Palmer v Acciona Infrastructures Canada Inc, 2017 ABQB 143

Court of Queen’s Bench of Alberta Citation: Palmer v Acciona Infrastructures Canada Inc, 2017 ABQB 143 Date: 20170302 Docket: 1301 03998 Registry: Calgary Between: William Alan Palmer Plaintiff - and - Acciona Infrastructures Canada Inc. Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J. T.

Eamon _______________________________________________________ Introduction [ 1 ] On January 11, 2017 the Defendant applied to adjourn the trial of this matter then scheduled to commence March 6, 2017 for 5 days, as a result of a conflicting personal commitment of counsel for the Defendant. I was advised that the Defendant did not wish to arrange for alternate counsel. [ 2 ] The matter was heard in Chambers on the telephone list and I gave brief oral directions. [ 3 ] In providing this memorandum I am mindful of the general rule that my reasons in Chambers are my reasons, and that they are not to be supplemented.

This memorandum provides my reasons in response to the request for reconsideration.

[ 4 ] I granted the adjournment, on the basis that Defendant will pay any of the Plaintiff’s out-of-pocket costs occasioned by the adjournment (for example, costs of changing any travel or accommodation arrangements for out of Calgary witnesses including the Spanish tax expert), together with an amount equal to 1/3 of the

Schedule “C” costs for trial preparation (item 10(1)) assessed on column 4, being 1/3 of $8,000. I directed the costs were payable forthwith. I noted a trial judge could further adjust costs once the outcome is known. [ 5 ] I chose column 4 of

Schedule “C” because it reflects the default for party and party costs based on the amount claimed in the pleading. At the trial the court may award an additional amount for trial preparation: item 10(2). [ 6 ] I chose to award a fraction of item 10(1) based on Plaintiff’s counsel’s representation, in response to my inquiry, that he had commenced preparation for trial and estimated about 1/3 was completed. [ 7 ] Following my direction on quantum, the Defendant’s counsel asked whether he would be able to inquire into this based on the Plaintiff’s lawyer’s time dockets.

I refused the request. [ 8 ] I chose to make the costs payable forthwith because that is the default for interlocutory costs under R. 10.29(1) of the Alberta Rules of Court, A.R. 124/2010 . [ 9 ] By letter dated January 17, 2017 Defendant’s counsel sought “clarification and perhaps reconsideration” as to whether I had directed that the trial preparation costs be payable forthwith, and if so, to reconsider same.

He noted that Plaintiff’s counsel represented about 1/3 of the costs had been incurred and that not all of the preparation would be lost as a result of the adjournment. [ 10 ] He submitted it would be extraordinary to order the Defendant to pay “forthwith” a substantial portion of the trial preparation costs and it would be more appropriate to quantify added trial preparation costs when the matter is finally determined, at a time when the parties have a much better understanding of the actual costs associated with adjourning the trial. [ 11 ] He further expressed concern that the costs were ordered as a result of counsel’s personal circumstances, and that as a practical matter either he or his law firm would be required to pay the costs. [ 12 ] He asked me to consider the foregoing in determining whether the trial preparation costs are to be payable forthwith. [ 13 ] Plaintiff’s counsel responded by letter dated January 20, 2017.

He indicated, among other things, that the amount awarded by the Court for lost trial preparation represents only a small portion of the actual trial preparatory fees lost or to be duplicated as a result of the adjournment. [ 14 ] The specific matter for reconsideration is the direction that the costs be payable forthwith.

Part of the Defendant’s argument questions the amount awarded (which it characterizes as a substantial portion), while the Plaintiff says the amount far exceeds the actual amounts the Plaintiff has thrown away. [ 15 ] I have an over-riding discretion to reconsider the matter before the formal order is entered. I recognize there must be good reason to reconsider.

See, for example, Huet v Lynch , 2001 ABCA 211 , at para 14 . [ 16 ] This Memorandum explains why there is no basis to reconsider my direction that the thrown away costs be paid forthwith including why the source of the payment on the Defendant’s side is not the Plaintiff’s concern. In considering whether to reconsider, I identified an error in quantum. This Memorandum also explains why the Defendant may have a reconsideration of the $2666 if it chooses to. Neither party cited precedent that my direction was or was not correct.

The Court looked for any precedent that might suggest an error was made and the authorities herein are cited by the Court. Thrown away costs [ 17 ] In granting the adjournment, I inquired whether the Defendant considered using another lawyer from the large law firm representing it. Defendant’s counsel explained that he was the lawyer involved in the file and he should continue with the case. I said that I considered that the Defendant’s choice of counsel to be paramount in this case.

However, the Plaintiff should receive protection from the inevitable financial loss that would arise from the adjournment because his lawyer had started preparing for trial. [ 18 ] I would not reconsider this direction because I see no error in it. [ 19 ] The general rule in respect of thrown-away costs is that they are paid by the party whose actions caused or necessitated the adjournment, regardless of which party sought the adjournment: D'Amico v Weimkin , 2008 ABQB 129 , at para 17 . [ 20 ] In Michel v Lafrentz , 1998 ABCA 224 , Côté JA stated at para 12: The usual reason for giving last-minute adjournments where there has been neglect to get ready, is on the theory that the prejudice to the person denied the adjournment would be greater than the prejudice to the person who is forced to accept an adjournment.

The theory is that, just as with amending pleadings, any request, no matter how late or careless, should be allowed unless it produces irreparable prejudice. Any prejudice compensable in costs is reparable, not irreparable. The corollary of that is that the costs must be payable, and they must be meaningful. [ 21 ] One category of thrown away costs is where an adjournment is sought by one of the parties as a result of no fault on their part, but they are nevertheless responsible for the adjournment. Costs thrown away are still awarded against the party applying for the adjournment: Goddard v Day , 2000 ABQB 799 .

In that case, Ritter J (as he then was) stated that a party may be responsible for an adjournment but may not be described as "at fault" at para 20:

I am satisfied that the third category of adjournment is really one of responsibility for the adjournment as opposed to fault or lack of fault.By that I mean situations where someone is responsible for an adjournment, but cannot be faulted for that responsibility. I conclude thatan individual who comes before the Court and requests an adjournment because of the pressures of work is in such a position. That is, heis responsible for the adjournment. He is not to be faulted for the adjournment, but nevertheless his responsibility remains. It is hardlythe responsibility of the system or the other party.

Being responsible for an adjournment, in my view, carries with it a cost consequence... [22] Included within the lack of fault category is a necessity to adjourn arising from unforeseen personal circumstances of counsel.Again, a costs award may be made against his or her client: Canada Building Materials v Osler Paving & Construction, 2011 ONSC114. [23] This reflects that a thrown-away costs award is not intended to punish the party seeking the adjournment, but rather tocompensate the other party for wasted preparation arising as a result of the adjournment: Incandescent Revolution Manufacturing Co vGerling Global General Insurance Co (1989), (AB KB), 96 AR 77 (QB) at paras 12-13; Lyons v Baldwin, 2012ABQB 137 (MC). [24] In Alberta, trial adjournments on the civil list are usually very lengthy.

It was, and remains, obvious to me that there would bethrown away preparation costs. Delay usually produces cost because of the need to come up to speed or refresh memory a second time,the need to speak to experts or other witnesses again, the need to update legal research, and the like. Many cases recognize this type offinancial consequence of an adjournment. See, for example, V.A.S. v. Grace, 2014 ABQB 150, at paras 5, 29; Goddard v Day, at para13; Michel, at para 14. [25] Following the adjournment order, counsel rebooked the trial for December 2017.

It remains obvious that the Plaintiff hasincurred thrown away costs as a result of the trial adjournment because that length of delay will require counsel to come back up tospeed. See V.A.S., at paras 5, 29 (6 month adjournment). [26] Here the circumstances were foreseen. The Defendant’s counsel knew that his personal circumstances might require him to beabsent during the time scheduled for the trial, but he chose not to inform the Plaintiff’s counsel of that until the potential for his absencebecame clearer. Whether or not there was fault, there was responsibility.

There is no real basis to suggest that the Plaintiff should bearany financial consequences of the adjournment, including carrying his thrown away legal fees until the matter is finally resolved at atrial. I adopt the words of Master Smart in Lyons at para 5: ...In doing so, I hasten to add that one should not characterize this decision as punishment for objectionable misconduct or otherwise. Noris it a situation where blame per se is the issue but rather who should bear the costs as a consequence of the adjournment....

Amounts payable forthwith [27] I directed the amounts be payable forthwith because that is the default under the Alberta Rules of Court for applications (Rule10.29(1)). [28] I would not reconsider this direction because I see no error in it. [29] The policy in Alberta is that the default for interlocutory costs is “pay-as-you-go”. That has been so for almost 17 years. R.607 of the old rules, A.R. 390/1968, was amended effective January 1, 1998 to provide for the default on interlocutory applications to bethat costs went to the successful party on the motion in any event of the cause. Alta. Reg. 269/1997, s. 14.

Effective June 26, 2000, theRules were further amended to provide that those costs be payable forthwith. Alta. Reg. 152/2000, s. 11. The same policy was adopted inthe present Rules which were made in 2010. [30] Older cases (Kerr & Richard Sports Inc. v Fulton (1992), (AB KB), 133 AR 382) or those relying onthem (Kowdrysh v Delong, 2002 ABQB 207) expressing a preference for costs in the cause or payable later, were based on a differentpolicy that has been superceded by these rules amendments. [31] It is often appropriate that thrown away costs be payable forthwith.

In a second decision in V.A.S. v Grace concerning costs,reported at 2014 ABQB 268, at paras 10-12, Madam Justice Veit provided several reasons why such an order is appropriate.

Those ofgeneral application were that: (1) for policy reasons that are well explored in the case law, the standard or default rule in Alberta forinterlocutory costs is “pay-as-you-go”; (2) access to the courts should be made as predictable as possible; therefore, standard rulesshould only be displaced where the circumstances of the case establish that it would be unfair or inappropriate to apply the general rule;and, (3) thrown away costs are costs that should not have had to be incurred, and there is no point waiting to pay those costs until theresult of the suit is known. [32] In the present case, there is no evidence to suggest that payment of the costs would impede the Defendant in continuing itsdefence.

See V.A.S. at para 14 of 2014 ABQB 268. [33] Moreover, I do not consider the potential that a law firm would need to pay those costs as a reason to preclude the Plaintifffrom some immediate financial relief from harm occasioned by an adjournment for which the Defendant bears responsibility. That is amatter between the Defendant and its counsel.

I note that in one case, the court directed that the costs be paid forthwith, and directed thatwhere counsel was at fault, the adjourning party should not pay the costs personally and appeared to be expecting they be paid by formercounsel: Kowdrysh at para 13. [34] Nor do I see that the difficulty in assessing the amount should force the Plaintiff to wait until his rescheduled trial beforebeing compensated. Making the Plaintiff wait would shift the financial burdens and risks of the adjournment to the Plaintiff, and forcehim to carry those costs until the matter is finally resolved.

His circumstances had nothing to do with the adjournment. No one says it isimpossible to come to a reasonable estimate, and there are cases where judges have come to such estimates based on counsel’s

submissions: Goddard . If there is a risk of readjustment being required later, the Defendant should bear it as part of its responsibility for the adjournment, not the Plaintiff who had no control over the Defendant’s lawyer’s personal choices. [ 35 ] As to the Defendant’s submission that it would be extraordinary to make a substantial portion of trial preparation payable forthwith, I refer to Kowdrysh and V.A.S.

Quantum [ 36 ] My intention was to find a way, without protracted arguments over time dockets or otherwise or incursions into privileged issues (litigation privilege or solicitor/client privilege), to make a fair allocation for thrown away costs of trial preparation. I did indeed assume that 1/3 of the trial preparation costs were thrown away and did not account for the fact that some of the preparation could be used later. [ 37 ] I do therefore see an error.

Thrown-away costs do not include costs for "steps which may yet be profitably employed in a later trial or the ultimate resolution of the dispute." D’Amico at para 32. I did not address that in my Chambers decision. [ 38 ] There is no connection between the quantum error, and my decision to direct the Defendant to pay the thrown away costs forthwith. I would have made the same direction even if the costs were substantially greater, including the full amount of item 10(1).

Conclusion [ 39 ] Therefore the request for reconsideration fails. [ 40 ] I wish to address three matters arising from the reconsideration application. [ 41 ] First, I will respond to the Plaintiff’s concern raised in his submissions that the amount I awarded is only a fraction of the actual fees incurred by the Plaintiff. In fixing quantum, I applied the party and party scale of costs. That is because I saw it as the default scale. [ 42 ] As stated in para 38 I did not and do not see a necessary connection between quantum and whether the costs are payable forthwith. It is true that the costs are modest.

However, the normal basis for assessing thrown away costs where the party causing the adjournment bears responsibility but not fault, is the default party and party scale, not solicitor and client costs. D’Amico , supra , at para 19. Some Queen’s Bench judges apply that rule to all cases, regardless of fault, because: With respect to those who have a different opinion, in my view thrown away costs should be treated in the same way as other costs assessments.

Since we rarely indemnify litigants for their legal costs, even where they are successful, I can discern no principled reason to indemnify a litigant for legal costs even before a final decision on success has been made. No matter how much time a lawyer has spent on a client's behalf, at the end of the trial if that lawyer's client wins, the only costs which the client can recover from the party opposite is set by

Schedule C. V.A.S. at para 42 of 2014 ABQB 150 ; followed, 3S Resources Inc. v. Improvisions Inc. 2015 ABQB 754 , para 27 . [ 43 ] I generally agree with that reasoning, though it appears to me that the degree of fault and the precipitousness of the adjournment request probably has a bearing on discretion in individual cases. Here the potential for an adjournment was known for some time before the scheduled trial date and the application was brought about 2 months before the trial was scheduled to commence.

It would not be a case for solicitor and client costs. [ 44 ] Second, as stated above, in considering the Defendant’s application it came to my attention that there was a potential error in quantum. The question is whether I should allow the Defendant an opportunity to apply to challenge the calculation if it so chooses. [ 45 ]

Schedule “C” does not require that trial preparation commence at any set time before the trial.

Here the Plaintiff’s lawyer said he started preparing for trial, and I have no qualm in accepting his representation because it is plausible and shows a concern for early readiness and organization that is commendable. [ 46 ] On the other hand, the Plaintiff should not receive all his trial preparation costs because his trial preparation was not completed. [ 47 ] Theoretically, the parties might undertake a great effort to identify all the steps taken and assess whether they could be used later, then develop a fraction that could be applied to the trial preparation item.

That would have required an additional attendance, likely causing the parties to spend more than the potential amount of thrown away trial preparation (a maximum of $8,000 subject to adjustment by the trial judge) in assessing what was thrown away. [ 48 ] I did not, and still do not, think it is fair to have protracted proceedings over such a modest amount, costing the Plaintiff even more legal fees. [ 49 ] It is seldom possible to perfectly quantify thrown away preparation costs, particularly in this case where the parties were still working toward a narrowing of issues which Defendant’s counsel described in his affidavit in support of the adjournment request as challenging given the multijurisdictional aspect. [ 50 ] However, the standard is not perfection.

It is reasonableness. It is necessary to be proportional about the quantum analysis. It would be a disservice to all to engage in lengthy inquiry or dispute over quantum. In Michel , Justice Côté stated at para 13:

It would be a disservice to everyone to simply order some solicitor-client costs, and then have a long fight before a taxing officer over that. Instead I have just set down some numbers which are probably a little less than Mr. Veale's and Mr. Dunlop's usual hourly rates. But on the other hand, theoretically it might not have required quite so senior a lawyer as Mr. Veale or Mr. Dunlop to argue this motion. I have built a little something in for that. [ 51 ] Justice Côté’s concerns for a disputed taxation are as true today as they were in 1998. Proportionality is now a foundational rule of civil procedure in Alberta. Alberta Rules of Court,

Part 1. [ 52 ] Moreover, the Plaintiff does not need to open his privileged files or preparations to the Defendant. Requiring an affidavit, and the potential for cross-examination could potentially impair privilege. Further, it may place the Plaintiff’s counsel in the position of being a witness and disqualify him from being counsel at trial. Just as the Defendant’s choice of counsel is a value that I recognized, the Plaintiff’s choice of counsel is also a fundamental right that case law directs I should respect.

Generally on these considerations, see V.A.S. at paras 13 and 48 of 2014 ABQB 150 . [ 53 ] In D’Amico the Court would have directed a bill of costs be delivered on a solicitor and client basis and that it be referred to taxation. In Goddard , counsel provided a general overview of the preparation. In that case the court estimated that 2/3 of the trial preparation fee was thrown away and awarded that without the necessity of taxation.

I consider the latter approach to be preferable given the potential amounts involved in this case. [ 54 ] In the circumstances, I will allow the Defendant 15 days to notify my office and arrange a conference call to address the terms and conditions on which a reassessment should be conducted and at whose cost. If such a reassessment occurs, the Plaintiff can also have a closer look at its estimates, which might decrease or increase. [ 55 ] Third, the costs of the reconsideration application are reserved and counsel may arrange to speak to same within 30 days of this memorandum.

Heard by written submission on the 17 th and 20 th of January, 2017 . Dated at Calgary, Alberta this 2 nd day of March, 2017. J.T. Eamon J.C.Q.B.A. Appearances: Ward Mather for the Plaintiff Jordan Kirkness for the Defendant