IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Granja v. Jozsef, |
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2017 BCSC 1087 |
Date: 20170627
Docket: M142449
Registry: New Westminster
Between:
Jose Granja
Plaintiff
And
Csaba Jozsef
Defendant
And
Insurance Corporation of British Columbia
Third Party
Before: The Honourable Madam Justice Devlin
Reasons for Judgment Regarding Costs
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Counsel for the Plaintiff: |
P. Yearwood |
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The Defendant appearing in person: |
C. Jozsef |
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Counsel for the Third Party, ICBC: |
B.D. Home |
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Place and Date of Trial/Hearing: |
New Westminster, B.C. June 12, 2017 |
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Place and Date of Judgment: |
New Westminster, B.C. June 27, 2017 |
[1] This is an application by the plaintiff, Jose Granja, for an award of double costs on the basis that he twice offered to settle this case for less than the amount he was ultimately awarded after trial.
[2] Specifically, the plaintiff now claims double costs of the proceedings after August 16, 2013 or, in the alternative, after November 15, 2013. The plaintiff made an offer to ICBC, the third party in the proceedings, to settle for $246,884.82 on the former date (the “first offer”) and another offer to settle for $70,000 on the latter date (the “second offer”).
[3] Mr. Granja was injured in a number of motor vehicle collisions which occurred on June 5, 2010 in the parking lot of his apartment complex in Surrey, B.C. While Mr. Granja was attempting to remove his granddaughter from a parked vehicle, an intoxicated Mr. Jozsef (the defendant) intentionally drove his car into the parked vehicle four times, causing Mr. Granja to be tossed around the back seat and resulting in injuries to his neck, shoulder, and back. After repeatedly ramming the parked vehicle, Mr. Jozsef got out of his car screaming and attempted to physically assault Mr. Granja, punching him in his open hands and kicking him in the leg. At trial, I found that Mr. Granja’s physical injuries were caused solely by the motor vehicle collision, but that Mr. Jozsef was 25 percent liable for Mr. Granja’s psychological injuries due to his physical and verbal assault of Mr. Granja.
[4] After 22 days of trial, the plaintiff was awarded damages of $290,350. The trial judgment is indexed at 2016 BCSC 1531.
[5] The following settlement offers were made before the trial:
1. On June 11, 2013 ICBC offered to settle for $15,000.
2. On August 16, 2013 the plaintiff sent the first offer of $246,884.82 to ICBC, but not the defendant. As discussed below, this offer did not contain the required wording reserving the right to present the offer to the court for consideration in relation to costs as set out in R. 9-1(1)(c)(iii) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules].
3. On October 2, 2013 ICBC offered to settle for $34,000.
4. On November 15, 2013 the plaintiff sent the second offer of $70,000 to ICBC. Once again the offer was made to ICBC only and not served on the defendant. This offer did however contain the wording required by R. 9-1(1)(c)(iii).
5. On February 14, 2014, ICBC offered to settle for $40,000.
6. On September 3, 2014, counsel for the plaintiff sent a one-page letter to ICBC advising that the plaintiff was withdrawing the second offer. No explanation was provided for the withdrawal.
7. On April 16, 2015 ICBC offered to settle for $55,000.
8. On April 22, 2015 ICBC offered to settle for $120,000.
[6] None of these exchanges provided any explanation for the amount stipulated, nor any explanation for the change in the sum from previous offers. In addition, the defendant was never served or provided notice of any of the offers.
[7] The plaintiff’s position is that he should be awarded double costs after the date of the first offer, or alternatively after the date of the second offer. Although the plaintiff argues both offers ought reasonably to have been accepted, he does acknowledge that the first offer did not contain the wording required by R. 9-1(1)(c)(iii). However, he argues that double costs may be awarded from the date of that offer despite this non-compliance with the Rule. In addition, the plaintiff takes the position that he was not required to serve the defendant with either offer, as the defendant had filed but failed to serve his Response to Civil Claim (the “Response”), and in any event the third party ICBC was essentially responsible for conducting the defence of the claim and thus there was no practical need to serve the offers on the defendant.
[8] ICBC opposes the application for double costs in relation to both offers. It argues that the first offer was not an “offer to settle” as defined in R. 9-1(1) because it did not contain the language in R. 9-1(1)(c)(iii), and that the second offer also fails to qualify under the Rule because it was not served on the defendant as required by R. 9-1(1)(c)(ii). Further, ICBC disputes that the second offer ought reasonably to have been accepted.
[9] The defendant advised he regards this application as irrelevant because he is unable to pay any costs regardless of the amount.
[10] Rule 9-1 of the Rules provides a procedure by which a party may be subject to costs consequences in the event that a formal offer to settle is made but not accepted. The relevant provisions of the Rule is as follows:
Rule 9-1 -- Offers to Settle
(1) In this rule, “offer to settle” means
…
(c) an offer to settle … made under this rule, that
(i) is made in writing by a party to a proceeding,
(ii) has been served on all parties of record, and
(iii) contains the following sentence: “The ………[party(ies)]………, ………[name(s) of party(ies)]………, reserve(s) the right to bring this offer to the attention of the court for consideration in relation to costs after the court has pronounced judgment on all other issues in this proceeding.”
…
(4) The court may consider an offer to settle when exercising the court’s discretion in relation to costs.
(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:
…
(b) award 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;
…
(6) In making an order under subrule (5), the court may consider the following:
(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;
(d) any other factor the court considers appropriate.
[11] With respect to the purpose underlying these provisions, our Court of Appeal stated in Hartshorne v. Hartshorne, 2011 BCCA 29 [Hartshorne] at para. 25 that
[a]n 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” (A.E. v. D.W.J., 2009 BCSC 505, 91 B.C.L.R. (4th) 372 at para. 61, citing MacKenzie v. Brooks, 1999 BCCA 623, Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 (C.A.), Radke v. Parry, 2008 BCSC 1397)…
[12] I will now turn to my analysis of the issues.
[13] The first offer of August 16, 2013 did not contain the wording set out in R. 9-1(1)(c)(iii). Counsel for the plaintiff did not provide this Court with any explanation as to why this wording was absent, nor advance any compelling argument for why the offer should nevertheless qualify as an “offer to settle” under the Rule. I agree with counsel for ICBC that the plaintiff’s failure to comply with the requirement of the Rule 9-1(1)(c)(iii) renders the first offer invalid for the purposes of R. 9-1: see P.H. v. Canada (Attorney General), 2016 BCSC 173 at para. 33, citing Roach v. Dutra, 2010 BCCA 264 at para. 52.
[14] The second offer does contain the wording set out in R. 9-1(1)(c)(iii). The issue is whether the plaintiff’s failure to serve this offer on the defendant was in breach of Rule 9-1(1)(c)(ii), which requires that an “offer to settle” be “served on all parties of the record.”
[15] “Party of record” is defined in R. 1-1(1) as “a person who has filed a pleading, petition or response to petition in the proceeding,” unless the context otherwise requires. In this case the defendant filed a pleading, the Response, but did not serve it on the plaintiff.
[16] The plaintiff argues that he was not required to serve any offer on the defendant because he was never served a copy of the defendant’s Response as required by R. 3-3. The plaintiff relies on C.P. v. RBC Life Insurance Company, 2015 BCCA 30 at paras. 83-85 for the proposition that imperfect compliance with the requirements of R. 9-1 is not an absolute bar to an award of double costs. However, as I read that decision, those paragraphs simply describe an evolution in the former Rules whereby greater discretion was afforded to the courts in awarding double costs where there had been an offer to settle. There is no mention of the threshold issue of whether an offer to settle had in fact been made under the relevant Rule, let alone whether there is any discretion to ignore the formal requirements of such an offer as provided by the clear wording of the Rule. In my view this case does not detract from the clear requirement in R. 9-1(1)(c)(ii) that an “offer to settle” under the Rule must be served on all parties of record.
[17] Further, while R. 1-1(1) provides that a party of record may be defined as something other than a person who has filed a pleading if “the context otherwise requires,” it is clear from the material filed in this application that plaintiff’s counsel was informed that the defendant was a “party of record” as early as July 15, 2013, which pre-dates both the first and second offers. Plaintiff’s counsel claims that he was not aware the Response had been filed until he attended a Trial Management Conference on March 27, 2015. However, the exhibits attached to the February 15, 2017 affidavit of the paralegal Ms. Baily, filed by the plaintiff, include an email from counsel for ICBC to the former litigation manager for plaintiff’s counsel, dated July 15, 2013, advising the plaintiff’s counsel that the defendant had filed a Response. Further, on July 17, 2013, plaintiff’s counsel sent a letter to the defendant advising him of a mediation date and including a copy of the plaintiff’s Statement of Facts and Issues. The materials show that there were further communications between plaintiff’s counsel and the defendant as the case progressed, all well before the March 27, 2015 Trial Management Conference. Based on the chronology provided by the plaintiff, I find that the context does not require deviating from the usual definition of “party of record” for the purposes of this application. The defendant was a party of record because he had filed his Response. The plaintiff was put on notice of this and was therefore required to serve him in order to make an “offer to settle” within the meaning of R. 9-1(1)(c).
[18] In the alternative, the plaintiff submits that regardless of whether he should have served the defendant it would not have made any difference even if he had done so. The plaintiff argues that since the defendant has no money to pay and would not have accepted an offer because of his denial of responsibility for any of the damages, the failure to serve him is irrelevant to the application for double costs. Further, the plaintiff argues that since ICBC has ultimate responsibility to pay any costs, they would be the ones deciding whether to accept any offer regardless of what the defendant said.
[19] As I have said, the wording of R. 1-1(1) and the surrounding context in this case support a finding that the defendant was a “party of record” and that the second offer had to be served on him before it could qualify as an offer to settle under R. 9-1(1). In my view this requirement is unaffected by the defendant’s position with respect to liability or the involvement of ICBC in the litigation. I am guided by the following comments of Goepel J. (as he then was) in Bronson v. Hewitt, 2011 BCSC 482 at para. 18:
… Rule 9-1(c)(ii) mandates that offers to settle be served on all parties of record. [The defendant’s] offer was not so served. While service on Mr. Tompkins [a party of record who was no longer an active participant in the litigation and who had no involvement in the portions of the case involving the defendant who made the offer] may or may not have had any practical effect on the settlement of this particular action, Rule 9-1 does not contemplate the Court embarking on a case by case investigation as to the impact of non-compliance. The authors of the rules chose the language of the rule. It is not for the Court to rewrite the rule or otherwise interpret it. I find the failure to deliver either the Trial Offer or the Costs offer to all parties of record is fatal to [the defendant’s] application. The offers are not offers to settle as defined in Rule 9-1 and the provisions of Rule 9-1 are not engaged
[20] Similarly, I find that the plaintiff’s failure to serve the second offer on the defendant is fatal to his application for double costs. The second offer was not an “offer to settle” within the meaning of R. 9-1(1) and therefore the provisions of R. 9-1 are not engaged.
[21] However, if I am wrong in my analysis I turn now to the second issue.
[22] As set out above, R. 9-1(6) of the Rules lists certain relevant factors to consider in deciding whether to make an award for double costs under R. 9-1(5). My analysis will consider those factors.
[23] As set out in Hartshorne at para. 27, in considering this 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 [citations omitted].” It would be improper for this Court to factor the award made at trial into this analysis; the question is what was reasonable at the time, 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”: Hartshorne at para. 27.
[24] One of the key issues in this case was the extent to which the plaintiff’s injuries were caused by the multiple collisions as opposed to the defendant’s assault on the plaintiff. At his examination for discovery, the plaintiff testified that he was “punched with a lot of force,” and that he could feel the punches. The second offer did not differentiate between the collisions and the assault and simply set out a lump sum without providing any rationale. In addition, the expert medical evidence suggested there would be some improvement in the plaintiff’s condition and there was little mention of the impact of the plaintiff’s pre-existing wrist injury on his prognosis. Although the comments attributed to the ICBC adjuster in Ms. Baily’s affidavit that the plaintiff was a liar and not credible are troubling, I am not prepared to base my analysis solely on the summary provided by Ms. Baily. Under the circumstances as they presented themselves prior to trial, it was not unreasonable for the third party to maintain their position. In my view, given all of these uncertainties this factor weighs against taking the second offer into account in deciding whether to make an award under R. 9-1(5).
[25] As stated earlier, the second offer was for $70,000, or $220,350 less than was awarded after trial. This factor weighs in favour of taking the second offer into account.
[26] As stated earlier, the plaintiff argues that the defendant’s position was irrelevant as it was ICBC who was ultimately responsible for the payment of any settlement. He relies on the decision of J.D. v. Chandra, 2014 BCSC 1272 to support his position. However, that decision does not stand for the proposition that when the third party is a well-financed corporation like ICBC the financial circumstances of the defendant need not be considered. Indeed, in Gonzales v. Voskakis, 2013 BCSC 675 at para. 39, Fitzpatrick J. rejected the notion that “ICBC’s greater financial clout” is necessarily a significant factor, and cautioned that it “must be remembered that although ICBC is well-funded, its resources largely come from the premiums of many individual insurers, who expect that these funds will be managed for the benefit of the insurance system as a whole.” While I accept that the plaintiff was in difficult financial circumstances as a result of the collision I am also cognizant of the fact that the defendant was also in a difficult financial situation - retired, elderly, and living on a pension. In my view the plaintiff’s situation relative to that of the defendant is so similar that, given the fact that ICBC was a third party, this factor does not weigh in favour of either party.
[27] After considering all of the relevant factors in this case I find that even if the second offer had qualified as an offer to settle under R. 9-1(1), I would decline to award double costs from the date it was served, or from any other date during which the offer was open, under R. 9-1(5). The plaintiff’s application for double costs is dismissed. The plaintiff is entitled to his costs of the proceedings to the end trial, on Scale B.
[28] The defendant and third party shall have costs, on Scale B, of this application.
“The Honourable Madam Justice Devlin”