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A-430-79
The Queen (Appellant) (Defendant) v.
Manitoba Fisheries Limited (Respondent) (Plaintiff)
Court of Appeal, Pratte and Heald JJ. and Maguire D.J.—Winnipeg, November 30, 1979; Ottawa, January 29, 1980.
Practice — Costs — Motion pursuant to Rule 394(7) direct ing an increase in Tariff B on taxation of costs allowed — Test case — Parallel cases not related to the action — Whether or not appeal from order granting increased costs should be allowed — Federal Court Rule 344(7).
This is an appeal from a decision of the Trial Division granting respondent's motion under Rule 344(7) "for an order directing an increase in Tariff B on the taxation of costs in this cause ...." Respondent commenced an action in 1975 seeking a declaration that it was entitled to be compensated for the loss of its business and goodwill. Seven other companies brought similar actions against appellant but respondent's action was the only one to go to trial. Although the Federal Court, Trial Division and the Federal Court of Appeal dismissed the action, the Supreme Court of Canada reversed those judgments, grant ed the declarations sought, and ordered that respondent be paid "its costs in all Courts". Following that judgment, the respond ent presented the motion which was granted by the decision under attack.
Held, (Pratte J. dissenting) the appeal is dismissed.
Per Heald J.: One of the main bases relied on by the Judge of first instance for directing an increase in costs was that subject action was in the nature of a test case. There was ample evidence upon which he could so conclude. The Judge of first instance quite properly issued the directions which he did to the Taxing Officer. The practice adopted by counsel in this case and in the seven other actions affected by the decision of the Supreme Court of Canada in this case is one which needs to be encouraged rather than discouraged. Rather than proceeding with eight parallel actions at an equal pace, with the result that much larger costs would have been incurred, the plaintiffs and their counsel chose to proceed with one case, for a final determination of the very important legal principle established in this action by the Supreme Court of Canada.
Per Pratte J. dissenting: Costs must relate to the action. Respondent is not entitled, as a result of the judgment in its action, for any costs for things done in relation to other actions in the Court. The additional work and responsibility resulting from the "test nature" of the case had nothing to do with respondent's action but related exclusively to the seven other similar actions pending in the Court. Respondent is not entitled to be paid any costs by reason of the fact that its counsel, in addition to representing its interests, also represented the inter ests of other persons who were not directly involved in the proceedings.
APPEAL. COUNSEL:
L. P. Chambers, Q.C. for appellant (defend-
ant).
K. M. Arenson for respondent (plaintiff).
SOLICITORS:
Deputy Attorney General of Canada for appellant (defendant).
Arenson & Arenson, Winnipeg, for respond ent (plaintiff).
The following are the reasons for judgment rendered in English by
PRATTE J. (dissenting): This is an appeal from a decision of the Trial Division granting respond ent's motion under Rule 344(7) "for an order directing an increase in Tariff B on the taxation of costs in this cause ...."
In 1975, the respondent commenced an action against the appellant seeking a declaration that it (the respondent) was entitled to be compensated by the appellant for the loss of its business and goodwill. Seven other companies brought similar actions against the appellant. The respondent's action was the only one that went to trial. It was dismissed both by the Trial Division and by this Court. Those judgments, however, were reversed by the Supreme Court of Canada which granted the declaration sought by the respondent and ordered that it be paid "its costs in all Courts". Following that judgment, the respondent presented the motion which was granted by the decision under attack.
The learned Judge below stated as follows his reasons for allowing the respondent's application [[1980] 1 F.C. 36 at pages 48-49]:
As I see the situation in the present case the engagement of two additional counsel cannot properly be described as a luxury. This was a test case, the result of which was to decide the rights of seven other companies that were in the same position as the applicant. The two additional counsel were also counsel for several of those seven companies. It was highly important that counsel for the applicant, conducting a test case, make sure that all the facts that might be considered, by counsel for the other companies as well as by himself, to be
relevant to the issues, were ascertained, considered, and pre sented fairly and fully to the Court, whether by way of an agreed statement of facts, or by parol or documentary evidence at the trial. Similarly, it was necessary, both in the various steps leading up to trial and at the trial itself, and subsequently, in deciding upon and proceeding with appeals to the Court of Appeal and Supreme Court, that counsel for the applicant be fully informed on all the points of law which counsel for the other companies thought applicable.
All of the eight companies had a great deal of money at stake in this action. The closest possible collaboration between the applicant (plaintiff) and the other seven companies was needed to make certain, so far as was humanly possible, that the test case was handled throughout in a thoroughly efficient manner. Only by such collaboration could the other seven companies feel satisfied that their rights were being fully protected in the proceedings in the test case. Undoubtedly, numerous discus sions and conferences were held, and necessarily so, throughout the various steps in the proceedings in the Trial Division and in the Court of Appeal. The simplest and most effective way to secure full cooperation was to engage counsel for some of the other companies as additional counsel in the test case. Doing so was in my opinion a prudent and well warranted step.
I am of the opinion that the applicant should be entitled to tax higher costs than are provided in Tariff B, Class III. I base my conclusion on the test nature of the case and the greatly increased responsibility and work resulting therefrom.
For those reasons, the learned Judge made the order under attack, the operative part of which
reads as follows:
... it is hereby ordered that the Application is granted, and that, pursuant to Rule 344(7) of this Court and Tariff B, section 2, subsection (3), the fees of the Applicant's (Plaintiffs) counsel be taxed at an increased amount, subject to the follow ing special directions:
The Taxing Officer is directed to consider that this is a test case and to what extent that fact has increased the responsibili ty and work of counsel for the Applicant (Plaintiff), particular ly in connection with conferences and consultations held in the course of preparation and steps taken prior to the hearings of the trial and appeal, with the two additional counsel engaged by the Applicant (Plaintiff). He should consider the reason ableness of the time spent on the various items in the bills of costs by reason of it being a test case, and what would be a fair fee, in the circumstances, to allow for such extra responsibility and time. As I have held that the Applicant (Plaintiff) was justified in engaging two other counsel in addition to its first counsel, the Taxing Officer should consider what would be a fair fee to allow each of them for his services both prior to and at Court hearings, which fee should in each case be at a lower rate than that allowed for the first counsel. Throughout the Taxing Officer is to bear in mind that costs in question are party and party costs and that party and party costs are not designed to provide full reimbursement of all costs incurred in the litigation, but only a reasonable portion thereof.
The Applicant's costs of this motion may be taxed as part of the costs.
I am of opinion that this decision cannot stand. The respondent's motion raised the question of the costs to which the respondent itself was entitled as a consequence of the final judgment in the respondent's action. It is clear, in my view, that those costs must relate to that action. The respond ent is not entitled, as a result of the judgment in its action, to any costs for things done in relation to other actions in the Court. The learned Judge below granted the respondent an increase in costs by reason of the additional work and responsibility resulting from the "test nature" of its case. How ever, that additional work, that additional respon sibility, had nothing to do with the respondent's action but related exclusively to the seven other similar actions pending in the Court. The respond ent is not entitled to be paid any costs by reason of the fact that its counsel, in addition to representing its interests, also represented the interests of other persons who were not directly involved in the proceedings.
It is my view, therefore, that the Judge of first instance erred when he held that the "test nature" of the respondent's case justified an increase in the respondent's costs. As the material filed in support of the application does not show, in my opinion, that the respondent's case was otherwise so excep tional as to warrant an increase in the Tariff B costs, it follows that I would allow the appeal, set aside the decision of the Trial Division and dismiss the respondent's motion. I would not make any order as to costs.
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The following are the reasons for judgment rendered in English by
HEALD J.: I have had the advantage of reading the reasons for judgment herein of my brother, Pratte J. With deference, I am unable to agree with him that the Judge of first instance erred and that the appeal herein should be allowed.
On May 1, 1969, the respondent was put out of business by the activities of the appellant. This was found, on the evidence, to be a fact, by the Trial Judge. The Trial Judge also found, on the evi-
Bence, that this respondent and his former com petitors were unfairly treated. From then until the
judgment of the Supreme Court of Canada on October 3, 1978, the appellant refused to compen
sate the respondent and others in a like position. From the commencement of the litigation in November of 1974, the respondent submits that it was required to engage solicitors and counsel for almost 500 hours to bring the claim to the end of the proceedings in the Federal Court of Appeal. The appellant's position was that the costs should be limited to a total figure of $3,650 as provided in Tariff B, which based on the amount of hours expended by counsel amounts to approximately $7.30 per hour.
One of the main bases relied on by the Judge of first instance for directing an increase in costs was that subject action was in the nature of a test case. In my view, there was ample evidence upon which he could so conclude. The reasons for judgment of the Trial Division make numerous references to the evidence establishing to the satisfaction of the learned Trial Judge that there were a number of other companies in a position similar to that of the plaintiff in this case. For example, at page 26 of the Appeal Book [at page 459 of the published judgment], the learned Trial Judge said:
I am satisfied from the evidence of Mr. Marder, Mr. Lazaren- ko and Mr. Page, that the plaintiff company and others like it had, even in that highly competitive field, over the years, built up individual clienteles.
He also found (A.B. p. 38) that the practical effect of the Freshwater Fish Marketing legislation ".. . has been to put the plaintiff and others out of business." There are also several references in the reasons for judgment of the Supreme Court of Canada and the Federal Court of Appeal to the fact that other companies were in a similar posi tion to this respondent. At the hearing before us, respondent's counsel stated that the learned Judge of the first instance, before dealing with this motion for increased costs, had earlier granted a motion for judgment on three of the other cases based on an agreement with the Crown that this case was to be the test case. Apparently the four remaining cases have not yet been settled but counsel for those plaintiffs have been encouraged to submit claims for judgment. I am therefore of the view that the Judge of first instance was correct in holding that this case was in the nature
of a test case, or was, at the very least, a case, the result of which has dictated the result in three other actions in this Court to date, and quite possibly, a further four actions very soon. In my opinion, the Judge of first instance quite properly issued the directions which he did to the Taxing Officer and I would not interfere with them. The practice adopted by counsel in this case and in the other seven actions affected by the decision of the Supreme Court of Canada in this case is one which, in my view, needs to be encouraged, rather than discouraged. Rather than proceeding with eight parallel actions at an equal pace, with the result that much larger costs would have been incurred, the plaintiffs and their counsel chose rather to proceed with one case, for a final deter mination of the very important legal principle established in this action by the Supreme Court of Canada.
They should not, in my view, be penalized for adopting such a course. To hold them strictly to the items in the Tariff would penalize them severe ly. For these reasons I would dismiss the appeal with costs.
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The following are the reasons for judgment rendered in English by
MAGUIRE D.J.: This is an appeal from a deci sion of the Trial Division granting respondent's motion under Rule 344(7) "for an order directing an increase in Tariff B on the taxation of costs in this cause ...."
I have had the opportunity of reading the rea sons for judgment of Mr. Justice Pratte and of Mr. Justice Heald.
I substantially agree with the reasons for judg ment and decision arrived at by Mr. Justice Heald and accordingly concur with his judgment.
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