Stanley M Smith and Donald Kilgour Campbell v. Her Majesty the Queen, [1985] 1 CTC 140, 85 DTC 5200

The Associate Chief Justice:—These motions pursuant to Rule 344 to review decisions of the Taxing Officer, came on for hearing at Toronto, Ontario, on May 7, 1984. The trial in these matters took place at London, Ontario, in February of 1983, and in due course, resulted in the judgment by Collier, J in favour of the plaintiff in each case, with the usual order for costs to be taxed. In accordance with that judgment, the taxations proceeded before Mr John E Clegg, Taxing Officer, on Friday, January 27, 1984. The transcript of that hearing was filed and I have now had an opportunity to consider it very carefully. I do not propose to retrace the ground covered in the trial or to reproduce extensive portions of the proceedings before the Taxing Officer. I am satisfied that the Taxing Officer took a too stringent approach in three areas.

The first relates to the pre-trial conference. It is, I am sure, unnecessary to expound on the value of this practice. Effectively used, especially with the full cooperation of counsel, it almost without exception, provides great assistance to the trial judge. As a minimum, it identifies issues both of fact and law, but frequently does much more, as for example, agreed statements of facts, agreed folios of documents for use at trial and admissions which may cover points of both fact and law. Finally, of course, there are occasions when it leads to partial or complete resolution of the issues between the parties. Nothing should ever be done to discourage the practice or to indicate in any way that involvement in it is not every bit as important as in the other necessary appearances relating to the conduct of the trial. In the present case, I conducted the pre-trial proceedings and, as has been my practice, made no order as to costs. It would be entirely unjust, however, to expect counsel to participate in these proceedings with the very useful results obtained, at the expense of their clients and accordingly, an order will go allowing counsel for the plaintiffs taxed costs for attendance at the pre-trial proceedings, in the amount disallowed of $950.

The second area relates to expert witnesses. I am satisfied that the Taxing Officer applied too strict an interpretation of Mr Justice Collier’s judgment and also of the jurisprudence submitted to him during the course of the argument. This resulted in a considerable scaling down of the allowances for pre-trial preparation and plaintiffs’ expert witnesses, Pearson and Strung. I have examined several of the cases cited plus a number of others on the treatment of expert witnesses in our Court. While it is difficult to generalize, it is obvious that in much of the jurisprudence before us, testimony of expert witnesses is indispensable. Indeed, this Court has specific rules dealing with the exchange of expert reports and affidavits and a great deal of experience at trial with expert testimony. In the treatment of costs, while the Court is careful to avoid requiring the defendant to make full compensation, there is an obvious acceptance of the elaborate preparation necessary in the reports used at trial and in particular, of the necessity for the use of support staff in that process. In the circumstances of this case, I would think it appropriate that pre-trial preparation for the witness Pearson be allowed at $150 an hour and for the witness Strung, at $85 an hour.

The third area relates to disbursements. With the complexities of this case, discussion of disbursements took up a good deal of the hearing before the Taxing Officer and not surprisingly, posed some rather delicate problems. This is the text of his disposition:

Disbursements:

At taxation the Plaintiff introduced invoices increasing the duplication of Case Book by M & T Instaprint (10 copies of 6 volumes each) from $2,594.49 to $3,281.10, and Registry searches from $28.25 to $229.50. Other invoices for $156.56 were produced for the materials used by the Plaintiff in the preparation of a map of considerable dimension, with seven overlays, which was filed as an exhibit at trial. All of the above amounts are allowed.

Mr Campbell gave evidence that he had spent two days going through his solicitor’s files and calculating various other charges from the invoices on file. He had with him a tabulation of the figures from those invoices which increased telephone charges from $851.30 to $878.00, courier charges from $357.85 to $399.24, and decreased duplication done in his solicitor’s office from $2,904.70 to $2,858.74 and postage charges from $150.00 to $101.88.

The telephone and courier charges were occasioned by the geographical distance between the solicitor for the Plaintiff, his client, the solicitor for the Defendant, the expert witness, Joseph Strung, and the offices of the Registry of this Court. While the Plaintiff should not be penalized for its lack of easy access to these people and facilities, they should not be fully indemnified for them and I tax the amount to be paid by the Defendant at one-third of the amounts claimed, or $292.66 for telephone charges and $133.08 for courier charges.

With respect to the in-house duplication and postage charges claimed, Mr Campbell testified that he noted that at the commencement of the action the rates charged by the solicitor’s office were $0.25 per page for duplication and $0.40 per letter for postage, and that at some point during 1981 the rates increased to $0.35 per page for duplication and $1.00 per letter for postage. Not only do these amounts appear to be arbitrary amounts fixed for billing to a client, but to my mind represent items that are normal office overhead, and both are taxed off in their entirety.

No other items under the heading Disbursements in the Plaintiffs Bill of Costs were contested, and all being properly supported by affidavit, I allow them as presented.

Disbursements are therefore taxed at $7,438.11.

There is, of course, no fault to find with the determination in the first paragraph and I am of the opinion that his approach in the fourth paragraph is equally sound. At present-day postal rates and the cost of photocopying equipment, it is obvious that in a matter of this complexity, these in-house items may run into a substantial sum. Nevertheless, they were not presented as disbursements in the true sense of the word, but rather, as the Taxing Officer has pointed out, at an arbitrary figure unrelated to the cost of a postage stamp or of a page of photocopying paper. The conclusion might have been different had they been identified as actual expenditures, although they have usually been considered to be part of the office overhead which justifies the fee items in a bill of costs. In any event, in the manner in which they were presented, it is my opinion that the Taxing Officer’s disposition was quite correct and they should be disallowed.

In respect to long distance and courier charges, however, I take a different view. It was, I think, appropriate for the Taxing Officer to attempt to express the principle that while the plaintiff should not be penalized for the necessity of these charges, neither should the defendant be required to pay them. Unlike the items for postage and in-house duplication, however, these were disbursements actually incurred and the amount and their relationship to the lawsuit were not questioned. Whatever the location of the office of the solicitors for the plaintiffs, such expenditures are not only necessary but unavoidable in a matter of this duration and while they are substantial amounts, I do not consider them to be disproportionate or unreasonable. I would allow the full sum claimed for telephone charges at $878 and for courier services at $399.24.

An order will go accordingly. Bearing in mind a suggestion of counsel that it might be appropriate for me to fix costs, I will hear counsel on that point after they have had an opportunity to examine these reasons. If counsel can agree, the form of order can be presented for signature and if not, the matter can be spoken to. The plaintiffs should also have their costs of this motion.