The issue raised in this appeal was whether, in the exercise of the discretion to award costs conferred by s. 73 of the National Transportation Act, the Canadian Radio‑television and Telecommunications Commission was bound by the principle of indemnification as it is applied in the award of costs by the courts. Bell Canada had challenged the taxation order on the ground that, because of the arrangements for the remuneration of counsel who represented the interveners and for the payment of other expenses of the interventions, the taxation order had the effect of awarding costs for expenses that were not actually incurred by the interveners and thus violated the principle of indemnification or compensation applicable to the award of legal costs by courts. Respondent Consumers' Association of Canada received government funding for participation in a variety of regulatory proceedings and its counsel in the rate hearing was on a "first retainer" with it. Counsel for the other respondents was on retainer from and disbursements made in connection with the hearing were paid by the Public Interest Advocacy Centre.
Held: The appeal should be dismissed.
The word "costs" in s. 73 must carry the same general connotation as legal costs. It cannot be construed to mean something quite different from or foreign to that general sense of the word, such as an obligation to contribute to the administrative costs of a tribunal or the grant of a subsidy to a participant in proceedings without regard to what may reasonably be considered to be the expense incurred for such participation. The word "costs", therefore, must carry the general connotation of being for the purpose of indemnification or compensation. In view, however, of the nature of the proceedings before the Commission and the financial arrangements of public interest interveners, the discretion conferred on the Commission by s. 73 must include the right to take a broad view of the application of the principle of indemnification or compensation. The Commission should not be bound by the strict view of whether an expense has been actually incurred that is applicable in the courts. It should, for example, be able to fix the expense which may be reasonably attributed to a particular participation by a public interest intervener as being deemed to have been incurred, whether or not as a result of the particular means by which the intervention has been financed there has been any actual out‑of‑pocket expense. The Commission did not reject the general concept of indemnification or compensation. Rather, it rejected the contention that in its application of the general principle of indemnification or compensation it should be governed by the authorities reflecting the application of that principle in the courts. The Commission, in doing so, did not err in law, so long as it adopted a reasonable approach to what should be deemed to be the expenses incurred for the interventions on behalf of the respondents.
Cases Cited
Ryan v. McGregor (1925), 58 O.L.R. 213; Bell Canada (Re) and Telecom. Decision CRTC 79‑5, [1982] 2 F.C. 681; Re Eastwood, [1974] 3 All E.R. 603; Armand v. Carr, [1927] S.C.R. 348; Northern Engineering & Dev. Co. v. Philip, [1930] 3 D.L.R. 387; Re Green, Michaels & Associates Ltd. and Public Utilities Board (1979), 94 D.L.R. (3d) 641; Newfoundland & Labrador Hydro v. Newfoundland & Labrador Federation of Municipalities (1979), 65 A.P.R. 317, 24 Nfld. & P.E.I.R. 317, referred to.
Statutes and Regulations Cited
CRTC Telecommunications Rules of Procedure, SOR/79‑554, s. 44(1) (6).
Electrical Power Control Act, 1977 (Nfld.), c. 92, s. 14(1).
Municipal and Public Utility Board Act, 1926 (Man.), c. 33, s. 55.
National Transportation Act, R.S.C. 1970, c. N‑17, ss. 64(2), 73(1), (2), (3).
Public Utilities Board Act, R.S.A. 1970, c. 302, s. 60.
Railway Act, R.S.C. 1970, c. R‑2, s. 2(1).
APPEAL from a judgment of the Federal Court of Appeal (1983), 147 D.L.R. (3d) 37, 48 N.R. 197, dismissing an appeal from a judgment of the Canadian Radio‑television and Telecommunications Commission dismissing an appeal from a taxation order. Appeal dismissed.
Bernard Courtois and David Kidd, for the appellant.
K. J. MacDonald and John S. Tyhurst, for the respondent the Consumers' Association of Canada.
J. J. Robinette, Q.C., and Max Wolpert, for the respondent the National Anti‑Poverty Organization.
Gavin MacKenzie, Gregory van Koughnett and Lisa de Wilde, for the respondent the Canadian Radio‑television and Telecommunications Commission.
The judgment of the Court was delivered by
1. Le Dain J.‑‑ The question raised by this appeal is whether, in the exercise of the discretion to award costs conferred by s. 73 of the National Transportation Act, R.S.C. 1970, c. N‑17, the Canadian Radio‑television and Telecommunications Commission is bound by the principle of indemnification as it is applied in the award of costs by the courts.
2. The appeal is by leave of this Court from the judgment of the Federal Court of Appeal on March 31, 1983 [ [1984] 1 F.C. 79] dismissing an appeal, pursuant to s. 64(2) of the Act, from Telecom Decision CRTC 81‑5 of March 9, 1981, in which the Commission dismissed an appeal from Taxation Order 1980‑1 of February 19, 1980. The order taxed the costs awarded by the Commission in Telecom Decision CRTC 78‑7 of August 10, 1978 to the respondents as interveners in the hearing of an application by the appellant Bell Canada for a general rate increase.
I
3. Bell Canada challenged the taxation order on the ground that because of the arrangements for the remuneration of counsel who represented the interveners and for the payment of other expenses of the interventions, the taxation order had the effect of awarding costs for expenses that were not actually incurred by the interveners and thus violated the principle of indemnification or compensation applicable to the award of legal costs by courts.
4. In issue is the award of counsel fees to the respondent Consumers' Association of Canada ("CAC"), which received government funding for participation in a variety of regulatory proceedings and whose counsel in the rate hearing was on a "first retainer" with it; and the award of costs for counsel fees and disbursements to the respondents National Anti‑Poverty Organization, Inuit Tapirisat of Canada, Taqramiut Nipingat Inc., and Mr. S. A. Rowan (hereinafter collectively referred to as "NAPO et al."), who were represented in the rate hearing by Mr. Andrew Roman, counsel on retainer from the Public Interest Advocacy Centre ("PIAC"), which also paid the disbursements incurred in connection with the intervention of NAPO et al. It was the contention of Bell Canada that because of CAC's government funding and its retainer arrangement with its counsel it was not put to any additional expense by its counsel's participation in the rate hearing. With respect to the costs awarded to NAPO et al., the essential contention was that the costs had not been incurred by NAPO et al. but had been incurred by PIAC, to which NAPO et al. had no obligation of payment or reimbursement.
5. The costs were allowed by the taxing officer and confirmed by the Commission on the general ground that they fell within the criteria adopted by the Commission in the exercise of its discretion to award costs to interveners in rate hearings in order to encourage informed public participation in such hearings.
6. The Federal Court of Appeal unanimously held that the Commission had not erred in law in dismissing the appeal from the taxation order, but the members of the panel differed in their reasons. The majority (Ryan J. and Kelly D.J.) held that the principle of indemnification or compensation applied to an award of costs by the Commission, but that the record did not establish that there had been a violation of that principle in the costs awarded to the respondents. Urie J. held that while the principle of indemnification or compensation was a relevant consideration in the exercise of the Commission's discretion to award costs, the Commission was not limited by that principle but could award costs on a broader basis to ensure effective participation in its hearings. He held that the court should not interfere with the exercise of the Commission's discretion to award costs in this case because it had not been exercised on wrong principles.
II
7. To understand the principles, as applied to the facts of this case, on which the Commission exercised its discretion, it is necessary to refer at some length to the reasons of the Commission and the taxing officer.
8. In its Telecom Decision CRTC 78‑4 of May 23, 1978 the Commission stated that one of the objectives of its practices and procedures was to "increase the capacity of interveners to participate at public hearings in an informed way" and in the course of a discussion of possible forms of financial assistance to interveners it made the following statement of principle with respect to the award of costs to them:
In the case of rate hearings, the Commission has concluded that costs may be awarded against an applicant, when the intervener meets the criteria set out in s. 52 of the Draft Rules, and subject to the circumstances of each case. These criteria were developed following a consideration of the factors used by the Alberta Public Utilities Board and the Ontario Energy Board, two agencies which have adopted a similar practice. Costs will only be available to interveners who have participated in a responsible way, and have contributed to a better understanding of the issues by the Commission. As noted above, costs will not be available to interveners who already have funding from government or other sources that would in the Commission's opinion enable them to participate in the case.
9. The criteria referred to in the above passage were set out in s. 52(1) of the Draft CRTC Telecommunications Rules of Procedure, published at the same time as Decision 78‑4, as follows:
52.(1) In any proceeding under this Part, the Commission may award costs against the applicant to any intervener who
(a) has a substantial interest in the outcome of the proceeding, or represents the interests of a substantial number or class of subscribers,
(b) has participated in a responsible way,
(c) has contributed to a better understanding of the issues by the Commission, and
(d) does not have sufficient financial resources available to enable it to prosecute its interest adequately, having regard to the financial implications of the application for the intervener, or, where the intervener represents the interests of a group or class of subscribers, for each member thereof, and the intervener requires the assistance provided by costs to do so.
10. Subsection 52(5) of the Draft Rules should also be noted:
52. ...
(5) Costs awarded under this section shall be taxed by the General Counsel of the Commission or by such officer as may be appointed by the Commission, and shall not exceed those necessarily and reasonably incurred by the intervener in connection with its intervention and, where the Commission has prescribed a scale of costs, shall not exceed the amounts so prescribed.
11. In its Telecom Decision CRTC 78‑7 of August 10, 1978 the Commission made the following general statement with respect to the award of costs to the interveners in the Bell Canada rate hearing:
The Commission has decided to award costs to a number of interveners, as set out in detail below. In each case, the costs are to be paid by the applicant, as taxed by the General Counsel for the Commission, and may be included by the applicant as part of its expenses for regulatory purposes. At the hearing, the question arose as to whether certain interveners had been awarded government funding, specifically, although not necessarily entirely, for the purpose of intervention in this rate case. In his taxation, General Counsel will take these forms of funding into account in the application of the Commission's principles as noted in Decision 78‑4 and Section 52(1)(d) of the Draft Rules.
12. The award of costs to CAC in Telecom Decision 78‑7 was originally in the following terms:
2. Awards
(a) The Consumers' Association of Canada
In the Commission's view, the Consumers' Association of Canada represented not only the interests of the Association's membership but also those of Bell Canada subscribers generally. The C.A.C., through its counsel, Mr. G. Kane, and its expert witness, Dr. Gordon, contributed to a better understanding of a number of relevant issues including that of the relationship between Bell Canada and its subsidiaries.
The Commission considers that participation in regulatory matters affecting its membership is a normal function of an association such as the C.A.C., and that a portion of its membership fees and annual budget can be deemed to be directed towards this participation. Accordingly, the Commission does not award costs to the Association for its administrative and routine expenses, including those related to the appearance of its counsel, a full‑time employee of the Association. The Commission does however, subject to written confirmation from the C.A.C. that it is formally applying for costs, award costs to the C.A.C. in respect of its expenses associated with Dr. Gordon's appearance.
13. By Telecom Decision CRTC 80‑1 of January 4, 1980 the Commission amended its award of costs to CAC by removing the limitation in the second paragraph above for reasons indicated as follows:
Uncontested affidavit evidence submitted by the CAC established that: (a) no portion of the membership fees of this Association are allocated to participation in rate hearings; and (b) counsel to the CAC is not a full time employee of the Association. These facts have convinced the Commission that the wording employed in the award of costs to the CAC was inappropriately narrow in scope.
Therefore, the second paragraph on page 108 of Decision 78‑7, 4 C.R.T. 359, cited above, is deleted and replaced with the following: "The Commission accordingly awards costs to the CAC."
14. The award of costs to NAPO et al. in Telecom Decision 78‑7 was in the following terms:
2. Awards
...
(e) The National Anti‑Poverty Organization, Inuit Tapirisat of Canada, Taqramiut Nipingat Inc. and Mr. S.A. Rowan
Through their counsel, Mr. A.J. Roman, NAPO et al represented a broad spectrum of subscriber interests and made an important and substantial contribution not only to the Commission's understanding of the relevant issues in the present case, but also to the fulfillment of the Commission's objectives as set forth in Decision 78‑4.
In the Commission's view also, the cross‑examination by Mr. Roman of a number of the Company's witnesses was clearly aided by the preparatory work performed by his expert witnesses.
The Commission accordingly awards costs to NAPO et al (except for ACCQ which did not request costs).
15. In its Telecom Decision 80‑1 reviewing the above awards, the Commission indicated that future awards of costs to interveners would be governed by s. 44 of the CRTC Telecommunications Rules of Procedure, SOR/79‑554, which were adopted by Telecom Order CRTC 79‑297 of July 20, 1979. Subsections (1) and (6) of s. 44 of the adopted rules are as follows:
44. (1) In any proceeding under this Part, the Commission may award costs to be paid by the regulated company to any intervener who
(a) has, or is representative of a group or class of subscribers that has, an interest in the outcome of the proceeding of such a nature that the intervener or group or class of subscribers will receive a benefit or suffer a detriment as a result of the order or decision resulting from the proceeding;
(b) has participated in a responsible way; and
(c) has contributed to a better understanding of the issues by the Commission.
...
(6) Costs awarded under this section
(a) shall be taxed by the General Counsel of the Commission or by such officer as may be appointed by the Commission;
(b) shall not exceed those necessarily and reasonably incurred by the intervener in connection with its intervention; and
(c) where the Commission has prescribed a scale of costs based on prevailing market rates, shall not exceed the amounts so prescribed.
16. In his Taxation Order 1980‑1, the taxing officer, Mr. David E. Osborn, considered whether the Commission's direction to take government funding into consideration included government funding for general purposes as well as government funding specifically earmarked for the particular rate hearing. After discussion of this question and consideration of Bell Canada's submissions against the award of costs to CAC and NAPO et al. based on the government funding received by CAC and PIAC, the relationship between CAC and its counsel, and the fact that the costs incurred in the intervention of NAPO et al. were paid by PIAC, the taxing officer concluded as follows:
I have concluded, after a consideration of all the facts and arguments, that the interpretation submitted on behalf of Bell Canada cannot be sustained. To do so would, in ultimate practical effect, weaken or destroy the principle which the Commission set out to accomplish in Decision 78‑4. In my opinion, the Commission's position in 78‑4 and the Draft Rules can be summarized as follows: informed participation in public hearings should be encouraged; the awarding of costs is a necessary, or at least desirable, method of so doing; the costs awarded shall not exceed those necessarily and reasonably incurred by the intervener and, more particularly, those parties who have received some form of public funding to participate before the CRTC should not receive a double recovery by means of an award of costs.
Some light is perhaps thrown on the view which he took of the application of the principle of indemnification by the following passage in his order:
I have reviewed the cases referred to me by counsel for all parties, but I have not found conclusive authority therein for purposes of the present case. Most of them deal with costs in a traditional legal context, and assume a traditional relationship between counsel, client and tribunal. Regulatory agencies and public interest interveners pose different problems and, while legal cases can be a useful guide in the area of costs, particularly with respect to quantum, the approach to the problems in this case cannot, in my opinion, be circumscribed by a strict application of traditional legal principles. Therefore, I have interpreted the Commission's decision in light of the knowledge that public participation is a fragile concept, more talked about than realized, that public interest advocacy groups offer a different, but no less valuable, approach to participation than does the traditional solicitor‑client form, and that a restrictive interpretation of a costs award by the officer responsible for implementing it would serve no useful public purpose.
17. The taxing officer acted on certain assumptions or findings of fact concerning the nature of the government funding received by CAC and PIAC and the understanding between NAPO et al. and PIAC concerning payment or reimbursement of costs for counsel fees and disbursements. He accepted the statements of counsel that CAC and PIAC had received government funding for the general purpose of participation in regulatory proceedings but that none of it was specifically ear‑marked for participation in the Bell Canada rate hearing. With respect to the obligation, if any, of NAPO et al. to pay for the services of Mr. Roman or to reimburse PIAC for the cost of such services and the disbursements made on behalf of NAPO et al., he expressed the following conclusion:
It is clear that there was never any obligation flowing from NAPO et al to either PIAC or Mr. Roman for their services. If the subject of costs was ever discussed between counsel and these interveners, the understanding was merely that if costs should happen to be awarded, they would be given by the interveners to the PIAC. This understanding is reflected in the terms of reference of the PIAC. According to Mr. Roman, any such bill, in the absence of an award of costs, would simply have had to be written off as an uncollectible debt, a practice which he submitted would accomplish nothing and would not be conducive to good client relations.
18. In the result, the taxing officer concluded that the disputed allowance of counsel fees to CAC and counsel fees and disbursements to NAPO et al. fell within the criteria established by the Commission for the award and taxation of costs to interveners.
19. In its Telecom Decision 81‑5 dismissing the appeal from Taxation Order 1980‑1, after reviewing the principles laid down in its previous decisions, the taxing officer's reasons and Bell Canada's submissions with respect to the effect that should be given to the government funding of CAC and PIAC and the principle of indemnification, the Commission said:
The Commission considers that the active participation of established organizations such as CAC and NAPO et al in regulatory proceedings is desirable in view of their continuing interest and knowledge base in the field. In the Commission's view, the adoption of Bell's argument concerning double recovery would in effect mean that only ad hoc organizations could expect to obtain awards of costs from the Commission. Such organizations would not likely have the base for informed participation upon which established organizations such as CAC and NAPO et al can build their specific interventions. Such organizations are called upon to intervene in a number of regulatory proceedings and the Commission has concluded that the taxing officer did not err in principle when he interpreted the Commission's direction to take into account government funding as a direction to deduct from awards of costs only funds specifically designated for the 1978 Bell rate case.
...
In the Commission's view, the application of the principle of indemnification upon which Bell relies would not be appropriate in regulatory proceedings before it. In the Commission's opinion, the proper purpose of such awards is the encouragement of informed public participation in Commission proceedings. It would inhibit public interest groups from developing and maintaining expertise in regulatory matters if, in order to be entitled to costs, they had to retain and instruct legal counsel in the manner appropriate to proceedings before the courts in civil matters. On the other hand, no useful purpose would be served by requiring public interest groups artificially to arrange their affairs, by means, for instance, of forgivable debts or bonus accounts, in order to avoid a restrictive interpretation of the term "costs".
The Commission concluded:
The Commission therefore finds that the taxing officer did not err in principle in awarding counsel fees to CAC and costs to NAPO et al.
III
20. The issue is whether the award and taxation of costs for counsel fees to CAC and for counsel fees and disbursements to NAPO et al. on the basis and in the circumstances indicated in the decisions of the Commission and the taxation order fell within the proper exercise of the discretion with respect to costs conferred on the Commission by s. 73 of the National Transportation Act as follows:
73. (1) The costs of and incidental to any proceeding before the Commission, except as herein otherwise provided, are in the discretion of the Commission, and may be fixed in any case at a sum certain, or may be taxed.
(2) The Commission may order by whom and to whom any costs are to be paid, and by whom they are to be taxed and allowed.
(3) The Commission may prescribe a scale under which such costs shall be taxed.
21. By section 43 of the Act the word "costs" in s. 73 has the same meaning as it has in the Railway Act, R.S.C. 1970, c. R‑2, where it is defined in s. 2(1) as follows:
2. (1) In this Act, and in any Special Act as hereinafter defined in so far as this Act applies,
...
"costs" includes fees, counsel fees and expenses;
22. Counsel for the appellant contended that the principle on which that discretion must be exercised is that "costs are an indemnity to a party for the expenses to which the party has been put as a result of the litigation or proceeding in question". As authority for the principle of indemnification he cited, among others, the case of Ryan v. McGregor (1925), 58 O.L.R. 213 (C.A.), in which Middleton J.A. said at p. 216:
The fundamental principle is thus clearly stated by Baron Bramwell in the case of Harold v. Smith (1860), 5 H. & N. 381, 385: "Costs as between party and party are given by the law as an indemnity to the person entitled to them: they are not imposed as a punishment on the party who pays them, nor given as a bonus to the party who receives them. Therefore, if the extent of the damnification can be found out, the extent to which costs ought to be allowed is also ascertained."
23. The question is whether the principle of indemnification, clearly applicable to the award of costs by the courts, should apply, at least in some form, to the award of costs by the Commission, having regard to the special nature and requirements of its proceedings and the financial arrangements of interveners. On this question, as I have indicated, the members of the Federal Court of Appeal differed. After referring to the statement of Pratte J. in Re Bell Canada and Telecom. Decision CRTC 79‑5, [1982] 2 F.C. 681, at pp. 687‑88 (to which further reference will be made) that the word "costs" in s. 73 of the National Transportation Act must be given its "normal legal meaning according to which the costs of a proceeding are the costs incurred by the parties or participants in that proceeding and do not include the expenses of the tribunal before which the proceedings are brought", Ryan J., with whom Kelly D.J. concurred, concluded as follows concerning the application of the principle of indemnification:
It does not, as I see it, follow that in assessing costs in a rate proceeding, the Commission is bound to follow precisely the same rules as would a taxing master assessing costs in litigation in the courts. Allowances would have to be made for differences in the purposes of the two quite different processes and in the practices and procedures followed in each. I am of opinion, however, that the term "costs", as used in section 73, does carry with it, as an essential aspect, the element of compensation or indemnification for expenses incurred in a proceeding. The Commission would thus have been in error if, in its Reasons for dismissing the appeal to it, it meant to reject the proposition that indemnification is an essential purpose in an award of costs under section 73 of the Act.
24. Ryan J. found, however, applying Re Eastwood, [1974] 3 All E.R. 603 (C.A.), respecting the taxation of costs for the services of a salaried solicitor and Armand v. Carr, [1927] S.C.R. 348, respecting the entitlement of an insured to costs for solicitors instructed by the insurer to act for him, in the absence of an agreement excluding his liability for such costs, that the record did not establish a violation of the principle of indemnification as applied by the courts in the award of counsel fees to CAC and counsel fees and disbursements to NAPO et al.
25. On the application of the principle of indemnification to the award of costs by the Commission pursuant to s. 73 of the Act, Urie J. expressed himself as follows:
The principal issue in this appeal is whether the meaning to be ascribed to the word ["costs"] as it appears in the Act should be the meaning given it in ordinary judicial proceedings in which, in general terms, costs are awarded to indemnify or compensate a party for the actual expenses to which he has been put by the litigation in which he has been involved and in which he has been adjudged to have been a successful party. In my opinion, this is not the interpretation of the word which must necessarily be given in proceedings before regulatory tribunals.
I use the word "necessarily" because I have no doubt that an element which may be considered by the tribunal in determining the entitlement of a party appearing before it to costs, is whether or not the party has incurred liability for expenses for the purpose of its appearance before the tribunal. It is not, however, in my view, either the only or a necessary element. As has been said on other occasions, the proceedings before the Commission in a rate fixing hearing are not adversarial in nature; there is no lis inter partes. The purpose of a hearing in such a proceeding is to obtain meaningful reaction from concerned and interested parties affected by the rate fixing, whether adversely or positively. Such parties may or may not have incurred actual, measurable expenses, such as counsel fees, in providing input to the proceedings and yet have contributed in a very real fashion to a better understanding by the Commission of some of the issues involved in the proposed rate structure. Such contributions to a better understanding of the issues should, as I see it, be encouraged and rewarded. If this is so, obviously such encouragement cannot be based solely on indemnification for actual costs incurred. It is at this point that the Commission's discretion as to who is deserving of an award of costs, as to the elements to be considered and the principles to be applied in the award, is exercised in any of the ways contemplated by section 73.
26. Courts of appeal in three provinces have held that in the exercise of the discretion to award costs under provisions in essentially the same terms as s. 73 of the National Transportation Act regulatory tribunals were not bound by the principles and rules governing the award of costs in the courts, although the application of the principle of indemnification would not appear to have been directly in issue in these cases. In Northern Engineering & Dev. Co. v. Philip, [1930] 3 D.L.R. 387, a majority of the Manitoba Court of Appeal (Prendergast C.J.M., Trueman and Dennistoun JJ.A.) held that whether a party who had successfully opposed an application before the Municipal and Public Utility Board to vary a building restriction was entitled to costs was not governed under s. 55 of The Municipal and Public Utility Board Act, 1926 (Man.), c. 33, which was in essentially the same terms as s. 73 of the National Transportation Act, by the principles applicable to the award of costs by the courts. Trueman J.A., speaking for the majority, said at p. 390:
Proceedings before the board belong to a different category and are necessarily dealt with from a point of view that has no place in litigation between parties. The status and risks of suitors in an action are fixed by practice and authority. No rule has been laid down by the board that persons appearing by counsel before the board shall, subject to the board's discretion, have costs in event of their success or pay costs in event of their failure. Whether such a rule should be adopted or not is a matter wholly for the board. In the meantime, the matter is left by s. 55 in the board's absolute discretion, untrammelled by the principles which necessarily control the discretion of the Court or a Judge. See Local Government Bd. v. Arlidge [1915] A.C. 120.
Robson J.A., dissenting, with whom Fullerton J.A. concurred, said with reference to the word "discretion" in s. 55 of the Act: "I construe this as meaning in the same sense as costs are in the discretion of a Court. The discretion must be exercised in accordance with legal principle."
27. In Re Green, Michaels & Associates Ltd. and Public Utilities Board (1979), 94 D.L.R. (3d) 641, interveners in a rate hearing before the Public Utilities Board of Alberta attacked reductions by the Board in their bills of costs on the ground that the Board had improperly exercised its discretion with respect to costs under s. 60 of The Public Utilities Board Act, R.S.A. 1970, c. 302, which is in essentially the same terms as s. 73 of the National Transportation Act. In the course of his analysis of the issues Clement J.A., who delivered the unanimous judgment of the Alberta Court of Appeal, said at pp. 655‑56 (a passage which was quoted with approval by Urie J. in the case at bar):
In the factum of the appellants a number of cases were noted dealing with the discretion exercisable by Courts in the matter of costs of litigation, as well as statements propounded in texts on the subject. I do not find them sufficiently appropriate to warrant discussion. Such costs are influenced by Rules of Court, which in some cases provide block tariffs, and in any event are directed to lis inter partes. We are here concerned with the costs of public hearings on a matter of public interest. There is no underlying similarity between the two procedures, or their purposes, to enable the principles underlying costs in litigation between parties to be necessarily applied to public hearings on public concerns. In the latter case the whole of the circumstances are to be taken into account, not merely the position of the litigant who has incurred expense in the vindication of a right.
28. In Newfoundland & Labrador Hydro v. Newfoundland & Labrador Federation of Municipalities (1979), 65 A.P.R. 317, 24 Nfld. & P.E.I.R. 317, the Board of Commissioners of Public Utilities of Newfoundland awarded costs in a fixed sum to the Newfoundland & Labrador Federation of Municipalities as interveners in the hearing of an application by Newfoundland & Labrador Hydro for an increase in rates. Hydro attacked the award of costs on the ground, among others, that the amount was excessive and that the costs should have been taxed on a party and party basis. Section 14(1) of The Electrical Power Control Act, 1977 (Nfld.), c. 92, conferred a discretion on the Board with respect to costs in essentially the same terms as s. 73 of the National Transportation Act, and like it, expressly conferred the power to award costs in a fixed sum. In the course of rejecting Hydro's contention, Furlong C.J.N. said at p. 320: "I can find no support for bringing in the Rules as to costs in this court to proceedings before independent bodies." Gushue J.A., with whom Morgan J.A. concurred, said at p. 425: "The manner in which the costs are arrived at, and awarded, is a matter strictly within the discretion and competence of the Board, and this Court has no jurisdiction to interfere with that discretion, unless of course improperly exercised. The fact that a litigant in a court proceeding is subject to various rules relating to costs is of no relevance here."
29. In Re Bell Canada, supra, which was considered by both Ryan and Urie JJ. in the case at bar, the issue was whether the Commission could, in the exercise of the authority conferred by s. 73 of the National Transportation Act, compel Bell Canada and British Columbia Telephone Company to pay the costs of an independent study ordered by the Commission in preparation for a hearing to consider applications for rate increases by these companies. The Federal Court of Appeal held that it could not. Pratte J., with whom Ryan J. and Hyde D.J. concurred, said at pp. 687‑88:
In my view, the word "costs" in section 73 of the National Transportation Act must, as argued by the appellant, be given its normal legal meaning according to which the costs of a proceeding are the costs incurred by the parties or participants in that proceeding and do not include the expenses of the tribunal before which the proceedings are brought. I do not see any reason to give it a wider meaning. I am confirmed in this opinion by the fact that much of the language used in section 73 is normally used in association with court costs. I have in mind the phrase "costs of and incidental to all proceedings" (which is found in section 50 of the English Supreme Court of Judicature (Consolidation) Act, 1925, 15 & 16 Geo. 5, c. 49), the reference to the possibility that costs be fixed at a sum certain or taxed and that the Commission prescribe a "scale" (in the French text: "tarif") of costs. If another interpretation were to prevail, the Commission would have the right to force the utility companies which the law obliges to appear before it to defray part of its expenses. This, in my opinion, would be contrary to the general policy of the National Transportation Act following which the expenses of the Commission are to be paid out of public funds rather than by the utility companies that are subject to its jurisdiction.
30. I would agree that the word "costs" in s. 73 must carry the same general connotation as legal costs. It cannot be construed to mean something quite different from or foreign to that general sense of the word, such as an obligation to contribute to the administrative costs of a tribunal or the grant of a subsidy to a participant in proceedings without regard to what may reasonably be considered to be the expense incurred for such participation. Thus I am of the opinion that the word "costs" must carry the general connotation of being for the purpose of indemnification or compensation. In view, however, of the nature of the proceedings before the Commission and the financial arrangements of public interest interveners, the discretion conferred on the Commission by s. 73 must, in my opinion, include the right to take a broad view of the application of the principle of indemnification or compensation. The Commission therefore should not be bound by the strict view of whether expense has been actually incurred that is applicable in the courts. It should, for example, be able to fix the expense which may be reasonably attributed to a particular participation by a public interest intervener as being deemed to have been incurred, whether or not as a result of the particular means by which the intervention has been financed there has been any actual out‑of‑pocket expense. This is what I understand the Commission to have done in this case. It did not reject the general concept of indemnification or compensation, as indicated by the provision in its draft and adopted rules that the costs awarded to an intervener "shall not exceed those necessarily and reasonably incurred by the intervener in connection with its intervention"‑‑a requirement included by the taxing officer in his summary of the principles which should govern him as a result of the general approach to the award of costs to interveners adopted by the Commission. What the Commission did reject, as I read its reasons and those of the taxing officer, was the contention that in its application of the general principle of indemnification or compensation it should be governed by the authorities reflecting the application of that principle in the courts. In doing so, it did not in my opinion err in law, so long as it adopted a reasonable approach, as it appears to have done, to what should be deemed to be the expenses incurred for the interventions on behalf of CAC and NAPO et al. I would accordingly dismiss the appeal.
Appeal dismissed.
Solicitor for the appellant: E. E. Saunders, Hull.
Solicitor for the respondent the Consumers' Association of Canada: K. J. MacDonald, Ottawa.
Solicitor for the respondent the National Anti‑Poverty Organization: M. Wolpert, Ottawa.
Solicitors for the respondent the Canadian Radio‑television and Telecommunications Commission: Campbell, Godfrey & Lewtas, Toronto.
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