Thomas J

10.28: Definition of “party”
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award

Case Summary

The Plaintiff, Zypherus Holdings Inc. (“Zypherus”), applied before a Master for a Foreclosure Order with respect to lands registered in the names of the Defendants, who were deceased. The estate of one of the Defendants was bankrupt, and the Trustee in Bankruptcy (the “Trustee”) advanced arguments on behalf of the creditors. Zypherus’s Application was dismissed. Zypherus successfully appealed the Master’s Decision before Justice Thomas. The Trustee then appealed Justice Thomas’s Decision, and the Court of Appeal dismissed the Trustee’s Appeal. Following the Trustee’s unsuccessful Appeal, Zypherus returned to the Court of Queen’s Bench and applied for Costs before Justice Thomas.

The parties agreed that by operation of the Alberta Law of Property Act, RSA 2000 c L-7 (“LPA”), Costs contemplated in the impugned mortgage could not be awarded. The Court therefore considered whether Costs could be awarded in the normal course of proceedings pursuant to the Rules. Justice Thomas considered the language of Rules 10.28 and 10.29, emphasizing that a “party” under Rule 10.28 includes a person participating in an Application, who may be subject to a Costs award. Further, under Rule 10.29, an unsuccessful party must pay Costs, but subject to “an enactment governing who is to pay costs in particular circumstances”.

The Court considered whether the relevant section in the LPA was an enactment that governs who is to pay Costs under Rule 10.29. The Court held that in enacting the LPA, the Alberta legislature did not intend to deprive Courts of their discretion to award Costs in the normal course. The LPA can prohibit a separate Action on Costs, but does not govern which Party is to pay Costs in an existing Action. Therefore, the LPA is not the type of enactment contemplated by Rule 10.29.

Justice Thomas then considered whether the Trustee is a party against whom Costs may be awarded under Rule 10.28. His Lordship stated that the Trustee is the owner at law of the property in question, and therefore has all of the rights and defences of an owner, and is subject to the same risks and liabilities. This includes liability for Costs. Therefore, Rule 10.28 applied to the Trustee.

Finally, Thomas J. considered whether Costs should be awarded. Thomas J. noted that there were no special circumstance in this case that would warrant solicitor-client Costs. Therefore, only party-party Costs were considered. Justice Thomas stated that, in granting Costs awards, Courts in Alberta must do so judicially, taking into consideration the principles set out by Rules 10.31 and 10.33. Citing prior authority, the Court stated that Costs serve as a tool to discourage litigation, and that a Trustee in Bankruptcy should not be immune from potential Costs implications and consequences. In the circumstances, Thomas J. awarded Costs against the Trustee.

View CanLII Details