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Monday Morning Case Bites for February 25, 2019

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

Edited by Amanda Kostek & Christie Dewar

Appleby v Smallwood, 2019 ABQB 114
Costs l Factors for Enhanced Costs

CWC Well Services Corp v Option Industries Inc, 2019 ABQB 108
Dismissal for Long Delay l Litigation Plan not complied with

Alderson v The Wawanesa Life Insurance Company, 2019 ABQB 96
Dismissal for Long Delay l Undertakings

Appleby v Smallwood, 2019 ABQB 114

This was a decision on the costs award after the Defendants were successful at trial. The Defendants successfully argued for enhanced costs. The quantum fell within Column 1, and the matter was dealt with expeditiously. The matter took 7 years to get to Trial, there were no experts called at Trial, and the Trial lasted 4.5 days. The Court confirmed the following case law on enhanced costs:

[8] The Courts have recognized that there are cases where Schedule C fees are inadequate. In Weatherford Canada Partnership v Addie, 2018 ABQB 571 (CanLII), Shelley, J. notes:

55 Alberta courts have recognized that when Schedule C fees are inadequate, courts may use several different methods for determining appropriate costs, including the application of multipliers to a column, extra lump sums, or some fraction of solicitor-client costs (Caterpillar Tractor at para 4; LSI Logic at para 7). The ultimate question is “whether the final total [reached] is reasonable or not” (Caterpillar Tractor at para 4).

[9] In Louw v Hamelin-Chandler 2012 ABQB 52 (CanLII), the Court identified factors which would lead a court to consider enhanced costs. These included (a) the importance of the outcome for the parties; (b) whether the successful party incurred significant liability to retain legal counsel; (c) “exceptional circumstances”; (d) whether the successful party needed to defend his or her reputation or standing; or (e) whether the issues were complex. The court specifically noted that costs should not be enhanced simple because the litigation was found to be without merit.

In this case the only factor that applied was the importance of the decision to the community, because the Plaintiffs were effectively trying to have the Defendants’ land declared public. The Court accepted the following case in inflating costs from $17,000 to $42,000:

[11] Further, as recognized by Kubic, J. in McAllistar, I note that the costs schedule is grossly out of date in terms of value and costs should be grossed-up to reflect a true monetary value. I am prepared to use the inflation factor applied by Kubic, J. in McAllistar which is a 46.60% gross-up applied to approximate reasonable fees in 2018 for the steps taken to bring this matter to trial. My rough calculations bring the costs total to approximately $42,000, which I find are reasonable costs in the circumstances.

However, the Court was not prepared to award double costs based on a Formal Offer. The Court affirmed that the onus of proving an offer is not genuine falls on the Plaintiff:

[14] The onus is on the Plaintiffs to establish that the offer was not genuine. As summarized by Feehan J. (as he then was) in Singh v Noce, 2018 ABQB 950 (CanLII) at para 42, the offer must be genuine at the time it was made and the time it was open for acceptance. To be genuine, the offer must:

(a) be reasonable and realistic in the circumstances;

(b) include an element of compromise;

(c) realistically reflect the relative merit of the parties’ positions;

(d) be made with a reasonable expectation that it will be accepted and is not merely a no-risk litigation strategy or tactic; and

(e) be examined in the context of all of the surrounding circumstances, subjective and objective.

However, at the time the offer was made, it offered no element of compromise on the part of the Defendants. As a result, the offer was not genuine:

[15] The formal offer was made February 1, 2016. By this time, the action had proceeded through document disclosure and questioning of all parties. (Further questioning of the Defendants occurred after the offer). At this stage in the litigation, the parties were in a position to realistically evaluate the action. I find that the Defendants could have objectively reached the honest conclusion that the Plaintiffs would not succeed given the nature of the action, that no experts were needed to make such determination and that ultimately, the issue would be determined based on the facts as testified by the various parties which evidence was revealed at questioning.

[16] Generally, a waiver of costs is also seen as a factor in favour of genuineness as it is an element of compromise. Here, however, there was an offer to settle for payment of $3,500 costs by each Plaintiff. Given that there was one statement of claim with one counsel representing all parties, I agree that the Plaintiffs would be jointly and severally liable for costs and in effect the offer, at the time, was for a discontinuance and $14,000 in costs. Here, the costs awarded to February 1, 2016 are very close to $14,000 and I find therefore that there was no element of compromise in the offer. I find that as a result, the offer was a no-risk litigation strategy or tactic and that the offer was not genuine. There will be no double costs.

CWC Well Services Corp v Option Industries Inc, 2019 ABQB 108

This was an unsuccessful appeal of an unsuccessful application for dismissal for long delay. The issue in this case is that following a period of four years of inactivity, the parties entered into a Litigation Plan, scheduled Questioning, and signed a Form 37 all in accordance with the timelines set out in the Litigation Plan, which was signed by all parties and filed with the Court. The argument made by the Defendants was that the Litigation Plan had not been complied with. However, the Court noted that the cancellation of Questioning of a witness was due to the Defendants. The Court concluded that the claim should not be dismissed. The Defendants participated in steps after the delay, and any imperfect compliance was not the Plaintiff’s fault:

[20] When counsel makes an agreement with opposing counsel, the counsel and their clients may rely upon that agreement. Here, counsel for the defendants agreed to proceed, on a timeline proposed by counsel for the plaintiff. The plaintiff can rely on that agreement.

[21] While the initial steps contemplated by the agreed Litigation Plan were not, in fact, carried out in accordance with the timeline, that was not due to any fault of the plaintiff or its counsel. The defendants asked for adjournments and extensions and plaintiff’s counsel granted them as a courtesy. This is not a case where, after the Litigation Plan was agreed upon and filed, the plaintiff procrastinated.

[22] The question before me is whether, in the circumstances described above, the defendants have participated, since the 3 year delay, for a purpose and to an extent that warrants the action continuing. I find that they have. The plaintiff could have done no more than it did. The plaintiff relied upon defence counsel’s agreements to participate in the manner expressed in the Litigation Plan.

The Court also considered whether there was inordinate delay. It concluded there was no inordinate delay on the following basis:

[25] However, I am of the view, that due to the fact that the lawsuit is about whether the design was negligent; and given that the design documents continue to be in existence; and given that there is a third party report which opines that the load factors were properly calculated by the defendants, which report has not been lost; and given that it was the defendant who lost documents, who now claims to be prejudiced by their loss; the plaintiff has rebutted the presumption of prejudice.

Alderson v The Wawanesa Life Insurance Company, 2019 ABQB 96

This was a successful application to dismiss a claim for long delay. The claim was filed March, 2012. Defences were filed and served and Affidavits of Records exchanged within five months. Questioning occurred in early 2013, and in mid 2014 an application was brought for the Plaintiff’s undertakings. The last round of undertakings were provided in July, 2015. The next step did not occur until May, 2018 when two Supplemental Affidavit of Records were served disclosing medical evaluations and records recently obtained.

The Court affirmed the following tests in respect of whether the provision of undertakings advance an action:

[24] The following principles emerge from the case law provided by the parties concerning the court’s assessment of undertaking responses in the rule 4.33 context:

1. Responses to undertakings, as an extension of questioning for discovery, often advance an action, particularly where the existence of the information or its importance was not known prior. However, undertaking responses that are merely perfunctory or where nothing hinges on them may not advance the action: Ravvin Holdings Ltd v Ghitter, 2008 ABCA 208 (CanLII) at paragraphs 24-25; Nash v Snow at paragraph 42.

2. Responses that fail to address an issue in dispute, or offer essentially the same information provided at questioning do not qualify as significant advancement of an action: Nash v Snow at paragraphs 42-43.

3. Responses to undertakings that do not significantly help determine one or more of the issues raised in the pleadings, or ascertain further evidence that would have this result, do not qualify. Responses that are merely a “gloss on what has gone on before” do not qualify: 1406998 Alberta Ltd. v Dorbrandt, 2017 ABQB 321 (CanLII).

4. Responses that are incomplete or effectively “non-answers” do not qualify: Davenport Homes v Cassin, 2015 ABQB 138 (CanLII) at paragraphs 31-32.

After examining each undertaking at length, the Court concluded that the undertakings provided did not advance the action, and dismissed the claim:

[82] In summary, application of the functional approach compels the conclusion that Mr. Newman’s undertaking responses, despite their number, did not move the litigation forward in a meaningful way. To the extent that they relate to disputed issues, they add little if anything to the information already provided at questioning for discovery by Technicoil/Essential Energy’s witnesses, and by the records disclosed by the parties. At best, the responses on relevant topics amount to a “gloss of what has gone on before”: Dorbrandt.