321665 Alberta Ltd. Plaintiff - v. -, 2012 ABQB 76

Court of Queen ’ s Bench of Alberta Citation: 321665 Alberta Ltd. v. ExxonMobil Canada Ltd., 2012 ABQB 76 Date: 20120207 Docket: 9703 06830 Registry: Edmonton Between: 321665 Alberta Ltd. Plaintiff - and - ExxonMobil Canada Ltd., formerly known as Mobil Oil Canada Ltd. and Husky Oil Operations Ltd. Defendants _______________________________________________________ Reasons for Judgment on Pre-judgment Interest and Costs of the Honourable Mr. Justice R.

Paul Belzil _______________________________________________________ The Applications [ 1 ] In written Reasons for Judgment dated May 27, 2011, cited 2011 ABQB 292 , I granted the Plaintiff, operating as Kolt Oilfield, judgment against the Defendants in an action based on s. 36 of the Competition Act . Damages at large were awarded in the amount of $5 million along with punitive damages in the amount of $1 million. In brief compass, I found that the Defendants, in contravention of the Act , engaged in anti-competitive behaviour by excluding Kolt from the opportunity to haul oilfield fluids for them.

By agreement, the issues of pre-judgment interest and costs were deferred pending further argument. Position of the Parties

[2] The Plaintiff seeks costs on a solicitor-client full indemnity basis including investigation costs incurred by the Plaintiff inadvancing the claim pursuant to s. 36 of the Competition Act R.S.C. 1985, c-34. In addition, the Plaintiff claims as costs interest incurredfor a litigation loan and claims an entitlement to compound interest for the entire period of time over which damages at large wereawarded. [3] The Defendants argue that the Plaintiff is entitled to an award of party and party costs only and has no entitlement to anaward of compound interest, investigation costs or the costs of a litigation loan.

They dispute that the Plaintiff is entitled to an award ofpre-judgment interest for the entire period of time over which damages at large were awarded on the basis that the Plaintiff unnecessarilydelayed prosecuting the action. Is the Plaintiff entitled to Compound Interest? [4] In its Amended Statement of Claim, the Plaintiff claimed pre-judgment interest pursuant to the Judgment Interest Act R.S.A.2000, c. J-1. No claim was made for compound interest in the prayer for relief nor were any facts alleged which could be used tosubstantiate a claim for compound interest.

Section 2(

b) of the Act precludes an award of compound interest. [5] The Alberta Court of Appeal in Creditel of Canada Ltd. v. Terrace Corp. (Construction) Ltd. 1983 ABCA 258 ,1983, 50 A.R. 311, held that the jurisdiction of a trial judge is restricted to the relief claimed in the pleadings. [6] In Costello v. Calgary (City) 1997 ABCA 281 , [1997] A.J.

No. 888, the Alberta Court of Appeal made thefollowing observation at para. 114: 114 Civil litigation almost invariably involves something that was not done that ought to have been done (e.g. the exercise ofreasonable care, the fulfilment of a contractual obligation, the restoration of a mistaken payment). And while it is conceivable that(compound) interest could accompany all manner of claims, it is too late in the game for a court to effect such a development.

That isparticularly true now that the legislature has devised a scheme of pre-judgment interest in the Judgment Interest Act. [7] There is a limited jurisdiction at common law to award compound interest. In Bank of America Canada v. Mutual TrustCo. 2002 SCC 43, this limited jurisdiction was defined in para. 55: 55 An award of compound pre- and post-judgment interest will generally be limited to breach of contract cases where there isevidence that the parties agreed, knew, or should have known, that the money which is the subject of the dispute would bear compoundinterest as damages.

It may be awarded as consequential damages in other cases but there would be the usual requirement of proving thatdamage component. [8] There was no evidence at trial that the test in Bank of America was met. [9] There is also very limited jurisdiction to award compound interest in equity. In Alberta (Minister of Public Works, Supply &Services) v. Nilsson 2002 ABCA 283, the following passage appears at para. 194: 194 A right to compound interest remains in equity for cases falling outside of statutory schemes.

A plaintiff must prove, first,entitlement to interest either in equity before the statutory scheme came into play or by some express contract; and, second, either thatthe defendant traded, speculated, or earned compound interest with the money improperly withheld the profits of which should be justlydisgorged, or that the plaintiff would have earned compound interest had the debt been properly paid. . . [10] There is no evidence in this case that either of these components has been satisfied.

[11] The Plaintiff also argues that compound interest can be awarded as consequential damages. The failure of the Plaintiff toplead such relief is a complete answer to this argument. [12] Finally, the Plaintiff argues that the wording of s. 36 can be used to justify an award of compound interest. I do not agree.There is no authority cited in support of this proposition and even if there were, the failure to seek this relief in the pleadings would besufficient to bar such a claim. [13] In the result, the Plaintiff is entitled to recover simple and not compound pre-judgment interest.

When Does the Obligation to Pay Pre-Judgment Interest Arise? [14] The parties agree that the obligation to pay pre-judgment interest arises when the loss actually occurs, on a year to year basis. Over what period of time should Pre-Judgment Interest be calculated? [15] In my Reasons for Judgment, I concluded that damages at large should be calculated over a period of 14.5 years commencingNovember 13, 1996 when the Defendants made their decision to sole source fluid hauling thus excluding the Plaintiff, to May 27, 2011being the date my Reasons for Judgment were released.

The Plaintiff claims pre-judgment interest for this entire period. [16] The Defendants argue that the Plaintiff delayed prosecuting its claim, thus pre-judgment interest should be awarded for aperiod of no more than three years from the date of filing of the Statement of Claim.

In support of their position, the Defendants rely onan Affidavit from the senior lawyer who acted for Mobil up to a few weeks before trial who deposed that the action could have beenheard within three years of the filing of the Statement of Claim. [17] Section 2(1) of the Judgment Interest Act states that a court “shall award interest in accordance with this Part” subject to theexceptions enumerated in s. 2(2) none of which are applicable. [18] Section 2(3) of the Act reads as follows:

(3) If it considers it just to do so having regard to changes in market interest rates, the circumstances of the case or the conduct of theaction, the court may (

a) refuse to award interest under this Part, [19] In 216927 Alberta Ltd. v. Fox Creek (Town) 1990 ABCA 29 , [1990] A.J. No. 156, the Alberta Court of Appealmade the following observation at para. 51: While s. 2(1) states that the court “shall” award interest nonetheless there is an overriding discretion in (3) to refuse to award any interesthaving regard to “the circumstances of the case”. In my view before the court should exercise its discretion to refuse to award interestand thus deprive a litigant of what is a prima facie entitlement to under (1) the reason for doing so must be compelling. [20] In Rayani v.

Yule & Co. 1996 ABCA 35 , [1996] A.J. No. 27, the Alberta Court of Appeal considered an appealfrom the decision of a trial judge who denied a successful plaintiff two years worth of pre-judgment interest because the plaintiffunnecessarily delayed the prosecution of his claim. On appeal the plaintiff argued that there should be a full recovery of pre-judgment

interest as the defendant’s insurer had the use of the money throughout. [ 21 ] At paras. 28 and 29 the following passages are found: 28 However, the plaintiff argues for full interest because the defendant Yule (or its liability insurer) had the use of the money throughout and could earn interest on it. There is some weight in that argument, but to my mind other countervailing factors outweigh it. 29 In the first place, the policy of s. 2(3) is obviously to encourage promptness, and (if need be) to penalize delay by denying interest.

In the second place, the plaintiff has no right to treat the defendant as its compulsory banker. A torts claim should not be treated like a savings account, idly drawing interest as long as the holder of it wishes. [ 22 ] In Chapell v.

Canadian Pacific Railway 2011 ABQB 74 , Erb J. awarded a successful plaintiff pre-judgment interest but at para. 39 concluded that the plaintiff should be denied pre-judgment interest for a period of three years which were described as dormant years in the action for which no explanation or justification was offered. [ 23 ] In order to fully appreciate the nature and complexity of this claim it is necessary to consider the significant litigation steps which were undertaken: · April 9, 1997 Statement of Claim filed · October 7, 1997 Affidavit of Records of Plaintiff filed · December 22, 1997 Affidavit of Records of Mobil filed · January 19, 1998 Affidavit of Records of Husky filed · January 23, 1998 Supplementary Affidavit of Records of Mobil filed · February 5, 1998 Plaintiff examined ExxonMobil Officer for Discovery · February 6, 1998 Supplementary Affidavit of Records of Mobil filed · March 10/11, 1998 Plaintiff examined Husky Officer for Discovery · May 5, 1998 Plaintiff filed a Supplementary Affidavit of Records · May 21, 1998 Plaintiff requested Case Management.

Lewis J. was subsequently appointed · July 23/24 1998 Plaintiff examined a Husky employee · September 23, 1998 Plaintiff filed a Notice of Motion seeking production of additional Husky documents · July 30, 1998 Continued Examination for Discovery of Husky Officer · October 2, 1998 Lewis J. issued an order respecting the production of Husky documents and ordering that Mobil was to produce an Officer within 40 days of the completion of the Husky Discovery · November 19, 1998 Supplementary Affidavit of Records of Husky filed · December 7/8, 1998 Plaintiff continued the Examination for Discovery of the Husky Officer · January 27, 1999 Plaintiff filed a Notice of Motion seeking answers to undertakings from Husky · March 1, 1999 Lewis J. issued an order respecting these outstanding undertakings · July 13, 2000 Plaintiff made a further application for further production of Husky documents · July 31, 2000 Lewis J. issued an order for production of further records from Husky · September 26, 2000 Second Supplementary Affidavit of Records of Husky filed · May 1, 2001 Examination for Discovery of ExxonMobil Officer continued

· May 2, 2001 Supplementary Affidavit of Records of Mobil filed · October 18, 2002 Veit J. heard an application by the Plaintiff for production of further documents by Husky · October 31, 2002 Veit J. issued Reasons for Judgment · February 10/11, 2003 Plaintiff’s Officer was examined for Discovery · April 1, 2003 Plaintiff provided responses to undertakings from that Examination for Discovery · Feb. 4, 2004 Counsel for the Plaintiff was suspended by the Law Society of Alberta and subsequently disbarred · August 2004 Plaintiff retained new counsel · February 9, 2005 New counsel for the Plaintiff filed a Notice of Change of Solicitors · June 3, 2005 ExxonMobil filed a Notice of Motion to compel answers to undertakings from the Plaintiff · August 12, 2005 Plaintiff provided some answers to undertakings · October 12, 2005 Case management conference before Lewis J. who ordered all pre-trial steps to be completed by May 12, 2006 · March 4, 2008 Plaintiff requested a case management conference before Lewis J. · July 8, 2008 Plaintiff received the expert report from its financial expert, Mr.

Bailey · December 15, 2008 Ross J. was appointed Case Management Judge replacing Lewis J. who retired · February 23, 2009 Plaintiff requested a Pre-Trial Conference · April 20, 2009 Plaintiff’s counsel advised that he wished to amend the Statement of Claim · May 4, 2009 Ross J. directed the hearing of an application respecting the request to amend the Statement of Claim · September 17, 2009 Plaintiff served a second Supplementary Affidavit of Records · March 9, 2010 Defendants served the expert report from their financial expert, Mr.

Siebert · April 23, 2010 Ross J. heard the application to amend the Statement of Claim · August 9, 2010 Ross J. issued Reasons for Judgment · September 17, 2010 Trial dates were agreed to · December 20, 2010 Amended Statement of Claim Filed · March 14, 2011 Plaintiff filed a Third Supplemental Affidavit of Records · April 4, 2011 Trial commenced [ 24 ] I identify the following factors as being relevant in determining whether the plaintiff should be deprived of pre-judgment interest for some period of time: 1. It is the plaintiff’s responsibility to prosecute an action with reasonable diligence. 2.

The Judgment Interest Act provides a prima facie entitlement to the recovery of pre-judgment interest. 3. The court may reduce the award of pre-judgment interest for compelling reasons. 4. The goal is to be fair to all parties which involves a consideration of all of the circumstances and a balancing of interests. No single factor is determinative of the issue.

5. The use of the term “conduct of the action” in the Judgment Interest Act necessarily involves an analysis of whether delays were justified and explained. Not all delays in litigation are unjustified. 6. The Defendants are large corporations in active, capital intensive business and have had the use of the money which is a demonstrable benefit to them. They have not adduced any evidence that they have not made use of the funds which would be used to pay an award of pre-judgment interest. 7.

The action was complex, involving extensive document production and a multiplicity of issues respecting liability and damages. 8. The Defendants, as they were entitled, vigorously contested liability and damages. 9. Both sides in the litigation retained experts who prepared reports resulting in some delay during their preparation. 10. A plaintiff is not responsible for institutional delays in litigation, including delays occasioned waiting for a reserve judgment by the Case Management Judge and delay between the setting down of trial and the hearing of trial. 11. The action was in active Case Management. 12.

With the agreement of all counsel and pursuant to the Order of Lewis J., the Discovery of Mobil was completed only after completion of the Husky Discovery which could only be completed after production of Husky documents was complete. There was significant dispute about the production of Husky documents which involved several contested court applications. 13. The action could not be set down for trial until all of the expert reports were completed. 14. There is no evidence that the Plaintiff made a conscious decision to delay the prosecution of the action for reasons unrelated to the carriage of the action. 15.

The Defendants are not alleging any specific prejudice arising from delays in having the matter set for trial in terms of loss of documentation or inability to produce witnesses. 16. On February 4, 2004 the Plaintiff’s lawyer was suspended by the Law Society of Alberta for alleged misconduct unrelated to this action and subsequently was disbarred. Current counsel in argument estimated that the change of counsel resulted in a delay of the action of 24 months whereas counsel for the Defendants estimated that a delay of only a few months was caused by the change of counsel.

I am unable to determine precisely how much delay was caused by the forced change of counsel but clearly there was some significant delay. This unfortunate occurrence was not the fault of any party in this action. [ 25 ] I accept that this action took too long to get to trial and could have been tried sooner.

I also accept that each action has unique features and that it is problematic to establish a time line within which an action should have been set down for trial. [ 26 ] In any event, as noted above, the fact that the action proceeded too slowly to trial is not determinative of the issue of whether the Plaintiff should forfeit a portion of the pre-judgment interest which it is prima facie entitled to receive.

By the same token, the fact that the Defendants had the use of pre-judgment interest money throughout is not determinative. [ 27 ] In weighing all of the above factors and in exercising my discretion, I have concluded that the fairest result is to deduct two

years of pre-judgment interest from the Plaintiff’s award of damages at large. [28] Accordingly, notwithstanding that the Plaintiff’s damages at large were calculated over a period of 14.5 years commencingNovember 13, 1996, pre-judgment interest will be calculated only for 12.5 years commencing November 13, 1998. Is the Plaintiff entitled to an award of Solicitor-Client costs? [29] It is trite law that in Alberta recovery of costs is normally on a party and party basis. Solicitor-client costs may be awarded inrare and exceptional circumstances. [30] In Walsh v.

Mobil Oil Canada 2008 ABCA 268 at para. 112 the court described the limited circumstances wherein solicitor-client costs may be awarded: 112 In this case, Mobil argues that the reviewing judge erred in principle by focussing on Mobil’s conduct prior to the hearing.Solicitor-client costs are awarded where the conduct of a party has been “reprehensible, scandalous or outrageous”: Young v. Young, (SCC), [1993] 4 S.C.R. 3 at 134, 108 D.L.R. (4th) 193 (S.C.C.). Moreover, the conduct must have occurred during thecourse of the litigation.

If the party’s pre-litigation conduct was outrageous or reprehensible, that may be a factor that is relevant to theultimate damage award: Hill v. Church of Scientology of Toronto, (SCC), [1995] 2 S.C.R. 1130, 24 O.R. (3d) 865(note) (S.C.C.). This principle was affirmed in Polar Ice Express Inc. v. Arctic Glacier Inc. 2009 ABCA 20 at para. 21. [31] In this case the Plaintiff is not alleging any litigation misconduct. [32] Moreover, the authorities are clear that punitive damages are not to be confused with costs.

The fact that the Plaintiffrecovered an award of punitive damages is not supportive of a claim for solicitor-client costs. [33] The Plaintiff argues in the alternative, that the wording of s. 36 of the Competition Act supports an award of solicitor-clientcosts. [34] Section 36(1) reads as follows: Recovery of damages 36.

(1) Any person who has suffered loss or damage as a result of (

a) conduct that is contrary to any provision of

Part VI, or (

b) the failure of any person to comply with an order of the Tribunal or another court under this Act, may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with theorder an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the courtmay allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section.

[ 35 ] Specifically the Plaintiff argues that use of the term “full cost” should be interpreted as meaning that Parliament intended that a successful Plaintiff would be entitled to recover solicitor-client costs. [ 36 ] In Bell Express Vu Limited Partnership v. Rex , 2002 SCC 42 the Supreme Court of Canada defined the proper approach to statutory

interpretation at para. 26 as follows: 26 In Elmer Driedger’ definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983): Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [ 37 ] Utilizing this approach to statutory

interpretation does not mean that courts are at liberty to stretch the meaning of a legislative provision to such an extent that the original meaning of the provision is blurred beyond recognition. [ 38 ] I do not accept that s. 36 mandates the awarding of solicitor-client costs to a successful party who would otherwise not be entitled to recover solicitor-client costs.

Had Parliament intended that a successful claimant in a s. 36 action would be entitled to recover solicitor-client costs, it could easily have said so. [ 39 ] Moreover, the term “full cost” is not synonymous with solicitor-client costs except in expropriation proceedings or where a special arrangement has been entered into between the parties allowing for the awarding of solicitor-client costs. Subject to these narrow exceptions, “full cost” means party and party costs. [ 40 ] In Commalert Monitors Inc. v.

Maple Ridge Business Centre Ltd. [1995] B.C.J No. 1939 , the following passages at paras. 4-6 are instructive: 4 The term “full costs” is derived from s. 11 of the Rent Distress Act , R.S.B.C. 1979, c. 362, upon which the claim for double the value of the property wrongfully distrained is based. 5

Section 11 in part reads: 11. In case distress and sale is made for rent alleged to be due, and no rent is due to the person distraining ... then the owner ... may ... recover double the value of the property distrained and sold, together with full costs of the proceedings . (my italics). 6 The term “full costs” is to be found at least as far back as 1690, in 2 Will. & M., c. 5, s. 5, which is the statute upon the present Distress Act (B.C.) , including s. 11, is based. So the term “full costs” must be interpreted in the light of what the decided cases say is meant by the term as used in the statutes. In my view the law is clear: in the context of s. 5 of

An Act For Enabling The Sale of Goods Distrained For Rent, In Case Rent Be Not Paid In A Reasonable Time , 2 Will. & M., c. 5, and thus in the context of s. 11 of the Distress Act , the term “full costs” means party and party costs: Irwine v. Reddish (1822), 5 B. & Ald. 796 , where the Court held per curiam that ... no distinction is known in the law between costs and full costs. (See also Avery v. Wood , [1891] 3 Ch. 115 (C.A.) ). In In Re Adelphi Hotel (Brighton) Ltd., [1953] 1 W.L.R. 955 (Ch. Div.) , at p. 958, Vaisey J. stated:

... but that expression (i.e. “full costs”) means ordinary party and party costs, and not costs as between solicitor and client ... part, ofcourse, from some special bargain. [41] There is no reported decision in which solicitor-client costs were awarded for pre-litigation misconduct respecting a claimpursuant to s. 36 of the Competition Act. In Maritime Travel Inc. v. Go Travel Direct.Com Inc. 2009 NSCA 42 the court confirmed anaward of party and party costs in a s. 36 claim. [42] I have concluded that the Plaintiff is entitled to recover party and party costs only pursuant to

Schedule C of the AlbertaRules of Court. Given the magnitude of the Judgment the Plaintiff is entitled to party and party costs in Column 5. [43] In Alberta, it is customary to award multiples of

Schedule C in complex actions. This was indeed complex litigationinvolving significant legal steps prior to trial followed by a lengthy, document intensive trial. There were unique features in this action inthat it was represented to me that this was the first supplier side s. 36 claim in Canada to proceed to trial. [44] The Plaintiff is entitled to recover costs on triple Column 5 of

Schedule C, including second counsel fee throughout. Inaddition, the Plaintiff is entitled to recover all reasonable disbursements including the account from Bailey Valuations Ltd. in the amountof $107,205.66 and Dudley & Associates, Certified General Accountants, in the amount of $6,867.

Is the Plaintiff entitled to claim its alleged investigation costs in advancing its claim? [45] As noted above, a party advancing a claim pursuant to s. 36 of the Competition Act is entitled to claim damages “togetherwith any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matterand of proceedings under this section”. [46] Counsel for the Plaintiff argue that Gary Whelen, the principal of the Plaintiff, incurred significant pre-action expensesinvestigating the claim and seek an award of $963,000. [47] Typically, a successful plaintiff may not claim pre-action investigative costs.

In Millott Estate v. Reinhard 2002 ABQB 998,the following passage appears at para. 91: 91 However, the decision of Madam Justice Bielby of this Court in Kha v. Salhab (2001), 282 A.R. 423 (Alta. Q.B.) is authority forthe proposition that costs necessarily incurred prior to the commencement of an action in order to determine if a case for liability couldbe made are not allowable under the Rules of Court. The decision in Kha was based on Bow Island (Municipal District) v. Wortz, (AB CA), [1921] 2 W.W.R. 153 (Alta. C.A.). The latter decision held that audit fees incurred prior to suit could not beallowed.

The relevant Rule in force today is similar to the Rule before the Court in Bow Island. [48] In Dilcon Constructors Ltd. v. ANC Developments Inc. (AB KB), 42 Alta. L.R. (3d) 132, the followingpassage appears at para. 16: 16 . . . Any party who attends a trial is likely to suffer some expense, whether living and travel expenses if from out of town, or lossof income or earnings. Mr. Osborn as Vice President of Dilcon is in the same position as any individual party to an action. Similarpersonal or internal costs are incurred by parties from the start of litigation and not merely for attendances at trial.

These kinds of costsare incurred in instructing counsel, gathering documents, attending at Examinations for Discovery and briefing for trial. Party and partycosts are not intended to compensate a successful party for its own personal or internal costs for attending to the litigation. [49] However, the general prohibition against claiming pre-action investigative costs is not absolute. Sidorsky v. CFCNCommunications Ltd. 1997 ABCA 280 , [1997] A.J. No. 880 involved a defamation action.

The Alberta Court of Appeal, whilerecognizing the possibility of advancing a claim for the costs of investigation, reduced an award of $200,000 made by the trial judge to$10,000 as the successful party failed to call any evidence to justify the necessity and reasonableness of the expense claimed.

[ 50 ] In Polar Ice Express Inc. v. Arctic Glacier Inc. 2007 ABQB 717 , Marceau, J. dealt with a claim pursuant to s. 36 of the Competition Act . In that case the claimant made a claim for investigation costs which was disallowed at para. 115 on the basis that there was insufficient evidence tendered to support this claim. Presumably, had such evidence been presented, the claim for investigation costs may have succeeded. [ 51 ] In support of this claim, Whelen swore an affidavit on June 14, 2011.

The affidavit deposes that he “personally invested enormous amounts of my own time pursuing the litigation” and that he took time away from his other businesses and family to do so. Attached as an Exhibit to his Affidavit is documentation wherein investigation costs in the amount of $963,000 are outlined for the period December 1996 to May 31, 2011. [ 52 ] This is further broken down for the time period December 1996 to July 31, 2003, a period of 80 months in the amount of $3,000 per month for a subtotal of $240,000.

No details of what investigation was actually carried out during this time period were provided. [ 53 ] For the time period August 1, 2003 to December 31, 2008 investigation costs are claimed in the amount of $4,500 per month for 65 months for a subtotal of $292,500. No details of what investigation was actually carried out during that time period were provided. [ 54 ] For the period January 31, 2009 to May 31, 2011 the claim for investigation costs is being advanced on the basis of a per diem rate of $1,500 multiplied by the number of days specified for each month for a subtotal of $430,500.

Other than identifying the number of days claimed for each month during this time period, no details of what investigation was actually carried out were provided. [ 55 ] During questioning on his Affidavit, Whelen acknowledged that he kept no records of what time was spent investigating the claim nor was he able to provide particulars of what investigation was carried out on any given day.

He testified that at no time did he contact the Competition Bureau respecting his concerns about the conduct of the defendants. [ 56 ] In response to the Plaintiff’s claim for investigation costs, the Defendants filed an Affidavit sworn October 26, 2011 from Robert G.

Lancop who retired in 2007 after 35 years of service with the Competition Bureau having attained the position of Assistant Deputy Commissioner for Competition. [ 57 ] He was asked to review a number of documents, including the trial transcripts of key witnesses and deposed that had a complaint been filed with the Competition Bureau, it would have been investigated.

Complaints are directed to either the criminal matters branch or the civil matters branch. [ 58 ] He outlined in an exhibit to his Affidavit the steps that an investigation would entail and opined that a civil complaint is not as time intensive as a criminal complaint. [ 59 ] He opined that a maximum of 48 days would be required to investigate this civil claim and based on the salary of a commerce officer employed by the Bureau tasked with investigating these types of complaints, assigned a monetary value for the work they would have undertaken in the amount of $14,300.

He also opined that travel expenses between Ottawa and a location would be incurred as well as the cost of retaining experts and concluded by opining that Whelen lacks the training to carry out a proper investigation. [ 60 ] In paragraph 14(

a) of his Affidavit the following statement is found: (

a) most alleged conspiracies are covert and require the use of search warrants and other powers to uncover. In this case, the arrangements, circumstances and documents, appear to have been open and transparent; [ 61 ] In enacting s. 36 of the Competition Act , Parliament saw fit to specifically mention the right to claim investigation costs. It is

not a condition precedent to advancing a claim for investigation costs that a complaint to the Competition Bureau be made.

Section 36 is a stand alone

section which permits a party to advance a civil claim. [ 62 ] The wording of the

section provides no guidance as to how investigation costs are to be defined and case law provides limited assistance. However, investigation costs must mean something different than court costs as Parliament must have known that a successful claimant would be entitled to recover court costs in any event. [ 63 ] I accept that the trial decision in Polar Ice is authority for the proposition that a claim for investigation costs must be evidence based.

The evidence before me dealing with investigation costs provides only limited assistance. [ 64 ] While I accept that Whelen’s estimates of the amount of time he spent investigating the claim were deposed to honestly and in good faith, they are not itemized except to the extent of identifying a number of days occupied for each time period. Moreover, his Affidavit does not distinguish between investigation costs and his personal time dealing with his claim, the latter not being compensable. [ 65 ] The Lancop Affidavit is as well of limited value.

Whelen did not file a complaint with the Competition Bureau and was not legally required to do so.

I do not accept that a citizen who undertakes an investigation pursuant to s. 36 can be fairly compared to trained personnel within the Bureau who by virtue of their training have the expertise to investigate complaints efficiently. [ 66 ] Given that Whelen does not purport to have any training or expertise it necessarily follows that his investigation of his claim would take longer and not be as focussed as an investigation carried out by trained complaints personnel. [ 67 ] In addition, the Lancop Affidavit in para. 14(

a) contains a serious misapprehension about the nature of Whelen’s concerns about the conduct of the Defendants. In deposing that “in this case the arrangements, circumstances and documents, appear to have been open and transparent,” Lancop is overlooking the fact that the Defendants never hid the fact that they were entering into a joint synergy initiative. At the time however, Whelen did not know the details of this initiative and indeed full documentary disclosure was not achieved for several years after filing of the Statement of Claim.

The volume of documents disclosed was very substantial as evidenced by the number of exhibits at trial. [ 68 ] The Defendants, as they were entitled, contested production of some documents on the grounds of relevance and privilege. Both Defendants filed Supplementary Affidavits of Records as did the Plaintiff.

Ultimately, document production was made or refused in the conduct of the litigation, but from the perspective of the Plaintiff, investigating this claim was not as simple as Lancop implies. [ 69 ] Based on the foregoing I have concluded that the following principles govern the award of the costs of investigation of this s. 36 claim: 1. The claim can be advanced notwithstanding that no complaint was made to the Competition Bureau. 2. I accept Lancop’s opinion that had a complaint been filed it would have been investigated. 3. The term “full costs” includes reasonable disbursements.

At all times material Whelen was residing in Red Deer, Alberta which is 900 km. from Rainbow Lake, Alberta where Kolt was based. 4. Costs of investigation must relate to actual investigation of the claim, not merely participating in the litigation which is not compensable.

5. I do not accept that it is fair to compare Whelen’s investigation of the claim with what investigation would have been carried out by trained investigators employed by the Competition Bureau. Whelen did not have, nor did he purport to have, any training or expertise in the investigation of his complaint about what he believed was anti-competitive behaviour on the part of the Defendants. It necessarily follows that Whelen’s investigation would take longer and not have been as focussed as that of a trained investigator. 6.

Assessing investigation costs must be viewed from the perspective of Whelen at the time he undertook the investigation not with the benefit of the perfect wisdom of hindsight following the conclusion of trial. At the time Whelen starting investigating the possibility of advancing a claim, he had no access to records from the Defendants and thus he started the investigation in a documentary vacuum. As noted, full production of records from the Defendants was not completed for several years following the filing of the Statement of Claim in 1997.

Ultimately, a large volume of records was produced but Whelen and his counsel did not discover the full evidentiary import of the records until all of them had been produced. This is not analogous to a situation wherein an individual investigating a potential claim has full access to the records at the outset of the investigation. 7. I accept that there must be an evidentiary basis for investigation costs. However, I do not accept that it is fair to apply too rigorous a standard of record keeping for an individual like Whelen who is not a trained investigator. 8.

I accept that Whelen expended an enormous amount of time and effort investigating this claim and that this was done at the expense of his family life and his other business ventures. 9. I do not accept Lancop’s opinion that Whelen’s time can be fairly valued by comparing him to a salaried investigator employed by the Competition Bureau.

Given that Whelen is not a salaried employee but rather is the owner of several businesses, one of which I found was put out of business by the anti-competitive behaviour of the Defendants, a salaried comparison is simply not suitable. [ 70 ] In the result, while I accept that some award for costs of investigation is warranted on this evidence, I do not accept that a claim for $963,000 has been substantiated.

As the evidence of investigation costs has not been particularized, I am left with no alternative but to estimate a lump sum award and given all of the foregoing have concluded that costs of investigation should be awarded in the amount of $75,000 inclusive of disbursements. Is the Plaintiff Entitled to Claim the Cost of Borrowing Funds to Finance the Litigation? [ 71 ] The Plaintiff argues that because it was put out of business by the action of the Defendants, it should be allowed to claim the cost of money borrowed to finance the litigation. [ 72 ] In Davidson v.

Patten 2005 ABQB 521 at para. 51 and Do (Next Friend of) v. Sheffer 2010 ABQB 422 at para. 16 it was held that these types of expenses are not recoverable.

Conclusion and Order [ 73 ] In

summary, the Plaintiff is entitled to an award of simple pre-judgment interest on the award of damages at large for the 12.5 year period commencing November 13, 1998 to May 27, 2011 calculated when the losses actually occurred, on a year to year basis. [ 74 ] The Plaintiff is entitled to recover

Schedule C costs calculated on the basis of triple Column 5 including second counsel fee throughout. [ 75 ] In addition the Plaintiff is entitled to recover all reasonable disbursements including the account from Bailey Valuations Ltd. in the amount of $107,205.66 and Dudley & Associates, Certified General Accountants in the amount of $6,867. [ 76 ] The Plaintiff is also entitled to recover investigation costs in the amount of $75,000 inclusive of disbursements. [ 77 ] The claim for litigation loan expenses is dismissed. [ 78 ] As success in this application has been divided, each party will bear their own costs for it.

Heard on the 20 th day of January, 2012. Dated at the City of Edmonton, Alberta this 7 th day of February, 2012. R. Paul Belzil J.C.Q.B.A. Appearances: R. L. Duke, Q.C. and G. J. Thorlakson Miller Thomson LLP for the Plaintiff J. J. Patterson & R.F.T. Quinlan Fraser Milner Casgrain LLP for Husky Oil Operations Ltd.

D. W. McGrath Q.C. and M. C. O’Brien Blake, Cassels & Graydon LLP for Mobil Oil Operations Ltd.