1985 SAWRIDGE TRUST v ALBERTA (PUBLIC TRUSTEE), 2017 ABQB 377
1.2: Purpose and intention of these rules
3.74: Adding, removing or substituting parties after close of pleadings
3.75: Adding, removing or substituting parties to originating application
10.29: General rule for payment of litigation costs
10.33: Court considerations in making costs award
A number of individuals, who argued that their status as beneficiaries under a trust would be affected by proposed changes to the trust, applied to be added as parties in order to protect their interests. The Action had been commenced by way of Originating Application, and was for advice and direction in the administration of the trust. One of the main issues in the underlying Action was whether the trustees should (or could) alter the definition of “beneficiary” under the trust.
The trustees, Respondents to the Application, argued that the Applicants were “third parties” and thus were barred by the operation of Rule 3.74. Justice Thomas noted that in an Originating Application, it is less clear than in an Action commenced by Statement of Claim exactly who qualifies as a third party, and less clear exactly when pleadings close. His Lordship thus declined to dismiss the Application on that basis. However, Justice Thomas noted that Rules 1.2 and 3.75(3) do apply, and found that the Court must be satisfied that the Order should be made and that doing so would not cause prejudice. Thomas J. noted that this Action had been underway for nearly six years, during which time the parties and Justice Thomas, as Case Management Judge, had worked to narrow the issues in dispute. His Lordship noted that granting this Application would have the opposite effect and broaden the issues. Additionally, the Applicants might not be able to satisfy any costs awards that may be made against them, which meant that the trust would be left to pay the bill. Consequently, Thomas J. held that the Respondents would suffer prejudice that would not be remediable by a costs award, and dismissed the Application.
In considering the Costs of the Application, Justice Thomas noted that several of the Applicants did not have a real intention to contribute to the advice and direction Application and had no intention of paying for their own litigation Costs, hoping instead to offload them onto the trust. Thomas J. noted that, even in the event the Applicants were successful, such a Costs outcome was impermissible. Noting that Rule 1.2 encourages cost-effective litigation, and that Rules 10.29 and 10.33 encourage positive litigation practices, Justice Thomas ordered all but one of the Applicants to pay solicitor-and-client Costs to the trustee; the remaining Applicant was ordered to pay Costs on a party-and-party basis.View CanLII Details