581257 Alberta Ltd. v. Aujla, (2011) 518 A.R. 323 (QB)

• Judge: Topolniski, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 11, 2011
• Citations: (2011), 518 A.R. 323 (QB);2011 ABQB 539

581257 Alta. Ltd. v. Aujla (2011), 518 A.R. 323 (QB)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. SE.030

581257 Alberta Ltd. (plaintiff) v. Balwinder Aujla and Harwinder Aujla (defendants)

(0803 04677; 2011 ABQB 539)

Indexed As: 581257 Alberta Ltd. v. Aujla

Alberta Court of Queen's Bench

Judicial District of Edmonton

Topolniski, J.

September 2, 2011.

Summary:

The plaintiff employed the two defendants (the Aujlas) at one of its liquor stores. The plaintiff alleged the Aujlas misappropriated $350,000 from the store's till, and converted those funds to their own use. The plaintiff obtained partial summary judgment of about $2,600 plus interest for specific conversions occurring on particular dates. The defendants made a formal offer to settle for $20,000, plus interest, plus costs and discontinuance of the defendants' $45,000 counterclaim for defamation. The offer was not accepted. The balance of the claim proceeded to trial. At the conclusion of the trial, the plaintiff reduced its damages claim to a maximum of $116,000.

The Alberta Court of Queen's Bench, in a decision reported at (2011) 507 A.R. 315, found the Aujlas liable for damages for conversion in the total sum of $14,784.42. The plaintiff asked for solicitor-client costs and cost consequences of the parties' respective notices to admit facts. Unaware that a formal offer to settle had been made by the defendants, the court ordered party and party costs against the defendants. The defendants applied for reconsideration of the costs award to address their offer. The plaintiff applied to have its experts' fees paid. The judgment roll had not yet been entered.

The Alberta Court of Queen's Bench granted the parties' applications to reopen the costs award and determined the issues.

Practice - Topic 6922

Costs - General principles - Power to amend award (incl. rehearing) - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The plaintiffs asked to have its experts' fees paid - The judgment roll had not yet been entered - Rule 9.13 of the Alberta Rules of Court (2010) permitted the court to vary a judgment at any time before it was entered if there was good reason to do so - Rule 4.28(1) expressly required that a formal offer to settle not be disclosed to the court until the offer was accepted or the remedy had been decided - The Alberta Court of Queen's Bench held that there was good reason to allow the parties' cross-applications to reopen the case since the offer was not disclosed prior to issuance of its reasons for decision - See paragraphs 16 to 19.

Practice - Topic 6923.1

Costs - General principles - What rules applicable (incl. when to apply cost grid) - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The offer had been withdrawn before the Alberta Rules of Court that came into force on November 1, 2010 (New Rules) came into effect - An issue was whether the New Rules or the former Rules governed the application - Rule 15.2(1) of the New Rules stated that unless otherwise provided, the New Rules applied to every existing proceeding - "Existing proceeding" meant a court proceeding commenced but not concluded under the former Rules - The transitional rule provided that "A formal offer to settle an existing proceeding that was made and neither withdrawn nor accepted prior to the coming into force of these rules remains open for acceptance in accordance with the former rules" - Rule 15.6 allowed the court to suspend or modify operation of the New Rules if there was doubt about their application, or if their application would result in difficulty, injustice or impossibility - The Alberta Court of Queen's Bench found that, subject to relief that might be available under rule 15.6, the application was governed by the New Rules - See paragraphs 12 to 15.

Practice - Topic 7004

Costs - Party and party costs - General principles and definitions - Scale of costs - Fixing of - [See second Practice - Topic 7247 ].

Practice - Topic 7117

Costs - Special orders - Lump sum in lieu of taxed costs - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The plaintiffs suggested that the party-party costs initially awarded be converted into a lump sum - Rule 4.29(40)(a) of the Alberta Rules of Court (2010) provided that the Rules relating to the costs consequences of a formal offer to settle which was not accepted did not apply if costs were awarded on an indemnity basis or as a lump sum under rule 10.31(2)(b) - The Alberta Court of Queen's Bench stated that the plaintiff's suggestion was "untenable" - The sole design of the proposal was to defeat the compromise Rules - See paragraphs 75 to 77.

Practice - Topic 7241

Costs - Offers to settle - General (incl. what constitutes and validity) - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The offer was withdrawn before the Alberta Rules of Court (2010) (New Rules) came into effect - An issue was whether the New Rules or the former Rules of Court governed the issue of whether the offer was valid as a formal offer - Rule 4.24(2) of the New Rules described the information that had to be contained in an offer to settle in order for it to be valid - Those requirements differed from those under rule 169(1) of the Former Rules - The Alberta Court of Queen's Bench held that the failure of the offer to comply with the informational requirements of rule 4.24(2) was not fatal to its validity - The offer was crafted almost two years before the New Rules were enacted - "The legislators could not have intended that parties seeking to compromise their claims using a court process should be defeated for want of prescience" - Rule 15.6 had been mentioned as a fall back form of relief in the court's jurisprudence - The facts of this case exemplified the raison d'être for rule 15.6 - The court exercised its discretion to suspend the operation of rule 4.24, and determined the validity and effect of the offer pursuant to rules 169 and 174(1) of the former Rules - See paragraphs 20 to 24.

Practice - Topic 7243

Costs - Offers to settle - Effect of failure to accept - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The Alberta Court of Queen's Bench found that, calculated on the basis of the face value of the award plus interest to the date of the defendants' offer to settle, the plaintiff "did not beat the Offer" - Rule 174(1) of the Rules of Court (1968), provided that where the plaintiff did not recover a judgment more favourable than the offer of judgment made by the defendant, the court was to, unless for special reason, award costs to the defendant for all steps in relation to the claim after service of the offer - The offer provided that it automatically was withdrawn on the 45th day after service if not accepted - Withdrawal was one day too soon - The question arose as to whether the early withdrawal invalidated the offer or simply was ineffective in revoking the offer - The court found that the offer was a valid offer of settlement under the Rules, and it was neither accepted nor validly withdrawn - As a result, the defendants were entitled to receive the benefit of rule 174 unless there was some special reason not to award them costs for all steps after the offer was served - See paragraphs 31 to 55.

Practice - Topic 7243

Costs - Offers to settle - Effect of failure to accept - This was a case of employee theft - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The plaintiff sought to have all of its experts' fees paid by the defendants, including after the date the offer was served, irrespective of the outcome of the suit or operation of the compromise Rules - The experts' fees were double the value of the judgment - The Alberta Court of Queen's Bench found that, while it was reasonable for the plaintiff to retain experts to assist in its calculation of damages, that was not a justifiable basis for deviating from the operation of the compromise Rules - As a result, the plaintiff was not entitled to the taxable disbursements for the fees of either of its experts relating to work undertaken after the date the offer was served - See paragraphs 78 to 87.

Practice - Topic 7247

Costs - Offers to settle - Costs to unsuccessful defendant - This was a case of employee theft - Unaware that a formal offer to settle had been made by the defendants, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - A trial judge found that, calculated on the basis of the face value of the award plus interest to the date of the defendants' offer to settle, the plaintiff "did not beat the Offer" - Rule 174(1) of the Alberta Rules of Court (1968) provided that the court was to, unless for special reason, award costs to the defendant for all steps in relation to the claim after service of the offer - The plaintiff asserted that the following were special reasons which warranted not giving effect to the defendants' offer: (1) the defendants failed to admit certain facts and those facts were later proven at trial; (2) the timing of the offer precluded the plaintiff conducting a reasonable assessment of its value; (3) the defendants were guilty of misconduct; and (4) the issues at trial were difficult - The Alberta Court of Queen's Bench found that there were no special reasons to avoid operation of the Rules - See paragraphs 56 to 74.

Practice - Topic 7247

Costs - Offers to settle - Costs to unsuccessful defendant - This was a case of employee theft - The trial judge found the defendants liable for damages for conversion in the total sum of $14,784.42 - A formal offer to settle for $20,000 had been made by the defendants on December 9, 2009 - Unaware of the offer, the trial judge ordered party and party costs against the defendants - The defendants applied for reconsideration of the costs award to address their offer - The judgment roll had not yet been entered - The Alberta Court of Queen's Bench concluded that: (1) the plaintiff was entitled to the full amount of its Schedule C, column 1 taxable costs and its disbursements, incurred up to December 9, 2009; and (2) the defendants were entitled to their costs after December 9, 2009, pursuant to rule 174(1)(b) of the Rules of Court (1968) - The defendants' offer was genuine - There were no special reasons why it should not be taken into consideration in assessing costs - There was no reason to deviate from calculation of the defendants' costs in accordance with column 3 of Schedule C, which was the column that applied to the amount of damages claimed by the plaintiff in its statement of claim - The plaintiff gave no indication that its claim might be worth something less than what was pled until closing argument (Schedule C, s. 1(3)) - See paragraphs 90 to 94.

Practice - Topic 7248

Costs - Offers to settle - Costs to successful plaintiff - [See second Practice - Topic 7247 ].

Cases Noticed:

Broers v. Real Estate Council of Alberta et al. (2010), 498 A.R. 190; 2010 ABQB 774, refd to. [para. 11].

Apex Safety Apparel Inc. et al. v. Kel-Tek Safety Apparel, [2011] A.R. Uned. 465; 2011 ABQB 406, refd to. [para. 23].

Linder v Chittick et al. (2010), 506 A.R. 134; 1 R.P.R.(5th) 142; 2010 ABQB 819, refd to. [para. 23].

Laframboise v. Billett (1991), 81 Alta. L.R.(2d) 285 (Q.B.), refd to. [para. 26].

Madge v. Meyer et al. (2000), 259 A.R. 351; 2000 ABQB 156, refd to. [para. 27].

Garand v. Mutual of Omaha Insurance Co. et al. (2001), 297 A.R. 286; 2001 ABQB 964, refd to. [para. 27].

Sidorsky v. Lowry et al. (2009), 463 A.R. 183; 2009 ABQB 197, refd to. [para. 27].

Meyer v. Partec Lavalin Inc. et al. (2002), 303 A.R. 385; 273 W.A.C. 385; 2002 ABCA 114 (C.A.), refd to. [para. 28].

McCardell Estate v. Cushman (1990), 104 A.R. 23 (Q.B.), dist. [para. 33].

Chancellor Management Inc. v. Oasis Homes Ltd. et al. (2002), 316 A.R. 336 (Q.B.), dist. [para. 33].

Damar (J.C.) Developments Ltd. v. Ecec Inc. and Ecal Ltd. (1994), 157 A.R. 259; 77 W.A.C. 259; 31 C.P.C.(3d) 9 (C.A.), refd to. [para. 37].

McJane Developments Ltd. v. Kazanecki (2003), 345 A.R. 378; 2003 ABQB 584, consd. [para. 40].

Collins v. National Life Assurance Co. of Canada (1995), 174 A.R. 206 (C.A.), consd. [para. 40].

Edmonton (City) v. Lovat Tunnel Equipment Inc. et al. (2002), 328 A.R. 314; 2002 ABQB 1033, dist. [para. 41].

Davidson v. Patten et al. (2008), 425 A.R. 186; 418 W.A.C. 186; 2008 ABCA 65, dist. [para. 43].

Brown v. Shortreed Estate (1988), 86 A.R. 265 (C.A.), consd. [para. 46].

K.E.M. Presentations Inc. v. Shell Canada Products Ltd. (2001), 290 A.R. 166 (Q.B.), affd. (2003), 330 A.R. 153; 299 W.A.C. 153, 2003 ABCA 217, consd. [para. 48].

Reid v. Stein et al. (1999), 253 A.R. 90; 1999 ABQB 222, consd. [para. 59].

642718 Alberta Ltd. et al. v. Alberta (Minister of Public Works, Supply and Services) (2005), 390 A.R. 193; 2005 ABQB 810, consd. [para. 66].

Polar Ice Express Inc. v. Arctic Glacier Inc. (2007), 434 A.R. 261; 2007 ABQB 717, affd. (2009), 446 A.R. 295; 442 W.A.C. 295; 2009 ABCA 20, refd to. [para. 66].

Waste Management of Canada Corp. v. Thorhild No. 7 (County) et al. (2009), 463 A.R. 193; 2009 ABQB 157, refd to. [para. 69].

Young v. Young et al., [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161; 108 D.L.R.(4th) 193, refd to. [para. 69].

Brock v. Brock (1998), 221 A.R. 79 (Q.B.), dist. [para. 71].

Viridian Inc. v. Dresser Canada Inc. et al., [1998] A.R. Uned. 579; 1998 ABQB 687, refd to. [para. 85].

Seidel v. Kerr et al. (2004) 348 A.R. 154; 321 W.A.C. 154; 2004 ABCA 157, refd to. [para. 85].

Nova, An Alberta Corp. v. Guelph Engineering Co. et al. (1988), 89 A.R. 363 (Q.B.), refd to. [para. 85].

Laube v. Juchli (1998), 228 A.R. 81; 188 W.A.C. 81; 1998 ABCA 319, refd to. [para. 94].

Robinson et al. v. Williams Estate et al. (2005), 385 A.R. 284; 2005 ABQB 970, refd to. [para. 94].

Statutes Noticed:

Civil Enforcement Act, R.S.A. 2000, c. C-15, sect. 17(6) [para. 97]; sect. 19(1) [para. 98].

Rules of Court (Alberta), Alta. Reg. 390/1968, rule 169(1) [para. 21]; rule 169(3) [para. 31]; rule 174(1) [para. 56].

Rules of Court (Alberta), Alta. Reg. 124/2010, rule 4.24(2) [para. 20]; rule 4.28(1) [para. 17]; rule 4.29(40)(a) [para. 76]; rule 9.13 [para. 16]; rule 10.42 [para. 90]; rule 15.1, rule 15.2(1) [para. 11]; rule 15.6 [para. 14]; rule 15.11 [para. 12].

Authors and Works Noticed:

Stevenson, William A., and Côté, Jean E., Alberta Civil Procedure Handbook (2004), p. 156 [para. 37].

Counsel:

Shawn Beaver, for the plaintiff;

Brian Doherty, for the defendants.

This costs matter was heard on July 11, 2011, before Topolniski, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on September 2, 2011.