Case Summary: RVB Managements Ltd. v. Rocky Mountain House
Defence + Indemnity
Costs per Schedule C can be increased for inflation and subjected to a multiplier for complexity of the case.
RVB Managements Ltd. v. Rocky Mountain House, 2015 ABCA 304, per Paperny, Watson, Slatter JJ.A.
I. FACTS AND ISSUES
This was a $25 million tort claim against a municipality. It culminated in a long, 27day trial over two years. The Plaintiffs ended up getting nothing. They appealed and lost. The parties could not agree on costs. The trial judge made a costs award that 1) adjusted the costs for inflation and 2) used a column multiplier, since the amount at issue was several times the $1.5 million Column 5 number.
II. HELD: Inflation adjustments and column multipliers are permissible
(a) The current amounts were enacted in 1998 and haven’t been changed. Some trial judges have allowed indexing for inflation; some haven’t. There has been no direct appellate ruling on the issue.
(b) The Plaintiffs made three arguments. First, they contended the fact the 2010 Rules didn’t update the 1998 amounts means they implicitly “confirmed” them. The Court rejected that. They noted the Alberta Law Reform Institute specifically said that the amounts in Schedule C were “beyond the scope of the Rules of Court Project”. The Court also observed that the Interpretation Act “displaces any assumption that the repeal and substitution of an enactment was intended to either confirm or change the prior law”. In fact, at the time of the re-enactment in 2010, many judges were already adjusting for inflation. The “re-enactment should,” the Court found, “be interpreted on the assumption that, where appropriate, that practice could continue.”
(c) The Plaintiffs then cited a number of cases which had declined to adjust for inflation. The Court of Appeal noted some of these merely upheld, without discussion, costs awards which hadn’t been adjusted. In other words, the Court of Appeal didn’t interfere with the trial court’s discretion, but didn’t rule on the merits of adjusting at all. (E.g. Chisholm v. Lindsay, 2015 ABCA 179).
(d) Finally, the Plaintiffs argued inflation has to be proven in each case by expert evidence. The Court said the basic fact of inflation—that “the cost of living varies over time,” was “sufficiently notorious that notice can be taken of it”, but agreed that “the exact amount of inflation is something upon which evidence should ordinarily be presented.” They noted the Bank of Canada inflation calculator says the average increase in cost of living since 1998 is 39%. “While more exact evidence would have been desirable, the award of 25% for inflation does not demonstrate any miscarriage of justice.”
2. Column Multipliers
(a) This was a $25 million claim. The current Schedule C Column 5 maxes out at $1.5 million. The proposed amended column from the Rules of Court Committee is up to $2 million. The trial court here doubled the column since the claimed amount was 10x the column maximum. (b) The Court of Appeal said this was permissible, since R. 10.31(3)(b) specifically authorizes the trial judge to award “a multiple, proportion or fraction of an amount set out in any column of the tariff”. Rule 10.33 lists the criteria to be considered, and includes in R. 10.33(1)(b) “the amount claimed and the amount recovered”. They noted it is common to award multiples for various reasons and
essentially endorsed that practice.
1. It is a bit surprising the Court failed to mention the Rules of Court Committee, which found in January a “broad consensus that the Schedule needs to be updated to reflect inflation, and the Committee will be recommending approximately a 35% increase in the assessable amounts and the different columns.”
2. In light of the Rules of Court memorandum and this Court of Appeal decision, it is likely inflation will be claimed and awarded much more often.