January 24, 2003,  E.C.B. 42/97/231

REASONS FOR DECISION

1.  APPLICATION

[1]  This is an application under section 48 of the Expropriation Act, R.S.B.C. 1996, c. 125 (the "Act") and the Tariff of Costs Regulation, B.C. Reg. 189/99 (the "Tariff"), for a review of the claimants' bill of legal costs, dated September 9, 2002, and for an order for advance payment of costs.

[2]  The parties have reached agreement on the amount to be paid to the claimants under every item in the bill of legal costs with the exception of Item 5, for which the description reads: "Every process for commencing and prosecuting a claim before the board", and Item 15, for which the description reads: "Attendance before the board to assess costs". I have not been asked to formalize an award of costs for those items upon which the parties agree.

[3]  The parties have elected to proceed before the board in respect of those cost items in dispute by way of written submissions only. The claimants filed their application for review on November 1, 2002, the respondent filed its submissions in response on November 28, 2002, and the claimants filed a letter reply to the respondent's submissions on December 4, 2002. There has been no oral cost hearing in this matter.

2.  BACKGROUND

[4]  A review of documentation in the board's file indicates that the compensation proceeding in this matter arises from a partial acquisition of lands situated at 11016 Bridge Road, Surrey, British Columbia. The claimant, Sam Sangha ("Sangha"), is the registered owner of the lands and the claimant, Can-Am Building Supply Ltd. ("Can-Am"), operates a building supply business from the lands. The respondent City of Surrey acquired a portion of the lands fronting on Bridge Road in connection with a road widening project. The partial acquisition appears to have been completed in or about December, 1996, evidently through an agreement pursuant to section 3 of the Act.

[5]  Compensation proceedings were commenced on October 1, 1997, when the claimants filed with the board an application for determination of compensation (the "Form A"). In their statement of claim within the Form A the claimants sought compensation totalling $200,000 for the market value of the lands and for disturbance damages. They served the Form A on the respondent on October 2, 1997.

[6]  The respondent filed its reply to the application for determination of compensation (the "Form B") on November 18, 1997. In its Form B the respondent said that the claimants had provided insufficient particulars to enable the respondent to properly plead its case and that it required further and better particulars with respect to several enumerated matters, including: (a) the basis on which each claim is calculated and the facts in support of each element of compensation claimed; (b) the respective amounts claimed by Sangha and Can-Am; (c) the quantum claimed; and (d) the respective interests of Sangha and Can-Am in the lands.

[7]  Shortly following a change of solicitor, the claimants filed with the board on September 13, 2002 a ten paragraph document entitled "claimants' surrejoinder". The surrejoinder amended and particularized the claim in several respects. Among other things it stated that Sangha's claim for market value had been fully paid and satisfied, and that the claim which remained to be pursued was that of the corporate claimant Can-Am for disturbance damages. It alleged that Can-Am had carried on business from the lands since 1972 and was in legal possession or occupation of the whole of the lands when part of the lands were transferred to the respondent under the section 3 agreement. It further alleged that Can-Am had suffered "grievous business loss" during the construction or reconstruction of Bridge Road by the respondent and quantified the lost sales said to have resulted from the "confusion upheaval and disruption of traffic caused by the works on Bridge Road" in the amount of $104,000.

3.  THE COST CLAIM UNDER ITEM 5

[8]  It is the legal costs of the claimants' surrejoinder, claimed under Item 5, upon which the parties in the first instance disagree.

[9]  Item 5 of "Schedule 1 — Legal Costs" under the Tariff provides for a minimum of 1 unit and a maximum of 10 units for "every process for commencing and prosecuting a claim before the board". Under section 4(6) of the Tariff, if an item provides for minimum and maximum numbers of units, the reviewer has the discretion to allow a number within that range of units, having regard to how much time should ordinarily have been spent on the matter.

[10]  In the bill of legal costs the claimants have claimed 5 units under Item 5 for the preparation and filing of the surrejoinder. They say that it was in order to meet the respondent's demand for particulars that they filed the additional document, which was in the nature of further pleadings. They submit that a claim for 5 units under Item 5 is both fair and reasonable.

[11]  The respondent submits that, since the surrejoinder does not commence a new claim, but instead was filed as part of the existing proceedings in order to address deficiencies in the original Form A, additional units are not recoverable pursuant to Item 5 of the Tariff. To conclude otherwise, the respondent says, suggests that every amendment to a Form A would entitle a claimant to a maximum of 10 additional units. The respondent also questions the appropriateness of the use of the term "surrejoinder".

[12]  It seems to me that both parties are under some misapprehension as to the recovery of legal costs under Item 5.

[13]  Item 5 is one of 23 items of description within Schedule 1 in respect of which legal costs incurred that are "proper or reasonably necessary to conduct the proceeding" within the meaning of section 3(2) of the Tariff may be claimed. Many of these items provide for a fixed number of units and in some cases the fixed number may be claimed more than once, for example, for attendance at successive interlocutory applications under Item 13 and at successive applications to assess advance costs under Item 15 or for each day of attendance at the hearing of a compensation claim under Item 19. Other items of description which provide for a minimum and maximum range impose an upper limit on the number of units that can be claimed for all legal work falling within that description over the course of the proceedings.

[14]  Item 5, which logically pertains to the preparation and filing of a Form A and any subsequent amendment to or particularization of the Form A, clearly falls within the latter category just described. The words "every process" are to be read as both cumulative and all-encompassing. The maximum number of units which could be awarded to a claimant under Item 5 by the conclusion of the proceedings is 10 units.

[15]  The cumulative nature of legal work falling under Item 5 is demonstrated in the second of the board's section 48 cost decisions in Danny James Topping and Tina Marie Topping v. H.M.T.Q. in Right of the Province of British Columbia as represented by the Minister of Transportation and Highways, unreported, E.C.B. No. 40/99, January 16, 2001. At para. 6 the vice chair stated:

[6] Item 5 is for commencing and prosecuting a claim. One unit was awarded in the last review. Nine units are claimed in this account and Mr. Melville indicates that one further hour out of a total of five hours of legal services have been expended on this item. This appears to be for an amended Form A at the compensation hearing with new numbers for amounts claimed in line with the evidence. As I said in the first review [reported at 73 L.C.R. 72], very little time should ordinarily have been spent commencing and prosecuting this claim that was solely for moving costs. Two units altogether is appropriate and therefore I award one further unit.

[16]  Accordingly, there is no substance to the respondent's expressed concern that awarding units for the preparation and filing of the claimants' surrejoinder leads to the prospect of a claimant being entitled to as much as an additional 10 units for every amendment to a Form A.

[17]  I also see no merit in entering into a terminological discussion as to whether use of the term "surrejoinder" was an appropriate description of the document which the claimants filed. I am satisfied that it was intended as the claimants' answer to the respondent's demand, as expressed in the Form B, for further and better particulars and that it further served to narrow the scope of the claim. The claimants, in preparing and filing that document, were clearly "prosecuting" their claim within the meaning of Item 5.

[18]  There are, however, some difficulties arising from the way in which the claimants have presented their claim under Item 5. They have not attempted an estimation of the legal work performed under this item of description pre- and post-Tariff nor have they given a clear indication as to the stage which the proceedings have reached. They have also not provided any back up evidence as to the time spent. These are all matters which the reviewer must necessarily consider in fixing the appropriate number of units within the bill of costs.

[19]  The Tariff applies to legal costs claimed that were incurred on or after June 28, 1999. Prior to that date, the legal costs payable are governed by the "actual reasonable" standard under section 45(7)(a) of the Act. In the present instance the claimants commenced their claim before the board on October 1, 1997, and the legal costs associated with the preparation and filing of the Form A therefore fall outside the Tariff.

[20]  The board has previously determined that, in fixing the appropriate number of units under an item of description in the Tariff for legal work performed, account should be taken of legal work of the same description performed in the pre-Tariff period so as to avoid double compensation: see Chu v. School District No. 36 (Surrey) (2001), 72 L.C.R. 89, at pp. 109-110.

[21]  There was no indication in the submissions before me on this application as to whether any pre-Tariff legal costs had been billed or paid. It is evident that the claimants' claim for 5 units under Item 5 relates only to the preparation and filing of the surrejoinder and does not take into account the earlier pleadings.

[22]  The claimants evidently consider that the amount of time which should ordinarily have been spent to create what they describe as a "lengthy" ten paragraph document will be apparent on its face and will lead to the conclusion that the 5 units claimed are "both fair and reasonable". Having the document itself to review is certainly of some assistance, but other supporting evidence would also have been preferable. The document essentially consists of two pages. It cannot properly be characterized as lengthy. The paragraphs contain uncomplicated allegations of fact with reference in some cases to applicable sections of the Act and, in one instance, to the section 3 agreement. In my view their preparation would not ordinarily have required even an average amount of time. I am therefore not satisfied that preparation and filing of the surrejoinder justifies an award of 5 units which is one-half the maximum allowable for all legal work falling within Item 5.

[23]  I take note of the fact that the claimants have filed no further documents in the nature of pleadings or particulars since filing the surrejoinder and that the compensation hearing in this matter was scheduled to be heard commencing on January 13, 2003, but was necessarily adjourned by consent for reasons of ill health on January 10, 2003. At that point it appears that no further legal work falling under Item 5 was likely.

[24]  Having regard to all of the foregoing considerations, I conclude that 3 units should be awarded under Item 5 for the preparation and filing of the surrejoinder. The parties are agreed that all items in the bill of legal costs are to be assessed at Scale 2 under the Tariff, which is "for matters of ordinary difficulty or importance". The value allowed on an assessment of legal costs under Scale 2 is $140 for each unit.

4.  THE COST CLAIM UNDER ITEM 15

[25]  The claimants have requested that I also set the number of units to be allowed under Item 15. Item 15 of Schedule 1 is for attendance before the board to settle an order or, as in this instance, to assess costs. It provides for a fixed number of 4 units for each day of attendance. The claimants have claimed 4 units under Item 15 in their bill of legal costs with respect to this application.

[26]  The respondent has requested that I defer any award of costs of this application "until the outcome of the proceedings", which I construe to mean the entire compensation proceedings. Alternatively, the respondent has submitted that I should find that costs are not recoverable by the claimants on the basis that this application was "unnecessary and amounts to a waste of the Board's time."

[27]  I see no reason to defer making an award of the costs of this application and, given the position taken by the respondent with respect to Item 5, I am unable to conclude that the application was unnecessary. The parties' mutual decision to proceed by way of written submissions only on this minor matter was a responsible one.

[28]  For the purpose of making an award of costs under Item 15, I find that the presentation by way of written submissions should be treated as an "attendance before the board" to assess costs. What is somewhat surprising is that the claimants in their bill of legal costs have not also made a claim under Item 14, which is for "preparation for attendance referred to in Item 15, for each day of attendance". Item 14 provides a fixed number of 2 units per day. The claimants may have felt that, having prepared written submissions for the board but not having actually physically attended at a cost hearing, they were not entitled to claim for both. In my view, they are so entitled and I would therefore include in the award an appropriate number of units under Item 14.

[29]  In my view, having regard to the scope of the submissions on this application, an oral hearing would not have consumed anything approaching 2 1/2 hours. That being the case, section 4(7) of the Tariff comes into play. The relevant portions provide:

	4	(7)	If an item in the tariff provides for
			(a)	an amount for each day but the time spent during the day is less than 2 1/2 hours, only 1/2 of the amount is allowed for that day,
			(c)	an amount for preparation for an attendance but the time spent on the attendance is less than 2 1/2 hours, only 1/2 of the amount for preparation is allowed.

[30]  Accordingly, I conclude that 2 units should be awarded under Item 15 for attendance before the board to assess costs and a further 1 unit should be awarded under Item 14 for preparation for attendance. As previously indicated, the parties have agreed on an assessment of all items in the bill of legal costs at Scale 2, or $140 for each unit.