In Price v. 481530 B.C. Ltd., 2020 BC 1806, the unsuccessful defendants in a wrongful dismissal action adopted an obstructive “scorched earth” approach and the plaintiff was awarded $384,602 plus special costs. At the Registrar’s hearing to assess the quantum of costs, the plaintiff presented a bill of $1,014,278. Registrar Nielsen confirmed that the successful party was only entitled to those fees and disbursements that were proper and reasonably necessary to the proceeding. After taking a global approach to assessment, the Registrar allowed costs of $660,000 plus taxes and most disbursements.
The factual background and procedural history of these proceedings is lengthy and complex and will not be addressed in this article. For further reading, the factual background of the issues arising in the case are described in Price v. 481530 BC Ltd., 2016 BCSC 1940 at paragraphs 1 through 14. The subsequent procedural history is described in detail in Price v. Robson, 2017 BCCA 419 at paragraphs 4 through 21.
An assessment of special costs is governed by SCCRs 14-1(3) and (5), which provide:
(3) On an assessment of special costs, a registrar must
(a) allow those fees that were proper or reasonably necessary to conduct the proceeding, and
(b) consider all of the circumstances, including the following:
(i) the complexity of the proceeding and the difficulty or the novelty of the issues involved;
(ii) the skill, specialized knowledge and responsibility required of the lawyer;
(iii) the amount involved in the proceeding;
(iv) the time reasonably spent in conducting the proceeding;
(v) the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the proceeding;
(vi) the importance of the proceeding to the party whose bill is being assessed, and the result obtained;
(vii) the benefit to the party whose bill is being assessed of the services rendered by the lawyer;
(viii) Rule 1-3 and any case plan order.
(5) When assessing costs under subrule (2) or (3) of this rule, a Registrar must
(a) determine which disbursements have been necessarily or properly incurred in the conduct of the proceeding, and
(b) allow a reasonable amount for those disbursements.
A party who has been awarded their special costs is only entitled to those costs which are objectively reasonable. The fact that a lawyer has billed a certain amount does not make that amount reasonable: Gichuru v. Smith, 2014 BCCA 414 at paras. 104, 105 and 155.
In Tanious v. The Empire Life Insurance Company, 2019 BCCA 329, the BCCA confirmed that, while there is a close relationship between special costs and actual legal costs, they are not the same. Further, special costs are not a substitute for damages or a means of ensuring the successful party is not put to any expenses whatsoever. Their purpose is to censure and deter litigation misconduct, not to compensate the plaintiff. The successful party is only entitled to those fees and disbursements that were proper and reasonably necessary to the proceeding.
In Price, the amount claimed in special costs totaled $1,014,278.92 in fees, disbursements and taxes. The Court factored into its assessment the following issues:
In assessing the quantum of fees and disbursements paid by the plaintiff, the Court noted:
Taking a global approach to the assessment of special costs, and considering all of the circumstances and the factors in SCCR 14-1(3), the Registrar allowed $660,000 in fees plus applicable taxes, $60,000 of which was attributable to the assessment before the Registrar.
The plaintiff also sought disbursements of $31,188.90 in document production, $25,000 of which was allowed. Support staff overtime ($4,996.09) as a result of a last-minute discovery and office stationary ($220.75) were both considered overhead and therefore non-recoverable.