Defence denied costs despite beating formal offer; court says “no utility” in imposing costs on plaintiff

In a costs decision released earlier this week, the court in Barta v. Silva, 2017 BCSC 410, declined to award the defence costs despite the defence beating its formal offer by a substantial margin at trial.  About two months before trial the defence made a formal offer to settle for $150,000.  The plaintiff declined this offer and was ultimately awarded $77,750 at trial.  In ordering that the parties would bear their own costs for the trial, the court appeared to be swayed by the “generous” position taken by the defendant.  Mr. Justice Affleck wrote as follows:

[1]            The plaintiff was injured in a motor vehicle accident in July 2007. The trial to assess damages took place in June 2014. In reasons for judgment indexed at 2014 BCSC 2113, damages were assessed at $77,750. The plaintiff now applies for an award of costs.

[2]            The plaintiff alleged a number of injuries the most serious of which was a mild traumatic brain injury, which was said to have deprived him of the ability to make prudent financial decisions the consequence being that he lost about $4 million in capital, as well as about $1,850,000 income to the date of trial and thereafter.

[3]            The findings at trial were that the plaintiff had not suffered a brain injury and his loss of capital and income were not caused by the accident injuries.

[4]            On May 15, 2014, the defendant had made a formal offer to settle for $150,000 plus costs and disbursements. On May 27, 2014, the plaintiff had made a formal offer to settle for $970,000 plus costs and disbursements.

[12]        The defendant's offer of $150,000 plus costs and disbursements was a serious offer. The plaintiff ought to have known that the defendant's legal advisers had a plausible basis for concluding that the plaintiff would be unable to prove a causal connection between his accident injuries and his financial losses. In my opinion the defendant’s offer ought reasonably to have been accepted.

[15]        The evidence at trial indicates that the plaintiff's assets were severely depleted by the effects of the financial downturn in 2008 and 2009. Mr. Creighton informed me that his client's income is now meagre. I can see no utility in imposing the costs of the trial on the plaintiff.

[16]        My order is that the plaintiff is entitled to his costs and disbursements to and including May 15, 2014, and that thereafter the parties will each bear their own costs and disbursements. I recognize that the usual order would be to impose the costs following the defendant’s offer on the plaintiff. The defendant, however, has proposed the disposition which I have made, which I consider to be generous to the plaintiff in the circumstances.

The full decision can be found here: http://www.courts.gov.bc.ca/jdb-txt/sc/17/04/2017BCSC0410.htm