WOOD J.A. (for the Court, allowing the appeal):—

This is an appeal from an affirmative answer given by a chambers judge to the following question, which was stated as a special case pursuant to Rule 33:

• Is the Plaintiff entitled to receive indemnity for accelerated depreciation under the Contract of Insurance entered into with the Defendant? Accelerated depreciation, in the context of this case is the loss of market value suffered by a motor vehicle, by reason of the fact that it has been damaged, and notwithstanding the fact that such damage has been repaired.

It was conceded by counsel for the appellant that such a claim has been advanced sucessfully in tort against the person whose fault caused the damage. See: Gunn v. Tritow Systems Ltd. (1984) 31 C.C.L.T. 102 (B.C. Co. Ct.), West Mount Property Ltd. et al. v. Sandhu et al. (1985) 20 C.C.L.I. 9 (B.C.S.C.), and Nesbitt v. Carmey [1930] 3 W.W.R. 504 (Sask. C.A.).

But in this case the respondent seeks indemnification for such loss under the "own damage coverage" provisions of her owner's certificate of insurance issued by the appellant pursuant to the combined provisions of the Insurance (Motor Vehicle) Act R.S.B.C. 1979, c. 204, and the Revised Regulations (1984), which have been promulgated under the Act. As a result, the determination of the issue on this appeal depends upon the proper construction to be given to the indemnification provisions of the contract governing such coverage, and not on the application of any principles of tort law.

The respondent cross-appeals on the question of costs, seeking either solicitor and client costs, or party and party costs taxed at a higher level than would otherwise be applicable, both here and in the court below, on the ground that she ought not to be expected to underwrite the costs of what is described as a test case.

The facts of this case demonstrate that accelerated depreciation can result in a significant loss. The respondent's 1984 Nissan 4x4 truck was stolen on 6th May, 1986. When it was recovered, it was found to be extensively damaged. The appellant indemnified her for the cost of repairs which totalled $3,624.70 In a later arbitration the value of the accelerated depreciation resulting from the damage was set at $2,500.00.

The terms of the contract between the appellant and the respondent, which describe the obligation to indemnify under the own damage coverage of the contract, and which are otherwise relevant for the purpose of appreciating the arguments advanced by counsel, are found in the following provisions of the Regulations:

116. Where own damage coverage is provided under an owner's certificate, the corporation shall, subject to sections 117, 120, 121, 122 and 131, indemnify an insured, to the extent of his insurable interest in respect of direct and accidental loss or damage to the vehicle described in the owner's certificate or its equipment or both that
     1. occurs in Canada or the United States of America or on a vessel travelling between Canada and the United States of America,
     2. is caused by one of the perils for which the own damage coverage is provided.
117. (1) Subject to sections 121 and 131, the liability of the corporation for payment of indemnity for loss or damage described in section 116 is limited to the amount by which
     1. the cost of repairing or replacing the vehicle or any part of it with material of a similar kind or quality,
     2. the declared value of the vehicle, or appropriate, or
     3. the actual cash value of the vehicle, whichever is least, exceeds the deductible amount set out in the owner's certificate for the vehicle, or each vehicle in a combination of vehicles.
     (2) The corporation is not liable for that part of the cost of repair or replacement that improves a vehicle beyond the condition in which it was before the loss or damage occurred.
     (3) Instead of making a payment to an insured, the corporation may repair or replace the vehicle, or part of it, with another vehicle or part of similar kind or quality.
     (4) The liability of the corporation for loss or damage to an obsolete part of an insured vehicle, or a part the manufacturer does not have in stock, is limited to the price at which the part was last listed on the manufacturer's price list.
     (5) Where loss or damage arises out of theft of an entire vehicle or fire, no deductible amount is payable, unless the vehicle is a motorcycle.

132. (1) The corporation is not liable to indemnity any person under comprehensive or collision coverage for loss or damage
     1. to tires,
     2. consisting of, or caused by, mechanical fracture, failure or breakdown of any part of a motor vehicle, or
     3. caused by rusting, corrosion, wear and combustion chamber,
     unless the loss or damage is coincidental with other loss or damage for which indemnity is provided under comprehensive or collision coverage or is caused by fire, theft or malicious mischief.
     (2) The corporation is not liable to indemnify any person under this Division for loss or damage
     1. caused by conversion, theft or concealment of a vehicle by a person in lawful possession of the vehicle under a written agreement,
     2. caused by a voluntary surrender of title to a vehicle, whether or not the surrender of title is induced by fraud,
     3. covered by comprehensive or specified perils coverage and arising out of theft of a vehicle by a person who resides with the insured or is an employee of the insured,
     4. to any contents of trailers, campers, motor homes or motor vehicles, except as provided in section 120 or 122,
     5. to a motor vehicle licenses and insured as a trailer unless, when the loss or damage occurs, the vehicle is being operated as a trailer, or
     6. primarily caused by the operation of a vehicle in contravention of
        1. a statement in the application for insurance for the vehicle,
        2. a provision of the Motor Vehicle Act, Commercial Transport Act or Motor Carrier Act, or
        3. a provision of a regulation made under an Act mentioned in subparagraph (ii),
        relating to the combined weight of the vehicle and its load.

The chambers judge concluded that the words "loss or damage" in s116 were general enough to include accelerated depreciation, that sub-s. 117(1) on the other hand appeared to exclude such loss from coverage, and that accordingly there was at least a "difficulty of construction", if not an ambiguity, which entitled him to invoke the contra proferentem rule in favour of the insured.

Since the chambers judge reached his decision, this Court has expressed the view that the contra preferentem rule has no application to the statutory terms of a contract of insurance. See: .Insurance Corporation of British Columbia v. Joseph and Joseph (1989) 36 B.C.L.R. (2d) 248, per Southin J.A. at p. 256. The same view was expressed in both the majority and the minority judgements in Madill v. Chu [1977], 2 S.C.R. 400. It is suggested that these authoritative statements are merely obiter dicta. If that is so, I would adopt and apply those views in this case. As counsel for the appellant put it, the underlying rationale of the rule has no application when neither party can choose the language of the contract between them.

Thus it is that the basis upon which the issue was decided below cannot be sustained.

The appellant argues that, when sections 116 and 117 are read together, there is no ambiguity or difficulty of construction. In his view the words of s116 clearly subject the obligation to lndemnify found therein, to the provisions of subs117(1), which in turn restrict that obligation to the lesser of the amounts described in paragraphs (a) through (c) thereof.

The respondent urges us to construe sub-s. 117(1) as setting one maximum limit to the obligation to lndemnify, namely the actual cash value found in para.(c). In his view the words "damage" and "repair" should both be given a broad construction, so as to include accelerated depreciation in the former and compensation for the economic loss arising therefrom in the latter. By that approach whenever the cost of "repairing" (or replacing) exceeded the pre-damage market value of the vehicle, the insured would be entitled to the actual cash value and would thus be compensated for any accelerated depreciation. As further support for this view of sub-s. 117(1), it is pointed out that s. 132 of the regulations, which excludes various types of loss or damage from coverage, does not exclude accelerated depreciation.

The construction suggested by the respondent ignores the obvious intent of sub-s. 117(1), which is to limit the liability of the appellant, and not to maximize the indemnity of the insured. Furthermore, it requires that the word "repairing" be given a meaning which is both unusual and inconsistent with the context in which it is found. The ordinary meaning of the verb "repair" does not invoke any concept of compensation for economic loss. In the case of sub-s. 117(1), it is used, in conjunction with the verb "replace", in a context which clearly suggests physical repairs or replacement "with material of a similar kind or quality".

In short, it is impossible to read "compensation for the economic loss resulting from accelerated depreciation" into the words "the cost of repairing or replacing" found in paragraph (a), without doing violence to the plain meaning of those words. I agree with the reasons of Drake C.C.J. in Insurance Corporation of British Columbia v. Wallace, unreported, Victoria Reg. No. 166/88, March 6, 1988, and would apply them in this case. Referring, at p. 2 of those reasons, to the Shorter Oxford Dictionary definition of "repair", which includes the phrase, "restoration to a sound condition", the learned judge said:

• If I were to extend the meaning of "restoration to a serviceable condition" to include economic loss resulting from damage caused by an unknown tortfeasor, I would be doing violence to the plain words of the regulation which limits the liability of the petitioner to "the cost of repairing". That phrase cannot be read in such a way as to embrace the concept of compensation for a decrease in market value: "repair" has reference to the condition of the vehicle, and not to its price.

Read together it is plain that sub-s. 117(1) was intended to limit the obligation to lndemmfy found in s. 116 to the lesser of the amounts described in paragraphs (a) to (c). That being the case, an insured seeking indemnity under the own damage coverage provisions of the certificate of insurance issued under the present Act and Regulations, will only be compensated for the value of any accelerated depreciation resulting from damage caused to the insured vehicle when the cost of repairing that damage exceeds the actual cash value of the vehicle prior to its occurrence. In my view that is the proper answer to the question stated on the special case under Rule 33.

That brings me to the question of costs raised by the cross-appeal.

The respondent, after some initial difficulty, was awarded costs in the court below on a party and party scale.

When the appellant obtained an extension of time for filing this appeal, Taggart J.A. ordered that it pay to the respondent the costs of that application "in any event of the cause", and that the appellant pay to the respondent the costs of the appeal on a party and party basis, or on such higher scale as the Court may ultimately determine.

As to the scale of costs, it is settled law that generally speaking solicitor and client costs will only be awarded where the party against whom such costs are ordered has been guilty of reprehensible conduct. See: Stiles v. Workers' Compensation Board of British Columbia et al. (1989), 38 B.C.L.R. 307. The respondent here suggests that the failure of the appellant to revise s. 116 and s. 117 of the Regulations, to clarify the scope of its obligation to indemnify, after the validity of a claim for accelerated depreciation had been accepted by the courts in tort actions, was conduct which meets that threshold test. That submission cannot succeed.

There is express authority in both Appendix B to the Rules of Court, and Appendix B to the Court of Appeal Rules, to order that costs be taxed at a greater amount than would otherwise be applicable, where the court determines that:

1. a difficult point of law or construction is involved in a proceeding,
2. an issue in a proceeding is of importance to a class or body of persons, or is of general or public interest,
3. the result of a proceeding effectively determines the rights and obligations as between the parties beyond the relief that was actually granted or denied in the proceedings, or
4. any other special reason exists.

In my view this case did not involve a difficult point of law or construction.

I cannot say that the issue involved was one that is unimportant to those who may find themselves in the same position as the respondent, however, there is nothing about the "issue" resolved in this case that would distinguish it from the ordinary legal issue that frequently is decided in these courts, with the result, inter alia, that litigants in other causes know better, as a matter of law, where they stand.

The third exception set out above is not applicable in this case.

The only "special reason" brought to our attention, as a reason for ordering that costs be taxed at a greater amount than would otherwise be applicable, is that the respondent has been put through two expensive legal proceedings in a dispute involving, by comparison, a relatively small amount of money. I do not believe that such a circumstance, by itself, can amount to the sort of special reason envisaged by s. 8(1)(d) of each of the appendices referred to above. Quite apart from anything else, if such were endorsed by this Court as a "special reason", it would encourage all manner of litigation in pursuit of minor, or even inconsequential, issues.

I see no reason to increase the scale of costs in this case above the normal party and party tariff.

There remains the question of the disposition of costs generally. I see no reason to disturb the order of Taggart, J.A. with respect to the costs of this appeal. However, the appellant has succeeded in this Court, and in the ordinary course of events a successful appellant is awarded costs both in this Court and in the court below. Whatever it was that prompted Taggart, J.A. to make the order he did, did not at the same time move him to preserve the respondents order for costs in the court below in any event of the outcome of the appeal. I see no reason why the usual order with respect to those costs should not be made.

I would allow the appeal and answer the question posed in the special case in the manner indicated above. I would dismiss the cross-appeal. l would award the appellant its costs in the court below, and order a set off as between those costs and the respondent's costs on appeal.