Executive Summary: Key Legal and Evidentiary Issues

• The Court considered what costs are payable to HTE Investments Ltd. and its principal, Mr. Howard Gordon Rutledge, against Ms. Lynn Dianne Rutledge following various applications and cross-applications after her ouster as director and employee.

• HTE Investments Ltd. and Mr. Rutledge were found to be the substantially successful parties and were held entitled to costs of the application(s) and cross-application(s).

• The Court fixed costs at Schedule C level, totaling $8,050, and declined to award solicitor-client-level or other enhanced costs.

• Allegations in the plaintiffs’ costs brief of “misconduct” and “numerous aggravating factors” were largely not particularized, and costs on the “authenticity” front had already been awarded in HTE Investments Ltd v Rutledge, 2025 ABKB 256 (para 108).

• Regarding passwords, the Court found that Ms. Rutledge initially had a good-faith position about retaining access as a (then-believed) director or potential reinstated director, that the parties appeared to have reached their own solution at one point, and that when ordered, she provided the required information, with any shortcomings inferred not to be material.

• Payment of the $8,050 Schedule C costs award was deferred until the conclusion of family-property proceedings between Mr. and Ms. Rutledge, with primary payment by set-off against any amount Mr. Rutledge may owe Ms. Rutledge, and if insufficient, Ms. Rutledge has one year from that point to pay.

Background and parties

HTE Investments Ltd. and Mr. Howard Gordon Rutledge are the plaintiffs/defendants by counterclaim in this matter. Ms. Lynn Dianne Rutledge, also known as Lynn Freeman, is the defendant/plaintiff by counterclaim. The costs endorsement is issued by the Court of King’s Bench of Alberta, in the action HTE Investments Ltd v Rutledge, 2026 ABKB 39, under Docket 2401 14454, Registry: Calgary. The endorsement is dated January 16, 2026, and is authored by the Honourable Justice Michael J. Lema. The costs issue arises from “various applications and cross-applications” required in the aftermath of Ms. Rutledge’s ouster as both a director and an employee of HTE Investments Ltd. The parties provided written costs submissions pursuant to an unpublished November 27, 2025 endorsement. The written submissions on costs were provided on December 12, 2025 and January 2, 2026.

Entitlement to costs

Justice Lema found that HTE Investments Ltd. and Mr. Rutledge were the “substantially successful parties” in respect of the application(s) and cross-application(s) in question. As a result, they were held to be entitled to costs of those application(s) and cross-application(s). The endorsement answers the initial question posed in paragraph [1] by confirming that costs are payable to the corporation and its principal against Ms. Rutledge.

Scale of costs and reasons for applying Schedule C

As to the scale of costs, Justice Lema determined that Schedule C is appropriate and that there should be no solicitor-client-level or other enhanced costs. The plaintiffs’ costs brief referred to “misconduct” and “numerous aggravating factors,” but the Court noted that these were largely not particularized. The endorsement further records that costs had already been awarded on the “authenticity” front, with reference to HTE Investments Ltd v Rutledge, 2025 ABKB 256 (para 108).

With respect to password issues, the Court made several specific findings:

• Ms. Rutledge initially had a good-faith position that she was entitled to retain access to the passwords on the basis that she was still a director and, for a period afterward, that she would be reinstated as a director.

• As discussed in an unpublished July 31, 2025 endorsement, it appeared that the parties had reached their own solution to the password issues.

• When it later became apparent that the solution was not in place, not sufficient, or no longer applicable, and when the plaintiffs pressed the issue and the Court directed that the passwords and associated information be provided, it appears that Ms. Rutledge provided the required information promptly.

The Court also observed that the plaintiffs did not ask for any follow-up directions regarding the passwords. From this, Justice Lema inferred that any shortcomings related to password disclosure were not material.

More broadly, Justice Lema found that Ms. Rutledge’s position on the various issues in the application(s) and cross-application(s) reflected her earnest and thoughtful assessment of the issues. The endorsement states that she was not motivated by, and her actions did not reflect, obstructionism, mischief-making, bad faith, or vexatiousness. Instead, she took good-faith positions and advanced them with coherent, logical, and proportionate positions, in a measured and always respectful manner, while advancing her positions forcefully and effectively but without aggression or hostility.

On this basis, the Court concluded that there was no foundation for solicitor-client-level or other enhanced costs and that Schedule C remained the appropriate scale.

Amount and form of the costs award

Justice Lema approved the essentials of the draft bill of costs built on Schedule C that was submitted by the plaintiffs. That draft featured a total costs award of $8,050. The Court accepted this total and directed that the draft be retitled “Schedule C Costs Award.” Justice Lema asked Ms. Alicia M. Martin to retitle the document accordingly and to submit the new draft for signature via SharePoint, without the need for any party or counsel signatures. Thus, the formal costs award is a Schedule C costs award in the amount of $8,050 in favour of HTE Investments Ltd. and Mr. Rutledge.

Deferral and method of payment of costs

Payment of the $8,050 Schedule C costs award is not immediate. The endorsement provides that payment is deferred to the conclusion of the family-property proceedings involving Mr. and Ms. Rutledge, whether concluded by agreement or court order. The costs shall be paid, in the first instance, by set-off against any amount which Mr. Rutledge may be found to owe to Ms. Rutledge via such agreement or court order. If there is no such amount, or if any liability is inadequate to clear the costs award, Ms. Rutledge shall have one year from that point to pay the costs award.

Closing note and appearances

In closing, Justice Lema thanked Ms. Martin and Ms. Rutledge for their helpful written and oral submissions on the file from start to finish. The endorsement records that the matter was heard by way of written submissions provided on December 12, 2025 and January 2, 2026. Appearances are listed as Christopher Dormer and Alicia M. Martin of Dunphy Best Blocksom LLP for the plaintiffs/defendants by counterclaim, and Ms. Lynn D. Rutledge as self-represented defendant/plaintiff by counterclaim.