Date: 20081027
Docket: A-71-00
Citation: 2008 FCA 327
BETWEEN:
DALLAS IAN HAY
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
ASSESSMENT OF
COSTS – REASONS
Charles
E. Stinson
Assessment Officer
[1]
The
Court dismissed with costs this appeal from a decision of the Tax Court of
Canada denying losses related to farming, taxidermy and writing activities. I
issued a timetable for written disposition of the assessment of the
Respondent’s bill of costs.
I. The Respondent’s Position
[2]
The
Respondent referred to the supporting affidavit of Sarah Armstrong sworn August
5, 2008 (the Affidavit) and noted that her duties as a paralegal in the Tax Law
Services section of the Department of Justice include the drafting of
bills of costs. The Respondent argued further to s. 222(4) of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.) that the bill of costs is
timely being within ten years of the judgment (December 13, 2001). The
Respondent argued that the disbursement claim of $638.58 for photocopying was
reasonably necessary.
II. The Appellant’s Position
[3]
The
Respondent’s bill of costs is unreasonable and unjustified and should be denied
with costs to the Appellant. The Appellant argued that the bill of costs is
deficient, not having been signed or dated by an authorized assessment officer,
and that a delay of several years in advancing it is prejudicial to his rights.
Ms. Armstrong did not deal with the Appellant and therefore does not have the
personal knowledge requisite to give evidence in support of the bill of costs.
[4]
The
Appellant argued that the evidence is deficient in that only one of the
supporting invoices appended to the Affidavit was stamped as sworn. He asserted
that he had never seen them before and that they were excessive and
duplicative. The asserted figures in the Affidavit are inconsistent with the
individual amounts of the invoices.
III. Assessment
[5]
Consistent
with my approach outlined in paragraph 2 of Halford v. Seed Hawk Inc.,
[2006] F.C.J. No. 629 (A.O.) [Halford], my account in these reasons of
the respective positions of the parties is at times somewhat summary in nature.
It is detailed enough for an understanding of the notion of issues between the
parties, but should be read keeping in mind that there are nuances and details
of the issues in the record, all of which I have read and considered. My
findings in Halford above, Biovail Corp. v. Canada (Minister of
National Health and Welfare) (2007), 61 C.P.R. (4th) 33, [2007]
F.C.J. No. 1018 (A.O.), aff’d [2008] F.C.J. No. 342 (F.C.) and Abbott
Laboratories v. Canada (Minister of Health) (2008), 66 C.P.R. (4th)
301, [2008] F.C.J. No. 870 (A.O.) [Abbott] (under appeal) set out my
views on thresholds of proof for categories of costs and approach to their
assessment. Paragraphs 68 – 71 inclusive of Abbott above summarize the
subjective elements of assessments of costs.
[6]
Rule
405 provides that costs “shall be assessed by an assessment officer”. The
practice is that a draft bill of costs is filed per Rule 406 which often bears
a proposed endorsement for the assessment officer. The responding party (here,
the Appellant) must be given an opportunity to challenge the bill of costs and
its supporting materials, followed by the assessment officer’s disposition of
each item of costs in turn, i.e. the assessment of costs. It is then that the
assessment officer would sign and date the bill of costs.
[7]
The
Appellant’s position on the suitability of Ms. Armstrong to swear an affidavit
did not address the admissibility of evidence sworn on information and belief,
which Ms. Armstrong did here. Affidavits on information and belief are
permissible for interlocutory process, i.e. motions, incidental to the hearing
of and judgment on the substantive issues of the lawsuit. An assessment of
costs is also an interlocutory process as its function is not to further
adjudicate on the substantive issues of the lawsuit, which are res judicata
further to the judgment, but to transform the costs portion of the judgment to
a specific dollar amount.
[8]
Paragraphs
1 and 6 of the Affidavit set out the basis of the evidence on information and
belief, i.e. the counsel of record for the Respondent. In considering the
weight to be given the Affidavit, I have in mind the commentary for Rule 81
(affidavits) relative to personal knowledge and information and belief in Brian
J. Saunders et al., Federal Courts Practice 2008 (Toronto: Thomson
Carswell, 2007) at pp. 407 – 410 inclusive. Paragraph 4 of the Affidavit
identifies the invoices collectively as Exhibit “A”. Rule 80(3) requires that
the commissioner of oaths endorse the exhibit with a statement relating it to
the affidavit. That was done, but as is common practice, the endorsement was
confined to the first page of the seven-page exhibit. The Department of Justice
(DOJ) file number and party names on these pages satisfy me as to nexus.
[9]
It
is not clear to me that s. 222(4) specifically pegs to the date of judgment a
ten-year statutory time limit for collection of tax debt. However, the Federal
Court of Appeal had the jurisdiction to award (December 13, 2001) costs to the
Crown. My considerations in Urbandale Realty Corp. v. Canada, [2008]
F.C.J. No. 910 (A.O.), on the timeliness of advancing a bill of costs did not
address the ten-year limit raised here. It was not argued before me, but Rule
406 does not impose a time limit. Provisions elsewhere such as for collection
of an assessed amount may contain time limits, but my role is assessment of
costs and not collection of costs.
[10]
The
Appellant did not address orders silent on costs, but as he expressed opposition
to the bill of costs in general and to certain items in particular, I think
that I must intervene regardless of the lack of assistance from him on this
point. As sometimes happens, a paralegal with ongoing duties to prepare bills
of costs for many unrelated matters may not, as the Appellant suggests, be
familiar with every detail of each matter, but is able to extract expenditure
details from office records. Here, Ms. Armstrong’s attention to detail elicited
invoice no. 69568 (reproduction costs of $130.18) with a specified job
completion date of February 8, 2001 associated with unspecified documents. The
Appellant’s position that invoice no. 69568 duplicated the work associated with
invoice no. 70876 ($107.63) with a specified job completion date of February 6,
2001 is incorrect. The latter invoice likely addressed the Respondent’s
Memorandum of Fact and Law filed that day. Invoice no. 69568 likely addressed
the Respondent’s motion record for Rule 54 directions filed on February 8,
2001. Invoice no. 69568 is slightly more than invoice no. 70768 because the
motion record was slightly longer than the Memorandum of Fact and Law.
[11]
Again,
the Appellant’s position that invoice no. 117006 ($332.55) duplicated the work
associated with invoice no. 69568 was of no assistance because the order dated
April 3, 2001 disposed of the motion associated with invoice no. 69568 meaning
no further work was needed in that area. Invoice no. 117006 in fact indicated
that the work request was made on October 31, 2001, with a specified completion
date of November 1, 2001. It was for Books of Authorities. The Respondent
filed the Book of Authorities on November 8, 2001, for the hearing of the
appeal.
[12]
The
order dated April 3, 2001 was silent on costs. Further to my conclusions in paragraph
73 of Abbott above, I disallow the $130.18 (invoice no. 69568)
associated with it. I allow the remaining counsel fees as claimed and the
balance ($508.40) of the disbursements as I am satisfied that the latter were
not associated with orders silent on costs and were modest and reasonable in
the circumstances. The Appellant’s position was erroneous in its analysis of
given items, but did invite me to resolve discrepancies (Appellant’s Written
Reply filed September 3, 2008). I have done so.
[13]
For
example, the Appellant examined invoice no. 16188 dated November 1, 2001 for
copies from the courthouse library (the Library Invoice) and concluded that he
was owed $91.80 with accrued interest from said date. His rationale was that
the 12 individual charges therein totalled $234.00 exclusive of a 13th
entry confirming an account payment of $325.80, which did not accord with the
$1,265.20 noted as amount due at the end of said invoice. I think it
understandable that a lay litigant may have difficulty in construing
evidence of this sort as he is likely unfamiliar with the many forms, i.e.
prior art, patent file wrappers etc., of disbursements in litigation.
Sometimes, a supporting affidavit explains the internal payment and accounting
practices of a law firm to facilitate understanding of a bill of costs. That
the Affidavit did not do so here is not a serious omission as it seems apparent
that the DOJ internal file number 3-177602 (the DOJ Number) assigned to the
Appellant’s appeal was Ms. Armstrong’s key in isolating relevant items of
costs.
[14]
Paragraph
4 of the Affidavit claims $638.58 (which I have reduced above by $130.18) for reproductions
and appends as Exhibit “A” the invoices underlying that without specifying how
many there are. Exhibit “A” comprises seven pages. The Appellant erroneously
understood each page as a discrete invoice. I think that each of the first five
pages is a discrete invoice for a discrete piece of work. Each contains the DOJ
Number.
[15]
The
seventh page, entitled ‘Litigation Billing Information’, might be viewed as an
invoice, but is more a certification to the client of DOJ that a charge of $5 meets
the requirements of s. 34 of the Financial Administration Act, R.S., c.
F-10, s. 1. That section is part of the financial controls in place for disbursement
of public funds for work, goods or services. It requires that, before payment
can be made, an authorized person (by an instrument of delegation) certify that
the work was done and that the proposed charge is reasonable (the latter does
not preclude my consideration of reasonableness further to Rule 405). The
individual making this certification also prepared one of the earlier invoices
from the first five pages of Exhibit “A”.
[16]
Thus,
the seventh page is not as the Appellant suggests “the total bill for the
Respondent’s legal services”. Its amount of $5 was used in the calculation of
$638.58. The source of the $5 is the sixth page of Exhibit “A” which is
the Library Invoice. I surmise from it that DOJ has a standing account
with the library identified as DJUS2 for ongoing requests for copies of case
law. The Library Invoice lists 12 amounts ranging from $5.00 to $91.80 for
copies on various dates. It would be inefficient for both DOJ and the
courthouse to process an individual invoice for each of these
transactions. The 12 amounts are cross-referenced to various internal DOJ file
numbers, the 11th of which is the DOJ number for copies of case
law costing $5 on October 31, 2001, a date consistent with the preparation of
the Book of Authorities. It is the $5 referred to on the seventh page of
Exhibit A. Therefore, the $1,265.20 is the accrued amount owing as of November
1, 2001 on the library account no. DJUS2. It includes the $234.00 (current
charges) and $325.80 (credit for a payment), the balance presumably resulting
from previous invoices.
[17]
The
Respondent’s bill of costs, presented at $2,198.58, is assessed and allowed at
$2,068.40.
“Charles
E. Stinson”
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