Lee v. Yeung, 2012 ABQB 102

Court of Queen ’ s Bench of Alberta Citation: Lee v.

Yeung, 2012 ABQB 102 Date: 20120215 Docket: 1103 10936 Registry: Edmonton Between: Michael Sai Cheung Lee, David Lee, Guo Chao Sun, James Fung, Phan Tram, Annie Pan, Chuck Kwan and Andy Wong Applicants - and - Florence Yeung , Andrew Wang, Hubert Hsu, John Chu, Chen Yuan Liu, Yang Gao, John Stinson, Edmonton Poon, Wah Tso, Vinh Tran, Lin Wah Chu and Bob Ning Lee Respondents Corrected judgment: A corrigendum was issued on February 23, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum on Costs of the Honourable Mr.

Justice Eric F. Macklin _______________________________________________________ [ 1 ] The Applicants seek costs for their successful application for a declaration that the election of the Executive Board of the Photographic Arts Society of Alberta held on November 21, 2010 was invalid and for an Order setting aside the results. My Reasons for Judgment can be found in Lee v. Yeung , 2012 ABQB 40 . [ 2 ] The Applicant Lee has filed an affidavit and the Respondent Yeung has filed two affidavits in relation to this application.

I have reviewed the affidavits and they are contradictory in places and in others try to address matters already determined in my Reasons for Judgment. Accordingly, I find them of no assistance in considering the issue of costs.

[ 3 ] Rule 1(4) under

Schedule C of the Rules of Court provides that when a remedy is given in a judgment other than the payment of money, costs must be assessed according to Column 1 of the tariff. In my judgment, I issued a declaration that the election of November 21, 2010 was invalid and granted an Order setting aside its results. This would ordinarily entitle the Applicants to single Column 1 costs. [ 4 ] The Applicants, however, seek solicitor-client costs or, alternatively, costs set at some increased level from Column 1 of

Schedule C. They rely on Rules 10.33(1) and 10.33(2) of the Rules of Court and argue that the conduct of the Respondents, particularly the Respondent Yeung, as outlined in my Reasons for Judgment, justify an increased award of costs. The Applicants rely on my description of the Respondents ’ conduct as improper, unfair and illegal in carrying out an election on November 21, 2010 and my findings that the Respondents ’ actions were contrary to the bylaws of PASA, contrary to the rules of natural justice and were

an act of mala fides . The actions resulting in these findings all occurred before the filing by the Applicants of the Originating Application. [ 5 ] The Respondents argue that it is only conduct that occurs during the course of litigation that can result in an award of solicitor-client costs and then, only if the conduct of the liable party has been shown to be reprehensible, scandalous or outrageous. Misconduct prior to the litigation is properly the subject of punitive damages and none were sought in this case.

That is, solicitor-client costs relate to the conduct of the lawsuit and not conduct of the party before the lawsuit (see Polar Ice Express Inc. v Arctic Glacier Inc. 2009 ABCA 20 at para 21 ). [ 6 ] The position of the Respondents is correct. The one wrinkle in this case, however, is that the parties had agreed to attend an arbitration to resolve the matters in dispute between them. The 1987 bylaws of PASA contained an arbitration clause and the parties were negotiating the terms of the arbitration.

On March 3, 2011, the parties agreed to meet with their respective counsel to discuss a resolution of the issues and the possible appointment of an arbitrator in accordance with the 1987 bylaws. However, on March 15, 2011, approximately four months after the impugned election, the Respondent Yeung caused a set of bylaws passed in 1993 which, for unknown reasons, had never been duly registered with Corporate Registry, to then be filed, thereby superseding the 1987 bylaws. The 1993 bylaws did not contain an arbitration clause.

After the Applicants filed their Originating Application on July 6, 2011, the Respondent Yeung took the position that the six-month limitation period for filing an Originating Application had passed and the action was barred. [ 7 ] I am not satisfied that the filing of the 1993 bylaws by Ms. Yeung was a reprehensible, scandalous or egregious act. The fact is that they had been passed in 1993 and were never properly registered.

While she may have sought a strategic advantage by doing so when she did, they should have been filed years earlier and had they been, the Applicants would have been in the same position they ultimately found themselves in. The issue of the limitation period did not cause any inordinate delay or additional steps in the litigation itself. [ 8 ] The Applicants are entitled to costs in accordance with Column 1 of

Schedule C of the Rules of Court. However, two of the Respondents will not be responsible for payment of any costs. John Chu advised the Court that he was not present on November 21, 2010 for the impugned election and only found out about it on his subsequent return to Edmonton. On discovering what occurred, he resigned. John Stinson advised the Court that he had only seen a copy of the registered bylaws after the November election and he too resigned from the Executive Committee. I am satisfied that Mr. Chu and Mr.

Stinson were unaware of what had occurred and immediately upon discovering the impropriety of the election and its results, they distanced themselves from the actions of the other Respondents by resigning from the Executive Board. Accordingly, they will not be responsible for the payment of any costs. [ 9 ] The Applicants are awarded costs in accordance with Column 1 of

Schedule C of the Rules of Court. With the exception of John Stinson and John Chu, the Respondents are responsible to pay those costs to the Applicants. Heard on the 3 rd day of February 2012. Additional written submissions provided on the 10 th day of February 2012. Dated at the City of Edmonton, Alberta this 15 th day of February 2012.

Eric F. Macklin J.C.Q.B.A. Appearances: Omolara Oladipo Fraser Milner Casgrain LLP for the Applicants Philip G. Lister, Q.C. Philip G. Lister Professional Corporation for the Respondents _______________________________________________________ Corrigendum of the Memorandum on Costs of The Honourable Mr. Justice Eric F. Macklin _______________________________________________________ The name “ Lin Wah Chu ” on Page 3 has been changed to “ John Chu ” .