| January 31, 2001, E.C.B. No. 49/96/199
(72 LCR 114)
Tariff Costs
| Between: | Gerald
Charles Budd
Claimant | | And: | Her
Majesty the Queen in Right of
the Province of British Columbia as
Represented
by the Minister of Transportation
And Highways
Respondent |
| Before: | Robert
W. Shorthouse, Chair | | Appearances: | William
A. Scott, Counsel for the Claimant
Fran Crowhurst, Counsel for the Respondent
| REASONS FOR
DECISION 1. APPLICATION [1]
This is an application brought by the claimant, Gerald Charles Budd, for a review
of the claimant's bills 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"),
and the Tariff of Costs Regulation, B.C. Reg. 189/99 (the "tariff regulation"),
under the Act. The costs at issue arise out of the expropriation of a small portion
of the claimant's lands by the respondent, Her Majesty the Queen in right of the
Province of British Columbia as represented by the Minister of Transportation
and Highways, in April, 1996. The costs claimed are in respect of legal and appraisal
services provided to the claimant between May, 1996 and May, 2000 in the course
of asserting his claim for compensation. At the beginning of May, 2000, approximately
two weeks before the compensation hearing was scheduled to begin, the parties
reached a settlement of all claims except for costs. The claimant also now claims
the costs of this review, which is the first to consider the effect of the new
tariff regulation on a determination of final costs. 2. BACKGROUND 2.1 The
Subject Property and the Expropriation [2] The claimant
is the registered owner in fee simple of a rectangular shaped 10 acre (4.1 ha.)
parcel of land located at 1045 Harewood Mines Road in the City of Nanaimo, British
Columbia. The property is traversed by a watercourse. The westerly portion of
the property, west of the watercourse, is gently sloping and improved with a single
family residence, a detached garage and a barn. Part of the easterly portion of
the property is a bluff with a steep slope downward in a westerly direction and
a flat area which both parties appear to have considered developable, at least
prior to the expropriation. [3] The respondent acquired
by expropriation a small triangular portion comprising 0.13 acres (0.05 ha.) at
the northeast corner of the property to facilitate its construction of the Nanaimo
Parkway, which is part of a much larger scheme known as the Vancouver Island Highway
Project. Specifically, the purpose of the taking was for the construction of a
service road paralleling the Nanaimo Parkway at that location. 2.2 Chronology
of Proceedings [4] The history of this matter, relevant
to the determination of costs, can be summarized in the following chronology:
- On November 28, 1995, the respondent made an offer to purchase that portion
of the claimant's property which it required for the sum of $16,250. The offer
was not accepted.
- On February 21, 1996, in anticipation of
expropriation, the respondent's advance payment appraiser, Nick Davies, AACI,
completed a report valuing the area of the intended partial taking at $4,600.
- On April 18, 1996, the respondent issued a certificate of approval
of expropriation with respect to the partial taking.
- On April
29, 1996, the respondent issued a notice of advance payment and, on May 1, 1996,
served on the claimant the notice, the advance payment appraisal, and a cheque
for $4,600.
- On June 5, 1996, the claimant, through his newly
retained solicitor, William A. Scott of the firm Hobbs Hargrave, filed with the
board an application for determination of compensation (the "Form A").
The brief statement of claim in the Form A sought compensation for the portion
of the land which was taken, the reduction in market value to the remaining land,
personal losses, and costs. No specific amount was claimed.
- On
January 16, 1997, the respondent filed with the board a reply to the claimant's
application (the "Form B"). The Form B stated that $4,600 was equal
to or greater than the amount of compensation to which the claimant was entitled
in respect of the expropriation.
- On September 14, 1997, an
appraiser retained by Hobbs Hargrave on behalf of the claimant, Victor Sweett,
AACI, of Pacific Rim Appraisals Ltd., completed an appraisal report with respect
to the subject property.
- During the early months of 1998, it
appears that the parties exchanged lists of documents and also made efforts at
mediation. According to Mr. Scott, the claimant's expressed concerns were initially
focused on the impact of noise from the Parkway, loss of access to the easterly
portion of the property adjacent to the bluff, and some loss of fencing. The mediation
was unsuccessful.
- On August 19, 1998, the respondent requested
particulars of the claimant's claims. In a letter dated September 15, 1998, Mr.
Scott quantified the claims as follows: market value of the taking - $5,200; injurious
affection to the remainder - $23,500; cost to re-establish access - $5,885; cost
to replace fencing - $1,500; total claim: $36,085 (rounded to $36,000). At the
same time the claimant provided a supplemental list of documents.
- On
November 15, 1999, the respondent filed with the board an application to set a
hearing date, indicating that it had been agreed between the parties that a four
day compensation hearing should be scheduled in Nanaimo from May 15th to May 18th,
2000. A notice of hearing issued by the board on March 10, 2000, confirmed the
dates and location for the compensation hearing.
- On December
17, 1999, Mr. Scott attended at an examination for discovery of the claimant and
in turn conducted an examination of Mr. Simmons, the respondent's representative.
Both examinations were brief.
- In the early months of 2000,
the parties began negotiations aimed at settling the claim. Judy Reynier, a property
agent retained by the respondent, was principally involved in the negotiations
on its behalf.
- On February 2, 2000, the respondent made a request
for further particulars of the claim. On April 13, 2000, the claimant particularized
his claim, indicating that he was seeking compensation as follows: for the partial
taking of his land; the reduction in market value of the lands lying to the west
of the watercourse as a result of highway traffic noise; the loss of use of 2.2
acres to the east of the watercourse for a residential building site as a result
of City of Nanaimo bylaw amendments made in contemplation of the Parkway construction
or, alternatively, as a result of unreasonable highway traffic noise; the loss
of both legal and physical access to lands lying to the east of the watercourse
as a result of the Parkway; the replacement of a fence removed during Parkway
construction; and reasonable personal losses.
- On April 14,
2000, the respondent provided to the claimant an acoustics study it had commissioned,
at the claimant's request, of the noise impact of the Nanaimo Parkway on the claimant's
property.
- Also on April 14, 2000, the respondent's appraiser,
Mr. Davies, completed a further appraisal report on the subject property. On the
basis of that further report, the respondent prepared to make a supplemental advance
payment to the claimant in the amount of $47,279.08. This amount comprised $34,880
for what was described as injurious affection to the remainder of the claimant's
property, $2,550 for disturbance damages for loss of trees and fencing, and $9,889.08
for interest on the foregoing items calculated from May 2, 1996 to May 2, 2000.
- On April 25, 2000, the claimant filed with the board an Amended
Form A, which incorporated the various claims and allegations of fact set out
in the particulars provided on April 13, 2000.
- At the end of
April and beginning of May, 2000, before the supplemental advance payment was
made, further negotiations resulted in a settlement of the claimant's claims,
except for costs. The board was advised by claimant's counsel on May 2, 2000,
that a settlement had been reached. As reflected in a release of claims signed
by the claimant on May 12, 2000, the settlement was for the sum of $59,882, which
Mr. Scott indicated was an additional amount over and above the initial advance
payment of $4,600 provided on May 1, 1996.
[5] Once
a settlement of the compensation claims had been achieved, discussions ensued
over costs. There were "without prejudice" written offers from both
sides but no overall agreement was reached. At the hearing into costs, the parties
agreed to enter this correspondence into evidence for my consideration. 3. THE
COST CLAIMS [6] Over the course of these proceedings,
the claimant's law firm, Hobbs Hargrave, rendered four legal accounts to the claimant
and, in turn, submitted them for payment to the respondent pursuant to section
48 of the Act. As evidenced in an affidavit sworn by the respondent's property
negotiator, Ms. Reynier, they are as follows:
| Date of Account | Fees | Disbursements | Taxes | Total |
| January 15, 1998 | $
l,008.00 | $100.45 | $
144.31 | $ 1,252.76 | | August
12, 1998 | 1,008.00 | 47.25 | 144.42 | 1,199.67 |
| December 9, 1999 | -
- - | 43.50 | 3.05 | 46.55 |
| May 5, 2000 | 8,365.50 | 205.37 | 1,184.76 | 9,755.63 |
The respondent fully reimbursed the first
three accounts in the total sum of $2,498.98 but has made no payment with respect
to the fourth account. [7] Mr. Sweett, the real estate
appraiser retained by Hobbs Hargrave on behalf of the claimant, rendered three
accounts to the claimant's law firm and these, in turn, were also submitted for
payment to the respondent pursuant to section 48. As evidenced in Ms. Reynier's
affidavit, they are as follows:
| Date of Account | Fees | Disbursements | Taxes | Total |
| September 29, 1997 | $1,800.00 | -
- - | $126.00 | $1,926.00 |
| October 27, 1997 | 300.00 | -
- - | 21.00 | 321.00 |
| May 5, 2000 | 450.00 | -
- - | 31.50 | 481.50 |
The respondent fully reimbursed the first
two of these accounts in the total sum of $2,247.00 but has made no payment with
respect to the third account. [8] All of the foregoing
accounts followed what may be described as the conventional billing format in
which the work performed, time spent, and hourly or daily fees charges are set
out. However, with the coming into force of the tariff regulation on June 28,
1999, it became necessary for the claimant to present his claims for legal and
real estate appraisal costs incurred on and after that date in tariff format,
specifying the units claimed for various items of work described under the tariff
schedules and the appropriate scale at which, according to the claimant, such
units ought to be allowed. The respondent declined to consider for payment the
legal and appraisal accounts, each dated May 5, 2000, until they were presented
in tariff format. [9] On or about May 11, 2000, when negotiations
to settle costs were underway, the claimant's law firm prepared a draft bill of
costs in tariff format and presented it to the respondent for payment. The cost
claim as presented was a rendering in tariff format of all the legal work performed
from the outset of the law firm's involvement in the case in May, 1996. It claimed
a total of 69.5 units under various items of description in the legal tariff schedule
and fixed the costs allowable under scale 2, which is for matters of ordinary
difficulty or importance, at the prescribed value of $140 per unit. The resulting
cost claim was for an amount of $9,730.00 in fees plus disbursements and applicable
taxes. From this fee total the claimant proposed to credit the full amount of
the fees already reimbursed by the respondent on the first two pre-tariff accounts
rendered in the sum of $2,016.00. [10] The respondent countered
with an offer on May 17, 2000 to settle the legal costs on the basis of 52.5 units
at scale 2, for a total of $7,350.00 in fees, minus the $2,016.00 already reimbursed,
plus disbursements and applicable taxes. [11] The respondent's
offer being unacceptable to the claimant, the legal tariff cost claim which ultimately
came before the board for determination on this final review of costs was revised
to reflect 105 units at scale 2, for a total of $14,700.00 in fees, $205.37 in
disbursements over and above those already reimbursed on previous accounts, and
applicable taxes in the amount of $2,072.38. The legal tariff cost claim therefore
totals $16,977.75. The claim was supported by an affidavit sworn by claimant's
counsel, Mr. Scott, who also appeared on this application. [12]
Like the claimant's law firm, the real estate appraisal firm prepared a bill of
costs in tariff format which was intended to reflect all the work carried out
since its first involvement in early 1997. As initially presented to the respondent,
the cost claim was for a total of 75 units for various items of description in
the real estate tariff schedule, all under scale 2 at the prescribed value of
$100 per unit. The appraisal tariff cost claim was therefore for $7,500.00 plus
GST for a total of $8,025.00. [13] At the cost hearing
there was no affidavit or other evidence in support of the appraiser's bill and
claimant's counsel made clear that he was not prepared to justify it. In the circumstances
I decided to give the appraiser some further period of time within which to provide
sworn evidence. Following the hearing in due course I received a supporting affidavit
from Mr. Sweett which also attached a modified real estate tariff cost claim.
The bill of costs as now presented reflects a total of 62 units at scale 2, or
$6,200 plus GST for a total of $7,068.00. [14] To summarize
the billings which are before me, the legal accounts in conventional format total
$12,254.61 in fees, disbursements and taxes whereas the bill of legal costs in
tariff format for essentially the same work (the legal costs associated with this
final cost hearing were added) totals $16,977.75. The appraisal accounts in conventional
format total $2,728.50 in fees and taxes whereas the real estate appraisal bill
of costs in tariff format for the same work totals $7,068.00. 4. THE
COST REVIEW 4.1 The Statutory and Regulatory
Regime [15] Before turning to consider the issues which
arise from the claimant's cost claims, it is appropriate at this juncture to review
the statutory and regulatory regime which now governs the final determination
of costs in this matter. [16] Under section 45(3) of the
Act, a person whose interest or estate in land is expropriated is entitled to
be paid "costs necessarily incurred" by the person for the purpose of
asserting his or her claim for compensation or damages. While under section 45(5)
the board has discretion to award the owner less than all of his or her costs
where the compensation awarded is 115% or less of the amount paid in advance by
the expropriating authority, there is no suggestion that the provision applies
in this instance. [17] The costs payable under section
45(3) are therefore either the "actual reasonable" legal and appraisal
costs pursuant to section 45(7)(a) or, where a tariff of costs has been prescribed
under section 45(7)(b), then the amounts prescribed in the tariff and not the
actual reasonable costs. [18] Section 2 of the tariff regulation
provides that the regulation applies to costs payable under section 45 of the
Act "if the costs claimed were incurred on or after the date the regulation
comes into force." In the present instance, part of the costs were incurred
before the tariff regulation came into force on June 28, 1999, and part were incurred
after that date. The cost review on its face therefore becomes something of a
hybrid exercise and the board's prior decisions dealing with "actual reasonable"
costs are clearly germane. [19] Insofar as the tariff regulation
applies to this cost review, section 3(2) provides that, when making an assessment
of costs under section 45, the reviewer must allow those costs under the tariff
that were "proper or reasonably necessary" to conduct the proceeding. [20]
If this matter had proceeded to a compensation hearing, the panel which heard
the claim would have had discretion to fix the scale under which the costs would
be assessed. Since this did not happen, it is for the reviewer to fix the scale
under section 4(1) of the tariff regulation, having regard to the principle that
scale 1 is for matters of less than ordinary difficulty or importance, scale 2
is for matters of ordinary difficulty or importance, and scale 3 is for matters
of more than ordinary difficulty or importance. Under section 3(4) the reviewer
may assess the legal costs on a different scale from the real estate appraisal
costs and may also assess one or more steps in the proceedings under a different
scale from that fixed for other steps. [21] I would observe
that section 4(3) of the tariff regulation establishes a presumption that costs
in a matter are to be assessed on the basis that the matter is of ordinary difficulty
or importance. With reference to a final cost review under section 45, it states
that if such costs are payable, the costs must be assessed under scale 2 unless
a party, on application, obtains an order of the board that the costs be assessed
under another scale. [22] For some steps in the proceedings
the tariff regulation prescribes a fixed number of units and for others it provides
for minimum and maximum numbers of units. Where a range of units is indicated,
the reviewer has the discretion under section 4(6) to allow a number within that
range, having regard to the principle that when assessing costs, 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 language of this section contemplates
the application of an objective standard. [23] Finally
with respect to the tariff regulation, it is relevant in this case to note that
section 4(7) provides that if an item in the tariff provides for an amount for
each day but the time spent during the day is less than 2 1/2 hours, only half
of the amount is allowed for that day. Similarly, if an amount for preparation
for an attendance is provided but the time spent on the attendance is less than
2 1/2 hours, only half the amount for preparation is allowed. There is also provision
for increasing the amount allowed by half where the time spent during the day
exceeds 5 hours. [24] The authority for the present final
cost review flows from section 45(8) of the Act which provides that, if an expropriating
authority and an owner agree on the amount of compensation or damages, but do
not agree on the amount of costs to be paid, the costs must be determined by the
chair. Under section 45(10), the chair must take several considerations into account
when determining costs, namely, the number and complexity of the issues, the degree
of success achieved, and the manner in which the case was prepared and conducted. 4.2 Interpretive
Issues [25] The interpretation of the new tariff regulation
by the parties posed several issues on this final cost review. Since they raise
questions of general application, I propose to deal with them in some detail in
the context of this matter. The questions can be framed as follows:
- What is the scope of the tariff on a final cost review?
- What
role do "actual" costs play in a final cost review under the tariff?
- What role does the principle of "reasonableness" play
in a final cost review under the tariff?
- What is the reviewer's
discretion in allowing fixed units under the tariff?
- What is
the proper role of claimant's counsel on a final cost review?
4.2.1 The
Scope of the Tariff [26] The claimant approached
the question by reconstructing the whole of the legal and real estate appraisal
costs on the file from start to finish in tariff format. The respondent accepted
the claimant's approach inasmuch as it attempted to negotiate a settlement of
final legal costs with the claimant on an overall tariff basis. [27]
Respondent's counsel, Fran Crowhurst, in written submissions following the final
cost review, suggested that it is also open to me to accept the approach. She
proposed that I proceed with either of two options:
| (1) | consider
the pre-tariff accounts under the pre-tariff criteria established by the Act and
previous decisions of the board and consider the post-tariff accounts under the
tariff regulation; or | | (2) | consider
all of the accounts within the tariff framework, since this is the manner of presentation
chosen by the claimant's professional advisors. | In
the respondent's submission, the practical result from adopting either approach
would be the same. If pre-tariff costs already reimbursed by the respondent were
to be assessed separately under the pre-tariff criteria, there would still have
to be a dollar-for-dollar reduction made in respect of those earlier reimbursements
when assessing all of the costs incurred in tariff format. [28]
While there may be some attraction to the second option suggested in that it would
tend to simplify the task at hand in this matter, where only legal and appraisal
costs are at issue, there is plainly no statutory or regulatory authority to sanction
such an approach. The tariff regulation applies only to those legal and appraisal
costs which were incurred on and after June 28, 1999. It has not been made retrospective
in effect. Before that date the costs payable are the "actual reasonable"
legal and appraisal costs incurred. A dollar-for-dollar reduction along the lines
suggested ignores the reality that the tariff regulation has introduced a different
regime which may result in cost recovery that does not indemnify an owner to the
same extent as the earlier "actual reasonable" costs regime. [29]
I am therefore of the view that both the governing enactments and regard for the
principle of indemnification in expropriation matters require me to proceed as
best I can with the evidence provided as to legal and real estate appraisal costs
in accordance with what the respondent identified as the first option. [30]
Although for the reasons indicated I reject the formula of a dollar-for-dollar
adjustment for pre-tariff costs when allowing post-tariff costs, it is apparent
to me that some appropriate adjustment must be made. In my recent cost decision
in Dennis Yew Gow Chu and Shew Ha Chu (Estate) v. The Board of School Trustees
of School District No. 36 (Surrey), unreported, E.C.B. No. 25/99/195, January
9, 2001, I observed as follows at para. 61: The
tariff regulation contains no transitional provision specifying how costs which
an owner has incurred for legal and appraisal services performed in the pre-tariff
period, and which the expropriating authority has already reimbursed, should be
factored into the number of units allowed for such services under the tariff.
However, common sense would suggest that the owner or his or her professional
advisors should not receive a windfall from the introduction of the tariff in
the sense of being compensated twice for the same work. [31]
The Chu decision resulted from an application for advance payment of tariffed
costs under section 48 of the Act. There, evidence of time spent on both pre-tariff
and post-tariff legal work of the same or similar description was taken into account
in fixing the appropriate number of units allowable under the tariff so as to
avoid duplication of costs on an advance cost review. [32]
A similar exercise will assist in arriving at the appropriate allocation on a
final cost review. However, it should be noted that in Chu the reasonableness
of the pre-tariff accounts, already fully reimbursed by the authority, were not
directly in issue whereas on a final cost review such pre-tariff costs would fall
to be considered under the "actual reasonable" standard. Also, the units
claimed in the post-tariff bill of costs under corresponding items of description
fall to be assessed, not on the basis of time actually spent, but rather on the
basis of the amount of time which "should ordinarily have been spent"
on them. 4.2.2 The Role of "Actual"
Costs [33] The respondent asserted that under the
new tariff regulation there is no provision for payment or reimbursement by an
expropriating authority of more than the owner's actual liability for costs. In
written submissions following the hearing, Ms. Crowhurst put the matter this way:
"The application of the Tariff is not intended to and
cannot result in a windfall to legal representatives or experts retained by the
Claimant, such that the former are paid more than the Claimant's liability to
them for their accounts." [34] The respondent
referred to principles said to arise from the application of Appendix B (Party
and Party Costs) of Rule 57 of the Rules of Court, B.C. Reg. 221/90, upon which
the new tariff regulation has been closely modelled. According to Mark M. Orkin,
The Law of Costs, Second Edition (Aurora: Canada Law Book, 1999), at TR
12-13: Ordinary costs are intended as an indemnity
for the expenses to which the recipient has been put as a result of litigation.
A party is not entitled to recover costs equal to or in excess of 100% of its
actual costs unless the Court finds it necessary to impose costs as a form of
punishment because of the egregious conduct of another party during litigation. In
Foundation Company of Canada v. United Grain Growers Limited (1996), 8
C.P.C. (4th) 354 (B.C.S.C.) appeal allowed in part 34 B.C.L.R. (3d) 92, Brenner
J. observed at p. 365 that "[t]he authorities identify the target of 50 percent
indemnity as a fundamental objective of the current Rules of Court." [35]
The tariff regulation which governs legal and real estate appraisal costs in expropriation
matters is clearly intended to provide a higher level of indemnity than does Appendix
B in the Supreme Court for ordinary litigation. For example, whereas the value
allowed per unit on assessment of legal costs under Appendix B ranges from between
$40 and $120 depending upon the scale, the value allowed per unit on such an assessment
under the tariff regulation ranges from between $100 and $180. Nevertheless, as
I understand the respondent's argument, it becomes necessary on a final cost review
under section 45 to compare the actual accounts rendered to the owner for legal
or appraisal services in the post-tariff period in order to ensure that a bill
of costs in tariff format does not exceed the amount reflected in those accounts. [36]
If what the respondent submits is correct, then final cost reviews before the
board would follow a quite different course from what counsel advised is the normal
practice on a taxation under Appendix B in the Supreme Court. There, although
particulars are required to substantiate that the work reflected in a bill of
costs was actually performed, was necessary and was reasonable, the accounts rendered
to a party in respect of services provided are not themselves usually considered
relevant or placed in evidence. Exceptions to the practice may occur where the
party seeks costs on a higher than ordinary scale or "increased" or
"special" costs. There is no provision under the tariff regulation for
an award of increased or special costs. [37] Rule 57(2)
provides:
| 57 (2) | On
an assessment of party and party costs, the registrar shall allow those fees under
Appendix B that were proper or reasonably necessary to conduct the proceeding. |
The wording of section 3(2) of the tariff
regulation closely parallels that of Rule 57(2). It states:
| 3 (2) | When
making an assessment of costs under section 45 or 48 of the Act, the reviewer
must allow those costs under the tariff that were proper or reasonably necessary
to conduct the proceeding. | [38]
However, the respondent points out that what is absent in a taxation of party
and party costs in the Supreme Court, but is included in both section 45(3) of
the Act and section 2 of the tariff regulation, is a requirement that the owner
has "incurred" the costs in question before they can be considered for
payment or reimbursement on a final cost review. It is the word "incurred"
which, in the respondent's submission, makes the actual accounts rendered to the
owner highly relevant in a final cost review before the board. [39]
In Chu I considered the meaning of "incurred" in the context
of tariffed costs as well as the standard of proof required that tariffed costs
at issue have been incurred by an owner. [40] At the advance
cost review the expropriating authority argued that owners only incurred the legal
and appraisal costs at issue when accounts were rendered to them, thereby creating
an actual debt. The owners argued that they incurred such costs when the legal
and appraisal professionals they retained performed services on their behalf,
thereby creating an obligation to pay. Whether actual accounts had been rendered
to them, they submitted, was irrelevant. The standard of proof was satisfied by
providing sufficient details of the services provided so that they could be properly
assessed under the tariff schedules. [41] I found the owners'
position on these questions more compelling, particularly in light of the object
of a tariff under which notional or standard allowances are made which are not
dependent upon what an owner in fact may have been billed. The costs at issue
were the amounts prescribed in the tariff rather than the actual costs so that
the rendering of accounts to the owners took on far less relevance at an advance
cost review than previously had been the case. At para. 46 of the decision, I
stated: It seems to me that advance costs
may be said to have been "incurred" by an owner for the purposes of
the tariff regulation when legal and appraisal services falling within the items
of description in the tariff schedules have been provided to the owner. Sufficient
details of the work itemized in a bill of costs are required so that they can
be properly assessed on an interim basis under the tariff schedules. [42]
What I said in the context of an advance cost review, which is intended to be
somewhat summary in nature, is similarly applicable on a final cost review under
section 45 where, however, the provision of detailed cost particulars takes on
added importance. The costs "necessarily incurred" under section 45(3)
become payable under either section 45(7)(a) as being the "actual reasonable"
costs or, where a tariff of costs has been prescribed pursuant to section 45(7)(b),
then as the "amounts prescribed in the tariff and not the costs referred
to in paragraph (a)". In my view, the new costs regime does not contemplate
as a standard practice the comparison of actual costs with tariffed costs for
the same work in order to establish an upper limit on cost recovery based on accounts
rendered to the owner. As the vice chair, Sharon I. Walls, pointed out in her
decision in C.R. All Trucks Ltd. v. British Columbia (Minister of Transportation
and Highways) (2000), 69 L.C.R. 197, at p. 214: In
my opinion a bill of costs that reflects the Tariff is not a translation of a
bill that a lawyer or appraiser might send his or her client, but an entirely
separate exercise. Rather, where the tariff
regulation applies, the legal and appraisal costs to be considered are those in
respect of steps taken in the proceedings set out in a tariffed bill of costs
which have been proven to be "proper or reasonably necessary" and for
which amounts have been prescribed under the tariff. [43]
In the present instance, of course, the actual accounts rendered to the claimant
by his legal counsel and appraisal expert in the post-tariff as well as the pre-tariff
period have been entered into evidence. As I indicated earlier, they reveal a
considerable disparity between the amounts actually billed to the claimant and
the amounts now claimed under the tariffed bills of costs. They also serve to
highlight that actual accounts rendered, while not a necessary component of every
final cost review, may nevertheless become relevant in certain circumstances. [44]
In Elsie Yuen Ching Chan v. The City of Vancouver, unreported, E.C.B. No.
72/00/197, January 22, 2001, another recent decision resulting from an application
for advance payment of costs, the reviewer, Julian K. Greenwood, stated as follows
at para. 14: In a case under the Tariff, there
may be a request for a higher than usual scale or number of units, and in such
a case the reasonableness of the bill of costs might become an issue. In such
a case the reviewer could well decide to ask for evidence of actual expenses,
but the purpose of this evidence would be to assess reasonableness, rather than
the threshold right to compensation. [45]
I agree with this observation. I further note that a similar procedure has been
considered in the Supreme Court in a decided case not cited by counsel on this
application but which I consider relevant to the issue of actual costs: Alastair
Scott v. Norris Alan Hutchinson, unreported, July 7, 1992, No. C883112, Vancouver
Registry (B.C.S.C.). There the issue was the scale of costs to be applied in a
medical malpractice case where the plaintiff received what was described as "only
a fraction of the claim advanced". Under the tariff for party and party costs
where costs are to be fixed on a scale of 1 to 5, the defendant conceded the obligation
to have the costs against him assessed at scale 3 on the basis that the case was
one of ordinary difficulty or importance. The plaintiff sought a higher scale.
In rejecting the plaintiff's submission and fixing the costs at scale 3, Meredith
J. said at p. 3 of his decision: ...I would
be disinclined to raise the level without knowing what the plaintiff is obligated
to pay his lawyer given that the agreement between the plaintiff and his lawyer
in all probability was that the lawyer be paid a percentage of the judgment. Raising
the level might well result in giving the plaintiff a judgment for costs in excess
of what the plaintiff owed his lawyer. This would be contrary to the principle
that the award of costs is to indemnify the plaintiff for his costs, not to augment
the judgment in favour of the plaintiff. 4.2.3 The
Role of "Reasonableness" [46] The foregoing
discussion of the role of "actual" costs leads logically to the next
question concerning what role the principle of "reasonableness" plays
on a final cost review. At least prior to the introduction of the tariff regulation,
"reasonableness" was a guiding principle on all costs reviews under
the Act since the "actual reasonable" standard applied. [47]
The respondent cites the vice chair's decision in C.R. All Trucks Ltd.
for the proposition that the "actual reasonable" standard which previously
governed the assessment of costs under section 45 of the Act has been replaced
by "the amounts prescribed in the tariff" with respect to legal and
appraisal costs. This change, the respondent says, has two consequences for cost
assessment. First, the tariff is exhaustive in terms of setting out the items
of description in respect of which legal and appraisal costs are allowed. Second,
the tariff regulation is intended to act as a ceiling on the amount of incurred
costs which an owner may recover from an expropriating authority, irrespective
of whether under the pre-tariff regime a reviewer might have found an award of
some higher amount of actual costs incurred to be reasonable given the nature
of the case. [48] Respondent's counsel referred to decided
cases in both British Columbia and Ontario which deal with the conclusiveness
of a tariff in fixing costs. In Eileen's Quality Catering Ltd. v. Depaoli et
al. (1985), 1 C.P.C. (2d) 152 (B.C.S.C.), where under the Supreme Court Rules
there was no tariff item expressly allowing a fee for the preparation of a chambers
brief, Bouck J. held there was no inherent jurisdiction in the court to allow
costs for such a brief. However, in that instance the learned judge found that
the more general item "preparation for an application" covered the particular
activity, albeit in a less generous amount than the task at hand might otherwise
have warranted. In Bratt v. Hanes (1988), 65 O.R. (2d) 612 (Ont. H.C.),
it was held that experts' fees were not recoverable to the extent they fell outside
the ambit of the disbursement tariff. Osborne J. commented at p. 618:
The tariff dictates the assessment of disbursements, not broad
principles of reasonableness. The words of [the applicable rule of civil procedure]
do not support the conclusion that the assessment officer can depart from the
disbursement tariff in assessing a litigant's disbursement on a party-and-party
assessment. [49] Where the tariff regulation
under section 45(7)(b) applies, I note that, except in regard to the costs of
a participant in an inquiry prior to expropriation, nowhere else in section 45
does the word "reasonable" now appear. Curiously, the wording of section
48 of the Act continues to make "reasonableness" a pivotal consideration
on an advance cost review under the tariff but its role in a final cost review
is less clear. [50] I acknowledge that the reviewer's discretion
to fix costs on the basis of what was necessary and reasonable in the circumstances
is somewhat more limited than in the past as a result of the tariff regulation.
I am inclined to agree with the respondent that the tariff sets a ceiling. The
limitations which I identify include: the seemingly exhaustive nature of the items
of description in respect of which legal and real estate appraisal costs are allowed
under the tariff schedules; the fixed numbers of units specified for certain steps
in the proceedings; the maximum numbers of units specified for other steps; the
unit values allowed for the work of the legal and real estate appraisal professionals
retained; and the provision in section 5(6) of the tariff regulation that no allowance
can be made for interest on legal or real estate appraisal costs or expense or
disbursement claims. [51] Nevertheless, in my opinion it
remains a primary consideration for the reviewer of post-tariff legal and appraisal
costs under section 45 to determine the reasonableness of the costs at issue within
the parameters set out. This consideration arises in a number of ways. First,
under section 3(2) of the tariff regulation, the reviewer is required when making
an assessment of costs under section 45 to allow those costs under the tariff
that were "proper or reasonably necessary" to conduct the proceeding.
Second, under section 4(6), when fixing the appropriate number of units for an
item in the tariff which provides for maximum and minimum numbers of units, the
reviewer must consider the amount of time that "should ordinarily have been
spent". As I indicated earlier, this provision appears to set an objective
standard implying an assessment of what would be reasonable in the circumstances.
Third, under section 5(1), the reviewer "may allow a reasonable amount for
expenses and disbursements that were necessarily and properly incurred in the
conduct of the proceeding." Finally, all of the statutory criteria under
section 45(10) of the Act which must be taken into account in determining final
costs continue to apply. These considerations, involving the number and complexity
of the issues, the degree of success achieved, and the manner in which the case
was prepared and conducted, once again imply, in my view, an assessment of what
costs should reasonably be allowed in the circumstances. 4.2.4 The
Reviewer's Discretion in Allowing Fixed Units [52]
The respondent initially argued that, where items in the tariff schedules prescribe
a fixed number of units for certain steps in the proceeding rather than a range
between some minimum and maximum number, the fixed number itself merely sets a
maximum. Quite apart from section 4(7) of the tariff regulation, which adjusts
for portions of days and long days, the reviewer has a discretion to allow a lesser
number than what the tariff schedule stipulates. [53] For
example, Item 11 in the legal costs schedule specifies 6 units for each day of
attendance on examination of a person for discovery by the party conducting the
examination. Under section 4(7), if the time spent during the day in conducting
the examination is less than 2 1/2 hours, then only half the amount or 3 units
is allowed. However, in the present instance, the parties agreed that Mr. Scott's
examination for discovery of the respondent's representative lasted for some 30
to 40 minutes. That being the case, the respondent contended that only 1 unit
rather than 3 units should be allowed. [54] Mr. Scott for
the claimant strenuously objected to what he described as the respondent's novel
approach. It was at odds, he said, with practice before the registrar in the Supreme
Court when applying the tariff for party and party costs. [55]
Some time after the hearing concluded, Ms. Crowhurst in a letter containing supplementary
written submissions said she had reconsidered Mr. Scott's comments and had made
enquiries of a deputy registrar with respect to the application of the party and
party tariff in the Supreme Court. As a result she had concluded that Mr. Scott's
interpretation was correct with respect to Supreme Court assessment practice.
Where a tariff item specifies "for each day" or "per day",
the provision as to portions of days or long days governs, but otherwise no adjustment
is made to the set unit number for that particular tariff item. The respondent
therefore retreated from its previous position in regarding items with fixed numbers
of units, such as Item 11 above, as setting a maximum with discretion to the reviewer
to allow a lesser number. [56] I concur in the interpretation
now evidently agreed upon by the parties with respect to how fixed units under
the tariff schedules are to be treated. I would only add that the reviewer, in
allowing fixed unit items, must nevertheless be satisfied that they "were
proper or reasonably necessary to conduct the proceeding" pursuant to section
3(2) of the tariff regulation. 4.2.5 The
Role of Claimant's Counsel [57] Claimant's counsel
took the position that under the tariff regulation it has become the responsibility
of each professional on a final cost review to justify those cost claims for which
he or she seeks reimbursement. Evidently the difficulty which Mr. Scott confronted
in this matter was an inability to make arrangements with the claimant's appraiser
to provide a modified bill of real estate appraisal costs or to offer evidence
in support of what he had earlier provided. Mr. Scott was therefore only prepared
to speak to the bill of legal costs. He suggested that perhaps Mr. Sweett could
attend at some future time to deal with his own costs. [58]
This unconventional approach created something of a dilemma. In the result, as
I indicated earlier, I felt it appropriate to adjourn the final cost review once
the bill of legal costs had been addressed in order to allow Mr. Sweett the opportunity
to provide an affidavit in support of the bill of real estate appraisal costs.
At the same time I reserved to the respondent the right to apply to cross-examine
or otherwise make submissions on any such affidavit. In due course Mr. Scott filed
the appraiser's affidavit which included a modified bill of costs in tariff format.
Respondent's counsel objected to the inclusion of certain paragraphs and provided
written submissions regarding it, but Ms. Crowhurst elected not to cross-examine
the appraiser. [59] I fail to see that the introduction
of the tariff regulation has in any way altered the normal practice before the
board on a final cost review which is for the expropriated owner's counsel to
present and endeavour to prove all of the owner's cost claims from whatever source
that are in dispute. Indeed, the tariff schedule of legal costs makes specific
provision for legal counsel's preparation for and attendance at a cost review
before the board. No such express provision appears in the tariff schedule of
real estate appraisal costs. [60] Sometimes the claims
before the board on a final cost review are supported only by affidavit evidence
although frequently viva voce evidence is also offered. The purpose of
such evidence is not, as claimant's counsel seemed to believe, to establish legal
counsel's entitlement to reimbursement nor any expert's entitlement to reimbursement.
It perhaps bears repeating what I said in this regard in my final cost decision
in Bill's Frontier Restaurant Ltd. v. British Columbia (Minister of Transportation
and Highways) (1996), 58 L.C.R. 204. In that case the owners had been represented
by three successive law firms. The owner's most recent legal counsel, who also
appeared on the final cost review, did not come prepared to substantiate the reasonableness
of his predecessors' bills. He seemed most concerned to justify the reasonableness
of his own fee accounts which, he advised me, the owners had yet to pay. I commented
at p. 214: While such a focus is perhaps not
surprising in the circumstances, counsel should take care not to lose sight of
the central fact that they appear on behalf of the client rather than themselves
and that it is the client's costs, rather than their own, for which reimbursement
is being sought. 4.3 Considerations
under Section 45(10) [61] Section 45(10) of the Act
provides:
| 45 (10) | In
a determination of costs under subsection (8) or (9), the
following considerations
must be taken 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. | [62]
Because this matter settled without the board being required to determine compensation,
it becomes more difficult to assess costs in light of all the statutory factors
set out in section 45(10). However, these factors remain relevant and their consideration
by a reviewer of final costs is mandatory. 4.3.1 The
Number and Complexity of the Issues [63] This expropriation
case was by no means particularly complex. The area of the land taken was small
both in absolute terms and in relation to the overall size of the subject property.
According to the pleadings, the parties were only $600 apart on the market value
of the expropriated portion. [64] However, there was broader
disagreement over the impact of the taking on the remaining land. Until late in
the proceedings, the respondent formally took the position that there was no reduction
in market value to the remainder. It relied on the report of its advance payment
appraiser, Mr. Davies, who, in using a subdivision development approach and before
applying what is now section 40(3) of the Act, found the market value of the remainder
to be greater after the taking than before. The claimant questioned the appropriateness
of Mr. Davies' valuation approach. The claimant also raised issues, eventually
particularized, concerning the alleged impact of highway traffic noise, the alleged
loss of legal and physical access to that easterly portion of the subject property
lying adjacent to the bluff, and the alleged loss of residential development potential
of the flat area of land in the vicinity of the bluff. The claimant made some
inquiry into the impact of setbacks from the watercourse and other municipal or
regional district bylaw requirements said to have been made in contemplation of
the highway scheme and alleged that they effectively prevented residential development
on that site. [65] Most of the submissions at the cost
hearing focused on the issue of highway traffic noise as a complicating factor
in the case. There had been some discussions between the parties around the practicality
of sound barriers. Claimant's counsel, Mr. Scott, who also has a degree in civil
engineering, suggested that the construction of effective sound barriers would
have required an "engineering marvel". A site specific acoustics study
was commissioned and paid for by the respondent and provided to the claimant.
Evidently the study did not lend much support to the claimant's claim that highway
traffic noise unreasonably interfered with actual or potential use and enjoyment
of the subject property except perhaps in the area of the bluff. The claimant's
appraiser was nevertheless asked to consider noise impact in the course of amending
his appraisal report a few weeks before the compensation hearing was scheduled
to begin. However, the settlement intervened before any such amended report was
prepared. [66] In addition to the issues related to market
valuation, there was also a minor claim for disturbance damage for loss of fencing
removed in the course of Parkway construction. Some trees on the subject property
were also evidently removed. [67] At the cost hearing the
parties confined themselves to dealing with the question of complexity in the
context of fixing the appropriate scale of costs under the tariff regulation.
They were in agreement that both legal and real estate appraisal costs in this
matter should be fixed at scale 2, as involving matters of ordinary difficulty
or importance. Later, in further written submissions, respondent's counsel suggested
that I should apply section 3(4) of the tariff regulation, which provides that
one or more steps in the proceeding may be assessed under a different scale from
that fixed for other steps. Ms. Crowhurst proposed that I allow the costs for
examination for discovery and for the negotiations leading to settlement at scale
1 to reflect what she said were the relatively straightforward issues in this
matter. Claimant's counsel did not reply to this submission. [68]
In my overall assessment this expropriation case was at best average in terms
of the number and complexity of the issues involved. Insofar as the tariff regulation
applies, I fix the matter at scale 2 throughout in accordance with what the parties
at the cost hearing itself considered appropriate. I decline to make the particular
exceptions later sought by the respondent. Partly this is because the respondent
is attempting to re-argue an issue upon which I was advised at the hearing that
agreement had already been reached. Partly it is because, at least with respect
to the negotiation stage, I am not satisfied in any case that reaching a settlement
was necessarily so simple a matter in light of the various issues to be resolved. 4.3.2 The
Degree of Success [69] Since there was no compensation
decision in this matter, my assessment of the degree of success achieved by the
claimant rests primarily upon what I am able to glean from the supplemental advance
payment which the respondent was preparing to make shortly before the settlement
occurred and from the terms of the settlement itself as reflected in the final
release of claims. [70] What is perhaps most striking about
the proposed further advance payment is the respondent's belated acceptance of
the claimant's position that the taking resulted in a reduction in market value
to the remaining land. The respondent initially denied that there was any such
reduction in value, supporting its estimation that the $4,600 payment already
advanced was all, or more than all, that the claimant was entitled to receive
by way of compensation. When asked to particularize his claims in August, 1998,
the claimant quantified injurious affection to the remainder in the sum of $23,500
and the cost to re-establish lost access in the sum of $5,885. On the basis of
its appraiser's further report in April, 2000, the respondent was preparing to
advance to the claimant the sum of $34,880 specifically allocated to injurious
affection to the remainder. I do not know the basis upon which the respondent
reached its revised estimation of loss in this regard. However, it is sufficient
for my purposes to note that the claimant ultimately succeeded on what was clearly
the central market valuation issue in this case. [71] As
to the difference between the amount for which the claim was ultimately settled
and the one advance payment which was actually made, it is clear that the claimant
met with a high degree of success. The claimant initially rejected an offer from
the respondent to acquire that portion of the subject property it needed for its
highway development without expropriation for $16,250. After proceeding with expropriation
a few months later in April, 1996, the respondent made an advance payment of only
$4,600. The claimant's claim, at least as set out in September, 1998, was for
$36,000. The matter was ultimately settled in May, 2000 for $64,482 which takes
into account the advance payment and which undoubtedly includes interest on the
additional compensation which the respondent agreed to pay. 4.3.3 Conduct
of the Claimant's Case [72] This assessment is
perhaps more usefully undertaken in the context of examining the legal and appraisal
costs at issue. However, at this juncture, I will simply observe that my review
of the case, as reflected in the chronology of proceedings set out much earlier
in these reasons, does not lead me to conclude that there are grounds for criticism
of the manner in which the case was prepared and conducted, either by claimant's
counsel or the appraisal expert retained, in the period between the time of expropriation
and the date of settlement. Certainly the claim as initially presented was spare
in detail and there were a few rather lengthy intervals during the proceeding
when it appears that little was actually being done to advance the claim. However,
in my experience, this is not an uncommon situation in expropriation litigation.
The evidence shows that claimant's counsel was reasonably responsive to the respondent's
requests when they were made. 4.4 The Legal
Costs [73] All of the professional legal services provided
to the claimant in this matter by the firm of Hobbs Hargrave were performed by
Mr. Scott. At the cost hearing, with reference to his own supporting affidavit,
he addressed his experience as a legal practitioner including work in the field
of expropriation law. Having been called to the Alberta bar in 1973, Mr. Scott
for many years practised in several areas of business and real estate law. From
1980 to 1994 his practice included acting for utility and oil companies in the
acquisition and expropriation of surface rights in Alberta, including applications
before the Alberta Surface Rights Board. He was called to the British Columbia
bar in 1993 and, since taking up practice with Hobbs Hargrave in Nanaimo in 1995,
has appeared before this board on at least two expropriation proceedings and has
had conduct of other expropriation files, including the present one, that were
settled before hearing. Although he acknowledged that his experience with expropriation
matters in British Columbia to date is "somewhat limited", I accept
that he should be regarded by any reasonable standard as senior counsel. 4.4.1 Pre-Tariff
Legal Costs [74] In the pre-tariff period between
May, 1996 and late June, 1999, Mr. Scott recorded a total of 17.6 hours of billed
time on the file. His professional services in this period comprised meetings
and other communications with the claimant (3.1 hrs.), one site visit (1 hr.),
communications with the appraiser and review of his report (2.4 hrs.), preparation
of the Form A and of particulars of the claim (1.2 hrs.), preparation of document
lists (1.4 hrs.), communications with a mediator (1.6 hrs.) and with respondent's
counsel and representatives (4.9 hrs.), and a variety of other related tasks which
included conducting searches, reviewing file documents and researching the law
(2.0 hrs.). [75] For these services Mr. Scott billed his
time on the first two accounts rendered in January, 1998 and August, 1998 at the
hourly rate of $140. On the final fee account rendered in May, 2000, which includes
some 3.2 hours of recorded time prior to the introduction of the tariff regulation
on June 28, 1999, Mr. Scott billed at the hourly rate of $195. [76]
In my view, the time recorded on the file by claimant's counsel for the various
matters itemized above over a period of more than three years is eminently reasonable.
The accounts rendered disclose no instances of excessive time or duplication.
I also consider the hourly fee rate of $140 charged on the first two accounts
to be modest for someone of Mr. Scott's experience. The hourly fee rate of $195
on the third account represents a rather considerable leap for which no real justification
was provided other than Mr. Scott's observation during the cost hearing that he
had been accustomed to billing at $200 per hour when he left practice in Alberta
in 1994. Having regard to hourly rates which the board in previous cost decisions
has found appropriate and to the rates which Mr. Scott charged on his earlier
accounts to the claimant, I consider that it would be reasonable to allow the
3.2 hours billed on this account between August 27, 1998 and March 9, 1999 at
the rate of $180 per hour. [77] The disbursements on the
three accounts rendered pre-tariff total $191.20, of which approximately half
the amount was comprised of photocopying costs. There was no back up evidence
concerning the rates at which photocopies were charged. However, all three of
these accounts were fully paid by the respondent at the time and no issue was
raised on this cost review to suggest that any of the disbursements was unnecessary
or unreasonable. I would allow them as presented. [78]
It was agreed by the parties that the claimant is not a GST registrant and therefore
that he was entitled to be reimbursed with respect to applicable GST in addition
to PST on any legal costs awarded. This, I would add, applies to both the legal
accounts rendered prior to the tariff and to the bill of legal costs presented
after the tariff regulation came into force. All of the disbursements are stated
to be GST taxable. [79] In summary, I allow the pre-tariff
legal costs in this matter in the amount of $2,592.00 in fees, $191.20 in disbursements,
$194.82 in GST and $181.44 in PST for a total of $3,159.46. 4.4.2 Post-Tariff
Legal Costs [80] The legal services provided to
the claimant by Mr. Scott after the tariff regulation came into force are itemized
within the bill of legal costs in tariff format which he presented at the cost
hearing. However, because the bill of costs purported to cover all the work on
the file from start to finish, it is necessary to isolate those items of description
which properly fall under the tariff regulation from those which pertain to work
performed in the pre-tariff period. [81] From my review
of the entries in the actual accounts rendered to the claimant, I identify eleven
items of description which cover legal work performed since the tariff regulation
came into force. Three of these items describe legal services on which Mr. Scott
had already spent time in the pre-tariff period. Therefore, when fixing the appropriate
number of units under the tariff for these items, an adjustment must be made to
avoid duplication in the award of costs. [82] The eleven
items of description, together with the minimum and maximum or fixed numbers of
units allowed and the units actually claimed in the claimant's bill of legal costs,
are as follows:
| Item | Description | Fixed | Min. | Max. | Claimed |
| 1 | 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 this tariff | | 1 | 20 | 10 |
| 4 | Instructing
expert witness if witness prepares
a report, for each expert (maximum of 3
witnesses, without leave) | | 1 | 5 | 5 |
| 5 | Every
process for commencing and
prosecuting a claim before the board | | 1 | 10 | 5 |
| 10 | Preparation
for examination of a person
coming under Item 11 for each day of
attendance | | | | |
| (a) by party conducting
examination | 3 | | | 1.5 |
| (b) by party being
examined | 2 | | | 1 |
| 11 | Attendance
on examination of a person
for discovery, on affidavit, for each day | | | | |
| (a) by party conducting
examination | 6 | | | 3 |
| (b) by party being
examined | 5 | | | 2.5 |
| 14 | Preparation
for attendance referred to in
Item 15, for each day of attendance | 2 | | | 2 |
| 15 | Attendance
before the board to settle an
order or to assess costs, for each day | 4 | | | 4 |
| 18 | Preparation
for hearing, if claim set down,
for each day of hearing, to a maximum of
30 units | 5 | | | 25 |
| 21 | Process
for setting down claim for hearing | 1 | | | 1 |
| 22 | Negotiations,
mediation and process for
settlement, discontinuance, or dismissal by
consent of any claim if settled, discontinued,
or dismissed by consent as
a result of the
negotiations, for each day, to a maximum
of 60 units | 15 | | | 30 |
| 23 | Travel
by a solicitor to attend any hearing,
application, examination or analogous
proceeding if held more than 40 km. from
the place where the solicitor carries
on
business, for each day of travel by the
solicitor | 2 | | | 2 |
[83] The last legal account rendered
to the claimant indicates that between August 18, 1999 and May 8, 2000, Mr. Scott
recorded a total of 39.7 hours of billed time on the file. His professional services
in this period consisted of further meetings and other communications with the
claimant (6.1 hrs.), one further site visit (1.0 hr.), preparation for and attendance
at examinations for discovery (5.5 hrs.), preparation of further particulars and
an amended Form A (4.5 hrs.), investigation of municipal bylaw requirements (1.0
hr.), further communications with the appraiser (3.9 hrs.), further communications
with respondent's counsel or representatives (8.4 hrs.), communications with the
board (0.8 hrs.), review of file documents and research of the law (8.0 hrs.),
and review of settlement documents (0.5 hrs.). Time spent in negotiations on costs
after settlement and in preparation for and attendance at this final cost review
came after the rendering of the last legal account. [84]
In order to allow legal costs under the tariff schedule, I must be satisfied,
pursuant to section 3(2) of the tariff regulation, that the costs incurred were
"proper or reasonably necessary to conduct the proceeding." Respondent's
counsel referred to the judgment of the British Columbia Court of Appeal in Van
Daele v. Van Daele and London Hotel (1951) Limited (1983), 56 B.C.L.R. 178,
as setting the applicable test. There the Court was dealing with Rule 57(4) of
the Supreme Court Rules, which at the relevant time provided that on a taxation
"the registrar shall allow necessary or proper disbursements and expenses"
which were not "incurred through extravagance, negligence or mistake, or
by payment of unjustified charges or expenses." McFarlane J.A. stated at
p. 180: The proper test, it seems to me, from
a number of authorities referred to us this morning is whether at the time the
disbursement or expense was incurred it was a proper disbursement in the sense
of not being extravagant, negligent or mistaken or a result of excessive caution
or excessive zeal, judged by the situation at the time when the disbursement or
expense was incurred. Since that judgment
was rendered, Rule 57(4) has been amended to provide that "the registrar
shall allow a reasonable amount for expenses and disbursements that were necessarily
or properly incurred in the conduct of the proceeding." [85]
Although the test set out in the Van Daele decision refers to disbursements
under Rule 57(4) rather than the fees to be allowed under Appendix B (Party and
Party Costs) of Rule 57(2), I accept that the test has a more general application
and that it is germane to a final review of costs such as this one. [86]
As I observed with respect to the pre-tariff accounts, I find that the time recorded
on the file by claimant's counsel in the post-tariff period was reasonable given
the nature of the case and the stage which it had reached. Not surprisingly, involvement
with the file intensified somewhat in the months preceding the scheduled compensation
hearing with the onset of examinations for discovery, refinement of pleadings,
hearing preparation and settlement negotiations. Nothing suggests to me that Mr.
Scott's conduct of the case in this period was other than proper and reasonably
necessary. Viewed from the perspective of the detailed entries in the post-tariff
account rendered to the claimant, the test in Van Daele is met. [87]
However, for reasons which I will explain, I am not prepared to allow all of the
units claimed under every item of description in the claimant's bill of legal
costs which I have earlier set out. I allow the units for Items 10, 11, 14, 15,
21 and 23 as claimed, but adjust downward the units claimed for Items 1, 4, 5,
18 and 22. [88] Items 1, 4 and 5 are those where some legal
work of a corresponding description was performed in the pre-tariff period and
for which some costs have already been allowed. Therefore, there must be an adjustment
of those items to avoid duplication when awarding post-tariff costs. [89]
Approximately the same amount of time (about 11 hours) was spent on work described
in Item 1 (correspondence, etc.) in both the pre-tariff and post-tariff period.
This is not a matter which, in my view, justifies allowing anything like the maximum
of 20 units and, indeed, Mr. Scott in the tariffed bill of legal costs which he
presented for the entire case claimed only half the maximum number. However, it
seems to me that the negotiations on costs which followed settlement of the claimant's
claims for compensation would also reasonably fall within Item 1 as involving
negotiations for which provision is not made elsewhere under the tariff. Taking
that additional work into consideration when making my adjustment, I conclude
that it would be reasonable to allow a total of 8 units under Item 1. [90]
In April, 2000, Mr. Scott instructed the appraiser to prepare for the compensation
hearing and to do further work on his appraisal report taking into account his
assessment of highway traffic noise on market value. Almost all of the time in
the post-tariff period which falls under Item 4 appears to relate to Mr. Scott's
communications with Mr. Sweett for those purposes His total time on the file for
appraisal-related matters was slightly more than 6 hours, of which nearly 4 hours
was recorded post-tariff. Taking into account Mr. Scott's pre-tariff involvement
with the appraiser, on a range of between 1 and 5 units, I consider that 2 units
under Item 4 represents the amount of time which should ordinarily have been spent
on the matter. [91] It was in the post-tariff period that
Mr. Scott most thoroughly particularized the claimant's claim and amended the
Form A accordingly. Even so, this should not have been an especially time-consuming
task and I would allow 3 units under Item 5 with respect to it. [92]
Mr. Scott's explanation for claiming 25 units under Item 18 in preparation for
a compensation hearing which did not take place was that he was required to prepare
some weeks in advance because of other court commitments prior to when the hearing
was scheduled. I accept his explanation up to a point but I am not satisfied that
full preparation could have occurred so early nor do his recorded time entries
reflect such intensive preparatory work. Mr. Scott also was under the impression
that the hearing had been scheduled for 5 days whereas in fact the preponderance
of evidence shows that it was set for only 4 days. In the circumstances I am prepared
to allow 10 units under Item 18. [93] With respect to Item
22, the respondent has asserted that the negotiations which resulted in settlement
were readily achieved at the beginning of May whereas the claimant says the negotiations,
largely between Mr. Scott and Ms. Reynier, proceeded over a period of a couple
of months before culminating in settlement on or about May 2, 2000. My review
of the recorded time entries in the legal account during this period shows that
approximately half the time spent by Mr. Scott in communications with the respondent
was with Ms. Reynier, amounting to approximately 4 1/2 hours. Clearly, the tariff
schedule encourages successful negotiation by allowing 15 units per day up to
a maximum of 60 units. Overall, I consider that it would be reasonable to allow
the equivalent of one day's negotiation toward settlement of this matter, and
therefore I allow 15 units under Item 22. [94] In summary,
I have allowed a total of 55 units under the claimant's tariffed bill of legal
costs. At scale 2 this amounts to $7,700.00 in fees to which GST and PST apply.
The parties are agreed that disbursements of $205.37 plus GST reflected in the
tariffed bill of legal costs should be allowed as presented. Accordingly, the
legal costs allowed in the post-tariff period including fees, disbursements, and
applicable taxes total $8,997.75. 4.5 The
Real Estate Appraisal Costs [95] The professional real
estate appraisal services provided to the claimant in this matter were performed
by Mr. Sweett of Pacific Rim Appraisals Ltd. Mr. Sweett, with reference to the
curriculum vitae attached to his supporting affidavit, deposed as to his experience
in the appraisal field. He has been a qualified appraiser since 1974, was awarded
his AACI designation in 1981, and received an RI(BC) designation in 1992. From
1974 until 1991 he was employed in an appraisal capacity with the B.C. Assessment
Authority. Thereafter, he became the owner of and fee appraiser with Pacific Rim
Appraisals Ltd. which, as at July, 2000, employed five appraisers in four offices
located on Vancouver Island and was headquartered in Nanaimo. According to the
curriculum vitae, the company is the largest appraisal firm in Nanaimo. Mr. Sweett
provided what he described as a partial list of some 31 full and partial takings
of land, mostly in and around Nanaimo, with which either he or his company has
been involved. 4.5.1 Pre-Tariff Appraisal
Costs [96] In the pre-tariff period Mr. Sweett
recorded 3 1/2 days of billed time on the file, which appears to equate to a total
of 28 hours. According to his affidavit evidence, his professional services initially
consisted of meeting with Mr. Scott to receive instructions, inspecting and photographing
the subject property, researching comparable properties, and drafting a narrative
written report. Mr. Sweett in his affidavit deposes that he spent many more research
hours in this process than the 24 hours that were actually billed to accord with
the original estimate of costs he provided to Mr. Scott. Subsequent to providing
the draft report, Mr. Scott requested him to consider certain amendments and to
comment specifically on the expropriation of another parcel of land located near
the subject property. This involved him in a further four hours of billed time.
For all of these services in the pre-tariff period, Mr. Sweet billed his time
at the daily rate of $600.00, which I interpret as an hourly rate of $75.00. There
are no disbursements charged on any of his accounts. [97]
It might have assisted my assessment of Mr. Sweett's accounts, which even with
the provision of a supporting affidavit do not offer a great deal of detail, if
I had been provided with his work product in the form of the draft or board-ready
appraisal report. Be that as it may, there is nothing which suggests to me that
the time spent on this appraisal assignment in the pre-tariff period was unnecessary
or unreasonable. Given Mr. Sweett's extensive appraisal background and the board's
past experience in reviewing appraisal accounts, I consider his fee charge equating
to $75.00 per hour to be extremely modest. I allow the two pre-tariff appraisal
accounts in this matter as presented, comprising $2,100.00 in fees and $147.00
in GST for a total of $2,247.00. As I noted earlier, these accounts have already
been fully reimbursed by the respondent. 4.5.2 Post-Tariff
Appraisal Costs [98] Because the claimant's bill
of real estate appraisal costs as prepared by Mr. Sweett and attached as exhibit
"F" to his affidavit is a rendering in tariff format of all the work
he performed on the file, it becomes necessary again to isolate those items of
description which properly fall under the tariff regulation from those which have
to do with pre-tariff work. From my review of the entries in the actual account
rendered as well as the information contained in Mr. Sweett's affidavit, I identify
three items of description which cover real estate appraisal work performed since
the tariff regulation came into force. All of the work, it appears, took place
during the month of April, 2000. [99] The three items of
description, together with minimum and maximum numbers of units allowed under
the real estate appraisal tariff schedule and the units actually claimed in the
bill of real estate appraisal costs, are as follows:
| Item | Description | | Min. | Max. | Claimed |
| 1 | Correspondence,
conferences, instructions
or meetings with a claimant and counsel
relating
to a claim, whether before or after
commencement, for which provision is
not made elsewhere in this tariff
| | 1 | 20 | 10 |
| 2 | Inspect
and research subject property
| | 1 | 30 | 10 |
| 5 | Analysis
of data and preparation of a
report or reports | | 1 | 60 | 30 |
Although the bill of costs also sets
out claims for Item 3 (market research, including all necessary attendances) and
for Item 4 (inspection of comparable properties), these relate to work which was
done in the pre-tariff period, the costs of which have already been allowed, and
there is no evidence before me to suggest that any further work of those descriptions
was performed in the post-tariff period. [100] In his affidavit,
at paras. 13, 14, and 15, Mr. Sweett deposes to matters upon which he says he
was informed by Mr. Scott relating to Supreme Court practice on the taxation of
costs. Respondent's counsel in supplementary written submissions, citing case
authority, objected to the inclusion of those paragraphs on the grounds that they
were in the nature of submissions or argument which do not properly belong in
an affidavit. The respondent filed a notice of motion with the board seeking an
order that the impugned paragraphs be struck out, but that application did not
proceed. Claimant's counsel filed no submissions in response. In any case, I agree
with the respondent that the paragraphs in question are improper in an affidavit
such as this, and I propose to disregard them. [101] The
only real question for my determination under the bill of real estate appraisal
costs is the number of units which I should allow for Items 1, 2, and 5, all of
which involve work on the file which had already commenced in the pre-tariff period.
Mr. Sweett deposes that it was in April, 2000 that Mr. Scott advised him to begin
preparing himself for the compensation hearing, and asked him to consider the
impact of highway traffic noise in an amended appraisal report. Mr. Sweett says
he undertook a further site visit and performed a preliminary evaluation. However,
before the appraiser could produce a further written report or prepare himself
for the hearing, Mr. Scott telephoned to advise of what he viewed as an offer
to settle which the claimant should accept, subject to Mr. Sweett's confirmation.
Mr. Sweett deposes that he considered the settlement offer and advised acceptance.
Mr. Sweett's last account reflects that he recorded and billed for 6 hours of
his time in providing these services, again at the modest rate of $75.00 per hour. [102]
I am satisfied that the real estate appraisal costs incurred at this time were
proper or reasonably necessary to conduct the proceeding within the meaning of
section 3(2) of the tariff regulation. However, dramatic downward adjustments
are required to the units claimed in the bill of costs to take into account the
earlier work. From what I can discern as to the nature of the appraisal assignment
and the time devoted to it by Mr. Sweett, none of the Items 1, 2 and 5 would warrant
anything approaching the maximum numbers of units within the range provided even
if the entire exercise had fallen within the tariff schedule. The units claimed
for Items 1, 2 and 5 by the appraiser within the bill of costs for his entire
conduct of the file, which he presented at the mid-point of the range, also strike
me as being somewhat on the high side. [103] Doing the
best that I can with the evidence which was provided, I consider it appropriate
to allow 3 units for Item 1, 3 units for Item 2, and 2 units for Item 5. Therefore,
8 units in total are allowed under the real estate tariff schedule. At scale 2,
which sets the value of real estate appraisal costs at $100 for each unit, this
amounts to $800.00 in fees to which GST also applies, making a total of $864.00. 5. SUMMARY [104]
My determination of the costs in this matter are as follows:
| (1) | Pre-tariff
legal costs consisting of fees, disbursements, GST and PST are allowed in the
amount of $3,159.46. Post-tariff legal costs consisting of these same elements
are allowed in the amount of $8,997.75. The total of legal costs allowed is therefore
the sum of $12,157.21, in respect of which the respondent to date has reimbursed
the sum of $2,498.98. Accordingly, there remains owing by the respondent to the
claimant on account of his legal costs in this matter the sum of $9,658.23. |
| (2) | Pre-tariff
appraisal costs consisting of fees and GST only are allowed in the amount of $2,247.00.
Post-tariff real estate appraisal costs consisting again of fees and GST are allowed
in the amount of $864.00. The total of real estate appraisal costs allowed is
therefore the sum of $3,111.00, in respect of which the respondent to date has
reimbursed the sum of $2,247.00. Accordingly, there remains owing by the respondent
to the claimant on account of his real estate appraisal costs the sum of $864.00. |
|
