Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al., (2010) 489 A.R. 37 (QB)

• Judge: J.D.B. McDonald, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 15, 2010
• Citations: (2010), 489 A.R. 37 (QB);2010 ABQB 501

Condo. Corp. 9813678 v. Statesman Corp. (2010), 489 A.R. 37 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. AU.080

Condominium Corporation No. 9813678, Condominium Corporation No. 0013062, Condominium Corporation No. 9911158, Condominium Corporation No. 9911560, Condominium Corporation No. 0112632, Mary Vanderogt, Catherine Sliwa, Trevor MacFarlane, Kirk McFee, Terry S. Shibley, Rob Watson, Charles Gray, Norma Gray, Lloyd B. MacDonald, Scott James Francis, Harry Radomsky, Danielle Marchant, Michael Klassen, Douglas A. Pounder, Pierre Schrifee, Paul Foley, Leo Bouckhout, Richard Dyjack, James Smith, Pamela Smith, Stephanie Bischsel, Bernie Rabwowich, Susan Rabwowich, Ryan Birmingham, Alberta Wireless 2002 Inc., John Boehm, David MacMartin, Jack Clayton, Audrey Clayton, Tom Pearson, Kathleen Millard, Jason Salmon, Michael Morrison, Michael Johnson-Stewart, Tanya Johnson-Stewart, Raymond Daniels, Andrew Course, Cathy O'Bright, and Brian David Hassett, (plaintiffs) v. Statesman Corporation, 893137 Alberta Ltd. formerly known as Statesman Construction Corporation and the said Statesman Construction Corporation, the City of Calgary, Burgener Kilpatrick Design International also known as BKDI Architects and formerly known as BLK Architects and the said BKDI Architects and BLK Architects, Peter G. Burgener, Graham Harmsworth Lai & Associates, Ltd., David Graham, The Advanced Group Calgary Ltd., Advanced Waterproofing Inc. carrying on business under the trade name of and/or style of The Advanced Group Calgary and the said Advanced Waterproofing Inc., Michael Adams carrying on business under the trade name and/or style of The Advanced Group Calgary, Michael Adams carrying on business under the trade name and/or style of Delta-Protech Membrane Installations, Calvin Schieve carrying on business under the trade name and/or style of Delta-Protech Membrane Installations, Dean Sziva carrying on business under the trade name and/or style of Cactus Waterproofing & Roofing, and Karl Swan (defendants)

(0401 08466; 2010 ABQB 501)

Indexed As: Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

J.D.B. McDonald, J.

July 26, 2010.

Summary:

Statesman Corp. was the developer and general contractor of four condominium properties, three of which were completed. A fire in the fourth during construction caused extensive damage (over $25 million). The fire was allegedly caused by Swan, a waterproofer who was using a propane torch near the wood exterior of the fourth building. Statesman had retained Advanced Group to do the waterproofing. Advanced Group subcontracted some of the work to Sziva, who employed Swan. The plaintiffs were a number of condominium corporations and individuals affected by the fire.

The Alberta Court of Queen's Bench, in a decision reported at (2009), 472 A.R. 33, held that Swan was negligent and his negligence caused the fire and resultant damages. Sziva, as Swan's employer, was vicariously liable for Swan's negligence. Advanced Group was liable for the negligence of the employee of its subcontractor on the basis that it retained Sziva to perform the inherently dangerous activity that it had contracted with Statesman to perform itself. Statesman was also liable on the basis of a non-delegable duty of care. All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally to the extent of their respective damages. All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman. Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence. Advanced Group was entitled to indemnity from Sziva and Swan. Sziva was entitled to indemnity from Swan. The plaintiffs' claim against the city was dismissed. The parties made submissions on costs.

The Alberta Court of Queen's Bench determined the costs issues.

Editor's Note: There are a number of reported decisions related to this action. These can be located by searching "Condominium Corp. No. 9813678 et al. v. Statesman Corp. et al." on Maritime Law Book's website: www.mlb.nb.ca.

Practice - Topic 7115

Costs - Party and party costs - Special orders - Increase in scale of costs - Difficulty and complexity of proceedings - [See both Practice - Topic 7118.1 ].

Practice - Topic 7118.1

Costs - Party and party costs - Special orders - Multiplier - Statesman Corp. was the developer and general contractor of four condominium properties - A fire during construction caused extensive damage - The fire was allegedly caused by Swan, a waterproofer - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - Seeking $21.7 million in damages, they brought claims against Statesman, Advanced Group, Sziva and Swan for causing the fire (the fire negligence claim) and against the city for approving a deficient design (the building regulations claim) - The court found that Swan's negligence caused the fire - All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally - All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman - Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence - The plaintiffs' claim against the city was dismissed - There were eight days of trial for the fire negligence claim and 32 days for the building regulations claim - At issue was the city's claim for costs - The city sought a specified increase in certain taxable items and asserted that, regarding other fee items under Schedule C, the costs should be enhanced by a multiplier - The city had served a formal offer of judgment on December 18, 2008 - The Alberta Court of Queen's Bench awarded costs in favour of the city against the plaintiffs on the basis of its bill of costs to be increased by a multiplier of 2.5 times Column 5, but only on those tariff items that the court had not already specified to be increased - The tariff items that pertained to the period after December 18, 2008, were to be doubled in accordance with rules 169 and 174 - Having regard to the factors enumerated in Trizec Equities Ltd. v. Ellis-Don Management Services Ltd. et al. (1999 Alta. Q.B.), the length and complexity of the trial and the fact that Schedule C was over 10 years old, 2.5 was the appropriate multiplier - See paragraphs 14 to 32.

Practice - Topic 7118.1

Costs - Party and party costs - Special orders - Multiplier - Statesman Corp. was the developer and general contractor of four condominium properties - A fire during construction caused extensive damage - The fire was allegedly caused by Swan, a waterproofer - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - Seeking $21.7 million in damages, they brought claims against Statesman, Advanced Group, Sziva and Swan for causing the fire (the fire negligence claim) and against the city for approving a deficient design (the building regulations claim) - The court found that Swan's negligence caused the fire - All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally - All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman - Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence - The plaintiffs' claim against the city was dismissed - There were eight days of trial for the fire negligence claim and 32 days for the building regulations claim - At issue was the plaintiffs' claim for costs - The Alberta Court of Queen's Bench held that the plaintiffs were entitled to recover from Statesman, Advanced Group, Sziva and Swan jointly and severally their costs relating to the fire negligence claim - The court granted specified increases in certain tariff items and, in light of the trial's length and complexity, employed a multiplier of two for all other applicable tariff items - See paragraphs 33 to 38.

Practice - Topic 7155

Costs - Party and party costs - Liability for party and party costs - Bullock order or Sanderson order - Where success divided - Statesman Corp. was the developer and general contractor of four condominium properties - A fire during construction caused extensive damage - The fire was allegedly caused by Swan, a waterproofer - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - Seeking $21.7 million in damages, they brought claims against Statesman, Advanced Group, Sziva and Swan for causing the fire (the fire negligence claim) and against the city for approving a deficient design (the building regulations claim) - The court found that Swan's negligence caused the fire - All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally - All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman - Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence - The plaintiffs' claim against the city was dismissed with costs in favour of the city against the plaintiffs - There were eight days of trial for the fire negligence claim and 32 days for the building regulations claim - At issue was the plaintiffs' claim for costs - The plaintiffs sought a "Bullock order" regarding the costs payable by the plaintiffs to the city, but only as against Statesman - The Alberta Court of Queen's Bench held that even though the two causes of action (the fire negligence claim and the building regulations claim) were significantly different, it was "just and proper" to grant a Bullock order in favour of the plaintiffs as against Statesman for the full amount of the costs payable by them to the city - Statesman was expressly denied any right to seek to recover those costs in turn from Advanced Group, Sziva or Swan - See paragraphs 39 to 49.

Practice - Topic 7168

Costs - Party and party costs - Liability for party and party costs - Between defendants - Statesman Corp. was the developer and general contractor of four condominium properties - A fire during construction caused extensive damage - The fire was allegedly caused by Swan, a waterproofer - Statesman had retained Advanced Group to do the waterproofing - Advanced Group subcontracted some of the work to Sziva, who employed Swan - The plaintiffs were a number of condominium corporations and individuals affected by the fire - Seeking $21.7 million in damages, they brought claims against Statesman, Advanced Group, Sziva and Swan for causing the fire (the fire negligence claim) and against the city for approving a deficient design (the building regulations claim) - The court found that Swan's negligence caused the fire - All of the plaintiffs were entitled to a judgment against Swan, Sziva and Advanced Group jointly and severally - All of the plaintiffs (except two of the condominium corporations according to a related decision regarding subrogation) were entitled to a judgment against Statesman - Statesman was entitled to indemnity from Advanced Group, Sziva and Swan for any liability imposed on it arising from Swan's negligence - The plaintiffs' claim against the city was dismissed - There were eight days of trial for the fire negligence claim and 32 days for the building regulations claim - The court held that the plaintiffs were entitled to recover from Statesman, Advanced Group, Sziva and Swan jointly and severally their costs relating to the fire negligence claim - At issue was the apportionment of costs as between Statesman and Advanced Group, Sziva and Swan and the effect of Calderbank offers made by Advanced Group, Sziva and Swan - Statesman refused to agree to the Calderbank offers - Without Statesman's agreement, the plaintiffs refused the offers - The Alberta Court of Queen's Bench held that Statesman was entitled to recover its costs from Advanced Group, Sziva and Swan for all steps taken in the fire negligence claim up to January 12, 2009 (the commencement of the trial), but not thereafter - After that date, Statesman, Advanced Group, Sziva and Swan were to bear their own costs - Normally, because Statesman's only liability was on the basis of vicarious liability, it would have been entitled to recover all proper costs relating to its defence of the fire negligence claim against Advanced Group, Sziva and Swan - However, Statesman's refusal to provide the consent necessary to effect settlement meant that those parties were required to participate in the trial - See paragraphs 50 to 63.

Practice - Topic 7170

Costs - Party and party costs - Liability for party and party costs - Joint and several liability - [See Practice - Topic 7168 ].

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See first Practice - Topic 7118.1 and Practice - Topic 7168 ].

Cases Noticed:

Trizec Equities Ltd. v. Ellis-Don Management Services Ltd. et al. (1999), 251 A.R. 101; 1999 ABQB 801, refd to. [para. 17].

Klemke Mining Corp. v. Shell Canada Ltd. et al., [2007] A.R. Uned. 513; 2007 ABQB 427, refd to. [para. 17].

Phillip v. Whitecourt General Hospital et al. (2005), 381 A.R. 234; 2005 ABQB 174, refd to. [para. 17].

Marathon Canada Ltd. v. Enron Canada Corp. (2008), 447 A.R. 89; 2008 ABQB 770, agreed with [para. 17].

Aram Systems Ltd. v. NovAtel Inc. et al. (2010), 476 A.R. 188; 2010 ABQB 152, refd to. [para. 17].

Paskivski et al. v. Canadian Pacific Ltd. (1973), 44 D.L.R.(3d) 260 (Alta. C.A.), refd to. [para. 22].

Green, Michaels and Associates Ltd., Edmonton (City) and Consumer's Association of Canada (Alberta Branch) v. Public Utilities Board (Alta.) (1985), 58 A.R. 366; 16 D.L.R.(4th) 459 (C.A.), refd to. [para. 24].

Edmonton (City) v. Public Utilities Board (Alta.) - see Green, Michaels and Associates Ltd., Edmonton (City) and Consumer's Association of Canada (Alberta Branch) v. Public Utilities Board (Alta.).

Miller (Ed) Sales & Rentals Ltd. v. Caterpillar Tractor Co. et al. (1994), 170 A.R. 341; 26 Alta. L.R.(3d) 16 (Q.B.), refd to. [para. 42].

Mulready v. Bell (J.H. & W.) Ltd., [1953] 2 All E.R. 215 (C.A.), refd to. [para. 43].

Goldsworthy v. Brickell, [1987] 1 All E.R. 853; [1987] 2 W.L.R. 133 (C.A.), refd to. [para. 43].

Wenden v. Trikha et al. (1992), 124 A.R. 1 (Q.B.), refd to. [para. 44].

Amoco Canada Petroleum Co. et al. v. Propak Systems Ltd. et al. (2001), 281 A.R. 185; 248 W.A.C. 185; 91 Alta. L.R.(3d) 13 (C.A.), refd to. [para. 52].

Counsel:

J.W. Rose, Q.C (Fraser Milner Casgrain LLP), for the plaintiffs;

Lise Olsen and Colleen M. Sinclair, for the City of Calgary;

Norman Machida, Q.C. (Machida Shewchuk James LLP), for Statesman;

Paul J. Stein (Gowling Lafleur Henderson LLP), for the Advanced Group;

J.A. McDougall (Scott Hall LLP), for Cactus, Sziva and Swan.

This costs matter was heard on July 15, 2010, by J.D.B. McDonald, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following memorandum of costs on July 26, 2010.