B & R Development Corporation Ltd. v. Trail South Development Inc., 2011 ABQB 706

Court of Queen ’ s Bench of Alberta Citation: B & R Development Corporation Ltd. v. Trail South Development Inc., 2011 ABQB 706 Date: 20111118 Docket: 0203 07239, 0003 10282 Registry: Edmonton Between: 0203 07239 B & R Development Corporation Ltd., operating under the trade name of Abbey Lane Homes Plaintiff - and - Trail South Developments Inc. Defendant And Between: 0003 10282 410675 Alberta Ltd. Plaintiff - and - Trail South Development Inc. Defendant _______________________________________________________ Reasons for Judgment on Costs of the Honourable Madam Justice L.J. Smith _______________________________________________________

Summary [1] These reasons pertain to costs following a trial. [2] The Defendant succeeded in the litigation. The parties agree that the costs ought to be party-party costs including the amountfor second counsel, that Column 5 of

Schedule C of the Alberta Rules of Court is the appropriate column to be applied and that doublingafter the date of a formal offer is appropriate. [3] The parties depart on the question of whether the column amount ought to be multiplied, on whether there ought to beenhanced costs for written argument, on which party ought to be entitled to costs of an interim appeal, and whether there should be a setoff for the failure by the Defendant to prove a failure to mitigate. Law [4] Costs are discretionary. Pharand Ski Corporation v. Alberta (1991), (AB KB), 122 A.R. 395 (Alta.

QB). [5] Departure from the usual party-party costs is reserved for unusual cases. Dallin v. Montgomery 2010 ABQB 587, 498 A.R.287. [6] The usual party-party costs can be subject to several types of adjustment for various reasons with the ultimate question beingwhether the final total is reasonable. Multiples are the exception rather than the rule. Eaton v. HMS Financial Inc., 2010 ABQB 364,(2010) 486 A.R. 131; Ed Millar Sales & Rentals Ltd. v. Caterpillar Tractor Co. (1998), 1998 ABCA 118 , 216 A.R. 304, 61Alta. L.R. (3d) 256, (Alta. C.A.). [7] In appropriate circumstances costs can be distributed.

Sagacity Professional Corporation v. Buchanan Barry LLP, 2011ABQB 58; Viridian Inc. v. Dresser Canada Inc., 2001 ABQB 733. [8] Costs ought not to be oppressive. Smith v. Buller

(1875) L.R. 19 Eq 473. Circumstances [9] The dispute between the parties concerned the purchase and sale of commercial land. The Plaintiff, the intended purchaser ofthe land, alleged eight causes of action in two actions. The trial consumed almost 13 days of trial time. Thirteen witnesses testified, six ofwhom were expert witnesses. The case management judge directed opening briefs of law. I requested written argument. There weremany binders of exhibits.

Two binders of exhibits became the heart of the case in addition to the testimony from the lay witnesses. [10] The Plaintiff tried but failed to have the Defendant agree to facts. As a result the required exhibits expanded. The exhibitswere well organized.

[ 11 ] The action was serious for the parties but it otherwise carried no public interest component. Nor did it involve grave causes of action. The causes of action alleged breaches of contract, trust and good faith, waiver and estoppel, and collateral contract. There was a request to make an adverse inference. Read-ins were disputed. Both parties employed lead and second counsel. The action was not unduly complex. [ 12 ] The opening briefs of law provided a useful outline of the applicable law.

The written briefs of argument were very useful particularly in understanding counsels' view of how the law ought to be applied to the evidence. The tariff amount for written briefs is $5000. Counsel seeks $30,000 for each brief before doubling. [ 13 ] The dispute arose about 11 years before it came to trial. It had been previously set for trial in 2008. The Plaintiff requested an adjournment to amend its pleadings. The amendment was allowed. That decision was appealed. The Plaintiff was successful on the appeal. However, the cause of action brought forth by the amendment was not successful at trial.

The Court of Appeal left the costs of that appeal to the trial judge. [ 14 ] The penalty paid by the Plaintiffs for the adjournment was thrown away costs on a solicitor client basis. [ 15 ] The Defendant applied and succeeded in having discharged the Plaintiffs ’ caveat against the land.

Costs of the appeal of that motion are not part of the current claim. [ 16 ] The Plaintiff lost its action on all accounts; nevertheless, the action was worthy of litigation. [ 17 ] The Defendant defended the action partly by alleging near to full mitigation and, alternatively, by alleging the Plaintiff failed to mitigate its loss. The first mitigation defence was accepted as a basis for calculating damages in the event the decision on liability was deemed wrong by a higher court. [ 18 ] The Defendant's alternative argument was not assessed since its primary mitigation argument was found to be proven.

However, a great deal of evidence at trial and discovery involved the alternative argument on mitigation. The Plaintiff seeks the costs involved in resisting the alternative argument to be set off against the costs to be awarded to the Defendant. [ 19 ] There was no conduct by the Plaintiff which unnecessarily lengthened the trial. Rather, Plaintiffs' counsel were proactive, considerate and made efforts to streamline the pretrial and trial process as well as this dispute over costs. [ 20 ] The

Schedule of Costs was developed in 2000, eleven years prior to the trial. The Defendant requests that inflation be considered as justification for multiplying of the column amount. A web document was entered in argument to prove the yearly inflation in the Consumer Price Index is about two percent per year for a total change in relation to consumer goods of about 25 percent.

I am not persuaded that an inflation figure calculated for consumer goods is relevant to legal fees in law suits, and more particularly the tariff, given the unique considerations which apply to costs for legal disputes. [ 21 ] The Plaintiff sought 7.5 million dollars in its action. It received nothing.

Had it succeeded on liability the damages with the near to full mitigation found would have been between $200,000 and $300,000. [ 22 ] The quantum of an award assuming single Column 5 with doubling after the formal offer would be about $124,000 plus about $88,000 for the doubling for a total fee award of about $212,000 without the appeal. [ 23 ] The estimated fee for the appeal regardless which party becomes entitled to claim it is $15,000. [ 24 ] The estimated fee for the failed mitigation argument is about $69,000.

[ 25 ] I am aware that the disbursements for all of the experts are high. Findings [ 26 ] The tariff amount of $5,000 for the brief of written final argument is too low given the usefulness of it. I set the amount for that item before doubling at $15,000. [ 27 ] There shall be no adjustment to the tariff amount for the opening brief. Its purpose was limited and the tariff amount is adequate compensation. [ 28 ] The Appeal was procedural. It sought the right to amend pleadings.

In many circumstances such a right is not opposed; yet here, the amendment gave birth to a new cause of action years after the law suit had been initiated and on the eve of trial. The Plaintiff was seeking a new substantive way to win its law suit. It ultimately failed. [ 29 ] In my view, the Plaintiff had the right to seek to amend to ensure a fair trial on any law which could be applied to the merits. The troublesome aspect of the application to amend was its timing. Despite being paid appropriately for the costs related to the adjournment of the trial, the Defendant unsuccessfully opposed the amendment.

In my view, an appropriate resolution for these costs is to deprive the Plaintiff of the costs it would otherwise be entitled to receive. [ 30 ] The Defendant proved mitigation. Having found that fact the Court did not assess the alternative theory of mitigation. This is not a failure to prove and ought not to entitle the Plaintiff to a set off.

However, the large amount of time and expense devoted to the alternative argument is relevant to the exercise of discretion overall. [ 31 ] I am not inclined to grant a multiple based upon inflation alone in the absence of evidence on whether the tariff is now failing to meet its objectives. Similarly, the quantum of the claim ought not to justify a multiple in these circumstances. In my view, there is no basis on which to depart from the usual party-party award under Column 5 including second counsel fees and doubling after the formal offer was made with the increase for the written final argument.

Conclusion [ 32 ] In all of the circumstances a fair award of costs is a single set under Column 5, with the written final argument assessed at $15,000 instead of $5,000, with doubling after the relevant date. Added will be the disbursements and GST. This award shall be taxed. Heard on the 14 th day of November, 2011. Dated at the City of Edmonton, Alberta this 18 th day of November, 2011.

L.J. Smith J.C.Q.B.A. Appearances: David T. Parkatti & Harvey Hait, Cleall Barristers & Solicitors for the Plaintiff Scott J. Hammel, Miller Thomson LLP for the Defendant