Toliver v Koepke, 2016 ABQB 710

Court of Queen’s Bench of Alberta Citation: Toliver v Koepke, 2016 ABQB 710 Date: 20161216 Docket: 4803 132898 Registry: Edmonton Between: Rachelle Ann Toliver Plaintiff - and - Murray Elwood Koepke Defendant Corrected judgment: A corrigendum was issued on December 19, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L.

Shelley in relation to Costs _______________________________________________________ Background [ 1 ] This action has a very long history, much of which was set out in my Reasons for Decision, 2016 ABQB 452 , or in the earlier Reasons for Judgment of Justice Read, 2012 ABQB 307 . Position of the Parties Ms. Toliver’s Position [ 2 ] Ms. Toliver was the successful party at trial. She seeks costs of no less than $71,859.64 on the basis of:

(

a) her success; (

b) having achieved a more favourable result than she would have had Mr. Koepke accepted either of the two formal offers made tohim; (

c) unnecessary and unusually difficult circumstances attributable to Mr. Koepke; (

d) Mr. Koepke’s delays during the proceedings; (

e) Mr. Koepke’s absence from court during a portion of the scheduled trial time; and (

f) abuse of process by Mr. Koepke who, with other litigants who might consider engaging in similar conduct, ought to be discouragedfrom doing so. [3] In relation to double costs of steps taken after the formal offers were made, Ms. Toliver relies on r 4.29(1) and argues that nospecial circumstances exist which would affect the normal application of the rule. [4] In addition, Ms. Toliver seeks enhanced costs for the undue burden born by her during the litigation process, for unnecessary and repetitive correspondence and applications (many of them filed last minute), for Mr.

Koepke’s relitigation of manyissues, and for other conduct by Mr. Koepke which unnecessarily increased Ms. Toliver’s expenses in relation to the litigation, delayedits resolution, and otherwise constituted conduct which the Court ought to discourage. [5] Ms. Toliver submits that Column 2 is the minimum that ought to be awarded in respect of steps prior to October 31, 2014,with doubling thereafter in consequence of the first offer. She also seeks an additional minimum amount of $10,000 in enhanced costs inrelation to Mr. Koepke’s objectionable conduct. [6] Ms.

Toliver has provided two draft Bills of Costs (based both on Column 1 and Column 2 of

Schedule C). She cites Jacksonv Trimac Industries Ltd, ; Lyner (Re), 2015 ABQB 510; Kent v Law Society of Alberta, 2015 ABQB 432; and StatoilCanada Ltd v Cadillac Fairview Corporation, 2014 ABQB 24 as authority in relation to her costs submissions. [7] Ms. Toliver has also provided documentary confirmation which she submits confirms that she has not included in her draftBills of Costs amounts in respect of steps for which costs have already been granted in her favour. Mr. Koepke’s Position [8] Mr. Koepke’s initial response to Ms.

Toliver’s submissions was to raise the concern that his former solicitors (Witten LLP,Mr. Plupek and Ms. Koska), are all lien holders in relation to the funds held in court. He maintained that Ms. Toliver’s counsel wasaware of Justice Macklin’s direction that these counsel receive notice, so that “their cost applications” could be heard together with thecosts applications related to the trial. He further submitted that he was not in sufficient information to respond to Ms. Toliver’s writtensubmissions on costs. [9] Ms. Toliver’s solicitor responded to these initial concerns. She submitted that Mr.

Koepke was mistaken in relation to thesolicitor’s liens claimed by Mr. Koepke’s previous counsel. She advised that such claims were behind Ms. Toliver’s claim and wouldonly be relevant if funds are available following payment of Ms. Toliver’s costs. She took this position in part relying on a transcript ofthe same proceedings before Justice Macklin on which Mr. Koepke had relied for his

interpretation. She believed that Mr. Koepke hadmisunderstood Justice Macklin’s directions and comments when the matter was discussed amongst Justice Macklin, Mr. Plupek and Mr. Koepke, on December 2nd, 2014. She maintained that her appearance before Justice Macklin on July 28th, 2015, and, in particular,Justice Macklin’s comments on that date, are supportive of her position. In any event, Ms. Toliver’s solicitor was prepared to providenotice to Mr. Koepke’s prior counsel should I so direct. [10] In this same correspondence, Ms.

Toliver’s counsel provided additional information concerning the calculation by her of thecosts sought in connection with this matter. [11] Mr. Koepke responded by providing his written argument in relation to costs. [12] Mr. Koepke submits that a portion of my Decision in this matter decides an issue for the first time in Alberta legal history(specifically, the issue of whether a matrimonial property settlement agreement can be enforced without strict compliance with theformalities contained in s38 of the Matrimonial Property Act). For this reason, Mr.

Koepke submits that it meets the criteria, establishedin Jackson v Trimac, of being an important case which needed to be pursued and which, accordingly, ought not to attract double costsagainst him. [13] Mr. Koepke submits that the costs awarded by Justice Ackerl related not to an adjournment application (although that waswhat was before him), but related to preparation for trial and the first half-day of trial. For this reason, he believes that these amountsought to be deducted from Ms. Toliver’s calculations; otherwise, there would be a duplication for this amount. [14] Mr.

Koepke submits that costs ought to be awarded on Column 1, as was done at the trial before Justice Read. He submitsthat the trial before me was not a matter involving quantum, but was about whether or not the agreement found by Justice Read wasenforceable. [15] Mr. Koepke points out that there is a typographical error in point 2 of the

summary of the Plaintiff’s written argument in relation to costs, incorrectly referring to the date of Ms. Toliver’s first offer as October 31st, 2004, rather than 2014. He then seems to suggest that the written argument does not show the doubling effect from October 31st, 2014, making it difficult or impossible to“address this Bill of Costs to verify and make any counter submissions on costs”.

[ 16 ] Mr. Koepke acknowledges that a successful party can double the amount of party and party costs under

Schedule C when they have made an offer which is more favourable than that received at trial. He points out that this does not apply to solicitor’s costs, maintaining that Ms. Toliver “could be entitled to a double set of costs under Column 1, excepting the costs already paid out, and reducing the costs for Trial Preparation and Trial as were partly paid-out under the J Ackerl costs award”. Mr. Koepke also submits that “as the Plaintiff claims for double costs, it is necessary for the Court to consider if the punitive nature of solicitor-client costs constitutes a special reason to deny double costs”.

He further points out “the Plaintiff has not cited any authority for double costs to be awarded for full indemnity for her solicitor-client costs”. [ 17 ] Mr. Koepke points out that he too made offers to settle. In December of 2007, he offered to settle the action if Ms. Toliver paid him the principal sum of $454,000, plus taxable costs, but excluding settlement of any corollary relief. [ 18 ] In response to Ms. Toliver’s request for enhanced costs, Mr.

Koepke submits that he made diligent efforts to move this litigation to conclusion, relying on comments made by Justice Ackerl, at the January 18 th , 2015 adjournment application. [ 19 ] Mr. Koepke argues that he has endured significant financial burdens from this litigation. If there are any funds remaining after payment of Ms. Toliver’s costs, the balance will be subject to applications by his previous counsel, who are owed approximately $97,000 in total. Therefore, there will be no funds available for Mr. Koepke. [ 20 ] Mr. Koepke points out that, when Ms.

Toliver requested enhanced costs from the Court of Appeal in 2013 and from Justice Ackerl in connection with the adjournment application in January of 2015, her requests were denied. [ 21 ] Mr. Koepke maintains that, although Ms. Toliver said in her written submissions that she was not seeking solicitor-client costs, the amount requested by her does not indicate how they could be calculated from

Schedule C, even by doubling them. In the absence of an explanation for her calculation, he suggests that she is seeking costs on an indemnity basis. [ 22 ] Mr. Koepke denies that any of his correspondence or applications were unnecessary, repetitive, or filed last minute. He also denies that he engaged in excessively litigious behaviour, or that he delayed these proceedings. Furthermore, he submits that he proposed ways to shorten the litigation, pointing out that he had requested that the issue of enforceability of the settlement be heard in Special Chambers, rather than at trial.

His suggestion was rejected by Ms. Toliver’s counsel and the Court at the appearance before Justice Macklin, on February 18 th , 2014. [ 23 ] Mr. Koepke argues that, while some of his allegations were not proven at trial, they were not groundless, and that there was no finding of misconduct leading to or during the course of the trial. Accordingly, he submits this is not an appropriate case for an award of solicitor-client costs. [ 24 ] Mr. Koepke also applies for costs of the Special Chambers application, which he made for removal of Ms. Toliver’s former solicitor.

He relies on the order of Justice Macklin, issued May 15 th , 2009. At that time, Justice Macklin had adjourned a Special Chambers application at Mr. Koepke’s request. Paragraph 6 of that Order specified that no costs would be awarded to Ms. Toliver or her solicitor at that time. If the Special Chambers application was heard and decided at a later date, costs of the adjournment application were to be decided in the context of that application. If the application was not heard and decided, then Ms. Toliver and her lawyer were at liberty to apply for costs of the adjournment application.

In addition to seeking costs of the Special Chambers application, Mr. Koepke now applies for payment of such costs out of the monies which are held in court. However, Mr. Koepke also requests that this costs application be heard, and the costs amount set off against any amount payable by him to Ms. Toliver. Analysis [ 25 ] Unfortunately, many of Mr. Koepke’s submissions on costs arise because of his misunderstanding of the calculation of costs. For example, he understood that Justice Ackerl had awarded costs for trial preparation and the first half-day of trial, assuming this meant for the trial before me.

For this reason, he believes that Ms. Reeves’ inclusion, in her draft Bills of Costs, of the scheduled amount for trial preparation and the first half-day of trial constitute a duplication. However, Justice Ackerl was awarding thrown away costs in connection with Mr. Koepke’s successful adjournment application, made just before the adjourned trial was to commence. Those thrown away costs are not a duplication, they relate to costs unnecessarily incurred because of the late adjournment. [ 26 ] Mr. Koepke’s submissions seem to suggest that he believes that his December 2007 offer is relevant to Ms.

Toliver’s request for a doubling of costs after the date of her offer of October 2014. Her offer is only relevant because she did better at trial than she would have had Mr. Koepke accepted her offer. Mr. Koepke’s offer, on the other hand, was not bettered by him at trial. To the contrary, he offered to settle at a far higher amount than he actually received. [ 27 ] Mr. Koepke also believes that Ms. Reeves’ has claimed solicitor and client costs, rather than

Schedule C costs. This is because his calculation of Ms. Toliver’s entitlement, based on

Schedule C, is limited to a trial preparation cost, eight half-days of trial, and written argument, which he has calculated at $7,500 under Column 1 and $12,150 under Column 2. If doubling occurs because of the offer, he contends that the resulting amount is $15,000 under Column 1 and $24,300 under Column 2. This is not how costs of the action are calculated. Ms. Reeves has set out, in her proposed draft Bills of Costs (based on both Column 1 and Column 2, with doubling from the date of the offer), all of the items to which a successful litigant is entitled.

She has therefore included costs for the preparation of pleadings, the Notice to Admit Facts, applications for which costs have not yet been paid, review of Mr. Koepke’s expert reports, preparation of Ms. Toliver’s experts’ reports, etc. She has not included the costs of the application before Justice Ackerl. She has not doubled any costs incurred prior to the date of the first offer. Her proposed Bills of Costs are based on Columns 1 and 2 of

Schedule C, and are not a claim for solicitor and client costs. [ 28 ] The Court of Appeal’s denial of Ms. Toliver’s request for enhanced costs following the appeal in 2013, and Justice Ackerl’s denial in connection with the adjournment application, do not determine whether or not Mr. Koepke’s conduct through the course of the

litigation attracts enhanced costs. As has been pointed out in my earlier Reasons for Decision, as well as in Reasons or Judgments of other Courts and Justices through the course of this litigation, there is ample evidence that Mr. Koepke attempted to re-litigate matters already decided, often brought last minute applications which resulted in delays and the incurring of unnecessary expense by Ms. Toliver, and brought unnecessary applications. Justice Ackerl’s comments cannot be given the meaning ascribed to them by Mr. Koepke. Nor can Mr.

Koepke’s 2014 suggestion that this matter could be resolved in Special Chambers, rejected for good reason by the Case Management Judge, be viewed as evidence of his attempts to shorten the litigation or move it to a speedy conclusion. [ 29 ] I also conclude that the issue of compliance with the formalities of s 38 of the Matrimonial Property Act was not of such importance that its pursuit by Mr. Koepke justifies the numerous other issues raised throughout this litigation, or the manner in which he raised them. [ 30 ] As for Mr.

Koepke’s argument that Column 1 applies because the trial was not about quantum but about enforceability, a review of evidence presented at trial confirms that the trial was very much about quantum, as well as enforceability. [ 31 ] I do not have to consider Mr. Koepke’s submission that this is not an appropriate case for an award of solicitor-client costs, because Ms. Reeves’ has not requested that. She has sought an additional $10,000 by way of enhanced costs, in connection with Mr. Koepke’s conduct.

There is ample evidence on the record, much of it observed in the various written Decisions issued throughout the course of this litigation, that supports an award of enhanced costs in this case. It is telling that, following litigation that spanned more than 13 years, and following the trial, written submissions, and my Reasons for Decision, Mr. Koepke sought to delay the finalization of the costs issue by seeking to involve his former counsel. Mr. Koepke’s

interpretation of the comments of Justice Macklin was likely a misunderstanding of those comments, but cannot be reasonably construed as Justice Macklin suggesting that Mr. Koepke’s prior unpaid counsel would be invited to apply for costs at the same time as costs were spoken to following trial. [ 32 ] Similarly, in his written submission on costs, Mr. Koepke raises, more than seven years after the fact, a comment of Justice Macklin which he construes as an entitlement to now apply for costs in relation to a May 2009 application. A review of the Order relied on confirms that Ms.

Toliver or her solicitor were at liberty to apply for costs of that application if the adjourned Special Chambers application did not proceed. If the Special Chambers application did proceed, then costs of both the adjournment and the Special Chambers application would be heard at the conclusion of the Special Chambers application. Mr. Koepke now wants to apply for costs in relation to the adjourned Special Chambers application. Justice Macklin’s comments cannot be construed in the manner suggested by Mr.

Koepke, and any costs in relation to the Special Chambers application ought to have been made (and have been awarded) at the time of that application. Conclusion [ 33 ] Mr. Koepke is correct in pointing out that this litigation has cost him a lot. However, many of these costs would not have been incurred by him had he not pursued this litigation, particularly if he had not pursued it in the manner in which it was pursued. A good chunk of the money paid into Court has already been used to pay interim costs awards in favour of Ms. Toliver. The balance will be consumed by additional costs awarded, but not yet paid.

This is indeed unfortunate. However, it is also unfortunate to Ms. Toliver. An award of enhanced costs will not come close to compensating her for her actual solicitor costs. More importantly, she has had to deal with more than 13 years of very stressful litigation. She is entitled to costs, and the amount of the enhanced costs is more than reasonable in all of the circumstances. [ 34 ] Accordingly, Ms. Toliver is awarded $71,859.64 in costs. This amount is to be paid out of the funds currently held in court. If there is a balance owing, the amount is payable forthwith.

If there is any balance left in trust, it is to be retained pending notification to Mr. Koepke’s prior counsel who have asserted liens against these funds. [ 35 ] Rule 9.4(2)(

c) is invoked. Written Submissions received August 24, September 6 and September 7, 2016. Dated at the City of Edmonton, Alberta this 16 th day of December, 2016. D.L. Shelley J.C.Q.B.A. Appearances:

Michele J. Reeves for Ms. Toliver Murray Elwood Koepke Self-Represented Litigant _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Madam Justice D.L. Shelley _______________________________________________________ Rule 9.4(2)(

c) was added to the para 1 of these Reasons for Judgement.