PILLAR RESOURCE SERVICES INC v PRIMEWEST ENERGY INC, 2017 ABCA 141

McDonald, Bielby and Wakeling JJA

4.29: Costs consequences of formal offer to settle
10.29: General rule for payment of litigation costs
14.59: Formal offers to settle
14.88: Cost awards

Case Summary

The Defendant and Respondent to the Appeal (“PrimeWest”), applied for Costs following the Plaintiff/Appellant’s (“Pillar”) unsuccessful Appeal. Pillar’s Appeal was related to Trial Costs which were awarded to PrimeWest on a full indemnity basis.

The Court of Appeal noted that Rule 14.88(3) creates a rebuttable presumption that Costs of an Appeal are awarded on the same basis as the Judgment appealed from. The Court noted that the parties had cited conflicting authority on whether full indemnity Costs should follow an Appeal where there was no misconduct of the unsuccessful party on the Appeal, but there had been misconduct meriting such Costs in the Decision appealed from. The Court observed that where the conduct is of a sufficiently egregious nature that the party is held in contempt, full indemnity Costs should also follow on Appeal. However, the Court held that Pillar’s conduct fell short of that standard, and, referring to leading prior authority, ruled that this was a case where the schedule of Costs on the Appeal should be varied from that at Trial.

The Court then noted that the Respondent had served a Formal Offer, which was bettered in the result. The Court of Appeal noted that Rule 4.29 applies to appeals through the operation of Rule 14.59(4), and that all steps subsequent to the service of the Formal Offer were therefore doubled.

Finally, Pillar argued that it had been successful on two interlocutory Applications within the Appeal and should be entitled to a setoff for those Costs. With respect to the Application for permission to appeal, the Court ruled that no setoff was appropriate; if it were otherwise, every unsuccessful Appellant would get Costs of their leave Application no matter how unlikely the Appeal. Further, without the successful leave Application, there would have been no Appeal, and thus no Costs. With respect to Pillar’s Application relating to permissible evidence in the Appeal, the Court noted that Costs were reserved at the time of the Application to be determined by the panel on the full Appeal. The Court interpreted the direction as Costs in the cause. Since Pillar ultimately lost on Appeal, it should not be awarded the Costs for the Application.

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