DeeThree Exploration Ltd. v. Cabot Petroleum Canada Corporation, 2012 ABQB 450

Court of Queen ’ s Bench of Alberta Citation: DeeThree Exploration Ltd. v. Cabot Petroleum Canada Corporation, 2012 ABQB 450 Date: 20120713 Docket: 0901 07093 Registry: Calgary Between: DeeThree Exploration Ltd. Plaintiff - and - Cabot Petroleum Canada Corporation Defendants _______________________________________________________ Memorandum on Costs of the Honourable Mr. Justice P.J.

McIntyre _______________________________________________________ [ 1 ] This dispute on costs revolves around the trial of an issue that would have resolved the law suit, had the issue been resolved in favour of Cabot Petroleum Canada Corporation (“Cabot”). It was not. [ 2 ] DeeThree Exploration Ltd. ( “ D3 ” ) sued Cabot for $1.7 million. Cabot defended and counterclaimed for $140,000, plus interest, plus indemnity costs. After filing its statement of defence and counterclaim, Cabot filed an amended statement of defence to say the matter had been settled between counsel: that D3 would pay Cabot $96,000.

D3 denied a settlement. Affidavits were filed. The lawyers cross-examined on the affidavits.

[ 3 ] Cabot sought

summary judgment in Masters Chambers, relying on the asserted settlement. Master Laycock denied the application, ordering the trial of the issue whether the matter had been settled. As to costs, his Order states “ Costs are payable in any event by Cabot to D3 in relation to Cabot ’ s

summary judgment application after the trial of an issue is heard ” . [ 4 ] I heard the trial of the issue. I denied Cabot ’ s claim that the matter had been settled. D3 wants costs of $33,974.85. Cabot says it is only required to pay $9,021.22. [ 5 ]

Schedule C: Tariff of Recoverable Fees, states in part: Framework 1(1) This

Schedule specifies the lawyer ’ s fees that may be recovered as costs by one party from another.

(2) Each column of the tariff in Division 2 [The Tariff] gives a dollar amount range for the purpose of determining the lawyer ’ s fee under that column for the work described under each item.

(3) Subject to subrule (4), the dollar range indicates the amount recoverable (

a) as against the plaintiff, with reference to the amount claimed by the plaintiff, (

b) as against the defendant, with reference to the amount of the judgment or order against the defendant, or (

c) in the case of an interlocutory application, as against the person liable to pay the costs with reference to the amount claimed by the plaintiff.

(4) Unless the Court otherwise orders, (

a) when a remedy is given in a judgment or order other than or in addition to the payment of money, or (

b) when judgment is given for a defendant in an action in which a remedy other than or in addition to the payment of money is sought, costs must be assessed according to the higher of Column 1 of the tariff in Division 2 [The Tariff], and the scale that would have applied if the other remedy had not been given or sought. [ 6 ] Counsel for D3 provided a draft Bill of Costs. No cases were cited by either counsel. The Appropriate Column [ 7 ] D3 says that its $1.7 claim was at stake in the

summary trial, for if Cabot had won, it would have obtained judgment for $96,000 and defeated D3's $1.7 million claim. Thus column 5 is appropriate.

[ 8 ] Cabot says that subrule 1(3)(

b) means that because there was no amount ordered payable by it as defendant, that one looks to rule 1(3)(

a) to see what it was seeking as plaintiff. This it says was $96,000. The counterclaim said $140,000. In either case, on Cabot ’ s argument, it would be column 2. Therefore, it says, column 2, not column 5 applies. It also says that paragraph 1(3)(

b) does not apply because no money judgment or order has been made against it as defendant. Paragraph 1(3)(

c) does not apply as this was not an interlocutory application. [ 9 ] Does subrule 1(3)(

a) apply? Cabot, as plaintiff by counterclaim, sued for $140,000. Had it been successful, it would have obtained judgment for $96,000 and defeated D3's $1.7 million claim. I hold that the Order for the trial of an issue meant, that for that trial, Cabot is to be treated as the Plaintiff, D3 the Defendant. Thus, whatever the ultimate outcome of the trial, the costs are based on what it claimed in the counterclaim. Subrule 1(3) means that because Cabot was claiming $140,000, it is liable for costs on column 2. [ 10 ] There was no order for the payment of money.

Under subrule 1(4), the scale to be applied is the higher of column 1 and the scale that would have applied: column 2. Item 5 Oral Questioning under

Part 5 [ 11 ] Cabot says there was no questioning under

Part 5 of the Rules . There was cross-examination on the affidavits. Cabot says this questioning is under

Part 6. Cabot says D3 is already compensated for that under Item 8(1). In response, D3 says Item 5(2) specifically refers to cross-examination on affidavit. [ 12 ] I hold that D3 is entitled to costs of cross-examination. Item 8(1) does not contemplate cross-examination.

Part 5 is broad enough to cover costs for cross-examination on any affidavit, not just, for example, an affidavit of records. [ 13 ] Cabot says Item 5(4), $3,000 for preparation and response to written questions is not appropriate because there were no written questions. I agree with Cabot. Item 8 Applications: Requiring Written Briefs, Item 12 Submission of Written Argument [ 14 ] D3 says written argument was requested by the Court and it should have its costs.

Cabot says the argument was the same given to Master Laycock, and for which $2,000 is claimed under Item 8(1) and $5,000 under Item 12. [ 15 ] I do not recalling requesting argument. Even if I had, the argument was the same as given to Master Laycock, so D3 may have only one set of costs. Item 9 Trial Readiness/Case Management [ 16 ] D3 claims $1000 for case management attendance. Cabot says the meeting with Justice Phillips on January 12, 2012 was not a case management meeting, but a pretrial conference meeting.

A pre-trial conference meeting is necessary to have a trial date, so this is payable under Item 9, trial readiness. [ 17 ] I hold that D3 is entitled to costs for the attendance of the pre-trial conference meeting. It was required, and part of trial readiness. Other Charges [ 18 ] Cabot agrees with D3 ’ s claim for $676.82 for other charges and disbursements of $440.00.

Conclusion [ 19 ] D3 is entitled to costs as follows: Number Item Amount 5(1) Preparation for questioning $ 750.00 5(2) Cross-examination on affidavits (2 x half-day) 750.00 750.00 8(1) Application where brief is requested or allowed by Court (Summary Judgment application) 1,250.00 9(1) Pre-trial application (pre-trial conference) 400.00 10(1) Preparation for trial and

summary trial 4,000.00 11 First half-day of trial; Two additional half-days 1,250.00 1,400.00 Disbursements 444.40 Other Charges 676.82 Sub-total 11,671.22 plus GST 583.56 Total $ 12,254.78 Dated at the City of Calgary, Alberta this 12 th day of July, 2012.

P.J. McIntyre J.C.Q.B.A. Appearances: Oliver Ho Jensen Shawa Solomon Duguid Hawkes LLP for the Plaintiff J. Kelly Hannan Burnet, Duckworth & Palmer LLP for the Defendants