February 16, 2001, E.C.B. No. 39/94/202 (72 L.C.R. 198)

REASONS FOR DECISION

1. APPLICATION

[1] This is an application brought on behalf of the claimant, Konstadinos Daflos, for a review of the claimant’s bill of costs and a final award of costs pursuant to section 45 of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act"). A small portion of the claim for costs also engages the Tariff of Costs Regulation, B.C. Reg. 189/99 (the "Tariff") under the Act. The costs claimed are solely in respect of legal services provided to the claimant by the firm of Whitelaw Twining for which an account was rendered on November 30, 1999. The account covers the period from July 23, 1997 to November 30, 1999, and consists of $26,549.00 in fees, $1,410.81 in disbursements, and $3,815.62 in applicable taxes for a total of $31,775.43. The respondent, the Board of School Trustees of School District No. 42 (Maple Ridge-Pitt Meadows), has made no payment to the claimant in respect of this account.

2. BACKGROUND

 [2] The costs at issue arise out of the expropriation by the respondent of a two acre parcel of property located in Maple Ridge, British Columbia, in September, 1995. The registered fee simple owners of the property at the date of expropriation were Peter Panagiotis Daflos and Evanthia Daflos (the "Dafloses"). Peter Daflos is the claimant’s son. In 1993 the Dafloses had granted a registered third mortgage for $350,000 over their property to the claimant. That mortgage remained on title at the date of expropriation and was only partially paid out from the advance payments received from the respondent. The respondent advanced a total of $515,000 for what it estimated was or would be payable as compensation as a result of the taking. This amount was sufficient to pay out fully the first and second mortgages registered on title and to pay to the claimant on account of his third mortgage a total of $162,774.

 [3] The Dafloses commenced compensation proceedings before the board in November, 1995 with the filing of an application for determination of compensation (the "Form A"). Initially, they claimed $950,000 for the market value of their property, together with interests and costs. By the time the matter finally came to hearing in August, 1997, their claim as amended was for $645,000 for the market value of their property and $130,084 for disturbance damages in the nature of mortgage financing costs, to which was to be added the reasonable costs of relocating to other property, interest, and their actual reasonable legal, appraisal and other costs of the proceeding.

 [4] Although Konstadinos Daflos had independent legal representation with respect to his third mortgage interest since at least July, 1995, he was formally added as a claimant in these proceedings only a few days before the compensation hearing began. At the outset of that hearing, a statement of agreed facts was entered in evidence, signed by counsel for all the parties. Paragraphs 12 and 13 state as follows:

"12. Konstadinos Daflos is an "owner" of the subject property under the provisions of the Expropriation Act. In this capacity, he has standing and will be represented by counsel at the Hearing scheduled to begin on August 18, 1997.

13. Konstadinos Daflos will not be delivering a Form A and will rely upon the Amended Form A delivered by counsel for the Claimants filed November 22, 1995. Therefore, counsel for the Respondent will not be delivering a further Form B [reply to the application for determination of compensation]."

[5] The compensation hearing proceeded over four consecutive days from August 18 to August 21, 1997 in Vancouver. Konstadinos Daflos was represented at the hearing by Lyle E. Braaten of Whitelaw Twining, and the Dafloses were represented by Mark W.J. Ferbers of the firm Marinakis & Ferbers. The claimant sought compensation as a security holder for the market value of his security interest in the expropriated property. He also claimed disturbance damages amounting to $5,250 for three months’ interest on the principal balance of his third mortgage under section 5(1) of the Expropriation Act General Regulation, B.C. Reg. 451/87 (the "General Regulation").

[6] On November 25, 1999, the board released its compensation decision in this matter (reported at 68 L.C.R. 167). The Dafloses were awarded compensation in the amount of $586,565 for their fee simple interest in the expropriated property, some $71,565 more than the advance payments already received. They were also awarded interest under section 46(1) and additional interest under 46(4) of the Act, subject to adjustments for penalty interest which the board imposed both upon the Dafloses and the respondent under section 47 for what it considered to be unreasonable delays in the proceeding. The board also awarded the Dafloses their actual reasonable legal, appraisal and other costs. The Dafloses’ claim for compensation for disturbance damages, including moving costs, was dismissed.

[7] The claimant, Konstadinos Daflos, was awarded compensation in the claimed amount of $5,250 for three months’ interest on the principal balance of his third mortgage under the General Regulation, together with interest and additional interest on that amount. He was also awarded his actual reasonable costs of, and incidental to, the application and hearing before the board. No penalty interest was assessed for or against him.

[8] The respondent sought leave to appeal from the board’s compensation decision to the British Columbia Court of Appeal on three alleged grounds. The first was that the board erred in awarding "penalty interest" pursuant to section 47(b) of the Act. The second was that the board erred in exercising its discretion to award actual reasonable legal, appraisal and other costs pursuant to section 45(5) of the Act. The third alleged ground was that the board erred in awarding Konstadinos Daflos interest pursuant to sections 46(1) and (4) of the Act. The Court of Appeal granted leave to appeal on the first ground but denied leave on the second and third grounds (reported at 69 L.C.R. 246). Accordingly, no part of the award to the claimant, Konstadinos Daflos, is under appeal, including entitlement to the actual reasonable costs he necessarily incurred for the purpose of asserting his claim for compensation or damages, pursuant to section 45(3) of the Act.

[9] The final cost review in this matter was held in Vancouver and occupied somewhat less than two and a half hours. I heard the matter in my capacity as chair of the board pursuant to section 45(9) of the Act which provides that, if the board determines the amount of compensation to which a person is entitled, the amount of costs must be determined by the chair.

[10] At the outset of the hearing, I was informed that Konstadinos Daflos died on January 27, 2000. The costs being claimed are therefore in respect of his estate. Because Mr. Braaten had sworn an affidavit in support of the claimant’s cost claim, respondent’s counsel took the position that it would not be appropriate for him to appear as counsel on this application. His colleague John M. Moshonas therefore appeared for the claimant although Mr. Braaten was in attendance throughout.

3. THE ISSUES

[11] The primary issue for my determination is the necessity for and reasonableness of the costs incurred by the late Konstadinos Daflos for the legal services provided to him in this matter by the firm of Whitelaw Twining. A secondary issue concerns how I should deal with that small portion of the costs incurred which fall within the timeframe now governed by the Tariff, including preparation for and attendance at this final cost review.

4. THE CLAIMANT’S POSITION

[12] The position advanced on behalf of the claimant is that, not only was Konstadinos Daflos entitled to separate legal representation at the compensation hearing, as set out in paragraph 12 of the agreed statement of facts, but also that he had the most at stake in the outcome of those proceedings. The importance of his interest is not to be measured merely by the claim he asserted during the hearing for disturbance damages for three months’ interest on the principal balance of his third mortgage. The greater importance, it is argued, lay in the fact that the value of his third mortgage security interest would be determined in large measure by what the board concluded as to the market value of the expropriated property. Since the claimant’s mortgage was for $350,000 of which only $162,774 had been paid out from the proceeds of the respondent’s advance payments, the claimant stood to benefit by way of additional repayment on the outstanding balance from any additional compensation awarded by the board in respect of market value.

[13] In his supporting affidavit Mr. Braaten deposed that, after being retained by the claimant on or about August 6, 1997, less than two weeks before the compensation hearing was scheduled to begin, it was he who identified the fact that the claimant had not been paid three months’ interest, calculated to be $5,250, as prescribed under section 5(1) of the General Regulation.

[14] Moreover, after discussing the matter with Mr. Ferbers, the Dafloses’ lawyer, Mr. Braaten had decided that it would be in his client’s best interest if he were to focus on the appraisal evidence at issue in the forthcoming compensation hearing. Accordingly, Mr. Braaten prepared and conducted the examination in chief of the claimants’ appraiser, Mr. Hollett, and prepared and conducted the cross-examination of the respondent’s appraiser, Mr. Umlah. He also prepared and made the final submissions on behalf of the claimants at the compensation hearing respecting the appraisal evidence. Claimant’s counsel on this application calculated that the appraisal evidence and the submissions concerning it consumed about two and a half days of the four day compensation hearing.

[15] According to the claimant, although Mr. Braaten was a latecomer to these compensation proceedings, his role was nevertheless a central one. The substantial degree of success achieved was evidenced in the fact the board awarded Konstadinos Daflos the three months’ interest that he sought, together with interest and additional interest, and awarded an additional $71,565 on the market value portion of the claim.

[16] Mr. Moshonas for the claimant said he had come to the final cost hearing prepared to defend the reasonableness of the Whitelaw Twining legal account against any suggestion of unwarranted duplication in effort among the various legal counsel involved on behalf of the claimants in this matter. In his submission, the interests of Konstadinos Daflos were different from those of the Dafloses, fully justifying separate representation by counsel. Even so, the agreed division of responsibility between the lawyers for prosecution of the case was proper, reasonable and cost-effective. Mr. Moshonas also indicated that he was taken by surprise by other issues raised by the respondent for the first time at the cost hearing itself, including the question of the hourly rates charged and the applicability of the Tariff. He submitted, in any case, that the claimant’s legal costs reflected in the account rendered by Whitelaw Twining were reasonable and should be fully reimbursed.

5. THE RESPONDENT’S POSITION

[17] The respondent submits that the Whitelaw Twining account totalling nearly $32,000 is not reasonable for several reasons and suggests a drastic reduction in the amount which should be allowed in respect of it. As I construe the respondent’s position, the cost award should be for no more than $4,129 in fees plus disbursements and applicable taxes for a total of approximately $6,200.

[18] In the first place, the respondent contends that the legal services invoiced are wholly out of proportion to the amount at issue in the claimant’s claims and to the award which he received. The respondent rejects the characterization of the case as one in which the claimant had the most at stake. It points out that, although the Dafloses filed their claim with the board in November, 1995, during which time the claimant was also legally represented, the claimant advanced no claim until practically the eve of the compensation hearing which had already been once adjourned. It was not until August 14, 1997, four days before the hearing began, that the respondent first received notice of any kind that a claim for compensation would be made on behalf of the claimant.

[19] At the compensation hearing itself, the claimant sought disturbance damages under the General Regulation amounting to $5,250. This amount, says the respondent, together with interest and additional interest, and his actual reasonable costs, was the sum total of the board’s award to the claimant. The award of compensation for the market value of the expropriated property, amounting to $71,565 more than the advance payments, was an award expressly made to the Dafloses, not the claimant. The respondent says it has paid in full the damages awarded to the claimant, including interest and additional interest, in the amount of $7,918.17.

[20] With reference to what the board in previous costs decisions has said about the reasonable relationship between the costs claimed and the net amount awarded, the respondent argues that the expenditure of nearly $32,000 in legal costs to obtain an award of less than $8,000 is plainly unreasonable. Moreover, for two years prior to the involvement of Whitelaw Twining, the claimant was legally represented in this matter by the firm of McEachern Harris & Brown (later McEachern Harris Brown & Kehler). That firm rendered accounts to the claimant totalling $2,580.69, which the respondent fully reimbursed. Accordingly, the true expenditure in legal costs amounts to more than $34,000.

[21] In the second place, the respondent submits that the legal services provided by Whitelaw Twining were duplicative both of the work already performed by the claimant’s previous counsel and of the work done by counsel for the Dafloses.

[22] The respondent refers to entries in the Whitelaw Twining account in late July, 1997 indicating that Mr. Braaten spent time in conversation with Mr. Harris, the claimant’s previous lawyer, and in reviewing the file, the apparent object of which was to bring Mr. Braaten up to speed on the matter. The respondent says that, having already paid for Mr. Harris’s time in conversation, it should not also have to pay for Mr. Braaten’s. Furthermore, it should not be asked to pay for the time spent by Mr. Braaten in acquainting himself with the file.

[23] The respondent produced affidavit evidence to show that it has paid in full the costs awarded to the Dafloses. For the period May 1, 1992 through December 1, 1999, the total amounts invoiced for legal services by the firm of Marinakis and Ferbers, and reimbursed by the respondent, are said to exceed $40,000. These include $16,821.75 in the period between January 24, 1997 and August 17, 1997, and $13,554.60 in the period between August 18, 1997 and December 1, 1999.

[24] The respondent therefore disputes that there were any legal cost savings achieved by the "team approach" undertaken by counsel for the claimant and for the Dafloses before and during the compensation hearing. If Mr. Braaten had not undertaken the role of dealing with all of the appraisal evidence, the respondent says this task would have been performed in any case by Mr. Ferbers who was in attendance throughout the proceedings. The respondent also points to 17 of the 22 time entries in the Whitelaw Twining account between July, 1997 and June, 1998 which refer to conferences between Mr. Braaten and Mr. Ferbers, although no time sheets were produced to illuminate how much time was expended on particular items. In the respondent’s submission it is pure duplication to request the respondent to pay for both sides of such conversations.

[25] In the third place, the respondent takes issue with the time charged by Mr. Braaten in the weeks preceding the compensation hearing under such headings as reviewing material, reviewing the file, and researching or reviewing the law. Part of the respondent’s objection has to do with the fact that Mr. Ferbers was also engaged in legal research at the same time and his invoice for such time spent has already been paid in full by the respondent. Part of the objection relates to what the respondent evidently characterizes as Mr. Braaten’s inexperience. The respondent cites the board’s cost decision in Nygard v. Surrey (District) (1989), 42 L.C.R. 279, for the proposition that when counsel are inexperienced in expropriation matters, it is reasonable that the authority should not have to pay for the extra time spent on reviewing and researching the law.

[26] A fourth ground of objection by the respondent concerns the hourly fee rate charged by Mr. Braaten, which is reflected in the Whitelaw Twining account at $210 per hour from July, 1997 through December, 1998, and thereafter at $220 per hour. Again referring to the question of experience, the respondent contends that there is no evidence as to Mr. Braaten’s personal experience with expropriation matters as of August, 1997, when he assumed conduct of the claimant’s file. The respondent refers to Mr. Ferber’s accounts to the Dafloses, wherein he charged his billable time to his clients throughout the years 1997, 1998 and 1999 at the rate of $170 per hour. According to the respondent, there is no reason why Mr. Braaten’s rate should be any higher.

[27] Finally, the respondent says that the legal services provided by Whitelaw Twining after June 28, 1999 are governed by the Tariff rather than the account actually rendered in respect of them. The actual account reflects 6.5 hours of billed time after that date. In the absence of a bill of legal costs in tariff format, the respondent suggests that all of the entries in question relate to services which would fall under Item 1 of the legal tariff schedule (correspondence, conferences, etc.) and that, within the prescribed range of between 1 unit and 20 units, the minimum of one unit is appropriate. Additionally, with respect to preparation for and attendance at this cost review, which is covered under Items 14 and 15, a total of 3 units should be allowed. In the respondent’s submission, all the costs falling under the Tariff should be allowed at scale 1, which is "for matters of less than ordinary difficulty or importance".

6. DISCUSSION

6.1 The Costs Regime

[28] Because it is accepted that the claimant is an "owner" for the purposes of the Act, and the board in its compensation decision awarded him costs, the costs to which he is entitled are the "costs necessarily incurred" for the purpose of asserting his claim for compensation or damages pursuant to section 45(3). The costs payable under section 45(3) are either "the actual reasonable legal, appraisal and other costs" pursuant to section 45(7)(a) or, where a tariff of costs has been prescribed pursuant to section 45(7)(b), then "the amounts prescribed in the tariff and not the costs referred to in paragraph (a)." The Tariff came into force on June 28, 1999 and applies to the costs incurred on or after that date.

[29] In the present instance the vast majority of the legal costs claimed were incurred before June 28, 1999, and accordingly fall under the "actual reasonable" standard. In that regard the board over the years has developed an extensive jurisprudence dealing in particular with the principle of "reasonableness" as applied to the costs at issue. The respondent in its written submissions at this cost hearing set out, I believe correctly, the factors and circumstances which the board has considered relevant. It cites, for example, the following passage from the board’s cost decision in Branscombe v. British Columbia (Minister of Transportation and Highways) (1995), 56 L.C.R. 138, at p. 143:

The board’s initial objective is to determine whether the nature of the work done was necessary and, if so, to determine whether the amount claimed for it was reasonable. The reasonableness of the amount claimed is to be determined in the context of the statutory direction provided in s. 44(11) [now s. 45(10)], and also with a view to the common law criteria for reasonableness as codified in s. 71.1 of the Legal Profession Act, S.B.C. 1987, c. 25. Among these factors to be considered are the complexity and difficulty of the issues involved, the degree of success, the skill and specialized knowledge required of the lawyers involved and time reasonably expended.

[30] Because the board has considered common law criteria for reasonableness to apply, the factors which are set out in leading cases such as Yule v. Saskatoon (1955), 16 W.W.R. 305 (Sask. Q.B.), affd 1 D.L.R. (2d) 540, 17 W.W.R. 296 (Sask. C.A.), become germane. At p. 313 of the Yule decision, Thomson J. made the following observations:

In fixing the remuneration of the plaintiff in this case all factors essential to justice and fair play must be taken into account….The circumstances to be considered in arriving at the proper amount are the extent and character of the services rendered; the labour, time and trouble involved; the character and importance of the litigation in which the services were rendered; the amount of money or the value of the property to be affected; the professional skill and experience called for; the character and standing in his profession of the counsel; the results secured, and to some extent at least the ability of the client to pay….

[31] Recently the board has begun to consider the application of the Tariff to an award of costs, including in transitional matters such as the present one where the costs claimed were incurred in both the pre-Tariff and post-Tariff period. In the context of a final cost review, some of the governing principles and interpretive issues are discussed at length in my recent decision in Gerald Charles Budd v. Her Majesty the Queen in right of the Province of British Columbia as represented by the Minister of Transportation and Highways, unreported, January 31, 2001, E.C.B. No. 49/96/199.

6.2 Statutory Considerations under Section 45(10)

[32] In determining final costs, I am required under section 45(10) of the Act to take the following considerations into account:

(a) the number and complexity of the issues;

(b) the degree of success, taking into account

(i) the determination of the issues, and

(ii) the difference between the amount awarded and the advance payment under section 20(1) and (12) or otherwise;

(c) the manner in which the case was prepared and conducted.

[33] A central difficulty in assessing these factors from the perspective of the claimant’s claim for legal costs arises from the differing way in which the parties characterize the claimant’s position in the compensation proceedings. Whereas the respondent says the claimant’s interests in the outcome of the proceedings were minor, the claimant says they were of utmost importance.

[34] Insofar as the claimant’s claim was one for disturbance damages in the form of three months’ interest on the principal balance of his third mortgage, the issue was a novel one not previously addressed in compensation decisions by the board. Because the board determined that the Dafloses were not entitled to any disturbance damages under section 34 in light of the applicable provisions of section 31(1) of the Act, the claimant’s claim under the General Regulation was one which required discrete legal interpretation. Even so it could not properly be characterized as a complicated issue nor was the amount involved large or difficult to calculate.

[35] It is correct to say, as the respondent has submitted, that the board’s award of additional compensation on account of the market value of the expropriated property was an award expresssly made to the Dafloses rather than to the claimant. The award amounted to 113.9% of the advance payments already received. The proceeds of those advance payments went, firstly, to pay out and discharge the first and second mortgages and, secondly, to pay out in part the claimant’s third mortgage. The evidence shows that the respondent, in initially valuing the expropriated property at $450,000 and making an advance payment based upon that value, paid to the claimant the balance remaining of $97,774.58 under a notice of advance payment dated August 30, 1995. In later valuing the property at $515,000, the respondent made a further advance payment of $65,000 on August 23, 1996, the whole amount of which was paid to the claimant on account of his third mortgage.

[36] From what had previously occurred with respect to the distribution of compensation funds, it seems to me a reasonable inference to draw that the claimant had good reason to suppose that any additional amount of compensation for market value awarded by the board would first be applied toward the retirement of his third mortgage. In that respect, the claimant had a very real interest in how the appraisal issues were addressed at the compensation hearing. It was, in my view, appropriate for claimant’s counsel, Mr. Braaten, to take the lead in advancing the owners’ case in that respect. Indeed, the board, when dealing with the claimant’s claim under the General Regulation, made the following observation in its compensation decision at pp. 209-210 (L.C.R.):

Because the principal balance of his third mortgage was only partially paid out from the advance payments made by the School District, it may well be in this instance that he is entitled to the proceeds of the compensation awarded in excess of the advance payments and, in that sense, is the beneficiary of the board’s determination of a higher market value based on highest and best use.

[37] The board in its compensation decision devoted considerable space to consideration of the market valuation issues involved. Although the appraisers were largely in agreement in their analyses of highest and best use of the expropriated property, the evidence concerning valuation was made somewhat more complicated by the fact that the highest and best use was determined to be a mixed use, comprising a residential component and a service commercial component each of which required separate treatment. There was also a need to take into account the board’s earlier determination of market value for an adjacent property which had been expropriated by the respondent in connection with the same project.

[38] Apart from advancing his client’s own disturbance damage claim for interest under the General Regulation, claimant’s counsel did not participate to any significant degree on the other major compensation issue which was before the board, namely the Dafloses’ claim for disturbance damages for what they alleged were mortgage expenses incurred as a direct result of both the threat of expropriation and of pre-expropriation delay. This is somewhat surprising inasmuch as the disturbance damage claim included the sum of $63,114 in interest said to have been owing on the third mortgage to the claimant. In any reasonable assessment of the degree of success achieved by the claimant, it should be taken into account that the claim for disturbance damage, which depended in the first instance on satisfying the board that the highest and best use of the property was the same as its existing use, did not succeed.

[39] Because I was a member of the panel which heard the compensation claim in this matter, I am in a good position to be able to assess the manner in which the claimant’s case was prepared and conducted. However, apart from what I have already observed, it seems to me that this factor is one best dealt with in the context of considering the detailed legal account rendered to the claimant by the firm of Whitelaw Twining.

6.3 The Legal Costs

[40] It is necessary for the purposes of this final cost review to make a distinction between those legal costs incurred in the period before the Tariff came into force and those which were incurred thereafter.

6.3.1 The Pre-Tariff Costs

[41] In the period between July 23, 1997 and December 3, 1998, the account rendered to the claimant by Whitelaw Twining discloses that legal professionals in the firm recorded a total of 120.3 hours of billed time on the file. Of this total, all but 1.8 hours was billed by Mr. Braaten. Of his total time in this period amounting to 118.5 hours, all but 4.9 hours occurred between the commencement of his involvement in the matter on July 23, 1997 and the end of the four day compensation hearing on August 21, 1997.

[42] Most of the time entries in the legal account lump together under each date a number of activities without revealing precisely how much time was spent on the activity. Therefore, it is impossible from the evidence offered to do any precise breakdown of how much time Mr. Braaten devoted overall to particular tasks. This necessarily handicaps my ability to assess the necessity for and reasonableness of what was being done.

[43] On analysis the pre-Tariff account appears divisible into four component stages: first, preliminary assessment and contact between July 23, 1997 and August 11, 1997; second, preparation for hearing, including some time spent on narrowing the issues and discussing settlement, between August 12 and 17, 1997; third, attendance at the hearing between August 18 and 21, 1997 as well as final preparation outside the hearing for examination and cross-examination of the appraisal witnesses and preparation of final argument; and fourth, attendance to matters after the hearing concluded between August 22, 1997 and December 3, 1998. I propose to review each of these stages in turn.

[44] It appears that Mr. Braaten was first approached about taking over conduct of the claimant’s case from Mr. Harris on July 23, 1997. I construe a great deal of the time spent by Mr. Braaten from that date until August 11, 1997 as involving simply acquainting himself with the file, making contact with counsel for the other parties, and seeking and obtaining instructions from the claimant. Because the claimant lived in Greece, was elderly, and did not speak English, more time than might otherwise have been usual was required to obtain those instructions for which purpose the services of a translator were also engaged. On August 7, 1997, Mr. Braaten also participated in a pre-hearing teleconference with the board involving counsel for all the parties.

[45] No explanation was offered for this rather last minute change in claimant’s counsel so as to indicate some unavoidable or extenuating circumstance. The change in law firms undoubtedly resulted in some duplication of time and effort on the file. The situation here is similar to that in Gerestein v. Abbotsford (District) (1990), 43 L.C.R. 262, where the chair of the board observed as follows at p. 272:

The additional costs incurred by the claimants because they elected to change law firms must be to their account. An expropriating authority is not responsible for that time expended by a new law firm to become familiar with the nature of the claim and the extent to which it had been prosecuted prior to being retained. In this case, the cost was not caused by the respondent nor was it a cost over which it had any control….Accordingly, a downward adjustment must be made.

[46] Of the 13.5 hours of billed time recorded on the file during this period, I am of the opinion from my review of the account entries that it would be reasonable to allow in total some 5.0 hours.

[47] From August 12 through August 17, 1997, Mr. Braaten was engaged on a daily basis in preparing for the compensation hearing. It is unclear to me what this preparation work involved, since it is shown as a separate activity but is also combined with other activities on the same dates which include researching and reviewing the law, reviewing (on three separate occasions) a proposed agreed statement of facts, reviewing all parties’ documents, and holding numerous telephone conferences with Mr. Ferbers as well as with Mr. Fishman, the respondent’s counsel. Additionally, there were also discussions among counsel concerning possible settlement, the nature and scope of which was not revealed to me. There is no indication that Mr. Braaten was involved in any discovery processes during these final pre-hearing days, and it was only on the eve of the hearing, on August 17, 1997, that he evidently turned his attention to reviewing the appraisal reports, preparing for the examination of witnesses, and putting together an opening statement.

[48] I have difficulty with the respondent’s submission that much of Mr. Braaten’s billed time in both the immediate pre-hearing and hearing stages was pure duplication of the work performed by Mr. Ferbers, the Dafloses’ counsel, and that since the respondent has already paid for that work, it should not now be called upon to pay again.

[49] The respondent has chosen to reimburse the accounts of Marinakis and Ferbers without referring them to a cost review before the board. The necessity for and reasonableness of Mr. Ferbers’ work is therefore not in issue, nor is the magnitude of the accounts rendered. To subject Mr. Braaten’s account to the claimant to scrutiny simply on the basis of what the respondent has seen fit to pay on accounts rendered by separate counsel for other claimants in the matter strikes me as inappropriate.

[50] I am unable to conclude on its face, for example, that it would be unreasonable to allow Mr. Braaten’s billed time for legal research on behalf of the claimant simply because Mr. Ferbers already billed for such work and the respondent evidently thought it reasonable to pay for it. Similarly, I do not accept that when separate counsel for different claimants with differing interests confer on the case, it is only appropriate to expect the respondent to reimburse the time spent by one side in the conversation. Accordingly, even though Mr. Ferbers’ billed time on such calls or meetings may have been fully reimbursed, Mr. Braaten’s billed time is also, in my view, recoverable provided that it is shown to have been necessary and reasonable. The situation here is distinguishable from that in Tidmarsh v. Comox-Strathcona (Regional District) (1994), 54 L.C.R. 13 (B.C.E.C.B.), cited by the respondent, where overlap in hours billed for conferences between lawyers in the same firm and the "team approach" which they adopted were not found to have been fully warranted given the nature of the issues and size of the claim.

[51] While I consider the respondent’s argument on duplication in this respect to be weak, I am nevertheless not satisfied that all of Mr. Braaten’s billed time in the immediate pre-hearing period, amounting to some 46.8 hours, meets the test of necessity and reasonableness. For example, his research of the law was apparently confined to questions of the legal effect of delay in light of the decision of the Supreme Court of Canada in Toronto Area Transit Operating Authority v. Dell Holdings Ltd. (1997), 60 L.C.R. 81, and of the law regarding disturbance damages generally, which were not the focus of his examinations or submissions at the compensation hearing. Indeed, Mr. Braaten in his closing submissions acknowledged that he had no authorities to cite. The number of telephone conferences in which Mr. Braaten engaged with Mr. Ferbers during these final pre-hearing days, while understandable up to a point, seem excessive overall.

[52] Based on the evidence with which I was provided, I am inclined to the view that the total number of hours devoted by Mr. Braaten to the claimant’s case at this stage of the proceedings was somewhat excessive, either the result of unnecessary work being done or the work being done in an overly time-consuming manner. In my opinion, it is appropriate to reduce the number of billed hours for which recovery from the respondent should be allowed from 46.8 hours to 30.0 hours.

[53] From August 18 through August 21, 1997, Mr. Braaten attended on the claimant’s behalf at the compensation hearing before the board. On average the hearing occupied about six hours per day for each of the four days. Mr. Braaten’s recorded time for each of the first three days exceeded 14 hours and for the final day amounted to 10.4 hours. During this period, in addition to attending at the hearing, he also met with the claimants’ appraiser, Mr. Hollett, and prepared his examination in chief, finalized his preparation for cross-examination of the respondent’s appraiser, Mr. Umlah, and prepared written closing submissions. There were also meetings with the other counsel which took place outside the hearing.

[54] Given the degree of preparation which had already occurred before the compensation hearing began, the expenditure of so many additional hours of preparation while the hearing was underway strikes me as being at least slightly excessive, bordering on overpreparation. I do observe, however, from my perusal of the account rendered by Mr. Ferbers and reimbursed by the respondent, that Mr. Ferbers recorded slightly more than 50 hours of billed time during these same four days.

[55] In my view it would be reasonable to allow Mr. Braaten’s time during these four days on average at 12 hours per day, in other words to allow as much time spent in preparation out of the hearing as in attendance at the hearing itself. This has the effect of slightly reducing the total number of billable hours for this period from 53.3 to 48 hours.

[56] I should also note that it was during the compensation hearing stage that a billed time entry of 1.8 hours was recorded in the Whitelaw Twining account for what is described as "serving summons to witness on Mr. Gauthier in Coquitlam". The person who billed this entry was a Jordan L. Kronick of the firm who charged his time on the file at $130 per hour. This entry is something of a mystery since no witness by the name of Gauthier appeared at the compensation hearing, and there is no evidence as to the identity of Mr. Kronick or his qualifications. I could perhaps speculate that the summons related to Mr. Andruschak, the secretary-treasurer of the respondent School District, who was called and cross-examined by the claimants as an adverse witness. However, given the absence of any real information to justify this entry, I conclude that it should simply be disallowed.

[57] There are a few scattered entries in the Whitelaw Twining account which cover the post-hearing stage prior to when the Tariff came into effect. Between August 22, 1997 and December 3, 1998, the time recorded on the file by Mr. Braaten amounted to some 4.9 hours. Largely they seem to be involved with telephone communications with the claimant, the claimant’s appraiser, and counsel for the other parties. There is one rather sizeable time entry just after the hearing ended entitled "preparation of file materials", the need for which is not apparent. It also unclear to me from my knowledge of the history of this matter why claimant’s counsel would need to participate in a conference with Mr. Ferbers over the status of the rental agreement which his clients, the Dafloses, had entered into with the respondent for continued use of the residence on the expropriated property. Taking these concerns into account, I would allow 3.5 hours of the 4.9 hours billed in this post-hearing stage.

[58] As a result of my review of the time entries in the Whitelaw Twining account in the pre-Tariff period, I have reduced the number of billed hours for which I consider the respondent ought to be responsible from 120.3 to 86.5 hours.

[59] The next question for determination is the fee rate at which those hours should be allowed. I have already noted that Mr. Braaten billed all of his time in the pre-Tariff period at the rate of $210 per hour. In his supporting affidavit, Mr. Braaten deposed that he was called to the British Columbia bar in 1990 and that of the Yukon Territory in 1996. Initially, he articled with and was an associate in the firm then known as Killam Whitelaw & Twining. From 1993 until 1997, he was with the Vancouver law firm of Bull Housser & Tupper where he worked in the firm’s public and administrative law department and was evidently exposed to municipal law and expropriation matters. In 1997 he rejoined the firm now known as Whitelaw Twining. As of the date of his affidavit in September, 2000, Mr. Braaten was a partner in the firm which consisted of 21 lawyers and 6 legal assistants.

[60] In August, 1997, when Mr. Braaten assumed conduct of the claimant’s case and carried it forward to hearing, he was a lawyer of approximately seven years’ call. There is no evidence to suggest that, by that date, he had amassed any significant personal experience in the field of expropriation law. The hourly fee rate of $210 reflected in his account somewhat exceeds that which the board has previously allowed during the relevant period even for very senior counsel with many more years of practice experience generally and in the field of expropriation law in particular. The board’s oral cost decision in N.Y. Automotive Ltd. v. Richmond (City), March 30, 1999, BCEA 296, cited in support of the claimant’s position on hourly rates, is not helpful to his case.

[61] Accordingly, I am of the view that the fee rate at which I should allow Mr. Braaten’s time must be substantially reduced. The respondent has suggested that it should not exceed the rate of $170 per hour which Mr. Ferbers charged on his accounts during this period. Although I was not provided with any evidence as to Mr. Ferbers’ own practice experience, I conclude that it would be reasonable in all of the circumstances to allow Mr. Braaten’s time at the same rate.

[62] The net result of my review of the Whitelaw Twining account in the pre-Tariff period is that I have allowed 86.5 hours of Mr. Braaten’s billed time at the rate of $170 per hour. This calculates to fees amounting to $14,705.00 to which GST and PST apply, making a total of $16,763.70.

[63] It is not possible to discern from the account whether any significant disbursements were incurred in the period after June 28, 1999, when the Tariff came into force. However, given the general chronology of Whitelaw Twining’s involvement in the matter, I doubt whether this would be the case. Therefore, I propose to deal with all of the disbursements as falling within the pre-Tariff period.

[64] The disbursements reflected in the account amount to $1,410.81. All are said to have been GST taxable and therefore the overall total is $1,509.57. The largest single item is for interpreters in the amount of $386.75. Other significant items are photocopying and printing costs shown at $258.30, incidental meeting expenses at $222.27, long distance telephone charges at $180.28, and what is described as research fees at $157.72.

[65] The respondent did not specifically challenge the need for or reasonableness of any of these charges even though back up for some of the items, such as unit rates for photocopying or explanations to account for incidental meeting or research costs, were conspicuously lacking. Since I am unable to discern anything patently unreasonable in the disbursements incurred, and the respondent has raised no objection, I allow them as presented.

6.3.2 The Post-Tariff Costs

[66] It would appear that nearly all of the time spent by Mr. Braaten in the period between June 28, 1999 and the rendering of the Whitelaw Twining account on November 30, 1999, concerned the rendering of the board’s compensation decision and the consequences flowing from it. Mr. Braaten recorded 2.5 hours in reviewing the decision and discussing it with Mr. Ferbers, a further 1.5 hours in further communications with the Mr. Ferbers, Mr. Hollett, and either the claimant or Mr. Peter Daflos, and 2.0 hours in preparing the interest calculations based upon the board’s award and attending to payment from the respondent.

[67] Claimant’s counsel at the final cost hearing seemed unaware of the introduction of the Tariff or the requirement to have the costs incurred set out in a bill of costs in tariff format. In the absence of a proper bill of costs, as prescribed in the board’s decision in C.R. All Trucks Ltd. v. British Columbia (Minister of Transportation and Highways) (2000), 69 L.C.R. 197, it is questionable whether I should make a formal award in respect of these matters. However, given the slight amount of the post-Tariff costs incurred which are at issue, and in order to save a further application, I will make my observations now with respect to those costs.

[68] Before making an award of costs I must be satisfied pursuant to section 3(2) of the Tariff that the costs were "proper or reasonably necessary to conduct the proceeding". In the present instance I accept that the work performed by Mr. Braaten in reviewing the board’s compensation decision and finalizing matters which flowed from it from the claimant’s perspective was a proper or reasonably necessary part of the legal costs incurred.

[69] I agree with the respondent that all of the time spent in the post-Tariff period involved work which would fall within Item 1 of "Schedule 1 – Legal Costs" under the Tariff. Item 1 refers to correspondence, conferences, instructions, investigations or negotiations by a claimant relating to a claim, whether before or after commencement, for which provision is not made elsewhere in the Tariff. Item 1 provides for a range of units between 1 and 20. The reviewer of costs has the discretion to allow a number within that range, having regard to the principle that one unit is for matters upon which little time should ordinarily have been spent, the mid-point of the range is for matters upon which an average amount of time should ordinarily have been spent, and the maximum number of units is for matters upon which a great deal of time should ordinarily have been spent. The board in previous cost decisions involving the Tariff has made the point that, in fixing the appropriate number of units for an item within the range, account must also be taken of work performed of the same or similar description which was billed for in the pre-Tariff period.

[70] Given the nature of these proceedings, which included communications with the claimant that proved somewhat difficult for reasons I have already noted, communications with counsel both for the Dafloses and for the respondent, and time spent inconclusively on settlement, I am of the view overall that Item 1 covers matters on which in this instance an average or slightly greater than average amount of time should ordinarily have been spent. In allocating the portion of these matters which fall within the post-Tariff period, I conclude that it would be reasonable to allow 3 units out of a maximum of 20.

[71] As for the final cost review itself, Item 14 allows a fixed number of 2 units for preparation for attendance before the board to assess costs for each day of attendance, and Item 15 allows 4 units for each day of attendance for that purpose. However, as I indicated earlier, the cost review in this matter occupied less than 2 ½ hours. Therefore, section 4(7) of the Tariff applies and only half the number of units is allowed both for preparation and attendance. Accordingly, I allow a total of 3 units in this regard.

[72] A further question for determination under the Tariff is the scale at which the foregoing units should be allowed. From my earlier discussion of the number and complexity of the issues involved, I would characterize the claimant’s legal case overall for the purposes of the Tariff as being one of "ordinary difficulty or importance". This would fix the matter at scale 2. For the purpose of determining legal costs, the value allowed on an assessment under scale 2 is $140 for each unit. While there is provision in the Tariff for assessing one or more steps in the proceedings under a different scale than that fixed for other steps, I am not convinced by anything I heard in the respondent’s submissions that the items in question here should fall under scale 1.

[73] Therefore, the net result of my review of the claimant’s post-Tariff legal costs is that I have allowed 6 units under scale 2. This calculates to fees amounting to $840 to which GST and PST apply, making a total of $957.60.

6.3.3 Interest on Legal Costs

[74] A final question on this cost review has to do with whether any interest is payable on the amount outstanding on the Whitelaw Twining account. In his affidavit Mr. Braaten deposes that he had made an agreement with the claimant that he would not render an invoice until the board had issued its reasons for decision on compensation. The board released its reasons on November 25, 1999 and the invoice was rendered to the claimant on or about November 30, 1999 and provided to the respondent the following day. Therefore, Mr. Braaten acknowledged that no interest was owing on the account until that time. However, he went on to say that clients are required to pay interest at a rate of 1.5% per month on all legal services accounts oustanding for more than 15 days in accordance with his firm’s policy.

[75] The respondent took the position that, if the claimant was indeed claiming interest with respect to delayed payment of the account, such a claim should be rejected for two reasons. First, the statement of account does not, on its face, charge interest, and the account receivable report exhibited in Mr. Braaten’s affidavit indicates that no late interest charges were recorded. Second, the respondent says that, if there was interest charged and not paid, the decision to allow the account to become overdue was completely within the claimant’s control and, under those circumstances, no award for interest should be made. The respondent referred to the board’s decision respecting payment of interest in the Tidmarsh case.

[76] The board’s decision on interest in Tidmarsh is not determinative of the issue. On appeal from that decision the British Columbia Supreme Court held that the fact that interest charges on legal accounts have not yet been paid is not, in itself, a reason to deny interest as a cost incurred by a claimant. Whether interest charges are recoverable, the Court held, depends upon the particular circumstances of each case and also the reasonableness of the interest expense: see 55 L.C.R. 81, at pp. 85-7. The board in subsequent cost decisions has exercised its discretion to allow interest on unpaid and overdue accounts in appropriate circumstances.

[77] However, I do agree with the respondent that, apart from Mr. Braaten’s affidavit statement concerning his firm’s policy on overdue accounts, there is no other evidence to indicate that interest was being charged to the claimant either in the invoice rendered or the account receivable report. Neither was I provided with any correspondence between counsel to suggest that interest was being claimed or to explain why the costs claim with respect to the Whitelaw Twining account did not come before the board for review at an earlier date. Absent more compelling evidence to demonstrate that reasonable interest costs were actually incurred by the claimant in respect of this account, I am not prepared to exercise my discretion to make an award of interest.

[78] I should add that, in any event, it appears no interest would be payable on at least that portion of the account falling within the post-Tariff period in light of section 5(6) of the Tariff which provides:

5 (6) An allowance must not be made for interest on legal or real estate appraisal costs or expense or disbursement claims.

Arguably, no interest should be allowed on any part of the Whitelaw Twining account since Mr. Braaten acknowleged that no interest was owing until November, 1999, resulting in the claimant not having incurred such costs until after the Tariff came into force. However, neither counsel referred to this provision in argument and it is therefore a point which, in providing reasons, I need not now decide.

7. SUMMARY OF COSTS AWARDED

[79] The claimant’s prior solicitors, McEachern Harris Brown & Kehler, rendered three accounts to the claimant in the amount of $2,580.69 for services rendered between July, 1995 and July, 1997, in connection with the claimant’s third mortgage security interest on the expropriated property. Except for interest said to be owing on the last invoice, the respondent fully reimbursed these accounts. They were not made the subject of review at this final cost hearing except to the extent that they served to reveal any overlap or duplication in the legal account of Whitelaw Twining.

[80] My determination of the claimant’s legal costs in this matter pertaining to the Whitelaw Twining account are as follows:

(1) Pre-Tariff legal costs are allowed in the amount of $14,705.00 in fees, $1,410.81 in disbursements, $1,128.11 in GST and $1,029.35 in PST, for a total of $18,273.27.

(2) Post-Tariff legal costs, including the costs of preparation for and attendance at this cost review, are allowed in the amount of $840.00 in fees, $58.80 in GST and $58.80 in PST, for a total of $957.60.

(3) No interest is awarded with respect to the account.

(4) Therefore, there remains owing by the respondent to the claimant (now the claimant’s estate) on account of his legal costs the sum of $19,230.87.