Executive Summary: Key Legal and Evidentiary Issues

• Defendant Bates, a lawyer, published his client's statement of claim to news media, prompting a defamation lawsuit by the Plaintiffs who were Calgary Police Service employees.

• A second summary judgment application by Bates was dismissed as the new records did not address the fundamental basis on which the first application had been denied.

• Plaintiffs sought solicitor-client costs of approximately $32,650 or enhanced costs based on a Calderbank offer, while Bates argued for Schedule "C" costs only.

• Solicitor-client costs were denied because Bates' conduct did not rise to the level of reprehensible, scandalous, or outrageous behaviour required under established precedent.

• The Calderbank offer of $1,000 to withdraw the application was found to be a reasonable and genuine compromise that Bates should have accepted.

• Costs were assessed at approximately $22,500 using Schedule "C" Column 4, with a doubling multiplier applied to certain fees following the rejected settlement offer.

Background and parties involved

Joel Rumancik and Candace Rumancik, the Plaintiffs, were employees of the Calgary Police Service — one a police officer and the other a civilian employee. They brought a defamation action against Jacob Hardy and his lawyer, Michael Bates. The claim arose from Bates' decision to publish the contents of a statement of claim — filed by Hardy alleging misconduct against the Plaintiffs and the Calgary Police Service — to news media, which resulted in wide public dissemination of the allegations. Bates defended himself by invoking the doctrine of qualified privilege, a defence applicable where the contents of a pleading are published outside of the Court, as recognized in Hill v Church of Scientology of Toronto. The Plaintiffs countered that qualified privilege did not protect Bates because his publication was overbroad and malicious.

The first and second summary judgment applications

Bates first sought summary judgment in 2018, primarily relying on the defence of qualified privilege. Robertson AJ dismissed that application on January 16, 2019. Bates subsequently brought a second summary judgment application, which was heard by Justice Eamon on January 27, 2025. Bates' then-counsel argued that additional records, unavailable at the time of the first application, justified a fresh attempt at dismissing the action. Justice Eamon acknowledged that Bates did rely on new records that were not previously available to him. However, the Court found that these new records did not address the fundamental basis on which Robertson AJ had dismissed the first application and therefore did not justify a second application. The Plaintiffs had also applied to strike Bates' second application as an abuse of process, and they were substantially successful on that front.

The claim for solicitor-client costs

The Plaintiffs sought solicitor-client costs of approximately $32,650 plus disbursements. The Court reviewed the established legal standard, noting that solicitor-client costs are reserved for rare and exceptional cases involving reprehensible, scandalous, or outrageous conduct, as directed by the Supreme Court of Canada in Young v Young and affirmed by the Alberta Court of Appeal in FIC Real Estate Fund Ltd v Phoenix Land Ventures Ltd and Goldstick Estates (Re). Justice Eamon determined that while the second summary judgment application ultimately failed, it was not brought in bad faith, and the conduct did not reach the high threshold required for a solicitor-client costs award.

The party-and-party costs framework

The Court turned to the party-and-party scale, referencing the Alberta Court of Appeal's guidance in McAllister v Calgary (City) and Barkwell v McDonald (#1), which established that costs awards are often quantified in the range of 40–50% of a hypothetical solicitor-client account, tempered by reasonableness and proportionality. Justice Eamon also cited V.L.M. v Dominey Estate, which emphasized that the primary purpose of costs is to partly indemnify the successful party, while balancing the interest of not unduly penalizing the losing party or discouraging access to the courts. Without detailed time dockets before the Court, and finding that a full assessment would be disproportionate for what amounted to a relatively routine application, the Court concluded that Schedule "C" was an appropriate starting point.

The Calderbank settlement offer and its consequences

On November 20, 2024, the Plaintiffs made a Calderbank offer — an informal settlement offer reserving the right to refer to it at the costs stage — proposing to pay Bates $1,000 in exchange for a withdrawal of his application on a with-prejudice basis. The offer was open for two weeks. Justice Eamon found that the Plaintiffs achieved a better result than what they had offered, that the offer was a reasonable and genuine compromise given the weakness of Bates' position, and that the offer was advantageous to Bates as it would have allowed him to defray some of his costs and avoid the serious risk of adverse costs. The Court emphasized the strong public interest in promoting settlement of lawsuits and cited Sparling v Southam Inc and subsequent authorities affirming this policy rationale. While doubling of costs following a rejected Calderbank offer is not automatic, the Court noted that Bates' own counsel accepted doubling in their quantification of a reasonable costs award.

Ruling and costs awarded

Both parties agreed that Schedule "C" Column 4 was the appropriate measure if the Court elected to use the tariff. Justice Eamon resolved the disputed individual items: a $200 fee for an abandoned application by Meghan Grant to set aside a Notice of Appointment for Questioning was disallowed against Bates, as the costs related to the abandonment and should be addressed there. Fees and disbursements for two half-day cross-examinations of Hardy were allowed in full, as they were principally required to respond to Bates' application and did not appear to have been unreasonable or excessive. The fee for item 8(1) was doubled on account of the rejected Calderbank offer. The resulting amount was in the range of $22,500, inclusive of substantial disbursements for transcripts ($5,850), other minor disbursements, and GST. The Court found this amount proportionate given the amounts at stake had the summary judgment been allowed, the effort apparent from the written and verbal submissions, the affidavits and the lengthy cross-examinations of both Hardy and Bates, and the opportunity to settle which ought to have been taken. The parties were directed to deduct the $200 item, adjust GST, and submit an order for the Court's approval, with costs payable forthwith.