The Plaintiffs (the “Murrays”) originally sought damages exceeding $1.65 million for defective sliding doors in their residence. At Trial, the Court found Windsor Brunello Ltd (“WBL”) liable for approximately $914,946.59 plus interest, but dismissed the claims against the other defendants, Luxus Haus Imports Ltd. (“Luxus”), Sebastian Bade (“Bade”), and KAPO Fenster Und Turen GMBH (“KAPO”) (the “Trial Decision”). The purpose of this Decision was to address the allocation of Costs arising from the Trial Decision.

Justice Sidnell emphasized the costs regime under the Rules is intended to encourage settlement, promote efficiency, deter weak claims, and provide clarity in litigation. As required under Rule 10.31(1), Sidnell J. considered the factors set out in Rule 10.33 to determine Costs. Justice Sidnell noted that the Murrays were successful against WBL but not the other Defendants. Sidnell J. further explained that, while the Trial could have been more streamlined, the complex nature of the case, together with procedural inefficiencies that unnecessarily extended the proceedings, supported an award of higher Costs.

Both the Murrays and Luxus relied on their respective Calderbank offers in support of their claims for Costs. Justice Sidnell highlighted that the proper assessment of Calderbank offers was set out in ILI’s Painting Services Ltd v Homes by Bellia Inc, 2020 ABQB 972 and Kent v MacDonald, 2020 ABQB 29. Sidnell J. noted that Calderbank offers should be assessed on whether the offer constituted a genuine compromise, provided a cost advantage, allowed adequate time for consideration, was unreasonably rejected, and whether the offering party ultimately fared better than if the offer had been accepted. While the Murrays’ offer met most of these criteria, it was left open for only two and a half days. The short acceptance period was insufficient to justify double Costs. In contrast, Sidnell J. found that Luxus’ offers, which were left open for 16 days and seven days respectively, were reasonable, unreasonably rejected, and allowed sufficient time for consideration, thereby justifying an award of double Costs for expenses incurred after the first offer.

Justice Sidnell held that Luxus was entirely successful and entitled to Costs on a single Column 4 of Schedule C, including reasonable disbursements and applicable taxes. Similarly, Sidnell J. determined that Bade, as a self-represented litigant, was entitled to Costs due to exceptional circumstances, including his participation in the litigation, mediation, Trial, and contribution to a settlement. Given that Bade did not incur legal fees, Sidnell J. awarded Costs at 25% of single Column 4 of Schedule C, plus reasonable disbursements and applicable taxes.

While acknowledging that McAllister v Calgary, 2021 ABCA 25, suggests successful plaintiffs are generally entitled to 30-40% of reasonable legal fees, the Court awarded the Murrays 35% of their reasonable Costs, plus full disbursements and applicable taxes, taking into account all relevant factors. Pursuant to Rule 10.34, Justice Sidnell directed that any disputes over the amounts be determined by an Assessment Officer, with the Murrays required to pay Luxus and Bade once the quantum was assessed.

The Murrays also sought a Sanderson Order requiring WBL to pay the costs of Luxus and Bade (the “Successful Defendants”). Justice Sidnell explained that a Sanderson Order is an exception to the general rule that a successful plaintiff recovers costs from an unsuccessful defendant and is then responsible for paying the costs of successful defendants. In assessing whether a Sanderson Order was warranted, Sidnell J. reviewed the established factors including whether it was reasonable for the plaintiff to join the successful defendants, whether it would be just to shift their costs to the unsuccessful defendant, and whether the unsuccessful defendant was wholly responsible for the action.

Justice Sidnell determined that it was reasonable for the Murrays to have joined the Successful Defendants given that the claims arose from the same alleged defects and damages. However, after considering WBL’s partial blame of other parties, the absence of evidence that WBL caused the addition of the Successful Defendants, the commonality of the causes of action, and the relative ability of the parties to pay, the Court was not satisfied that it would be just to require WBL to pay the Successful Defendants Costs. Accordingly, Justice Sidnell concluded that a Sanderson Order was not warranted.