321665 ALBERTA LTD v HUSKY OIL OPERATIONS LTD, 2013 ABCA 326
MARTIN, WATSON AND McDONALD JJA
Rule 601 : Awarding Costs
Rule 608: Costs on Appeal
1.9: Conflicts and inconsistencies with enactments
4.24: Formal offers to settle
4.29: Costs consequences of formal offer to settle
In this case, the Trial Judge had awarded triple column 5 Costs and a second counsel fee to the Respondent, 321665 Alberta Ltd. Although the Appellant was successful on the Appeals, the Respondent requested that the Court of Appeal vary from the usual Costs consequences of Appeals.
The Respondent acknowledged that the Appellant was completely successful on the outcome of the Appeals, but argued that this was a special case where the parties should bear their own costs on Appeal and the Court should affirm the Court of Queen's Bench Costs award. Further, the Respondent submitted that the language of s. 36 of the Competition Act created a "one-way" entitlement to Costs which operated against the effect of Rule 601(3).
The Court of Appeal noted that former Rule 601 continued to apply to Costs. Further, the Court highlighted that, where no Costs Order on Appeal was made, "the costs follow the event" and, under Rule 608, the applicable tariff and column on Appeal should usually match what was selected at Trial. The Court of Appeal also noted that the Trial Costs award was within the scope of the Trial Judge’s discretion due to the quantum of the claim and the complexity and duration of the litigation.
Regarding the Trial Judge's award of a second counsel fee, the Court of Appeal noted that the submissions from each of the (Appellant) Defendants' counsels on Appeal were consistent with one another and the Court was not given a reason for departing from awarding a single set of Costs that included a single set of counsel fees for each successful party.
The Court noted that Rule 1.9 provided that if there was an inconsistency between the Rules and an enactment, the enactment prevailed; therefore, the Respondent argued that Rule 1.9 meant that s. 36 of the Competition Act prevailed over Rule 601(3). The Appellants disagreed with the Respondent's arguments regarding the effect of the Competition Act, stating that such an approach would permit risk-free litigation contrary to the principles in Alberta of awarding Costs to the successful party.
The Respondent also argued that this litigation was a public interest litigation that had prima facie merit and involved complex issues of importance to the public generally.
In addition, the Appellants had made a Formal Offer under Rule 4.24 and were seeking Double Costs. The Respondent claimed that the Offer was not a serious offer of compromise; however, the Appellants contended that the unambiguous wording of Rule 4.29(1) was such that the Appellants should not be denied their Costs except for good reason.
In making its Decision, the Court of Appeal first noted that, "limitations on the compensatory role of costs aris[ing] from litigation success in a purely private action should generally be grounded in statute or in established legal principle" [Emphasis in original]. The Court also highlighted the standard characteristics of Costs awards as mentioned in British Columbia (Minister of Forests) v Okanagan Indian Band, 2003 SCC 71 at paras. 20 to 26, and noted that entitlement to Costs can be limited by statutory direction or by legal principles, such as those that relate to misconduct of the party or miscarriage in procedure. After considering several previous decisions and the Competition Act, the Court held that the Respondent did not refer to any statute which permitted it to bypass the applicable Rules and s. 36 of the Competition Act did not set-up a "one-way" Costs regime.
Finally, the Court held that the dispute in this case was a private commercial dispute between corporate parties that did not raise unusual issues or trigger any special consideration as to Costs. With respect to the submission for Double Costs in light of the Formal Offer, the Court held that there was no reason for bypassing that Rule, as the Formal Offer was intended to encourage resolution and was not derisory or abusive. The Appellants were each entitled to a set of Costs at triple Column 5, but with single counsel fees, and subject to the effect of Rule 4.29(1).View CanLII Details