UBG Builders Inc (Re), 2017 ABQB 791

Court of Queen’s Bench of Alberta Citation: UBG Builders Inc (Re), 2017 ABQB 791 Date: 20171219 Docket: 1201 05843, 1401 01630 Registry: Calgary 1201 05843 In the Matter of the Companies’ Creditors Arrangement Act , RSC 1985, c C-36 And in the Matter of UBG Builders Inc., Alberta Builders Capital Inc., Alpine Homes

(2006) Inc., American Builders Capital (US) Inc., Edgewater at Griesbach Inc., Elite Homes

(2006) Ltd., Evolution by Greenboro Inc., Greenboro Communities

(2006) Inc., Greenboro Estate Homes

(2006) Ltd., Greenboro Homes

(2006) Ltd., Greenboro Luxury Homes Inc., High Pointe Inc., Mountaineers Village

(2006) Inc., Mountaineers Village II Inc., Origins at Cranston Inc., South Terwillegar Village Inc., The Bridges Management Inc., The Ledges Inc., Timberline Lodges

(2006) Inc., Today’s Communities

(2006) Inc., Today’s Homes

(2006) Inc., Tuscany Developments

(2006) Inc., UBG Builders

(2006) Inc., UBG Alpine Homes

(2006) Ltd., UBG Bridges Inc., UBG Builders (USA) Inc., UBG Commercial Inc., UBG Land Inc., UBG Lot Deposit Corp., UBG 4500 Calgary Inc., UBG 75 Canmore Inc., UBG 808 Calgary Inc., Unity Investments

(2012) Inc., Valmont at Aspen Stone Inc., Valour Park at Currie Inc., Village at The Hamptons Inc., Village on the Park Inc., Wilderness Homes by Riverdale Inc., Wilderness Ridge at Stewart Creek Inc. Between: 1401 01630 John Land , Phyllis Land, Lisa Little , Claude Lamonaca, Cynthia Lamonaca, Catherine Jespersen, Trevor Titheridge, David Barry, Dianna Barry , Paul Fisher, Jane Fisher, Walter Buchan and Linda Buchan Plaintiffs - and - The Alberta New Home Warranty Program, Canadian Western Bank , McLeod Law LLP, Robert A.

Friesen a nd Valour Park at Currie Limited Partnership , by its general partner, Valour Park at Currie Inc. Defendants _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice K.D. Yamauchi _______________________________________________________ I. Introduction [ 1 ] This Court rendered a decision on June 23, 2017, in this matter that is reported as UBG Builders Inc (Re) , 2017 ABQB 401 [Reasons].

In the Reasons it found Valour Park at Currie Limited Partnership, by its general partner Valour Park at Currie Inc (collectively, "Valour Park") liable to the Plaintiffs for deposits the Plaintiffs made as part of their respective purchases of certain condominium units that Valour Park was intending to build. It dismissed the Plaintiffs’ claims against the other defendants, being The Alberta New Home Warranty Program, McLeod Law LLP, and Robert A. Friesen.

[2] At the end of the Reasons, this Court invited the parties to appear before it, should they be unable to agree on costs and theallocation of them. They took-up this Court’s invitation. II. Background [3] The factual background to this matter is set forth in the Reasons, so this Court will not repeat them in this decision. Insummary, this Court found Valour Park liable to the Plaintiffs based on negligent and fraudulent misrepresentations. As mentionedearlier, this Court dismissed the claims against the other defendants.

Rather than providing the bases on which it dismissed those claims,it will do so as part of its costs discussion. III. Discussion A. General Principles [4] The parties acknowledge that this Court has considerable discretion when it makes a costs award. See rules 10.29(1)(a),10.31(a), 10.33(1) of the Alberta Rules of Court, Alta Reg 124/2010 [Rules].

The parties also agree that a successful party is entitled toseek its costs from an unsuccessful party: Rules r 10.29(1); Little Sisters Book and Art Emporium v Canada (Commissioner of Customsand Revenue), 2007 SCC 2 at para 34, [2007] 1 SCR 38. [5] What is at issue is whether this Court will exercise its discretion and issue what is known as a Sanderson order or a Bullockorder. In Bullock v London General Omnibus Co, [1907] 1 KB 264, [1904-07] All ER Rep 44, 95 LT 905, 23 TLR 62, 76 LJKB 127(Eng CA) [cited to KB], the plaintiff claimed damages for injuries resulting from a collision between two vehicles.

In the plaintiff’saction, he named the respective vehicle owners as defendants, alleging joint negligence. The trial judge entered judgment for the plaintiffagainst one defendant, with costs, and judgment for the other defendant with costs to be paid by the plaintiff. He also ordered that thecosts payable by the plaintiff to the successful defendant be included in the costs that the plaintiff will recover against the unsuccessfuldefendant. In other words, the plaintiff must pay the costs of the successful defendant, but the unsuccessful defendant must reimburse theplaintiff for those costs.

The Court of Appeal upheld the trial judge’s disposition of the costs in this manner. [6] Sanderson v Blyth Theater Co, [1903] 2 KB 533, 72 LJKB 761 (Eng CA) [cited to KB] involved an action for damages forbreach of contract, in which the plaintiff claimed relief in the alternative against two defendants. The plaintiff’s action succeeded againstone defendant, but failed against the other. In accordance with the "modern practice," the court ordered the unsuccessful defendant to paythe successful defendant’s costs directly. [7] Courts in Alberta have made Bullock orders and Sanderson orders.

The test to determine whether a court should grant suchan order was articulated by Perras J in Allen (Next friend of) v University Hospitals Board, 2000 ABQB 965 at para 6, 276 AR 345,where he said the following: The test is this: 1. was it reasonable for [the Plaintiff] to join the successful defendants given the circumstances; 2. is there any good reason to deprive the successful defendants of costs; and 3. were the unsuccessful defendants vis a vis the successful defendants wholly responsible for the action. [8] See also Palechuk v Fahrlander, 2008 ABCA 10 at para 5, citing McLeod v Great Western Distributors Ltd, (AB KB), [1941] 3 WWR 827 at 829. [9] The first part of the test has been referred to as a "threshold question." See e.g.

Moore v Hayik (2008), 2008 ONCA 162, 90 OR (3d) 463 at para 41 (CA). In Bullock, Collins MR explained this threshold question as follows: [Permitting joinder of defendants] to a particular case does not arise upon proof of a joint or other wrong, but upon the state of mind of aplaintiff who does not know exactly whether an injury of which he complains arose from the joint act of two parties or the sole act of oneor other of them.

Bullock at 271. [10] In Besterman v British Motor Cab Company Ltd [1914] 3 KB 181 at 186-87, Vaughan Williams LJ articulated the thresholdquestion as follows: Under these circumstances, was it a reasonable thing for the plaintiff in this action against a man who ultimately turns out to be in factthe wrong-doer to join the other defendant in order that the matter might be thoroughly threshed out?

If, in the circumstances, it was areasonable thing to do, then he was entitled to add as part of the costs in bringing this reasonable action in which he reasonably joinedthis other person the costs of that other person who is found not to be at fault. [11] The second part of the test could be extracted from Sanderson where Romer LJ said the following: Of course, in exercising the jurisdiction [to make this type of order for costs], a judge should have regard to the circumstances of thecase, and be satisfied that it is just that the unsuccessful defendant should, either directly or indirectly, have to pay the costs of thesuccessful defendant.

In the present case I do not think that I myself should have given to the defendant hope, having regard to hisdefences and conduct, any costs whatever, either as against the plaintiff or co-defendant.

Sanderson at 539. [ 12 ] Perras J described this part of the test as the discretion that courts exercise in determining whether to grant a Bullock order or a Sanderson order.

He said, "[i]t is my view that this stage of the test, as articulated in Alberta courts, ought to be viewed as providing a guide for the 'judicial' exercise of discretion rather than dictating it": Allen at para 13 . [ 13 ] In Gladue v Alberta (Attorney General) , 2011 ABQB 535 at para 39 , Veit J framed the 3-part test as follows: In Alberta, the courts have articulated a three stage test for determining whether a costs recovery order - either a Bullock or a Sanderson order - is appropriate: was it reasonable for the plaintiff to add the successful defendant to the litigation, was it reasonable for the plaintiff to keep the successful defendant in the litigation, and is it fair and just to require the unsuccessful defendant to pay the costs of the successful defendant. … Alberta's test makes it somewhat clearer that a litigant has an obligation to not only begin, but to maintain, reasonable conduct of litigation, and leaves the discretion of the judge who must determine costs untrammelled other than the usual obligation to exercise the discretion in a judicial way. [Emphasis added]. [ 14 ] It is this Court’s view that the second 2 parts of the 3-part test to which Veit J referred are best considered under the second part, as Perras J articulated in Allen .

Why? This is the part of the test in which the court exercises its discretion in making or not making a Sanderson order or a Bullock order. It is the "equitable balancing" aspect of the test. [ 15 ] In Strategic Acquisition Corp v Multus Investment Corporation , 2017 ABQB 297 at para 84 , Mahoney J said the following: In the absence of special circumstances, I decline to make a Sanderson or Bullock costs order. [Strategic Acquisition Corp] as the party that initiated proceedings, must bear the primary risk of meeting Starke's costs against whom it was eventually unsuccessful.

The fact that the conduct of the defendants was related is in itself insufficient; such circumstances exist in most cases where more than one defendant is properly joined by a plaintiff ... B. Application of the General Principles [ 16 ] The Plaintiffs, in the first instance, did not know who might be liable to them for their deposits. Mr. Friesen and McLeod Law do not vigorously argue that the Plaintiffs were being unreasonable in commencing the action against them, as liability had to be "thoroughly threshed out." Accordingly, this Court finds that the Plaintiffs have met the first test as against Mr.

Friesen and McLeod Law. [ 17 ] The question then becomes whether the Plaintiffs have met the second part of the test, as more thoroughly articulated by Veit J in Gladue . Even though this Court has found that the successful Defendants were properly parties to the proceeding, in the first instance, was it reasonable for the Plaintiffs to keep each successful Defendant in the litigation? [ 18 ] Mr. Friesen filed a statement of defence to the Plaintiffs’ action and filed an affidavit on January 15, 2015, in which he denied that he knowingly assisted Valour Park in the misrepresentations it made to the Plaintiffs.

When the Plaintiffs questioned him on his affidavit, he denied any knowledge of any such misrepresentations, or knowingly assisted Valour Park in that regard. Despite this, the Plaintiffs in their trial brief continued to allege that Mr. Friesen knowingly assisted Valour Park in its misrepresentations, and sought to have this Court “lift the corporate veil” to find Mr.

Friesen personally liable. [ 19 ] In the Reasons, this Court found that Valour Park had made negligent or fraudulent misrepresentations that resulted in the Plaintiffs signing the purchase agreements and providing Valour Park the deposits they ultimately lost. Furthermore, this Court held that Valour Park had used those deposits in a manner that breached the Plaintiffs’ purchase agreements with it and the trust provisions contained in those purchase agreements. This Court declined to "lift the corporate veil" to make Mr.

Friesen personally liable for the acts of Valour Park and, accordingly, it dismissed the Plaintiffs’ claim against Mr. Friesen. [ 20 ] From the evidence that the parties presented to this Court, it is clear that once the Plaintiffs had completed their questioning of Mr. Friesen, their claim against him was tenuous, at best. Although this Court went through a long explanation of why it refused to hold Mr. Friesen liable for Valour Park’s misrepresentations, the factual underpinning for that explanation was rather simple; Mr.

Friesen had no knowledge of the misrepresentations that Valour Park was making and had put into place a proper system in an attempt to ensure that potential purchasers were protected insofar as their deposits were concerned. See Reasons at paras 80, 85-88. [ 21 ] As a result, from the time that the Plaintiffs had completed their questioning of Mr.

Friesen, it would be unreasonable to have kept him in the litigation. [ 22 ] Although the Plaintiffs argue that it was Alberta New Home Warranty that added McLeod Law to the within action, the Plaintiffs, through a joint application with Alberta New Home Warranty, sought to add McLeod Law. Horner J granted that order on January 16, 2014, which included not only McLeod Law, but 2 of its lawyers. Various third party claims were made by the various defendants against each other.

This Court found that McLeod Law was not liable to either the Plaintiffs or Valour Park. [ 23 ] This Court said the following: Valour Park’s liability to the Plaintiffs is its own doing. McLeod Law had absolutely nothing to do with that liability. There was no “duty to advise” on the part of McLeod Law. Valour Park knowingly chose to breach the trust imposed on it through the Purchase Agreements and the CPA . Its claim against McLeod Law is dismissed. …

There can be no doubt that the Plaintiffs sustained damage through the Lost Deposits. Did McLeod Law "cause" that damage? Becausethis Court has found that McLeod Law did not owe the Plaintiffs a duty of care, that finding should sufficiently answer that question.Moreover, it was through the fault of Valour Park, and Valour Park alone, which "caused" the damage to the Plaintiffs. Reasons at paras 112 and 139. [24] Similar to Mr.

Friesen’s situation, McLeod Law argues that once the Plaintiffs had received McLeod Law’s affidavits, andcross-examined the affiants on those affidavits, they were in a position to assess the strength of their case against McLeod Law and, moreimportantly, Valour Park. [25] A somewhat troubling aspect of the Plaintiffs action against McLeod Law concerned their suggestion to this Court that itshould create a new basis on which to find McLeod Law liable to them.

This Court discusses this issue at Reasons paras 114-140.Specifically, this Court noted: The Plaintiffs correctly concede that if this Court were to find that McLeod Law owed the Plaintiffs a "third party beneficiary duty," thisCourt would be making "new law" where none before existed. This is not the type of case where such "new law" should be created.

Reasons at para 130. [26] McLeod Law should not be held responsible for the costs of this "failed experiment." [27] Should this Court consider Valour Park’s impecuniosity when it makes a determination as to which party will bear the costs?It is a factor that this Court must take into account when it makes its costs award. In 1483677 Ontario Ltd v Crain, 2010 ONSC 1353 atpara 24, Himel J said, "[i]n deciding whether to grant a Bullock or Sanderson order, the risk of not recovering is a determining factor."[Emphasis added].

In Widdis (Litigation Guardian of) v Hall (1995), (ON SC), 22 OR (3d) 187 at 189 (Ct Jus (GenDiv)), Misener J said the following: The prima facie rule is that the successful Defendant is therefore entitled to look to the Plaintiff for its costs. A Sanderson Orderrelieving the Plaintiff from that obligation and imposing it directly on the unsuccessful Defendant should not be made if there is a realrisk that the successful Defendant will not receive those costs from the unsuccessful Defendant because of the latter's impecuniosity.That real risk certainly exists in this case.

Accordingly, the prima facie rule must prevail … [Emphasis added]. See also Craven v Chmura, 2015 ONSC 4843 at para 9. [28] Erb J took a similar approach in Archer v St John, 2008 ABQB 245 at para 26, where she said the following: There is no evidence before me that the Defendant, Laureen St. John, is impecunious. Nevertheless, a balancing of equities leads me toconclude that any risk of non-recovery of costs from Ms. St.

John should be borne by the Plaintiff, Devon Archer, rather than MountainView Credit Union and the Estate of Gerald Archer. [Emphasis added]. [29] In Archer, Erb J referred to the "risk of non-recovery," which requires the plaintiff to undertake a risk assessment whencommencing and conducting litigation. In Rowe v Investors Syndicate Ltd (1984), 46 CPC 209 at 271 (Ont H Ct Jus) , Henry J explainedthis risk assessment as follows: The equitable issue is whether the plaintiffs or [the successful defendant] should bear the risk of non-recovery.

A "Bullock" order willprejudice the plaintiffs, a "Sanderson" order the successful defendant. As between the two equity lies with the [successful] defendant.The plaintiffs took the risk of bringing [the successful defendant] to Court and did not succeed. See also SGH v Gorsline, 2001 ABQB 671 at para 21. [30] Because Valour Park is impecunious, a Sanderson order places the risk of non-recovery on the successful defendants. ThePlaintiffs, in the case at bar, took the risk that they might not be able to recover costs from Valour Park because of Valour Park’simpecuniosity.

Although this Court does not see this as "the determining factor," it is one factor that this Court must consider in weighingthe balance. See also Rowe at 214. [31] Despite his referring to the third part of the test as part of the “test,” Perras J did not feel he was constrained by it.

He said thefollowing: … [I]t appears that failure to meet the requirement does not preclude a Bullock or Sanderson order, although it would probably affect theterms of the order. … Given that the third element of the test is used to assess the form of the order rather than to determine if an order should be granted in thefirst instance, I believe that it is an unnecessary requirement. Instead, it ought to be viewed as a factor to consider when apportioningliability. Allen at paras 15-16. [32] This Court agrees with Perras J’s views on the third part of the test.

This Court, however, is of the view that the third part ofthe test should be expanded such that if the unsuccessful Defendant and the Plaintiffs were responsible for the action and maintaining theaction against the successful Defendants, neither a Sanderson order nor a Bullock order is appropriate. See e.g. Garrioch v SonexConstruction Ltd, 2017 ABCA 262 at para 11. As well, if the Plaintiffs themselves were responsible for the action and maintaining the

action against the successful Defendants, those orders would not be appropriate. [33] This Court has chosen to deal with Alberta New Home Warranty separately, as it argues that the Plaintiffs should never havenamed them as a Defendant. If there was, in fact, deposit insurance or if Alberta New Home Warranty had improperly exercised itsdiscretion to deny Valour Park’s application to obtain insurance for the Phase II project, then the Plaintiffs might have had a claimagainst it. Thus, this Court finds that the Plaintiffs have met the threshold test.

It was reasonable for the Plaintiffs to join Alberta NewHome Warranty as a Defendant given the circumstances. [34] The question then become whether it was reasonable for the Plaintiffs to keep Alberta New Home Warranty in the litigation.Like McLeod Law and Mr. Friesen, Alberta New Home Warranty argues that following the various cross-examinations on affidavits, itshould have been clear to the Plaintiffs that Alberta New Home Warranty should not have continued to be involved in the litigation.

Italso argues that including it as a Defendant in this particular action was unnecessary to determine which of the other Defendants wasliable or where the actions of one would exclude the liability of another: H(SG) v Gorsline, 2001 ABQB 671 at para 21. This Court’sfinding of liability as against Valour Park did not require the inclusion of Alberta New Home Warranty as a Defendant. [35] As a result of the foregoing, this Court will not exercise its discretion and grant a Sanderson order or a Bullock order.

In sodoing, it echoes the words of Broad J in Craven in which he said the following: Although there is cause to have much sympathy for the plaintiffs in their situation, the exercise of my discretion must not be carried outon the basis of sympathy, but rather on the basis of legal principle as laid down by the authorities, which are binding on me. Craven at para 33. C. Quantum [36] This matter involved 8 claims, as some of the Plaintiffs were married to each other. Their claims ranged from $58,000 to$75,000.

Rather than commencing 8 separate actions, the Plaintiffs chose to commence a single action in which they claimed$553,505.02 plus costs and interest. The question becomes whether costs should be calculated under Column 2 or Column 4 of ScheduleC of the Rules. [37] The Plaintiffs argue that each of their claims was substantially similar to the others, and that there was only one affidavit ofsubstance on which the Defendants had to question the Plaintiffs. The others simply clarified particulars of their respective situations.Accordingly, they argue, only one Plaintiff had to be questioned.

Instead, all were questioned. Practically, because this matter proceededby way of a

summary trial, this Court finds that the Defendants needed to obtain all relevant and material evidence from all of thePlaintiffs. [38] The Defendants argue that each of the Plaintiffs had a different story on how the court might view their respective claims. Aswell, none of the other Plaintiffs would have been bound by any answers that any other Plaintiff might have provided. Besides, separateactions for each smaller amount would have resulted in aggregate costs under column 2 that far exceed total costs under column 4. [39] As for Alberta New Home Warranty, the initial claim against it involved Ms.

Little and the Lamonacas. After disclosure andcross-examinations on affidavits, the Plaintiffs amended their statement of claim to include all Plaintiffs, which increased the amountclaimed. [40] Rules

Schedule C, rr 1(3) and (4) provide as follows: 1(3) Subject to subrule (4), the dollar range indicates the amount recoverable (

a) as against the plaintiff, with reference to the amount claimed by the plaintiff, (

b) as against the defendant, with reference to the amount of the judgment or order against the defendant, or (

c) in the case of an interlocutory application, as against the person liable to pay the costs with reference to the amount claimed by theplaintiff.

(4) Unless the Court otherwise orders, (

a) when a remedy is given in a judgment or order other than or in addition to the payment of money, or (

b) when judgment is given for a defendant in an action in which a remedy other than or in addition to the payment of money is sought, costs must be assessed according to the higher of Column 1 of the tariff in Division 2 and the scale that would have applied if the otherremedy had not been given or sought. [Emphasis added]. [41] In Vincent v Perfect Investments Ltd (1991), (AB KB), 126 AR 101 at para 11 (QB), Montgomery J saidthe following: The principle is that the successful parties are awarded costs in the ordinary case on a party and party basis against the party which loses.Rule 605(5) establishes on what column such award should be made.

It is quite clear from the Statement of Claim that general damagesin the sum of $150,000.00 were sought. This is set out in the prayer, and in subparagraph (

c) of the prayer such further special damagesas may be proven. Thus the claim was for something over $150,000.00, because there was some evidence of special damages, albeitimprecise, but sufficient to put the amount over $150,000.00 which is an important factor in order to make an award on Column 6.

… Let me add on this point that if counsel for Plaintiff insists on putting in an unrealistic figure for general damages, he should not expect to have any reduction on the party and party column scale. The Sum claimed here of $150,000.00 in relation to the evidence I heard about injuries is completely unrealistic and cannot in any way be condoned particularly when one considers the evidence of Dr. Braun called by the Plaintiff, and which evidence I would prefer … [ 42 ] In other words, the amount claimed determines the column under which courts calculate costs. [ 43 ] In R(

W) v Alberta (Attorney General) , 2006 ABCA 358 , 412 AR 167, 68 Alta LR (4th) 62, the court was dealing with an action that the plaintiff brought against government for more than $6,000,000 in damages, plus interest, plus solicitor and client costs. The plaintiff submitted that costs of appeal should be on column 1 of

Schedule C, arguing that the topic of the appeal was merely an interlocutory procedure. The court found the issue to be substantive. The court said the following: A defendant cannot ignore the large amounts claimed by the plaintiff, and treat a suit as a small matter, especially when the plaintiff has counsel, still more when the suit alleges deliberate dishonesty and intent to injure, and very grave permanent resulting physical and mental injury. We cannot even presume that the appellant plaintiff has thought all along that his suit is not worth much money; indeed his counsel does not suggest that even now.

In those circumstances, we see no principled reason to depart from column 5 as specified in the Rules of Court and set by the chambers judge. R(

W) at paras 4-5. [ 44 ] The Plaintiffs in the case at bar chose to frame and run their action by consolidating their claims which, although substantially similar, had nuanced differences that this Court had to assess. Separate actions would, no doubt, result in a larger costs award, in the aggregate. The Defendants should not be penalized for the Plaintiffs’ choice. [ 45 ] Accordingly, costs in this matter will fall under Rules

Schedule C, column 4. [ 46 ] All the Defendants ask this Court to consider awarding them enhanced costs, for different reasons. In the case of McLeod Law, it seeks enhanced costs from December 5, 2016, based on a Calderbank offer. The Alberta Court of Appeal said that such offers are a relevant consideration when considering costs in a proceeding: Horizon Resource Management Limited v Blaze Energy Ltd , 2013 ABCA 139 at paras 93-94 .

In Holizki v Alberta (Public Trustee) , 2009 ABQB 260 at paras 45-47 , Martin J, as she then was, summarized the criteria that a court must consider when dealing with whether a party has made a Calderbank offer, when she said the following: • whether it was reasonable for the offeree to accept the offer at the time it was made; • whether it represented a genuine compromise; • whether it was unreasonably rejected; • whether the offer was clear, precise, and certain in its terms; and • whether the offer was identified as a Calderbank Offer with a clear statement that it would be submitted to the court for costs consideration. [ 47 ] McLeod Law’s offer was provided to the Plaintiffs after all substantive steps had been taken leading up to the trial, including disclosure and cross-examinations on affidavits.

McLeod Law’s offer meets all the criteria that Martin J outlined. [ 48 ] The Plaintiffs argue that the

summary trial would have proceeded with the involvement of McLeod Law even had the Plaintiffs accepted the Calderbank offer, as both Valour Park and Mr. Friesen advanced claims against McLeod Law. This may be so, but what this Court is dealing with is how the Plaintiffs dealt with the offer.

As well, neither the Plaintiffs nor this Court know what other discussions were occurring among the Defendants at that time. [ 49 ] In any event, because McLeod Law provided the Calderbank offer at a late stage in the proceedings, the Plaintiffs would have known McLeod Law’s exposure, and the strength of the claims of Valour Park, Mr. Friesen and Alberta New Home Warranty, as well as its own claim, as against McLeod Law. As mentioned earlier, with all the evidence, those claims would not have appeared to be strong by that point. [ 50 ] As a result McLeod Law is entitled to receive its Rules

Schedule C, Column 4 costs that follow the Calderbank offer using a multiplier of 2. [ 51 ] On May 25, 2015, Alberta New Home Warranty made formal offer to settle pursuant to Rules r 4.24. In Clancy v Gough , 2011 ABQB 778 , 523 AR 163, 59 Alta LR (5 th ) 108, Bensler J outlined the factors that courts must examine to determine whether the formal offer was “genuine,” which are as follows: (

a) Whether the offer remained open for acceptance; (

b) Whether the offer was reasonable and realistic in all the circumstances at the time of service; (

c) Whether the offer included an element of compromise; (

d) Whether the offer realistically reflected the relative merit of the parties' positions at the time of service;

(

e) The amount or nature of the settlement offer relative to the relief claimed or judgment at trial; and (

f) The timing of the offer in relation to the commencement of the trial. [52] Rules r 4.29 deal with the effect of a formal offer that is not accepted. It provides as follows: 4.29

(2) Subject to subrule (4), if a defendant makes a formal offer to settle that is not accepted and a judgment or order in the action ismade that is equal to or more favourable to the defendant than the offer, the defendant is entitled to costs for all steps taken in the actionin relation to the action or claim after service of the offer.

(3) A defendant is entitled to double the costs provided for in subrule (2), excluding disbursements, if (

a) subrule (2) applies, and (

b) the action or claim that is the subject of the formal offer to settle is dismissed.

(4) This rule does not apply (

a) if costs are awarded under rule 10.31(1)(b), (

b) in the case of a formal offer to settle made with respect to an application for judgment after a

summary trial, if the offer is made lessthan 10 days before the date scheduled to hear the application for judgment, (

c) in the case of a formal offer to settle made with respect to any other matter, if the offer is made less than 10 days before the datescheduled for the trial to start, (

d) in the case of a formal offer to settle that is withdrawn in accordance with rule 4.24(4), or (

e) if in special circumstances the Court orders that this rule is not to apply. [53] This rule applies to the case at bar, and none of the issues raised in Rules r 4.29(4) apply. [54] Alberta New Home Warranty also asks this Court to award enhanced costs on the basis that this Court found that it did notfraudulently or negligently mislead Mr. Lamonaca or Ms. Little. The foundation for the Plaintiffs allegation is contained in para 54(

e) ofthe Amended Statement of Claim that was filed in this matter, which alleges the following: In some cases, [Alberta New Home Warranty] deliberately deceived or failed to respond to direct inquiries by purchasers as to coveragewithin a reasonable time. [55] This Court made its finding with respect to this issue on a different basis from which the parties were arguing it.

It looked,practically, at what had happened during the course of this matter, and found that there was no detrimental reliance on the part of any ofthe Plaintiffs, given that none of them contacted Alberta New Home Warranty before they paid their deposits. The “deception” in thiscase, was grounded on the alleged failure of Alberta New Home Warranty to respond to Mr. Lamonaca and allegedly provided wronginformation to Ms. Little.

This Court did not feel it necessary fully to consider this issue. [56] Contextually, the allegation of fraud for which Alberta New Home Warranty complains is not of the egregious nature that itcomplains. Accordingly, this Court will not award increased costs on that basis. [57] It does, however award Rules Sched C, column 4 costs using a multiplier of 2 for all steps that it took in the action afterservice of the formal offer to settle. [58] Mr.

Friesen seeks to have this Court award him enhanced costs for the improper allegations that the Plaintiffs have madeagainst him "which damaged or had the prospect of damaging" his reputation. When one carefully reviews the materials that thePlaintiffs presented to this Court, and the arguments they made, it is Valour Park that committed the fraudulent activity of which theycomplain, and Mr. Friesen, they argue, knowingly assisted Valour Park in this activity. This Court discusses the term “fraud” in itsdiscussion as to whether it would pierce the corporate veil. See e.g. Reasons at para 69.

It did not say that he was a fraudster, or even thatthe Plaintiffs were claiming he was a fraudster. [59] Thus, this Court will not award Mr. Friesen enhanced costs. [60] The Plaintiffs argue that none of the defendants required the services of second counsel to deal with this matter. This Courtfinds that argument to be disingenuous inasmuch as the Plaintiffs, apparently, required the services of two counsel throughout theirdealings with this Court.

This Court agrees with the comments of Veit J in Kassam v Dragish (1991), (AB KB), 123AR 161 at paras 13-14, where she said the following: … It may be that the conduct of the other parties in the matter of additional counsel is an indication of how complex those partiesconsidered the trial issues; this comparison will not, however, be relevant in all situations. In my view, the case does not have to beexceptionally complex or weighty before a second counsel fee is awarded.

It appears to me that the Court should err if at all on the side of generosity in allowing second counsel fees, since party-and-party costsprovide their own form of check and balance in this matter. Party-and-party costs will result in reimbursement for only a fraction of thecost of having a second counsel at trial; therefore, most parties will probably consider carefully whether they wish to bear that expense. [61] The Plaintiffs also argue that not all counsel present made oral argument before this Court.

This Court also agrees withMahoney J’s comments in Davidson v Patten, 2005 ABQB 521 at para 19, where he said the following:

It is not necessary for second counsel to be present in person at every court appearance to earn costs under this item. The costs are earned as long as second counsel assisted in the preparation leading to the presentation of the matter and his or her retention was justified by the nature of the case. It was obvious to me that both parties each had two counsel who worked closely with each other in presenting their respective cases. [ 62 ] As a result, this Court will allow each of the Defendants their costs for second counsel. IV.

Summary and Conclusion [ 63 ] In conclusion, this Court awards costs in favour of each of the Defendants under Rules

Schedule C, Column 4 as follows: McLeod Law: from the commencement of the action to December 4, 2016, in accordance with Rules

Schedule C, Column 4, and from December 5, 2016, those same costs, applying a multiplier of 2 Alberta New Home Warranty: from the commencement of the action to May 24, 2015, in accordance with Rules

Schedule C, Column 4, and from May 25, 2015, those same costs, applying a multiplier of 2 Mr. Friesen: costs under Rules

Schedule C, Column 4 [ 64 ] All the Defendants may have their costs for second counsel. [ 65 ] Liability for the costs will be joint and several as against the Plaintiffs. [ 66 ] The Defendants shall have their party and party costs in relation to the costs application. Heard on the 16 th of November, 2017. Dated at the City of Calgary, Alberta this 19 th day of December, 2017. K.D. Yamauchi J.C.Q.B.A. Appearances: Arif Chowdhury Fasken Martineau DuMoulin LLP for the Plaintiffs Tyler Derksen Warren Benson Amantea LLP for the Defendant Alberta New Home Warranty Christine Viney Bennett Jones LLP For the Defendant McLeod Law LLP Kate Millar MLT Aikins LLP

For the Defendant Robert A. Friesen