2004 BCSC 116 Chaplin v. Sun Life Assurance Company of Canada et al

Before: The Honourable Mr. Justice Holmes

Reasons for Judgment

Counsel for the Plaintiff:	Gordon Turriff, Q.C.
Counsel for the Defendant, Sun Life:	Vincent R.K. Orchard Sudhir K. Padmanabhan
Counsel for the Solicitor, Lawrence Pierce:	Darrell W. Roberts, Q.C. and Grant Ritchey as to Cost Reconsideration only
Date and Place of Hearing:	July 8–10, 2002
	Vancouver, B.C.

[1] These applications concern various aspects of cost issues consequent upon the February 26, 2001 dismissal following trial of the plaintiff's claim to entitlement for long term disability insurance benefits against the defendant Sun Life Assurance Company of Canada ("Sun Life").

[2] The defendant Sun Life's application is pursuant to Rule 57(3), 57(37), Appendix B, Section 7 and Appendix B, Section 2 of the Rules of Court, for an award considered in the alternative, for,

(a) special costs payable by the plaintiff's solicitor, Lawrence E. Pierce;

(b) special costs payable by the plaintiff;

(d) increased costs based upon 75% of special costs payable by the plaintiff;

(e) scale 5 costs payable by the plaintiff.

[3] The parties have consented to a determination of the applications in respect of increased costs which were applicable at the commencement of the applications but have now been repealed.

[4] The plaintiff applies for orders:

(a) that solicitor Pierce pay any costs she is obliged to pay Sun Life, or

(b) that alternatively, solicitor Pierce indemnify her for costs she is obligated to pay Sun Life, and

(c) that disbursements claimed by solicitor Pierce from the plaintiff be disallowed and that he refund disbursements she has already paid to him.

[5] What the plaintiff seeks in a practical sense is that ultimately she will be responsible only for payment of the defendant Sun Life's costs on scale 3 based upon the days of trial of the "unextended action" she authorized be prosecuted.

[6] Solicitor Pierce, against whom the defendant Sun Life seeks special costs or alternatively special costs jointly with the plaintiff, opposes both the application as against him as well as against the plaintiff. He opposes the orders the plaintiff seeks against him that he pay any costs ordered against the plaintiff directly to the defendant Sun Life, or alternatively that he indemnify her against any costs she must pay the defendant Sun Life. Solicitor Pierce also opposes the plaintiff's application for disallowance of unpaid disbursements and for return of disbursements she has paid.

[7] There is a further incidental costs issue that arises from an earlier order dismissing an application by the plaintiff to join a negligence malpractice action by the plaintiff against the defendant for trial and determination with the present cost applications. That application was dismissed and costs of the application were awarded to Solicitor Pierce payable forthwith.

[8] The plaintiff applied for leave to appeal that decision and as a result of Reasons on the leave application by Madame Justice Rowles, counsel for the plaintiff seeks a reconsideration of the payment forthwith provision of the cost order.

DEFENDANT SUN LIFE'S ENTITLEMENT TO COSTS

[9] Rule 57(1) and 57(3) provide for special costs. Mr. Justice Owen–Flood in Cook v. Bowen Island Realty Ltd., [1998] B.C.J. No. 415, 19 C.P.C. (4th) 148 (B.C.S.C.), summed the purpose of special costs (at ¶6 & 7) as:

Rule 57(3) of the Supreme Court Rules provides for the assessment of special costs. These costs represent the legal fees incurred by a reasonably competent lawyer for the work described in the legal bill. Special costs usually represent 80% to 90% of the actual legal fees as assessed under the Legal Profession Act, R.S.B.C. 1996, c.255 as described in Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54 B.C.L.R. (2d) 309 (B.C.S.C.), aff'd. (1992), 73 B.C.L.R. (2d) 212 (B.C.C.A.).

The purpose of special costs is to punish the unsuccessful party for reprehensible conduct during the course of litigation by expressing the court's disapproval of that conduct. Special costs are not intended as a means of achieving greater indemnification of the successful party: Fullerton v. Matsqui (District) (1992), 74 B.C.L.R. (2d) 311 (B.C.C.A). Reprehensible conduct includes conduct described as "scandalous or outrageous" and also encompasses "milder forms of conduct deserving of reproof or rebuke": see Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (B.C.C.A.) and Leung v. Leung (1993), 77 B.C.L.R. (2d) 314 (B.C.S.C.). In Eusanio v. Janolino, [1997] B.C.J. No. 2066, (18 September 1997), Vancouver Registry H950419 (B.C.S.C.), Romilly J., in declining to award special costs, held that "special costs should generally be reserved for reprehensible conduct which can be characterized as `egregious', rather than conduct toward the deserving-of-rebuke end of the continuum." The court held that although the defendant's conduct was deserving of rebuke, it was not "flagrant and deliberate". The case of Kalaman v. Singer Valve Co. Ltd., [1997] B.C.J. No. 877, (4 April 1997), New Westminster Registry C936594 (B.C.S.C.) was cited. This case dealt with a wrongful dismissal. Stromberg-Stein J. found that the defendant's conduct at trial was "worthy of condemnation" and "flagrant and extreme", but nonetheless was not reprehensible to the extent that it deserved to attract an award of special costs.

[10] Special Costs, once known as solicitor-client costs, are "…generally awarded only where there has been reprehensible, scandalous, or outrageous conduct on the part of one of the parties". [Young v. Young (1993) 108 D.L.R. (4th) 193 at 199 (S.C.C.), affirming (1990) 50 B.C.L.R. (2d) 1 (C.A.)]

[11] The defendant Sun Life characterizes the plaintiff's conduct in this action as being "reprehensible" within the meaning ascribed in Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (C.A.) at 249, and deserving of rebuke, and punishment by an award of special costs. As set out by Lambert J.A.:

… [T]he single standard for the awarding of special costs is that the conduct in question properly be categorized as "reprehensible". As Chief Justice Esson said in Leung v. Leung, the word reprehensible is a word of wide meaning. It encompasses scandalous or outrageous conduct but it also encompasses milder forms of misconduct deserving of reproof or rebuke. Accordingly, the standard represented by the word reprehensible, taken in that sense, must represent a general and all encompassing expression of the applicable standard for the award of special costs.

[12] In the event special costs are not awarded the defendant Sun Life seeks an order for increased costs.

[13] Increased costs may be awarded pursuant to Appendix B, Section 7 of the Rules of Court where "…for any reason there would be an unjust result if costs were assessed on Scales 1 to 5…".

[14] Increased costs when ordered are determined by assessing costs as if for special costs pursuant to Rule 57(3) and then allowing one half, varied more or less, as the court determines. The defendant Sun Life seeks 75% of special costs.

[15] The two-fold test to be met for an award of increased costs requires that there be a significant discrepancy between an award of special damages and the indemnity provided by ordinary costs. Secondly, on a view of the case as a whole, whether the discrepancy is explained by other factors that make the litigation more costly.

[16] Sun Life incurred and paid legal fees of approximately $388,000 inclusive of tax. Special costs, using a factor or 80% (as discussed in Bradshaw Construction Ltd. v. Band of Nova Scotia (1991), 54 B.C.L.R. (2d) 309 (S.C.) at 324; aff'd on appeal as to costs only (1992) 73 B.C.L.R. (2d) 212 (C.A.); with additional reasons (1992) 19 B.C.A.C. 186), would be approximately $310,000. Ordinary costs on scale 3 would be approximately $41,000 or 13% of special costs. Scale 5 costs would approximate 20% at $61,000.

[17] The disparity between special costs and ordinary costs is very significant and comparative to authorities where increased costs have been allowed. [Cook v. Bowen Island Realty Ltd, supra; Clucas v. Clucas Estate (1999), 37 C.P.C. (4th) 299; Monenco Ltd. v. Commonwealth Insurance Co. (1998), 19 C.P.C. (4th) 66, aff'd (1999) 64 B.C.L.R. (3d) 307]

[18] The law presently is that a disparity "…must however be accompanied by some other reason in order to justify an award of increased costs". [Rieta v. North American Air Travel Insurance Agents Ltd. (1998), 105 B.C.A.C. 239 at ¶40]

[19] The case should be viewed as a whole, and a cost injustice not determined by the disparity alone. As Mr. Justice Lambert said in Monenco at 310:

Some of the cases say that factors that would establish an injustice if special costs were not awarded include such things as complexity, difficulty, special importance to the parties, special importance in the development of the law, and finally, reprehensible conduct. Those would all be significant factors. But of course, what constitutes complexity for one person is not complexity for another, and the same is true of difficulty, and may even be true of special importance to the parties or to others in the development of the law. So one must think of each of these factors, but also view the case as a whole, and go to the final issue of whether the disparity is such that, in the particular circumstances of the case, including all the relevant factors, an "unjust result" would occur if an order for special costs were not made.

[20] Finally the defendant Sun Life seeks Scale 5 costs pursuant to Appendix B, Section 2 of the Rules of Court in the event it is entitled to neither special costs or increased costs. The test for an increase of costs to scale 5 is whether there were matters of unusual difficulty or importance.

SPECIAL COSTS

[21] The basis of the defendant Sun Life's claim for special costs , and the reason for disparity in the increased costs, is that the plaintiff made serious allegations of wrongdoing by Sun Life without supporting evidence and that misleading statements were made in the Amended Further Statement of Claim. It was thereby implied Sun Life was guilty of corporate immorality and dishonesty.

[22] Additionally the defendant Sun Life alleges the plaintiff's actions led to a "forensic extravaganza" as the offensive allegations were raised and pursued without an appropriate evidentiary base.

[23] The defendant Sun Life argues further conduct occurred that comes within the rubric of "reprehensible". The impugned conduct includes proceeding with a flawed expert report of Dr. Joy; failing to obtain a detailed medical report from Dr. Thompson; and relying upon Dr. Thomson as an expert when his evidence was biased and he was found by the court to be an advocate for his patient. In addition the defendant Sun Life argues the plaintiff exaggerated her economic impoverishment in an effort to obtain an award for aggravated damages.

[24] The plaintiff pleaded in the Further Amended Statement of Claim (paragraphs 9, 11, 12 and 13) that she and five similar fact evidence witnesses were misled and deceived by Sun Life. In a like fashion the defendant Sun Life was said to have a corporate strategy to avoid payment of disability claims and that claims employees received bonuses for their participation in the scheme from the claims monies saved.

[25] The defendant Sun Life's position is that in broad concept the plaintiff was clearly alleging fraud against the defendant Sun Life within the meaning described by Finch J., as he then was, in Kruska v. Manufacturers Life Insurance Company (1984) 54 B.C.L.R. 343 at 353 (S.C.). The issue becomes whether the plaintiff having made serious allegations involving corporate immorality and dishonesty amounting to fraud thereby impugning Sun Life's reputation in the industry and marketplace had the support of a sufficient evidentiary base.

[26] A litigant making such claims must do so only after careful consideration and on the basis of the existence of a prima facie case. Special costs are available as chastisement against those who ignore the pre-requisite foundation to serious allegations of fraud and dishonesty. [Ip v. I.C.B.C. (1994), 89 B.C.L.R. (2d) 251 (S.C.)]

[27] An unproven fraud claim does not however equate to an order for special costs. Special costs must not to be used to "chill" parties in proper circumstances from pursuing perceived wrongful conduct. As stated by the Court of Appeal in Young v. Young (1990), 50 B.C.L.R. (2d) 1 (C.A.), at 63-64:

Solicitors who think that they may be mulcted in costs for advancing points which they honestly believe to be fairly arguable may not act fearlessly and in the best traditions of an independent profession. If solicitors are limited in what they think they can say or do on behalf of their clients, then the rights of those clients are also necessarily limited. The potential for a chilling effect, especially if solicitors may be exposed to orders that they pay costs as between solicitor and client, the repercussions on solicitors' positions and consequently upon that of their clients, if adverse costs awards are made, underscore the need for judges to exercise caution in the making of such orders.

[28] Special costs should not however be withheld when examination of all circumstances show the allegations of fraud were unwarranted and completely unfounded.

[29] The plaintiff's decision to plead the alleged similar fact evidence of 5 other Sun Life claimants alleging that they had all been misled by the defendant Sun Life in similar fashion was from it's inception ill fated in the prospect of becoming relevant admissible evidence at trial. A very strained interpretation of a medical report of Dr. Ballon was a weak base to the allegation the plaintiff was deliberately misled.

[30] The plaintiff herself was not misled as it was alleged and pleaded, and she never said she was.

[31] It appears that Solicitor Pierce had a problem understanding what could constitute similar fact evidence, and how to properly plead it. Several Chambers applications were necessary for him to accomplish what should not have been difficult if there was some sound base to the allegations. From inception he chose to deal with the matter in a casual and off hand manner.

[32] The issue regarding allegations of a dishonest employee bonus incentive plan provided by the defendant Sun Life to motivate it's employees by sharing the benefit of savings from wrongfully denied claims was extremely offensive and repugnant to both the defendant Sun Life and to its claims employees. It should have received very serious consideration before it was advanced.

[33] I consider the base for the allegation was extremely tenuous. It is alleged to have come from an unnamed informant solicited through a newspaper advertisement and proved unreliable or badly misunderstood. The tenor of the later interview of Ms. Marchitto by counsel for the plaintiff was in my view offensive, manipulative, and certainly not suggestive of a person seeking the truth.

[34] The plaintiff never had evidence sufficient to support a prima facie case of the alleged dishonest bonus scheme. The allegations were continued after Solicitor Pierce was told directly by a knowledgeable and credible employee of Sun Life that the information was false.

[35] The object was to directly attack the integrity of Sun Life and its claims employees in order to obtain an award of punitive damages.

[36] The continued demands for documents that there was no longer reason to believe existed, and the subpoena to Ms. Simpson to appear at trial with documents, were completely unwarranted.

[37] There is no question that the introduction of the issues of similar fact evidence and the dishonest "bonus plan" increased the complexity, time and cost required in this action. Any competent solicitor would appreciate the escalation in costs that would occur by necessary defence response to such allegations. The defendant Sun Life's integrity and commercial honesty was placed squarely in issue. It was a matter of extreme importance that a vigorous and thorough response was made.

[38] I am alive to the fact that the courts should guard the need for counsel and parties to raise issues regarding honesty and morality that may be unpopular, embarrassing and difficult of proof, but that are relevant and reasonably based.

[39] Some claims may need to be pleaded and then carefully considered on an ongoing basis for the existence of a prima facie case following within a reasonable period allowing for pre-trial procedures and investigation to occur before continuing through to trial.

[40] I am of the view that raising a similar fact issue, pleading it, investigating and marshalling evidence, and if not having proof of a prima facie case withdrawing the allegations in timely fashion, may well not give rise to findings of reprehensible conduct. Some reasonable period of time for assessment and evaluation of whether a prima facie case exists may well be warranted. This is of particular importance when dealing with matters of insurance where duties of good faith and trust arise. When an allegation is continued beyond a reasonable period without the presence of evidence to support a prima facie case it may become reprehensible conduct within the meaning of Garcia. To prolong withdrawal of unsupportable claims may become indicative of intent and speak to the motive in putting them forward. This is particularly so where the matter is carried into trial.

[41] The plaintiff continued pursuit of the similar fact issue long after it was apparent the plaintiff had not been misled and there was no admissible similar fact evidence relevant to the plaintiff's claim.

[42] Had the plaintiff discontinued the similar fact issue after a reasonable period for investigation and assessment it would likely not have been a matter of consideration for special costs; rather only for increased or enhanced scale costs.

[43] Similarly in respect of the issue as to the allegations regarding the dishonest bonus plan issue. In my view although originally of tenuous base, some reasonable period for inquiry, document demand and investigation may be justified. I accept however that here that reasonable period passed and the plaintiff persisted with the extremely serious allegations of dishonesty. Solicitor Pierce spoke with Ms. Marchitto and was advised in no uncertain terms there was no "bonus plan", and therefore no documents of relevance in existence. The matter was pursued into trial and a subpoena was served on Ms. Simpson.

[44] The course of conduct supports the view the plaintiff knew the allegation could not be supported and didn't care.

[45] Had the matter ended within a reasonable period of inquiry either no increase in scale might have been warranted, or an enhanced scale might have been considered. The deliberate manner of proceeding here tends to the reprehensible.

[46] The plaintiff made an allegation that the defendant Sun Life was negligent by training claims personnel "on the job". I would not categorize this allegation as being reprehensible but it was made without foundation and no attempt was made by counsel to prove merit to the allegation. Such allegations that fall by the way may be reflective of competency of counsel, or the strength or lack thereof of the plaintiff's case and deserving of rebuke. It does serve to increase complexity of the claim, wastes time and increases costs.

[47] Sun Life raises several further matters in support of it's application seeking special costs which in my view raise serious issues of competence of counsel but the grounds differ from the dishonesty or fraud aspects of the similar fact evidence and bonus plan issues. I do not intend in these proceedings to resolve issues of solicitor negligence raised by the plaintiff against Solicitor Pierce and subject of separate action.

[48] The defendant Sun Life raises the issue of Dr. Joy's flawed expert report. There was considerable unnecessary time wasted on the admissibility of this report that should have been addressed by counsel for the plaintiff prior to the trial. Ultimately the parties then advised the Court that the report was being withdrawn on the basis of an agreement between the parties. In light of agreement between the parties I am loath to brand this conduct was reprehensible, but it did unnecessarily waste time and increase the costs of defending.

[49] The defendant Sun Life suggests it was reprehensible conduct to have presented Dr. Thomson as an expert witness when it was found he was biased ands an advocate for his client. Dr. Thomson was an important witness for the plaintiff and quite necessary that he give evidence. The findings were those of the court. I do not consider it reprehensible to have presented Dr. Thomson as a witness. The weight of his evidence was a matter for the trier of fact.

[50] The defendant Sun Life complains that the plaintiff did not present a detailed report of Dr. Thomson that contained evidence pertinent to her claim. Counsel then tried to obtain a letter from Dr. Thomson to be filed as a report after he had testified. He also attempted to have various clinical records, notes, and consultation reports from Dr. Thomson's file entered into evidence. Again it raises issues of competence of counsel, but I would not categorize it as reprehensible conduct. It was also not an abuse of court process.

[51] The defendant Sun Life argues that paragraph 9(e) of the Further Amended Statement of Claim was pleaded as an example of Sun Life’s bad faith and that it was misleading and therefore reprehensible and worthy of rebuke. The paragraph does illustrate that there is an ambiguity in Dr. Ballon's written report and that an unfortunate choice of wording was used by Sun Life in a form type of letter to the insured.

[52] I do not agree this pleading can be accurately categorized as intending to mislead. It raised a matter for interpretation to be resolved on the evidence.

[53] In summary I find the defendant Sun Life has shown entitlement to a variation from ordinary costs on scale 3.

[54] The plaintiff significantly escalated what commenced as an ordinary and straightforward claim of entitlement to an insurance disability benefit. Sun Life was required to defend its corporate morality, reputation and integrity in its assessment, processing and payment of claims. It had to protect its claims personnel who were branded as dishonest, and accused of sharing in bonuses generated by denying claims.

[55] The claims failed miserably in the proof. They should never have reached trial. Some of the conduct by counsel was clearly reprehensible, but also to a large degree appears fostered by a lack of judgment, an inability to understand the seriousness of the allegations made, and occasional arrogance.

[56] Although there is much evidence in support of Sun Life's claim for special costs I am left with uncertainty that a requisite degree of malicious intent or that the conduct qualified as scandalous or outrageous. Reprehensible conduct is one of degree in all the circumstances. On balance, I do not find entitlement to special costs proven.

INCREASED COSTS

[57] It is my view however that the defendant Sun Life has shown that it is clearly entitled to increased costs from the time of adjournment of the original trial date to allow for similar fact evidence to be raised for the balance of the proceeding.

[58] The formula comparing actual costs, special costs, and ordinary scale and enhanced scale costs indicates a significant disparity exists and will likely persist through taxation, although perhaps diminished to some degree.

[59] In addition to the disparity alone there are a host of reasons to justify an order for increased costs. Complexity and difficulty was created by the plaintiff in pleading the similar fact evidence of other claimants whose claims had already been adjudicated by the court or were pending adjudication in separate actions. The allegation of a dishonest bonus plan, compounded by the last minute advancement of it, also increased the difficulty for the defence in regard to the direction of the plaintiff's attack on Sun Life's integrity.

[60] It should be patently obvious that to attack the integrity of the defendant Sun Life and its employees as it did the plaintiff created a special importance in the litigation.

[61] I have detailed many aspects of the plaintiffs conduct as being reprehensible. There are many examples where failure to prove alleged misconduct has led to a finding of an unjust result without an order for increased costs. [Westfair Foods Ltd. v. Great Pacific Industries Inc., [1997] B.C.J. No. 2669 (S.C.)(Q.L.); National Hockey League v. Pepsi-Cola Canada Ltd. (1995) 2 B.C.L.R. (3d) 13 (C.A.)]

[62] It has been noted that defence of reputation will result in hard fought litigation with increased costs appropriate for the successful party. [British Columbia (Milk Marketing Board) v. Bari Cheese Ltd. (1993), 23 C.P.C. (3d) 382 (S.C.), affirmed 26 B.C.L.R. (3d) 279; Trinity Western University v. British Columbia College of Teachers (1998), 19 C.P.C. (4th) 99 (B.C.S.C.)]

[63] In my view it would be unjust considering the relevant factors and viewing the case as a whole if the defendant Sun Life was not awarded increased costs. I fix the defendant Sun Life's entitlement to increased costs at 75% of special costs applicable to all proceedings after the date of the original trial adjournment to raise similar fact issues. The plaintiff is liable for those costs.

PLAINTIFF'S APPLICATION FOR COST INDEMNITY AGAINST SOLICITOR

[64] The plaintiff concedes that she is responsible for costs limited to those that were proper or reasonably necessary in respect of her claims for damages for breach of contract, a declaration of entitlement to benefits, and special damages.

[65] I agree with the submissions of plaintiff's counsel this action became enlarged beyond the one instructed by Ms. Chaplin and she ought to be entitled to relief pursuant to Rule 57(37).

[66] The evidence supports the view that in essence Solicitor Pierce "hijacked" the plaintiff's action and without authorization promoted what he envisaged as an enormous potential award of punitive damages for his own benefit as a stakeholder through his contingency fee. He was on a frolic of his own.

[67] In my view Solicitor Pierce did not properly advise Mrs. Chaplin of the very significant cost penalty she would incur if his similar fact and dishonest bonus plan allegations failed. In fact, he hid the risk from her. On inquiry as to costs he repeatedly told her not to worry about them. He told her the action was good for a multi-million dollar award.

[68] I accept the affidavit evidence of Ms. Chaplin and where in conflict with that of Solicitor Pierce I place the greater credence with the client over the solicitor. [Kowarsky and Co. v. Williams (1998), 6 C.B.R. (4th) 203 (B.C.S.C., Registrar)]

[69] Solicitor Pierce's evidence that he had never known an insurer to pursue costs lends credence to the plaintiff's evidence. It also indicates his experience was extremely limited, and he very naive. How he felt he could attack the integrity of corporate defendants with impunity to cost consequences defies belief.

[70] The effect of his failure to advise her of the enormous cost risk and his posturing as to a multi million dollar award to be anticipated had the practical effect of guaranteeing her costs. [Cockle v. Whiting (1892) 39 E.R. 17, at E.R. 18]

[71] I am satisfied the plaintiff would not have authorized him to proceed with the punitive damage claims and similar fact evidence if she had been fairly advised of the cost risk. Any consent given was an uninformed consent and of no avail for Solicitor Pierce to claim a contractual permission for his conduct.

[72] The plaintiff however is not entitled to a cost guarantee that the "unenlarged" action that she did authorize would necessarily have been completed within a given number of trial days. Unfortunately many factors may slow a trial process. It is my view in this action a very liberal estimate of trial time for the plaintiff's unenlarged action would have been nine days.

[73] I therefore find the plaintiff is liable in costs to the defendant Sun Life for scale 3 costs based upon a trial duration of nine days.

[74] Solicitor Pierce enlarged the action far beyond the scope authorized by Ms. Chaplin and will bear the cost responsibility for his action and conduct. I find that Rule 57 (37) has appropriate application as Solicitor Pierce "… has caused costs to be incurred without reasonable cause, or has caused costs to be wasted through delay, neglect or some other fault…".

[75] It is entirely appropriate that pursuant to Rule 57(37)(c) he be personally and directly liable for that portion of the increased costs award of the defendant Sun Life that are in excess of the scale 3 costs payable by the plaintiff. The plaintiff should not be required to pay first and then be indemnified.

[76] In addition, pursuant to Rule 57(37)(a) and (d), the plaintiff is relieved of her obligation to pay disbursements that were incurred in respect of the issues of similar fact evidence or the dishonest bonus plan. Any disbursements that have been paid in that regard will be refunded.

RESULT

[77] The defendant Sun Life is entitled to costs on scale 3 to the date of the adjournment of the original trial date to allow for the similar fact evidence to be advanced. It is entitled to increased costs, at 75% of special costs, after that date.

[78] The plaintiff will be responsible for payment to the defendant Sun Life of scale 3 costs based on a trial duration of nine days without issues relating to similar fact evidence or the alleged dishonest bonus plan.

[79] Solicitor Pierce will be personally and directly responsible to the defendant Sun Life for the payment of the amount of their costs in excess of the scale 3 costs to be paid by Ms. Chaplin.

[80] Solicitor Pierce's claim against the plaintiff for disbursements incurred by him in connection with the prosecution of any claim for Ms. Chaplin other than her claim for damages for breach of contract, for a declaration of entitlement to benefits and for special damages is disallowed. Solicitor Pierce will refund to the plaintiff any disallowed disbursements which she has already paid. The quantum of the disallowance and the credit for paid amounts is to be determined in Mr. Pierce's review numbered L011385 if those questions were not first determined in any action the plaintiff may be advised to bring against Solicitor Pierce for damages for breach of contract and negligence.

RECONSIDERATION OF COSTS ORDER OF APRIL 8, 2002

[81] The plaintiff seeks reconsideration of the costs order consequent upon the dismissal of her Rule 57(37)(d) application to join her negligence suit against Solicitor Pierce with the present cost applications. The plaintiff was ordered to pay the costs forthwith to Solicitor Pierce.

[82] In reasons of Rowles J.A. of May 3, 2002 on the plaintiff's application for Leave to Appeal, her Ladyship viewed the cost issue as a ruling along the way to an ultimate costs judgment. In that context the ruling refusing joinder was subsumed in the overall cost applications amongst the parties.

[83] Having the advantage of a review of the reasons on the Leave Application I accept that my immediate order of costs payable forthwith was premature and not in accord with her Ladyship's analysis. It is prejudicial to the plaintiff Ms. Chaplin who continues the cost dispute litigation with Solicitor Pierce.

[84] I do not consider it will be prejudicial in the circumstances therefore to rescind my cost order and accept the suggestion of Mr. Turriff that the costs abide the result in these proceedings and be addressed as part of the costs of these applications.

APPLICATION COSTS

[85] The parties requested leave to abeyance their cost submissions arising on these applications pending this decision. In the event the parties cannot now agree upon disposition of costs the matter may be set for submissions.

“R. Holmes, J.”
The Honourable Mr. Justice R. Holmes

March 2, 2004 – Corrigendum to the Reasons for Judgment issued by Mr. Justice R. Holmes advising that the Reasons for Judgment are amended as follows:

1. Paragraph 21 should be amended to replace the word "immortality" with "immorality" at the end of the paragraph, to read as follows:

[21] The basis of the defendant Sun Life's claim for special costs, and the reason for disparity in the increased costs, is that the plaintiff made serious allegations of wrongdoing by Sun Life without supporting evidence and that misleading statements were made in the Amended Further Statement of Claim. It was thereby implied Sun Life was guilty of corporate immorality and dishonesty.

2. Paragraph 28 should be amended to replace the word "damages" with "costs" at the beginning of the paragraph, to read as follows:

[28] Special costs should not however be withheld when examination of all circumstances show the allegations of fraud were unwarranted and completely unfounded.

3. Paragraph 29 should be amended to replace the word "misleading" with "misled" at the end of the paragraph, to read as follows:

4. Paragraph 50 should be amended to add the word "not" in the final sentence, to read as follows:

5. Paragraph 74 should be amended to replace the word "responsibly" with "responsibility" in the first sentence of the paragraph, to read as follows:

6. Throughout the judgment, and in particular at paragraphs 74, 79, 80 and 83, references to "Ms. Chapman" should be changed to "Ms. Chaplin".

Citation:	*Chaplin v. Sun Life Assurance Company of Canada et al.,*
	2004 BCSC 116