T-1307-90
B E T W E E N:
THE CSL GROUP INC. and
CANADA STEAMSHIP LINES INC.,
Plaintiffs,
AND:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
| Defendant |
REASONS FOR ORDER
NADON J.:
On December 3, 1996, I rendered judgment in this matter. I dismissed the plaintiffs' action against the defendant with costs in favour of the defendant. The defendant applies for directions as to costs pursuant to Rule 344(7)(b) of the Federal Court Rules. The rule provides that any party may, within thirty (30) days of judgment, apply to the Court for directions to be given to the taxing officer with regard to any matter referred to in Rules 344 or 346.
Specifically, the defendant seeks directions as to costs with respect to an increase in counsel fees and the obtention of full costs of its expert Fred E. Parkinson, engineer.
In support of its motion, the defendant filed the affidavits of Peter J. Cullen, one of the solicitors who has been acting on its behalf throughout these proceedings. In his affidavit of December 23, 1996, Mr. Cullen asserts that the defendant's "effort and expense" in defending the plaintiffs' action will not be compensated adequately if I do not allow the defendant an increase in counsel fees over and above the Court's tariff.
Mr. Cullen advances a number of reasons why an increase in counsel fees should be allowed. Firstly, he states that this action was a test case in respect of thirteen other actions. He then states that "the defendant required a number of legal advisors" to defend, prepare and attend the trial. Mr. Cullen also refers to the statement of defence filed by the defendant which consisted of fifteen pages setting forth, in considerable detail, the relevant facts required to properly defend against the statement of claim. Mr. Cullen also mentions the fact that the fourteen actions covered claims relating to 93 ships and that, as a result, a considerable amount of work had to be done to obtain particulars regarding the claims.
Mr. Cullen also declares that the preparation of the defendant's affidavits of documents required weeks of work by counsel since the documents which had to be listed in the affidavits were documents which originated both with the Canadian Coast Guard and the Treasury Board.
Mr. Cullen also states that "a great deal of time and effort" was required by counsel with respect to the quantum claimed by the plaintiffs. Mr. Cullen further states that the defendant required two teams of lawyers to properly defend the action, i.e. one team with expertise in Canadian Maritime Law and the other with expertise in Administrative and Labour Law. Mr. Cullen concludes his affidavit as follows:
| 16. Defendant has been put to a great deal of effort and expense as a result of Plaintiffs' action and trial, which effort and expenses will not be substantially compensated for through the tariffs of the Court. Under the circumstances outlined above Defendant submits that an increase in counsel fees is warranted and that the expert's costs should be taxed in full. |
With respect to the costs of expert Fred Parkinson, the relevant paragraph of Mr. Cullen's affidavit dated December 23, 1996, is paragraph 12 which reads:
| 12. Although Plaintiffs indicated early in mid 1996 that they were reconsidering the allegations contained in Paragraphs 11 and 12 of their Amended Statement of Claim (allegations with respect to the competence and conduct of the Canadian Coast Guard), they refused to abandon them until the trial was well under way. As a result, Defendant sought the expertise of Mr. Fred Parkinson as to, inter alia, the foreseeability of the temperatures and ice conditions in November/December, 1989. A number of meetings were held with Mr. Parkinson prior to trial to review his opinions and report, and his expert's report was ultimately filed and accepted. Defendant also had to prepare Messrs. Turner, Clavelle and Champagne of the Canadian Coast Guard for trial, and all three gentlemen were at the trial. |
At the hearing of the application, counsel for the defendant submitted a document entitled Defendant's Pro Forma Bill of Costs so as to show me what the defendant would be entitled to under Part II of Tariff B if it were allowed to tax its costs under column V with the maximum number of units. This, according to counsel, would give the defendant $62,150.00 in taxable fees.
The plaintiffs, in opposing the defendant's application, filed affidavits signed by one of its solicitors, David F.H. Marler. According to Mr. Marler, the fact that the present case was a test case is irrelevant primarily because the conduct of the present case "was in no way affected by the existence of other cases".
With respect to the legal advisors retained by the defendant, Mr. Marler states that there was no necessity of having lawyers from the Department of Justice and from Mr. Cullen's law firm. In Mr. Marler's view, Mr. Cullen's firm had the internal capacity to handle this case without seeking advice from lawyers not members of that firm.
With respect to the facts of the case, Mr. Marler states that they were not complicated and could not warrant the amount of work which Mr. Cullen claims had to be put in. With respect to the defendant's affidavits of documents, again Mr. Marler states that there was nothing extraordinary involved in preparing the affidavits.
The guiding principle regarding the taxation of costs in this Court is clearly stated in Rule 344(1)1. That principle is that the judge has full discretionary power over the payment of costs. Rule 344(4) provides that the judge may fix the costs with or without reference to Part II of Tariff B and further, the judge may award a lump sum in lieu of or in addition to taxed costs.
With respect to taxation under Part II of Tariff B, the judge may direct the taxing officer to tax costs under a specific column or a combination of columns of Part II of Tariff B.
In exercising his discretion, the judge may direct the taxing officer to allow fees over and above the amounts specified in Tariff B; further, the judge may direct the taxing officer to tax services and disbursements which are not included in Tariff B. Finally, the judge may direct the taxing officer to consider "factors" which do not appear in the list set out in Rules 346(1.1) and (1.2) which read as follows:
| Rule 346. (1) Unless otherwise ordered by and subject to any directions from the Court, all costs shall be taxed in accordance with column III of Part II of Tariff B. |
| (1.1) In taxing and determining the number of units to be allocated to a taxable service from the range set out in the appropriate column of an item in Part II of Tariff B, the taxing officer shall consider |
| (a) the amounts claimed and the amounts recovered; |
| (b) the importance of the issues; |
| (c) the complexity of the issues; |
| (d) the volume of work; and |
| (e) any other matter that the Court has directed the taxing officer to consider. |
| (1.2) In taxing costs, the taxing officer shall take into account any refusal of the Court to make a direction pursuant to Rules 344(6) and (7). |
Rule 346(1) provides that, unless the Court orders otherwise, costs are to be taxed in accordance with column III of Part II of Tariff B. However, parties are free, pursuant to Rule 344(7), to seek directions from the Court so as to obtain costs in excess of column III of Tariff B. As I have already indicated, parties may ask that their costs be taxed under a column other than column III, they may ask that these costs be taxed without reference to Tariff B or they may ask for a lump sum in lieu or in addition to their taxed costs. In exercising his discretion under Rule 344, the judge may consider those factors set out in Rule 344(3):
| (3) In exercising its discretionary power pursuant to subsection (1) the Court may consider |
| (a) the result of the proceeding; |
| (b) the amounts claimed and the amounts recovered; |
| (c) the importance of the issues; |
| (d) the apportionment of liability; |
| (e) any confession of judgment under Rule 405 and the amount thereof; |
| (f) any payment of money into Court under Rules 441 et seq and the amount of that payment; |
| (g) any offer of settlement made in writing; |
| (h) any offer of contribution made pursuant to Rule 1732 that is brought to its attention pursuant to a reserved right to do so; |
| (i) the volume of work; |
| (j) the complexity of the issues; |
| (k) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; |
| (l) the denial of or the neglect or refusal of any party to admit anything that should have been admitted; |
| (m) whether any stage in the proceedings was, |
| (i) improper, vexatious, or unnecessary, or |
| (ii) taken through negligence, mistake or excessive caution; |
| (n) whether or not two or more parties should be allowed more than one set of costs, where they defended the proceeding by different counsel or where, although they defended the proceeding by the same counsel, they separated their defence unnecessarily; |
| (o) whether two or more parties, represented by the same counsel, initiated separate proceedings unnecessarily; and |
| (p) any other matter relevant to the question of costs. |
These are the factors which both Mr. Cullen and Mr. Marler have attempted to address in their respective affidavits.
On the one hand, the defendant, through Mr. Cullen's affidavits, has attempted to impress upon me that this was not an "ordinary" case so that I will allow them to tax their costs other than as per column III of Tariff B. The plaintiffs, through Mr. Marler's affidavits, have attempted to downplay Mr. Cullen's assertions that this was a complex and difficult case.
I will not attempt to define what an "ordinary" case is. However, as Mr. Justice Potter Stewart of the Supreme Court of the United States said in Jacobellis v. Ohio, 378 U.S. 184 at 197, albeit in a different context:
| But I know it when I see it, ... |
This case, in my view, was not an ordinary case. My reasons for judgment, I hope, amply demonstrate that the issue of liability was rather complex. With respect to the issue of quantum, I agree with the view taken by Mr. Cullen in his affidavits that delays in transit involving a considerable number of ships rendered the task of determining quantum quite difficult.
I need not go further into the specifics of the case. Suffice it to say that I am satisfied that the defendant is entitled to more than column III of Part II of Tariff B. As I indicated earlier, the defendant submitted a draft of a Pro Forma Bill of Costs under column V. No evidence was provided to me with respect to the total number of hours actually spent by counsel in defending the plaintiffs' action. It is therefore difficult for me to assess the statement which appears in Mr. Cullen's affidavit of December 23, 1996, in paragraph 16, where he states that "[d]efendant has been put through a great deal of effort and expense as a result of plaintiffs' action and trial, which effort and expense will not be substantially compensated for through the tariffs of the Court".
I do not doubt, however, that at least $62,150.00 have been billed by counsel to their client. No doubt the amounts billed to the client exceed that figure. Consequently, in the circumstances, I will allow the defendant to tax its costs under column V of Tariff B with the maximum number of units per item and will so direct the taxing officer.
I now turn to the defendant's request that the costs of its expert Mr. Parkinson be taxed in full. Two invoices were issued by Mr. Parkinson in respect of his services, namely invoice # 96-1245 in the sum of $25,804.89 and invoice # 96-1291 in the sum of $3,838.60, for a total sum of $29,643.49.
In response to paragraph 12 of Mr. Cullen's affidavit, Mr. Marler, at paragraph 9 of his affidavit of June 11, 1997, states:
| 9. I, respectfully, cannot agree with the first sentence of paragraph 12 of Mr. Cullen's Affidavit. As early as the letter of April 30, 1996 (please refer to Exhibit "B" to this Affidavit) the Plaintiffs set forth (see foot of page 1 and top of page 2) the elements of Plaintiffs' intended case, which included a statement that allegations contained in the paragraphs 11, 12, and 14 of the Amended Statement of Claim were not to be pursued and a specific statement of the basis of Plaintiffs' case, which statement included no suggestion of any allegations of fault against any sector of the government other than the Treasury Board. The Defendant's solicitors confirmed their understanding of the passage just referred to in the third paragraph on page 2 of their letter of July 23, 1996 and to cement the point the Plaintiffs' solicitors confirmed (see fifth paragraph on page 2 of their letter of August 1, 1996) that "you already have my written undertaking that these matters will not form part of our proof." Thus the evidence relating to the Defendant's case concerned quantum only, and no evidence needed to be made on the issue of liability, since issues of liability were all covered by the "Admissions" including an admission of all of the facts pertaining to the late filing and the facts relating to the strike itself. Facts which were not admitted pertained solely to quantum, it having been Defendant's position that it was not so much the strike as the weather which caused the delays and hence Plaintiffs' damages. As already referred to, the presiding judge found that "Notwithstanding the difficult weather conditions, ... delays in navigation would have been kept to a minimum," had the strike not occurred. Thus, and in my submission, all the evidence of the weather expert and the employees of the Canadian Coast Guard was based upon a false and ultimately rejected premise. The amount of time spent both before and during trial may largely be contributed to an attempt by the Defendant to support its unsuccessful premise. To put it another way, the case could have been presented and argued to exactly the same conclusion upon the Admissions alone. |
The comments made by both Mr. Cullen and Mr. Marler in their affidavits cannot be properly understood without reference to the allegations contained in paragraphs 11 and 12 of the plaintiffs' Amended Statement of Claim, as these paragraphs read prior to the plaintiffs' decision to abandon these allegations during the trial. The paragraphs in question read as follows:
| 11. The Defendant could have, following the failure of the Treasury Board to file the designated list within time, taken alternate methods to ensure safe and appropriate navigation within the channels in question, such as letting contracts to private concerns to undertake much of the work which the Coast Guard crews would have attended to but, and through its failure to act, hesitation and the general incompetency of the administration of the Canadian Coast Guard and other employees of the Defendant whose duty it is to ensure safe navigation within said waters, no alternate means to ensure the movement of traffic within the waters were undertaken; |
| 12. The Defendant additionally and through its Coast Guard or other employees, and being well aware of the pending strike, could have taken a number of steps prior to the strike to alleviate the conditions which subsequently occurred by having the Coast Guard attend to some of its duties prior to the strike and, in particular but without restricting the generality of this allegation, causing, prior to the commencement of the strike, the removal of summer buoys and replacement by winter buoys; |
As Mr. Cullen states in paragraph 12 of his affidavit of December 23, 1996, it is the defendant's position that Mr. Parkinson was retained to address the allegations contained in paragraphs 11 and 12 of the plaintiffs' then amended statement of claim. Specifically, Mr. Cullen states that Mr. Parkinson's expertise was sought by the defendant with respect to the foreseeability of the temperature and ice conditions in November and December 1989.
Before deciding this issue, reference should be had to Mr. Parkinson's report. In the introduction to his July 1996 report, Mr. Parkinson explains the object of his study as follows:
| ... First, to offer an opinion as to whether the early 1989 freeze-up could have been anticipated during the first ten days of November, 1989 or before. Second, to evaluate the decisions taken by the Canadian Coast Guard during these events from the point of view of ice generation under the influence of the river discharge and meteorological conditions and to provide an opinion as to whether those decisions were timely and reasonable. Third, to offer an opinion as to the effect of the winter conditions on shipping in general. |
At page 16 of his report, Mr. Parkinson states his conclusions:
| a) In early November, 1989, the weather conditions gave no indication of the impending sudden and lengthy cold snap. The impending cold snap was unusual and lengthy for the time of year, and could not have been anticipated. It was therefore not unreasonable to make decisions regarding of summer buoys and replacement by winter spars based on the assumption that mean conditions or near mean conditions would apply. The mean dates confirm that there should have been time enough to get this done in late November and December. |
| b) When it became obvious that there was a serious problem with the ice, the Canadian Coast Guard reacted with promptness and precision in specifying modified sailing instructions to ensure the safety of ships. These decisions were based on and supported by a detailed and accurate knowledge of the ice conditions all along the river and must be credited with successfully avoiding situations that could have caused loss or damage to ships. |
| c) Had there not been a strike and had the summer buoys been removed and replaced in the customary fashion on or after November 17, 1989, shipping would have suffered delays in any event, due to the early rapid accumulation and quantity of ice. |
Mr. Parkinson's testimony was to the effect that even if there had not been a strike, delays in transit would have been encountered by reason of the difficult weather conditions which prevailed in November and December 1989. Mr. Parkinson also testified that these conditions could not have been foreseen by the Canadian Coast Guard and thus, that the Canadian Coast Guard could not be faulted for not having, inter alia, removed the summer buoys before the arrival of the cold spell.
I have come to the conclusion that the defendant ought to be allowed to tax in full the services of Mr. Parkinson. Firstly, the defendant cannot be faulted for retaining Mr. Parkinson so as to respond to the allegations contained in paragraphs 11 and 12 of the Amended Statement of Claim. These paragraphs, as I have already said, were not abandoned until the trial began. Secondly, although I concluded that notwithstanding the difficult weather conditions, the delays to navigation would have been kept to a minimum if the ice breakers had been in service, Mr. Parkinson's testimony was still relevant and, in my view, useful. By reason of Mr. Parkinson's testimony, I allowed the plaintiffs 80% of the loss which they claimed. I only allowed 80% because I was satisfied that because of the weather conditions delays would have, in any event, occurred.
I will therefore direct the taxing officer to tax the defendant's counsel fees under column V of Tariff B with the maximum number of units allowed for each item. I will also direct the taxing officer to tax in full the costs to the defendant of expert Fred Parkinson.
There shall be no costs on this application.
(Sgd.) "Marc Nadon"
Judge
Vancouver, British Columbia
October 17, 1997
T-1307-90
Vancouver, British Columbia, this 17th day of October, 1997
PRESENT: THE HONOURABLE MR. JUSTICE NADON
B E T W E E N:
THE CSL GROUP INC. and
CANADA STEAMSHIP LINES INC.
Plaintiffs,
AND:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Defendant.
O R D E R
The taxing officer is hereby directed to tax the services of counsel for the defendant under column V of tariff B with the maximum number of units allowed per item.
The taxing officer is also directed to tax in full the cost of expert Fred E. Parkinson.
(Sgd.) "Marc Nadon"
Judge
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| STYLE OF CAUSE: THE CSL GROUP INC. and CANADA STEAMSHIP LINES INC. |
- and -
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA |
COURT NO.: T-1307-90
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: June 17, 1997
REASONS FOR ORDER OF NADON, J.
dated October 17, 1997
APPEARANCES:
Mr. Andrew Deere for Plaintiff
Mr. Raymond Piché for Defendant
Mr. Peter Cullen for Agent for Defendant
SOLICITORS OF RECORD:
The Law Offices of David F.H. Marler for Plaintiff
Montréal, PQ
Department of Justice for Defendant
Montréal, PQ
Stikeman, Elliott for Agent for Defendant
Montréal, PQ
__________________
1Rule 344(1):
Rule 344. (1) The Court shall have full discretionary power over payment of the costs of all parties involved in any proceeding, the amount and allocation of those costs and determining the persons by whom they are to be paid.