Originally published in Blakes Bulletin on Litigation
& Dispute Resolution, February 2012
In 321665 Alberta Ltd. v. ExxonMobil Canada Ltd., the
Court of Queen's Bench of Alberta released the first reported decision on a
party's entitlement to costs pursuant to s. 36 of the
Competition Act, R.S.C. 1985, c-34. In the course of doing
so, the court also had the opportunity to address a number of novel
costs issues, including entitlement to compound interest, the
effect of the plaintiff's delay on the calculation of
pre-judgment interest and entitlement to costs for litigation
Following a damages award, 321665 Alberta Ltd. (the plaintiff)
sought a substantial amount of costs including:
solicitor-client costs and investigation costs under s. 36 of
the Competition Act
compound interest for a period of 14.5 years
costs incurred by the plaintiff for a litigation loan.
The plaintiff sought solicitor-client costs on the basis of the
wording of s. 36 of the Competition Act. Section 36
provides that any person who has suffered loss or damage as a
result of conduct that is contrary to Part VI of the
Competition Act may sue to recover damages, together with
"the full cost to him of any investigation in connection with
the matter and of proceedings under this section."
The plaintiff submitted that the words "full cost" of
proceedings meant solicitor-client costs of the action. In
interpreting s. 36, the court held that "full cost" is
not synonymous with solicitor-client costs. In doing so, the court
relied upon numerous authorities that have held that the term
"full costs" is consistent with party-party costs only,
except in expropriation cases. According to the court, "Had
Parliament intended that a successful claimant in a s. 36 action
would be entitled to recover solicitor-client costs, it could have
easily have said so."
The court's interpretation of s. 36 is significant since
prior to the decision, a number of competition law practitioners
and commentators had wrongly opined in various articles that the
term "full costs" meant costs beyond those on a
party-party basis. The court confirmed the common law principle
that solicitor-client costs can only be awarded in instances where
there is litigation misconduct. In the end result, the plaintiff
was awarded only party-party costs.
The court also clarified when investigation costs can be awarded
under s. 36. In particular, the court held that any claim for
investigation costs must be supported by evidence. The plaintiff
sought costs to investigate the matter but had failed to provide
sufficient evidentiary support for the amounts being claimed.
Moreover, the court noted that the evidence in support of the
investigation costs did not distinguish between investigation costs
and the plaintiff's personal time and expense as a private
litigant, the latter of which was not compensable. Having failed to
provide sufficient and particularized evidence necessary to claim
investigation costs under s. 36, the court rejected the claim of
about C$1-million and awarded C$75,000.
In its decision, the court also had the opportunity to revisit
the issue of a party's entitlement to compound interest. The
plaintiff sought compound interest for a 14.5-year period,
representing a substantial amount. In denying compound interest,
the court found that the plaintiff had failed to plead compound
interest both in its prayer for relief as well as in the facts
necessary to support such a claim. As a result, the failure to
plead such relief was sufficient to dispose of the claim.
Moreover, the court found the plaintiff had failed to provide
evidence sufficient to meet the legal or equitable test required
for compound interest as articulated in 2002 by the Supreme Court
of Canada in Bank of America Canada v. Mutual Trust Co. In
the end result, the plaintiff was confined to simple interest under
the Judgment Interest Act as the alleged damages arose.
The court further reduced the amount of time that the plaintiff was
entitled to interest on account of the plaintiff's significant
delay in advancing the matter to trial.
Finally, the court rejected the plaintiff's argument that it
was entitled to claim the cost of money borrowed to finance the
litigation. In relying upon earlier decisions from the Court of
Queen's Bench of Alberta, the court confirmed that the costs of
borrowing funds to finance litigation are not properly
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