Decore v Decore, 2016 ABQB 572

Court of Queen’s Bench of Alberta Citation: Decore v Decore, 2016 ABQB 572 Date: 20161011 Docket: 1303 16302 Registry: Edmonton Between: Lyndon Decore and Matthew Decore Plaintiffs - and - Karyn Decore, Nicole Decore, Maligne Lodge Ltd and Tonquin Inn Ltd Defendants And Between: Karyn Decore, Nicole Decore and Decore Holdings Inc Plaintiffs by Counterclaim - and - Lyndon Decore and Matthew Decore Defendants by Counterclaim _______________________________________________________ Memorandum of Decision of the

Honourable Mr. Justice P.B. Michalyshyn _______________________________________________________ I. Introduction [1] The parties have been unable to agree on costs following competing

summary judgment applications decided at Decore v.Decore, 2016 ABQB 246. Owing to scheduling difficulties, and by agreement of counsel, submissions as to costs were made in writing,leading now to these written reasons. [2] The

summary judgment applications referred to above were each dismissed. On the face of it, that would lead to the partiesbearing their own costs. [3] The Daughters say however that they should recover costs because they succeeded on three important points which maystreamline any litigation to follow: (

a) the characterization of the dispute; (

b) the Sons’ unsuccessful defence based on Rule 3.56(1) ofthe Alberta Rules of Court; and (

c) the Sons’ unsuccessful defence based on the Limitations Act. They argue as well that solicitor-clientor, alternatively, enhanced costs, should follow on account of the Sons’ conduct of the proceedings. [4] In their written reply to the Daughters’ position, the Sons say nothing about costs for the three decided points. The Sonsoppose solicitor-client or enhanced costs.

They argue that any consideration of costs should be put over to be dealt with, in due course,by a trial judge. [5] For reasons which follow, I agree with the Daughters that some costs recognition should come their way owing to success onthe three decided issues mentioned above. I disagree that the Daughters are entitled to their full

Schedule C costs, whether enhanced forinflation, or otherwise. [6] I agree further that the Daughters are entitled to enhanced costs for the Sons’ conduct of the

summary judgment proceedings,most particularly on account of the Sons’ unproven allegations of misrepresentation, dishonesty and a lack of good faith. II. Analysis 1. Partial success [7] It is true that costs are not usually allocated on an issue by issue basis: Mahe v Boulianne, 2010 ABCA 74 at para.6, 21 Alta LR (5th) 277. This is often stated in the context of an overall successful party not being disentitled to costs because they lostcertain issues, e.g., Hogarth v Rocky Mountain Slate Inc., 2013 ABCA 116.

It is sometimes manifested in costs based on so-calleddivided, or partial success. [8] I know of no absolute prohibition, however, in assessing costs to an unsuccessful party where they have won on a certainissue or issues. The Sons have pointed me to no such authority. [9] Numerous cases speaking in favour of apportioned costs for partial success are mentioned in the Alberta Civil ProcedureHandbook (Juriliber, 2016) annotation to Rule 10.33, at p 10-73. [10] Just on its face, Rule 10.33(1)(

a) is some authority for such an exercise of such discretion. It specifically entitles the court toconsider “the result of the action and the degree of success of each party”. [11] Other Rule 10.33(1) considerations in play here are (c) “the importance of the issues”, and the residual (g) “any other matterrelated to the question of reasonable and proper costs that the Court considers appropriate”. [12] The Daughters argue persuasively that each of the three decided points – (

a) the characterization of the dispute; (

b) the Sons’unsuccessful defence based on Rule 3.56(1) of the Alberta Rules of Court; and (

c) the Sons’ unsuccessful defence based on theLimitations Act – will potentially streamline what everyone agrees has been long and difficult litigation. In their written submissionsregarding costs, the Sons did not suggest otherwise. 2. The Sons’ conduct of the proceedings [13] Rule 10.33(2) entitles me to consider, amongst other things, “(

a) the conduct of a party that was unnecessary or thatunnecessarily lengthened or delayed the action or any stage or step of the action”, and “(

g) whether a party has engaged in misconduct”. [14] Both parties cite Graesser J from College of Physicians and Surgeons of the Province of Alberta v. J.H., 2009 ABQB 48 forgeneral principles around the discretion to award costs and, in particular, solicitor-client costs. [15] I find the Sons’ conduct here falls short of supporting a successful claim for solicitor-client costs. [16] That said, conduct falling short of satisfying the test for solicitor-client costs may still support an award of enhanced costs.

Such conduct is often expressed as “misconduct”, e.g., Indutech Canada Limited v Gibbs Pipe Distributors Ltd., 2012 ABQB 425 (perRomaine J), and the authorities noted at pp 10-75 to 10-78 of the Alberta Civil Procedure Handbook (Juriliber, 2016). I am also attracted

to Justice Sanderman’s articulation of the point in Kent v Law Society of Alberta , 2015 ABQB 432 , at para 18 : … Full indemnity costs are only to be awarded in the most egregious circumstances. They are a rarity. Enhanced costs are not. They can be awarded in those circumstances where the conduct of one of the participants falls far short of what is expected from a responsible litigant. [ 17 ] I agree with the Daughters that certain positions taken by and/or on behalf of the Sons lengthened the

summary judgment proceedings unnecessarily. [ 18 ] The positions included these: (

a) that a certain indebtedness was known at the date of a settlement agreement; (

b) that Karyn Decore agreed with and/or conceded certain things in the Sons’ accounting evidence; and (

c) that the Daughters sought to take advantage of an alleged accounting error in their favour. [ 19 ] In my decision on the merits I concluded that the Sons’ positions on these points were unfounded on the evidence (paras 38- 61 of Memorandum of Decision). In the case of the alleged accounting error, I found that the Sons’ position was misleading (para 194 of Memorandum of Decision). I find that on the whole the Sons’ positions on these points probably led the Daughters to incur unnecessary legal expense.

The Sons’ positions certainly resulted in the court having to spend many additional hours poring through voluminous transcripts and other records to determine just what evidence existed, or did not, to support the Sons’ assertions. [ 20 ] I also agree with the Daughters that enhanced costs should follow the Sons’ unproven allegations of misrepresentation and a lack of good faith. [ 21 ] Allegations of misrepresentation and a lack of good faith were set out in the Sons’ filed written submissions in support of

summary judgment. They were repeated orally at the September 23, 2015 hearing. If anything, the oral submissions were even more pointed. In those oral submissions, the Sons through counsel submitted that Karyn Decore in particular had engaged in “misrepresentation”; the Sons argued that despite many alleged compromises on the Sons’ part, the Daughters improperly sought to take advantage of the “KPMG error” to get more than their half of the estate; the Sons argued that the Bhasin v.

Hrynew , 2014 SCC 71 , [2014] 3 S.C.R. 494 duty of good faith – to act honestly in the performance of contractual relations – “is missing here on the part of the Daughters”. In other words, it was alleged that the Daughters had acted dishonestly. [ 22 ] The Daughters interpret the Sons’ position simply as alleging bad faith. They say the Sons attack their honesty and integrity.

They say the Sons’ positions: …demonstrate misconduct during the litigation which has led to increased costs of the proceedings and has unnecessarily bred confrontation and hostility. [ 23 ] As for the litigation as a whole, I am unable to conclude that the Sons have uniquely bred unnecessary confrontation and hostility. Within the

summary judgment proceedings, however, I agree that such has been the effect of their conduct. 3. Cost to be decided by a trial judge [ 24 ] The Sons rely on 369413 Alberta Ltd. v. Pocklington , 1998 ABQB 860 for the proposition that costs should be deferred to the trial judge. That case involved an application under then-rule 244.1. Justice Lee did order party-party costs. He subsequently declined to order solicitor-client costs, apparently on the basis that the applicant’s entitlement to such costs might be affected by the “general circumstances” of the case.

He questioned whether it would be possible to award such costs in the circumstances before him without pre- judging the merits of the defence to the main suit, or unduly prejudicing the rights of the Respondents. [ 25 ] I do not find that 369413 Alberta Ltd. , or any authority mentioned in it, supports the Sons’ contention that I should leave costs of the

summary judgment applications to a trial judge. III. Conclusion [ 26 ] In their written submissions the Daughters refer to party-party bills of costs totaling $73,010. I have no reason to depart from that total, if only given the Sons’ silence, in their written submissions, regarding this quantum of costs. I am not satisfied that an inflation increase to

Schedule C generally is called for in this case, or at least at this stage of the proceedings. Elan Construction Limited v. South Fish Creek Recreational Association 2016 ABCA 220 states no general rule in that regard. [ 27 ] [ 28 ] For the reasons already stated, I award 2/5ths of the Daughters’ claimed costs against the Sons on account of the Daughter’s partial success. They are thus entitled to $29,204 between them. I further award the sum of $15,000 as enhanced costs for the Sons’ conduct of the

summary judgment proceedings, most particularly on account of their unproven allegations of misrepresentation, dishonesty, and bad faith. Dated at the City of Edmonton, Alberta this 11 th day of October, 2016.

P.B. Michalyshyn J.C.Q.B.A. Appearances: Michael J McCabe QC Cherisse Killick-Dzenick of RMRF LLP for the Plaintiffs and Defendants by Counterclaim Louis M H Belzil, QC of Rackel Belzil LLP for Nicole Decore, Defendant and Plaintiff by Counterclaim Grant S Dunlop QC of Ogilvie LLP for Karyn Decore, Maligne Lodge Ltd and Tonquin Inn, Defendants and Plaintiffs by Counterclaim Decore Holdings Inc, Plaintiff by Counterclaim