10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award
SCHEDULE C: Tariff of Recoverable Fees

Case Summary

After Syncrude Canada Ltd. (“Syncrude”) unsuccessfully applied for several forms of pre-judgment relief, the parties appeared before Jones J. to speak to Costs.

Athabasca Minerals Inc (“AMI”) argued that it should be granted enhanced Costs forthwith. It emphasized that pursuant to Rule 10.33, Costs are discretionary and the actual legal bill of the successful party may be considered in determining the appropriate Costs award. As well, Costs may be used to sanction unreasonable or vexatious litigation conduct, or conduct that tended to increase time and expense. AMI further argued that Syncrude’s Applications were brought as a tactic to “avoid the orderly administration of justice by means of a trial”, because the Orders sought by Syncrude would have prevented AMI from pursuing its debt Claim against Syncrude. It emphasized that the Applications took seven days of Court time and required a large volume of materials. It also referenced several decisions which had held that a Costs award should indemnify the successful party for about 40% to 50% of their actual legal fees. Lastly, AMI argued that inflation should be considered in making any Costs award.

Conversely, Syncrude argued that Costs should be in the cause based on Column 5 of Schedule C, without any multipliers, and that multipliers of Column amounts in Schedule C are not the rule, but the exception. It also argued that it should not be ordered to pay Costs forthwith.

Jones J. considered the factors in Rule 10.33, and concluded that Syncrude should pay enhanced Costs in the form 45% of the reasonable legal fees actually incurred by AMI, plus disbursements – without reference to the standard amounts set out in Schedule C.  In coming to that conclusion, Jones J. noted that he was permitted to make a Costs award without reference to Schedule C pursuant to Rule 10.31(3)(a). His Lordship noted that where legal issues are complex and parties are sophisticated, the line items set out in Schedule C do not necessarily correspond with the value of work performed. As such, where the volume of materials adduced or the complexity of the litigation is the reason for an award of enhanced Costs, it is often not very helpful to increase the amount of Costs by “mak[ing] artificial and arbitrary adjustments to Schedule C amounts”. However, adjusting Schedule C amounts may be appropriate to account for egregious conduct in the litigation. Additionally, Schedule C should still be considered in order to perform a “reality check” on an award of Costs.

Jones J. further held that Costs should be payable forthwith, as set out in Rule 10.29(1). His Lordship noted that the onus is on the losing party to demonstrate why Costs should instead be payable in the cause, and that Syncrude had not justified departure from the rule. Jones J. further noted that given the apparent disparity between Syncrude and AMI’s financial resources, it could “invite misuse of the prejudgment relief process” if Costs were not made payable forthwith. Lastly, Jones J. also noted that it is not appropriate to account for inflation absent extraordinary circumstances. If Courts accounted for inflation on a case by case basis, it could lead to inconsistent results. In any event, inflation was already accounted for because the Costs award made was based on a percentage of fees incurred.

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