Attila Dogan Construction v. AMEC Americas Limited, 2013 ABQB 240

Court of Queen ’ s Bench of Alberta Citation: Attila Dogan Construction v. AMEC Americas Limited, 2013 ABQB 240 Date: 20130423 Docket: 0701 09436 Registry: Calgary Between: AMEC Americas Limited, formerly AMEC E & C Services Limited and AGRA Monenco Inc. Applicant - and - Attila Dogan Construction and Installation Co. Inc . Respondent _______________________________________________________ Oral Reasons for Judgment of the Honourable Mr. Justice Neil Wittmann _______________________________________________________ Introduction [ 1 ] As part of case management, this Court made an Order for Security for Costs on the application of AMEC Americas Limited

(“AMEC”) against Attila Dogan Construction and Installation Co. Inc. (“AD”) on March 17 th , 2011: Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 175 , (“the SFC Decision”).

The Order fixed security for costs at $1.6 million dollars with leave to AMEC to apply for the next installment of security for costs after questioning is completed: paras. 30 and 31. [ 2 ] In a subsequent case management decision, AMEC applied to this Court for direction and assistance with respect to the cost of translating to the English language an estimated 20,000 - 25,000 records in the Turkish language produced by AD in the Turkish language in its Affidavit of Records: Attila Dogan Construction v. AMEC Americas Limited, 2011 ABQB 794 , (the Turkish Records Decision).

In the Turkish Records Decision, this Court stated at paragraph 71, that upon proof of disbursements by AMEC for translation into English, AD will be required to post additional security for costs in the amount of these disbursements. The Turkish Records Decision was appealed: Attila Dogan Construction and Installation Co. Inc. v. AMEC Americas Limited, 2012 ABCA 379 (“the Appeal Decision”).

The Appeal Decision resulted in a dismissal of the appeal subject to a limited direction that the AMEC translation costs were to be subjected to “a degree of scrutiny for the purpose of fixing the amount of such security”: paras. 28 and 29. [ 3 ] AMEC has now applied for an Order that AD be required to post security for costs in the amount of $433,348.98 representing the translation costs incurred by AMEC (the Translation Security). A further part of this application is that AD be required to post security for costs in the amount of $5,424,709.30, (the “Additional Security”).

The Additional Security applied for has two components. The first is an increase in security for costs to the end of the Questioning stage by $322,202.30. The second component is additional security for costs to the end of the trial in the sum of $5,102,507.00. Status of the Action [ 4 ] Questioning is not complete, but there have been 85.5 days of Questioning. No trial date has yet been set for this matter. Furthermore, there may be Questioning on over 1400 Undertakings given by AMEC’s corporate representative, David Leonard, and AD’s corporate representative, Kaan Dogan.

There is no evidence that either side has retained experts or paid for them. On May 15 th , 2013, this Court is scheduled to hear an application by AD to amend its Amended Statement of Claim. A further application brought by AMEC for

Summary Judgment on it’s Counterclaim against AD for Unpaid Claim Costs is scheduled for June 24 th , 2013. AMEC has a further application for

Summary Judgment on other matters relating to Delay Costs to be scheduled after June 24 th , 2013. Position of the Parties

a) AMEC [ 5 ] AMEC claims that the Translation Security relates to reasonable translation costs incurred by AMEC. It also claims that AD is required to post additional security for the Questioning stage because of this Court’s statement in the SFC Decision, that the security for costs could be adjusted after the Questioning stage, in the event the $1.6 million dollar figure was too high or too low. If too low, the estimate would be taken into account in determining the appropriate sum of security to be tendered for the next stage.

AMEC takes the position that the $1.6 million dollar figure was too low on the basis of the nature and length of the Questioning and claims that the taxable costs and disbursements incurred by AMEC during the Questioning stage, if awarded, would amount to $1,922,202.30, a sum which is $322,202.30 more than the $1.6 million dollars security for costs ordered. AMEC also takes the position that having been given leave to apply for further security for the next stage of the litigation, the total amount to the end of the trial including disbursements for experts, would be $5,102,507.

AMEC supports its calculations with the Affidavits of Adam Finch, an employee of AMEC.

b) AD [ 6 ] AD has emphasized that leave was given to AMEC to apply for the next installment of security for costs only “after questioning is completed” and that Questioning is not completed. Simply stated, AD says the AMEC application for Additional Security is premature.

Secondly, with respect to the Turkish Records Decision, AD quotes the Appeal Decision at paragraph 27, that the translation costs should be scrutinized for reasonableness and that the Court may fix an amount that “may not necessarily be equal to the amount the respondent [AMEC] actually incurs by way of translation expenses.” Further, AD says that less than 400 of 9000 translated records were put to AD witnesses during Questioning, demonstrating the Translation Security claim is unreasonable.

AD also says that contrary to the Translation Records Decision, AMEC is claiming security for the cost of translating documents to English from languages other than the Turkish language including Arabic, German, French, Italian, Polish, Russian, Danish, Spanish and Dutch, in the

amount of $71,402.12. AD also asserts that the company doing the translation, TransPerfect, has provided inaccurate invoices by invoicing for a higher number of translated words than the word count verified by AMEC’s counsel and also, charged for transcribing English words. [ 7 ] With respect to the Additional Security, for costs during the Questioning stage, in excess of the $1.6 million dollar figure, AD disputes some travel disbursements, the full fees incurred for an electronic database by a service provider, Platinum Legal Group, and some transcript costs.

It is alleged the transcript disbursement is unreasonable and improper, because it included real time court reporting costs. With respect to trial costs, and the claim for $5,102,507, AD simply says that the application is premature and notes there is no evidence that any experts have been hired by AMEC, and points out the claim for anticipated experts is $2 million dollars. Translation Security [ 8 ] The Turkish Records Decision is not, in my view, significantly modified by the limited direction in the Appeal Decision.

Implicit in the Turkish Records Decision is that when the claim for disbursements for the Turkish Records translation is scrutinized, those disbursements must, of course, be reasonable. That is what the Appeal Decision mandates the scrutiny for. The limited direction is difficult to implement in detail.

In paragraph 27 of the Appeal Decision, where examples are used, it is stated: “such scrutiny would obviously mirror principles used to fix costs.” The problem with this concept is that generally costs are fixed after the event and security for costs is, by definition, fixed before the event on a prospective basis. That is one of the reasons that a Court has discretion when fixing security for costs. The ultimate column for party-and-party costs is within the discretion of the trial judge as is every other aspect of the costs.

With respect to disbursements, the foundational principle is that a costs award for disbursements must be reasonable. I view the Appeal Decision as saying nothing more nor less than that. It is, however, difficult to predict before the event that a disbursement is reasonable and even after it has been incurred, a final determination of reasonableness may not be available until future events have happened. [ 9 ] In this case, one of the arguments of AD is that a number of the translation disbursements were not reasonable because only 400 of the translated documents were put to AD’s witnesses during Questioning.

There is no evidence detailing the content of those documents nor is there evidence of the details of the translated documents not used. AMEC says a number of the documents that it translated are not relevant. If they are not relevant, why were they produced as part of AD’s Affidavit of Records? In my view, it is perfectly reasonable for AMEC to get the AD Turkish Records translated to ascertain whether they are relevant and material, as they are supposed to be.

If they are not, it doesn’t lie in AD’s mouth to suggest that it was unreasonable to obtain a translation of something that they proffered to be relevant and material. Therefore, I reject the notion that a determinative criteria for reasonableness at this stage is how many of the documents were used during Questioning. Also, the Appeal Decision in paragraph 27 gives examples as to whether there was a need to translate the document at all. In my naivete, I am struggling with the proposition as to how that need is assessed without the translation.

An argument has been made to me as to how that could be done, but there is no evidentiary foundation for it. [ 10 ] AD argued that a high level overview of the documents ought to have been done by a translator, before a detailed translation of each document. While this proposition may be meritorious, the Court cannot take judicial notice that it could be done, absent any evidence.

The Court would need a qualified translator’s evidence, or perhaps additional expert evidence, that a high level overview is practical and useful, before it could come to the conclusion that AMEC ought to have a Turkish language document, proffered to be relevant and material, reviewed at a so called “high level”, before it is translated. Not only would the Court need some evidence that could be done, it would also have to be satisfied that it could be done at a lesser cost than simply translating the document. [ 11 ] There are two other aspects to AD’s argument.

One is that a number of the documents were not translated from the Turkish language to the English language at all, but included a number of other languages as indicated above. AD says that the security for translation costs should be reduced by $74,972.23 to reflect AMEC’s non-compliance with the Turkish Records Decision, because those costs relate to the translation of non-Turkish records. AD is technically correct. AMEC did not apply for advice and directions on the translation of non-Turkish records, but only Turkish records, in the Turkish Records Decision.

If AD deems it practical to force AMEC to apply for security for disbursements for the translation of documents produced by AD as being relevant and material to the action, from Arabic, German, French, Italian, Polish, Russian, Danish, Spanish and Dutch, AMEC is at liberty to bring that application. AMEC argued that the spirit of the Turkish Records Decision mandates that security for the translation of the documents will be guided by the same principles as those articulated in the Turkish Records Decision and the Appeal Decision.

AD has conceded this, but remains steadfast in its opposition, based on the fact that this review should not take place until Questioning is complete. It is with some reluctance that based on the position of AD at this time, the Court will deduct the sum of $74,972.23 from AMEC’s claim of $433,348.98 reducing the claim for additional security for translation costs of the Turkish documents to $358,376.75 which I round off to $360,000.00.

[ 12 ] AD also alleges inaccuracies in TransPerfect’s billing practices or invoices, and thus argues that the translation costs are excessive. In paragraph 27 of the Appeal Decision, there is reference to scrutiny in terms of whether the translation costs actually incurred were reasonable in the sense that they were not excessive having regard to the market cost of such a translation. AMEC argues that the market cost as set forth in Exhibit D of the first Finch Affidavit is significant.

The three quotes for the translation of the Turkish records were respectively $1 million dollars, $1,472,500.00, and $1,850,000.00. AMEC further states that the cost of 9,000 records which have been translated is $433,348.98 or $48.15 per document. Therefore, by an extrapolation process, AMEC argues that if the remaining 16,000 Turkish records were translated, this would result in a total cost of $1,203,750.00, well within the market cost range.

AMEC has in fact estimated that 12,000 more records may need to be translated at a total cost of approximately $1 million dollars, including the $433,348.98 already spent. [ 13 ] AMEC concedes that to the extent there is evidence, there were some inaccuracies in the translation, but says AMEC, exercising due diligence as demonstrated by the evidence, went to TransPerfect and obtained a discount.

In other words, AMEC’s position is that the evidence shows that the discounted translation cost for the Turkish documents demonstrated reasonableness, not the other way around. [ 14 ] On the basis of the forgoing, I am prepared to award additional security for costs, on the basis of the reasonable translation disbursements made by AMEC to translate from the Turkish language to the English language, in the sum of $360,000.00. It is to be noted that this is only a requirement for security.

There is no final determination as to whether those disbursements will be regarded as recoverable or reasonable or characterized in some other way, if and when costs are actually awarded, as opposed to a Case Management Judge considering security for costs at this stage of the litigation. Additional Security

a) Claim for Additional Security [ 15 ] I agree with AD that the application for Additional Security is premature. There are a number of reasons for this. First, the SFC Decision indicated that AMEC was at liberty to apply for security for costs at the next stage, after Questioning was concluded. Questioning has not been concluded. Perhaps this Court should show a degree of flexibility in the event something unusual or unforeseen arises with respect to ongoing issues of security for costs.

But the fact that a better analysis can occur after events have happened does not make it appropriate for the Court to do so, when milestones have been decided for such a review, absent unusual circumstances arising. It was foreseeable that when the $1.6 million dollar figure was set, that the predicted costs looking back would not be the same as those when looking forward. Still, it is well that everyone remembers that the Case Management Judge is not fixing costs but merely setting security for them.

Thus, parsing and predicting what costs are likely to be awarded to one side or the other, is better done after certain phases of the litigation have been performed. Arguably, reasonable disbursements are more accurately assessed than party-and-party fees. For example, when the SFC Decision was made, a draft Bill of Costs was presented and certain assumptions had to be made, namely how many days of Questioning and also, what Column the costs were likely to be assessed on a party-and-party basis.

If the number of Questioning days radically changed, after Questioning is complete, an adjustment may be made upward or downward on that basis. Before me are detailed arguments as to the necessity of real time court reporting, travel expenses and an electronic database disbursement of some significance. The parties are at liberty to bring those matters forward for the purpose of adjusting the security for costs amount, but only after the Questioning is complete. This may seem like an arbitrary milestone, but the function of a Case Management Judge or Court is not to nanny the case, but rather to manage it.

Therefore arbitrary milestones are set and absent an exceptional circumstance, will be adhered to. [ 16 ] Similar reasoning is applicable to setting security for costs for the trial for which AMEC is claiming $5,102,507.

AMEC argues that that amount includes taxable disbursements in the amount of approximately $3 million dollars including the translation of the remainder of the Turkish records referred to above, daily transcripts, trial witness expenses and expert costs in the sum of $2 million dollars. [ 17 ] This Court does not regard it helpful to set security for costs for the trial until a trial date is fixed.

That is not to say that security for disbursements actually incurred, subject to the scrutiny mandated by both case law authority and the Appeal Decision in terms of reasonableness, can be applied for on application at the appropriate milestone. Thus, this Court will not generally award security for costs in terms of disbursements until they are incurred. Finally, as indicated above, there are three significant applications in this litigation set respectively for May 15 th , 2013 and June 24 th , 2013 and one thereafter.

If the ultimate disposition of these applications, presumably after a Reserved Judgment by this Court or in the Court of Appeal, is such that a

Summary Judgment on the counter-claim or the delay claim is granted, I would expect a significant impact on the number of trial days required and the number of expert and other witness fees incurred.

[ 18 ] In fairness to AMEC, after this Court made its preliminary remarks based on a review of the written arguments presented, especially with regard to the outstanding applications to come later this year, AMEC conceded that its application for security for costs for the trial would not be proceeded with, at this time. I commend AMEC for that concession. Conclusion [ 19 ] AD will be required to put up additional security for costs for the translation of the Turkish documents in the sum of $360,000.00.

AMEC is given leave to apply for security for costs for additional translation disbursements reasonably incurred, including the translation of the other languages and ongoing Turkish document translation. [ 20 ] The remainder of the application is dismissed as being premature but may be revived upon the conclusion of a Questioning insofar as adjustments to the now $1,960,000.00 security, upwards or downwards, according to the evidence. Security for costs for the trial will not be visited until the matter is set for trial and that will be after the final disposition of the

Summary Judgment applications referred to. [ 21 ] Success has been divided in this application. Therefore, each side will bear its own costs for this application. If any dispute arises as to the method of posting security, the parties may apply to the Court for direction. The additional security ordered by this decision will be posted by AD no later than 35 days from today, unless otherwise ordered. Heard on the 19 th day of April, 2013. Dated at the City of Calgary, Alberta this 23 rd day of April, 2013. Neil Wittmann C.J.C.Q.B.A. Appearances: A. Webster Macdonald Jr., Q.C. David Tupper Chris Petrucci for the Applicant George M. Vlavianos Desislava K. Docheva Peter Banks

for the Respondent