Thunberg v. Zadworny, 2012 ABQB 609

Court of Queen ’ s Bench of Alberta Citation: Thunberg v. Zadworny, 2012 ABQB 609 Date: 20121002 Docket: 0803 10649 Registry: Edmonton Between: Kevin Thunberg, Lloyd Thunberg, Lynnanne Thunberg, Glenn Thunberg, Karen Brule, Jeremy Ell, Glen Laing, Persicaria Holdings Ltd., Linneaus Management Inc., 1231956 Alberta Ltd. And 1283038 Albera Ltd. Plaintiffs - and - William Zadworny, 1186348 Alberta Ltd., William Zadworny Professional Corporation and 1246720 Alberta Ltd. Defendants _______________________________________________________ Memorandum of Decision of the Honourable Mr.

Justice Donald Lee _______________________________________________________ Introduction [ 1 ] In written reasons for judgment issued September 18, 2012, I dismissed the appeal by the Respondent William Zadworny from the order of the Master granted April 26, 2012. The Master had dismissed Mr. Zadworny ’ s application for an order declaring that none of the claims of the Plaintiffs against him survived his bankruptcy. I made no order as to costs at that time, and normally the default provisions as set out in Rule 10.29(1) of the Alberta Rules of Court would apply as follows:

10.29(1) A successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party, and the unsuccessful party must pay the costs forthwith, notwithstanding the final determination of the application, proceeding or action, subject to (

a) The Court ’ s general discretion under rule 10.31 [Court-ordered costs award] (

b) The assessment officer ’ s discretion under rule 10.41 [Assessment officer ’ s decision] (

c) Particular rules governing who is to pay costs in particular circumstances, (

d) An enactment governing who is to pay costs in particular circumstances, and (

e) Subrule (2) [applications without notice]. [ 2 ] The Court of Queen ’ s Bench Costs Manual states as follows with respect to Rule 10.29(1): Rule 10.29(1) grants a “ successful part to an application, a proceeding or an action ” and automatic and binding entitlement or right “ to a costs award against the unsuccessful party ” . It further stipulates that “ the unsuccessful party must pay the costs forthwith ” .

This right to partial or complete indemnification or a successful party ’ s costs and to payment without undue delay is subject to, primarily, the general discretion of the Court to order otherwise under Rule 10.31. [ 3 ] The considerations that the Court may consider in the exercise of its discretion in making a costs aware are set out in Rules 10.31 and 10.33, and include a consideration of the result of the action and the degree of success of each party (Rule 10.33(1)(a)).

In this case, it is submitted that since the appeal was wholly unsuccessful, and there are no other considerations that would warrant a departure from the general rule, that the successful party (the Plaintiffs) are entitled to their costs from the unsuccessful party (Zadworny), and that these costs are payable forthwith. [ 4 ] In this case, the Amended Statement of Claim seeks damages in the amount of $605,588.05 plus prejudgment interest and costs. The appeal was brought in relation to Zadworny ’ s application for

summary dismissal of this claim. It is submitted that the appropriate column under

Schedule C of the Rules of Court is Column 4, and that the Plaintiffs should be entitled to receive taxable fees under item 8(1) in the amount of $1,750, plus their reasonable and proper disbursements arising from the application. Conclusion [ 5 ] Rules 10.31 and 10.33 provide the Court with a general discretion on the awarding of costs. I note that in the present matter it could be difficult for the Plaintiffs to succeed at trial with respect to their allegations of fraud/or misappropriation against Mr. Zadworny. The Plaintiffs have not amended their Statement of Claim so as to allege fraudulent conduct by Mr.

Zadoworny, and when they do it will be up to the trial judge to determine if there is any merit to the allegations of fraud. If there is no merit to allegations of fraud, costs could and would be awarded on a solicitor/client basis against the Plaintiffs. [ 6 ] Accordingly I have concluded that in these circumstances the normal entitlement to

Schedule C costs in favour of the Plaintiffs given their success in the Zadworny application will not result in an immediate award of costs plus reasonable and proper disbursements. Rather the matter can be dealt with by the trial judge hearing the evidence as to the allegation of fraud at the conclusion of the proceedings. The trial judge will determine the entitlement to costs of this appeal.

Dated at the City of Edmonton, Alberta this 2 nd day of October, 2012. Donald Lee J.C.Q.B.A. Appearances: Phyllis Van Campenhout Hall & Van Campenhout for the Plaintiffs Douglas N. Tkachuk Reynolds, Mirth Richards & Farmer LLP for the Defendant William Zadworny