Date: 20000128
Docket: T-2434-91
BETWEEN:
AIR CANADA
Plaintiff
- and -
HER MAJESTY THE QUEEN, in Right of Canada
as represented by the MINISTER OF TRANSPORT
Defendants
ASSESSMENT OF COSTS - REASONS
CHARLES E. STINSON
[1] This action, for damages to an aircraft engine further to a tail pipe fire, was dismissed with costs. The Defendants filed a bill of costs with items claimed under columns III and V. Before me, the Defendants presented a revised bill of costs restricted to column III:
| ITEM Units Unit Value Fees |
| A2 Preparation and filing of Defence 7 $100.00 $700.00 |
| C7 Discovery of documents, including |
| listing, affidavit and inspection 5 $100.00 $500.00 |
| C8 Preparation for an examination, including |
examinations for discovery, on affidavits,
| and in aid of execution. 5 $100.00 $500.00 |
| C9 Attending on examinations, per hour |
| (2 hours) 3 $100.00 $600.00 |
| D10 Preparation for conference, including |
| memorandum 6 $100.00 $600.00 |
| D11 Attendance at conference, per hour |
| September 22, 1998 (1.75 hours) 3 $100.00 $525.00 |
| D13(a) Preparation for hearing, including |
correspondence, and preparation of
| witnesses 5 $100.00 $500.00 |
| D13(b) Preparation for hearing, per day in |
| Court after the first day (3 extra days) 3 $100.00 $300.00 |
| E14(a) Hearing Counsel Fee for March 22-25, 1999 |
| March 22, 1999 6.83 hours |
| March 23, 1999 7.083 hours |
| March 24, 1999 6.083 hours |
| March 25, 1999 2.666 hours |
| TOTAL 22.662 hours 3 $100.00 $6,798.60 |
| E15 Preparing and filing of written argument |
| when requested or permitted by the court 7 $100.00 $700.00 |
| G25 Services after Judgment 1 $100.00 $100.00 |
| G26 Assessment of Costs 6 $100.00 $600.00 |
| G28 Services by paralegal |
D13(a) Preparation for hearing, including
correspondence, and preparation of witnesses
| (50% of Counsel fee) 5 $100.00 $250.00 |
E14(a) Hearing Paralegal Fee (50% of
Counsel fee) for March 22-25, 1999
| March 22, 1999 6.83 hours |
| March 23, 1999 7.083 hours |
| March 24, 1999 6.083 hours |
| March 25, 1999 2.666 hours |
| at 50% 3 $100.00 $3,399.30 |
| Sub-Total Fees $16,072.90 |
Photocopying:
| Canada Communications Group $58.75 |
| Toronto Legal Copies Inc. $36.31 |
| Ikon Office Solutions $86.80 |
| Ikon Office Solutions $9.35 |
| Ikon Office Solutions $9.84 |
| Ikon Office Solutions $42.28 |
| Ikon Office Solutions $110.91 |
| Ikon Office Solutions $33.13 |
| Ikon Office Solutions $10.59 |
| Ikon Office Solutions $5.56 |
| Ikon Office Solutions $50.62 |
| Ikon Office Solutions $96.62 |
| Total Photocopying $550.76 |
Holley & Strauch Court Reporters Examination April
| Airport Express Bus May 5, 1993 $18.50 |
Holley & Strauch Court Reporters transcripts
| Bora Laskin Law Library $47.03 |
| Federal Court Trial Division fee for extra day at hearing $118.75 |
| Sub-Total Disbursements $1,169.87 |
| TOTAL FEES AND DISBURSEMENTS $17,242.77 |
The Plaintiff"s Position
[2] The Plaintiff argued that only $250.00-$300.00 for item A2 should be allowed because the Statement of Defence was straightforward and did not require more than 2 hours to draft. The initial claim pleaded only negligence and damages of some $75,000.00. Whether there was or was not some complexity later during case preparation is irrelevant given that only a simple pleading in response was required by the negligence alleged. The amount claimed for damages was increased at trial, but that would not have complicated the preparation of a defence in an action which was not complex, ie. whether or not the contents of a fire extinguisher should have been put into the inlet of an aircraft engine. There are no dockets in evidence to substantiate the number of hours for a claim for $700.00.
[3] Although conceding the maximum $500.00 claimed for item C7, the Plaintiff noted that many of the documents consisted of extensive, but standard, firefighting training manuals. However, for item C8, the Plaintiff argued that the rule of thumb is one hour of preparation for an appearance at discovery of 2 hours. If the actual rate was $300.00 per hour, then an acceptable party and party hourly rate would be $150.00 per hour. Therefore, as this discovery required an appearance of 2 hours, preparation of 2-2.5 hours at $150.00 per hour is acceptable at the party and party level. The Plaintiff suggested $350.00 in the absence of dockets. The Plaintiff argued that item C9 as presented equates to $300.00 per hour which would be a considerable result at the solicitor-client level much less at the party and party level. The Defendants agreed to $350.00 and $300.00 respectively for items C8 and C9.
[4] The Plaintiff argued that, as for items C8 and C9, items D10 and D11 as claimed are excessive. For example, the memorandum associated with item D10 was brief. The 1.75 hours shown for item D11 are correct. The Plaintiff suggested $300.00 for each of items D10 and D11. The Defendants agreed to $300.00 for item D11, but asked for more for item D10, ie. $450.00 because preparation of the memorandum required the consideration of several factors such as experts. I told them that I would allow $400.00 for item D10.
[5] The Plaintiff conceded items D13(a), D13(b) and G25 as presented. The Plaintiff also conceded that the 22.662 hours shown for item E14(a) were correct, but noted that they equated to approximately $309.00 per hour and suggested, to be consistent with results elsewhere in this bill of costs, that $150.00 per hour be applied. That is, something should be allowed in the range of $4,600.00 given that preparation fees were conceded above. For item E15, the Plaintiff noted that there was no written argument. The memorandum of fact and law required further to the March 1, 1999 pre-trial conference has already been addressed by item D10 above. In any event, item E15 addresses materials prepared subsequent to trial, but not before trial. Further, item E15 addresses written argument, but not a memorandum of fact and law. For item G26, the Plaintiff argued for something consistent with the result on assessment. As well, the Plaintiff noted that offers to settle were made me, and if the result equals the amount of the settlement offer, take into consideration that the Defendant originally claimed under column V, which was immediately reduced at assessment to column III. This assessment could easily have been resolved without the necessity for appearance.
[6] The Plaintiff objected to any allowance for item G28 because Ontario"s law society authorizes payment of 50 percent for the services of law students, but not for paralegals. Even if the claim for this paralegal was permissible, the evidence does not disclose any details of the work performed nor the necessity. The Plaintiff argued that the claim for item E14(a) is particularly problematic because the Crown has not met the onus for necessity in a matter involving few documents and for which this paralegal did not assist at the counsel table. The Plaintiff"s counsel then consented to item D13(a) ex gratia as presented because, in Ontario, a student-at-law is authorized to perform the service addressed by item D13(a) at 50 percent of counsel"s rate. However, that authorization in the Ontario rules does not extent to the service described in item E14(a), and certainly does not provide for indemnification for paralegals. The Plaintiff noted that it is particularly objectionable to require it to pay for this person to sit and observe a trial.
[7] The Plaintiff concedes all disbursements except photocopies because there is no evidence of their purpose. This matter represented approximately 700 pages, and not the 2,400 pages claimed. Further, the Plaintiff undertook to prepare a binder of documents for the Court and for the Defendants. The Defendants then sent a binder with the same documents, and a few additional ones, to the Plaintiff. The Plaintiff agrees, however, that something should be allowed for photocopies, ie. about 700 pages at $0.25 per page or perhaps up $250.00.
The Defendant"s Position
[8] The Defendants argued that the brevity of the Statement of Defence reflected the amount of work put into it to achieve succinctness. For example, the research into the background of the incident included considerable effort to sort through conflicting stories and high emotions to precisely isolate the factual details setting the stage for paragraphs 5-7 inclusive laying out the sequence of events.
[9] For item E14(a), the Defendants argued that this was a highly technical matter with several witnesses and conflicting testimony warranting at least $200.00 per hour. The Defendants claim 3 units because of their success at trial and suggest that something in the range of $5,200.00, representing approximately $229.00 per hour, is fair in the party and party context. The Defendants asserted that the Plaintiff"s concession of preparation fees is irrelevant because they concentrated their efforts on the appearance at trial. The Defendants submitted that the wording of item E15 is broad enough to encompass materials both before and after trial and also a memorandum of fact and law. The Defendants argued that item G26 should be allowed consistent with costs of the day at the $150.00 per hour used elsewhere.
[10] For item G28, the Defendant"s counsel submitted a printout detailing the purpose and time for the paralegal (6th and 7th pages). Effectively, she acted as litigation assistant. The particular wording of item G28, "Services in a province by students-at-law, law clerks or paralegals that are of a nature that the law society of that province authorizes them to render, 50%of the amount that would be calculated for a solicitor", means that the Federal Court of Canada, as well as the law society for Ontario, has authorized compensation for paralegals who perform duties assigned by counsel. For this matter, the paralegal helped organize the flow of witnesses and documents. Effectively, she represents a disbursement for a manager, not as counsel to argue the case nor to prepare the witnesses, but to be a helper or coordinator in areas such as the scheduling and appearance of witnesses.
[11] The Defendants noted that the photocopies in dispute addressed exhibits and books of documents. The Defendants provided several additional documents to the Plaintiff. The Defendants noted that the copies were obtained through an outside agency and suggested an allowance of $300.00 - $400.00.
Assessment
[12] I accept the Defendant"s premise that a document, brief and straightforward on its face, may be so because of underlying care to detail and drafting. This was not the most difficult of incidents, but I agree that counsel would have had to sort out events compressed by time and shaded by emotions. I allow 6 units for item A2. The Defendants agreed to $350.00 for item C8, which is precluded by Tariff B2(2). However, the Plaintiff agreed to the related item C9 at $300.00. In the interests of promoting settlement, my view is that a consent should not normally be disturbed. The use of fractions of hours does not violate Tariff B2(2), and by using them for item C9, I have achieved the total amount of $650.00 agreed upon for items C8 and C9.
[13] The units allocated for items are not a function of a set hourly rate. For a hearing, differing numbers of units may be assigned to hours throughout. Therefore, using either 2 or 3 units per hour, I allow $5,000.00 for item E14(a) in the context of the manner in which the dispute at assessment was framed. I remove the $700.00 claimed for item E15. The Defendants did submit a Memorandum of Fact and Law 3 days prior to trial but, consistent with my Reasons dated January 12, 2000 in docket T-1459-97: ITV Technologies, Inc. v. WIC Television Ltd., I consider this part of hearing preparation under item D13. I allow $400.00 for G26. This was not the most difficult of assessments, but the item G28 issues were novel. Consistent with my Reasons in Carlile v. The Queen1 and on March 25, 1999 in docket T-323-98: Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada, I find the proof for photocopies less than absolute and allow $275.00 as appropriate in the circumstances of this case.
[14] The Law Society Act2 defines student members in the context of being students-at-law in the Bar Admission Course. The authority to make by-laws at s. 62(0.1) includes:
| 19. defining and governing the employment of student members while under articles and the employment of other law students; |
| 20. defining and governing the employment of barristers and solicitors clerks; |
The Professional Conduct Handbook as amended to June 26, 1998, provides:
| Delegation to Non-Lawyers |
| 1. Lawyers may in appropriate circumstances render services to their clients with the assistance of non-lawyers of whose competence they are satisfied. Though legal tasks may be delegated to such persons, the lawyer in question remains responsible for all services rendered and for all written materials prepared by non-lawyers. It is recognized that there exists a category of non-lawyers, generally referred to as law clerks, who have received specialized training or education and are therefore capable of doing independent work under the general supervision of a lawyer. Such persons are included within the scope of this Rule. |
| 2. The lawyer may permit a non-lawyer to perform tasks delegated and supervised by a lawyer so long as the lawyer maintains a direct relationship with the client or, if the lawyer is in a community legal clinic funded by a Clinic Funding Committee, so long as the lawyer maintains a direct supervisory relationship with each client"s case in accordance with the supervision requirements of the Clinic Funding Committee, and assumes full professional responsibility for the work. The lawyer shall not permit a non-lawyer to perform any of the duties that only lawyers may perform, or do things that lawyers themselves may not do. Generally speaking, and subject to the provisions of any statute, rule or court practice in that regard, the question of what the lawyer may delegate to a non-lawyer turns upon the distinction between any special knowledge of the non-lawyer and the professional and legal judgment of the lawyer which in the public interest must be exercised by the lawyer whenever it is required. |
| 3. The lawyer may permit a non-lawyer to act only under the supervision of a member of the Society. The extent of supervision will depend on the type of legal matter, including the degree of standardization and repetitiveness of the matter, and the experience of the non-lawyer generally and with regard to the matter in question. The burden rests upon the lawyer who uses a non-lawyer to educate the latter with respect to the duties that may be assigned to the non-lawyer, and then to supervise the manner in which such duties are carried out. The lawyer should review the non-lawyer"s work at sufficiently frequent intervals to enable the lawyer to ensure its proper and timely completion. |
| 4. Every law office, including a branch office of a law firm, must at all times be effectively supervised by a lawyer. |
| 1. This Rule has been formulated to provide guidelines for the delegation of duties to non-lawyers and the supervision of non-lawyers. |
| 2. The following examples, which do not purport to be exhaustive, illustrate the application to particular areas of practice of the general guidelines contained in paragraph 1 of the Commentary. |
| The lawyer may permit a non-lawyer to attend to all matters of routine administration, and to assist in more complex transactions relating to the sale, purchase, option, lease or mortgaging of land, to draft statements of account and routine documents and correspondence, and to attend to registrations, provided that the lawyer should not delegate to a non-lawyer ultimate responsibility for review of a title search report, or of documents before signing, or the review and signing of a letter of requisition, a title opinion or reporting letter to the client. |
| (b) Corporate and Commercial |
| A lawyer may permit a non-lawyer to attend to all matters of routine administration, and to assist in more complex matters and to draft routine documents and correspondence relating to corporate, commercial and securities matters such as drafting corporate minutes and documents pursuant to corporation statues, security instruments, security registration documents and contracts of all kinds, closing documents and statements of account, and to attend on filings. |
| (c) Wills, Trusts and Estates |
| A lawyer may permit a non-lawyer to attend to all matters of routine administration, and to assist in more complex matters, to collect information, draft routine documents and correspondence, prepare income tax returns, calculate such taxes, draft executors" accounts and statements of account, and attend to filings. |
| The lawyer may permit a non-lawyer to attend to all matters of routine administration, and to assist in more complex matters, to collect information, draft routine pleadings, correspondence and other routine documents, research legal questions, prepare memoranda, organize documents, prepare briefs, draft statements of account and attend to filings. Generally speaking, a non-lawyer shall not attend on examinations or in court except in support of a lawyer also in attendance. Permissible exceptions include law clerks employed by only one lawyer or law firm appearing on; (i) routine adjournments in provincial courts; (ii) appearances before tribunals where statutes or regulations permit non-lawyers to appear, e.g., Small Claims Court, Provincial Courts, Coroners" Inquests, as agent on summary conviction matters where so authorized by the Criminal Code , and administrative tribunals under the Statutory Powers Procedure Act; (iii) attendance on routine examinations in uncontested matters such as for the purpose of obtaining routine admissions, attendance upon judgment debtor examinations and on watching briefs; however, in no circumstances shall a non-lawyer be permitted to conduct an examination for discovery in a contested matter or a cross-examination of a witness in aid of a motion; (iv) attendance before a Master on simple ex parte matters or for a consent order; (v) attendance on assessment of costs. |
| Non-Permissible Delegation |
| 3. The lawyer may not permit a non-lawyer to , |
| (a) accept cases on behalf of the lawyer, except that such person may receive instructions from established clients if the supervising lawyer is advised before any work commences; |
| (b) fix fees, except where such persons use a fee schedule; provided that the lawyer has set the fee schedule and is responsible for sending the account to the client; |
| (d) give or accept undertakings, except with the express authorization of the supervising lawyer; |
| (e) act finally without reference to the lawyer in matters involving professional legal judgment; |
| (f) be held out as a lawyer. (The lawyer should insure that the non-lawyer is identified as such when communicating orally or in writing with clients, lawyers, public officials or with the public generally whether within or outside the offices of the law firm of employment); |
| (g) appear in court or actively participate in formal legal proceedings on behalf of a client except as set forth above, or in a support role to the lawyer appearing in such proceedings; |
| (h) be named in association with the lawyer in any pleading, written argument or other like document submitted to a court; |
| (i) be remunerated on a sliding scale related to the earnings of the lawyer, except where such person is an employee of the lawyer; |
| (j) conduct negotiations with third parties, other than routine negotiations where the client consents and the results thereof are approved by the supervising lawyer before action is taken; |
| (k) take instructions from clients, unless the supervising lawyer has directed the client to the non-lawyer for that purpose; |
| (l) sign correspondence containing a legal opinion, but the non-lawyer who has been specifically directed to do so by a supervising lawyer may sign correspondence of a routine administrative nature, provided that the fact such person is a non-lawyer is disclosed, and the capacity in which such person signs the correspondence is indicated; |
| (m) forward to a client any documents, other than routine documents, unless they have previously been reviewed by the lawyer. |
| 4. For the purposes of the Rule and Commentary, a non-lawyer does not include a student-at-law. |
| Practice by Unauthorized Persons |
| The lawyer should assist in preventing the unauthorized practice of law1. |
| 1. Statutory provisions against the practice of law by unauthorized persons are for the protection of the public. Unauthorized persons may have technical or personal ability, but they are immune from control, regulation and, in the case of misconduct, from discipline by the Society. Moreover, the client of a lawyer who is authorized to practise has the protection and benefit of the lawyer-client privilege, the lawyer"s duty of secrecy, the professional standard of care which the law requires of lawyers, and the authority which the courts exercise over them. Other safeguards include professional liability insurance, rights with respect to the assessment of bills, rules respecting the handling of trust monies, and requirements as to the maintenance of compensation funds.2 |
| 2. Lawyers must assume complete professional responsibility for all business entrusted to them maintaining direct supervision over staff and assistants such as students and clerks to whom they delegate particular tasks and functions. The lawyer who practises alone or operates a branch or part-time office should ensure that all matters requiring a lawyer"s professional skill and judgment are dealt with by a lawyer qualified to do the work, and that legal advice is not given by unauthorized persons, whether in the lawyer"s name or otherwise. Furthermore, the amount of any fee to be charged to a client should be approved by the lawyer. |
| 3. No collection letter should be sent out over the signature of a lawyer unless the letter is on the lawyer"s letterhead, prepared under the lawyer"s supervision and sent from the lawyer"s office. |
| 2 Cases and statutes provide that certain acts amount to the "practice of law" . See, for example: |
| ... Sask. Legal Profession Act, R.S.S. 1978, c. L-10, s. 5(1) and s. 76 as am. S.S. 1983-84, c. 43, s. 8 Y.T. supra, s. 102 "To protect the public against persons who ... set themselves up as competent to perform services that imperatively require the training and learning of a solicitor, although such persons are without either learning or experience to qualify them, is an urgent public service." R. ex rel. Smith v. Ott (1950), O.R. 493 at 496 (C.A.), Robertson C.J.O. "When a man says, in effect, I am not a lawyer but I will do the work of a lawyer for you, he is offering his services as a lawyer. In offering his services as a lawyer, he is holding himself out as a lawyer, even though he makes it clear he is not a properly qualified lawyer." R. v. Woods (19/61), [1962] O.W.N. 27 at 30, Miller C.C.J. And see, generally Orkin at 350-53, Bennion at 54 ... |
The Compact Edition of the Oxford English Dictionary3 defines paralegal as "... of or pertaining to auxiliary aspects of the law... One trained in subsidiary legal matters, though not fully qualified as lawyer, etc.; a legal aide..." The Ontario provisions do not mention paralegals by name, but I think that they contemplate the use of paralegals in the context of item G28. However, I construe item G28 in the overall context of Tariff B. The only comparable items, predicated as a 50 percent function of the amount calculated for a solicitor, and therefore not having their own set of ranges, are items E14(b) and F22(b) for second counsel at the trial and appeal hearings respectively. They clearly suggest an indemnity additional to, and conditional upon, the indemnity already sought and approved for first counsel.
[15] By contrast, item G28 does not suggest an indemnity additional to an indemnity already sought and approved for supervising counsel. Rather, it suggests indemnification at "50% of the amount that would be calculated for a solicitor" (my emphasis). That is, the lawyer delegates to the non-lawyer who then provides a service, and the supervising lawyer may bill the client accordingly at a lower hourly rate. Item G28 then reflects a reduced indemnification in the party and party scheme of costs. Further, I doubt that the scheme of this Tariff, requiring a special direction of the Court in the circumstances of items E14(b) and F22(b), was intended to leave unfettered the access to indemnification for non-lawyers. In other words, if the supervising lawyer, by the authority of the law society of the relevant province, delegates a particular service to the non-lawyer, the limit imposed by item G28 is that the litigant to be indemnified cannot recover once for the supervising lawyer and again for the non-lawyer. For example, if the non-lawyer handles all aspects of an assessment of costs, an activity which I do not think the Ontario practice, ie. paragraph 1 of Rule 16 in the Professional Conduct Handbook, precludes for paralegals, a claim cannot be made under both items G26 and G28. If the lawyer and non-lawyer shared responsibility, I would expect a claim to be properly advanced under item G26, thereby precluding item G28. Here, the Defendants were indemnified already under items D13(a) and E14(a) thereby precluding the claim for item G28. The Plaintiff consented to item D13(a) under item G28. Here, a consent cannot create jurisdiction for me. I remove the $250.00 and $3,399.30 for items D13(a) and E14(a) respectively claimed under the aegis of item G28.
[16] The Defendant"s Bill of Costs, presented at $17,242.77, is assessed and allowed at $9,619.11.
"Charles E. Stinson"
Assessment Officer
Dated this 28th day of January, 2000.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-2434-91
STYLE OF CAUSE:
AIR CANADA
Plaintiff
- and -
HER MAJESTY THE QUEEN, in Right of Canada
as represented by the MINISTER OF TRANSPORT
Defendants
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: November 16, 1999
ASSESSMENT OF COSTS REASONS BY: CHARLES E. STINSON
DATED: January 28, 2000
APPEARANCES:
Guy L. Poppe for the Plaintiff
P. Christopher Parke for the Defendants
SOLICITORS OF RECORD:
Guy L. Poppe for the Plaintiff
Toronto, Ontario
Morris Rosenberg for the Defendants
Deputy Attorney General of Canada
Ottawa, Ontario
__________________
1 97 D.T.C. 5284
2 R.S.O. 1990 c. L-8 as amended at s. 28(d)
3 Volume III, a supplement to the Oxford English Dictionary Volumes I-IV Oxford at the Clarendon Press 1987 at page 719, plate 261
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