Before: The Honourable Madam Justice Garson

Reasons for Judgment

Counsel for the Plaintiff:	T.L. Spraggs
Counsel for the Defendants:	K. Armstrong
Date and Place of Trial:	July 15, 2008; and September 8, 2008
	New Westminster, B.C.

INTRODUCTION

[1] This is an application concerning costs arising out of the settlement of the plaintiff's claim for damages for personal injuries he suffered in a May 3, 2005 motor vehicle accident.

[2] The plaintiff brings an application for costs of this proceeding. The defendants oppose the plaintiff's application, on the grounds that the settlement was within the jurisdiction of the Provincial Court under the Small Claims Act, R.S.B.C. 1996, c. 430, and they bring a cross application, seeking their costs from the date of delivery of the Offer. The plaintiff contends that under R. 37B, of the Rules of Court, she is entitled to all her costs regardless of whether the settlement was within the monetary limits of the Provincial Court.

BACKGROUND FACTS

[3] On August 29, 2007, the defendants delivered to the plaintiff a notice of withdrawal of an earlier offer and a new formal offer to settle, dated August 28, 2007, for $16,788 (the "Offer"). Receipt of the Offer was acknowledged by the plaintiff and is agreed to have occurred at approximately 10:30 a.m. on August 29, 2007.

[4] The offer, made in the prescribed form, stated that the defendants offered to settle on the following terms:

1. Payment of the sum of $16,788 … after taking into account Part 7 benefits paid or payable pursuant to Section 25 of ….

2. Payment of costs in accordance with Rule 37(22) and (37).

[5] Dr. Marc Boyle, the defendants' medical expert witness was examined by way of deposition on the evening of August 29, 2007, thus incurring significant costs and disbursements.

[6] On August 31, 2007, the plaintiff delivered to the defendants a formal acceptance of offer, stated to be pursuant to R. 37(22) and (37).

[7] When this matter first came before me the application was made pursuant to R. 37(22) and (37). After the first hearing, counsel applied to re-open the case to make further submissions concerning R. 37B. I granted that application, and having done so, vary the judgment I made with respect to some of the matters argued on July 15, 2008, in accordance with these reasons.

ISSUES

[8] This application raises the following issues, arising from the repeal of R. 37 and the enactment of R. 37B, both concerning offers to settle:

1. Which regime of the Supreme Court Rules, B.C. Reg. 221/90 [Supreme Court Rules], applies to this costs application: Rule 37, which was repealed on July 1, 2008; or R. 37B, which was brought into force on July 1, 2008?

2. If R. 37B is applicable, should the plaintiff be disentitled to costs owing to the fact that the settlement is within the monetary limits of the Provincial Court under the Small Claims Act?

DISCUSSION

Which Regime Applies?

[9] Rule 37, Offer to Settle, and R. 37A, Offers of Settlement, were repealed by Supreme Court Rules Regulation Amendment, B.C. Reg. 130/2008, s. 1 on July 1, 2008, and the following R. 37B, Offer to Settle, was substituted in their place . The pertinent provisions of R. 37B are:

Definition

(1) In this rule, "offer to settle" means

(a) an offer to settle made and delivered before July 2, 2008 under Rule 37, as that rule read on the date of the offer to settle, and in relation to which no order was made under that rule,

(b) an offer of settlement made and delivered before July 2, 2008 under Rule 37A, as that rule read on the date of the offer of settlement, and in relation to which no order was made under that rule, or

(i) is made in writing by a party to a proceeding,

(ii) has been delivered to all parties of record, and

(iii) contains the following sentence: "The ….[name of party making the offer]…. reserves the right to bring this offer to the attention of the court for consideration in relation to costs after the court has rendered judgment on all other issues in this proceeding."

…

Offer may be considered in relation to costs

(4) The court may consider an offer to settle when exercising the court's discretion in relation to costs.

Cost options

(5) In a proceeding in which an offer to settle has been made, the court may do one or both of the following:

(a) deprive a party, in whole or in part, of costs to which the party would otherwise be entitled in respect of the steps taken in the proceeding after the date of delivery of the offer to settle;

(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery of the offer to settle.

Considerations of court

(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 on any later date;

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

(d) any other factor the court considers appropriate.

[10] Whether R. 37B applies to the Offer in question is determined by the definition of "offer to settle" in R. 37B(1). Rule 37B(1) provides three alternative situations that fall within the meaning of "offer to settle." The situation applicable to the case at hand is R. 37B(1)(a) and thus paras. (b) and (c) are not applicable.

[11] Rule 37B(1)(a) requires three criteria to be met to satisfy the definition of "offer to settle": first, the offer to settle must have been made and delivered before July 2, 2008; second, the offer to settle must have been made under R. 37 as that rule read on the date of the offer to settle; and third, there must have been no order made under R. 37 in relation to the offer to settle.

[12] Applying R. 37B(1)(a) to the facts in this case, I note, the Offer was drafted on August 28, 2007, and delivered on August 29, 2007. This is prior to July 2, 2008; therefore the first criterion is met. The Offer was made pursuant to R. 37 as that rule read on August 28, 2007, and thus the second criterion is met. Lastly, no order was made under R. 37 in relation to the Offer. Thus, R. 37B applies to the offer made by the defendants and the new regime applies.

[13] In Bailey v. Jang, 2008 BCSC 1372 at para. 10, Hinkson J. held that R. 37B "… applies to offers to settle made both before and after July 1, 2008 where no order as to costs has been made." (See also Brewster v. Rominn Laboratories Inc., 2008 BCSC 1463 at para. 13.)

[14] In this case the defendants argue that because the offer was made and accepted pursuant to R. 37, R. 37 should continue to apply. I cannot accede to that argument in the face of clear legislation to the contrary as well as the two authorities of this Court just mentioned.

Is the plaintiff entitled to her costs?

[15] In the case at hand, receipt of the Offer was acknowledged by the plaintiff on August 29, 2007. That same evening Dr. Boyle was examined by way of deposition. The plaintiff delivered to the defendant a formal acceptance of offer on August 31, 2007. Who should incur the costs associated with the deposition of Dr. Boyle? To answer this question the phrase, "after the date of delivery of the offer to settle" must be considered. In other words, are costs incurred on the day of, but after the time of delivery of the offer to settle, considered costs incurred "after" the date of delivery.

[16] The provincial Interpretation Act, R.S.B.C. 1996, c. 238 [Interpretation Act], discusses the calculation of time in s. 25. Section 25(1) declares that, "[t]his section applies to an enactment and to a deed, conveyance or other legal instrument unless specifically provided otherwise…", thus, s. 25 applies to the Supreme Court Rules. Subsections (4) and (5) are instructive. They state as follows:

(4) In the calculation of time expressed as clear days, weeks, months or years, or as "at least" or "not less than" a number of days, weeks, months or years, the first and last days must be excluded.

(5) In the calculation of time not referred to in subsection (4), the first day must be excluded and the last day included.

[17] Applying ss. 25(4) and (5) of the Interpretation Act to R. 37B, the plaintiff is entitled to costs assessed to August 29, 2007, the date receipt of the delivery of the Offer was acknowledged by the plaintiff, including that day, and the defendant is entitled to costs assessed after August 29, 2007, not including that day, on the basis that “the first day must be excluded.” Alternatively the literal interpretation of s. 378(5)(a) is clear that costs incurred "after the date of delivery of the offer" are the costs the plaintiff may be liable to pay. I would interpret “date” as meaning the day of delivery, thus the calculation of the defendants costs would begin the following day.

[18] Therefore, the costs of the deposition of Dr. Boyle are not costs that may be awarded, subject to R. 37B(6), to the defendants.

Does the plaintiff forfeit her costs because the settlement was within the monetary jurisdiction of the Provincial Court under the Small Claims Act?

[19] The defendants contend that the plaintiff is not entitled to her costs of the entire proceeding because the settlement is within the monetary jurisdiction of the Provincial Court. Old R. 37(37) provided that a plaintiff was not entitled to costs if the offer accepted was within the jurisdiction of the Provincial Court under the Small Claims Act and could have been appropriately brought in the Provincial Court. Rule 37(37) was not carried forward to R. 37B.

[20] I turn back to R. 37B(5).

Cost options

37B (5) In a proceeding in which an offer to settle has been made, the court may do one or both of the following:

(a) deprive a party, in whole or in part, of costs to which the party would otherwise be entitled in respect of the steps taken in the proceeding after the date of delivery of the offer to settle;

(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery of the offer to settle.

[21] On the basis, that I have already decided that the words "after the date of delivery of the offer to settle" means costs incurred from and after the day following delivery, subsection (b) is inapplicable because no costs were incurred by either party after delivery of the offer to settle.

[22] The "Cost options" as it is put in R. 37B are prescribed by the rule. In this case the defendants argued that the plaintiff should be disentitled to all her costs because the case was one that ought to have been brought within the monetary jurisdiction of the Small Claims Court. Even if that is one of the factors that could be taken into account under ss. (6), ss. (5) of R. 37B does not permit a court the option of depriving a party (in this case the plaintiff) of her costs before the date of delivery of the offer.

[23] The rule only permits the Court to deprive a party, "in whole or in part" of her costs to which she "…would otherwise be entitled….after the date of delivery of the offer to settle;" [emphasis added].

[24] Accordingly, there is no basis in R. 37B on which this Court could deprive the plaintiff of costs incurred before the date of the delivery of an offer regardless of whether the ultimate settlement is within the monetary jurisdiction of the Provincial Court.

Application of Rule 57(10)

[25] Rule 57(10) of the Supreme Court Rules states as follows:

(10) A plaintiff who recovers a sum within the jurisdiction of the Provincial Court under the Small Claims Act is not entitled to costs, other than disbursements, unless the court finds that there was sufficient reason for bringing the proceeding in the Supreme Court and so orders.

[26] The purpose of R. 57(10) is to encourage actions to be brought and continued in Provincial Court when there is no sufficient reason to expect that the claim might give rise to damages in excess of the monetary jurisdiction of that Court. If the plaintiff proceeds in the Supreme Court, and the resulting monetary judgment falls within the jurisdictional limits of the Provincial Court, the plaintiff must justify his choice of forum or be denied costs other than disbursements.

[27] However, as the action did not actually proceed to trial, R. 57(10) has no application to the case at hand.

DISPOSITION

[28] I therefore conclude that the plaintiff is entitled to her costs of this proceeding up to and including August 29, 2007.

[29] The plaintiff has been successful on this application and is therefore entitled to her costs of this application.

"N. GARSON, J."

Citation:	*Goertz v. Calin,*
	2008 BCSC 1716