PTW Canada Ltd v Smith, 2023 ABKB 138

Court of King’s Bench of Alberta Citation: PTW Canada Ltd v Smith, 2023 ABKB 138 Date: 20230310 Docket: 2201 05725 Registry: Calgary Between: PTW Canada Ltd Applicant - and - Brett Smith, Vital Controls Inc and Jayson Pancoast Respondents _______________________________________________________ Reasons for Decision on Costs of the Honourable Justice C.M. Jones _______________________________________________________ [ 1 ] On May 20, 2022, I issued an ex parte Anton Piller Order (the “APO”) that included certain injunctive provisions against the Respondent, Brett Smith.

On June 27, I issued an ex parte injunction order (the “Injunction”) against the Respondent, Vital Controls Inc (“Vital”) and its agents and employees. On October 20 and 21, 2022, I heard an application for review of the APO and the Injunction. I concluded that both properly had been issued at first instance. I further concluded that certain search and seizure provisions in the APO were effectively spent and of no further effect but that the injunctive provisions of the APO should be maintained in force. I also continued the Injunction.

The parties have been unable to agree on costs in respect of the granting, execution and review of the APO and the Injunction. Pursuant to my direction, they have provided written submissions. [ 2 ] PTW Canada Ltd (“PTW”) takes the position that it was entirely successful in that I granted the APO and the Injunction and then, on the review application, declined to set aside or vacate them.

Citing Enviro Trace Ltd v Sheichuk , 2015 ABQB 28 , it takes the position the successful party on an interlocutory injunction application is entitled to costs payable forthwith. [ 3 ] PTW seeks a very large costs award of approximately $1 million, inclusive of disbursements. It attributes roughly two-thirds of this amount to the APO and one-third to the Injunction. It seeks the former against Smith and the latter against Vital. PTW justifies this amount on various grounds. First, it asserts that the proceedings have been complex, time-consuming and expensive.

Second, PTW points to various conduct on the part of the Respondents that it argues warrants enhanced costs. [ 4 ] Mr. Smith disputes PTW’s claim that it was entirely successful on the review application. He contends that he too had some success in that I declined to continue the search and seizure provisions of the APO. He argues that Enviro Trace is distinguishable because in that case, there was evidence of wrongdoing and the claim had been quantified.

He asserts that neither of those things is true in this case and that what we have here is an unquantified claim based on mere suspicion that confidential information has been misappropriated. [ 5 ] For its part, Vital acknowledges that the successful party on an interlocutory application normally is entitled to costs payable forthwith, but asserts that the Court has a great deal of discretion in dealing with costs.

It points out that, while I declined to set aside the Injunction, I have made no finding of wrongdoing by Vital. [ 6 ] All parties made reference to the costs provisions of the Rules of Court and to McAllister v Calgary (City) , 2021 ABCA 25

and to the “general rule” that a successful party should recover costs approximating 40-50% of its actual costs incurred. PTW, however, argues that this assumes no misconduct in the litigation. Both Mr. Smith and Vital argue that the amount of costs sought by PTW is excessive. Indeed, Mr. Smith argues that it is punitive and will limit his ability to defend PTW’s claims at trial. [ 7 ] Mr. Smith also argued that the APO was unnecessary and that he “was not given the opportunity to provide and/or handover any material in his possession.” I reject this argument.

In my decision on the review application, I found that Mr. Smith’s conduct was of sufficient concern to warrant the initial issuance of the APO. [ 8 ] Both Mr. Smith and Vital proposed alternatives to the costs order sought by PTW. Mr. Smith proposed that each party bear their own costs, that costs be in the cause or that I award PTW party-party costs on Column 1 of

Schedule C to the Rules . Vital proposes deferring the costs award to the trial judge or awarding

Schedule C costs in respect of specific steps taken against it. [ 9 ] As I see it, the fundamental difficulty in this case is that the true benefits of the APO and the Injunction have yet to be ascertained. The purpose of an Anton Piller order is to preserve evidence where there is a risk that it may be lost or destroyed before the discovery process can do its work. That has been achieved here in the sense that various materials have been seized from Mr. Smith and examined. However, it has not yet been established that any of the seized materials were confidential information belonging to PTW.

The purpose of the Injunction was to preclude Vital from using PTW’s confidential information but again, it is not yet established that Vital came into possession of any such information. [ 10 ] Mr. Smith contends that PTW’s claim against him for misappropriation of confidential information is without foundation because none of the materials he took fell into that category. Vital too claims to be innocent of PTW’s claims against it. [ 11 ] Whether the materials Mr.

Smith took were or were not confidential information belonging to PTW is a determination for the trial judge, as is the question of whether Vital received or used any such confidential information. It is not my place to make these determinations on this interlocutory application. [ 12 ] That being the case, it would be inappropriate in my view to make a substantial costs award against Mr. Smith or Vital at this stage.

Given the uncertainty as to the nature of the materials seized, and therefore the utility of the APO and the Injunction, this matter is somewhat different in character from an ordinary interlocutory application where the granting of costs payable forthwith is often appropriate. [ 13 ] For that reason, I find that the costs in respect of the granting, execution and review of the APO and the Injunction should be determined by the trial judge at the conclusion of the proceedings. Dated at the City of Calgary, Alberta this 10 th day of March, 2023. C.M. Jones J.C.K.B.A.

Appearances: Richard N Billington, KC Billington Barristers for the Applicant Lori Brienza and Laura Dunnigan Mathews, Dinsdale & Clark LLP for the Applicant Charles Osuji and Clifford Sukhai Osuji & Smith Lawyers for the Respondents , Brett Smith and Jayson Pancoast Todd M. Lee Miles Davison LLP

for the Respondent, Vital Controls Inc. Oliver Ho Jensen Shawa Solomon Duguid Hawkes LLP as independent Supervising Solicitor