Edinburgh Tower Development Ltd v Curtis, 2021 ABQB 392

Court of Queen’s Bench of Alberta Citation: Edinburgh Tower Development Ltd v Curtis, 2021 ABQB 392 Date: 20210519 Docket: 1101 05683 Registry: Calgary Between: Edinburgh Tower Development Ltd. and Diamond Park Builders

(2004) Inc. Plaintiffs - and - William Edward Curtis, Curtis Engineering Associates Ltd., Louis Allen Richards, Louis Allen Richards, carrying on business as Richards Engineering Defendants _______________________________________________________ Endorsement Regarding Costs of the Honourable Mr. Justice O.P. Malik _______________________________________________________ I.

Introduction [ 1 ] In Edinburgh Tower Developments Ltd v Curtis , 2021 ABQB 239 , I ordered that the Plaintiffs’ claim be struck on the basis of delay pursuant to Rules 4.31 and 4.33 of the Alberta Rules of Court . [ 2 ] The parties cannot agree on costs. [ 3 ] The Plaintiffs argue that costs should be awarded according to Column 5 of

Schedule C of the Rules for both the application and the action. The Plaintiffs generally agree with the Defendants’ proposed Bills of Costs but argue that there are several disputed items that require adjustment. [ 4 ] The Defendants argue that costs should be based on a 40% indemnity of their legal fees, plus disbursements and taxes. [ 5 ] Here are how the Defendants’ costs, calculated pursuant to Column 5,

Schedule C of the Rules , compare with a 40% indemnity:

Richards Defendants (Louis Allen Richards, and Louis Allen Richards, carrying on business as Richards Engineering) Curtis Defendants (William Curtis and Curtis Engineering Associates Ltd.) Column 5,

Schedule C Bill of Costs $52,930.00 plus disbursements and GST $52,791.78 plus disbursements and GST 40% indemnity for fees $61,799.00 plus disbursements and GST $71,491.60 plus disbursements and GST II. Costs Generally [ 6 ] In approaching the issue of costs, I am guided by the Alberta Court of Appeal’s decision in McAllister v Calgary (City) , 2021 ABCA 25 . [ 7 ] Pursuant to Rule 10.29(1), a successful party is prima facie entitled to costs from the unsuccessful party.

In determining what amount of costs should be awarded, the court considers those factors enumerated in Rule 10.33 which include the following: - each party’s success: Rule 10.33(1)(a); - the amount claimed and recovered: Rule 10.33(1)(b); - the importance of the issue being litigated: Rule 10.33(1)(c); - the complexity of the action: Rule 10.33(1)(d); - the apportionment of liability: Rule 10.33(1)(e); - the conduct of a party that shortened the action: Rule 10.33(1)(f). [ 8 ] Following its consideration of Rule 10.33, the Court is directed to proceed to Rule 10.31 which grants the court broad discretion to craft an award that is reasonable and proper: Rule 10.31(1)(a); or that is appropriate in the circumstances: Rule 10.31(1)(b); or that is a combination of both. [ 9 ] In awarding reasonable costs pursuant to Rule 10.31(1)(a), the can award costs on one or more of the following grounds: - with out or without refence to

Schedule C: Rule 10.31(3)(a); - an amount equal to a multiple, proportion or fraction of the amount set out in any column of

Schedule C: Rule 10.31(3)(b); - costs to be paid with respect to a particular issue, application or proceeding: Rule 10.31(3)(c); or - costs to be paid on the basis of a percentage of all, or part of the successful party’s assessed costs: Rule 10.31(3)(d). [ 10 ] Rule 10.31(1)(

b) allows the Court to award “any amount” that it considers appropriate in the circumstances including but not limited an award of costs on the basis of an indemnity for a party’s legal fees or a lump sum instead of, or in addition to, assessed costs. [ 11 ] There is no presumption that costs should be awarded on the basis of the appropriate column of

Schedule C as this would not always produce a costs award that is reasonable. ( McAllister at paras 53-56 ). While

Schedule C provides a rough ballpark of what reasonable costs might approximate in some contexts,

Schedule C should be looked at as one of a number of tools, rather than as the default mechanism, for determining reasonable costs. [ 12 ] Generally speaking, the purpose of a reasonable and proper costs award pursuant to Rule 10.31(3)(

a) is to provide the successful party with partial indemnification of its costs. In McAllister , the Court of Appeal confirmed that a 40-50% level of indemnification provides a “reasonable 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 ). [ 13 ] If a trial judge awards costs on the basis of a percentage indemnity, then either an assessment officer or a judge should consider the reasonableness of the legal services performed and the amounts charged for those services ( McAllister at para 46 ).

Finally, an assessment of the reasonableness of legal costs must also consider Rule 10.2(1). III. Analysis [ 14 ] Having regard to the parties’ submissions on costs and the guidance that I have derived from McAllister , I will, as the Defendants have asked me to do, award them indemnification of 40% for their legal fees, rather than costs in accordance with Column 5 of

Schedule C. [ 15 ] In my view, the action was neither important in terms of the issues being litigated ( Rule 10.33(1)(c)), nor particularly complex ( Rule 10.33(1)(d)). The Defendants were entirely successful in terms of the ultimate result ( Rules 10.33(1)(

a) and (b)), although this has

to do with my decision to dismiss the Plaintiffs’ action on procedural, rather than on substantive grounds. I note that while the Plaintiffs did not engage in misconduct of any kind ( Rule 10.33(2)(g)), the Plaintiffs’ delay unnecessarily lengthened the action ( Rule 10.33(1)(f)), justified a dismissal of the action ( Rule 10.33(2)(f)), and caused the Defendants to incur expenses as a result of what essentially had become a stalled action. [ 16 ] From 2015 onwards, there are few

Schedule C costs to award the Defendants due to the Plaintiffs’ delay and the fact that most of the work undertaken by the Defendant did not constitute steps for which

Schedule C costs are awarded. Consequently, to use

Schedule C as the starting point would effectively under-compensate the Defendants. [ 17 ] I find that providing the Defendants with a 40% level of indemnification of their costs is a reasonable and proper costs award to make pursuant to Rule 10.31(1)(a), having regard to the factors set out in Rules 10.33 and 10.2(1). [ 18 ] That being said, I would have been prepared to grant the Defendants a higher indemnity, particularly with respect to legal costs incurred during the period of time that the Plaintiffs failed to advance the action.

These costs were needlessly incurred in respect of an action that was going nowhere. To award a higher level of indemnity for these wasted costs would be consonant with, and reinforce the court’s ongoing enforcement of, the objectives of the foundational Rules found in

Part 1, Division 1 of the Rules . [ 19 ] With respect to the Curtis Defendants’ submissions that I award them their expert’s fees, I note that Rule 10.31(2)(

d) provides that reasonable and proper costs do not include the fees and charges of an expert unless specifically ordered. [ 20 ] I have reviewed the Curtis Defendants’ invoices for expert fees and find those to be reasonable. This action, had it proceeded to trial, would have required expert evidence. The Plaintiffs knew that expert evidence was required and expressly identified the preparation and exchange of experts reports as a pre-trial step that needed to be completed.

It is perfectly reasonable for the Curtis Defendants to have retained experts to provide an assessment of liability, a review of documentary evidence and production and to provide a response to the Plaintiff’s anticipated case.

In the result, the Curtis Defendants are entitled to their expert fees. [ 21 ] Consequently, the Curtis Defendants are entitled to an indemnity of 40% of their assessed costs, plus GST and disbursements, including their expert fees. [ 22 ] The Richards Defendants are entitled to an indemnity of 40% of their assessed costs, plus GST and disbursements. [ 23 ] Further to my direction above, the Defendants shall have their costs assessed by an assessment officer, in accordance with Rule 10.34. Submissions Received on April 27 and April 28, 2021 Dated at the City of Calgary, Alberta this 19 th day of May, 2021. O.P.

Malik J.C.Q.B.A. Appearances: Dan B. Ramsay for the Plaintiffs, Edinburgh Tower Development Ltd. and Diamond Park Builders

(2004) Inc. Brent W. Mescall for the Defendants, William Edward Curtis and Curtis Engineering Associates Ltd. Marc T.J. Matras for the Defendants, Louis Allen Richards

and Louis Allen Richards carrying on business as Richards Engineering