full compliance with the mandatory wording of Rule 21-7(10) requires that a Form 49 appointment for assessmentof the bill of costs. [31] The order that the BVCU is not entitled to costs, in my view, in all the circumstances, would not be just. This issue had meriton both sides and ultimately required a proper

interpretation of this rule by the court. [32] In the result, I order that the BVCU release the mortgage and the certificate of pending litigation over the specified landsforthwith. [33] That the bill of costs be filed for assessment and that upon assessment by the Registrar or agreement as the amount payable thatthe respondents pay the bill of costs forthwith Costs [34] Given that each side submitted that costs of this application should be on a solicitor-client basis, for obviously different reasons;and given that the respondents/applicants provided payment and a undertaking to pay the bill of costs upon assessment on July 27, 2012,the respondents/applicants are entitled to their costs of the application on a solicitor-client basis, which costs are payable forthwith uponthe assessed bill of costs being paid. “Koenigsberg, J.”