Green v Fiess, 2018 ABQB 1044

Court of Queen’s Bench of Alberta Citation: Green v Fiess, 2018 ABQB 1044 Date: 20181213 Docket: 1301 03437 Registry: Calgary Between: William George Green, Richard Andersen, Jean Arens, Neelum Austin, Deborah Bandola, Marian Banilevic, Ron Beggs, Irene Besse, the Estate of Thomas Besse, Betty Bevan, Tracy Blair, Diane Boprey, Percy Boyko, George Brunt, Dorothy Buck, Robert Buck, Catherine Bursey, Terry Campbell, Brian Cavanagh, Bozena Cerny, Marc Charest, Fred Clarke, Robert Coak, Gloria Collins, Graham Collins, Kathleen Coombes, Donald Coombes, Bill Cormylo, Ivan Cosic, Nina Cosic, Eileen Davidson, Robert Davidson, Gerald Dekker, Glenn Dennis, Felicity Dennis, Hendrikus Derix, John Dermastja, Connie Dickman, Sorin Dinescu, Rodica Dinescu, Lawrence Dudar, David Duma, Agatha Dyck, Peter Dyck, Michael Eastep, Margaret Edgar-Thompson, Bill Elliott, the Estate of Christine Elliott, Paul Fairbridge, Ross Farnham, Lois Farnish, Robert Allan Farnish, Donovan Fetter, Erin Fetter, Les Fetter, Theresa Fetter, Tracey Fetter, the Estate of Anton Fettig, Doreen Fettig, Diane Finnemore, William Finnemore, Tammie Fischer, Francine Fleming, Diane Florence, George Florence, Jacqueline Fode, a dependant adult, by her guardian Elaine Fode, Marion Foster, Brian Freehill, Elio Frison, John Froese, Judith Froese, Hans Fung, Ruth Fung, Marion Galbraith, Robert Galbraith, Severiano Garcia, Cheryl Garden, Lori Geneau, Mary Gordon, Gail Goreski, Robert Goreski, Brent Grantham, Stacey Grantham, Keith Gravel, Concetta Greco, Randy Gretzan, Sarah Hafer, Gail Hamilton, Karen Hart, Tom Henderson, Maudie Hill, Murl Hill, Lilya Hilton, Deanna Huisman, Garry Hunt, Robert Huntley, Valerie Huntley, Nizarali Jiwani, Les Kaplan, Brian Kelm, Traudi Kelm, Margaret Kern, Ross Kern, Doris Klingbeil, Gary Kulak, Delores Lamarsh, Robert Lamarsh, Bernadette Lanneville, Dale Legault, Heather Legault, Martha Leventhal, Feng Liang, Michael Livingstone, Aileen Lublinkhof, Arnold Magnus, Andrew Mah, Jerry Mah, Peggy Mah, Timothy Mah, Glenda Malina, Carl Marr, Arthur Mathes, Brenda McArthur, Wanda McCaig, James McLachlin, Gail McLeod, Ray McManus, Susan McManus, Dean Minchin, Debbie Bolton, Kristina Minks, Shawn Mole, Steve Mole, Christine Molohan, Murray Molohan, Meryl Joan Needham, Patricia Nelson, Betty O'Bray, Ralph O'Bray, Brenda Ohlhauser, Mark Ohlhauser, Ann O'Reilly, Irene Ostapowich, Irena Palka, Nick Paulich, Evelyn Pearce, Glen Pearce, Glen Perschbacher, Greg Peters, Denis Piquette, Deborah Pratt, Albert Randall, Jaqueline Randall, William Rasmussen, Mason Rees, John Richardson, David Robertson, Cheryl Robinson, Patricia Robinson, Robin Roome, Carl Rosenau, Vern Rosnoski, Guenther Ruben, Noreen Ruben, Ronaldo Salonga, Julie Ann Schmidt, Ken Schmidt, Gerhard Schmold, Gloria Schwartz, Bob Schwartz, Eric Semple, Gerald Shackleton, Neelam Sharma, Sidney Shoib, Jordan Sim, Sherry Sim, Diane Skolny, Kenneth Skolny, Raymond Smith, Almas Somani, Taslim Somani, George Sparacino, Karey Spenst, Patricia Spring, Leonard Stark, Lawrence Steele, Kathleen Stevens, William Stokes, Giselle Stonehouse, Donald Strand, Karl Sudyk, Natalie Swan, Michael Sykes, Linda Sylvester, Frederick Thompson, Rosyln Thompson, Myra Tomich, Paula Tomich, Robert Tomich, Jay Tracey, Tammy Tracey, Donald Upton, Brenda Urness, Patricia Volk, Doug Webster, Gordon Weicker, Lynda Weicker, Raymond Williams, Carol Williams, Lila Wollman, Stephen Wollman, Stacy Deagle, Beverly Wood, Elaine Wood, Bhanu Yerramilli, Winnie Yue, Denize Yurko, 399315 Alberta Ltd, 635622 Alberta Ltd, CMV Inc, Dekker Construction Ltd, Orange Grove Holdings Inc, P.G.

Wilson Professional Corporation, Robert Lang Professional Corporation, Robert Lang MD Ltd, Sommer Breeze Inc, and WRW Enterprises Ltd Plaintiffs - and - Phil Fiess, Scott Venturo LLP and Gord Cormie Defendants

_______________________________________________________ Reasons for Decision of J.T. Prowse , Master in Chambers _______________________________________________________ [ 1 ] By reasons dated August 3, 2018 and reported at 2018 ABQB 580 , 2018 CarswellAlta 1536, I summarily dismissed the plaintiffs’ claims against Scott Venture LLP and Gord Cormie (together “SV”). [ 2 ] This application concerns what costs should be awarded to SV as a result of that dismissal. [ 3 ] The plaintiffs agree that, unless they are successful in having my ruling overturned on appeal, SV is entitled to party and party costs of the dismissal application, and of the action, based on column 5 of

schedule C of the Alberta Rules of Court. [ 4 ] There are two areas of disagreement on costs, which I will now discuss: (

i) whether SV should be awarded an inflation factor on the

schedule C costs, and (ii) whether the plaintiffs are entitled to set off, against SV’s costs, the costs of four interlocutory applications heard earlier in the action. Costs were not dealt with on those four interlocutory applications pending the outcome of the

summary dismissal hearing. Should SV be awarded an inflation factor on the

schedule C costs? [ 5 ] Let me first state the obvious: costs are discretionary and I have the discretion to award an inflation factor on

schedule C costs. [ 6 ] However, discretionary decisions should be made on a principled basis. [ 7 ] And so the question becomes, if there are no other factors pointing to a result different that a standard award of

schedule C costs , should an inflation factor be added? [ 8 ]

Schedule C costs are often awarded in chambers applications. This would happen at least dozens and perhaps hundreds of times a month in Alberta. [ 9 ] In my experience, an inflation factor is rarely sought in chambers applications. Inflation factors are more frequently sought following trials. [ 10 ] Perhaps the reason an inflation factor is not typically sought in chambers applications is that the amount of additional costs which would result due to an inflation factor would be small compared to the cost of proving the rate of inflation, and the time spent arguing the point. [ 11 ] However, sometimes the amount of costs in chambers applications is large. In this

summary dismissal chambers application, SV seeks over $50,000 in

schedule C costs. [ 12 ] An inflation factor is typically awarded in foreclosure matters in Southern Alberta. This involves solicitor and client costs rather than party and party costs. This inflation factor resulted from a discussion between the Masters in Southern Alberta and the foreclosure subsection of the Canadian Bar Association.

The resulting guideline lists standard costs to be awarded for various steps taken in a typical residential foreclosure, and contains the following provision: The fees awarded pursuant to this guideline will be subjected to an annual adjustment, calculated on December 31st every year for use during the following year, commencing with an adjustment calculated on December 31, 2015 for use during 2016, by taking the total fees and adjusting the total by the amount of inflation or deflation occurring since December 31, 2014, calculated using the Consumer Price Index [ 13 ] In the case of the costs sought by the SV defendants, there are no other factors pointing to a result different that a standard award of

schedule C costs. I decline to award an inflation factor because there is presently no guidance by way of prior case law concerning chambers applications to indicate that, in this circumstance, an inflation factor should be awarded. [ 14 ] If case law develops indicating that an inflation factor should be awarded with respect to

schedule C costs resulting from chambers applications, I respectfully suggest that the consumer price index be referenced, lest a cottage industry be established for economists submitting affidavits regarding inflation. Setting up a system requiring evidence, and argument, every time an inflation factor

is sought in my view is not consistent with the goal set out in Rule 1.2 to have litigation conducted in a timely and cost-effective way. Are the plaintiffs entitled to set off, against SV’s costs, the costs of four interlocutory applications heard earlier in the action? [ 15 ] For the reason which follows it is my conclusion that neither the plaintiffs nor SV should be entitled to costs of the four interlocutory applications discussed below.

In other words, due to mixed success, each side should bear their own costs of those four applications. [ 16 ] The four interlocutory applications were held on January 8, 2018; February 12, 2018; April 9, 2018, and July 13, 2018. Hearing of January 8, 2018 [ 17 ] By way of background, on December 6, 2017, the plaintiffs filed an application returnable on January 8, 2018 seeking a supplemental affidavit of records from SV. [ 18 ] As noted in my earlier reasons at 2018 ABQB 580 , the plaintiffs were essentially second mortgage financers.

As lot after lot of the development in question was sold, the plaintiffs’ mortgage was discharged from the lot being sold to facilitate the sale. [ 19 ] The plaintiffs wanted production of these lot sale files to explore whether SV had been properly authorized to file the discharges, and whether SV had properly accounted for the distribution of proceeds from the lot sales. [ 20 ] SV had produced 5 or 6 sample lot sales files so this issue could be explored. The plaintiffs wanted all lot sales files produced.

The plaintiffs also took the position that SV had not done an adequate job describing documents over which privilege was being claimed. [ 21 ] On January 2, 2018, SV applied for

summary dismissal, and made that dismissal application returnable on January 8, 2018 to be heard concurrently with the plaintiffs’ application. [ 22 ] At the hearing of January 8 th the parties argued the production issue from different perspectives. [ 23 ] SV’s position was that only documents relevant to its upcoming

summary dismissal application need be produced at that time. The plaintiffs were asserting that they were entitled to document production in the ordinary course. [ 24 ] The leading case on this topic, P. Burns Resources Ltd. v Patrick Burns Memorial Trust (Trustee of) , 2015 ABCA 390 , 2015 CarswellAlta 2282 was cited, but no decision was made as to whether document production was to be made at large or simply as to matters directly relevant to the upcoming

summary dismissal application. [ 25 ] In the end, the Court adjourned the application until February 12, 2018 so that the plaintiffs could give more details as to why the production of the 5 or 6 sample files was not sufficient.

Hearing of February 12, 2018 [ 26 ] With respect to the ‘sample lot sale vs full lot sale production issue’, the plaintiffs were directed by February 16, 2018 “to specifically identify the records sought to be produced and other relief sought, and serve same on SV”. [ 27 ] With respect to the privilege issue, an order was issued setting up a process for handling the potential claims of privilege.

This was necessary because SV’s client needed to be involved in the process as SV’s client was entitled to make sure its privilege was not being waived without either its concurrence or the ability to argue the issue. [ 28 ] The hearing of February 12 th thus resembled a case management order (typically not attracting costs) and/ or mixed success. Hearing of April 9, 2018 [ 29 ] By this time the parties had reached a compromise whereby SV would produce the documents from 50 lot sale files.

The order of April 9, 2018 provided that this additional production was to be reflected in a supplementary affidavit of records. In addition, the order set forth the timing of steps which were to occur leading up to the hearing of SV’s

summary judgment application. Again, this was largely a case management exercise. Hearing of July 13, 2018 [ 30 ] The plaintiffs achieved some success when SV withdrew certain objections to questions in the face of this application. SV achieved some success in that its other objections were upheld during this application. There was mixed success. Conclusion regarding the four interlocutory applications [ 31 ] The results of these applications were mixed. As well, some of the hearings resembled case management applications. I direct each party to bear its own costs of these four applications.

Overall conclusion [ 32 ] I decline to award SV an inflation factor on its

schedule C costs. I also decline to award costs to the plaintiffs of the four interlocutory applications to set-off against SV’s costs. Each party will bear its own costs of the application resulting in these reasons. Heard on the 26 th day of November, 2018. Dated at the City of Calgary, Alberta this 13 th day of December, 2018. J.T. Prowse, Q.C. M.C.C.Q.B.A. Appearances: Norman Anderson James McCall Panunto for the plaintiffs Dale E Johns, Q.C. Brent L. Robinson Carscallen LLP for the defendants Scott Venturo LLP and Gord Cormie