Executive Summary: Key Legal and Evidentiary Issues

• The appeal by Thomas Droog, T & E Ventures Inc., and 1554670 Alberta Ltd. was dismissed, and costs were to be determined.

• The parties disagreed on costs, specifically regarding a second counsel fee, double costs, and the applicable scale.

• Respondents requested a second counsel fee under item 20(b) of Schedule C and double costs pursuant to Rules 4.29 and 14.59, to be calculated at 1.5 x column 4 of Schedule C.

• Appellants argued that a second counsel fee was not appropriate, double costs should not be granted, and the 1.5 multiplier should not apply.

• The Court found the procedural history justified a second counsel fee and determined the respondents’ formal offer was a genuine offer of compromise.

• The Court awarded the respondents a second counsel fee and double costs for all steps after the formal offer, calculated at 1.5 x column 4 of Schedule C.

Facts of the case

The appeal brought by Thomas Droog, T & E Ventures Inc., and 1554670 Alberta Ltd. was dismissed: Droog v Hamilton, 2025 ABCA 228. The Alberta Rules of Court, Alta Reg 124/2010, Rules 14.88(1) and (3), provide that the successful party in an appeal is generally entitled to a costs award against the unsuccessful party and that, unless otherwise ordered, the scale of costs in an appeal shall be the same as the scale that applies to the order or judgment appealed from. In this case, by agreement of the parties, the scale applied to the order of the chambers judge appealed from was 1.5 x column 4 of Schedule C. This was the same scale of costs applied following the hearing before the applications judge, which was the subject of the first appeal before the chambers judge.

Issues regarding costs

The parties were unable to agree on costs for the appeal heard by this Court. The respondents asked for a second counsel fee under item 20(b) of Schedule C and sought double costs pursuant to the formal offer rules (4.29 and 14.59), to be calculated on the same scale applied by the chambers judge. The appellants accepted that costs are payable to the respondents but argued that a second counsel fee is not appropriate because the issues were not complex, and that the respondents should not be entitled to double costs because their formal offer was a “nothing offer.” The appellants also resisted the multiplier of 1.5 on column 4 of Schedule C on the basis that the appeal to this Court was more straightforward than the application and appeal in the Court of King’s Bench.

Court’s analysis and findings

Contrary to the appellants’ submission, by the time of the appeal to this Court the matter had a long and convoluted history. The substantive issues may have been straightforward, but the procedural history was not. The Court requested that second counsel walk it through the full sequence of events to ensure it understood all the relevant facts. In these circumstances, the respondents’ request for a second counsel fee was found reasonable. The respondents’ formal offer to settle the appeal contained an “identifiable and sufficient compromise.” The respondents offered to forego the costs they would accumulate during the currency of the formal offer. The timing of the offer did not detract from the offer being a genuine offer of compromise. The Court found no principled basis to refuse to grant double costs to the respondents in this case.

Outcome and costs awarded

The Court was not persuaded to depart from the scale of costs agreed to by the parties and applied by the chambers judge. The respondents are entitled to a second counsel fee and double costs for all steps taken after the formal offer. The amounts payable shall be calculated on a scale of 1.5 x column 4 of Schedule C.

Procedural details and successful party

Written submissions were filed on July 25 and August 5, 2025. The memorandum was filed at Calgary, Alberta, this 8th day of September, 2025. The judgment was authorized to sign for: Crighton J.A., Kirker J.A., and de Wit J.A. The successful parties were Myles Hamilton and 1437183 Alberta Ltd., who were awarded a second counsel fee and double costs for all steps after the formal offer, calculated at 1.5 x column 4 of Schedule C. The exact amount is to be determined according to this scale.