Alberta Court of Appeal provides clarification on enhanced costs

In Kantor v. Kantor 2023 ABCA 329 the husband appealed a consent order pertaining to spousal support, and lost at the Court of Appeal.

After being successful, the wife asked the Court of Appeal to grant enhanced costs. More specifically, Ms. Kantor was asking the court to grant her 75% of the legal fees and disbursements that she had paid to her lawyer, which amounted to $12,768. If the court was not agreeable to this, Ms. Kantor asked for 50% which amounted to $8512.

As a part of her costs submissions, Ms. Kantor argued that Mr. Kantor had engaged in misconduct and had caused delay by, not providing timely and full financial disclosure, by not following the court order and paying the proper amount of support, and by bringing an appeal that was unsuccessful.

The Court of Appeal provided some insightful clarification regarding enhanced costs:

- Misconduct or conduct unnecessarily delaying proceedings can justify enhanced costs, however the misconduct or delay must relate to the appeal. You can’t seek enhanced costs from the Court of Appeal on issues that took place in King’s Bench

- An appeal that ends up being unsuccessful does not in and of itself justify enhanced costs. If the appeal was brought in good faith, an appeal will not be found to be frivolous simply because it was unsuccessful.

- Declining an offer to settle is not misconduct warranting enhanced costs

- McAllister v Calgary (City), 2021 ABCA 25 does not mean that the winning party can simply argue for the quantum of the fees that was charged by counsel, and then the quantum is payable by the losing party. The process is more involved. The court must consider whether the costs being sought are reasonable and proper costs. To assess whether the costs are reasonable, the court must apply rule 10.2 which looks at the nature of the work and services provided by the lawyer.

- The losing party should pay costs calculated giving consideration to section 10.33 of the Rules

- The court of appeal will generally award costs on the same scale/schedule as was set out in the lower court, unless there is a good reason to vary it.

- Appeal conferences which are a dispute resolution mechanism, are not recoverable by a successful party at appeal

Rule 10.2 clarifies that a lawyer is entitled to be paid a reasonable amount for the services provided considering:

- the nature, importance and urgency of the matter,

- the client’s circumstances,

- the trust, estate or fund, if any, out of which the lawyer’s charges are to be paid,

- the manner in which the services are performed,

- the skill, work and responsibility involved, and

- any other factor that is appropriate to consider in the circumstances.

Rule 10.33 notes that in making a costs awards the court should consider the following:

- the result of the action and the degree of success of each party;

- the amount claimed and the amount recovered;

- the importance of the issues;

- the complexity of the action;

- the apportionment of liability;

- the conduct of a party that tended to shorten the action;

- any other matter related to the question of reasonable and proper costs that the Court considers appropriate

- the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action;

- a party’s denial of or refusal to admit anything that should have been admitted;

- whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party;

The Court of Appeal noted that It is extremely rare for courts to award solicitor and own client costs to a successful party.

The Court of Appeal refused to order the costs sought by Ms. Kantor. The legal invoices from her counsel did not contain enough information to assess the reasonableness of the amounts charged to Ms. Kantor which restricted the ability of the court to asses the reasonable amount that Mr. Kantor should pay.

While the court found that Ms. Kantor was not entitled to enhanced costs, it did grant costs to Ms. Kantor in a lesser amount. In total, the Court of Appeal ordered costs to be $6000.00 all inclusive of the initial appeal and the costs hearing.