Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether costs should be awarded to Nelson Skalbania after successfully defending a counterclaim.

• Rule 14-1(9) of the Supreme Court Civil Rules mandated costs to the successful party unless otherwise ordered.

• Archer Ltd. argued that Skalbania was more culpable and that awarding him costs would be unjust due to the ex turpi causa doctrine.

• The counterclaim was dismissed entirely, and Skalbania had discontinued his own claim years earlier.

• The court found that Skalbania was only before the court to defend the counterclaim and did not seek affirmative relief.

• Costs at Scale B were awarded to Skalbania as the successful party, with no adjustment based on alleged culpability.

Facts and outcome of the case

Background and procedural history

The dispute involved Nelson Skalbania, who was originally the plaintiff but later became the defendant by way of counterclaim, and 0055498 B.C. Ltd., formerly Archer Investments Ltd., who defended the original claim and pursued a counterclaim.

On April 2, 2019, Nelson Skalbania discontinued his claim against Archer Ltd., effectively ending his pursuit of affirmative relief. However, the litigation continued on the basis of the counterclaim filed by Archer Ltd., which proceeded to trial. The trial exclusively dealt with the counterclaim, which the court ultimately dismissed. A ruling on costs followed.

Arguments and legal issues
Mr. Skalbania, having successfully defended the counterclaim, applied for an award of costs at Scale B under Rule 14-1(9) of the Supreme Court Civil Rules, which directs that costs generally follow the event unless the court orders otherwise. Archer Ltd. opposed this, arguing that due to the application of the legal doctrine of ex turpi causa—which bars recovery for claims rooted in illegality—Skalbania should not receive costs because he was allegedly the more culpable party.

Archer Ltd. contended that even though its counterclaim was dismissed, it would be unjust to award Skalbania his costs. Counsel argued that since the court refused to assist either party under ex turpi causa, neither should be entitled to costs.

Court’s reasoning
Justice Funt rejected Archer Ltd.’s submissions and found that there was no basis to deviate from the standard rule. The judge emphasized that Mr. Skalbania had abandoned his claim well before trial and only appeared in court to defend against the counterclaim. The court held that it was not unjust to award him costs since Archer Ltd. initiated and pursued the counterclaim, which necessitated the trial.

The court also clarified that the doctrine of ex turpi causa did not bar an award of costs to a successful defendant. Since Mr. Skalbania was not seeking the court's assistance beyond defending himself, he had not invoked the kind of claim the doctrine usually targets.

Outcome
Mr. Skalbania was awarded his costs at Scale B. No damages were awarded, as the ruling only dealt with costs. The exact monetary value of the costs was not specified in the judgment. This decision reaffirmed the principle that costs follow the event, even in cases involving equitable doctrines like ex turpi causa.