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Special costs may be awarded in Fast Track actions

Summary: Special costs may be awarded in Fast Track actions as an exception to the usual Fast Track cost formulas

Background: With respect to costs in Fast Track actions, Rule 15-1 says:

(15) Unless the court otherwise orders or the parties consent, and subject to Rule 14-1 (10), the amount of costs, exclusive of disbursements, to which a party to a fast track action is entitled is as follows:

(a) if the time spent on the hearing of the trial is one day or less, $8,000;
(b) if the time spent on the hearing of the trial is 2 days or less but more than one day, $9,500;
(c) if the time spent on the hearing of the trial is more than 2 days, $11,000.

Earlier BC jurisprudence was undecided whether special costs (punitive costs intended to chastise a party for reprehensible litigation conduct) could be awarded in Fast Track actions. In Majewska v. Partyka, 2010 BCCA 236, the BC Court of Appeal held that the objectives of Fast Track litigation – a speedier and less expensive process – favour adherence to readily determinable lump sum costs as set out in Rule 66(29) (now Rule 15-1(15)). If a party wishes to be unbound from the lump sum cost rules, the proper response would be to apply for removal from Fast Track litigation. Otherwise, the party “should have no basis for complaint that her costs are limited by R. 66(29).” Still, the Court left open the possibility that special circumstances, including circumstances justifying special costs, might justify a departure from the normal lump sum costs:

[38] I acknowledge there may be situations that justify a departure from such costs. I anticipate these would be “exceptional” circumstances rather than “special” circumstances, and might include situations deserving of special costs or solicitor client costs, however, such matters must be left for another day.

Following Majewska, it was unclear whether special costs were available in Fast Track actions. In Lam v. Chiu, 2013 BCSC 1281, for example, the Court noted that it was not certain whether special costs could be awarded in Fast Track actions at all: “The law is not clear about whether an award of special costs is available in a case under the Fast Track process.” In Arrowmark Contracting Ltd. v. JDP Construction Ltd., 2013 BCSC 2307, the Court again noted the uncertainty in the law:

[22] With regard to special costs, while the law is not clear whether an award of special costs is available under the fast track rules, even if they are I do not consider that “exceptional circumstances” were present in this case that justify special costs or solicitor client costs. (Majewska and Lam)

In each of Majewska, Lam, and Arrowmark, the parties’ litigation conduct did not justify special costs in any event, so it was unnecessary to decide if special costs were available in Fast Track litigation.

Decision: In Wildcat Helicopters Inc. v. Ellis, 2017 BCSC 506, a Fast Track action, the Court held that the defendant’s litigation conduct justified special costs. Before awarding special costs to the plaintiff, the Court questioned whether special costs were available at all. Referring back to Majewska and Arrowmark, the Court noted that previous cases had not decided the issue:

[28] Neither party was able to refer me to any case where special costs have been awarded in a fast track proceeding. The door, however, appears to have been left open for such an award.

After reviewing the factors relevant to special costs, the Court concluded that there is no reason why special costs should not be available in Fast Track actions:

[33] In theory, I see no reason why, in a proper case and where “reprehensible conduct” exists, special costs could not be awarded in a case under the fast track provisions of R. 15-1.

[34] Rule 15-1(15) limits costs in fast track actions to fixed amounts unless, as the opening words of that sub-rule state, “the court otherwise orders”. It is therefore open to a court to “otherwise order” greater costs in cases where special circumstances warrant the departure from typical fast track costs: Peacock v. Battel, 2013 BCSC 1902 (CanLII), at para. 17.

As a result of reckless conduct in the course of the Fast Track action, the defendant was ordered to pay special costs to the plaintiff.

Commentary: Less than 2 weeks after Mr. Justice Weatherill’s decision in Wildcat was issued, Madam Justice Donegan’s decision in Pete Walry Construction Ltd. v. Canadian Adventure Company Holdings Ltd., 2017 BCSC 595 (another Fast Track action) was released. In Pete Walry, the Court separately reached the same conclusion: special costs are available in Fast Track actions. As a result of the defendant’s reprehensible litigation conduct, special costs were awarded against the defendant instead of ordinary Fast Track costs:

[75] It is the cumulative effect of all of the defendant’s conduct that deserves reproof or rebuke in the form of special costs. This is one of those exceptional situations where the plaintiff has established the defendant’s conduct was reprehensible. Special costs are awarded to the plaintiff, including special costs of this hearing.

It is this author’s view that the decisions in Wildcat and Pete Walry are consistent with the purposes of the Rules and with the previous jurisprudence. While Rule 15-1(15) generally sets out easily determinable lump sum costs awards in order to expedite Fast Track litigation, it explicitly grants courts the discretion to “otherwise order” where appropriate. Considering that special costs are awarded rarely and only in exceptional circumstances, the discretion to award special costs should impact only a small portion of Fast Track actions. But if parties did not have recourse to special costs, it might give unscrupulous parties the ability to intentionally prolong, frustrate, and impede Fast Track actions (but not regular actions) without fear of recourse. It is consistent with the purpose of Fast Track rules to ensure that parties are deterred from acting in such a manner.

This post was originally published on CanLII Connects on May 1, 2019.