Rath & Company Barristers & Solicitors v Sturgeon Lake Cree Nation, 2022 ABKB 784

Court of King’s Bench of Alberta Citation: Rath & Company Barristers & Solicitors v Sturgeon Lake Cree Nation, 2022 ABKB 784 Date: 20221128 Docket: 1801 11136 Registry: Calgary Between: Rath & Company Barristers & Solicitors Respondent - and - Sturgeon Lake Cree Nation Applicant _______________________________________________________ Endorsement on Costs of the Honourable Justice B.B.

Johnston _______________________________________________________ [ 1 ] Sturgeon Lake Cree Nation [SLCN] seeks costs against Rath & Company Barristers & Solicitors [Rath] for all steps relating to the decision of Applications Judge Prowse dated December 12, 2019: Rath & Company Barristers & Solicitors v Sturgeon Lake Cree Nation , 2019 ABQB 949 [ Prowse Decision ] and the appeal of the Prowse Decision . [ 2 ] SLCN also seek costs of the appeal from the decision of Applications Judge Farrington: Sturgeon Lake Cree Nation v Rath & Company Barristers & Solicitors (13 November 2020), Calgary 1801-11136 (Alta QB) [ Farrington Decision ].

SLCN only seeks costs related to the Farrington Appeal because Applications Judge Farrington directed that the parties bear their own costs. [ 3 ] SLCN seeks a multiplier of three times Column 5 of

Schedule C. [ 4 ] Rath argues that SLCN is not entitled to costs. Alternatively, any costs should be calculated under Column 3 of

Schedule C with no multiplier. Background [ 5 ] Rath represented SLCN in litigation with the Federal Government relating to its economic and agricultural benefits claims. SLCN signed a Contingency Fee Agreement with Rath relating to the litigation around October 9, 2014. [ 6 ] Rath issued their final account for legal services in the amount of $28,577,607.80 on February 16, 2018. [ 7 ] On August 7, 2018, counsel for SLCN obtained a date and time from the Review Officer for an appointment for review of both the retainer and the lawyer’s charges and filed the appointment [Appointment].

[ 8 ] The Appointment was not served on Rath until December 24, 2018. The Appointment had a return date of January 3, 2019. [ 9 ] Rath argued before the Review Officer that the Appointment was out of time pursuant to rule 10.10 of the Alberta Rules of Court , Alta Reg 124/2010 , as it was served more than six months from the date of the final account. The matter was referred by the Review Officer to the Court. [ 10 ] Rath’s application to set aside the Appointment was allowed in the Prowse Decision .

SLCN appealed the Prowse Decision to this Court. [ 11 ] SLCN filed an application to extend the time for service of the Appointment. That application was granted in the Farrington Decision .

Rath appealed the Farrington Decision to this Court. [ 12 ] The appeals were heard consecutively before me pursuant to the Order of Justice Macleod dated May 5, 2021. [ 13 ] On August 18, 2022, I issued my written decision in Rath & Company Barristers & Solicitors v Sturgeon Lake Cree Nation , 2022 ABQB 556 [ Rath Decision ]. [ 14 ] In my decision, I allowed SLCN’s appeal from the Prowse Decision and dismissed Rath’s appeal from the Farrington Decision .

Rath was subsequently denied leave to appeal the parts of the Rath Decision that address the Farrington Decision : 2022 ABCA 373 . [ 15 ] Additional facts are set out in the Rath Decision . I will not repeat the additional facts. [ 16 ] I directed that parties could speak to costs within 30 days of my decision. [ 17 ] Submissions on costs proceeded by way of both oral submissions and written briefs. Submissions of Counsel [ 18 ] SLCN argues: • they were entirely successful in both appeals and are entitled to costs; •

Schedule C Column 5 is appropriate as the claim exceeds $2 million; • enhanced costs equal to a three times multiplier are appropriate based on rule 10.33 because: • SLCN was fully successful in the result; • although the issues were not complex, they were of great importance to SLCN particularly given the fees involved were over $28 million and the application required SLCN to commit significant resources to bring the application before the Court. • a three times multiplier is appropriate where

Schedule C alone would provide an inadequate result. In this case, “the issues that were before this Court have taken years to resolve, which has included numerous affidavits, questioning on affidavits, and briefs. There was an extremely high volume of evidence before this Court. Moreover, the quantum of damages greatly exceeds $2 million”. [ 19 ] Rath argues: • although a successful party is entitled to costs, this is subject to the discretion of the Court; • rule 10.31 confirms the Court should consider the factors under rule 10.33, including “(

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” and “(

g) whether a party has engaged in misconduct”; • Applications Judge Farrington and this Court both raised concerns with the delay in serving the Appointment until December 24, 2018; • since it was SLCN’s conduct that wasted court resources and led to these proceedings, it is fair and just to order that the parties bear their own costs; • alternatively, the costs claimed by SLCN are disproportionate given the low complexity of the applications and there is no basis to apply a multiplier; • any delay can be attributed to the COVID-19 pandemic and the availability of chambers dates, not due to Rath’s conduct; • there has been no prejudice to SLCN; and • some of the specific entries in the Bill of Costs are inappropriate.

Issue [ 20 ] Should costs be awarded to SLCN? If so, in what amount?

Is SLCN Entitled to Costs? [ 21 ] A successful party is entitled to costs, subject to the discretion of the chambers justice: McAllister v Calgary (City) , 2021 ABCA 25 at paras 17 and 21 . [ 22 ] Here, SLCN was substantially successful on both appeals. [ 23 ] A Court may depart from the typical award of party and party costs.

Generally, such a departure should occur only in rare and exceptional circumstances: Sidorsky v CFCN Communications Limited , 1997 ABCA 280 at para 28 . [ 24 ] Rath provided several cases demonstrating exceptional circumstances in which parties bore their own costs: Grande Prairie (County No 1) v Hildebrand , 2018 ABCA 406 ; Heather v Hatt , 2022 ABQB 496 ; Sharpe v Sharpe , 2014 ABQB 159 ; Kissel v Rocky View (County) , 2020 ABQB 570 . [ 25 ] Those cases demonstrate more serious conduct than occurred in this instance.

SLCN did not put forth moot arguments, fabricate evidence, make improper adjournment requests or advance irrelevant allegations of misconduct. SLCN served the notice of Appointment on Christmas Eve, which left Rath with little time to prepare. Although I have some concerns with the litigation strategy employed by SLCN, as discussed below, I do not find that it rises to the level of conduct sufficient to deny costs to SLCN. [ 26 ] Rule 10.33(1) outlines considerations that a court may consider in making a costs award, including:

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; and

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate. [ 27 ] As the successful party, SLCN is entitled to costs. The question, therefore, is the appropriate quantum of costs. What Costs are Appropriate? [ 28 ] The amounts involved in the action were large. However, it is not yet known whether the $28,577,607.80 legal account will be subject to any reduction. [ 29 ] The history of this matter was somewhat lengthy, but the issues before this Court were not complex. Both parties filed comprehensive written briefs for the appeals.

These briefs were necessary and helpful to this Court. [ 30 ] I also note that the parties filed voluminous evidence and materials for the applications before Applications Judges Prowse and Farrington. These materials were also before me and were helpful. [ 31 ] The Court may consider the factors set out in rule 10.33(2).

In this case, Rath argues that this Court should have regard to: • the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action: rule 10.33(2)(a); and • whether a party has engaged in misconduct: rule 10.33(2)(g). [ 32 ] Both parties assert that the conduct of the other party unnecessarily lengthened and delayed the action. [ 33 ] I commend the parties for seeking an order to have the appeals heard consecutively before one justice.

Indeed, this added to efficiencies of the litigation. [ 34 ] Although Rath filed voluminous materials, this was not surprising given the nature of the interests at stake. I have also considered that this was the first time the courts have considered the provisions relating to time for service of an Appointment under rule 10.10 .

I do not find that the filing of voluminous materials “unnecessarily” lengthened the action. [ 35 ] However, I find that SLCN’s initial conduct in the litigation was a significant contributing factor in these proceedings being commenced, notwithstanding that SLCN was ultimately successful in both appeals.

Specifically, these applications may have been avoided if SLCN had promptly served the Appointment. [ 36 ] This concern was raised by Applications Judge Farrington, who noted, “I remain a bit troubled by the strategic decision to hold off on serving the appointment and there is no doubt in my mind that was a decision that was calculated for reasons which really have not been disclosed”: Farrington Decision at 45. [ 37 ] In declining to award costs, he further noted, “I am not inclined to grant costs to the party that was successful with the

extension application simply for that reason, that the whole reason that we are in this mess is a conscious decision”: Farrington Decision at 45. [ 38 ] Although my comments were not dealing with costs, I raised similar concerns in the Rath Decision at para 71 : I agree with Master Farrington that SLCN’s delay in serving the Appointment was a conscious decision. It troubles me that counsel for SLCN waited until Christmas Eve to serve an Appointment with a return date of early January.

Certainly, such action virtually guarantees that Rath would have insufficient time to prepare and nothing substantive would occur on the date set for the Appointment. Instead, it would almost invariably result in an adjournment of the review while Rath prepares its response. [ 39 ] In light of the above concerns, it would not be proper to reward SLCN for employing this type of litigation strategy by awarding a multiplier: Flock Estate v Flock , 2021 ABQB 774 at paras 31 and 33 . [ 40 ] Having considered rules 10.31 and 10.33, I find that an award of party and party costs is appropriate.

Given the claim exceeds $2 million, Column 5 applies. This includes costs for steps related to the Prowse Decision and appeal, the Farrington appeal and costs for this application. [ 41 ] I decline to decide at this time whether certain Bill of Cost entries are appropriate. The Review Officer is best positioned for that task. [ 42 ] In the result, I award SLCN costs based on Column 5 of

Schedule C, with no multiplier. Heard by written submissions on the 3 rd and 10 th days of November 2022 with oral submissions on the 22 nd day of November 2022. Dated at Calgary, Alberta this 28 th day of November 2022. B.B. Johnston J.C.K.B.A. Appearances: Glenn K. Epp & Inez Agovic for Sturgeon Lake Cree Nation Marco S. Poretti for Rath & Company Barristers & Solicitors