The Canadian Islamic Trust Foundation, Illham Hashim, Abla Kacemi, Huda Saman, Fatiha Akacem, Abderrahmane Kacemi, Eman Salman, Jawad Mouayyad, Safa Koja, Newal Yousf, Ali Salman v. Nagla Alamri, 2022 ABKB 672

Court of King’s Bench of Alberta Citation: CITF v the Muslim Community of Edmonton Mosque and Muslim House, 2022 ABKB 672 Date: 20221012 Docket: 1803 22449 Registry: Edmonton Between: The Canadian Islamic Trust Foundation, Illham Hashim, Abla Kacemi, Huda Saman, Fatiha Akacem, Abderrahmane Kacemi, Eman Salman, Jawad Mouayyad, Safa Koja, Newal Yousf, Ali Salman and Nagla Alamri Applicants - and - The Muslim Community of Edmonton Mosque and Muslim House, Ashique Khan, Jamal Osman, Shakib Rahman, Ahmed M. Jomha, and the Registrar of Corporations (Alberta) Respondents _______________________________________________________ Costs Endorsement of the Honourable Justice M. J. Lema

_______________________________________________________ A. Introduction [ 1 ] What costs are payable to the successful applicants here? [ 2 ] The full background is outlined in the main judgment ( 2019 ABQB 872 ).

The essence is that the applicants sought, and obtained, declarations that a set of bylaws governing their mosque community was invalid (lacking the necessary approval of an overseeing entity) and that the pre-existing bylaws continued to operate. [ 3 ] I awarded costs to the applicants but without specifying the quantum, scale or other details. [ 4 ] The parties had preliminary discussions about those details shortly after the November 2019 judgment, but the discussions (and any other costs-focused steps) ceased when further mosque-administration disputes arose between some of the applicants and some of the respondents. (In this judgment, I will use the labels applicants and respondents, noting that in fact the later disputes featured subsets of each.) Those disputes ended up in arbitration, in which the respondents prevailed, sparking a costs award in their favour by the arbitrator. [ 5 ] In response, the applicants returned to the subject of the 2019 costs award, asserting a certain amount owing and seeking to offset that amount against the arbitration costs. [ 6 ] The respondents balked, raising several arguments against the proposed 2019 costs. [ 7 ] I find that quantifying the 2019 costs was not folded into the arbitration, that the applicants did not unduly delay in pursuing those costs, that the respondents’ other costs-mitigation arguments fail, that (contrary to the applicants’ position) no actual settlement offers were made here and that, when all the dust settles, the applicants are entitled to $13,000 in costs for the 2019 proceeding and a further $2,000 for the current costs exercise.

B. Analysis 1.

Was the settling of the 2019 costs folded into the arbitration? [ 8 ] The respondents first argued that the matter of the 2019 costs (i.e., the settling of them after differences reflected in their preliminary discussions) was folded into the later arbitration i.e., as one of the issues to be addressed and decided there. [ 9 ] The respondents are wrong, as explained below. [ 10 ] As part of a July 3, 2020, interim without-prejudice consent order granted by Bokenfohr J. in the follow-up action started by the respondents (2003 09490), the parties agreed that: ... this matter [detailed below] shall proceed by way of binding arbitration via an arbitrator as agreed to between the parties[.] [emphasis added] [ 11 ] In a May 5, 2021, order in that action, Kachur J. directed (in part) that: The parties are directed to make immediate arrangements for a binding arbitration for all matters raised in this action [as detailed below]. ...

Either party is at liberty to make any arguments at the arbitration, including those based on Justice Lema’s decision [in 2019 ABQB 872 ]. [emphasis added] [ 12 ] In his arbitration award (January 12, 2022), the arbitrator (Joseph Rosselli, KC, FCIArb) described the second action: Further disputes and a subsequent [i.e., the second] court action concerning membership, management and control of the society arose after the Justice Lema decision, in particular with respect to membership applications and elections for the governing body that were to follow. [ 13 ] He also outlined the issues (per each side): The Claimants [i.e., the respondents in the original proceeding] submit that the issues in this arbitration are as follows: o Was the Executive Committee suspended in accordance with the 1997 Bylaws? o Is the Respondent’s [i.e., the original applicants’] position that the CITF cannot serve in a supervisory role over the affairs of the Mosque due to no longer being a registered charity barred by the doctrine of res judicata? o Is the Interim Executive Committee permitted to implement the direction of Justice Lema?

The Respondent [i.e., one of the original applicants] submits the issues to be determined are as follows: o What common law framework applies to resolving disputes with respect to the Mosque? o What is the current scope of authority of the CITF under the 1997 bylaw? o Has the CITF’s purpose under the 1997 Bylaws been frustrated? o Did the Executive Committee comply with the Justice Lema decision? o Who are the proper members of the Executive Committee? o Are any issues with respect to who are the “true” members of the Executive Committee moot? [ 14 ] As seen above, neither side requested or suggested that quantifying or otherwise settling the 2019 costs be part of the arbitration. [ 15 ] As well, the subject of those costs was not included, expressly or implicitly, in the arbitration-outcome remedies sought by either side, per the arbitrator’s “remedies sought”

summary (paras 54 and 55 of his award). [ 16 ] Not surprisingly, those costs were not addressed by the arbitrator among his various “Decisions on Issues in Dispute” (paras 56-132), as confirmed in his “Award

Summary” (i.e., synopsis of decisions made) (paras 133-140). [ 17 ] The final paragraph of the decision does refer to costs, but necessarily (in light of the above arbitration-focus factors) limited to the costs of the arbitration itself (“As requested by the parties, this award is subject to further submissions on costs. ...”) [ 18 ] The arbitrator’s costs award (issued March 9, 2022) makes no mention of the 2019 costs. [ 19 ] The respondents (i.e., Mr. Samia’s clients) are also wrong in suggesting that Kachur J.’s direction above somehow folded the 2019 costs issue into the arbitration.

Her “available arguments” direction was necessarily framed by the arbitration issues (identified above). On those issues, it was open to the parties to include arguments anchored, in whole or in part, on the 2019 decision. That direction cannot fairly be read as opening the door to an issue (2019 costs) not contemplated as an arbitrable point by either side. [ 20 ] And this is so even if the applicants (i.e., Mr.

Nanda’s clients) somehow understood (incorrectly) that the 2019 costs could be brought, post-arbitration, to the arbitrator for a decision (which the arbitrator (properly) declined to take on). [ 21 ] The arbitration record and proceedings are crystal-clear that the quantum of and any other issues surrounding the 2019 costs fell and continue to fall outside the arbitration proceedings. [ 22 ] The respondents are accordingly also wrong in their res judicata and cause-of-action-estoppel arguments. [ 23 ] As well, contrary to the respondents’ assertion, nothing in the arbitration record or proceedings reflects any intention, on either side, that the arbitration was to be treated as an “all issues” affair i.e., that issues not expressly raised in the arbitration must be treated as waived or otherwise abandoned by the party in question. [ 24 ] Accordingly, I reject the respondents’ arguments that the arbitration somehow eclipsed the 2019 costs award in favour of the applicants. 2.

Undue delay [ 25 ] In the alternative, the respondents asserted undue delay by the applicants in seeking to crystallize the 2019 costs award: [T]he applicants failed to take any steps to obtain a determination on quantum of costs in the [2019] action until three (3) years following the decision in [that] action, and only when facing a loss at the arbitration. The applicants should not be awarded for their undue delay. At any stage prior to the Kachur order, the applicants were free to write to [me] for a determination on costs.

If the applicants genuinely believed the issue of costs in the [2019] action were not before the arbitrator, the applicants were also free to write to [me] following the Kachur order. [ 26 ] The respondents did not point to any statute, regulation, rule or case law imposing, expressly or implicitly, a deadline for crystallizing a general cost award i.e., taking steps to determine the scale or otherwise quantify a “costs to the successful party” award. [ 27 ] I note that: • per Rule 10.29(1): “A successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party, and the unsuccessful party must pay the costs forthwith ...subject to [identified exceptions, none of which the respondents pointed to as applying here]; • here, while I awarded costs of the 2019 proceeding to the applicants, as noted I did not identify the applicable scale or otherwise quantify the award.

Accordingly, in advance of the award being quantified, the “pay forthwith” obligation was necessarily suspended; • concerning when a costs award may be made (which I interpret as including steps to quantify an initially unquantified award), R. 10.30(1) provides general rules (in part) that “a costs award may be made

a) in respect of [a with-notice] application or proceeding ..., after the application has been decided

b) [post-settlement rule – not applicable here], and

c) in respect of trials and all other matters in an action, after judgment or a final order has been entered ; • in other words, whether the 2019 litigation featured an application, a trial or “other matter”, step(

s) to quantify it were permitted i.e., as coming “after” the identified events; • in terms of an outer limit for such steps, none of the party-and-party-costs rules (10.28 to 10.45) imposes an express deadline for a costs award (or quantifying one) after an application, judgment or final order; • the apparent absence of an outer limit does not mean that the paying-costs party is necessarily left hanging.

Per R. 10.30(2): If the Court does not make a costs award or an order for an assessment officer to assess the costs payable when an application or proceeding is decided or when judgment is pronounced or a final order is made, either party may request from an assessment officer an appointment date for assessment of costs under rule 10.37. [emphasis added] • on this aspect, see the “No Time Limit” discussion (with associated cases), part of the commentary on R. 10.30, in the Alberta Civil Procedure Handbook (2023) (pp 10-49 and 10-50); • similarly, the respondents could have nudged the applicants under R. 10.35(1): A party entitled to payment of costs must prepare a bill of costs in Form 44

a) if that party wishes or is required to have the costs assessed by an assessment officer, or

b) on request of a party who is required to pay the costs . [emphasis added] • the respondents appear to gain no traction either from Orkin on the Law of Costs (Second Edition – updated to March 24, 2022], where delay in advancing a party-party costs awarded is discussed as follows: Where a party delayed unduly bringing a bill of costs for assessment, the bill was reduced by an amount equal to interest on the costs as assessed, calculated for the period of delay.

That decision [ Mintz v Mintz (1984) 46 CPC 234 (Ont Assessment Officer) ] was overtaken by Ontario Rule 58.04 which allows the party liable for costs to obtain a notice to deliver a bill for assessment [akin to the set-assessment and deliver-bill rights identified above]. Moreover, the party had the use of the money during the period of delay which mitigated any prejudice. Delay, it has been said, is not of itself evidence of prejudice, and the onus is on the party challenging the assessment to show that the delay caused prejudice.

A successful applicant’s decision to proceed with a bill of costs four and one-half years after the Federal Court issued its decision did not have any impact on the costs assessment. [title 6:38 Delay – p. 6-27] [footnotes omitted] • the respondents here did not point to any prejudice caused by the delay.

In any case, as noted, given their unexercised rights to spur the applicant to quantify, it is hard to see how they could tag the applicants with exclusive responsibility (i.e., for any assumed prejudice); and • with no quantification deadline imposed by the 2019 judgment, Truehope Inc v Stringam , 2014 ABQB 772 (Miller J.) (express deadline for seeking costs directions missed) does not assist the respondents. [ 28 ] For these reasons, I do not find “undue delay” here or, in any case, that any quantification delay must or should eclipse the costs award. 3.

Applicants made unsuccessful arguments too [ 29 ] The respondents also seek costs relief or mitigation based on “the applicants [having] advanced arguments [in the 2019] action that were unsuccessful, including the applicability of the Business Corporations Act to the dispute between the parties.” [ 30 ] It is true that some of the applicants’ arguments were unsuccessful. But a review of the judgment confirms that the applicants’ chief concern was the impugned bylaws.

While not every argument attacking those bylaws was accepted, one of them (lack of CITF approval) was, yielding the principal relief the applicants were seeking. [ 31 ] As for the unavailability of BCA oppression relief, as noted in paragraph 51 of the judgment, the applicants were not seeking such relief at large or otherwise than in support of undercutting the impugned bylaws, which they achieved by other means. [ 32 ] In these circumstances, the failure of the applicants’ alternative arguments does not cast a shadow on the scale or overall quantification of costs. 4. Applicants should be limited to

Schedule C, Column 1 costs [ 33 ] The respondents finally argue that the 2019 issues were not complex, that they did not engage in any egregious, offensive or otherwise enhanced-costs-attracting behaviour, and that any “new default position” of 40 to 50 per cent recovery of actual legal costs required or suggested by McAllister v Calgary (City) , 2021 ABCA 25 , should not reach back to these 2019 costs. [ 34 ] In the end, they say that

Schedule C, Column 1 costs are the maximum warranted.

[ 35 ] I will return to this aspect after addressing the applicants’ call for full-indemnity costs. 5. Applicants seek full-indemnity costs based on “informal offers exceeded” [ 36 ] The applicants seek full indemnity of total legal costs incurred in the 2019 proceeding, calculated by their current counsel to be just shy of $55,000. [ 37 ] That total includes legal bills from their initial counsel (totalling approximately $23,000) and from a successor counsel who took over the handling of the litigation and appeared for the applicants in the 2019 proceeding. That counsel changed firms midstream.

While at her initial firm, she issued invoices totalling just under $22,000; at her next firm, she issued invoices for just over $10,000. [ 38 ] I first factor out the first-counsel fees ($23,057.70), completely.

While the applicants included copies of that counsel’s invoices, the invoices do not provide any detail of the work provided, instead simply billing (numerous occasions) for “professional services rendered.” That is insufficient evidence to show that that counsel provided any services in support of the 2019 proceedings, let alone $23,000 worth. [ 39 ] That leaves the $32,000 (approximate) billed by the successor counsel. [ 40 ] Interestingly, as reflected in correspondence to the respondents’ counsel shortly after the 2019 judgment, the successor counsel for the applicants calculated their

Schedule C, Column 1 costs to be roughly $6,000, inflation-adjusted to just under $10,000. [ 41 ] She proposed a subset figure by way of compromise, which the respondents’ then counsel rejected, proposing an even smaller figure.

As noted, those discussions ebbed as other disputes arose, leading to the arbitration. [ 42 ] Moving to the present, the applicants’ current counsel seeks full indemnity (necessarily of $32,000, in light of my ruling above), based on “the applicants [having] made an offer of settlement [on two separate occasions] that is consistent with what [I] eventually granted [in the 2019 judgment].” [ 43 ] Per their current counsel: The significant evidence vetting and [the 2019] hearing itself could have been avoided had the respondents accepted the offers.

For this reason, the applicants seek costs above the 40%-50% partial indemnity basis that is the default position on costs under the Rules of Court . [ 44 ] Here are the “offers” referred to: On behalf of our client, which speaks for numerous disaffected members of the MCE, we hereby demand that the 2016 Bylaws be rescinded forthwith, and the 1997 bylaws that were approved and accepted by the MCE members and ratified by CITF be registered in their place .

We require confirmation that the MCE Executive Committee will undertake to complete these actions by no later than July 31, 2017 , failing which our client has instructed us to proceed with a court application . In that event, we will be seeking the following: 1. rescission of the improperly registered bylaws (effective May 1, 2014, registered November 25, 2016); 2. a declaration that the approved 1997 bylaws are the current, active bylaws ; and 3. full indemnity legal costs for our client, payable by the MCE Executive Committee members personally.

We trust the foregoing sufficiently demonstrates our client’s seriousness and commitment to ensuring that the Executive Committee act appropriately. We therefore look forward to receiving cooperation from the MCE Executive Committee in correcting this substantial procedural error and reinstating the former bylaws. 25208059.1 Kindly govern yourselves accordingly. [July 4, 2017, letter from initial counsel for applicants] ... we reiterate our demand that the 2016 Bylaws be rescinded immediately, and the 1997 bylaws approved by the MCE members and ratified by CITF be registered in their place.

If we do not receive confirmation that the MCE Executive Committee will undertake to complete these actions by September 22, 2017, we will proceed with the aforementioned court application , seeking, among other things: 1. Rescission of the improperly registered bylaws (effective May 1, 2014, registered November 25, 2016); 2. A declaration that the approved 1997 bylaws are the current, proper bylaws; 3. Removal of Mr. Johma as counsel for MCE; and 4. Full indemnity legal costs payable by the MCE Executive Committee members personally. We trust you will govern yourselves accordingly.

[September 6, 2017, letter from the same counsel] [ 45 ] The applicants’ current counsel did not cite any Alberta cases on the “genuine element of compromise” factor or, in any case, show what compromise was being proposed via either letter. [ 46 ] In my view, these are not settlement offers; instead, they are demand letters, calling for capitulation. [ 47 ] If these letters qualified as settlement offers, so would every statement of claim outlining identified relief and seeking costs of same. [ 48 ] I reject the applicants’ argument that these letters somehow open the door to elevated costs as “offers beaten.” C. Conclusion [ 49 ] I accept the predecessor counsel’s calculation of the

Schedule C, Column 1 costs, inflation adjusted i.e., $10,000. Such costs would represent 31.3 per cent recovery of the accepted $32,000 in actual legal expenses for the 2019 proceeding. [ 50 ] I also find that that counsel could reasonably have sought costs at the 40 to 50 per cent recovery level i.e., on the basis of costs principles later recognized (but not created) by McAllister .

That would translate to costs between $12,800 and $16,000. [ 51 ] I find that the appropriate costs figure for the 2019 proceeding is $13,000. [ 52 ] I also award costs of this costs exercise in the amount of $2,000 to the applicants. The reason is the respondents-caused unnecessary exploration of the arbitration proceeding. As discussed above, there was no reasonable basis for arguing that the 2019 costs debate had been, or was necessarily, folded into the arbitration. [ 53 ] In total, the applicants are entitled to costs of $15,000.

Heard by way of written submissions received 2 nd day of September, 2022 Dated at Edmonton, Alberta this 11 th day of October, 2022. M. J. Lema J.C.K.B.A. Appearances: Avnish Nanda Nanda & Company Barrister & Solicitor for the Applicants George Samia Forum Law LLP for the Respondents