YEGPRO REALTY LTD v DHILLON, 2026 ABKB 530

The Plaintiff sought costs following success at Trial. The Plaintiff argued that, under the Independent Contractor Agreement (the “ICA”) between the parties, it was entitled to solicitor-client costs. Alternatively, it claimed it was entitled to enhanced costs based on Calderbank offers and the Defendant’s alleged litigation misconduct. The Defendant contended that any Costs Award was limited pursuant to Rule 10.42, since the claim fell within the monetary jurisdiction of the Alberta Court of Justice (“Court of Justice”).

Justice Mah confirmed that the successful party in litigation is presumptively entitled to costs, pursuant to Rule 10.29. Mah J. further noted that costs are to be determined in accordance with the discretionary principles set out in Rules 10.31 and 10.33.

The Court held that the ICA did not clearly provide for solicitor-client costs. Applying the principles of contractual interpretation, Justice Mah concluded that the reference to court costs, litigation expenses and reasonable lawyers' fees in the ICA was insufficient to displace the ordinary party-and-party costs regime.

Further, Justice Mah found that the Defendant’s conduct did not rise to the level of reprehensible, scandalous, or outrageous conduct required to justify solicitor-client costs under Rule 10.33. Mah J. held that, while the Defendant rejected several Calderbank offers, those offers justified only a degree of enhancement and did not warrant solicitor-client costs.

With respect to Rule 10.42, the Court held that the Rule ordinarily limits recoverable costs where the amount in issue falls within the jurisdiction of the Court of Justice. However, Mah J. highlighted that, while the Plaintiff commenced the Action in the Court of Justice, the matter was transferred to the Court of King's Bench on the Court's own initiative rather than at the Plaintiff's election. While Rule 10.42 remained applicable, Justice Mah held that the circumstances justified departing from its prescribed limits, subject to the overriding principle of proportionality.

In the result, Justice Mah awarded the Plaintiff costs for the Court of Justice proceedings under the applicable tariff. Mah J. further awarded enhanced costs in the Court of King's Bench at 1.5 times the applicable Rule 10.42 tariff, reflecting the Defendant’s rejection of the Calderbank offers, together with actual disbursements and GST.