Albionex (Overseas) Ltd. et al. v. ConAgra Ltd. et al., 2013 MBQB 310

• Judge: Hanssen, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: December 20, 2013
• Jurisdiction: Manitoba
• Citations: 2013 MBQB 310;(2013), 301 Man.R.(2d) 51 (QB)

Albionex Ltd. v. ConAgra Ltd. (2013), 301 Man.R.(2d) 51 (QB)

MLB headnote and full text

Temp. Cite: [2014] Man.R.(2d) TBEd. JA.016

Albionex (Overseas) Limited and Pagnan S.p.A. (plaintiffs) v. ConAgra Limited and The Canadian Wheat Board (defendants)

(CI 85-01-06148; 2013 MBQB 310)

Indexed As: Albionex (Overseas) Ltd. et al. v. ConAgra Ltd. et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Hanssen, J.

December 20, 2013.

Summary:

ConAgra Ltd., a Canadian wheat exporter, agreed to sell wheat to Pagnan S.p.A., an Italian grain trader. Subsequently, with ConAgra's agreement, Albionex (Overseas) Ltd. was substituted as purchaser, with Pagnan's guarantee. The wheat in question was frost-damaged Red Spring Wheat described by the Canadian Wheat Board (CWB) as being of fair milling quality and quite suitable for milling purposes in an information letter provided to ConAgra which was to be distributed to potential wheat purchasers. The wheat was allegedly of poorer quality than expected by the purchasers. Pagnan and Albionex (the plaintiffs) sued ConAgra for damages for breach of contract and breach of the Sale of Goods Act. The plaintiffs also sued the Canadian Wheat Board for damages for negligent misrepresentation respecting the information it distributed respecting the quality of the wheat and for breach of collateral contract. ConAgra cross-claimed against the CWB, claiming that it too had relied upon the CWB's representations.

The Manitoba Court of Queen's Bench, in a decision reported at 242 Man.R.(2d) 258, awarded judgment in favour of Albionex against CWB and ConAgra jointly and severally in the amount of $4,642,392.40, inclusive of interest to the date of judgment. Judgment for the same amount was also entered in favour of ConAgra against CWB with respect to the cross-claim. ConAgra and the CWB appealed and CWB appealed ConAgra's cross-claim judgment. The plaintiffs also cross-appealed, arguing that damages should be increased.

The Manitoba Court of Appeal, in a decision reported at (2011), 270 Man.R.(2d) 293; 524 W.A.C. 293, dismissed the appeals by ConAgra and the CWB and the cross-appeals by Pagnan and Albionex (the plaintiffs). CWB applied for leave to appeal.

The Supreme Court of Canada, in a motion reported at (2012), 439 N.R. 394, refused to grant leave to appeal. The parties asked the Court of Queen's Bench to fix costs respecting the action.

The Manitoba Court of Queen's Bench, in the decision reported below, dealt with the costs issues accordingly.

Practice - Topic 6923

Costs - General principles - Power to award or fix costs - [See Practice - Topic 7111.2 ].

Practice - Topic 7085

Costs - Party and party costs - Witness fees and costs of preparation for trial or appeal - Expert witness fees - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - Albionex sought to recover expert fees for Dr. Shuey, who was retained by Albionex to provide advice and guidance during the discovery phase of the trial - However, for health reasons he was not available at trial - CWB argued that Dr. Shuey's fee was not recoverable as a disbursement because he was not actually called at trial - The Manitoba Court of Queen's Bench, citing Tariff B 1(g), held that it was reasonable for Albionex to enlist the assistance of Dr. Shuey for preparation purposes and allowed it to recover his fee as claimed in full - See paragraphs 45 to 47.

Practice - Topic 7085

Costs - Party and party costs - Witness fees and costs of preparation for trial or appeal - Expert witness fees - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - Albionex sought to recover expert fees for Dr. Hoseney who was retained to provide his expert opinion at trial - The Manitoba Court of Queen's Bench, citing Tariff B 1(f), found the fee charged by Dr. Hoseney was reasonable and allowed Albionex to recover the entire fee of Dr. Hoseney - The CWB failed to show why specific portions of Dr. Hoseney's fee should be disallowed - See paragraphs 48 to 52.

Practice - Topic 7110

Costs - Party and party costs - Special orders - Increase in scale of costs - General - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - The Manitoba Court of Queen's Bench held that this was an exceptional case and an elevated costs award (i.e., above Tariff A - Class 4), was clearly appropriate having regard to the factors in Queen's Bench Rule 57.01 - The case was complex - It took 24 years to complete - Language issues - Interpreters - Translations - Voluminous documentary evidence - Contractual obligations to hold discoveries and trial in Winnipeg - Motions - Expert evidence and reports - Unaccepted offer - The court awarded costs against CWB of $850,000 exclusive of disbursements, consisting of a $700,000 global award, plus a $150,000 penalty for failing to accept an offer - See paragraphs 18 to 30.

Practice - Topic 7110

Costs - Party and party costs - Special orders - Increase in scale of costs - General - Albionex (Overseas) Ltd. obtained judgment against the Canadian Wheat Board (CWB) and ConAgra Ltd. jointly and severally for $4,642,392.40 - Judgment was also entered for the same amount in favour of ConAgra on a cross-claim against CWB - ConAgra sought costs from CWB with respect to the cross-claim and asked the court to fix costs - The Manitoba Court of Queen's Bench held that ConAgra was entitled to costs substantially in excess of the applicable Tariff (i.e., a Class 4 action under Tariff A) - The court held that a global award of $500,000 plus disbursements was appropriate having regard to the factors set out in Queen's Bench Rule 57.01 - See paragraphs 73 and 74.

Practice - Topic 7111.2

Costs - Special orders - Increase in scale of costs - Effect of settlement offer - The plaintiff was awarded damages for negligent misrepresentation ($4,642,392.40) - The court was asked to fix costs (Queen's Bench Act, s. 96(1)) - The plaintiff sought to have a substantial amount of its costs doubled because of an unaccepted offer (Queen's Bench Rule 49.10(1)) - The Manitoba Court of Queen's Bench held that a global award of $700,000 was appropriate, but rejected the plaintiff's argument as to doubling - The court was not obliged to apply rule 49.10(1)(d) when exercising its general discretion to fix costs under s. 96(1) of the Act - The court stated that the rejected offer was, however, a factor to consider in fixing costs pursuant to rule 57.01(1) - The court imposed a penalty of $150,000 for the defendant's failure to accept the offer - Total costs were thus fixed at $850,000, exclusive of disbursements - See paragraphs 28 and 29.

Practice - Topic 7115

Costs - Party and party costs - Special orders - Increase in scale of costs - Difficulty and complexity of proceedings - [See first Practice - Topic 7110 ].

Practice - Topic 7134

Costs - Party and party costs - Disbursements - Photocopies, scanning or printing - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - The case was heard in Winnipeg and was lengthy (24 years) and complex - Albionex claimed disbursements of $23,888.95 for photocopying based on 25 cents per page - The Manitoba Court of Queen's Bench noted that Tariff B 1(j) allowed a reasonable amount for copies - The court held that, given the volume of photocopying which was done, 15 cents a page was reasonable - The court therefore allowed $14,333 for photocopying - The court also allowed Albionex $2,460 for external photocopying services - See paragraphs 61 to 64.

Practice - Topic 7135

Costs - Party and party costs - Disbursements - Telephone expenses - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - The case was heard in Winnipeg and was lengthy (24 years) and complex - Albionex claimed disbursements for courier fees ($3,731), faxes ($3,741) and long distance charges ($4,190) - The Manitoba Court of Queen's Bench held that given the length of time this case spanned and the volume of documentary evidence, Albionex's claim for courier fees, faxes and long distance charges was reasonable - See paragraphs 56 to 60.

Practice - Topic 7136

Costs - Party and party costs - Disbursements - Travelling expenses - General - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - Albionex sought full reimbursement of business class fares for both its witnesses and representatives - CWB argued that the travel allowances in the Tariffs should be applied - The Manitoba Court of Queen's Bench allowed Albionex to recover business class airfares for trial, discovery and preparation purposes - The trial took place in Winnipeg because of a term in CWB's standard contract - All but one of Albionex's witness had to travel from Europe to Winnipeg - The court stated that it was unreasonable to require people to travel through many time zones in an economy class seat and then expect them to be in a reasonable condition to properly carry out their duties - The court also allowed hotel expenses beyond the Tariffs - See paragraphs 32 to 44.

Practice - Topic 7136

Costs - Party and party costs - Disbursements - Travelling expenses - General - ConAgra Ltd. was granted judgment on a cross-claim against the Canadian Wheat Board (CWB) for $4,642,392.40 - ConAgra sought disbursements for business airfare (i.e., an amount greater than Tariff B) for a witness who lived in Quebec and over the course of the litigation made 25 trips to Winnipeg - The Manitoba Court of Queen's Bench allowed ConAgra to recover costs associated with airfare and accommodations relating to witness preparation - The court allowed recovery of the business class airfares during the latter portion of the litigation given the witness's age (70), his deteriorating health and mobility issues - ConAgra could otherwise recover only for the cost of economy flights - See paragraphs 75 to 80.

Practice - Topic 7137

Costs - Party and party costs - Disbursements - Travelling expenses - Counsel - [See first Practice - Topic 7136 ].

Practice - Topic 7138

Costs - Party and party costs - Disbursements - Computer research - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - The case was complex and lengthy (24 years) - Albionex sought to recover costs of electronic legal research as a disbursement ($3,538.37) - The CWB argued that the costs of computer research should already be built into lawyers' fees and, therefore, was not recoverable - The Manitoba Court of Queen's Bench disagreed - Tariff B 1(n) allowed for the payment of "any other disbursement reasonably necessary for the conduct of the proceeding" - Given the complexity of this case and the realities of technology in today's modern world, computer research was reasonably necessary - Given the length of time this litigation spanned, the court was satisfied that this claim was reasonable - See paragraphs 69 to 72.

Practice - Topic 7141

Costs - Party and party costs - Disbursements - Cost of expert advice - [See both Practice - Topic 7085 ].

Practice - Topic 7145

Costs - Party and party costs - Disbursements - Items essential to conduct of action or appeal (incl. costs relating to posting of security) - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - During proceedings, Albionex had been ordered to post $360,000 as security for costs - Albionex claimed $15,447 as a disbursement which it spent to obtain a letter of credit so that it would not have to deposit the actual funds with the court - The Manitoba Court of Queen's Bench disallowed recovery for the cost of the letter of credit - The letter of credit was for the convenience of Albionex who wished to have use of the funds - See paragraphs 65 to 68.

Practice - Topic 7150.3

Costs - Party and party costs - Disbursements - Faxes - [See Practice - Topic 7135 ].

Practice - Topic 7150.7

Costs - Party and party costs - Disbursements - Delivery and service charges - [See Practice - Topic 7135 ].

Practice - Topic 7150.9

Costs - Party and party costs - Disbursements - Translation or interpretation services - The Canadian Wheat Board (CWB) was found liable to Albionex (Overseas) Ltd. for damages for negligent misrepresentation ($4,642,392.40) - The trial, which was held in Winnipeg, was lengthy and complex - The first language of five of the Albionex's six witnesses was Italian and for three of them it was their only language - Albionex used two interpreters during the course of the case - When the first turned out to be inadequate, Albionex had to bring in a second interpreter from Toronto - Albionex claimed $14,640 for interpretation services - The Manitoba Court of Queen's Bench allowed Albionex to recover the full costs associated with hiring both of the interpreters - See paragraphs 53 to 55.

Cases Noticed:

Morton et al. v. Asper et al. (1991), 72 Man.R.(2d) 184 (Q.B.), refd to. [para. 24].

Hill v. Kilbrei (2005), 195 Man.R.(2d) 76; 351 W.A.C. 76; 2005 MBCA 81, refd to. [para. 29].

Goodman Yachts LLC v. Penguin Boat International Ltd. et al. (2002), 227 F.T.R. 29; 2002 FCT 1168, refd to. [para. 33].

Keith Plumbing & Heating Co. et al. v. Newport City Club Ltd. et al. (2003), 181 B.C.A.C. 253; 298 W.A.C. 253; 2003 BCCA 233, refd to. [para. 66].

Milsom v. Corporate Computers Inc. et al., [2003] A.R. Uned. 424; [2003] 9 W.W.R. 269; 2003 ABQB 609, refd to. [para. 70].

Strandquist et al. v. Coneco Equipment et al., [2000] A.R. Uned. 86; 2000 ABCA 138, refd to. [para. 70].

Philip v. Whitecourt General Hospital et al. (2005), 381 A.R. 234; 2005 ABQB 174, refd to. [para. 70].

Cliffton Management Corp. v. Paterson (N.M.) and Sons Ltd. et al. (2000), 154 Man.R.(2d) 176; 2000 MBQB 226, refd to. [para. 70].

TDL Group Ltd. v. Zabco Holdings Inc. et al. (2007), 224 Man.R.(2d) 23; 2007 MBQB 303, refd to. [para. 84].

Martin v. Glaze-Bloc Products Inc., [2003] O.J. No. 1952 (Sup. Ct.), refd to. [para. 84].

Fillion v. Degen, [2006] Man.R.(2d) Uned. 87; 2006 MBQB 223, refd to. [para. 86].

Counsel:

Mark Newman and David J. Kroft, for the plaintiffs;

George J. Orle, Q.C., for the defendant, ConAgra Ltd.;

Colin R. MacArthur, Q.C., and Curtis M. Unfried, for the defendant, the Canadian Wheat Board.

This costs matter was heard by Hanssen, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on December 20, 2013.