Sutherland v. Encana Corp. et al., 2014 ABQB 601

• Judge: Michalyshyn, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 20, 2014
• Citations: 2014 ABQB 601;(2014), 597 A.R. 230 (QB)

Sutherland v. Encana Corp. (2014), 597 A.R. 230 (QB)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. OC.044

Teresa Sutherland and Thomas Sutherland (plaintiffs) v. Encana Corporation, Darcy John Lattery and Ari Financial Services Inc. (defendants)

(0803 00695; 2014 ABQB 601)

Indexed As: Sutherland v. Encana Corp. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Michalyshyn, J.

October 1, 2014.

Summary:

The plaintiffs rejected the defendants' settlement offer of $365,000 plus costs, which was made about 100 minutes before the trial was to start. After trial, the plaintiffs recovered an award of $369,273.18 (see [2014] A.R. Uned. 230). At issue was the plaintiffs' claim for the costs of trial. The defendants said that those costs should be denied. They said that the plaintiff's net gain ($4,273.18 more than the offer) was disproportionate to the costs claimed for an almost four-week trial. The plaintiffs argued that they won the day, and costs should follow the event. They also argued for an increase to Schedule C for inflation and complexity.

The Alberta Court of Queen's Bench held that although it would not deny the plaintiffs' trial costs entirely, a 25% reduction in costs for the trial was appropriate. The court rejected any Schedule C increase for inflation, but doubled fees for trial preparation. Given the divided success, the parties would bear their own costs of the costs applications.

Practice - Topic 7110.4

Costs - Party and party costs - Special orders - Increase in scale of costs - Inflation - Successful plaintiffs claimed for the costs of the trial - They argued for an increase to Schedule C for inflation - The Alberta Court of Queen's Bench stated that "Absent binding appellate authority and given the differing opinions of trial judges, it is hard to conclude there is any established principle in favour of 'inflating' Schedule C in any given circumstances. In all I am persuaded by those authorities which conclude there is a certain arbitrariness or at least the appearance of it when setting an inflation factor to a costs schedule enacted by the legislature on the recommendation of the Rules of Court Committee. Again the Rules of Court provide extremely broad discretion regarding costs overall. Yet none of the examples set out in rule 10.33(1) specifically mention setting an across-the-board increase in the Schedule C tariff owing to inflation, whether based on evidence - which does not exist before me - or otherwise. In the face of this uncertainty, I am also persuaded by those authorities which observe that a mechanism - a legislative one - already exists to review the adequacy of the tariff in Schedule C. As recently as 2010 with the new Rules of Court the legislature saw fit to leave Schedule C unaltered. .... At the end of the day I decline to exercise any discretion I may have to impose an inflation factor in the case before me" - See paragraphs 67 to 73.

Practice - Topic 7115

Costs - Party and party costs - Special orders - Increase in scale of costs - Difficulty and complexity of proceedings - Successful plaintiffs claimed for the costs of the trial - They sought an adjustment to column 3.5 from column 3 of Schedule C on the basis that the case was complex - The Alberta Court of Queen's Bench stated that "I agree that in some respects the trial was both long and complex. The plaintiffs have not however established an entitlement to an across-the-board .5 column increase for complexity. In quite brief submissions on the point they refer only to the numbers of witnesses. As such I am prepared to consider an increase only to the related trial preparation item in Schedule C. ... I find the plaintiffs are entitled to an increase for trial preparation only to $12,000 from $6,000" - See paragraphs 65 to 66.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - The plaintiffs rejected the defendants' settlement offer of $365,000 plus costs, which was made about 100 minutes before the trial was to start - After trial, the plaintiffs recovered an award of $369,273.18 - At issue was the plaintiffs' claim for the costs of trial - The defendants said that those costs should be denied - They said that the plaintiff's net gain ($4,273.18 more than the offer) was disproportionate to the costs claimed for an almost four-week trial - The Alberta Court of Queen's Bench accepted the plaintiffs' argument that an offer that failed to exceed the offerees' recovery should rarely oust the usual rule that costs follow the event - Circumstances giving rise to deviation from the usual rule had to be "exceptional" - The court stated, inter alia, "In my view a consideration of exceptional circumstances is prima facie engaged when as here the plaintiffs beat the defendants' position by just over 1 per cent of what was offered. That narrowest of margins is a factor going to the existence of exceptional circumstances. This is particularly the case when assessing the proportionality of the costs claimed to recover the net gain of just over $4,200" - The court concluded that in the extraordinary circumstances of this case a fair and reasonable costs outcome was a 25% reduction in the plaintiffs' costs and disbursements for the trial - See paragraphs 31 to 64.

Cases Noticed:

Fullowka et al. v. Pinkerton's of Canada Ltd. et al., [2008] 12 W.W.R. 60; 437 A.R. 390; 433 W.A.C. 390 (N.W.T.C.A.), refd to. [para. 20].

Fullowka v. Royal Oak Ventures Inc. - see Fullowka et al. v. Pinkerton's of Canada Ltd. et al.

Mahe et al. v. Boulianne, [2010] A.R. Uned. 25; 2010 ABCA 74, refd to. [para. 20].

Kretschmer v. Terrigno (2012), 539 A.R. 212; 561 W.A.C. 212; 2012 ABCA 345, refd to. [para. 32].

Goulding v. Keck (2014), 580 A.R. 352; 620 W.A.C. 352; 2014 ABCA 293, refd to. [para. 35].

Tomich Estate, Re, [2011] A.R. Uned. 344; 2011 ABCA 257, consd. [para. 36].

Koma v. Tomich - see Tomich Estate, Re.

Botan v. St. Amand (2013), 553 A.R. 333; 583 W.A.C. 333; 2013 ABCA 227, affing. (2012), 538 A.R. 307; 2012 ABQB 260, refd to. [para. 38].

J.R. v. University of Calgary et al. (2012), 551 A.R. 395; 2012 ABQB 774, consd. [para. 39].

Millott Estate et al. v. Reinhard et al. (2002), 322 A.R. 307; 2002 ABQB 998, refd to. [para. 51].

Moser v. Derksen (2002), 321 A.R. 56; 2002 ABQB 679, refd to. [para. 51].

Atkinson v. McGregor et al. (1998), 227 A.R. 376 (Q.B.), refd to. [para. 51].

Jando v. Kung (1995), 164 A.R. 237 (Q.B.), refd to. [para. 51].

Chisholm v. Lindsay (2013), 571 A.R. 260; 2013 ABQB 589, consd. [para. 52].

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, consd. [para. 56].

Labby (Emile) Trucking Ltd. v. Option Inc., [2014] A.R. Uned. 277; 2014 ABQB 248, refd to. [para. 61].

Nash et al. v. Snow et al. (2014), 590 A.R. 198; 2014 ABQB 355, refd to. [para. 62].

McAteer et al. v. Devoncroft Developments Ltd. et al. (2003), 340 A.R. 1; 2003 ABQB 425, refd to. [para. 62].

Windsor v. Canadian Pacific Railway Ltd. (2014), 572 A.R. 317; 609 W.A.C. 317; 2014 ABCA 108, refd to. [para. 63].

Fill et al. v. Somani et al. (2013), 571 A.R. 230 (Q.B.), refd to. [para. 67].

Eaton et al. v. HMS Financial Inc. et al. (2010), 486 A.R. 130; 2010 ABQB 364, refd to. [para. 67].

Evans v. Sports Corp. (2011), 523 A.R. 88; 2011 ABQB 616, refd to. [para. 68].

Bowman et al. v. Ralph's Arctic Cat Sales & Services Ltd. et al., [2012] A.R. Uned. 317; 2012 ABQB 205, refd to. [para. 68].

Pharand Ski Corp. v. Alberta (1991), 122 A.R. 395; 81 Alta. L.R.(2d) 304 (Q.B.), refd to. [para. 69].

Statutes Noticed:

Rules of Court (Alta.), rule 10.29(1) [para. 28]; rule 10.31, rule 10.33 [para. 29].

Authors and Works Noticed:

Stevenson, William A., and Côté, Jean E., Alberta Civil Procedure Handbook (2015), p. 1-5 [para. 58].

Counsel:

Terrance Kulasa and James O'Neil, for the plaintiffs;

Ward Hanson and Morgan Deacon, for the defendants.

This matter was heard on May 15 and 20, and June 20, 2014, by Michalyshyn, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton. Further written submissions were made on June 22 and 27, 2014. Michalyshyn, J., delivered the following memorandum of decision regarding costs on October 1, 2014.