Botan (Botan Law Office) v. St. Amand, 2012 ABQB 260

Court of Queen ’ s Bench of Alberta Citation: Botan (Botan Law Office) v. St. Amand, 2012 ABQB 260 Date: 20120420 Docket: 1003 19856 Registry: Edmonton Between: Allan Mitchell Glen Botan Operating As Botan Law Office Plaintiff - and - Brian Gerrard St. Amand Defendant _______________________________________________________ Memorandum of Decision Regarding Costs of the Honourable Mr. Justice Peter Michalyshyn _______________________________________________________ Introduction [ 1 ] The Defendant Brian St.

Amand seeks costs against his former lawyer Allan Botan on account of Botan ’ s marginally successful action for payment of legal fees. The decision on the merits is at 2011 ABQB 774 . Botan sued St. Amand, his former client, for $106,250 plus interest and solicitor client costs. Botan alleged he was owed $58,633.33 arising from a 25% contingent fee in an agreement between the parties. He also claimed punitive and aggravated damages for fraud and similar allegations. [ 2 ] St. Amand acknowledged the agreement, but said he fired Botan before he was obliged under the agreement to pay a 25% fee.

[ 3 ] Whether Botan was fired and the agreement terminated at a certain point in time was the central issue. Its resolution hinged on a credibility assessment between the parties. St. Amand was believed. [ 4 ] Once terminated, the agreement provided Botan ’ s fee would be set on an hourly basis. That fee was set at $5,250 in the decision on the merits. The fraud and related allegations were rejected as unproven. [ 5 ] Days before Botan commenced the within Statement of Claim, St. Amand offered to pay $10,000 in legal fees to resolve the matter. Issues [ 6 ] The costs issues are as follows: (

a) What costs is Botan entitled to owing to his partial success in the action? (

b) Is St. Amand entitled to full indemnity costs owing to unproven allegations of fraud and the like? (

c) What is the significance of Botan ’ s status as a lawyer and officer of the court? (

d) What is the effect of St. Amand ’ s informal offer? [ 7 ] Following argument, I had raised as a potential issue what costs Botan may be entitled to as a a self-represented litigant. I am grateful to counsel for their submissions on this point. I have decided however that it is not an issue I need to address to reach my decision. [ 8 ] I will then deal with the remaining issues in turn. At the end of the day I will consider them as a whole and exercise my discretion as to costs judicially to assess costs that are appropriate in all of the circumstances.

Positions of the parties [ 9 ] Botan, now represented by counsel, argues no costs should be payable to either party. He argues he was successful in recovering $5,250 in fees, plus interest. As noted, he sued for $106,250 plus interest plus solicitor client costs. He recovered less than 5% of his claim. [ 10 ] Botan nevertheless argues he won the ‘ cause ’ and on the face of it is entitled to costs. Those costs would be at Column 1 of

Schedule C of the Rules of Court . They would then be reduced by 25% as Botan ’ s recovery was within the limit of the Civil Division of the Provincial Court of Alberta: Rule 10.42. [ 11 ] That said, Botan seeks no costs. He proposes the parties bear their own costs. He offers to trade his entitlement to costs against what St. Amand may be owed in costs, including costs for unproven allegations of fraud. [ 12 ] For his part St. Amand seeks to deny Botan any costs, and to collect full indemnity, solicitor-client costs of just shy of $85,000 inclusive.

[ 13 ] St. Amand argues he was substantially successful in the action despite the fact Botan recovered a small judgment. He says ‘ substantial success ’ is a factor in his costs entitlement. [ 14 ] St. Amand argues another factor going to his costs entitlement is a settlement offer made to Botan on November 14, 2010. Botan argues the offer is irrelevant. [ 15 ] If solicitor client costs or other enhanced costs are not awarded, St. Amand argues he is entitled at least to costs ‘ in the cause ’ of $20,013 including disbursements and GST. That figure represents costs on Column 2 of

Schedule C. That

schedule would apply however only if St. Amand can be said to have won the cause on the basis of substantial success. [ 16 ] The accounts as between St. Amand and his lawyer have not been taxed. On their face, Botan objects that the overall fee of some $85,000 is too high. He says the accounts are disproportionate to the size of the claim, and to the litigation up to and including a one day trial. [ 17 ] The parties agree however that I should decide what costs are owing at the end of the day. There is no stomach for further hearings or taxations.

Of course I will decide nothing about what fee is owed as between St. Amand and his lawyer. [ 18 ] St. Amand was awarded costs in any event of the cause on February 14, 2011. On June 9, 2011 he was awarded solicitor- client costs in any event of the cause. All of those costs in his favour were made payable at the end of the action. It is agreed the solicitor-client costs awarded June 9, 2011 are $2,160. The parties agree that any previous orders simply awarding costs in the cause require me to decide on what scale or basis those costs are payable. [ 19 ] The parties also agree St.

Amand is entitled to pre-judgment interest on a special damages scale on the $56,000 paid into Court on November 26, 2010. On February 8, 2012, with the consent of the parties, I ordered the sum of $51,750 plus any accrued interest be paid out to St. Amand. The remaining funds are in Court to protect Botan ’ s $5,250 recovery, plus any interest thereon, subject to further order in the nature of set-off in this costs hearing.

Background [ 20 ] In assessing costs overall I need to revisit certain key events in the litigation which have already attracted costs consequences, in some cases though leaving the scale of costs to be determined. [ 21 ] The Statement of Claim issued November 22, 2010. Days earlier St. Amand made the following offer in a letter dated November 14, 2010: Dear Mr. Botan, You have yet to send me a bill for your hours worked on my claim and out-of-pocket expenses. I will offer you a total of $10,000, no more no less, for your work on my claim. This offer will expire November 26, 2010.

I will pay this to you once the funds come in from the settlement and if you accept this offer. [ 22 ] On November 26, 2010 - ironically the same day St. Amand ’ s offer expired - Botan appeared before Germain J. to apply for

an order compelling St. Amand to pay $56,000 into court as a form of pre-judgment remedy. St. Amand also appeared but was not yet represented by counsel. He had only just been served with the Statement of Claim. While he continued to deny liability to Botan, St. Amand agreed to pay funds into court. [ 23 ] Germain J. ’ s order paying funds into court was made “ without prejudice ” to a further application to be heard February 4, 2011 to determine Botan ’ s longer-term entitlement to have the funds stay in court pending the substantive outcome of the claim.

The order was characterized as an emergency, temporary order. Germain J. took pains to ensure Botan agreed with this characterization. A review of the transcript of the proceedings on November 26, 2010 leaves no doubt Botan agreed: THE COURT: $56,000 will be paid into court by Mr. St. Amand on a without prejudice basis ... ST. AMAND: Thank you. THE COURT: And then the matter is adjourned to what day for the hearing of the merits on whether there should be any kind of injunction or not, we are still going to have a hearing on the merits, right? MR. BOTAN: Well, if I ’ ve got the order I mean ...

THE COURT: No, you have got the order until the hearing... MR. BOTAN: Yes ... THE COURT: This is an emergency temporary order. [St. Amand] may show that you are not entitled to it. That is without prejudice to your claim, right? ” MR. BOTAN: Right, right I understand, I understand. [ 24 ] By any measure the order, on the evidence, was an extraordinary one. It is fair to say it was given on the basis of Botan ’ s unsworn representations, as an officer of the court, that he had a valid claim against St. Amand for unpaid fees, and that he would not touch the funds until further order.

As will be seen in what follows, for reasons no one could reasonably anticipate, the order spawned a series of events which in the end resulted in much legal work and expense by St. Amand for which he now seeks reimbursement. [ 25 ] Not long after the November 26, 2010 hearing St. Amand retained counsel. [ 26 ] Before that however Botan noted St. Amand in default on December 14, 2010. On the same day, Botan obtained Default Judgment in the sum of $61,314.73. Again on the same day he appeared before Eidsvik J. ex parte in morning Chambers. A transcript of Botan ’ s application reveals as follows: MR.

BOTAN: By way of background, my Lady, the Plaintiff, Botan Law Office, has sued Brian Gerrard St. Amand for fees. We had settled a case for him. He received the cheque personally for over $300,000, and refused to pay his fees. We commenced an action against him. We got an Order by Justice Germain for the payment out of Court for $56,000 as a portion of the fees. Default Judgment are enacted against Mr. St. Amand and I am here to get an Order to have the funds payable to the firm. ” (emphasis added) [ 27 ] The order was granted.

Botan walked away from the law courts on December 14, 2010 with a $56,000 cheque made payable to him unconditionally.

[ 28 ] Before moving on, it must be said that my own review of the digital recording of the appearance of December 14, 2010 leaves me in doubt whether Botan said “ . . .payment out of court ” . The recording is hard to make out. It is possible Botan said something other than payment “ out of ” court. It is not possible to be certain just what he said. [ 29 ] That noted, there is no denying Botan failed to say anything to Eidsvik J. regarding the without prejudice nature of November 26, 2011 order.

There is no denying he failed to disclose his own agreement that the order was subject to a further hearing, on February 4, 2011, to revisit his entitlement to the funds as security. [ 30 ] The parties next appeared before Germain J. on February 14, 2011. By then St. Amand was represented by counsel. St. Amand took exception to Botan obtaining the order of Eidsvik J. paying funds out of court. Amongst other things, it was noted: (

a) the application before Eidsvik J. was made without notice and as such obliged Botan strictly to make full and frank disclosure to the court; (

b) Botan failed to inform Eidsvik J. the initial order of Germain J. was made on a without prejudice basis, pending the February 4, 2011 appearance; and (

c) Botan breached Rule 10.22 of the Alberta Rules of Court which provides that an action brought for payment on a lawyer ’ s charges may not go to Default Judgment without the court ’ s permission. [ 31 ] At the February 14, 2011 appearance Germain J. was critical of Botan ’ s conduct around obtaining judgment against St. Amand, then appearing before Eidsvik J. He referred to the “ high fiduciary duty to the Court ” that accompanies such an ex parte application.

He noted the high standard of professional and ethical conduct required of lawyers, a standard enforced not only by the self- governing law societies but also by the courts which retain a supervisory jurisdiction over lawyers, for example the Rule 10.22 requirement “ ensuring that no lawyer will take a legal judgment for fees against a client without a frank and clear review of that judgment by the Courts. ” [ 32 ] Germain J. found that first by obtaining Default Judgment, then the order of Eidsvik J., Botan had . . .violated the spirit and intent of the order that I made directing the monies be paid into Court and setting up the date of February 4, 2011 for a hearing.

Not on the merit of the judgment, but hearing on the merit of whether Mr. Botan, as a practising lawyer, was entitled to security for costs. [ 33 ] On February 14, 2011 Germain J. ordered that Botan return the $56,000 to court. Botan said he was unable immediately to pay the funds back. Over St. Amand ’ s objections he was given 75 days, until May 4, 2011, to do so. He undertook to the court that he would deposit “ as much funds as I can as I get them to make the $56,000. ” [ 34 ] Costs of the February 14, 2011 hearing were ordered in St. Amand ’ s favour, in any event of the cause.

They were ordered payable pursuant to the Rules of Court . [ 35 ] Before leaving the events of February 14, 2011, it must be noted that in an apparent attempt to explain his position before Eidsvik J., Botan stated St. Amand ’ s form of order filed after the initial November 26, 2010 hearing failed to specify that matters were adjourned to February 4, 2011. [ 36 ] Unfortunately, what Botan stated is not correct. St. Amand ’ s form of order specifically notes the February 4, 2011 adjournment date.

What ’ s more, Botan ’ s own form of order filed after the November 26, 2010 appearance also states, in the second paragraph, that “ .... this matter is adjourned to February 4, 2011 at 10:00 a.m. ” Both forms of order note the without prejudice nature of the decision.

[ 37 ] No funds were paid into court by the 75-day deadline of May 4, 2011. [ 38 ] Botan ’ s failure to pay funds into court necessitated his further application on May 10, 2011, coincidentally before Eidsvik J. A further 30 days was allowed for the payment in.

The order provided that no costs were payable. [ 39 ] Again, no funds were paid into court by the further 30-day deadline. [ 40 ] Botan ’ s repeated failure to pay funds into court necessitated a further application on June 9, 2011, this time before Germain J. [ 41 ] The June 9, 2011 order of Germain J. provided amongst other things that Botan “ shall renew his undertaking ” to the court to pay the sum of $56,000 into court; that his action was stayed pending the monies being paid into court; that he be required to pay 100% of the legal fees received from his practice save and except for payment to the Law Society of his membership fees and insurance premiums and payments required to be paid to his bank; that if the total sum owing was not paid into court by August 30, 2011 Botan would be penalized $50/day in any event of the cause until payment was made. [ 42 ] Costs were ordered payable to St.

Amand on a solicitor and his client basis payable in any event of the cause. [ 43 ] At the June 9, 2011 hearing Germain J. was critical of Botan ’ s many delays seeing the monies paid back into Court. He revisited what he called Botan ’ s “ unseemly haste ” to have funds paid out of Court by Eidsvik J. notwithstanding his own earlier order which in fact was made to protect Botan himself, on the basis of his representations he had a valid claim against St. Amand for unpaid fees.

Germain J. was again highly critical that Botan breached Rule 10.22 of the Alberta Rules of Court when obtaining his Default Judgment against St. Amand. Germain J. repeated that Botan ’ s conduct embarrassed the court and the legal profession. [ 44 ] Botan finally paid the funds back into Court on July 11, 2011. By then he had enjoyed the use of St.

Amand ’ s $56,000 for more than seven months . [ 45 ] I am mindful of the fact that in a further hearing of July 15, 2011, and upon being advised the funds were paid into court, Germain J. expressed his view to Botan that “ the page has now been completely turned on any issues that related to [the $56,000] and now it is back to square one. ” While I must take it into account, I do not conclude I am in any way bound by this earlier observation. [ 46 ] I should also note that the spectre of the involvement of the Law Society of Alberta was raised at the June 9, 2011 hearing as it was earlier on February 14, 2011, and indeed again before me at the hearing as to costs on February 8, 2012.

What may unfold elsewhere is of no consequence to what I must decide. As noted by Ritchot v. The Law Society , 2010 MCCA 13 at para. 48: The goals of the Society’s disciplinary process are non-punitive and are “intended to protect the public, maintain high professional standards, and preserve public confidence in the legal profession.” ...

See Gavin MacKenzie, Lawyers and Ethics: Professional Responsibility and Discipline , looseleaf (Toronto: Carswell, 2009) at para. 26.1. [ 47 ] The courts’ scrutiny on the other hand stems from a residual jurisdiction to regulate the affairs of lawyers as officers of the court whose conduct in legal proceedings may affect the administration of justice: Beacon Hill Service

(2000) Limited v. Esso Petroleum Canada , 2011 ABQB 138 (McLeod J.) The courts’ exercise of this jurisdiction may also be punitive, if not intentionally then in the result, in the sense courts are entitled to reduce lawyers’ accounts to their clients, and are entitled to award costs personally against lawyers for certain misconduct: Rule 10.50 Analysis

(

a) What costs is Botan entitled to owing to his partial success in the action? [48] As noted, at trial Botan was awarded $5,250, slightly less than 5% of the amount claimed. [49] In Mitrovic v. Mitrovic, 2007 ABQB 107 at para. 2, Veit J. set out the basic principle underlying the award of costs in anaction that: It is well established that substantial success rather than absolute success is the test for awarding costs. [50] The Court of Appeal Mahe v.

Boulianne, 2010 ABCA 74 recently dealt with and elaborated on the concept of substantialsuccess being the basis of costs entitlement: 6 The general rule is that the successful party on appeal is entitled to costs of the appeal. It is rare for any successful party on appeal tobe successful on each and every argument that is made. Where several forms of relief are requested on appeal, it is also relatively rare forthe successful party to succeed on each item of relief. Further, the parties often make arguments on points that the court does not have todeal with, because of the way the decision unfolds.

The general rule contemplates that the party who achieves substantial successon the appeal will receive costs, even if that party is not totally successful, nor successful on every issue or argument. Generallythe costs follow the ultimate result, and costs are not usually apportioned on an issue-by-issue basis, a claim-by-claim basis or on ahead-of-damages basis, although there is a discretion to do that in proper cases [citations omitted].

In this case the appellant wassubstantially successful by reducing the amount of the damage award by a significant amount, and he is entitled to costs of the appeal:Alberta Wheat Pool v. Northwest Pile Driving Ltd., 2000 BCCA 641, 146 B.C.A.C. 119, 2 C.P.C. (5th) 12 at paras. 18-9. [emphasisadded] See also Gainers Inc. v. Pocklington Holdings Ltd., (ABQB). [51] Granted, in the hearing before me St.

Amand failed to establish several of the more technical defences raised around theexecution of the contingency fee agreement, the agreements and the like. [52] Botan however failed on the central issue of when the agreement was terminated. What’s more, he failed because he wasdisbelieved. [53] Botan also did nothing to advance his cause or assist the court with regard to the alternative compensation offered by thecontingency fee agreement. He provided the court with no evidence or submissions as to how that alternative compensation could bemeasured. He even failed to respond to the submissions of counsel for St.

Amand as to how much time Botan in fact spent prosecutingSt. Amand’s claim. These observations are relevant to costs in that Botan’s limited success of $5,250 came about only on an analysis ofthe alternate compensation model set out in the agreement, and for no other reason. It is that which succeeded at the end of the day, yetBotan played very little

part in it. While perhaps not a windfall - the court is obliged to do its best to assess damages despite littleevidence - Botan’s recovery might fairly be described at best as a fortuitous outcome. [54] I am persuaded that here, on the factors already mentioned, a good case is made out to deny Botan costs in the cause on thebasis St. Amand had substantial success in the action. Is St. Amand entitled to full indemnity costs for all or part of the action? [55] In opposing a solicitor-client costs assessment for unproven allegations of fraud, Botan argues the court should considerfactors including that St.

Amand denied any liability in his Statement of Defence, and that little if any time was spent in trial litigatingthe impugned allegations.

[56] In response, St. Amand argues that despite the denial in his formal pleadings, he acknowledged throughout that he owedsomething to Botan for his services. St. Amand points to the $10,000 offer made on the eve of the litigation. On other, previousoccasions before the offer, St. Amand had indicated he was prepared to pay something, just not the 25% contingent fee. And as late as aJuly 15, 2011 attendance before Germain J. counsel for St. Amand stated he would recommend to St. Amand settlement in the range of$30,000.

Finally, the order setting the trial of the issues before me specifically contemplated that if all else failed Botan’s fee needed tobe quantified on a quantum meruit basis. [57] It is fair to say that little if any time was spent, in the one-day trial of the issues, focusing on the impugned allegations offraud and the like. As I noted in the course of hearing submissions on costs, to Botan’s credit the trial lacked the acrimony found in thepleadings and in Botan’s legal brief of argument. [58] That said, the pleadings and brief of argument cannot be minimized.

The pleadings contain the following allegations(emphasis added): (a) “ … the Defendant wrongfully plotted to devise a scheme to avoid paying the Plaintiffs fees…” (Para. 16) (b) “The Plaintiff states that all of these statements by the Defendant were clearly false and made by the Defendant in an attempt towrongly justify his breach of the Agreement and his breach of his fiduciary and trust duties, all of which were said and done to defraudthe Plaintiff in an effort to avoid paying his fees and disbursements pursuant to the Agreement.” (Para. 23) (c) “…the Defendant's wrongful conduct was contrived, malicious, outrageous and directed with the sole intent to harm the Plaintiffand benefit the Defendant at the Plaintiffs expense, and as such is deserving of aggravated and punitive damages. (Para. 31) [59] In his brief of argument Botan at the trial of the issues, he stated that: (

a) he would prove a portion of the Defendant’s evidence was “… a total fabrication …” (b) “It is clear the Defendant was lying …” (c) ”The Defendant’s conduct was reprehensible” (d) “The Defendant made up a story about talking to the Plaintiff on May 18, 2010" [60] The allegations of fraud and serious wrongdoing against St.

Amand continued up to and through the trial of the issues andwere never withdrawn. [61] Granted, an unsuccessful attempt to prove fraud or dishonesty on a balance of probabilities does not lead inexorably to theconclusion the unsuccessful party should be held liable for solicitor-client costs, since not all such attempts will be correctly consideredto amount to the generally-required “reprehensible, scandalous or outrageous conduct”: Young v.

Young (SCC), [1993]4 S.C.R. 3. [62] I also agree entirely with the Botan’s submissions that the mere fact a litigant fails to prove fraud does not automaticallydeprive that party of costs he would otherwise be entitled to, unless the charges were made recklessly or oppressively, or were obviouslyunfounded. Counsel cites in support 599291 Alberta Ltd. v. Luff, 2005 ABQB 892.

[63] In Luff, Mahoney J. at para. 13 states: 13 The mere fact that a litigant has failed to prove a charge of fraud does not automatically deprive that party of costs it wouldotherwise be entitled unless the charges were made recklessly or oppressively, or were obviously unfounded. . . . I am satisfied that thefacts, while insufficient to establish outright fraud, show enough carelessness and enough misrepresentation, overtly or by silence, to thepoint where it was not unreasonable for the Luffs to raise that allegation. [64] Clearly in Luff, considerations quite distinct from those before me in St.

Amand’s case outweighed the denial of costs onaccount of unproven charges of fraud. [65] So while a court should treat unproven allegations of fraud and the like with caution, as noted by Arbour J. inHamilton v. Open Window Bakery Ltd., 2004 SCC 9: allegations of fraud and dishonesty are serious and potentially very damaging to those accused of deception.

When, as here, a partymakes such allegations unsuccessfully at trial and with access to information sufficient to conclude that the other party was merelynegligent and neither dishonest nor fraudulent (as Wilkins J. found), costs on a solicitor-and-client scale are appropriate...” (at para. 26) [66] In Alberta the reasoning underlying awards of solicitor-client costs where unsuccessful pleas of fraud are advanced was setout by Kenny J. in Conway v.

Zinkhofer, 2007 ABQB 2: [21] The Applicants have pointed out that solicitor-clients costs or increased costs are generally awarded where there has been anunsuccessful allegation of fraud. Actual damage to one’s reputation need not be proven. Coe v. Sturgeon General Hospital District No.100, [2001] A.J. No. 1037. [22] The Applicants put forward quotes from three decisions which support their position: a. While this Court cannot prevent the making of unsubstantiated allegations of this kind, it can penalize those who do.

It has longbeen the practice of the courts to award solicitor and client costs against persons who, in judicial proceedings, make unfoundedallegations of fraud ... (Chin v. Salvation Army Scarborough Grace General Hospital (1998), 28 O.A.C. 388 (Ont. Div. Ct. at page 8). b. ... the court should not condone the recent trend in commercial cases of alleging fraud, seemingly without regard for the rule thatfraud must be strictly pleaded and strictly proved. While parties are free to conduct litigation in this manner, they must remain mindful ofthe potential costs consequences. (Toronto-Dominion Bank v.

Leigh Instruments et al, [1998] O.J. No. 4221 at paragraph 18.) c. It should not be forgotten that allegations such as were advanced in this case would be defamatory and actionable if they were madeother than in a court document to which an absolute privilege applies. Mr. Soumalias is a Toronto businessman who has a reputation toprotect. Most people take their reputations, and any aspersions case on them, as matters of the utmost seriousness.

Parties, and theircounsel, should not be permitted to use their privileged position by making such assertions as if it were some sort of “free shot” to see ifthey will be accepted and to which no other consequences obtain. The person against whom such allegations are made would certainlynot treat them so lightly. They are, after all, a matter of public record. ... (Toronto Harbour Commissioners v. T.H.C. Parking Inc.,[1999] O.J. No. 2265 at paragraph 60.) [23] The Respondents correctly point out that unsuccessful allegations of fraud do not necessarily result in a costs sanction or anincreased costs award.

There are many factors that the court must review. Some include whether the allegations are completelyunfounded or only partially unfounded, the nature of the allegations, whether the allegations were simply technical or significant,whether they were made recklessly or intentionally. Canada (Attorney General) v. Bourassa (Trustees of), 2002 ABCA 205 ,2002 ABCA 205; Belzil v. Bain, 2002 ABQB 388 , 2002 ABQB 388; Mitran v. Guarantee RV Centre Inc., 1999 ABQB 276, 1999 ABQB 276; 599291 Alberta Ltd. v. Luff, 2005 ABQB 892 , 2005 ABQB 892.

[67] In another recent decision Graesser J. addressed the analytical framework in College of Physicians and Surgeons of theProvince of Alberta v. J.H., 2009 ABQB 48 , 2009 ABQB 48, 468 A.R. 101, at para. 27, adopting the reasoning of FradshamP.C.J. in Davis v. 840015 Alberta Ltd., 2003 ABPC 68 , 2003 ABPC 68, 335 A.R. 172: 1. The nature of the allegation made, and whether the particular circumstances of the party against whom the allegation was madewere such as to make the implication of the allegation more serious. 2.

What, if any, information supportive of the allegation was known to the party making the allegation. 3. The strength and reliability of that information as it was known, or should have been known, by the party making the allegation. 4. The steps taken by the party making the allegation to verify the information upon which the allegation was based. 5. When the information was made known to the party making the allegation, whether additional information subsequently becameknown, and whether the allegation was modified, or withdrawn, to reflect the new information. 6.

The timeliness of any such modification or withdrawal. 7. Whether the party making the allegation knew, or should have reasonably known, the allegation’s implications for the partyagainst whom it was made. [68] As argued by St. Amand, Botan’s claim was simply a breach of contract action. The allegations of fraud, dishonesty andmisconduct were not essential to Botan’s claim and added nothing to it. Botan knew or ought to have known he could produce noevidence supporting his fraud and related allegations at trial.

It is aggravating the allegations were made against a former client withwhom Botan had a fiduciary relationship. The allegations were never modified or withdrawn. [69] The authorities emphasize that such knowledge, that ‘you knew or should have known better’, in the face of casting out theallegations, and in the absence of any hope anything could be proved, is reckless if not intended to harm or intimidate, and may lead tothe conclusion the conduct is reprehensible. [70] I find it hard not to agree with St.

Amand’s submission that the purpose of Botan’s allegations was to seek punitive damages,to punish if not intimidate St. Amand for daring to challenge Botan’s account when of course St. Amand had the legal right to challengethe account if he thought it was improper. Botan’s attitude and approach was signalled in the comment he made to St. Amand just before issuing the Statement of Claim: Brian, don’t make this difficult for the both of us.

I’ve been a lawyer for 27 years and no client has ever successfully stiffed me on a bill. [71] Having considered all of the circumstances surrounding the unproven allegations of fraud and the like I conclude St. Amandis entitled to a measure of solicitor-client costs. What is the significance of Botan’s status as a lawyer and officer of the court?

[ 72 ] The parties agree that as expressed by St. Amand ’ s counsel, “ the lawyer as Plaintiff stands in a different position than a layman as Plaintiff ” . [ 73 ] With perhaps depressing frequency, courts in Alberta have found it necessary to express concern and to impose costs on lawyers for their actions as lawyers conducting their own litigation. [ 74 ] For example, in Beacon Hill Service

(2000) Limited v. Esso Petroleum Canada , 2011 ABQB 138 is a recent case in which a lawyer represented himself in court proceedings. As noted by McLeod J.: [33] Lawyers are not prohibited from being their own counsel as parties to a proceeding: Brogan v. Walker , 2001 NSSC 53 , 193 N.S.R. (2d) 154 at para. 18 . However, a lawyer ’ s right of self-representation is not unqualified. Even when appearing on their own behalf, lawyers are still bound by the relevant codes of ethics and professional responsibility.

A practicing lawyer who represents himself in a court of law is to conduct himself in a manner consistent with that expected of a member of the Law Society and with his status as an officer of the court gained from that membership: Parkridge Homes Ltd. v. Anglin , [1996] A.J. No. 768 (Alta. Q.B.) ; Collins v. Collins , 1999 ABQB 707 , 256 A.R. 311 at para. 26 . In Parkridge Homes Ltd. v. Anglin , at paras. 33, 72 Rooke J. (as he then was) stated: 33 Mr. Anglin is not merely a person with legal training, but, I find that it is significant that he is a member of the Law Society of Alberta.

If he were not, one could apply the standard of conduct of an ordinary citizen, and excuse some conduct for which an ordinary citizen might be ignorant or from which he or she would be otherwise excused. In my view such is not the case for an active practising member of the Law Society of Alberta, who has a standard to meet, regardless of his technical capacity of appearance, merely by virtue of that membership. The standard that I find should be applicable to Mr. Anglin is to be consistent with the conduct expected of such members, and his status as an officer of the Court, gained from that membership.

That standard is set out in great detail in the Alberta Code of Professional Conduct (the "Code"), applicable to its members effective January 1, 1995... 72 ... I have referenced the complaints of Counsel for Parkridge about the unfounded allegations of conspiracy and fraud, and in particularly those against Mr. Huth and Mr. Lemon. Indeed, I have made some comments on these allegations. I find that to pursue these unfounded issues, for which there was never any evidence, to the end of the trial, in addition to any time taken thereby, deserves a cost sanction, even though neither Mr. Huth, nor Mr.

Lemon, incurred any costs additional to those of Parkridge. [ 75 ] In Collins v. Collins , 1999 ABQB 707 Marceau J . stated: [26] I also think that the fact that the Respondent is a lawyer is relevant and significant in determining that solicitor and client costs should be awarded. I agree with a case advanced by the Applicant, a decision of Mr. Justice Marshall in Osborne v. Pinno (1997), 56 Alta. L.R. (3d) (Q.B.) where the Court found that the defendant was entitled to solicitor and client costs because, among other things, the plaintiff was a lawyer. Mr.

Justice Marshall wrote at 411: The Plaintiff is a practising lawyer who issued the claim himself. In these circumstances he utilized the position of responsibility entrusted to him by this province through the Law Society to attempt to intimidate the Defendants. He was in a position where he could, at less expense than a member of the public, force the Defendants to incur the expense of hiring counsel. He cannot say he followed counsel ’ s advice in issuing proceedings... However, it appears to me that where the Plaintiff is a lawyer, this is a significant consideration.

He took an oath on admission to the Bar to “ not promote false suits on frivolous pretences. ” [ 76 ] See also Burgener v Code Mortgage Investment Corp , 2008 ABQB 583 at paras. 36 , 37, 70, 172 ACWS (3d) 590 , and Broda v. Broda, 2003 ABQB 257 .

[77] There is then ample further support for a measure of solicitor-client costs to be visited upon Botan given his conduct as alawyer in the case before me. What is the effect of St. Amand’s informal offer? [78] St. Amand argues for enhanced costs on account of his $10,000 offer made on the eve of the action being commenced againsthim.

Botan argues the offer should be disregarded in that it failed to comply with the Rules of Court and equally the requirements of aCalderbank offer that the offeror specifically reserves the right to refer to the offer at the end of the trial. [79] While that is so, even “informal” offers not bested at trial can attract adverse costs consequences. [80] Gauthier v. Butkevich, 2010 ABQB 357 is a recent example wherein, as here, no valid offer existed under the Rules of Courtor in line with the Calderbank requirements.

Nevertheless Nielsen J. stated: [13] It is not, however, necessary that [a Calderbank reservation] be made in an informal offer for regard to be had to such an informaloffer in a costs application. Our Court of Appeal recently addressed this issue in , Mahe v. Boulianne, 2010 ABCA 74 , 2010ABCA 74, [2010] A.J. No. 238;. At para. 10 the following comments are made: The respondents also argue that the offer of settlement made no reference to the Rules of Court, nor to the effect that a refusal of the offerwould have on costs.

The Rules of Court do not specify that any particular form of offer is required to trigger its costs consequences, andan offer need not make reference to costs. The parties are presumed to know the law, including the provisions of the Rules of Court. Inany event, even informal offers that arguably do not comply with the Rules can have an effect on costs: Fullowka v. Royal Oak VenturesInc., 2008 NWTCA 9 , 2008 NWTCA 9, [2008] 12 W.W.R. 60, 437 A.R. 390 at paras. 23-5. While informal offers do notrestrict the court's discretion over costs, they are nevertheless a relevant consideration.

The appellant made a generous offer thatexceeded his eventual liability, and he is entitled to double costs of the appeal after the offer was made. [14] Justice Veit in Dhala v. Dhala, 2010 ABQB 176 , 2010 ABQB 176, [2010] A.J.

No. 282 relied on the Court of Appealdecision in Mahe and came to a similar conclusion. [15] Clearly, an informal offer can be considered in a costs application in the action in respect of which the offer is made and it is notnecessary for such a reservation to be specifically made in the informal offer. [81] The question is when to give any costs effect to an informal offer, and to what extent. And without intending to be exhaustiveon the issue, the following are relevant considerations in the case before me: (

a) the offer was made in writing, and was clear and unambiguous; (

b) it was made to a lawyer who knew or ought to have known the state of the law around even informal offers, and of the adversecosts consequences that could potentially follow; (

c) it was made before any claim was commenced, doubtless in the hope further hostilities could be avoided; (

d) it was open for acceptance for only 12 days: while in some cases that would arguably be too short a time for reasonableconsideration, here 12 days was ample for Botan to consider the pros and cons of rejecting the offer and carrying on to litigate; (

e) it was a generous offer, nearly double Botan’s recovery at the trial of issues.

[ 82 ] In these circumstances I am satisfied it is appropriate to consider the informal offer when assessing costs. Conclusion [ 83 ] I have concluded St. Amand is entitled to costs in the cause. St. Amand calculated

Schedule C costs on column 2 at $19,060. That amount in fact includes solicitor-client costs of $2,160 for the June 9, 2010 application before Germain J. It also includes a fee item for the within costs hearing. For the moment I would back those items out of the $19,060 to arrive at a new total of $16,200. I would also back out those amounts claimed in relation to the trial of issues - trial preparation, attendance at trial, and written argument - to arrive at a new total of $8,250. [ 84 ] I was invited to address the scale of costs previously ordered in the cause for the various applications pre-trial. St.

Amand sought solicitor-client costs where no scale had been specifically addressed. I am not prepared to take that approach where appearances were previously made. I may have ordered solicitor-client costs arising from the application of February 14, 2011.

However, it is not for me to substitute my opinion for that of Germain J., who was best able to assess costs of that hearing, and clearly rejected any claim for costs on a solicitor-client scale. [ 85 ] I am prepared however to adjust costs from the commencement of the action up to the trial of issues to take into account the effect to be given the informal offer made November 14, 2010. A valid formal offer under the Rules of Court would result in double costs. There is no such hard-and-fast rule regarding successful Calderbank or indeed informal offers.

In the circumstances here I would increase the $8,250 in pre-trial costs payable under

Schedule C, column 2 by roughly one-third, resulting in a $2,750 increase and a new total of $11,000. [ 86 ] To that $11,000 total must be added back the solicitor-client costs ordered after the June 9, 2011 appearance in the amount of $2,160, for a new total of $13,160. GST on that sum is $658. Disbursements are also claimed at $2,720.60 inclusive of GST.

In total those costs/disbursements inclusive of GST are $16,538.60. [ 87 ] Finally I need to assess a measure of solicitor-client costs on account of my findings regarding the unproven allegations of fraud and the like, and my findings regarding Botan ’ s status as a lawyer making those allegations. Solicitor-client costs will be awarded for the preparation for and conduct of the trial of issues before me. Counsel for St. Amand put billing records before me. It appears preparation began in earnest September 8, 2011. A total of 68 hours is posted for preparation, generating fees of $27,200.

A total of seven hours is posted for attendance at trial, for fees of $2,800. [ 88 ] As noted earlier, I am not taxing counsel ’ s accounts to his client St. Amand. That being said, in assessing what I have called a measure of solicitor-client costs I am mindful of the need for proportionality as between time preparing for a one-day trial of issues, albeit a very full day supplemented by much documentary material and written arguments.

And as also noted earlier, at the end of the day counsel agreed I should assess costs without the need for further applications. [ 89 ] In the circumstances an appropriate measure of solicitor-client costs for the trial of issues including preparation is $20,000. GST on that sum is $1,000. To put that measure of costs into some perspective,

Schedule C, column 2 costs for the trial of issues including preparation would be $7,950. To increase that sum by only one-third as I have done with regard to pre-trial steps does not sufficiently take into account Botan ’ s impugned conduct which gives rise to the solicitor-client costs order in the first place. [ 90 ] At the end of the day, costs in St. Amand ’ s favour total $37,538.60 including GST. Botan ’ s recovery of $5,250, plus interest, should be deducted. Owing to divided success, the parties will bear their own costs of the within application. Heard on the 8th day of February, 2012. Further written submissions received February 23, 2012

Dated at the City of Edmonton, Alberta this 18 th day of April, 2012. P.B. Michalyshyn J.C.Q.B.A. Appearances: Simon M. Renouf Q.C. for the Plaintiff Dennis G. Groh Q.C. for the Defendant