Nature Conservancy of Canada v Waterton Land Trust Ltd, 2016 ABQB 65

Court of Queen ’ s Bench of Alberta Citation: Nature Conservancy of Canada v Waterton Land Trust Ltd, 2016 ABQB 65 Date: 2 0160129 Docket: 0601 00089 Registry: Calgary Between: The Nature Conservancy of Canada La Société Canadienne pour la Conservation de la Nature Plaintiff - and - Waterton Land Trust Ltd., Waterton Land Trust, Wild West Buffalo Ranches Ltd Waterton Land Trust Limited Partnership, Thomas H. Olson, Bruce Lemons and Kenneth Lukowiak Defendants - and - Waterton Land Trust Ltd., Waterton Land Trust, Wild West Buffalo Ranches Ltd Waterton Land Trust Limited Partnership, Thomas H. Olson and Moose Mountain Buffalo Ranch Plaintiffs by Counterclaim and

The Nature Conservancy of Canada La Société Canadienne pour la Conservation de la Nature and Larry Simpson Defendants by Counterclaim _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice P.R. Jeffrey _______________________________________________________ [ 1 ] The Defendants apply for costs on a solicitor and client basis, or failing that on an escalated basis, following fractious litigation on complex factual and legal issues.

The background to the dispute, the claims made between the parties, the issues arising and the Court’s judgment are all contained in the written reasons found at: 2014 ABQB 303 . [ 2 ] The applicants fall into two groups. They are, first, the “ Olson Defendants ”, comprised of Thomas H. Olson, Wild West Buffalo Ranches Ltd. and Moose Mountain Buffalo Ranch and, second, the “ Waterton Defendants ”, comprised of Waterton Land Trust Ltd., Waterton Land Trust, Waterton Land Trust Ltd. Partnership, Bruce Lemons and Kenneth Lukowiak.

Each group had separate counsel throughout trial and consequently incurred separate sets of costs. Each group now seeks indemnity, or failing that substantial contribution on an escalated scale, to their legal costs. [ 3 ] The defendants all seek costs on an escalated scale because fraud was alleged but not proven, because the plaintiff was improperly motivated and because they say the plaintiff’s trial counsel strayed beyond what is permissible for “hard fought litigation”.

The Olson Defendants say the manner the case was litigated attracted “the strong censure of this Court”. [ 4 ] The Nature Conservancy of Canada (the “ NCC ”) opposes those applications. It says this is not an appropriate case for an award of costs on an escalated basis. Further, it says success was shared and therefore the fair approach would be to estimate the costs caused by the various specific severable issues. Some suitable offsetting of them, adjusted to affect a fair ultimate result, would best reflect the actual divided success at trial.

It also says that only a single set of costs should be granted for all defendants. [ 5 ] The Applicants respond that apportioning costs is appropriate only in extraordinary cases and this is not such a case. They argue this litigation did not have easily severable parts either substantively or in terms of trial time or preparation, there was no identifiable issue that consumed an inordinate amount of trial time or that unnecessarily lengthened trial and, just generally, apportioning is not fair in the circumstances. They remind me that costs typically flow to the party enjoying predominant success.

Applicable Law [ 6 ] The parties agree that costs ultimately are in the Court’s discretion, that solicitor-client costs are extraordinary and exceptional, and that my declining to award punitive damages at trial, in part on the basis that costs availed further opportunity to redress NCC’s behaviour, is not determinative of the issue of solicitor-client costs. [ 7 ] The Alberta Rules of Court address the Court’s determination of costs.

Of particular releva nce to these two applications from among those Rules are the following: General rule for payment of litigation costs 10.29(1) A successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party, and the unsuccessful party must pay the costs forthwith, notwithstanding the final determination of the application, proceeding or action, subject to (

a) the Courts’ general discretion under rule 10.31, […] Court-ordered costs award

10.31(1) After considering the matters described in rule 10.33, the Court may order one party to pay to another party, as a costs award, one or a combination of the following: (

a) the reasonable and proper costs that a party incurred to file an application, to take proceedings or to carry on an action, or that a party incurred to participate in an application, proceeding or action, or (

b) any amount that the Court considers to be appropriate in the circumstances, including, without limitation, (

i) an indemnity to a party for that party’s lawyer’s charges, or (ii) a lump sum instead of or in addition to assessed costs.

(2) Reasonable and proper costs under subrule (1)(a) (

a) include the reasonable and proper costs that a party incurred to bring an action; (

b) unless the Court otherwise orders, include costs incurred by a party (

i) in an assessment of costs before the Court, or (ii) in an assessment of costs before an assessment officer; (

c) do not include costs related to a dispute resolution process described in rule 4.16 or a judicial dispute resolution process under an arrangement described in rule 4.18 [Judicial dispute resolution arrangement] unless a party engages in serious misconduct in the course of the dispute resolution process or judicial dispute resolution process; (

d) do not include, unless the Court otherwise orders, the fees and other charges of an expert for an investigation or inquiry or the fees and other charges of an expert for assisting in the conduct of a

summary trial or a trial.

(3) In making a costs award under subrule (1)(a), the Court may order any one or more of the following: (

a) one party to pay to another all or part of the reasonable and proper costs with or without reference to

Schedule C; (

b) one party to pay to another an amount equal to a multiple, proportion or fraction of an amount set out in any column of the tariff in Division 2 of

Schedule C or an amount based on one column of the tariff, and to pay to another party or parties an amount based on amounts set out in the same or another column; (

c) one party to pay to another party all or part of the reasonable and proper costs with respect to a particular issue, application or proceeding or part of an action; (

d) one party to pay to another a percentage of assessed costs, or assessed costs up to or from a particular point in an action.

(4) The Court may adjust the amount payable by way of deduction or set-off if the party that is liable to pay a costs award is also entitled to receive an amount under a costs award.

(5) In appropriate circumstances, the Court may order, in a costs award, payment to a self-represented litigant of an amount or part of an amount equivalent to the fees specified in

Schedule C.

(6) The Court’s discretion under this rule is subject to any specific requirement of these rules about who is to pay costs and what costs are to be paid. Court considerations in making costs award 10.33(1) In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily

separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct. [8] The Court is to interpret these Rules in such a way as to do justice between the parties: KEM Presentations Inc v ShellCanada Products Ltd, 2003 ABCA 217 at para 8. [9] Courts award solicitor and client costs only in rare and exceptional circumstances.

The Supreme Court of Canada in Young vYoung, (SCC), [1993] 4 SCR 3 at 134, said that in order for solicitor and client costs to be warranted, the court willgenerally require evidence of “reprehensible, scandalous or outrageous conduct on the part of one of the parties”. [10] That remains the test to this day, though as Justice Veit observed in Northland Material Handling Inc v Parkland (County),2012 ABQB 586 at para 14, it is a general statement, not an absolute principle; costs are first and foremost subject to judicial discretion.Unproven allegations of fraud, for pertinent example, do not automatically entitle a litigant to solicitor and client costs.

The SupremeCourt of Canada commented to this effect about 10 years after Young, in Hamilton v Open Window Bakery Ltd, 2004 SCC 9 ,[2004] 1 SCR 303 at para 26: An unsuccessful attempt to prove fraud or dishonesty on a balance of probabilities does not lead inexorably to the conclusion that theunsuccessful party should be held liable for solicitor and client costs, since not all such attempts will be correctly considered to amountto “reprehensible, scandalous or outrageous conduct.” However, allegations of fraud and dishonesty are serious and potentially verydamaging to those accused of deception.

When, as here, a party makes such allegations unsuccessfully at trial and with access toinformation sufficient to conclude that the other party was merely negligent and neither dishonest nor fraudulent ... costs on a solicitor-and-client scale are appropriate: see generally, M.M. Orkin, The Law of Costs (2nd ed (loose-leaf)), at para. 219. [11] Other considerations can warrant costs on an escalated basis “to signify court disapproval of a litigant’s conduct”: Joy Estate v1156653 Ontario Ltd, 2007 CarswellOnt 7323 (Sup Ct) at para 34.

Analysis General [12] The NCC argues that the applicants take a selective hindsight approach in their costs application, holding the NCC to anunreasonable standard by expecting it to have known in advance how the case would be decided on each individual issue. Yet that is truein virtually all cases. By an award of costs the Court says, among other things, that the losing party should have known what would bethe outcome if the matter went to trial, and should not have pressed their erroneous position through trial.

This is true even whencredibility is the primary issue. [13] Nevertheless, the complexity of the issues is relevant to costs and that entails the predictability of the outcome. Here theoutcomes were anything but predictable, turning in large part on credibility findings of the principal witnesses: Larry Simpson for theNCC and Thomas Olson for the Olson Defendants. [14] The NCC is correct in a number of its observations. First, while its theory of the case failed, it nevertheless proved a numberof its allegations of fact. Second, not everything Mr. Olson said under oath was accepted by the Court.

Third, Olson could be consideredequally responsible for the drafting errors necessitating rectification. Fourth, the Court found fault with Olson’s disregard of the entreatyfrom Mr McLean, a fellow member of the bar. However the NCC overlooks that the Court also found the principal cause of the entirelitigation to be NCC’s preoccupation with its public reputation, not seeking an adjustment of the fence height for any conservationpurposes. But for that, as I intimated in the trial judgment, it is very unlikely this litigation would have come about.

The NCC and Olsoneach exacerbated the situation once they became adversaries, but initially at least Olson attempted in good faith a resolution from what hethought were their shared conservation ideals and from what he correctly understood they had agreed, whereas the NCC did not. [15] The NCC argued that its “thorough and rigorous advocacy” was required for a case of this kind. It further surmised itsapproach was appreciated by the Court given the challenging nature of the case.

The defendants said the NCC’s approach strayed wellbeyond merely “hard fought litigation”. [16] From my vantage point, NCC’s trial counsel was at all times eminently civil, calm and deferential – to the court, to witnessesand to counsel opposite. He displayed throughout a professional and respectful demeanor, all the while tenaciously contending with theissues, with the evidence and with the positions of opposing counsel. At no time did his manner come even close to crossing the line,despite the hard fought litigation.

His voice was never raised, his interactions with and characterization of opposing counsel neverresorted to ad hominen. [17] The positions he espoused, however, very often over-reached, to the obvious consternation of counsel opposite and to thedismay of the Court. This was displayed in, for example, the framing of the claims starting the litigation, amending them based on atheory not persuasive evidence, persisting with them through trial, and in reasserting failed motions during trial.

Waterton Defendants [18] With respect to the cost claim of the Waterton Defendants, I find this not to be an appropriate case for only a single set of

costs to all the Defendants collectively. The Waterton Defendants were not aligned in interest on all issues with the Olson Defendants. [ 19 ] The breadth and severity of conduct alleged by the NCC presented to each of the Waterton Defendants, and especially to Lemons and Lukowiak, the possibility of their liability not just to the NCC but also to some of the Olson Defendants and even to each other. Separate counsel was not superfluous, unnecessary or duplicative. It was prudent.

It would not surprise me if one or some of the defendants, not just Lemons and Lukowiak, may have reserved their rights to claim contribution from other defendants and tolled the time within which they could bring any such claim, pending the outcome of this first action. [ 20 ] Each of Lukowiak and Lemons had cause to retain their own separate counsel, but did not.

By aligning with both each other and the other Waterton Defendants they reduced the issues for the Court, increased trial efficiency and mitigated the costs for all parties. [ 21 ] More practically, the two groups of defendants avoided overlap in the evidence that they adduced. They also minimized overlap in the topics they pursued in cross examination and motion arguments. Where their clients’ interests were aligned they adopted rather than repeated the contribution of the other. Where their client’s interests conflicted they held their powder.

That can be hard to do for some clients – and even harder for their lawyers. The practical point is this – I find that if all the defendants had been defended by a single counsel, the total cost would not be too far off the combined cost of both sets of counsel. [ 22 ] As for the Waterton Defendants’ cost application, they were completely successful in defending all claims against them. The litigation was very complex.

The issues around the validity and enforceability of conservation easements were important to the NCC beyond this specific lawsuit and arguably were important to the public because of their novelty and because the concept of the statutory conservation easement at issue was added to Alberta law relatively recently. It had not been the subject of prior judicial reasons. The Waterton Defendants had little stake in those issues but were forced into that debate by the NCC.

The Waterton Defendants attempted to end the litigation against them early, which would have greatly reduced their costs, but were thwarted by the NCC amending its claim. The amendments were unsuccessful at trial. [ 23 ] The NCC indicated at the start of trial that it only named Lemons and Lukowiak for notice purposes, because they were the “directing mind” of the current owner of the Penny Ranch. A trust is not a separate legal entity and, if seeking a remedy in respect of a trust, it is often necessary to name its trustees in the law suit. Here, however, Lemons and Lukowiak were not trustees of the trust.

They were directors of a corporation which was trustee of the trust. [ 24 ] I find that the NCC’s approach towards the Waterton Defendants, particularly toward Lemons and Lukowiak, warrants more than costs on an escalated basis, but costs on a solicitor and client basis, for two reasons. Solicitor and client costs are warranted both because of the allegations of conduct by them akin to fraud, that were not proven, and because of the reason the NCC sued them.

I will explain those two reasons further. [ 25 ] Regarding the first reason, the unsuccessful fraud allegations, the NCC says its Statement of Claim did not actually make fraud allegations against Lemons and Lukowiak, only against the other Waterton Defendants. The NCC is correct superficially. Upon a careful parsing of the allegations specifically against Lemons and Lukowiak in the pleading, fraud and dishonesty are not alleged. But the NCC alleged collusion by Lemons and Lukowiak, as directing minds of Waterton Land Trust Ltd, in land titles fraud.

It alleged Lemons’ deliberate complicity in unlawful conduct, knowing he is a lawyer. It alleged Lemons’ and Lukowiak’s involvement in “deliberate” breaches and that they did “definitely and unequivocally persuade, induce and procure” the other Waterton Defendants to perpetuate Olson’s misconduct. In its final argument the NCC characterized the “Waterton purchasing entities” by the same “pervading dishonesty, deceptiveness and misleading conduct” as Olson.

Those Waterton purchasing entities, of course, were alleged by the NCC to be solely directed by Lemons and Lukowiak in collusion with Olson to accomplish his schemes. I had no doubt by the end of final argument at trial that conduct tantamount to fraud had been alleged against both Lemons and Lukowiak. [ 26 ] Further, the prayer for relief seeks solicitor and client costs to be awarded against them. The basis for claiming solicitor and client costs against the owner(

s) of the Penny Ranch was that a term of the conservation easement had the parties to that easement agreeing that steps by the NCC to enforce the conservation easement would entitle the NCC to solicitor and client costs. Lemons and Lukowiak personally were not counter-parties to the conservation easement, yet solicitor and client costs were claimed against them. There was no contractual basis to claim costs on that scale against Lemons and Lukowiak.

Therefore, by claiming solicitor and client costs against them the NCC had to be alleging their conduct was reprehensible and egregious. [ 27 ] The NCC went to some length to argue that, in any event, land titles fraud is not real or full fraud (for which a failure to prove risks full indemnity costs), just a regrettable choice of terms in the Land Titles Act that the NCC was then forced to repeat in its Statement of Claim. I disagree. Alleging fraud of this sort exposed Lemons and Lukowiak to the same reputational prejudice as would have been some other fraud.

If anything, land titles fraud connotes a more sophisticated or targeted fraudulent scheme. The constituents of concern to Lemons and Lukowiak, as regards their professional reputations, will not differentiate degrees of fraud or types of fraud. [ 28 ] The NCC argued that it succeeded in proving many findings adverse to Lukowiak, but that it just fell short of persuading the Court that the conduct satisfied the “something more” than knowledge required in the case law to prove land titles fraud.

First, that is contrary to the finding at trial that: “…the NCC’s allegation of land titles fraud against the two individual directors was without foundation and an unwarranted personal attack.” [ 29 ] Second, the findings that the NCC says demonstrates near proof were that Dr Lukowiak’s approach “[fell] short of the duty of care required of directors in discharging their duties on behalf of a corporation” and that he was “essentially, a straw man” signing “where he was told to do so without giving any real thought as to the significance of” what he was signing on behalf of the Trustee.

But proving Dr Lukowiak was acting as a straw man was not proof that his purpose in so acting was “to set up the claim for indefeasibility of title”, to quote the NCC’s oral argument on costs. I fail to see how being unduly trusting and compliant, rather than inquisitive and suspicious, is anywhere remotely close to proof of the alleged collusion and intentional complicity. Even if willful blindness by Dr. Lukowiak was proven, and it was not, that still is not proof of collusion and intentional complicity in fraud.

The fact that Olson was found to have retained ultimate residual control over the Trust is not the same as him having exercised that control or of the trustees knowingly facilitating Olson’s allegedly fraudulent and dishonest objectives. Just because Olson could doesn’t mean he did. Further, Dr

Lukowiak’s conduct was closer to the opposite of the “knowledge and something more” the NCC attempted to prove against him. The allegations against Lemons and Lukowiak were unfounded; I find that the NCC was reprehensible and egregious for making them. [ 30 ] The NCC knew Lemons and Lukowiak to be professionals that are well regarded in their respective fields and who depend in considerable measure on their good reputations both to earn their livelihoods and to advance in those chosen fields.

Alleging collusion by Lemons and Lukowiak, as directing minds of Waterton Land Trust Ltd, in land titles fraud and complicity in deliberate unlawful conduct, would be known by the NCC’s counsel to risk an award of solicitor-client costs if the allegations could not be proven. The risk of facing escalated costs is to deter baseless allegations in just such circumstances.

The NCC took a calculated risk, with knowledge of the down-side. [ 31 ] I also find the NCC had access to all the material evidence on these allegations against Lemons and Lukowiak and therefore it should have foreseen failing in its pursuit of them personally. No evidence existed to substantiate the ad hominem allegations, only theory. The NCC should not have proceeded through trial against them in the circumstances. This, combined with the NCC’s reprehensible conduct, satisfies the test for solicitor-client costs. [ 32 ] I also find solicitor and client costs warranted for a separate reason.

The NCC said their decision to prosecute claims against Lemons and Lukowiak through to the end of trial was strategic, but hastened to point out that no relief was actually claimed against them other than costs. The NCC went so far as to suggest it was compelled in the circumstances to sue Lemons and Lukowiak – as it was the best way it could get the men to testify at trial and be exposed to cross-examination. [ 33 ] The NCC strategy appears to have worked.

Both Lemons and Lukowiak testified at trial and were cross-examined by counsel for the NCC. [ 34 ] That admission by the NCC, that Lemons and Lukowiak were sued to compel their testimony against a different defendant, not to recover any relief against them, has the appearance of an abuse of the process – a use of the court process for an ulterior purpose. It may have served a desirable purpose for the NCC’s claims against Olson, but that does not legitimize proceeding against Lemons and Lukowiak personally. The ends do not justify the means.

The lives and reputations of Lemons and Lukowiak are not permissible collateral damage – mere inconsequential trivialities to disregard as the NCC doggedly pursued its theory of the case against some other party, no matter the cost. [ 35 ] It is not uncommon for a person to be sued, alone or as one of many defendants, but the action later be discontinued after the disclosure of further information reveals success in the claim to be unlikely. That is not what occurred here.

Here the NCC says it sued Lemons and Lukowiak not to recover relief against them, but to cross examine them in support of its case against someone else. In this case, therefore, it did not matter what the NCC learned about Lemons and Lukowiak through the discovery process. What the NCC was really after, it told the Court, was the evidence of Lemons and Lukowiak in cross-examination.

For the NCC to allege collusion and complicity by Lemons and Lukowiak just to increase the likelihood of them testifying at trial, not to claim any actual relief from them (other than costs for suing them so they would testify), was outrageous. [ 36 ] For both these reasons, therefore, the Waterton Defendants are entitled to their costs on a solicitor and own-client basis from the NCC. I consider indemnity costs to be just in this case and I grant them through to and including all their costs of this application.

Olson Defendants [ 37 ] The Olson Defendants say solicitor-client costs should be awarded to them also because, among other reasons, they enjoyed substantial success, they beat the formal offer to settle tendered before trial, and fraud was alleged but not proven against Olson.

He is a lawyer and, just as the Waterton Defendants argued, the Olson Defendants say alleging but not proving fraud against a professional crossed the line from merely hard fought litigation to the reprehensible and egregious. [ 38 ] The NCC offers three reasons for saying any award of costs here should not be on a solicitor and client basis. First, it says there were no findings in the trial judgment of the sort of reprehensible, scandalous or outrageous conduct necessary. Second, it says that land titles fraud was pleaded as a shield, not a sword.

Third, the NCC is a not for profit entity defending the validity of the conservation easement in the public interest rather than for any private gain. [ 39 ] The fact the plaintiff is a not for profit organization, pursuing charitable purposes, is not a factor in my determination of a just cost award. This was not public interest litigation. The Rules of Court, including those on costs, are to be applied the same to all litigants. The advantage society gives to charities is their ability to raise funds under preferential tax treatment not preferential litigation treatment.

To accord them most favoured nations treatment on litigation costs would be unfair, since the effect would be to cause the parties opposite to bear the entire burden of any litigation with them. Such an approach would also deter others from ever contracting with charities. While it is true that the court on occasion will temper cost awards against the impecunious, just because an entity is a not for profit organization does not mean it is impecunious.

The NCC is donor dependant but by no means impecunious. [ 40 ] The remainder of the NCC’s third reason for resisting an order of solicitor and client costs was that it “engaged in this litigation with the view to defending the validity of the conservation easement in the public interest rather than for any private gain”. This is inconsistent with the trial judgment findings. The trial judgment finding was that the NCC motive was its public image.

Only later, after Olson suggested the entire conservation easement was ultra vires , did the validity of conservation easements become an added concern and motivation of the NCC. [ 41 ] The NCC is correct that the rectification of page 5 of the amending conservation easement involved far more than merely fence height.

It does not change the fact that, in my view, this entire litigation would not have been necessary had the NCC taken a principled rather than self-interested approach, particularly when Olson was in good faith attempting to assist the NCC with its public relations issues by dissemination of accurate and science based information to the NCC’s concerned constituents. Olson’s resistance to the NCC’s approach to all of page 5 came only after it was apparent to him that the NCC was not behaving as Ms.

Green represented it would, not behaving as its organizational mandate suggested it might, and not behaving as one interested in either the safe husbandry of

bison or the fluid migration of wildlife should. [ 42 ] The NCC said it did not adduce observational evidence of its alleged deterrent effect of the replacement fence height on wildlife migrations because Olson’s team said an entry on the land would be treated as a trespass. That does not follow, since vantage points for observing wildlife-fence interactions were readily available outside the Penny Ranch. [ 43 ] I am not prepared to segregate the litigation issue by issue for costs purposes.

The vast majority of the issues are tied together, are based on evidence common to multiple issues, and are understood best in the context of the broader claims each side has prosecuted against the other. All issues arose out of the same initial contractual relationship and from a single chronological narrative. No issue was cleanly severable, let alone each of them as the NCC’s spreadsheet approach contemplates. As affirmation of that point, I considered whether any of the issues in this case could have been the subject of a successful pre-trial application for the trial of an issue and concluded not.

The evidentiary overlap was too great. [ 44 ] Nevertheless, the counter-claim is appropriate to address separately because, first, the factors in Rule 10.33(1) have very different outcomes when applied to the counter-claim issues as a group and, second, before the trial began the Olson Defendants considered most of the causes of action in the counter-claim were severable for formal offer purposes. Their suggestions to the contrary now are not persuasive. [ 45 ] With respect to the counter-claim issues, I conclude that parties thereto shall each bear their own costs.

I do so for the following reasons: • First, Olson had a degree of success on one of the issues, namely the failure to deliver the charitable donation receipt in a timely manner, but not on any of the remaining causes of action in the counter-claim; • Second, on the eve of trial Olson first disclosed material and relevant information on that tax issue, not before. That militates against any costs for his success on that issue.

Theoretically the NCC could have asked to adjourn trial to consider the implications of that evidence, maybe even change its position on or attempt to resolve that issue, but practically that was not a palatable option. This relatively last minute timing prejudiced the NCC. Though successful on the tax issue, recovering costs for all the steps taken on that issue prior to that revelation of new evidence would be unfair; • Third, the remainder of the counter-claimed causes of action were very substantial and all failed.

The NCC enjoyed predominant success on the counter-claim; and • Fourth, the egregious motive for withholding the tax receipt, of withholding it for ulterior purposes, is factored into my costs award to the Olson Defendants on the main claim.

Similarly, I am addressing the costs to the Olson Defendants of their expert on the tax issues in my separate decision on disbursements. [ 46 ] With respect to the Olson Defendants’ costs on the defence of the initial claim, I award them on an escalated scale but not on a solicitor client basis for the following reasons: • First, the Olson Defendants enjoyed substantial success and substantial success rather than absolute success usually warrants an award of costs: Mahe v.

Boulianne, 2010 ABCA 74 , at para 6 ; • Second, the case was very complex, manifest by the length of trial, the sheer volume of documents and exhibits, the inter-related and co-dependent nature of most issues, the length of written arguments, and the length of the judgment that ensued; • Third, the importance of the issue litigated also militates in favour of costs on an escalated scale.

Here, the Olson Defendants were unsuccessful in their arguments that would have undermined the enforceability of most, maybe even all, other NCC conservation easements; • Fourth, as described above, this litigation was initiated for reasons other than facilitating wildlife migration and the tax receipt was withheld for improper reason; • Fifth, also as described above, the NCC’s approach throughout overreached; • Sixth, the unproven allegations against Mr.

Olson’s character and integrity, and of land titles fraud, despite not attracting in this case an award of solicitor and client costs, nevertheless militate in favour of escalated costs; • Seventh, I consider the resulting total award to be just in all the circumstances. [ 47 ] The NCC argues that the land titles fraud allegations were raised as a shield and not a sword.

It says these allegations were not in the original claim but arose in response to the indefeasibility argument of the Waterton Defendants and therefore should not serve to escalate any cost award. [ 48 ] Regardless of whether a sword or a shield, initially or later, fraud was alleged. The individuals that might look to Mr. Olson in his professional capacity for advice and counsel would not disregard the allegations based on such a distinction. I am not satisfied that the allegations of land titles fraud cause any less of a blemish on a professional’s reputation than fraud simpliciter .

The NCC argued that the allegations had to be made to resist the indefeasibility argument of the Waterton Defendants. The judgment demonstrates that not to be the case. While indefeasibility did not succeed, it was not by reason of any land titles fraud. Therefore, it was not necessary to allege. Great care must be taken when alleging fraud within litigation against a professional. If unsuccessful there is a high risk of an incremental cost consequence. Here it was unsuccessful. [ 49 ] Nevertheless, there was conduct by Olson which militates against him recovering full indemnity costs.

Olson contributed to the need for the agreement to be rectified. Had that not occurred, it is much less likely that the NCC would have insisted he change his

new fences, acquiescing to uninformed neighbours of the Penny Ranch. Olson shares responsibility for the agreement between them not being accurately captured in written form. Responsibility for the errors in the conveyancing processes must also be shared. The legal processes that ensued were primarily driven by the NCC, at least at the outset, but Olson had a hand in escalating and exponentially expanding the breadth of those issues. [ 50 ] I therefore grant to the Olson Defendants their costs of their defence at four times Column 5 of

Schedule C. I consider two thirds of the trial time to have been spent on the defence of the original claim and one-third on prosecuting the counter-claim. This same allocation of costs between claim and counter-claim shall apply to costs for questionings and records disclosure. All other pre-trial steps I deem to relate entirely to the defence.

The amount for second counsel at trial is permitted for the defence two thirds of the trial, and is subject to the multiplier (4x). [ 51 ] The Olson Defendants are also entitled to 100% of their disbursement costs, regardless of whether the cost was incurred on a counter-claim issue. I consider this to be fair in the circumstances. Among other reasons, it will then include the costs of the tax expert and will assure me that any additional cost to the Olson Defendants of Ms.

Reimer having to be stood down while additional witnesses were called by the NCC out of the normal trial sequence, is borne by the NCC. [ 52 ] All of a successful party’s costs are recoverable absent good reason to the contrary, even though some costs may be for evidence rejected by the court. No good reason to deny them exists here. The NCC says that the costs for John Nishi were unnecessary because his evidence was not relied upon. I did rely on Nishi’s evidence; see for example paragraph 224 of the trial judgment.

Conclusions [ 53 ] For these reasons, the Waterton Defendants are awarded from the NCC their costs on a solicitor and own-client basis, including their costs through to the conclusion of this application on that same scale. The Olson Defendants are awarded from the NCC their costs of their defence, including two thirds of their trial time for two counsel, all at four times Column 5 of

Schedule C, 100% of all their disbursement costs and none of their costs of the counter claim except disbursements. Heard on the 24 th day of November, 2015. Dated at the City of Calgary, Alberta this 29 th day of January, 2016. P.R. Jeffrey J.C.Q.B.A. Appearances: C. Simard and O.C. Dixon for the Applicants, the Waterton Defendants (Plaintiffs by Counter-Claim) P.T. Linder, Q.C. for the Applicants, the Waterton Defendants W. C. Hunter, Q.C. and S. Carscallen, Q.C. for the Respondent NCC, Plaintiff and Defendant by Counterclaim