YANGARRA RESOURCES LTD v ADVANCED UPSTREAM LTD

This was a costs decision arising from an abandoned Mareva Injunction Application brought by the Applicant against the Respondent. The Applicant was concerned that a corporate transaction involving the Respondent would render the Respondent Judgment-proof in ongoing litigation. However, the Applicant withdrew the Application after receiving confirmation that the Respondent would remain a going concern. Both parties claimed they were successful for the Application and sought costs.

The Court acknowledged that pursuant to Rules 10.29 and 10.31, costs are presumptively awarded to the successful party, and that a costs award is discretionary. The issue was determining which party was the successful party. Justice Feasby determined that the Respondent was the successful party, noting that a withdrawal of an application by an applicant was almost always a victory for the respondent. Although it was emphasized that there may be exceptions to this general rule, the Court determined this case to not be exceptional. Feasby J. acknowledged that the Applicant aggressively pursued the Mareva Injunction, which it withdrew upon realizing that the apprehended harm did not exist. As such, the Applicant was not successful and should pay costs to the Respondent.

The Respondent sought solicitor-client costs or, alternatively, an award of enhanced costs to provide it with substantial indemnity given their success and the seriousness of the allegations. Justice Feasby emphasized that in determining an appropriate quantum of costs, the Court may consider various things, including the factors pursuant to Rule 10.33, and litigation conduct. Feasby J. also considered the foundational principles in Rule 1.2 requiring the parties to resolve disputes efficiently and communicate reasonably. The Court rejected the Respondent’s argument for solicitor-client costs and found that both parties had contributed to the unnecessary escalation of the Application. The Applicant was aggressive in pursuing relief beyond what was reasonable in the circumstances, especially after learning of key details of the transaction. However, the Respondent also contributed to the Application being brought by refusing to provide timely and sufficient information that could have alleviated the Applicant’s concerns at minimal cost.

The Court apportioned responsibility between the parties and determined that a partial indemnity was appropriate, given that while the allegations were ultimately not proven, they were not unreasonable or sufficiently egregious to warrant an elevated costs award. Justice Feasby awarded costs to the Respondent as the successful party, fixed at 50% of solicitor-client costs plus full reimbursement of disbursements.