“Proportionality” in assessing the reasonableness of disbursements. Cadillac v. Buick

Rainville v. Zheng, 2017 BCSC 767 is a hearing that took place on May 9, 2017 in Kamloops, BC before Master R.W. McDiarmid in which an assessment of costs and disbursements takes place.

This post will focus on the law that has been referenced in determining proportionality in assessing the reasonableness of disbursements.

“The claim settled on June 21, 2016 for $81,000.00, plus costs and disbursements.

[12]        In her submissions, counsel for the defendant submits that the proportionality considerations need to be given considerable weight in this case. I was helpfully directed to a decision of Mr. Justice Voith in Kasim v. Spittel, 2013 BCSC 2422 (CanLII), where at paras. 23-26 Voith J. writes:

[23]      The Master appears to have arrived at his conclusions on the twin basis that aspects of Mr. Teasley’s work were straightforward and that the object of proportionality somehow warranted a reduction in the disbursement.

[24]      The object of proportionality, though certainly relevant under Rule 141(2)(b) of the Supreme Court Civil Rules, does not, however, overwhelm the analysis of what would otherwise be a “proper” expense. Thus, Harvey J. in Gill v. Widjaja, 2011 BCSC 1822 (CanLII), at para. 29, said:

While I agree Rule 141(2)(b) states that on an assessment of party and party costs the registrar must consider the Rule 1-3. I am in agreement with plaintiff’s counsel that the objects of Rule 1-3 cannot supersede the clear wording of Rule 141.

[25]      In Fairchild, McEwan J. further explained the relevance of “proportionality” in assessing the reasonableness of disbursements:

[16] Counsel for the defendants before this Court have urged that another factor, proportionality, may be in play since the introduction of the 2010 Rules. A representative iteration of this principle is, they submit, found in Stapleton v. Charambidis, 2010 BCSC 1642 (CanLII), at para. 32, per Master Baker:

[32] But fourthly and significantly, there are the new Rules of Court and their emphasis on proportionality. Much of the thrust of the quest for proportionality is, of course, directed to steps and processes in the litigation itself as in, for example, the discovery of documents, limitations on examinations for discovery and, indeed, the necessity at an early stage for an overall litigation plan. But surely this proportionality must, in appropriate circumstances, extend to disbursements expended by the parties.

[17] Used in the only sense in which it is pertinent “proportionality” really does not add to the concept of reasonableness. The concept of proportionality in the new rules is an attempt to vest in the court a responsibility that has always rested with counsel, where it best remains, generally speaking. With respect to disbursements, specifically, the notion of reasonableness has always encapsulated a sense of proportion.

[26]      The principles that a registrar must apply in determining whether a disbursement is “proper” are found in Van Daele v. Van Daele (1983), 1983 CanLII 720 (BC CA), 56 B.C.L.R. 178 (C.A.) at 180:

… whether at the time the disbursement or expense was incurred it was a proper disbursement in the sense of not being extravagant, negligent, mistaken or a result of excessive caution or excessive zeal, judged by the situation at the time when the disbursement or expense was incurred.

[13]        In her submissions, defendant’s counsel urged me to look at what is the plaintiff’s claim, how can it be proven, and how can it be proven by expert evidence. I am mindful that the nature of a claim can develop over time and competent counsel can properly obtain additional evidence to bolster their case. Sometimes the additional evidence is extravagant. Both counsel relied on extracts from my decision in Miley v. Abulaban, 2015 BCSC 720 (CanLII), and in particular, paras. 59, 79-80 as follows:

[59]      In Salsman v. John Doe, 2014 BCSC 45 (CanLII), Master Bouck at para. 39 writes as follows:

[39] However, in my respectful view, these reports are an example of the plaintiff purchasing the Cadillac when the so-called Buick would serve the required purpose. The Buick in this case is the therapists’ clinical records. It is those documents which record the contemporaneous symptoms during assessment and provide records of treatment and outcome. Given that the plaintiff was being followed by a family doctor, a rehabilitation consultant and eventually various specialists, I see no need or propriety in commissioning reports from the physiotherapists. Accordingly, these disbursements are disallowed.

[79]      Master Baker was referring to the decision of Master Young as registrar in Ross v. Logan, 2014 BCSC 548 (CanLII). In that decision, Master Young considered the BCMA guidelines in her determination of what is reasonable. She makes that determination by starting with the legal proposition summarized at para. 30 of her decision as follows:

[30] In evaluating the reasonableness of the charge, I am provided a wide measure of discretion. However, as Madam Justice Dardi wrote in Smith v. Moshrefzadeh, 2013 BCSC 1623 (CanLII), the discretion must be exercised judicially in a principled way consistent with the Supreme Court Rules and not arbitrarily or capriciously. It is fine for me to say in chambers that a $900-an-hour charge seems high, but in exercising my discretion, I must set out for the litigants what I am comparing that fee to.

[80]      I also agree with the approach taken by Master Young as set out in paras. 20 – 23 and 44:

[20] On the issue of proportionality, Master McDiarmid says:

[19] In dealing with proportionality, I was referred to the decision of Registrar Sainty in Dhillon v. Bowering, 2013 BCSC 1178 (CanLII), and in particular para. 23 with respect to proportionality which reads as follows:

[23] I must also consider “proportionality” in making my decision. But proportionality is, in my view, a two-way street. The amount of money at issue in an action (large or small) may have a bearing on both the necessity and propriety of a disbursement and whether it is reasonable in the circumstances. Here, the defendants’ initial offer to settle this matter (made August 11, 2009) was the sum of $22,500 all-inclusive. That initial offer was later increased to $35,000. Following service of all of the plaintiff’s experts’ reports, the formal offer increased to $145,000 and, as noted earlier, the actions settled the Friday before trial for $175,000 plus costs and disbursements. No doubt the experts’ reports played a part in the settlement offer and influenced the outcome. It was not until the medical reports and the Functional Capacity Evaluation were provided to the defendants that the amount of the offer increased to an amount the plaintiff was prepared to accept. In my view (and I agree with Ms. Dewar’s submissions on this point), proportionality (which I must consider in assessing costs per Rule 141(2)(b)) refers to the significance of the claim; either small or large.

[21] At paragraph 22, he quotes again from Registrar Sainty’s decision in Fairchild v. Vancouver Coastal Health Authority, 2011 BCSC 616 (CanLII):

[22] I have also gained guidance from the extract reproduced in Chow [2012 BCSC 729], at para. 144 of Registrar Sainty’s decision in Fairchild v. Vancouver Coastal Health Authority, 2011 BCSC 616 (CanLII):

[144] I have previously held (see Dosanjh v. Martin, 2001 BCSC 1759 (CanLII)) that expert’s fees ought only to be reduced where there is a clear overcharge. Specifically I said:

[50] In my opinion, a registrar should not, without good reason, interfere with the amounts charged by experts. The plaintiff hired the experts in good faith to assist with the plaintiff’s case. Those experts charge what they charge. In my view, the defendant should not be rewarded (and the plaintiff penalised) by a registrar reducing expert fees except in cases where there is clearly an overcharge or it is determined that the fees were unreasonable. (See Reap v. Insurance Corporation of British Columbia, 2000 BCSC 1588 (CanLII), [2000] B.C.J. No. 2258 (Registrar). I cannot say that there was a clear overcharge or that the disbursements were unreasonable for any of the medical legal reports provided by Drs. Yasin and Khan. I will therefore allow the disbursements for the medical legal reports prepared by each of Drs. Khan and Yasin.

[22] Master McDiarmid assesses the cost of a neurologist’s report for investigating the plaintiff’s headache symptoms. The doctor charged $650 an hour, plus $30 an hour for typing a 20-page report. The charge for the preparation of the report was $7,236.25.

[23] The learned master says:

[51] Dr. Woolfenden is a neurologist who is also an Associate Professor at the University of British Columbia. While his hourly rate is higher than that of other specialists whose accounts are before me, it is not “clearly an overcharge”. Exhibit A to the C. Harkness affidavit #2 made October 17, 2013 and filed October 18, 2013, by Cynthia Harkness, legal assistant for Mr. Yawney attaches as exhibit A a breakdown of Dr. Woolfenden’s accounts setting out a time expended doing certain tasks and the cost of those tasks. I do not find that the fees he changed were unreasonable.”

Court’s application of the Law

MRI / Disallowed

“ In her submissions, counsel for the defendant points out that at the time the private MRI was performed, the Notice of Civil Claim had not been filed and there was no pending trial date. She also submits (and her submission is to some extent confirmed by the evidence before me from Dr. McKenzie) that there was no evidence that the plaintiff was seeking a final diagnosis in an expedited manner. The defendant submits that the incurring of a private MRI arthrogram on July 20, 2011, was extravagant.

[32]        The applicable law is supported by Sachs J.:

When considering whether or not an item in a bill is “proper” the correct viewpoint to be adopted by a taxing officer is that of a sensible solicitor sitting in his chair and considering what in light of his then knowledge is reasonable in the interests of his lay client.

Francis v. Francis, [1955] 3 All E.R. 837 at p. 840.

[33]        That principle guides me in all of the disbursements at issue.

[34]        With respect to the private MRI, I agree with the defendant’s submission that in the circumstances of this case, the ordering of a private MRI prior to the commencement of the Notice of Civil Claim and the circumstances set out by Dr. McKenzie, the plaintiff’s own expert, was extravagant. It is disallowed.

Medical Report of Dr. Marc Lourens $3,500. / Reduced to $2,500

[36]        Defendant’s counsel takes the position that the amount he has charged for his report was not reasonable. He charged $3,500.00.

[38]        I am mindful of the case law which sets out that experts charge what they charge and to some extent there is very little a plaintiff can do to control that. There is no issue taken with the necessity of this report. I do agree, though, that given the qualifications and the content of the report, the amount charged is unreasonable. It is unreasonable to expect an unsuccessful litigant to pay for portions of a report which are of limited probative value. While it was necessary for Dr. Lourens to review all of the materials, the recitation of all of that reviewing added nothing to the evidence which would have been provided at trial. It is unreasonable to expect the defendant to pay for the entirety of this account. I allow $2,500.00.

Dr. Mel Kaushansky / Allowed

[41]        The defendant submits that Dr. Kaushansky’s opinions do not add anything to opinions already obtained from Drs. McKenzie and O’Breasail. The defendant further submits that the assessment by Dr. Kaushansky and the obtaining of his report was done out of excessive caution or zeal and out to be disallowed.

[42]        In the alternative, the submission is that the opinion sought ought to have been limited to the narrow issue of whether the plaintiff suffered a mild traumatic brain injury and whether she had any ongoing symptoms as a result. The alternative submission by the defendant is that $2,000.00 would be a reasonable amount to pay for what ought to have been sought.

[43]        Dr. Kaushansky’s account is $5,385.00.

[44]        Keeping in mind that the correct viewpoint to be adopted to see what a sensible counsel in light of his then knowledge, would consider reasonable in the interests of his client. I find that it was reasonable to determine whether or not the plaintiff had sustained a mild traumatic brain injury, and thus it was proper to retain Dr. Kaushansky.

[45]        His conclusions, in my view, were helpful to both parties in the resolution of this claim. Had the matter gone to trial with the possibility of a mild traumatic brain injury, damages recoverable may have been greater than what the case ultimately settled for. This assessment and opinion by Dr. Kaushansky was probably an aid in resolving this case at the dollar value it ultimately settled for.

[46]        Dr. Kaushansky has substantial credentials. He often appears as an expert witness in this court. His invoice details the time spent. I have reviewed it. His hourly rate is $340.00 per hour. Technical support was charged at $130.00 per hour.

[47]        I have concluded that his report was proper, probably of assistance to both parties in enabling a consensual resolution of this matter, and given his expertise is reasonable. It is allowed as claimed at $5,385.00 plus GST.

OT Consulting Reports / 1st FCE Report Disallowed / 2nd FCE Report Allowed

Cases Relied on by the Defence:

Collis v. Passero2014 BCSC 1844 (CanLII)

Hayhurst v. Rees2014 BCSC 1714 (CanLII)

Garth Mercer Reports / $950 / Allowed at $750.

The reports were not necessary. Viewed from the perspective of counsel at the time they were ordered, I find that they were proper. It is only reasonable for the defendant to pay for the opinion portion, not the portions that are a recitation of facts. I allow $750.00 in total for the two Garth Mercer reports.

Kamloops Active Health – James McGettigan / $750. / Allowed at $375.

Going back to the applicable law set out in para. 32 above, was it reasonable to order the report, keeping in mind the interests of Mr. Zak’s client, I conclude that the ordering of this report was proper. It is reasonable for the defendant to pay half of the cost and I allow $375.00.

Associated Economic Consulting Ltd.

I find that it was probably necessary but without question, proper to request a further report in anticipation of trial. The amount charged is $280.00, which I find to be reasonable. The charge for the April 5, 2016 report is allowed as claimed at $280.00

Further disbursements are discussed.  See the decision for full particulars.