Executive Summary: Key Legal and Evidentiary Issues

• Dispute involved recovery of expert witness fees omitted from the original Bill of Costs but later included in an amended version.

• The chambers judge concluded the assessment officer lacked jurisdiction to award expert fees without express court authorization, citing Rule 10.41(2)(e).

• Applicant argued the chambers judge had discretion under Rule 10.45(1)(d) to allow expert fees as part of “reasonable disbursements.”

• The Court determined the issue was the interpretation of its own prior Costs Direction, which was issued without reasons.

• Court found that interpreting the Costs Direction did not raise a matter of general importance or precedent.

• Application for permission to appeal was denied for failing to meet the required criteria under Rule 14.5(1)(e).

Background of the dispute
Hudye Inc. and related entities (the applicants) initiated a claim against their former legal counsel, James Rosowsky and James Rosowsky Professional Law Corporation (the respondents), alleging that several agreements drafted by Rosowsky constituted a breach of fiduciary duties. The Court of King’s Bench dismissed the claim, finding no breach. However, the Alberta Court of Appeal reversed this decision in Hudye Inc v Rosowsky, 2022 ABCA 279.

Costs direction and further litigation
Because the prior court decisions did not address costs, the parties sought direction from the Alberta Court of Appeal. The Court awarded the applicants taxable costs under column 5 (less 10%) for both the trial and appeal, along with reasonable disbursements (referred to as the “Costs Direction”).

The respondents subsequently filed an Appointment for Assessment of Costs. At the assessment, the applicants submitted an amended Bill of Costs including fees for two expert witnesses that were omitted from their original Bill of Costs. The assessment officer approved the amended Bill, awarding the applicants the revised total.

Decision of the chambers judge
The respondents appealed the assessment officer’s decision to the Court of King’s Bench. They argued that the officer lacked jurisdiction to award expert fees under Rule 10.41(2)(e) of the Alberta Rules of Court, which excludes such fees unless a court explicitly orders them. The chambers judge agreed, stating in a desk endorsement that the Court of Appeal had not expressly included expert fees, and because these were not part of the original submission, the Court could not have considered them.

Application for permission to appeal
The applicants applied for permission to appeal this decision. Since the matter concerned costs only, permission was required under Rule 14.5(1)(e). To succeed, the applicants needed to meet four criteria outlined in Alberta case law: a good arguable case, issue of importance, practical utility, and consideration of delay.

They did not dispute the applicability of Rule 10.41(2)(e), but instead argued that the chambers judge failed to consider her discretion under Rule 10.45(1)(d), which allows a judge hearing an appeal from an assessment officer to make “any other order the judge considers appropriate.” They contended that the expert fees were part of the “reasonable disbursements” awarded by the Court of Appeal.

Ruling of the Court of Appeal
Justice Antonio, delivering oral reasons, emphasized that the role of the chambers judge was to implement the Costs Direction, not to exercise discretion afresh. She determined that the key issue was whether the Costs Direction intended to include expert fees, a question of fact or mixed fact and law, subject to deference on appeal.

The Court concluded that interpreting the Costs Direction, issued without reasons, did not raise a matter of general importance, nor was it precedential. Broader questions suggested by the applicants—about procedure or discretion to award expert fees—were not central to the case and arose only because of the unique facts. Even though the amount at stake was approximately $155,000, the Court held that this did not justify permission to appeal, referencing Cold Lake Industrial Park GP Ltd v Abt (Estate), 2022 ABCA 23, where permission was denied despite a $500,000 amount.

Final outcome
The Court found the applicants did not meet the criteria for permission to appeal under Rule 14.5(1)(e). The application for permission to appeal was denied.