SHEHU v IQBAL, 2018 ABQB 862


10.31: Court-ordered costs award
10.33: Court considerations in making costs award
10.49: Penalty for contravening rules
10.50: Costs imposed on lawyer

Case Summary

In an earlier Hearing, Justice Topolniski granted the Defendants’ Application to set aside the Default Judgment. The parties then appeared before Topolniski J. to make submissions on Costs. The Defendants sought Costs against the Plaintiff and his lawyer, jointly and severally, on a solicitor and own client indemnity basis. The Plaintiff sought his thrown away Costs of entering the Default Judgment and filing a Writ, or alternatively, that no Costs be paid by or to any party.

As noted by Justice Topolniski, this case was “an illustration of ineffective, costly and frustrating litigation”. There were multiple proceedings, both ex parte and with notice, requiring a Costs determination. Before awarding Costs for the various steps, Topolniski J. surveyed the relevant law on Costs. Her Ladyship first noted that usually the successful party is entitled to Costs, subject to the Court’s discretion. Rule 10.33 sets out the considerations for Courts when making Costs awards. Topolniski J. stated that the Rules permit the Court to order full indemnity Costs as per Rule 10.31(1)(b)(i). Courts will only depart from ordering party and party Costs in exceptional and unique circumstances. Her Ladyship then cited a recent Alberta Court of Appeal authority, Secure 2013 Group Inc v Tiger Calcium Services Inc, 2018 ABCA 110 (CanLII), regarding the difference between solicitor-client Costs, which means full indemnity Costs for all legal fees and disbursements reasonably incurred, and solicitor and own client Costs, which include services requested by the client that go beyond reasonable fees and disbursements, which are only justified in the most exceptional circumstances.

Finally, Rule 10.49 permits the Court to order a party or a lawyer to pay a penalty for contravening the Rules, and Rule 10.50 provides authority to award Costs against a lawyer personally. As set out by the Supreme Court of Canada in Director of Criminal and Penal Prosecutions v Jodoin, 2017 SCC 26 (CanLII), the threshold for awarding Costs against a lawyer personally is high and the Court’s power to do so much be exercised with restraint and caution.

Justice Topolniski then reviewed the circumstances of the various proceedings at issue in detail, noting various contraventions of the Rules. Her Ladyship was specifically concerned with instances where the Plaintiff’s counsel failed to fulfil the duty of disclosure and utmost good faith required during ex parte Applications. Where Plaintiff’s counsel had failed to fulfil his duties and therefore misled the Court, Topolniski J. ordered solicitor-client Costs against the Plaintiff and his lawyer, jointly and severally.

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