Grimes v Governors of the University of Lethbridge, 2023 ABKB 432

Court of King’s Bench of Alberta Citation: Grimes v Governors of the University of Lethbridge, 2023 ABKB 432 Date: 20230719 Docket: 2206 00498 Registry: Lethbridge Between: Austin Grimes Plaintiff - and - The Governors of the University of Lethbridge Defendant _______________________________________________________ Decision on Costs of the Honourable Justice Robert A. Graesser _______________________________________________________ I.

Introduction [ 1 ] In Grimes v Governors of the University of Lethbridge , 2023 ABKB 287 , I dismissed Austin Grimes’ (hereinafter referred to as “Rejeena”) application for judicial review of the decision of the University’s Board of Governors, which in turn had dismissed Rejeena’s appeal from a decision of the University’s General Faculties Council Academic Appeal Committee. The two University Committee decisions imposed sanctions on Rejeena, including suspension, following a series of communications involving a professor that Rejeena was unhappy with.

[ 2 ] The result of the judicial review decision affirmed Rejeena’s suspension from the University of Lethbridge. In the decision, I invited the parties to make written submissions on costs. [ 3 ] I received a letter from Mr. Thiesen, counsel for the University, seeking costs under the principles expressed in McAllister v City of Calgary (City) , 2021 ABCA 25 ( “McAllister ”). [ 4 ] The University says that they should receive 70% of their solicitor client costs, being $18,830.70 plus disbursements of $165.70. Attached to their submission is a copy of their legal bill. The University points out that: 1.

The University’s counsel wrote Rejeena on September 8, 2022 offering to accept a discontinuance of the Application without seeking costs against the Applicant; 2. It encouraged Rejeena to get legal advice; 3. The University was entirely successful – it was not a “close case”; 4. The Application dealt with an important issue, which was finally resolved; 5. The University was obliged to fully defend the Application; 6. The Application had no basis for success; and 7. Rule 1.2(2)(

c) encourages early settlement, and Rejeena rejected a reasonable Calderbank offer. [ 5 ] Rejeena responded to the University’s position, arguing that the University was not wholly successful, and suggested that they had been unsuccessful on most of their arguments. Rejeena repeated many of the complaints about the University’s conduct giving rise to the proceedings at the University.

Rejeena cites Huet v Lynch , 2001 ABCA 37 and Dechant v Law Society of Alberta , 2001 ABCA 81 in relation to costs payable to self-represented litigants and suggests that those cases support costs in the Applicant’s favour and not the University’s. At a minimum Rejeena submits that each party bear their own costs. Rejeena’s submissions conclude: “the University should be sanctioned”. II. Analysis [ 6 ] At the outset, I will state that the University was entirely successful on the judicial review Application. Rejeena lost on every issue. There was no merit to any of the arguments raised, and Mr.

Thiesen is correct in saying that the Application was not “close”. I noted at para 169 of my decision that “the result imposed by the Appeal Committee was the inevitable consequence of the Applicant’s misconduct.” [ 7 ] I found no fault whatsoever with the University’s processes at any level of the proceedings initiated against the Applicant. [ 8 ] The cases cited by Rejeena are cases where the self-represented litigant was successful in Court, not where they had lost.

The case law is clear that self-represented litigants run the same costs risk should they lose their case as do represented parties. [ 9 ] That being said, such findings do not automatically entitle a successful litigant to more than

Schedule C costs. [ 10 ] I confess to being somewhat uncertain as to the state of the law on “party party” costs as a result of the Court of Appeal’s decision in McAllister . [ 11 ] I recognize that McAllister is a Court of Appeal decision and is binding on me. That said, it appears to create a significant shift in the Court of Appeal’s approach to party party costs. It has certainly been interpreted that way. [ 12 ] When McAllister was decided,

Schedule C had not been updated since 1998. Alberta’s Rules of Court had been extensively studied in the context of the Rules Project, which led to the “new” Rules of Court in November 2010. [ 13 ] No changes to

Schedule C were proposed in that process. The Consultation Memo produced by the Alberta Law Reform Commission (No. 12.17, February 2005) recommended no changes to the underlying costs principles or to the amounts in

Schedule C, recognizing that these issues might be addressed by further initiatives. [ 14 ] At para 8, the Committee noted: Alberta presently uses a partial indemnity system for the legal costs component of party and party costs…Accordingly,

Schedule C of The Rules is intended to award approximately 30-50% of a winning party’s actual legal fees, subject always to the discretion of the court to vary a costs award. [ 15 ] At para 31 of the Consultation Memo, the Committee expressed the view that “on balance, a fixed tariff best reflects the principles that underlie the view of costs in Alberta and minimizes the problems encountered in other systems.” [ 16 ] At para 43, the Committee reported that it was unable to reach a consensus as to how to address inflationary factors with

Schedule C. It is interesting to note that the Committee dealing with costs worried about over-indemnification, following Shillingford v Dalbridge Group Inc , 2000 ABQB 28 . That case followed the 1998 amendments to

Schedule C and was a reference to the Court by the taxing officers as to how to deal with the new tariff.

[ 17 ] Following the adoption and implementation of the “new” Rules of Court by the Government in 2010, the Rules of Court Committee began the task of reviewing

Schedule C, which was by then some 15 years old. Following an extensive consultation process, the Rules Committee made recommendations to the Government in 2014 that an inflationary adjustment from 1998 to 2004 be added to the various tariff items. [ 18 ] The recommendations followed consideration of expanding solicitor and client costs as well as looking at indemnity and partial indemnity costs as had been implemented in some other Canadian jurisdictions.

The Rules Committee recommendations did not change the underlying philosophy of partial indemnity costs and a fixed tariff as the “norm”. [ 19 ] Up to the time of these recommendations being made to the Government, and continuing thereafter (even following their eventual adoption), parties frequently complained as to

Schedule C’s inadequacy. Many decisions in the Court of Queen’s Bench were also critical of the level of costs provided by

Schedule C. An inflationary multiplier was sometimes applied, and multiples of the normal column were sometimes used to bring the amount of recoverable costs up to date with inflation and the increased costs of litigation. [ 20 ] I am no stranger to the use of multiples of

Schedule C tariff costs. In Schwartz Estate v Kwinter , 2013 ABQB 147 , I awarded cost of 6 times column 5 in a contested estate case. [ 21 ] The Rules of Court Committee recommendations were ultimately approved and adopted by the Government in March 2020. There was, however, no change to the inflationary multiplier applied to the tariff despite that more than 5 years had passed between the Committee’s recommendations to the time of their adoption.

Unfortunately, by the time the Government accepted and adopted the Committee’s recommendations, 5 years of inflation had already eroded the currency of the new tariff. [ 22 ] McAllister was decided in the period between the Committee recommendations and Government approval and was undoubtedly generated by the growing discontent over use of a tariff that was by then 12 years old. I initially viewed it as a stop-gap to

Schedule C being updated. However, in looking at cost claims and awards since then, and case law surrounding McAllister , it appears that McAllister is being viewed as effecting a fundamental change in the approach to costs in civil litigation. It appears to endorse a new approach that leans towards partial indemnity costs based on a party’s actual solicitor client costs, as opposed to what they have been estimated to be in the

Schedule C “fixed tariff”. [ 23 ] There have been numerous cases considering, interpreting, applying, and distinguishing it. It is clear that successful parties routinely cite McAllister in support of their claims for partial indemnity costs representing 40-50% of their actual solicitor and client costs. There are over 100 reported decisions citing McAllister , mostly Queen’s and King’s Bench decisions. There are no statistics on how frequently “ McAllister costs” are being awarded in unreported cases.

There are a handful of Court of Appeal cases before 2023 where McAllister has been followed and partial indemnity cost awards have been upheld. [ 24 ] Most recently, the Court of Appeal discussed McAllister in Barkwell v McDonald , 2023 ABCA 87 (“ Barkwell #1 ”) and 2023 ABCA 183 (“ Barkwell #2 ”). Barkwell #1 , decided in March 2023, appears to be the first Court of Appeal decision to discuss McAllister at length. [ 25 ] There, the trial judge had awarded the successful party 50% of their solicitor client costs, relying on McAllister .

In the appeal from the trial decision, the Appellant challenged the quantum of costs awarded to the Respondent at trial. [ 26 ] In Barkwell #1 , the Court of Appeal stated at paras 53-58: [53] As the decision in McAllister v Calgary (City) , 2021 ABCA 25 confirms, trial judges have considerable discretion in setting “reasonable and proper costs” under R. 10.31(1) of the Alberta Rules of Court , Alta Reg 124/2010 . The costs award need not be based on

Schedule C in the Rules and indeed

Schedule C is not a mandated default method: McAllister at para 54 . However, as McAllister confirmed at para 58 , that does not mean that

Schedule C is without utility and “is used day in and day out by judges in a great variety of situations.” Using

Schedule C has the advantage of providing parties with greater certainty as to their exposure to costs, it is simple, efficient, and inexpensive to apply, and in many cases avoids the need for lengthy inquiries into and assessment of the appropriate level of costs: McAllister at paras 59-60, 62 . [54] Whenever the winning party seeks a lump sum costs award, that party should provide the court, as a benchmark, an assessment of the fees that would be ordered under

Schedule C: McAllister at para 61 . [55] McAllister confirms that the discretion of a trial judge over costs extends to awarding a percentage of the solicitor and client costs incurred by the successful party. That does not, however, mean that the winning party can simply assert the quantum of the fees that was charged by counsel, and paid by the winning party.

As McAllister recognized by sending the costs award in that case back to the trial judge, a detailed analysis is required to determine “reasonable and proper costs”. [56] The starting point is to recognize the important distinction between solicitor and own client costs, and solicitor and client costs. Solicitor and own client costs are those costs that counsel can charge to the winning party, and that the winning party is required to pay as a matter of contract. Solicitor and client costs represent the costs that a reasonable client might be required to pay for the services rendered.

It is rarely appropriate to award solicitor and own client costs as a costs award in litigation: Luft v Taylor, Zinkhofer & Conway , 2017 ABCA 228 at paras 77-78 , 53 Alta LR (6th) 44. [57] The overriding issue is proportionality. The rules on costs aim to balance indemnity of the winner without unreasonably discouraging access to the court, or unduly penalizing the losing party: McAllister at para 45 . The winning party cannot simply claim a percentage of the fees paid if they are disproportionate to the issues and the amounts involved. Success is not a justification for disproportionate litigation.

One important feature of the tariff in

Schedule C is that it does not measure how much in fees was paid by the winning party, but rather, gives a rough measure of how much should have been incurred in the ordinary case having regard to the amounts in dispute. Obviously, the amount involved is not always determinative, but the principle of proportionality applies to non- monetary issues as well.

[58] The long-established principle is that costs awards are designed to partially, but not fully indemnify the winning party: McAllister at para 37 . It is frequently said that a rough rule of thumb is that the costs award should reflect 40 to 50% of the solicitor and client costs: McAllister at paras 41-42 . That again is not necessarily a reference to the costs incurred and paid by the client, but rather to the costs that should reasonably have been incurred given the issues. This was also the benchmark that was used to set the tariff in

Schedule C ( McAllister at para 43 ), and why we stress that a party, regardless of the costs claimed, should always provide as a benchmark a draft Bill of Costs based on

Schedule C. [ 27 ] In Barkwell #2 , the Court of Appeal ultimately awarded costs based on Column 4 of

Schedule C, concluding at paras 74-76: [74] As noted, the reasons on trial costs ( 2022 ABQB 208 ) awarded the respondent 50% of solicitor and client costs, relying on McAllister v Calgary (City) , 2021 ABCA 25 . As indicated in the appeal reasons, an award of party and party costs based on solicitor and client costs must be justified: 2023 ABCA 87 at paras. 52-61 . The issue is not simply how much the successful party spent, but how much that party can reasonably expect the other party to pay. The amount actually charged to the client is not definitive. The rates and amount of time invested must be justified.

The costs awarded must be proportionate to the amounts in issue. [75] This dispute ended up in a seven day trial, following many years of acrimonious litigation. Both parties took positions that were not supported by the ultimate outcome. Simply put, the amount of litigation was disproportionate to the issues, and both parties incurred excessive solicitor and client costs. This is not an appropriate file in which one party should be entitled to recover from the other party assessable costs based on a percentage of solicitor and client costs. [76] The ultimate outcome places this dispute within Column 4 of

Schedule C of the Rules of Court . Given the complexity, a second counsel fee is justified, and the amount for trial preparation under item 10(1) should be doubled under item 10(2). [ 28 ] I have difficulty understanding the statement in paragraph 53 in Barkwell #1 that

Schedule C is “not a mandated default position”. [ 29 ] That appears to be at odds with Rule 10.31(3) – (6) (although Caterpillar Tractor Co v Ed Millar Sales & Rentals , 1998 ABCA 118 does say at para 6 that

Schedule C is for “taxing officers, not judges”):

(3) In making a costs award under subrule (1)(a), the Court may order any one or more of the following: (

a) one party to pay to another all or part of the reasonable and proper costs with or without reference to

Schedule C; (

b) one party to pay to another an amount equal to a multiple, proportion or fraction of an amount set out in any column of the tariff in Division 2 of

Schedule C or an amount based on one column of the tariff, and to pay to another party or parties an amount based on amounts set out in the same or another column; (

c) one party to pay to another party all or part of the reasonable and proper costs with respect to a particular issue, application or proceeding or part of an action; (

d) one party to pay to another a percentage of assessed costs, or assessed costs up to or from a particular point in an action.

(4) The Court may adjust the amount payable by way of deduction or set-off if the party that is liable to pay a costs award is also entitled to receive an amount under a costs award.

(5) In appropriate circumstances, the Court may order, in a costs award, payment to a self-represented litigant of an amount or part of an amount equivalent to the fees specified in

Schedule C.

(6) The Court’s discretion under this rule is subject to any specific requirement of these rules about who is to pay costs and what costs are to be paid. [ 30 ] I also have difficulty reconciling McAllister and the Barkwell decisions with the Court of Appeal’s 1997 decision in Sidorsky v CFCN Communications Limited , 1997 ABCA 280 , to the extent they are being interpreted as creating a new cost regime. In that case, the Court of Appeal stated at para 28: [28] Costs are discretionary and as a general rule a departure from party and party costs should only occur in rare and exceptional circumstances… [ 31 ] At that time, I believe it is fair to say that party and party costs were equated with

Schedule C. That case involved a claim for solicitor and client costs by CFCN. [ 32 ] I do not read any of the pre- McAllister case law to suggest that “party and party costs” included indemnity costs (solicitor and own client costs) or even partial indemnity costs (“reasonable” solicitor and client costs, or a percentages of either form of solicitor and client costs). [ 33 ] It is certainly true that

Schedule C has always been an attempt to provide “partial” indemnity to successful litigants, but that partial indemnity was achieved by the tariffs in

Schedule C that obviously contemplated proportionality with recoverable costs tied to the amount in issue or the amount awarded. As discussed below, Schutz J (as she then was) equated party party costs with

Schedule C costs ( Blaze Energy Ltd v Imperial Oil Resources , 2014 ABQB 509 at para 61 ). I agree with her analysis. [ 34 ] Indeed, RVB Managements Limited v Rocky Mountain House (Town) , 2015 ABCA 304 describes

Schedule C costs as “presumptive”: [11] The re-enactment of

Schedule C in 2010 does not limit a trial judge’s discretion to set the quantum of costs. The amounts in

Schedule C are presumptive amounts only. Rule 10.31(3)(

a) allows a judge to award costs “with or without reference to

Schedule

C”: Hill v Hill Family Trust , 2013 ABCA 313 at para. 38 , 561 AR 50. The criteria for exercising the court’s discretion over costs found in R. 10.33 would lose much of their meaning if the Court was nevertheless bound by the amounts in

Schedule C. It was not an error in principle for the trial judge to adjust the costs for inflation, and that aspect of the award does not reflect any other reviewable error. [ 35 ] Hill v Hill , 2013 ABCA 313 does appear to minimalize the importance of

Schedule C to judges: [38] We must keep in mind that

Schedule C is a purely-optional rubber stamp for a judge, who may use it or not, or amend it, as he or she sees fit. See Caterpillar v Ed Miller , supra (paras 6, 8), and R 10.31(3)(a). [ 36 ] However, in that case the issue on costs was whether to apply a multiplier to the normal tariff items, not whether there should be a departure from

Schedule C entirely or even at all. [ 37 ] In Caterpillar Tractor Co v Ed Miller Sales & Rentals , 1998 ABCA 118 , Caterpillar sought a multiplier of the usual tariff as well as an inflationary adjustment. Like the circumstances in McAllister where

Schedule C had not been updated for 12 years, in 1998 when Caterpillar was decided,

Schedule C had not been updated since 1984 and had been significantly eroded by inflation. As an aside,

Schedule C amounts were raised later in 1998. The Court commented on

Schedule C as follows: (6 )

Schedule C is addressed to taxing officers, not judges. For the sake of convenience and certainty, it arbitrarily selects certain steps in a lawsuit, and compensates for them. It omits all other steps. In a large suit such as the present one, if one awards multiples of the top column (6), on its face that may seem to overcompensate for certain work. But one must recall that on its face it awards nothing for much other work. And Rule 605(3) expressly says that the items in

Schedule C cover all necessary or convenient work for fully completing the step described, which obviously includes preparation. …

(8) Schedule C is a series of rubber stamps which a judge may approve for a bill of costs. But rubber stamps are not really adequate here in such an unusual case. They are well worth looking at, but merely stamping them onto a blank piece of paper does not describe the complete picture. It is also worth looking at the hours actually expended on certain tasks, at the conduct of the parties in the suit, and at the total bill to the client. Counsel for Caterpillar have given us all that information.

We have detailed bills of costs, time records, and hourly rates. [ 38 ] This decision flowed from the parties’ inability to agree on the quantum of the “party and party costs” awarded to Caterpillar on its successful appeal of the trial decision (at para 90, 1996 ABCA 275 ). At issue was the parties’ disagreement over multiples of column 6 (4 or 6) and an inflationary adjustment. The decision does not say how the final number awarded was arrived at, but it was ultimately based on multiples of

Schedule C columns. [ 39 ] Caterpillar appears to have had no effect on subsequent use of

Schedule C by Queen’s Bench judges or by the Court of Appeal since then, other than to recognize that multipliers and inflationary adjustments were appropriate exercises of judicial discretion in some individual circumstances. [ 40 ] The principles in Sidorsky , RVB , Hill and Caterpillar were not expressly considered in McAllister or either of the Barkwell decisions.

Hill and Caterpillar were mentioned in McAllister , but they were only references and there was no discussion of that case itself. [ 41 ] McAllister says it relies on Weatherford Canada Partnership v Artemis Kautschuk und Kunstoff-Technik GmbH , 2019 ABCA 92 . [ 42 ] Weatherford said at para 11 that “the discretion to award costs must be exercised judicially and in line with the factors in Rule 10.33: [11] The discretion to award costs must be exercised judicially and in line with the factors in r 10.33: Stewart Estate v TAQA North Limited , 2016 ABCA 144 at para 26 , 35 Alta LR (6th).

The general rule is that costs are awarded on a party and party basis, and that this should represent partial indemnification of the successful party – approximately 40-50% of actual costs: Trizec Equities Ltd v Ellis-Don Management Services Ltd , 1999 ABQB 801 at para 20-21 , 251 AR 101; Blaze Energy Ltd v Imperial Oil Resources , 2014 ABQB 509 at para 68 , [2014] AJ No 916 (QL). [ 43 ] Weatherford also relies on Stewart Estate v TAQA North Ltd , 2016 ABCA 144 . It makes no reference to Sidorsky , RVB , Hill , or Caterpillar . RVB is mentioned but only as authority for the use of multiples of columns in

Schedule C in complex cases. Weatherford itself involved an appeal over the use of a 4x

Schedule C multiplier by the case management judge. The decision was not interfered with. [ 44 ] Apart from Stewart Estate , which says nothing about departing from

Schedule C, the authorities cited in Weatherford for the “general rule” that costs should represent partial indemnification of the successful party – approximately 40 – 50% of actual costs” are two Queens Bench decisions. [ 45 ] In Trizec Equities Ltd v Ellis-Don Management Services Ltd , 1999 ABQB 801 , Mason J stated at para 21: [21] In Alberta, the application of this philosophy has, in the usual course, lead to an attempt by the Courts to award costs which achieve indemnity in the range of 40% to 50%. This practice is reflected in the discussions of the

Schedule C Committee, which was struck in order to develop the amendments to

Schedule C which were adopted in 1998. At page 5 of its Interim Report the Committee stated that: “The hard issue is what share of the actual costs should be borne by the unsuccessful litigant. Should it be 80% as perhaps in England or 15% as in Alberta. The Committee considers that it should approach 40-50% in a typical case. Any number is, of course, arbitrary. We

must also remember that costs are in the Court’s discretion and can be increased or reduced as the case warrants. In fact, however, that discretion is often not exercised.” [ 46 ] Mason J discussed the Canadian approach to party party costs, and then described instances where the Court determined it was necessary to depart from

Schedule C.

Schedule C was described as being applicable to the “typical case” (at para 22). [ 47 ] Ultimately, at para 32, Mason J was extremely critical of Trizec’s approach to the litigation and concluded at para 33 that “in light of those circumstances I find that a costs award based on a 50% recovery level would be inadequate in this kind of case”.

He awarded the Defendant 60% of its “appropriate” solicitor and client costs. [ 48 ] In Blaze Energy Ltd v Imperial Oil Resources , 2014 ABQB 509 , the Defendant, Imperial Oil, sought costs of an expedited trial on the basis of 85% of its solicitor client costs, citing Trizec v Ellis-Don in support of its position. Schutz J, as she then was, granted Imperial Oil costs on a scale of 1.5 times column 5 of

Schedule C. Other parties sued by Blaze took similar positions. [ 49 ] She stated at para 61: [61] There are three levels of costs that may be payable by one party to another: 1. Party and party costs: calculated on the basis of

Schedule C of the Alberta Rules of Court or some multiple thereof, plus reasonable disbursements. 2. Solicitor and client costs: which provide for indemnity to the party to whom they are awarded for costs that can be said to be essential to and arising within the four corners of the litigation. 3. Solicitor and his own client costs: sometimes referred to as complete indemnity for costs.

These are costs which a solicitor could tax against a resisting client and may include payment for services which may not be strictly essential to the conduct of the litigation. [ 50 ] It is noteworthy that Schutz J stated at para 67: [67] There is nothing to persuade me to depart from the general rule that successful parties recover costs from the unsuccessful party and that such recovery is normally on a party-and-party basis: Reese at para 7 . That is, the costs recoverable are those fees fixed for the steps in the proceeding by

Schedule C in the Rules , plus reasonable disbursements. [ 51 ] Stewart Estate was an appeal over the use of a

Schedule C multiplier by the trial judge. Para 26, cited in Weatherford , states: [26] Since a costs award is ultimately at the discretion of the judge, there is little in the way of a uniform basis upon which a multiplier is awarded or declined. It is highly dependent on the unique facts and circumstances of each case. However, a general principle arising from the case law is that the discretion to grant costs must be exercised judicially, and in line with the factors in Rule 10.33. Additionally, in actions where the amount in dispute greatly exceeds Column 5, there is a general recognition that

Schedule C is deficient, and that a multiplier may be applied. However, courts are careful to avoid awarding a multiplier that would result in the over- indemnification of a successful party. [ 52 ] After reviewing costs principles, the Court in McAllister found that the trial judge had not properly considered potential cost awards other than under

Schedule C, and sent the issue back to her for her decision. The Court of Appeal made no determination as to what the appropriate costs were in that case. I am unaware as to the ultimate resolution of costs by the trial judge. [ 53 ] At para 64, they described the circumstances of the case: [64] However, we emphasize, once again, that this was a case involving an almost completed piece of protracted litigation, which included a trial and the many steps required to bring the matter to trial.

The issue of indemnification becomes a more important consideration in assessing costs at the end of a lawsuit than it does at each and every step of the way. At the interlocutory stage, it is often not clear who will ultimately be entitled to some level of indemnification. [ 54 ] In discussing

Schedule C, the Court of Appeal expressly said at para 58: [58] That said, we should not be taken as questioning the utility of

Schedule C, which is provided for in the Rules of Court and which is used day in and day out by judges in a great variety of situations. [ 55 ] Ultimately, I do not see that McAllister and Barkwell have any greater authority than the earlier decisions. I do not see that the comment in Weatherford about the “general rule” being that party party costs should be “between 40 and 50% of actual costs” fundamentally changed the law and made use of

Schedule C the exception rather than the general rule. None of these decisions purport to overturn or modify the earlier authorities in any way. The earlier decisions were not even considered other than by way of brief reference for a couple of them, and not by way of any analysis. As such, they all must be read together and rationalized somehow. [ 56 ] I will make some observations: 1. The appropriateness of a solicitor and own client bill has generally been the bailiwick of the Review Officers, who have considerable expertise in this area, as opposed to judges; 2. Cost awards outside the tariffs in

Schedule C (solicitor and own client costs, solicitor and client costs, and partial indemnity costs) are very fact driven; 3. The basic principles of party party costs in the Rules of Court have not changed since 1998. Only the amounts and tariff items have; and

4. Some Court of Appeal decisions, as cited above, treat

Schedule C as the starting point for a party party cost award. [ 57 ] From all this I conclude that McAllister is an example of a case where the strict application of

Schedule C was not appropriate. It does not stand for any change in costs principles as previously outlined in earlier Court of Appeal decisions. I do not read either of the Barkwell decisions or Weatherford to say anything different. [ 58 ] Specifically, I do not see that any of these decisions now requires that judges routinely compare what

Schedule C would provide and what the parties have actually spent on their lawyers, absent exceptional circumstances. “Routine” or ordinary cases should continue to attract

Schedule C costs, and in appropriate cases, with multipliers applied or an inflationary adjustment. [ 59 ] These decisions do make it clear that in appropriate cases the court can award partial indemnity costs base on the actual solicitor client costs incurred by the successful party, or, as in Trizec , partial indemnity costs based on “appropriate” solicitor and client costs.

There is no doubt that with that clarification, successful litigants have been quick to seize on the opportunity to seek partial indemnity costs where solicitor and client costs would not be available. [ 60 ] The Court of Appeal commented at para 53 of Barkwell #1 that “Schedule C is not a mandated default method.” [ 61 ] It does say at para 54 that if the winning party is seeking something other than

Schedule C costs, they should provide the Court with an assessment of the fees that would be ordered under

Schedule C to be used as a “benchmark”. [ 62 ] I do not understand what the Court means by “not a mandated default method”. It is the only method available to taxing officers. Rule 10.31 does not differentiate between “the Court” (meaning judges and applications judges) and review officers. RVB Management , decided only 8 years ago, describes

Schedule C as “presumptive”. [ 63 ] Until the Court of Appeal perhaps clarifies what it means by “not a mandated default method”, I will proceed on the assumption that they are simply reiterating that since costs are highly discretionary, there are other methods of awarding costs that may be used when

Schedule C is inappropriate. [ 64 ] As such, except in cases where indemnity costs based on solicitor and client costs are sought,

Schedule C remains the starting point for any party party costs award. As stated in RVB Management , they are “presumptive”. A judge may ultimately choose to award costs using some other method, but

Schedule C needs to be considered.

Schedule C costs will be applied, perhaps with a multiplier or an inflationary adjustment, unless the use of

Schedule C is determined to be inappropriate. [ 65 ] In other words, departing from

Schedule C for party party costs requires some exceptional circumstances. Complexity and misconduct during the litigation process have been found to be “exceptional” in the past. This factor will have to be analyzed on a case- by-case basis. [ 66 ] Where a percentage of actual solicitor and client costs is sought, Barkwell #1 says at para 60 : 60] If the winning party seeks a costs award based on a percentage of solicitor and client fees, that request must be justified by a consideration of the factors in R. 10.2 that are relevant to the reasonableness of a fee.

That includes the importance of the issues, the circumstances of the client, the manner in which the services were provided, the skill and responsibility involved, and other relevant considerations. Many of those same issues are also listed in R. 10.33, which in addition to the amount in issue, refers to the complexity of the action and the conduct of the parties.

Also relevant are things like the hourly rates being charged (including paralegal or administrative time), whether those rates were appropriate given the seniority and experience of counsel, whether the work was being done by lawyers of appropriate seniority, the number of counsel involved, whether the duration and intensity of pre-trial questioning was appropriate or excessive or disproportionate, whether unnecessary interlocutory proceedings were launched and the outcome of those proceedings, and whether the ultimate fee was proportionate to the issues. [ 67 ] The judge applying Barkwell must therefore embark on the same review of the actual solicitor client fees and disbursements as would the Review Officer under Rule 10.9. [ 68 ] If this is indeed required of judges on a regular or routine basis, I have some basic concerns: 1.

Court of King’s Bench does not have the capacity to have every party party costs award turned into a post-trial battle; and 2. Without an exhaustive review of every step in the litigation, a judge cannot make a fair determination as to whether each step was reasonable, or opposition to the other party’s step was reasonable and proportionate, or whether it was dealt with by a lawyer at the appropriate level and at an appropriate hourly rate, and so on.

Caterpillar notes in para 8 that the Court of Appeal had been provided with Caterpillar’s lawyers’ time records and hourly rates. [ 69 ] I cannot imagine having to undertake such tasks following years of litigation leading to the costs award, unless my

schedule was adjusted to provide for days upon days of sitting time to do such a review with the arguments of counsel. That kind of sitting time is not available, other than at the expense of other more pressing matters than costs. [ 70 ] I recognize that the Court of Appeal expressly criticized similar concerns expressed by the trial judge in McAllister , and rejected them as a valid reason for not looking at indemnity costs.

I agree that resource shortages imposed by Governments should not be the deciding factor in a judge’s exercise of discretion in regard to costs. [ 71 ] However, before starting down the path of looking at a party’s actual legal costs, in my view there should be a preliminary determination, made summarily, by the judge or applications judge that an award of partial actual indemnity costs is a reasonable possibility in the circumstances of the case. There is no presumption or even an inference as to the inapplicability of

Schedule C costs simply because the successful party has incurred more than double in solicitor and own client costs than

Schedule C would ordinarily award.

[72] I note with approval that Master Schlosser performed a similar analysis in far less detail than this decision in Brosseau Estatev Dubarry Estate, 2023 ABKB 378. His comments at paras 21 resemble mine here, but in a much pithier way: [21] The McAllister decision seems to be on every successful counsel’s lips. However, it would be a misreading of the case to say that itsupplants

Schedule C with a 40-50% indemnification model. With respect, this case is simply a reminder that there are a wide range ofchoices on the costs menu, depending on the Court’s appetite and the circumstances of any particular case; all of which are contemplatedby rules 10.33 (and 10.2) with respect to scale, and r 10.31, with respect to options. It is not a shift from prix fixe to carte blanche, ornearly so. [22] Costs remain wholly within the discretion of the Court. Apart from the comprehensive list of principles set out in the McAllisterdecision, the case has no direct application to this one.

As noted, and unlike McAllister, this case is not a piece of hard-fought protractedlitigation involving ‘arguably novel’ liability. Though it has been protracted, this case is the opposite. III. Assessment [73] In this case, I am not satisfied that there are any factors that suggest that a departure from

Schedule C costs is in order. [74] “Close cases” should not be treated differently than more obvious cases. Litigants have a right to bring a dispute to court.Frivolous or vexatious cases can frequently be nipped in the bud by

summary proceedings. The issues were important to a self-represented student feeling aggrieved by the decisions of the large University he attended. They were not particularly important to theUniversity as there were no important precedents being sought or that were set. [75] The issues here were not particularly complicated or complex, although dealing with them was more difficult because theApplicant was self-represented.

That said, costs against self-represented litigants are not treated differently than costs against representedlitigants, although costs where self-represented litigants are involved may be higher because of additional time that may be required. [76] I do not see that this was a particularly important decision. No new principles of law were involved and no credible attack wasmade on the University’s policies and procedures. [77] In its essence, this was a routine judicial review of an expulsion decision from a University.

It followed the specified internaldiscipline policies and procedures, and then followed the normal course of a judicial review. It was more complicated because of theApplicant’s lack of familiarity with the law in this difficult area. However, there is no reason to treat this case as an exceptional one, butfor one issue: the Calderbank offer made to the Applicant as soon as the Application for judicial review was filed. [78] The Rules provide that if an offer is not beaten, the rejecting party pays a cost consequence.

Rule 4.29 provides: 2) Subject to subrule (4), if a defendant makes a formal offer to settle that is not accepted and a judgment or order in the action is madethat is equal to or more favourable to the defendant than the offer, the defendant is entitled to costs for all steps taken in the action inrelation to the action or claim after service of the offer.

(3) A defendant is entitled to double the costs provided for in subrule (2), excluding disbursements, if (

a) subrule (2) applies, and (

b) the action or claim that is the subject of the formal offer to settle is dismissed. [79] Here, the Application was dismissed in its entirety, and if an offer to settle under Rule 4.24 had been made, the Universitywould be entitled to claim double the usual cost award. Calderbank offers do not carry the same weight and automatic application Rule4.29(3) provides, but such an offer is to be taken into account. [80] There is case law on what constitutes an “offer to settle”.

Allen (Next Friend of) v University Hospitals Board, 2006 ABCA101 states that to attract the double cost rule, an offer must be a “genuine” offer. The Court of Appeal stated at para 13-17: [13] For a settlement offer to satisfy the purpose of the compromise rules and justify a double costs sanction, it must have been agenuine offer at the time it was served and remained open for acceptance: Petro-Canada Products Inc. v. Dresser- Rand Canada Inc. (2004), 33 Alta. L.R. (4th) 197 (C. A.), 2004 ABCA 282. [14] In every case where double costs are claimed under

Part 12 on the basis of an unaccepted offer of settlement, the court mustdetermine if the offer was genuine. As a general rule, for an offer of settlement to qualify as a genuine offer it must have been one thatwas reasonable and realistic in all the circumstances current at the time it was served and remained open. Characterization of a disputeas “all or nothing” is irrelevant to a consideration of whether the compromise rules apply. This Court pointed out in Budget Rent-A-Carof Edmonton Ltd. v. Security National Insurance Co., 2001 ABCA 71 , [2001] A.J.

No. 321 at para. 8, that the issue on appealis often “all or nothing”, but that alone does not constitute a “special reason” for excluding application of the compromise rules: By the time cases reach the appeal stage there is often only one major issue to be decided. The fact that the outcome of an appeal is an“all-or-nothing” proposition does not constitute a special circumstance which negates the double costs rule. ....

The nature of the issue or issues in dispute may, however, be one of the circumstances relevant to the question of whether an offer isgenuine. [15] To be genuine, an offer of settlement made pursuant to

Part 12 must include an element of compromise: Re Blue RangeResources Corp. (2000), 281 A.R. 351 (C.A.), 2001 ABCA 177at para. 1. An offer to settle for the full amount of a liquidated claimplus judgment interest and costs to the date of service of the offer cannot be characterized as a genuine offer as it lacks an element of

compromise: Labbee v. Peters , supra . Likewise, an offer to accept the full amount of a trial judgment plus interest and costs to the date of service is not a genuine offer to compromise an appeal: Blue Range, supra at paras. 11 and 13. The addition of an offer to forego costs that may be incurred after service of the offer does not introduce an element of compromise.

Where a settlement offer does not contain an element of compromise, the court may nevertheless consider it to have been reasonable in the circumstances and exercise its discretion to award enhanced costs. [16] An offer of settlement that does not realistically reflect the relative merit of the parties’ positions at the time it is made is not a genuine offer. It is one made without any reasonable expectation that it will be accepted and for the sole purpose of invoking the double costs sanction: Kerr v. Kerr (2000), 293 A.R. 384 (C.A.), 2001 ABCA 152 .

Such an offers is merely a no-risk litigation strategy or tactic.

If such an offer were held to justify a double costs penalty if not accepted, a litigant with a bona fide perception of the facts or the law, or both, different than that of his adversary could only pursue the matter to trial or appeal at an unjustifiable financial risk, thus potentially impeding the access of deserving litigants to the courts and aggravating the inherent advantage enjoyed by litigants with the deepest pockets. [17] The assessment of an offer’s genuineness is not confined to a consideration of whether it was made honestly and in good faith.

The fact it contains an element of compromise, although necessary and relevant, may not be determinative. The genuineness of an offer must be assessed as at the time it was served and remained open and its character cannot be decided by simply comparing it to the result of the trial or appeal. That is only one factor to be considered.

Other factors that may be relevant include the amount or nature of the settlement offer relative to the relief claimed or the judgment at trial, the relationship of the proposed settlement to an objective view of the relative merit of the positions of the parties, and the timing of the offer in relation to the commencement of the trial or hearing of the appeal. None of these factors, or any other single factor, is necessarily conclusive.

An assessment of whether an offer was or was not genuine requires an examination of all of the surrounding circumstances, subjective and objective, existing at the time the offer was served and remained open, as well as the outcome of the trial or appeal. [ 81 ] More recently, Bruen v University of Calgary , 2019 ABCA 275 considered the consequences of an offer to pay the Appellant $1 on the eve of the hearing of the Appeal.

The Court of Appeal concluded that such an informal offer was “not sufficiently realistic and reasonable to have any impact on costs.” (at para 10). [ 82 ] The Court of Appeal observed at para 8: [8] The costs rules respecting offers are designed to encourage the principled and reasonable settlement of litigation, and to deter litigants from taking unreasonable positions.

In order to attract costs consequences, offers must be realistic, reasonable and represent a bona fide compromise or other articulable reason for settlement: Allen (Next Friend of) v University Hospitals Board , 2006 ABCA 101 at paras. 12-5 , 59 Alta LR (4th) 1, 384 AR 23. They are not to be used as a mere stratagem for doubling costs: Allen (Next Friend) at para. 16. The courts view with scepticism offers to merely abandon actions or appeals, or to do so for nominal sums.

An offer to the other party that they “think again” generally contains no element of compromise, and is unlikely to promote settlement. [ 83 ] It cited an earlier decision Budget Rent-A-Car of Edmonton Ltd v Security National Insurance Co, 2001 ABCA 71 which is sometimes cited as authority that a nominal payment plus foregoing costs may amount to a “genuine offer to compromise”. What is not as frequently noted is that the Respondent there also offered to forego its cross-appeal, and the fact that the nominal $1 offer would have resulted in the Appellant being able to obtain some trial costs and its appeal costs.

There was undoubtedly value to the offer in that case. [ 84 ] In Union Square Apartments Ltd v Academy Contractors Inc (Abalon Construction) , 2017 ABQB 151 , Topolniski J discussed “nominal offers” at paras 18 and 19: [18] Nominal settlement offers that include a waiver of costs incurred to the date of service may be ‘genuine’ if they adequately reflect the relative strength of the parties’ positions at the material time: Carbone v Whidden , 2015 ABCA 255 , [2015] AJ No 894 (QL) at paras 36-39 ; Breitkreuz v Alberta (Minister of Infrastructure) , 2016 ABQB 377 , [2016] AJ No 765 (QL); Mraz v Herman , 2016 ABQB 14 , [2016] AJ No 19 (QL) at paras 16-17 ; Blaze Energy at paras 92-93; SGH v Gorsline , 2001 ABQB 671 , 292 AR 329 at para 13 ; Jama v Bobolo , 2002 ABQB 216 , 311 AR 362 at para 19 . [19] However, nominal offers to waive costs that are made early in the litigation will not be considered to be ‘genuine’ if the offeror could not possibly know the strength of their position at that time.

An example of this scenario is Marathon Canada Ltd v Enron Canada Corp , 2008 ABQB 770 , 447 AR 89, where the Plaintiff offered to settle if the Defendant paid the full amount of its claim and discontinued its counterclaim in exchange for the Plaintiff waiving costs. The offer came early in the litigation before questioning, and after only two of twenty-one affidavits of records exchanged. [ 85 ] Here, there was no real offer to the Applicant. The letter advises that if the Application is not immediately withdrawn, the University will start work responding and will be looking to its costs.

It had no value to it and was used as a “mere stratagem”. [ 86 ] While a nominal offer may in some circumstances be effective, such as when a claimant or defendant knows or ought to know that they have no arguable case, knowledge of that is not made out by a letter from the other party’s lawyer saying “you have no case”. [ 87 ] As a result of the foregoing, the University’s costs will be set on Column 1 of

Schedule C. The Application took a full court day to argue, so the University is entitled to fees of $2,025.00 plus GST of $101.25 ($2,126.25), and disbursements as claimed: $165.70. This totals $2,291.95. [ 88 ] I am mindful that

Schedule C is now some 8 years out of date. The adjustment in March 2020 was based on recommendations made to the Government in 2014. Statistics Canada information says there has been an approximate 25% increase in the cost of living in that interval. [ 89 ] If

Schedule C is to remain relevant, it needs to be updated regularly to keep in line with the cost of living. As such, I will apply a 1.25% multiplier on the fee portion of the current

Schedule C tariff.

[ 90 ] As such, the fee portion including GST will be increased to $2,657.81. Heard by exchange of written submissions following the hearing. Dated at the City of Edmonton, Alberta this 19 th day of July, 2023. Robert A. Graesser J.C.K.B.A. Appearances: Austin Grimes, self represented litigant Taylor Thiesen, Reynolds Mirth Richards & Farmer LLP, for the University of Lethbridge