Focus On

ACTIONS - Practice and procedure - Costs

Tuesday, October 29, 2019 @ 8:14 AM  

Lexis Advance® Quicklaw®
Appeal by the defendant insurer from the award of special costs against it. The respondent suffered from multiple sclerosis and lived below the poverty line after the appellant rejected her claim for disability benefits. The trial judge allowed the respondent’s claim for past and future long-term disability benefits. He awarded $15,000 in aggravated damages for mental distress. In determining costs, the trial judge admitted and relied on an affidavit adduced by the respondent’s trial counsel that address the unique nature of disability insurance contracts and claims. The trial judge did not find the appellant committed any reprehensible conduct or acted in bad faith but found the interests of justice required full, rather than partial, indemnification of the respondent’s costs.

HELD: Appeal dismissed. The trial judge did not err in exercising his discretion to award special costs in the interests of justice in the exceptional circumstances of the case. He did not base his decision on a contractual right to full indemnity costs or compensate the respondent twice for emotional harm. The special costs awarded responded to the impact of the unique characteristics of the disability insurance contract in the litigation, not the emotional consequences of its breach. In balancing the parties’ interests in the unique litigation, the trial judge did not err by concluding it was just for the unsuccessful institutional defendant to indemnify the impoverished and disabled claimant fully for the reasonable costs of pursuing her claim for subsistence-level disability insurance benefits. The trial judge applied the correct legal test in determining whether the affidavit evidence was relevant and was entitled to accept and rely on its content in support of the application for special costs.

Tanious v. The Empire Life Insurance Company, [2019] B.C.J. No. 1772, British Columbia Court of Appeal, R.J. Bauman C.J.B.C. and G. Dickson and J.J.L. Hunter JJ.A., September 20, 2018. Digest No. TLD-October282019006