The Applicant, Rawanco Inc. (“Rawanco”), brought an Application for Costs after succeeding in an Action against its landlord, 617271 Saskatchewan Ltd. The Applicant sought costs on a solicitor and own client basis or, alternatively, party and party costs in accordance with McAllister v Calgary (City), 2021 ABCA 25.

Rawanco argued that enhanced Costs were justified because: (1) the lease entitled the Landlord to recover solicitor-client costs upon the tenant’s default, (2) the matter was complex, and (3) the Defendant engaged in bad faith litigation conduct.

The Respondent argued that no enhanced Costs should be awarded because: (1) bad faith conduct had already been considered without a finding of misconduct, (2) the parties had mixed success, as the Applicant’s bad faith claim failed, and (3) solicitor-client and McAllister Costs were disproportionate to the complexity of the Action.

Justice Kubik rejected the claim for solicitor-client Costs, finding no contractual basis in the lease and no evidence of misconduct rising to the threshold of reprehensible, scandalous, or outrageous conduct.

Applying Rules 10.29, 10.31, and 10.33, Kubik J. held that the Applicant was the successful party on the central issue of liability for HVAC expenses, and the failed bad faith claim did not amount to “mixed success.” While the Respondent’s withdrawal of certain allegations increased costs and complicated the matter, the Action remained procedurally straightforward and akin to a Special Chambers Application.

The Applicant’s solicitor and own client costs exceeded $132,000, while the Respondent’s costs totaled approximately $16,500. Justice Kubic found that Schedule C, Column 1 Costs ($7,450) were insufficient, but that McAllister costs would be disproportionate. Justice Kubik instead awarded a lump sum of $20,000, reflecting the Applicant’s success and the additional work required to address the withdrawn allegations.