Brandt Tractor Ltd v BOMAG (Canada) Inc, 2021 ABQB 948

Court of Queen’s Bench of Alberta Citation: Brandt Tractor Ltd v BOMAG (Canada) Inc, 2021 ABQB 948 Date: 20211129 Docket: 2001 07716 Registry: Calgary Between: Brandt Tractor Ltd Plaintiff/Applicant - and - BOMAG (Canada) Inc and SMS Equipment Inc Defendants/Respondents _______________________________________________________ Decision of the Honourable Madam Justice B.E. Romaine _______________________________________________________ [ 1 ] This application relates to costs of an injunction application brought by Brandt Tractor Ltd. against BOMAG (Canada) Inc. and SMS Equipment.

The application was dismissed in a written decision cited as 2021 ABQB 71 . [ 2 ] Brandt concedes that BOMAG is entitled to costs, but submits that these costs should be assessed under

Schedule C of the Alberta Rules of Court . BOMAG submits it is entitled to solicitor-client costs. SMS does not seek costs. [ 3 ] The issue is whether enhanced costs are warranted. [ 4 ] On a full indemnity basis, BOMAG’s costs, exclusive of disbursements, are $218,419.50. BOMAG submits that it claims solicitor-client costs, which it submits should be in the same amount. The history of this matter is relevant in view of the amount

claimed. [ 5 ] Brandt sought the following injunctive relief against BOMAG and SMS:

a) an interim and interlocutory injunction against BOMAG prohibiting it from distributing equipment to SMS until the conclusion of the litigation between the parties;

b) a direction that BOMAG reappoint Brandt as the dealer of BOMAG products in the service areas detailed in the agreement between the parties;

c) an interim and interlocutory injunction against SMS prohibiting it from:

i) directly or indirectly selling and servicing BOMAG products in competition with Brandt; and ii) directly or indirectly soliciting or accepting any jobs or work in respect of any BOMAG products anywhere from any customer of Brandt to whom Brandt sold or serviced BOMAG products. [ 6 ] Brandt sought a statutory injunction under the Farm Implement and Dealership Act , RSA 2000, c. F-7 as well as an equitable injunction. [ 7 ] Brandt’s June 18, 2020 statement of claim alleged that Brandt possessed a dealer license to sell farm implements in Alberta under the FIDA .

An affidavit in support of the injunction application filed on September 9, 2020 made the same claim, without any supporting documentation. In response, BOMAG filed an affidavit on September 30, 2020, that stated that Brandt was not included on a list of Alberta licensed farm implements dealers dated as of April, 2018 although it was listed as a distributor.

Notwithstanding an agreement between counsel and after questioning, Brandt filed a supplemental affidavit dated October 20, in which the same affiant, Michael Cox, stated that he had undertaken an extensive review of Brandt’s sales records to identify equipment sold to “an agricultural operation for an agricultural use” and provided what he submitted were specific examples of such sales. [ 8 ] BOMAG filed a supplemental affidavit in response appending a list of active dealers registered under FIDA in 2019 and 2020, which did not include Brandt. [ 9 ] In its brief for the application dated November 2, 2020, Brandt for the first time referenced a further affidavit of Mr.

Cox sworn November 2, 2020 that stated that Brandt had held a dealer license under FIDA since 1996 except for a period of time between 2017 and 2019 when the license had not been renewed due to an administrative error. [ 10 ] On November 3, 2020, BOMAG was served with a further affidavit of Mr. Cox, which stated that Brandt was not aware that its dealer license under FIDA had expired until 2020, and that, upon become aware of this, Brandt took steps to renew it. Mr.

Cox states in his affidavit that the license was renewed “effective January 1, 2020”. [ 11 ] BOMAG filed an affidavit dated November 4, 2020 in which the affiant stated that, further to its additional inquiries, BOMAG determined that Brandt had registered for a dealer license under FIDA for the first time on June 3, 2020, two weeks prior to filing its statement of claim, and that it had not held a dealer license at any time prior to that date. [ 12 ] After both parties had filed their briefs, Mr. Cox swore another affidavit on November 6, 2020 five days before the hearing, in which he stated: 4.

I was surprised by the information in the Supplemental [BOMAG] Affidavit concerning the status of Brandt’s dealer license under FIDA . Accordingly, I had internal discussions with Brandt personnel, coordinated reviews of Brandt’s records and conducted further due diligence regarding the matter. 5. As a result, I learned that I was mistaken about Brandt being a licensed dealer under FIDA since 1996. I now realize that I had confused Brandt’s dealer license with its distributor license under FIDA .

Accordingly, I mistakenly referred to Brandt’s distributor license as its dealer license under FIDA in parts of my November 3, 202 Affidavit. This was an honest mistake, and my intention was not to mislead the Court. [ 13 ] In addition, Mr. Cox’s affidavit included documentation purporting to show BOMAG equipment being used in farming and agricultural operations. Mr.

Cox was not cross-examined on the late affidavit. [ 14 ] Counsel for Brandt apologized to the Court on the date of hearing, November 11, 2020, for what he characterized as an unintentional error, conceding that, but for the final affidavits, the evidence before the Court about Brandt’s licensing would have been incorrect and misleading. [ 15 ] In my decision on the application, I noted that Brandt had conceded that it was not a licensed dealer under FIDA at the time the agreement in issue between the parties was terminated, that Brandt’s evidence that BOMAG had sold equipment to farmers and agricultural operations did not withstand scrutiny, and that therefore Brandt was not entitled to a statutory injunction under FIDA .

I also found that Brandt had not satisfied the first branch of the test for a common law injunction, that there was a serious issue to be tried, nor had it established irreparable harm, and that the balance of convenience favoured BOMAG. I therefore dismissed Brandt's application. [ 16 ] On April 21, 2021 Brandt filed a Notice of Change of Representation. Brandt's new counsel made submissions on its behalf respecting the costs of the injunction application, but was not counsel to Brandt at the time of the injunction application and the steps leading to the injunction application noted above. [ 17 ] Given that Mr.

Cox’s evidence that his allegation with respect to whether Brandt held a dealer license under FIDA was a result of a mistake and not intentional, I am unable to award BOMAG full indemnity costs, although the timing of Brandt’s application to

become a dealer raises reasonable suspicions. [ 18 ] However, I agree with BOMAG that, at best, Brandt acted carelessly and haphazardly with the truth, despite the extensive relief it sought in its injunction application, which would have had a significant and detrimental impact on BOMAG’s business. [ 19 ] I note that Brandt continued with its incorrect and misleading allegations about licensing even after the issue had been raised in BOMAG’s first responding affidavit, which should have alerted Brandt to investigate whether its assertions were incorrect.

It is clear that Brandt failed to take steps that any reasonable litigant would have taken to confirm a material allegation. [ 20 ] In addition, Brandt filed materials shortly before the hearing and after questioning had concluded and briefs had been filed, both with respect to the licensing issue and with respect to its allegation that BOMAG equipment was being used in farming operations, effectively denying BOMAG a reasonable chance of cross-examining on the affidavits. [ 21 ] This conduct constitutes litigation misconduct. [ 22 ] BOMAG submits that the injunction application was hopeless from the outset.

It is clear that, without a basis for a statutory injunction, Brandt’s arguments with respect to entitlement to a common law injunction were weak. [ 23 ] In the circumstances, I find that BOMAG is entitled to enhanced costs, equal to 60% of its solicitor and own client costs. [ 24 ] Brandt submits that BOMAG’s costs are excessive.

However, given the complexity of the application, the detrimental impact the injunction would have had on BOMAG’s business, the need for investigation and multiple response affidavits, and the compressed time period in which events leading to the application for an injunction took place, I cannot find that the costs are excessive. [ 25 ] BOMAG confirms that:

a) the costs outlined in its draft bill of costs are restricted to matters directly related to the application, and do not including anything with respect to a preceding Ontario action;

b) the costs sought do not include fees for the preparation of any commencement documents, but only amounts relating to the preparation of the three BOMAG affidavits and time spent reviewing the four affidavits filed by Brandt (which I agree each raised new issues that had to be addressed and accounted for as part of BOMAG’s preparation for the injunction application);

c) a considerable portion of BOMAG’s preparation was spent researching and analyzing the basis of statutory injunctions, which was necessary because of Brandt’s assertion that it held a dealer license under FIDA ;

d) Brandt filed a 25-page brief with 23 citations to case law, all of which needed to be reviewed in order to draft BOMAG’s response brief; and

e) fees to prepare for and attend questioning required extensive preparation in advance, even though actual questioning was brief. [ 26 ] Brandt submits that its actual costs exceeded the amount sought in its draft bill of costs. However, the draft bill of costs states on its face that it represents fees claimed on a solicitor and own client (full indemnity) basis, and I have accepted this as so. [ 27 ] I therefore award BOMAG costs for the application in the lump sum amount of $131,051.70, plus disbursements and GST in the amount of $14,042.06, payable forthwith. Dated at the City of Calgary, Alberta this 29 th day of November, 2021.

B.E. Romaine J.C.Q.B.A. Appearances: Jonathan J. Bourchier and Brian Catalano for the Plaintiff, Brandt Tractor Ltd Warren P. Foley and Mark Crane for the Defendant BOMAG (Canada) Inc