T-1775-74
Brougham Sand & Gravel Limited (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Mahoney J.—Toronto, October 4;
Ottawa, October 29, 1976.
Practice—Costs—Expropriation—Application for judgment
by consent with costs to be taxed on solicitor and client basis
pursuant to Expropriation Act, s. 36—Combined effect of
Federal Court Act, s. 57(3) and Department of Justice Act, s.
5(d)—Criteria for awarding costs—Whether judgment for
compensation should be declaratory or mandatory—Expro-
priation Act, R.S.C. 1970 (1st Supp.) c. 16, ss. 14, 29 and 36
Federal Court Act, ss. 46(2) and 57(3)—Department of Justice
Act, R.S.C. 1970, c. J-2, s. 5(d).
The parties are seeking a consent judgment setting out the
compensation payable and taxation of costs on a solicitor and
client basis, pursuant to section 36 of the Expropriation Act.
Held, the application is dismissed without prejudice to the
right of either or both parties to apply for a judgment by
consent in different terms. The record discloses that the amount
of the settlement is such that if it were adjudged to be payable
the Court would be required to award costs on a solicitor and
client basis against the Crown. However, the judgment on
consent must be one which the Court could have granted after
a trial: the material presented must establish that the amount
negotiated represents compensation payable pursuant to the
Expropriation Act and that part of the judgment dealing with
compensation should be declaratory rather than mandatory.
Galway v. M.N.R. [1974] 1 F.C. 600, applied. Bowler v.
The Queen [1976] 2 F.C. 776 and The King v. Hooper
[1942] Ex.C.R. 194, distinguished.
APPLICATION for judgment by consent.
COUNSEL:
Paul R. Henry for plaintiff.
No one appearing for defendant.
SOLICITORS:
Chappel, Bushell and Stewart, Toronto, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for order ren
dered in English by
MAHONEY J.: The plaintiff, with the consent of
the defendant, seeks a judgment fixing the com
pensation to be paid for an interest in land taken
under the authority of the Expropriation Act'.
The plaintiff commenced this action to have the
compensation payable determined. The defendant
filed a defence disclosing that a total of $639,350
had been offered under section 14 of the Act as the
total compensation for the expropriated interest.
Negotiations have led to a settlement including
costs on a solicitor and client basis. The parties
have not been able to agree on the amount of the
costs and appeared before a prothonotary of this
Court with a view to taxing them. He refused to do
so until such time as judgment was signed.
The consent judgment sought is in the following
terms:
1. THIS COURT DOTH ORDER AND ADJUDGE that the Plaintiff
do recover from the Defendant the sum of $873,278.04 which
amount has already been paid by the Defendant to the
Plaintiff.
2. THIS COURT DOTH FURTHER ORDER AND ADJUDGE that the
Defendant do pay all reasonable legal costs of the Plaintiff on a
solicitor and client basis to be taxed by a prothonotary of this
Honourable Court.
Thus the record discloses the amount of the settle
ment is such that if it were adjudged to be pay
able, the Court would be required, under section
36 of the Act, to award costs, on a solicitor and
client basis, against the Crown.
36. (1) Subject to subsection (2), the costs of and incident
to any proceedings in the Court under this Part are in the
discretion of the Court or, in the case of proceedings before a
judge of the Court or a judge of the superior court of a
province, in the discretion of the judge, and the Court or the
judge may direct that the whole or any part of such costs be
paid by the Crown or by any party to the proceedings.
(2) Where the amount of the compensation adjudged under
this Part to be payable to a party to any proceedings in the
Court under section 29 in respect of an expropriated interest
does not exceed the total amount of any offer made under
section 14 and any subsequent offer made to such party in
respect thereof before the commencement of the trial of the
proceedings, the Court shall, unless it finds the amount of the
compensation claimed by such party in the proceedings to have
been unreasonable, direct that the whole of such party's costs of
and incident to the proceedings be paid by the Crown, and
' R.S.C. 1970 (1st Supp.) c. 16.
where the amount of the compensation so adjudged to be
payable to such party exceeds that total amount, the Court
shall direct that the whole of such party's costs of and incident
to the proceedings, determined by the Court on a solicitor and
client basis, be paid by the Crown.
It will be noted that subsection 36(2) expressly
refers to "proceedings in the Court under section
29". The material portions of that section follow:
29. (1) Subject to section 28,
(a) a person entitled to compensation in respect of an expro
priated interest may,
(i) at any time after the registration of the notice of
confirmation, if no offer under section 14 has been accept
ed by him, and
(ii) within one year after the acceptance of the offer, in
any other case,
commence proceedings in the Court by statement of claim
for the recovery of the amount of the compensation to which
he is then entitled; or
(b) the Attorney General of Canada may at any time after
the registration of the notice of confirmation, whether or not
proceedings under paragraph (a) have been commenced, file
a notice in the matter in the Court ....
(2) A notice filed in the Court under subsection (1) shall be
deemed to commence an action or suit involving the persons
stated therein to be parties to the proceedings, for the final
determination of the compensation payable or any other matter
or issue arising out of the registration of the notice of
confirmation.
(4) Subject to this section, an action or suit commenced as
described in subsection (2) shall be proceeded with in accord
ance with the Rules and Orders of Practice and Procedure
before the Court and as if the proceedings had been com
menced by statement of claim filed by a person stated in a
notice filed in the Court under subsection (t) to be a party to
the proceedings.
(6) A judgment, whether by consent, default or otherwise, in
any proceedings under this section bars all further claims of the
parties thereto and of any persons claiming through or under
them, including any claim in respect of dower or of dower not
yet open or in respect of any mortgage, hypothec or other right
or encumbrance, and the Court shall declare the amount of
compensation payable and make such order for the distribution,
payment or investment of any compensation money and for the
securing of the rights of all persons interested, as may be
necessary.
Proceedings under section 29, commenced as these
were by a statement of claim filed by a person
entitled to compensation, are to be dealt with in
accordance with the Rules of this Court and may
be resolved by a consent judgment.
In the absence of any specific Rules on the
subject prescribed under subsection 46(2) of the
Federal Court Act 2 , Rule 340 of the General
Rules and Orders applies.
Rule 340. (1) In any action where there is an attorney or
solicitor on the record for the defendant, no judgment shall be
given by consent unless the consent of the defendant is given by
the attorney or solicitor on the record.
(3) No order for judgment by consent shall be made unless
the defendant has entered an appearance or filed a defence.
Paragraph (2) has no application where, as here,
the defendant has an attorney or solicitor on the
record.
The defendant's attorney or solicitor of record is
the Deputy Attorney General of Canada; however,
at some point since the defence was filed, a private
law firm has taken over conduct of the case. The
consent to judgment has been given by that firm. I
assume that the failure to comply with Rule 300 in
respect of the change of solicitors is readily cur
able; however, counsel may wish to consider the
import of the decision of the Federal Court of
Appeal in Galway v. M.N.R. 3 which was also
concerned with an application for a consent judg
ment to which the Crown was a party.
In ordinary litigation between private persons of full age and
mentally sound, the Court has not, in normal circumstances,
any duty to question a consent by the parties to judgment. We
should have thought that the same statement applies where the
Crown, represented by its statutory legal advisors, is one of the
parties. There is, however, at least one exception to the unques
tioning granting of consent judgments, regardless of who the
parties are, namely, that the Court cannot grant a judgment on
consent that it could not grant after the trial of an action or the
hearing of an appeal. It follows that, as the Court cannot, after
a trial or hearing, refer a matter back for assessment except for
assessment in the manner provided by the statute and cannot
therefore, at such a stage, refer a matter back for re-assessment
to implement a compromise settlement, the Court cannot refer
a matter back by way of a consent judgment for re-assessment
for such a purpose.
2 R.S.C. 1970 (2nd Supp.) c. 10.
3 [1974] 1 F.C. 600 at pages 602-603.
In the circumstances, there is no reason why the parties cannot
re-apply on the basis of a consent to a judgment designed to
implement an agreement of the parties as to how the assess
ment should have been made by application of the law to the
true facts. If there should be such a further application, we
suggest that having regard to the history of the matter, there
should be an express recital in the consent that it is designed to
implement such an agreement.
While the language of that judgment is dictated by
the fact that it concerned an income tax assess
ment, the principle is applicable here. A consent
judgment under section 29 of the Expropriation
Act must be a judgment which the Court could
have given had it heard the necessary evidence and
determined the amount of compensation payable.
Perhaps counsel should assume, as I do, that
when the Court of Appeal expressly indicated that
the same considerations apply to the Crown as to
any private person of full legal capacity when a
consent judgment is sought by the Crown "repre-
sented by its statutory legal advisors", it meant
what it said. While I should not wish to be taken to
consider that the Crown cannot retain and be
bound by commitments made by private solicitors,
at the very least a number of questions do not even
arise when the solicitor or attorney executing a
consent to judgment obviously derives his author
ity from paragraph 5(d) of the Department of
Justice Act 4 . This is not, in my view, a mere
technicality bearing in mind the fact that a judg
ment of this Court ordinarily can have the effect,
under subsection 57(3) of the Federal Court Act 5 ,
of authorizing payment of public monies that have
not necessarily been appropriated for the particu
lar purpose by Parliament. It is fitting that the law
officers of the Crown, answerable through their
Minister to Parliament, rather than private solici
tors, share with the Court the responsibility for
that result.
" R.S.C. 1970, c. J-2.
5 57. (3) There shall be paid out of the Consolidated Reve
nue Fund any money or costs awarded to any person against
the Crown in any proceedings in the Court.
In Bowler v. The Queen 6 , the Associate Chief
Justice refused a consent judgment under the
Expropriation Act which was sought in the follow
ing terms:
UPON the consent of the parties being filed, this Court does
order and adjudge that the action herein be dismissed and that
the Plaintiff do recover from the Defendant the costs of and
incidental to this action to be taxed on a solicitor and client
basis.
In his reasons the Associate Chief Justice noted
the incongruity of any court exercising its discre
tion as to costs in such a way as to dismiss a
plaintiff's action while awarding him costs on any
basis much less a solicitor and client basis. He
observed that costs on a solicitor and client basis
are "of a kind rarely given in any ordinary action
and then only for very cogent reasons". He also
noted the absence of authority under section 36
that would permit the dismissal of the action and
an award of solicitor and client costs to the plain
tiff. There was nothing on the record which
"would show that the situation is one in which
payment of solicitor and client costs should be
directed".
In The King v. Hooper', it was apparent on the
record that the amount of compensation to be paid
for the expropriated interest had been agreed in
advance of the commencement of proceedings. The
Expropriation Act 8 then in force (hereafter called
"the old Act") provided only for proceedings com
menced by an information filed by the Attorney
General—a procedure very similar to that
envisaged by paragraph 29(1)(b) and subsection
29(2) of the present Act. The information
expressed the Crown's willingness to pay $39,830
and the defence expressed Mr. Hooper's willing
ness to accept that amount. Thorson P. declined, in
that circumstance, to allow the Court to
... become merely an agency for the convenience of the parties
who have already agreed upon the amount of the compensation
money in a particular expropriation but desire a judgment of
the Court approving of their agreement so that the defendant
may be paid out of the Consolidated Revenue Fund, without
any specific appropriation.
6 [1976] 2 F.C. 776.
' [1942] Ex.C.R. 193.
8 R.S.C. 1927, c. 64.
That consideration is valid today; however, some
modification of the approach adopted by the
learned President is dictated by the fact that the
old Act did not envisage consent judgments while
the present Act, in subsection 29(6), expressly
does.
I should note that, in this instance, the parties
are patently not seeking to avail themselves of
subsection 57(3) of the Federal Court Act to
obtain unappropriated funds for the compensation.
The compensation has already been paid and the
only matter remaining is the quantum of costs. If a
judgment on consent is granted and subsection
57(3) becomes the basis for funding the payment
of costs, that will only occur after due determina
tion of their quantum by a prothonotary in accord
ance with the usual practice of the Court. In other
words, it will happen only after an adjudication
based upon proper evidence.
This application is to be distinguished from the
Hooper case in that the record discloses a genuine
disagreement as to compensation payable at the
close of pleadings. It is to be distinguished from
the Bowler case in that an amount of compensa
tion is sought to be declared payable by the judg
ment which, on the record, carries with it the
statutory right to an award of costs, on a solicitor
and client basis, payable by the Crown.
The criteria established by the Federal Court of
Appeal in the Galway case apply. The judgment
on consent must be one which the Court could
have granted after a trial. The material presented
must establish that the result of the negotiations
was an amount that represents the compensation
payable determined by an application of the provi
sions of the Expropriation Act to the actual facts.
If the lump sum of $873,278 comprises anything
other than compensation, e.g., interest, that ought
to be segregated from the compensation adjudged
to be payable. The Court is not ordinarily con
cerned with the entitlement to or calculation of
interest; those flow from and are determined by
application of section 33 of the Act after determi
nation of the compensation payable. I should also
think that, in the circumstances, the portion of the
judgment dealing with the compensation, as dis
tinct from the costs, should be declaratory rather
than mandatory—a form which I note would
appear, in any case, to be more strictly in conform
ity with the provisions of subsection 29(6) in this
respect, than is the usual form of judgment.
ORDER
This application is dismissed without costs and
without prejudice to the right of either or both
parties to apply for a judgment by consent in
different terms than the terms of the judgment
sought here.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.