Date: 19981019
Docket: T-2836-94
BETWEEN:
KEN STEPHAN WILLIAM FEGOL,
Plaintiff,
- and -
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA AS REPRESENTED BY
THE MINISTER OF NATIONAL REVENUE,
Defendant.
ASSESSMENT OF COSTS - REASONS
Charles E. Stinson
Assessment Officer
[1] The Minister of National Revenue (hereafter, the Minister) certified (Court file No. GST-127-94) under the Excise Tax Act, s. 316 that $8,014.03 and interest was payable by the Plaintiff. The Minister took out a writ of execution directed to the Sheriff of the Judicial District of Winnipeg, Manitoba. The Plaintiff, represented by counsel at that point, moved for "recovery of the possession of his personal property (writ of replevin) wrongfully seized from the applicant by the respondent" and, in the alternative, for compensation. The Minister then moved for a stay of proceedings and, in the alternative, for leave to issue a third party notice against the Sheriff. By Order dated November 1, 1994, the Honourable Mr. Justice Cullen stayed the Plaintiff's motion and jointed the Deputy Sheriff, Mr. James Douglas, as a Third Party without prejudice to Mr. Fegol "commencing an action herein and naming the said third party".
[2] Mr. Fegol, still represented by counsel, filed a Statement of Claim in this file naming the Deputy Sheriff as Third Party in addition to the Defendant, Her Majesty the Queen (hereafter, the Crown). Both the Crown and the Deputy Sheriff moved for a conditional appearance to object to jurisdiction. By Order dated April 25, 1995, the Prothonotary, John A. Hargrave, denied the Crown's motion with costs in the cause but allowed the Deputy Sheriff's motion and struck the action as against the Third Party for want of jurisdiction with costs of the motion to the Deputy Sheriff. On September 13, 1996, the Plaintiff filed a Notice to remove his solicitor of record. By Order dated November 15, 1996, and further to a Notice of Motion by the Plaintiff's solicitor, the Prothonotary permitted the solicitor to withdraw conditional upon proof of service of notice of the Order. That notice was done by December 2, 1996. By Judgment dated March 31, 1998, the Honourable Mr. Justice Campbell directed reimbursement of $8,014.03 forthwith to the Plaintiff and costs of the action at Column V of Tariff B. His Lordship's Reasons of an even date identified the primary issue at trial as whether the Plaintiff could take advantage of a "farm equipment" exemption to obtain relief from a seizure intended to offset an outstanding tax debt.
[3] In Court file No. T-2836-94, the Plaintiff filed a Bill of Costs including the events of Court file No. GST-127-94. In fixing a date for assessment, I set deadlines for the exchange of materials. Plaintiff filed supporting materials, not in the form of an affidavit, consisting of an amendment to the disbursement portion of his Bill; correspondence addressing settlement discussions; an assignment by Plaintiff, of a debt of some $10,000.00 owed to him, to his solicitor of record on account of professional services; his solicitor's account dated February 21, 1995, and a number of receipts.
Submissions on Behalf of the Crown
[4] Tariff B1(4) requires that the payment of disbursements be confirmed by affidavit or by the solicitor appearing on the assessment. The Plaintiff is not licensed to practise as a lawyer and therefore his supporting material is deficient. It is difficult to respond to a Bill of Costs in the absence of an affidavit. The amendment in his supporting materials may mean that certain costs are not properly before me. There were allegations against the Crown of bad faith and references to settlement documents not provided. This interfered with the Crown's capacity to properly respond. Therefore, do not rely on material not on the record. As well, the Plaintiff must confirm that the disbursements relate solely to Court file No. T-2836-94. There is an outstanding appeal on the Judgment and the Assessment Officer should suspend payment of costs pending its outcome or take this assessment under advisement pending hearing of the appeal. As well, Rule 474 may apply. That is, the Bill of Costs may be assessed and an amount established but payment must be deferred. Campbell J. did not order the payment of costs forthwith and therefore the Assessment Officer has discretion to set the timing of payment by issuing a certificate suspending payment of costs pending hearing of the appeal in Court file No. A-280-98.
[5] The tariffs of $50.00, $100.00 and $30.00 respectively for filing the Statement of Claim, application for trial and request for subpoena and the Quick Law account of $17.50 (shown as $17.45 in his solicitor's account) are conceded. Given that Campbell J. specifically limited costs to this action, thereby precluding indemnification for GST-127-94, the amount of $181.00 for photocopying in his solicitor's account may relate improperly to the GST proceeding. The dates disclosed in that account for steps taken suggest that most of the $181.00 was associated with the GST file. Allow only the portion of the $181.00 deemed applicable to T-2836-94. The Bill of Costs as initially presented claimed $240.00 for photocopying and binding. The supporting materials amended this to $359.54. The Plaintiff should be held to the lower amount. The Crown recognizes that lawsuits require dollars to run them and leaves it to the Assessment Officer to assess an amount that may exceed $240.00 but, on the basis of the submissions above addressing the timeline for GST-127-94, is less than $359.54. Pages 9 - 14 of the supporting materials disclose $319.98 permissible to assess. Mr. Fegol interjected and agreed to the $319.98. As well, disbursements of $15.00 (City of Winnipeg); $25.00 (Minister of Finance); $25.00 (witness fees for Jim Douglas); $25.00 (witness fees for Charlie Camara); $22.00 (document service on the Sheriff) and $2.50 (courier) are questionable. The $561.75 added in the supporting materials for transcript is not permitted by the Judgment.
[6] The Reasons for Judgment (A-104-97) dated June 8, 1998, in Robert Lavigne v. Human Resources Development et al. (F.C.A.) state a proposition that has weathered Charter challenges:
| We are all of the view that the decision appealed against cannot be overturned by this Court. The motions judge could not but confirm that lay litigants cannot receive counsel's fees, under the Federal Court Rules, when they have successfully represented themselves. Under Tariff B of those Rules, a service cannot be rendered by a litigant to himself. The Courts, be it the Trial Division or the Court of Appeal, are not at liberty to change what is legislation. |
| We are prepared to admit that the appellant has a point when he says that it could be unfair to deny successful lay litigants, who could not afford to be represented by counsel, some costs that could compensate them for the time they had to give and the "legal skills" they had to apply to satisfy the requirements of the Rules for bringing their cases to the tribunal. We are not sure that the actual Rule 400(4) (formerly 344(4)) could not, to a certain extent, be used to satisfy, in special cases, what fairness could dictate in that respect. However, we have no doubt that a change in the Act or the Rules would be required to provide openly that lay litigants could be entitled, in whole or in part, to fees that, up until now, have always been formally reserved to counsel. |
| As to whether the Rule as it exists could be seen as breaching rights protected by the Charter, specially those covered by sections 7 and 15, as the appellant urged the Court to decide, we are of the view that it is not so, as already found by the Court in Rubin v. Canada (A.G.), [1990] 3 F.C. 642.... |
Further, since Solicitor General of Canada v. Neil Anderson Davidson [1989] 2 F.C. 341 at 345-46 (F.C.A.) confirmed that a barrister and solicitor representing himself in litigation is not entitled to counsel fees for his time, a lay litigant is that much more disentitled to fees for his time. The decision in I.C.I. Americas Inc. et al. v. Her Majesty the Queen et al. 48 F.T.R. 101 (T.D.) confirmed that a lay litigant may recover only disbursements but not fees for any time expended. The fact that he is out some $10,000.00 for his lawyer is irrelevant. By letter dated August 26, 1998, the Crown replied to case law alluded to below, and produced subsequently to the hearing before me, by the Plaintiff:
| McBeth v. Governors of Dalhousie College & University(1986) 26 D.L.R. (4th) 320 (N.S.C.A.) |
| In this case, the Nova Scotia Court of Appeal considered the common law rule that lay litigants are not entitled to costs unless they are required to indemnify their counsel. The Court, relying on a report of the Law Reform Commission of British Columbia, found that this practice was discriminatory and breached section 15 of the Charter. The Crown's position is that this case has no application in a Federal Court of Canada assessment of costs hearing. The binding decision of the Federal Court of Appeal in Lavigne v. Her Majesty the Queen et al. (A-1040-97 (T-1977-94) June 8, 1998) is a clear statement of the present state of the law in the Federal Court of Canada. In Lavigne, the Federal Court of Appeal held that under Tariff B of the Rules, a service cannot be rendered by a litigant to himself. The Federal Court of Appeal also held that the Rule did not breach sections 7 or 15 of the Charter. |
| Rubin v. Canada [1990] 3 F.C. 642 (F.C.T.D.) |
| In this case, Strayer, J. held that the rule denying lay litigants costs under Tariff B did not breach sections 7 or 15 of the Charter. Strayer, J. at pages 650-651 indicates that he is mindful of the McBeth decision, however, he goes on to state that the Federal Court of Appeal rejected the McBeth decision in the case of Davidson v. Canada [1989] 2 F.C. 341. The Federal Court of Appeal in Lavigne relied on the decision in Rubin. |
| Andrews v. The Law Society of British Columbia [1989] 1 S.C.R. 143 |
| This important decision considering the scope of s. 15 of the Charter was applied in Rubin, and supports the Crown's position that the rule denying lay litigants costs under Tariff B does not offend the Charter. |
| Davidson v. Canada [1989] 2 F.C. 341 (F.C.T.D.) |
| This decision of the Federal Court Trial Division expressly declines to follow the reasoning in McBeth and supports the Crown's position that the rule denying lay litigants costs under Tariff B does not offend the Charter. |
| Reekie v. Messervey [1990] 1 S.C.R. 219 |
| This decision is irrelevant to the present proceeding. |
| Laufer v. Bucklaschuk (CI 88-01-28190, judgment delivered June 9, 1998) (Man. Q.B.) This decision is irrelevant to the present proceedings. The issue of loss of opportunity to invest in Laufer related to the amount of non-pecuniary damages awarded at trial. The decision does not relate to the issue of costs. |
[7] Column V costs are reserved for difficult cases. The trial judge awarded costs beyond the usual standard of Column III in the context of a litigant representing himself for a short period. Paragraph No. [11] of his Lordship's Reasons, by confirming one issue as contested, indicates that these proceedings were not complicated. This is significant because there were few documents and because the Crown made several concessions to narrow the issues during trial. This absence of complexity coupled with Rules 400(3) and 409 suggest that the lower end of Column V is appropriate. If there were complexities, they stemmed from the naming of the Deputy Sheriff as a Third Party and not from issues with the Crown. There is nothing in the Judgment or Reasons suggesting that Column V costs were intended as a penalty or punishment. The letters written without prejudice and included in the supporting materials do not help. They disclose that the Plaintiff sought $165,000.00. The Judgment, by contrast, being for some $8,000.00, was considerably less. The Crown wants to be reasonable concerning disbursements but the fees must be lawful and therefore at the lower end of the ranges in Column V.
[8] The GST proceeding had its own Court file number. Under the old Rules, there was no provision to convert a notice of motion to a Statement of Claim. The Order of Cullen J. concluded the GST proceeding and did not prejudice Mr. Fegol relative to his initiating a separate action by way of Statement of Claim. The Plaintiff cannot, however, extend the timeline of the Judgment in T-2836-94 to include the events of GST-127-94. That the Third Party was struck from the style of cause in T-2836-94 implies that this action was separate from GST-127-94. Therefore, the first five fee items for his solicitor's work in GST-127-94 must be struck off. Allow the item, presented at 13 units for preparation of the Statement of Claim, at 7 units being the low end of Column V. The 13, 13 and 11 units respectively presented for preparation to respond to the Crown's motion and to the Third Party's motion, both for conditional appearance, and for preparation of a brief must be clarified because the motions were distinct. The Prothonotary sat for two hours on April 25, 1995, to hear them but only one hour should be attributed to the Crown's motion. The first item for 13 units addresses preparation for the Crown's motion on the basis of a hearing scheduled for March 14, 1995, but adjourned by letter dated February 8, 1995, to the April 25 date. This letter, five weeks prior to March 14, implies that no preparation occurred because counsel was already booked for another matter. Therefore, disallow these 13 units. The second item for 13 units should be disallowed because it addresses the Third Party's motion and was not part of an award of costs. As for the 11 units claimed at the maximum for preparation for April 25, allow 2.5 units on the basis that the minimum of 5 units available in Column V should be divided in half to reflect preparation for two related motions.
[9] The Plaintiff claims 4 hours at 5 units per hour for the April 25 appearance encompassing both motions. The Abstract of Hearing should confirm that the Court did not sit from 8:00 a.m. until 12:00 noon (it discloses 10:05 - 10:44 a.m). Therefore, from the available range of 1 - 5 units, assign 1 unit for the hour as adequate for both motions and divide that single unit to give 0.5 units for the Crown's motion. The claim for 4 units for counsel to travel to the April 25 hearing effectively means $400.00 to walk six blocks in total between his law office and the courtroom: that is unwarranted. As well, the Court did not exercise the prior discretion required by item G24 of Tariff B. The claim of the maximum of 11 units for discovery, affidavit of documents and supplemental affidavit of documents should be reduced to the minimum of 5 units. The affidavit of some 15 documents was not complex. The supplemental affidavit occurred outside his period of representation by a solicitor and may not properly have been on file. The claim of the maximum of 5 units under item G27 for other services, being the preparation and filing of the Notice of Removal of Solicitor of Record, cannot be allowed. The nature of that document suggests that he represented himself in its preparation and therefore did not have a solicitor of record. As a self-represented litigant, he cannot claim fees. This leaves items numbered 11 and 15-43 inclusive, presented at the maximum total available of 312 units, which are not allowable to a self-represented litigant. If allowable, approve them at the minimum value in each range.
Submissions on Behalf of the Plaintiff
[10] The appeal includes the award of costs. The fact that the Crown moved in A-280-98 for a stay of Judgment precludes an Assessment Officer's jurisdiction to effect a stay of proceedings by deferring the payment of costs. The Order of the Honourable Mr. Justice J.T. Robertson dated June 10, 1998, dismissing the motion has addressed the point and an Assessment Officer cannot interfere. The inclusion in the Written Argument before his Lordship of confirmation of the policy of deferring payment of damages and costs pending disposition of appeal also suggests lack of jurisdiction. Normally, transcript is required for the Federal Court of Appeal. Here, the Crown did not disclose grounds for appeal thereby prejudicing my preparation. The transcript addressed that. Relative to the $181.00 for photocopies, the action in T-2836-94 would not have occurred but for GST-127-94 and its Third Party dispute. There were difficulties in obtaining relevant materials from the solicitor after his dismissal. The assignment of the debt noted above complicated this. Therefore, the portion attributable to GST-127-94 cannot be estimated.
[11] Column V costs imply a penalty or punishment to the Crown even if only $8,014.03 was the award in the substantive issue between the parties. These costs approach solicitor-client costs. Otherwise, the Court would have awarded Column III or even Column I costs on the basis of the involvement of a self-represented litigant. The circumstances of this litigation fit the reference in Lavigne, supra, to "special cases" and a possible assignment of fees to lay litigants. There are a series of cases supporting the premise that, if a Court, as here, awards costs to a lay litigant, that lay litigant can recover fees for his time (Mr. Fegol did not have copies with him: I granted an extension for him to submit them). For example, the claim of 5 units under item G27 for loss of earning power is consistent with a case in the Court of Queen's Bench allowing 3% for such loss. There is no regulation preventing lay litigants from conducting their own litigation.
[12] The activity in GST-127-94 was integral to the litigation in T-2836-94. It is only fair that some of the $10,000.00 assigned to my solicitor be recovered from the Crown. The maximum value in each range may not necessarily be appropriate but research suggested that if the minimum was initially presented, it could not subsequently be adjusted upward in front of the Assessment Officer. The correspondence, dated January 19, 1996, and August 7, 1997, in the supporting materials indicates that the Crown was not acting in good faith. The Judgment did not address this but documents elsewhere in the Court file allude to this.
[13] Possibly, the Prothonotary did not award costs relative to the Deputy Sheriff. His Reasons dated May 1, 1995, addressed the role of the Deputy Sheriff relative to the Court and to the Crown. The transcripts were necessary to sort this out relative to a possible appeal. This typified the "special" nature of this case resulting in punitive costs. The claim in GST-127-94 of 13 units each for preparation of a notice of motion and for preparation of a response to a notice of motion could be reduced to 7 units each. The claim of the maximum of 11 units for preparation for the hearing before Cullen J. should stay as is because of the complexity and extended argument over two years concerning the jurisdiction of the Sheriff. There was considerable correspondence and there were occasions when we did not have facts immediately available. The claim for 20 units (4 hours at 5 units per hour) in GST-127-94 can be reduced to 16 units (4 units per hour). My solicitor charged for one-half day. The claim of 4 units for travel to attend before Cullen J. can be reduced to 1 unit. I attended as well.
[14] In T-2836-94, the claim of the maximum of 13 units for the Statement of Claim should remain. This flowed from several court appearances. The claim of 13 units for preparation of a response to the Crown's motion for stay scheduled for March 14, 1995, can be reduced to 10 units. It did not address the Deputy Sheriff's motion and, effectively, it was preparation for April 25, 1995, complicated by the amount of case law plus the Crown's efforts to move to another jurisdiction. The claim of 13 units for preparation of a response to the Third Party's motion heard April 25 can be reduced to 10 units. The Third Party was always part of the style of cause in this action. The Prothonotary noted that the Deputy Sheriff was not a Defendant in this Court: a point missed by my solicitor. That is, consistent with the Prothonotary's Reasons, supra, it was only a technicality as to whether the Deputy Sheriff was a Defendant or a Third Party. The claim of the maximum of 20 units for the April 25 appearance should remain. Both motions were intertwined, complex and technical. Tariff B2(2) precludes fractions of units. Allow 1 unit for travel to the April 25 hearing. The claim of the maximum of 11 units for preparation of the brief for the April 25 hearing should remain for the same reasons of intertwining, complexity and technical aspects. The claim of the maximum of 5 units for the Notice of Removal of Solicitor of Record should remain. This occurs routinely in litigation. My file had to be rebuilt without access to records retained by my solicitor. The claim for the maximum of 11 units for an affidavit of documents and supplemental affidavit of documents should remain. Ultimately, the Registry said that the latter was allowed.
Disposition
[15] If GST-127-94 was a proceeding independent of T-2836-94, then the Plaintiff cannot use the Judgment here to claim its costs. If T-2836-94 was a continuation of the litigation in GST-127-94, then the hearing before Cullen J. was interlocutory in nature. His Lordship's Order was silent on costs meaning that there was no visible exercise of the Court's discretion per Rule 400(1). I do not have jurisdiction under Rule 400(1). The litigation commenced here by Statement of Claim was certainly independent of GST-127-94 for the purpose of costs. It if was not, I would have applied my rationale in Byers Transport Limited v. Dorothy Kosanovich (A-333-94) dated June 3, 1996, to conclude that the Judgment here could not vary the interlocutory result before Cullen J. Therefore, fees up to and including travel to attend the November 1, 1994 hearing in GST-127-94 are removed.
[16] Rule 474 sets out certain conditions precedent. They are not relevant to my function. Robertson J.A. addressed the request for stay. That included costs. I have no jurisdiction.
[17] The Plaintiff's cases do not establish that a change to the historical principle of costs as an indemnity has occurred. Therefore, any speculation as to loss of earning power by a self-represented litigant clearly results in dollars not equating to an indemnity for actual payment for a service performed. The Laufer case, supra, is particularly instructive from the need to keep in mind the current principle underlying costs as an indemnity. In Laufer, that is highlighted by treatment of loss of earning power within the factor of non-pecuniary damages distinct from the issues of costs addressed under a separate heading. Mr. Fegol can recover dollars for all reasonable disbursements attributable to T-2836-94 but only for fees attributable to his period of representation by a solicitor in said file. As for the intent of Column V costs, a higher award of costs can carry a punitive element but that is not a mandatory consideration. For instance, consider the permissive phrasing of "may consider" in the introductory words of Rule 400(3) and that Rule 400(3)(i) is only one of several possible factors in Rule 400 as a whole.
[18] I reduce the 13 units for the Statement of Claim to 10 units which is generous in my reading of record. His solicitor charged $175.00 per hour and he charged $3,325.00 for all services from October 5, 1994 to February 17, 1995, in GST-127-94 and T-2836-94 (exclusive of the 1/2 day before Cullen J.). This included the Statement of Claim in T-2836-94. Rule 409 does not restrict me from adjustments to ensure an allowance does not exceed indemnity. This service extended over part of November 2 and December 1, 1994. I allow 10 units for the preparation to respond to the Defendant's motion ultimately heard on April 25, 1995. The Plaintiff incorrectly presented this under item A2 instead of B5. I remove entirely the 13 units claimed for preparation for the Third Party's motion because the costs for that motion went to the Third Party. For counsel's appearance on April 25, I allow 1 hour at 5 units per hour. His solicitor's account suggests that such appearances were billed at a global rate and, in the absence of clarifying materials, I did not interfere further.
[19] I remove the 4 units under item G24 for travel to the hearing on April 25, 1995. The definition of "Court" and "assessment officer" in Rule 2 read with Rule 405 means that these two entities are separate and distinct. Therefore, an assessment officer does not exercise the "discretion" of item G24. I remove the 11 units claimed under item E15 for preparation of a brief for April 25, 1995. The Plaintiff did prepare a motion brief for which he was indemnified under item B5 above. This item addresses preparation of written argument subsequent to trial or hearing. This did not happen. The claim under item G27 includes not only his Notice of Removal of Solicitor of Record filed September 13, 1996, but also the motion for withdrawal filed separately by his solicitor on November 14, 1996. The Order of the Prothonotary dated November 15, 1996, and permitting withdrawal was silent on costs. As for his own document, the limitation on fees for self-represented litigants precludes any allowance under G27. For item C7 to prepare for discovery, I allow 8 units.
[20] The Plaintiff included fees from GST-127-94 in his Bill of Costs. Likely, he did so for disbursements. For photocopies, I allow 300 copies at $0.25 per page = $75.00 consistent with Byers Transport Limited, supra. I remove the $561.75 for transcript. There was nothing to support its relevance in the trial file. I allow the $22.00 for service on the Deputy Sheriff. The solicitor's account discloses service relative to the Statement of Claim. The Judgment of Campbell J. and not the Order of the Prothonotary applies to these costs of the action as opposed to the motion. I remove the $2.50 for courier charges as they might easily have applied to either file per my perusal of the solicitor's account. The same could be said of the $15.00 (City of Winnipeg) and $25.00 (Minister of Finance). The solicitor's account does not clarify them. The issue of the Deputy Sheriff resumed in T-2836-94 and these charges likely related to a search or copies. I allow them. I allow $25.00 for each of Jim Douglas and Charlie Camara. The former testified. The latter did not but was the subject of wrangling just prior to trial resulting in the Order of the Honourable Madame Justice McGillis dated February 5, 1998, authorizing issuance of a writ of subpoena for their attendance. I recognize the Plaintiff's prudence in arranging for his attendance even if he did not testify.
[21] The Plaintiff's Bill of Costs, presented at $47,714.29, is assessed and allowed at $4,004.48.
(Sgd.) "Charles E. Stinson"
Assessment Officer
Dated this 19th day of October, 1998
| NAMES OF COUNSEL AND SOLICITORS OF RECORD |
| STYLE OF CAUSE: KEN STEPHAN WILLIAM FEGOL |
| - and - |
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF NATIONAL REVENUE |
| COURT NO.: T-2836-94 |
| PLACE OF HEARING: Winnipeg, Manitoba |
| DATE OF HEARING: August 21, 1998 |
| ASSESSMENT OF COSTS - REASONS: CHARLES E. STINSON |
| ASSESSMENT OFFICER |
| DATED: October 19, 1998 |
| APPEARANCES: |
| Ken Stephan William Fegol for himself |
| (Plaintiff) |
| Perry Derksen (articled student) |
| Duncan A. Fraser for Defendant |
| SOLICITORS OF RECORD: |
| Mr. Morris Rosenberg for Defendant |
| Deputy Attorney General of Canada |
| Ottawa, Ontario |