June 19, 2002, E.C.B. No. 26/94/222

REASONS FOR DECISION

1.  INTRODUCTION

[1] The claimant seeks a review of his bills of costs and an order for advance payment of costs pursuant to section 48 of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act"). I was delegated the power to conduct this review by the chair pursuant to section 48(4) of the Act.

[2] The Notice of Motion filed with the board resets the respondent's earlier April 30, 1997 application, as subsequently amended and adjourned, for a review of the following Interwest Property Services (1991) Ltd. invoices:

Invoice # 2477 dated March 25, 1997 for $19,024.99,
Invoice dated April 23, 1997 for $10,850.01, and
Invoice dated December 9, 1997 for $5,055.22.

[3] The parties are agreed for the purposes of this hearing that $8,000 should be credited as having been paid by the respondent in respect of the amounts invoiced by Interwest. The claimant also says that interest should be awarded on the unpaid amounts invoiced.

[4] The Notice of Motion also seeks a review of seven accounts for legal services rendered to the claimant by the firm of Worthington, Simm & David. At the hearing counsel for the claimant advised that payment had been received in respect of the first two legal accounts dated December 15, 1994 and March 29, 1995. The legal accounts still at issue are:

Account dated July 7, 1995 for $ 310.94,
Account dated March 23, 1997 for $2473.13,
Account dated April 27, 1997 for $6,073.52,
Account dated January 6, 1998 for $2,621.18, and
Account dated February 4, 1998 for $125.72.

Counsel identified the principal issue with respect to the accounts for legal services as being the hourly rates charged in respect of Mr. Jeffrey Hayes' time.

[5] The claimant also seeks reasonable costs of preparation for and attendance at this hearing.

2.  BACKGROUND

[6] The compensation claim arises from the expropriation in July 1994 of the claimant's fee simple interest in the whole of the property located at 33095 Bevan Avenue, Abbotsford for the stated purpose of "park and road".

[7] At the claimant's request an inquiry was held pursuant to section 14 of the Act. As described in the Inquiry Report dated March 29, 1995, the subject property is a lakefront parcel of residential land located along the south shore of Mill Lake. It is a long, thin, rectangular parcel with an east-west frontage of about 75 feet and is approximately 1.3 acres with a little more than one-quarter of the northern end of the property underwater.

[8] The history surrounding the expropriation is set out in the Inquiry Report. In summary, the respondent municipality commissioned a report in 1987 to look at the potential of further developing lands around Mill Lake as a park. The 1987 report recommended development of a large park area at the south end of the lake which would have included the entire subject property as part of the recommended park expansion. It also recommended that the subject property be included in the first of three acquisition phases. The plan was submitted to but not adopted by the municipal council in June 1987. Instead, the municipal property manager was instructed to acquire the subject property, which at that time was being offered for sale by the owner previous to the claimant. The municipal council also approved in principle the acquisition of land contained in the first phase of the report although it did not change the zoning of these properties to parkland, proposing instead to answer inquiries about the development potential of these lands with a response that the municipality intended eventually to acquire all the lands for park purposes. The municipality also released the report to the public but without further statement or resolution that it was intending to proceed with the development of a park in accordance with the plan recommended in the report. Following that the municipality acquired 22 properties for the purposes of park development.

[9] On April 20, 1995, the respondent municipality made an advance payment to the claimant of $325,000 pursuant to section 20(1) of the Act on account of the market value of the lands taken.

[10] In his Form A Application for Determination of Compensation filed November 2, 1995, the claimant sought compensation for the market value of the lands taken pursuant to section 31 of the Act in the amount of $450,000 or $125,000 more than the advance payment made by the municipality. Disturbance damages were also claimed pursuant to sections 31 and 34 of the Act in the amounts of $5,000 for moving expenses and $22,500 for occupier's allowance.

3.  ISSUES

[11] Under section 48(5) my task is to assess the reasonableness of the bills submitted after taking into account all relevant circumstances. Since the bills being reviewed all predate the implementation of the Tariff of Costs Regulation, B.C. Reg. 189/99 (the "Tariff"), the costs payable pursuant to section 48(6) and section 45(7) are the actual reasonable legal, appraisal and other costs.

[12] The issues for determination are:

1.	Are the appraisal fees and disbursements set out in the three Interwest invoices reasonable?
2.	Is Interest entitled to interest on outstanding amounts and, if so, at what rate and from what date?
3.	Are the legal fees and disbursements set forth in the five legal accounts remaining unpaid reasonable, in particular, what is the reasonable hourly rate chargeable in respect of the legal services provided by Mr. Hayes from October 1, 1995?
4.	Is the claimant entitled to the reasonable costs of his participation at this hearing?

4.  THE INTERWEST ACCOUNTS

4.1 The Invoices

[13] The March 25, 1997 Interwest invoice for $19,024.99 concerns the preparation of the appraisal report respecting the lands taken. It includes fees for the time of Mr. D. Grant at $170 per hour, Mr. B. Davies at $135 per hour, Mr. C. Chan at $60 per hour and Mr. S. Grant at $50 per hour. Fees for professional services rendered total $17,102.50 in respect of 137.25 hours billed, for an average rate per hour billed of approximately $125. Disbursements were $677.86, of which $504.72 was attributable to charges for "Maps, Searches, LTO", $57.47 for "Photographs", $51.67 for faxes, MLS on-line charges and long distance charges, and $64.00 for kilometres traveled. The balance of $1,244.63 is GST.

[14] The April 23, 1997 Interwest invoice for $10,850.01 was described by claimant's counsel as being for services provided by Interwest to facilitate the discovery process and for review of the respondent's appraiser's report. This account includes fees for the time of the same four individuals at the same rates. Fees for professional services rendered total $9,007.50 in respect of 65.5 hours for an average rate per hour billed of approximately $138, consistent with most of the fees charged being for the services of Mr. Davies. Disbursements were $1,132.69, with $604.72 of that amount charged for "Photographs", $386.69 for "Maps, Searches, LTO", $84.54 for photocopying, faxes and long distance charges, $44.74 for laser prints and $12.00 for kilometres traveled. The balance of $709.82 is GST.

[15] The December 9, 1997 invoice for $5,055.22 was described as covering an addendum to the appraisal report prepared primarily by Mr. D. Grant. The account includes fees for the time of Mr. D. Grant, Mr. Davies and Mr. S. Grant at the same rates as previously described for those individuals. Fees for professional services rendered total $4,710.00 in respect of 31 hours for an average rate of approximately $152, reflecting Mr. D. Grant's greater involvement. Disbursements were minimal at $14.50 for faxes, with the remainder of $330.72 being GST.

[16] Each of the three Interwest invoices states at the bottom of the first page that accounts are due when rendered and that overdue accounts are subject to interest charges of 1.5% per month.

4.2 Claimant's Position

[17] Counsel for the claimant emphasized the complexity of the issues surrounding the compensation claim in view of the need to take into account those matters set out in section 33 (a), (d), (e), (f) and (g) of the Act in determining the market value of the lands taken. The scope of the project, the impact of the project on nearby comparables and the impact of the actions of the municipality since 1987, which claimant's counsel characterized as manipulation of and interference with the market, were all issues which she submitted the appraiser had to address.

[18] The claimant's position with respect to the March 25, 1997 invoice is that the appraisal report and opinion provided were complicated by section 33 issues and that this required services and expertise beyond those required in an average expropriation case.

[19] With respect to the April 23, 1997 invoice, claimant's counsel says that Interwest's services in connection with discovery provided efficiencies for counsel given Interwest's background with respect to the area of the taking. These services also obviated the subsequent need for counsel to forward documents received in the course of discovery for review by the appraiser. The services provided in connection with the review of the respondent's appraiser's report and preparation of a rebuttal report were described as being in the normal course.

[20] Counsel for the claimant characterized the addendum covered by the December 9, 1997 invoice as being necessary to substantiate Mr. D. Grant's opinion that the respondent's conduct since at least 1987 had amounted to manipulation of the market place. The addendum was described as consisting of a binder of 17 documents relevant to section 33 issues. The claimant says that these services did not duplicate earlier services.

[21] Mr. D. Grant's billing rate of $170 per hour was justified as reasonable on the basis of his experience in expropriation matters and his specific experience with respect to waterfront lots. The hourly rate for Mr. Davies was described as being an average rate in the industry for an appraiser with his level of expertise. Mr. S. Grant's and Mr. Chan's rates were said to reflect their experience in relation to the services performed by them.

4.3 Respondent's Position

[22] The respondent took issue with the global amount, including accrued interest, billed by Interwest. Respondent's counsel submitted that the global amount was excessive bearing in mind the stage of the proceedings, the issues and Interwest's existing knowledge of the area in question. The respondent also took issue with the number of individuals involved and the apparent duplication of work, the hourly rates and the charging of interest. Counsel for the respondent advised that the respondent relied on the affidavit of Mr. Stan Wong, Manager, Property Services, for the respondent sworn May 22, 1997.

4.4 The Interwest Reports

[23] Both the Interwest appraisal report dated March 21, 1997 which is the subject matter of the March 25, 1997 invoice and the Interwest appraisal review report dated April 10, 1997 billed for in the April 23, 1997 invoice were available to me.

[24] The appraisal report is 68 pages plus a further 51 pages of addenda. It addresses section 33 issues in relation to the subject property. It reviews 15 comparable sales in Abbotsford (none of which is in the immediate Mill Lake area), Mission and Burnaby and addresses adjustments for time and waterfront. The addenda include a 13-page waterfront versus non-waterfront lot study. The report estimates the market value of the subject property at $660,000.

[25] The appraisal review report notes that the appraisal report of the subject property prepared by Hooker Carmichael Property Consultants for the respondent was reviewed and the data contained in it researched and confirmed. The report itself consists of a seven-page critique and 35 pages of attachments.

4.5 Evidence of Mr. D. Grant

[26] The following information was provided by Mr. D. Grant at the hearing and in his affidavit sworn October 10, 1997.

[27] Mr. Grant has more than 30 years' appraisal experience and has been involved in a considerable number of waterfront appraisals. Mr. Davies, AACI and RI (BC), at the time had more than 20 years experience as an appraiser. Mr. Chan had been with Interwest for some six to seven years at the time of the appraisal report, had prior appraisal experience in China and subsequently obtained his AACI designation. Mr. S. Grant at the time of the appraisal report had conducted research for the firm for approximately 7 years, had taken a number of courses relevant to appraisal work, but had no appraisal designation.

[28] Mr. Grant explained the nature of the work performed by each member of the firm in connection with each of the accounts. Mr. Chan and Mr. S. Grant did most of the research work. Mr. Davies was responsible for contacts with both the claimant and counsel. Both Mr. D. Grant and Mr. Davies were involved in drafting the appraisal report.

[29] Mr. Grant testified that the hourly rates charged were the usual rates charged by Interwest for the services of the individuals involved and were comparable to rates charged by others in the industry.

[30] Mr. Grant confirmed at the hearing that a retainer of $5,000 had been paid at the time Interwest was engaged in May 1995. No retainer agreement could be located. He said that because of difficulties in obtaining information from the municipality, Interwest later advised Mr. Hayes by letter that if Interwest had to "dig out" information the cost would be greater. Eventually this occurred resulting in additional expense.

[31] Mr. Grant said that after researching surrounding properties Interwest noticed discrepancies between sale prices given for certain properties in the section 20 appraisal report and the municipality's internal documents and those reported in documents filed in the Land Titles Office or already known to Interwest. This resulted in requests for further information and particulars. Because of continuing price discrepancies and difficulties determining the extent of the project itself and the influence the project may have had on prices for properties around Mill Lake, Interwest concluded the Mill Lake data could not be relied on. It then became necessary to look beyond Mill Lake at other waterfront properties in the Lower Mainland to select appropriate comparables. This was time consuming and also involved further research to deal with adjustment factors. The information obtained was then put in appraisal format. In the meantime further information and particulars were still being sought and denied. When additional information became available following formal discovery and document production, this necessitated further work.

[32] Mr. Grant testified that it was Interwest's practice to charge interest at a rate of 1.5% per month from the date of the invoice if the invoiced amount was not paid within 30 days. He explained that the statement of accounts sent out monthly to a client summarized the invoices rendered, amounts paid on each invoice and interest accruing on the unpaid balances. He identified a Statement of Accounts dated September 4, 1996, as the Statement of Accounts sent to the claimant in care of his counsel for the month of September 1997. He explained that the statement date was incorrect and should have been September 4, 1997. He described the Statement of Accounts for September 1997 as summarizing the claimant's accounts with Interwest to that point in time. That statement shows: the amounts invoiced pursuant to the March 25, 1997 and April 23, 1997 invoices; the application of the $5,000 retainer to the initial invoice of March 25, 1997; two additional payments made in June and July 1997; accrued interest calculated at the rate of 1.5% per month on the unpaid balances of the invoiced amounts; and the balance outstanding in respect of each invoice including accrued interest. He confirmed that a payment in the amount of $8,000 had been received from claimant's counsel on July 24, 1997 as indicated in the September 1997 Statement of Accounts but indicated he did not know the source of that payment. Counsel for the claimant identified that payment as the payment agreed by counsel as having been made on account by the respondent.

[33] While Mr. Grant agreed with counsel for the respondent that interest was not shown on any of the invoices, he explained that in keeping with Interwest's practice and as demonstrated by the September 1997 Statement of Accounts, interest at the rate of 1.5% per month was calculated and included in the monthly statement of accounts sent to the claimant. He explained that the third invoice of December 9, 1997 would not have shown interest accrued in respect of the earlier invoiced amounts since the December 9, 1997 invoice dealt only with the time charged and disbursements incurred in the period after the second invoice of April 23, 1997. After the December 9, 1997 invoice had been sent out, it would then be shown in the next monthly statement of accounts together with interest accrued on the unpaid balance of the invoiced amount. Mr. Grant noted that the claimant would have been sent approximately 40 statements of account after September 1997 showing the interest accruing. He also observed that the Statement of Accounts for September 1997 showed that payments made in respect of the March 25, 1997 account included payment on account of a portion of the accrued interest.

[34] Mr. Grant confirmed that the items "Maps, Searches, LTO" and "Photographs" were charged at the actual cost incurred by Interwest without mark-up and that the items were obtained either in connection with Interwest's review or for anticipated use at the hearing then scheduled to commence April 27, 1997. He advised mileage was charged at a rate of $0.40 per kilometre on the basis of distance traveled.

4.6 Affidavit of Mr. S. Wong

[35] The May 22, 1997 affidavit of Mr. Wong speaks primarily to the March 25, 1997 invoice, characterizing it as dramatically higher than any appraisal invoice Mr. Wong had previously seen. In this regard the affidavit refers to fees charged by Interwest to the respondent for appraisals of other properties around Mill Lake in 1987, 1988 and 1991, an update of one of the 1988 appraisals and a fee quote for a 1996 update of one of the 1987 appraisals. These fees range from $2,600 to $3,000. The purpose of these previous Interwest appraisals is stated to be the provision of an estimate of the "market value" for the property for possible acquisition. Reference is also made in the affidavit to the section 20 appraisal of the property by another firm for a total of $2,300.

4.7 Analysis

[36] Counsel for the respondent argued that the amount claimed by Interwest was significantly greater than that claimed for appraisal fees in other proceedings of equal or greater complexity that had proceeded as far as or further than this case. He cited several previous decisions of the board as examples, as well as citing Ferancik et al v. Langley (Township) (1997), 62 L.C.R. 291 for the proposition that consideration may be given to other decisions with factual similarities.

[37] Firstly, I note that as stated in Ferancik each cost assessment must rest ultimately on its own particular facts. Secondly, the difficulty here is that counsel applied these remarks to the global amount billed by Interwest, including the latter two accounts dealing with matters beyond the appraisal report itself and accrued interest, making the comparison more akin to one of comparing apples to oranges. Thirdly, counsel left me to my own comparative analysis, a task which while it may be appropriate on a final determination of costs as in Ferancik, is in my view somewhat onerous for what respondent's counsel himself described as a summary proceeding. I decline to take on this task although agreeing with the statement in Ferancik that it is open to a reviewer to do so.

[38] With respect to timekeepers and duplication of hours, respondent's counsel's argument appeared to be less concerned with actual duplication and more concerned with the use of a team approach both because of its possible inconsistency with the role of an expert witness (a matter which counsel stated was not in issue in this proceeding, but might be raised at the compensation hearing) and because of what was described as the loss of efficiencies with working on and preparing a report by committee. In this regard counsel pointed to the fact that all three invoices included time for both Mr. D. Grant and Mr. Davies. Additionally, he referred to several of the time entries as evidence of duplication since the description of the services rendered generally referred to the same type of services, e.g. "appraisal report drafting", "revise and review draft", "review and analysis of data", "final review of issues and drafting". However, in his cross-examination of Mr. Grant, he failed to establish any actual duplication.

[39] I do not consider the generic service descriptions to be evidence of duplication. Nor do I consider the fact that both Mr. D. Grant and Mr. Davies worked on the file establishes duplication. Rather, given my analysis of the invoices and Mr. Grant's explanation of the various roles performed by the team, I find the team effort resulted in efficiencies and costs reductions. This is particularly seen in connection with the March 25, 1997 account where the team approach resulted in an average rate of approximately $125 per hour which is below both Mr. D. Grant's and Mr. Davies' hourly rates.

[40] With respect to the hourly rates, respondent's counsel submits that the rates of Mr. D. Grant and Mr. Davies are far in excess of those permitted by the board, referencing the rate of $125 per hour billed by an appraiser whose accounts were under consideration in Ferancik and the same rate of $125 per hour allowed to one of the appraisers in Hampton Investments Ltd. v. British Columbia (Minister of Transportation and Highways) (1998), 64 L.C.R. 284.

[41] With respect to the Ferancik decision, I note that the appraiser referred to in that case had lesser qualifications and lesser experience. In any event, while his rate of $125 per hour was considered high in view of his qualifications and experience, an appropriate hourly rate was neither discussed nor fixed by the reviewer who proceeded to consider the accounts on a global basis. In Hampton, I note that $125 per hour was the rate charged by the appraiser and the rate was neither challenged by the respondent in that case nor discussed by the board in reaching its conclusion that the account was reasonable and should be paid in full. I do not consider these cases particularly helpful in this regard.

[42] If anything, the Hampton decision serves to establish that Mr. Davies rate of $135 per hour was not out of line with that charged by the appraiser in Hampton in that both Mr. Davies and that appraiser have the same designations and similar years of experience. I find Mr. Davies rate of $135 per hour to be reasonable on that basis and on the evidence of Mr. D. Grant that it was within the market range at the time.

[43] Mr. D. Grant has more than 30 years of experience in appraisal matters and has appeared many times as an expert witness before this board, in the BC Supreme Court, the Federal Court, and on many private arbitrations. I consider his experience justifies a higher rate than that of Mr. Davies. I accept his evidence that $170 was his usual charge out rate at the time. I note that his previous rate of $165 per hour in 1995 was considered by the reviewer in McKinnon v. School District No. 36 (Surrey) (1997), 61 L.C.R. 9 to be supportable for one of his experience. I find his rate of $170 per hour in 1997 while obviously at the high end of the range to be an acceptable market rate at the time for an appraiser of his experience and expertise.

[44] The rates of $60 and $50 per hour charged for the services of Mr. Chan and Mr. S. Grant, respectively, are in my view reasonable for the services they provided. As, previously noted, the use of these individuals for much of the research work involved in the preparation of the appraisal report resulted in a lower average rate for that work. I accept these rates as appropriate for the nature of the services provided by them.

[45] With respect to disbursements, counsel for the respondent advised that the rates for faxes and photocopies were not disputed. Given Mr. Grant's explanation as to the nature and purpose of the expenses incurred and the basis upon which they were billed, I consider the disbursements set forth in all three accounts to be reasonable. I also note counsel were agreed that there was no issue with respect to GST, since the claimant is not a GST registrant.

[46] The question then becomes was the additional work entailed in going further afield in the search for comparables, in assisting in connection with discovery and in preparing the review and addendum reports necessarily reasonable. This is a difficult question to answer in a pre-hearing stage of any proceeding and will always be better able to be dealt with in the context of a final cost hearing.

[47] In the present instance the Inquiry Report provides additional background information that is useful. It together with Mr. Grant's evidence as to the difficulties encountered with respect to the information relevant to the appraisal work, provide some basis at this stage upon which to draw the conclusion that the approach taken in the preparation of the appraisal report which resulted in additional work and therefore greater costs, was not unreasonable. While I have considered Mr. Wong's affidavit, I observe that the purpose of the previous Interwest appraisal work for the respondent municipality was significantly different and did not involve the broader search for appropriate comparables. Also, the preparation of an appraisal report for use at a compensation hearing where the appraiser expects to give expert testimony is a more complex assignment, especially where, as here, it is felt that section 33 issues need to be given consideration.

[48] However, I note that the market value estimated in the Interwest appraisal report is considerably higher than that claimed in the pleadings and that to date the pleadings have not been amended to reflect that higher value nor has section 33 been specifically plead. Certainly while my brief review of the appraisal report indicates that a great deal of work was done and this is reflected in the time spent in connection with that assignment, I am concerned with the overall amount of the March 25, 1997 invoice given the lack of clarity as to the direction in which the claimant intends to proceed. In light of this, I consider it appropriate at this stage to reflect the uncertainty with respect to the amount and particulars of the claim and therefore the appropriateness of the extent of the work performed by Interwest in connection with the appraisal report by a reduction of 25% in respect of the fees set out in the Interwest March 25, 1997 invoice. This results in fees of $12,827 which is more in keeping with the usual range of fees seen in respect of an appraisal report prepared for use at a compensation hearing. While the necessity for and appropriateness of the extent of the work performed by Interwest may later become more transparent, at this stage and in these circumstances I am unable to consider fees in excess of this reduced amount to be reasonable. Together with disbursements of $677.86 and GST of $945.34, this results in a total amount of $14,450.20. I order payment of this amount in respect of the March 25, 1997 invoice.

[49] With respect to the April 23, 1997 invoice, the bulk of the fees charged relate to the review of the appraisal report prepared for the respondent. The balance of the fees cover Mr. Davies' meeting with the claimant to review materials preparatory to discovery of the claimant and his attendance at that discovery and Mr. Davies' attendance with counsel to review documents at the respondent's counsel's office in the week prior to the hearing then scheduled for April 27, 1997.

[50] I am satisfied that the involvement of Mr. Davies at the request of counsel in connection with discovery and review of documents facilitated the process. I note the charges for these services involve a total of 12.5 hours of Mr. Davies' time and I consider his time spent in those tasks to be reasonable.

[51] With respect to the review of the appraisal report prepared for the respondent, I accept Mr. Grant's statement that such a review is usual and would have been carried out in any event for the purposes of the hearing and that, while not always the case, it is not unique that a review report be prepared. However, I consider the 45 hours spent by Mr. Davies and the 7 hours spent by Mr. Grant in that exercise to be lengthy.

[52] I consider that a reduction in the order of 25% of the fees charged for the review work is appropriate. This would reduce the overall fees to approximately $7,200, which while still significant, I consider represents reasonable fees for the services performed. Together with disbursements of $1,132.69 and GST of $583.29, this results in a total amount of $8,915.98. I order payment of this amount in respect of the April 23, 1997 account.

[53] The December 9, 1997 invoice is more difficult to assess. It is for the preparation of a third report not yet filed with the board. The account descriptions are very general referring mainly to reviewing material and preparing and revising a report. Of the 31 total hours charged, 23.5 are for Mr. D. Grant's time.

[54] Mr. Grant described the services he performed as the selection of 17 documents which he considered to show material interference in the market in the Mill Lake area and the preparation of a summary of those documents together with an 8 page report dealing with the reliability of market data from the Mill Lake area and highest and best use matters. Mr. Grant said none of the 17 documents had been referred to in either of the earlier two reports prepared by Interwest since the documents were not obtained until after those reports had been completed. He said the purpose of the report was to satisfy the claimant's onus of proof with respect to section 33 matters and to provide hard evidence to support the observations made in the Interwest appraisal report and better delineate the effects of the scheme.

[55] In the absence of greater knowledge as to the contents of and need for this report and in view of my comments above in connection with the appraisal report regarding the lack of clarity as to the direction in which the claimant intends to proceed, I consider it appropriate to reduce the costs allowable at this time in respect of this addendum report to approximately 50% of the fees charged or $2,355 plus photocopying charges of $14.50 plus GST of $165.87 for a total of $2,535.37. I order payment in this amount in respect of the December 9, 1997 account.

5. INTEREST ON OUTSTANDING ACCOUNTS

[56] The remaining question is whether the claimant should be awarded interest on the unpaid balance of the amounts I have allowed in respect of the Interwest accounts and if so at what rate and from what date.

[57] The claimant seeks interest at 1.5% per month.

[58] The respondent says the claimant is not entitled to interest since the board, in adjourning the compensation hearing on April 27, 1997, decided that the claimant was to be deprived of interest from that date until resumption of the adjourned hearing. The respondent also submits that there is no evidence of interest being charged in the present case. Alternatively, if interest is recoverable, the respondent submits that the 1.5% per month charged by Interwest is excessive and that a lower rate should be awarded giving as an example the 12% per annum permitted in Ferancik and McKinnon.

[59] Claimant's counsel submits that it has been decided that interest may be awarded under section 48 of the Act for outstanding costs and that the decision to do so is discretionary, citing Roadmaster Auto Centre Ltd. v. Burnaby (City) (1996), 58 L.C.R. 305 and El & El Investments Ltd. v. School District No. 36 (Surrey) (1996), 59 L.C.R. 200. The claimant says that the board's April 27, 1997 decision to deprive the claimant of interest is made pursuant to the penalty provisions of section 47 of the Act, that section 47 is applicable to an award of interest under section 46 only and that the board's April 27, 1997 decision does not apply to the board's discretion to award interest under section 48 in respect of unpaid costs.

[60] The claimant maintains that the evidence is that Interwest charges 1.5% on overdue accounts and that interest at that rate has been accruing on the outstanding balance of the accounts since 1997. The claimant says that 1.5% per month is a reasonable rate in the circumstances of this case.

[61] I agree with the claimant's submission that Roadmaster and El & El make it clear that the board (prior to the application of the Tariff) has discretion to award reasonable interest expenses on professional accounts on an application for advance costs under section 48 of the Act. Those cases also set out certain principles and guidelines applicable to such awards.

[62] The board's previous decision of April 27, 1997 provides for an interest penalty for delay in connection with the adjournment of the hearing at the claimant's request on that date. Section 47 is the only section of the Act that provides for such a penalty and it does so under subsection (a) where in the board's opinion there has been an unreasonable delay in proceedings under the Act caused by the claimant. The interest that the claimant now seeks is unrelated to that earlier delay. That earlier delay did not prevent the respondent from paying the bills of costs submitted by the claimant nor from seeking to again bring on its adjourned April 30, 1997 application for a review of the Interwest invoices and spare itself further interest costs. It is not the claimant's delay that is being addressed in this section 48 proceeding but the interest expense or cost incurred by the claimant in respect of the advance costs awarded and not yet paid by the respondent. I conclude the board's previous decision does not preclude me from awarding as part of advance costs an amount in respect of the interest expense or cost incurred on the amounts I have awarded in respect of the Interwest accounts.

[63] I disagree with the respondent's submission that there is no evidence of interest being charged to the claimant. Each of the invoices states that accounts are due when rendered and that interest will be charged on overdue accounts at 1.5% per month. The inclusion of interest in Interwest's Statement of Accounts for September 1997 evidences the charging by Interwest of interest at that rate on the outstanding balances of the invoices rendered to that point in time. I consider this evidence together with Mr. Grant's testimony sufficient to conclude that interest was and continues to be payable on the invoiced amounts outstanding.

[64] I am left with the question of what is a reasonable rate of interest in this instance. Absent a retainer agreement, there is no evidence of the claimant's agreement to the 1.5% per month claimed. While Mr. Grant referred to the payments made in respect of the March 25, 1997 invoice as including payments for interest, in my view the September 1997 Statement of Accounts merely indicates that Interwest applied a portion of each of the two payments received in June and July 1997 to accrued interest. In this regard, I note the July payment so applied was the July 24, 1997 payment of $8,000 now agreed to have been made by the respondent. I do not consider the application of a portion of the two payments received to the payment of accrued interest establishes the claimant's agreement to pay interest at the rate of 1.5% per month as Mr. Grant inferred.

[65] In both Roadmaster and El & El the reviewer allowed as reasonable simple interest at the rate of 1% per month or 12% per annum. The respondent has cited two additional cases where that rate of interest has also been allowed. In view of these previous decisions, I am prepared to allow as reasonable the same rate of simple interest at 1% per month or 12% per annum on the unpaid balance of the amounts awarded in respect of the Interwest invoices.

[66] Consistent with Roadmaster and El & El, I find such interest is payable on the outstanding balance of the amounts awarded in respect of the Interwest invoices from the date upon which the respective invoices were provided to the respondent until paid. I leave to the parties the calculation of the interest payable noting only that interest is payable in respect of the March 25, 1997 account on the full amount awarded until July 24, 1997 when the payment by the respondent of $ 8,000 was received by Interwest and thereafter on the remaining balance.

6. THE LEGAL ACCOUNTS

[67] The particular issue identified for my consideration with respect to the legal accounts is Mr. Hayes' hourly rate of $175 effective October 1, 1995. The respondent for the purposes of this section 48 hearing did not take issue with the hours claimed for legal expenses and made no submissions in respect of disbursements.

[68] The only evidence provided in respect of hourly rates for legal services was Mr. Hayes' affidavit sworn August 27, 2001, which provided the following information. Mr. Hayes was retained by the claimant at the hourly rate of $150 and effective October 1, 1995 his hourly rate changed to $175. The $175 hourly rate reflected Mr. Hayes' understanding at the time of the average hourly rate in the marketplace for a lawyer with his level of experience in expropriation law. Mr. Hayes was called to the bar in 1984. He has practised expropriation law since about 1987 and by 1995 expropriation law amounted to 40% of his practice.

[69] The accounts attached as exhibits to Mr. Hayes' affidavit show that with the exception of the July 7, 1995 account which was billed at the rate of $150 per hour, the remaining accounts in issue were all for services rendered after October 1, 1995 and were billed at $175 per hour.

[70] The respondent submits that on the basis of Mr. Hayes' experience in expropriation matters before the Board as at the date of the invoices in question an hourly rate of $150 would be more appropriate.

[71] The claimant submits that the hourly rate of $175 charged by Mr. Hayes commencing October 1, 1995 is reasonable in the context of the prevailing marketplace citing Summit Enterprises Ltd. v Kamloops (City) (1995), 57 L.C.R. 24 and is warranted in view of his expertise and experience in expropriation matters.

[72] I have no problem with the July 1995 account. The time billed and the disbursements seem reasonable and the hourly rate is $150 since it is for services performed prior to October 1995. I allow this account as billed in the amount of $310.94.

[73] Since the only evidence of the reasonableness of Mr. Hayes rate of $175 per hour effective October 1, 1995 is based on Mr. Hayes' own understanding of the marketplace, with no further explanation as to the basis for that understanding, I have some difficulty in accepting that rate. I also have difficulty with the respondent's unsupported submission that $150 is a more appropriate rate given the evidence that by October 1995 Mr. Hayes had been called to the bar for approximately 11 years, with some 8 years experience in expropriation law and about 40% of his practice in that area by that time. In the absence of independent evidence as to market rates at the relevant time, I am prepared to allow Mr. Hayes a rate of $165 per hour for his services effective October 1, 1995.

[74] The time billed and disbursements set forth in the remaining four accounts in issue dated March 23 and April 27, 1997 and June 6 and February 4, 1998 appear reasonable. The fees require amendment to reflect the reduced hourly rate of $165; as well, the taxes on the reduced fees will need to be amended accordingly. I leave these calculations for the parties.

7. COSTS OF THIS REVIEW

[75] The claimant seeks his reasonable costs of this review. However, these costs are subject to the Tariff.

[76] The cost review occupied the whole of one long hearing day, with Mr. D. Grant being called to give evidence. No evidence was adduced as to any disbursements.

[77] The claimant has been largely successful on this cost review. I make no specific award but find that the claimant is entitled to the Tariff costs of preparation for and attendance at this cost hearing.