Kent v Martin, 2017 ABQB 27

Court of Queen’s Bench of Alberta Citation: Kent v Martin, 2017 ABQB 27 Date: 20170116 Docket: 0801 08414; 1001 16418 Registry: Calgary Docket: 0801 08414 Between: Arthur Kent Plaintiff - and - Don Martin, The National Post Company, Canwest Publishing Inc., National Post Holdings Ltd. and Canwest Mediaworks Inc. Defendants Docket: 1001 16418 and Between: Arthur Kent Plaintiff -and- Postmedia Network Inc. and National Post Inc. Defendants _______________________________________________________

_______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J. Strekaf _______________________________________________________ Introduction [ 1 ] In a written decision delivered on June 8, 2016 ( 2016 ABQB 314 ), following a five-week trial in these two defamation actions, I found that Arthur Kent had been defamed by an

article written by Don Martin that was published in the Calgary Herald, the Edmonton Journal, and the National Post in February 2008 (“Article”) and made available online on various websites of Postmedia and its corporate predecessors. Mr. Kent was awarded damages of $150,000 from the Defendants in the 0801 Action and $50,000 from PostMedia in the 1001 Action. On October 27, 2016 and November 4, 2016, I heard Mr. Kent’s application for a permanent injunction prohibiting the Defendants from publishing the Article, as well as submissions from the parties on costs. Injunction [ 2 ] Mr.

Kent is applying for a permanent injunction to prohibit the Defendants from publishing or distributing the Article. The application is brought pursuant to rule 9.14 of the Alberta Rules of Court , Alta Reg 124/2010, which permits the Court, after a judgment has been entered, to make any further or other order that is needed to provide a remedy to which a party is entitled in connection with the judgment, provided that doing so does not require the original judgment to be varied. [ 3 ] Mr.

Kent submits that a permanent injunction is necessary because there is a real likelihood the Defendants will republish the Article. In his sworn affidavit in support of his application, he refers to an

article on a website which indicated that Postmedia had decided not to appeal the decision, and that Mr. Martin had indicated that he disagreed with the decision. [ 4 ] The Ontario Court of Appeal in 1711811 Ontario Ltd (AdLine) v Buckley Insurance Brokers Ltd , 2014 ONCA 125 , noted that the test for a permanent injunction is different than for an interlocutory injunction and stated at para 86: In general terms, injunctive relief is onerous. It is available only when truly necessary to ensure that a party is not deprived of his or her rights.

Even when injunctive relief is appropriate, the particulars of that relief must be determined so as to ensure a proper balancing of the parties' respective interests. That also demands a careful weighing of the evidence. [ 5 ] Postmedia suppressed online access to the

Article on November 6, 2012 and it has not been available from their database for more than four years. Mr. Kent has not demonstrated that there is any meaningful prospect that the Defendants will republish the

Article or that there is any need for an injunction at this time, much less it being truly necessary. Should either the

Article be republished, or a need be established, Mr. Kent can seek a remedy at that time. [ 6 ] The application for a permanent injunction is dismissed. Costs [ 7 ] Mr. Kent is seeking costs of $1,222,990.91, including $131,002.64 in disbursements, for the two actions combined. The costs amount includes partial indemnity costs of approximately 79% of the legal fees he incurred in connection with the two actions (excluding amounts incurred in relation to his claims against Ms. Robidoux) and a Bullock Order directing that he be indemnified by the Defendants for costs of $304,016.80 that he was required to pay to Messrs. Love, Hallman, Smith and Thorpe, who were granted

summary dismissal in August 2013, for claims advanced against them by Mr. Kent in these actions. [ 8 ] The Defendants submit that each side should bear their own costs. [ 9 ] Costs are a matter for the Court’s discretion, to be exercised in accordance with the guidance provided in rules 10.29 through 10.34 of the Rules of Court and the case law. Rule 10.29(1) provides that a successful party is entitled to a costs award against the unsuccessful party, subject to the court’s general discretion under rule 10.31. Rule 10.31 provides a broad range of the type of costs that could be ordered including full indemnity costs, a lump sum, taxable costs determined with reference to

Schedule C, or some multiple or percentage of such costs. Rule 10.33 states:

(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. [ 10 ] I have taken the following matters into consideration in determining how the costs of these actions should be addressed: A. The Results [ 11 ] The Plaintiff was successful in both actions in establishing that he was defamed by the Defendants and in obtaining an award for damages. However, the Plaintiff was not successful in either establishing malice or with his claims for aggravated or punitive damages.

The Defendants were successful in establishing the defence of fair comment with respect to portions of the Article. [ 12 ] The Plaintiff had sought injunctive relief in both actions, which was neither abandoned nor pursued at trial.

The Plaintiff sought a permanent injunction following the issuance of the trial judgment, which was heard and dismissed at the same time as this costs application. [ 13 ] The Plaintiff sought general damages of $1.5 million and aggravated, punitive and exemplary damages of $5 million in the 0801 Action and damages of $4 million, including punitive and exemplary damages, in the 1001 Action.

The Plaintiff was awarded compensatory damages of $150,000 in the 0801 Action and $50,000 in the 1001 Action, which represented slightly less than 2% of the amounts claimed by him. [ 14 ] While the damages awarded were a small fraction of the amounts claimed by Mr. Kent, proceeding through trial was Mr. Kent’s only option to obtain public acknowledgment that the

Article was defamatory as the Defendants never offered to retract or correct the

Article and continued publishing the

Article online until November 2012. B. The Importance and Complexity of the Issues [ 15 ] The trial raised issues that were important to the parties, being damage to his reputation in the case of Mr. Kent, and the scope and application of various defences in a defamation action in the case of the Defendants. [ 16 ] The issues raised in the two actions were the typical issues that arise in a defamation action involving an

article published by the media in print and online and were of moderate complexity. C. Conduct that Tended to Shorten/Lengthen the Action [ 17 ] The litigation was vigorously contested and spanned more than eight years as a result of the approach adopted by both sides. There were more than 20 attendances before the case management justice, four pre-trial attendances before me, and at least 15 applications or attendances before other members of this court.

There were few instances of cooperation, timely concessions on procedural issues, or meaningful steps to shorten or expedite the proceedings by either side. [ 18 ] Both sides complain that the other side (rather than themselves) engaged in conduct that delayed the proceedings and caused unnecessary expense. [ 19 ] For example, the Defendants note that Mr. Kent: named eight individuals as defendants in the action, of whom only Mr.

Martin was a defendant at trial; amended his pleadings on multiple occasions (with the result that there were nine Statements of Claim in the two actions); delivered 15 sworn and 14 unsworn Affidavits of Records in the 0801 and 1001 Actions; and brought five unsuccessful contempt applications against the Defendants. They further note that Mr. Kent brought other actions against the Defendants in New York and Ontario and against Glacier Media, which I do not consider relevant in determining the costs in these actions. The Defendants also submit that Mr.

Kent refused to commit to a timetable to complete pre-trial steps in March 2014 after becoming self-represented; that he failed to cooperate in finalizing orders and resolving costs issues; and brought a motion contesting privilege claims advanced in the Defendants’ Supplemental Affidavit of Records, which resulted in a delay of the original trial date scheduled for January 2015 as well as Macleod J’s review of seven binders of documents that resulted in the production of only 12 pages of records.

[ 20 ] For his part, Mr. Kent submits that the Defendants frustrated records production, both delayed and refused to cooperate in questioning, and caused unnecessary court applications by refusing to consent to amendments to pleadings or to further questioning. [ 21 ] There is no doubt that some of the procedural steps taken by Mr. Kent delayed the actions. He added seven individuals as defendants in the actions, in addition to Mr. Martin. Messrs. Love, Hallman, Thorpe, Smith, Godfrey and Fisher successfully applied for

summary dismissal of the Plaintiff’s claims against them. Mr. Kent commenced a separate action against Ms. Robidoux which was dismissed as it was based on information obtained through questioning, contrary to the implied undertaking. Mr. Kent then added Ms. Robidoux as a defendant in the 0801 Action and his claim against her was ultimately settled prior to trial. Mr. Kent brought – and later abandoned – an application to add Joseph Lougheed and the Progressive Conservative Association of Alberta as defendants in the 0801 Action.

He gave notice to the Attorneys General of Canada and Alberta that he would be raising constitutional issues, which he did not pursue. [ 22 ] Both sides had prepared for a jury trial, which did not proceed after the jury was discharged as a result of comments made in the Plaintiff’s opening statement. While the trial proceeded by judge alone, considerable expense that had been incurred in preparation for a jury trial was wasted. [ 23 ] The Defendants’ approach to document production – particularly in relation to privilege – and their failure to concede on obvious motions (such as the continued questioning of Mr.

Martin) contributed to an unhealthy relationship of distrust between the parties. [ 24 ] I find both sides responsible for the delay and excessive pre-trial proceedings in these actions. D. Noncompliance with the Rules [ 25 ] The two key documents in this case – other than the

Article – were two emails from Ms. Robidoux to Mr. Martin.

In my trial decision, I concluded that the Defendants provided no satisfactory explanation for their failure to include these two emails in the Affidavit of Records – an omission which was contrary to the Rules of Court and which appeared intentional rather than inadvertent – and which also justified enhanced damages (paras 281–285). [ 26 ] The Defendants now submit that they were of the view that the two emails were “subject to journalist-source privilege” and were somehow appropriately identified in the Second Part of the Defendants’ initial Affidavit of Records sworn on December 22, 2008, in which they are to identify the records in their possession which they object to produce, which stated: (

a) Bundle of records being without prejudice communications. (

b) Bundle of records consisting of communication between solicitor and client. (

c) Bundle of records being document prepared in contemplation of litigation of subject to confidentiality. (

d) Bundle of records consisting of solicitor notes, work product, memoranda, records of telephone conversations and account information, various dates. [ 27 ] The Defendants submit in their brief that the word “of” in paragraph (

c) was “obviously a typo and intended to be ‘or’”. On that basis, they would then be claiming they objected to the production of these documents simply because they were “subject to confidentiality”. Confidentiality alone has never been recognized as a sufficient reason not to produce a document in an Affidavit of Records. [ 28 ] I continue to find the Defendants’ treatment of these two key documents in the Affidavit of Records problematic.

Without deciding whether the Defendants had a reasonable basis for advancing a claim of journalist-source privilege at the time, they clearly did not properly identify that claim in their Affidavit of Records as required by the Rules of Court , either in the body of the Affidavit or in the Schedules. The body of Mr. Motley’s Affidavit of Records, in which he identifies the categories of records he objects to produce, makes no mention to any category that could encompass journalist-source privilege as it refers only to the following categories of documents: (

a) communications between solicitor and client; (

b) records prepared in contemplation of litigation; (

c) records forming part of a solicitor’s brief; and (

d) communications and records made without prejudice. [ 29 ] If the Defendants wished to assert “journalist-source privilege” as a basis for not producing the two emails, it should have been done expressly in a manner that clearly identified the nature of the privilege claimed, as was the case with without prejudice communications or documents prepared in contemplation of litigation. This requirement for privilege claims in affidavits was clearly outlined by the Court of Appeal of Alberta in Dorchak v Krupka , 1997 ABCA 89 at paras 67–70 : A completely different topic is what reasons for any claim of privilege in the body of the affidavit of documents. Rule 188(

b) says: "The affidavit ... shall state ... the party objects to produce and the grounds for any such objection, …” The reasons must be fairly precise, and must recite enough facts to trigger privilege. For example, if the body of the affidavit refers to three kinds of privilege (solicitor's advice, litigation, and without-prejudice), it should indicate which papers fall within which.

Nor is it enough to speak of communications with a solicitor; one must swear that they were for the purpose of getting advice. Nor is itenough to say that papers were for the purpose of resisting a claim; one must also say they were created when the claim existed or wascontemplated. Here each affidavit refers to at least two different types of privilege, and does not say which paper falls within which category: "I object to produce the said documents on the following grounds: (

a) Material obtained for or by Counsel in contemplation of litigation; and (

b) Privileged professional communications of a confidential character passing between Counsel, third parties and Client for the purposeof giving and taking legal advice and arising in contemplation of litigation. That will not do. The individual types of privilege must be segregated, and the affidavit must say which numbered documents comewithin each type of privilege. [30] In this case, neither “journalist-source” privilege was clearly identified as the type of privilege claimed, nor were thedocuments subject to that category of privilege, numbered. [31] Further, on July 8, 2009, one week prior to Mr.

Martin’s questioning, the Defendants’ counsel sent a further letter indicatingthat they had “located some additional documents” and provided an unexecuted Supplemental Affidavit of Records that they indicatedwould be sworn and filed as soon as possible, and two documents: a redacted version of one of the Robidoux emails and Mr. Kent’sRebuttal dated March 9, 2008. The email was described as follows in the first

schedule of the Supplemental Affidavit of Records: 54. February 7, 2008 Email correspondence between Bruce Thorpe and Arthur Kent (3 pages) [32] The redactions made by the Defendants deleted the entire first page of the document which contained Bruce Thorpe’s emailpassing on the Thorpe/Kent email exchange to Ms. Robidoux and Mr. Smith on February 7, 2008, Ms. Robidoux’s email passing it on toMr. Martin on May 6, 2008, and Mr. Martin’s email passing it on to Mr. Watson on May 7, 2008.

As well, the date of “5/7/2008” thatappeared on the bottom left corner of each page and the reference in the top right corner on each page as being page 2, 3 or 4 of 4 wereredacted, along with 3 lines at the top of the second page that identified the email being forwarded by Bruce Thorpe at 02/07/2008 08:53.There was no indication on the document that anything had been redacted, nor was there any indication in the description in the Affidavitof Records or the covering letter that any of the documents produced contained redactions.

Moreover, the deletion of the page numberson the document appears to reflect an attempt to conceal the fact that redactions had been made to the document. Such conduct wasclearly inappropriate. [33] While there may be legitimate reason to redact something from a document that is privileged or not otherwise producible, it isdoubtful that it is ever appropriate to redact a document without disclosing that a redaction had been made.

As noted in Guelph (City) vSuper Blue Box Recycling Corp, (ON SC), [2004] OJ No 4468 (SCJ) at para 119: The practice of "redacting" documents has been in wide use in commercial litigation in Ontario for at least two decades. [...] The propersolution is to produce the portion of the document that is not privileged, delete the portion that is privileged, and show the deletion onthe face of the document to alert the opposing party that privileged material has been removed. (emphasis added) [34] The Defendants submit that no costs penalty should be imposed arising out of the manner of the disclosure of the two emailsbecause, they claim, “it is apparent that the minor delay in disclosure of these records was justified in the context of the Defendants’privilege claim” and that an additional costs penalty would be “excessively punitive”.

I reject both of these submissions. There wasnothing “justified” about the way that the Defendants dealt with their privilege claim. While they were entitled to advance a claim ofjournalist-source privilege, it was not appropriate to do so in a fashion that concealed the fact that such a claim was being made contraryto the Rules of Court.

Further, courts regularly award both enhanced damages and enhanced costs in defamation actions arising out of thesame conduct. [35] The Defendants further submit that no steps taken by the Plaintiff have been identified that would have been unnecessary hadthe two emails been produced earlier. That is no excuse. If these documents had been properly addressed in December 2008, that mayhave affected how the litigation proceeded. Certainly, Mr.

Kent was entitled to know by the time that the Affidavit of Records wasserved that the Defendants had in their possession documents over which they were advancing a claim of journalist-source privilege andhe would have been entitled to seek to contest that claim before proceeding to questioning. The failure to disclose that information wouldhave affected the nature of preparation for Mr.

Kent’s questioning and likely contributed to the lack of trust between the parties whichwas largely behind the excessive procedural wrangling and lack of cooperation that characterized this litigation. [36] I am of the view that the Defendants made an intentional strategic decision to conceal that they were advancing a claim forjournalist-source privilege over these documents. Further, after the two emails were produced in the course of Mr. Martin’s questioning,they refused the Plaintiff’s reasonable request that Mr.

Martin be produced for further questioning and required the Plaintiff to bring anapplication to require him to re-attend. Such conduct merits a costs sanction. E. Unfounded Allegations of Misconduct [37] While Mr. Kent was self-represented, he repeatedly accused the Defendants and their counsel of wrongdoing, includingfraudulent concealment of records, intentional destruction of records, and the giving of false evidence during the course of submissions.None of these allegations were ever established.

While I do not consider the handling of the journalist-source privilege issue to have beenappropriate, it did not amount to fraudulent concealment. [38] Costs penalties may be appropriate where there are unproven allegations of fraud and dishonesty, or of counsel engaging in

unprofessional conduct, as was recently recognized by Slatter, JA in Thompson v Procrane Inc (Sterling Crane), 2016 ABCA 71 at para16: One of the factors to be considered in awarding costs under rule 10.33(2)(

g) is "whether a party has engaged in misconduct". Accusingcounsel of unprofessional conduct, and accusing anybody of criminal acts, constitutes "misconduct" unless the allegations can be proven.The principle was confirmed by the Supreme Court of Canada in Hamilton v Open Window Bakery Ltd., 2004 SCC 9 at para. 26,[2004] 1 SCR 303: . . . allegations of fraud and dishonesty are serious and potentially very damaging to those accused of deception.

When, as here, a partymakes such allegations unsuccessfully at trial and with access to information sufficient to conclude that the other party was merelynegligent and neither dishonest nor fraudulent (as Wilkins J. found), costs on a solicitor-and-client scale are appropriate. A costs penalty of this type should be applied cautiously, but there are many examples of it having been done: Botan (c.o.b. Botan LawOffice) v St.

Amand, 2012 ABQB 260 at paras. 66-71, 68 Alta LR (5th) 359 affirmed 2013 ABCA 227, 85 Alta LR (5th) 199; Bizon vBizon, 2014 ABCA 174 at paras. 80, 83, 96 Alta LR (5th) 337; Prochazka v Alberta (Labour Relations Board), 2013 ABCA 60 atparas. 6-7. […] [39] It is appropriate that Mr. Kent be penalized in costs for this aspect of his conduct of the litigation. F. Costs relating to Messrs. Godfrey and Fisher [40] The 1001 Action filed on November 3, 2010 named Messrs. Godfrey and Fisher as Defendants. An application for

summarydismissal of the claim was filed on behalf of Mr. Godfrey on June 3, 2011, and was later amended to include Mr. Fisher. This applicationwas ultimately heard by Campbell J on May 25, 2015, and she then summarily dismissed the Plaintiff’s claims against Messrs. Godfreyand Fisher on July 17, 2015 after Messrs. Godfrey and Fisher had each filed Affidavits of Records, plus two affidavits in support of theapplication, and had been questioned on two occasions. In her decision, Campbell J stated that costs would be determined in the cause. [41] In the event that any costs are awarded to the Plaintiff, the Defendants seek a set-off of $150,000 arising out of the

summarydismissal of the Plaintiff’s claims against Messrs. Godfrey and Fisher, who were represented by the same counsel. In the alternative, theyseek a set-off of taxable costs awarded to each of them under column 5, which they have calculated to be $28,906.01 for Mr. Godfrey and$29,245.65 for Mr. Fisher. Mr. Kent has calculated the taxable costs to Messrs. Godfrey and Fisher to be $35,014 under column 3 and$46,000 under column 5. Having reviewed both calculations, I find that $35,000 is a reasonable estimate of the taxable costs payable toMessrs. Godfrey and Fisher collectively under column 5 in respect of their successful

summary dismissal applications. In making thisdetermination, I have only allowed a single claim for items for which their joint counsel would have provided the same service to bothDefendants. [42] When a plaintiff elects to sue an individual directly for corporate acts and is unsuccessful, they may face enhanced costs.Campbell J found “no evidence of any action on the part of Mr. Godfrey or Mr. Fisher that would make publication or republication ofthe

Article their own deed, rather than

an act of Postmedia or the National Post” (Kent v Postmedia Network Inc, 2015 ABQB 461 atpara 70). In this case, Messrs. Godfrey and Fisher are entitled to an increased level of costs for a total amount of $50,000 as I find thatthere was no reasonable basis for Mr. Kent to have added either of them as a defendant in the 1001 Action. [43] Accordingly, I grant the Defendants a credit of $50,000 to reflect costs in favour of Messrs. Godfrey and Fisher that is to beset-off against any costs awarded to Mr. Kent in these actions. G.

Settlement Offers [44] The Defendants submit that the Plaintiff should not be entitled to any costs because they achieved a result at trial which wasmore favourable than offers which they had provided to the Plaintiff.

The Defendants made three settlement offers to the Plaintiff. [45] The Defendants rely on rule 4.29(2) which provides that if a defendant makes a formal offer to settle that is not accepted and ajudgment is made “that is equal to or more favourable to the defendant than the offer, the defendant is entitled to costs for all steps takenin the action in relation to the action…after service of the offer.” [46] The Court of Appeal of Alberta provided guidance on how a formal offer should be compared to the judgment obtained, forthe purpose of this rule, in Whitford v Agrium Inc, 2007 ABCA 109 at paragraph 3 (albeit in that case in the context of an offer by theplaintiff): As a general rule, for the purposes of calculating costs, a judgment should be valued as if it included interest and costs up to the date ofthe offer only, not up to the date of trial.

The plaintiff's offer can only be "more favourable than" the judgment if the defendant would, onthe date of offer, have been better off to accept the offer than suffer the eventual judgment. It is inconsistent with the objectives of theRules on formal offers to say that a plaintiff or a defendant can, by running up costs between the date of the offer and the trial, achieve amore favourable result. When the offer is inclusive of costs, the proper approach is to add costs (including disbursements) and interest tothe date of the offer, as set out in Steve's Contracting Ltd. v.

Williams (1997), (AB KB), 214 A.R. 318, HillsideInvestments Ltd. v. Boychuk, [2002] A.J. No. 33, 2002 ABQB 26at para. 6; McAteer v. Devoncroft Developments Ltd., 2003 ABQB425, 21 Alta. L.R. (4th) 116, at para. 60; and Merrill Lynch Canada Inc. v. Cassina (1992), 15 C.P.C. (3d) 264 (Ont. Gen. Div.). Howthe offeror came up with the amount of a lump sum offer, and what sub-components of the lump sum the offeror subjectively thought theoffer contained, are not relevant to the assessment of whether the offer is "more favourable".

In the end, the comparison is between thetotal amount of the offer, on the one hand, and on the other, the principal amount recovered on all heads of damage plus pre-judgmentinterest and costs (including disbursements) to the date of the offer. [47] The first settlement offer was a formal offer made on August 7, 2012 by all of the defendants in the 0801 Action of $150,000

plus up to $50,000 in costs (“First Offer”). Four of the defendants who were part of that offer subsequently obtained

summary dismissal of the claims against them and had costs in excess of $300,000 awarded to them payable by the Plaintiff. The Plaintiff was ultimately awarded damages of $150,000 against Mr. Martin and the corporate defendants in that action. [ 48 ] The evaluation of the First Offer is complicated by the fact that it was made on behalf of all of the defendants in the 0801 Action in circumstances where the four individual defendants who succeeded with their

summary dismissal applications were represented by other counsel. [ 49 ] The Plaintiff may have been better off financially if he had accepted this offer in 2012 and received $150,000 plus up to $50,000 costs and avoided the costs awarded on the successful

summary dismissal applications to the four individuals of approximately $300,000. However, the test in rule 4.29(2) is from the perspective of whether the trial judgment is more favourable to the defendant who made the offer. The onus is on the party seeking to rely on the rule to demonstrate that the test was satisfied: Madge v Meyer , 2000 ABQB 156 at para 14 .

The Defendants have not established that the judgment which required them to pay $150,000 plus interest under the Judgment Interest Act , RSA 2000, c J-1, is more favourable to them than participating with other parties in an offer to pay $150,000 plus costs up to $50,000. As a result, rule 4.29(2) was not triggered by the First Offer. [ 50 ] The second settlement offer, made on September 17, 2012, was not presented as a formal offer. The Defendants offered to take steps to remove the

Article from the Postmedia website if Mr. Kent agreed to discontinue his action and his application to amend as against Messrs. Godfrey and Fisher and sign a release in favour of them (“Second Offer”). The claims against Messrs. Godfrey and Fisher were summarily dismissed on July 17, 2015.While the Defendants suggest that this offer is essentially an offer to accept a discontinuance without costs, the correspondence makes no mention of costs.

Rule 4.24(2) requires that a formal offer be in Form 22, include notice of the cost consequences specified in rule 4.29, and mention whether or not the amount of the offer is inclusive of costs and, if not, the amount or scale of the costs and the date to which they are payable under the terms of the offer. The Second Offer did not meet the requirements for a formal offer set out in rule 4.24(2) and is not subject to rule 4.29(2). The Defendants subsequently voluntarily removed the

Article from the Postmedia website in November 2012. [ 51 ] The third settlement offer was presented as a formal offer made by the Defendants on February 6, 2015 of $325,000 (all inclusive) to settle both actions (“Third Offer”). The Defendants submit the trial judgment was more favourable to them than this offer so long as the Plaintiff’s taxable costs as of the date of the offer were less than $73,898.62. They calculated this amount by deducting the damages awarded of $200,000 and pre-judgment interest of $51,101.38 calculated as of the date of the offer from the $325,000 offered.

The Plaintiff denies that the Third Offer qualified as a formal offer for the purposes of rule 4.29(2) because it contained conditions that are inconsistent with rule 4.25. [ 52 ] The Third Offer required that “(t)he Plaintiff must agree that he waives any rights that he may have pursuant to rule 4.25(2)(

a) and 4.25(3) of the Rules of Court”. Rule 4.25 states:

(1) For the purpose of this Division, a formal offer to settle an action or a claim in an action may only be accepted in accordance with this rule.

(2) At any time a formal offer to settle remains open for acceptance or before a formal offer to settle is withdrawn, a party to whom the offer has been made may accept the offer by (

a) filing the offer and the acceptance of it, and (

b) serving on the party who made the offer notice that (

i) the offer has been accepted, and (ii) the terms of any judgment or order in the offer have been agreed to.

(3) After the filing and service, a party may (

a) apply to the Court for judgment or an order in accordance with the terms of the formal offer to settle, (

b) continue the action in respect of any matter not covered by the judgment or order, and (

c) continue the action against any party who is not a party to the settlement. [ 53 ] As the Third Offer required the Plaintiff to waive his right to accept the offer by filing it and his acceptance (which would have made the terms of the offer a matter of record), the offer was inconsistent with rule 4.25(1) and, therefore, did not qualify as a formal offer for the purposes of rule 4.29(2). [ 54 ] As a result, I need not determine whether the Plaintiff’s taxable costs, including disbursements, were less than $73,898.62 at February 6, 2015.

I also need not determine whether an offer to settle in a defamation action that does not involve a retraction, apology or undertaking to not continue publishing an

article that was found defamatory, would constitute the type of special circumstances contemplated in rule 4.29(3)(

e) where the Court could find that the rule should not be applied. [ 55 ] The Plaintiff states in his Reply Brief that he made an offer to settle the litigation for just over $1 million (including damages, costs and interest) on February 26, 2015. However, since the details of that offer were not made available for review by the Court, it will not be considered. [ 56 ] Settlement offers that don’t qualify as a formal offer for the purposes of rule 4.29(2), as was the case with all of these offers mentioned, can still be a relevant consideration when making a costs award.

While I accept that these offers reflected a genuine attempt by the Defendants to resolve the dispute, none of the offers contained any acknowledgment that the

Article contained any errors, nor did

they contemplate a retraction or apology, provide any opportunity for Mr. Kent to respond to the Article, or contain any commitment toremove the

Article from the website. These were matters that clearly went to the heart of Mr. Kent’s claim. In the context of thisdefamation action, it would not be reasonable to penalize Mr. Kent in costs for failing to accept a settlement offer that did not providehim with some form of the public vindication he was seeking and which he ultimately had to obtain through the trial process. H. Bullock Order [57] The Plaintiff seeks a Bullock Order requiring the Defendants to reimburse him for the $304,016.80 in costs that he wasrequired to pay to Messrs.

Love, Hallman, Thorpe and Smith when the claims he brought against them were summarily dismissed. ABullock Order requires an unsuccessful defendant to pay the costs that the plaintiff was required to pay to successful defendants in an action involving multiple defendants.

The test for obtaining a Bullock Order was outlined in Mark M Orkin, The Law of Costs, 2nd ed,(Toronto: Canada Law Book, 2010) at 2–119 to 2–121: If the action was properly brought, that is, if it was a reasonable thing for the plaintiff to have joined the other defendants, then theplaintiff may be entitled to add to the costs recoverable from the unsuccessful defendants the amount of the costs which he or she isobliged to pay to the successful defendant. The threshold test is whether it was reasonable to join the defendants and keep them in theaction until judgment.

This will be so in action of contract as well as tort, and the cost are payable to the plaintiff as trustee for thesuccessful defendant. [emphasis added]. Such an order, known as a “Bullock” order, is appropriate where a plaintiff is in doubt as to which of two persons is responsible for theact that caused the injury. It is not, however, appropriate where a plaintiff alleges independent causes of action against two defendants.Although this is not a blanket rule, it should not be used where the breaches of duty are in no way connected with each other.

However,where the causes of action against each defendant was different, but they were closely connected in that they arose out of the sameincident, and each defendant sought to blame the other, the court made a Bullock order in favour of the plaintiff. [58] Applying this test, the Plaintiff has not established that it was reasonable for him to have named Messrs. Love, Smith, Thorpeand Hallman in the 0801 Action. The claims, which were summarily dismissed, involved allegations against Messrs. Love, Smith,Thorpe, Hallman and Ms. Robidoux (“Conspiracy Defendants”) of a conspiracy to undermine Mr.

Kent’s campaign that arose prior topublication of the Article. It is not alleged that any of the Defendants were part of the conspiracy. The causes of action in defamation andconspiracy are distinct and are not closely connected. It was largely irrelevant to the defamation claims advanced against the Defendantswhether or not the conspiracy claims were established against the Conspiracy Defendants. The Defendants did not purport to blame theConspiracy Defendants and did nothing that would have given the Plaintiff any reasonable basis to add the individual defendants to theaction.

The fact that the Plaintiff may have obtained helpful information through questioning of the Conspiracy Defendants that wasuseful at the trial provides no basis for requiring the Defendants to be responsible for such costs. [59] Mr. Kent’s application for a Bullock Order is dismissed. I. Mr. Kent’s Claim for Full/Partial Recovery Costs [60] Mr.

Kent is seeking to recover 100% of the $153,353.63 in legal fees that he paid between March 2008 and July 2010 toMJSS Barristers, Mark Hayes and Gabor Zinner, and 75% of the $846,187.08 in legal fees he paid between September 2010 and October2016 to Mark Hayes, Gabor Zinner, Roger McConchie, Michael Bates and McLennan Ross. The latter amount includes $64,535 for theclaims brought by Mr. Kent against the four individual former defendants which were summarily dismissed. I see no reason for theDefendants to have any responsibility for this portion of Mr.

Kent’s legal fees for reasons similar to those outlined above in relation tothe Bullock Order. As well, the Defendants should have no responsibility for any costs incurred by Mr. Kent in relation to the claimsadvanced against Messrs. Godfrey and Fisher. [61] Solicitor-client costs are only awarded in exceptional cases: Jackson v Trimac, (AB KB), 8 Alta LR (3d)403. Sharpe v Sharpe, 2014 ABQB 159, set out the factors from Jackson, and included a review of circumstances (from College ofPhysicians & Surgeons v JH, 2009 ABQB 48) in which courts have awarded solicitor-client costs.

Having considered the circumstancesand the factors, I do not consider this to be an extraordinary case where an award of solicitor-client costs is warranted. [62] Ordering a percentage of solicitor-client costs can also be problematic where it is not conceded that the costs incurred wereboth reasonable and appropriately incurred to advance the issues in the action: Murphy Oil Canada Ltd v Predator Corp, 2005 ABQB134 per McMahon, J, at para 20. I am satisfied that many of the legal fees incurred by Mr.

Kent relate to matters that did not advance thelitigation, and I do not consider ordering a percentage of the legal fees to be appropriate in this case. J. Mr. Kent’s Taxable Costs [63] Counsel each provided their calculation of Mr. Kent’s taxable costs under

Schedule C to the Rules of Court. Mr. Kentcalculated his taxable costs to be $387,910 under column 3 (of which $300,910 related to pre-trial steps) and $624,750 under column 5(of which $485,500 related to pre-trial steps). [64] The Defendants provided their calculation of Mr. Kent’s taxable costs prior to trial to be $38,700. Their calculation wasprepared under column 2 with respect to the 0801 Action and column 1 with respect to the 1001 Action up until the actions wereconsolidated on April 23, 2014, and thereafter under column 3, which reflects the combined amount of $200,000 in the two actions.

TheDefendants removed a number of items from Mr. Kent’s calculation of his pre-trial taxable costs that related to: the claims against Ms.Robidoux or the individual defendants in respect of whom

summary dismissal was granted; Notices to Admit Facts that did not result inexpediting the case or better defining the issues; matters where costs were previously addressed by the court; costs claimed while Mr.Kent was self-represented; costs they claim were duplicative or dealt with issues resolved at case management meetings; costs whichrelated to applications by Mr. Kent that were dismissed; and costs after formal offers were made.

[ 65 ] Having reviewed the calculations provided by both counsel, my estimate of Mr. Kent’s taxable costs for steps reasonably taken in both actions, up to and including trial, (excluding disbursements) calculated under column 3, would be approximately $146,600 as outlined below. In preparing this estimate I have not awarded costs to the Plaintiff for steps where costs were previously addressed by the Court, or for proceedings or steps (including questioning) which relate to claims against any of the individual defendants other than Mr. Martin. Costs relating to some of the questioning of Messrs.

Godfrey and Fisher are included as they could have been examined as employees or officers of the Defendants. The offers made by the Defendants would not affect a taxable costs calculation for the reasons already outlined. Where costs were awarded for case management conferences, additional costs for applications dealt with at those case management conferences were not awarded as doing so would be duplicative. [ 66 ] Costs for steps taken by self-represented individuals can be included in a taxable costs calculation in an appropriate case pursuant to rule 10.31(5).

However, self-represented litigants should generally not receive costs unless doing so would serve the policy reasons for which costs awards are made, to partly indemnify the successful party for the costs of the litigation, to encourage settlement, prevent vexatious or harassing litigation and encourage economy and efficiency: Hogarth v Rocky Mountain Slate Inc , 2013 ABCA 116 at paras 8-10 . Mr. Kent was represented throughout much of the litigation. I accept that it was very expensive, which was the reason he elected to represent himself for some steps.

In this context, I do not consider it unreasonable to include such steps in my estimate of his taxable costs. [ 67 ] Below is my estimate of the Plaintiff’s taxable costs under Column 3: Estimate of the Plaintiff’s Taxable Costs Calculated Under Column 3 Item Amount 1(1) Commencement Documents 2 @ $2,000 $4,000 3(1) Disclosure of Records 2 @ $1,000 2,000 3(2) Review of Opposite Party Documents 2 @ $1,000 2,000 4 Notices to Admit 4 @ $800 3,200 5(2)&

(3) Questioning 27 half-days 27 @ $1,000 27,000 5(4) Written Interrogatories 2 @ $1,000 2,000 6(1) Consent Orders (Nov 22, 2012; Apr 22, 2013; Nov 6, 2014) 3 @ $600 1,800 7(1) Contested Applications (Dec 10, 2014; Mar 18, 2015) 2 @ $1000 2,000 7(2) Consent Adjournment (June 16, 2014) 150 8(1) Applications Requiring Briefs (May 17, 2010; May 18, 2010; Feb 5, 2015; Aug 22, 2014) 4 @ $1,500 6,000 Additional Half Days (Sep 17, 2014; Nov 4, 2014; Nov 12, 2014) 3 @ $750 2,250 9(1) Pretrial/Case Management Meetings 22 @ $600 13,200 10 Preparation for Trial 6,000 11 Trial First ½ day with Second Counsel Fee 2,250 Additional ½ days with second counsel fee 45 @ $1,350 60,750 12 Written Argument 4 @ $3,000 12,000 $146,600 K.

Disbursements [ 68 ] Mr. Kent is claiming disbursements of $131,002.64. The Defendants submit that the amounts claimed are excessive. In particular, they note that the Plaintiff is seeking to recover: (

a) Disbursements relating to his unsuccessful claims against Messrs. Love, Hallman, Thorpe and Smith ($7,554.02); the claim against Ms. Robidoux ($4,790.03); and his unsuccessful claims against Messrs. Godfrey and Fisher ($3,812.11);

(b) $396.17 in relation to his questioning of Valerie Fortney; (c) $3,675 to Atticus Alliances for “retainer for jury trial preparation”; (d) $2,370.63 for legal research; (e) $12,704.01 for expedited trial transcripts; and (f) $11,352.23 paid to Jeffrey Dvorkin and $13,177.35 to Computer Evidence (Kevin Ripa). [69] Useful guidance regarding the recovery of disbursements was provided by O’Leary, J in Petrogas Processing Ltd v WestcoastTransmission Co, (1990), (AB KB), 105 AR 384 at para 47: When considering the reasonableness or otherwise of an expenditure made by the defendant I must view the matter through the eyes ofthe defendant and in light of the problem facing it when the expenditure was made.

The test of reasonableness is not, in my opinion,entirely based on the importance of the expenditure to success at trial. Hindsight may show that some liabilities assumed were, in theend, of little or no benefit. The question is whether the expense was reasonable and proper in the light of the circumstances which existedat the time it was incurred. The issues raised from time to time by the pleadings and by discovery and production are significantcircumstances.

The magnitude of the expenditure in relation to the amount at risk in the proceedings is another important consideration.In all cases the party taxing costs has the burden of showing that both the nature of the expense and its amount were reasonable andproper in the circumstances. [70] No disbursements relating to Messrs. Love, Hallman, Thorpe, Smith and Ms. Robidoux should be recoverable from theDefendants. The disbursements relating to Messrs.

Godfrey and Fisher appear to relate to their questioning; at least some of thesedisbursements should be recoverable as they could have been examined in their capacity as employees or officers of the Defendants, evenif they had not been named as defendants. Ms.

Fortney was examined as an employee and this amount should be recoverable even thoughit became apparent after she had been examined that she had no relevant information. [71] No amount should be recoverable for jury trial preparation in view of the discharge of the jury due to statements made in thePlaintiff’s opening statement. [72] A review of the actual invoices indicates that the amount claimed for legal research related to ecarswell or quicklaw chargeswas only a small portion of the disbursements on each of the invoices in question. [73] Whether expedited transcripts will be a recoverable disbursement in a particular case will depend upon the circumstances.Given the number of witnesses and the timing of final argument, it was reasonable for Mr.

Kent to have obtained transcripts. [74] With respect to the payments to Mr. Ripa, I am satisfied that they were reasonably incurred. While he was only referred to inone paragraph in the trial decision, I found his evidence extremely helpful in understanding how the

Article could be accessed online,which was a matter squarely in issue at trial. Mr. Dvorkin’s evidence was less helpful to the extent that his evidence was based upon hisreview of discovery transcripts and conclusions that contradicted findings made at trial, however, it did provide useful backgroundcontext. As a result, only 75% of Mr. Dvorkin’s fee should be treated as recoverable. [75] I am satisfied that approximately $115,000 of the disbursements claimed by the Plaintiff are reasonable. L. Conclusion [76] For the reasons outlined above, Mr.

Kent is awarded costs in the global amount of $300,000 in respect of both actionscombined, which is reduced by $50,000 to reflect costs awarded to Messrs. Godfrey and Fisher in relation to their successful

summarydismissal applications, for a net costs award to Mr. Kent of $250,000. This amount takes into account my estimates of his taxable costsand reasonable disbursements, which was adjusted upwards to reflect the results and complexity of the proceedings. It also reflects mydismissal of Mr. Kent’s application for a Bullock Order. I have concluded that no further adjustments to the costs to be awarded isappropriate. To the extent that Mr.

Kent made unfounded allegations of misconduct that justified reducing his costs, this was offset bythe Defendants’ inappropriate conduct in dealing with their claim of journalist-source privilege which justified awarding additional coststo Mr. Kent. Both sides were responsible for some of the excessive pre-trial proceedings and delay. This costs award also includes costsassociated with the Plaintiff’s unsuccessful injunction application and this costs application. Heard on October 27th and November 4th, 2016. Dated at the City of Calgary, Alberta this 16th day of January, 2017. J. Strekaf J.C.Q.B.A.

Appearances: Kent W. Jesse and David Nicol McLennan Ross LLP Michael Bates Ruttan Bates for the Plaintiff G. Scott Watson and Brent W. Mescall Parlee McLaws LLP for the Defendants