T-908-74, A-404-74
The Trustee Board of the Presbyterian Church in
Canada (Petitioner)
v.
The Queen in right of Canada (Respondent)
Trial Division, Walsh J.—Montreal, November
22; Ottawa, December 2, 1976.
Practice—Taxation of costs under Expropriation Act—
Whether provisions of s. 36 applicable to appeal proceedings—
Method of calculating costs—Expropriation Act, R.S.C. 1970
(1st Supp.) c. 16, ss. 24, 27 and 36—Federal Court Rules,
Tariffs A and B, Rule 350.
MOTION.
COUNSEL:
N. Bindman and L. G. McDougall for
petitioner.
Yvon Brisson for respondent.
SOLICITORS:
Hemens, Harris & Associates, Montreal, for
petitioner.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
WALSH J.: This is a motion for taxation of
petitioner's costs in connection with the trial of
expropriation proceedings which resulted in the
Trial Division in the increase of the amount
offered as compensation from $187,000 to $412,-
000, which latter figure was subsequently reduced
by judgment in appeal to $329,515 with interest
and costs. The judgment in appeal ordered the
payment of the difference of $142,515 with inter
est from the date of the offer at the basic rate on
the said sum and with interest at 5% on the sum of
$329,515 pursuant to section 33(1) of the Expro
priation Act 2 . It was specified that costs both in
the Court of Appeal and the Trial Division should
be established in accordance with section 36(2) of
[1976] 1 F.C. 632.
2 R.S.C. 1970 (1st Supp.), c. 16.
the Expropriation Act which briefly provides that
when the amount awarded exceeds the amount of
any offer made before the commencement of the
trial of the proceedings, unless the Court finds that
the amount of the compensation claimed in the
proceedings to have been unreasonable, the whole
of the expropriated party's costs "of and incident
to the proceedings" shall be determined by the
Court on a solicitor and client basis and paid by
the Crown.
In a further decision of the Court of Appeal on
an application to it to determine the costs it was
held that the determination of the costs contem
plated by section 36(2) must be made in the first
instance by the Trial Division. The Court of
Appeal refrained from expressing any opinion as to
whether that section contemplates the award of
costs to be determined on a solicitor and client
basis in respect of proceedings in the Court of
Appeal as well as in respect of proceedings in the
Trial Division. This is therefore a question which I
must first consider. The purpose of section 36(2)
would appear to be to indemnify the expropriated
party against all costs which it will be called upon
to pay "of and incident to the proceedings" so that
the amount of the compensation received will not
be reduced by legal fees billed to it on a solicitor
and client basis. If this is the intention of the Act
then I believe that further legal costs in defending
an appeal and bringing a cross appeal from the
judgment of the Trial Division should also proper
ly be determined on a solicitor and client basis and
certainly the words "of and incident to the pro
ceedings" do not seem to limit these costs to costs
incurred in the Trial Division. By refraining from
expressing any opinion on this question the Court
of Appeal appears to have left this to the discretion
of the judge of the Trial Division called on to
determine the costs and I will proceed on the basis
that my determination shall include the solicitor
and client costs both in the Trial Division and in
the Court of Appeal.
In its claim for costs the petitioner includes fees
and disbursements totalling $5,361.07 pursuant to
Tariff A and Tariff B of the Federal Court Rules.
It is to be noted that the fees so claimed, leaving
aside the accounts of expert witnesses and sundry
disbursements total $2,862. Counsel for respond
ent did not object to the sum of $5,361.07 claimed,
the dispute being with respect to the balance for
solicitor and client costs which petitioner claims in
alternate ways. Petitioner claims in the first place
that it is entitled to the sum of $23,274.75 as
solicitor and client costs which sum represents the
fees which petitioner's attorneys consider as being
due on the basis of the number of hours of time
spent by various members of their firm in connec
tion with the present case from the institution of
the proceedings to the date of the hearing on the
question of costs on November 22, 1976, the ser
vices of each member of the firm being attributed
a different hourly value, with the two senior part
ners claiming a rate of $100 per hour for their
services, the next most senior member of the firm
$75 an hour and so on down the list.
An alternative method of calculating the claim
is based on the tariff in expropriation matters
established by section 89(1) (b) of the Regulations
of the Bar of Quebec in which province the litiga
tion took place which allows 1% of the amount of
the indemnity and 10% of the increase in the
indemnity beyond the amount of the offer which
two amounts work out to a total of $17,546.65.
During the course of argument before me it was
submitted that in the determination of proper
solicitor and client costs various factors should be
taken into consideration including the amount of
the award, the amount of the offer, the complexity
of the issues involved, the degree and scale of
competence required to present them, the degree
of the success of the action, the experience of the
attorneys involved, the time expended by them,
and the fee structure of the tariff in force in the
Province of Quebec. All of these factors have some
bearing on the discretion to be exercised in the
determination of the costs. Having heard this case
at trial I have no hesitation in stating that a
number of the issues involved were very complex,
many of the problems never having been raised
before since the new Expropriation Act came into
effect, and that they were well and competently
presented by petitioner's attorneys and undoubted
ly involved a considerable expenditure of time.
While it was not contended that the tariff for
expropriation proceedings applicable in the Prov
ince of Quebec is in any way binding on this Court
it can be one of the indicia used in endeavouring to
arrive at a proper figure.
Respondent's counsel argued strongly that since
$2,000 was allowed in the trial judgment and
confirmed in appeal for appraisal fees and $10,000
for negotiations with the Department of Public
Works and with the City of Montreal Planning
and Real Estate Department, title searches, lease
negotiations and so forth, this should be taken into
consideration and deducted from the amount now
claimed. These items were allowed by virtue of
section 27 of the Act which reads as follows:
27. (1) The Crown shall pay to each person entitled to
compensation under this Part an amount equal to the legal,
appraisal and other costs reasonably incurred by him in assert
ing a claim for such compensation, except any such costs
incurred after the institution of any proceedings under
section 29.
(2) The costs provided for in subsection (1) may be taxed by
the official responsible for taxing costs in the Court.
While the fact that subsection (2) provides that
these costs may be taxed, they were in fact includ
ed as part of petitioner's claim. In any event it
would appear by section 27 (1) that this is only
intended to cover such claims up to the institution
of any proceedings, the costs following the institu
tion of the proceedings being determined in
accordance with the judgment of the Court by the
application of section 36 of the Act. The judgment
itself allowed these items by the application of the
provisions of section 27 of the Act and there is
nothing in the judgment or in the judgment in
appeal to justify the contention of respondent that
the sum of $10,000 was intended to cover all
solicitor and client costs throughout the proceed
ings. If, in submitting a summary of its time
sheets, the petitioner had included time charges for
services rendered before the institution of proceed
ings, then there would clearly have been a duplica
tion and any time charges relating to the period
prior to the institution of proceedings should not
be taken into consideration, but this does not
appear to have been the case. I find some difficulty
however in reconciling petitioner's affidavit show
ing 296 hours and thirty-five minutes as having
been devoted to the case from the institution of
proceedings, on March 1, 1974 with a pencilled
notation indicating a total of 225 hours and forty
minutes appearing on page 9 of the detailed time
charges which also states that this time includes 13
hours with the City. This total could only have
been arrived at if the time charges prior to institu
tion of proceedings were included as otherwise the
total to this stage would only have been about 198
hours. From then until the end of page 10, being
the final sheet of the detailed time charges submit
ted there appears to have been a total of some 36 1 / 2
additional hours which would indicate a total of
considerably less than 296 hours and thirty-five
minutes if one commences only with the institution
of proceedings, especially if the 13 hours indicated
as including negotiations with the City is deducted
as petitioner's counsel contended was done in his
oral submissions to the Court. In making this
comment I am not suggesting that there has been
any attempt by counsel for petitioner to mislead
the Court, but merely to point out that it is
difficult to rely too strongly on the time sheets,
especially since a reasonably substantial portion of
the work was in connection with petitioner's
negotiations with the City of Montreal in an
attempt to relocate, which may not be a cost
"incident to the proceedings".
Section 24(5) of the Act provides that in deter
mining under subsection (4)(b)(ii) the cost,
expenses and losses arising out of or incidental to
moving to and re-establishing in other premises,
any assistance given by the Minister to enable the
former owner to seek and obtain alternative prem
ises shall be taken into account. This clearly
relates only to the amount of the award which has
now been finalized by the Court of Appeal and
should have no bearing on the costs. In any event
in the present case the respondent was unable to
offer any substantial assistance to petitioner in its
search for alternative premises since all the avail
able property was owned by the City of Montreal.
I therefore feel that the extensive negotiations
between petitioner and the City of Montreal in an
attempt to obtain suitable alternative premises,
even if these negotations had not proven to be
abortive as they were, can hardly be considered to
be incident to the costs of the expropriation pro
ceedings within the meaning of section 36 of the
Act. While a substantial portion of the time of
petitioner's attorneys was very properly devoted to
discussions with their client, the City of Montreal
and others in connection with efforts to relocate I
cannot find that this properly enters into solicitor
and client costs payable by respondent.
Two other factors necessitate a downward
adjustment of petitioner's claim for $23,274.75
calculated on a time charge basis. The first of
these is that the two senior partners whose services
make up by far the greater portion of the claim
make a time charge of $100 an hour for their time.
This, on the basis of an eight-hour day, which is
claimed in some instances, results in fees of $800 a
day. Without casting any doubt on the ability or
experience of the two attorneys in question, nor
expressing any opinion as to the propriety of these
hourly charges I would point out that the tariff of
this Court provides a maximum of $400 per diem
for the conduct of the hearing either in the Trial
Division or the Court of Appeal and this only for
the first day. This gives some guidance as to what
is considered to be an appropriate counsel fee and
I do not believe that any more should be allowed
on a solicitor and client basis for extrajudicial
work than what is allowed for the very demanding
work involved in the conduct of a hearing in Court,
although it must be borne in mind that such a
hearing usually occupies only 5 to 5 1 / 2 hours of the
day. The second factor which would require the
reduction of an account based on time charges
arises from the fact that, as already noted the sum
of $2,862 has already been included as fees in
connection with the trial and appeal in the pro
posed taxation under Tariff A and B so that it
would clearly be a duplication unless this amount
were deducted from any time charges for these
services. This is apparent from Rule 79(e) of the
Regulations of the Bar of Quebec referred to by
petitioner in another context which concludes that
"in determining the value of an attorney's services
he must take into account as one of the factors
both the judicial and extrajudicial fees fixed by the
tariffs".
Petitioner's other approach based on the value
of the amount awarded relies on Rule 89(1) of the
Regulations of the Bar of Quebec establishing the
proposed tariff for expropriation matters which
reads as follows:
89. (1) In expropriation matters, the suggested extrajudicial
fees are as follows:
(a) a fee of 1% of the amount of the indemnity (save in cases
where the advocate is already entitled to an equivalent fee
under the tariff of judicial costs), plus
(b) a fee of 10% of the difference between the amount of the
indemnity and the amount of the initial offer made by the
expropriator or, when the expropriator has made no offer, the
difference between the amount of the indemnity and the
minimum amount established by the experts acting for the
expropriator.
In justice to the petitioner it must be pointed out
however that this is merely a suggested extrajudi-
cial fee and not a binding one and could be
increased when there is an extraordinary amount
of work involved, as in the present case. On the
other hand it must be said that if this were the sole
basis of calculation to be used it would appear to
cover all services from the commencement of the
mandate to the conclusion of the action and would
not be limited to fees following the institution of
proceedings and petitioner has already received
$10,000 included in the amount of its award for
the services of its attorneys prior to the institution
of proceedings. I express no view as to whether in a
claim by petitioner's attorneys against petitioner
for extrajudicial fees based on the percentage
allowed in section 89(1) of the Quebec Tariff the
client could set off as a credit the $10,000 included
in the award in the event that it had already paid
this to the attorneys, but in any event as I have
already indicated I have concluded that this
$10,000 should not be set off against the amount
of costs to be taxed on the present motion.
The Quebec Tariff is, as I have indicated, in no
way binding on this Court but certainly it gives a
good indicia as to what attorneys practising law in
the Province of Quebec would expect to receive for
services such as those they have rendered in the
present matter.
After taking into consideration all the factors
which I have mentioned, I consider that the total
services rendered in this case from the commence
ment of the mandate up to and including the
judgment in the Court of Appeal and on the
present motion to establish the amount of the costs
would justify fees in the range of $25,000 to
$30,000. Bearing in mind that fees to the extent of
$2,862 are already included for taxation agreed to
under Tariff A and B and that the attorneys have
received or will receive $10,000 which was includ
ed in petitioner's award, I believe that solicitor and
client fees to be taxed on the present motion could
appropriately be fixed at $15,000 in addition to the
$5,361.07 agreed to under Tariff A and B making
a total of $20,361.07.
While Rule 350 requires costs to be taxed by an
officer in the Court, subsection (3) provides
"Where, for any reason, there would otherwise be
a delay in the taxation of a bill of costs, if a judge
finds that he can do so without interfering with his
judicial duties, he may tax the bill of costs as if he
were a prothonotary". Neither party objected to
the taxation being made by the Court and under
the circumstances I feel that this was desirable. I
therefore tax costs herein in accordance with the
tariff of this Court and by application of the
provisions of section 36(2) of the Expropriation
Act in the amount of $20,361.07.
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.