10.33: Court considerations in making costs award

Case Summary

On the eve of Trial, the Plaintiffs discontinued against one of the Defendants, Umer Choudhry (“Choudhry”), and agreed to pay Costs of $9,000.00 to Choudhry. After completion of the Trial, the Plaintiffs applied for Costs on a full indemnity basis. The Plaintiffs also sought an Order that the unsuccessful Defendants pay the Costs owed to Choudhry.

The Plaintiffs based their claim for full indemnity Costs on the Defendant’s credibility issues, misstatements of facts and delay. The Court held that although there were issues with the conduct of the Defendants, it did not meet the high bar for solicitor-and-client Costs, but did give rise to an increase in the taxable Costs.

The Court held that it may make Orders requiring an unsuccessful Defendant to pay Costs directly to a successful Defendant, or directing a Plaintiff to pay the successful Defendant’s Costs and allowing a Plaintiff to add those Costs to its Costs. The Court cited Gladue v Alberta (Attorney General), 2011 ABQB 535, for the following tripartite test:

(a)    Was it reasonable to add the successful Defendant to the litigation?

(b)   Was it reasonable to keep the successful Defendant in the litigation?

(c)    Is it fair and just to require the unsuccessful Defendant(s) to pay the Costs of the successful Defendant?

The Court held that:

(a)    Because of the uncertainty about potential liabilities at the commencement of the Action it was reasonable and advisable to name Choudhry;

(b)   It was reasonable to keep Choudhry in the litigation; and

Had the other Defendants not failed to admit certain facts, Choudhry could have been discontinued against earlier.

The Court ordered the unsuccessful Defendants to pay the $9,000.00 in Costs directly to Choudhry.

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