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Tuesday Morning Case Bites for October 12, 2021

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Steven Graham

Barbe v Evans – 2021 ABQB 796
Medical Malpractise | Costs Award | Formal Offer

The Court previously found the Defendant Dr. Evans liable for negligence for a medical procedure conducted on the Plaintiff, though the Plaintiff’s claim against the hospital defendants was dismissed. This decision deals with the cost consequences of the trial.

The Plaintiff argued that a “Bullock Order” should be granted, directing the Defendant Dr. Evans to indemnify the Plaintiff for the hospital defendants’ costs, or alternatively a “Sanderson Order”, directing Dr. Evans to pay the hospital defendants’ costs directly.

The Court noted the fundamental purposes of costs awards and provided context of the types of orders sought by the Plaintiff:

[5]               Mr. Barbe and Dr. Evans agree that in assessing same, the Court is to look to three criteria:

a. Was it reasonable for the plaintiff to join both defendants in the action?

b. Is there a good reason to deprive the successful defendant of its costs?

c. Was the unsuccessful defendant responsible for the action as between the co-defendants?
(Abt Estatev Ryan2020 ABCA 133 at para 71)

[6]               In considering this issue, I am guided by Abt Estate and McAllister v Calgary (City)2021 ABCA 25. I note that in general costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants (Serra v Serra2009 ONCA 395 at para 8British Columbia (Minister of Forests) v Okanagan Indian Band2003 SCC 71 at paras 22-26, [2003] 3 SCR 371).

[7]               I also note that in Garrioch v Sonex Construction Ltd2017 ABCA 262, our Court of Appeal suggested that a Bullock or Sanderson order is commonly, but not exclusively, called for where the defendant mounts a “cutthroat defence” (at para 6). In Dhingra v Pham2004 ABQB 973 at para 25, the Court indicated that a Sanderson order is appropriate where the unsuccessful defendant attempted to throw the blame on someone else.

The first criteria – the reasonableness of the Plaintiff initially joining the Defendants, was conceded.

The second criteria, whether there is a good reason to deprive the successful defendant of its costs, allows judicial discretion. The Court will consider whether it was reasonable for the Plaintiff to keep the hospital defendants in the action. On that point, the Court determined that it was not, in light of various factors.

The Plaintiff claimed that it was not until the trial had significantly progressed that the position of Dr. Evans changed from alleging negligence on the part of the hospital defendants. The Court dismissed this argument and pointed to the following as evidence that Dr. Evans’ liability stance did not target the hospital defendants:

[13]           On April 5, 2019, counsel for Dr. Evans sent to counsel for Mr. Barbe a “comfort” letter, indicating that Dr. Evans would not be asserting negligence against the Hospital Defendants, and attached a Partial Discontinuance of Claim on a without costs basis in favour of the Hospital Defendants, signed by Dr. Evans’ counsel.

[14]           As no response was received, Dr. Evans’ counsel sent a follow up email to Mr. Barbe’s counsel on April 9, 2019, stating:

In the event that your client keeps AHS in the action, there will no doubt be a finding at trial that the hospital was not negligent. Since we have given you a partial discontinuance, to the extent that costs are sought by AHS against your client, our position will be that your client be solely responsible for AHS’ costs.

Lastly, I note that there will be no evidence adduced on behalf of our client that any actions or inaction by the nurses fell below the standard of care. You have also not served any expert opinions that the nurses were in any way negligent….

Counsel for Dr. Evans also gave undertakings to the Plaintiff’s counsel that they would not be leading evidence that the hospital defendants breached their standard of care, or advancing any claim for indemnity against the hospital defendants:

[16]           Accordingly, I find that by April 9, 2019, Mr. Barbe knew that Dr. Evans would not be pointing the proverbial finger at the Hospital Defendants, and could have secured a partial discontinuance as against the Hospital Defendants, on a without costs basis.

As such, the Court determined that it was not reasonable for the Plaintiff to continue the action against the hospital defendants, and declined to issue a Bullock or Sanderson order:

[19]           Considering the facts recited above, I cannot accept Mr. Barbe’s submission that “as far as [he] knew, Dr. Zorn intended to testify at trial that overheated irrigation fluid caused Mr. Barbe’s injuries.” (at para 32 of Plaintiff’s Brief). Arguably, that position was reasonable at some point in the litigation, but it certainly was not after April 9, 2019.

[20]           It is true, as Mr. Barbe argues, that if Dr. Evans had accepted liability, then this matter would not have continued to trial. However, denial of liability is not sufficient in itself to warrant granting a Sanderson or Bullock Order.

[21]           While Mr. Barbe was entitled to conduct the litigation as he saw fit, including not releasing the Hospital Defendants prior to trial and not consenting to the Hospital Defendants’ non-suit application, those decisions have consequences. Given Mr. Barbe’s litigation strategy, it is not reasonable for him to expect any contribution from Dr. Evans towards the Hospital Defendants’ costs. The second element of the test is not made out.

The Court then considered the amount the hospital defendants were entitled to recover. The Court noted several actions taken by the hospital defendants which streamlined the trial:

[29]           I also note that the Hospital Defendants shortened the trial by not [calling or] cross-examining any witnesses. Further, I granted the Hospital Defendants leave to bring a further non-suit application prior to the conclusion of the trial, which, given my ultimate findings at trial, likely would have been successful. The Hospital Defendants decision to not bring a further non-suit application shortened the length of trial.

The Court also rejected the Plaintiff’s argument that the hospital defendants’ costs would have been lower than those of the typical litigant, considering their minimal involvement in the trial and boilerplate pleadings:

[31]      … While all of this is accurate, the Hospital Defendants were still required to review voluminous documents to determine what questions needed to be asked at discovery or trial, what expert reports may be required, ultimately obtaining expert reports, trial decisions needed to be made in relation to whether or not witnesses should be called, preparing to cross-examine witnesses if deemed necessary, addressing the non-suit application, and being fully familiar with the case, in order to make the appropriate judgment calls at the appropriate time.  Given the trial outcome, counsel for the Hospital Defendants made sound judgment calls.

[32]           I also note that the Hospital Defendants did not claim a disbursement for their liability experts ($26,403.59), whose reports were not tendered in evidence at the trial, nor did they seek the costs of the non-suit application, which required written briefs and oral argument.

The Court also considered the fact that the Plaintiff had the opportunity to discontinue his claim against the hospital defendants over a month before trial on a without costs basis, pursuant to a formal offer. In conjunction with the assurances that Dr. Evans would not be advancing cross-claims for liability or indemnity against the hospital defendants, the Court determined that the Plaintiff’s decision to maintain the claim against the hospital defendants was an informed risk, such that it was unreasonable for him to now argue that the Court should not award double costs pursuant to the formal offer:

[36]           As our Court of Appeal stated in Apt Estate, at paras 66-69, a formal offer automatically doubles a successful offeror’s entitlement to costs, except in “special circumstances”. No special circumstances are present here. Therefore, I agree with the Hospital Defendants that they are entitled to double costs as claimed in the Bill of Cost for items after March 14, 2019, the date of the Formal Offer to Settle.

The Court also awarded a second counsel fee for the hospital defendants, noting that the other parties also had multiple counsel, and even in light of the hospital defendants’ minimal participation, they would still have to prepare for the trial and review the complex and voluminous production.

The hospital defendants were also permitted to recover their share of costs on a damages expert which they co-retained with Dr. Evans:

[42]           Mr. Barbe submits that the Hospital Defendants should not be entitled to recover their half share of the damages experts, which they shared with Dr. Evans, arguing that the full cost of the damages experts should have originally been borne by Dr. Evans, and would thus have been recoverable from Dr. Evans, not paid as a cost disbursement to the Hospital Defendants. The difficulty I have with Mr. Barbe’s argument is that he chose not to release the Hospital Defendants from the action in April 2019, prior to the commencement of trial, on a without costs basis. The risk to Mr. Barbe was potentially being held responsible for the Hospital Defendants’ costs and disbursements. Further, had the Hospital Defendants retained their own damages experts, as the successful party, they would have been entitled to recover from Mr. Barbe, the full cost of their damages experts, far exceeding the 50% share claimed. It is a benefit to both Mr. Barbe and Dr. Evans that the Defendants chose to share in this cost: Mr. Barbe is not being called on to reimburse the Hospital Defendants 100% of the costs of their own damages experts, and Dr. Evans is only required to bear 50% of the costs. The only party not benefitting from this arrangement is the Hospital Defendants, and it is unreasonable for them to be deprived of reimbursement, given the outcome of the trial

[43]           I agree with the Hospital Defendants that the choice of co-defendants to share in the costs of damages experts should be encouraged by the Court in light of Rule 1.2 of the Alberta Rules of Court. To penalize a litigant for conducting themselves in a timely and cost-effective way, runs contrary to Rule 1.2.

The Plaintiff also argued that he should be entitled to double or enhanced costs, as he alleged Dr. Evans’ conduct unnecessarily lengthened the trial. The Court rejected the Plaintiff’s argument that changes to Dr. Evans’ expert opinion lengthened the trial:

[53]           […] In my view, these comments do not represent a change in Dr. Zorn’s initial opinion, but rather a supplemental explanation for the presentation of Mr. Barbe’s bladder.

[54]           I do note that at para 92, the last paragraph in his 2017 Report, Dr. Zorn stated:

On a balance of probabilities, I am of the opinion that other mechanisms of pan-bladder injury and fibrosis, such as hot water irrigation during the case (as routinely done for transurethral bladder/prostate surgery) for prolonged periods, as has been more recently reported in the medical literature caused Mr. Barbe’s bladder injury and is more consistent with the appearance of the temporal, not immediate, events following Mr. Barbe’s procedure.
(Emphasis added)

[55]           Yet, missing from this passage was a fulsome recitation of the “other mechanisms” of pan-bladder injury and fibrosis as set out in Dr. Zorn’s 2014 Report, and throughout his 2017 Report. The question is – does this statement in the final paragraph of Dr. Zorn’s 2017 Report mean that Dr. Zorn’s opinion regarding the cause of Mr. Barbe’s injury had changed? In particular, did he attribute that injury to overheated irrigation fluid? The clear answer is no. There is nothing to suggest that Dr. Evans’ original theory of causation, as set out in his 2014 Report, was being abandoned.

The Court found that Dr. Evans had not abused the litigation process or engaged in conduct to delay or extend the trial, and as such declined to award the Plaintiff enhanced costs.

The result was that the Plaintiff did receive costs against Dr. Evans, but also was directed to pay double-costs of the hospital defendants.