Date: 20010222
Docket: A-538-98
Citation: 2001 FCA 33
BETWEEN:
FRED TURNER
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
ASSESSMENT OF COSTS- REASONS
CHARLES E. STINSON
[1] The Court allowed this appeal with costs and set aside the judgment of the Tax Court of Canada concerning the Appellant's claim for an allowable business investment loss based on shares having an adjusted costs base of $55,090.00. On the record, the Appellant represented himself throughout except for a brief period described below. Initially, he presented a bill of costs consisting of $600.00 for fees (for the assessment of costs) and $41,513.92 for disbursements. This latter figure included $31,500.00 for 420 hours of his time @ $75.00 per hour. The Appellant then submitted a revised bill of costs in the amount of $275,268.12 consisting of 48 fee items, calculated by multiplying the number of hours of his own time for each item (a total of 424 hours for the 48 fee items) times the number of units for the particular service listed in the Tariff times $100.00 (subtotalling $265,700.00), and these disbursements:
| Filing fee |
$250.00 |
| Wallbridge (Invoice #98-102) |
$187.25 |
| Wallbridge (Invoice #2000-192) |
$935.89 |
| Mike Odell (Invoice #793) |
$417.30 |
| Edney, Hattersley & Dolphin |
$125.00 |
| Transcript (Invoice #3-2-99) |
$322.50 |
| Riva Resources Ltd. (Invoice #5-17-2000) |
$3,920.00 |
| Travel to Edmonton to attend court costs: 6000 Kilometer @ .42 = $2,520.00 Hotel: $353.87 Incidental 9 day x 59.35 $536.31 Sub total: $3,410.18 |
$3,410.18 |
| Total Disbursements: |
$9,568.12 |
I set a timetable for the exchange of materials, including written submissions.
The Appellant's Position
[2] The Appellant argued that Skidmore v. Blackmore1 "unequivocally declared the ancient rule that people who represent themselves get nothing for their efforts by way of costs is now outmoded" (written submissions filed October 20, 2000). The Appellant asserted that section 15 of the Canadian Charter of Rights and Freedoms requires that a "lay litigant be treated in the same fashion as a successful self-represented lawyer" (written submissions filed December 12, 2000) and that it is both illogical and inconsistent to allow the costs of a lawyer for a successful party, but to deny the costs for the time of a "self-represented lay litigant". As well, Skidmore, supra, requires that all courts comply with the spirit and intent of the Charter by allowing costs for the time of lay litigants. The Appellant argued that an additional feature of costs is deterrence, by way of punitive awards, of vindictive abuses of authority. The Appellant asserted that the Crown continued to abuse its authority in its administrative handling of his tax file subsequent to the Judgment in this Court.
[3] In rebuttal, the Appellant argued that it was inconsistent for the Respondent to rely on the Federal Court Rules, 1998 in one area, but then assert elsewhere that they are irrelevant or inapplicable. The Respondent's case law, Lavigne v. Canada2 and Rubin v. Canada3, does not diminish the principle that all litigants should be treated equally before the law. The Appellant asserted that the evidence led at assessment by the Respondent "is nothing less than a blatant attempt to distort the facts and mislead the court" (written submissions filed January 10, 2001). The Appellant noted that the amount suggested below by the Respondent of only $1,973.94 for his costs excludes small items such as photocopies, long distance facsimiles and telephone charges. The Appellant disagreed with the Respondent's evidence concerning the costs of travel between Yellowknife and Edmonton and, in particular, noted that the one-way distance is approximately 1,500 kilometres requiring 2 days driving time. The Appellant argued that he had been given an estimate, before institution in the Tax Court of Canada, of $25,000.00 as the cost for representation in that Court only.
The Respondent's Position
[4] The Respondent argued that, per Lavigne, supra, a lay litigant cannot claim counsel fees under the Rules and therefore the $265,700.00 claimed as fees under Tariff B is not allowable. Further, the hours and amounts claimed are entirely unproven, grossly unreasonable and beyond the ambit of the Rules. The Respondent noted that the bill of costs claims approximately five times the amount in issue on appeal and claims hours that are approximately forty times the length of the hearing in the Tax Court of Canada and in this Court (less than 1 day for each).
[5] The Respondent asserted that there are several examples of claims either unreasonable or beyond the ambit of the Rules, ie. the $250.00 filing fee to institute the Tax Court proceeding and routine matters such as the filing and service of documents allegedly requiring two to four hours each and which are claimed in addition to the claim for preparation of those documents. Another example of unreasonableness is the claim of 6 hours totalling $2,400.00, and the associated travel costs of $21,000.00 between Yellowknife and Edmonton, for a conference concerning the contents of the appeal book. The evidence is that the Respondent neither requested nor expected the Appellant to travel from Yellowknife for such a conference, that the conference took approximately 10 minutes and that correspondence is the usual method for settling the contents of appeal books. The Respondent asserted that an award of costs does not include extravagant costs incurred unnecessarily. The Respondent argued that the Appellant calculated costs incorrectly relative to Tariff B, that the Court did not award costs as if the Appellant had had counsel and that, in the absence of directions from the Court, the Appellant is not entitled to costs outside the Rules and Tariff. Further, the Respondent argued that, as an award of costs is discretionary and is not required to be made in any particular manner by legislation or a rule, the Charter does not apply to this matter.
[6] The Respondent argued that, as costs were not awarded on a solicitor-client basis, the amount of $417.30 (services of chartered accountant) and the amounts of $187.25, $935.89 and $125.00 (services of two law firms) were not appropriate disbursements per Entreprises A.B. Rimouski Inc. v. Canada4. As well, the invoices are ambiguous, lack detail, do not, on their face, indicate any necessary relationship to this litigation and, in two instances, are not even billed to the Appellant, but to other entities. The Respondent argued that the Riva invoice appears incomplete on its face and that there is no evidence establishing that its billed costs of office computer equipment, consulting services, photocopying, facsimiles and supplies were essential and related to this litigation.
[7] The Respondent argued that the disbursements claimed for travel between Yellowknife and Edmonton for the hearing before the Federal Court of Appeal were excessive and unreasonable because the evidence is that the hearing in this Court and in the Tax Court of Canada were each less than 1 day, but the Appellant is claiming for a 9 day stay in Edmonton. Economy air fares and hotels were available for more modest charges. The Respondent asserted that the Appellant is entitled to only the following:
| Tariff Receipt from the Tax Court of Canada: |
$250.00 |
| Transcript of Verbal Testimony: |
$322.50 |
| Costs of travel to Edmonton: |
$1,205.46 |
| Costs of Hotel in Edmonton (one night): |
$77.28 |
| Meals and Incidentals (two days): $59.35 x 2 = |
$118.70 |
| TOTAL: |
$1,973.94 |
Assessment
[8] The case summary preceding the full text of Skidmore, supra, reads:
| The plaintiffs brought an action for damages arising out of damage done to their fishing boat. The action was successfully conducted by one of the plaintiffs, a former member of the law society, who no longer held a practising certificate. The plaintiffs applied for costs. The trial judge held that there was binding precedent to the effect that unless a litigant is a practising lawyer, no costs may be awarded and only disbursements may be recovered. The plaintiffs appealed. |
| Held - Appeal allowed. |
| The view that cost are awarded solely to indemnify the successful litigant for legal fees and disbursements incurred is now outdated. Party-and-party costs serve many functions. They partially indemnify the successful litigant, deter frivolous actions and defences, encourage both parties to deliver reasonable offers to settle, and discourage improper or unnecessary steps in the litigation. Under the old English practice, implicitly accepted in the past as the law in British Columbia, the self-represented lay litigant is in the unenviable position of being unable to take advantage of the cost provisions of the Rules of Court while, at the same time, being liable to pay costs to a solicitor-represented opponent if the opponent is entitled to costs. The old English practice is unsound and unsupported by authority. There are sound reasons for allowing costs to successful self-represented litigants, and no good reason why costs should be denied to such litigants. The practice of denying costs to self-represented litigants arose entirely from the common law. Since the matter of costs is essentially within the discretion of the court, it bears directly on matters of practice and it is something on which the court is well situated to rule, without the necessity for legislative intervention. Since the matter of costs payable to lay litigants is not a matter where legislation or a rule requires a judge to make an order that infringes Charter rights, the Charter does not apply. |
At pages 531-532, the British Columbia Court of Appeal notes that one of the purposes of costs, additional to the concept of indemnification, is to encourage settlement to the extent that the rules provide for double costs in certain circumstances. In this Court, Rule 420 may perform a similar function. I find that Skidmore, supra, contains practical commentary concerning costs as an indemnity distinct from costs as a deterrent, but it must be construed in the context in which it was decided.
[9] In Skidmore, supra, the Court considered issues of costs in the context of a court exercising its discretion as a tool, ie. by the award or denial of costs, to control its process as a function of one or several factors. By way of comparison, that discretion was comparable to that contemplated by Rule 400(1) in this Court. Therefore, in my opinion, Skidmore, supra, might have helped the Appellant in this litigation only if he had raised it before the panel in Federal Court of Appeal hearing his case and urged that directions for the compensation for his time as a self-represented litigant be included as part of the judgment and as a function of Rule 400(1). The circumstances in Skidmore, supra, were not part of the process of assessment of costs, but rather clearly addressed the inclusion of appropriate directions in the award of costs, as part of judgment, which in turn would permit the allowance at a subsequent assessment of costs for the time of a lay litigant. With particular regard to the Appellant's bill of costs in this Court, Skidmore, supra, is decided in a context which can only be compared to the discretion exercised under Rule 400(1) in this Court, but not in a context comparable to the discretion under Rule 405 to resolve the individual issues of entitlement at assessment. In other words, the Court decides in the first instance, under Rule 400(1), whether there is a entitlement to costs. Until that happens, the assessment officer has no authority to proceed under Rule 405 and cannot, in any event, usurp the Court's authority under Rule 400(1). As well, I note that the Federal Court of Appeal in Lavigne, supra, addressed and rejected the proposition of compensation for the time of a lay litigant and considered and rejected an associated proposition that the rule as it exists, denying such compensation, breaches rights protected by the Charter.
[10] The Law of Costs Second Edition5 notes in paragraph 209.15 at pages 2-89 to 2-93 that, historically, a self-represented lay litigant was not entitled to assess costs for his own time because "such a litigant had not incurred legal costs requiring indemnification". The Law of Costs, supra, refers to a statute in the United Kingdom now providing specifically for legal costs for a lay litigant's time and notes that there "is no comparable statutory provision in Canada, but the common law appears to be moving towards awarding costs to litigants who represent themselves". However, I do not read paragraph 209.15 as authority for an assessment officer in this Court to exercise Rule 400(1) authority as part of a Rule 405 assessment, to permit, in the absence of directions to that effect in a judgment for costs, allowances to a lay litigant of anything beyond disbursements.
[11] The result in The Attorney General of Canada v. David A. Kahn, on October 23, 1998 in T-2166-97, allowing a lump sum to reimburse a lay litigant for his "lost" time in representing himself, illustrates the discretion possible under Rule 400(1) for exercise by a judge, but not by an assessment officer. In that case, the Court considered and distinguished Lavigne, supra. My conclusions in paragraph [17] of Ken Stephan William Fegol v. Her Majesty the Queen, on October 19, 1998 in T-2836-94 and the conclusions of the Court, addressing the review of the assessment of costs, in the Reasons for Order in T-2836-94 on November 6, 1998 at paragraphs [14] and [18]-[23] inclusive, reinforce my view that assessment officers do not exercise Rule 400(1) authority with particular regard to allowing costs for the time of a lay litigant in the absence of a prior direction from the Court. Alternatively, Fegol, supra, supports the Respondent's proposition that the law in this Court precludes the Appellant's claim for compensation for his time.
[12] The Appellant clearly removed any doubt as to whether he had improperly included costs from the Tax Court of Canada by means of paragraph 9 of his rebuttal submissions. It refers to an attached schedule listing activities specifically identified with the Tax Court, but corresponding to claims in the bill of costs for the Federal Court of Appeal. A law firm had forwarded the initial bill of costs under cover of a letter dated September 22, 2000 stating that it represented the Appellant in this matter. That bill of costs used fee item numbers from Tariff B for disbursement amounts without, however, assigning any number of units to each fee item. Only fee item 26 for the assessment of costs was assigned a number of units, ie. 6. By letter dated October 6, 2000, the law firm withdrew the initial bill of costs and stated that "Mr. Turner or this firm will shortly be in touch with the Court further in this matter". I think that, on the record, the Appellant has represented himself throughout. For this item 26 claimed at $14,000.00, as with several others in this party and party bill of costs, the Appellant incorrectly claimed a number of units beyond the ranges permitted by Rule 407 and incorrectly multiplied the number of units by the number of hours claimed for the services. In the circumstances, I allow the minimum $200.00 for item 26, but disallow all other fees claimed.
[13] Consistent with my rationale in Carlile v. The Queen6 and with Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada7, I allow $80.00 for photocopies, $90.00 for facsimiles and long distance tolls and $95.00 for "supplies, binding books etc." in the Riva Resources Ltd. invoice. The balance of the Riva invoice, including the $2,000.00 claimed for "office computer equipment" and the $1,200.00 claimed for "consulting services Bill Reid", is disallowed because I am not satisfied about necessity and reasonableness. I concluded in Sutherland v. The Queen8 that costs prior to institution in this Court are assessable. However, I disallow the $250.00 tariff for institution in the Tax Court of Canada as beyond my jurisdiction. I allow the $322.50 for transcript as claimed.
[14] I concluded in Youssef Hannah Dableh, v. Ontario Hydro9 that an economy airfare, as opposed to a faresaver, is the appropriate standard in assessed costs. I allow the $1,205.46 airfare proposed by the Respondent. Although I agree with the Respondent's submissions concerning the lack of necessity for personal attendance to settle the contents of the Appeal Book and concerning the excessiveness of a nine day stay in Edmonton for the hearing, the scheduling of flights for the return leg after the hearing of the appeal might have been uncertain as a function of how long the Court required the presence of the parties. Therefore, I allow hotel costs for 2 nights totalling $154.56 keeping in mind that a sense of austerity should pervade costs. I find the Respondent's proposal of $118.70 for 2 days of meals and incidentals reasonable. The Respondent did not propose an amount for ground transportation such as taxis to and from airports. I allow $115.00 for those costs.
[15] There are problems in the Appellant's affidavit sworn October 20, 2000 in support of his bill of costs. For example, paragraph 2 incorrectly identifies a tariff receipt issued by the Tax Court as having been issued by the Federal Court of Appeal. Paragraph 5 identifies an invoice dated October 22, 1998 from a law firm for $133.75 to assist with an appeal book, but the only attachment referring to $133.75 (claimed at only $125.00 in the bill of costs) is a letter dated April 21, 1999 from that law firm. It states services were rendered in connection "with his tax appeal" and I assume it relates to the invoice dated February 24, 1999 which contains a date entry for October 22, 1998 referring to a "tax appeal". However, the entry for October 22nd, the day after the conference on the appeal books, does not refer to their preparation, but only to discussions of "tax appeal forward documents for registration". Paragraph 6 of his rebuttal submissions asserts that the "appeal book document" was prepared at the law firm's office and that the charge for that service is exhibit D to his affidavit. My difficulty with this evidence is that exhibit D, an invoice from a different law firm, is dated prior to the Tax Court hearing and it addresses the preparation of affidavits, but not an appeal book. As the Appellant agrees that the meeting occurred on October 21st (paragraph 6) and that October 21st was the final day for serving and filing the appeal book (paragraph 8), I can only surmise that there is material not before me which might clarify both the inconsistency concerning dates (the filed Agreement as to contents of Appeal Book and his show cause submissions also indicate the meeting occurred on October 21, 1998) and work performed. In any event, this sort of solicitor-client charge cannot be allowed because of my conclusions, consistent with Entreprises A.B. Rimouski, supra, in Dableh v. Ontario Hydro10 and in James L. Ferguson v. Arctic Transportation Ltd. et al11 that a litigant cannot circumvent the partial indemnity limits of the Tariff, by charging, as a disbursement, the full solicitor-client fee of a lawyer not registered as the solicitor of record. I will not consider an allowance for fee item 18.
[16] The decision of the Tax Court was dated August 18, 1998 and the Notice of Appeal to this Court was filed September 23, 1998. In my opinion, the chronology provided by the Appellant indicates that the first Wallbridge invoice dated May 6, 1998 for $187.25 addressed the Tax Court litigation and I therefore disallow it. As for the second Wallbridge invoice dated July 14, 2000 for $935.89, it discloses solicitor-client charges by a law firm for June, 1998 through June, 2000. As above in Dableh and Ferguson, supra, I conclude that a litigant entitled to only partial indemnity cannot claim full indemnity by means of a solicitor-client bill (in this instance, the billing as between solicitor and own client) charged as a disbursement in the bill of costs. As well, this $935.89 likely includes some costs associated with the Tax Court. Further, this law firm never appeared on the record. I considered whether I should convert part of this charge to allowances under the appropriate fee items in Tariff B, but decided that was inappropriate in the circumstances. This invoice includes $23.66 for disbursements such as photocopies, facsimiles, postage and long distance. I conclude that my allowances above for Riva Resources Ltd. were sufficient in this area. Those allowances included a consideration for costs associated with settling the contents of the appeal book, something which the Respondent conceded was necessary, but which was not reflected in the proposed $1,973.94. I disallow the entire $935.89. I disallow the claim of $417.30 associated with Micheal Odell, chartered accountant. Paragraph [3] of the Reasons for Judgment refers to an affidavit by the Appellant's former accountant which was before the Tax Court of Canada. The Odell invoice charges for preparation of an affidavit prior to the Tax Court hearing. Despite my conclusion in Sutherland, supra, that costs prior to the date of institution may be assessable (the reference to preparation in item 1 of the current Tariff certainly implies assessable costs prior to institution), I doubt that, on the materials before me, the Odell work is sufficiently attributable to the Federal Court litigation to warrant indemnification between these litigants.
[17] In fairness, I think that the Appellant may have misconceived the award of costs and the purpose of partial indemnity as embodied in the Tariff. For example, his submission that a tax lawyer estimated $25,000.00 for the Tax Court litigation and that the figure submitted for his time is consistent with similar cases regarding costs is not relevant here because he is essentially comparing sets of solicitor-client costs as opposed to party and party costs. As well, he charges $27,000.00 to prepare a factum under item 19 as a function of 30 hours times 9 units times $100.00 per hour. Item 19, and several other items, were not intended to be calculated as a function of hours. The 9 units comes from the column IV range, a range not available to the Appellant in the absence of a Rule 407 direction permitting something other than column III. The Appellant's bill of costs, presented at $265,700.00 is assessed and allowed at $2,381.22.
(Sgd.) "Charles E. Stinson"
Assessment Officer
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OR RECORD
| DOCKET: A-538-98 |
| STYLE OF CAUSE: Fred Turner v. Her Majesty the Queen |
ASSESSMENT IN WRITING WITHOUT PERSONAL APPEARANCE OF PARTIES
REASONS FOR ASSESSMENT OF COSTS BY: CHARLES E. STINSON
| DATED: February 22, 2001 |
SOLICITOR FOR THE RECORD
Morris Rosenberg
Deputy Attorney General of Canada FOR THE RESPONDENT
Ottawa, Ontario
__________________2 (1998), 229 N.R. 203(F.C.A.)
4 [2000] F.C.J. No. 501 (Court file no. A-418-99)
5 Mark M. Orkin 1999 Canada Law Book Inc.
8 T-1856-89, November 15, 1991
9 T-1422-90, November 2, 1994, at page 16