A-516-75
Minister of National Revenue (Appellant)
v.
Bethlehem Copper Corporation Ltd. (Respondent)
Court of Appeal, Heald, Urie and Ryan JJ.—
Ottawa, September 29 and October 15, 1976.
Practice—Interest on costs Whether discretionary ele
ments involved in taxation represent barrier to payment under
s. 40 of Federal Court Act—Costs made payable by any
judgment in civil proceedings deemed judgment debt for the
purposes of s. 15 of Interest Act—Federal Court Act, s. 40—
Interest Act, R.S.C. 1970, c. 1-18, ss. 13, 14 and 15.
Respondent successfully appealed against a tax assessment
and was awarded costs in the Trial Division, the Court of
Appeal and the Supreme Court. At issue is an order of Gibson
J., of the Trial Division, that the Crown be directed to pay
interest at 5% a year from the dates of judgment on the
judgments for costs in the Trial Division and the Court of
Appeal. It is agreed that a judgment for costs is a judgment for
the purposes of section 40 of the Federal Court Act, which
provides for payment of interest on a judgment from the time
of giving the judgment.
Held, the appeal is dismissed and costs are awarded on a
solicitor and client basis. Judgment for costs does not usually
refer to a precise amount since they must first be taxed, but this
is essentially an administrative process although there may be,
as in this case, discretionary elements involved. The latter are
not, however, a barrier to the application of section 40 unless
some contrary order is made. Assuming that sections 13 to 15
of the Interest Act are applicable to this case, costs made
payable by any judgment in any court in a civil proceeding are
deemed to be a judgment debt for the purposes of the Act and
under section 14 shall bear interest from the date of judgment.
Star Mining and Milling Company, Limited v. Byron N.
White Company (1910) 15 B.C.R. 161, followed. Canadi-
an Aero Service Ltd. v. O'Malley (1974) 12 C.P.R. (2d)
91 and K v. K [1976] 2 All E.R. 774, distinguished.
APPEAL.
COUNSEL:
G. W. Ainslie, Q.C., for appellant.
B. W. F. McLoughlin, Q.C., for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Lawrence & Shaw, Vancouver, for respond
ent.
The following are the reasons for judgment
rendered in English by
RYAN J.: This is an appeal from an order of the
Trial Division delivered September 15, 1975,
whereby the Crown was directed to pay interest on
judgments for costs at 5% per annum from the
dates of the judgments.
The respondent, a British Columbia company,
was assessed tax for the year 1967, and appealed
to the Trial Division. The respondent was success
ful at the trial of the action, which was held in
British Columbia, and was awarded costs; the
judgment was delivered on September 22, 1972.
The Minister appealed and the appeal was dis
missed with costs by a judgment delivered May 9,
1973. An appeal by the Minister to the Supreme
Court of Canada was also dismissed with costs,
which were subsequently taxed and paid and are
not in issue in the present appeal.
By an order dated June 23, 1975, the Trial
Judge in the action directed that all steps in the
action, for the purposes of Tariff A of the Rules of
the Federal Court, should be classified as being
Class III. It was also directed, pursuant to para
graph 2(2)(a) of Tariff B, that certain specified
disbursements should be allowed.
On June 23, 1975, the District Administrator of
the Court at Vancouver certified that the costs of
the respondent in the present proceedings, in
respect both of the trial and of the appeal to the
Court of Appeal, had been taxed and allowed at
the sum of $21,243.73.
On September 15, 1975, Mr. Justice Gibson of
the Trial Division ordered that the Crown should
be directed to pay interest at 5% per year from the
dates of judgment on the judgments for costs of
the Trial Division and of the Court of Appeal. It is
from this order that this appeal was brought.
Section 40 of the Federal Court Act provides for
the payment of interest on a judgment from the
time of giving the judgment'. It was not disputed
in argument that a judgment for costs is a judg
ment for purposes of section 40.
At the moment a judgment for costs is given, its
amount is, of course, not precisely fixed unless the
judgment is for a lump sum. Taxation is, however,
essentially an administrative process although
there are, sometimes, as there were in this case,
discretionary elements involved. The presence of
such elements of discretion in the taxing of costs
does not seem to me to place any real barrier in
the way of reading the words of section 40 in their
ordinary sense: interest on costs taxed in due
course pursuant to a judgment should run from the
time the judgment is delivered subject, or course,
to a contrary order. There was no such contrary
order in this case.
It is not strictly necessary to decide whether
sections 13 to 15 of the Interest Act are made
applicable to this case by section 12 of the Act 2 .
Assuming that they are—and I am inclined to the
view that in relevant particulars they are appli-
cable—they reinforce the judgment I have formed
on the effect of section 40 of the Federal Court
Act, reading that section by itself. By section 15 of
' Section 40 of the Federal Court Act provides:
40. Unless otherwise ordered by the Court, a judgment,
including a judgment against the Crown, bears interest from
the time of giving the judgment at the rate prescribed by
section 3 of the Interest Act.
2 Sections 12 to 15 of the Interest Act provide:
12. Sections 13, 14 and 15 apply to the Provinces of
Manitoba, British Columbia, Saskatchewan and Alberta and
to the Northwest Territories and the Yukon Territory only.
13. Every judgment debt shall bear interest at the rate of
five per cent per annum until it is satisfied.
14. Unless it is otherwise ordered by the court, such
interest shall be calculated from the time of the rendering of
the verdict or of the giving of the judgment, as the case may
be, notwithstanding that the entry of judgment upon the
verdict or upon the giving of the judgment has been suspend
ed by any proceedings either in the same court or in appeal.
15. Any sum of money or any costs, charges or expenses
made payable by or under any judgment, decree, rule or
order of any court whatever in any civil proceeding shall for
the purposes of this Act be deemed to be a judgment debt.
the Interest Act, costs made payable by any judg
ment of any court whatever in a civil proceeding
are, for purposes of the Act, deemed to be a
judgment debt. By virtue of section 13, every
judgment debt is to bear interest, and under sec
tion 14 such interest is to be calculated from the
time of giving the judgment.
I would, with respect, follow the judgment of the
British Columbia Court of Appeal in Star Mining
and Milling Company, Limited v. Byron N. White
Company 3 .
We were referred in argument to the judgment
of Mr. Justice Grant in Canadian Aero Service
Ltd. v. O'Malley 4 , in which it was held that, in
Ontario, the date from which interest is to be
calculated on taxed costs, in respect of trial divi
sion judgments, is the date of the certificate of
taxation. I note, however, that Mr. Justice Grant
referred particularly to Form 115, the form of the
writ of fi. fa. in the appendix of forms to the
Ontario Rules of Practice. He said, with reference
to Form 115 5 :
... the second blank relates to the date from which interest is
to run on costs, and the words in parenthesis direct that it be
completed by inserting 'the date of the certificate of taxation'.
He also said 6 :
It is my view that the long-established principle whereby
interests on costs could only be recovered from the date of the
certificate of taxation, is, by virtue of s. 25 of the Judicature
Act, and the rules and Form 115 appended thereto, applicable
to the present situation, and that the statement of Riddell, J.,
supra, in Vano v. Canadian Coloured Cotton Mills Co. is the
correct statement of the law. [Emphasis added.]
Form 56, the form of writ of fieri facias, in the
Appendix to the Federal Court Rules, provides in
paragraph 1:
We command you:
1. That of the goods and chattels and lands and tenements of
C. D. within your jurisdiction you cause to be made a certain
sum or sums that were on the . day of , 19 .....,
adjudged (or ordered) to be paid by the said C. D. to A. B. (or
3 (1910) 15 B.C.R. 161.
4 (1974) 12 C.P.R. (2d) 91.
5 Ibid., at 93-94.
6 Ibid., at 95.
into Court) by a judgment (or order) of the above named Court
in the above named action (or as the case may be), which sum
or sums are more specifically described as follows:
(here enumerate the sum or sums payable by virtue of the
judgment including any amount payable as costs indicating,
if it be the case, that it was determined by a taxing master's
certificate)
and also interest on such sum or sums of money to the extent
that such interest is, in accordance with law, payable thereon
by the said C. D., which interest is more specifically described
as follows:
(here specify the rate of interest and the interest period for
interest on each sum, referring to the statutory authority for
such interest)
and also an amount equal to all fees and expenses of execution
of this writ;
It may be noted that in Form 56 interest is to be
charged "... on such sum or sums of money to the
extent that such interest is, in accordance with
law, payable thereon ...." [Emphasis added.] It is
also stipulated that reference is to be made to the
statutory authority for such interest, which in the
present case I take to be section 40 of the Federal
Court Act.
We were also referred to a recent English case,
K v. K 7 , in which it was held, in a decision of the
Family Division, that interest payable under sec
tion 17 of the Judgments Act 1838 on costs
incurred in the Family Division become due only
from the date of the order for payment following
the taxing officer's certificate. The decision was
cited particularly with a view to distinguishing a
series of cases decided in England between 1883
and 1894 which support the proposition that inter
est on a judgment for costs runs from the date of
the judgment, not from the date of taxation. It was
submitted that, in K v. K, the Family Division
distinguished those cases on the ground that they
depended on the English Rules of 1883 and espe
cially on a footnote to a form of writ of fi. fa.
included in an appendix to those Rules; substantial
changes were made in the forms of writ of fi. fa.
by the Rules of the Supreme Court, 1965, and the
footnote was omitted. It is true that, with reference
to these changes, the judgment in K v. K does say:
"... Most important of all, the footnote has
7 [1976] 2 All E.R. 774.
gone." 8 I confess, however, that for purposes of the
present case I do not find K v. K in any way
decisive; resolution of the problem in that case
appears to me to have depended on particular
developments in legislation and rule making and
on the proceedings actually followed in the various
divisions of the English Supreme Court. The fol
lowing passage from the judgment of Sir George
Baker in K v. K, at pages 779 and 780, supports
this view:
I have no doubt that the 1838 Act applies to the Family
Division (see the Supreme Court of Judicature (Consolidation)
Act 1925, s. 225) and that, subject to any particular rule made
by virtue of s. 99(e) of the 1925 Act, the same practice in
relation to execution should apply as in other Divisions; RSC
Ord. 45, r. 12, applies and the prescribed forms for writ of fi fa
must be used. I am however of the opinion that: (a) the
Matrimonial Causes (Costs) Rules 1971, r. 8, is a special rule
and that as costs are not payable until the order for payment
which follows the taxing master's certificate, interest cannot be
charged until that date. I reject counsel for the wife's argument
that RSC Ord. 62, r. 3(1), creates the obligation to pay at the
date of the order of Dunn J., and that the notice is merely a
statement that the amount of costs has been finally quantified.
In other words, Dunn J.'s order created, or was the fount of, an
obligation to pay costs which crystallised into, or became
enforceable as, a liability to pay only on notice after costs had
been taxed. The husband was ordered to pay within 28 days of
the notice of 18th August 1975 and he did so. It is to be noted
that the lump sum was not due and payable until 1st September
and, although the wife was not claiming interest on that,
counsel's argument involved the proposition that she could have
claimed such interest from 17th May 1974, the date of Dunn
J.'s order, and that as the order is silent about interest, there
would be no discretion in this court to disallow it. This is,
however, contrary, not only to what Field J. said in Pyman's
case ([1884] W.N. at 100), `... there may be a judgment
directing money to be paid on a future day, in which case the
interest will begin to run from that day ...', but also to the
approach of the Court of Appeal in Harrison v. Harrison (18th
July 1974; unreported) where an order for payment of interest
at 11 per cent from judgment on the wife's share of the
matrimonial home, on the basis that she was being kept out of
her interest, was set aside. (b) There has never been a practice
in the Probate Divorce and Admiralty or Family Division to
claim or allow interest on costs from the date of the order. (c)
For many years there has been no settled practice in other
Divisions to claim such interest, although the post-1883 cases
would have justified such a claim. (d) The ratio of Boswell v.
Coaks ((1887) 36 W.R. 65), a decision which would otherwise
have been binding on me (or at any rate in the absence of a
special rule), ceased to be valid from the omission of the
8 lbid., at 778.
footnote and the change of forms of writ in 1965-66.
I would dismiss the appeal.
The amount involved in the appeal is approxi
mately $3,000. The solicitor and client costs of the
respondent may exceed this amount. The question
of law involved has its difficulties, which the appel
lant appears to want resolved. I would award costs
on a solicitor and client basis.
* * *
HEALD J.: I concur.
* * *
URIE J.: I concur.
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.