A-53-72
Mark G. Smerchanski (Appellant)
v.
Minister of National Revenue (Respondent)
Court of Appeal, Jackett C.J.—Ottawa, May 24,
1977.
Practice — Costs — Application under Rule 350(3) for the
Court to tax costs and Rule 344(7) for application that
increase be allowed for certain solicitors' fees — Federal
Court Rules, 337(5), 344(7), 350(1),(3).
The respondent, by motion, applies for an order that costs of
$8,626, with interest, be paid. The Court of Appeal had ordered
that costs be paid. Counsel, nevertheless, was permitted to
address the Court as though there were an application under
Rule 344(7), (and as contemplated by Tariff B), to increase
certain amounts for solicitors' services, and as though there
were an application under Rule 350(3) that the Court tax the
costs allowed by the judgment disposing the appeal.
Held, the application is dismissed. The Court is bound by
Crabbe v. Minister of Transport: where this Court gives judg
ment for costs to be taxed, it cannot subsequently substitute a
lump sum except for a reason falling within a class of case
found in Rule 337(5) or (6). The application under Rule
350(3) that the Court tax the costs allowed in the judgment is
dismissed because there is no material establishing that "there
would otherwise be a delay in taxation". The application under
Rule 344(7) is dismissed because it is not made within the time
contemplated and no application for extension of time has been
made. Very special reasons warranting a lengthy extension of
time and a reasonably arguable case for an exercise of judicial
discretion increasing the fees for services must support such an
application. Party and party costs are not designed to constitute
full compensation to a successful party for his solicitor and
client costs and the volume of work in preparation, considered
alone or in conjunction with such factors as the difficulty or the
importance of the case, does not constitute an adequate basis
for the exercise of judicial discretion to increase tariff cost
items.
Crabbe v. Minister of Transport [1973] F.C. 1091,
followed.
APPLICATION.
COUNSEL:
J. T. Thorson, Q.C. for appellant.
G. J. Kroft and Cy Fien for respondent.
SOLICITORS:
J. T. Thorson, Q.C., Ottawa, for appellant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered by
JAcKETT C.J.: This is a motion by the respond
ent for an order that costs be paid to the respond
ent in the amount of $8,626 with interest thereon.'
The proceeding in this Court is an appeal from
the Trial Division. This Court's judgment, ren
dered on March 13, 1974, dismissed the appeal
with costs. An appeal to the Supreme Court of
Canada was dismissed on June 29, 1976.
At the end of the submissions of counsel for the
respondent, I intimated that I did not find it
necessary, as I then appreciated the matter, to call
on counsel for the appellant but I adjourned the
hearing of the matter so that counsel for the
respondent might consider whether he wished to
make further submissions in writing.
A letter has now been received by the Registry
indicating that counsel for the respondent has no
further submissions to make.
In my view, I am bound, by this Court's decision
in Crabbe v. Minister of Transport, 2 to dismiss
this application. In that case an application to fix
costs that, by a prior judgment of the Court, had
been ordered to be paid "when taxed" was dis
missed on the ground that is set out at pages
1091-2, as follows:
Such a judgment is final (Rule 337(4)) except that
(a) its terms may be reconsidered on the ground that they do
not accord with the reasons or that there has been an
accidental omission (Rule 337(5)), and
(b) clerical mistakes and accidental slips, etc., may be cor
rected (Rule 337(6)).
' In fact, the motion was made pursuant to a notice of motion
bearing the style of cause in this appeal and also the style of
cause on A-54-72. I know of no authority for such procedure
and, as there were two separate appeals and two separate
judgments, I do not understand what order is really being
sought. Having regard to my conclusion, this becomes
immaterial.
2 [1973] F.C. 1091.
That judgment establishes, in my view, that, where
this Court gives judgment for costs to be taxed, it
cannot subsequently substitute a lump sum unless
by way of reconsideration of the judgment for a
reason that falls within one of the classes of case to
be found in Rule 337(5) or (6). This is not such a
case. 3
I do not overlook the fact that the notice of
motion indicates an intention to make the applica
tion for an order fixing the total amount of the
costs "pursuant to paragraph 3 of Tariff B and
Rules 344(7) and 350(3)". In my view this cannot
change the nature of the order that may be sought
as set out in the notice of motion without the
acquiescence of the opposing party and the Court
and it cannot be said that there was any acquies
cence on the part of the opposing party during the
hearing of this application.
Nevertheless, counsel for the respondent was
permitted to address the Court as though there
were before the Court
(a) an application to increase certain of the
amounts for services of solicitors and counsel set
out in section 2 of Tariff B to the Rules as
contemplated by section 3 of Tariff B and Rule
344(7), 4 and
(b) an application under Rule 350(3) that the
Court tax the costs allowed by the judgment
disposing of the appeal.
In so far as the motion might be regarded as
seeking taxation of costs by a judge under Rule
350(3), 5 I am of opinion that it should be dis
missed because there is no material establishing
that "there would otherwise be a delay in the
taxation". (In my view, the paragraph in question
is obviously intended for a case where a judge is
3 See Appendix.
There has been no suggestion of an application for a
direction under any of the Rules that contemplate directions to
increase tariff amounts.
5 Rule 350(3) reads as follows:
(3) 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.
sitting at a place where there is no authorized
taxing officer available or for some comparable
exceptional case and does not entitle a party as of
right to taxation of costs by a judge instead of
taxation by a regular taxation officer.) Further
more, if a judge were to act as taxing officer, the
provisions of Rule 350(1) should be complied
with. 6
In any event, in my view, special court directions
changing the tariff amounts, such as are contem
plated by section 3 of Tariff B and certain of the
Rules, should be obtained before the taxation
procedure is proceeded with so that such directions
will be available to support the amounts claimed in
the bill of costs at the time of the taxation. (There
may be circumstances justifying a departure from
such course of events but they do not occur to me.)
In so far as the motion might be regarded as
seeking directions from the Court under section 3
of Tariff B, the motion was not made within the
time contemplated by Rule 344(7), which reads:
(7) Any party may
(a) after judgment has been pronounced, within the time
allowed by Rule 337(5) to move the Court to reconsider the
pronouncement, or
(b) after the Court has reached a conclusion as to the
judgment to be pronounced, at the time of the return of the
motion for judgment,
whether or not the judgment includes any order concerning
costs, move the Court to make any special direction concerning
costs contemplated by this rule, including any direction con
templated by Tariff B, and to decide any question as to the
application of any of the provisions in Rule 346. An application
under this paragraph in the Court of Appeal shall be made
before the Chief Justice or a judge nominated by him but either
party may apply to a Court composed of at least 3 judges to
6 Rule 350(1) reads as follows:
(1) A party whose costs are to be taxed shall, unless the
opposing party consents to the amount to be taxed, or
arrangements for the taxation can be made informally,
obtain from a taxing officer an appointment for taxation and,
not less than 2 days before the day appointed for taxation,
serve on every other party interested in the taxation, a copy
of his bill of costs, any supporting affidavit and a copy of the
appointment.
review a decision so obtained. 7
and there has been no application for an extension
of such time.
I might add that, as seems clear to me from a
reading of Rule 344(7) with Rule 337(5), it is
contemplated that any such application for a
direction increasing costs should be made while the
matter is sufficiently fresh in the mind of the
Court that the Court is in a position to appreciate
whether there were present in the particular case
circumstances justifying a departure from the
normal tariff amounts; and it would, in my view,
require very special reasons to warrant a lengthy
extension of the time contemplated by Rule 344(7)
such as would be required here.
Finally, I should say on this point that the
material submitted in support of this application
does not, in my opinion, provide a reasonably
arguable case for an exercise of judicial discretion
increasing the fees for services of solicitors and
counsel in connection with this appeal. Such a
direction must be based on relevant considerations
and must not be made on an arbitrary basis. All
that has been established here is that the respond
ent incurred a very large solicitor and client bill in
connection with the appeal, which would have
been relevant if costs had been awarded on a
solicitor and client basis but is not ordinarily rele
vant to the determination of costs on a party and
party basis. Nothing has been put forward to
suggest that there was anything in the conduct of
the appeal to warrant any increase in the party
and party tariff. While there is no principle with
reference to the basis for ordinary party and party
costs that is apparent to me from a study of the
relevant Rules, it does seem to be clear that party
7 Rule 337(5) reads:
(5) Within 10 days of the pronouncement of judgment
under paragraph (2)(a), or such further time as the Court
may allow, either before or after the expiration of that time,
either party may move the Court, as constituted at the time
of the pronouncement, to reconsider the terms of the pro
nouncement, on one or both of the following grounds, and no
others:
(a) that the pronouncement does not accord with the
reasons, if any, that may have been given therefor,
(b) that some matter that should have been dealt with has
been overlooked or accidentally omitted.
and party costs are not designed to constitute full
compensation to the successful party for his solici
tor and client costs. (This must certainly be so in a
case such as this where the successful party has
chosen to instruct counsel whose base of operations
is elsewhere than the appropriate place for the
hearing of the appeal.)
Reference was made to some four or five deci
sions of the Trial Division where Tariff B items
were increased apparently "having regard particu
larly to the great volume of work done in prepara
tion ...". I have difficulty in accepting volume of
work in preparation considered alone, or in con
junction with such factors as the difficulty or
importance of the case, as constituting a basis for
exercising the judicial discretion to increase Tariff
B costs items. It must be obvious that such items
are so low in relation to what is involved in a very
substantial proportion of the matters that come
before the Court that they are not designed to
provide complete compensation to the successful
party for the costs incurred by him in the litiga
tion. (Indeed, what is sought in this case is an
increase that would still leave the successful party
largely uncompensated for solicitor and client
costs.) If Federal Court party and party costs are
not designed to provide full reimbursement, as it
seems to me, what is intended is that they be made
up of the completely arbitrary amounts fixed by or
in accordance with the rules subject to variations
(where authorized) based on factors arising out of
the conduct of the particular proceeding. As it
seems to me, the vague basis put forward on behalf
of the respondent would put the Court in the
position, in a very substantial proportion of pro
ceedings, of weighing imponderable factors, or fac
tors that are not capable of determination, with a
view to making an allowance of an undefined
portion of solicitor and client costs. In my view,
such an approach is not acceptable as a basis for
exercising a judicial discretion under Tariff B and
would open the way for an unseemly complication
of our practice. 8
8 In so far as the disbursement items of $201 and $3,050 are
concerned, under section 4 of Tariff B, such disbursements are
to be dealt with in the first instance "upon taxation". If an
issue develops on taxation with regard thereto, it may be
referred to the Court.
For the above reasons, I am of opinion that the
application should be dismissed even if it could be
regarded as being for one, of the other orders
indicated above that are not set out in the notice of
motion.
I am further of the view that the motion should
be dismissed with costs.
APPENDIX
On reading the reasons in the Crabbe case, I
find a sentence therein in which there is, in my
opinion, a patent error, which might well cause
confusion. That sentence reads [at page 1093]:
In the present case since the judgment was pronounced in
open court the matter of awarding a fixed amount in lieu of
costs to be taxed might have been spoken to before the judg
ment was pronounced or it might have been raised on an
application under Rule 344(7), within the time limited by Rule
337(5), to reconsider the pronouncement on any ground falling
within Rules 337(5) and 337(6), that is to say, on the ground
(1) (Rule 337(5)) that the terms of the judgment did not
accord with the reasons of the Court or that there had been an
accidental omission or (2) (Rule 337(6)) that there had been a
clerical or accidental slip which required correction.
Having regard to the last portion of that sentence
and reading the reasons as a whole, it is, in my
view, clear that what it was intended to convey was
that an application after judgment to fix an
amount in lieu of costs to be taxed would have to
be made under Rule 337(5) or (6). I can only
conclude that the words "it might have been raised
on an application under Rule 344(7) .. , to recon
sider the pronouncement" found their way into the
sentence by error. Rule 344(7) authorizes applica
tions for special directions to be carried out on the
taxation of costs. It does not authorize applications
to change a "pronouncement" of judgment or a
judgment after it has been signed. The sentence
from the Crabbe reasons that I have quoted
should, in my opinion, have read as follows:
In the present case, since the judgment was pronounced in
open court, the matter of awarding a fixed amount in lieu of
costs to be taxed might have been spoken to before judgment
was pronounced or it might have been raised on an application
under Rule 337(5) or (6), that is to say, on the ground (1)
(Rule 337(5)) that the terms of the judgment did not accord
with the reasoning of the Court or that there had been an
accidental omission, or (2) (Rule 337(6)) that there had been a
clerical or accidental slip which required correction.
This error seems to have played a part in leading
Walsh J., in his reasons for judgment of January
27, 1976, in Crelinsten Fruit Company v. Mari
time Fruit Carriers Co. Ltd. [1976] 2 F.C. 316, to
the conclusion that, on a review of a taxation,
directions might be made under Rule 344(7), a
view that also seems to have been taken by Kerr J.
in Aladdin Industries Inc. v. Canadian Thermos
Products Ltd. [1973] F.C. 942. I can only say that
the view expressed by Thurlow and Pratte JJ. and
myself in the Crabbe case was that, on a review of
a taxation under Rule 346(2), the Court decides
whether the taxing officer erred in performing his
duty and can neither change the Court's judgment
nor make a direction or order contemplated by
Rule 344 or section 3 of Tariff B.
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.