JR v. University of Calgary, 2012 ABQB 774

Court of Queen ’ s Bench of Alberta Citation: JR v. University of Calgary, 2012 ABQB 774 Date: 20121219 Docket: 0803 15387 Registry: Edmonton Between: JR Plaintiff - and - The Board of Governors of the University of Calgary, Sheila Evans, and Jill Brown Defendants Editorial Notice: On behalf of the Government of Alberta identifying information has been removed from this unofficial electronic version of the judgment. _______________________________________________________ Reasons for Judgment on Costs of the Honourable Madam Justice D.C. Read _______________________________________________________

[ 1 ] This 17 day trial ended in a written decision, JR v. University of Calgary , 2012 ABQB 342 . I awarded the Plaintiff $116,610.89 in damages for constructive dismissal, loss of a living allowance and loss of an accommodation benefit. The Plaintiff made a number of other claims, for future loss of income, future cost of care, and damages for intentional or negligent infliction of psychiatric harm which were dismissed. I directed that costs could be spoken to if required. [ 2 ] JR (now

F) was employed by the Defendant University for approximately eight months in a contract position as Director of External Relations in the Faculty of Nursing on the Doha, Qatar campus. She sued the University, as well as two employees of the University by Statement of Claim issued October 31, 2008. The total claim for damages was over $2,000,000. The matter proceeded to trial from November 21, 2011 through December 9, 2011 and then had to be adjourned until January 23 and 24, 2012 when it concluded. Reasons for judgment issued May 25, 2012. [ 3 ] On November 10, 2011, Ms.

F served a Formal Offer of Settlement under the Rules offering to settle the action for $800,000 plus costs. The University served an offer which did not comply with the Rules respecting Formal Offers of Settlement on November 18, 2011. Their global offer was for $100,000. [ 4 ] On June 24, 2012, Ms. F provided a proposed Bill of Costs in the amount of $153,224.65. On October 19, 2012, the University provided a proposed Bill of Costs in the amount of $44,327.17, although their covering letter specified that they did not admit that the Plaintiff was entitled to costs of the action.

Issues: [ 5 ] The parties have been unable to agree to costs and made written submissions, which raise the following issues: i. Is the Plaintiff entitled to costs? ii. If so, should the Plaintiff ’ s

Schedule C costs be reduced because: (1) she was not substantially successful when considering the total amount claimed in the Statement of Claim (2) the Defendant made a Calderbank offer which was close to the amount ultimately recovered (3) the trial ran over time iii. Should particular items in the Plaintiff ’ s proposed bill of costs be allowed: (1) should a fee be allowed for second counsel (2) should certain fee items be allowed on an enhanced scale (3) should certain other disputed items be permitted (4) should the Plaintiff be entitled to claim all of her proposed expert fees iv.

Should the Defendant be entitled to costs of a mid-trial application permitting admission of their expert psychiatrist ’ s report? Discussion and Decision: [ 6 ]

Part 10, Division 2 of the Alberta Rules of Court , Alta Reg 124/2010 ( “ Rules ” ) sets out the general rules and considerations respecting payment of costs. Rule 10.33(1) sets out a number of factors to consider in making a determination respecting costs. [ 7 ] It is trite law that a court has a broad discretion in ordering costs but this discretion must be exercised judiciously.

i. Is the Plaintiff entitled to costs? [ 8 ] The University acknowledges that the general rule is that costs follow the event. In other words, the successful party is entitled to their costs. However, they argue that the general rule does not apply here. They say that the Plaintiff should not be considered to have been substantially successful when one considers the degree of success she had, both as measured by the amount recovered in contrast to the amount claimed and when considering the number of the issues raised on which the Plaintiff was unsuccessful.

The University says that in reviewing my findings on the issues raised, it is apparent that the University had relatively more success in defending against these issues than had the Plaintiff in proving them. They say that in view of what they characterize as divided success, each party should bear their own costs. [ 9 ] The degree of success of each party is clearly a factor to consider in making an award of costs (see Rule 10.33(1)(a)) and there is no doubt that success in this action was somewhat divided in that the Defendant successfully defended against a number of the Plaintiff ’ s claims.

However, I agree with McIntyre, J in Lavallee v. Siksika Nation 2011 ABQB 282 who commented at para 11 that “ [p]laintiffs are rarely awarded everything asked for in a Statement of Claim...the fact that the Plaintiff was not successful on all causes of action is not a ground for departing from the general rule that costs should follow the event ” . [ 10 ] Here, Ms. F was successful in obtaining a judgment. I conclude that she is entitled to costs. ii. Should

Schedule C costs be reduced because: (1) she was not substantially successful when considering the total amount claimed in the Statement of Claim (2) the Defendant made a Calderbank offer the amount of which was close to the amount ultimately recovered (3) the trial ran over time [ 11 ] I will consider all of these arguments together. [ 12 ] The parties are agreed that Column 2 of

Schedule C is the relevant reference given the amount of the judgment obtained. [ 13 ] The Defendant argues that the Column 2 costs should be reduced generally to reflect the fact that “ a large percentage of the trial was spent litigating issues upon which [Ms. F] was unsuccessful ” and, thus, it could not be said that she was substantially successful. The University points out that Ms. F ’ s claim was for more than $2,000,000 and she was awarded only $116,610.89 and calculated that her judgment was for only 6% of the amount she claimed.

Further, the Defendant argues that the amount of costs claimed, over all, is excessive. They calculate that the costs claim represents a full 130% of the amount of the judgment. The Defendant relies upon a number of cases in support of their argument, including D.O.S. Enterprises v. Lac la Biche (Town) , 2003 ABQB 62 . [ 14 ] The Plaintiff argues that this was not a case of a split on liability or of divided success based upon both a claim and a counterclaim. Success was divided only in the sense that she obtained a judgment significantly reduced from the amount claimed.

In support of her argument, she relies upon Mahe v. Boulianne 2010 ABCA 74 where at para 6 , the Court of Appeal commented in respect to costs on appeal that “ costs are not usually apportioned on an issue-by-issue basis, a claim-by-claim basis or on a head-of-damages basis, although there is a discretion to do that in proper cases ” . [ 15 ] In respect to the offer made by the Defendant, the Plaintiff says it was not made under the Rules and, in any event, was for less than the amount of the judgment and so, should not trigger any costs consequences.

The Defendant acknowledges that the offer made does not meet the formal requirements of the Rules but says that it is still appropriate to consider it when considering costs: Mahe v. Boulianne , op cit, para 10 . [ 16 ] Based upon both the considerations set out in Rule 10.33(1) and decisions such as Mahe, it seems clear that this Court does have the discretion to consider both the degree of success and the informal offer made in its determination of what costs should be awarded.

[ 17 ] The Plaintiff was not successful in respect to many of the heads of damages she claimed. In particular, much trial time was taken up with medical evidence respecting her claim that she suffered post traumatic stress syndrome as a consequence of the manner in which she was dismissed or because the Defendant either negligently or intentionally inflicted psychiatric harm. Neither of those claims was successful. Further, I agree with the Defendant that the amount she now claims in costs is out of all proportion to the amount of success she enjoyed.

As well, although the offer made by the Defendant to settle this litigation was not a formal offer meeting the requirements of the Rules , it was a reasonable offer and the amount was very close to the final award of the Court. The offer was, however, made late in the pre-trial process and when both parties must have been in active preparation for trial. It was also open for acceptance for only a short period of time. Nonetheless, the Plaintiff did not respond to this offer in any fashion and seems simply to have ignored it. [ 18 ] The trial ran far longer than was scheduled.

Sitting hours were lengthened throughout the scheduled time period in an effort to keep the trial within the time allotted. However, notwithstanding these efforts, two further trial days had to be scheduled after the Christmas break in order to conclude the trial. The Plaintiff says both parties must take some responsibility for the time over run of the trial and says, in particular, that she could not have anticipated that the Defendant would cross examine her for what she characterized as a period in excess of three days. [ 19 ] I disagree.

I conclude that the Plaintiff was more responsible than was the Defendant for the fact that the trial ran long. Although the Plaintiff testified for much of the first week of trial, it was not a question of the Defendant taking an inordinate amount of time in cross examination. Indeed, the time it took for the Plaintiff to give her evidence in chief was almost exactly equal to the amount of time during which she was cross examined. One of the difficulties in obtaining her evidence was that the Plaintiff tended to pause, sometimes for a lengthy period of time, before responding to a question.

Another was that she appeared so intent on precision in her answers that she would sometimes quibble with the wording of the question before making any attempt to answer it. Further, her answers sometimes appeared argumentative, obstreperous or even evasive and she sometimes had to be asked more than once or in more than one fashion before an answer could be elicited. To give but one example, she was asked in cross examination to confirm that she was the legal owner of a home in Winnipeg. The question seemed simple and should have elicited a simple answer and one word answer – yes.

Instead, however, the Plaintiff answered by saying something to the effect that no, she was not the legal owner of a Winnipeg home but did own a rental house in Winnipeg. This response required at least two further questions to be asked to clarify what she meant. The home in question was the house she owned and had resided in when she lived in Winnipeg, before taking the position in Doha. The distinction she made seemed designed to further an argument her counsel would later make.

The question was simple; her answer seemed needlessly precise and to venture into trial strategy or argument rather than simply provide evidence.

There were a number of other similar instances, all of which increased the length of her examination and cross examination. [ 20 ] Of course, these may simply reflect her manner of communication but, if so, it should have been clear to her counsel before the trial began that the process of obtaining her evidence would be lengthy so that the scheduled trial time was adjusted before hand. [ 21 ] Further, the Plaintiff would not agree that the Defendant ’ s expert ’ s report could be admitted and much of half a day was taken up with argument respecting this issue.

After the report was admitted, the Plaintiff called her experts back to the stand to give rebuttal evidence. Almost an entire day of trial was utilized to obtain this rebuttal evidence. [ 22 ] From my review of the Defendant ’ s experts ’ reports, it also seems clear that the Plaintiff was uncooperative in the process required to obtain these. She required frequent breaks, asked numerous questions about what information certain psychological tests were intended to elicit, and refused to respond to questions which Ms. F had decided was irrelevant.

All of this undoubtedly made obtaining the reports more expensive and the reports themselves as well as the evidence of the Defendants ’ experts more lengthy. [ 23 ] The purpose of the Rules is set out in

Part 1, Division 1 particularly in Rule 1.2 which provides that the purpose of the Rules generally is “ to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way ” .

Rule 1.2 (4) specifies that when exercising a discretion the intention is that in granting a remedy or imposing a sanction, the discretion will be exercised in a fashion “ proportional to the reason for granting or imposing it ” . [ 24 ] Bearing in mind particularly her level of success and the offer made, as well as, and to a lesser extent, the trial length, I conclude that the Plaintiff ’ s costs as set out in her draft bill of costs are not proportionate to the general purposes for granting of costs. The Plaintiff ’ s costs should be reduced from what would normally be payable under

Schedule C. I will reduce her costs by 30% to take into account these factors. I will not make a similar reduction in respect to her disbursements. Subject to what I will say below about particular items, her disbursements should be paid.

iii. Should a fee be allowed for second counsel ? [ 25 ] Both parties had second counsel throughout the trial. Ms. F has asked that the fees for her second counsel be permitted. The Defendant argues that this matter was not significantly complex and says second counsel was not necessary. [ 26 ] In Seidel v. Kerr , 2004 ABCA 157 at paras 11 and 12 , the Alberta Court of Appeal summarized the factors relevant to allowing second counsel fees.

They include the general importance of the issues to the parties, the value of the case, the complexity and scope of the issues, the size of the trial record, the manner in which opposing counsel conducts the case, and whether second counsel addressed the court. [ 27 ] The issues alive in this lawsuit were important to the parties themselves, particularly to the Plaintiff and the amount originally at issue was large. The matter was factually dense but not complex. The trial record was large because of the length of the trial. However, it was not particularly document intensive.

Second counsel for the Plaintiff did address the court both in terms of leading witnesses and engaging in some limited cross examination. My general impression was that both sides took aggressive stances in the trial of this action so, in view of that, I will not comment particularly on the manner in which opposing counsel conducted the case. [ 28 ] The trial days were long and as I am well aware, during a long trial such as this, the work load for counsel does not end with adjournment at the end of each day. For that reason alone, I am certain that second counsel was useful.

I note, as well, that both sides had second counsel so I conclude that it was necessary in this matter. I will allow fees for second counsel. iv. Should certain fee items be allowed on an enhanced scale? [ 29 ] The Plaintiff claims entitlement to enhanced fees for three items set out in

Schedule C: disclosure of records and review of the opposite party ’ s documents (Item 3(1)(2)); preparation for trial (Item 10(1)); submission of written argument (Item 12(2)). In each case, she seeks to have the Column 2 amounts doubled. [ 30 ] The Plaintiff argues that this case was both legally and factually complex. She says that the documentation was extensive. There were numerous documents and the total volume was thousands of pages in length.

She says, further, that the complexity of the trial and its factual density caused the trial to be long and caused, as well, the necessity for a longer and more arduous trial preparation process as well as long and involved written arguments at the conclusion of trial. [ 31 ] As I have already said, this case was factually dense but was not legally complex. At its core, it was an action for constructive wrongful dismissal.

There was a claim for aggravated or punitive damages for the Defendant ’ s conduct in dismissing her and, in addition, she made a claim in tort for intentional or negligent causing of mental suffering. However, all of the causes of action related to the same series of incidents and none of these causes of action was novel. Indeed, wrongful dismissal claims making similar further claims are not uncommon. Nothing in this action raises any reason to order enhanced costs. v. Should certain other disputed fees be permitted? [ 32 ] The Plaintiff ’ s claim also includes claims for costs of various interim applications.

These included one slated for July 8, 2009 and another returnable on October 7, 2009. For both she claims the amount recoverable for a contested application. However, in each case the application was resolved by a consent order. As a consequence, only the amount recoverable for an application without notice under item 6(2) should be recoverable. [ 33 ] The Plaintiff acknowledges in her written submissions that a number of other claims she has made such as those for runner ’ s fees and computer research are generally not allowable. I agree and will not allow them here.

vi. Should the Plaintiff be entitled to claim all of her proposed expert fees? [ 34 ] The Plaintiff has claimed expert fees totalling over $65,000. The Defendant argues that the expert ’ s fees of four of these experts should be discounted on the basis that their evidence was not necessary or helpful. These were Mr. Randy Popik, the Plaintiff ’ s accounting expert, Dr. Cheryl Malmo, the Plaintiff ’ s treating psychologist, Dr. E.S.

Wiebe, the Plaintiff ’ s psychiatrist and Cathy Mayhew, the Plaintiff ’ s treating clinical social worker. [ 35 ] The primary factor in allowing expert witness costs is whether, at the time it was incurred, the expenditure was reasonable: Seidel v. Kerr , 2004 ABCA 157 at para 15 . It is not appropriate therefore to utilize hindsight and argue that because a court preferred the evidence of another expert or otherwise did not find an expert ’ s evidence persuasive, it was unreasonable for the party retaining the expert to have incurred the cost.

In this case, the Plaintiff alleged that she suffered from post traumatic stress disorder as a consequence either of how she had been dismissed by the Defendant or because the Defendant had negligently or intentionally inflicted psychiatric harm. As a consequence, she was obliged to offer expert evidence in support of this allegation, both in terms of the cause, diagnosis, and prognosis of her illness and in terms of the loss she had suffered as a consequence. [ 36 ] I will not, therefore, discount the experts ’ fees simply because I did not accept their evidence.

However, some particular portions of their fees bear comment. [ 37 ] Dr. Malmo was in attendance in Court for a number of days when she did not give evidence. Undoubtedly it was helpful to the Plaintiff to have her present as well when Dr. Carl Blashko and Dr. Paula Blashko gave evidence so that she could aid Plaintiff ’ s counsel with her cross examination. Other than for those occasions, however, I cannot see that Dr.

Malmo ’ s presence in Court was necessary or reasonable and any fees she has claimed for court attendance time unrelated to her own testimony or that of either of the Doctors Blashko should not be paid. [ 38 ] The Plaintiff ’ s cost claim also includes a claim for $985 for “ items from Cathy Mayhew ” . This was not otherwise explained in the draft bill of costs. At the hearing of this application, counsel for the Plaintiff was not certain what it entailed as it had been incurred before her involvement in the file. She speculated that the cost might have been incurred for textbooks or other research materials.

She sent a letter later in the hearing day to explain that the amount claimed was misnamed and was actually incurred for a report and correspondence with the Plaintiff ’ s former counsel. This amount is a proper disbursement and payable. I note further however that Ms. Mayhew ’ s December 16, 2011 account includes a $2000 charge for “ client support ” on November 21 through 24 . Those were the dates on which Ms. F testified. I can only conclude that Ms. Mayhew ’ s services on these days was therapeutic and not related to her expert testimony.

Therapeutic costs are not recoverable as a disbursement. [ 39 ] With these exceptions, however, I conclude that the fees of Dr. Malmo, Dr. Wiebe, Ms. Mayhew and Mr. Popik are proper disbursements and should be paid. [ 40 ] The Plaintiff also claims a disbursement in the amount of $10,725 for “ Health Pointe Medical Centres – Dr. Block ” . Dr. Block is identified as a psychiatrist. By way of explanation, the Plaintiff says that Dr. Block ’ s fees are divided into two accounts. The first and larger was incurred in respect to a special chambers application made pursuant to Rule 5.43(

a) to require Ms. F to submit to an independent medical examination by a psychiatrist chosen by the Defendant. It is important to note, however, that this application was made not in this action but, instead, in another action which the Plaintiff brought against her disability insurer. This other action was related to this one only insofar as both related to Ms. F ’ s employment in Qatar and the illness she suffered. [ 41 ] Apparently Ms. F wished to have her own nominee present at this independent medical examination as permitted under Rule 5.42(1)(a). She chose both Dr. Block and Dr.

Malmo as her nominee health care professionals although my recall is that Dr. Blashko ’ s report made an exhibit in these proceedings references only the presence of Dr. Malmo. In support of her request for payment of this disbursement, the Plaintiff attached to her costs submission a letter from counsel for the disability insurer, indicating he had no objection to these named nominees. The Plaintiff argues that the disbursement for Dr. Block ’ s work in attending at this IME is a proper cost in this action because there was an agreement among her counsel and that of the Defendants in both actions, that Dr.

Blashko ’ s report could be used in both proceedings. [ 42 ] I understand from submissions made at the oral hearing of this costs application, that the disability insurance action

concluded in a settlement. Counsel for Ms. F in that action was not counsel in this action and counsel in this action was only able to tell me that costs were payable to the Plaintiff in the other action. She did not know whether those costs had included the disbursement for Dr. Block ’ s fees. However, later on the day of the oral costs hearing counsel for the Plaintiff sent a letter indicating that one half of Dr.

Block ’ s costs were paid in the other action. [ 43 ] To the extent that they were included either generally or specifically in the costs payable in the other action, they have already been paid and are not a proper disbursement in this action. In view of the information I now have, I conclude that one half of the $2500 described in Dr. Block ’ s account as his fee for attendance at the IME with Dr. Blashko is recoverable in this action as a disbursement and should be paid. I have no knowledge of what the two amounts itemized as meeting with the patient involved but question whether the necessity to meet with Ms.

F for 2.25 hours before attending at the IME could be seen as a reasonable disbursement or simply a therapeutic measure, given that Dr. Block ’ s function at the IME was simply to act as nominee. I would not allow those amounts. [ 44 ] A review of Dr. Block ’ s accounts also indicates that he charged for preparation of a report. Counsel for the Plaintiff did not say if this report was prepared for the other action, for the within action or for both. I note that Dr. Block gave no evidence at this trial and no report that he prepared was entered into evidence at this trial. Ms. F also had another psychiatrist, Dr.

Wiebe, provide a report which was admitted into evidence at this trial. I can think of no reason that two psychiatric reports would have had to be admitted. I would not allow as a proper disbursement in this trial, the amount paid to Dr. Block for what he termed an ‘ IME ’ or for ‘ chart review, file prep, dictation and review ’ . [ 45 ] The Plaintiff also submits a second account from Dr. Block for $1800 incurred for what is only described as ‘ legal meeting ’ . Counsel for Ms. F says that this fee was incurred when Dr. Block met with her to prepare for this trial. Again, Dr.

Block gave no testimony at this trial and provided no report which was admitted into evidence. I note that similar claims were made for counsel meetings with other mental health professionals which I have allowed. I understand that I have the discretion to award the cost of an expert even if that expert does not testify; however, I have no basis upon which I can conclude that this disbursement was one reasonably incurred in this action. I would not allow this disbursement. vi.

Should the Defendant be entitled to costs of a mid-trial application permitting admission of their expert psychiatrist ’ s report ? [ 46 ] The Defendant claims costs related to the application argued mid-trial to admit the expert report of Dr. Carl Blashko, the Defendant ’ s psychiatrist expert, after the Plaintiff filed a Notice of Objection pre-trial to its admission. This application was argued for one half day on November 29, 2011 and both parties prepared and provided written submissions in respect to the application.

The Defendant says that these costs should be awarded under item 8(1) – Application where Brief is required, based upon Column 5 rather than on Column 2 because the amount the Plaintiff claimed was in excess of $2,000,000. [ 47 ] The Plaintiff does not dispute that the Defendant is entitled to costs of this application but argues that they should be payable under Column 2 so that they are on the same scale as those of the Plaintiff. [ 48 ] Costs for the Blashko report application should be payable to the Defendant under Column 5. Article 1(3)(

a) of

Schedule C provides that as against the Plaintiff the range for costs payable should be recoverable “ with reference to the amount claimed by the Plaintiff ” . The Plaintiff ’ s claim in her Statement of Claim, makes Column 5 the correct column. [ 49 ] Because a half day of trial was taken up in argument for this application, the Plaintiff ’ s trial costs should also be reduced by one half day. [ 50 ] If any other questions respecting costs arise, I direct that they be taken first to the assessment officer. Heard on the 17 th day of December, 2012.

Dated at the City of Edmonton, Alberta this 19 th day of December, 2012. D.C. Read J.C.Q.B.A. Appearances: Dawn Pentelechuk, Q.C. Cleall for the Plaintiff Michael D.A. Ford, Q.C. McCarthy Tetrault LLP for the Plaintiffs