McAulay v McAulay, 2021 ABQB 574

Court of Queen’s Bench of Alberta Citation: McAulay v McAulay, 2021 ABQB 574 Date: 20210721 Docket: 4806 021593 & FL06 03655 Registry: Lethbridge Between: Cindy Ann McAulay Plaintiff - and - Connor Wade McAulay Defendant _______________________________________________________ Costs Endorsement of the Honourable Madam Justice J.C. Kubik _______________________________________________________ [ 1 ] Connor McAulay was the successful litigant in a divorce and matrimonial property trial involving the

interpretation of the reconciliation provisions of a Divorce and Matrimonial Property Agreement, entered into between he and his former spouse in 2012 (the

“Agreement”). He seeks solicitor and own client costs of the action, based on the terms of the Agreement. [2] The Agreement references costs in relation to both the enforcement of the Agreement and the parties’ divorce. [3] The relevant provisions of the Agreement are as follows: 31 Enforcement of this Agreement 31.1 Connor and Cindy expect that the Court will enforce this Agreement.

If either Connor and Cindy has to enforce any term of thisAgreement, then the person who has not complied with any term of this Agreement will pay all costs arising from such enforcement on asolicitor/client, full indemnity basis. 31.2 Connor and Cindy will strictly obey this Agreement including all deadlines in this Agreement. 31.3 Connor and Cindy agree that if one of them breaches any term in this Agreement and the other person sues on this Agreement,the remedies set out in

section 9 of the Matrimonial Property Act are available to the Court hearing and determining any enforcementaction on this Agreement. 38 Payment of Legal Costs 38.1 Connor and Cindy will each pay their own legal fees and costs for this Agreement, the divorce action and any Divorce Judgmentthe Court may grant. 38.2 Connor and Cindy will equally share the legal fees and costs for the preparation, filing and service of the Consent MatrimonialProperty Pension Order, if required. [4] As in the main action, the costs provisions of the Agreement must be interpreted in their ordinary, grammatical sense havingregard to the objective intention of the parties at the time of making the Agreement: Sattva Capital Corp v Creston Moly Corp, 2014SCC 53.

Clauses providing for solicitor and own client or full indemnity costs must be clear and unambiguous, having regard to thewhole of the contract: 911502 v Elephant Enterprises, 2014 ABCA 437. [5] Clause 31 is about enforcement of the Agreement. The objective intention of the parties is specifically set out in theAgreement.

Each party had, at the time of the signing the Agreement, an expectation that it would be enforced by the court, such that apenalty, in this case solicitor client full indemnity costs, would result from non-compliance with or default of a term of the Agreement. [6] But what is enforcement, and is it distinct from asking the court to interpret a particular provision of a contract? [7] In this case, the parties required the court to determine whether the reconciliation clause in the Agreement was binding withrespect to both spousal support and matrimonial property, as a result of facts alleged to have occurred subsequent to their reconciliation.This is distinct from non-compliance with or default of a term of the Agreement (for example: payment of support, or transfer of an asset)for which a party must sue to obtain performance. [8] I am unwilling to read the enforcement clause to include

interpretation of the Agreement for the purposes of determining theparties’ rights and remedies in relation to the matrimonial property action. Enforcement implies something different than

interpretation,particularly where the language of the Agreement specifies that enforcement relates to acts of non-compliance or breach. [9] Accordingly, it is my determination that the costs of the action are not governed by Clauses 31 and 38, but are in thediscretion of the court. [10] A successful party to an application, proceeding, or action is entitled to costs against the unsuccessful party.

Rule 10.33requires the court to consider certain factors, including: the result and degree of success of each party, the amount claimed andrecovered, the importance of the issues, the complexity of the action, apportionment of liability, conduct related issues, and any othermatter related to the question of ‘reasonable and proper’ costs. Subsection (2) of the Rule also includes other considerations for the courtin imposing, denying, or varying the amount of costs awarded. This

section generally describes misconduct or other improper conduct onthe part of a litigant. [11] Rule 10.31 gives discretion to the court as to the nature of the costs awarded. [12] The purpose of costs awards is to partially indemnify the successful party for the legal expenses incurred during the litigation.Party and party costs awards are deliberately set so that they do not fully indemnify the successful party.

This discourages unwarrantedlitigation, it promotes proportionality in litigation that is commenced, and it creates an incentive on all litigants to litigate economically:Pricewaterhousecoopers Inc v Perpetual Energy, 2021 ABCA 16. [13] Further, a departure from party and party costs should only incur in rare and exceptional circumstances, including where therehas been misconduct, hindrance, or delay in the proceedings: Young v Young, (SCC), [1993] 4 SCR 3. [14] In this case there are no circumstances or conduct which would give rise to a solicitor client costs award against Cindy.

Shebrought an action seeking a division of matrimonial property and a divorce, and it was litigated in a non-contentious and uncontroversialway. She did not engage in any reprehensible, scandalous, or outrageous conduct. In addition, regardless of the binding effect of thereconciliation clause, it was necessary for the court to assess the spousal support provisions in the context of Miglin v Miglin, 2003 SCC24 at para 82. [15] Therefore, the question becomes one of quantification of reasonable party and party costs.

In considering the factors in Rule10.33, I note that Connor was entirely successful, the issue was important to the parties, and there was an absence of existingjurisprudence in Alberta on this point. The action was not complex, and was conducted expeditiously by both parties through use of the

summary trial process. While it is true that Cindy brought a concurrent constructive trust action which was dismissed and had to apply to amend her pleadings on the morning of trial, those additional steps can be adequately compensated based on an award premised on Column 3 of

Schedule C of the Alberta Rules of Court , which reflects the value of the property at issue in the action. [ 16 ] I therefore direct that Ms. Andreachuk prepare a Bill of Costs for review by Mr. Schlachter premised on Column 3 of

Schedule C, reflecting all steps of the matrimonial property action and constructive trust action, from the commencement of pleadings through to the conclusion of

summary trial, including disbursements, other charges, and GST. Items specifically related to the divorce action should not be included given the parties agreement that each would bear their own cost of the divorce. [ 17 ] In the event there continue to be any difficulties settling the Bill of Costs, the draft Bill of Costs shall be submitted to an assessment officer for further determination. Costs submissions received on the 10 th and 11 th days of June, 2021. Dated at the City of Lethbridge, Alberta this 21 st day of July, 2021. J.C. Kubik J.C.Q.B.A. Appearances: Kurt. E. Schlachter Stringam LLP for the Plaintiff Lori G. Andreachuk, Q.C. Andreachuk Law for the Defendant