In a recent decision of the
Smithies and the "
In 2017,
AMG offered
AMG
AMG involved the acquisition of a mining project (Pinaya) by Kaizen from AMG. After the deal closed, AMG filed a claim alleging that Kaizen (1) had failed to disclose material information or had made misrepresentations; and (2) had breached a non-disclosure agreement and committed the tort of trespass. After a 27-day trial, Justice
Costs Decision
Kaizen sought orders for special costs, or alternatively, increased or "uplift" costs, as opposed to the ordinary tariff costs it would usually be entitled to as the successful party. Kaizen argued that AMG had pursued a meritless claim, was reckless with regard to the truth, made improper allegations of fraud and dishonesty, and engaged in a planned and deliberate effort to mislead the Court.
Kaizen also sought that the president and CEO of AMG,
AMG and
Special Costs
In AMG,
Unsuccessful Claims of Fraud/Dishonesty
Where a party alleges fraud or dishonesty and is not successful, the result can be (though will not inevitably be) an order for special costs. The issue is whether the party makes these serious allegations despite having access to information sufficient to conclude that the other party was not, in fact, dishonest or fraudulent. In that case, special costs will be appropriate.
In AMG, the fraud allegations were grounded in the contractual misrepresentation claims. AMG had alleged that Kaizen knew about, but did not disclose, key social, environmental, and regulatory impediments. As noted, the judge found that in pursuing these claims to trial, AMG had advanced meritless claims of fraud that were wholly without foundation.
Dishonest Testimony
Another basis for awarding special costs can be dishonest testimony. Untrue testimony alone, however, is not sufficient, and in considering whether untrue testimony should attract special costs, the Court will consider whether a party gave:
- false evidence that was contrived concocted, or fabricated,
- with an intention to mislead,
- on an issue that is central to the matter before the Court and which, if accepted, would 'drive the opposing party from the judgment seat'.
The second basis upon which the judge had ordered special costs in AMG was her conclusion that
Again,
[85] ... false evidence that has been contrived, concocted, or fabricated with an intention to mislead will only lead to an award of special costs if it is given on an issue that is central to the matter before the court and which, if accepted, would "drive [the opposing party] from the judgment seat". In the circumstances of this case I do not accept the judge's conclusion that the evidence she deemed to be fabricated was central to the matter before the court.
[86] To analyze the Pinaya claim, the trial judge had to interpret the NDA and determine whether AMG's express consent was required for Kaizen to take soil samples.
As such, dishonest testimony similarly did not justify special costs.
"Uplift" Costs
Misconduct that falls short of attracting an award for special costs can ground an award of increased costs, pursuant to s. 2(5) of Appendix B to the
Costs Against a Non-Party
The Court has discretion, pursuant to its inherent jurisdiction, to award costs against a non-party. Such an order is exceptional, however, and should only be made in special circumstances.
On this issue,
Special Costs in Civil (including Estate) Litigation
In AMG,
AMG will be of interest to estate and trust litigators. In estate and trust litigation, the "modern approach" to costs will generally apply, meaning that costs will be awarded in favour of the successful party against the unsuccessful party and will be assessed as ordinary costs unless there is an applicable exception that would justify all parties receiving their special costs from the estate or trust2 The principles governing special costs, and in particular, whether conduct is "reprehensible" so as to justify such an award, therefore often apply with equal force in the estates and trust context.
Footnotes
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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