Guarantee Co. of North America v. Beasse et al., (1993) 139 A.R. 241 (QB)

• Judge: Rooke, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: September 21, 1992
• Citations: (1993), 139 A.R. 241 (QB)

Guarantee Co. of North Am. v. Beasse (1993), 139 A.R. 241 (QB)

MLB headnote and full text

Guarantee Company of North America (plaintiff) v. Roger Beasse, Shirley Beasse, Robdale Contractors Ltd., 239223 Alberta Ltd., Henlo Enterprises Ltd., Robdale Roadbuilders Ltd., Lester Sorenson, Greg Charette and Beasse Charette Sorenson Equipment Leasing Ltd. (defendants)

(Action No. 8501-16233)

Robdale Contractors Ltd. (plaintiff) v. Guarantee Company of North America (defendant)

(Action No. 8703-12813)

Indexed As: Guarantee Co. of North America v. Beasse et al.

Alberta Court of Queen's Bench

Judicial Centre of Calgary

Rooke, J.

February 8, 1993.

Summary:

Guarantee Co. issued a Performance Bond and a Labour and Material Payment Bond to Robdale (obligor) in favour of Public Works Canada (obligee) respecting a highway construction project. Robdale went into receivership before completion. Guarantee Co. was required by Public Works Canada to step in and complete the contract under the Performance Bond and to respond to claims under the Labour and Material Payment Bond. Guarantee Co. brought an action for indemnity against the indemnitors under a Deed of Indemnity. Robdale brought an action against Guarantee Co. claiming Guar­antee Co. failed to claim against Public Works Canada for extras owing to Robdale, failed to complete at the lowest cost possible and failed to properly defend the Labour and Material Payment Bond claims. The two actions were consolidated for trial.

The Alberta Court of Queen's Bench, in a decision reported at 124 A.R. 161, allowed Guarantee Co's. action, award­ing joint and several liability against the indemnitors. The court dismissed Robdale's claims. Subsequently, questions arose con­cerning the calculation of the amount claimed by Guar­antee under the Performance Bond. Also, a question arose as to whether costs should be on a solicitor and client basis or solicitor-and-own-client-cost basis.

The Alberta Court of Queen's Bench de­termined the issues according and issued the following Amended and Supplementary Reasons for Judgment.

Guarantee and Indemnity - Topic 7083

Indemnity - Extent of - Legal fees - A Deed of Indemnity entitled Guarantee Co. to indemnification for any "counsel fee" - Guarantee Co. claimed solicitor-client costs under the Deed of Indemnity - The Alberta Court of Queens Bench held that reasonable solicitor-client costs were properly chargeable under the Deed of Indemnity subject to exemption of certain motions for production of information by Guarantee Co. - In preparing the draft Judgment Roll, Guarantee had worded the cost award to include "... solicitor client costs on a full indemnity basis as between a solicitor and its [sic] own client ..." - The Alberta Court of Queen's Bench, in Amended and Supplementary Reasons for Judgment, changed the wording to read "reasonable, and necessary or prudent, solicitor client costs (subject to taxation)" - See paragraph 3.

Practice - Topic 7403

Costs - Solicitor and client costs - Gen­eral principles - Solicitor-client v. solici­tor and client v. solicitor and his client costs - The Alberta Court of Queen's Bench considered the distinction between solicitor-client costs and solicitor-and-own-client costs - Solicitor-client costs were those awarded against the opposite party - Those costs consisted of all mat­ters necessary for the proper presentation of the case - Included are all measures that fall within the four corners of the litigation and were necessary for the proper presentation of the case - Solicitor-and-own-client-costs are paid by the client - Included are all of the things done on the clients in­struction even when un­necessary for the proper presentation of the case - See paragraph 11.

Practice - Topic 7403

Costs - Solicitor and client costs - Gen­eral principles - Solicitor-client v. solici­tor and client v. solicitor and his client costs - The Alberta Court of Queen's Bench considered the distinction between solicitor-client costs and solicitor-and-own-client costs - The court observed that, except in most exceptional circum­stances, solicitor-and-own-client costs should never be awarded in party-party litigation - See paragraph 12.

Practice - Topic 7422

Costs - Solicitor and client costs - Measure of solicitor and client costs - Reasonable charges, reasonably performed - The Alberta Court of Queen's Bench observed "that any costs ever approved by a court should always be subject to the test of reasonableness, and necessity and pru­dence. Furthermore, in my view the court should never condone without examination, and, where questioned, without specific analysis and decision, costs that are argu­ably, or even potentially, unnecessary or unreasonable. In other words, I believe that an 'unsuccessful' party should not be left to accept, without question, the costs incurred by a 'successful' party, but rather a 'suc­cessful' party, entitled to solicitor/client costs, had a prima facie duty to demon­strate that they are reasonable, and necess­ary or prudent." - See paragraph 13.

Practice - Topic 7467

Costs - Solicitor and client costs - En­titlement to - By agreement - What con­stitutes - [See Guarantee and Indemnity - Topic 7083 ].

Cases Noticed:

Landru et al. v. Inter City Contractors Ltd. et al. (1987), 59 Sask.R. 10 (Q.B.), refd to. [para. 5].

Voris v. Insurance Corp. of British Co­lumbia (1984), 9 D.L.R.(4th) 40 (B.C.C.A.), consd. [para. 6].

Canada Permanent Trust Co. v. Santos (1985), 63 A.R. 103 (Q.B.), consd. [para. 7].

Colquhoun v. Colquhoun (1988), 52 Man.R.(2d) 193 (Fam. Div.), refd to. [para. 8].

Kelvin Energy Ltd. v. Bahan et al. (1987), 79 A.R. 259 (Q.B.), consd. [para. 10].

Cabre Exploration Ltd. v. Arndt and Prov­incial Planning Director, [1988] A.J. No. 952 (C.A.), consd. [para. 11].

E.M.I. Records Ltd. v. Wallace (Ian Cam­eron) Ltd. et al., [1982] 2 All E.R. 980, consd. [para. 12].

Statutes Noticed:

Surface Rights Act, R.S.A. 1980, c. S-27, sect. 26(9) [para. 11].

Authors and Works Noticed:

Orkin, The Law of Costs (1968), pp. 2-7 [para. 7].

Orkin, The Law of Costs (2nd Ed. 1992), pp. 1-1 to 1-10 [para. 8].

Stevenson and Côté, Civil Procedure Guide (1992), p. 1418 [paras. 5, 12].

Counsel:

J.C. van der Lee, for the Guarantee Co. of North America;

Roger Beasse and Shirley Beasse, for themselves;

Roger Beasse, for Robdale Contractors Ltd., 239223 Alberta Ltd. and Henlo Enterprises Ltd.

This matter was heard in the Judicial Centre of Calgary, Alberta, before Rooke, J., of the Alberta Court of Queen's Bench. The deci­sion of Rooke, J., was given on Sep­tember 21, 1992 with the following amended and supplementary reasons filed on February 8, 1993.