Dove Homes, 2012 ABQB 497

Court of Queen ’ s Bench of Alberta Citation: Dove Homes

(1999) Ltd. v Fountain Creek Estates Ltd., 2012 ABQB 497 Date: 20120730 Docket: 0603 13746 Registry: Edmonton Between: Dove Homes

(1999) Ltd., Joanne Guinan and Dwayne Gough Plaintiffs - and - Fountain Creek Estates Ltd., Umer Choudhry and Riaz Choudhry Defendants _______________________________________________________ Memorandum of Decision on Costs of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Introduction [ 1 ] This is an application by the Plaintiffs for costs on a full indemnity basis.

It arises from my decision issued on January 4, 2012, and reported at 2012 ABQB 1 (the “Decision”), in respect of the Plaintiffs' claim for breach of a real estate contract (the “Contract”). [ 2 ] The corporate Plaintiff (“Dove Homes”) is an Alberta Corporation; the individual Plaintiffs are its directors. The corporate Defendant (“Fountain Creek”) is an Alberta Corporation; Mr. Riaz Choudhry (“Mr. Choudhry”) is its director.

Background Facts [ 3 ] The facts are detailed in the Decision, so I will reiterate only those that are particularly pertinent to the costs application. [ 4 ] Dove Homes alleged that Fountain Creek breached an agreement they had made (the “Contract”). Having succeeded in proving the formation and breach of the Contract, I awarded the Plaintiffs judgment in the amount of $22,193.50. I refused to award specific performance. [ 5 ] The action against Umer Choudhry (“Umer”) was discontinued on the eve of trial.

The Plaintiffs agreed to pay taxable costs of $9000.00 to Umer, in accordance with a filed Bill of Costs. [ 6 ] The parties were unable to agree on all other cost issues. Consequently, the Plaintiffs filed this application. The Defendants also filed an application, seeking an Order requiring the Registrar of Land Titles to discharge the Plaintiffs’ Caveat from the Certificate of Title to Lot 1, Block 8, Plan 032 5709 (“Lot 1”), the property that was the subject of the Contract. Issues [ 7 ] The issues in this costs application are: 1.

Are the Plaintiffs entitled to full indemnity costs based on the Defendants’ conduct in the course of litigation? 2. Are the Plaintiffs entitled to either a Bullock Order or a Sanderson Order in respect of the costs payable to Umer? Relevant Legislation [ 8 ] The following provisions of the Alberta Rules of Court , Alta Reg 124/2010 (the " Rules " or, individually, a " Rule ") are applicable to my analysis. 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. Issue 1. Are the Plaintiffs entitled to full indemnity costs based on the Defendants’ conduct in the course of litigation? Parties’ Positions Plaintiffs’ Submissions [9] In support of their application for full indemnity costs or enhanced costs, the Plaintiffs submit that this Court may make, atits discretion, any order relating to costs that is appropriate in the circumstances: Court of Queen's Bench Act, RSA 2000, c C-31, s 21.Rule 10.33 outlines the considerations that the Court may refer to in making a costs award.

The Plaintiffs also refer me to Pharand SkiCorp v Alberta (1991), (AB KB), 122 AR 395 at 397, 81 Alta LR (2d) 304 [Pharand], where Mason, J stated that:

While the Court has a wide discretion when awarding costs, the discretion must be exercised judicially and in accordance withestablished principles... it is to be exercised in accordance with the precepts and historical precedents established by that Court anddeveloped therefrom, by case law based upon a proper application and extension of those precedents. [10] The Plaintiffs also refer to a considerable number of case authorities in which the courts have considered when it isappropriate to award solicitor-client costs.

They note that Graesser, J, in College of Physicians and Surgeons of the Province of Albertav JH, 2009 ABQB 48 at para 22, 468 AR 101 [JH], confirmed the statement of McLachlin J. (as she then was) for a majority of theSupreme Court of Canada that solicitor-and-client costs “are generally awarded only where there has been reprehensible, scandalous oroutrageous conduct on the part of one of the parties”: Young v Young, (SCC), [1993] 4 SCR 3 at 134 [Young]. [11] The Plaintiffs point to the Court’s reference in JH, at para 20, to Jackson v Trimac Industries Ltd (1993),(AB KB), 138 AR 161, 8 Alta LR (3d) 403; aff’d 1994 ABCA 199 , [1994] 155 AR 42, (ABCA) [Jackson], where a number ofcircumstances that attract an award of enhanced costs were outlined: In order for costs to be awarded on an indemnity basis or even on a solicitor-client basis, as opposed to a party-party basis, the court mustconclude that the case fits within the parameters of a rare and exceptional or unusual case.

Examples [of] cases resulting in theidentification of a rare and exceptional case include: 1. Circumstances constituting blameworthiness in the conduct of the litigation by that party [Reese v Alberta (1992), (AB KB), 133 AR 127, 5 Alta LR (3d) 40 (QB)]; 2. Cases in which justice can only be done by a complete indemnification for costs [Foulis v Robinson (1978), (ONCA), 21 OR (2d) 769, 92 DLR.(3d) 134 (CA)]; 3.

Where there is evidence that the plaintiff did something to hinder, delay or confuse the litigation, where there was no serious issue offact or law which required these lengthy, expensive proceedings, where the positivity misconducting party was “contemptuous” of theaggrieved party in forcing that aggrieved party to exhaust legal proceedings to obtain that which was obviously his [Max SonnenbergInc v Stewart, Smith (Canada) Ltd. (1987), (AB KB), 48 Alta LR (2d) 367, [1987] 2 WWR 75 (QB) [Sonnenberg]]; 4.

An attempt to deceive the court and defeat justice, an attempt to delay, deceive and defeat justice, a requirement imposed on theplaintiff to prove facts that should have been admitted, thus prolonging the trial, unnecessary adjournments, concealing materialdocuments from the plaintiffs and failing to produce material documents in a timely fashion [Olson v New Home Certification Programof Alberta (1986), (AB KB), 69 AR 356, 44 Alta LR (2d) 207 (QB)]; 5.

Where the defendants were guilty of positive misconduct, where others should be deterred from like conduct of the defendants shouldbe penalized beyond the ordinary order of costs [Dusik v Newton (1984), (BC SC), 51 B.C.L.R. 217 (SC), varied onother grounds (1985), (BC CA), 62 BCLR 1 (CA)]; 6. Defendants found to be acting fraudulently and in breach of trust (Davis v Davis) [(1981), (MB KB), 9 Man R (2d)236 (QB)]; 7.

The defendants’ fraudulent conduct in inducing a breach of contract and in presenting a deceptive statement of accounts to the court attrial (Kepic v Tecumseh Road Builder [(1987), 23 OAC 72, 18 CCEL 218 (CA)]; 8. Fraudulent conduct [Sturrock v Ancona Petroleums Ltd (1990), (AB KB), 111 AR 86, 75 Alta LR (2d) 216 (QB)]; 9. An attempt to delay or hinder proceedings, an attempt to deceive or defeat justice, fraud or untrue or scandalous charges [Pharand Ski

Corp v Alberta (1991), (AB KB), 122 AR 81 (QB)]. (citations supplied) [12] The Plaintiffs also refer to Lounsbury v Dakota Tipi First Nation, 2011 MBQB 96 [Lounsbury], where Saull, J awardedenhanced costs to the plaintiff on the basis that the defendant acted in bad faith and its whole defence was premised on lies that wereperpetuated throughout the entire litigation process, from the statement of defence through to discoveries and trial. [13] The Plaintiffs argue that it is particularly significant that, in the Decision, I made the following observations in relation to Mr.Choudhry’s evidence and its trustworthiness: [36] At the outset, I confirm that I have considerable difficulty accepting much of Mr.

Choudhry’s evidence. While the passage oftime will commonly affect the reliability of people’s memory, I do not accept that the inconsistencies, obvious contradictions and failuresto recall key aspects of the events recollected by other witnesses at the trial are merely the result of the passage of time or the busyness ofhis

schedule in the fall of 2005. I found much of his evidence to be not credible; not only because it conflicted with the evidence of otherwitnesses (including, in some respects, Umer and Ms. Shymko) but also because in other respects it did not make sense when viewed inthe context of the actions taken by various individuals during the relevant time period. ... [38] In addition, Mr. Choudhry’s evidence ... and his stated reasons for his actions changed between Examinations for Discovery andTrial. ... In general, however, where Mr. Choudhry’s evidence conflicts with the evidence of the plaintiffs, Ms.

Shymko or Umer, orwhere it is at odds with the actions taken by him and others, I do not accept Mr. Choudhry’s evidence. [14] The Plaintiffs state that the defence to the issue of formation and breach of contract, which were the primary issues at trial,was premised on mis-statements of fact(s). These mis-statements were contained in the Statement of Defence, maintained through thediscoveries of both Umer and Mr. Choudhry, and continued at trial as was in the case in Lounsbury. The Plaintiffs refer to examplesdocumented in the Decision (at paras 36-39) which include: (

a) Mr. Choudhry’s evidence conflicted with that of other witnesses which was accepted by me; (

b) Mr. Choudhry maintained that there could not have been a contract as he was not “legally or morally” entitled to sell Lot 1; areasoning that I found to be at odds with the facts; (

c) Mr. Choudhry’s stated reasons for his actions changed between examination for discoveries and trial; (

d) Mr. Choudhry maintained throughout that Umer did not have ability to bind Fountain Creek, notwithstanding the circumstancesestablished in the evidence; (

e) Mr. Choudhry (as well as Umer) disputed that Umer’s signature appeared on the Contract, which was contradicted by the evidence ofMs. Shymko; and (

f) Mr. Choudhry’s evidence conflicted with the more plausible evidence of others and the actions taken by him or others. [15] Referring to the provisions of Rule 10.33(2)(a), the Plaintiffs submit that the Defendants attempted to delay proceeding as inPharand; that they attempted to deceive the Court through factual mis-statements and by concealing material documents from thePlaintiffs; and that they failed to produce material documents in a timely fashion as in Olson. The Plaintiffs cite instances where they

were forced to seek and obtain various Orders in order to compel the Defendants’ compliance with the Rules , including: (

a) Mr. Choudhry and Monica Shymko, an employee of Fountain Creek, failed to attend the scheduled Examination for Discovery, despite being served with Appointments for Examination. A Consent Order was granted by Master Breitkreuz compelling their subsequent attendance; (

b) The Plaintiffs were required to bring an application to compel the Defendants’ answering of Undertakings given at the Examination for Discovery of Mr. Choudhry. Although the application did not proceed, the Defendants only provided partial answers after the application was filed and served; and (

c) In order to compel the Defendants to provide a response to a specific Undertaking from Discovery, a Consent Order had to be granted by Master Breitkreuz. [ 16 ] The Plaintiffs submit that it is noteworthy that certain facts which ought to have been admitted by the Defendants were not so admitted due to their intransigence and prevarication. The Plaintiffs state that Mr. Choudhry challenged the validity of the Contract and confused issues by being dishonest about: (

a) the ability of Umer to bind Fountain Creek; (

b) Umer’s authority to accept the offer of Dove Homes for the purchase of the Lot; and (

c) Umer’s signature and its affixation to the Contract as signatory for Fountain Creek. They assert that all these were essential elements required to be proven in the action that should have been admitted by the Defendants. [ 17 ] The Plaintiffs also maintain that there was a fundamental flaw in the position of the Defendants in that, contrary to the latter’s arguments, the trial was not simply about specific performance. The Plaintiffs contend that there were other significant issues of liability, formation of the Contract and the breach of the Contract that were involved in the 5-day trial.

The Plaintiffs submit that, in exercising its discretion to grant costs, the Court should take into account that the Defendants breached all the fundamental principles of timeliness of full disclosure, honesty, and co-operation as provided under the Rules . The Plaintiffs submit that Mr. Choudhry’s conduct as a whole was reprehensible, scandalous and outrageous. In the result, the Plaintiffs should be entitled to enhanced costs. [ 18 ] The Plaintiffs note that the Defendants admit that the 5-day trial could have been abridged by 3.5 days.

They also argue that the Plaintiffs’ discontinuance of action against Umer on the eve of trial was a calculated risk and that keeping him in the action would have been justifiable. Defendants ’ Submissions [ 19 ] The Defendants acknowledge that this Court has the jurisdiction to award costs on a full indemnity basis. They draw my attention to the statement of Mason, J that the Court’s discretion must be exercised judicially in accordance with historical precedents based upon a proper application and extension of those precedents: Pharand at 397.

They note that costs on a full indemnity basis are only awarded in exceptional circumstances: Jackson at paras 28-37 ; Sonnenberg ; and Gladue v Alberta (Attorney General) , 2011 ABQB 535 [ Gladue ]. They submit that there was no reprehensible, scandalous or outrageous conduct on their part that would warrant an award of costs on a full indemnity basis. [ 20 ] The Defendants argue that I should consider the fact that the Plaintiffs originally claimed $170,000 but were awarded only $22,000.

They further point out that I denied the relief of specific performance which the Plaintiffs sought and found that the Plaintiffs failed to mitigate. They submit that the Plaintiffs were only marginally successful in respect of the quantum of their claim. [ 21 ] The Defendants submit that success was divided and, as such, the Defendants are entitled to costs with respect to the issues of specific performance and mitigation. They say that the costs to which they are entitled should be set off against the costs for the issues on which the Plaintiffs were successful.

The Defendants contend that in this case the difference is nil and each party should bear their own costs: Condominium Plan No 8022962 v Malinowski , 2005 ABQB 346 at paras 2-3 , 47 Alta LR (4th) 399 [ Condominium Plan No

8022962 ], where Madam Justice Veit held that, based on the facts of the case, parties should bear their own costs because “[w]here success is divided, the court should - all other pertinent factors being equal - estimate the time and cost attributed to the successful and unsuccessful issues and award costs accordingly.” [ 22 ] Alternatively, the Defendants argue that, since the Plaintiffs were only marginally successful (having received only 13% of the overall quantum of their original claim), only a portion of Column 1 costs should be awarded: Parkridge Homes Ltd v Anglin , [1996] AJ No 768 at para 9 .

They note that in Parkridge the court awarded the plaintiff $35,836.00 and awarded the defendant $3,789.00 in respect of the “successful counterclaim [which] represents slightly more than 1/10 of the successful claim of Parkridge, and does not deserve a full set of costs”. [ 23 ] The Defendants invite me to adopt the procedure for determining the degree of success in an action as outlined by Veit J in Condominium Plan No 8022962 at para 8: 8 A useful

summary of the principles that apply to the award of costs where there has been divided success is found in Gemmell where R.D. Wilson J., referring to earlier decisions, stated: ... [para25] The procedure for determining "the degree of success" is described in [ Waterhouse v Fedor , [1987] BCJ No 1033 at page 2 (BCSC) ]. One method involves the judge assessing a percentage figure to the relative success of the parties. The other method involves determining the number of days spent in trial on "unsuccessful" issues in proportion to the time spent on "successful" issues.

Either way, the relative success of the parties is determined and each party is entitled to that portion of his own costs, which are then set off against the other, and the difference, if any, is paid to the party in whose favour the difference lies. [ 24 ] In support of their position, the Defendants refer to Drew Oliphant Professional Corp v Harrison , 2011 ABQB 216 , 56 Alta LR (5th) 233, where the court allowed the plaintiff’s action in part but determined that he was largely unsuccessful on the substantive issues in the trial; and that the defendants had greater success vis-a-vis the plaintiff’s marginal success.

Consequently, the Court awarded the defendants 75% of their costs. [ 25 ] They note that in Heritage Construction v Cao , 2011 ONSC 2921 ,the plaintiff claimed it was owed $25,388.28 in respect of a home renovation contract and the defendants counterclaimed for $30,000.00 for deficiencies. The court ordered the defendants to pay the plaintiff $2,338.69 and held that, since success was divided and the plaintiff’s success was marginal, each party should bear their own costs.

Analysis [ 26 ] Approximately 3.5 days of the 5 trial days were spent on the issues of liabilities of parties, formation of the Contract and the breach of the Contract. This was necessitated by the Defendants’ denial or refusal to admit relevant facts. Approximately 1.5 days were spent on other issues, including the availability of the remedy of specific performance, the “uniqueness” of Lot 1 and the measure of damages. [ 27 ] It is relevant that the Plaintiffs originally claimed $170,193.50 but were awarded $22,193.50, approximately 13% of their original claim.

This raises the question of whether the Plaintiffs achieved only “marginal” success and, if so, what effect that should have on costs. While this is a factor that should be taken into account, I do not consider that the amount of the award should be overly emphasized as a factor in this particular case. The Plaintiffs were successful in proving that an enforceable contract existed, something which, in light of the evidence, they ought not to have had to do.

Limitation on their recovery was largely due to the difficulty in establishing uniqueness of land for the purposes of successfully advancing a specific performance action in Alberta. This difficulty has been commented on by others and was referred to in the Decision. [ 28 ] It was clear from the trial evidence that land values in the subject area, including that of Lot 1, were rising during the relevant time period. It is a reasonable inference that the position taken by the Defendants, in denying the existence of a contract that both parties

had spent several months taking steps to bring to conclusion, was likely motivated by the Defendants’ perception that they could sell Lot 1 to a new buyer for a higher price or could, by taking this position, possibly obtain a higher price from the Plaintiffs. While somewhat speculative, in the circumstances of this case, it is another, albeit minor, factor that adds to the objectionable behavior of the Defendants exhibited throughout this matter. [ 29 ] The conduct of a party is a relevant consideration for an award of costs: Rule 10.33.

The Plaintiffs made numerous references to my findings, comments and observations about the conduct of the Defendants (see, Decision at paras 36-39). I had considerable problem with Mr. Choudhry’s evidence and his credibility. I also note that the Plaintiffs were compelled at various points to seek and obtain Court Orders to compel the Defendants’ compliance with the Rules .

This too is relevant to the issue of costs. [ 30 ] The law is clear that solicitor-and-client costs “are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties: Young at 134. For costs to be awarded on a solicitor-client basis, the court must conclude that the case fits within the parameters of a rare and exceptional or unusual case: JH at para 22 . [ 31 ] The Court should not leap to the conclusion that a party’s conduct is outrageous or scandalous once it identifies credibility issues or problems with the party’s evidence.

That may lead to unintended consequences for the legal system as a whole.

As much as the Defendants’ conduct deserves this Court’s criticism, and even condemnation, the conduct does not rise to the level of “reprehensible, scandalous or outrageous”conduct, nor does it rise to the threshold of a rare, exceptional or unusual case that should attract an award of a solicitor-client costs. [ 32 ] However, the courts have recognized that, even when it is difficult to find grounds for ordering solicitor-client costs, the grounds for a discretionary increase in taxable costs are much broader: Louw v Hamelin-Chandler , 2012 ABQB 52 at para 18 ; Waste Management of Canada Corporation v Thorhild (County) , 2009 ABQB 157 .

I have come to the conclusion that, although the high threshold was not met for solicitor-client costs in this case, the Plaintiffs are entitled to a costs award on an enhanced basis. [ 33 ] Given the actions of the Defendants, and what I conclude can reasonably be inferred as their underlying motive, I conclude that the Plaintiffs should be awarded double party-and-party costs for 3 ½ of the 5 days of trial.

Given the weakness of their argument on the uniqueness of Lot 1 and the availability of specific performance, which took up much of the remaining trial time, I award the Plaintiffs only 50% of party and party costs for 1 ½ days of trial time. Issue 2. Are the Plaintiffs entitled to either a Bullock Order or a Sanderson Order in respect of the costs payable to Umer? Parties ’ Positions Plaintiffs ’ Submissions [ 34 ] The Plaintiffs argue that they are entitled to reimbursement from Mr. Choudhry for the costs payable by them to Umer as a result of the discontinuance of action against him.

They say they were forced to keep Umer in the lawsuit because Fountain Creek and Mr. Choudhry failed or refused to admit the facts regarding Umer’s ability to bind Fountain Creek, accept the offer to purchase, and act as signatory for Fountain Creek. [ 35 ] There are two avenues through which this Court can exercise its discretion to order an unsuccessful defendant to pay a successful defendant’s cost. The Court may grant either: (

a) a Sanderson Order, directing the unsuccessful defendant to pay costs directly to the successful defendant ( Sanderson v Blythe Theatre Co , [1903] 2 KB 533 ); or (

b) a Bullock Order, directing the claimant to pay the successful defendant’s costs while permitting the claimant to add those costs to the one that the unsuccessful defendant is ordered to pay the claimant ( Bullock v London Omnibus Co , [1907] 1 KB 264 ).

[36] The Plaintiffs submit that Gladue, at para 39, outlines the tripartite test used in Alberta for the determination of whether aBullock or a Sanderson Order for costs recovery is justifiable: (

i) was it reasonable for the plaintiff to add the successful defendant to the litigation? (ii) was it reasonable for the plaintiff to keep the successful defendant in the litigation? and (iii) is it fair and just to require the unsuccessful defendant to pay the costs of the successful defendant? [37] The Plaintiffs argue that it was reasonable for them, who were initially in doubt as to which defendant caused the injury, tojoin Umer as a defendant in order to determine the facts and issues arising. They determined the claim against Umer might beunnecessary after discoveries and undertakings were answered.

They argue that the failure of Fountain Creek and Mr. Choudhry to admitthat Umer had bound Fountain Creek as its signatory made Umer’s joinder reasonable. The Plaintiffs also contend that it was reasonableto keep Umer in the litigation because Mr. Choudhry failed to admit Umer’s authority and position at Fountain Creek throughoutdiscoveries and trial. This made Umer’s potential liability difficult to assess for the Plaintiffs. It is therefore fair and just to requireFountain Creek and Mr. Choudhry to pay the costs they owe Umer because they were wholly responsible for the need to join andmaintain Umer as a party.

Defendants’ Submissions [38] The Defendants acknowledge that the test in Gladue governs the exercise of this Court’s discretion to make a Sanderson orBullock Order. However, they submit that the Plaintiffs have failed to meet the test and I should not grant such an order. [39] The Defendants argue that a Sanderson or Bullock Order is not appropriate in circumstances where the action is discontinuedagainst a defendant prior to trial.

In support of this, the Defendants refer to the decision of the British Columbia Supreme Court inFreedman v Graburn, (BC SC), 13 WWR (NS) 540 [Freedman]. [40] The Defendants submit that Umer was not the registered owner of Lot 1; and that it was clear that he would not have been in aposition to pay any damage award. They contend that the Plaintiffs joined Umer for “ulterior reasons” which are evidenced by: (

i) thePlaintiffs’ discontinuance of action against him a day before trial; and (

b) the Plaintiffs’ knowledge that the Defendants would call Umeras a witness (or, alternatively, if Umer was not called as a witness, the court would draw a negative inference from his failure to testify). [41] The Defendants also argue that the Plaintiffs conduct in pursuing untenable or abandoned causes of action made the triallengthy and expensive. Analysis [42] The Plaintiffs’ decision to sue all the parties they considered potentially liable at the commencement of their action was bothreasonable and advisable.

In the face of uncertainty about potential liabilities due to the questions surrounding Umer's authority, thereasonable thing for the Plaintiffs to do was to join as Defendants those that might be liable. Consequently, the Plaintiffs meet the firststage of the tripartite test in Gladue. [43] The Defendants’ representation of the legal principle for which Freedman stands is not accurate. In that case, an action fordamages was brought against defendant ‘A’, the registered owner of a car and defendant ‘G’, the driver of the car.

Defendant ‘A’ deniedliability and stated that at the time of accident he had no interest or estate in the car or any control over it. After examinations for

discovery, the plaintiff determined that the statements of defendant ‘A’ were true. However, the plaintiff proceeded to trial, during which he asked for a dismissal of the action as against defendant ‘A’. The Court allowed the action against ‘G’ and dismissed as against ‘A’. It held that ‘A’, being the registered owner of the car, created the situation which justified his joinder as a party in the action in order to determine his liability. The Court also held that, in the circumstances, defendant ‘A’ was entitled to have costs against the plaintiff from and after the examinations for discovery.

However, Coady, J ruled that he had no jurisdiction to make an order that the plaintiff could add the costs he must pay to defendant ‘A’ to the costs he was entitled against defendant ‘G.’ [ 44 ] It is apparent from the facts of Freedman that Coady, J refused to order costs recovery in favour of the plaintiff, in part, because (at para 3): The plaintiff was apparently satisfied on this examination that the defendant Anderson had no interest or equity in the said motor car and had no control over it and consequently the plaintiff could not succeed as against him.

Had the plaintiff discontinued the action against Anderson at that time I do not think he would be liable for costs. But this was not done. He proceeded to trial and then asked that the action against Anderson be dismissed . Under the circumstances it seems to me the defendant Anderson is entitled to his costs against the plaintiff from and after the examination for discovery, but not before, and I so order. The facts in Freedman are distinguishable from the present case.

In addition, the case is inapplicable in Alberta to the extent that it denies this Court’s jurisdiction to make a Sanderson or Bullock Order for costs recovery purposes. [ 45 ] Unlike the facts in Freedman , the Plaintiffs never determined that it was unnecessary to continue keeping Umer in the action. I am not persuaded by the Defendants’ argument that Umer was joined for “ulterior reasons” on the basis that the Plaintiffs discontinued the action against him on the eve of trial. Presumably they decided that their argument on his authority was strong, as was my conclusion at trial.

I find that it was reasonable for the Plaintiffs to keep Umer in the litigation until they were comfortable to take what they described as a “calculated risk” of discontinuing their claim against him. I also agree that they could have kept him in the litigation given the continuing assertions by the other Defendants that he had no authority to negotiate, agree to or execute contracts on behalf of Fountain Creek. As such, I conclude that the Plaintiffs meet the second test in Gladue . [ 46 ] Were it not for the denial or failure of Fountain Creek and Mr.

Choudhry to admit Umer’s authority and position throughout discoveries and trial, the Plaintiffs could have discontinued the action against Umer earlier. I conclude that it is fair and just for the Plaintiffs to recover costs payable to the successful Defendant, Umer, from the unsuccessful Defendants, Fountain Creek and Mr. Choudhry. Caveat Discharge Issue [ 47 ] During the hearing of this application, Plaintiffs’ Counsel undertook to discharge the Caveat from title to Lot 1. Therefore a decision is not required in relation to the Defendants’ application for a discharge order. Disposition [ 48 ] In the result:

a) The Plaintiffs shall be entitled to enhanced costs based on two times the fee amounts calculated in accordance with Column 1 of

Schedule C for 3.5 days of trial.

b) The Plaintiffs shall be entitled to 50% of costs based on Column 1 of

Schedule C for 1.5 days of trial.

c) The $9,000 costs payable by the Plaintiffs to Umer shall be payable by Fountain Creek and Mr. Choudhry directly to Umer. [ 49 ] If any further issues arise in connection with the calculation of costs arising from this Decision the parties should contact my assistant to arrange a time to address same. Heard on the 26 th day of June, 2012. Dated at the City of Edmonton, Alberta this 27 th day of July, 2012. D.L. Shelley J.C.Q.B.A. Appearances: B. M. King Strathcona Law Group for the Plaintiffs R.J. Cotter, Q.C. Fraser Milner Casgrain LLP for the Defendants