Date: 20051012
Docket: T-2034-91
Citation: 2005 FC 1382
BETWEEN:
Trevor Nicholas Construction Co. Ltd.
Plaintiff
and
HER MAJESTY THE QUEEN represented by the
Minister of Public Works Canada
Defendant
ASSESSMENT OF COSTS - REASONS
B. PRESTON
ASSESSMENT OFFICER
[1] The within action was commenced August 6, 1991. By way of judgment dated November 23, 2001 the Court dismissed the Plaintiff's action with costs to the Defendant on a party and party basis. There were no directions concerning the assessment of costs.
[2] On February 2, 2005 a Notice of Appointment was issued setting the Assessment of Costs down for April 14, 2005 at 10:00 a.m. The parties were told that any written submissions to be relied upon had to be filed on or before April 12, 2005.
[3] At the commencement of the Assessment on April 14, 2005, Mr. Susin, representing the Plaintiff, indicated that he did not receive the Affidavit of Disbursements of Karen Hodges. The assessment was adjourned for 45 minutes to give Mr. Susin an opportunity to review the Affidavit of Disbursements.
[4] Upon resumption Mr. Susin objected that he did not have all his records with him. At that point it was determined that we would proceed, however, should Mr. Susin find that he was missing documentation, the Court file would be made available to him. Should this not suffice, an adjournment would be entertained.
[5] The Plaintiff inquired as to whether a unit value of $100.00 was to be used. After a brief explanation, the Plaintiff was informed that pursuant to Tariff B of the Federal Court Rules 1998, a wait value of $110.00 would be used in the assessment.
[6] The Plaintiff raised one final preliminary matter concerning the motion for summary judgment. The Plaintiff questioned the fact that the motion referred to in the Bill of Costs was for November 2, 1998. Counsel for the Defendant indicated that although the motion for summary judgment was heard November 19, 1999, it was originally returnable November 2, 1998.
Assessment
[7] Defendant's counsel submitted Item 2, preparation and filing of the Statement of Defence at 5 units. The Plaintiff submitted that Item 2 should be not more than 4 units as the Statement of Defence was not long and not that complicated. Further, the Plaintiff referred to W.H. Brody Co. v. Letraset Canada Ltd., [1991] 2 F.C. 226 for the proposition that, to be entitled to recover costs, a litigant must be liable to pay them to his solicitor.
[8] Counsel for the Defendant submitted that the amount claimed for counsel fees is set by the Rules. Further, counsel submitted that the case law referred to is under a system that is not as structured as the present and not germane to the issue today.
[9] As alluded to by counsel for the Defendant, the assessable amount for counsel fees is set by Tariff B. Pursuant to Rule 407, unless the Court orders otherwise, party and party costs shall be assessed in accordance with Column III of the table to Tariff B. Therefore as the amount claimed falls within Column III, the number of units claimed by the Defendant falls within the range available by way of assessment.
[10] Notwithstanding the above, having reviewed the Statement of Defence and the Statement of Claim which necessitated its preparation and filing, the Defendant's costs under Item 2 are allowed at 4 units. The Statement of Defence was not long and the specific issues that were addressed were addressed in three sentences under paragraphs 4, 5, and 6.
[11] Counsel for the Defendant submitted Item 5, preparation and filing of a contested motion at 4 units. The Plaintiff submitted that the memorandum has extremely short and the Notice of Motion was only 2 pages. The Plaintiff submitted that costs should be assessed at 3 units.
[12] Defendant's counsel submitted that from the Reasons for Order and Order dated May 12, 2000 it is clear that the issues in the motion were complicated and deserve higher than 4 units but that the Defendant did not claim the highest number of units available under Column III.
[13] At paragraph 25 of the Reasons for Order and Order the Court states:
In this case, the facts necessary to decide the question of the contractual effect of the tender documents and the privilege clause are not contentious and consist primarily of the documents themselves.
[14] From this it appears that the issues before the Court in the summary judgment motion were not overly complicated. Having said this, neither was this a simple procedural motion for an extension of time. Having regard to the above, Item 5 is allowed as presented.
[15] Defendant's counsel submitted Item 6, attendance on a motion, per hour, at 2 units for a 7 hour motion. The Plaintiff submitted that the motion did not last 7 hours. The parties agreed that for the purposes of the assessment 6 hours should be used.
[16] For the reasons stated in paragraph 14 above, Item 6 is allowed as presented at 2 units per hour for a total of 12 units.
[17] It was decided that items 7, 8 and 9 would be assessed as a group. The Defendant's counsel presented Items 7 (discovery of documents) and 8 (preparation for an examination at 4 units each. Item 9, attendance on examination, per hour was presented at 1 unit per hour.
[18] The Plaintiff submitted that the order of Mr. Justice Pelletier dated May 12, 2000 reduced the number of issues to one, that of fairness. The Plaintiff further submitted that as the only issue at trial was fairness, Items 7 and 8 should be assessed at 2 units. Finally, the Plaintiff submitted that the Examination which took place on March 4, 1996 lasted less than the 5 hours submitted by the Plaintiff and should be assessed at 1 or 1.5 hours.
[19] Counsel for the Defendant submitted that although the trial was limited to the issue of fairness, this limit was with respect to the legal issue, not the factual issue. Counsel submitted the entire contract was at issue even though the only legal issue was fairness. Defendant's counsel further submitted that the Examination which took place on March 4, 1996 should be assessed on the basis of 2.5 hours.
[20] Having read the Reasons for Judgment rendered November 23, 2001, it is clear that the only legal issues before the Court related to whether the Plaintiff had been treated fairly and damages, if any recoverable as a result of any breach of fairness. However, upon reading the reasons it is also clear that there were numerous factual issues to be considered. Further, there were a total of 4 dates for examination for discovery spread over 7 years. All 4 of these dates related to the examination of a Defendant's witness by the Plaintiff.
[21] Having regard to the above, Items 7 and 8 are allowed as presented at 4 units each. Under Item 9, the examination on March 4, 1996 is reduced to 2 hours, however the remaining events are allowed as presented for a total of 17 hours. The rate of 1 unit per hour was not at issue and is allowed as presented.
[22] Having regard to Item 14 (a) counsel fee per hour in Court, counsel for the Defendant submitted 7 hours at 2 units per hour. The Plaintiff had no quarrel with the number of hours.
[23] The Plaintiff presented two cases, W.H. Brady Co. v. Letraset Canada Ltd., [1991] 2 F.C. 226 and General Motors Corp. v. Cast (1983) Ltd., [1994] F.C.J. No. 848. As these cases relate to assessments prior to the implementation of the current Tariff B and the amounts submitted by the Defendant are not beyond the Tariff, Item 14(a) is allowed as presented at 2 units per hour for 7 hours.
[24] Items 25 and 26 were not at issue and are allowed as presented at 1 unit and 3 units respectively.
[25] Having regard to the above, assessable fees are allowed in the amount of $6,930.00.
Disbursements
[26] Counsel for the Defendant submitted disbursements in the amount of $300.00 for the filing fee to commence a motion for Summary Judgment and $97.50 for the production of a Transcript of the examination for Discovery of Elwood Wurts. As these disbursements were not disputed they will be allowed as presented.
[27] Counsel for the Defendant submitted disbursements in the amount of $176.18 for process serving fees. The Plaintiff submitted that there was no need to use a process server as the documentation could have been served by mail. Counsel for the Defendant submitted that a process server was used because they provide the kind of service which ensures material is received. Counsel further submits that the Plaintiff has exhibited that he has difficulty receiving material sent to him.
[28] Having regard to the above, and given that the disbursements to Avanti Paralegal Services are proven by the Affidavit of Karen Hodges sworn August 31, 2004, under the circumstances of this particular file, the disbursement of $176.18 for process serving fees is allowed as submitted.
[29] Counsel for the Defendant submitted disbursements in the amount of $2,043.76 for photocopying, Counsel agreed that $136.31 relating to invoice 168407 may be deducted as it does not appear to relate to the case at issue. Therefore, disbursements for photocopier were submitted at $1,907.45.
[30] The Plaintiff submitted that one is not available to tell if the photocopies relate to this file. The Plaintiff further submitted that there is no evidence of the necessity that all the photocopying was essential. In support of these positions the Plaintiff submitted three cases.
[31] In Windsurfing International Inc. et al. v. Bic Sports Inc. et al. [6 C.P.R. (3d) 526] The Court states:
In my opinion, on the facts of this particular case, the taxing officer was correct. The only evidence before him was that the defendants' solicitors had charged that amount to their clients. There was no evidence, as there should have been, as to what was photocopied, the necessity for it, and whether the charge was reasonable, and not generally included in office overhead.
[32] In Diversified Products Corp. v. Tye-Sil Corp. [34 C.P.R. (3d) 267] the Court states:
With respect, I cannot agree with the reasoning of the taxing officer. The item of photocopies is an allowable disbursement only it is essential to the conduct of the action. Therefore, this is intended to reimburse a party for the actual out-of-pocket cost of the photocopy. The 25 charge by the office of plaintiffs' counsel is an arbitrary charge and does not reflect the actual cost of the photocopy. A law office is not in the business of making a profit on its photocopy equipment. It must charge the actual cost and the party claiming such disbursements has the burden to satisfy the taxing officer as to the actual cost of the essential photocopies.
[33] Finally, in F.C. Research Institute Limited et al. v. The Queen [95 DTC 5583] The Court states:
In my opinion, the simple delineation of expenditures generally described in a Bill and supported only by the scant statement that they were reasonable and necessary fails to provide sufficient information upon which a taxing officer can discharge the responsibility of being satisfied that the costs claimed were essential to the conduct of the proceeding, that they were prudently incurred, or that the quantity or rate applied, as the case may be, was reasonable in the circumstances. In arriving at that conclusion, I am guided as well by the principles established by this Court in Alladin Industries Inc. v. Canadian Thermos Products Ltd. F.C. 942, 12 C.P.R. (2d) 266 (Fed. T.D.); Teledyne Industries v. Lido Industries (1981) 56 C.P.R. (2d) 93; and Diversified Products Corporation v. Tye-Sil Corporation Limited, Court file no. T-1565-85, unreported, November 22, 1990, the Honourable Mr. Justice Teitelbaum, from which decision I derive that, firstly, it would be improper not to question disbursements, even, I would add, in the absence of any apparent opposition on the part of other interested parties. Secondly, disbursements must be supported by evidence which satisfactorily demonstrates that the costs claimed meet the twofold test of reasonableness and necessity. The Defendants have fallen well short of that challenge in the present taxation and the disbursements claimed under Tariff B 3 must therefore be disallowed.
[34] In reply to the contention that the photocopies were neither reasonable nor necessary, Counsel for the Defendant submitted that the photocopies related to 3 volumes of Defendant's documentary evidence, an extensive motion for Summary Judgment, the discovery of documents, transcripts and the Affidavit of Documents. It was submitted that all expenses have been proven by invoice and that all were necessary. When the Plaintiff asked about the invoice from Butterworths counsel submitted it was for photocopies of cases related to contracts which coincided with the filing of the Statement of Defence.
[35] On close examination of the invoices, it is clear that each invoice is clearly relating to the case before me. Further, having reviewed the case law it is clear that it related to situations where photocopies were produced by the law firm "in house". That is not the situation in the case before me. Therefore, having regard to the case law and the file in its entirety, on the facts of this particular case, the disbursements for photocopies are allowed as presented at $1,907.45.
[36] The final disbursement is for the services of Mr. Elwood Wurts. Counsel for the Defendant submitted this at $16,254.16.
[37] Mr. Wurts is a former employee of the Ministry of Public Works. He was a witness to the within proceeding. At the assessment Counsel for the Defendant submitted supplementary costs for witness fees under the Rules of Civil Procedure for Ontario. These supplementary costs were presented as an alternative to the costs originally presented. These supplementary costs were presented at $423.84.
[38] In support of the witness fees as first presented, counsel for the Defendant referred to the case Midland Mortgage Corp. v. Jawl & Bundon, [1995] B.C.J. No. 379. Counsel submitted that this case supported the reimbursement of witnesses for expenses and lost income, however, when asked whether there was evidence that Mr. Wurts experienced any losses, counsel submitted there was no such evidence.
[39] In the Midland decision the Court states:
32. Counsel for the plaintiff seeks an order that the defendants be required to pay preparation money to witness Andrew Bennett pursuant to paragraph 4 of Schedule 3 of Appendix "C" to the Rules of Court. As noted earlier, Mr. Bennett is a former employee of Midland. He is currently a mortgage broker. Although he usually bills his clients on a commission basis, he sometimes charges a flat fee for service. For example, when asked to give an opinion on the feasibility of a mortgage transaction, Mr. Bennett charges a flat fee, determined in advance, according to the anticipated time required, at a rate of $200 per hour. Counsel for the plaintiff submits that a charge-out rate of $200 per hour is a reasonable estimate of the cost of Mr. Bennett being out of the office in preparation for his examination for discovery in this matter.
[40] The Court concludes that Mr. Bennett is entitled to be reimbursed for his cost of being out of the office in preparation for discovery. The Court also concludes that he should be reimbursed at the rate of $100.00 per hour.
[41] Section 3 of Tariff A to the Federal Courts Rules states:
WITNESSES
Witness fees
3(1)
3.(1) Subject to subsection (2) a witness is entitled to be paid by the party who arranged for or subpoenaed his or her attendance $20 per day plus reasonable travel expenses travel expenses, or the amount permitted in similar circumstances in the Superior Court of the province where the witness appears, whichever is the greater.
Expert witness
3(2)
(2) Where a witness, other than a party, is an expert witness, the daily rate referred to in subsection (1) shall be $100.
Additional costs to witness
3(3)
(3) A party may pay a witness, in lieu of the amount to which the witness is entitled under subsection (1) or (2), a greater amount equal to the expense or any loss incurred by the witness in attending a proceeding.
Amount established by contract
3(4)
(4) In lieu of the amounts to which an expert witness is entitled under subsections (1) and (2), a party may pay the expert witness a greater amount established by contract for his or her services in preparing to give evidence and giving evidence.
[42] At the assessment counsel for the Defendant conceded that Mr. Wurts was not an expert witness. When asked if there was any case law which indicated that section 3(2) and 3(4) apply to witnesses who are not experts, Defendant's counsel indicated that we had no such case law. As sections 3(2) and 3(4) are not applicable to the present case, the Defendant is not entitled to the costs incurred as a result of the contract with Mr. Wurts.
[43] Section 3(1) states that a witness is entitled to be paid $20.00 per day plus reasonable travel expenses, or the amount permitted in similar circumstances in the Superior Court of the province where the witness appears, whichever is the greater.
[44] The Midland Mortgage case relates to time spent by a witness preparing to give evidence. Schedule 3 section 4 of the British Columbia Supreme Court Rules states:
Preparation
4 For any witness other than a party or a present officer, director or partner of a party to a proceeding, a reasonable sum shall be allowed for the time employed and expenses incurred by the witness in preparing to give evidence, when that preparation is necessary.
[45] The Plaintiff has submitted that the Midland case is from British Columbia and that no such Rule exists in Ontario. It was further submitted that under British Columbia rules this is permitted, however, they are not applicable to the matter being assessed.
[46] Having reviewed the Federal Courts Rules and the Rules of Civil Procedure for the Superior Court of Justice, Ontario, I am not able to locate a similar provision to section 4 of Schedule 3 to the British Columbia Supreme Court Rules. I therefore find that the applicable Rules in the facts of this particular case are either the Federal Courts Rules or Ontario Rules of Civil Procedure, whichever is greater.
[47] The Rules of Civil Procedure Part II section 21 states:
21. Attendance money actually paid to a witness who is entitled to attendance money, to be calculated as follows:
| 1. Attendance allowance for each day of necessary attendance.
2. Travel allowance, where the hearing or examination is held,
(a) in a city or town in which the witness resides, $3.00 for each day of necessary attendance;
(b) within 300 kilometers of where the witness resides, 24 ¢ a kilometer each way between his or her residence and the place of hearing or examination;
(c) more than 300 kilometers from where the witness resides, the minimum return air fare plus 24 ¢ a kilometer each way from his or her residence to the airport and from the airport to the place of hearing or examination.
3. Overnight accommodation and meal allowance, where the witness resides elsewhere than the place of hearing or examination and is requires to remain overnight, for each overnight stay
|
$50
$75
|
[48] As the attendance allowance under the Rules of Civil Procedure ($50.00) is greater than that allowed by the Federal Courts Rules ($20.00), I will accept the supplementary costs of the Defendant presented at $423.84. As there has been no evidence concerning overnight accommodation, subsection 3 of section 21 is not applicable and no costs for overnight accommodation are allowed.
[49] Having regard to the above, disbursements are allowed in the amount of $2904.97.
[50] For the above reasons, and on the facts of this particular case, costs, inclusive of fees and disbursements, presented at $26,461.60 are allowed in the amount of $9,834.97.
"B. Preston"
Bruce Preston
Assessment Officer
Toronto, Ontario
October 12, 2005
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