LA CAILLE NORTH POINT INC v 2160806 ALBERTA LTD

The Court was called upon to determine the costs following the conclusion of a Trial. The Plaintiff’s claim was allowed in part and the Defendants’ cross-claim was dismissed in its entirety. As the parties were unable to come to an agreement on costs, the Court was required to determine the appropriate costs Award in the circumstances.

The Plaintiffs submitted that in the contractual arrangement between the parties that gave rise to the dispute, the parties agreed that solicitor-client costs were to be awarded. As such, the Plaintiff took the position that there was no basis for the Court to exercise any discretion with respect to costs. The Defendants submitted that the Plaintiff’s conduct during the course of the dispute justified a departure from the contractual arrangement, and that an award of solicitor-client costs would amount to a windfall to the Plaintiff in light of their success in the Action.

Justice Silver first had to determine whether the Court should exercise its discretion in determining the appropriate costs to award. In canvassing the relevant caselaw, the Court noted that while it typically is not appropriate for the Court to interfere with a contractual agreement on costs, if the contractual terms result in a harsh or disproportionate Costs Award, it will be appropriate for the Court to step-in. Justice Silver addressed the Defendants’ allegations of litigation misconduct and held that no such misconduct occurred. While there was questionable conduct on the part of the Plaintiff, and while Justice Silver noted that she did not condone the Plaintiff’s acts, it did not rise to litigation misconduct.

Although the Court did not find litigation misconduct, it held that the amount of solicitor-client costs being sought were disproportionate. The costs claimed were essentially equal in amount to the total value of the Plaintiff’s claim and the damages awarded. The proposed Bill of Costs also sought recovery of costs that appeared to be unnecessarily incurred by the Plaintiff. In particular, Justice Silver noted that although only one lawyer litigated the case on behalf of the Plaintiff, they sought to recover costs for two additional counsel who attended the trial for 20 days. Justice Silver questioned the necessity of the daily attendance of what she viewed lawyers acting as note takers. Ultimately, Justice Silver held that the disproportionate costs sought necessitated the Court exercising its discretion with respect to the appropriate costs.

In considering the factors outlined in Rule 10.33, Justice Silver noted that while the issues in dispute were of great importance to the parties and did involve a degree of legal complexity, the evidence went in smoothly and the factual basis was straightforward and easy to understand. The Court also noted that neither party took meaningful steps to shorten the action. After considering these factors, the awarded the Plaintiff costs on a party-party basis at a two-times multiplier of what was set-out in Schedule C to the Rules of Court. However, Justice Silver noted that she would not be permitting counsel fees for three lawyers. Not only did she see no justification for those fees but also noted that costs for second counsel is permitted upon leave being granted by the Court. In this matter, leave for second or third counsel was neither sought nor referenced at any point in the proceedings.