PACIFIC WEST SYSTEMS SUPPLY LTD v A & K TILES & DRYWALL LTD, 2026 ABKB 633

This decision determined costs following the dismissal of an Application by the Plaintiff, Pacific West Systems Supply Ltd. (“Pac West”), for a pre-judgment Attachment Order. Although the Application had initially sought relief against A&K Tiles & Drywall Ltd. (“A&K”) and its guarantor, by the Hearing, the attachment relief was restricted to approximately $200,000 in net property sale proceeds belonging to Dhothar Developments Inc. (“DDI”).

Following the dismissal, A&K sought partial indemnity amounting to 45% of its actual legal costs ($35,395.41) pursuant to Rule 10.33. A&K argued that partial indemnity was justified by the detailed record, the extraordinary nature of a pre-judgment attachment, and relied on Southwest Design & Construction Ltd v Janssens, 2024 ABKB 698 (“Southwest Design”). Pac West argued that costs should be restricted to party-and-party costs under Schedule C, contending that seeking extraordinary relief did not automatically warrant enhanced costs. DDI requested party-and-party costs under Schedule C.

Pursuant to Rules 10.31 and 10.33, the Court confirmed that the primary objective of a Costs Award is to provide a reasonable and proper measure of indemnity, guided by proportionality, fairness, and equity. The Court emphasized that while Schedule C was not mandatory, it provided certainty and simplicity, and there was no legal presumption in favour of either a percentage of actual legal costs or Schedule C. Justice Mah held that proportionality did not justify awarding A&K 45% partial indemnity. Mah J. also observed that the Application, as ultimately presented, was restricted to funds owned by DDI, meaning A&K faced no asset attachment or monetary risk in the Application itself.

The Court distinguished Southwest Design as involving greater factual and legal complexity and substantially greater commercial consequences, as the injunction sought in that case would have prohibited the Respondents from operating or bidding on contracts or soliciting former clients or employees. In contrast, the $200,000 in issue did not justify approximately $35,000 in costs for a party that ultimately faced no monetary exposure. Justice Mah affirmed that while pre-judgment attachment was an extraordinary remedy in its effect on the party whose property was attached, seeking such relief did not automatically elevate the scale of costs when denied. Consequently, the Court found that party-and-party costs under Schedule C plus disbursements and GST were proportional and appropriate.

Justice Mah declined to award costs for preparing written costs briefs. A&K had not succeeded in their position seeking 45% of their actual costs, while DDI had achieved mixed success on the costs issues.