Lee v. MacLean

2022 BCSC 833 Lee v. MacLean

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Lee v. MacLean, 2022 BCSC 833 Date: 20220518 Docket: M186042 Registry: Vancouver Between: Marette Hazel Lee Plaintiff And: Christy MacLean Defendant Before: The Honourable Madam Justice Adair Supplementary Reasons for Judgment on Costs Counsel for the Plaintiff: J. Fearon T. Dennis Counsel for the Defendant: C. York C. Dolfo-Smith Written submissions of the Plaintiff: May 2, 2022 Written submissions of the Defendant: May 6, 2022 Place and Date of Judgment: Vancouver, B.C. May 18, 2022 [1] On March 2, 2022, I issued Reasons for Judgment (indexed as Lee v. MacLean, 2022 BCSC 312) in this action, following a seven-day trial that began December 6, 2021. The action arose out of a motor vehicle accident in which the plaintiff, Dr. Lee, sustained injuries. Liability was admitted, and I awarded damages of approximately $2,870,000 to Dr. Lee. The largest component ($2,710,000) was for loss of future earning capacity. [2] With respect to costs, I said, at para. 281: [281] Subject to any submissions that the parties may wish to make, Dr. Lee is entitled to costs on Scale B. If the parties wish to make submissions concerning costs, they may do so in writing, provided that any submissions must be filed within 45 days of the date of these reasons. . . . [3] The parties did not deliver submissions in accordance with the deadline I set.

Rather, on April 7, 2022, counsel for the defendant requested an "evidentiary hearing" on the grounds that counsel for Dr. Lee intended to rely on communications that were protected by settlement privilege. Defence counsel advised that the hearing was necessary before submissions could be filed. A hearing was scheduled for May 3, 2022. However, on May 2, 2022, I was informed that the hearing would not proceed. [4] I have now received written submissions on costs. [5] Neither party argued that costs should be assessed on any scale other than Scale B of Appendix B of the Supreme Court Civil Rules. [6] Dr. Lee delivered three offers to settle under Rule 9-1 of the Rules. In her first offer, dated October 17, 2021 (the "First Offer"), Dr. Lee offered to settle for $2,000,000 plus costs and disbursements. In her final offer, dated November 29, 2021, Dr. Lee offered to settle for $1,000,000 plus costs and disbursements. [7] Dr. Lee now seeks double costs from October 17, 2021, the date of the First Offer. In addition, Dr. Lee seeks increased costs for trial preparation and the trial itself. [8] The defendant agrees to pay Dr. Lee double costs from the date of the First Offer, with this qualification: the defendant does not concede this offer was one that ought reasonably to have been accepted. In addition, the defendant says that Dr. Lee has failed to justify an order for increased

costs. [9] Given the defendant's agreement to pay double costs, I will comment only very briefly on matters relating to the First Offer, before turning to the main issue, which is whether increased costs are justified. [10] The court may consider an offer to settle when exercising the court's discretion in relation to costs: see Rule 9-1(4). The available options are set out in Rule 9-1(5), and include (in sub-para. (b)) awarding double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle. The factors for the court's consideration are set out in Rule 9-1(6) and include: whether the offer to settle was one that ought reasonably to have been accepted (Rule 9-1(6)(a)); and the relationship between the terms of settlement offered and the final judgment of the court (Rule 9-1(6)(b)). [11] In my view, the First Offer was one that ought reasonably to have been accepted. It represented a reasonable compromise of Dr. Lee's position. There were (as I described in my Reasons) problems with Dr. Boucher's report. However, Dr. O'Connor's opinion evidence, together with Mr. Kyi's evidence, supported Dr. Lee's evidence concerning the effects of her injuries and her limitations in respect of her post-accident earning capacity, compared to the without-accident scenario. Loss of future earning capacity was the largest part of Dr.

Lee's claim and the ultimate damage award. The second factor, the result at trial, clearly favours Dr. Lee. [12] While I acknowledge the defendant's qualification of her agreement to pay double costs, in my opinion, an order that the defendant pay double costs, based on the First Offer, is clearly justified. [13] I turn then to Dr. Lee's request for increased costs. [14] Counsel have used the term "uplift costs." However, I agree with the observations of Justice Blok in Globalnet Management Solutions Inc. v. Aviva Insurance Company, 2020 BCSC 1361, at paras. 31-33, concerning terminology, and I will refer to costs under s. 2(5) as increased costs, rather than uplift costs. [15] Increased costs are provided for under s. 2(5) of Appendix B of the Rules, which reads as follows [underlining added]: (5) If, after it fixes the scale of costs applicable to a proceeding under subsection (1) or (4), the court finds that, as a result of unusual circumstances, an award of costs on that scale would be grossly inadequate or unjust, the court may order that the value for each unit allowed for that proceeding, or for any step in that proceeding, be 1.5 times the value that would otherwise apply to a unit in that scale under section 3(1). [16] Thus, increased costs require unusual circumstances that render the costs awarded on the scale determined by the court grossly inadequate or unjust.

Factors that are often taken into account include: positions or behaviour which have added to the complexity of the litigation; the importance of the matter to a party; misbehaviour by a party that added to the expense incurred by the party claiming costs; and the degree of disparity between costs calculated at Scale B and the actual legal fees incurred. See Globalnet, at para. 30. [17] Mr. Fearon, counsel for Dr. Lee, argues that the "unusual circumstances" justifying increased costs include: ● Dr. Lee's clear willingness to settle the claim on reasonable terms (especially on the terms in her final offer to settle), and what Mr. Fearon describes as "ICBC's failure to negotiate in good faith"; ● the inconvenience created for Dr. Lee's colleagues (Dr. Finlayson and Dr. Stuart), whose time would have been better spent in the operating room saving lives, rather than the courtroom; and ● the unusual circumstances created by the pandemic, and the rise of the Omicron wave. [18] However, in my view, Dr. Lee has failed to demonstrate unusual circumstances that would result in an award of costs on Scale B, and double costs from October 17, 2021, being either grossly inadequate or unjust. She has therefore failed to justify her claim for increased costs. [19] In an affidavit sworn by Dr. Lee and submitted in support of her request for increased costs, Dr. Lee says that she was willing to

accept even less than her last offer to settle to avoid the trial. However, there is no evidence that such views were communicated to anyone on the defence side. On the other hand, her formal position on settlement was communicated through her offers to settle. The defendant will bear the consequences - in the form of double costs from the date of the First Offer - of not accepting her First Offer. [20] Dr. Lee's expressed opinions in her affidavit concerning settlement offers made on behalf of the defendant come very close to breaching the privilege that attaches to settlement communications. This point was discussed recently by Justice E. McDonald in Kringhaug v. Men, 2022 BCSC 185, where, on an application for costs similar to the one before me, plaintiff's counsel proposed to place before the court not only her own offers to settle, but also offers made by the defendant. E. McDonald J. wrote, at paras. 30-33 [underlining in original]: [30] . . . There is nothing in the language stipulated by Rule 9-1(1)(c)(iii) to suggest the party who is deciding to disclose their offer to settle, is also given the right to bring the other side's unaccepted offer to the attention of the court. [31] Subrules 9-1(4), (5) and (6) refer to the Court considering "an offer to settle" or, "the offer to settle", as part of deciding the matter of costs. In my view, nothing in the wording of these

subrules suggests that the Court must consider, in addition to an unaccepted offer to settle made by the moving party, the unaccepted offer(s) of the other side, especially when the other side expressly maintains a claim of settlement privilege. I am supported in this view by the decisions in Wong v. Rashidi, 2011 BCSC 66 at para. 44 [Wong] and Kim v. Dresser, 2021 BCSC 1874 at para. 3. [32] In Wong, at para. 44, Justice Grauer (as he then was) stated as follows: Correspondence concerning or proposing settlement does not lose the protection of having been written without prejudice unless it complies with Rule 9-1(c), in which case the party preparing the document will have reserved the right to refer to it in relation to costs. Otherwise, it is not only inadmissible, but also irrelevant to the exercise to the exercise of discretion reserved to the court by the rule. [Emphasis added] [33] In my view, the defendant is entitled to maintain settlement privilege over the defendant's own formal settlement offer because the plaintiff reserved only the right to refer to her own offer in relation to an application for costs. I see no basis for the plaintiff asserting a right to refer to the other party's unaccepted settlement where the other party does not agree to waive settlement privilege. [21] Dr. Lee is certainly not alone in finding participation in a trial an enormously stressful

experience. Motor vehicle accident claims are not the only setting in which plaintiffs seek damages for personal injuries caused by a defendant's negligence. To prove their claims, plaintiffs must speak publicly about highly personal matters that they would, generally speaking, much prefer to keep private. The experience is often very emotionally draining and upsetting. Dr. Lee's personal experience as a plaintiff cannot constitute unusual circumstances for the purposes of an award of increased costs. [22] In her affidavit, Dr. Lee relates a report from her husband, Mr. Bungay, about a discussion he had with an investigator from ICBC. However, Dr. Lee does not tell me either the date or the context for the discussion, and, in those circumstances, I can give no real weight to the report. The fact that this discussion took place would not demonstrate unusual circumstances justifying an award of increased costs. [23] Mr. Fearon's submissions concerning "ICBC's failure to negotiate in good faith" repeat arguments (for example, about Dr. Lee's condition worsening over time) that I rejected. I note that the law currently does not impose a free-standing duty to "negotiate in good faith": Martel Building Ltd. v. Canada, 2000 SCC 60, at para.

73. While settlement is certainly encouraged, a party (whether plaintiff or defendant) is not required to make an offer. Mr. Fearon's complaints that ICBC failed "to make any offers that involved a reasoned, fair, or objective assessment of Dr. Lee's claim," again, at least indirectly, come close to breaching settlement privilege. In any event, the submissions and complaints are not persuasive. In my view, the evidence does not support the conclusion that the defendant's insurer did not settle only because it wanted to force Dr. Lee to go to trial. [24] In addition to Dr. Lee's affidavit, an affidavit from Mr. Dennis, one of Dr. Lee's trial counsel, was sworn and filed in relation to costs. A copy of a newspaper article (some of which was illegible in the copy) published in the Vancouver Sun in June 2020 was attached as an exhibit to Mr. Dennis's affidavit. It appeared that the intention was to rely on statements reported in the article for their truth, and in support of the general argument that ICBC's litigation strategy was to force plaintiffs (like Dr. Lee) to trial. However, the article was not admissible for that purpose. [25] There was no evidence to support the submission that Dr. Lee's colleagues were forced by the intransigence of the defendant and her insurer to abandon patients awaiting life-saving surgery to attend the trial. [26] With respect to the state of the

pandemic, by early December 2021, in-person trials had been conducted for about 18 months. Health and safety precautions were in place and were enforced in the courthouse and in the courtroom. Often, witnesses testified by video to avoid unnecessary personal attendances. By January 2022, things had changed, and in-person hearings were suspended for a few weeks on account of the Omicron wave. However, as of early December 2021, having a trial proceed in person was much less of an "unusual circumstance" than earlier in the pandemic. [27] Mr. Fearon relied heavily on Johnson v. Heer, 2020 BCSC 1751, where increased costs were ordered, to support Dr. Lee's entitlement to increased costs. However, Johnson has since been distinguished in a number of cases, for example: Kringhaug; Sidhu v. Alton, 2021 BCSC 265; Yeomans v. Buttar, 2021 BCSC 1394; Dunn v. Heise, 2021 BCSC 2215; and Palmer v. Pozniak, 2022 BCSC 513. [28] In my view, this case is also distinguishable from Johnson. The amount of damages presented in the defendant's closing submissions was less than the amounts in Dr. Lee's offers to settle. The defendant called a case (Dr. O'Connor) and attacked (with some success) the opinion evidence of the plaintiff's medical expert (Dr. Boucher). At trial, the defendant also challenged the plaintiff's career plans and work limitations. [29] Finally, I agree with, and emphasize, the

observation made by Kent J. in Yeomans, at para. 38: [38] Lastly, I would observe that increased costs should not become the norm on top of double costs where a defendant fails to accept a reasonable offer to settle before trial. The rules contemplate that double costs will be the consequence for such failure and in order for increased costs to also be awarded, something truly unusual militating in favour of that result must exist. [30] Here, there is nothing that, in my view, justifies increased costs. [31] In summary, costs are payable by the defendant to the plaintiff on Scale B of Appendix B of the Supreme Court Civil Rules, with double costs from October 17, 2021. [32] I consider that the defendant has been substantially successful in relation to the matter of costs, and therefore is entitled to costs of this application. The defendant is permitted to set off costs payable by the defendant to the plaintiff against costs payable by the plaintiff to the defendant. "Adair J."