Lay v Lay, 2017 ABQB 279

Court of Queen’s Bench of Alberta Citation: Lay v Lay, 2017 ABQB 279 Date: 20170420 Docket: 1001 15614 Registry: Calgary Between: Melanie Anne Lay and Terry Holmes Lay Plaintiffs/Respondents - and - Bradley Lay, Marlene Lay and 228916 Alberta Ltd. (Formerly Known As Steep Rock Construction Materials Ltd.) Defendants/Applicants _______________________________________________________ Costs Decision of the Honourable Mr. Justice B.A. Millar _______________________________________________________ [ 1 ] The Defendants were successful in their application for

summary dismissal of the Plaintiff’s claim. [ 2 ] The Defendants dismissal application was granted on two grounds: the Plaintiffs’ Amended Statement of Claim was barred by the Limitations Act and the Plaintiffs’ executed a release. [ 3 ] The Court awarded costs in favor of the Defendants. The parties now seek an Order on quantum. [ 4 ] The Defendants seeks in the alternative: 1) Solicitor and client (full indemnity) costs of $858,192.36, inclusive of disbursements, or; 2) Two-thirds of their solicitor and client (partial indemnity) costs of $600,000.00, or; 3) Party and party costs in accordance with

Schedule “C” to the Rules of Court , with a multiplier of 3, in addition to double costs for steps taken following their formal offer of September 8, 2011.

[ 5 ] The Amended Statement of Claim was 21 ps (68 paras) and advanced multiple causes of action, including: fraud, deceit, fraudulent misrepresentation and breach of fiduciary duties. The amount sought to be recovered exceeded $2 million. [ 6 ] The procedural history started in October of 2010 and included an unsuccessful appeal to the Court of Appeal and a denial of leave to appeal that ruling to the Supreme Court of Canada. [ 7 ] The Plaintiff’s submit that their conduct in this action does not merit costs on a full indemnity nor a partial indemnity basis. That party and party costs on Column 5 of

Schedule “C” is appropriate and the formal offer has no impact as it was not a genuine attempt to settle the action. Finding [ 8 ] This claim was protracted and did not proceed at a robust pace. Most of that can be attributed to the unsuccessful appeals and the application to amend the Statement of Claim. Those decisions should not be held against the Plaintiffs. Further, I cannot find that the conduct of the Plaintiff was “reprehensible, scandalous or outrageous”. I decline to award full indemnity costs. [ 9 ] Our case law has commented on the partial or percentage of solicitor and own client costs.

This approach is typically reserved for cases that are complex and protracted. While multiple causes of actions were pled, this is not an overly complex case.

I decline to award partial indemnity costs. [ 10 ] Party and party costs are appropriate in this case. [ 11 ] The allegation of fraud is a significant factor and can weigh on full or partial indemnity costs, however, I prefer to take that into account when dealing with any multiplier of party and party costs. [ 12 ] The considerations which are to be taken into account in making a costs award are enumerated under Rule 10.33(1), and are applied to the facts of this within Action below:

a) the result of the action and the degree of success of each party : in this case, the Defendants have been wholly successful;

b) the amount claimed and the amount recovered : the Plaintiffs claimed $2,000,000 in damages, the loss of unpaid dividends, loss of interest, and punitive damages of $250,000;

c) the importance of the issues : the issues were very important, as they could have had very significant consequences for the Defendants;

d) the complexity of the action : the action was complicated by the multiple causes of action and the age of the allegation (ie: back in 2002);

e) the apportionment of liability : the Defendants were wholly successful.

f) the conduct of a party that tended to shorten the action : the Defendants attempted to, and did, shorten the Action, including by issuing a Formal Offer to Settle and through the Dismissal Application, a step that has helped to significantly shorten the Action. [ 13 ] Considering all of the above, including the detailed procedural history and multiple applications I award costs on a party and party basis,

Schedule “C”, Column 5. [ 14 ] The Court may grant a multiplier, even in absence of misconduct. [ 15 ] Even though not a trial on the merits, the Defendant had to respond in its pleadings, questioning and submissions to the substantial allegations of fraud. [ 16 ] Considering all of the above factors, including the allegation of fraud, I grant a multiplier of 3 times column 5. [ 17 ] There is the issue of the formal offer made on September 7, 2011 and withdrawn on November 7, 2011. [ 18 ] The offer was pursuant to R 4.24 of the Rules of Court in which the Defendants offered to pay $10,000.00 for a discontinuance of the claim without costs.

The offer was not accepted and has now been exceeded. [ 19 ] The Defendants offer was a genuine settlement offer with a sufficient element of compromise. The Defendants maintained a complete defence to the claim advanced by the Plaintiffs, offered a significant amount ($10,000.00) and a waiver of their entitlement to costs. [ 20 ] When the offer was served, this was not a lawsuit in its infancy.

Multiple steps had been taken including questioning by the Defendants and the Plaintiffs. [ 21 ] The additional multiplier of 2 will apply to all costs incurred after the date of service of the offer, being September 8, 2011. [ 22 ] The Bill of Costs of the Defendant is directed to taxation. [ 23 ] Second counsel fee will be allowed. [ 24 ] The $60,000 security for costs will be releasable to the Defendants within 10 days of the granting of this Order.

Heard on the 05 th day of May, 2016. Dated at the City of Calgary, Alberta this 20 th day of April, 2017. B.A. Millar J.C.Q.B.A. Appearances: Jakub Ksiazek and Evan Nuttall for the Plaintiffs Ariel Z. Breitman and Jonathan J. Bourchier for the Defendants