Canadian Deposit Insurance Corp. v. Canadian Commercial Bank, (1987) 76 A.R. 271 (QB)

• Judge: Wachowich, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 05, 1987
• Citations: (1987), 76 A.R. 271 (QB);1987 CanLII 3315 (AB QB);[1987] 3 WWR 160;50 Alta LR (2d) 1;76 AR 271;64 CBR (ns) 9

CDIC v. Cdn. Com. Bk. (1987), 76 A.R. 271 (QB)

MLB headnote and full text

Canadian Deposit Insurance Corp. v. Canadian Commercial Bank

(Action No. 8503-23319)

Indexed As: Canadian Deposit Insurance Corp. v. Canadian Commercial Bank

Alberta Court of Queen's Bench

Judicial District of Edmonton

Wachowich, J.

February 5, 1987.

Summary:

The Canadian Deposit Insurance Corporation applied for a determination of whether participation loan agreements between the Canadian Commercial Bank and other banking institutions were valid. It was agreed that the sample agreements would be considered "test" cases.

The Alberta Court of Queen's Bench, in a judgment reported 72 A.R. 379, held that the agreements were valid. The parties re-appeared on the matter of costs and some of the participant banking institutions claimed solicitor and client costs.

The Alberta Court of Queen's Bench held that the participants were entitled to more than party and party costs, but not full solicitor and client costs. The court awarded the participants party and party costs plus disbursements with no limiting rule to apply. The court exercised its discretion under rule 601(1)(a) and also awarded each participant a gross sum in addition to party and party costs. The court ordered that costs were to be paid out of the balance of the estate, not the participation monies.

Practice - Topic 6927

Costs - Payment of costs - Source of payment - Participation loan agreements between the Canadian Commercial Bank and other banking institutions were found to be valid - The banking institutions were awarded costs - The Alberta Court of Queen's Bench ordered that the costs be paid out of the balance of the estate and not from the participation monies - See paragraphs 30 to 34.

Practice - Topic 7006

Costs - Party and party costs - Purpose of - The Alberta Court of Queen's Bench stated that party and party costs were not intended to completely indemnify a successful party, but were "viewed as a reasonable apportioning of the expense of litigation between the parties" - See paragraph 18.

Practice - Topic 7061

Costs - Party and party costs - Counsel fees - Increased fee - Participants in participation loan agreements with a failed bank were successful in an application to determine the validity of the agreements - The application was a rare and exceptional case because the bank failure was the first in Canada in 66 years - Issues were complex and involved unresolved interpretations of the Bank Act - The Alberta Court of Queen's Bench held that the participants were entitled to more than party and party costs, but less than solicitor and client costs - The court awarded each participant an increased counsel fee and increased costs for preparation of written argument at the court's request - See paragraph 23.

Practice - Topic 7110.2

Costs - Party and party costs - Special orders - Increase in scale of costs - Written argument - [See Practice - Topic 7061 above].

Practice - Topic 7116

Costs - Party and party costs - Special orders - Gross or lump sum in addition to party and party costs - The Alberta Court of Queen's Bench determined that owing to the rare and exceptional nature, complexity and importance of a proceeding the successful parties were entitled to more than party and party costs - However, the court refused to award solicitor and client costs where the result would be a windfall for the "extravagant and inefficient" - The court therefore awarded party and party costs and exercised its discretion under rule 601(1)(a) to award each party a gross sum in addition to party and party costs - See paragraphs 24 to 29.

Practice - Topic 7458

Costs - Solicitor and client costs - Entitlement to - Rare and exceptional cases - An application was made concerning the validity of participation loan agreements between the Canadian Commercial Bank and other banking institutions - The bank was the first to fail in Canada in 66 years - The issues were novel, complex and important, involving previously uninterpreted provisions of the Bank Act - Hundreds of millions of dollars were involved and the application was considered a test case - The Alberta Court of Queen's Bench held that the successful banking institutions were entitled to more than party and party costs, but were not entitled to solicitor and client costs, where awarding solicitor and client costs would result in a windfall for the "extravagant and inefficient" - See paragraphs 9 to 23.

Cases Noticed:

Landry v. Bridgestone Tire Co., [1976] 3 W.W.R. 160; 66 D.L.R.(3d) 408 (B.C.S.C.), refd to. [para. 6].

Allman v. Commissioner of Northwest Territories, [1983] N.W.T.R. 231; 46 A.R. 61, refd to. [para. 7].

Welk v. Saskatchewan Social Services Appeal Board, [1986] 2 W.W.R. 333; 23 D.L.R. (14th) 698; 44 Sask.R. 252, revsd. [1986] 5 W.W.R. 478 (Sask. C.A.), refd to. [para. 8].

MacFie v. Cater (1920), 48 O.L.R. 487; 57 D.L.R. 736, affd. 50 O.L.R. 452; 64 D.L.R. 511 (C.A.), refd to. [para. 8].

McCarthy v. Board of Trustees of Calgary Roman Catholic Separate School District No. 1, [1980] 5 W.W.R. 524; 30 A.R. 208 (Q.B.), refd to. [para. 9].

Foulis v. Robinson (1979), 92 D.L.R.(3d) 134; 21 O.R.(2d) 769; 8 C.P.C. 198 (C.A.), refd to. [para. 9].

Evaskow v. International Brotherhood of Boilermakers (1970), 9 D.L.R.(3d) 715; 71 W.W.R.(N.S.) 565 (Man. C.A.), refd to. [para. 10].

Vanderclay Development Co. Ltd. v. Inducon Engineering Ltd. (1969), 1 D.L.R.(3d) 337; 1 O.R. 41 (H.C.), refd to. [para. 11].

McDonald Dure Lumber Co. v. Marston Holdings, [1976] 1 W.W.R. 80; 66 D.L.R.(3d) 375 (Man. C.A.), refd to. [para. 12].

Bjorninen v. Mercredi (1984), 27 Man.R.(2d) 67; 42 C.P.C. 97 (C.A.), refd to. [para. 12].

Cominco Ltd. v. Westinghouse Canada Limited (1980), 16 C.P.C. 19 (B.C.S.C.), refd to. [para. 12].

Re McIntosh-Marshall Equipment Ltd.; Nash v. Guelph Engineering Co. (1964), 48 W.W.R.(N.S.) 420; 7 C.B.R. (N.S.) 84 (Alta. S.C.), refd to. [para. 13].

Re Clemenshaw (1962), 4 C.B.R. (N.S.) 17 (B.C.S.C.), refd to. [para. 16].

Calbar Securities Ltd. v. Toole Peet Co. & Barton (1984), 50 A.R. 393; 30 Alta. L.R.(2d) 286 (C.A.), refd to. [para. 20].

Williams v. Saint John et al. (1985), 66 N.B.R.(2d) 10; 169 A.P.R. 10; 34 C.C.L.T. 229 (N.B.C.A.), refd to. [para. 21].

Pickford and Black Ltd. v. Canadian General Insurance Company (1975), 10 N.S.R.(2d) 245; 2 A.P.R. 245, refd to. [para. 25].

Wadsworth v. MacDonald (1976), 16 N.S.R.(2d) 592; 16 A.P.R. 592, refd to. [para. 27].

Re MacLeod (1949), 29 C.B.R. 163, refd to. [para. 31].

Statutes Noticed:

Winding-up Act, R.S.C. 1970, c. W-10, sect. 90, sect. 94 [para. 33].

Rules of Court (Alta.), rule 600(1), rule 600(2), rule 601(1), rule 601(2), rule 601(3), rule 605(1), rule 605(3), rule 605(4), rule 605(5), rule 605(6), rule 609(2), rule 809 [para. 18].

Court of Queen's Bench Act, R.S.A. 1980, c. C-29, sect. 19 [para. 19].

Authors and Works Noticed:

Orkin, Mark M., The Law of Costs (1968), p. 25 [para. 6].

Counsel:

F.R.C. Price and T. Hurlburt, for the liquidators;

H.W. Veale, Q.C., for the unsecured creditors;

G.E. Bowker, Q.C., and D.H. Shell, for Scarborough Corporate Centre participants;

M.B. Bielby and C.A. Kent, for Teachers' Retirement Fund;

P.J. McIntyre, for Barclay's Bank of Canada;

J.J. Marshall, Q.C., for Hanil Bank Canada;

B.C. Bell, for Northland Bank;

R.J. Potts, for First Interstate Bank of Canada;

D.I. Knowles, for First Fiscal Agencies Ltd.;

M. Binder, Q.C., for North West Trust;

A.R. Anderson, for C.C.B. REIT;

J.A. Isaac, Q.C., for C.D.I.C.;

B. Barnes, for C.C.B. MIC.

This matter was heard before Wachowich, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on February 5, 1987.