T-3595-76
Spur Oil Limited (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Cattanach J.—Ottawa, June 8,
1982.
Practice — Costs — Special direction — Application to
extend time to apply for increased costs — Whether special
circumstances of exceptional nature present — Whether legal
issues of such complexity, value and importance that time and
work greatly increased — Federal Court Rules 3, 324, 337(5),
344(1),(7)(b), 350(3), Tariff B.
By notice of motion, the plaintiff moved for special direction
to increase the fees of counsel for the plaintiff over the amounts
provided in Tariff B as well as for an extension of time within
which the application could be heard.
Held, the motion was allowed. His Lordship reviewed the
complex and important legal issues involved and concluded that
the time and work involved was greatly increased. Counsel bear
the paramount responsibility in the conduct of a trial and a
balance should be struck with respect to the substantial fees
paid to expert witnesses. The intervention of the Long Vacation
and a subsequent application for leave to appeal to the
Supreme Court of Canada constituted special circumstances of
an exceptional nature such as to warrant the granting of an
extension of time.
MOTION.
COUNSEL:
B. A. Mcisaac for plaintiff.
L. P. Chambers, Q.C., for defendant.
SOLICITORS:
Herridge, Tolmie, Ottawa, agents for Mac-
Kimmie, Matthews, Calgary, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
CATTANACH J.: By notice of motion dated May
10, 1982 to be dealt with in accordance with Rule
324 upon written representations without the
appearance of counsel in person, the plaintiff
moved for special direction increasing the fees of
counsel for the plaintiff over the amounts provided
in Tariff B, for disbursements and expenses
incurred in the attendance of two witnesses called
by the plaintiff and for the services of an expert
witness called on behalf of the plaintiff, as well as
simultaneously moving for an order extending the
time within which the application might be heard.
In a bill of costs the disbursements to the two
witnesses are shown in the amount of $2,676.07
and as paid to the expert witness an amount of
$4,000 for preparation and attendance at trial.
That bill was submitted to the Attorney General
on January 20, 1982. On January 28, 1982 excep
tion was taken to the charge of fees for junior
counsel and to the magnitude of the charge for
counsel fees. These charges were for senior counsel
for four extended days of trial, $3,000 (or $750 per
day) and $1,500 for junior counsel (or $375 per
day) or $4,500 for counsel fees for the trial (or
$1,125 per day).
A breakdown of the $4,000 disbursement was
requested.
No exception was taken to the disbursement to
the two witnesses and it is apparent that the
breakdown requested with regard to the disburse
ment to the expert witness in the amount of $4,000
was satisfactory to the Attorney General.
Accordingly the sole question remaining is the
question of the counsel fees in the total amount of
$4,500.
By his reasons for judgment dated February 22,
1980 [[1981] 1 F.C. 461 (T.D.)] the Trial Judge
dismissed the plaintiff's appeal from its assessment
to income tax with costs. Counsel were to prepare
the formal judgment implementing the conclusions
of the Trial Judge.
On the motion the defendant claimed an
increase in counsel fees to $1,000 for senior coun
sel per day and $500 per day for junior counsel.
An amount of $20,382.67 was also claimed as a
reasonable increase for the defendant's two expert
witnesses.
Counsel for the plaintiff agreed to those
increases.
As previously indicated the appeal was allowed
in part but otherwise dismissed and the assessment
was referred back to the Minister for reassess
ment. The Trial Judge concluded the order by
stating "and costs to be taxed are awarded to the
Defendant".
The draft judgment which had been submitted
to him with respect to costs read "Costs to be
awarded to the Defendant of -". Clearly a
total which was left in blank was to be awarded to
the defendant but nowhere in the material can I
see where that total amount was specified, no
doubt to include the increases sought to which
counsel for the plaintiff agreed.
On June 9, 1980 the Trial Judge made minor
corrections to the draft judgment to read:
The Appeal of the Plaintiff for its 1970 taxation year is allowed
in part but otherwise dismissed and the assessment is referred
back to the Minister of National Revenue for reassessment on
the basis that the Plaintiff's taxable income for its 1970 taxa
tion year is $1,063,368.00 and costs to be taxed are awarded to
the Defendant.
The Trial Judge directed the Registry to ascer
tain if counsel for the parties agreed to such
change.
Counsel for the plaintiff agreed.
Counsel for the defendant replied in part as
follows:
I enclose a copy of the Plaintiffs submission on costs in which
no objection is made to the Defendant's claim for costs in the
total amount of $27,937.13. It would therefore appear that it is
not necessary to have a taxation of the costs as set out in the
altered draft judgment and that they could be awarded in that
amount.
Should the Honourable Mr. Justice Gibson have already seen
the Plaintiffs submission on costs prior to altering the draft
judgment then certainly we do not object to that draft as set
out in your letter of June 16, 1980.
This is the first time that I see a reference to
costs being in the total amount of $27,937.13. No
such total is included in the "Defendant's Submis
sions on Costs" dated May 26, 1980.
Assuming that a total of $27,937.13 was agreed
upon between the parties, as is obviously the case,
then, even though Gibson J. had granted costs to
the defendant in an amount to be taxed, there
would appear to be no impediment to the parties
agreeing upon the amount in which event the
taxation of costs would be superfluous.
It is idle for me to speculate but I would assume
that if the parties had agreed upon a lump sum as
costs to be inserted in the draft judgment in lieu of
taxation then, in all likelihood, that amount could
have been inserted but when the amount has been
left blank and no total appears in the defendant's
submission on costs as to an increase in costs in
those areas where it is necessary, that is tant
amount to asking the Trial Judge to act as a taxing
officer as to the whole of the costs which is beyond
his usual responsibilities.
Following upon the decision in the Trial Divi
sion an appeal was launched.
The Appeal Division allowed that appeal and by
judgment dated July 3, 1981 [[1982] 2 F.C. 113
(C.A.)] ordered that the plaintiff should have its
costs both in the Trial Division and in the Appeal
Division.
By application dated September 9, 1981 the
defendant applied to the Supreme Court of
Canada for leave to appeal from the judgment of
the Appeal Division. That leave was refused by the
Supreme Court on September 30, 1981.
Between July 3, 1981, the date of the judgment
of the Appeal Division, and September 9, 1981,
the date of the application for leave to appeal to
the Supreme Court of Canada (of which the plain-
tiff would be given notice) the defendant did not
apply for a stay of execution.
Again I am left to conjecture why the defendant
did not and I would again assume that in actuality
there was no necessity for doing so because any tax
alleged to be owed was collected as a debt due the
Crown on assessment and paid by the taxpayer,
both as a due debt and to avoid the accumulation
of interest thereon. What would remain for the
plaintiff to do might have been to seek repayment
in some form or some like such relief.
By virtue of Rule 344(7) any party may apply
for special directions as to costs after judgment.
Under paragraph (b) this may be done, 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. This is what was done by the
defendant.
On appeal the Appeal Division gave the decision
July 3, 1981 it had concluded ought to have been
given by the Trial Division which was that the
plaintiff's appeal should be allowed and that the
plaintiff was entitled to its costs before the Trial
Division (as well as before the Appeal Division).
By reference Rule 344(7) incorporates the time
limitation in Rule 337(5) which is within 10 days
of the pronouncement of judgment (which in this
instance would be July 3, 1981) "or such further
time as the Court may allow, either before or after
the expiration of that time".
The plaintiff so moved on May 10, 1982 which
is well beyond the 10-day period.
The judgment of the Court of Appeal was pro
nounced on July 3, 1981 which is within the Long
Vacation comprised of the months of July and
August.
By virtue of Rule 3 the time of Long Vacation
shall not be reckoned in the computation of time
for filing, amending or serving any pleading or
other document, unless otherwise ordered by the
Court. Thus it may be that the time to file and
serve a notice of motion might not begin to run
until September 1, 1981, if that date does not fall
on the first Monday in September. If this be so,
and I do not decide the matter, the expiration of
the time to move for increased costs would fall on
September 10, 1981.
On September 9, 1981 the defendant applied for
leave to appeal to the Supreme Court of Canada.
That application was dismissed on September 30,
1981.
It was not until January 20, 1982 that the first
draft of the plaintiff's bill of costs was submitted
to the Attorney General who took exception to the
items here in question of which only the increase in
counsel fees remain.
This was the subject of dispute and resulted in
the present notice of motion dated May 10, 1982.
The contention on behalf of the defendant is
that an application to extend the time to apply for
increased costs should only be granted in excep
tional circumstances and that such circumstances
do not exist to warrant the grant of the extension
sought.
On the other hand the plaintiff contends that
the defendant's application for leave to appeal to
the Supreme Court constituted ample justification
to wait until the outcome of that application before
submitting its bills of costs on all matters including
the application for leave to appeal.
That, in this respect, is the bone of contention.
The delay from about October 10, 1981 (when a
period of the ten days from September 30, 1981
would expire) to May 10, 1982 is not made an
issue. Rather it is that the application should have
been made prior to October 10, 1981.
In my view, the intervention of Long Vacation
and the application for leave to appeal to the
Supreme Court by the defendant constitute such
special circumstances of an exceptional nature to
warrant the delay of the application for increased
costs.
Accordingly the extension sought by the plain
tiff in its notice of motion is granted to May 10,
1982.
The issue which remains is the propriety of any
fee to junior counsel and the increase in the fee to
senior counsel beyond that allowed in Tariff B for
a Class III action, that is from $400 to $750 for
the first day and from $200 to $750 for the next
three following days.
Subsection 2(1) of Tariff B reads:
2. The following may be allowed unless the Court otherwise
directs:
(1) For services of solicitors and counsel:
Counsel for the defendant submits that because
the services of solicitors and "counsel" are pro
vided for no provision is therefore made for addi
tional costs for additional or junior counsel.
That I take to be an application of the maxim
"Expressio unius est exclusio alterius" but for
that interpretation and result to follow the word
"counsel" must be used as singular in the context
of subsection 2(1).
But the word "counsel" is both plural , and
singular.
It is defined in The Shorter Oxford English
Dictionary as "A body of legal advisers, engaged
in the conduct of a cause. (Usually a collective pl.;
formerly treated as a collective sing.)" and as "A
single legal adviser".
In my view the use of the word "amounts" in
section 3 of Tariff B refers to those authorized by
Tariff B and does not exclude a fee to junior
counsel.
In my view the affidavit of Charles Gordon
Pearson does not warrant the conclusion that any
services of significance were not provided to the
plaintiff by junior counsel.
In my view there are a number of factors any
one of which, if considered individually, would not
justify an increase in the counsel fee set forth in
the Tariff but when considered cumulatively war
rants doing so based upon the factors arising out of
the conduct of these particular proceedings.
Party and party costs are not designed to pro
vide complete compensation to the successful party
for costs incurred and for that matter neither is an
award of costs on a solicitor and client basis.
In the present case the legal issues involved were
of such complexity, value and importance to the
litigants that the time and work involved was
greatly increased.
The issues involved the purchase of crude oil
and the proper fair market value of quantities and
quality of crude oil and its transportation prior to
and including the 1970 taxation year.
There were lengthy and complex examinations
for discovery to review, as well as the many docu
ments that would be produced at trial.
In addition the plaintiff called one expert wit
ness and the defendant two. The affidavit of the
plaintiff's expert witness was required to be pre
pared with care and those of the opposite party to
be reviewed with great care to undertake proper
cross-examination of those witnesses.
There were three other appeals pending, the
results of which were dependant on the outcome of
the present matter.
The taxable income for the plaintiff's 1970 taxa
tion year was found to be $1,063,368, a deduction
of $1,622,728.55 was disallowed by the Minister
affecting not only the 1970 taxation year but also
subsequent taxation years under appeal.
The disbursements by the defendant to two
expert witnesses were in excess of $20,000 and the
disbursement by the plaintiff to one expert witness
was $4,000 and for the attendance of two witnesses
was $2,676.07. Counsel for the opposing parties
agreed that these amounts were reasonable and are
not disputed.
The position taken by the defendant appears to
me to be inconsistent with her own prior applica
tion to increase expert witness fees and senior and
junior counsel fees.
As previously indicated this application was
made upon the motion for judgment as contem
plated by Rule 344(7)(b).
However as previously recited there was a blank
space provided for the insertion of the costs in a
lump sum which had not been mentioned in the
submissions. Thus it might be construed as a com
bination of an application under Rules 344(7)(b)
and 344(1) to direct payment of a lump sum in
lieu of costs.
It would be possible to construe the application
as being meant to be dealt with under Rule
350(3).
In either event, taxing a lump sum under Rule
344(1) or taxing under Rule 350(3) would result
in the first instance as tantamount to the taxation
of costs by the Trial Judge and in the second as
requiring him to tax the costs.
Mr. Justice Gibson declined to do either. In the
pronouncement he gave he ordered costs to be
taxed.
I do not construe that as a dismissal of the
defendant's application. It is, in my view, more
consistent with a referral of the entire taxation of
costs to the taxing officer on the basis of the
defendant's representations and the plaintiffs con
sent to the increases sought.
The defendant had sought an increase in the
senior counsel fee to $1,000 per day and an
increase of the fee for junior counsel to $500 per
day. To this the plaintiff had consented.
The trial lasted for four extended days making a
total in counsel fees sought of $6,000. That I do
not find incongruous bearing in mind that two of
the defendant's expert witnesses exacted fees
slightly in excess of $20,000.
The plaintiff seeks an increase to $750 per day
for senior counsel, $375 per day for junior counsel,
or $3,000 and $1,500 for the four-day trial, or a
total of $4,500.
Again I note that this is but $500 more than the
disbursement paid to the plaintiff's expert witness.
Accepting that expert witness' fees of $20,000
for two or perhaps $10,000 each and $4,000 for
another were reasonable and justified it would
follow that, bearing in mind their respective
responsibilities, the fees paid to counsel might be
commensurate therewith and perhaps they might
be to those in private practice on a solicitor and
client basis. On the other hand the reverse on a
party and party basis might indicate a substantial
reduction in taxable fees paid to expert witnesses.
There should be a balance and, in my view, that
balance should weigh in favour of counsel who
have the paramount responsibility in the conduct
of a trial.
Added to this is the fact that while the trial was
estimated to last for four normal sitting days by
extending the usual sitting hours the Trial Judge
sat another two normal days or six days rather
than four to complete the trial within the allotted
four days much to the strain of those involved.
For the foregoing reasons and factors I would
grant the increase in fees for both senior and
junior counsel over those allowed in Tariff B to the
extent as is sought.
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.