1808882 Alberta Ltd v. Giota Investments Ltd., 2018 ABQB 1000

Court of Queen’s Bench of Alberta Citation: 1808882 Alberta Ltd v Moderno Ventures Ltd , 2018 ABQB 1000 Date: 20181210 Docket: 1701 12398 Registry: Calgary Between: 1808882 Alberta Ltd and Giota Investments Ltd. Plaintiff - and - Moderno Ventures Ltd Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.T. Eamon _______________________________________________________ [ 1 ] This is my ruling on costs arising out of my decision to allow in part the appeal of the Plaintiff 1808882 Alberta Ltd (“180” or “Appellant”) from Master Prowse, QC’s refusal to grant it

summary judgment ( 1808882 Alberta Ltd v Moderno Ventures Ltd , 2018 ABQB 885 ). [ 2 ] This was a debt action between the Plaintiff 180 and the Defendant. The Plaintiff 180 applied in Masters’ Chambers for

summary judgment on the debt. The Defendant’s sole defence was that it had paid the debt to the Plaintiff. The Defendant cross-applied for

summary dismissal on the sole ground the debt had been paid.

[ 3 ] Both applications failed. Master Prowse QC observed that each sides’ case was “wholly inadequate”, neither side had given a “wholesome, fulsome” explanation of the issue, and the Court had been put in a position to speculate rather than rely on a full record (Transcript, May 2, 2018, pp 28-29). Master Prowse QC held there was mixed success and directed each side bear its own costs. [ 4 ] The Appellant appealed. The Defendant did not. [ 5 ] The Appellant provided new evidence and arguments on appeal, and established that the Defendant had not paid the debt.

However, the materials and arguments disclosed a potential second, unpleaded, defence that the debt had been assigned to a third party. I decided it was fair to allow the Defendant a short opportunity to attempt to amend its statement of defence, failing which

summary judgment would issue. [ 6 ] Because the result was a “near miss”, I barred the Defendant from further hindering the action with its assertion that it paid the debt, and limited any further proceedings to the assignment issue in the event the Defendant amended its defence. (The Defendant later amended its defence to plead assignment, and the Plaintiff 180 joined the alleged assignee as a plaintiff). [ 7 ] The Appellant seeks costs of the appeal and the action. The Defendant says the Appellant should be denied costs of the appeal, or receive reduced costs, because it ought to have placed all the evidence before Master Prowse, QC and was not successful in obtaining

summary judgment.

Further, it should not receive costs of the action because the counterclaim remains to be tried. [ 8 ] Rule 10.29 states that “a successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party, and the unsuccessful party must pay the costs forthwith, notwithstanding the final determination of the application, proceeding or action”, subject to the Court’s discretion under Rule 10.31 after considering the matters in Rule 10.33 and certain other matters which are not material in the present case. [ 9 ] A party who is substantially successful on an application or appeal should normally be awarded costs, absent other considerations.

It is not necessary that the party succeed entirely on every issue and argument ( Wilde v Archean Energy Ltd , 2008 ABCA 132 at para 9 ; Mahe v Boulianne , 2010 ABCA 74 at para 6 ; Zuk v Alberta Dental Association and College , 2018 ABCA 398 at para 4 ; 574095 Alberta Ltd v Brendanco Investments Inc , 2002 ABQB 487 at para 13 ; Sagacity Professional Corporation v Buchanan Barry LLP , 2011 ABQB 58 at paras 16-18 ; Adams v Adams , 2011 ABQB 812 at para 5 ; Donselaar v Donselaar , 2013 ABQB 276 at para 4 ; Clarke v Syncrude Canada Ltd , 2014 ABQB 430 at paras 7 , 8, 11). [ 10 ] In making an award, the Court may consider any matter related to the question of reasonable and proper costs that the Court considers appropriate (Rule 10.33(1)).

In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all the relevant circumstances including: the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; a party’s denial of or refusal to admit anything that should have been admitted; and, whether any application, proceeding or step in an action was unnecessary, improper or a mistake (Rule 10.33(2)). [ 11 ] The Appellant was substantially successful on the appeal.

The main issue on appeal, and the only pleaded defence, concerned whether the Defendant paid the debt. The Defendant failed on that issue. Although the Appellant did not receive a judgment immediately, it succeeded in substantially narrowing any remaining issues in the action. [ 12 ] I also take into account the Appellant’s conduct of the

summary judgment proceedings. Appeals from Masters’ decisions are de novo and a party is permitted to add evidence and arguments on appeal. That does not mean there are no costs consequences for failing to efficiently conduct the proceedings. As I said in my appeal reasons, [71] .... Where decisive additional evidence or a new argument is adduced on appeal, any prejudice can be addressed by penalizing the successful appellant in costs for wasting the application before the Master where appropriate.

Of course, other considerations might also factor into that decision such as litigation misconduct by the other side, time pressures in the proceeding below such as those often seen in assembling evidence or responding in the context of a morning chambers list, or the like. [ 13 ] I agree with Master Prowse QC that the Plaintiff 180’s evidence on the application in Master’s Chambers was wholly inadequate.

Also, the Plaintiff 180 wanted to cross-examine on the Defendant’s affidavit, but was unable to arrange it and made a strategic decision to proceed in Master’s Chambers without it (Transcript, May 2, 2018, pp 30-31). On appeal, the Appellant conducted the cross-examination which it earlier decided to forego and added substantial new evidence to the appeal record including that testimony. [ 14 ] The Appellant’s approach to

summary judgment was akin to litigation by instalment, starting from an obviously weak position before the learned Master and curing the gaps on appeal. That conduct unreasonably and unnecessarily delayed the litigation and increased cost and effort. Although the Appellant has already borne adverse costs consequences for its failure in the initial application, its costs award on the appeal should be reduced to address the prejudice of delay and wasted effort associated with its approach and encourage parties to reasonably prepare

summary judgment applications by placing the necessary record before the Master. [ 15 ] I must also consider the Defendant’s conduct. Civil procedure is intended to be used to identify the real issues in dispute and facilitate the quickest means of resolving a claim at the least expense (Rule 1.2). The Defendant’s position on the appeal was markedly contrary to that approach. It raised numerous issues devoid of merit, mostly in a superficial way without evidence suggesting an air of reality. I repeat para 120 of my Reasons: [120] One primary purpose of

summary judgment is to screen out unmeritorious attempts to delay or hinder litigation. I have considered the Defendant’s defences individually and collectively. On examination, the defences are supposition of what one might hope the Defendant’s director, real estate lawyers, or previous litigation counsel might possibly testify to, mixed with bare denials, unsupported self-serving evidence and speculation which are unsupported by records and fly in the face of the uncontradicted documentary record, simple arithmetic and common sense. [ 16 ] The Defendant bears the greater responsibility for defeating the objectives under

Part 1 of the Rules than does the Appellant.

Having regard to the Appellant’s eventual success and the other considerations discussed above, I will deprive the Appellant of 1/3 of its costs (apart from reasonable disbursements) of the appeal. [ 17 ] On the issue of quantum, the Plaintiff 180 seeks double costs from the date it made an offer to settle both the claim and counterclaim. That offer was made May 7, 2018 and was open for acceptance until May 11, 2018. Informal offers to settle may be considered in determining a costs award ( Mahe at para 10 ).

The Plaintiff did not obtain a result better than it offered, because the counterclaim was unaffected by the appeal. I will not award enhanced costs of the appeal by reason of this offer. [ 18 ] I assess the appeal costs at 2/3 of the amounts in

Schedule C, column 4, items 5(2) (cross-examination - $1,250) and 8(1) (written brief on the appeal - $1,750). These costs are fixed at $2000 before GST. I allow the entire disbursements for conduct money, court reporter’s fee and transcript fee for the cross-examination, in the amount of $1060.11 before GST. I allow an estimated amount for photocopies (at $0.15 per page) for three sets of a single affidavit and written brief for

summary judgment in the amount of $90 before GST. The Plaintiff 180 also claimed process server costs. If any were incurred for serving the notice to attend cross-examination, they are also awarded. The Plaintiff has included the necessary certificate to recover 5% GST on all amounts awarded. [ 19 ] The Plaintiff also claims costs of the action, being item 1 (pleadings related documents) and item 3 (records disclosure and review) of

Schedule “C”. [ 20 ] I would have allowed the Plaintiff the costs of records disclosure and records review in the action to the date of the appeal decision if the existence of the debt was the only pleaded issue in the action, on the basis that the Plaintiff succeeded in eliminating that issue. I do not agree with the Defendant that an award of costs of the action to that date could also turn on the outcome of the assignment issue, apart from item 1 of

Schedule “C” (pleadings). The other steps in the action until that date should be taken as solely referable to the pleaded issues and the Plaintiff has therefore wasted effort in disclosing and reviewing records (Schedule “C”, item 3 and any associated disbursements). [ 21 ] However, there is a small counter-claim and I have no basis to allocate the records disclosure and review costs between the action and counter-claim.

The Plaintiff’s claim for costs of the action must await the outcome of the action so that the judge or assessing officer can decide how much should be allocated to the debt issue as opposed to the counterclaim. I am not seized with that matter. [ 22 ] No costs are awarded for the submissions leading to these supplemental directions, because success was divided. [ 23 ] The body of the formal Order will be as follows: 1. The time for delivery of the Defendant’s written submissions on costs dated November 9, 2018 is extended to November 15, 2018. 2. The Appellant is awarded 2/3 of its costs of the appeal on

Schedule C, column 4, together with all its reasonable disbursements, in the following amounts: (a) $2000 costs, plus $100 GST, totalling $2100; (b) $1150.11 disbursements and other charges, plus $57.51 GST, totalling $1,207.62; (

c) the amount of the disbursements, if any, incurred to serve the Defendant’s witness with a notice to attend for the cross-examination held September 19, 2018. If the parties are unable to agree on the amount, they may apply for directions by letter not exceeding one page, plus any supporting affidavit or record. 3. The Plaintiff’s claim for costs of the action up to November 10, 2018 under items 1 and 3 of

Schedule “C” including enhanced costs by reason of an offer to settle are deferred and may be assessed in accordance with the practice of the Court at the appropriate time. 4. The fixed amounts awarded in sub-paras 2(

a) and (

b) herein are payable forthwith. The amount, if any, due under para 2(

c) herein is payable forthwith upon being quantified. 5. No costs of these supplemental directions are awarded. [ 24 ] The Plaintiff 180 will prepare the formal Order and provide it for review to the Defendant’s counsel before submission. The parties are reminded of the procedures and timelines in Rule 9.2. Heard by written submissions, November 9, 2018, November 16, 2018 and November 23, 2018 . Dated at the City of Calgary, Alberta this 10 th day of December, 2018. J.T. Eamon J.C.Q.B.A.

Appearances: Gabrielle Maunier for the Plaintiff 1808882 Alberta Ltd Felipe Parades-Canevari for the Defendant