Halvorson v. West, 2022 BCSC 457

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Halvorson v. West, 2022 BCSC 457 Date: 20220321 Docket: M33884 Registry: Chilliwack Between: Debbie Ruth Halvorson Plaintiff And Vincent John West and Louise Fay Podann Defendants Before: The Honourable Mr. Justice Blok Reasons for Judgment Counsel for the Plaintiff: T. Zoobkoff V. Namdarian, Articled Student Counsel for the Defendants: C. Ho Place and Date of Hearing: New Westminster, B.C. March 11, 2022 Place and Date of Judgment: Chilliwack, B.C. March 21, 2022 I. Introduction [ 1 ] The plaintiff seeks an order allowing her double costs against the defendants.

Her application is based on her delivery of a formal offer to settle this action for an amount that was lower than the ultimate award at trial. II. Background [ 2 ] By way of brief background, this action arises from a motor vehicle-pedestrian accident that occurred on October 11, 2016, in Chilliwack, British Columbia. The plaintiff, Debbie Halvorson, was injured when she was struck by the defendant West’s pickup truck as she was at work as a landscaper, clearing a parking lot of leaves. [ 3 ] The matter proceeded to a ten-day trial that took place in September and October 2020.

In written reasons issued on July 8, 2021, I found in favour of the plaintiff on liability and awarded damages totaling $213,450 . These reasons for judgment may be found at 2021 BCSC 1322 . [ 4 ] On July 13, 2020, the plaintiff delivered a formal offer to settle this matter for $195,000. By its terms, the offer to settle was open for acceptance at any time before 4:00 p.m. on the last business day before the start of the first day of trial. Given the dates involved, the offer was therefore open for acceptance for 74 days. [ 5 ] The defendants did not accept the plaintiff's offer to settle. III.

Positions of the Parties A. The Plaintiff [ 6 ] The plaintiff relies on Rule 9-1(5)(

b) of the Supreme Court Civil Rules in arguing for an award of double costs for the steps taken after the delivery of her offer to settle. [ 7 ] The plaintiff notes that Rule 9-1(6) sets out factors for the court to consider in determining whether to award double costs. The

primary factor, in the plaintiff's view, is “whether the offer to settle was one that ought reasonably to have been accepted”. [ 8 ] In that regard, the plaintiff argues that there was a full body of evidence available to both parties, and in particular to the defendants, on which the plaintiff's claim could be assessed.

Specifically, discoveries of the principal parties took place in January 2020 and the plaintiff’s experts’ reports were served on the defendants on various dates (one as early as May 14, 2019) with all five of those reports delivered before the end of June 2020. [ 9 ] On July 9, 2020, the parties engaged in mediation, and for that session the plaintiff provided to defence counsel a mediation brief setting out in full her position on liability and damages. In that brief she quantified her damages at $291,625. [ 10 ] As already noted, the plaintiff's formal offer to settle was delivered on July 13, 2020.

The plaintiff notes the settlement figure of $195,000 represented a 33 percent reduction from the damages figure the plaintiff put forward at the mediation. [ 11 ] Citing Hartshorne v.

Hartshorne , 2011 BCCA 29 [ Hartshorne ], which set out some additional factors to consider, the plaintiff argues that the timing of the offer, the magnitude of the offer, the ability to evaluate the offer and the rationale for the offer were fully evident to the defendants, and therefore the formal offer ought to have been accepted by the defendants. [ 12 ] The plaintiff also notes the defendants did not muster any expert evidence of their own on the matter of the plaintiff's physical injuries, relying only on an expert report from a psychiatrist, who did not provide an assessment of the plaintiff but merely critiqued the report of the plaintiff's psychiatrist. [ 13 ] The plaintiff notes that the defence strategy was to advance the defendants’ case almost exclusively through cross-examination.

The plaintiff submits that this was a risky strategy that exposed the defendants to a potentially significant loss if the strategy failed. The plaintiff says this risky strategy is an additional factor the Court should take into account in awarding costs in her favour. B.

The Defendants [ 14 ] The defendants emphasize that Hartshorne holds that an award for double costs is a “punitive measure against a litigant for that party’s failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted”. [ 15 ] Here, the defendants say the main issues between the parties were those of liability, the plaintiff's credibility, and damages. There was a live issue on liability because the evidence indicated the plaintiff was not paying attention and the defendant West testified on discovery that the plaintiff stepped backwards into his vehicle.

There was an issue as to the plaintiff’s credibility because she had testified on discovery that her pre-accident mental health issues had stabilized by the time of the accident but the records of her family doctor contradicted that. She also claimed a level of disability that appeared inconsistent with activities shown in surveillance video. The damages issues were complicated by the plaintiff's pre-existing mental health issues and her claim that she suffered from somatic symptom disorder as a result of the accident. [ 16 ] Relying on Enns v.

Corbett , 2021 BCSC 2 [ Enns ], the defendants argue that these matters left uncertainty with respect to the strength of the plaintiff's claim, as liability remained a contentious issue and matters of credibility clouded the assessment of damages.

In this regard, the defendants note that the Court ultimately found credibility issues with the plaintiff insofar as the Court remarked that “she downplayed her pre-accident mental health difficulties to an unreasonable extent” and made too much of her post-accident difficulties. [ 17 ] The defendants also note that the difference between the offer to settle in the ultimate award was marginal, being just 9 percent over the offer to settle, which is less than the percentage difference in Enns . [ 18 ] The defendants note that Enns also had live issues on liability as well as a marginal difference between the offer to settle and the ultimate award, and the court in Enns declined to award double costs.

The defendants say the Court should do the same here. [ 19 ] In brief, the defendants say that although the damages awarded at trial exceeded the plaintiff's offer to settle, the authorities establish that this does not result in an automatic award of double costs. Due to credibility, liability, the plaintiff's pre-existing health, and the plaintiff's claim of somatic symptom disorder all being issues prior to the trial, it was not unreasonable for them to decline the plaintiff's offer. In these circumstances, the Court should not award double costs but should award only ordinary costs. IV. Discussion A.

Rules 9-1(5)(

b) and 9-1(6) [ 20 ] Rule 9 - 1(5)(

b) provides that in a proceeding in which a plaintiff has served a formal offer to settle, the court may award double costs of all or some of the steps taken in the proceeding after the service of the offer. [ 21 ] Rule 9-1(6) lists the factors the court may consider in making that determination. These are:

a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;

b) the relationship between the terms of settlement offered and the final judgment of the court;

c) the relative financial circumstances of the parties; and

d) any other factor the court considers appropriate. [ 22 ] Hartshorne is the leading case on the subject. There, the Court of Appeal said: [25] An award of double costs is a punitive measure against a litigant for that party’s failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted.

Litigants are to be reminded that costs rules are in place “to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”… [Citations omitted.] [ 23 ] The court went on to endorse comments made in Giles v. Westminster Savings and Credit Union , 2010 BCCA 282 , at para. 73 [ Giles ], concerning the purposes for which costs rules exist:

a) to deter frivolous actions or defences;

b) to encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect;

c) to encourage litigants to settle whenever possible, thus freeing up judicial resources for other cases;

d) to have a winnowing function in the litigation process by requiring 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

e) to discourage the continuance of doubtful cases or defences. [ 24 ] The following comments from Giles are also instructive: [88] I appreciate there are no mandatory factors under Rule 37B(6) [the double costs rule of the time] and that trial judges have discretion to take into account whatever factors they consider appropriate in a given case. However, the ultimate discretion as to double costs must be exercised in a just, principled, and consistent way.

One of the goals of Rule 37B is to promote settlement by imposing consequences on parties who have refused to accept an offer that ought reasonably to have been accepted. While it may not invariably be the case, I consider that it would be generally antithetical to that goal to penalize an unsuccessful plaintiff with double costs for proceeding to trial in the face of an unreasonable offer. Virtually all litigation comes with a degree of risk. When faced with settlement offers, plaintiffs must carefully consider their positions.

However, they should not to be cowed into accepting an unreasonable offer out of fear of being penalized with double costs if they are unable to “beat” that offer. Put somewhat differently, plaintiffs should not be penalized for declining an offer that did not provide a genuine incentive to settle in the circumstances. B. Analysis [ 25 ] I discuss the Rule 9-1(6) factors under the headings that follow, although I do so in a different order by addressing the first factor last.

Relationship Between the Offer and Award [ 26 ] The offer was for $195,000; the judgment amount was $213,450. [ 27 ] The plaintiff argues that the difference is material; the defendants say it is marginal, and it is less than the percentage difference in Enns , where Mr. Justice Riley denied double costs, though I note his principal reasons for doing so were related to the liability uncertainty in that case. [ 28 ] The award in this case is $18,450 more, or 9.5 percent higher, than the offer. It is not an enormous amount more, but it is a material amount.

It is a factor that weighs in favour of the plaintiff, though perhaps not strongly. Relative Financial Circumstances of the Parties [ 29 ] While noting that the insured defendants enjoyed a greater financial capacity to bear litigation risks, the plaintiff nonetheless took the position that this was a neutral factor here. I agree. [ 30 ] I question the utility of this factor in most personal injury cases, at least those where defendants are insured, as there will be a vast disparity in financial circumstances in almost every case.

In Enns , Riley J. noted there was no evidence that the defendant or her insurer in that case “used their financial strength in an untoward manner”. I find that observation useful here. In this case I similarly find no evidence that the defendants or their insurer utilized their financial strength in an unfair or untoward manner. Other Factors [ 31 ] The plaintiff argues that the defendants’ strategy of advancing a case largely on cross-examination only was an unnecessarily risky strategy that left them vulnerable to a substantial award against them if the strategy fell short.

The plaintiff says this “high risk” approach ought to be an additional factor weighing in favour of an award of double costs. She cites Ostrikoff v. Oliveira , 2014 BCSC 842 [ Ostrikoff ] in support of this submission. [ 32 ] While I agree that Ostrikoff offers favourable support for the plaintiff’s submission generally (although I note the damages award in Ostrikoff was successfully appealed, rendering the costs decision moot: see 2015 BCCA 351 ), I do not agree with the plaintiff’s characterization of the ratio or rationale in that case.

In Ostrikoff , the court did not, in effect, punish the defendant for adopting a risky

strategy – the court quite plainly said “defendants are free to litigate the case in such fashion as they consider appropriate” – instead, the court focused on the assessment of the plaintiff’s case that the defendant ought to have made. To quote from the costs decision: [15] In my opinion, the February 17, 2014 settlement offer made by the plaintiff was reasonable and one that ought reasonably to have been accepted by the defendant before the commencement of trial.

A careful assessment of the strength of the plaintiff’s case on the eve of trial … would have, and should have, resulted in a conclusion that a recovery at trial of sums in excess of the offer was a realistic prospect. Instead, relying almost exclusively on tactics limited to cross-examination and putting the plaintiff to strict proof of his case, the defendant chose to proceed to trial to see what might happen. Defendants are free to litigate the case in such fashion as they consider appropriate.

But as stated in Hartshorne , above, “[l]itigants are to be reminded that costs rules are in place to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer”. [ 33 ] Accordingly, the costs issue in Ostrikoff essentially came down to the first factor set out in Rule 9-1(6), that is, whether the offer to settle was one that ought reasonably to have been accepted. I now turn to that question.

Whether the Offer Ought Reasonably to Have Been Accepted [ 34 ] Hartshorne offers some further guidance on this factor: [27] The first factor – whether the offer to settle was one that ought reasonably to have been accepted – is not determined by reference to the award that was ultimately made.

Rather, in considering that factor, the court must determine whether, at the time that the offer was open for acceptance, it would have been reasonable for it to have been accepted … Instead, the reasonableness is to be assessed by considering such factors as the timing of the offer, whether it had some relationship to the claim (as opposed to simply being a “nuisance offer”), whether it could be easily evaluated, and whether some rationale for the offer was provided.

We do not intend this to be a comprehensive list, nor do we suggest that each of these factors will necessarily be relevant in a given case. [ 35 ] As for the timing of the offer, I am satisfied it was made well in advance of the trial and there was plenty of time (74 days) for the defendants to evaluate it. [ 36 ] I am also satisfied that (

a) the offer is not one that would be properly described as a “nuisance” offer; (

b) there was what I understand to have been a reasonably full rationale for the offer provided to the defendants in the form of a mediation brief delivered nearly three months prior to trial; and (

c) there was a full body of evidence available to the defendants (discovery evidence, experts’ reports and clinical records) on which to evaluate the claim. [ 37 ] The key issue here is the defendants’ argument that there were too many variables at play here for them to make a reliable evaluation. [ 38 ] I accept that there may be cases where the range of likely outcomes is so great or uncertain that it would be unfair to impose double costs on a defendant who fails to beat a formal offer to settle.

However, this is not one of those cases. [ 39 ] The defendants made much of the liability issue, arguing that it was uncertain, but this was not a “light switch” case where liability was all or nothing. The defendant driver testified at discovery that he saw the plaintiff in the parking lot, and she had her back to him. He was also blind in one eye. These matters meant he had an enhanced duty to take care. Nonetheless, he struck the plaintiff with his vehicle.

The best the defendants could have reasonably hoped for was an apportionment of liability, and even then – based on just the discovery evidence and not the trial evidence, I emphasize – liability would likely have been weighted substantially against the defendant driver. [ 40 ] The defendants also argue that credibility issues hampered any accurate assessment. On this point I agree with the comments of Mr. Justice Kelleher in Vine v. Taylor , 2018 BCSC 1025 : [22] The defendants argue two principal propositions.

First, they argue that they acted reasonably in refusing the offer because there were contentious issues that hinged on the credibility of the plaintiff. [23] I respectfully disagree that that is a legitimate consideration. There is always the argument that credibility issues and other complex issues justify going to trial in the face of an offer to settle. [24] But that is not consistent with the whole point of Rule 9-1. In Johal v. Radek , 2016 BCSC 1170 , Mr.

Justice Voith responded to a similar argument: [59] The suggestion that a party ought to be able to cross-examine an opposing party before deciding whether to accept an offer of settlement would mean that trials would have to be underway before settlements were achieved, and that offers would have to be outstanding throughout the course of the trial.

This suggestion is inimical with the stated purpose of R. 9-1 and would serve to undermine its efficacy. [60] Accordingly, I do not consider that there are any “additional factors” that inform the present inquiry or that assist the defendants. [ 41 ] The defendants cite three cases where credibility was mentioned as a factor: 1029865 B.C. Ltd. v. 1007442 B.C. Ltd. , 2017 BCSC 2381 [ 865 B.C. ]; Griffith v. Larsen , 2014 BCSC 2005 [Griffith] and Enns . In 865 B.C. , credibility was a central element in a claim by a purchaser who failed to complete the purchase of a commercial property.

The case largely hinged on an assertion by the plaintiffs that there was a contractual term requiring the vendor to provide architectural plans and, further, that there had been a representation to that effect. The plaintiffs lost. The court declined to award double costs given the uncertainties. [ 42 ] 865 B.C. is distinguishable from the present case. It appears to have been a classic “light switch” case in which the range of outcomes was extremely broad and uncertain.

[ 43 ] In Griffith , a personal injury case, the plaintiff was awarded damages of $85,159. She had made a formal offer to settle for $85,000, meaning that she beat the offer by just $159. The court declined to award double costs, noting that the plaintiff “had not given her evidence with candour”. That comment is suggestive of a much more serious credibility issue than the usual credibility issues at play in most personal injury cases, including this one.

I conclude Griffith is distinguishable from the case at bar. [ 44 ] In Enns , a personal injury case, the plaintiff made a formal offer to settle the case for a sum that was about $30,000 less than the $322,780 award made after trial. The court noted that at the time the offer was made, there was uncertainty as to the strength of the plaintiff’s claim, “due in large measure to issues of contributory negligence and potential apportionment of liability” (at para. 7). Mr.

Justice Riley noted in particular that the offer “expressly rested on the premise that the defendant would be found ‘fully liable’ for the collision”, made no allowance for contributory negligence on the part of the plaintiff, and did not account for the “real risk that the plaintiff’s claim might have been dismissed entirely or that liability might be apportioned”.

He concluded that the offer “did not put forward a ‘genuine compromise or an incentive to settle’ in view of the litigation risks, such that the defendant did not act unreasonably in declining to accept it”. [ 45 ] Here, there is no evidence on which I can conclude there was no liability risk factored into the offer or that the offer did not represent a genuine compromise on the plaintiff’s part. Enns is distinguishable. [ 46 ] In

summary, the defendants in this case had full information on which to assess the strength of the plaintiff’s claim and plenty of time to perform that assessment. While there were variables to take into account, these were not so extreme that a reasonably reliable assessment could not be made. Uncertainty as to outcome is inherent in any litigation. To repeat part of an earlier quote from Giles : [88] Virtually all litigation comes with a degree of risk.

When faced with settlement offers, [litigants] must carefully consider their positions. [ 47 ] I conclude the offer made by the plaintiff was a reasonable one that ought reasonably to have been accepted. Accordingly, the plaintiff will have double costs from the time of service of the offer. “Blok J.”