LLOYD v DE WALLE

The Court considered costs following successful Applications to remove one of the parties' ("Lloyd") litigation representative ("McDonald") and to preclude former counsel ("Moodie") from continuing to act after a new litigation representative had been appointed.

Lloyd's capacity was a live issue in the litigation. Moodie had been retained by McDonald while she was Lloyd's litigation representative. After McDonald was removed for conflict-related reasons, the Court appointed a new litigation representative who then retained new counsel. Despite that appointment, Moodie continued to file documents and appear in Court on Lloyd's behalf without instructions from the new litigation representative. Moodie's actions necessitated multiple Applications culminating in a finding that Moodie did not have a client in the proceedings and an Order prohibiting him from filing further materials.

The Court confirmed that the Defendants were presumptively entitled to costs under Rule 10.29. The Court held that McDonald was personally liable under Rule 10.47 for the costs of the Application removing her. The litigation involved multiple Actions, in some of which Lloyd was the Plaintiff ("Plaintiff Actions") and in others the Defendant ("Defendant Actions"). Under Rule 10.47(1), McDonald was liable for costs in the Plaintiff Actions. Justice Kubik also held that McDonald should be liable for costs in the Defendant Actions because she had engaged in serious misconduct as contemplated in Rule 10.47(2)(a). Her removal related to her conflict of interest in relation to Lloyd's financial affairs and findings that she obstructed the determination of Lloyd's capacity. Further, she had caused delay in the proceedings. The Court awarded partial solicitor-client costs calculated based on the Schedule C Tariff items.

The Court held that Moodie was not personally liable for costs pursuant to Rule 10.50 in relation to the Application removing McDonald. Justice Kubik confirmed that costs against a lawyer personally are an exceptional remedy that requires clear evidence of serious misconduct. That threshold had not been met in relation to McDonald's removal Application.

However, the Court held that Moodie's conduct after the appointment of the new litigation representative seriously interfered with the administration of justice and orderly Court proceedings, engaging Rule 10.50 costs. By continuing to act without instructions from the new litigation representative and without a client in the proceedings, he confused the issues, compounded costs, and delayed necessary litigation steps. His conduct was a marked and unacceptable departure from the standard of reasonable conduct expected of a lawyer. Justice Kubik held that Moodie should personally pay the costs associated with these steps, rather than Lloyd. The Court ordered Moodie to pay the solicitor-client costs of the Defendants' and new litigation representative's legal fees, and the litigation representative's fees, for all steps between June 7, 2025, and December 16, 2025.

The Court awarded an additional $6,000 to the Defendants and Lloyd in costs for the present Application. All costs were payable forthwith.