Park Avenue Flooring Inc v EllisDon Construction Services Inc, 2016 ABQB 332

Court of Queen’s Bench of Alberta Citation: Park Avenue Flooring Inc v EllisDon Construction Services Inc, 2016 ABQB 332 Date: 20160617 Docket: 0301 17092 Registry: Calgary Between: Park Avenue Flooring Inc. Plaintiff - and - EllisDon Construction Services Inc. Defendant _ ________________________________________ ______________ Reasons for Determination of Costs of the Honourable Mr. Justice J.T.

McCarthy _________________________________________ ______________ [ 1 ] Reasons for Judgment were issued July 31, 2015 regarding a contractual dispute between Park Avenue Flooring Inc. (“PAF”) and EllisDon Construction Services Inc. (“ED”) over tile work at the Calgary International Airport: 2015 ABQB 478 . Following a trial of 127 days, PAF was awarded $675,650.46 plus pre-judgment interest to the date of judgment of $201,932.22, and the parties were invited to speak to costs. These Reasons for Determination of Costs arise out of that judgment. I.

Summary of Facts A. Background [ 2 ] This dispute arose out of an agreement between PAF and ED for tile work to be completed at the Calgary International Airport. ED was the general contractor, and PAF was a sub-trade whose bid was accepted in January 2002. Pursuant to the parties’

agreement, PAF would supply labour, equipment and materials to install porcelain tile and related materials. [ 3 ] Issues arose as to what work was included under the parties’ agreement, deficiencies, and payment for additional work performed. In the trial decision, the scope of items included in the parties’ agreement was addressed, as were deficiencies and additional work. I also made determinations as to the parties’ conduct and duties owed, and awarded damages of $150,000 to PAF as a result of ED’s failure to be reasonable and cooperate.

The total award at trial was $877,582.68, comprised of the judgment for $675,650.46 and pre-judgment interest of $201,932.22 to the date of judgment (July 31, 2015). [ 4 ] ED advanced a counterclaim for damages, losses and additional costs for its work at the Calgary International Airport arising from PAF’s conduct. The counterclaim was dismissed at trial. [ 5 ] The plaintiff was represented by counsel for part of the pre-trial proceedings, and by one of its principals (Debbie Miller) for the remainder of the pre-trial proceedings and trial.

The defendant disputes the costs claimed by the plaintiff, and the parties seek this Court’s determination of costs in this matter. B. Cost Proceedings [ 6 ] The parties have filed a series of written cost submissions, and also made oral submissions on October 19, 2015.

The submissions received are: -Two draft Bills of Costs filed by the plaintiff dated October 8, 2015; -Costs Brief and Draft Bill of Costs filed by the defendant dated October 14, 2015; -Reply to the Defendant’s Cost Brief with two Amended Bills of Costs filed by the plaintiff dated October 16, 2015; -Oral submissions by both parties on October 19, 2015; -Draft Bill of Costs and Answers to Questions raised in Argument filed by the plaintiff dated October 21, 2015; -Supplemental Brief on Costs filed by the defendant dated November 10, 2015 including a revised draft Bill of Costs; and -Reply to the Defendant’s Costs Brief of November 10, 2015 filed January 4, 2016 by the plaintiff that included revised draft Bills of Costs. [ 7 ] The parties’ arguments from these submissions are summarized below.

C. Parties’ Submissions (

a) Plaintiff Submissions dated October 8, 2015 [ 8 ] Mrs. Miller filed two draft Bills of Costs on behalf of PAF on October 8, 2015: the first, filed in two parts, she says was prepared in accordance with column 4 of the Tariff in

Schedule C to the Alberta Rules of Court , Alta Reg 124/2014 (the “ Rules ”), and the second was “calculated without the benefit of

Schedule C, double costs or inflation”.

Part 1 of the first Bill of Costs says: “All steps while represented”. The total of $2,309,957 is comprised of: Fees: $238,752 Disbursements: 477,164 Other Charges: 1,484,044 GST: 109,997 [ 9 ]

Part 2 of the first Bill of Costs says: “All steps from 2007 when Director represented”. The total of $3,055,595 is comprised of: Fees: $2,013,977 Disbursements: 428,091 Other Charges: 468,024 GST: 145,503 [ 10 ] The second Bill of Costs says: “To Indemnify Park Avenue Flooring”. The total of $1,940,409 is comprised of: Fees: $ 0 Disbursements: 555,714

Other Charges: 1,293,348 GST: 92,447 [ 11 ] In addition to seeking costs for PAF, Mrs. Miller also requests an order releasing the Letter of Credit that had been posted pursuant to an order for security for costs. [ 12 ] In the draft Bills of Costs filed, PAF seeks costs in the following categories: 1. Costs for steps in litigation stated to be in accordance with

Schedule C; 2. Increased costs for certain

Schedule C items due to their size; 3. Costs for various interlocutory applications heard leading up to trial (including where costs were already awarded at those hearings); 4. Costs for other legal proceedings, including trial costs and judgments; 5. Double costs based on a settlement offer of $350,000; 6. Disbursements for financing litigation; 7. Disbursements relating to electronic document production; 8.

Disbursements relating to security for costs proceedings, including transcripts, faxing, photocopying, cost to obtain and maintain the letter of credit, and interest costs on a line of credit to support the letter of credit; 9. Disbursements relating to discharging a lien on the Calgary Airport Authority land; 10. Disbursements relating to efforts to obtain standstill agreements in other legal proceedings; 11. Disbursements for accommodations while proceeding with the case for 7 years; 12.

Disbursements for travel expenses; 13. “Other charges” for interest on an unpaid line of credit, amounts owing to Revenue Canada for unpaid GST on unpaid invoices, as well as interest and penalties; 14. Business Development Bank debt; 15. Paid legal costs pursuant to other court orders awarding costs against PAF; 16. Unpaid judgment in other legal proceeding; 17. Costs for expert witnesses; 18. Liability to director for time spent on case for 7 years; 19. Inflation claimed on costs, disbursements and other charges; and 20.

Double costs claimed for costs, disbursements and other charges. [ 13 ] Each of these categories will be discussed in the Analysis and Decision

section of these Reasons. (

b) Defendant Submissions dated October 14, 2015 [ 14 ] In response, the Defendant filed a Costs Brief and Draft Bill of Costs dated October 14, 2015. [ 15 ] In its Brief, ED argues that PAF is only entitled to costs for the period of time it was represented by counsel, and not for costs beyond disbursements for the time it was represented by Mrs. Miller. [ 16 ] Alternatively, ED submits that the draft Bill of Costs submitted by PAF should be disregarded in their entirety. ED points out that PAF included multiples of items, such as production of documents and preparation for questioning, that

Schedule C expressly states are recoverable only once per action. PAF refers to these as an “increase due to the size”.

Another issue with the PAF draft Bills of Costs is that they apply the higher rate applicable to questioning to cross-examinations. [ 17 ] ED also takes issue with PAF’s inclusion of costs awarded in other proceedings and for financing this litigation. [ 18 ] With respect to offers to settle, ED argues that PAF’s lowest formal Offer to Settle was $1,765,500, which did not exceed the judgment awarded of $675,000. [ 19 ] ED objects to some of the disbursements claimed by PAF, including lease payments to maintain a residence in Calgary, fees for re-mortgaging property (presumably to fund the litigation) and fees paid to maintain a letter of credit required to satisfy an order for security for costs.

[ 20 ] Instead, ED provides a draft Bill of Costs prepared as though PAF had been represented throughout the litigation to be used as a starting point in determining the cost award. ED’s draft Bill of Costs is prepared on the basis of column 4 of the Tariff.

It totals $372,766.05 , including a set-off of cost awards it is owed from PAF, broken down as follows: Fees (while represented): $ 4,250.00 Fees (while unrepresented): 345,753.75 Disbursements: 21,476.00 GST: 1,286.30 [ 21 ] In calculating disbursements, it appears that ED largely accepts the disbursements outlined in PAF’s draft bills of costs for photocopying, court reporter and transcript charges, videoconferencing costs, filing fees, scanning and formatting productions, faxing, long distance and search fees, binders and tabs, and costs for registered mail and service. [ 22 ] ED argues that PAF, in conducting much of the litigation as a self-represented party, considerably lengthened both pre-trial proceedings and the progress of the trial itself.

ED says that PAF brought dozens of interlocutory applications, many of which were frivolous. There were fifty adjournments and an appeal of an unsuccessful

summary judgment motion that PAF pursued to the point of unsuccessfully seeking leave to appeal to the Supreme Court of Canada. According to ED, there were also approximately 42 case management meetings held between 2007 and 2012, sometimes lasting for days. [ 23 ] At trial, ED argues that PAF dragged out the proceedings, focusing on collateral elements. [ 24 ] ED submits that although the trial in this matter was lengthy, the subject matter was a breach of contract in the context of tile installation, which is not particularly complex itself. [ 25 ] ED argues that in light of the amounts set out in column 4 of

Schedule C and the sheer length of the trial, an unadjusted costs award would constitute a windfall for a self-represented litigant, rather than fairly compensating PAF for Mrs. Miller’s time. [ 26 ] ED submits that if the entry “Liability to Director” is to account for Mrs. Miller’s time away from PAF, that should be the starting point for the Court’s calculation of PAF’s actual costs of running the litigation, which was valued by PAF at $210,000, or $30,000 per year for seven years. As Mrs.

Miller would have spent time managing the litigation even if PAF was represented, ED argues that this amount should be reduced by 50% to $105,000 for fees. [ 27 ] Alternatively, ED proposes starting with its draft Bill of Costs, and reducing the fees portion by 50%.

As well, ED asks this Court to limit credit for case management to 20 meetings, limit credit for trial days to 80 days (the length for which the trial was originally scheduled), and discount the entire fees portion by 50%. [ 28 ] The resulting cost award proposed by ED totals $132,026.68 , broken down as follows: Fees: $109,275.88 Disbursements: 21,476.00 GST: 1,273.80 [ 29 ] ED’s submissions on a self-represented litigant’s entitlement to costs and the factors to take into account when setting costs are discussed in the Analysis and Decision

section below. (

c) Plaintiff Submissions dated October 16, 2015 - Reply to the Defendant’s Cost Brief with two Amended Bills of Costs [ 30 ] In its Reply, PAF responds to ED’s submissions and provides two Amended Bills of Costs. One consideration PAF raises is that the Calgary Airport Authority (the “CAA”), although not a party, provided support during trial to ED.

PAF states it was up against “heavy-hitters” throughout the litigation. [ 31 ] In response to ED’s argument that PAF’s conduct lengthened the pre-trial and trial proceedings, PAF argues that it followed the case management process in bringing and abandoning applications. In that regard, PAF stated that: It was agreed during the first meeting that Applications would be made for each case management [meeting] to create an agenda.

Usually the entire agenda was addressed in some way during the case management, some agenda items were discussed briefly and if they had no merit or for other reasons they were dropped, some were set aside because there was no time left or other items had greater priority. [ 32 ] In response to ED’s allegation that PAF’s conduct of the trial stretched out the length and broadened the scope of the trial, PAF states that there were 75 work items to be proved.

As the plaintiff, PAF had to lead all the evidence to establish them because ED would not admit facts or attend an on-site review. [ 33 ] PAF confirms it was represented by two separate counsel from mid-2003 to February 7, 2007, and advises that their combined legal fees were $64,000. PAF argues the quantum supports its position that the work done was not insignificant, contrary to ED’s position. Some of the work particularized by PAF does not relate directly to this action, although it relates to the underlying dispute with ED.

These include fees for negotiating a return to work, addressing turmoil created on site, addressing the liens on the CAA land,

addressing the second termination, settlement discussions, the offer to arbitrate, and dealing with financing and taxation issues. [ 34 ] PAF points to actions taken (or not taken) by ED that lengthened the proceedings, including an allegation that ED withheld key documents until shortly before trial. Further, PAF says the trial was lengthened because ED called 31 witnesses to support their credibility. [ 35 ] In its submission, PAF details offers to settle based upon its records, although copies of those offers and proof that they were sent to ED were not provided at this time. These offers to settle are discussed below in the

summary of PAF’s October 21, 2015 submissions, as documentation was provided with those submissions. [ 36 ] PAF also revised its bills of costs to remove its request for double costs. The changes to the quantum sought are: (

a) Part 1 of the first Bill of Costs (when represented by counsel) now totals half of the original bill filed, $1,154,978 (instead of $2,309,957 ), comprised of: Fees: $119,376 Disbursements: 238,582 Other Charges: 742,022 GST: 54,998 (

b) Part 2 of the first Bill of Costs (when self-represented) includes an increase in the amount claimed for attendance at trial, as well as removes multiple requests for double costs. It now totals $1,123,230 (instead of $3,055,595 ), comprised of: Fees: $603,627 Disbursements: 222,673 Other Charges: 243,444 GST: 53,486 (

c) The second Bill of Costs (indemnification) has been increased to include further disbursements (as well as the disbursements sought in Parts 1 and 2 above), for a new total of $2,005,950 (instead of $1,940,409 ), comprised of: Fees: $ 0 Disbursements: 620,255 Other Charges: 1,293,348 GST: 92,447 PAF notes also that charges for a contingency assessment and costs relating to a lawsuit with a sub-trade, C&S Ceramic Tile Distributors, should also be added to the “other charges” in addition to the items listed. The charges claimed in this second Bill of Costs are discussed in the Analysis and Decision

section below. (

d) The Court’s

Summary of Orders and Cost Awards [ 37 ] At the hearing on October 19, 2015, the Court provided a

summary to the parties of the Orders in the Court File or noted in the court system, together with the disposition on costs in each. The

summary listed 34 orders from the Court of Queen’s Bench file dated between June 2005 and October 2012, many of which were silent as to costs or ordered costs in the cause. There were also two orders listed in the Procedure Record but otherwise not mentioned, and 10 Notices of Motion where the outcome is unclear. The parties were invited to comment on this

summary in an attempt to reconcile the outstanding cost awards to be determined. Their responses were incorporated into their submissions following the October 19, 2015 attendance. (

e) Plaintiff Submissions dated October 21, 2015 - Draft Bill of Costs and Answers to Questions raised in Argument [ 38 ] The parties made oral argument on October 19, 2015. PAF filed submissions dated October 21, 2015 in response to issues discussed during the oral argument. One issue related to the number of interlocutory matters throughout this litigation. PAF submits that there were: -45 case management meetings (for which PAF accounted in

Part 2 of its first Bill of Costs); -49 applications and motions, of which six required briefs (but later stating there were 50 motions, of which only 8 were accounted for in its Bill of Costs); -35 court orders where costs were ordered in the cause, except for the Plaintiff’s unsuccessful

summary judgment application held September 2, 2010;

–few references in the materials to abandoned or withdrawn applications, except that ED withdrew an application to strike parts of the Statement of Claim; and -a breakdown of the number of days of examinations for discovery, totalling 40.5 days. [ 39 ] PAF seeks a further $52,500 for the additional motions and applications (42 applications X $1,250 per application). It indicates the costs claimed for examinations for discovery in its draft Bills of Costs are $50,000 for 40.5 days.

This is in contrast to the $33,750 reflected in ED’s draft Bill of Costs. [ 40 ] PAF states that it has not included costs awarded at the Court of Appeal or Supreme Court of Canada in its submissions. This is proper, as those costs can only be determined by those courts where the appeals were heard. [ 41 ] In these submissions, PAF provides supporting documentation to show it successfully resolved two arbitrations through counsel. It appears from the documents that one matter involved a project at Keyano College, and it is not clear what the other matter was.

PAF submits that it consented to judgment or defaulted on actions brought in Manitoba because the principals, Mrs. and Mr. Miller, were involved in this litigation in Calgary. The propriety of claiming costs and judgment amounts awarded in other actions is discussed later in this decision. [ 42 ] PAF submits it made several settlement offers, and in this submission, attaches supporting documentation.

PAF says it made the following offers: -Offer to Arbitrate in October 2004 – referenced in a memo to PAF from its lawyer with no indication of whether it was pursued with ED; -Draft offer to settle in July 2005 for $1,100,000 – documentation supports that PAF discussed this offer with its counsel, but there is no documentation showing this was sent; -Unsigned letter dated November 14, 2005 from PAF to Don Smith for $675,000 – documentation is a draft letter with information including the court file number and expiry date left blank to be completed and excerpt from lawyer’s account showing he discussed proposed settlement with PAF.

There is no proof letter was sent to ED; -Unsigned letter dated March 7, 2006 from PAF to Don Smith offering to settle for $1,675,000 plus GST – there is no proof letter was sent to ED; and -Signed letter dated March 9, 2006 from PAF to Don Smith offering to settle for $1,675,000 plus GST and a letter from ED’s counsel to PAF’s counsel dated March 30, 2006 rejecting the offer. [ 43 ] PAF also includes an offer to settle received from ED dated June 22, 2009 for $350,000. [ 44 ] With respect to the separate action against PAF by C&S Ceramic Tile Distributors (“C&S”), PAF includes with its submissions the invoice for $23,240.40 that was in issue, as well as a fax transmission from C&S indicating that the amount owed as of June 30, 2002 is $23,705.21 including interest.

C&S further indicated that they would not accept less than the full amount. [ 45 ] Other documentation provided with these submissions includes a copy of a contingency agreement between PAF and its initial counsel, with the suggestion that further amounts may be owed under the agreement. PAF also provides pension statements of the principals of PAF, Mrs. and Mr. Miller, to demonstrate that their pensionable income was zero in 2003, 2004, 2007 and 2008 (Mrs. Miller) and in 2006-2008 (Mr. Miller) and Mrs. Miller’s pensionable income was much lower than previously in 2005 and 2006.

PAF says this is as a result of the time they had to dedicate to this litigation. (

f) Defendant Submissions dated November 10, 2015 - Supplemental Brief on Costs [ 46 ] ED filed a Supplemental Brief on Costs following oral submissions, both to respond to PAF’s October 16, 2015 Brief and to respond to questions raised during oral argument. [ 47 ] ED responded to PAF’s allegations about its delay, that it withheld documents, and that the large number of witnesses called at trial were due to ED’s conduct.

ED also provides information about offers to settle. [ 48 ] With respect to PAF’s allegations that ED caused delays in this matter, ED responds that any delays in the action were actually caused by PAF. After reviewing a chronology of pre-trial steps to refute that it caused delay, ED argues that PAF was actually the cause of any delay. ED says the process of advancing the matter to trial was impeded as a result of repeated amendments to the Statement of Claim, and because PAF brought applications, many of which were without merit or duplicative.

ED estimates that PAF served 13 versions of its Statement of Claim, in addition to the one that was filed. [ 49 ] In response to PAF’s allegation that ED withheld documents, ED explains that PAF often requested documents beyond ED’s control, and as a result, ED frequently re-examined its records for missed documents and requested documents from third parties for the purpose of its production. Further, ED says that as the pleadings changed over time, the relevance and materiality of some documents also changed.

ED explains that certain documents requested by PAF were not withheld; rather, an application to compel their production was dismissed by the case management judge. [ 50 ] In response to PAF’s argument that the trial was lengthened because ED called an excessive number of witnesses at trial, ED says it did not call all of them by choice. PAF served summonses on a number of ED employees so ED undertook to call them in an effort to simplify the trial process and assist the Court. ED prepared a breakdown for each witness estimating the time spent by it and PAF conducting examinations and cross-examinations.

ED estimates that PAF took 91.25 days, while ED took 32.75 days.

[ 51 ] Finally, ED disputes PAF’s

summary of the offers to settle in this matter, commenting: (

a) PAF did not make an offer to settle the action for $350,000. Rather, ED made a formal offer to settle for $350,000 dated June 22, 2009, a copy of which is included with ED’s submissions. (

b) PAF claims it made an offer to settle the action for $675,000 on November 14, 2005, but ED disputes this. ED’s counsel states it has reviewed its correspondence files and has been unable to find any record of or reference to this offer. (

c) ED agrees that PAF made an offer to settle dated March 9, 2006 for $1,675,000 plus GST. Both the offer to settle and the covering letter are included in ED’s materials. The covering letter dated March 9, 2006 explains that “[a] settlement offer was not made earlier because we felt neither Ellis Don nor Calgary Airport Authority would be receptive until after the hearing of security for costs.” [ 52 ] ED summarizes the offers to settle made in this action as follows: (

a) March 9, 2006 – offer from PAF for $1,675,000; (

b) June 19, 2006 – offer from PAF for $1,765,000; (

c) July 7, 2006 – offer from ED for $75,000; (

d) June 22, 2009 – offer from ED for $350,000; (

e) June 26, 2009 – offer from PAF for $2,500,000; (

f) October 1, 2009 – offer from PAF for $3,200,000; and (

g) March 1, 2010 – offer from PAF for $3,700,000. [ 53 ] ED states that PAF made no formal offer to settle for less than it was awarded at trial, and as a result, no double costs award is warranted. [ 54 ] Next in its submissions, ED raises numerous issues with PAF’s draft Bills of Costs, and provides its own draft Bill of Costs. Its comments are divided into four sections: (1) fees while represented; (2) disbursements while represented; (3) fees while unrepresented; and (4) disbursements while unrepresented.

Revised Draft Bill of Costs [ 55 ] ED provided a Revised Draft Bill of Costs with these submissions, divided into the period when PAF was represented and when PAF was self-represented. [ 56 ] The Revised Draft Bill of Costs while represented totals $14,517.76 , comprised of the following: Fees: $ 6,750.00 Disbursements: 6,818.00 GST: 949.76 [ 57 ] The Revised Draft Bill of Costs while self-represented totals $395,450.75 , comprised of the following: Fees: $378,698.75 Disbursements: 15,955.00 GST: 797.75 [There is a mathematical error in the total, which is out by $0.75.] [ 58 ] This includes set-offs for amounts owed to ED from various interlocutory and appeal proceedings.

The fees do not reflect the adjustments ED maintains should be made on the basis that PAF was self-represented, as it prepared this Revised Draft Bill of Costs as though PAF had representation throughout. Fees while represented [ 59 ] ED’s comments on the portion of PAF’s first draft Bill of Costs (Part 1) relating to fees while represented include: (

a) Pleadings – PAF has claimed for fees to prepare three sets of pleadings, including for a separate action before this action was commenced. ED says there should properly be a single charge. (

b) Document Production – PAF claimed $2,500, or twice the amount allowed under column 4 of the Tariff. ED submits the quantity of disclosure is not out of the ordinary, and the disorganized nature and erratic numbering was the source of delay and confusion. ED argues PAF is entitled to $1,250 for its own disclosure and $1,250 for its review of ED’s disclosure. (

c) Security for Costs – ED notes this was a half-day special application with briefs. While ED was successful, costs were ordered in the cause. In its draft Bill of Costs, PAF seeks $20,500 for this application; ED submits the appropriate Tariff amount is $1,750, and has no objection to this amount.

(

d) Liens on Federal Land – PAF claims costs for filing a discontinuance of its action against the CAA and related discharge of a lien. ED submits that PAF’s decision to sue the CAA had nothing to do with ED, and argues that no costs should be awarded payable by ED for these steps. (

e) Notices to Admit – PAF filed numerous voluminous Notices to Admit for which it claims costs of $29,800 on the basis that 9.5 days of trial were saved. ED argues it is unclear how these days were saved, and notes that the Tariff sets the costs for this item at $1,200. (

f) Costs incurred to Participate in the Action – PAF claims $44,000 for costs arising from other actions to which ED was not a party. ED submits these costs are not properly payable. (

g) Inflation – Pursuant to Rule 10.41(3)(d), PAF claims inflation of 1.2% on all fees and disbursements. ED submits that this rule does not apply; Rule 10.41 sets out the basis on which an assessment officer may set costs, and is irrelevant here. Disbursements while represented [ 60 ] ED concedes some of the disbursements claimed, while noting that PAF has not provided evidence in support of any them. ED has the following comments on PAF’s first draft Bill of Costs (Part 1) relating to disbursements: (

a) Pleadings – To the extent disbursements are claimed for the Statement of Claim filed June 20, 2003 and for filing a Certificate of lis pendens . ED objects as these charges pre-date this action (

b) Production / Expedition of Case – ED agrees that photocopying and scanning expenses are properly recoverable as disbursements. (

c) Security for Costs – ED accepts most of these disbursements, except for a charge for “consultant fees” as it is unclear to whom this refers or how it relates to the action. (

d) Lien (CAA) – ED submits these charges are not properly attributable to it. (

e) Financing Costs – PAF has claimed $113,158 under this head for items including a truck lease and fees for the sale of a property. ED submits that amounts paid by PAF to service debt or sell assets are not properly recoverable as costs in litigation. (

f) Other Actions – ED objects to any disbursements incurred by PAF in actions other than this action, and disputes that it is responsible for their payment. (

g) Inflation – ED notes that it found no examples of an inflation factor applied to disbursements. In any event, ED argues that the manner of calculation used by PAF would result in overcompensation, as PAF applies seven years’ inflation to all disbursements regardless of when they were incurred. (

h) Double Costs – ED disputes that PAF is entitled to double costs, as noted in its review of the offers to settle made. Fees while unrepresented [ 61 ] With respect to fees for self-represented litigants, ED repeats its previous argument that PAF, as a self-represented litigant, is not entitled to recover fees as there are no exceptional circumstances in this case. In the event the Court determines that PAF is entitled to some fees, ED has the following specific comments on PAF’s first draft Bill of Costs (Part 2): (

a) Questioning – ED notes that PAF claimed $6,250 for preparation for questioning, while the Tariff only permits $1,250. PAF also claims fees of $2,500 for additional document review, which is not permitted in the Tariff. ED objects to these excess amounts. ED argues that the claim for an additional $20,000 for ED’s alleged delay in providing documents until after PAF’s discovery is not proper, as it appears to be some sort of punitive costs claim. ED accepts PAF’s calculations as to the number of days spent in questioning. (

b) Case Management – ED adopts PAF’s calculation of the number of case management meetings. (

c) Applications – PAF seeks costs for the many applications brought leading up to trial. ED notes that a large number of applications brought were adjourned and never revived, and are, in effect, abandoned. One option is to treat the numerous applications brought by PAF in advance of the case management meetings as part of the case management process for which no costs are payable. ED reviewed the list of applications and orders provided to the parties by the Court during oral argument, and adjusted its own calculations to account for discrepancies, as set out in its Revised Draft Bill of Costs.

ED’s Revised Draft Bill of Costs includes costs for PAF for various applications, as well as deductions for costs set off that ED argues it is owed for PAF’s unsuccessful or abandoned applications. (

d) Preparation for Trial – ED submits that the base amount for trial preparation under Column 4 of

Schedule C is $8,000, which may be varied depending on the length and complexity of the trial. ED says that PAF’s claim for $83,625 is excessive, being the equivalent of payment for counsel for 35 trial days. (

e) Trial – ED agrees with PAF’s calculation of the number of trial days. (

f) Inflation – ED maintains that inflation is not assessed on

Schedule C fees, as explained above. (

g) Double Costs – ED submits that no double costs award is warranted. (

h) GST – ED argues that as no GST was paid on PAF’s work, it should not be permitted to recover GST on any award of fees during the time PAF was self-represented.

Disbursements while unrepresented [ 62 ] As with the disbursements from PAF’s draft Bill of Costs (Part 1) while represented, ED adopts PAF’s numbers even where those numbers appear to be on the high side or are poorly defined, except as follows: (

a) Living Expenses – PAF claims expenses for rent and utilities in Calgary for its representatives, the Millers, for the seven- year period during which PAF was represented by Mrs. Miller. ED submits these are not recoverable disbursements. First, ED notes that the Millers already resided in Calgary during the time of the work in issue before the litigation commenced. Also, for the majority of the time, the litigation was working its way through case management so there was no reason the Millers were required to reside in Calgary full time. Finally, if fees are payable for Mrs.

Miller’s representation, that should include living expenses. Otherwise, Mrs. Miller is effectively receiving a salary for her work. (

b) Travel Expenses – PAF claims a flat rate for travel expenses each year without any information about these expenses. As a result, ED is not prepared to accept them without further information about the nature of the travel and the actual expenses incurred. (

c) Liability to Director for time spent on the case – PAF claims $30,000 per year to compensate PAF’s directors for their time on the case, for a total of $210,000. ED surmises this amount is intended to pay Mr. and Mrs. Miller, and objects to this disbursement. In the event PAF is awarded legal fees while self-represented, this amount would represent double recovery. (

d) Liability for Expert Witness Costs – ED states that PAF’s draft Bill of Costs suggests that the experts have not been paid, and it is not clear that they have issued invoices for their work or expect to be paid. In these circumstances, ED objects to paying a disbursement for expert fees. (

e) Inflation – ED repeats that it has found no precedent for PAF’s claim for inflation on its disbursements, and further objects to each disbursement being subject to seven years of inflation despite when it was incurred. (

f) Double Costs – As previously noted, as there were no offers that trigger the double costs provision under the Rules, ED submits that there is no basis for a double costs award. [ 63 ] ED does not dispute that PAF is entitled to disbursements, as well as to fees while it was represented by counsel. However, with respect to the time when PAF was self-represented, ED argues that there are no special circumstances to justify an award for fees. In the event the Court is inclined to award fees to PAF during the time it was self-represented, ED “requests that the Court consider the whole of the litigation in determining how such an award should be calculated.” (

g) Plaintiff Submissions filed January 4, 2016 - Reply to the Defendant’s Costs Brief of November 10, 2015 [ 64 ] PAF filed a final submission in response to ED’s November 10, 2015 submissions. Agreed items in Bills of Costs [ 65 ] PAF notes certain items in its Bills of Costs were agreed to by ED. These are identified and discussed in more detail below. PAF filed notated copies of its previous Bills of Costs indicating which items it says have now been agreed to by ED and redacting items that this Court indicated would not be considered during oral argument on October 19, 2015. PAF takes issue with ED’s conduct in settling orders [ 66 ] PAF provides a notated copy of ED’s

summary of the applications and motions in this matter, indicating areas of disagreement. Its supporting materials relate to its notations. PAF provides a binder containing draft and signed court orders, and transcripts of case management proceedings. These provide a picture of the proceedings leading up to trial, which included numerous case management meetings and applications.

The materials also include correspondence regarding settling the form of orders including from an appeal decision and following case management meetings. [ 67 ] PAF takes issue with ED’s conduct at the time of settling various orders, and gives as an example the process to settle the form of order from an appeal. In a letter dated April 1, 2011 provided by PAF that it sent to ED, PAF indicates that the appeal order wrongly referred to costs. PAF argues this is misconduct.

It appears that PAF drew its concerns to the attention of the Case Management Officer at the Court of Appeal, who settled the form of the order. PAF argues there are at least two other instances it found where something ED added to the form of a draft order was removed when the order was settled. This appears to be part of the process of settling orders, and is not misconduct. PAF asks this Court to disallow the $12,000 awarded in costs by the Court of Appeal. Those costs were already dealt with by the Court of Appeal, and this Court will not interfere with the order. [ 68 ] PAF further argues that ED’s

summary of the costs rulings in several court orders was inaccurate, and notes that it cannot check all of the orders for accuracy. PAF argues that ED’s conduct in this regard is deceitful, and that ED is trying improperly to reduce the costs award in PAF’s draft Bills of Costs. For example, PAF disputes ED’s submission that it brought three contempt applications, arguing that there was only one and it was never heard. At the same time, PAF argues that one contempt application ran overtime and had to be continued.

PAF seeks higher costs “because of the Defendant’s incorrect and prejudicial Court Order and for repeatedly making unfounded allegations.” [ 69 ] It is difficult to tell from PAF’s submissions whether ED’s conduct goes beyond what normally occurs when terms of an order must be settled. As a result, I do not make any findings about the manner in which orders were settled, and do not take into account this conduct in determining costs.

I do consider the point raised by PAF that it is difficult on the record to determine what applications were brought, adjourned, heard, partially heard or abandoned, and difficult to ascertain in some instances what the costs awards were.

PAF takes issue with ED’s delay [ 70 ] PAF relies on Rule 5.12, which specifies that the Court may impose a penalty of two times the amount in item 3(1) of the Tariff (or more or less) for failure to comply with the Rule 5.10 obligation to give notice of “not previously disclosed” records and supply them if requested. [ 71 ] PAF refers to documents it says ED was late in providing that establish proof of payment to Porter Tile & Marble

(1991) Ltd. (“Porter Tile”). Supporting materials include correspondence from Porter Tile and cancelled cheques from ED regarding proof of payment. PAF also provides documentation and argument in support of its position that ED delayed in providing other documents it was ordered to provide, including copies of cheques and invoices, as well as transcript excerpts. [ 72 ] Similarly, PAF provides further documentation in support of its position that it was not responsible for delay; rather, ED was responsible for the length of time it took to get to trial. PAF points to various requests it made for an early trial.

Further, PAF identifies delays it says ED caused in various pre-trial proceedings, including an 11-month delay to apply for security for costs, a 16-month delay in replying to undertakings, and other examples. PAF also identifies instances it says ED was not cooperative. [ 73 ] In its January 4, 2016 submissions, PAF submits this delay is conduct deserving of costs sanctions. PAF’s claim for financing costs [ 74 ] In support of its claims for financing costs, PAF has provided records regarding legal fees and costs to obtain a mortgage refinancing of a residential property.

There is also correspondence regarding using proceeds from a second mortgage to pay down PAF’s line of credit and for the proceeds to secure a Letter of Guarantee for the court. (The Letter of Guarantee is sometimes also referenced as a Letter of Credit by the parties.) Various banking records and accounts are provided. Also attached are a lawyer’s accounts and a contingency agreement. Pre-trial Applications [ 75 ] PAF provides documentation demonstrating that, often, applications would be grouped together as part of the case management process.

In those situations, case management meetings and applications would be heard together.

Costs for Lost Earnings and Lost Opportunity [ 76 ] PAF argues it should receive costs for lost opportunity on the basis that the matter was complicated and spanned a few years; the work performed was of good enough quality to prove a large number of its claims; PAF was never reprimanded by the Court for unnecessary delays or for not taking steps in the action; PAF did not take up unreasonable amounts of time; the time taken was appropriate to the issues and circumstances; in PAF’s view, ED took advantage of it being self-represented; and that ED thwarted reasonable requests to settle the litigation. [ 77 ] In support of its argument that it is entitled to costs for lost earnings and lost opportunity, PAF relies on a report filed at trial by Mr.

Leo Ragot. PAF notes that it identifies earnings of $35,422 and $41,819 in the two years prior to its contract with ED. PAF estimates the contract with ED through to trial was approximately 10 years, representing lost earnings and lost opportunity of approximately $400,000, not including payments made to the directors of $90,000 per year. [ 78 ] PAF argues it retained a director and agreed to pay the director $30,000 per year for its work on this case.

Other Allegations raised by ED [ 79 ] PAF responds to allegations raised in ED’s submissions that it called unnecessary witnesses, that costs should be awarded for each of 16 applications heard at one case management meeting, and ED’s request for costs for abandoned applications. [ 80 ] PAF argues it did not call too many witnesses; further, its witnesses did not take long to give their evidence. [ 81 ] PAF highlights that in ED’s table of applications and orders, there were 16 applications heard on October 16, 2007 at one of the case management meetings.

Ordering costs for each of these would result in an award of $20,000 for a half day attendance, which PAF notes is not the correct way for costs to be determined. [ 82 ] In response to ED’s request that costs be reduced by $27,500 for abandoned applications, PAF disputes ED’s record of the number and dates of abandoned applications. Argument in support of PAF’s draft Amended Bills of Costs [ 83 ] PAF reviews, item by item, its draft Amended Bills of Costs, providing its response to ED’s arguments for reducing the amount claimed. PAF’s comments include: (

a) For costs for more than one statement of claim – PAF says the first statement of claim was necessary so it could bring an application for an injunction. (

b) Injunction application – PAF seeks $1,000. (

c) Defence to Counterclaim – PAF reduced the amount on its Bill of Costs to $1,000 for this item. (

d) Affidavits of Records – PAF seeks a multiplier on the basis of the size of the production. According to PAF, ED’s total production was approximately 20,000 documents.

(

e) Undertakings – PAF also seeks a multiplier for answering 215 undertakings. (

f) Security for costs application – PAF notes that the parties spent a lot of time on this application, including four days of cross- examination. PAF disputes ED’s submission that there should be no costs for the cross-examinations included in discovery questioning. (

g) Preparation for questioning and trial – PAF argues enhanced preparation costs should be awarded based on the number of witnesses and the complexity of the matter. Using a formula of two hours per day at $250 per hour would result in $63,500 allowed for trial preparation. (

h) Penalty for withholding documents – PAF seeks a penalty for what it alleges is ED’s failure to provide requested documents. (

i) Lien on federal land – PAF says it registered a lien on CAA lands because of ED’s failure to pay what it owed to PAF. PAF ultimately discontinued its action against the CAA and discharged its lien. PAF seeks costs to discharge the lien estimated at $400, costs to discharge the CAA estimated at $180, and interest paid from June 2003 to November 2005 of $24,948. It is not clear what is meant by discharging the CAA or the basis for the interest claimed for that period of time, other than that PAF argues it would never have been able to take the matter to trial without the support of its bank. (

j) Notices to Admit – PAF seeks its costs for preparing lengthy notices to admit fact, including a multiplier and a penalty of $25,000, as ED “failed to take this process seriously that would have assisted the Trial”. (

k) Court costs of $200 – PAF attaches the receipt for payment of this amount by its counsel. It is the filing fee for the Statement of Claim. (

l) Cost of financing – PAF had no money and was impecunious. As a result, it had to raise money in order to have its day in court. PAF seeks payment of its financing costs, including fees to mortgage a property on Oak Grove Road of $8,591; interest for the mortgage on the Oak Grove Road property, which would be a portion of $10,080 per year; fees to sell a property referred to as “Burland” of $6,431; fees to mortgage a house in Roland of $880; interest on the principal of $14,200; and payment of a lease on a truck to replace a truck that was sold to finance the litigation. (

m) Consultant fees – PAF includes a lawyer’s account itemizing consultant fees of $945 and $180 for document organization, and for $3,741.18 for scanning, copying, formatting and preparing CDs of productions. This is claimed in addition to the Tariff amount allowed for production of documents. (

n) Fees for obtaining and maintaining a Letter of Guarantee to satisfy the order for Security for Costs – PAF seeks cost related to obtaining a Letter of Guarantee, including costs of $3,500 charged by its credit union, annual renewal costs of $800, and interest on the Letter of Guarantee of $2,900. (

o) Inflation – PAF notes that the court does not award an inflationary factor where there has been an award of double costs. (

p) GST – PAF is not claiming GST on top of invoices that already include GST charges. (

q) Costs on Application for Costs – PAF seeks costs of $1,250 for its Application for Costs, together with a disbursement of $800 for a flight. No receipt was provided. (

r) Accommodation and Travel Costs – PAF seeks its costs for renting a house and paying utilities in Calgary, as well as reasonable travel costs. This is because the Millers live in Manitoba, and were travelling to, and staying in, Calgary for the litigation. No receipts or bills have been provided. (

s) Expert Witnesses – PAF seeks $7,200 for Leo Ragot’s expert report, and provides an e-mail message from him setting out his fee of $150 per hour for 48 hours. PAF also seeks $7,380 as payment for Jim McKenzie, who charged $180 per hour for 41 hours. Mr. McKenzie also provided an e-mail to Mrs. Miller with a description of the work he completed. In response to ED’s argument that there is no proof that these costs were paid, PAF argues that costs should be awarded even where costs are owed. (

t) Liability to Director – PAF maintains its claim of $30,000 per year paid annually to its directors. It says the liability to Mrs. Miller is of the same nature as liability to expert witnesses. (

u) Contingency Fees – PAF has provided a copy of its contingency fee agreement with its counsel. It seeks to have this added to the amount of the legal fees not awarded in the judgment as solicitor and his own client costs. [ 84 ] PAF argues that where previous orders in the action are silent as to costs, costs should be awarded to it. [ 85 ] In its January 4, 2016 submission, PAF reviews numerous statements made by ED and identifies where they were incorrect.

These relate largely to conduct during the action including who produced what and when, who was successful on various applications, who was responsible for calling a large number of witnesses and for the length of trial, and other alleged conduct and misconduct that has come up throughout both parties’ arguments. I have considered both parties’ submissions on these issues and will comment as necessary below. [ 86 ] Finally, PAF notes that PAF has withdrawn its claim for double costs, as it misunderstood what was required to succeed on such a claim.

PAF originally understood it only had to do better at trial than ED’s offer to obtain double costs. II. Issues [ 87 ] The issues that arise from the various submissions summarized above are:

1. Is the Plaintiff entitled to costs for the time it was self-represented? 2. What is the appropriate quantum of costs? a. What costs and disbursements are recoverable pursuant to the Tariff? b. Is this an appropriate situation for a lump sum or fixed costs award? [ 88 ] These issues are discussed below. III. Analysis and Decision [ 89 ] ED does not dispute that PAF was the successful party at trial and is entitled to costs. This is mandated by Rule 10.29(1), subject to the Court’s discretion.

The issues in dispute include how much PAF is entitled to receive for costs during the time it was self- represented (which is through much of the litigation) and what types of expenses can be reimbursed to PAF. A. Is the Plaintiff entitled to costs for the time it was self-represented? [ 90 ] Costs may be awarded to a self-represented litigant of an amount or part of an amount equivalent to the fees specified in

Schedule C in appropriate circumstances: r 10.31(5). [ 91 ] ED argues that PAF is not entitled to its costs beyond reasonable disbursements for the time it was self-represented, as it did not incur legal fees. ED relies on the general rule set out in Hogarth v Rocky Mountain Slate Inc , 2013 ABCA 116 (“ Hogarth ”) at para 9 , leave to appeal to SCC refused, 35321 (July 4, 2013). ED acknowledges that exceptions to this general rule exist where an award of costs would serve one of the policy reasons for which costs awards are made.

These policy reasons include the primary purpose of partly indemnifying the successful party for litigation costs, as well as encouraging settlement, preventing frivolous, vexatious or harassing litigation, or encouraging economy during litigation: Hogarth at paras 8-9 . [ 92 ] In the alternative, ED relies on its draft Amended Bill of Costs as a starting point to calculate what costs would be properly payable had PAF been represented.

From there, ED argues costs should be adjusted based on the factors first set out in Dechant v Stevens , 2001 ABCA 81 (“ Dechant ”), leave to appeal to SCC refused, 28293 (October 4, 2001). Dechant was summarized more recently by this Court in LL v GB , 2009 ABQB 322 (“ LL ”), aff’d 2009 ABCA 356 , where Graesser J. quoted and discussed Dechant at paras 50- 53 : 50 In Dechant , the Court again considered the issue, noting the following: 1. Costs are always discretionary and no party has an absolute entitlement to

Schedule C costs; 2. R. 600 did not bar an award of costs to a self-represented litigant ( H. (V.A.) v. Lynch ); 3. Costs provide a partial indemnity for legal fees, encourage settlement, and discourage frivolous actions and improper and unnecessary steps; 4. Indemnity is not the sole basis for costs; 5.

Costs should bear a relationship to the result, the amounts involved, the importance of the issues, the efficiency of the conduct of the litigation, and the other matters set out in R. 601; 6. “The threat of costs is always an important factor in the settlement process, and without this “hammer”, there is less of a disincentive to litigate.” (At para. 14). 51 The Court went on to say (at para. 15): The balancing of the various policy objectives associated with costs for the unrepresented litigant presents courts with a difficult challenge.

Inequity can result from a strict indemnity approach where only one party faces a threat of costs. As noted, however, costs can always be awarded at the end of the day and the threat of costs exists for all. Moreover, anticipated legal fees for the represented litigant provide their own incentive to settle - one which the unrepresented litigant does not face. In fact, policy concerns arise where unrepresented litigants receive costs on other than an indemnity basis.

For example, the expectation of costs may encourage litigation and discourage settlement because of an anticipated windfall to the unrepresented litigant that could result from a costs award. Certainly costs under

Schedule C are substantial. Awarding costs to an unrepresented party in excess of expenses creates serious dangers in that regard. Similarly, those dangers have always been a good reason for keeping party-and-party costs well below the solicitor-client level except in exceptional circumstances. The ability to award partial

Schedule C costs makes it clear that not all cases are entitled to the full

schedule and, having regard to the schedule, we imagine that there are few cases that would attract a double

Schedule C award. 52 The Court concluded that the represented and unrepresented parties cannot be treated exactly the same, noting that the represented litigant is rarely, if ever, fully indemnified for legal fees, and they also have lost opportunity costs for the time they have personally expended on the lawsuit. An unrepresented litigant, on the other hand, has no out of pocket expenses for legal fees, and costs awards effectively award fees for their own time and work.

53 The Court goes on to say that crafting a just costs award in these circumstances is a “delicate exercise”, and that the court needs to consider many factors, including: 1. Lost opportunities of the litigant as a result of self-representation, for example lost time from work (proof of the exact value is not required, otherwise there would be another trial just on costs); 2. The particular facts of the case: a. Was the matter complicated? b. Was the work of good quality? c. Did self-representation cause delays? d.

Did the self-represented litigant take up unreasonable amounts of time by the opposing parties or the courts? e. What is the lost opportunity of the self-represented litigant? f. Did the other side take advantage of the fact that the litigant was unrepresented by taking unnecessary or frivolous steps? g. Did the other side refuse to consider reasonable requests to discuss settlement? h.

What is an appropriate amount given the issues involved, including all the factors in R. 601? [ 93 ] In general, PAF argues this was a complex matter, that its work was of good quality, that it did not take up unreasonable amounts of time, that it had significant lost opportunity as a result of pursuing this litigation, and that ED tried to take advantage of it being self-represented.

PAF submits there are exceptional circumstances that make this an appropriate case to award costs to it as a self- represented litigant. [ 94 ] In response, ED argues that there are no circumstances here to justify awarding costs to PAF during the time it was self- represented. This was not a complex matter; rather, the litigation was lengthened significantly by PAF’s conduct of the action. ED denies that it took advantage of PAF’s lack of representation. ED also denies refusing reasonable requests to settle the matter, and in fact itself made repeated efforts to settle.

To give PAF costs as claimed would result in a windfall to PAF. This is particularly so if PAF receives costs as requested, including the item for “Liability to Director”, which ED surmises would compensate PAF again for Mrs. Miller’s time. ED notes that PAF would have had to spend a fair amount of time to manage the litigation even with legal representation. [ 95 ] In LL , Graesser J. listed at para 67 principles that apply to the award of costs in favour of a self-represented litigant: 1. There is no automatic rule entitling a self-represented litigant to costs.

While there is a presumption in favour of awarding costs on a party and party basis to a successful represented litigant, a self-represented litigant bears a stronger onus of establishing an entitlement to costs; 2. In determining entitlement, the Court should have regard to the factors set out in Dechant ; 3. To achieve fairness, a self-represented party’s time is a minor factor in the consideration of costs, and then only to the extent that the self-represented party has spent more time on the matter than one would expect a represented party to have spent. 4.

The Court’s discretion should be exercised after an analysis of the Dechant factors; 5. Only after the Court has exercised its discretion in favour of awarding cost to a self-represented litigant should the Court determine the quantum of costs; 6.

Schedule C is a guide to determining quantum, but the Court may exercise a discretion to award a lump sum, or all or a portion of

Schedule C costs; and 7. The Court should try to avoid turning the assessment of costs into a further trial. Application to this Case [ 96 ] Following the above principles, I have considered the factors in Dechant . [ 97 ] This was a lengthy trial and, while I agree with ED that it was not complicated in law, it was factually complicated as a result of the nature of the dispute between the parties and the degree of conflict between them. This conflict from the beginning of the parties’ dealings with each other resulted in an award against ED at trial of $150,000 for failure to be reasonable and cooperate.

PAF was required by ED to prove every element of its case, leading to voluminous documents and 127 days of trial. An award of costs to the self- represented plaintiff in this case may act as an incentive to other litigants in the future facing self-represented litigants. It also will serve to partially indemnify PAF for the time it has spent pursuing this litigation that reduced the time Mrs.

Miller could spend on the business. [ 98 ] Keeping in mind that costs are discretionary, that this Court’s discretion must be exercised judicially, and that coming up with a just costs award is a “delicate exercise”, I find on balance that PAF is entitled to some measure of costs to partially indemnify it for Mrs. Miller’s time. In so finding, I am mindful of Graesser J.’s comment at para 66 of LL : …[T]he consideration with respect to a self-represented litigant’s time should be the amount of time in excess of what an interested, involved represented litigant might spend on his or her own lawsuit.

Otherwise, the represented party not only pays for his or her lawyer, but contributes his or her personal time. In attempting to level the playing field between represented parties and self-represented parties,

the Courts should be careful not to tilt the balance in favour of the self-represented party. [emphasis in original] [99] PAF argues that Mrs. Miller worked on bringing this case to trial like it was a full-time job, and that she could not go andwork at something else. She and Mr. Miller were in court every day. [100] Parties are expected to spend time on their litigation matters in assisting and instructing counsel, and to the extent a self-represented party spends similar time, it is not compensable in costs. In this case, I am satisfied that Mrs.

Miller spent time over andabove what a represented party would have spent. [101] Specifically, the lost opportunities for Mrs. Miller to work in the business, and the complexity of the matter as a result of theposition taken by ED throughout its dealings with PAF persuade me that this is an appropriate situation for costs to be awarded to PAFwhen it was self-represented. Mrs.

Miller devoted time to complete work that would ordinarily have been done by a lawyer retained toconduct the litigation and, as a result, PAF incurred an opportunity cost as she was not able to devote her attention to remunerativeactivity. [102] This is in keeping with the British Columbia Court of Appeal decision in Skidmore v Blackmore (1995), (BC CA), 122 DLR (4th) 330 (BCCA), where the Court concluded that self-represented lay litigants should be entitled to costs: para 50.Moreover, it held that any concerns about over-compensation could be addressed with a flexible tariff and through the overall discretionof the trial judge: para 49.

This decision has been applied in Alberta, for example, in ARC v LLC, 1999 ABQB 707 and Shillingford vDalbridge Group Inc, 2000 ABQB 28. B. What is the appropriate quantum of costs? [103] As I have determined that PAF will receive an award of costs for the time it was self-represented, I now turn to the quantum ofcosts. In that regard, the Court may exercise its discretion to award a lump sum, or all or a portion of

Schedule C costs: LL at para 30. [104] In awarding costs, the Court may consider any or all of the factors set out in Rule 10.33(1) and (2). This includes the result ofthe action and the degree of success of each party: r 10.33(1)(a). The Court has discretion to consider any other matter related to thequestion of reasonable and proper costs that it considers appropriate: r 10.33(1)(g).

The Court may also consider the conduct of a partythat was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action: r 10.33(2)(a), as well asirregularities in documents or pleadings, non-compliance with a rule, or whether any application, proceeding or step in an action wasunnecessary, improper or a mistake: r 10.33(2)(d), (

e) and (f). There are also cost consequences when a successful party achieves a resultas favourable as any formal offer to settle it makes that is not accepted by the unsuccessful party: r 4.29. (

a) Success of a party [105] ED concedes that, as the successful party, PAF is entitled to some measure of costs (subject to its arguments about costs to self-represented litigants). (

b) Conduct of a party that unnecessarily lengthened or delayed the action [106] ED argues that the length of this trial and the pre-trial proceedings was due to PAF’s methods of disclosure, attempts to involvethird parties in the proceedings, and insistence that there be a large number of witnesses at trial. ED points to dozens of interlocutoryapplications brought by PAF, many of which it says were frivolous. ED notes there were 50 applications adjourned sine die and neverrevived. Finally, there were 42 case management meetings held between 2007 and 2012, sometimes lasting for days.

The trial lasted 26weeks, significantly longer than the time originally scheduled, and ED argues that much time was spent by PAF on examination andcross-examination. [107] PAF disputes ED’s characterization of the conduct of this litigation that the length of pre-trial proceedings is largely as a resultof its conduct. Instead, PAF argues that ED was responsible for lengthening the proceedings, as it delayed the production of documentsand withheld documents.

Also, PAF says ED did not reply to undertakings for a year, responded to correspondence a month later andrequired a court order for ED to start its discovery, all of which lengthened the proceedings. PAF further argues that ED lengthened thetrial proceedings by calling 31 witnesses. [108] In one of its submissions, PAF agrees that there were 50 motions (although in the same submission, argues there were 49applications and motions). While ED says there were 42 case management meetings, PAF points to 45 case management meetings. EDhas indicated it is prepared to accept PAF’s number for case management meetings.

A review of the court file reveals 34 court ordersflowing from applications and 10 Notices of Motion where the outcomes are unclear. [109] ED, PAF and the court file reach different conclusions as to the number of applications, but all point to an extraordinary numberof applications.

It may be, as PAF suggests in its submissions, that applications were used to assist in the organization of casemanagement meetings, and many were heard together or abandoned as a result. [110] While having legal representation may have reduced the number of case management meetings that were required and resultedin fewer applications, PAF was in the position as a self-represented litigant of having to navigate a complex legal system. I do not faultMrs.

Miller for not having the same level of expertise as a lawyer would. [111] At the same time, I am not satisfied that the manner in which ED produced its documents resulted in unnecessary delay. It isdifficult to look at the few specific examples provided by PAF of documents it says were produced late and conclude that was a generaltrend. In addition, I am satisfied that ED called some of its witnesses to facilitate the trial process and did not contribute to delay in that

manner either. (

c) Offers to Settle [ 112 ] In its October 16, 2015 submissions, PAF states it made offers to settle of $1,100,000 on July 26, 2005, $675,000 on November 14, 2005, and $1,675,000 on March 7, 2006. PAF further states that ED made an offer to settle on July 7, 2006 (although no particulars were provided) and on June 22, 2009 for $350,000. [ 113 ] In its October 21, 2015 submissions, PAF provided its supporting documentation regarding the offers it submits were made. According to PAF’s documentation, the first offer to settle served on ED was in March 2006 for $1,675,000.

The letter enclosing the offer to settle dated March 9, 2006 is included in PAF’s submissions, together with ED’s response from its counsel dated March 30, 2006 rejecting the offer. That letter explains that “[a] settlement offer was not made earlier because we felt neither Ellis Don nor Calgary Airport Authority would be receptive until after the hearing of security for costs.” [ 114 ] ED made a formal offer to settle to PAF for $350,000 dated June 22, 2009, a copy of which is included in ED’s submissions. [ 115 ] In its materials, ED identified other offers to settle as well. I accept ED’s

summary of the offers to settle made in this action, as follows: (

a) March 9, 2006 – offer from PAF for $1,675,000; (

b) June 19, 2006 – offer from PAF for $1,765,000; (

c) July 7, 2006 – offer from ED for $75,000; (

d) June 22, 2009 – offer from ED for $350,000; (

e) June 26, 2009 – offer from PAF for $2,500,000; (

f) October 1, 2009 – offer from PAF for $3,200,000; (

g) March 1, 2010 – offer from PAF for $3,700,000; and. (

h) Mid-trial mediation – informal offer from ED for $800,000. [ 116 ] While PAF initially sought double costs in its draft Bills of Costs, its revised drafts remove that claim. In its January 4, 2016 submissions, PAF explains it misapprehended the effect of offers to settle, initially believing it was entitled to double costs because it achieved a result better than ED’s offer of $350,000. [ 117 ] There were no offers to settle that would trigger cost consequences as set out in rule 4.29, and no award of double costs is warranted. (

d) Costs pursuant to the Tariff [ 118 ] The parties exchanged voluminous submissions on items claimed in the Plaintiff’s draft Bills of Costs, and PAF responded with revised draft Bills of Costs. ED also provided a draft Bill of Costs, later revised, that it argued could be a starting point and was adjusted to reflect that PAF is self-represented. ED’s draft Bill of Costs [ 119 ] ED’s Revised Draft Bill of Costs was prepared on the assumption that PAF had legal representation throughout the litigation.

The fees for both the time when PAF had legal counsel and when it was self-represented total $385,448.75 , including fees of $6,750.00 incurred when PAF was actually represented and $378,698.75 when PAF was self-represented but using the fees permitted under the Tariff for represented litigants (calculated using column 4). [ 120 ] ED proposes any fees for PAF when self-represented be calculated using either its Revised Draft Bill of Costs or the line item “Liability to Director” totalling $210,000 as a starting point.

In either case, the line item should be reduced or the fees in the Revised Draft Bill of Costs should be reduced by 50% to take into account that the director would have had to spend time managing the litigation in any event. It also asks this Court to limit credit for case management to 20 meetings, limit credit for trial days to 80 days (the length for which the trial was originally scheduled). As a result, ED argues that the fees portion of its draft bill of costs should be reduced significantly.

PAF’s draft Bills of Costs [ 121 ] In PAF’s Amended Bills of Costs filed with the October 16, 2015 submissions, adjustments were made, presumably in response to ED’s submissions. In addition, in the October 21, 2015 submissions, PAF asks for a further $52,500 for additional motions and applications it had not previously included (42 applications X $1,250 per application). The October 21, 2015 Amended Bills of Costs were revised as follows:

Part 1 of the first Bill of Costs – $2,309,957 was amended to $1,154,978;

Part 2 of the first Bill of Costs - $3,055,595 was amended to $1,123,230; and

The second Bill of Costs - $1,940,409 was amended to $2,005,950. [ 122 ] Handwritten notations were made on the October 21, 2015 Amended Bills of Costs and the resulting mark-ups were filed January 4, 2016. While no new totals are calculated, the notations indicate that PAF is not pursuing all of the cost categories it did initially. [ 123 ] It remains that there are many items in dispute between the parties that are included in PAF’s notated Amended Bills of Costs. The appropriateness of the items claimed by PAF in its draft Bills of Costs, both in fees and disbursements, are now considered. Fees in Dispute Costs for steps in litigation stated to be in accordance with

Schedule C [ 124 ] The parties have both used column 4 of the Tariff appended as

Schedule C to the Rules . Given the amount of the judgment, this is the appropriate column. PAF seeks costs for multiple pleadings [ 125 ] PAF seeks costs for the preparation of an initial Statement of Claim that was later discontinued, as well as for the Statement of Claim in this action. PAF also seeks costs for bringing an injunction application in the first action. [ 126 ] PAF argues that the initial Statement of Claim was required so it could seek an injunction, and the costs to prepare and file it are reasonable and proper costs incurred to bring an action.

ED responds that there should properly be a single charge. I agree. Costs of a separate Statement of Claim should be determined in that action. The plaintiff is entitled to costs for a single Statement of Claim – the one that commenced this action. Increased costs for certain

Schedule C items due to their size, the length of time taken or for other reasons [ 127 ] PAF seeks increased costs in its draft Bills of Costs.

These include increased costs for the plaintiff’s production (11,514 pages) and review of the defendant’s production (15,716 pages), increased costs for the large number of undertakings (112 undertakings), increased costs for time to prepare for questioning, increased costs for the size of PAF’s Notice to Admit, increased costs for preparation of lengthy written argument, and increased costs for trial preparation. [ 128 ] ED opposes these extra costs on the basis that the size of the production and undertakings is not so great as to warrant it.

Further, the increased costs exceed what is permitted under the Tariff. Finally, PAF’s proposed costs for trial preparation of $83,625 greatly exceeds the $8,000 permitted by the Tariff. [ 129 ] The Tariff specifies that the review of opposite party documents may be increased if the circumstances warrant. In this case, there were voluminous records and I would allow increased costs for production review of $1,250 for each of the plaintiff’s and defendant’s production.

I would not allow increased costs for the number of undertakings, for more time to prepare for questioning, or for the size of PAF’s Notice to Admit as I am not satisfied the length and duration warrant it. [ 130 ] At item 10(2), the Tariff specifically provides that the amount for preparation for trial “may be varied up or down depending on the length and complexity of the trial”. I find $8,000 to prepare for a 127-day trial with voluminous documents and more than 30 witnesses is not sufficient. I would permit an increase of this amount by a multiplier of 5, or $40,000.

In light of that increased amount, I would not increase the amount for preparation of written argument. Penalty costs for delay of documentary production [ 131 ] PAF seeks $20,000 in costs as a penalty for ED’s alleged delay in producing documents. This item is not allowed under the Tariff. I am not persuaded at this point that there was egregious delay by ED sufficient to warrant a $20,000 penalty.

Penalty costs for Notices to Admit [ 132 ] In addition to seeking enhanced costs for its Notices to Admit due to the size of the notice (which is discussed above), PAF seeks $25,000 noting “Defendant made about 30 admissions. 50% of 19 days X 2,950)”. In its submission, PAF says this is penalty, as ED “failed to take this process seriously that would have assisted the Trial”. It is not clear that the Notices to Admit would have saved trial days in any event, and I am not satisfied that ED’s actions were so serious as to warrant a penalty in costs.

Costs for various interlocutory applications heard leading up to trial [ 133 ] As has been noted, there is not an agreed number of applications brought in this matter, as many of them were brought before the Case Management Judge and adjourned or abandoned. [ 134 ] PAF seeks costs relating to a security for costs application brought September 27, 2004. Some of the costs sought are not permitted: costs for questioning (as that relates to the discovery process, not cross-examination).

Costs are limited under the Tariff to $1,750 for applications with briefs. [ 135 ] PAF also seeks costs for each application brought that was silent as to costs (42 applications at $1,250 each) in the amount of $52,500. [ 136 ] ED categorizes the applications brought as uncontested, contested, contested with briefs, and abandoned. In its Revised Draft Bill of Costs, ED identifies both applications where it says PAF is entitled to costs, and those where ED is entitled to costs. The results are:

Uncontested applications PAF

(2) ED

(0) Net $1,400 to PAF Contested applications PAF

(6) ED

(4) Net $1,250 to PAF Contested with briefs PAF

(2) ED

(2) Net $120 to ED Abandoned applications PAF

(51) ED

(7) Net $27,500 to ED [ 137 ] Pursuant to section 7(3) of

Schedule C, the fee for abandoned applications is 50% of the fee that would be payable had the application not been abandoned. However, I accept PAF’s information on this point that applications were used to establish an agenda for case management in many instances and therefore I would not award any fee for abandoned applications where no separate application date was scheduled. Costs for other legal proceedings, including trial costs and judgments [ 138 ] PAF seeks fees for costs incurred indirectly as a result of this litigation where it was unable to negotiate a standstill or assignment agreement.

These include 11 claims and arbitrations that proceeded separately, some of which went to trial and others that were uncontested. [ 139 ] Costs of other legal proceedings are not recoverable as costs in this proceeding. The courts and arbitrators may deal with costs of those proceedings separately. Double costs based on a settlement offer of $350,000 [ 140 ] As discussed above, this argument was abandoned by PAF in its final set of written submissions. In any event, PAF did not achieve a better result at trial than any of its formal offers to settle so double costs are not available.

Disbursements Disbursements for standard office charges [ 141 ] ED and PAF are in agreement about disbursements for filing fees, photocopying, scanning and formatting the production, photocopying exhibits, faxing and long distance fees, search fees, binders and supplies, and payment of a court reporter and for transcripts, videoconferencing costs, the trial fee and fees for registered mail and service.

ED has agreed to these amounts even though they are not supported by invoices. [ 142 ] The amounts claimed for several of the charges differ between PAF and ED, but the difference is insignificant and these disbursement amounts reflect on balance approximately what is sought by PAF for these items. Using the disbursement amounts set out in ED’s Revised Draft Bill of Costs for both when PAF was represented and self-represented, these total $22,773 plus GST of $1,275.01 . [ 143 ] The remaining disbursements sought by PAF are disputed and are discussed below.

Disbursements for financing litigation [ 144 ] PAF seeks payment of its financing costs. In its January 4, 2016 submissions, PAF itemized its financing costs. In its second revised draft Bill of Costs, PAF itemizes loans and mortgages for which it also claims.

The financing costs, loans and mortgages include: -Oak Grove Road - fees of $8,591 to mortgage the property on Oak Grove Road, interest on the mortgage in the amount of a portion of $10,080 per year, and a claim for $171,000 for the mortgage with a note that “except for re-mortgaging, Oak Grove would be free and clear by now”; -Burland property - fees of $6,431 to sell the property, and a claim for $279,000 for the mortgage with a note that “except for selling Burland, Burland would be free and clear”; -Roland property – fees of $880 to mortgage a house, interest on the mortgage of $14,200, and a note in the Bill of Costs with a claim for $72,000 indicating “[l]iability for the $50,000 loan from the Roland house plus interest”; -Liability for three loans, including interest, in the amounts of $15,840, $16,785 and $6,300; -A claim for payment of a lease on a truck to replace a truck that was sold to finance the litigation; and -Claims for interest to Vantis Credit Union and the Business Development Bank for $110,500 and $57,000, respectively. [ 145 ] PAF argues that interest paid on financing is an allowable cost, as PAF required financing in order to fund this litigation.

In support of its position, PAF refers to the Court of Queen’s Bench Cost Manual (updated January 17, 2011) at D-11. Upon review of this section, it is clear it is referencing interest on costs and disbursements, not on costs to finance litigation. The excerpt at page D-11 reads: As noted in Stevenson & Côté, Civil Procedure Guide (1996) at p. 1940, “interest to finance a litigant’s expenses during a suit is not recoverable as part of party-and-party costs: Hunt v. R.M. Douglas (Roofing) (HL) [1988] 3 WLR 975, 3 All ER 823, [1990] 1 AC 398 .” This decision was followed in Davidson v. Patten [2005] A.J.

No. 842, 2005 ABQB 519 , 381 A.R. 1, 141 A.C.W.S. (3d) 372 where the Q.B. justice concluded: 33 Interest to finance a litigant’s expenses during a suit is not recoverable as party and party costs. ( Hunt v. R.M. Douglas Roofing ) (HL) [1988] 3 W LR 975 ; All E.R. 823; [1990] 1 A.C. 398 ; Stevenson and Côté 2004 Alberta Civil Procedure Guide (1996) p. 1940.

34 However, interest is awarded on costs from the date when a party becomes entitled to them. The party entitled to costs in this actionwill have interest on those costs, at the post-judgment interest rate, from the date of judgment to the date costs are paid. [146] PAF also relies on the decision of Bourgoin v Ouellette (2009), (NB KB), 343 NBR (2d) 58 (QB)(“Bourgoin”) in support of its ability to recover financing costs. There, the plaintiff borrowed money from a private corporation thatprovides financing to victims of personal injury who are awaiting insurance claim settlements: para 48.

The New Brunswick Court ofQueen’s Bench held that the interest cost was a cost payable by the defendants to the plaintiff: para 59. [147] ED distinguishes Bourgoin on its facts. In Bourgoin, a plaintiff who was injured in a motor vehicle accident took out a loanspecifically to fund litigation disbursements. The loan could only be used to co

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