The issue before the Master and on Appeal in the underlying Action was whether Intact Insurance Company (“Intact”) owed Clauson Cold & Cooler Ltd. (“Clauson”) a duty to defend it in two separate Actions.  Clauson was successful both before the Master and on Appeal before Justice Dilts who found that Intact’s duty to defend Clauson was triggered under the policy language and by virtue of the pleadings. The parties were invited to provide written submissions on Costs.

Clauson sought a Cost award of $30,000.00, approximately one half of its actual legal fees. Clauson relied on the Alberta Court of Appeal decision of Hill v Hill, 2014 ABCA 313 (CanLII) in support of the principle that its actual legal bills were a relevant factor in assessing an appropriate award of Costs and that party-party Costs are designed to compensate a party for approximately one half or slightly less of a reasonable legal bill. Intact argued that the law regarding Cost awards for non-monetary relief has evolved to create a division between claims involving complex matters and misconduct by a party, and those cases where there is no misconduct and the litigation is not overly complex. In the latter case, a multiplier of Schedule C is considered to be appropriate.

Justice Dilts noted that Rule 10.31 extends the Court a general discretion to make an award of Costs, taking into consideration the factors that appear in Rule 10.33. Those factors include the importance of the issues, the complexity of the Action and the conduct (including the misconduct) of the parties. After reviewing the relevant jurisprudence, Dilts J. emphasized that there are no hard and fast rules on Costs and the Court is left with a broad discretion to determine an award of Costs that is fair and reasonable in the context of the litigation.

Justice Dilts concluded that awarding Costs of Schedule C or on a multiplier of Schedule C would not provide Clauson with an appropriate level of Costs given the nature of the issues in dispute, the risks to Clauson, and the effort required by the parties in bringing the Applications relative to the allowance in Schedule C. Accordingly, Clauson was awarded 40% of its actual solicitor-and-own-client Costs relating to the proceedings.