This was a Decision regarding Costs following the summary dismissal of Geophysical Service Incorporated’s (“GSI”) claim against Canadian Natural Resources Limited (“CNRL”). The Court confirmed that CNRL was the successful party and therefore entitled to costs under Rule 10.29. The central issue was the appropriate method of calculating costs, whether by reference to Schedule C or as a percentage of actual legal fees under the McAllister approach.

CNRL sought 75% indemnification of its legal fees, totalling $618,224.58, or alternatively enhanced Schedule C costs. GSI argued that costs should be limited to Schedule C and denied that CNRL was entitled to enhanced costs, raising objections based on the nature and conduct of the litigation. The Court held that the amount claimed supported costs under Column 5 of Schedule C, and that while GSI was entitled to advance its claims, its persistence in allegations of fraud and misconduct, despite lack of supporting evidence, weighed in favour of enhanced costs under Rules 10.31 and 10.33.

The Court considered CNRL’s Calderbank of January 26, 2022, which proposed discontinuance on a without-costs basis. The offer was found to be a genuine compromise and relevant under Rule 10.33(2)(h), though it did not automatically trigger double costs. The Court also reviewed the reasonableness of the legal fees under Rule 10.2 and accepted that the fees incurred were not disproportionate given the complexity and duration of the proceedings.

After analyzing both the Schedule C and McAllister approaches, the Court found that a multiplier of 4–5 would be appropriate if Schedule C were used, and that 60% of actual legal fees would be reasonable under the percentage-based approach. Ultimately, the Court awarded CNRL a lump sum of $405,000, inclusive of disbursements, as reasonable and proportionate under Rules 10.2, 10.29, 10.31, and 10.33.