Date: 20030612
(T-332-94)
Citation: 2003 FCA 264
BETWEEN:
ROSE A. BECKFORD STEWART
Appellant
(Plaintiff)
- and -
THE ATTORNEY GENERAL OF CANADA
on behalf of HER MAJESTY THE QUEEN
Respondent
(Defendant)
ASSESSMENT OF COSTS - REASONS
PAUL G.C. ROBINSON
ASSESSMENT OFFICER
[1] A copy of these reasons is filed today in Court file T-332-94 and applies there accordingly.
[2] This is an assessment of costs pursuant to a judgment dated April 27, 2001, by the Court of Appeal dismissing the appeal with costs. The appeal was from a decision of the trial judge in T-332-94 dated December 30, 1999, dismissing the Plaintiff's action with costs.
[3] After receiving a request for an assessment appointment, a letter was issued setting a timetable for written submissions. Bills of costs and associated written material were submitted by the Defendant/Respondent and filed. The Plaintiff/Appellant filed their opposing documentation. No submissions in reply were filed.
[4] I note the Court's obiter dictum observation in IBM Canada Limited-IBM Canada Limitée v. Xerox of Canada Limited, and Xerox Corporation, [1977] 1 F.C. 181 at 182:
The bills of costs from the Trial Division and this Court were combined and in hearing this application we do not wish it to be taken that we consider that combining bills of two different divisions of the Federal Court is proper procedure. In fact, we seriously question the propriety of proceeding in that way.
For technical consistency and in the interests of expediency, I have filed a copy of the Bill of costs as assessed on each of the Appeal and Trial files.
[5] On November 22, 1999, approximately two weeks before the trial of this action, the Defendant/Respondent made a written offer to the Plaintiff/Appellant to settle. The offer was for $5,000.00, in full satisfaction of all claims for damages, interests and costs, and without admission of liability.
[6] On November 25, 1999, the Plaintiff/Appellant rejected the above offer and made a counter-offer "...of $22,000.00, which amount is inclusive of costs and pre-judgment interest ". Within the same letter, the Plaintiff/Appellant made an alternative offer "...of $18,000.00, plus party and party costs".
[7] Notwithstanding the settlement correspondence, these two offers did not lead to a settlement and the parties proceeded to trial.
[8] The trial of this action was heard by The Honourable Madam Justice Sharlow (the Trial Division as she then was) on December 7, 8 and 9, 1999.
[9] The Federal Court of Appeal heard the appeal on April 27, 2001 and dismissed it with costs.
[10] In the interests of simplicity, I will outline my reasons for allowing or disallowing certain items in what I believe is a descending order of logical importance.
[11] The Defendant/Respondent takes the position as outlined in Rule 420(2)(b) that the Plaintiff/Appellant's failure to obtain judgment with respect to the Defendant/Respondent's November 22, 1999 offer, means that costs, excluding disbursements, should be doubled from November 22, 1999 to the conclusion of the appeal.
Consequences of failure to accept defendant's offer
420. (2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked,
(b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment.
[12] In my opinion, it is appropriate that I first address the Plaintiff/Appellant's assertion at paragraph 15 of its Written Submissions on Costs :
...that the assessment officer only has jurisdiction in this matter to award party and party costs on a regular basis. In the alternative, if the assessment officer has jurisdiction to invoke Rule 420(2) and double the party and party costs, it is submitted that such doubling may only be ordered up to the date of judgment, and not up to the end of the appeal process.
[13] Several Federal Court Rules pertain to this issue.
Rule 2 definition:
"assessment officer" means an officer of the Registry designated by an order of the Court, a judge or a prothonotary, and includes, in respect of a reference, the referee presiding in the reference.
Rule 400(1), (3)(1)(e), (4) and (5):
Discretionary powers of Court
400. (1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.
Factors in awarding costs
(3) In exercising its discretion under subsection (1), the Court may consider
...
(e) any written offer to settle;
Tariff B
(4) The Court may fix all or part of any costs by reference to Tariff B and may award a lump sum in lieu of, or in addition to, any assessed costs.
Directions re assessment
(5) Where the Court orders that costs be assessed in accordance with Tariff B, the Court may direct that the assessment be performed under a specific column or combination of columns of the table to that Tariff.
Rule 403:
Motion for directions
403. (1) A party may request that directions be given to the assessment officer respecting any matter referred to in rule 400,
(a) by serving and filing a notice of motion within 30 days after judgment has been pronounced; or
(b) in a motion for judgment under subsection 394(2).
Motion after judgment
(2) A motion may be brought under paragraph (1)(a) whether or not the judgment included an order concerning costs.
Same judge or prothonotary
(3) A motion under paragraph (1)(a) shall be brought before the judge or prothonotary who signed the judgment.
Rule 405:
Assessment by assessment officer
405. Costs shall be assessed by an assessment officer.
Rule 407:
Assessment according to Tariff B
407. Unless the Court orders otherwise, party-and-party costs shall be assessed in accordance with column III of the table to Tariff B.
Rule 408(3):
Costs of assessment
(3) An assessment officer may assess and allow, or refuse to allow, the costs of an assessment to either party.
Rule 409:
Factors in assessing costs
409. In assessing costs, an assessment officer may consider the factors referred to in subsection 400(3).
[14] The trial judge's order stated that the "Plaintiff's action is dismissed with costs" and the Judgment of the Court of Appeal stated that the " appeal is dismissed with costs". Both Courts exercised their discretion to award costs. Rule 405 allows costs to be assessed by an assessment officer. Rule 2 defines an "Assessment officer" and since I am such an officer as described in the definition above, I conclude I have the authority to assess the costs of the parties within certain parameters. Those parameters include assessing the costs in accordance with Tariff B Column III as set out in Rule 407. Pursuant to Rule 408(3), I may assess and allow, or refuse to allow the costs of assessment to either party; and while assessing costs, I may consider the factors referred to in subsection 400(3). I note the parties did not proceed under Rule 403(1) which allows them to serve and file motions for directions.
[15] The Plaintiff/Appellant refers to Apotex Inc. v. Syntex Pharmaceuticals International Limited, [1999] F.C.J. No. 1465 for the proposition that an order of the Trial Judge is required for a party to be entitled to double costs. Rule 420 is clear that a party is entitled to double costs "Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked...". The Apotex case is distinguishable in that the parties brought a motion for directions to be given to the assessment officer with respect to costs. No motion for such an order under Rule 403(1) was ever filed in this matter.
[16] In addition, the Plaintiff/Appellant relies on Sanmammas Compania Maritima S.A. v. "Netuno" (1995), 102 F.T.R. 181 in which the Court noted it had discretion to not award double costs even though an offer to settle had been made. It is my opinion that this case is distinguishable as above since the issue to be decided there by the Court was brought forward by motion. No motion for such an order under Rule 403(1) was ever filed in this matter.
[17] I now turn my attention to the issue of doubling of costs. The Defendant/Respondent relies on Rule 420(2)(b) to support its argument that it is entitled to double such costs to the conclusion of the appeal.
Consequences of failure to accept defendant's offer
420. (2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked,
...
(b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment.
[18] As outlined above in paragraph 5, the Defendant/Respondent made a written offer to settle. The Plaintiff/Appellant indicates at paragraph 17 of its Written Submissions that "it is submitted that the Defendant's offer of $5,000.00 represented very little element of compromise... offer to settle must contain some element of compromise". The Plaintiff/Appellant relies on Canadian Olympic Association v. Olymel, Société en Commandite (2000), 8 C.P.R.(4th) 429, regarding the issue of compromise within the offer to settle.
[19] A review of the Defendant/Respondent's November 22, 1999 letter reveals that counsel offers:
...$5,000.00, in full satisfaction of all claims for damaging interests and costs, and without admission of liability. If accepted by your client, we will require a Release to be executed, and a Consent to a dismissal of the action without costs...the offer is made in light of the expense that the Crown will incur in the defence of the case, and the transportation of the witnesses. The offer will be withdrawn once those expenses have been incurred.
[20] The statement in the correspondence dated November 25, 1999 that clearly indicates that Plaintiff/Appellant counsel considered this a valid offer to settle "...your client's offer is rejected", the Plaintiff/Appellant outlined certain terms to the Defendant/Respondent which were "... payment to the Plaintiff of $22,000.00, which is inclusive of costs and pre-judgment interest".
[21] A more thorough reading Canadian Olympic Assn. v. Olymel, Société en Commandite supra at paragraph 10 may be appropriate.
(...) I am of the view that the ingredient of compromise (or incentive to accept) is an essential element of an offer to settle. (...)
The Plaintiff/Appellant's counsel acknowledged that the November 22, 1999 letter was an offer to settle and proposed terms of its own which in my opinion are the "...element of compromise (or incentive to accept)..." necessary for the triggering of Rule 420(2)(b) and the doubling of costs.
[22] The terms "... ingredient of compromise (or incentive to accept) ..." may have more significance here. Counsel for the Plaintiff/Appellant had knowledge the Defendant/Respondent would be withdrawing its offer once it incurred the expenses of the transportation of witnesses and further expenses that it would incur in the defence of their case. Paragraph 11 in Canadian Olympic Assn. v. Olymel, Société en Commandite (2000)supra states:
The purpose of the offer to settle rule, as pointed out by Morden A.C.J.A. in Data General, (1991),G.O.R. (3rd) 409, supra, is to encourage the termination of litigation by agreement of the parties -- more speedily and less expensively than by judgment of the Court at the end of a trial. He added the impetus to settle is a mechanism which enables a plaintiff to make a serious offer respecting his or her estimate of the value of the claim which will require the defendant to give early and careful consideration to the merits of the case.
[23] Therefore, I am of the opinion that the offer to settle presented by the Defendant/Respondent contained an "incentive to accept" in that the Defendant/Respondent would be incurring costs in the defence of this proceeding and if successful, it could seek double its costs from the Plaintiff/Appellant pursuant to Rule 420(2)(b).
[24] The Defendant/Respondent has requested doubling of costs for both the Trial Division and the Court of Appeal matters. As noted in paragraph 5 above, the Defendant/Respondent's offer to settle was made on November 22, 1999 including terms that the "offer is made in light of the expense that the Crown will incur in the defence of the case, and the transportation of witnesses...offer will be withdrawn once those expenses have been incurred". It is my opinion there was a judgment in the Trial Division proceeding and as a result of that judgment being issued, the Defendant/Respondent's offer to settle terminated. In addition, as mentioned in paragraph 14 above, the parties did not seek directions of the Court regarding costs. Therefore, I rely on Rule 400(3)(e) of the Federal Court Rules, 1998 and conclude that since no offer to settle was made in the Court of Appeal proceeding, Rule 420 and the issue of doubling of costs cannot be considered for that matter.
[25] Accordingly, in the Trial Division segment of the Bill of Costs (which I determine to be Item 14(a) of Tariff B, costs are doubled from $4,000.00 to $8,000.00 on the assessable services of counsel fees for first counsel at trial only.
[26] The Plaintiff/Appellant, at paragraph 20 of the Plaintiff's Written Submissions on Costs, takes exception to the assessable disbursement of $228.08 claimed with respect to preparation of Affidavit of Documents. He indicates that this is high and not backed by any documentation. I note that the Defendant/Respondent's client ledger at Tab 7 of Respondent's Written Submissions repeatedly refers to 'review of Affidavit of Documents' at least seven times from October 2, 1997 to November 4, 1999. The last occurrence for review is just under three weeks before the commencement of trial. I rely on the reasons of Taxing Officer Charles E. Stinson in Grace M. Carlile v. Her Majesty the Queen, [1997] , 97 D.T.C. 5287.
... Taxing Officers are often faced with less than exhaustive proof and must be careful, while ensuring that unsuccessful litigants are not burdened with unnecessary or unreasonable costs, to not penalize successful litigants by denial of indemnification when it is apparent that real costs were indeed incurred. ...
Further, Phipson on Evidence, Fourteenth Edition (London: Sweet and Maxwell, 1990) at page 78, paragraph 4-38 states that the " standard of proof required in civil cases is generally expressed as proof on the balance of probabilities". Accordingly, the onset of taxation should not generate a leap upwards to some absolute threshold. If the proof is less than absolute for the full amount claimed and the Taxing Officer, faced with uncontradicted evidence, albeit scanty, that real dollars were indeed expended to drive the litigation, the Taxing Officer has not properly discharged a quasi-judicial function by taxing at zero dollars on the only alternative to the full amount. Litigation such as this does not unfold solely due to the charitable donation of disinterested third persons. On a balance of probabilities, a result of zero dollars at taxation would be absurd ....
[27] Taking into account the above reasons, and noting that the Affidavit of Documents obviously exists, I allow the amount of $228.08 for this assessable disbursement.
[28] The Plaintiff/Appellant takes issue with respect to the motion re: undertaking. I share the same concerns as the Plaintiff/Appellant and refer to Tariff B, Item 5:
Preparation and filing of a contested motion, including materials and responses thereto.
[29] Counsel for the Defendant/Respondent is requesting four units for a motion that was never filed. Paragraph 8 of the Defendant/Respondent's affidavit of S. Wayne Morris sworn August 23, 2002 asserts that the "motion for undertakings and/or want of prosecution was neither filed nor served as counsel for the Plaintiff/Appellant eventually agreed to proceed forward with the matter." With no motion before the Court, the issue of costs for the motion cannot be dealt with and it follows that costs cannot be allowed. In addition to this explanation, I rely on Kibale v. Canada (Secretary of State), [1991] 2 F.C. D-9 (Taxing Officer) where the principle is well stated that if an order is silent as to costs, no costs are awarded. Since these costs cannot be recovered unless specifically ordered by the Court, the four units of assessable fees and the disbursement of $2.91, requested by the Defendant/Respondent, are not allowed.
[30] The Plaintiff/Appellant submits that $600.00 as an assessable service for pre-trial preparation is excessive. I do not agree. I would like to endorse the sentiment (addressing counsel fees) of Lord Justice Russell in Re. Eastwood (deceased)(1974)3 All E.R. 603 at 608:
... In my view, the system of direct application of the approach to taxation of an independent solicitor's bill to a case such as this has relative simplicity greatly to recommend it, and it seems to have worked without it being thought for many years to lead to significant injustice in the field of taxation where justice is in any event rough justice, in the sense of being compounded of much sensible approximation ... my emphasis.
I extend its reasoning to this issue. Therefore, I conclude the $600.00 is reasonable and is allowed.
[31] The Plaintiff/Appellant argues the requested counsel fee for the second counsel, the student-at-law, should not be assessed at any amount in this matter. Upon review of the entire file, I was unable to locate where the Court had allowed second counsel for the Trial. I disallow the $1,000.00 claimed for the student-at-law and second counsel on the Trial Division proceeding.
[32] The Bill of Costs in T-332-94 is assessed allowed in the amount of $14,161.03 which includes the assessable services prior to November 22, 1999, doubling of assessable services from November 22, 1999 to the final decision in the Trial Division, assessable disbursements and GST. A certificate is issued in this Trial Division proceeding for $14,161.03.
[33] The Bill of Costs in A-10-00 is assessed and allowed in the amount of $3,425.21 which includes assessable services, assessable disbursements and GST. A certificate is issued in this Court of Appeal proceeding for $3,425.21.
"Paul Robinson"
Paul G.C. Robinson
Assessment Officer
Toronto, Ontario
June 12, 2003
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-10-00
(T-332-94)
STYLE OF CAUSE: ROSE A. BECKFORD STEWART
Appellant
(Plaintiff)
- and -
THE ATTORNEY GENERAL OF CANADA on behalf of HER MAJESTY THE QUEEN
Respondent
(Defendant)
ASSESSMENT WITHOUT PERSONAL APPEARANCE OF PARTIES
ASSESSMENT OF COSTS -
REASONS BY: PAUL G.C. ROBINSON
DATED: June 12, 2003
SOLICITORS OF RECORD: Patrick T. Summers
Basman Smith
Toronto, Ontario
For the Appellant
S.Wayne Morris
Dutton, Brock, MacIntyre & Collier
Toronto, Ontario
For the Respondent
FEDERAL COURT OF CANADA
Date: 20030612
Docket: A-10-00
(T-332-94)
BETWEEN:
ROSE A. BECKFORD STEWART
Appellant
- and -
THE ATTORNEY GENERAL OF CANADA
on behalf of HER MAJESTY THE QUEEN
Respondent
ASSESSMENT OF COSTS - REASONS