McAllister v Calgary (City), 2018 ABQB 999

Court of Queen’s Bench of Alberta Citation: McAllister v Calgary (City), 2018 ABQB 999 Date: 20181210 Docket: 0701 07017 Registry: Calgary Between: Kyle Lyndon McAllister Plaintiff - and - The City of Calgary Defendant _______________________________________________________ Endorsement of the Honourable Madam Justice J.C. Kubik _______________________________________________________ Introduction [ 1 ] This is my decision with respect to costs, arising from my trial decision in McAllister v Calgary (City) , 2018 ABQB 480 . The trial was with respect to liability only. At this date damages have neither been settled nor determined at trial.

Issues [ 2 ] There are three general issues for my determination: 1. Whether the plaintiff’s costs application is premature, owing to the fact that his damages have yet to be determined; 2. If not premature, whether costs should be awarded based on a partial indemnity of solicitor client fees incurred, or based on

Schedule C of the Alberta Rules of Court , Alta Reg 124/2010; and 3. The reasonableness of expert fees incurred by the plaintiff, with respect to his retention of Dr. Randall Atlas.

Prematurity [ 3 ] The defendant argues that until the plaintiff’s damages are settled or assessed, it is premature to determine his entitlement to costs. [ 4 ] The plaintiff argues that he was successful on the issue of liability, following a week-long trial, and should be entitled to an award of costs with respect to that step. [ 5 ] Rule 10.29(1) of the Alberta Rules of Court provides that: 10.29(1) 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... [ 6 ] Further, 10.30(1)(

c) the Alberta Rules of Court provides that: 10.30(1) Unless the Court otherwise orders or these rules otherwise provide, a costs award may be made: (

c) in respect of trials and all other matters in an action, after judgment or a final order has been entered. [ 7 ] These Rules give the Court wide discretion in terms of the timing of orders for costs. In relation to bifurcated trials there is no hard and fast rule with respect to the timing of costs awards. Courts have both awarded costs following the liability trial, and deferred costs until after the determination of damages. [ 8 ] In this case, judgment has been entered with respect to liability.

The parties engaged in a trial which lasted over one week, and a date to determine damages has not yet been scheduled. There is no good policy reason to defer the award of costs until damages are determined. While the defendant argues that it is impossible to determine which column of

Schedule C to apply, given we are dealing with the issue of liability only, quantification of damages should not be a determinative factor in addressing reasonable costs. Rather, the Court can exercise discretion to determine those reasonable costs either by reference to

Schedule C, having regard to the pleadings and the factors set out in Rule 10.33, or by considering partial indemnity costs. [ 9 ] Accordingly, I am satisfied that it is not premature to award costs with respect to the liability trial. Quantification of costs [ 10 ] The plaintiff argues that he should receive costs calculated at 45% of his solicitor client legal bill.

While his solicitor client costs have not been assessed pursuant to the Rules, the plaintiff incurred $389,711.78 in legal fees for all matters relating to liability issues, from the opening of his file through to the submission of written legal arguments after trial.

He seeks costs of $175,370.03, plus disbursements. [ 11 ] The Plaintiff relies on the recent decision of Remington v Crystal Creek Homes Inc , 2018 ABQB 644 , as well as historic decisions, including: Hill v Hill , 2013 ABCA 313 ; and Trizec Equities Limited v Ellis-Don Management Services Ltd, 1999 ABQB 801 , which he argues stand for the proposition that a proper costs award should approximate between 40%-50% of the solicitor client fee account. [ 12 ] The defendant argues that partial indemnity costs have traditionally been reserved for circumstances where damages claimed are substantially in excess of Column 5, the litigation is significantly complex, or there has been misconduct by the party who faces liability for costs; they further assert that none of these factors apply and therefore

Schedule C should be used to determine the quantification of costs. The defendant submits that based on the damages claimed by the plaintiff in his pleadings a proper costs award should be calculated in accordance with Column 3 of

Schedule C, with an additional 25% gross up of that amount to account for inflation. [ 13 ] I agree with the defendant’s argument that

Schedule C should be used to calculate the costs award. [ 14 ]

Schedule C costs serve many useful purposes in litigation. First, they reward a successful party by compensating them for the significant steps taken in the litigation. Second, they allow the parties to effectively measure the risk of costs associated with the litigation. This assists in achieving a third purpose – encouraging parties to abide by the foundational rules which promote resolution of the issues between the parties in a practical and efficient manner. [ 15 ] Relying on a rule of thumb practice that a proper costs award should approximate between 40%-50% of the incurred solicitor

client fees does not, in my view, achieve these purposes. First, it compensates not for the significant steps in the court process, but for all legal expenses incurred without a safeguard for reasonableness. Second, it does not allow the parties to effectively analyze the risk of costs in litigation as it is impossible to know hourly rates charged or the amount of time spent on various steps until the conclusion of the litigation. Finally, an award of partial indemnity costs measured on the basis of solicitor client fees charged, could undermine the spirit of the foundational rules.

These comments are in no way a criticism of the solicitor client fee account before me. I am wholly satisfied that counsel acted reasonably in their pursuit of the claim. I am simply making the point that when measuring appropriate costs, a principled approach which considers the purpose of costs, in terms of Court process, should be applied. The use of

Schedule C imports certainty in cases where the parties have conducted themselves reasonably and advanced meritorious claims and defences. [ 16 ] Madam Justice D.L. Shelley’s decision in Weatherford Canada Partnership v Addie, 2018 ABQB 571 , provides a comprehensive review of the case law with respect to when partial indemnity of solicitor client fees, a multiplier approach to

Schedule C, or hybrid awards are appropriate. Overwhelmingly, the Courts use the percentage of indemnity method where there is misconduct, significant complexity, or damages claimed in excess of Column 5. Multipliers and hybrid costs are reflected in cases where there is no misconduct and the litigation is not overly complex or protracted. [ 17 ] In this case there was no misconduct. The matter, although novel, was not overly complex. The plaintiff’s case consisted of two lay witnesses and an expert; the defendant’s case consisted of one lay witness and an expert.

The vast majority of trial time was taken up with expert testimony relating to the issue of standard of care. The parties had filed both an Agreed Statement of Facts and an Agreed Exhibit Book, steps which significantly reduced the amount of necessary trial time. I am therefore satisfied that

Schedule C is the appropriate measure of costs in this case. [ 18 ] Where damages are unascertained and the issues of liability and quantification of damages have been bifurcated, assessing costs based on the claimed amount is the most fair and reasonable resolution of costs. This reflects the parties’ knowledge regarding the risk of costs in proceeding to trial. In this case the plaintiff claimed damages in the amount of $154,602.73, plus future damages in an amount to be determined at trial. Therefore, Column 3 applies. [ 19 ] In considering whether there should be a gross-up or multiplier applied to Column 3 costs, I have considered both the fact that the costs

schedule is grossly out of date in terms of value and the conduct of the parties in relation to the litigation. There being no misconduct, it is my view that Column 3 costs should be grossed-up to reflect a true monetary value. In that regard, evidence was before me at the costs hearing indicating a rate of inflation of 46.60%. Accordingly, a 46.60% gross-up is applied to approximate reasonable costs in 2018 for the steps taken to bring this matter to trial. [ 20 ] The plaintiff is awarded costs in the sum of $70,294.70, reflecting base costs of $47,950.00 grossed up by 46.60%.

Expert Disbursement [ 21 ] The plaintiff’s expert, Dr. Randall Atlas, is one of the leading American experts in Crime Prevention Through Environmental Design (CPTED) as relates to the design of public transit systems. Dr. Atlas was retained in August 2014, following completion of Questioning.

Tasks billed in relation to his invoicing, include: a site inspection in Calgary; compendious document review; consultation with counsel in relation to obtaining transit and crime statistics, bylaws, and policies in other jurisdictions; and his attendance throughout trial, including time spent in advising counsel on cross-examination issues relating to the competing expert and trial evidence. [ 22 ] Dr. Atlas’ expert fees totaled $117,941.53 Canadian dollars.

The test for recovery of expert fees is whether it was reasonable to retain the expert in light of the circumstances that existed at the time: Seidel v Kerr , 2004 ABCA 157 . The plaintiff argues it was necessary to retain an expert to establish the standard of care owed by the defendant and that all of the items charged were reasonably associated with the issues raised at trial. Further, he argues that the fact Dr.

Atlas was expensive is a reflection of his level of expertise, and should not be an overriding factor in the review of reasonableness. [ 23 ] The defendant argues that several factors should be considered in assessing the reasonableness of Dr. Atlas’ fee accounts. Those include: that Dr.

Atlas was an expert outside of the jurisdiction, that he charged a significant hourly rate, that he charged significantly more than the defendant’s own expert ($17,731.50), that his document review was excessive in light of the fact that his trial opinion rested on assumptions given to him by counsel, and that not all of the opinion testimony he gave was accepted by the Court in its final findings. [ 24 ] It should be noted that Dr. Atlas was qualified as an expert in CPTED, whereas the defence expert, Dr. Sundberg, was not.

As a result, comparing their respective accounts for services rendered is not a reasonable manner by which to assess the reasonableness of the fee charged. In addition, while all of the opinions provided by Dr. Atlas were not accepted by the Court, his testimony with respect to the standard of care was necessary for the plaintiff to meet the burden of proof, and was relied upon by the Court to find the defendant liable. The reality is that parties to litigation rely on experts to shape their case for trial.

This includes investigatory matters and attendance at trial to assist with the formulation of cross-examination questions and strategy. At the time of his retainer, I am satisfied that it was reasonable for the plaintiff to engage Dr. Atlas and his services were reasonable with respect to the issues before the Court. [ 25 ] Accordingly, I allow the disbursement with respect to Dr. Atlas’ full fee account, save for the Banff Springs Hotel charge of $852.00.

That figure will be amended to $286.00 to reflect the equivalent two-night stay at the Hilton Garden Inn in Calgary. [ 26 ] The remaining disbursements were not in dispute between the parties. Conclusion [ 27 ] As a result, in relation to the liability trial only, the plaintiff is awarded party and party costs in the sum of $70,294.70, plus Dr. Atlas’ full fee account (adjusted for the hotel expenses), plus the additional disbursements agreed to by the parties.

Heard on the 30 th day of October, 2018. Dated at the City of Lethbridge, Alberta this 10 th day of December, 2018. J.C. Kubik J.C.Q.B.A. Appearances: Trevor R. McDonald and Robert Martz Burnet, Duckworth & Palmer LLP for the Plaintiff Colleen Sinclair City of Calgary Law and Legislative Services for the Defendant