Rock River Developments Ltd v Village of Nampa, 2023 ABKB 529

Court of King’s Bench of Alberta Citation: Rock River Developments Ltd v Village of Nampa, 2023 ABKB 529 Date: 20230920 Docket: 2101 03296 Registry: Calgary Between: Rock River Developments Ltd Applicant - and - Village of Nampa Respondent _______________________________________________________ Endorsement (Costs) of the Honourable Justice M.H.

Hollins _______________________________________________________ [ 1 ] The parties came before the Court on a Special Chambers application in which Rock River, the Plaintiff which owned real property in the Village of Nampa, applied for a permanent injunction to prevent Nampa from selling its properties to satisfy tax debts owed to Nampa. That application was dismissed; 2022 ABKB 751 . [ 2 ] Now Nampa, as the successful party, wants to be paid its costs.

It seeks an award of $16,100 or approximately 35% of its solicitor-client costs. [ 3 ] Rock River says that no costs ought to be awarded at this stage of the proceedings as this disposed only of the claim for

injunctive relief and other issues remain for trial. If costs are awarded now, Rock River disagrees with Nampa’s proposed treatment of a pre-application settlement offer. Costs Generally [ 4 ] There are some general rules which apply to the determination of an appropriate costs disposition. Under Rule 10.29 of the Alberta Rules of Court , we begin with the assumption that a successful party is entitled to his costs from the unsuccessful party, subject to the Court’s discretion.

In exercising that discretion, I may consider any number of factors set out in Rule 10.33: Court considerations in making costs award 10.33(1) In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct; (

h) any offer of settlement made, regardless of whether or not the offer of settlement complies with

Part 4, Division 5. [ 5 ] In this case, there was no monetary amount at issue but rather the right of Nampa to proceed with the tax sale of Rock River’s properties. Accordingly, the most relevant factors to consider are the result of the dismissal of the injunction and Nampa’s settlement offer. Should Costs be “In the Cause”? [ 6 ] Rock River argues vigorously that costs should be in the cause. In its Brief, it characterizes the merits of the injunction application as still being in dispute and incapable of final determination until trial.

However, that is a mischaracterization. [ 7 ] Rock River had already obtained an interim injunction preventing Nampa from selling its properties until this application was heard and dismissed. There will be no further consideration of any injunctive relief.

Indeed, Nampa has presumably proceeded with its sale of the properties unless the parties have come to some agreement since my decision or Rock River paid its tax debt to obviate the sale. [ 8 ] I agree with Ross, J that it may be inappropriate to award costs of an interim or interlocutory injunction application depending on the nature of the application and the relief granted or refused; Stonewater Group of Restaurants Inc v Mikes Restaurants Inc , 2005 ABQB 964 at para.5. [ 9 ] However, in this case, the dismissal of Rock River’s application for a permanent injunction did dispose of essentially all the issues in the lawsuit.

The only remaining relief in this action are damages, like emotional distress, alleged to have flowed from Nampa’s improper sale of the properties. Those damages, if recoverable at all, are likely only recoverable in Rock River’s related lawsuit, Action No. 2201-11771. In that lawsuit, Rock River seeks damages for Nampa’s improper liquidation of the properties, including allegations that the properties were sold under market value to the detriment of Rock River. [ 10 ] Whether the 2201 action has now been consolidated with this one or not, it had not been at the time of this injunction application.

In other words, when Rock River says that costs should be “in the cause”, that is really a reference to costs that may flow once the 2201 issues are resolved, if that ever happens.

[ 11 ] It would be manifestly unfair to Nampa, having successfully won the right to proceed with its statutory sale of the properties, to have to wait to collect any costs until the Plaintiff gets this action to trial (which is illogical and unlikely) or until the Plaintiff proceeds with the 2201 action (in which it has taken no steps since the hearing of this matter). [ 12 ] Nampa is entitled to have its costs assessed and paid now.

Settlement Offer [ 13 ] In October of 2021, Nampa offered to suspend any attempts to proceed with the sale of Rock River’s properties if Rock River: (1) provided documentation to support its contention that its bank had improperly returned its cheque to Nampa for insufficient funds in December of 2020 (which is what began the tax sale process); (2) pay its overdue taxes (while retaining a statutory right to dispute them); and (3) discontinue this Action. [ 14 ] Rock River refused as they disagreed with the tax assessment and believed that Nampa would be unjustly enriched as a result of overtaxing it while simultaneously selling the properties below market value.

Putting aside the deficiencies in that legal argument, it is the 2201 Action that claims unjust enrichment, not this action. [ 15 ] While Nampa’s offer was somewhat unusual in asking for the bank’s corroboration of Rock River’s excuse for missing its tax payment, that condition made sense in light of the evidence given by the principals of the company. Further, the offer explicitly referred to the cost consequences of refusing it.

Rock River ought to have accepted or at least, as referred to in my reasons for decision, brought its taxes current to avoid the sale of the properties while retaining the ability to dispute the tax debt. [ 16 ] It is appropriate to consider this offer and Rock River’s refusal of it in determining the costs payable. Conclusion [ 17 ] The Rules include a

Schedule “C”, which is a tariff of suggested fee amounts for various steps taken in typical litigation. While I am not allowed to simply default to that Schedule; McAllister v Calgary (City) , 2021 ABCA 25 at para.27, it remains a tool for assessing reasonable costs, albeit it an out-of-date tool., it is now suggested that a costs award should, prima facie , aim to indemnify the successful party for approximately 40-50% of its actual costs paid; McAllister at para.41. [ 18 ] In this case, I am not convinced that

Schedule “C” is overly helpful. The application required cross-examinations and Briefs, so Column 1 of the Schedule, which would apply to applications for declaratory relief, does not adequately capture the work done nor the quantum of value at issue. [ 19 ] Nampa seeks approximately 35% of its costs, or $16,100. I note that Justice Hall ordered “costs in the cause” for the initial interim injunction obtained by Rock River. There is an argument to be made that this permanent injunction application is effectively “the cause”.

Nevertheless, I will reduce the $16,100 claimed by $675. [ 20 ] Nampa is entitled to costs of $15,425, payable forthwith. Submissions received on the 6 th day of January and 8 th day of February, 2023. Dated at the City of Calgary, Alberta this 20th day of September, 2023. M.H. Hollins J.C.K.B.A. Appearances: Lori A. O’Reilly for the Applicant, Rock River Developments Ltd Shauna N. Finlay for the Respondent, Village of Nampa