E.C.B. Number 56/90/175

October 22, 1999, E.C.B. No. 56/90/175 (68 LCR 91)

Between: Sonia S. Hruschak and Sonia S. Hruschak as Co-Executor of John And Mildred Hruschak
Claimant

And: The Corporation of the City Of Vernon
Respondent

Before: Fiona St. Clair Vice Chair*

*At The Time Ms. St. Clair Heard This Application, She Was The Vice Chair Of The Board.

Appearances: Mr. J. Bruce Melville, Counsel for the Claimant
Mr. James H. Goulden, Counsel for the Respondent

1. APPLICATION

The claimant, Sonia Sally Hruschak, in her own capacity and as co-executor of the estates of her late parents, John and Mildred Hruschak, has applied under s.45(1) of the Expropriation Act, R.S.B.C. 1996, c.125 ("the Act"), for a determination of the costs to be paid to her by the respondent, the Corporation of the City of Vernon, in this proceeding. She also seeks interest and the costs of this hearing.

The costs claimed are for Ms. Hruschak’s personal out of pocket expenses, and in respect of bills rendered to her by three law firms, Alexander Holburn, Melville & Company and Peterson Stark, by the appraisal firm of Kent-Macpherson Appraisals, and the planning firm of Coriolis Consulting Corp. The accounts of Melville & Company and Peterson Stark relate primarily to the same counsel of record, Mr. Bruce Melville, who changed firms during the course of representing the claimants.

The order which the claimants seek is for the reimbursement of the following costs:

a.

Legal Costs

Alexander Holburn

$5,261.94

Melville & Company/Peterson Stark

      Lawyers' fees

$40,878.70

      Legal assistant fees

2,046.00

      Photocopying

219.30

      Fax transmissions

64.40

      Other disbursements

1,955.53

      GST

3,155.27

      PST

1,868.69

$50,187.89

b.

Appraisal Costs

$9,300.00

c.

Planning Costs

      Fees

$6,156.25

      Disbursements

534.63

      GST

468.32

$7,159.20

d.

Claimant's out of pocket costs

$1,670.89

TOTAL:

$73,579.92

Of this amount claimed, Vernon has reimbursed the sum of $39,154.75, leaving $31,574.82 remaining unpaid.

2. BACKGROUND

The costs claimed were incurred as the result of a full fee simple expropriation of a 10 acre parcel of land in Vernon. The issues in the case were the highest and best use and market value of the land taken, disturbance damages, interest and the advance recovery of costs. The claim advanced by the claimants was for $500,000 for market value and $250,000 for disturbance damages. Vernon made an original advance payment of $81,000 on March 14, 1990, which was increased by an additional $12,000 in September, 1994.

The hearing was scheduled for 10 days beginning May 23, 1995, but the parties settled the matter on May 19, 1995. Prior to that time, there was a one-half day examination for discovery of Vernon's representative, and one interlocutory motion before the board regarding interrogatories. The basis of the final settlement was that Vernon would pay the claimants a further $63,000 all inclusive of market value, interest and disturbance damages, bringing the total amount paid on account of the claim to $156,000. This is an amount $594,000 less than the original amount claimed.

3. AREAS OF AGREEMENT BETWEEN THE PARTIES

Mr. Melville, counsel for the claimants, advised me that the parties have reached agreement on a number of issues, as follows:

Vernon will pay $1,670.89 for Ms. Hruschak's out of pocket expenses, inclusive of all items;
Vernon will pay $9,300.00 for the appraisal fees and disbursements of Kent-McPherson, inclusive of all items;
Vernon will pay $5,261.94 for the legal fees and disbursements of Alexander Holburn, inclusive of all items, which represents a 50% reduction in fees from those originally charged. The amount agreed to is composed of $4,582.94 in fees, $525.40 in disbursements and $153.60 in taxes;
With regard to the Melville & Company/Peterson Stark accounts:

Fees for the legal assistant, Elizabeth Olkovick, have been agreed to at $2,046, which is a reduction of 50% from the $4,092 originally billed for her time;

Fees in the amount of $500 will be deducted from the original amount billed in the first account dated August 31, 1991, to account for overlap of services with Alexander Holburn;

Photocopies will be reimbursed at the rate of $0.15 per page for a total cost of $219.30;

Fax transmissions will be reimbursed at the rate of $0.35 per page for a total cost of $64.40;

All other disbursements will be reimbursed as billed;

Taxes will be adjusted to accord with the above reductions;

Simple interest will be paid on unpaid amounts at the rate of 12% per year;

Vernon agrees that it was reasonable of the claimants to obtain planning advice and that the experts engaged were properly qualified, but does not agree to pay for the amounts billed by Coriolis Consulting Corp..

4. THE ISSUES

This leaves me with the following issues to determine:

whether the 18 legal accounts billed by Melville & Company/Peterson Stark between August 31, 1991 and August 30, 1995, totalling $50,187.89 after the above-noted agreed upon deductions, were reasonable and necessary, and the appropriate amount that Vernon should be required to reimburse on their account;

whether the following Coriolis Consulting Corp. accounts, inclusive of fees, disbursements and GST, were reasonable and necessary, and the appropriate amount
that Vernon should be required to reimburse on their account:

November 1, 1992

$ 449.40

April 1, 1995

$5,446.39

May 1, 1995

$1,180.48

June 1, 1995

$ 82.93

TOTAL:

$7,159.20

5. THE PARTIES' POSITIONS

Mr. Melville, on behalf of the claimants, maintains that, because this matter was settled rather than decided by the board, I may not take into consideration the factors set out in s.45(10)(b)(i) or (ii) or s.45(10)(c) -- that is, the degree of success or the manner in which the case was prepared and conducted. Section 45(1) provides as follows:

(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.

Mr. Melville submits that the determination of the issues relates only to a determination of compensation by the board, and not to a situation like this one where the parties have simply agreed to a lump sum payment that is not even allocated to the various heads of compensation originally claimed. He also submits that the difference between the amount of the settlement and the advance payment should not be considered because of the lack of allocation of the total and also because parties often settle cases based on considerations that have nothing to do with the merits of the claim (such as, for example, a claimant's pressing need for cash based on other exigencies). Finally, he maintains that subparagraph (c) refers only to the conduct of a compensation hearing, and is therefore inapplicable here.

Mr. Melville maintained that all of the costs presented were both necessarily incurred and reasonable in all respects, and that I therefore should award the claimants full reimbursement for all of the costs sought.

Mr. James Goulden, counsel for Vernon, argued that "the manner in which the case was prepared and conducted" should be taken to refer to the way in which the entire compensation claim was handled from its inception. He also argued that I should take into consideration the degree of success considerations in s.45, to the extent of weighing the fees in light of the fact that the original claim was for over $750,000 and yet the total settlement amount was only $156,000. Overall, Mr. Goulden maintained that the costs claimed are not reasonable, and should therefore be reduced considerably.

6. JURISDICTION AND STATUTORY CONSIDERATIONS

As vice chair of the board when I heard this application, I was and am exercising the powers and jurisdiction of the chair under s.26(6) of the Act in making this cost determination. The chair’s jurisdiction to determine costs following a settlement like this stems from s.45(8) of the Act. Pursuant to s.45(7), the costs payable are the claimant’s "actual reasonable legal, appraisal and other costs". According to s.45(3), these costs must be "necessarily incurred…for the purpose of asserting [the] claim for compensation or damages". I have since resigned from the board, but pursuant to section 53(7) of the Act, I am entitled to "give judgment in a hearing in respect of which [I] was, while holding office, sitting as a member…and the judgment is valid and effective as though [I] still held office."

In addition, the board has set out other relevant considerations arising from the common law, that apply to final cost determinations. These, as summarized by Robert Shorthouse, the chair of the board, in Garnett v. British Columbia (Minister of Transportation and Highways) (1997), 62 L.C.R. 32:

…include not only the amount and character of the services rendered, and the labour, time and trouble involved, but also the character of the litigation in which the services were rendered, the amount of money or value of the property to be affected, the professional skill and experience called for, and the character and standing of counsel in their profession…[p.38].

Subsection 45(10), quoted above, sets out the considerations that "must be taken into account" in a "determination of costs under subsection…(8)". This is a determination of costs under s.45(8), "if an expropriating authority and a person [whose interest or estate in land is expropriated] agree on the amount of compensation or damages, but do not agree on the amount of costs to be paid..." To accede, therefore, to Mr. Melville’s argument that the factors then outlined in subsection (10) should not be considered where there has been a settlement of the compensation issues, would make nonsense of the specific direction contained in subsection (10) itself.

While I agree that, depending on the way the settlement has been structured (especially, for example, whether the parties have broken down the total amount of the settlement into the various aspects of the claim), some of the outlined factors may be difficult to apply with certainty, I nonetheless am of the view that I must direct my attention to the factors set out in s.45(10)(a) through (c) in reviewing this cost claim.

6.1 The Number and Complexity of the Issues

The first factor under s.45(10) is "the number and complexity of the issues". This is a bit of an unusual case in that what finally emerged as the issues to be resolved at the time of the settlement were neither numerous nor complex; however, until quite shortly before the settlement, the claimant had been pursuing a potential aspect of her claim that involved complex legal, planning and factual investigations and determinations. Mr. Melville describes it this way in his submissions:

The determination of highest and best use presented some unusual problems because of the twenty year prior history of the use of the land by the Respondent throughout the Vernon Commonage for sewage disposal. This history required an extensive investigation into whether and over what period of time the market value had been influenced by the project for which the land was taken.

Mr. Wollenberg, the principal of Coriolis Consulting Corp., indicated in his testimony that the expropriation involved acquiring property to add to a project that had existed for some time. There were apparently some references in documents that were available initially to the claimant that suggested Vernon had been contemplating acquiring the subject property for a number of years. The question this raised in the claimant’s mind was whether there was any possibility that Vernon had attempted to influence community planning designations in the area around her property with the aim of creating a situation in which no change in the highest and best use of her property would occur, and it could therefore acquire the land at a lower cost. As Mr. Wollenberg stated, the question put to him was:

…was there a possibility that growth management practice in Vernon was designed to direct development potential, infrastructure and other things that would enhance the highest and best use of properties to other parts of the community so that this area would in effect stay suppressed in terms of its highest and best use, thereby facilitating future acquisition.

He ultimately concluded that there was nothing in the documentation to suggest that the highest and best use had been specifically influenced downward by Vernon in order to protect land acquisition opportunities, but rather that this had occurred as a consequence of Vernon’s overall growth management approach.

It seems to me that this was a reasonable theory for the claimant to have pursued, in terms of obtaining legal and planning advice, putting forward an initial claim, and ferreting out and assessing all of the factual material that was available to support or reject her theory. As it turned out, Mr. Wollenberg gave an oral assessment of this claim to Ms. Hruschak and Mr. Melville in about the middle of April, 1995. The settlement was reached very soon thereafter, on May 19, 1995. I view this issue as being quite a complex one, and taking this case out of the simple or straightforward category.

6.2 The Degree of Success

It is with regard to the degree of success that I partly accept Mr. Melville’s previously outlined arguments, in that with certain types of settlements it is hard to ascertain how the issues have been determined as between the parties, and the significance of the difference between the amount of the settlement and the amount of the advance payments.

6.2.1 The Determination of the Issues

In this case, the parties have not chosen to delineate how the total settlement amount has been broken down among the various points at issue. The $156,000 paid in settlement of the claimants’ claim was, I am advised, to cover market value, interest, personal expenses and disturbance damages to acquire a new property. The original claim advanced was for $500,000 in market value and $250,000 in disturbance damages, for a total claim of $750,000.

Nonetheless, I believe that a $594,000 difference between the amount of the settlement and the amount of the original claim indicates that the claimant has not been what would normally be referred to as "successful" in putting forward the bulk of the amounts to which she originally claimed to be entitled.

6.2.2 Difference between "Award" and Advance Payments

Mr. Melville maintained that if I decide to consider the difference between the settlement and the advance payments, I should only consider the initial advance payment of $81,000 made on March 14, 1990. Although the total advance payment amount was $93,000, it was not until September 21, 1994 that the further advance payment of $12,000 was made.

Whether the appropriate amount to be considered is $81,000 or $93,000, the fact remains that the final settlement amount exceeds either of these amounts by a considerable degree. $81,000 amounts to just under 52% of the total settlement amount of $156,000, which means that until 8 months before the settlement (which was about five and a half years after the expropriation itself) the claimant had only received about 52% of what she was ultimately going to receive. If Vernon did as it is required to do under the Act, and made a genuine pre-estimate of the amount to which the claimant was entitled, it would appear that it underestimated quite drastically, leaving the claimant out of pocket for a very long period of time. Even the increased amount of $93,000 only amounts to approximately 60% of the final settlement.

In my view, this inadequate advance payment mitigates to some extent the effect of the difference between the original claim and the amount settled for in terms of gauging success. I regard the latter factor, however, as being the more significant one.

6.2.3 The Manner in which the Case was Prepared and Conducted

I have discussed, in section 6.1, Mr. Wollenberg’s opinion regarding one of the main original components of Ms. Hruschak’s claim, in terms of the complexity and difficulty of the issues. I find this opinion to be crucial to my consideration of the manner in which the case was prepared and conducted in terms of the legal fees now claimed.

What concerns me is the speed with which the claimant went about obtaining Mr. Wollenberg’s opinion, which eventually led directly to a settlement of the case. Mr. Wollenberg’s evidence was that he had been retained originally in 1992, but did not receive specific instructions to proceed in earnest with his work until the spring of 1995. His testimony was that his instructions "kind of melted away until 1995 when I was asked to really do the work that we were originally asked to do."

I have taken a look at the legal accounts, and note that the total amounts claimed for legal fees between August 31, 1991 and February 28, 1995 was $24,909. In the three accounts submitted after Mr. Wollenberg’s oral opinion was received (May 17, May 31 and August 30, 1995), the further amount of $15,958.50 is claimed. By far the largest amount of fees claimed on one account is the $13,532.50 claimed on the May 17, 1995 account, which spans work done between February 13, 1995 and May 17, 1995. During that time period the May 23 hearing date was looming, and counsel therefore had to proceed with hearing preparations while pursuing settlement negotiations, in case the latter proved unsuccessful. However, had counsel instructed Coriolis much earlier on to provide the analysis it required of Vernon’s alleged intentional influence over the highest and best use of the property, then the wisdom of a settlement would have been apparent much earlier, and most if not all of this hearing preparation could have been avoided.

Reviewing the accounts with these considerations in mind, I have concluded that, had the claimant proceeded in a more timely manner to obtain Mr. Wollenberg’s opinion regarding the largest portion of her claim, the need for much of the legal work done would have been obviated, and a settlement could have been reached much sooner. There was no explanation offered as to why, although Mr. Wollenberg’s firm was retained in 1992, he was not actually asked to provide an opinion until the spring of 1995. I note that, once his instructions were firm, it only took his firm two or three months to do all of the work necessary to enable the claimant to assess that aspect of her claim and reach settlement.

6.3 Conclusions about Statutory Considerations Summarized

In summary, my conclusions regarding the various applicable statutory considerations set out in s.45(10) are as follows:

Degree of complexity: medium to medium-high.
Degree of success:

Determination of issues: Low degree of success, due to ultimate abandonment of main aspect of claim;

Difference between "award" and advance payments: Vernon’s advance payment was inadequate even in light of the final settlement amount.

Manner in which the case was prepared and conducted: Too much time and expense was incurred as the result of not fully investigating the main aspect of the claim early enough in the proceedings.

Considering these factors over all, I conclude that a reduction of the legal fees in the amount of 20% is called for.

7. LEGAL ACCOUNTS

Since the parties have agreed about the Alexander Holburn accounts, and about the legal disbursements, fees of the legal assistant and interest on the Melville & Company/Peterson Stark legal accounts, I am left only with the lawyers' fees to determine. Extracting the legal assistant's fees and deleting the $500 from the first account which is acknowledged to represent overlapping efforts with the claimants' first law firm, the hours billed and amounts claimed for legal fees on the various accounts are as follows:

Date of account

Total hours billed

Total amount billed

August 31, 1991

18.16

$2,705.50

November 30, 1991

13.80

2,484.00

January 31, 1992

5.73

1,031.40

March 31, 1992

24.93

4,239.90

May 31, 1992

3.92

659.25

August 21, 1992

6.97

997.75

October 31, 1992

10.42

1,316.25

November 16, 1992

14.10

1,762.50

January 28, 1993

3.17

421.00

March 18, 1993

5.57

886.00

April 30, 1993

11.46

1,511.15

June 30, 1993

17.57

2,302.00

April 30, 1994

6.91

1,339.80

February 28, 1995

6.90

1,363.50

February 28, 1995

9.45

1,890.00

May 17, 1995

89.60

13,532.50

May 31, 1995

6.55

1,305.00

August 30, 1995

5.65

1,130.00

TOTALS:

260.85

$40,877.50

Mr. Melville took the stand as a witness to justify the accounts presented by his firms. He was cross-examined at some length by Mr. Goulden both with regard to his own accounts and with regard to the retainer of and instructions to Coriolis. He was the primary lawyer involved in the conduct of this case and in these accounts. His time (157.59 hours total) was billed at the hourly rate of $180 up to and including the June 30, 1993 account, and at the rate of $200 per hour thereafter. There were a few very small entries made by another lawyer of similar seniority (1.8 hours), and the remaining time (101.46 hours) was logged by some junior lawyers and articled students billing between $75 and $145 per hour. Most of those entries are billed at the rate of $125 per hour. Using a straight mathematical calculation, the average hourly rate of the two latter firms over the entire course of representing the claimants amounts to $156.71.

Mr. Goulden submitted that an appropriate figure for legal fees in this case would be $20,000. His main arguments for maintaining this were:

The original claim was for over $750,000, whereas the final settlement was for $156,000;
A total of 325 hours by Mr. Melville's firms and a further 100 hours by Alexander Holbourn were spent on this matter, which never went to hearing;
The claim was not complex, involving only one brief examination for discovery of a representative of Vernon, and one interlocutory application before the board;
There are numerous inappropriate entries in the accounts requiring an overall reduction, including:

intra-office conferencing between lawyers that was billed by both;

excessive and unnecessary preparation;

supervising of file opening;

instructing staff to perform administrative matters;

excessive time spent on document review by an articling student;

Legal fees were assessed at $35,000 in Bill's Frontier Restaurant Ltd. et al. v. Ministry of Transportation & Highways (1996), 58 L.C.R. 204, which was a complex case involving claims for real estate losses, loss of profits and disturbance damages, and which took up 9 days of hearing before the board and involved examinations for discoveries conducted by both sides. (I note, for the sake of accuracy, that the decision in this case actually described the claim as having been of average to slightly above average complexity.)

I have reviewed all of the legal accounts in detail. I agree with Mr. Goulden that the accounts do document some intra-office conferencing between lawyers that is duplicative, as well as some excessive preparation time, mainly on the part of junior lawyers. While I did observe charges for supervising and instructing staff, I did not find them to be frequent or excessive.

The duplication of effort between lawyers (and sometimes between lawyers and the legal assistant) appears in the following accounts: March 31, 1992, May 31, 1992, August 21, 1992 and June 30, 1993. I would deduct $500 in fees for these duplicative entries.

The instances of excessive preparation appear in the entries for the time of J.P. Baker in the following accounts: October 31, 1992 (at least 5.84 hours dealing with documents and interrogatories); November 16, 1992 (an estimated 9 hours dealing with documents and interrogatories); April 30, 1993 (almost 7 hours spent on interrogatories and discovery matters); June 30, 1993 (almost 11 hours dealing with interrogatories and specifically with a short application to the Chair regarding the same). This adds up to just under 33 hours spent dealing mainly with interrogatories and to some extent with discovery issues. Based on her hourly rate of $125, this amounts to approximately $4,125 in fees. In my view, even though Mr. Melville’s evidence was that the interrogatories were relatively complex, this indicates a degree of over-preparation that calls for a reduction. I would reduce the fees for this service to $2,750 (a reduction of $1,375).

In addition, there are entries amounting to 35.1 hours and $2,587 in fees (at an hourly rate of $75), for Trudy McDonald, then an articled student, reviewing and listing documents between February 13 and February 28, 1995 in the May 17, 1995 account. Mr. Melville stated that Ms. McDonald’s time was spent reviewing and summarizing the respondent’s documents for entry into a computer database that would have been used at the hearing had it taken place. He acknowledged that she may have keyed in the entries herself. While this would no doubt have streamlined matters at the hearing, in my view much of this work could have been performed by a legal assistant (who in this firm at the time was billed out at $65 an hour) and reviewed by an articled student or lawyer. The actual typing could have been done by a secretary, and given the amount of time spent, I can only conclude that the fact that Ms. McDonald was doing her own typing for this task added not insignificantly to the time she spent. I therefore feel that a reduction needs to be made to these entries, and will reduce these fees by $1,000 to $1,587.

I was also initially concerned about the fact that two or three accounts show lengthy amounts of time being spent communicating, mainly by telephone, with the claimant herself. However, when I examine the accounts as a whole, the time billed for this does not appear to be out of proportion to what one would normally expect, given the length of time that Mr. Melville spent as Ms. Hruschak’s counsel (i.e. the accounts span a period of years). I am therefore not inclined to effect a reduction for time spent communicating with the client.

The remaining fees billed (except, of course, for the overall reduction already applied) appear to me to have been reasonably incurred, and I take no issue with the hourly rates that have been applied.

In summary, therefore, the reduced amount claimed here for legal fees is $40,877.50. From this amount I have initially made a 20% reduction, as outlined in paragraph 6.3 above. This reduces the fees by $8,175.50 to $32,702. From this amount I will deduct the additional amounts of $500, $1,375 and $1,000 (totalling $2,875) outlined immediately above. This brings the allowed amount for legal fees to a total of $29,827. I have considered Mr. Goulden’s comments regarding the Bill’s Frontier case, and have concluded that this figure is not inconsistent with the principles set out in that decision. Finally, the PST and GST will have to be adjusted in accordance with these reductions and the reductions agreed to between the parties.

8. PLANNING ACCOUNTS

8.1 Fees and Disbursements

The parties agree that the planning services provided by Coriolis Consulting Corp. were necessary, and that the individuals within that firm who performed the services were qualified to do so. They do not, however, agree as to the value of the services.

The hourly rates billed on the various planning accounts range between $95 and $155 per hour. There was one small account rendered in 1992 for $449.40. The remaining three accounts were billed on April 1, May 1, and June 1, 1995, in the amounts of $5,446.39, $1,180.48 and $82.93 respectively. Mr. Wollenberg’s time was billed at $140 per hour in 1992, and at $155 per hour in the 1995 accounts. The disbursements set out in these accounts amount to $534.63. Coriolis generally charges interest on its overdue accounts at the rate of 1.49% per month (18.5% per annum), but the claimant suggests that 12% simple interest should be awarded on the unpaid Coriolis accounts, calculated from the date they were submitted to the respondent until the date of payment, to achieve consistency with previous board rulings regarding interest.

The claimant submits that all of the accounts are reasonable, and that they should be approved as submitted (except for the interest charges).

Vernon, on the other hand, maintains that the planning fees were "grossly excessive" and must be reduced. Mr. Goulden points out that no report was ever prepared or filed in this matter, and that Mr. Wollenberg did not spend any time preparing to give or giving testimony at a hearing. He maintains that the detail set out in the accounts themselves is insufficient to enable me to properly assess the appropriateness of the individual entries. He objects to the amounts charged by Ms. Cramp ($95 per hour) and Ms. McLaughlin ($155 per hour), on the basis that Ms. Cramp has few credentials other than a Bachelor of Commerce degree and that Ms. McLaughlin has few planning qualifications. Mr. Goulden, comparing this account to appraisal accounts which have been put before this board on cost hearings, and which have involved final written reports, extensive reviews of the report of the opposing party, and preparation for and testimony at hearings, submits that Coriolis’ fee should be reduced by at least 50% to reflect over-billing. He also argues that no interest should be ordered to be paid on the Coriolis accounts, on the basis that there is no evidence that the claimant agreed to pay interest, other than the general statement regarding the firm’s interest billing practice at the bottom of its accounts.

As I indicated previously, Mr. Wollenberg attended in person and gave evidence regarding his accounts. The general scope of his firm’s retainer is discussed earlier in these reasons, in section 8.1. Mr. Wollenberg testified that they reviewed a very large volume of documents and produced a very detailed chronology of the key events as determined by their review of the documents. In addition, Mr. Wollenberg himself had some conversations with the author of the claimant’s appraisal report, as well as doing a brief site inspection. He described his firm’s task as principally to "mine the documents" in order to arrive at an opinion.

He stated that he used other people within his firm to read a lot of the background materials in order to save money. Leslie Cram, for example, was more junior than him or his partner, Ms. McLaughlin, so they elected to have her do the initial review and culling of the documents in order to determine which documents it would be necessary for him to read himself.

Mr. Wollenberg described his own experience and qualifications as follows. In 1974 he obtained a Bachelor’s Degree in Science with a specialization in urban studies, and in 1975 received a Masters Degree in city planning from M.I.T.. He then returned to Vancouver where he was employed as an urban planning consultant for three years. For another five years he worked at a different consulting practice with increasing responsibilities, and in 1983 he started Coriolis Consulting Corp. with Sandra McLaughlin. At the time he was retained by the claimant, he had 17 years experience in consulting in all aspects of community and urban development planning, as well as a wide range of experience in the related fields of real estate marketing and financial analysis. He has served as the President of the Planning Institute of British Columbia and of the Canadian Institute of Planners. He has also held faculty appointments at various times at the School of Community and Regional Planning at U.B.C.

He testified that Ms. McLaughlin holds a Bachelor of Commerce Degree in Land and Urban Economics. Her experience, which is as lengthy as Mr. Wollenberg’s, has been in a wide variety of real estate consulting assignments, including a significant amount of work on issues related to community planning and growth management.

Ms. Lesley Cram obtained her Bachelor of Commerce degree in 1992 and has worked primarily with Coriolis since then. The firm charges her services at $95 per hour. In addition, it charges out the services of an administrative assistant at the hourly rate of $45. Mr. Wollenberg stated that a lot of the time billed for the administrative assistant would have been for photocopying the numerous documents involved in the opinion.

With regard to the issue of interest, Mr. Wollenberg testified that his agreement with the claimant was that his firm’s accounts would not be paid until they had been submitted to and paid by Vernon. The only "agreement" regarding interest was the statement written on their invoices. No reminders were sent out with regard to the unpaid accounts.

I agree with Vernon that the actual Coriolis accounts themselves are not sufficiently itemized, in the absence of any other evidence, to permit a determination of the reasonableness of the fees. However, the fact is that Mr. Wollenberg came in person to fill in the blanks, and in my view did so most satisfactorily. He was a credible and informative witness, and satisfied me as to the overall reasonableness of the firm’s fee charges. I find the hourly rates charged to be reasonable and well within expected market charges for professionals of the qualifications and experience of those within Coriolis. I also commend the practice of having a junior employee perform the bulk of the document review, thereby permitting the higher priced principals to use their time efficiently.

It also seems to me that Coriolis worked quickly and efficiently to provide the claimant with the opinion she required to enable her to arrive at a settlement of her claims. Although the overall amount claimed is in line with some appraisal accounts that have come before the board which have involved both a written report and attendance at a hearing, my experience has been that appraisals of any degree of complexity generally cost a good deal more than is being claimed for planning advice here. Vernon has not disputed the complexity of the planning issues placed before Coriolis, nor the high volume of documentation it was necessary for Coriolis to process in order to arrive at its oral opinion. In addition, the utility of this planning advice was very high in terms of moving the claimant towards a resolution of her claims.

The only aspect of the Coriolis accounts with which I have difficulty is the disbursement charge of $360 for the time spent by an administrative assistant in photocopying documents. I would normally expect this type of expense to be built into the hourly rates being charged by the professionals in the firm, and am not inclined to approve it as a separately charged item. I also am not prepared to allow a 5% handling fee on disbursements, claimed in two of the accounts for $26.82 and $0.42.

I therefore allow all of the fees charged by Coriolis, and all of the disbursements except for the three itemized above. By my calculations, this amounts to fees plus taxes in the amount of $449.40, $4,883.22, $1,171.65 and $82.93, for a total of $6,587.20. The disbursements plus taxes which I have allowed are $151.15 plus $8.41, for a total of $159.56. This brings the overall approved planning account to $6,746.76.

8.2 Interest

The first account submitted by Coriolis has been paid by Vernon. This was the account in the amount of $449.40, which I have allowed in full. The three remaining accounts were submitted to Vernon on June 8, 1995, but no payments have been made towards any of those accounts even though Vernon maintained here that a 50% reimbursement would be reasonable.

As indicated above, although the firm’s policy is to charge 18% per annum interest on unpaid accounts (based only on a statement to that effect contained on each account), the claimant seeks 12% per annum interest on Coriolis’ accounts. Although there was no separate written retainer agreement referring to the payment of interest, I accept that payment of interest did form part of the firm’s standard retainer, which is included in each of the accounts rendered by the firm to all of its clients. The three unpaid accounts bear the following statement:

INVOICES ARE DUE UPON RECEIPT. Overdue invoices are subject to interest at a rate of 1.49% per month (18.5%p.a. compounded semi-annually).

In terms of what rate would be reasonable to apply here, I note that recent cost decisions of the board have applied a simple rate of interest of 12% per annum at the relevant time and under similar circumstances. I therefore accept Mr. Melville’s submissions that this rate would be reasonable here, and award 12% simple interest on the outstanding Coriolis accounts, commencing June 8, 1995.

9. COSTS OF THIS REVIEW

Mr. Melville has requested an order that the claimant should recover her costs for preparation and attendance at this costs review. Since there was no evidence led as to the appropriate amount of these costs, however, he has asked that I not fix an amount, but rather grant leave to reapply if the parties are unable to reach agreement on that point.

Mr. Goulden has submitted that, if the claimant is unsuccessful in this costs review, no costs should be awarded. If I do grant an award of costs, however, he has submitted that I should determine a global amount for the hearing, so that it would not be necessary for the parties to attend an additional hearing.

I find that the claimant has been largely successful in her claims for reimbursement, and therefore should have her costs of this review. However, since no evidence was led as to an appropriate amount, I am not inclined to arbitrarily fix a sum or even a reasonable range. It occurs to me, for example, that a good deal of work may have been done to arrive at the various points of agreement between the time the review was set down and when it was heard, and I would have no way of assessing those sorts of areas. I will therefore award Ms. Hrushack her costs of this cost review, to be either agreed to between the parties or determined by a further application.

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