T-2248-74
Camp Robin Hood Limited (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Cattanach J.—Toronto, January
26; Ottawa, February 13, 1981.
Practice — Costs — Expropriation proceedings — Plain
tiffs action for additional compensation for expropriated
lands was settled "on the Court House steps" — Prothonotary
reduced fees for solicitors and disallowed certain disburse
ments — Plaintiff seeks to vary the taxation of its costs —
Whether the Prothonotary erred in law and in principle in
failing to allow the whole of the plaintiff's costs claimed as
being its `costs of and incident" to the proceedings on a
solicitor and client basis as required by s. 36(2) of the Expro
priation Act — Application allowed — Expropriation Act,
R.S.C. 1970 (1st Supp.), c. 16, s. 36(2) — Federal Court Rules
346(2), 349(2).
The plaintiff was not satisfied with the compensation offered
for lands expropriated by the Crown and began this action. The
matter was settled "on the Court House steps". The plaintiff
now seeks to vary the taxation of its costs of the action by the
Prothonotary who reduced the solicitors' fees and disallowed
certain disbursements. The question is whether the Prothono-
tary erred in principle and in law in failing to allow the whole
of the plaintiff's costs claimed as being its "costs of and
incident" to the proceedings on a solicitor and client basis as
required by section 36(2) of the Expropriation Act.
Held, the application is allowed. When section 36(2) of the
Expropriation Act provides that the "whole of' the expropriat
ed "party's costs of and incident to the proceedings, determined
by the Court on a solicitor and client basis, be paid by the
Crown" it means that the whole of the costs taxed on a solicitor
and client basis shall be paid by the Crown and nothing more.
What the successful party is entitled to is the costs of and
incident to the proceedings, not the costs of and incident to the
expropriation. The latter circumstance is proper for inclusion in
the compensation to be awarded. The established principles of
taxation remain applicable and are not varied by section 36(2).
The first premise is that the claimant is entitled to recover
those costs which have been necessarily incurred to make a
proper preparation and presentation of the case. The second
principle is that if an item does not involve a question of
principle but merely a question of amount the taxing officer's
discretion will not be interfered with unless the amount can be
shown to be so unreasonable as to suggest that an error in
principle must have been the cause. Factors which properly
enter into consideration in determining the question of costs on
a solicitor and client basis are: the amount of the offer in
expropriation cases, the amount of the award, the complexity of
the issues, the skill and competence required to present the
issues, the experience of counsel, the time expended on prepara
tion, and the fees allowed in any applicable tariff.
The Trustee Board of the Presbyterian Church in Canada
v. The Queen [1977] 2 F.C. 107, discussed. McCain Foods
Limited v. C. M. McLean Limited [1981] 1 F.C. 534,
referred to. Re Solicitors (1921) 20 O.W.N. 84, referred
to.
APPLICATION to Vary taxation.
COUNSEL:
L. Morphy, Q.C. for plaintiff.
T. L. James for defendant.
SOLICITORS:
Campbell, Godfrey & Lewtas, Toronto, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
CATTANACH J.: By its motion, notice of which
is dated January 14, 1981, the plaintiff seeks to
vary the taxation of the plaintiff's costs of the
action herein by J. A. Preston, Esq., in his capacity
as Prothonotary, on a solicitor and client basis at
the sum of $32,097.76.
The solicitors' bill of costs to this client for fees
was $16,850 being the total of $3,850 from May
1973 to March 1977 and $13,000 from October
1977 to April 21, 1980 (there is a hiatus from
March 1977 to October 1977 presumably because
no services were performed during that period)
and disbursements in the amount of $35,406.04 as
itemized on page 4 of the plaintiff's bill of costs.
In taxing the plaintiff's costs as he did the
Prothonotary reduced the solicitors' first account
for fees for the period May 1973 to March 1977
from $3,850 to $3,000, a reduction of $850 and the
second account for $13,000 he reduced to $11,400,
a reduction of $1,600.
In the total result the solicitors' account for
services in the total amount of $16,850 was
reduced to $14,400, a reduction of $2,450.
With respect to disbursements claimed the par
ties agreed upon disbursements in the amount of
$2,493.55.
With respect to the remaining disbursements
they were disputed both as to the quantum and
propriety thereof.
The particular disputed disbursements were as
follows:
(1) Robert L. Sachter, Q.C., the general solici
tor for the plaintiff, claimed a solicitor's fee in
the amount of $8,914.46 of which the Prothono-
tary allowed $3,600, a reduction of $5,314.46;
(2) Woods Gordon, a firm of management con
sultants, an adjunct of a firm of chartered
accountants, was engaged to report and testify
as to an estimate of business losses incurred by
the plaintiff as a result of the expropriation,
claimed an amount of $16,793.82 of which the
Prothonotary allowed $7,500, a reduction of
$9,293.82;
(3) through Robert M. Robson, a real estate
appraiser two accounts in the total amount of
$5,454.21 were claimed of which $3,804.21 was
allowed, a reduction of $1,650;
(4) Wm. Eisenberg & Co., the appointed audi
tors of the plaintiff company claimed $1,500 for
extra services which the Prothonotary disal
lowed in its entirety;
(5) General Urban Systems, with which an
architect formerly engaged by the plaintiff, was
associated, was concerned in rezoning land pur
chased by the plaintiff to continue its operation
billed $172 for this service and belatedly at
taxation a further $743 for such services, both of
which accounts were disallowed by the Pro-
thonotary in their entirety.
The net result of these disputed disbursements is
that a sum of $14,904.21 was allowed which, when
added to the agreed disbursements of $2,493.55
makes a total of $17,397.76 in allowed disburse
ments.
Thus the plaintiff's costs were taxed at
$32,097.76 made up of the solicitors' fee taxed at
$14,400, $17,397.76 in disbursements and $300
allowed as costs of taxation.
The contention on behalf of the plaintiff was
that the Prothonotary erred in principle and in law
in failing to allow the whole of the plaintiff's costs
claimed as being its "costs of and incident" to the
proceedings on a solicitor and client basis as
required by subsection 36(2) of the Expropriation
Act, R.S.C. 1970 (1st Supp.), c. 16, and more
particularly that the Prothonotary erred in princi
ple and in law:
(1) in reducing the amount of the solicitors' fees in the light of
the usual hourly charges of the solicitors;
(2) in reducing the amounts of the fees claimed by the manage
ment consultants and the real estate appraiser; and
(3) in disallowing the account of Wm. Eisenberg & Co.
The plaintiff had operated a day camp offering
recreational and educational facilities since 1965
on its premises four miles from the Town of Mark-
ham, Ontario not too far from Toronto, Ontario.
On January 30, 1973 the Crown expropriated
the plaintiff's land for the purposes of the Picker-
ing Airport.
As required by the Expropriation Act the
Crown offered and the plaintiff accepted, without
prejudice to its right to seek further compensation,
the sum of $127,320 as compensation for the
market value of the plaintiff's equity in the land
(there was a mortgage of $112,000 at 8 1 / 4 % per
annum), compensation for disturbance including
relocation and compensation for the loss of a pre
ferred rate of interest on the existing mortgage.
Later, on August 6, 1973, the compensation
offer was increased by $25,950 thereby increasing
the amount to $153,270.
Naturally the plaintiff was not satisfied with the
compensation offered and, as is its right, began
this action by statement of claim filed on May 31,
1974 seeking, (1) further compensation for its land
and buildings, (2) adequate compensation for busi
ness disturbance or alternatively discontinuance of
its day camp business, (3) compensation for loss of
specific economic advantage of the land as a day
camp, (4) compensation for the cost of a master
plan for development of the lands as day camp
before the expropriation but to be implemented in
five stages and not done but interrupted by the
expropriation and (5) moving costs and other
expenses incidental to acquiring substituted prop
erty for its day camp business for a total amount
of $500,000.
The trial of the matter was fixed to be heard on
February 25, 1980.
On the Court House steps the matter was settled
and motion made for judgment on affidavit evi
dence establishing that the amount to be declared
payable was fair and reasonable.
Judgment was accordingly given by my brother
Walsh on February 25, 1980 declaring the total
amount payable to be $449,858.94, $336,359 of
that total being compensation for the plaintiff's
expropriated interest, and the balance of
$113,499.94 being interest pursuant to paragraphs
(a) and (b) of subsection 33(3) of the Expropria
tion Act.
As conditions precedent to a consideration of the
dispositions made by the Prothonotary of the claim
in question I accept certain well-known premises.
I accept the remarks made by my brother Walsh
as to the purpose sought to be achieved by subsec
tion 36(2) of the Expropriation Act when he said
in The Trustee Board of the Presbyterian Church
in Canada v. The Queen ([1977] 2 F.C. 107 at
page 108):
The purpose of section 36(2) would appear to be to indemnify
the expropriated party against all costs which it will be called
upon to pay "of and incident to the proceedings" so that the
amount of the compensation will not be reduced by legal fees
billed to it on a solicitor and client basis.
It should be borne in mind that the instances
contemplated by subsection 36(2) of the Act are
not the cases where costs to be taxed on a solicitor
and client basis are to be paid by the client (over
which the client has a modicum of control) but
rather cases where the costs are to be paid by the
opposite party. Accordingly the foregoing remarks
cannot be construed as conferring a carte blanche
upon the expropriated party but must be qualified
by the well-established elementary principles.
One such principle is that many charges which
are proper against the client are unjust and
improper to fix upon the opposite party. When
taxation is against the opposite party the taxation
is on a less liberal scale than when the client is to
pay. It is strictly a taxation of the costs of the
action between party and party on a solicitor and
client basis. A reading of the reasons for judgment
given by the Prothonotary (specifically the 8th and
9th lines on page 4) demonstrates that this is the
basis he adopted.
Another such well-established principle is that
in awarding costs on a solicitor and client basis the
claimant is entitled to recover those costs fairly
incurred in making a proper preparation and pres
entation of the case. When costs are against the
opposite party the costs are normally restricted to
those commenced after the action is commenced.
In expropriation matters I think the notice of
expropriation can be construed as analogous to the
commencement of an action.
Thus, in my opinion, when subsection 36(2) of
the Expropriation Act provides that the "whole
of" the expropriated "party's costs of and incident
to the proceedings, determined by the Court on a
solicitor and client basis, be paid by the Crown" it
means that the whole of the costs taxed on a
solicitor and client basis shall be paid by the
Crown and nothing more. The exposition of Walsh
J. as to the purpose of subsection 36(2) that the
amount of compensation awarded will not be
reduced by fees billed to the expropriated parties
on a solicitor and client basis cannot be construed
otherwise than that fees billed to that party are
fees properly taxable on a solicitor and client basis.
It does not mean that if a solicitor bills his client in
an amount in excess of what can be or is taxed the
Crown is responsible for that excess.
Accordingly the established principles of taxa
tion remain applicable and are not varied by sub
section 36(2) nor, in my view, does Walsh J.
intend to imply otherwise.
Further what the successful party is entitled to
is the whole of his "costs of and incident to the
proceedings" as taxed on a solicitor and client
basis. It is the costs of and incident to the proceed
ings, not the costs of and incident to the expropria
tion. The latter circumstance is proper for inclu
sion in the compensation to be awarded but not in
the costs of the "proceedings".
The first premise by which I must be guided is
that the claimant is entitled to recover those costs
which have been necessarily incurred to make a
proper preparation and presentation of the case.
To exclude an item which was essential to the
proper presentation of the case would be an error
in principle as it would be to include an item which
ought to be excluded. In either instance that would
be a mistake in principle and warrants interfer
ence.
The second cardinal principle by which I must
be guided is that if an item does not involve a
question of principle but merely a question of
amount the taxing officer's discretion will not be
interfered with unless the amount can be shown to
be so unreasonable as to suggest that an error in
principle must have been the cause.
The matter of quantum is one of discretion
vested in the taxing officer. More than a century
ago Baron Pollock, Chief Baron of the Exchequer
Court, which I still consider the common law court
to which the Federal Court of Canada owes its
origin, said that the Masters have far more experi
ence in the exercise of such discretion as to the
taxation of costs than any Judge can ever have.
For my part, in view of the settled rule that the
court does not concern itself with matters of
amount merely or in the manner in which the
taxing officer exercises his discretion I am not
unmindful of the much quoted remarks of Middle-
ton J. in Re Solicitors ((1921) 20 O.W.N. 84)
recently reiterated [at page 537] with approval by
the Appeal Division in McCain Foods Limited v.
C. M. McLean Limited ([1981] 1 F.C. 534) in a
judgment rendered on September 12, 1980.
Middleton J. said:
In all these cases it is exceedingly difficult for a Judge upon
an appeal to interfere with the quantum allowed by an
experienced taxing officer. At the same time, it is important
that it should be understood that there is some limitation to the
statement found in many cases that the quantum of a fee which
is primarily in the discretion of the officer is not to be inter
fered with upon appeal. In many cases it is impossible to
substitute the discretion of the appellate tribunal for the discre
tion of the taxing officer with any confidence that the one is
any better than the other. There may be cases in which the
amount allowed is so excessive as to call for interference, and it
must not be forgotten that there is given by the statute a right
of appeal calling upon the judicial officer to exercise his own
judgment.
Neither am I unmindful that in McCain Foods
Limited v. C. M. McLean Limited and in Re
Solicitors (supra) the taxation was on a party and
party basis with a tariff available (but subject to
discretionary increases) whereas in the present
matter the taxation was on a solicitor and client
basis.
When items are governed by an authorized
tariff but certain items are not governed by that
tariff or where an increase is authorized above the
tariff then the value of a solicitor's services should
be recovered on a quantum meruit basis. Then the
value of the services is a question of fact. That is a
fact open to review as is any other question of fact.
A Court of Appeal will not reverse a finding of
fact unless that finding is so unreasonable and
contrary to the weight of evidence as to be
perverse.
Regardless of the true foundation of the review,
an error in principle or a finding of fact, it does not
detract from the rule, which is applicable to a
finding of fact, that if the question is merely one of
amount the discretion of the taxing officer ought
not to be interfered with unless in an exceptional
case there has been an obvious error in fixing the
amount.
The question was raised as to whether this
application was a review of the taxation or an
appeal therefrom.
Rule 346(2) provides that party and party costs
shall be taxed by a taxing officer "subject to
review by the Court upon the application of any
party". This Rule bestows on the taxing officer the
authority to tax costs on a party and party basis
from which a dissatisfied party can apply to have
it "reviewed".
Rule 349(2) provides that a taxing officer may
tax costs, where by virtue of an enactment one
party is required to pay to another costs to be
taxed on a solicitor and client basis. That is the
case here by reason of subsection 36(2) of the
Expropriation Act.
By paragraph (4) of Rule 349 an "appeal" may
be taken from any taxation of costs under the
Rule.
I do not feel called upon to decide the question
whether this particular application is an "appeal"
or a "review" because, in my view, the ground
rules which I have outlined in either instance are
in substance the same.
The procedural difference I foresee is that if the
matter is properly a "review" then, should I differ
from the Prothonotary, I cannot give the order I
think he ought to have given, as would be the case
if the matter is properly an "appeal", but to refer
the matter back to him with the direction as to
what should be done.
So far as I am aware this distinction, if it exists,
has not been observed by my brother judges and
the predominant practice, so far as I am aware, if
the taxation is to be varied, is to give the order the
judge concludes ought to have been given by the
taxing officer and that has been done under both
Rule 346 and Rule 349.
In addition to the ground rules mentioned above
there are a number of factors which properly enter
into consideration in determining the question of
costs on a solicitor and client basis.
Without attempting to be all inclusive the most
obvious factors are:
(1) the amount of the offer in expropriation
cases,
(2) the amount of the award,
(3) the complexity of the issues involved,
(4) the skill and competence required to present
the issues,
(5) the experience of solicitors and counsel,
(6) the time expended on preparation, and
(7) the fees allowed in any applicable tariff (in
this instance resort can be had to Tariff B, the
party and party tariff as a possible comparable
guide in certain circumstances).
It is now expedient to consider the disputed
items in the taxation seriatim.
First the solicitors' fees which were in two
accounts the first for $3,850 and the second for
$13,000 a total of $16,850 which were reduced by
$850 and $1,600 respectively for a total reduction
of $2,450. These were arrived at by the number of
hours spent by senior and junior members of the
firm at a progressively lower hourly rate based on
seniority.
There was a patent error in the hours attributed
by the Prothonotary to Claude R. Thomson, Q.C.
Counsel for the plaintiff thoughtfully provided
me with a breakdown of the solicitors' accounts for
services which I reproduce, the accuracy of which
is not disputed:
Breakdown of Two (2) Accounts for Solicitors' Services
1) Account for Services—May 1973 to March 1977
Les Rose
(student) 17.8 hrs. @ $20 $ 356.00
P. Griffin 6.8 hrs. @ $45 274.50
S. Barker .8 hrs. @ $45 36.00
S. Rickett 19.3 hrs. @ $60 1,158.00
G. MacKenzie 25.7 hrs. @ $75 1,927.50
$3,751.50
C.R. Thomson
1973 5.3 hrs. @ $ 75 $ 397.50
1974 .5 hrs. @ $ 75 37.50
1975 3.8 hrs. @ $110 418.00
1976 3.9 hrs. @ $110 429.00
1977 2.2 hrs. @ $125 275.00 $1,557.00
TOTAL $5,308.50
AMOUNT BILLED $3,850.00
2) Account for Services—October 1977 to April 21, 1980
C.R. Thomson 16.70 hrs. @ $150 $2,505.00
G. MacKenzie 122.70 hrs. @ $ 75 9,205.00
Cornwall,
Catherine 23.60 hrs. @ $ 20 475.00
J.F. Voege 5.80 hrs. @ $ 25 145.00
Alan Winter 13.40 hrs. @ $ 25 335.00
Opening
Balance 306.00 hrs. @ $ 1 310.00
TOTAL $12,975.00
AMOUNT BILLED $13,000.00
The Prothonotary properly disallowed hourly
rates charged for the services of law students for
the reasons he gave and which reasons are con
firmed by the Court of Appeal in McCain Foods
Limited v. C. M. McLean Limited (supra).
That leaves 65.4 hours expended at different
hourly rates. Mr. Thomson's average hourly rate
charged from 1973 to 1977 works out to $104.
The Prothonotary allowed 50 hours at $60 per
hour for the result of $3,000.
That is a reduction of the hours expended from
65.4 to 50, a reduction of 15.4 hours.
Mr. Thomson's average hourly charge over the
time was $104 and the average of the others was
$72 per hour making an overall average of $88 per
hour which was reduced to an average of $60 per
hour, a reduction of $28 per hour.
However the most significant factor about the
first account is that it was computed to be
$5,308.50. From that the charge for the student of
$356 must be deducted leaving a balance of
$4,952.50 which the solicitors voluntarily reduced
to $3,850, a reduction of $1,102.50 or a reduction
of slightly more than 20%.
In the circumstances I do not think that the
reduction from $3,850 to $3,000 is justifiable and
I would let that account stand.
In the second account Mr. Thomson only billed
for 16.7 hours at $150 per hour for a total of
$2,505 but the Prothonotary allowed him 30 hours
at $100 or $3,000 or $495 more than he actually
charged.
The Prothonotary, in his reasons, also indicated
that he allowed S. Rickett $60 an hour for 18
hours, that is $1,080 but in the breakdown of the
second account there was no charge for S. Rickett.
This would amount to an allowance of $595 more
than was claimed.
The Prothonotary, in his reasons for judgment
referred to law students in the plural. In the
breakdown of the accounts made available to me
only Les Rose is so identified. I therefore accept
that Catherine Cornwall, J. F. Voege and Alan
Winter have been duly admitted despite the fact
that $20 per hour was charged for Catherine
Cornwall's work and $25 per hour was charged for
Voege and Winter.
To reach the amount of $11,400 which he
allowed as the solicitors' fees for the second
account he allowed:
C.R. Thomson 30 hrs. @ $100.00 $3,000.00
G. MacKenzie 122 hrs. @ $ 60.00 7,320.00
S. Rickett 18 hrs. @ $ 60.00 1,080.00
Total $11,400.00
In the recapitulation of the persons and hours
worked by each reproduced above and applying
the mathematical formulae adopted the result
would be:
C.R. Thomson 16.70 hrs. @ $100.00 $1,670.00
G. MacKenzie 122.70 hrs. @ $ 60.00 7,362.00
$9,032.00
I assume that the hours and figures for Corn-
wall, Voege, Winter and the Opening Balance on
conversion to computer would have remained con
stant at $1,305 which added to $9,032 totals
$10,337.
Deduct from this total the amount of 18 hours
at $60 or $1,080 attributed to S. Rickett who is
not included in the second account from the total
of $10,337 which leaves $9,257.
Thus on the time schedule before me, which I
accept as accurate the Prothonotary would have
allowed but $9,257 for the solicitors' fees.
I observe that as at March 1977 Mr. Thomson
charged $125 per hour for his services but between
October 1977 and April 1980 he increased the
hourly rate to $150. I do not think that in the 7 or
12 months from March 1977 the inflation rate
increased by 20%.
My brother Walsh pointed out that the Tariff of
this Court provides a maximum of $400 as the
counsel fee at a hearing for the first day. The
normal day for a hearing is 5 hours (which is not
normally observed) or a scant $20 an hour. Of
course that is on a party and party basis. I suspect
that on a solicitor and client basis it is substantial
ly more.
Taking all factors into consideration I would
allow Mr. Thomson $2,350.
I would not vary the hourly rate of $60 by the
Prothonotary for the services of Mr. MacKenzie
for 122.70 hours which is $7,362.
The remaining four items in the second account
would remain constant at $1,305.
This results in a total for the second account of
$11,025 which I would allow.
Thus the total of the two accounts for the
solicitors' fees would be $11,025 plus $3,850 which
equals $14,875 which, (like the real estate apprais
ers say) I would round to $15,000.
The account of Robert L. Sachter, which is
included in the bill of costs as a disbursement, is
particularly vexing.
Mr. Sachter had been the solicitor for the plain
tiff but upon the retention of the solicitors for this
litigation he remained involved because of his
familiarity with the business of his client.
He submitted four accounts:
1. dated April 6, 1976 for services respecting
leases of Markham property $ 1,202.50
2. November 9, 1976 3,784.25
3. December 21, 1978 805.46
4. February 28, 1980 3,122.25
Total $ 8,914.46
The account dated April 6, 1976 is for the
negotiating and drafting of leases for the 1974,
1975, 1976 and 1977 seasons of the property after
expropriation in the amount of $1,202.50.
This account is for services possibly consequent
upon expropriation and as such should be included
in the compensation award but are not costs of or
incidental to the proceedings per se. For that
reason this item should be disallowed in its
entirety.
The same considerations are equally applicable
to the account dated December 21, 1978 in the
amount of $805.46 and should likewise be disal
lowed in its entirety.
The account dated November 9, 1976 in the
amount of $3,784.25 is referred to in the bill of
costs as a disbursement on that date.
In the affidavit of Robert L. Sachter an account
in that exact amount is dated August 31, 1976 and
is described as "all services rendered with respect
to Camp Robin Hood Limited—expropriation be
tween July 18, 1972 and August 31, 1976".
While this description might be a sufficient
description for billing a client it does not provide
sufficient details upon the taxation of that bill and
if I had been taxing this bill in the first instance I
would have had no hesitation in ordering further
details of the services rendered. I also note that the
bill is for services beginning July 18, 1972 which is
before the land was expropriated on January 30,
1973 and cannot therefore be costs of the proceed
ing, which was not until January 30, 1973 unless
there may have been other circumstances such as a
land freeze or the like.
In the absence of such details I should be
inclined to disallow this account in its entirety
bearing in mind that the onus is on the solicitor to
substantiate the bill he seeks to have taxed.
The concluding bill dated February 28, 1980 for
services rendered between August 31, 1976 and
February 28, 1980 is described with sufficient
clarity so as to relate to the expropriation
proceedings.
The bill is for $3,122.25 and involved not less
than 29 hours of Mr. Sachter's time. That works
out to about $104 an hour while the hourly fee
charged by the senior counsel in the matter over
the period 1976 to 1980 was $125 an hour which
the Prothonotary saw fit to reduce to $100 per
hour. The incongruity would be overcome by
allowing Mr. Sachter $75 per hour for 30 hours or
$2,250.
The two accounts, the one dated August 31,
1976 for $3,784.25 and the other dated February
28, 1980 for $3,122.25 total $6,906.50.
I would have been prepared to disallow the
accounts dated April 6, 1976 and December 21,
1978 which total $2,007.96 leaving $6,906.50.
The Prothonotary saw fit to reduce the total of
the accounts from $8,914.46 to $3,600, a total
reduction of $5,314.46.
The Prothonotary indicated that the accounts
which deal with zoning applications and leases
should not be allowed. I agree.
He did say that a review of the docket sheets
showed services in the proceeding for which he
allowed in the amount of $3,600.
While I would not have been adverse to disal
lowing the account for $3,784.25 in its entirety for
the reasons indicated and would have given con
sideration to taxing Mr. Sachter's account at
$2,250, I think the Prothonotary exercised his
discretion fully and reasonably and I would not
interfere with his award of $3,600 for this account.
The next account is that of Woods Gordon &
Co., the management consultants, whose task was
to estimate and testify respecting the business loss
suffered by the plaintiff as a consequence of the
expropriation. That would certainly be an issue at
trial and a proper item in fixing compensation.
A dispute was imminent because the Crown
expert, no doubt equally qualified, estimated the
business loss to be nil.
I fail to follow how this matter can be one of
great complexity to persons versed in this field. It
seems to me that what need be done is to examine
the record of past performance and project future
performance from financial statements and the
like and what facilities were owned and what
revenue would these facilities be likely to generate.
There were four accounts rendered:
1) dated June 19, 1974 which describes the
services generally but no time sheet $3,013.82
2) an interim billing dated January 30, 1976
similar to the initial bill $2,500.00
3) a further interim bill dated November 9, 1976
similar to the two preceding bills $2,500.00
4) and a final billing dated January 18, 1978 $1,400.00
Total $9,413.82
I should have thought that in view of the second
and third billings being interim and the last being
the final bill that this was the total account.
This does not appear to have been the case.
By letter dated March 18, 1980, described as a
final billing, reference is made to the breakdown of
that final billing. There has been no "final billing"
produced other than the "final billing" dated
January 18, 1978.
The letter then specifies two employees of
Woods Gordon, two employees of Clarkson
Gordon (the chartered accountant firm of which
Woods Gordon is an adjunct) for a total time
spent of 103 hours and one outside consultant who
spent 2 1 / 2 days on the matter. I translate 2 1 / 2 days
into 20 hours for a total time by all five persons of
123 hours. I speculate about the necessity of
experts in their own right engaging an outside
consultant at a cost of $625. The total account is
$7,380. This on an hourly basis is an average of
$60 an hour. I translate 123 hours into 15 eight-
hour days. That makes a daily cost of $492.
The total account was not $9,413.80 as would
appear to be the case but $9,413.80 plus $7,380 or
$16,793.80.
The bill of costs shows $16,793.80 as a
disbursement.
This in my view is grossly excessive.
The report required is not one of great complexi
ty. I know not how many hours or days it took to
produce that report, it may have been 123 hours or
15 days but that cannot be so because that time is
billed for at $7,380 and it cannot therefore relate
to the other $9,413.80. The affidavit as to the
expert testimony to be given attaches thereto a
report of five pages with four exhibits annexed to
the report.
The outstanding incongruity in this account is
that it is within $56.20 of the account of one of the
foremost legal firms in Toronto, Ontario charged
with the overall conduct of the proceedings where
as the report of Woods Gordon & Co. was directed
to but one of many aspects of the proceedings.
So far as I can judge from the information
before me only two of the persons engaged in
preparing this report were possessed of qualifica
tions approaching those of the solicitors engaged.
The ultimate estimate of business loss which this
firm came up with was $55,000 and for this a fee
of $16,793.80 about one-third of the amount that
this evidence sought to establish as compensation
in this respect and without any assurance that the
evidence would so establish. The Crown experts
estimated that there was no loss. In the affidavit
submitted in support of the negotiated settlement
the claim of business loss was included at $4,477.
Horace in Ars Poetica aptly described the
results of this exercise by these experts when he
wrote: "Parturient montes, nascetur ridiculus
mus", which freely translated means "Mountains
will be in labour, the birth will be a single laugh
able little mouse". This has developed into the
popular adage that "the mountain laboured might
ily and produced .a mouse".
For what was accomplished the fee for the
report is against conscience and grossly unfair.
The amount of $7,500 fixed by the Prothonotary
I think was fair and reasonable and accordingly
there should be no interference with the discretion
exercised by him for the reasons he gave with
which I have agreed.
The disbursement for the account of Wm.
Eisenberg & Co. can most conveniently be con
sidered immediately following that of Woods
Gordon & Co. These were the appointed auditors
of the plaintiff company.
In the affidavit in support of the application for
taxation the allegation is that the account of the
auditors dated August 25, 1978 in the amount of
$1,500 is for their services in addition to their
services as the plaintiff's auditors "in relation to
the quantification of the Plaintiff's claim for busi
ness losses in conjunction with Woods, Gordon &
Co."
The actual account while being a sufficient iden
tification for billing is devoid of details requisite
for taxation particularly: what did the auditors do
in addition to their normal responsibilities? The
representations made to me were that Woods
Gordon & Co. effected a substantial economy by
obtaining information and financial documents
which they would otherwise have to delve for
themselves. Frankly that is what I thought Woods
Gordon & Co. had undertaken to do and had
billed the plaintiff for those services. However the
only financial information which was obtained
from the auditors and utilized in substantiation of
the estimate of business losses was derived from
financial statements prepared by the auditors for
their client's shareholders.
In the financial tabulations attached to the
report as exhibits reference is made in each of the
four exhibits that the information relied upon for
certain purposes was from the financial statement
of Camp Robin Hood Limited audited by Wm.
Eisenberg & Co.
Those financial statements are the duty of a
company's appointed auditor to prepare. Therefore
there was no necessity, established to my satisfac
tion, to have recourse to the auditors and pay a fee
of $1,500 for material which was directly and
freely available from the plaintiff.
Mindful of the onus upon the applicant for
taxation and for the reasons expressed, I am in
agreement with the Prothonotary's conclusion that
this was "a duplication of the service performed
for the plaintiff by Woods Gordon & Co."
Accordingly the exercise of his discretion, which
in my view, did not err in principle or established
fact, whereby this account was disallowed as an
unnecessary or unreasonable disbursement should
remain inviolate.
The next disputed disbursement is the account
of Robert M. Robson in the total amount of
$5,454.21 of which amount the Prothonotary
allowed $3,804.21 a reduction of $1,650.
Robert M. Robson is the real estate appraiser
who made an appraisal of the market value of the
expropriated property as at January 30, 1973.
In actuality there are two accounts, one dated
December 29, 1978 from the Metropolitan Trust
Company, by whom he was employed, in the
amounts of $3,689.57 made up of $3,500 plus
expenses of $189.57 and a second account dated
April 1, 1980 in the amount of $1,764.64 made up
of $1,650 plus expenses of $114.64 from Mashke,
Robson Limited, the corporate name of which
indicates that Mr. Robson is an associate.
One criterion used in assessing the reasonable
ness of the fee of an expert witness is the relation
ship the opinion of that expert bears to the ulti
mate award and the extent to which reliance was
placed upon that expert's testimony in reaching
the conclusions leading to the judgment. In one
instance one of my brother Judges refused to
accept and follow the testimony of an expert wit
ness. The expert fee was not taxed at an increased
rate but was limited to the Tariff. (See Capus
Developments Limited v. The Queen, T-1116-74,
unreported.)
By virtue of Rule 482 no evidence of an expert
witness shall be received unless the full statement
of the proposed evidence in chief has been set out
in an affidavit filed before trial. That evidence of
that witness may then be tendered at trial by
reading the affidavit.
A certificate by Mr. MacKenzie was filed to
which was appended the appraisal report prepared
by Mr. Robson representative of the evidence he
would give at trial.
If that report were tendered at trial I would
refuse to receive it because it is inadmissible as
evidence. That report is prepared subject to the use
thereof imposed by the author included in the
report. The right to publish is prohibited. The
report is not to be used for any purpose other than
that for which it is prepared. That use is not
defined other than to estimate the market value of
the land appraised. It is not to be used by anyone
but the applicant (whom I presume to be in this
instance the plaintiff) without the written consent
of the appraiser or the applicant and in any event
only in its entirety.
The evidence of a witness may be accepted in
whole or in part or rejected in whole or in part.
Extracts of the written report tendered may be
used. No witness, as I assume Mr. Robson was
prepared to be, can dictate to the judge what use
shall be made of his testimony and for that reason
this evidence is wholly inadmissible subjected to
those conditions as it is.
Being inadmissible no use would be made of this
report and upon the basis above indicated it is
valueless and that disbursement of $5,454.21
should be struck out in its entirety.
Conceivably this offensive language, the effect
of which is to interfere with and dictate the proper
administration of justice and so contemptuous,
may be removed before this witness proffered his
testimony.
Assuming this might be done then this potential
witness does specify in detail the time spent gath
ering material for and the preparation of the
report. The first report was the major opus upon
which 184 hours was spent. Mr. Holborn worked
four-fifths of that time. The charge for this report
was $3,500 plus expenses of $189.57. This works
out to about $19 an hour. This report must have
been completed prior to December 28, 1978, the
date of the bill.
The second account dated April 1, 1980, about
one year and three months later is for $1,650 and
$114.64 expenses. The purpose of 67 hours' work
involved by two persons was to update the material
and the preparation of Mr. Robson for his
anticipated attendance as a witness.
All this information was before the Prothono-
tary who after taking cognizance of the usual
factors (except that the report in its present form
is inadmissible) concluded "that a reasonable
amount for the services performed in this matter
was $3,500.00 plus expenses". He therefore taxed
the total account at $3,804.21.
I do not construe the taxation of this amount as
being the disallowance of the second amount of
$1,650. He said $3,500 was the reasonable amount
for the services performed. That means both stages
of the services. Further he allowed the expenses
incurred and claimed for both stages. The fact that
the reduction of $1,650 is the same as the second
account less expenses is mere coincidence.
In my opinion the conclusion by the Prothono-
tary that the full amount claimed was excessive is
one he was entitled to make and there should be no
interference with the discretion exercised by him.
The concluding disbursement is the account of
General Urban Systems dated December 1, 1972
in the amount of $172 plus a second account dated
March 17, 1975 for services to the plaintiff in
1974 for an amount of $743.
Stephen G. McLaughlin is an architect. In that
capacity he was engaged by the plaintiff in 1969 to
prepare a master plan for the development of the
land owned by the plaintiff as a day camp in
various stages over a five-year period from 1971 to
1976.
In 1973 the property was expropriated well
before the master plan was fully implemented. In
the light of a land freeze and the expropriation
Mr. McLaughlin prepared a report supplementary
to the master plan in the amount of $130 which
was included as a disbursement in the bill of costs
and is not disputed. I entertain reservations as to
the propriety of the inclusion of this amount as a
cost of the proceedings but this item was not in
issue before the Prothonotary and, therefore, not
before me.
Mr. McLaughlin then became associated with
General Urban Systems Corporation.
That company through Mr. McLaughlin per
formed services in connection with the rezoning of
property purchased by the plaintiff to be used as
the site of a day camp in substitution of the
property expropriated. The account for these ser
vices by General Urban Systems Corporation is
one for $172 paid on December 1, 1976 and
claimed as a cost in the proceeding and a belated
account dated March 17, 1975 for like services in
the amount of $743.
The Prothonotary disallowed both these
accounts as taxable costs of these proceedings and
in my opinion he did not err in principle in doing
so. The rezoning services were performed with
respect to property to be used in lieu of the expro
priated property.
Thus these are costs that arose from the expro
priation and as such are the proper subject of
compensation for the cost incurred but not as costs
of or incident to the expropriation proceedings.
In the result, therefore, for the patent error in
the calculation of the solicitors' fee (the Prothono-
tary did not have the advantage of the breakdown
in the two accounts that I did) I have increased
that fee from $14,400 allowed by the Prothonotary
because of the detailed computations I engage in
as outlined above to $15,000.
In all other respects there was no departure
from the taxation by the Prothonotary. The dis
bursements which he allowed as proper remain
constant at $17,397.76 as does the fee of $300
allowed on taxation.
The application is therefore allowed and the
taxation by the Prothonotary is increased from
$32,097.76 to $32,697.76.
In accordance with the general prevailing princi
ple, as I understand it still to be, no costs are
allowed on the appeal from the taxing officer.
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.