TRDMS Services Inc v Condominium Corporation, 2017 ABQB 425

Court of Queen’s Bench of Alberta Citation: TRDMS Services Inc v Condominium Corporation 0425913 (The New Cambridge Lofts), 2017 ABQB 425 Date: 20170707 Docket: 1303 13601 Registry: Edmonton Between: TRDMS Services Inc Plaintiff - and - Condominium Corporation 0425913 Operating As "the New Cambridge Lofts" and John Doe Defendants - and - John Woo Proposed Third Party _______________________________________________________ Reasons for Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Background [ 1 ] On September 27 th , 2016, I dismissed the appeal brought by the Defendants in relation to the decision of a Master, which

dismissed the Defendants’ application to extend the time to add Mr. Woo as a third party to this action. This Application [2] Mr. Woo applies for solicitor - client costs or, in the alternative, enhanced costs (specifically, five times those payable onColumn 2 of

Schedule C). Parties’ Positions Mr. Woo’s Position [3] Mr. Woo submits that this is a special case, warranting solicitor - client costs (or enhanced costs), because the allegationsmade against him in the proposed third party claim related to professional negligence and breach of fiduciary duty. These, he submits,strike at the core of his role as a lawyer and the public’s perception of that role.

He further submits that, as a matter of public policy,making unfounded allegations against a lawyer that, as in this case, result in his removal from a file, ought to be discouraged. [4] Relying on College of Physicians and Surgeons of the Province of Alberta v J.H., 2009 ABQB 48, Mr. Woo suggests that,when an application has proceeded based on groundless allegations, an award of solicitor-client costs is appropriate to discourage thistype of conduct in litigation. [5] Mr.

Woo further submits that this Court found that the claims proposed to be advanced against him, as a third party, wereunfounded and untrue, and accordingly fall within the category of conduct that is reprehensible or outrageous. [6] Mr. Woo points out that, as a result of the allegations against him, he had to withdraw as counsel on this file, harming bothhis reputation and his income.

He submits that, if this is not discouraged, parties who dislike opposing counsel may make meritlessclaims against them, by way of third party proceedings, resulting in such counsel’s removal without fear of any serious consequences. [7] In addition to College of Physicians and Surgeons, Mr. Woo relies on the authorities set out in the attached Exhibit A. Position of the Condominium Corporation [8] The Condominium Corporation submits that there is no basis upon which to award solicitor-client costs or enhanced costs,and that costs pursuant to Column 1 of

Schedule C are appropriate. [9] Relying on Clark v Syncrude Canada Ltd, 2014 ABQB 430, the Condominium Corporation submits that solicitor-clientcosts should only be ordered in exceptional cases where there has been conduct that is reprehensible, scandalous or outrageous: forexample, conduct constituting deceit, fraud or maliciousness. It points out that the Supreme Court of Canada held, in Young v Young,SCC , that the fact that an application has little merit is no basis for an award of solicitor-client costs. [10] The Condominium Corporation submits that the actions taken against Mr.

Woo were ordinary steps in its litigation disputewith the Plaintiff, were not allegations of the type that could be considered an attack on Mr. Woo’s character, and that none of its actionscould be described as reprehensible, outrageous or scandalous. The advancing of a questionable claim is not sufficient to warrantsolicitor-client or enhanced costs. [11] The Condominium Corporation submits there has been no damage to Mr. Woo’s reputation as a result of its application to addhim as a third party. Similarly, no loss of income has been proven. While Mr.

Woo may have had to temporarily cease working for thePlaintiff, there is no evidence that he lost income as a result, since presumably he could have been working on other files for otherclients. Analysis [12] The law is clear that solicitor-client costs will only be appropriate in rare and exceptional cases. Mr. Woo relies heavily uponthis Court’s decision in College of Physicians and Surgeons.

In that decision, Justice Graesser reviewed many of the leading cases,many of which have provided guidance on the type of blameworthy conduct which may attract solicitor-client costs or enhanced costs.Justice Graesser observed that an award of solicitor-client costs may have a chilling effect on litigants, commenting that such an effect isthe intended consequence of such an award where the Court concludes, in an exceptional case, that the inappropriate conduct involvedneeds to be discouraged and punished. [13] Justice Graesser concluded that the nature of the misconduct engaged in by the defendants in College of Physicians andSurgeons fell into the exceptional case warranting such an award.

However, it is important to note the type of misconduct involved inthat case. Mr. Woo relies on, in particular, one sentence of Justice Graesser’s decision – namely, that “misconduct during the litigationcan surely be found if there is no reasonable basis on which to commence, or continue, litigation.” Reading the sentence in context makesit clear that the misconduct in question was found by Justice Graesser to be particularly egregious.

He found that the defendants hadattacked the credibility and integrity of an investigator employed by the College to investigate a complaint about professional conduct oftwo of its members. He was performing a statutory duty when faced with baseless and unfounded allegations of bias, allegations ofproviding misleading evidence to a court, and other allegations which Justice Graesser found to be akin to allegations of fraud.

JusticeGraesser observed that the allegations were made against a person whose integrity is essential to his job, making the allegations moreserious than allegations of bias against someone whose integrity is less critical to his work. Justice Graesser was of the view that the civil

proceedings for certiorari and prohibition (aimed at stopping the investigator from continuing his investigation of the complaint), done in a public way, were a strategic move taken, without any foundation, in the course of the investigation. [ 14 ] Mr. Woo’s reliance on the general comments made by Justice Graesser is divorced from the facts of the case in which they were made. The facts in the College of Physicians and Surgeons case are very different than the facts in his case.

It must be remembered that what was before the Master, and in the appeal before me, was an application for an extension of time to file a third party notice against Mr. Woo. The Master declined to grant the extension for several reasons, only one of which was his assessment of the strength of the Condominium Corporation’s case as “dubious”. However, his primary reason for refusing the extension was that there was no reasonable excuse given for the delay.

Other reasons included that the Plaintiff had expended considerable time and money advancing the action, adding a third party would considerably delay the action, and the Plaintiff would suffer prejudice if the extension were granted. [ 15 ] I too concluded that there had been no reasonable excuse given for what I also found to be inordinate delay in seeking to add Mr. Woo as a third party. I also concluded that the extension would be prejudicial to the Plaintiff, although prejudice was not a significant factor.

An assessment of the strength of the third party claim sought to be advanced arose primarily because the Condominium Corporation had argued that this issue had no application when considering the extension request. It was in that context that I commented on the questionable nature of the third party claim itself.

I shared the Master’s skepticism that the Condominium Corporation would be able to find case authority to support its position, rejecting that the case cited by it would be of much assistance in that regard, given the distinguishable nature of its facts. [ 16 ] Unlike College of Physicians and Surgeons , and other cases in which solicitor-client or enhanced costs have been granted, in this case the allegations were not even permitted to be made because the extension was not granted, largely on grounds related to the lack of an excuse for the inordinate delay in raising them.

There was no suggestion made by the Condominium Corporation that Mr. Woo had acted dishonestly or unethically. Rather, in raising the allegations of negligence and breach of fiduciary duty, the Condominium Corporation would be asking the Court to extend a solicitor’s duty of care and to find a breach of duty by a solicitor in circumstances beyond those which would normally attract such an argument. These were not allegations of bias or dishonesty, or anything akin to fraud.

Attempting to assert that someone else’s lawyer owes them a duty of care, although unique and unlikely to succeed except in very unusual circumstances, is neither reprehensible nor outrageous conduct. In any event, given the outcome of the application and the appeal, the allegations were not permitted to be advanced. [ 17 ] Mr. Woo suggests that the attempt to third party him was aimed at getting him off of the file. I do not find it necessary to decide this, but note that there are other possible explanations. Similarly, I do not find it necessary to determine (nor can I on the evidence) whether Mr.

Woo has suffered a loss of income as a result of the Condominium Corporation’s attempt to third party him. [ 18 ] There is no doubt that Mr. Woo has been put to expense as a result of having to hire counsel to oppose the application for the extension, as well as to argue the appeal. However, that is what costs awards are for. In the absence of the type of misconduct that warrants an award of solicitor-client costs or enhanced costs, a litigant is left with receiving party-and-party costs which may not be sufficient to cover the actual costs incurred by a successful litigant.

Conclusion [ 19 ] Having found that the Condominium Corporation’s attempt to add Mr. Woo as a third party in this action was not of such a kind as would fall within the types or categories found to warrant an award of solicitor-client or enhanced costs, I dismiss Mr. Woo’s application for such costs. [ 20 ] Mr. Woo is awarded party-and-party costs in relation to the appeal, based on Column 1 of

Schedule C. [ 21 ] The Condominium Corporation is entitled to costs of this application, also based on Column 1 of

Schedule C. Such costs may be set off against any costs owed by the Condominium Corporation to Mr. Woo arising out of the application for the extension and the appeal of the Master’s decision therefrom. Heard on the 8 th day of May, 2017. Dated at the City of Edmonton, Alberta this 6 th day of July, 2017. D.L. Shelley J.C.Q.B.A.

Appearances: Mr. Hugh Willis TRDMS Services Inc for the Plaintiff Mr. William Dushenski Mr. Craig Madill Blakeley & Dushenski for the Defendants/Appellants Ms. Kelly W. Wong Kuckertz & Wong for the Third Party Exhibit A Authorities 1. Alberta Rules of Court, Alta Reg 124/201010.31(1), 10.31(3) 2. Canada Deposit Insurance Corp v Canadian Commercial Bank, (ABQB) 3. Jackson v Trimac Industries Ltd, 4. Buchanan v Lamoureux, 2011 ABQB 256 5. Davis v 850015 Alberta Ltd, 2003 ABPC 68 6. Stevenson & Côté, Alberta Civil Procedure Handbook 2015, pp 10-44 to 10-46 7.

Waste Management of Canada Corp v Thorhild (County) No 7, 2009 ABQB 157 8. Mobil Oil Canada Ltd v Canadian Superior Oil Ltd, (ABQB) 9. Conway v Zinkhofer, 2007 ABQB 2