ESB v SDB, 2017 ABQB 522
4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award
In a dispute related to the imputation of income for the purposes of determining child support in a family law matter, both parties argued that the other had failed to accurately disclose changes in their incomes after their divorce. Jones J. made determinations with respect to both parties’ incomes, and then requested that the parties submit written submissions respecting the proper form of Order, after the parties prepared two “very different forms of Order” for endorsement. After the Order, which was close to the form of Order drafted by SDB, was issued, His Lordship directed the parties to make submissions as to Costs. SDB sought full indemnity solicitor and client costs on the basis that ESB did not negotiate reasonably, failed to honour child support obligations, coerced and bullied SDB, and acted in bad faith. Alternatively, SDB sought Costs calculated pursuant to Column 3 of Schedule C, doubled due to a Calderbank Offer. In the further alternative, SDB sought double Costs after she served a Formal Offer pursuant to Rule 4.29(1).
ESB argued that it was SDB who had acted poorly, and that the parties should bear their own Costs on the basis that the parties had enjoyed mixed success. Further, SDB’s Formal Offer was open for acceptance for an “unreasonably short” time. He also argued that his behaviour was not scandalous, outrageous, or reprehensible, and that as such, solicitor and client Costs were not warranted.
In coming to a decision, His Lordship noted that Rule 4.21 entitles an Applicant to double Costs “for all steps taken in relation to the action or claim after service of [an] offer, excluding disbursements”, if a Formal Offer is not accepted and the subsequent Order or Judgment is more favourable to the Applicant than the Formal Offer. Jones J. also reviewed the applicable Rules in determining a Costs award and noted that Rule 10.29 provides that a successful party is generally entitled to a Costs award against the unsuccessful party, subject to the Court’s discretion. Justice Jones also noted that, pursuant to Rule 10.31, the Court’s general discretion to award Costs should take the factors listed in Rule 10.33(1) and (2) into account. Jones J. ultimately concluded that the parties did not enjoy mixed success. It was SDB who was successful. However, on the facts, ESB had not acted unconscionably, egregiously, or in bad faith. As such, full indemnity and solicitor and own client Costs were not appropriate; nor was an award for double Costs after ESB’s receipt of the Calderbank Offer. Instead, Costs were awarded in accordance with Column 2 of Schedule C, doubled respecting steps taken after November 15, 2016, when SDB submitted a Formal Offer.View CanLII Details