Lavallee v. Siksika Nation, 2011 ABQB 282

Court of Queen ’ s Bench of Alberta Citation: Lavallee v. Siksika Nation, 2011 ABQB 282 Date: 20110426 Docket: 0601 11137 Registry: Calgary Between: Melvyn Lavallee Plaintiff - and - Siksika Nation As Represented by Its Chief and Council and Siksika Nation Tribal Administration and Siksika Health Services and Melvyn Tyler White Defendants _______________________________________________________ Memorandum of Costs of the Honourable Mr. Justice P.J. McIntyre _______________________________________________________ I. Introduction [ 1 ] This six day trial resulted in a written decision, Lavallee v.

Siksika Nation, 2011 ABQB 49 . I awarded the Plaintiff $92,450 damages against the first-named Defendants for reasonable notice. I dismissed the claims against Mr. White. [ 2 ] The parties were unable to agree on costs. They have given me written submissions. The Defendants have raised the following issues:

1. Does the Defendants’ degree of success defending the action warrant the them court costs? 2. Was the trial of this action needlessly lengthened and made more complex by the Plaintiff’s strategy of persisting with theallegations of defamation, unlawful interference, or breach of representation or in persisting in the claim for “Wallace” damages? 3. Should I grant a separate costs award to Mr. White? 4. Should the costs award reflect the Plaintiff’s success on each issue? 5. Should the Plaintiff receive second counsel fees? 6.

Should there be an adjustment for inflation? [3] The Plaintiff takes the position that party-party costs should be awarded to the Plaintiff for the entire litigation and that nocosts award should be made against the Plaintiff. The Plaintiff has asked for second counsel fees. II. Analysis 1. Does the Defendants’ degree of success defending the action warrant awarding them court costs? [4] The Defendants say the result of the action and their degree of success in defending the Plaintiff’s varied allegations warrantthe exercise of the court’s discretion to award them court costs. They point out that Mr.

White was 100% successful in defending theclaim against him. The Siksika Nation defendants were successful in defending five of the six causes of action against them. Conversely,the Plaintiff met with a substantial lack of success in achieving his litigation objectives. The Defendants argue the damage award onlyrepresented 6.6% of the total amount claimed. [5] Counsel for the Plaintiff says that the Plaintiff did not lead evidence on unsuccessful issues. The length of the trial wascorrespondingly unaffected. Therefore, lack of success on such issues should not be considered in awarding costs: Dix v.

Canada(Attorney General) 2002 ABQB 768, 315 A.R. 139. The general rule is that costs should follow the event. [6] The general rule is that costs are awarded on a party and party basis against the unsuccessful litigant: Jackson v. TrimacIndustries Ltd. (1993), (AB KB), 138 A.R. 161, varied on other grounds, (1994), 1994 ABCA 199 , 155 A.R.42 (C.A.). Costs are in the discretion of the court: Pharand v. Ski Corp. v. Alberta (1991), (AB KB), 122 A.R. 395(Q.B.). However, the use of this discretion “requires extreme caution and should only occur in rare and exceptional cases: Mobil OilCanada Ltd. v.

Canadian Superior Oil Ltd. (1979), (AB KB), 21 A.R. 111 (Q.B.). [7] Rule 10.33 of the Alberta Rules of Court, A.R. 124/2010 sets out considerations in making a costs award: Court considerations in making costs award 10.33(1) In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party;

(

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarilyseparated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct. [8] The Defendants cited the case of Nathu v. Imbrooke Properties Ltd. (1992), 1992 ABCA 242 , 131 A.R. 186 (C.A.)at para. 4: While costs routinely follow the event, all costs are not dictated by the bottom line of recovery. Sensibly the expense of litigatingunsuccessful issues may not be recoverable, or may even be awarded to the successful opponent, notwithstanding the fact that theplaintiff succeeds on other issues. It must and does lie within the court’s discretion: the Court of Queen’s Bench Act, R.S.A. 1980, c. C-29, s. 19; R. 601 Rules of Court.

Within the case law, the award of selective costs was recognized long ago as 1893; see Forster v. Farquhar, [1893] 1 Q.B. 564 (C.A.). Itwas recently affirmed in Herman v. Miller, (SK KB), [1988] 2 W.W.R. 72, 64 Sask R. 71 (Q.B.), where Gerein J.ruled [p.75 W.W.R.]: In short, the plaintiff put forth a serious and very substantial claim which is notoriously difficult. [9] The Defendants also cited Cerquieria v. Ontario, 2010 ONSC 3954 at para. 56: Although the defendants were not successful on all aspects of their motions their attack on the pleading was justified and wassubstantially successful.

I am satisfied that the costs claimed are fair and very reasonable. [10] In Dix, it was the Defendant’s position that the Plaintiff was awarded only 5% of the total amount claimed and succeededagainst only 15% of the Federal Defendants sued. It was the Defendants’ positions that the Plaintiff’s claim for negligent investigation,which was dismissed, consumed much discovery and trial time. Further, the Plaintiff led no direct evidence respecting a conspiracy. Thecourt distinguished Nathu and held that the evidence on the claim for negligent investigation was the same as the evidence for maliciousprosecution.

Many of the witnesses would have testified in any event. [11] In my view, costs should not be awarded to the Defendants based on incomplete success of the Plaintiff. Plaintiffs are rarelyawarded everything asked for in a Statement of Claim. There was no offer to settle made before trial. Here the fact that the Plaintiff was

not successful on all causes of action is not a ground for departing from the general rule that costs should follow the event. 2. Was the trial of this action needlessly lengthened and made more complex by the Plaintiff’s strategy of persisting with theallegations of defamation, unlawful interference or breach of representation or in persisting in the claim for “Wallace” damages? [12] The Defendants argue that the Plaintiff continued to maintain his allegations of defamation, breach of representation andunlawful interference with contractual relations.

Further, he maintained the claim for “Wallace” damages throughout the trial. TheDefendants argue that they wasted time and effort both before and at trial in defending these allegations. [13] The Defendants argue that although the Plaintiff did not lead evidence in chief respecting defamation or unlawful interference,evidence was tendered respecting the breach of representation.

The Defendants submit that the trial was extended by several days toreceive the testimony of several witnesses speaking in whole or in part to these issues; conducting a voir dire on the admissibility ofcertain Health Canada Records; and receiving submissions by the parties regarding the admissibility of those records. [14] Further the Defendants say the law has been clear since Keays v. Honda Canada Inc., 2008 SCC 39 , [2008] 2 S.C.R.362 that damages for bad faith are only recoverable if an employee proves that the manner of dismissal proved actual mental distress.

Asa result the trial of this action was needlessly lengthened and made more complex. [15] On the claim for Wallace damages, unlawful interference and breach of representation, I find that much of the evidence wasoverlapping and did not lengthen the trial unnecessarily. A portion of proving Wallace damages is the manner of dismissal which wasrelevant to this case. [16] On the defamation claim, the Plaintiff alleged in the Statement of Claim that words spoken by Mr. White “falsely andmaliciously portray Dr.

Lavallee as a doctor who does not act professionally in his practice of medicine.” The Plaintiff formallywithdrew his claim for defamation on day five of the trial. [17] The Plaintiff argues that it was clear in the pre-trial brief that the claim of defamation was no longer in issue. I disagree. In myview, the Plaintiff was required to formally withdraw the claim for defamation. As this was not done, the Defendants were entitled tomount a defence against this claim. [18] I agree that the defamation allegation did lengthen the trial.

Considering the Defendant’s unsuccessful proffer of evidence onthis topic, for which it should not receive costs, I would reduce the Plaintiff’s costs by one day of trial time. This claim should have beenwithdrawn before trial. 3. Should I grant a separate costs award to Mr. White? [19] The Defendants seek a separate costs’ award for Mr. White. The Defendants submit that Mr. White was personally named inthese proceedings and was in personal jeopardy of a $500,000 judgment throughout the history of this dispute. Mr.

White was 100%successful in defending the claim against him. [20] The Defendants acknowledge that co-defendants represented by the same counsel are normally restricted to one of set of costs.

They note that Orkin in The Law of Costs (2nd ed. 16th rel. 2001) at 209.4 points out there are exceptions to this general principle.Those exceptions include when there are “serious charges made which reflect on the character of the defendants, such as libel,conspiracy and matters of fraud and wrongdoing.” [21] Further, the Defendants point out that the Rules of Court states that the Court may take into account “any other matter relatedto the question of reasonable and proper costs that the Court considers appropriate (Rule 10.33(1)(g)).

[ 22 ] The Plaintiffs say that Mr. White is not entitled to recover costs in this action for two reasons, first because the evidence given by Mr. White would have been required in any event given his involvement in the matter in his capacity as director of health services for the defendant Siksika Nation, and second because he joined with his co-defendants in a general defense of the Plaintiff’s claim. [ 23 ] In Dix , Ritter J. cited Beenham v. Rigel Oil & Gas Ltd., 1998 ABQB 1100 , 240 A.R. 122 at para. 35 where the court noted that there was no indication of any significant costs incurred by the two defendants.

Further, there was a common defence. [ 24 ] In Baiden v. Vancouver Police Department, 2010 BCCA 375 , 9 B.C.L.R. (5 th ) 257 the plaintiff brought action against individual police officers as well as their employer, the City of Vancouver, for battery committed by the officers. The claim was dismissed against the police officers. The Court of Appeal observed that having made the tactical decision to join the police officers as defendants it was not unreasonable that the plaintiff should bear the consequences through an award of costs and disbursements.

However, in Baiden the Court of Appeal stated that it was a strategic decision to sue the police defendants individually even though counsel knew that he had no evidence of standard of care and the likelihood of establishing gross negligence on their part was unlikely. [ 25 ] In West Care Pharmacy Ltd. v. SwiftRx Ltd., 2010 ABQB 650 the successful defendants sought costs from the plaintiff. I denied the request because the relationship among the defendants reasonably required suit against all. The reasonableness of naming a party individually was a factor in denying costs to the successful defendants.

I stated at para. 7: There is no evidence that because naming all Defendants, the successful Defendants incurred costs that would have not been incurred, in any event, by the unsuccessful Defendant. The Defendants shared a common defence and the same counsel. The successful Defendants’ costs are not unique or discrete from those of the unsuccessful Defendant. The trial was not materially prolonged by adding relevant defendants. It was reasonable that all who might be responsible for the Plaintiff’s claims be named. [ 26 ] This case can be distinguished from Baiden .

There the judge made it clear that counsel for the Plaintiff knew that it was extremely unlikely that he would be successful against the additional defendants that were named and the judge found that they were named for a strategic reason. This is not the case here. In my view, it was reasonable to sue Mr. White. The Defendants shared a common defence and they shared the same counsel. The trial was not prolonged as Mr. White would have testified to the same issues had he not been named. Additional costs caused by the defamation have been reduced by one day, as noted above. 4.

Should the costs award reflect the Plaintiff’s success on each issue? [ 27 ] The Defendants argue that due to the Plaintiff’s limited success, any costs awarded in his favour should reflect his degree of success on each of the principal issues which he placed before this Court. [ 28 ] For the same reasons as discussed above I decline to further reduce the Plaintiff’s Bill of Costs with the exception of the reduction for the defamation claim which I have already reduced the Plaintiff’s entitlement to costs by one day of trial time. 5. Second Counsel Fees [ 29 ] The Plaintiff seeks second counsel fees.

The Plaintiff submits that the issues at trial were of great personal importance to the Plaintiff, the value of the case was not insignificant, that a variety of legal issues were argued and counsel for the Defendant also retained second counsel. The second counsel (briefly) addressed the court. [ 30 ] The Defendant did not make any submissions on this point. The relevant factors to be considered for second counsel fees appear in Alberta Production Corp. v.

Canada Lands Co. , 2004 ABCA 25 , 346 A.R. 180 at para. 2 : A number of factors have been recognized as relevant to the allowance of a fee for second counsel, including the general importance of the issue or issues to the parties or to others, the value of the case, the complexity and scope of the issues, the size of the trial record, the

manner in which opposing counsel conducts the case and whether second counsel addressed the Court: Kassam v. Dragish, (1991) (AB KB), 123 A.R. 161, 49 C.P.C. (2d) 174 (Q.B.) ; Murray v. Bitango (1996), 1996 ABCA 182 , 184 A.R. 68;122 WA.C. 68; (AB CA), 40 Alta. L.R. (3d) 110 (C.A.); Mackie v. Wolfe (1996), 1996 ABCA 255 , 184A.R. 339; 112 W.A.C. 339; 41 Alta. L.R. (3d) 28 (C.A.). [31] Second counsel must assist in the preparation leading up to presentation of the matter and such involvement must be justifiedby the nature of the case: Davidson v.

Patten, 2005 ABQB 521, 381 A.R. 6, var'd on other grounds 2008 ABCA 65 at para. 19. InKassam, at para. 14, Veit J. also suggested that courts should err, if at all, on the side of generosity by allowing second counsel feessince party and party costs provide a check and balance by reimbursing only a fraction of the cost of second counsel at trial. [32] The Plaintiff’s claim concerned an action for wrongful dismissal which required the consideration of issues surroundingwhether the Plaintiff was dismissed for cause, the appropriate award for damages in lieu of reasonable notice of termination.

The trialwas heard over 6 days of trial time, cumulatively. [33] The Plaintiff is claiming $4000 for second counsel fees. This was reasonable given the complexity of the issues. I allow theclaim for second counsel fees. 6. Adjustment for Inflation [34] The Plaintiff submits that the costs should be adjusted for inflation. In Blair v. Doerksen, 2009 ABQB 184, 470 A.R. 310,Justice Horner made the following comments with respect to costs set out in

Schedule “C” at para. 46: I find that it is in order here for the costs awarded to the Plaintiff on the basis of

Schedule C to be multiplied by an inflationary factor of1.33.

Schedule C was established in 1998 and I find that for costs awarded to be meaningful it must be adjusted for inflation from time totime on the proper evidence and on the fee portion of the Bill of Costs only. [35] In that case, the Plaintiff had put forward evidence from an economist on the appropriate inflation rate. There is no suchevidence here. I decline to make an inflationary adjustment.

Judgment Roll [36] I agree with the Defendants’ submissions on the points regarding the Judgment Roll. [37] The Defendants do not dispute the Plaintiff’s entitlement to pre-judgment interest, but submit that the interest should becalculated from the midpoint of the notice period rather than the date of the termination. [38] In Christianson v. North Hill News Inc. (1993) 1993 ABCA 232 , 13 Alta.

L.R. (3d) 78 (C.A.), the Alberta Court ofAppeal determined that pre-judgment interest should be calculated from the midpoint of the notice period rather that the date of thetermination. [39] Counsel for the Plaintiff appears to agree with this point. The Plaintiff mentions a Nova Scotia Court of Appeal which goesthe other way, however there is no cite provided. Further, the Plaintiff concedes the Alberta Court of Appeal decision is stronger.

Pre-judgment interest should be calculated from the mid-point between the termination date and the date of judgment. [40] I agree with the Defendants that the Judgment Roll should not include reasons or procedural history. On the remaining threepoints in dispute regarding the Judgment Roll, I agree with the Defendants:

2. The Judgement Roll must specify which Defendants are responsible for the award. 3. The Judgment Roll should reflect the multiplicity of claims advanced by the Plaintiff. 4. The Judgment Roll should specify the scale and responsible party for any costs which the Court deems appropriate. Disputed items in the Plaintiff’s Bill of Costs [ 41 ] I agree with the Defendants’ submissions about the Affidavit of Records and written argument. The Plaintiff may claim once for the Affidavit of Records and is granted one set of costs for the written submissions. Heard between June14 th and 21 st , 2010.

Dated at the City of Calgary, Alberta this 26 th day of April, 2011. P.J. McIntyre J.C.Q.B.A. Appearances: Frank Mason Mason Silver for the Plaintiff Leonard Polsky/Sarah M. Burton MacPherson Leslie & Tyerman LLP for the Defendants