Docket:
T-833-10
Citation:
2012 FC 221
[UNREVISED ENGLISH CERTIFIED
TRANSLATION]
BETWEEN:
|
|
CITY OF MONTRÉAL
|
|
|
|
Applicant
|
|
and
|
|
|
MONTREAL PORT
AUTHORITY
|
|
|
|
Respondent
|
|
|
|
|
REASONS FOR ASSESSMENT
JOHANNE PARENT, Assessment Officer
[1]
On
September 13, 2011, upon the applicant’s motion for reconsideration, the
Court ordered that the applications for judicial review in dockets T-833-10 and
T-936-10 be allowed with costs. On October 27, 2011, the applicant filed
its bill of costs with this Court. A Notice of Appointment was issued on
November 1, 2011, scheduling the hearing for the assessment of the bill of
costs for November 24, 2011. At the hearing on November 24, the
parties agreed to serve and file written submissions concerning the
disbursements claimed. Having received these submissions, I will now proceed
with the assessment of the applicant’s bill of costs.
[2]
Pursuant
to Tariff B of the Federal Courts Rules, seven units are requested for
the preparation and filing of the application for judicial review (item 1),
as well as seven units for the preparation of the full application record (item 1).
According to the applicant, the maximum number of units is justified, given the
total amount of work required; the importance and complexity of the new legal
issues, which counsel for the applicant called [translation]
“historic and complicated”; and the considerable sums of money at stake
in this case. To determine the point on the scale under Column III of
Tariff B that applies to the services claimed, the applicant relies on the
decision of the Honourable Justice Tremblay-Lamer in M.K. Plastics Corp. v
Plasticair Inc. 2007 FC 1029 [M.K. Plastics].
[3]
In
reply, the respondent submits that item 1 does not apply in this case because
this item excludes records for applications governed by Part 5 of the Federal
Courts Rules. Counsel for the respondent further submits that the number of
units claimed for services related to the bill of costs is too high and that
the mid-point on the scale of units under Column III of Tariff B
should be adopted for all the services claimed in the bill of costs. Counsel
explains his argument in his written submissions:
[translation]
It would appear that the importance and complexity
of the issues in this case cannot be regarded as being anything but the
consequence of the previous case dealing with the principal amount of the PILTs
for the silos and the business tax.
This previous dispute was heard by the Federal Court
(T-795-04 – judgment dated July 5, 2007), the Federal Court of Appeal (A-413-07
– judgment dated September 19, 2008) and the Supreme Court of Canada
(32881 – judgment dated April 15, 2010). At trial, the parties agreed not
seek costs from each other. On appeal, the victorious MPA waived the right to seek
costs. In the Supreme Court, the City of Montréal was not entitled to costs
against the MPA.
Once the outcome was known (the Supreme Court
favouring the position of the City of Montréal), the question remained as to
whether a late payment supplement should be added to the principal of the PILTs.
The only difficulty in this case was in performing
the calculation permitted under the Payments in Lieu of Taxes Act (PILTA)
by reference to the provisions of the Financial Administration Act to
establish the applicable interest rate. This calculation was performed by the
City of Montréal’s own finance department and verified by the Montreal Port
Authority’s own real property management officers. The quantum was not in
dispute.
All that remained to be determined was whether at
law a late payment supplement was owed (a) in whole; (b) in part; or (c) not at
all.
The exercise of the MPA’s discretion in this regard,
according to the City of Montréal’s arguments, was fettered by the decision of
the Supreme Court of Canada. Until the Supreme Court of Canada delivered its
judgment, it was the Federal Court of Appeal’s judgment that prevailed, and
that judgment fully agreed with the position of the Montreal Port Authority. In
the present case, the amount in dispute (whose quantum is, once again, common
ground) depended on the principal amount of those PILTs that the Supreme Court
of Canada finally recognized.
This is why the MPA submits that it would be
reasonable to apply the mid-point of scale under Column III.
[4]
Regarding
the respondent’s first argument, namely, that item 1 of Tariff B of
the Federal Courts Rules does not apply to records for applications
governed by Part 5 of the Federal Courts Rules, item 1 of Tariff B
states as follows:
|
1.
Preparation
and filing of originating documents, other than a notice of appeal to the
Federal Court of Appeal, and application records.
(my emphasis)
|
a. Préparation et dépôt
des actes introductifs d’instance, autres que les avis d’appel, et des
dossiers de demande.
(je souligne)
|
It seems to me that item 1 expressly covers
application records without making any distinction between Part 5 and any
other part of the Rules. What is more, I reviewed a vast number of decisions made
by assessment officers of this Court and cannot help but note that they do
indeed apply this item to records for applications governed by Part 5 of
the Federal Courts Rules. In light of the foregoing, and absent a more
substantial argument by the respondent on this point, I do not see how item 1
of Tariff B of the Federal Courts Rules could not apply to records
for applications under Part 5.
[5]
Furthermore,
recent case law, such as Dell
Inc. v 9153-3141 Québec Inc. 2007 FC 1070, Stanfield v Canada 2007 FC 542, Novopharm Ltd v AstraZeneca AB 2006 FC 678 and Kassam v R. 2005 FCA 169, generally
recognizes that, barring
exceptional circumstances, item 1 of Tariff B is allowed only once
for the preparation and filing of originating documents, affidavits and
application records. As I am not aware of any exceptional circumstances that
would warrant allowing units for the application and for the application
record, I will therefore assess the number of units requested for the
preparation of the application record, including the originating document, in
light of the arguments made by the parties.
[6]
Rule
409 of the Federal Courts Rules authorizes the assessment officer to
consider the factors referred to in subsection 400(3) when assessing
costs. In the present case, I have been specifically asked to assess costs on
the basis of the amounts in dispute, the importance and complexity of the
issues raised, and the workload. Upon reading paragraph 4 of the decision
of the Honourable Justice Martineau dated July 27, 2011, I note that the
dispute focused exclusively on the respondent’s refusal to pay the applicant
late payment supplements (LPS) or interest under the Act and the Crown
Corporation Payments Regulations. The principal amounts owing had been
dealt with in previous cases. There can be no doubt that the amounts in issue in
this case were considerable, but I find that this justification alone is
insufficient to allow the maximum number of units, particularly since the
payments in principal had already been dealt with in previous cases and it
remained to be seen at that point whether a late payment supplement was owed.
Regarding the importance and complexity of the matter, if I confine myself to paragraph 26
of M.K. Plastics, above, I note that “it is the legal significance of
the case, not the economic and business significance to the parties that must
be considered”. The dispute concerns decisions by the respondent not to pay LPS
to the applicant, so essentially, the Court should consider whether this
discretion was exercised reasonably. I find that this was a very important case
for the parties but was not, however, a case of major legal significance. Regarding
the workload required to deal with this application for judicial review, I note
that the applicant’s record contains a very well substantiated notice of
application, a single nine-page affidavit with two attached exhibits, and a
memorandum of fact and law citing various statutes and authorities. However, I
do not think that the required workload, while significant, could be
characterized as being much, much heavier than the norm in an application for
judicial review. In light of the preceding, I will allow six units under item 1
of Tariff B for the preparation of the application record (including the
application).
[7]
At
this point, in response to the respondent’s argument that the mid-point on the
scale of units should be adopted for all the services claimed, I would add
that, in light of paragraph 8 of Starlight v Canada, 2001 FCT 999, “each item is assessable in its own
circumstances and it is not necessary to use the same point throughout in the
range for items as they occur in the litigation”.
[8]
The
applicant claims seven units for the preparation and filing of a contested
motion to reconsider in accordance with subsection 397(1) of the Federal
Courts Rules (item 5). In reply, the respondent submits that the
Court, in its decision dated September 13, 2011, did not make an award of
costs. The claim for services rendered in connection with the motion to
reconsider cannot be allowed. A review of the Court’s order dated September 13,
2011, shows that no costs were awarded to either party. As is stated in
Rule 400(1) of the Federal Courts Rules, only the Court “shall
have full discretionary power over the amount and allocation of costs and the
determination of by whom they are to be paid”. Section 2 of the Federal
Courts Rules defines the “Court” as “the Federal Court, including a prothonotary”, while subsection 5.1(1) states that the
Court consists of “a chief justice called the Chief Justice of the Federal Court, who
is the president of the Federal Court, and
32 other judges”. Nowhere in the Act or the Federal Courts Rules is it stated that an
assessments officer is considered to be a member of the Court. Accordingly, an
assessment officer does not have the necessary jurisdiction to award costs when
the Court, in rendering its decision, has not expressly done so.
[9]
Eleven
times five units are claimed in the original bill of costs for discovery of documents
(affidavit, letters (5), draft schedule, record, request for hearing, supplemental
book of authorities and exhibits) under item 7 of Tariff B. Four times
five units were added to the bill of costs, through the applicant’s written
submissions, for discovery of four other documents: the notice of appointment,
the MPA’s record, additional documents from the MPA and a letter from the MPA.
The applicant submits that item 7 of the Tariff applies to the discovery
of each document (sent or received) and that the principle that each of the
discoveries should be treated discretely was established in Early Recovered
Resources Inc v Gulf Log Salvage Co-operative Assn., 2001 FCT 1212. The
respondent, on the other hand, submits that it is trite law [translation] “that the provisions of
item 7 for discovery of documents refer to rules 222 to 232 in
respect of Actions, that is, Part 4 of the Rules. Item 7 does not
apply to proceedings instituted through an application for judicial review in
accordance with Part 5 of the Rules” (Turcotte v Canada, 2011 FC
1090, Omary v Canada, 2010 FC 813, Wax v Canada, 2007 FC 424, Lavigne
v Canada Post Corporation, 2004 FC 350). The units claimed under item 7 of Tariff B
will not be allowed. As the respondent notes, the case law long ago established
that this service refers to rules 222 to 232 of the Federal Courts Rules
– Discovery and Inspection, which come under Part 4 – Actions in the
Rules. With respect for the contrary opinion, the decision cited by the
applicant refers to a case instituted by way of an action and therefore does
not apply here. Absent any other argument justifying such a request in the
present application for judicial review, I do not see how such a claim is
appropriate.
[10]
For
item 13(a) of Tariff B, the respondent challenges only the number of
units claimed, which is at the top of the scale under Column III. The
summary of the hearing in this case tells us that, in practice, the hearing
went on for three days. In light of my argument set out in paragraph 6 of
these reasons in my assessment of the factors under Rule 400(3), I allow
four units for the preparation for the first day of the hearing, given that the
preparation for the trial, although relatively complex, did not require
preparing any witnesses. For the same reasons, two units will be allowed for
each of the subsequent two days of preparation.
[11]
The
units claimed in the bill of costs under item 14(a) for first counsel’s
presence in Court were amended at the hearing to reflect the exact time in
Court. The number of hours claimed was not challenged by the respondent, and I
find the number of units claimed to be reasonable. Item 14(a) will
therefore be allowed as requested.
[12]
Regarding
the applicant’s claim under item 14(b) of the Tariff, which covers the
presence of second counsel at the hearing, the parties agreed at the assessment
hearing to withdraw this amount. In any event, the 23 units claimed under
this item could not be awarded. As was mentioned at the assessment hearing,
item 14(b) provides for counsel fees for second counsel at the hearing, “where
[the] Court directs” (emphasis added). At the assessment hearing, counsel
confirmed that no representations on this point were made before the Court and
that, accordingly, no order or direction was issued.
[13]
Ten
units are claimed under item 24 for travel by two counsel to attend the
hearing. Item 24 of Tariff B leaves this item entirely up to the
discretion of the Court, and absent a clear direction of the Court, the
assessment officer has no jurisdiction to allow the requested fees.
Accordingly, given the absence of an order or direction of the Court, the units
claimed will not be allowed.
[14]
The
claim under item 25 (services after judgment) is allowed. There is no
doubt in my mind that the applicant, following the Court’s judgment, had to
contact its clients, if only to explain the scope and impact of the judgment
and see to the next steps.
[15]
In
reference to the claim for the maximum number of units under item 26 of Tariff B
for the assessment of costs, counsel for the respondent argues that the number
of units should be reduced to the mid-point on the scale for this service. I
recognize that the applicant saw to the preparation, serving and filing of the
bill of costs and supporting documentation, as well as the representations made
at the hearing
and in the written submissions. In consideration of the work
performed, but taking into account the complexity of this assessment, four
units will be allowed under item 26.
I. Disbursements
[16]
In
the written submissions filed by the parties regarding the claims for taxes on
counsel fees, bailiff fees, taxi fares and court costs, it is stated that the
disbursements claimed for court costs and taxi fares are not in dispute. These
disbursements are justified and reasonable, and will be allowed as sought.
[17]
Relying
on the table of disbursements incurred in this case, which was submitted as an
exhibit in the applicant’s submissions, an amount of $237.15 is claimed as
assessable disbursements for bailiff fees. The respondent, on the other hand,
submits that the bailiff fees total only $112.67. I had an opportunity to
review the parties’ calculations, and it seems clear at first glance that the
respondent did not include the fees incurred in April 2011 to serve the
authorities. Another point on which the parties disagree seems to be the
reimbursement of fees for the urgent service of certain documents. It appears
from the Court’s record and from the invoices submitted in support of the bill
of costs that the authorities were indeed served and filed. In light of the
foregoing and the fact that no submissions were made to explain why the bailiff
fees related to the filing and service of these authorities should not be
reimbursed, I will include in my calculations the amounts submitted for the
month of April. Regarding the amounts incorporated into the invoicing for the
filing and urgent service of certain documents, no arguments were offered to
substantiate the use of this service to serve the application, the reply and
the authorities on an urgent basis, and I was unable to find any grounds that
would justify using this service and obliging the opposing party to reimburse
it. I have therefore revised the calculations for this disbursement
accordingly, and bailiff fees will be allowed in the amount of $164.98 (taxes
included).
[18]
A
total of $11,837.09 is claimed in the bill of costs for counsel fees under
paragraph 1(3)(b) of Tariff B. The applicant states in support
of its claim that
[translation]
. . . the purpose of this section
is to reimburse the party that had to pay the taxes described in it, despite
having won in Court, particularly those paid “on counsel fees” (GST and QST),
as well as those paid on “disbursements allowed under this Tariff”.
In support of its claim, the applicant refers to the
decision of Assessment Officer Stinson in Englander v Telus Communications
Inc., 2004 FC 276 [Englander], in which it was allegedly determined
that paragraph 1(3)(b) of the Tariff creates an entitlement to the
[translation] “reimbursement of
taxes on counsel fees as well as on disbursements”. The applicant argues that only
disbursements are affected by the “allowed under this Tariff” limitation.
Counsel for the applicant further argues that the assessment officer in Englander,
above, [translation] “does not
have jurisdiction to refuse to allow the taxes on counsel fees, given the
imperative rule of his own Court (paragraph 1(3)(b) of the Tariff),
which is expressed in very general terms, regardless of whether or not the
assessment officer thinks that the party could receive a windfall in this
regard”.
In response, the respondent submits that
disbursements are not the only component affected by the “allowed under this
Tariff” limitation in paragraph 1(3)(b) of the Tariff. Counsel fees
and disbursements must be considered in accordance with the Tariff. In the
French version of this provision of the Tariff, the use of the conjunction “et”
is associative, not alternative. Counsel for the respondent also refers to an
excerpt from Perry v Heywood et al (1997), 159 Nfld & P.E.I.R. 183, cited
in Englander, which explains, among other things, the three types of
costs that may be awarded by a trial judge: party and party, lump sum, or
solicitor and own client. On the subject of solicitor and own client costs and
lump sums for costs awarded by the Court, counsel for the respondent states in
his submissions that,
[translation]
. . . in both cases, it is the judge who decides,
failing which the assessment officer must follow Tariff B with regard to
counsel fees and disbursements that may be allowed for the purposes of
assessing costs, which means that taxes are excluded.
Accordingly, no taxes may be added to the counsel
fees in this case because the fees allowed were not established on a solicitor
and own client basis or on a lump sum basis, and because the Court gave no
express direction to the contrary.
[19]
Unlike
the decision in Perry, the Federal Courts Rules do cover, with
regard to the assessment of party and party costs, in paragraph 1(3)(b)
of the Tariff, any service or sales tax payable on counsel fees or
disbursements allowed under the Tariff.
See subsection 1(3) of Tariff B:
|
(3)
Disbursements – A bill of costs shall include
disbursements
including:
(a)
payments to witnesses under Tariff A; and
(b)
any service, sales, use or consumption taxes paid or payable on
counsel fees or disbursements allowed under this Tariff.
|
(3) Débours – Le
mémoire de frais comprend les débours notamment :
a) les sommes
versées aux témoins selon le Tarif A;
b) les taxes
sur les services, les taxes de vente, les taxes d’utilisation ou de consommation
payées ou à payer sur les honoraires d’avocats et sur les débours acceptés
selon le présent tarif.
|
[20]
As
counsel for the applicant ably explains in his interpretation of Englander,
the assessment officer does not have the power to refuse to allow taxes as
provided under paragraph 1(3)(b) of the Tariff. The ambit of the
assessment officer’s discretion in this regard is dealt with in countless
decisions of the Federal Court and the Federal Court of Appeal. By my reading
of paragraph 1(3)(b) and the case law, including Englander (paragraph 18),
and later Mercury
Launch & Tug Ltd. v Texada Quarrying Ltd., 2009 FC 331 [Mercury Launch], at
paragraph 11, I cannot conclude that the taxes referred to in
paragraph 1(3)(b) are for the counsel fees payable by the party
without taking into account Tariff B. In my view, paragraph 1(3)(b)
clearly stipulates that both the counsel fees and the disbursements must be
allowed under the Tariff before the application of any taxes can be considered.
The French version, which uses the conjunction “et”, does not lend itself to
any other application, and the English version seems to confirm this
application. Like the assessment officers in Englander and Mercury
Launch, I am therefore of the opinion that the taxes covered by
paragraph 1(3)(b) include counsel fees allowed under the Tariff. This
application is also confirmed in numerous decisions rendered by assessment
officers, including the two decisions mentioned in this paragraph, where the
assessment officer allowed GST on costs assessed for the services of counsel
and on the disbursements assessed. Accordingly, the taxes on counsel fees as
claimed under the disbursements assessed will not be allowed. Since the taxes on
the other disbursements are already included in the amounts assessed, only the
GST as claimed by the applicant in the bill of costs under assessable services
will be allowed.
[21]
The
applicant’s bill of costs is allowed in the amount of $10,731.48.
“Johanne Parent”
Toronto,
Ontario
February
16, 2012
Email this Content