Court of Appeal Decision of the Week

Court of Appeal Modifies Costs Award

Case: Kent v Martin, 2018 ABCA 202 (CanLII)

Keywords: Defamation; “Scud Stud”; Costs Award; Fraudulent Concealment; False Evidence; Sidorsky v CFCN Communications Ltd, 1997 ABCA 280 (CanLII)

Synopsis:

The Appellant, Mr. Arthur Kent, is a Canadian-born journalist reporting during the first Iraq war. Following a career as a journalist, the Appellant is subsequently nominated to be an Alberta Progressive Conservative Party’s candidate in the 2008 provincial election.

A defamatory article, whose headline in the Calgary Herald reads “Scud stud lands with a thud”, is written by the Respondent, Mr. Don Martin, and published during the election campaign. Following a five week trial, Mr. Kent is awarded damages totaling $200,000 and costs of $250,000. The Trial Judge observes:

The overall tenor of the Article is that Arthur Kent is a politically naïve arrogant has-been journalist with a huge ego whose election campaign is in disarray and who is doomed to become an ineffective MLA if elected.  It is markedly different than the other articles published about Mr. Kent and his campaign in the preceding couple of days, which were more balanced and focused on differences between Mr. Kent and the PC Party. None of the prior articles contained the harshly critical personal tone used in the Article or focus on the three new issues raised in the Article. (See Kent v Martin, 2016 ABQB 314 (CanLII) at para. 109).

The Appellant appeals the costs award only. The Court of Appeal disagrees with the Trial Judge’s conclusion that allegations of misconduct, including fraudulent concealment and the giving of false evidence as against the Respondent were not proven. As such, the costs award is increased by $200,000.

Importance:

The Court of Appeal noted that, since the Appellant’s allegations of misconduct were established in this case, the Trial Judge erred in penalizing him at the costs stage for having made them. (See para. 41). In light of the Supreme Court of Canada’s decision in Groia v. Law Society of Upper Canada, 2018 SCC 27 (released last week), one is struck by the fact that, to allege particular kinds of wrongdoing, one sometimes has to make statements or take procedural steps which may have the appearance of incivility, or juridical inefficiency. From a strategic perspective, is the Supreme Court of Canada in Groia and the Court of Appeal herein signaling to litigants that they should not shy away from ‘calling a spade a spade’ when necessary?

The Court of Appeal cited Sidorsky v CFCN Communications Ltd, 1997 ABCA 280 (CanLII) for a list of factors relevant for determining whether to increase costs in response to how litigation is conducted, including:

  • circumstances constituting blameworthiness in the conduct of the litigation by that party;
  • cases in which justice can only be done by a complete indemnification for costs;
  • where there is evidence that the plaintiff did something to hinder, delay or confuse the litigation where the positively misconducting party was “contemptuous” of the aggrieved party in forcing that aggrieved party to exhaust legal proceedings to obtain that which was obviously his;
  • an attempt to deceive the court and defeat justice, an attempt to delay, deceive and defeat justice, a requirement imposed on the plaintiff to prove facts that should have been admitted, thus prolonging the trial, unnecessary adjournments, concealing material documents from the plaintiffs and failing to produce material documents in a timely fashion;
  • where the defendants were guilty of positive misconduct, where others should be deterred from like conduct and the defendants should be penalized beyond the ordinary order of costs;
  • fraudulent conduct; and
  • an attempt to delay or hinder proceedings, an attempt to deceive or defeat justice, fraud or untrue or scandalous charges. (See para. 41).

Although the Court of Appeal did not state which factors specifically applied to the circumstances of this case, it noted “A number of these factors are in play…” (See para. 42). The Court of Appeal adjusted the costs awarded by the Trial Judge: “Mindful of the seriousness of the conduct” exhibited by the Respondent, “…we allow the appeal and award the appellant an additional $200,000 in costs” for a grand total of $450,000. (See paras. 42, 45).

Counsel for the Appellant: Michael Bates (Ruttan Bates, Calgary)

Counsel for the Respondents: G. Scott Watson and Brent Mescall (Parlee McLaws LLP, Calgary)

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Posted: Wednesday, June 06, 2018