Executive Summary: Key Legal and Evidentiary Issues

• Defendants in two motor vehicle injury claims sought to appeal orders excluding expert report disbursements from the 6% cap under s. 5 of the Disbursements and Expert Evidence Regulation (DEER)

• Central dispute concerned when a disbursement is "incurred" under s. 5(8)(a) of DEER — whether at the time of expert assessment or upon delivery of an invoice

• Associate Judges at the BCSC held that disbursements are not "incurred" until an invoice is issued, following the narrow interpretation established in Couture v. Oviatt

• Justice Baker dismissed the defendants' appeals, finding the interpretation consistent with DEER's legislative purpose of proportionality and avoiding prejudicial outcomes for plaintiffs

• The Court of Appeal determined the order under DEER qualifies as a "limited appeal order" under R. 11(f) of the Court of Appeal Rules because it is an order "in respect of costs"

• Leave to appeal was denied on the basis of mootness, as both underlying actions had settled, and the merits of the proposed appeal were found to be weak

The underlying motor vehicle injury claims

This case arose from two personal injury actions in British Columbia. In the first action, Nicole Lee Oechsner brought a claim against May Yee Yu and Kam Yu Yuen for injuries allegedly suffered from a motor vehicle accident that occurred in June 2018 (the "Oechsner Action"). The trial for the Oechsner Action was scheduled to begin on February 9, 2026, but has settled. In the second action, Payam Ali brought a claim against Mercedes-Benz Financial Services Canada Corporation, Qiu Chen, Xuanxi Chen, and Raad Hewary for injuries allegedly suffered from two motor vehicle accidents in August 2018 and September 2020 (the "Ali Action"). The parties in the Ali Action settled on May 8, 2024. In the Oechsner Action, the respondent retained two physicians as expert witnesses and attended assessments in February and March 2024. In the Ali Action, the respondent retained three medical experts and scheduled assessments in January and February 2024. In both actions, the experts provided the plaintiffs with cost estimates for their expert opinion reports.

The disbursement cap under DEER and the exclusion applications

Under s. 5(2) of the Disbursements and Expert Evidence Regulation (DEER), B.C. Reg. 210/2020, the amount of disbursements that can be awarded to a party in a vehicle injury proceeding is capped at 6% of the total award of damages assessed by the court or, if an offer to settle is accepted, 6% of the amount offered. However, s. 5(6) allows a party to apply for certain disbursements to be excluded from this cap, provided two conditions under s. 5(8) are met: the application must be made before the disbursements are "incurred," and, were the disbursements not excluded, the party making the application would suffer prejudice disproportionate to the benefit of not increasing the complexity and cost of the vehicle injury proceeding. Both respondents applied to exclude some of their disbursements from the 6% cap pursuant to s. 5(6) of DEER, arguing that they met the conditions set out in s. 5(8) and that the disbursements had not yet been "incurred."

The dispute over the meaning of "incurred"

The applicants argued that because the assessments occurred before the respondents filed the application — even though reports had not been delivered — the disbursements had been incurred before the application. Therefore, the applicants contended, the conditions in s. 5(8) were not met and the disbursements could not be excluded. The applicants further argued that the requirement in s. 5(8)(a) means the application for exclusion must be made before a disbursement for an expert report is commissioned, ordered, or requested. The respondents countered that a disbursement is not "incurred" until an invoice is issued, relying on the precedent set in Couture v. Oviatt, 2009 BCSC 15, where it was held that an expense or disbursement is not incurred until the third party demands payment.

The Associate Judges' decisions and the BCSC appeal

Mr. Ali's application came before Associate Judge Bilawich, who issued his decision on March 5, 2024, with reasons indexed as 2024 BCSC 384. Bilawich A.J. followed the approach taken in Couture and concluded that a disbursement had not been "incurred" prior to the plaintiff filing his application for exclusion, as the expert had not completed a report or issued an invoice at the time the application was filed. He granted the application and ordered the exclusion of disbursements related to three of Mr. Ali's experts, including their assessments and initial reports. On March 28, 2024, Associate Judge Scarth followed the decision in Ali 2024 and granted the application to allow Ms. Oechsner's disbursements from her two physicians to be excluded disbursements. The applicants appealed from both orders, and both appeals were heard together by Justice Baker on July 24, 2024. Justice Baker examined DEER's legislative history, noting that DEER was promulgated pursuant to the Evidence Act, R.S.B.C. 1996, c. 124, and that s. 12.1 of the Evidence Act and DEER were enacted as part of a law reform effort to address the high cost of motor vehicle litigation. She observed that this Court in British Columbia (Attorney General) v. Le, 2023 BCCA 200, stated that the purpose of the amendments to the Evidence Act, including s. 12.1, was to enhance proportionality and to avoid disproportionately prejudicial outcomes in the resolution of motor vehicle disputes. The judge found that DEER's context is inconsistent with the applicants' interpretation of s. 5(8)(a), and that it would be unfairly prejudicial to the plaintiff to require them to file their application for exclusion without first being assessed by an expert and obtaining an estimate for their expert opinion. Baker J. held that "incurred," as used in s. 5(8)(a) of DEER, means the point in time at which the party is liable to pay for the expert's work, and that while each case will need to be determined on its own facts, generally a party will be liable at the time the expert delivers their account. Justice Baker dismissed both appeals and awarded costs to the respondents on October 21, 2025.

Whether leave to appeal was required at the Court of Appeal

At the Court of Appeal, the applicants sought confirmation of an automatic right to appeal or, in the alternative, an order granting them leave to appeal. Justice Griffin addressed the threshold question of whether the order constituted a "limited appeal order" under R. 11 of the Court of Appeal Rules, B.C. Reg. 120/2022. The applicants argued that Baker J.'s order was not an order refusing an appeal from an order in respect of costs within the meaning of R. 11(f) and (g), and that in determining whether an order is a limited appeal order, the court must consider the jurisdictional basis for the order. They further submitted that neither Scarth A.J. nor Bilawich A.J. made a costs order because they did not "grant" or "refuse" costs or disbursements. The Court rejected these arguments, noting that contrary to the applicants' submission, the authority for an order does not always determine whether it is a limited appeal order. R. 11(f) focuses on the subject matter of the order and does so quite generally — it does not say "a costs order" or "costs awards after hearings," but rather an order "in respect of" costs. This point was confirmed by this Court in The Owners, Strata Plan VR29 v. Kranz, 2021 BCCA 32, and further affirmed in Singh v. Singh, 2025 BCCA 309. Disbursements are widely recognized as a subset of "costs" in the civil litigation context, as reflected in R. 14-1(5) of the Supreme Court Civil Rules, B.C. Reg. 168/2009. The Court concluded that an order under DEER is an order "in respect of costs" within the meaning of R. 11(f), making it a limited appeal order that required leave.

The denial of leave and the overall outcome

Applying the criteria for leave to appeal from Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326, considered under the rubric of the interests of justice per Vancouver (City) v. Zhang, 2007 BCCA 280, Justice Griffin found the merits of the proposed appeal to be quite weak. She did not read Baker J.'s reasons as imposing an immutable rule as to the meaning of "incurred," but rather emphasized Baker J.'s caution that each case will need to be determined on its own facts. Most importantly, the point for which leave was sought was not of significance to the actions themselves. The issue was entirely moot in the Ali Action, as that case had settled. The Oechsner Action had also settled just prior to the hearing, with the small exception that the parties had not yet reached agreement on costs because information was still being exchanged; the costs of disbursements being claimed in that case were in the range of $18,000. The Court observed it would be disproportionate and inefficient to grant leave to appeal, noting that there was no incentive for either respondent to be involved in the appeal and that the only party that seemed interested in the issue was the insurer that lies behind the applicants, and not because it mattered in the context of the present actions. The respondents — Oechsner and Ali — were the successful parties throughout the proceedings, and the applicants' applications for leave to appeal were denied by Justice Griffin on January 23, 2026. No specific monetary award was ordered at this stage, as the underlying actions had settled and the remaining costs issues in the Oechsner Action were still being resolved between the parties.