Citation:
Icecorp International v. Nicolaus ,
2007 BCCA 97
Date: （略）
Docket: CA033735
Between:
Icecorp International Cargo Express Corporation
Respondent
(Plaintiff)
And
Klaus Nicolaus, Martha Calderer and
Cole Freight Incorporated
Appellants
(Defendants)
Before:
The Honourable Madam Justice Newbury
The Honourable Madam Justice Saunders
The Honourable Madam Justice Levine
Oral Reasons for Judgment
T.A. McKendrick
Counsel for the Appellant
S.M. Winder
Counsel for the Respondent
Place and Date:
Vancouver, British Columbia
7 February 2007
[1] LEVINE, J.A.: The issue in this case is the interpretation of Rule 37(37) of the Supreme Court Rules.
[2] Since July 1, 2003, Rule 37(37) provides that a plaintiff is not entitled to costs other than disbursements, on accepting an offer made by the defendant, if (a) the offer is accepted for a sum within the jurisdiction of the Provincial Court under the Small Claims Act, and (b) the proceeding in which the offer was made could appropriately have been brought in the Provincial Court.
[3] Rule 37(37) applies “Despite subrule (22)”, and changes the result set out in that Rule. Rule 37(22) provides that if a plaintiff accepted an offer made by the defendant, the plaintiff is entitled to costs assessed to the date the offer was delivered to the plaintiff, and the defendant to costs assessed from that date.
[4] In this case, the action was commenced in July 2000. The defendants made an offer to settle on October 15, 2002 for “$100 and costs in accordance with Rule 37(22)”. The offer was accepted on October 27, 2004.
[5] The plaintiff claimed its costs and disbursements to the date of the offer, arguing that the action could not appropriately have been brought in Provincial Court. The chambers judge agreed with the plaintiff’s interpretation of the Rule (2006 BCSC 25).
[6] The defendants took the position that Rule 37(37) as it read before July 1, 2003 should apply, as the offer was made before the amendment. The previous version of Rule 37(37) did not include paragraph (b), that “the proceeding in which the offer was made could appropriately have been brought in the Provincial Court”. The chambers judge held that Rule 37(37) as it read at the time the offer was accepted applied. That part of the decision has not been appealed.
[7] The question on the appeal is therefore whether the chambers judge erred in concluding that the action could not appropriately have been brought in Provincial Court.
[8] For the reasons that follow, I would dismiss the appeal.
Leave to Appeal
[9] The appellant’s application for leave to appeal was referred to the panel to decide by Ryan J.A. (in chambers) on March 23, 2006. Leave was required, because the question is one of costs: s. 7(1)(b) of the Court of Appeal Act. The respondent took the position that leave should not be granted, because the appeal could not succeed. After hearing counsel’s submissions on both the application for leave and the appeal, however, it is apparent that resolving the question on the appeal is of some importance to the practice and the parties; the appeal has utility in that it will resolve the remaining issue between the parties; and the question raised is at least arguable. I would grant leave to appeal.
Application of Rule 37(37)(b)
[10] The chambers judge reviewed the nature of the claims made by the plaintiff, and the course of the proceedings. He concluded (at paras. 26-28):
I am not persuaded that one should engage in a detailed assessment of the merits of the claim when considering the application of Rule 37(37). The only issue in the application of the Rule in this case is whether the action could appropriately have been commenced in the Provincial Court. On the face of it, this action was not within the monetary jurisdiction of the Provincial Court. The damages associated with the loss of the Fair Trade contract were alleged to be in the range of $375,000. Nothing makes it appropriate to bring a claim of that magnitude in the Provincial Court. Nothing in the material on this application suggests that the measure of damages, had the action succeeded, would have been less than $10,000.
The fact that the claim was not ultimately proved should not affect the appropriateness of bringing the claim in the Provincial or Superior Courts. It is the likely magnitude of the claim pleaded, should it be found to have substance, rather than the merits of the claim and the prospect of success that will determine the entitlement to costs in conformity with Rule 37(37), a Rule of which the defendants chose to avail themselves rather than pursuing other avenues directed at dismissing the plaintiff's action.
I am satisfied that this claim could not appropriately have been brought in the Provincial Court. As a result, the plaintiff is entitled to assessable costs and disbursements to October 15, 2004.
[11] The appellants (defendants) argue that the interpretation applied by the chambers judge introduces an element of uncertainty into Rule 37(37), which this Court has found is a complete code with respect to the effect of offers to settle: Brown v. Lowe (2002), 97 B.C.L.R. (3d) 246, 2002 BCCA 7, Cridge v. Harper Grey Easton (2005), 37 B.C.L.R. (4th) 62, 2005 BCCA 33 at para. 24.
[12] The appellants say that the interpretation of Rule 37(37) in Reischer v. I.C.B.C., 2006 BCSC 198, a decision of Macaulay J. that post-dated the decision in this case, is the correct interpretation. In Reischer, the plaintiff accepted an offer of $10,000, the monetary limit of the Provincial Court at the time. Mr. Justice Macaulay upheld the master’s decision that the action could appropriately have been brought in Provincial Court. He interpreted Rule 37(37)(b) as applying to actions that could not be brought in Provincial Court because of a jurisdictional bar, not because of the amount in issue – actions such as libel, slander, malicious prosecution, or where the legislation requires the proceeding to be brought in Supreme Court such as under the Builders Lien Act. He contrasted the wording in Rule 37(37)(b) with that in Rule 37(38) (and Rule 57(10)), which applies “if a plaintiff obtains judgment in a sum within the jurisdiction of the Provincial Court under the Small Claims Act”. In that case, “the plaintiff is not entitled to costs or double costs, unless the court finds there was sufficient reason for bringing the proceeding in the Supreme Court and so orders.” He suggested that to interpret Rule 37(37)(b) as requiring an inquiry by the court into matters other than jurisdiction would equate that Rule with the Rules that include the “sufficient reason” test.
[13] Mr. Justice Macaulay emphasized the policy goal of Rule 37 of encouraging settlement, and said (at para. 12):
There would always be uncertainty if the court had to determine whether the plaintiff had sufficient reason to bring the proceedings in Supreme Court whenever a plaintiff accepted an offer within the monetary jurisdiction of the Provincial Court.
[14] He concluded (at para. 13):
Even if the plaintiff had sufficient reason [for bringing the action in Supreme Court], the cost consequence is as set out in Rule 37(37) for the simple reasons that she decided to accept an offer for an amount within the jurisdiction of the Provincial Court with respect to a proceeding that could have been brought in that court.
[Underlining added.]
[15] Two other decisions of Supreme Court justices demonstrate the difficulty the Court has had in interpreting the amended Rule. In Kuehne v. Probstl, 2004 BCSC 865, Master Groves (as he then was) concluded that there could be numerous reasons for determining that a proceeding could not appropriately be brought in Provincial Court, apart from jurisdiction or the amount of the claim. Some of the reasons he suggested were the complexity of the case, the need for document and examinations for discovery, whether the judgment may need to be enforced outside of British Columbia, a bona fide preference for a jury trial, and the availability of the summary trial procedure in Supreme Court. In Reischer, Macaulay J. disagreed with and refused to follow Kuehne.
[16] Menduk v. Ashcroft, 2006 BCSC 274, was decided after Reischer. In that case, the offer accepted was for $24,100, within the jurisdiction of the Provincial Court after it was increased from $10,000 on September 1, 2005. While adopting Macaulay J.’s reasons for preferring an interpretation of Rule 37(37) in a manner that would promote certainty, Ehrcke J. decided that where the decision to proceed in Supreme Court was not for the “tactical reasons” suggested in Kuehne, and at the time the action was commenced the claim was for an amount in excess of the then monetary limit of the Provincial Court (as demonstrated by the amount of the settlement), the action could not appropriately have been brought in Provincial Court.
[17] Thus, in Menduk Ehrcke J. considered the amount of the claim, as the chambers judge did in this case, but in the context of the increase in the monetary limit and the amount of the accepted offer. In Reischer, Macaulay J. rejected any reference to the amount of the claim, founding his decision on the narrow jurisdictional question and also the amount of the accepted offer. In this case, Pitfield J. examined the amount of the claim in interpreting the word “appropriately” in Rule 37(37)(b).
[18] This issue is one of statutory interpretation. The test to be applied is set out in Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42 at para. 26:
In Elmer Driedger’s definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983):
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
[19] As the chambers judge noted (at para. 26): “The only issue in the application of the Rule in this case is whether the action could appropriately have been commenced in the Provincial Court”. He did not expressly engage in an analysis of the ordinary meaning of the word “appropriately”, the context in which it is found, or the object of the legislation.
[20] In Reischer, Macaulay J. directed himself to the “ordinary meaning” of the word “appropriately” (at para. 11). He cited the Concise Oxford Dictionary, Ninth Edition, for the definitions of “suitably” or “properly”. But he gave no further consideration to the “ordinary meaning”. He turned immediately to the purpose of the amendment, which he said “was intended to avoid the unfairness that could arise under the previous rule if a party had no choice of forum”, and of Rule 37, to encourage settlement and provide certainty as to costs at the time an offer to settle is accepted. His conclusion was that “appropriately” should be interpreted in a limited way – by reference solely to the jurisdiction of the Provincial Court, and not the amount of the claim.
[21] There is no question that encouragement of settlement and certainty of the result of acceptance of an offer to settle is the purpose of Rule 37: see Cridge (at paras. 23-24) where Lowry J.A. for the Court said:
The purpose of Rule 37 is to encourage the settlement of litigation through prescribed consequences in costs…
Rule 37 is, as stated in Brown v. Lowe, a complete code. It is important that the Rule be uniformly applied to give effect to its purpose. Litigants must be able to make offers of settlement under the Rule with confidence that the Rule will be applied when costs are awarded.
[22] The purpose of Rule 37, however, does not determine the proper interpretation of the word “appropriately” in Rule 37(37)(b). The first task of the interpreter of a statute is to read the word in its entire context and in its grammatical and ordinary sense. There is nothing “grammatical and ordinary” about the word “appropriately”, in the context of Rule 37(37)(b), that connotes a narrow jurisdictional test. In fact, it is clear from Macaulay J.’s conclusion that he interpreted Rule 37(37)(b) without reference to the word “appropriately”, when he said (at para. 13), that the plaintiff accepted an offer “with respect to a proceeding that could have been brought in [Provincial] Court”. [Underlining added.]
[23] I agree with counsel for the respondent that the ordinary meaning of the word “appropriately” connotes the application of some degree of discretion in considering and weighing relevant factors, not the mechanical application of a narrow jurisdictional test. This is especially the case where the proceeding involves a claim for damages. In those cases, it will be necessary, as it was in this case, to assess the amount of the claim.
[24] The amendment to Rule 37(37)(b) added a factor to be considered in addition to the amount of the accepted offer. Rule 37(37)(b) would have no application to an action for damages if the amount of the accepted offer was determinative of whether the proceeding could appropriately be brought in Provincial Court (as found in Reischer). In all cases where the accepted offer was within the jurisdiction of the Provincial Court, the conclusion would be that the proceeding could appropriately have been brought in Provincial Court. The former Rule provided for that result. Nothing in the context of Rule 37(37)(b) suggests that actions for damages are excluded from its application. Such an interpretation not only robs Rule 37(37)(b) of meaning in many cases to which it is intended to apply, it would be inconsistent with the object and scheme of Rule 37, which is to encourage settlement in all kinds of cases.
[25] Rule 37(37)(b) applies where a judge has not determined what the plaintiff’s claim is worth and whether it is within the monetary jurisdiction of the Provincial Court. It may be contrasted with Rule 37(38), where a plaintiff must show “sufficient reason” for bringing the claim in Supreme Court after judgment has been given for less than the monetary limit. Interpreting both Rules in their context, in their ordinary and grammatical meaning, Rule 37(38) imposes a higher burden than “appropriately”, not an equivalent test, as suggested by Reischer, and for good reason. Once judgment has been given, an element of uncertainty, the value of the claim, is eliminated, and the plaintiff should have a higher onus to justify bringing the proceeding in Supreme Court.
[26] I can find no justification in the words, the context, or the scheme of Rule 37 to ascribe a narrow, jurisdictional meaning to the word “appropriately” in Rule 37(37)(b), that would effectively exclude an examination of the amount of the claim. Had the Legislature intended that a narrow jurisdictional test be applied in interpreting paragraph (b), it could have clearly provided for that. Deleting the word “appropriately” would arguably have that effect.
[27] On the facts of this case, I agree with the ultimate approach taken by the chambers judge, which was to assess the amount of the claim. He reviewed in some detail, probably more than was necessary, the history and content of the case, before coming to the conclusion that he need not engage in a detailed assessment of the merits, and that “on the face of it, this action was not within the monetary jurisdiction of the Provincial Court” because the amount claimed exceeded the monetary limit by a significant amount. In many cases, that assessment could likely be made from the pleadings. In some cases, where a claim for damages is not so clearly in excess of the limit of the Provincial Court, a somewhat more detailed assessment of the claim may be necessary to determine whether it could appropriately have been brought in Provincial Court. That assessment could include the factors suggested in Kuehne.
[28] The respondent argued that Rule 37(37)(b) applies to its action for another reason. It claimed injunctive relief and an accounting, both remedies that are not within the jurisdiction of the Provincial Court. While this appeal could be decided on that basis, its importance lies in the issue of the claim for damages.
Conclusion
[29] I would dismiss the appeal.
[30] NEWBURY, J.A.: I agree.
[31] SAUNDERS, J.A.: I agree.
[32] NEWBURY, J.A.: The appeal is dismissed.
“The Honourable Madam Justice Levine”
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