Date: 20010222
Docket: T-1646-97
Citation: 2001 FCT 106
BETWEEN:
RONALD WILLIAMS
- and -
144096 CANADA Ltd.
(carrying on business as CAPITAL CITY HELICOPTERS)
Plaintiffs
- and -
THE MINISTER OF NATIONAL REVENUE
Defendant
ASSESSMENT OF COSTS - REASONS
+
CHARLES E. STINSON
Assessment Officer
[1] This action addressed issues concerning seizure, import, valuation and jurisdiction relative to aircraft, a helicopter and the Customs Act. On August 31, 2000, the Court decided in favour of the Plaintiffs with costs. The Plaintiffs presented a bill of costs combining elements of solicitor-client and party and party costs. Counsel for the Defendant redrafted it in a party and party format upon which the assessment of costs proceeded.
| Item 1 |
Preparation and filing of statement of claim |
7 Units |
$700.00 |
[2] The Plaintiffs argued that $700.00 for approximately 7.5 hours to take instructions and prepare a pleading do not reflect the actual cost of that work. The GST amendments in the legislation, the provisions in the Customs Act and the nature of instructions given to Customs Officers created the complexity in this litigation which, on its surface, appeared to address only whether the act was breached and what was the proper method for valuation. The Plaintiffs argued that careful attention to the clients' instructions and to the drafting of the Statement of Claim were a function of considerable work in turn ultimately ensuring the Trial Judge would have a clear grasp of the issues. In reply, the Defendant argued that, although some mastery of not entirely straightforward facts was necessary, this was not the most complex of cases and therefore 5 units were sufficient. The Defendant noted that, in fact, 7.5 hours of work is not a lot of time and they do not warrant the high end of the available range.
Assessment
[3] I conclude that this was not the most difficult of matters, but that it did have some complexity. The fact that the actual cost to the client may exceed, perhaps significantly, the party and party costs permissible under the Tariff is a factor which may be considered, but generally it should not be determinative. I allow 6 units.
| Item 7 |
Discovery of Documents including listing, affidavit and inspection |
$500.00 |
| Item 8 |
Preparation for an examination, including examination for discovery |
$500.00 |
| Item 9 |
Attending on examinations, per hour (Oct. 13/98 - Williams) (5 hours x 3 units) |
$1,500.00 |
| Item 8 |
Preparation for an examination, including examination for discovery |
$500.00 |
| Item 9 |
Attending on examinations, per hour (Jan. 9/99 - Berry) (2 hours x 3 units) |
$600.00 |
| Item 24 |
Travel time (allow 3.0 hours attendance discovery, pre-trial and trial) (1 unit x 3 hrs) |
$600.00 |
[4] For item 7, the Defendant argued that 3 units were sufficient for a book of approximately 80 documents and for litigation not akin to complex aboriginal or patent law generating an overwhelming number of documents and paper. The Defendant argued that the Plaintiffs have not led any evidence to discharge their onus of justifying the maximum in the available range of units. Counsel for the Plaintiffs asserted that there were at least 4 volumes of discovery documents and urged that the assessment be adjourned to permit him to produce the documents. By agreement, he produced a summary after the oral hearing of the assessment. That summary confirms his assertion of multiple volumes for approximately 1,000 pages.
[5] For the first item 8, the Defendant suggested 3 units towards the lower end of the range because it is less complex and less work to prepare one's own client for discovery than to prepare for discovery of the opposing party. For the first item 9 (discovery of the Plaintiffs' designate), the Defendant agreed to the 5 hours presented, but suggested 1 unit per hour because 2 units per hour were too close to the maximum in the available range for litigation which was not relatively complex. The Defendant noted that 0 units per hour is an option, but conceded that 1 unit per hour is appropriate because counsel had to be present. For the second item 8 (discovery of the Defendant's designate), the Defendant suggested 3 units because, the Plaintiffs' counsel having already prepared for a discovery, he did not have as much work as he might have. There was still considerable work, but the absence of complexity is suggested by a few number of documents and only 2 hours duration for the discovery itself. For the second item 9, the Defendant proposed 2 hours at 1 unit per hour.
[6] Counsel for the Plaintiffs asserted that complexity was irrelevant because he had to be present to actively monitor the questions and answers and to advise his clients accordingly. Considerable preparation was required for potential questions as well as organization of many more documents than would be used at trial. The Plaintiffs argued that the duration of the discovery was irrelevant because this litigation had several serious issues including alleged breaches of the Customs Act, the nature of the underlying instructions for valuation and the manner in which the valuations were carried out.
Assessment
[7] In Canadian Olympic Association v. USA Hockey, Inc. (A-472-97) on February 22, 2001, @ paragraph [12], I concluded that each item is discrete and assessable in its own circumstances. If items are a function of a number of hours, the same unit value need not be allowed for each hour. I allow 4 units for item 7. For the first item 8, I allow 3 units. For the first item 9, I allow 3 hours at 1 unit per hour and 2 hours at 2 units per hour. For the second item 8, I allow 4 units. For the second item 9, I allow 2 hours at 2 units per hour. The limits in available ranges sometimes require broad distinctions between simple and more complex matters. At the assessment, I intervened to explain that, per decisions such as Grant R. Wilson v. Her Majesty the Queen1, and in the absence of a direction of the Court, I had no authority to allow anything for item 24.
| Item 10 |
Preparation for Conference including memorandum |
$600.00 |
| Item 11 |
Attend Pre-Trial (Mar. 10/99)(.5 hours) 2:35 p.m. - 3:10 p.m. |
$150.00 |
| Offer to Settle Mar. 10/99 r.420 (double costs) |
||
| Item 11 |
Mediation (June 25/99)(1hour) (9:35 a.m. - 10:30 a.m.) |
$600.00 |
| Item 11 |
Teleconference with Justice Huggeson[sic](.25)(11:05 a.m. to 11:15 a.m.) |
$150.00 |
[8] The Plaintiffs noted that the date for the third item 11 was August 11, 1999 and that the actual duration was one-half hour. Counsel for the Plaintiffs argued that, as he had to prepare his clients in advance and also be present, an additional item 10 is claimed at 3 units for the June 25, 1999 mediation. Similarly, an additional item 10, but at 6 units, is claimed for the August 11, 1999 teleconference. The Plaintiffs noted that settlement considerations intervening between the first and second mediations affected the circumstances of the latter two pre-trial attendances. This warrants an individual item 10 for each. The Plaintiffs argued that each item 11 warrants the high end of the available range, ie. 3 units, by reason of the rationale above concerning complexity.
[9] The Defendant reiterated its assertion above that this was not a complex case and suggested 3 units for the first item 10 while noting that the 4.2 hours disclosed in the original bill of costs for preparation are not indicative of any real difficulty. The Defendant argued for 3 units at the low end of the available range for the second item 10 because, given the work already done for the first mediation, the preparation for the second mediation should have been minimal. The Defendant argued that nothing should be allowed for the third item 10 because the original, and incorrectly drafted, bill of costs disclosed only 15 minutes for preparation. As well, an item 10 for each item 11 is excessive given that the second and third conferences were continuations of the first one. The Defendant noted that there was work required on behalf of the clients at the second and third conferences, but that it was not onerous, and suggested 1 unit per hour for each item 11 (for [frac12] hour, 1 hour and [frac12] hour respectively).
Assessment
[10] The wording of the Tariff for item 10 permits a claim for each conference. I do not think there was much difficulty in appreciating the relative positions of the parties. I allow the minimum 3 units for each item 10. I allow the first item 11 at 1 unit per hour, the second at 2 units per hour and the third at 1 unit per hour (for [frac12] hour, 1 hour and [frac12] hour respectively).
| Item 13(a) |
Counsel Fee- preparation for trial (adjourned trial in Dec./99) |
$1,000.00 |
| Item 13(a) |
Counsel Fee - preparation for trial |
$1,000.00 |
| Item 13(b) |
Preparation for Trial, per day in Court after the first day (2 days) ... |
$1,200.00 |
| Item 14 |
Counsel Fee, per hour June 19/00 (6.5 hours) (9:30 - 5:00) June 20/00 (6.5 hours) (9:30 - 5:00) June 21, 2000 (3.5) 2:10 - 5:25) |
$3,900.00 $3,900.00 $2,100.00 |
[11] Counsel for the Defendant noted that there were two claims for item 13(a) because the adjournment resulted from a death in the family of the previous counsel for the Defendant. The Defendant proposed 3 units for each item 13(a) because the trial, scheduled for 2 days, was neither the simplest nor the most complex of hearings from the perspective of the number of witnesses and mastery of facts. The original bill of costs discloses only 10 hours approximately for the first item 13(a) and 1 -2 days for the second item 13(a). Counsel for the Defendant noted that, for item 14, he drafted the bill of costs using hours taken from court records, but excluding both lunch and set-up time. The Defendant proposed 2 units per hour for all 3 days because, although counsel had to be attentive, the facts were straightforward.
[12] For item 13, the Plaintiffs argued that the record discloses many hours to research the law, including assessment of regulations governing compliance with the Customs Act and of numerous and detailed tariff classifications. As well, the preparation did not concentrate on witnesses, but rather on the numerous documents, including those underlying the department's methods of valuation, and how to examine the departmental representative relative to these documents. The Plaintiffs conceded that there had been some notice of the adjournment and that this may not have been the most complex matter, but argued that the amount of work required justified the maximum for each item 13(a) and for item 13(b). Counsel for the Plaintiffs asserted that he could not wait until the scheduled commencement time each day to enter the courtroom and begin his set-up, but rather he arrived an hour in advance. The Plaintiffs proposed 3 units per hour consistent with the actual work required and its complexity.
Assessment
[13] As above, broad distinctions must sometimes be drawn between simple and more complex cases. I allow 2 units and 4 units respectively for the first and second item 13(a). For item 13(b), I allow 3 units and 2 units respectively for the second and third days of trial. For the hours shown each day for item 14, I allow 3 units per hour, 2 units per hour and 3 units per hour for the first, second and third trial days respectively.
| Item 26 |
Assessment of Costs |
$600.00 |
[14] Counsel for the Defendant argued that nothing should be allowed for item 26 given his work in redrafting the Plaintiffs' bill of costs into an acceptable format. He noted that, for convenience, he used the maximum in each range and forwarded the draft bill of costs to opposing counsel for discussion, including settlement talks, but did not receive any response. Counsel for the Defendant characterized his own submissions at assessment as indicative of his openness and flexibility and that this day's appearance was unnecessary. He argued that a single telephone discussion between counsel could have generated a sensible settlement beforehand.
[15] Counsel for the Plaintiffs asserted that there has not been an offer to settle and that opposing counsel should have sent one. He noted that he prepared the original bill of costs thinking it to be consistent with the Tariff and that its listing of hours was relevant in assessing complexity. He argued that the nature of the Defendant's objections indicated that settlement would not have been possible and that he had to appear to reply to those objections.
Assessment
[16] Item 26 is a global allowance addressing both preparation and attendance. I think that the Plaintiffs are entitled to assess item 26, but in the particular circumstances here, for only 2 units.
| DISBURSEMENTS |
|
| Transcript and Discovery Costs |
$983.80 |
| Courier |
$75.00 |
| Photocopies |
$300.00 |
| Ron McEwan appraisal and testimony at court |
$1,152.00 |
| Issue claim and set pre-trial |
$150.00 |
[17] The Defendant relied on F.C. Research Institute Ltd. v. Canada2 as authority that a simple delineation of disbursements in the absence of sufficient proof, as here, precludes the amounts claimed. Counsel for the Defendant said that he was not necessarily proposing zero dollars and that common sense should prevail. However, he noted that the total absence of proof makes that difficult for him. The Defendant conceded the $983.50 and $150.00 for transcript and court fees respectively. Counsel for the Plaintiffs left the $75.00 and $300.00 for couriers and photocopies respectively in my discretion per Carlile v. Canada3.
[18] The Defendant argued that the report of Ron McEwan was not prepared in 1996 for use at trial, but for use during the departmental administrative process generally addressing the aircraft. A letter dated in 1996, covering transmission of the report to the department, specified a purpose outside the litigation process, ie. for the departmental valuation process. The Defendant argued that this report was not served and filed within the formal time limits prescribed in the Rules for experts and therefore is not an appropriate disbursement. The Defendant asserted that only $100.00 of his total account should be allowed because he did testify, he was accepted by the Court as an expert despite our objection to the lack of sufficient notice, ie. on the day he was called, of his proposed expert testimony, and because $100.00 is the prescribed rate in the Tariff for an expert.
[19] The Plaintiffs asserted that Mr. McEwan's report could not have taken the department by surprise since the latter had objected in 1996 to his closeness to the Plaintiffs. The Plaintiffs asserted that the department was aware that this report, prepared by an individual whose business was appraisals, would be used only for the litigation. The Plaintiffs noted that the Court qualified him as an expert and that he had to attend for the full day in Court because he was required to wait for another witness to finish.
Assessment
[20] The Statement of Claim in this matter was filed on July 31, 1997 over a year after the appraisals were prepared. I concluded on November 15, 1991 in T-1856-89: Sutherland v. Queen, that costs predating the date of institution of legal proceedings are assessable. There is no evidence that, in 1996, litigation was inevitable. I believe that the 1996 appraisals, however useful they may have been to Mr. McEwan in preparing his expert testimony in 2000, were originally prepared in support of the Plaintiffs' efforts in the departmental valuation process regardless of whether or not litigation was inevitable. In those circumstances, I do not think that the Plaintiffs should benefit by being able to attribute all of Mr. McEwan's pre-litigation costs to a judgment in which a means for recovery of those costs is more certain than a departmental valuation process in which the possibility of recovery of those costs may be virtually non-existent. However, that should not disqualify the Plaintiffs from being able to attribute some of the 1996 costs to Mr. McEwan's preparation for expert testimony. I allow $675.00 of the $1,152.00 claimed. I allow $55.00 and $230.00 for couriers and photocopies respectively consistent with Carlile, supra and with Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada.4
The Plaintiffs' Settlement Offer dated March 10, 1999
[21] The Defendant argued that the Plaintiffs' settlement offer:
| My client has instructed me to offer to settle the Federal Court matter on payment to Her Majesty the sum of $10,000.00 the said sum to be characterised as GST and not forfeit. There are two conditions: 1) The planes, helicopter and all documents are to be returned to my client; 2) the condition of the planes and the helicopter to be the same as when seized and this to be determined by my client to his satisfaction. This determination will be conducted by my client or such agent as he may appoint and that Revenue Canada will co-operate. Such determination to be made prior to any funds advanced under this offer ... |
does not meet the threshold set by Rule 420. The Defendant argued that the designation of the $10,000.00 as GST meant that the Plaintiffs would be eligible for an almost immediate return of those $10,000.00 because of set-off regulations. The Defendant asserted that the Customs Act does not provide for the proposed valuation by the Plaintiffs of the aircraft. The Defendant argued that, although the Judgment quashed the department's decision, it did not result in terms more favourable than the offer to settle. In effect, the settlement offer proposes something beyond the authority of the Customs Act in that it results in the Plaintiffs receiving more than their entitlement under the legislation and therefore, because the settlement offer is more advantageous than the Judgment, Rule 420 does not apply.
[22] The Plaintiffs argued that the Defendant's proposition was predicated on the assumption that the Plaintiffs would ask for the GST credit. In fact, that can only happen if the Plaintiffs have expenses against which to offset the GST. The payment of the $10,000.00 would have been better for the Defendant. The Plaintiffs asserted that the Defendant was in a worse position because the Judgment left it in custody of the aircraft and with the expense of their maintenance. The Plaintiffs argued that the Customs Act does provide for damages, which were not in issue. The proposal to pay cash and get the aircraft back in comparable condition was reasonable.
Assessment
[23] Paragraph [69] of the Reasons for Judgment and Judgment appears to be the judgment. It sets aside the department's decision. It does not grant the relief proposed in the settlement offer. In particular, that leaves the Plaintiffs as they were at the instant of commencement of this litigation: without access to the aircraft for which they certainly had committed considerable dollars. Paragraph [40] of the Court's decision indicates that there was not an issue of the amount of damages before the trial Judge and therefore I do not agree that the absence in the judgment of a direction to pay $10,000.00, or any other amount, creates a more favourable situation for plaintiffs whose settlement offer was the genesis of such a consideration. Finally, I do not accept the Plaintiffs' proposition that the Judgment left the Defendant in a worse position simply because the latter continues to hold the aircraft and to spend dollars to maintain them. The Defendant is administering an Act embodying public policy, the purpose of which is not profit. A component of the administration of public policy may include the sale of seized goods to offset expenses, but there may be situations in which it is in the public interest to destroy goods thereby precluding any such offsets. I conclude that the Plaintiffs' settlement offer does not meet the Rule 420 threshold. The Plaintiffs' bill of costs, presented at $22,160.80 is assessed and allowed at $11,693.80.
(Sgd.) "Charles E. Stinson"
Assessment Officer
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| DOCKET: T-1646-97 |
STYLE OF CAUSE: Ronald Williams et al v. The Minister of National Revenue
| PLACE OF HEARING: Ottawa, Ontario |
| DATE OF HEARING: November 8, 2000 |
ASSESSMENT OF COSTS - REASONS BY: Charles E. Stinson
| DATED: February 22, 2001 |
APPEARANCES:
Steven J. Greenberg FOR THE PLAINTIFFS
Greg Moore FOR THE DEFENDANT
SOLICITORS OF RECORD:
Steven J. Greenberg FOR THE PLAINTIFFS
Ottawa, Ontario
| Deputy Attorney General of Canada FOR THE DEFENDANT |
Morris Rosenberg
Ottawa, Ontario
__________________1 T-1677-79 on 20000413 @ paragraph [8]
2 (1995), 95 D.T.C. 5583 (Fed. Assessment Officer)