Zerbin v Vrbanek, 2021 ABQB 171

Court of Queen’s Bench of Alberta Citation: Zerbin v Vrbanek, 2021 ABQB 171 Date: 20210303 Docket: 1503 03621, 1503 18250 Registry: Edmonton Between: 1503 03621 David Zerbin and Barbara Zerbin Plaintiffs - and - Darren Vrbanek, DN Developments Ltd., 1363408 Alberta Ltd. and Interior Components Inc. Defendants - and - DN Developments Ltd. Plaintiff by Counterclaim - and - David Zerbin and Barbara Zerbin Defendants by Counterclaim

And Between: 1503 18250 Darren Vrbanek and DN Developments Ltd. Plaintiffs - and - David Zerbin, Barbara Zerbin, Modern Granite & Marble Inc. and Daniel Tran Defendants _______________________________________________________ Endorsement as to Costs of the Honourable Mr. Justice Douglas R. Mah _______________________________________________________ [ 1 ] The parties seek a ruling on costs in both actions following my decision at 2020 ABQB 797 . Costs are in the discretion of the trial judge but the discretion must be exercised in a principled manner.

Action No 1503 03621 [ 2 ] In this action, the successful plaintiffs (the Zerbins) claim a second counsel fee at trial in the aggregate amount of $65,520 based on Column 4 and applying an agreed-upon multiple of four. The second counsel fee is the only aspect in the Bill of Costs that is disputed. [ 3 ] The plaintiffs cite Strategic Acquisition Corp v Maltus Investment Corporation , 2017 ABQB 297 at paras 45-46 , which in turn cites Alberta Productions Corp v Canada Lands Co CLC Ltd, ABCA 25 at para 2, for the relevant factors in considering a second counsel fee:

• the general importance of the issue or issues to the parties or to others; • the value of the case; • the complexity and scope of the issues; • the size of the trial record, the manner in which opposing counsel conducts the case; and • whether second counsel addressed the court. [4] The plaintiffs say, through their counsel, that all of the above factors are present in this case, although conceding that secondcounsel addressed the court only sparingly with respect to exhibits.

It is also pointed out that the defendants also had a second counselassisting throughout, which it is submitted is an indicator of the trial’s complexity. [5] For their part, the defendants say that the plaintiffs’ second counsel had a minimal role in presenting evidence, that a majorwitness for the plaintiff (Mr. Tran) was presented by counsel for another party, and that the multiplier more than adequatelycompensates the plaintiffs for their counsel costs.

Citing Bruen v University of Calgary, 2018 ABQB 6 , 2018 ABQ B6 50 atpara 52, the defendants say a second counsel fee should not be awarded where the party is merely splitting work between two counselthat could reasonably have been done by one. [6] The complexity of this trial can be gleaned from the trial decision itself. The documentary evidence spanned many volumesand required management that could not have been adequately handled by one counsel during the trial.

This is evident from the fact thatthe defendants also had two counsel during the trial, a factor that Mahoney J weighed heavily in favour of a second counsel fee in theStrategic Acquisition case. [7] While second counsel for the plaintiffs (Ms. Findlay) did not address the court extensively, I am persuaded the complexityand scope of the issues and the size of the trial record merited her presence. This is so even with the way Mr. Tran’s evidence washandled. Mr.

Tran’s evidence played an important role in the plaintiffs’ case but it was only one part of a much larger overall case. [8] Finally, in reviewing the draft Bill of Costs and having regard to the hourly rates that law firms charge these days, I do notfeel that allowing a second counsel fee over-compensates the plaintiffs. [9] Accordingly, I allow an aggregate second counsel fee of $65,620. Action No 1503 18250 [10] In this conjoined action, the successful defendants, Modern Granite and Mr.

Tran, request either full indemnity costs or, in thealternative but as a second preference, recognition in costs for the participation of Mr. Peddie’s paralegal, Ms. Todd, in the form of 50%of the second counsel fee, using Column 4, or $10,175. Solicitor-Client Costs [11] Mr. Peddie relies on these passages from Walsh v Mobil Oil Canada, 2008 ABCA 268 at paras 158-159: [158] While solicitor-client costs are generally only awarded on rare occasions, as when a party has shown reprehensible, scandalous,or outrageous conduct, the question of costs is at the discretion of the trial judge: Mackin v.

New Brunswick (Minister ofFinance) (“Mackin”), 2002 SCC 13at para. 86, [2002] 1 S.C.R. 405. Reasons of public interest may also justify an award of solicitor-client costs: Mackin, at para. 86, citing Friends of the Oldman River Society v.

Canada (Minister of Transport), (SCC), [1992] 1 S.C.R. 3, 88 D.L.R. (4th) 1. [159] Persisting in unfounded allegations in an attempt to defeat justice may merit an award of solicitor-client costs: Jackson v.Trimac Industries Ltd., (AB QB), 138 A.R. 161, [1993] 4 W.W.R. 670 (Q.B.), affirmed (1994), 1994 ABCA 199, 155 A.R. 42 (C.A.). [12] These quotations come from Justice Paperny, who concurred with the majority of Justice Ritter and Justice Côté in the overallappeal, but dissented from the majority on the costs issue.

The majority reversed the Queen’s Bench judge on the award of solicitor-client costs, stating at para 112: In this case, Mobil argues that the reviewing judge erred in principle by focussing on Mobil’s conduct prior to the hearing. Solicitor-client costs are awarded where the conduct of a party has been “reprehensible, scandalous or outrageous”: Young v Young, (SCC), [1993] 4 S.C.R. 3 at 134, 108 D.L.R. (4th) 193.

Moreover, the conduct must have occurred during the course of the litigation.If the party’s pre-litigation conduct was outrageous or reprehensible, that may be a factor that is relevant to the ultimate damageaward: Hill v. Church of Scientology of Toronto, (SCC), [1995] 2 S.C.R. 1130, 24 O.R. (3d) 865. [13] In applying the reasoning of the majority, there was no argument that the unsuccessful plaintiffs in this action (Mr.

Vrbanekand DN Developments) acted in a “reprehensible, scandalous or outrageous” manner during the course of litigation. [14] Moreover, even Justice Paperny’s disapproval of Mobil’s conduct arose from the fact that a powerful corporation had wageda campaign of attrition against a single individual, instead of treating her with the respect to which she was entitled as an employee. Thatis a very different case from what we have here. [15] Finally, I found the plaintiffs (Mr. Vrbanek and DN) actually were defamed. All of the defendants in the defamation action

happened to have defences which insulated them from liability. The defamation allegations could not be separated from the defence of the action against Mr. Vrbanek and DN brought by the Zerbins. Both relied on the same facts and arguments. Despite what I ultimately found, Mr. Vrbanek and DN were entitled to defend the Zerbin action. Thus, I cannot say there was litigation misconduct on the part of Mr. Vrbanek and DN. [ 16 ] For these reasons, I decline to make an award of solicitor-client costs. “Second counsel” fee [ 17 ] The request for recognition of Ms.

Todd’s participation at the trial is premised on the same legal considerations set out above with regard to a second counsel fee. The fee is discounted by 50% to account for the fact that Ms. Todd is not a lawyer. [ 18 ] I do not for a moment wish to minimize the importance of Ms. Todd’s role in assisting Mr. Peddie at trial, particularly with regard to document management. However, the issues involving Modern Granite and Mr. Tran were only a part of much larger whole, and the litigation for those parties on smaller scale than for the Zerbins or for Mr.

Vrbanek and DN. [ 19 ] Further, the purpose of awarding costs is to permit the successful party to recoup a portion of his or her actual costs that are paid to legal counsel, not to permit legal counsel to charge out part of his or her overhead. Mr. Peddie’s staffing costs are not directly charged to the client but rather should be part of his hourly rate. [ 20 ] For these reasons, a second counsel fee, even discounted, is not allowed. Heard by way of written submissions on the 12 th day of February, 2021, the 19 th day of February, 2021, the 22 nd day of February, 2021 and the 1 st day of March, 2021.

Dated at the City of Edmonton, Alberta this 3 rd day of March, 2021. Douglas R. Mah J.C.Q.B.A. Appearances: Daniel W. Hagg, QC Daniel W. Hagg Professional Corporation for David Zerbin and Barbara Zerbin Kevin I. Peddie West Edmonton Law for Modern Granite & Marble Inc and Daniel Tran G. James Thorlakson Dentons LLP for Darren Vrbanek and DN Developments Ltd.