September 23, 2010

Lump sum court costs equivalent to special costs may be set aside


Lump sum costs awarded in chambers which amount to special costs may, in the absence of grounds for special costs, be set aside and replaced with party-and-party costs. This is illustrated in Gichuru v. Smith, 2010 BCCA 35, a case where a plaintiff, upon having his articling student employment with a law firm terminated, sued a law corporation and its principal for breach of fiduciary duty and contract, seeking compensatory and punitive damages.

The chambers judge struck out the claims for personal liability and punitive damages. Due to the inadequately drafted claim, the court awarded the defendant $1,800 lump sum costs in any event of the cause.

On appeal, though the plaintiff’s pleadings were “woefully inadequate,” the facts favoured a “less draconian” order with the plaintiff having opportunity to amend the personal claim, given a defence plea that the personal defendant practised under the firm name. The plea of punitive damages remained struck, as the pleaded facts did not support high-handed, malicious or arbitrary conduct forming part of the breach or occurring at the time of breach. The court found the lump sum costs to be intended special costs, being two to three times more than what party-and-party costs would have been, and it substituted party-and-party costs.

Gichuru v. Smith, 2010 BCCA 352