Executive Summary: Key Legal and Evidentiary Issues

• Standing of the Plaintiffs/Applicants to bring claims on behalf of Crane Manor US LP was a central issue, with most claims struck for lack of proper authorization.

• The application for an attachment order against Defendant Wazonek was dismissed following a more complete evidentiary process.

• Defendants/Cross-Applicants were found to be substantially successful on both the Application and Cross-Application.

• Legal and factual complexity arose from the Plaintiffs/Applicants’ decision to commence the action in Alberta without appropriate Delaware limited partnership authority or court approval.

• Both parties contributed to procedural delays and confusion, including inadequate record-keeping and delayed filings.

• Costs were awarded as a lump sum of C$40,000 (plus GST and reasonable disbursements) to the Defendants/Cross-Applicants, payable forthwith and in any event of the cause by the Plaintiffs/Applicants, jointly and severally.

Background and facts of the case

This costs decision arises from litigation over the Crane Manor Property, a multi-residential property in Memphis, Tennessee. The Plaintiffs/Applicants—Distinct Real Estate USA 2, LP, Distinct Real Estate LP 2, 2304460 Ontario Inc., Alberta Capital Corporation, Distinct Real Estate 2, LP by 2304460 Ontario Inc., and Distinct Real Estate USA 2, LP by its limited partner Distinct Real Estate LP 2 by its limited partner Alberta Capital Corporation—sought an order declaring that Crane Manor US LP could bring the action in its own name or through one of the other Applicants, and for an attachment order under the Civil Enforcement Act, RSA 2000, C C-15, as against Defendant Phillip Wazonek.

The Defendants/Cross-Applicants—Phillip Wazonek, Distinctive Realty Services Ltd., and 1508632 Alberta Ltd.—sought an order directing the Clerk of the Court to pay their counsel the Court Funds (C$145,000) paid into court under an earlier interim attachment order, dismissal of the Plaintiffs’ Application, and setting aside the statement of claim.

In the prior decision (2025 ABKB 275), the court:
(a) struck the claim by Crane Manor US LP in its own name, without prejudice to future action by or through its general partner;
(b) struck the claims by Canadian Crane Manor LP, 230 Ontario, and ACC, purportedly brought in the name of Crane Manor US LP, without prejudice to any future derivative action authorized by a Delaware court;
(c) declared that the direct claim by Canadian Crane Manor LP was not properly brought by its general partner, but allowed an application for permission to commence a derivative action within one month (failing which it would be struck);
(d) did not strike or set aside the direct claims by 230 Ontario and ACC;
(e) dismissed the Application for an attachment order against Wazonek; and
(f) directed the Court Clerk to pay the Court Funds to the Defendants’ legal counsel forthwith.

Key legal issues and policy terms

The main issues were whether the Plaintiffs/Applicants had standing to make the claims and whether an attachment order should be granted against Wazonek. The court found that the Defendants/Cross-Applicants were substantially successful on both issues. The Plaintiffs/Applicants’ approach of commencing the action in Alberta without proper Delaware partnership authority added significant legal complexity. The Plaintiffs/Applicants did not achieve the pre-judgment attachment of Wazonek’s assets, and the Defendants/Cross-Applicants did not succeed in having the entire statement of claim set aside.

Both parties’ conduct contributed to the length and complexity of the proceedings. The Plaintiffs/Applicants’ approach lengthened the process and caused unnecessary work, while the Defendants/Cross-Applicants’ lack of reasonable record-keeping also contributed to confusion and additional work.

Outcome and costs decision

Justice M.A. Marion determined that the Defendants/Cross-Applicants were substantially successful on both the Application and Cross-Application and were presumptively entitled to costs. The court found that Column 3 of Schedule C of the Rules was appropriate, with a 3X multiplier and a 25% inflationary adjustment. The court also considered the actual costs incurred by the Defendants/Cross-Applicants, which were $104,035.50 before disbursements and GST, but found that the reasonable and proportionate award was a lump sum.

The court awarded the Defendants/Cross-Applicants a lump sum of C$40,000 (plus GST), together with reasonable disbursements (plus applicable GST), payable forthwith and in any event of the cause by the Plaintiffs/Applicants, jointly and severally. The court did not award costs for the process to determine costs, as neither party was substantially successful in their position on costs. The successful party in this costs decision was the Defendants/Cross-Applicants, who are entitled to the awarded amount as set out above. All names, amounts, and facts stated are directly found in the decision of the Honourable Justice M.A. Marion dated July 28, 2025.