Executive Summary: Key Legal and Evidentiary Issues

• Court applied its broad discretion under Rules 10.29, 10.31 and 10.33 of the Alberta Rules of Court to determine a reasonable, proportionate lump-sum costs award rather than strictly following Schedule C.

• The January 26, 2021 consent order, together with the $2,000 contempt-purge payment, was interpreted narrowly so that the “no costs” provision applied only to contempt-related orders, not to all prior litigation steps.

• Mr. Koster’s position that only the 2101 Action should attract costs, and that all steps before the January 26, 2021 consent order should be excluded, was rejected based on the wording of the order and the limited scope of contempt-related steps.

• The Court corrected errors in Ms. Kitchenham’s draft Bill of Costs (including misapplied Schedule C items and disallowed Contested Purge Application costs), recalculating Schedule C Column 2 at $24,410.83.

• Schedule C was treated as a non-mandatory but useful benchmark for assessing a fair lump sum, in line with appellate guidance emphasizing partial indemnification, proportionality, and reasonableness.

• As the successful party, Ms. Kitchenham was awarded lump-sum costs of $25,000, which the Court considered an appropriate partial indemnification in light of the revised Schedule C Column 2 amount and the overall litigation history in the two related actions.

Facts and litigation background

This costs decision arises from two related actions between Georgina Kitchenham (plaintiff) and Joe Koster (defendant), both in the Court of King’s Bench of Alberta, Calgary Registry. The ruling on costs follows the Court’s earlier merits decision in Kitchenham v Koster, 2023 ABKB 501 (the Underlying Decision), after which the parties were unable to agree on costs.
The first proceeding, Action Number 1901 03381 (the “1901 Action”), concerned a claim commenced by Ms. Kitchenham for misrepresentation and breach of contract. In that action, she applied for summary judgment on December 13, 2019 and obtained judgment against Mr. Koster on January 9, 2020.
Following the January 2020 judgment, Mr. Koster declared bankruptcy. On June 24, 2021, Applications Judge Prowse granted an order lifting the stay of proceedings against Mr. Koster. After the stay was lifted, Ms. Kitchenham filed a second statement of claim in Action Number 2101 08362 (the “2101 Action”) alleging fraudulent misrepresentation.
There were also contempt-related proceedings involving Mr. Koster. To purge his contempt, he provided a cheque for $2,000 to Ms. Kitchenham, and a consent order was granted on January 26, 2021 (the “January 26, 2021 Order”). The effect of that order, and whether it limited costs for earlier steps, became a central point of dispute in this costs ruling.

Positions of the parties on costs

After the Underlying Decision, Ms. Kitchenham, as the successful party, sought an award of costs. She asked for full indemnity, claiming solicitor-and-own-client costs of $28,526.92. In the alternative, she requested costs calculated under Schedule C, Column 2, and asserted that such an assessment would exceed her solicitor-and-own-client total. She asked that the costs be awarded as a lump sum.
Mr. Koster did not dispute that Ms. Kitchenham was entitled to costs, but he argued that the litigation history had been arduous and that Ms. Kitchenham’s own conduct contributed to that history. He further submitted that, because of the January 26, 2021 Order and the $2,000 cheque given to purge his contempt, all steps prior to that consent order should be disregarded for the purposes of costs. In his view, only the 2101 Action should attract a costs award.
In addition, Mr. Koster contended that certain entries in the draft Bill of Costs relied on the wrong Schedule C column and that only Column 2 should be applied.

The governing rules and principles on costs

The Court reviewed the costs framework set out in the Alberta Rules of Court, Alta Reg 124/2010. Under Rule 10.29(1), the default rule is that a successful party to an application is entitled to an award of costs against the unsuccessful party, payable forthwith, subject to the Court’s general discretion under Rule 10.31. The decision confirms that there are no special constraints beyond these rules and that the Court’s discretion under Rules 10.31 and 10.33 must be exercised judicially on the facts of the case.
The Court reiterated that the primary purpose of a costs award is to partially indemnify the successful party for either defending an unfounded claim or pursuing a valid legal right. Under Rule 10.31(1), the trial judge has considerable discretion in determining what constitutes reasonable and proper costs.
The Court also emphasized that a costs award need not be based on Schedule C, and Schedule C is not a mandated default method. However, in appropriate cases, Schedule C has the advantage of providing parties with greater certainty about their exposure to costs and is simple, efficient, and inexpensive to apply. It can also avoid the need for lengthy inquiries into and assessments of the appropriate level of costs.
Consistent with appellate guidance, the Court noted that when a winning party seeks a lump-sum costs award, that party should provide, as a benchmark, an assessment of the fees that would be ordered under Schedule C. The decision underscores that the overriding considerations in setting costs are proportionality and reasonableness.

Interpretation of the January 26, 2021 consent order

A key issue was whether the January 26, 2021 Order and the $2,000 payment to purge contempt meant that there should be no costs payable in respect of the time period prior to that order. Mr. Koster argued that this combination effectively eliminated costs exposure for earlier steps.
The Court disagreed. It noted that the 1901 Action had been commenced in March 2019 and that the $2,000 amount was far too small to settle the entirety of the steps taken over approximately a year and a half.
More importantly, the Court relied on the precise wording of the January 26, 2021 Order. That order stated that “[t]here shall be no costs of this Application to either party nor shall there be any costs to either party in respect of the earlier Orders granted by the Court related to the contempt of the Defendant” (emphasis added). The Court held that this language clearly limited the no-costs provision to the specific application and to earlier orders “related to the contempt of the Defendant.”
After reviewing the court file, the Court found that most of the steps taken by Ms. Kitchenham in the 1901 Action did not relate to Mr. Koster’s contempt. Only those steps and orders directly connected to contempt were excluded from costs under the January 26, 2021 Order.

Use of Schedule C and corrections to the Bill of Costs

The Court undertook a detailed review of the draft Bill of Costs submitted by Ms. Kitchenham. It identified a number of errors and corrected them.
First, the Bill of Costs included a Notice of Appeal claimed under section 8(1) of Schedule C; the Court found that this should have been claimed under section 18(1). Second, a claim for Written Interrogatories was placed under section 5(4) in a way that produced an erroneously higher figure. Correcting those errors reduced the Schedule C Column 2 total that had been cited by Ms. Kitchenham.
The Court further concluded that the claim for the Contested Purge Application should be disallowed, because that application fell within the wording of the January 26, 2021 Order, which barred costs related to earlier contempt orders.
After making these corrections and adjustments, the Court determined that the revised total under the draft Bill of Costs, calculated on Schedule C Column 2, was $24,410.83. The Court noted that this revised amount was still close to, but lower than, the claimed solicitor-and-own-client costs of $28,526.92.

Exercise of discretion and final outcome on costs

Having reviewed the applicable law, the record, and the corrected Schedule C calculations, the Court considered how to exercise its discretion under Rules 10.31 and 10.33. It treated the revised Schedule C Column 2 figure as an important benchmark, while remaining mindful that Schedule C is not mandatory and that the key considerations are proportionality and reasonableness.
The Court concluded that this was an appropriate case to award a lump sum of costs. It determined that a lump-sum award of $25,000 to Ms. Kitchenham would provide appropriate and reasonable partial indemnification, taking into account the Schedule C draft Bill of Costs and the revisions made by the Court.
In the result, the Court awarded Ms. Kitchenham, as the successful party, costs in the amount of a lump sum of $25,000.