581257 ALBERTA LTD v AUJLA, 2011 ABQB 539


4.24: Formal offers to settle
4.28: Confidentiality of formal offer to settle
4.29: Costs consequences of formal offer to settle
9.13: Re-opening case
10.33: Court considerations in making costs award
10.42: Actions within Provincial Court jurisdiction
15.1: Definitions
15.2: New rules apply to existing proceedings
15.6: Resolution of difficulty or doubt

Case Summary

The Application before the Court was a reconsideration of a Costs Award made after the Trial of the Action. The reconsideration included the Plaintiff’s request for solicitor-client Costs and Costs consequences arising from the Parties’ Notices to Admit Facts and a Formal Offer issued during the course of the litigation.

The first issue considered by the Court was whether the New Rules of Court or the former Rules governed the Application for reconsiderations of the Costs Award. The Court held that Rule 15.2 directs that the new Rules apply to every existing proceeding unless otherwise provided. Rule 15.1 defines existing proceeding as a “court proceeding commenced but not concluded under the Former Rules”. The Court also stated that Rule 15.6 allows the Court to “suspend or modify operation of the New Rules if there is doubt about their application, or if their application would result in difficulty, injustice or impossibility”. Applying the direction arising from Rules 15.1, 15.2 and 15.6, the Court held that the Applications before it were governed by the new Rules.

The Court also addressed whether the Action should be re-opened to reconsider the Costs Award. The Court held that Rule 9.13 permits the Court to vary a Judgment at any time before it is entered if there is a good reason to do so. In this case, the Court exercised its discretion pursuant to Rule 9.13 and allowed the case to be re-opened since the Formal Offer had not been disclosed prior to the issuance of the Court’s Reasons for Decision in accordance with Rule 4.28.

Since the Court ruled that the case could be re-opened, it turned its mind to whether the Offer at issue was a Formal Offer under the former Rules or the new Rules. “Formal offers to settle under the Rules of Court must be certain and genuine.” The Formal Offer had been advanced under the former Rules of Court. The requirements for a Formal Offer under the new Rules are significantly different from those which were contained in the former Rule 169. Topolniski J. applied Rule 15.6 and held that the facts of the case before the Court “exemplify the raison d’être for Rule 15.6”, exercised “discretion to suspend the operation of Rule 4.24” and determined the validity and effect of the Formal Offer pursuant to Rules 169 and 174(1) of the former Rules.

The Court also considered which Column of Schedule C applied to the Costs Award granted by the Court. The Court noted that although Rule 10.42 was triggered because the Judgment awarded fell within the monetary jurisdiction of the Provincial Court, in this case, since the Action alleged conversion, the proceeding did not fall within the Provincial Court’s jurisdiction and Rule 10.42 did not apply. The Court considered the factors set out in Rule 10.33 and awarded the Plaintiff Schedule C, Column 1 Taxable Costs.

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