Date: 20000713
Docket: A-491-95
BETWEEN:
ACTRA FRATERNAL BENEFIT SOCIETY
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
ASSESSMENT OF COSTS - REASONS
CHARLES E. STINSON
Assessment Officer
[1]The Appellant was successful with costs here and in the Tax Court of Canada and presents a bill of costs, totalling $19,221.04, with these items still in issue:
| Tariff Item
|
Taxable Service
|
Actual Fees Expended
|
Tariff Column and Units
|
Tariff Amount
|
| 18
|
Preparation of appeal book.
Sr. Counsel
3.2 hours @ $200.00 per hour = $640.00
Intermediate Counsel
23.5 hours @ $120.00 per hour = $2,820.00
Jr. Counsel
7 hours @ $90.00 per hour = $630.00
Student-at-Law
34 hours @ $50.00 per hour = $1,700.00
$5,790.00
|
$5,790.00
|
III (1 unit)
|
$100.00
|
| 22(a)
|
to first counsel, per hour for 1 day: 8 hours -
March 18, 1997;
Sr. Counsel
8 hours @ $200.00 per hour = $1,600.00
|
$1,600.00
|
III (3 units)
|
$2,400.00
|
| 22(b)
|
to second counsel, where Court directs: 50% of the amount calculated under paragraph (a) for 1 day: 8 hours - March 18, 1997.
Intermediate Counsel
8.5 hours @ $120.00 per hour = $1,020.00
|
$1,020.00
|
(50% of (a) amount)
|
$1,200.00
|
| 26
|
Assessment of costs
|
|
III (6 units)
|
$600.00
|
| |
|
|
|
|
| Facsimile transmissions (outgoing: local - $1.00 per page; long distance - $3.00 per page; incoming - $0.50 per page)
|
$155.00
|
| Photocopying (7,973 pages at $0.30 per page)
Travel
Martineau Provencher - Actuary (consultation, advice and attendances for the period from June, 1995 through to July, 1995)
|
$2,391.98
$281.90
$753.28
|
| |
|
The Crown"s Position
[2]The Crown argued that item 18 applies only if counsel prepared the appeal book. Here, the Court prepared it and therefore nothing is assessable. Counsel on both sides had to examine and approve it, but, in the context of Rules 400(3), 407 and 409, that does not constitute the preparation contemplated by the language of item 18. As a general principle, an assessment officer has discretionary powers for the ranges of counsel fees and for disbursements. However, in terms of the Appellant"s argument below, only the Court has the power to apply the gap rule.
[3]For item 22, the Crown argued that the Court did not make a special direction for the costs of second counsel and the $1,200.00 must be deleted. For lead counsel, the Crown concedes 6.5 hours, per Court records which actually show 6 hours 20 minutes inclusive of lunch, at 2 units per hour. This was a simple issue of tax law concerning the reserves or excess funds associated with the provision of life insurance. Therefore, three units, in the absence of extreme complexity, are not warranted. There had been additional issues before the Tax Court, ie. actuarial practice, but this Court did not consider them. For item 26, the Crown argued that only 2 units should be allowed because the need for one hour of oral submissions was a function of the number of issues, but not of any particular complexity.
[4]The Crown argued that nothing should be allowed for facsimiles and photocopies because there was no evidence to support the rates claimed, to confirm whether the amounts claimed represented the actual costs of the law firm, or whether the client was actually charged, and to identify purpose and necessity. The affidavit of Keith Boldt sworn June 2, 1999, lists several items copied including case law and Tax Court of Canada transcripts, but only memoranda of law were relevant to this appeal. The Court in Diversified Products et al v. Tre-Sil Corp.1 concluded that only the actual disbursement costs are recoverable. There was no such proof here. The Crown noted that the Billing Working Sheets (Tabs 3, 4 and 5 in the Appellant"s Cost Brief) list various charges under the heading, Unbilled Disbursements. Therefore, even if the amounts claimed for facsimiles and photocopies were allowable, they are not assessable as costs between litigants because there is no evidence that they were ever billed to the client and therefore they are not indemnifiable by the Crown. Further, the Crown argued that the practice in other Courts is irrelevant if the scheme of the Federal Court Rules and Tariff is more restrictive. The Diversified case, supra, is good law in this Court. Tariff B 1(4) permits some discretion by assessment officers, but the record here is deficient and blanket statements as to numbers do not justify the amounts claimed.
[5]The Crown argued that, apart from the $5.50 parking charge, the evidence does not break down the $281.90 claimed for travel. The court house is four blocks from the Appellant"s law firm. There was no evidence of exceptional circumstances of necessity for travel and meals. The indemnification of meals for counsel during the hearing is a novel proposition. As well, Tariff B 1(4) precludes this amount because there is no evidence that it was ever billed to the client.
[6]The Crown argued that the only evidence filed in support of the $753.28 for actuarial services, paragraphs 9 and 10 of, and exhibit C to, the affidavit of Mark Jadd sworn June 9, 1999, does not establish reasonableness and necessity. Items 1-5 in the first invoice were deleted leaving $273.92 billed directly to the Appellant for June 1995 to "Review court case decision". This was after judgment in the Tax Court of Canada, but before the appeal taken to this Court. The Crown noted that, as above, issues requiring an actuarial expert were not before this Court. There is no detail in the evidence as to the nature and relevance of services provided by this expert. The Crown noted that the second invoice, rendered for July 1995, referred to the expert meeting with "auditors and lawyers to review tax case and appeal strategy" and argued the majority decision in this Court clearly established that actuarial considerations were not relevant in this appeal. Therefore, any associated costs are not assessable. The Crown agrees that absolute proof is not required, but argued that some evidence must be led to permit reasonable certainty of relevance to this appeal"s issues versus those of the Tax Court, and as well that the amounts claimed were actually billed and claimed.
The Appellant"s Position
[7]For item 18, the Appellant argued that the Tariff as it reads, "preparation of appeal book", entitles it to claim for services rendered by counsel such as examination of the appeal book for completeness. Alternatively, the Appellant urged application of the gap rule for analogous practice in the provinces, ie. the Ontario tariff permitting a reasonable amount for such services.
[8]For item 22, the Appellant argued that 6.5 hours, instead of 8 hours, excludes meetings and briefings with the client and travel to and from the court house and therefore does not reflect the reality of how law is practised. This litigation was not the simple conflict portrayed by the Crown. The Appellant argued that second counsel is in the discretion of the Assessment Officer. For item 26, the Appellant noted the cooperativeness of opposing counsel in settlement discussions, but argued that, given the necessity for preparation and filing of several pieces of supporting materials, and for appearance, the 6 units claimed are justified. The items in issue may not have been individually complex, but there were several of them requiring sufficient preparation to ensure proper material at the assessment.
[9]For facsimiles and photocopies, the Appellant argued that it is difficult to retrieve records for activities occurring several years ago. There is no evidence that these charges were never required or never paid. An assessment of costs does not require that decisions of counsel to incur charges at the time be subject to second guessing. The decision in Allied Signal Inc. v. DuPont Canada Inc.2 does not require scrutiny of charges so closely as to deprive the successful party of the actual costs incurred. At paragraphs [17] and [20] respectively, the Assessment Officer concludes that absolute proof is not required and that the assessing party must satisfy on balance, but not beyond doubt, the reasonableness and necessity of amounts claimed. The Assessment Officer considered Diversified, supra, but did not find it persuasive. In Ontario Cruisermarine Ltd. v. Canada3, the Assessment Officer approved $0.25 per page for photocopies. Here, the record is sufficient to support $0.25 per page at the minimum and, as well, the $0.30 per page which was the actual cost to the client. The Appellant argued that the same standard for proof applied to the travel charges claimed. The Appellant is out-of-pocket for those amounts and is entitled to reimbursement.
[10]Again, for the charges for expert actuarial advice, the Appellant argued that there are limits to how much proof can be required to second guess the decisions of counsel to incur charges. Although the appeal did not involve actuarial issues, expert actuarial evidence was relevant in the Tax Court proceeding and therefore it was prudent to involve the expert in the appeal proceeding. As above, the Allied Signal Inc. case, supra, resolves any issues of standard of proof. The invoices clearly link these services to the appeal proceeding and establish relevance. The assessment process does not require that the wording of such invoices be recast in the evidence to some other format.
Assessment
[11]I conclude that, in the context of income tax litigation, this was not the most complex nor the simplest of proceedings. The items in Column III are discrete and assessable in their own circumstances. I allow item 18 as presented. The term, "preparation", should not be construed so narrowly as to preclude the service suggested by the Appellant. There was a real need for both sides to participate regardless of who assembled the appeal book. For item 22(a), I allow 2 hours at 3 units per hour and 5 hours at 2 units per hour. The choice in this range, 2-3 units, requires broad distinctions to be drawn between the lower and upper values in that range. Therefore, I think a result of $1,600.00 in the context of partial indemnity is reasonable. The term, "Court", in item 22(b) does not include an assessment officer within the meaning of Rules 2 and 400(1). I have no jurisdiction to usurp that authority and make the direction sought. I remove the $1,200.00 claimed for item 22(b). For item 26, I allow 4 units.
[12]Generally, I have assessed this bill of costs following precepts in Grace M. Carlile v. Her Majesty the Queen4. Specifically, for photocopies, I have addressed Diversified, supra in Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada5. Here, I find the proof for both facsimiles and photocopies does not warrant the amounts claimed. However, I am satisfied that some expenditures were incurred and necessary. I allow $130.00 and $400.00 respectively for facsimiles and photocopies. I disallow the $281.90 claimed for travel. I found nothing in the record to convince me that the Crown should bear these costs. I remove the $753.28 for the actuary. The comments of both Courts concerning actuarial relevance, and the evidence, do not suggest that these services were essential beyond both the requirements of the litigation in the Tax Court and the professional expertise of competent counsel in this Court.
[13]The bill of costs includes an entry for me to insert a rate of interest per annum from April 30, 1997. Per my decision in Byers Transport v. Kosanovich6 and Wilson v. The Queen7, I cannot address interest. The bill of costs of the Appellant, presented at $19,221.04, is assessed and allowed at $6,018.93.
(Sgd.) "Charles E. Stinson"
Assessment Officer
Dated Wednesday, July 13, 2000.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| STYLE OF CAUSE: Actra Fraternal Benefit Society v. Her Majesty the Queen |
| PLACE OF HEARING: Teleconference between Vancouver, B.C. and Toronto, Ontario |
DATE OF HEARING: May 5, 2000
ASSESSMENT OF COSTS - REASONS BY CHARLES E. STINSON
APPEARANCES:
Subrata Bhattacharjee FOR THE APPELLANT
L.P. Chambers, Q.C. FOR THE RESPONDENT
SOLICITORS OF RECORD:
Heenan Blaikie
Toronto, Ontario FOR THE APPELLANT
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Ontario FOR THE RESPONDENT
__________________
1 (1991), 41 F.T.R., 227 @ 233
2 [1997] F.C.J. No. 993 (A.O.)
3 [1991] F.C.J. No. 1077, (A.O.)
4 97 D.T.C. 5284.
5 T-323-98, March 25, 1999.
6 [1996] F.C.J. No. 760
7 T-1677-79 et al dated April 13, 2000.
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