642718 Alberta Ltd. et al. v. Alberta (Minister of Public Works, Supply and Services), 2005 ABQB 810

• Judge: Read, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 12, 2005
• Citations: 2005 ABQB 810;(2005), 390 A.R. 193 (QB)

642718 Alta. Ltd. v. Alta. (2005), 390 A.R. 193 (QB)

MLB headnote and full text

Temp. Cite: [2005] A.R. TBEd. NO.070

642718 Alberta Ltd. and 606852 Alberta Ltd., operating as CNE Centre (plaintiffs/defendant by counterclaim) v. Her Majesty the Queen in Right of the Province of Alberta (Minister of Public Works, Supply and Services)

(defendant/plaintiff by counterclaim)

(9803 04815; 2005 ABQB 810)

Indexed As: 642718 Alberta Ltd. et al. v. Alberta (Minister of Public Works, Supply and Services)

Alberta Court of Queen's Bench

Judicial District of Edmonton

Read, J.

November 1, 2005.

Summary:

The plaintiffs sued the province of Alberta for breach of an alleged contract to sell land to the plaintiffs.

The Alberta Court of Queen's Bench, in a decision reported at 368 A.R. 53, dismissed the plaintiffs' action, holding that they did not have an enforceable agreement to buy the land. Notwithstanding the province's success, the court ordered that the parties bear their own costs where the province had not dealt with the plaintiffs in a commercially reasonable manner and its behaviour was the main reason why the action proceeded. The plaintiffs appealed from the dismissal of their action. The province cross-appealed from the costs award.

The Alberta Court of Appeal, in a decision reported at 371 A.R. 390; 354 W.A.C. 390, dismissed the appeal. The court allowed the cross-appeal and returned the costs issue to the trial judge to hear submissions and reconsider her determination. At issue was: (a) whether the province's pre-litigation conduct affected costs normally paid to the successful party; and (b) whether the province's pre-litigation conduct should have an effect on the operation of rules 174(1) and 174(1.1) where the province had served an offer to settle that was not accepted by the plaintiffs.

The Alberta Court of Queen's Bench considered the issues and ordered that the province was entitled to one set of costs in the appropriate column reduced by 50%, plus its disbursements.

Practice - Topic 7021

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Conduct - [See both Practice - Topic 7242.1 ].

Practice - Topic 7242.1

Costs - Party and party costs - Offers to settle - Grounds for denying double costs - Although the plaintiffs' action against the province of Alberta was dismissed, the trial judge found that the province had not dealt with the plaintiffs in a commercially reasonable manner and that its behaviour was the main reason why the action proceeded - At issue was the province's entitlement to costs - The province had served an offer to settle for $50,000 in accordance with Part 12 of the Rules of Court, which had not been accepted by the plaintiffs - The Alberta Court of Queen's Bench held that the province's pre-litigation conduct was sufficiently reprehensible that it should only be entitled to reduced costs notwithstanding its success at trial - The court further stated that "the fact that the plaintiffs recovered nothing would normally double the costs permitted because of the operation of rule 174(1.1) unless for 'special reason'. However, as I have determined that the pre-litigation conduct of the defendant is sufficient 'special reason' to disable them from full costs under rule 174(1), I have concluded that the same 'special reason' should disable them doubling their costs notwithstanding this sub-rule" - The court ordered that the defendant was entitled to one set of costs in the appropriate column reduced by 50%, plus its disbursements - See paragraphs 29 to 30.

Practice - Topic 7242.1

Costs - Party and party costs - Offers to settle - Grounds for denying double costs - The Alberta Court of Queen's Bench held that a successful party could be deprived of costs or have costs varied that would otherwise be payable because of that party's pre-litigation conduct - The pre-litigation conduct of a party could also, in some rare circumstances, constitute "special reason" for a trial judge to depart from the normal requirement set out in rule 174(1) that a defendant recover costs for all steps taken after the service of an offer to settle - Further, if pre-litigation conduct was sufficient to be "special reason" for varying costs under rule 174(1), it could also be sufficient to prevent the operation of the provision for double costs in rule 174(1.1) - See paragraphs 20 and 28 to 29.

Cases Noticed:

Huxley v. West London Extension Railway Co. (1886), 17 Q.B.D. 373, refd to. [para. 10].

155569 Canada Ltd. v. 248524 Alberta Ltd. et al. (1999), 251 A.R. 393; 1999 ABQB 682, refd to. [para. 12].

Luk et al. v. Cypress (Municipal District) (1999), 232 A.R. 306; 195 W.A.C. 306 (C.A.), consd. [para. 14].

Husky Oil Operations Ltd. v. Forest Oil Corp., [1990] 4 W.W.R. 38; 105 A.R. 27 (Q.B.), consd. [para. 15].

Donald v. Friesen (1990), 72 O.R.(2d) 205 (Dist. Ct.), consd. [para. 16].

Currie v. Thomas (1985), 19 D.L.R.(4th) 594 (B.C.C.A.), consd. [para. 17].

Ballard v. Money (1920), 52 D.L.R. 371 (Ont. C.A.), consd. [para. 18].

Darby v. Toronto (1889), 17 O.R. 554, consd. [para. 19].

Garand v. Mutual of Omaha Insurance Co. et al. (2001), 297 A.R. 286 (Q.B.), refd to. [para. 23].

Allen v. Allen, [1996] A.J. No. 794 (C.A.), refd to. [para. 23].

Morris et al. v. Hunt Morris & Associates (1982) Ltd. et al. (1987), 78 A.R. 96 (Q.B.), consd. [para. 24].

Statutes Noticed:

Rules of Court (Alta.), rule 174(1), rule 174(1.1) [para. 7].

Counsel:

James Thorlakson (Miller Thomson LLP), for the plaintiffs;

Sheila McNaughtan (Reynolds, Mirth, Richards & Farmer LLP), for the defendant.

This matter was heard on October 12, 2005, before Read, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on November 1, 2005.