Boll v Woodlands County, 2021 ABQB 1002

Court of Queen’s Bench of Alberta Citation: Boll v Woodlands County, 2021 ABQB 1002 Date: 20211214 Docket: 1603 22391 Registry: Edmonton Between: Jonas Boll and Pipistrel Aircraft Canada Inc. Applicants - and - Woodlands County, Woodlands County Municipal Planning Commission and Woodlands County Subdivision and Development Appeal Board Respondents _______________________________________________________ Ruling on Costs of the Honourable Mr. Justice S.N. Mandziuk _______________________________________________________ Background [ 1 ] On May 21, 2021, I granted the Woodlands County Subdivision and Development Appeal Board’s [SDAB’s] and the

Woodlands County Municipal Planning Commission’s [MPC’s] application for

Summary Dismissal of Jonas Boll’s [Boll’s] and Pipistrel Aircraft Canada Inc.’s [Pipistrel’s] judicial review application: Boll v Woodlands County , 2021 ABQB 406 [Summary Dismissal Decision] . [ 2 ] In the

Summary Dismissal Decision, I granted the SDAB and MPC enhanced costs of the action and directed that if the parties could not agree on costs they could argue the point before me. [ 3 ] The parties were unable to agree on costs. [ 4 ] For the reasons that follow, I direct Boll and Pipistrel to pay costs to the SDAB and MPC representing 65% of what will be assessed as appropriate solicitor-client costs, plus reasonable disbursements and GST as applicable. The

Summary Dismissal Decision [ 5 ] At the conclusion of their successful

Summary Dismissal application, the MPC and SDAB argued that solicitor-client costs were justified. It was clear that they were not appropriate parties to the action: they must presume the validity of the by-law under which they were operating at the time of their decisions.

Therefore, it is untenable to bring them in as parties in an attack on the constitutionality of the bylaw. [ 6 ] Further, I noted that “ [t]he MPC and SDAB have incurred significant costs preparing the record and dealing with a judicial review application against them, the pointlessness of which has been consistently communicated to Boll and Pipistrel” (Summary Dismissal Decision at para 106). I stated: The naming of these bodies is futile for the same reasons that the action fails under Rule 7.3 against the MPC and the SDAB.

It was brought out of time in respect of the MPC Decision and it also goes against the legal principles dealing with available alternative remedy; alternatively, it will fail on the merits as these are not the entities who made the decision or took the action that is the subject of the judicial review . . . [Summary Dismissal Decision at para 104] [ 7 ] While I found that enhanced costs were justified because “[t] he Applicants’ conduct falls short of what is expected of a responsible litigant in the circumstances of the present case” (Summary Dismissal Decision at para 110), I did not conclude that Boll and Pipistrel’s conduct attracted solicitor-client costs, citing Michalyshyn J in Decore v Decore , 2016 ABQB 572 at paras 13-16 .

Positions of the Parties [ 8 ] The SDAB seeks costs equal to 4 times Column 3 in the Rules of Court Tariff (Division 2 of

Schedule

C) plus $5,000 for the cost of this application, which it states would represent approximately 75% of its actual legal costs. They argue that this level of enhanced costs is fair given that the futility of the Applicants’ position was repeatedly pointed out to them. [ 9 ] The MPC asks for $53,750 in costs. They suggest that it “it is not possible to review all accounts paid by the Municipality and try to “parse” out what work related to the successful applications (i.e. the

Summary Dismissal Decision), and what work related to the balance of the litigation. The MPC points out that this was an interlocutory decision, not a final one, and the litigation will continue with the focus being the constitutionality of the Municipality’s Land Use Bylaw.

The amount sought by the MPC represents 75% of the SDAB’s actual costs, according to the Bill of Costs put forward by the SDAB. [ 10 ] In short, the two successful parties seek 75% of their costs as an appropriate measure of enhanced costs. [ 11 ] Boll and Pipistrel argue that costs decisions, including those involving enhanced costs, must be decided on a case by case basis.

They highlight the test for enhanced costs in Ontario, which appears to require “a clear finding of reprehensible conduct on the part of the party against which the costs award is being made”: Smith v Inco , 2012 ONSC 5094 at para 41 , citing Davies v Clarington (Municipality) , 2009 ONCA 722 . [ 12 ] Here, according to Boll and Pipistrel, the costs award should not be “inordinate”.

They submit there has not been “reprehensible conduct that would offend the Court’s or the participating parties sensibilities” (Boll and Pipistrel Brief at para 14), and that an inordinate costs award would negatively affect Boll and Pipistrel’s access to justice, hindering their ability to advance this action. Boll and Pipistrel state that Column 2 costs should be awarded to each of the successful parties on the interlocutory application.

The Law Rules of Court [ 13 ] Rule 10.29 of the Rules of Court states that successful parties are entitled to costs against unsuccessful parties, “ notwithstanding the final determination of the application, proceeding or action”. [ 14 ] This general rule is subject to Rule 10.31, which gives the Court broad discretion to make a costs award that it considers appropriate after considering the factors found in Rule 10.33. The relevant elements of Rule 10.33 are as follows: 10.33

(1) In making a costs award, the Court may consider all or any of the following:

(

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct; (

h) any offer of settlement made, regardless of whether or not the offer of settlement complies with

Part 4, Division 5. [ 15 ] Finally, Rule 10.31 reads: 10.31(1) After considering the matters described in rule 10.33 , the Court may order one party to pay to another party, as a costs award, one or a combination of the following: (

a) the reasonable and proper costs that a party incurred to file an application, to take proceedings or to carry on an action, or that a party incurred to participate in an application, proceeding or action, or (

b) any amount that the Court considers to be appropriate in the circumstances, including, without limitation, (

i) an indemnity to a party for that party’s lawyer’s charges, or (ii) a lump sum instead of or in addition to assessed costs.

(2) Reasonable and proper costs under subrule (1)(a) (

a) include the reasonable and proper costs that a party incurred to bring an action; (

b) unless the Court otherwise orders, include costs incurred by a party (

i) in an assessment of costs before the Court, or . . . [ 16 ] The general discretion found in Rule 10.31 can be read in conjunction with Rule 1.2(4), which provides a framework for the Court’s application of the Rules:

(4) The intention of these rules is that the Court, when exercising a discretion to grant a remedy or impose a sanction, will grant or impose a remedy or sanction proportional to the reason for granting or imposing it. Purpose of Costs [ 17 ] I can do no better than Renke J in describing the objective of costs awards in our legal system: . . . costs serve two direct purposes and one higher order purpose (which in turn serves further purposes promoting the rule of law). First, costs provide some compensation to a successful litigant.

The litigant is not required to shoulder alone all of the expense of legal vindication. In that way, costs serve the higher order objective of enhancing access to justice by providing deferred reimbursement to a successful litigant. This higher-order objective also imposes constraints on costs, which I’ll return to below. Second, costs promote rational and litigation norm-consistent decision making. On the one hand, costs discourage frivolous claims and discourage improper litigation behaviour.

On the other hand, by adding a measure of predictable risk to litigation, costs can contribute to incentives for settlement. These objectives promote access to justice by freeing the litigation system from cases that need not or should not be litigated. ( GO Community Centre v Clark Builders and Stantec Consulting Ltd , 2020 ABQB 203 at para 59 ).

[ 18 ] I also endorse Fagnan J’s observation that “. . . costs decisions provide an opportunity for the Court to further the administration of justice’s goal of efficient resolution of claims through an emphasis on reasonableness and proportionality of steps taken toward resolution of disputes” ( Lemay v Canadian Natural Resources Limited , 2020 ABQB 250 at para 43 ). [ 19 ] Renke J in GO Community Centre also emphasized the following principles (at paras 60 to 68): (a) “[a] costs system should be “just” in the sense of allocating costs on a “deserts” basis. The successful litigant is entitled to costs.

The unsuccessful litigant is obligated to pay costs”; (b) “[a]nother feature of justice that a costs system should meet is parity. Like cases should be treated alike and unlike cases differently”; (c) “[a] costs system should meet formal principles of justice such as clarity, certainty, and simplicity, so litigants can appreciate costs consequences of litigation and predict at least a reasonable range of costs outcomes for litigation. Put another way, a costs system should not be arbitrary”. (d) “[t]he access to justice objective imposes constraints of its own.

Costs should not be so small that they have no deterrent or incentive effect or provide no real support to a successful litigant, but costs should not be so large that their threat deters legitimate litigation.

Costs should not be a tool to oppress less wealthy litigants”; (e) “the costs system should meet the institutional imperatives of efficiency and proportionality”; and (f) “[t]he Alberta approach to satisfying the objectives and principles for costs is to avoid the extremes of too low and too high costs” citing Goldstick Estates (Re), 2019 ABCA 508 at para 31 , where the Court of Appeal noted that “[c]osts awards should always be proportional to the interests involved.” What are Enhanced Costs? [ 20 ] The three primary types of costs awards are solicitor and own client (full indemnity); solicitor-client (substantial indemnity); and party-party costs (partial indemnity). [ 21 ] Party-party costs are the usual c osts awarded pursuant to

Schedule C of the Rules of Court.

Schedule C allows courts to quickly and efficiently award costs, however,

Schedule C does not automatically apply to judges unless they choose to utilize it in making a costs award. The presumption that Column 1 of

Schedule C applies where a non-monetary remedy is sought is rebutted where the Court orders enhanced costs ( Freyberg v Fletcher Challenge Oil and Gas Inc , 2006 ABCA 260 at para 14 ). [ 22 ] The weight of Alberta authority is that party-party costs should partially indemnify the successful party for 40-50% of their actual costs in cases where no wrongdoing is alleged ( McAllister v Calgary (City) , 2021 ABCA 25 at para 41 ; Weatherford Canada Partnership v Artemis Kautschuk und Kunstoff-Technik GmbH , 2019 ABCA 92 at para 11 ; Hill v Hill , 2013 ABCA 313 at para 11 ).

This range serves as a guideline “upon which the level of indemnification implied by the phrase “ reasonable and proper costs” may be measured under the Rules.” ( McAllister at para 51 ). [ 23 ] I hasten to clarify that the Court of Appeal in McAlister went on to say, after commenting on the indemnity percentage: we refrain from defining with any precision the level of indemnification required in any given case. All we say is that the level of indemnification must be both meaningful and reasonable.

The court’s discretion to move up or down from that level having regard to the factors set forth in Rule 10.33 or in Rule 10.2(1) remains intact. Also, the level of indemnification may be higher or lower than the 40- 50% depending on how the litigation was conducted and other factors not necessarily having anything to do with the conduct of the litigation (at para 51). [ 24 ] There are circumstances where

Schedule C may be inadequate to meet the purposes of costs. In those cases, e nhanced costs representing more than the Tariff in the Rules of Court but less than full indemnification may be awarded: GNWT v 831594 et al , 2017 NWTSC 78 at para 12 , per Charbonneau J. Costs may be enhanced by using a multiplier, awarding extra lump sums, giving some percentage of solicitor and own client costs, or some other reasonable calculation together with reasonable disbursements ( R&R Consilium Inc v Talbot , 2019 ABQB 275 at para 41 ). [ 25 ] For example, courts have long adjusted costs to compensate for inflation by applying a multiplier to the outdated amounts found in

Schedule C. While the Tariff was updated in 2020 to bring the amounts closer to present-day billing realities, it still falls short of the 40-50% indemnity target ( McAllister , fn 2). [ 26 ] Enhanced costs can also be awarded where the conduct of one of the parties falls short of what is expected from a responsible litigant, but does not represent the sort of egregious behaviour that attracts full indemnity costs ( Kent v Law Society of Alberta , 2015 ABQB 432 at para 18 ). [ 27 ] One can only conclude that there is discretion in the determination of enhanced costs as in all costs decisions.

The guiding principle of any costs award, regardless of the method used to reach the end result, is that it must be reasonable and proper given the circumstances of the case ( McAllister at para 56 ). Decision [ 28 ] The parties concede that I awarded enhanced costs to the MPC and the SDAB in the

Summary Dismissal Decision. The focus of this decision is quantum. The R 10.33 factors that I find most relevant to determining the quantum of enhanced costs awarded are:

i. The result of the action and the degree of success of each party [ 29 ] SDAB and MPC were wholly successful in their

summary dismissal application. The claim against them was found to have no merit as they were not proper parties to the action brought by Boll and Pipistrel (Summary Dismissal Decision at para 96). ii.

The conduct of a party that unnecessarily lengthened the action [ 30 ] This is a situation where Boll and Pipistrel – as against the MPC and SDAB - “persisted with the litigation despite good reasons not to do so:” Shier Estate (Re) , 2018 ABQB 828 , Jeffrey J at para 37 and “the position taken in litigation [has been] shown to be unreasonable”: Geophysical Service Incorporated v Falkland Oil and Gas Ltd , 2019 ABQB 314 at para 11 (per Woolley, J). iii. Whether any step in an action was unnecessary, improper or a mistake [ 31 ] I made it clear in the

Summary Dismissal Decision that the SDAB and MPC should not have been named ab initio . I used words like “futile” (at para 104), “pointlessness” (at para 107) and “clearly unnecessary” (at para 106). The matters before the Court were complex and the SDAB’s and MPC’s involvement has prolonged the action, as have the procedural irregularities, and unnecessary proceedings have resulted. [ 32 ] I do not find that an award of enhanced costs requires litigation conduct that rises to the level of reprehensibility.

Given that one of the purposes of costs is to discourage frivolous and improper litigation, a consideration of the 10.33 factors in this case supports an award of enhanced costs. [ 33 ] I find that MPC and the SDAB are entitled to 65% of their solicitor-client costs, inclusive of this application, as well as reasonable disbursements and applicable GST. I find that this level of indemnity is reasonable and proper in the circumstances. [ 34 ] Bills of Costs on this basis, if not agreed to, may be submitted to the Assessment Officer with this Ruling. Heard on the 19 th day of October, 2021.

Dated at the City of Edmonton, Alberta this 14 th day of December, 2021. S.N. Mandziuk J.C.Q.B.A. Appearances: Peter J. Major, Q.C. for Jonas Boll and Pipistrel Aircraft Canada Inc. Kelsey L. Becker-Brookes for Woodlands County Subdivision and Development Appeal Board Jeneane S. Grundberg for Woodlands County Municipal Planning Commission and Woodlands County