RK v GSG, 2026 ABKB 647

The Court had previously summarily dismissed the Plaintiff’s claims against the Defendant for defamation, conspiracy, and intentional infliction of mental suffering, and was prepared to make a decision on costs. The Defendant had served a Formal Offer to Settle pursuant to Rule 4.24 on March 16, 2022, and sought a multiple of Column 5 costs, together with double costs for all steps taken after service of the Formal Offer. The Plaintiff argued that the Defendant’s costs should not be doubled because of the Defendant’s conduct and several allegedly inflated items in the Defendant’s proposed Bill of Costs.

The Court discussed the objective of costs. The primary objective of a costs ruling, pursuant to Rule 10.31(1), is to provide a reasonable and proper measure of indemnity for costs incurred in successfully advancing or defending an action, proceeding, or application. A Costs Award may also discourage unnecessary litigation or sanction improper litigation conduct. The Court noted that the determination of costs is discretionary and recognizes the principles of reasonableness, fairness, balance, and equity, with proportionality as the overriding consideration. Proportionality requires the Court to consider the amount at stake and the importance of the issues to the parties while balancing fair indemnification of the successful party against the need to preserve access to justice and avoid unduly burdening the unsuccessful party, having regard to the factors set out in Rule 10.33. The Court noted that a costs ruling consists of three parts: (i) entitlement, (ii) scale, and (iii) quantum.

In this case, the Defendant’s presumptive entitlement to costs pursuant to Rule 10.29(1) was not disputed. Mah J. applied the “costs in the cause” approach for interlocutory matters where costs had not previously been awarded. The purpose behind this approach was to avoid the need to revisit costs entitlement questions for past events.

Mah J. found that the Formal Offer satisfied Rule 4.24(2) and that the Defendant obtained a result nominally more favourable than the Formal Offer, giving the Defendant a prima facie entitlement to double costs for all steps taken after service, pursuant to Rule 4.29.

However, the Court went on to assess whether special circumstances justified refusing double costs pursuant to Rule 4.29(4)(e). Mah J. considered the parties’ competing allegations of litigation misconduct. The Court found that the relevant conduct on each side cancelled the other side’s effect and so chose not to award enhanced nor reduced the scale of costs on that basis. Although the Defendant’s request for a multiple of Column 5 followed by doubling would have produced a disproportionate Costs Award, the policy underlying Rule 4.24 and the Defendant’s minimally better result warranted double Column 5 costs from the date of service of the Formal Offer.

The Court held that Rule 10.29(1) separates an interlocutory Costs Order from the ultimate outcome of the Action. Further, Rules 4.29(2) and 4.29(3) do not contemplate reopening costs that had already been ordered and paid. Rule 4.29(2) also confines double costs to steps taken after service of the Formal Offer, requiring reductions for steps taken before March 16, 2022 in this case.

In addressing the remaining disputed items, the Court removed or reduced amounts that duplicated prior Costs Awards, stemmed from unnecessary steps, or claimed full attendance costs for Applications only requiring written work. Mah J. applied Rule 10.30(1)(c) and the “costs in the cause” approach to interlocutory costs that had not previously been determined. The Court ultimately awarded the Defendant costs of the Action on Column 5, with steps taken after service of the Formal Offer assessed at double Column 5.