Fegol v. Canada (Minister of National Revenue), docket T-2836-94

Date: 19981106

Docket: T-2836-94

BETWEEN:

     KEN STEPHAN WILLIAM FEGOL,

     Plaintiff,

     - and -

     HER MAJESTY THE QUEEN

     IN THE RIGHT OF CANADA

     AS REPRESENTED BY

     THE MINISTER OF NATIONAL REVENUE,

     Defendant.

     REASONS FOR ORDER

MULDOON, J.

[1]      The plaintiff asks the Court to review the assessment of costs performed, herein, on October 19, 1998, by an assessment officer. The plaintiff's bill of costs was presented at $47,714.29, and assessed and allowed at $4,004.48.

[2]      An adequate and accurate narration of events can be appreciated by a few passages from the assessment officer's reasons:

[1] The Minister of National Revenue (hereinafter: the Minister) certified (Court file No. GST-127-94) under the Excise Tax Act, s.316 that $8,014.03 and interest was payable by the plaintiff. The Minister took out a writ of execution directed to the Sheriff of the Judicial District of Winnipeg, Manitoba. The plaintiff, represented by counsel at that point, moved for "recovery of the possession of his personal property (writ of replevin) wrongfully seized from the applicant by the respondent" and, in the alternative, for compensation. The Minister then moved for a stay of proceedings and, in the alternative, for leave to issue a third party notice against the Sheriff. By order dated November 1, 1994, the Honourable Mr. Justice Cullen stayed the plaintiff's motion and jointed [sic] the Deputy Sheriff, Mr. James Douglas, as a third party without prejudice to Mr. Fegol "commencing an action herein and naming the said third party".

[2] Mr. Fegol, still represented by counsel, filed a statement of claim in this file naming the Deputy Sheriff as third party in addition to the defendant, Her Majesty the Queen (hereafter: the Crown). Both the Crown and the Deputy Sheriff moved for a conditional appearance to object to jurisdiction. By order dated April 25, 1995, the prothonotary, John A. Hargrave, denied the Crown's motion with costs in the cause but allowed the Deputy Sheriff's motion and struck the action as against the third party for want of jurisdiction with costs of the motion to the Deputy Sheriff. On September 13, 1996, the plaintiff filed a notice to remove his solicitor of record. By order dated November 15, 1996, and further to a notice of motion by the plaintiff's solicitor, the prothonotary permitted the solicitor to withdraw conditional upon proof of service of notice of the order. That notice was done by December 2, 1996. By judgment dated March 31, 1998, the Honourable Mr. Justice Campbell directed reimbursement of $8,014.03 forthwith to the plaintiff and costs of the action at Column V of Tariff B. His Lordship's reasons of an even date identified the primary issue at trial as whether the plaintiff could take advantage of a "farm equipment" exemption to obtain relief from a seizure intended to offset an outstanding tax debt.

[3] In Court file no. T-2836-94, the plaintiff filed a bill of costs including the events of Court file no. GST-127-94. In fixing a date for assessment, I set deadlines for the exchange of materials. Plaintiff filed supporting materials, not in the form of an affidavit, consisting of an amendment to the disbursement portion of his bill; correspondence addressing settlement discussions; an assignment by plaintiff, of a debt of some $10,000.00 owed to him, to his solicitor of record on account of professional services; his solicitor's account dated February 21, 1995, and a number of receipts.

[3]      The assessment officer dealt properly with the parties' respective submissions and with the pertinent jurisprudence, some of which will be referred to further on, herein.

[4]      It is basic principle that the assessment or taxing officer's discretion should not be interfered with unless there be an error of law (e.g. Diversified Products v. Tye-Sil Corp. (1991), 41 F.T.R. 227 at 229 (F.C.T.D.)) or unless the allowances made be so inappropriate or so unreasonable that they suggest an error in principle must have occurred. This latter principle is neatly set out in a passage from IBM Canada Ltd. v. Xerox of Canada Ltd., [1977] 1 F.C. 181 at 184-185 (F.C/A):

The jurisprudence on the question of the extent to which a taxing officer's discretion in allowing specific items on a taxation is reviewable clearly indicates that the discretion ought not to be interfered with unless the amounts allowed are so inappropriate or his decision is so unreasonable as to suggest that an error in principle must have been the cause. (See: Rickwood v. Aylmer, [1954] O.W.N. 858; Kaufman v. New York Underwriters Insurance Co., [1955] O.W.N. 496).

[5]      This principle makes it fairly difficult for a judge to interfere with what has been done by a registry officer experienced in taxation. That is a point made by the Court of Appeal in McCain Foods Ltd. v. C.M. McLean Ltd., [1981] 1 F.C. 534 at 537. There the Court referred to an often quoted passage from Re Solicitors, (1921), 20 O.W.N. 84 at page 84:

In all these cases it is exceedingly difficult for a judge upon an appeal to interfere with the quantum allowed by an experienced taxing officer. At the same time, it is important that it should be understood that there is some limitation to the statement found in many cases that the quantum of a fee which is primarily in the discretion of the officer is not to be interfered with upon appeal. In many cases it is impossible to substitute the discretion of the appellate tribunal for the discretion of the taxing officer with any confidence that the one is any better than the other. There may be cases in which the amount allowed is so excessive as to call for interference, and it must not be forgotten that there is given by the statute a right of appeal calling upon the judicial officer to exercise his own judgment.

[6]      There is a further limitation in this Court, and it is that the rôle of the person reviewing the taxation officer's decision is just that, a review and not the hearing of the matter anew or with supplementary evidence: see for example The Queen v. Capitol Life Insurance Co., (1988), 87 N.R. 153 at 161 (F.C/A):

The role of the judge was to review the taxing officer's decision not to rehear the case anew.

[7]      In the present instance, there is a further useful principle and that is that the taxing officer must have evidence that the item or the disbursement was essential for the conduct of the action: as, for example in Diversified Product Corp. v. Tye-Sil Corporation Ltd. (supra), at page 233, paragraph 32.

[8]      Keeping the above principles in mind, one may look now at the assessment under review. At paragraph 15 the officer is quite correct in disregarding an earlier proceeding, GST-127-94 when taxing costs in this matter. His aside, as to his rationale in Buyers Transport Ltd., is to the effect that if the present action were a continuation of the GST proceeding, then he would apply Buyers Transport, is merely another way of saying that because Mr. Justice Cullen did not award costs in the GST proceeding, it is not within the assessment officer's power now to award costs in Mr. Justice Cullen's stead.

[9]      At paragraph 17, he touches on Laufer v. Bucklaschuk, a June 9, 1998 Manitoba Queen's Bench decision. The principle for which the case apparently stands, is that damages are distinct from the issue of costs. While Mr. Fegol may have had some lost opportunity to earn money, by reason of representing himself in this litigation, it is well established that he may not claim an allowance for fees for representing himself. The assessment officer deals with the "odd case out", McBeth v. Dalhousie, (1986), 26 D.L.R. (4th) 320 (N.S.C/A) and correctly states the law in this Court.

[10]      Assessment was ordered under column V. At paragraph 18 the issue is the number of units for preparing and filing the statement of claim. Under column V the units for this service run from 7 to 13. There appears to be a reasoned exercise of discretion when the assessment officer reduced the 13 units claimed down to 10 units, that award of fees being related to a time at which Mr. Fegol was represented by counsel.

[11]      The next item under paragraph 18 relates to 10 units awarded for preparation to respond to the defendant's motion of April 25, 1995. The range under column V is 5 to 11 units. Ten units certainly seem to be a generous exercise of discretion.

[12]      The assessment officer disallowed all of the units claimed for preparation for a third party's motion, as the costs of that motion went to the third party.

[13]      The assessment officer seems to be overly generous in allowing 5 units for appearance of Mr. Fegol's counsel on the April 25, 1995 motion. That amounts to $500.00/hr. This judge is not certain he would have allowed any units, for, costs having gone to the third party, Mr. Fegol can scarcely now claim his counsel's costs against the Crown.

[14]      Item 13 in the bill of costs (G27) includes not only the plaintiff's notice of removal of solicitor filed September 13, 1996, but also the solicitor's motion for withdrawal in November, 1996. The prothonotary's order of November 15, 1996 was silent as to costs because a self-represented litigant is not entitled to costs, but only to disbursements. The prothonotary was quite correct in that and so was the assessment officer.

[15]      Preparation for discovery, in paragraph 19, has been allowed at 8 units. This seems to be a reasonable exercise of discretion, for column V units run from 7 to 11.

[16]      In paragraph 20 of the assessment reasons at least some of the items disallowed seem to be on the basis that they were not disbursements essential for the conduct of the present action.

[17]      Perhaps the assessment officer's analysis, or as he refers to it, his "Disposition", at pages 12 through 15, is a little brief. However, he makes it clear, in setting out, at length, the arguments made by both sides, that he has given the whole matter ample consideration.

[18]      In Rubin v. A.G. of Can. & al., [1990] 3 F.C. 642, Mr. Justice Strayer, then of the Trial Division, is reported thus:

The plaintiff, who describes himself as a "public interest researcher", had represented himself throughout. When it came to taxation of costs he included in his bill of costs an item of $1,025 as counsel fees claimed pursuant to Tariff B subsection 1(1) [Federal Court Rules, C.R.C., c.663 (as am. by SOR/87-221, s.8)]. The Taxing Officers involved were J.F. Cousineau and Raymond P. Guenette and the latter, by reasons dated July 13, 1989, rejected the plaintiff's claim for counsel fees. It is common ground that in doing so he was following the literal wording of Tariff B which only provides "for the services of counsel" and the well-established interpretation of the Rules of this Court to the effect that counsel fees are not taxed in favour of self-represented litigants. See e.g. Davidson v. Canada (Solicitor General), [1989] 2 F.C. 341 (C.A.).

(pp. 644-45)

[19]      Again Strayer, J. emphasized the principle in the following reported passage:

It is common ground that there is a distinction made by the Rules and Tariff B as interpreted by this Court, as between self-represented litigants and those represented by counsel. This was made amply clear by the Davidson case where a lawyer acting for himself was denied taxation of a counsel fee. It appears to me that to succeed in his action, however, the plaintiff must demonstrate that this unfavourable distinction, which he must bear along with all other self-represented litigants, amounts to discrimination within subsection 15(1) of the Charter. In that respect, McIntyre J. writing for a majority of the Supreme Court of Canada in Andrews v. Law Society of British Columbia [[1989] 1 S.C.R. 143, at pp. 181-182] held that a mere unfavourable distinction created by law does not automatically contravene subsection 15(1). Such distinction must amount to discrimination.

(p. 647)

Strayer J. found no discrimination in denying "counsel fees" to litigants who represent themselves in Court.

[20]      As recently as June, 1998, the Federal Court of Appeal explicitly approved of the principle expressed in Rubin v. A.G. of Canada & al. recited above. The decision rendered by Mr. Justice Marceau on the Court's behalf in Lavigne v. Human Resources Development & al., A-104-97 (June 8, 1998), is brief enough to be repeated in full:

We are all of the view that the decision appealed against cannot be overturned by this Court. The motions judge could not but confirm that lay litigants cannot receive counsel's fees, under the Federal Court Rules, when they have successfully represented themselves. Under Tariff B of those Rules, a service cannot be rendered by a litigant to himself. The Courts, be it the Trial Division or the Court of Appeal, are not at liberty to change what is legislation.

We are prepared to admit that the appellant has a point when he says that it could be unfair to deny successful lay litigants, who could not afford to be represented by counsel, some costs that could compensate them for the time they had to give and the "legal skills' they had to apply to satisfy the requirements of the Rules for bringing their cases to the tribunal. We are not sure that the actual rule 400(4) (formerly 344(4) could not, to a certain extent, be used to satisfy, in special cases, what fairness could dictate in that respect. However, we have no doubt that a change in the Act or the Rules would be required to provide openly that lay litigants could be entitled, in whole or in part, to fees that, up until now, have always been formally reserved to counsel.

As to whether the Rule as it exists could be seen as breaching rights protected by the Charter, specially those covered by sections 7 and 15, as the appellant urged the Court to decide, we are of the view that it is not so, as already found by the Court in Rubin v. Canada (A.G.), [1990] 3 F.C. 642.

The appeal must be dismissed with costs, if required.

(typescript)

[21]      There is no merit in the plaintiff's contention which he diminishes by the appearance of slyness. At the hearing, the plaintiff came forward strongly with the assertion that in Lavigne (above) the Court of Appeal stated that the unrepresented litigant is entitled to counsel fees, in special cases. When asked where it said that, he cited the sentence, above, beginning "We are not sure", which words are in themselves a signal of incertitude in a vague proposition. When his attention was drawn to the very next sentence, beginning: "However, we have no doubt * * *", another, opposite signal, preceding a precise proposition against his contention, the plaintiff said he preferred the "We are not sure" sentence, as if this were some species of game.

[22]      The Court cannot see that the assessment officer has misapplied the law, particularly as to the availability of costs to a self-represented lay-litigant. There thus remains the issue of whether the cuts he has made are so inappropriate or so unreasonable as to suggest an error in principle. Yet on reading through his reasons, and this judge done so several times, for here and there they do not flow, but require one to skip back and forth, one cannot see any real weaknesses which might result in a review seriously questioning the way in which he has exercised his discretion. Indeed, given that the litigation as a whole was not particularly complex and resulted in recovery of only $8,014.03, it appears that the assessment officer has been fairly generous.

[23]      That litigants may act on their own behalf, without engaging a lawyer, is clear and is undoubtedly an incident of a free and democratic society. Some may have to forego litigating their rights, real or imagined, because they cannot afford to devote the necessary time and still keep a "day job". Such a plight sets the right at naught. Surely it cannot be beyond the imagination of legislators and rules makers to devise a way to compensate successful self-represented parties to proceedings at law for their time and effort, without opening the proverbial "flood gates".

[24]      Now, Mr. Fegol has gone into these proceedings with his eyes wide open. He promises that they will come at last to the Supreme Court of Canada. The defendant sought no review of the costs assessment, so Mr. Fegol could have taken the $4,004.48, undisturbed; but, since he has unsuccessfully twice disturbed the defendant, he must pay the price.

[25]      The Court hereby assesses a lump sum of $900.00 costs on this unsuccessful review of assessment of costs. As the Court indicated last week on Mr. Fegol's unsuccessful attempt to levy contempt of Court against the Minister and other public officers for not at once paying over the $4,004.48 assessed on October 19, 1998, the costs of that attempt fixed at $800.00 may be simply deducted by the defendant from the assessed $4,004.48. So may the above costs of $900.00.

[26]      The combined costs awarded against Mr. Fegol in the amount of $1,700.00 may be deducted from the $4,004.48 which the defendant owes Mr. Fegol, leaving $2,304.48 which the defendant ought now to pay just as soon as a cheque can be requisitioned.

                                

                                 Judge

Ottawa, Ontario

November 6, 1998