Court of Appeal Confirms Test – When Should Disbursements For Expert Reports Be Allowed?

In Fan v. Chana, 2009 BCSC 1127, an infant Plaintiff went to trial and was awarded damages for her injuries in the amount of approximately $32,000 and, in the usual fashion, was entitled to costs with liberty to apply if circumstances warranted it. However, the Defendant in Fan had made a formal Rule 37B offer exceeding the judgment.

The trial judge ordered that the Plaintiff was entitled to costs to the date of the offer, except did not allow recovery of disbursements for two expert reports.  At trial, the judge found one expert report to be inadmissible because the doctor provided an opinion outside of her expertise as a psychologist.  Because of this, the report did not comply with the Rules.

The reason given by the trial judge in regards to the other expert report was that the facts on which the expert relied were not consistent with the facts he found at trial.  He critized experts for not digging deeper to clarify the facts they are basing their report on.  

The Plaintiff appealed the decision (regarding quantum and costs).  The Court of Appeal upheld the trial judge’s decision not to allow the disbursements for the first report but reversed the trial judge’s decision regarding the second report (Fan v. Chana, 2011 BCCA 516).

The Court of Appeal found that the trial judge had used the incorrect test in determining whether the cost of the expert reports ought to be allowed.  Madam Justice Levine for the Court of Appeal stated that:

the relevant time to consider whether it is reasonable to incur a disbursement is the time the disbursement was incurred.

It is much easier to understand why the costs/disbursements for a report of an expert who is opining outside of his or her area of expertise and found inadmissible won’t be allowed.  Presumably that would be known by the party as soon as the report is read.  However, counsel are not equipped with crystal balls to determine how the evidence will come forth at trial.  It might be entirely reasonable for the expert to rely on facts at the time that the report is written even if those facts are not ultimately accepted by the court.     

Also worth noting in this case is that the trial judge made his decision regards costs using the the inherent jurisdiction.  Although the Court of Appeal agreed that the trial judge had the right to invoke the inherent jurisdiction, it should only do so in circumstances not contemplated by the rules.  That was not the case here.  The trial judge ordered that the Plaintiff is entitled to costs until the date of the Defendant’s offer.  Using the inherent jurisdiction to depart from that would be going beyond the rules of court regarding formal offers.