ABCA Clarifies Approach To Determining A Successful Party's Entitlement To Costs

Published date07 June 2023
Subject MatterLitigation, Mediation & Arbitration, Court Procedure
Law FirmBorden Ladner Gervais LLP
AuthorMs Laura Poppel and Aidan Paul

In Barkwell v McDonald ("Barkwell"),1 the Alberta Court of Appeal (the "ABCA") recently clarified the considerations and procedure for determining reasonable and proper costs - particularly, where a party seeks a lump sum or percentage-based costs award.

What you need to know

  • A trial judge has broad discretion to make a "reasonable and proper" costs award, which may be awarded based on Schedule C, as a lump sum, or as a percentage of the costs that were reasonably incurred by a successful party.
  • A party must demonstrate that their claimed costs are reasonable, proper, and proportionate in the circumstances including with reference to, among other factors, the importance of the issues, the complexity of the action, the services provided the conduct of the parties, the rates charged, and the manner in which the file was staffed.
  • Where a party seeks a lump sum or percentage-based costs award they should always provide the Court with an assessment of the fees payable under Schedule C, which the Court may use as a benchmark to determine whether the claimed costs are "reasonable and proper" in the circumstances.

Background

Following a trial related to the division of matrimonial property, the Trial Judge awarded the Respondent $387,653.22 in costs, which consisted of: (1) 50% of their actual legal fees plus disbursements; and (2) $160,754.38 for expert reports.

The issues on appeal related to: (1) the division of matrimonial property, including tracing exempt assets and accounting; and (2) the Trial Judge's decision to award the Respondent 50% of their claimed legal fees without further analysis as to whether those fees were reasonable and proper in the circumstances.

Summary of the ABCA's decision on costs

The ABCA held that the Trial Judge erred in distributing the parties' property according to the factors set out in the Matrimonial Property Act.2 Although the Court noted that further submissions would be required regarding costs in this case, it took the opportunity to provide general guidance and clarification with respect to costs awards.

The Court began by affirming its recent decision in McAllister v Calgary (City) ("McAllister"),3 where the ABCA held that trial judges have broad discretion to determine what constitute "reasonable and proper costs" in a particular case, which may be awarded based on Schedule C, as a lump sum, or as a percentage of legal fees that were reasonably incurred by the successful party.

Although the Court observed that the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT