Breitkreuz v Alberta (Infrastructure), 2016 ABQB 377

Court of Queen ’ s Bench of Alberta Citation: Breitkreuz v Alberta (Infrastructure), 2016 ABQB 377 Date: 20160706 Docket: 1103 15781 Registry: Calgary Between: Walter Breitkreuz Plaintiff/Respondent - and - Her Majesty the Queen In Right of Alberta, as Represented by the Minister of Infrastructure (formerly Minister of Public Works, Supply and Services) and Carl Soneff Applicants/Defendants Corrected judgment: A corrigendum was issued on July 25, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr.

Justice C. M. Jones _______________________________________________________ I. Introduction [ 1 ] On January 6, 2016, I granted

summary dismissal of the Statement of Claim in this matter (the “Dismissal Decision” at 2016 ABQB 12 ). At the same time, I directed that if the parties were unable to agree on costs, they could provide me with written submissions in respect thereof. The parties were not able to agree and provided written submissions in February 2016. The following is my decision in respect of costs. II. The Parties’ Positions [ 2 ] The Applicants, the Minister of Infrastructure and Mr. Carl Soneff (hereinafter, the “Crown” and “Soneff”, respectively) assert that they are entitled to costs and are seeking one set of costs on Column 5. Further, they argue that they are entitled to double

costs for all steps following a formal offer made September 9, 2013. They have submitted a Bill of Costs. [ 3 ] The Respondent, Mr. Walter Breitkreuz (“Breitkreuz”), argues that no costs should be awarded. In the alternative, he argues that the Bill of Costs submitted by the Crown is not appropriate and that a reduced amount of costs should be awarded. Further, he asserts that the formal offer upon which the Crown relies was not a genuine offer of compromise and, therefore, should have no costs consequences. III.

Analysis [ 4 ] It is common ground that costs are in the discretion of the Court, subject to any express contrary enactment. No such enactment is applicable in this case. [ 5 ] Breitkreuz states in his brief that “The overarching question for determining whether a Court should exercise its discretion to award no costs in favour of a successful party is whether the normal rule is unsuitable on the facts of a case.” See BC (Minister of Water, Land and Air Protection) v BC (Information and Privacy Commissioner) , 2005 BCCA 368 , 50 BCLR (4 th ) 19.

He argues that the Applicants were successful in having his claim dismissed only on the basis of a “technical defence” that did not undermine the “validity and relative strength” of his allegations. He goes on to argue that “issues of complicated law and understandable reasons for confusion or difficulty in determining the merits of a claim” are reasons not to award costs against a party and that this case is “broadly analogous to one of mixed success”. [ 6 ] I reject these arguments.

I do not accept the proposition that reliance on a limitation period constitutes a “technical” defence that ought to disentitle a successful party from costs. Rather, they are a useful and accepted tool for the balancing of rights. At para 22 of the Dismissal Decision, I quoted from the Court of Appeal’s decision in Boyd v Cook , 2013 ABCA 27 , 542 AR 160 at para 4 : Limitations statutes exist for a purpose. They are not mere tidiness, nor a trick to give defendants windfalls or bargaining points.

Limitations legislation, so-called “statutes of repose” exist to give some certainty in their lives to all those who may at some time be sued. This is not only true of businesses and professional people, but also ordinary citizens who can ill afford the mental and emotional stress of threats or lawsuits. It is a nuisance and an expense to have to keep voluminous records in perpetuity. Allowing large potential threats to hang over their heads for a generation sterilizes capital and impoverishes businesses.

What is worse, it is unjust to sue people once their former ability to defend themselves has evaporated... [ 7 ] As I noted in the Dismissal Decision, Breitkreuz, as a former Master of this Court, would have been well aware of the limitations issue at the time he filed his Statement of Claim. While he makes much of the possible frailties of the Applicants’ evidence on the merits of his claim, such weaknesses would have resulted from the effluxion of time and the fading memories of witnesses, both of which resulted from Breitkreuz’s substantial delay in asserting his claim.

This is precisely the concern limitation legislation is intended to address. [ 8 ] Further, the limitations issue in this matter was not, as Breitkreuz claims, particularly complicated notwithstanding the need to address the question of fraudulent concealment. Rather, it lent itself to a relatively easy resolution, even on assumptions favourable to Breitkreuz. [ 9 ] Accordingly, I see nothing in this matter to render the application of the normal rule unsuitable and I will award costs in favour of the Applicants. [ 10 ] Breitkreuz argues that, if I award costs to the Applicants, I should award a reduced amount.

He proposes either that I award a lump sum of $2,000 or that I award costs on Column 1, rather than on Column 5 as advocated by the Applicants. [ 11 ] While I agree with Breitkreuz that I have the discretion to award a reduced amount of costs, I decline to do so. His written submissions do not articulate any reason for a reduced amount apart from the above arguments that I have rejected. [ 12 ] Next, Breitkreuz argues that the Applicants’ Bill of Costs is excessive. In particular, he takes issue with the claims for a half- day of questioning on each of September 12 and 13, 2013.

He asserts that a half-day comprises 2.5 hours and that the Court of Queen’s Bench Costs Manual provides that questioning requiring less than 2 hours should be prorated. Breitkreuz alleges that questioning on the days in issue took 1.6 hours and 0.25 hours, respectively. He attaches to his written submissions excerpts from the questioning indicating that the time required was 1 hour, 36 minutes on the afternoon of September 12, 2013 and 14 minutes on the morning of September 13, 2013. [ 13 ] Based on the transcripts provided, I accept Breitkreuz’s argument on this point.

Accordingly, the claimed item for questioning on the afternoon of September 12, 2013 is allowed only to the extent of 64%, reducing that amount from $1,500.00 to $960.00. Similarly, the claimed item for questioning on the morning of September 13, 2013 is allowed only to the extent of 10%, reducing that amount from $1,500.00 to $150.00. [ 14 ] Finally, the Applicants claim double costs for steps taken after a formal offer of settlement was made on September 9, 2013. [ 15 ] Breitkreuz argues that this formal offer was not a genuine compromise.

He cites, inter alia, the Court of Appeal’s decision in Allen (Next Friend of) v University Hospitals Board , 2006 ABCA 101 , 384 AR 23. The relevant portions of that decision are found at paras 13-17: For a settlement offer to satisfy the purpose of the compromise rules and justify a double costs sanction, it must have been a genuine offer at the time it was served and remained open for acceptance: Petro-Canada Products Inc. v. Dresser- Rand Canada Inc. (2004), 33 Alta. L.R. (4th) 197 (C. A.), 2004 ABCA 282 .

In every case where double costs are claimed under

Part 12 on the basis of an unaccepted offer of settlement, the court must determine ifthe offer was genuine. As a general rule, for an offer of settlement to qualify as a genuine offer it must have been one that was reasonableand realistic in all the circumstances current at the time it was served and remained open . Characterization of a dispute as "all ornothing" is irrelevant to a consideration of whether the compromise rules apply. This Court pointed out in Budget Rent-A-Car ofEdmonton Ltd. v. Security National Insurance Co., 2001 ABCA 71 , [2001] A.J.

No. 321 at para. 8, that the issue on appeal isoften "all or nothing", but that alone does not constitute a "special reason" for excluding application of the compromise rules: By the time cases reach the appeal stage there is often only one major issue to be decided. The fact that the outcome of an appeal is an"all-or-nothing" proposition does not constitute a special circumstance which negates the double costs rule. .... The nature of the issue or issues in dispute may, however, be one of the circumstances relevant to the question of whether an offer isgenuine.

To be genuine, an offer of settlement made pursuant to

Part 12 must include an element of compromise: Re Blue Range ResourcesCorp. (2000), 281 A.R. 351 (C.A.), 2001 ABCA 177 at para. 1. An offer to settle for the full amount of a liquidated claim plus judgmentinterest and costs to the date of service of the offer cannot be characterized as a genuine offer as it lacks an element of compromise:Labbee v. Peters, supra. Likewise, an offer to accept the full amount of a trial judgment plus interest and costs to the date of service isnot a genuine offer to compromise an appeal: Blue Range, supra at paras. 11 and 13.

The addition of an offer to forego costs that may beincurred after service of the offer does not introduce an element of compromise. Where a settlement offer does not contain an element ofcompromise, the court may nevertheless consider it to have been reasonable in the circumstances and exercise its discretion to awardenhanced costs. An offer of settlement that does not realistically reflect the relative merit of the parties' positions at the time it is made is not a genuineoffer.

It is one made without any reasonable expectation that it will be accepted and for the sole purpose of invoking the double costssanction: Kerr v. Kerr (2000), 293 A.R. 384 (C.A.), 2001 ABCA 152. Such an offer is merely a no-risk litigation strategy or tactic.

Ifsuch an offer were held to justify a double costs penalty if not accepted, a litigant with a bona fide perception of the facts or the law, orboth, different than that of his adversary could only pursue the matter to trial or appeal at an unjustifiable financial risk, thus potentiallyimpeding the access of deserving litigants to the courts and aggravating the inherent advantage enjoyed by litigants with the deepestpockets. The assessment of an offer's genuineness is not confined to a consideration of whether it was made honestly and in good faith.

The fact itcontains an element of compromise, although necessary and relevant, may not be determinative. The genuineness of an offer must beassessed as at the time it was served and remained open and its character cannot be decided by simply comparing it to the result of thetrial or appeal. That is only one factor to be considered.

Other factors that may be relevant include the amount or nature of the settlementoffer relative to the relief claimed or the judgment at trial, the relationship of the proposed settlement to an objective view of the relativemerit of the positions of the parties, and the timing of the offer in relation to the commencement of the trial or hearing of the appeal.None of these factors, or any other single factor, is necessarily conclusive.

An assessment of whether an offer was or was not genuinerequires an examination of all of the surrounding circumstances, subjective and objective, existing at the time the offer was served andremained open, as well as the outcome of the trial or appeal. [16] Breitkreuz argues that since the formal offer was served before questioning, it was made at a very early stage of the litigationwhen the parties were in an “evidentiary vacuum” and the merits of the claim could not yet be assessed. Breitkreuz notes that the costsbeing waived at that point were only $6,500.00, being 0.32% of his $2,050,000.00 claim.

He asserts that, for the offer to be genuine, theApplicants would have to have had a 99.7% chance of success. He offers no authority for this arithmetic approach to the assessment ofthe offer. [17] For their part, the Applicants cite the recent decision of Justice Veit of this Court in VAS v Grace, 2015 ABQB 7 at para 21: A defendant who is willing to give up costs is offering a valid compromise: S.R.G. at para. 13. That defendant is not required to offersubstantial cash if it honestly comes to the conclusion that the plaintiff has no cause of action against them.

Were the law otherwise, aplaintiff would feel entitled to advance a weak cause of action secure in the expectation that they would have to be bought off by someform of material cash payment. As the government put it, a plaintiff should not proceed as if they are entitled to benefit from thelitigation. [18] I note that the offer in VAS came at a later stage than was the case here.

Justice Veit noted as follows at para 20: At the times when the government made its offers, it had had a realistic opportunity to assess the strength of the plaintiff's case against it:prior to the first offer, there had been a review of the plaintiff's records, preparation for questioning, and questioning of both the plaintiffand of the defendant's chosen officer. Prior to the second offer, there had been a JDR. The government offers realistically, and indeedcorrectly given the trial result, assessed the merits of Ms. V.A.S.'s case against it.

The timing of the offers was also realistic in that thelast of the offers was made long before the trial was scheduled, thereby avoiding undue pressure on the plaintiff to consider the offer.Objectively, the government's assessment of the relative merits of the case was also reasonable: there was no juridical frameworksuggesting that the plaintiff would succeed, depending only upon the strength of the witnesses. [19] Nevertheless, I do not think it can be said that a formal offer, to be valid, must await a particular stage of the litigation.

Such arequirement would seem to be contrary to the purpose of the compromise rules, as articulated by the Court of Appeal at para 12 of Allen: The purpose of the compromise rules is, as their description suggests, to encourage parties to compromise and settle litigation on a fairand reasonable basis before trial or appeal, as the case may be: Forster v. MacDonald (1995), 1995 ABCA 431 , 178 A.R. 98(C.A.), [1995] A.J. No. 1063 (C.A.) at para. 5. The objective is less costly and more timely resolution of disputes with a concomitantreduction in pressure on crowded courts.

Laycraft, C.J.A. explained the purpose of the compromise rules in Rahmath v. Louisiana Land& Exploration Co. (Alta.C.A.), [1989] A.J. No. 1184 , (1989) 1989 ABCA 323 , 104 A.R. 391 at para. 5: The rules in

Part 12 of the Rules of Court, which bear the heading Compromise using Court Process, have the object of promoting

settlement and preventing needless litigation. They do so by providing a process under which the litigant responsible for unnecessary litigation may be made to pay for it. Either a plaintiff or a defendant may trigger the rules and thereafter place the opposing party at risk at to costs where a reasonable compromise is rejected. A defendant may pay into court or offer to accept judgment. A plaintiff may serve an offer specifying the terms of a proposed settlement.

The unreasonable plaintiff will pay [double] the defendant's costs for all subsequent proceedings; the unreasonable defendant will pay the plaintiff double costs after the offer is rejected. [ 20 ] I find that the Applicants’ offer meets the requirements of Rule 4.24 of the Rules of Court . In a case such as this where there was a very real possibility of dismissal based on the limitation period, an offer to discontinue without costs constitutes a genuine attempt at compromise.

A plaintiff who refuses that compromise does so at the risk of being held liable in costs. [ 21 ] In the result, the Applicants are awarded costs in the following amounts.

Item Amount Commencement documents, affidavits, pleadings, etc. $ 3,500.00 Disclosure of records $ 1,500.00 Review of opposite party documents $ 1,500.00 Preparation for Questioning ($1,500.00 x 2) $ 3,000.00 Questioning September 12, 2013 a.m. ($1,500.00 x 2) $ 3,000.00 Questioning September 12, 2013 p.m. ($960.00 x 2) $ 1,920.00 Questioning September 13, 2013 a.m. ($150 x 2) $ 300.00 Application to Court ($2,000.00 x 2) $ 4,000.00 Transcript fees $ 664.50 Photocopying $ 68.85 Total $19,453.35 Heard on the 14 th day of May, 2015. Dated at the City of Calgary, Alberta this 6 th day of July, 2016. C.M.

Jones J.C.Q.B.A. Appearances: Marta Burns and Stephanie Bowes Alberta Justice Legal Services Division for the Applicants Brian P. Kaliel, QC and Monique Petrin Nicholson Miller Thomson LLP for the Respondent _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice C. M. Jones _______________________________________________________

The Citation Line was incorrect. The citation line should read: Breitkreuz v Alberta (Infrastructure) , 2016 ABQB 377. The Style of Cause was also incorrect. The Style of Cause should read: Walter Breitkreuz (Plaintiff/Respondent) v Her Majesty the Queen in Right of Alberta, as Represented by the Minister of Infrastructure (formerly Minister of Public Works, Supply and Services) and Carl Soneff.