Date: 20021008
Docket: T-68-00
Neutral citation: 2002 FCT 1047
BETWEEN:
WESTSHORE TERMINALS LTD.
Applicant
- and -
VANCOUVER PORT AUTHORITY
Respondent
REASONS FOR ORDER
NADON J.
[1] This is a motion by the respondent, the Vancouver Port Authority (the "VPA"), for orders for costs against the applicant, Westshore Terminals Ltd. ("Westshore"). The motion arises from two decisions which I rendered in these proceedings, namely orders on a Rule 312 motion and on a Rule 107 motion[1].
[2] With respect to the Rule 312 motion, I denied Westshore leave to file four affidavits which it sought to introduce in the Rule 107 proceedings. With respect to the Rule 107 motion, I had been asked to answer five questions and I gave answers which were favourable to the VPA. As a result, the VPA now seeks costs in regard to both motions.
[3] Firstly, with respect to the Rule 312 motion, the VPA seeks solicitor and client costs of $95,879.04. In the alternative, it seeks an order for costs, payable forthwith in any event of the cause, on a lump sum basis, in the amount of $75,000. In the further alternative, the VPA seeks an order for costs for the maximum units under Column V, Tariff B, in the amount of $71,046.99.
[4] With respect to the Rule 107 motion, the VPA seeks an order for costs at the highest scale of Column V, Tariff B, in the amount of $28,466.33.
[5] Not surprisingly, Westshore takes a very different position. With respect to the Rule 312 motion, it submits that the VPA is entitled only to its reasonable costs, in accordance with column III of the Tariff. Further, with respect to the cross-examinations on the affidavits which it sought to adduce and on those filed in reply thereto by the VPA, Westshore submits that because counsel for the VPA was obstructive during the course of the cross-examinations, the VPA should receive no costs, but rather that it should pay Westshore's costs.
[6] With respect to the Rule 107 motion, Westshore's position is that there should be no order for costs, since the matter before the Court was one of first impression of a statute on a matter of public importance. Alternatively, Westshore submits that if costs are to be awarded to the VPA, no reasons have been shown to justify a departure from Column III of the Tariff.
[7] I now turn to the Rule 312 motion. I denied Westshore leave to file its affidavits in the Rule 107 proceedings, because I was of the view that they were not relevant. The bill of costs filed by the VPA shows that fees and disbursements, inclusive of the federal Goods and Service Tax, amount to $95,879.04. The VPA seeks an order for costs on a solicitor and client basis for the following reasons (taken from paragraph 32 of its Written Representations):
a) the VPA took the consistent position that the proposed Westshore affidavits were entirely unnecessary to address the Rule 107 application;
b) the affidavits of Westshore and the entire Rule 312 proceedings served to unnecessarily lengthen the duration of the proceedings;
c) Westshore prepared and delivered affidavits that were found to be inadmissible evidence;
d) On September 6, 2001, the VPA delivered an offer to settle to Westshore, providing Westshore with the opportunity to withdraw its affidavits and not incur the substantial costs of preparing and attending at cross-examinations o all of the affidavits; and
e) Westshore took the position before Prothonotary Hargrave at the September 6th pre-hearing conference that any prejudice to the VPA arising from the affidavits, should they be ruled inadmissible, could be dealt with by an appropriate order of costs.
[8] In Amway Corp. v. The Queen, (1990) 2 C.T.C. 339 (F.C.A.), at pages 340-341, Mahoney J.A. made it clear that an award of costs on a solicitor and client basis was exceptional and should only be made when misconduct was shown. Notwithstanding Mr. Kirkham's very able arguments on this point, I am satisfied that there was no misconduct on Westshore's part in the course of the Rule 312 proceedings. Consequently, the VPA is not entitled, in my view, to an award on a solicitor and client basis.
[9] In the alternative, the VPA seeks a lump sum award in the amount of $75,000 or costs at the highest scale of Column V and double costs at that scale after September 6, 2001, on which date the VPA wrote to Westshore, proposing that each side withdraw its affidavits and abandon cross-examinations upon them. The letter concluded as follows:
If this offer is not accepted by Westshore, the cross examinations will proceed. If the VPA's position - that all of the affidavits are inadmissible - is ultimately upheld by the court, we will be applying for an order for costs on a solicitor-client basis, or on the highest scale available, in respect of the preparation of the affidavits, the cross examinations on the affidavits, and the argument on their admissibility, in any event of the cause. On that hearing we intend to file this letter as an exhibit.
[10] There is no doubt that in proper circumstances, this Court can allow costs on a lump sum basis (See Eli Lily & Co. v. Novopharm Ltd., [1998] F.C.J. No. 1343 (T.D.) and AIC Ltd v. Infinity Investment Counsel Ltd., [1998] F.C.J. No. 904 (T.D.)).
[11] Although the issue on the Rule 312 motion was not a complex one, I am satisfied that a considerable amount of work had to be performed during the course of the proceedings which culminated in my Order of October 24, 2001. Both Westshore and the VPA take the position that the other side "misbehaved" during the course of these proceedings. I do not share their views.
[12] After careful consideration of the oral and written submissions made by counsel for Westshore and the VPA, and the factors set out in subsection 400(3) of the Federal Court Rules, 1998, particularly those relating to the result of the proceedings and the amount of work, I have concluded that a lump sum award of $40,000, in lieu of assessed costs, should be made.
[13] I now turn to the Rule 107 motion, in regard to which the VPA seeks costs at the highest scale of Column V of Tariff B, in the amount of $28,466.33. The VPA submits that such an order is fully justified in that:
a) it was entirely successful;
b) the issues at stake were of national importance, as this was the first interpretation of the relevant provisions of the Canada Maritime Act, S.C. 1998, ch. 10;
c) the result of the proceedings is of extreme relevance to the parties in that Westshore was seeking to have its rent reduced by approximately $12 million per year for a possible period of 20 years.
[14] For its part, Westshore takes the position that the VPA's success on the motion is not a basis for departing from Column III of Tariff B. Furthermore, Westshore submits that since the matter was one of first impression of a statute and was also a matter of public importance, no costs should be ordered.
[15] In support of the latter submission, Westshore referred me to a number of decisions, and in particular to the decision of the Federal Court of Appeal in Swan v. Canada (Attorney General), [1998] F.C.J. No. 1555 (F.C.A.), where the court allowed an appeal relating to the valuation of pension benefits without costs on the ground that the issue before the court was one of of first impression.
[16] Even though the matter before me on the Rule 107 motion was one of first impression of a statute and also a matter of public importance, I have not been convinced that I ought to deprive the VPA of its costs. However, the fact that the matter was one of first impression and of public importance is an important consideration, in my view, in making an order for costs on the Rule 107 motion. In the circumstances, it is my view that VPA's costs should be assessed in accordance with Column III of Tariff B, and the taxing officer shall be so directed.
[17] The VPA shall have its costs on the motion before me and those costs shall be taxed in accordance with Column III of Tariff B.
"M. Nadon"
JUDGE
O T T A W A, Ontario
October 8, 2002
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: T-68-00
STYLE OF CAUSE: Westshore Terminals Ltd. v. Vancouver Port Authority
DATE OF HEARING: June 14, 2002
PLACE OF HEARING: Toronto, Ontario.
REASONS FOR JUDGMENT BY: The Honourable Mr. Justice Nadon
DATED: October 8, 2002
APPEARANCES BY:
Mr. Bruce Carr-Harris For the Applicant
Mr. Peter A. Juk
Mr. D. Barry Kirkham, Q.C. For the Respondent
SOLICITORS OF RECORD:
Borden Ladner Gervais LLP For the Applicant
Barristers and Solicitors
Ottawa, Ontario
Blake, Cassels & Craydon LLP For the Applicant
Barristers and Solicitors
Vancouver, British Columbia
Owen Bird For the Respondent
Vancouver, British Columbia
[1] Rules 107 and 312 read as follows:
107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately.
(2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those applicable to examinations for discovery and the discovery of documents.
312. With leave of the Court, a party may
(a) File affidavits additional to those provided for in rules 306 and 307;
(b) Conduct cross-examinations on affidavits additional to those provided in rule 308; and
(c) File a supplementary record.
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