Big X Holdings Inc. et al. v. Royal Bank of Canada, 2015 NSSC 350

• Judge: Campbell, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: October 19, 2015
• Jurisdiction: Nova Scotia
• Citations: 2015 NSSC 350;(2015), 367 N.S.R.(2d) 330 (SC)

Big X Holdings Inc. v. Royal Bk. (2015), 367 N.S.R.(2d) 330 (SC);

    1157 A.P.R. 330

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. DE.027

Big X Holdings Inc., Robert Leonard McNeil and Margaret Anne McNeil (plaintiffs) v. Royal Bank of Canada (defendant)

(Hfx. No. 406111; 2015 NSSC 350)

Indexed As: Big X Holdings Inc. et al. v. Royal Bank of Canada

Nova Scotia Supreme Court

Campbell, J.

December 8, 2015.

Summary:

The plaintiffs lost a lot of money they invested in a company. The defendant financed the investment, and later became the company's banker. The plaintiffs said that the defendant was responsible for their losses because it breached implied terms of banking or lending contracts, or it breached fiduciary obligations, requiring the defendant to supervise the company. The plaintiffs elected trial by jury. The defendant moved for trial without a jury.

The Nova Scotia Supreme Court, in a decision reported at (2014), 351 N.S.R.(2d) 286; 1111 A.P.R. 286, granted the motion.

The Nova Scotia Supreme Court, in a decision reported at (2015), 363 N.S.R.(2d) 1; 1143 A.P.R. 1, dismissed the action. The defendant claimed more than $500,000 in costs.

The Nova Scotia Supreme Court awarded the defendant $135,000 in costs, plus $6,688.08 in disbursements.

Practice - Topic 6921

Costs - General principles - General - The Nova Scotia Supreme Court discussed the theory of costs - The court stated that Nova Scotia Civil Procedure Rule 77 set out a regime for costs that reflected those general concerns - The court referred to a number of provisions of rule 77 - The court stated that "In short, costs are highly discretionary. Judicial discretion is not the arbitrary exercise of authority, symbolized by John Selden's 17th century metaphor of the Chancellor's foot. It is not judicial whim or even unguided judicial intuition. It is not used to depart from established legal norms but to bring specific cases within larger legal norms. ... It allows the principles that animate the law of costs to be applied in a way that addresses the circumstances of a particular case." - See paragraphs 6 to 13.

Practice - Topic 6934

Costs - General principles - Where litigant impecunious (financial hardship) - The Nova Scotia Supreme Court stated that Civil Procedure "Rule 77.04 provides for relief from liability for costs because of poverty. It requires a motion before the trial and would be very unlikely to apply in the circumstances of this case in any event. People with a home, a cottage and a Florida condo, despite owing a pile of money, just cannot claim poverty. The absence of a prior motion under Rule 77.04 is not a bar to considering a litigant's financial situation on a motion for costs." - The court held that "The case law in Nova Scotia appears to have developed to allow the consideration of the financial circumstances of the party against whom the award of costs is to be made. That does not seem to be limited to matrimonial matters or to cases in which a party would have been granted an exemption from costs had a motion been made under Rule 77.04. Financial circumstances are relevant not only to deciding whether costs will or will not be awarded, but also to determining the amount." - See paragraphs 46 to 63.

Practice - Topic 7029.8

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Situation of unsuccessful party - The plaintiffs lost a lot of money they had invested in a company - The defendant financed the investment, and later became the company's banker - The plaintiffs claimed that the defendant was negligent because it failed to detect a fraud committed by his business associate - They claimed $3.9 million in damages - They also said that a personal guarantee for $400,000, bearing the male plaintiff's signature, must have been a forgery - The plaintiffs' were unsuccessful after a 10 day trial, and the male plaintiff was held liable under the terms of his guarantee - The defendant claimed more than $500,000 in costs - The Nova Scotia Supreme Court held that the total "amount involved" was $3.5 million, determined not by the application of arithmetic, but based on the amounts actually claimed, the complexity of the evidence, including its volume, the complexity of the legal argument and the importance to the defendant of the potential legal precedent - The court awarded the defendant costs of $135,000 - That amount was still likely outside the plaintiffs' current ability to pay but it was proportionate - It reflected the plaintiffs' personal responsibility in the matter having regard to the circumstances, the nature of the litigation and the formal offer to settle, which was a demand for unconditional surrender, but nonetheless should have been accepted.

Practice - Topic 7029.8

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Situation of unsuccessful party - [See Practice - Topic 6934 ].

Practice - Topic 7037

Costs - Party and party costs - Entitlement to - Factors or circumstances reducing entitlement - [See Practice - Topic 6934 and first Practice - Topic 7029.8 ].

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See first Practice - Topic 7029.8 ].

Cases Noticed:

British Columbia (Minister of Forests) v. Okanagan Indian Band et al., [2003] 3 S.C.R. 371; 313 N.R. 84; 189 B.C.A.C. 161; 309 W.A.C. 161; 2003 SCC 71, refd to. [para. 6, footnote 2].

Skidmore v. Blackmore (1995), 122 D.L.R.(4th) 330; 1995 CanLII 1537 (B.C.C.A.), refd to. [para. 7, footnote 4].

Catalyst Paper Corp. v. Companhia de Navegação Norsul (2009), 264 B.C.A.C. 288; 445 W.A.C. 288; 2009 BCCA 16, refd to. [para. 7, footnote 5].

Giffin v. Soontiens et al. (2012), 322 N.S.R.(2d) 325; 1021 A.P.R. 325; 2012 NSSC 354, refd to. [para. 11, footnote 7].

MacLellan v. Canada (Attorney General) et al. (2015), 358 N.S.R.(2d) 245; 1131 A.P.R. 245; 2015 NSSC 125, refd to. [para. 47, footnote 9].

Hill v. Cobequid Housing Authority et al. (2011), 303 N.S.R.(2d) 312; 957 A.P.R. 312; 2011 NSSC 219, refd to. [para. 47, footnote 10].

Gilfoy et al. v. Kelloway et al. (2000), 184 N.S.R.(2d) 226; 573 A.P.R. 226 (S.C.), refd to. [para. 50, footnote 11].

Farrell v. Casavant (2010), 287 N.S.R.(2d) 281; 912 A.P.R. 281; 2010 NSSC 46, refd to. [para. 51, footnote 12].

Kaye v. Campbell (1984), 65 N.S.R.(2d) 173; 147 A.P.R. 173; 1984 CarswellNS 47 (C.A.), refd to. [para. 53, footnote 14].

Body Shop Canada Ltd. v. Carson (Dawn) Enterprises Ltd. et al., [2015] N.S.R.(2d) Uned. 16; 2015 NSSC 39, refd to. [para. 62, footnote 23].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 77 [para. 9].

Rules of Civil Procedure (N.S.) - see Civil Procedure Rules (N.S.).

Rules of Court (N.S.) - see Civil Procedure Rules (N.S.).

Counsel:

Michael Donovan, Q.C., for the plaintiffs;

D. Geoffrey Machum, Q.C., Colin Piercey and Ian Breneman, for the defendant.

This costs matter was heard by Campbell, J., of the Nova Scotia Supreme Court, who received the last written submissions on October 19, 2015, and delivered the following written decision on December 8, 2015.