| February 18, 2002, ECB Control No.:
68/01/218
| Between: | Wayneroy
Holdings Ltd.
Claimant | | And: | Her
Majesty the Queen in Right of the
Province of British Columbia as Represented
by the Minister of Transportation and Highways
and the Ministry of Transportation
and Highways
Respondent | | Before: | Sharon
I. Walls, Vice Chair | | Appearances: | Robert
G. Garrett, Counsel for the Claimant
Fran Crowhurst, Counsel for the Respondent |
REASONS FOR DECISION 1. Introduction [1]
This is an application under section 48(2) of the Expropriation Act, R.S.B.C.
1996, c. 125 (the Act) and Tariff of Costs Regulation, B.C. Reg 189/99
(the Tariff) for review of accounts in this matter as follows:
| 1. | Coast
Forest | November 30, 2000 | $8,187.29
(without GST) | | 2. | Coast
Forest | January 12, 2001 | $3,792.50
(without GST) | | 3. | Western
Survey | November 22, 2000 | $5,632.00
(without GST) | | 4. | Ross
Glover | November 8, 2000 | $
675.00 (without GST) | | 5. | Westwater
Mining | March 30, 2001 | $5,100.00
(without GST) | | 6. | Robert
J. Harvey Q.C. | August 31, 2001 | $8,100.00
(without GST) | | Total | | $31,486.79 |
All of these accounts are for work that
has been done since the Tariff came into effect and therefore the Tariff applies.
The application was heard on October 4, 2001, after a number of adjournments
requested by the claimant, Wayneroy Holdings Ltd. (Wayneroy). [2]
The background to this claim is that Wayneroy owns two adjoining parcels, one
approximately 65 hectares (160 acres) and one approximately 25 hectares (61 acres)
near Courtenay, British Columbia. A significant portion of the two parcels is
forested. On February 7, 2000 the respondent, the Minister of Transportation
and Highways and the Ministry of Transportation and Highways (the Ministry), expropriated
6.58 hectares (16.26 acres) from the 65 hectare parcel and 1.26 hectares (3.11
acres) from the 24 hectare parcel for the Island Highway. These partial takings
totalled approximately 8 hectares (20 acres) and formed a strip that was approximately
115 metres (378 foot) wide and bisected the two parcels. [3]
The Ministry made two advance payments to the claimant on February 2, 2000 and
February 10, 2000 for $208,000 and $5,703.85 respectively, or a total of
$213,703.85 for both takings. The first payment was allocated to the market value
of the land that was taken and the second payment was allocated for the value
of the timber on the land that was taken. The Notices of Advance Payment allocated
nothing for gravel on the land that was taken. [4] Two
Form As were initially filed by Wayneroy on January 19, 2001. On June 28, 2001
a consolidated Form A was filed by consent. Wayneroy filed an amended Form A
on September 24, 2001. [5] In 2000 Wayneroy commenced
an action in the Supreme Court against five personal defendants who are water
license holders and Her Majesty the Queen in Right of the Province of British
Columbia. In the affidavit of Wayne Leakey, one of the two principal shareholders
of Wayneroy, this action was characterized as one in nuisance for back flooding
of a substantial part of the subject property in connection with creating a salmonid
fish habitat. On May 8, 2001 the claimant brought a chambers application in the
Supreme Court action seeking inter alia an order to be able to enter the
expropriated property and to conduct sampling and testing of the rock deposits
under the surface. It was made clear to the court that this order was sought to
further the expropriation claim as there was case law stating that this board
does not have the jurisdiction to make such an order. The chambers judge, Lander
J. dismissed this application and Newbury J.A. refused leave to appeal this decision
on July 16, 2001. [6] Wayneroy forwarded the accounts from
experts that are in issue in this application to the Ministry for reimbursement.
The Ministry sought particulars and some were provided. The Tariff legal account
was added after an application for this section 48 had been scheduled. Six affidavits
were filed altogether. Two were from David Aberdeen, an independent appraiser,
who was retained by the Ministry to provide litigation support, including review
of accounts submitted by Wayneroy, to review the expert reports, and to conduct
settlement discussions. Two were from Hugh Trenchard, a legal assistant with the
Ministry of Attorney General. Finally, two were from Mr. Leakey, one of the principals
of Wayneroy. [7] The primary issues were:
| a) | should
the board require any evidence on whether the expert accounts were necessarily
incurred to assert the claim for compensation or damages at an interim cost hearing
under section 48? | | b) | assuming
that the board should require such evidence, whether sufficient evidence has been
provided to establish whether the expert accounts and legal costs were reasonable
and were necessarily incurred to assert the claim for compensation or damages? |
2. GST [8]
There was no evidence that Wayneroy was not a registrant under the Excise Tax
Act (Canada) and therefore under section 5(5) of the Tariff no GST is payable
on any account. 3. Is
Evidence Required that Costs were "Necessarily Incurred" [9]
Mr. Garrett, appearing as counsel for Wayneroy on this application, made a preliminary
argument based on the wording of section 48 of the Act. He compared the provisions
of section 45 for final costs and section 48 for interim costs. Section 45 provides
that the owner is entitled to costs that are necessarily incurred, and
then if that hurdle is met another subsection refers to the costs being reasonable.
By contrast, Mr Garrett said, section 48 only refers to the owner being entitled
to reasonable costs. Section 48 does not contain the word necessary.
He submitted that reasonable means that the reviewer of the accounts should
consider such factors as the hourly rates of the expert and the number of hours
billed. Necessary on the other hand goes to whether the actual work done
by the experts was required to assert the claim for compensation. The absence
of necessary in section 48 led Mr. Garrett to submit that the reviewer
of the accounts should not be taking this type of issue into consideration. It
was too early in the proceedings to adequately deal with the matter of whether
a particular expense was necessary. The issue of whether a cost was necessary
to assert a claim for compensation should be made following the compensation hearing
(or a settlement of the claim) at a section 45 hearing in accordance with the
specific wording of section 45(3). [10] Mr. Garrett referred
me to Driedger on the Construction of Statutes, 3rd ed., (Butterworths:
Toronto, 1993) and the principle that every word in a statute ought to be presumed
to have a meaning. Where there is no ambiguity, the reader should not add or delete
words from the statute in order to arrive at its meaning. See p. 159 and following.
According to Mr. Garrett, a number of the board's decisions on section 48 applications,
including, for example, Whitechapel Estates Ltd. v. British Columbia (Minister
of Transportation and Highways) (1996), 58 L.C.R. 125, use the words reasonable
and necessary interchangeably when section 48 only contains the word reasonable. [11]
Ms. Crowhurst, counsel for the Ministry, pointed out that section 48 incorporates
certain subsections of section 45 including the consideration of whether the costs
were necessarily incurred. In addition, the Tariff stipulates that the
reviewer consider both whether the costs or expenses were reasonable and
whether they were necessarily incurred. She indicated that she had had
no advance notification of this argument. [12] The relevant
provisions of the Act are as follows:
| 45 | (3) | Subject
to subsections (4) to (6), a person whose interest or estate in land is expropriated
is entitled to be paid costs necessarily incurred by the person for the purpose
of asserting his or her claim for compensation or damages. | | (4) | If
the compensation awarded to an owner, other than for business losses, is greater
than 115% of the amount paid by the expropriating authority under section 20 (1)
and (12) or otherwise, the authority must pay the owner his or her costs. |
| (5) | If
the compensation awarded to an owner is 115% or less of the amount paid by the
expropriating authority under section 20 (1) and (12) or otherwise, the board
may award the owner all or part of his or her costs. | | (6) | On
a claim under section 41 (3), the board may award, in its discretion, costs to
the claimant or the expropriation authority. | | (7) | The
costs payable under subsection (3), (4), (5) or (6) are | | | (a) | the
actual reasonable legal, appraisal and other costs, or | | | (b) | if
the Lieutenant Governor in Council prescribes a tariff of costs, the amounts prescribed
in the tariff and not the costs referred to in paragraph (a). |
| 48 | (1) | An
owner may, from time to time after an expropriation notice or an order under section
5(4)(a) has been served on the owner but before the hearing has begun, submit
a written bill to the expropriating authority consisting of the reasonable legal,
appraisal and other costs that have been incurred by the owner up to the time
the bill is submitted. | | (5) | At
a review under subsection (2) or (3), the person conducting the review must, after
taking into account all relevant circumstances, assess the reasonableness of the
bill and may make an order with respect to its payment, accordingly. |
| (6) | Section
45 (7), (11) and (12) apply to reviews under this section. | [13]
Specific provisions in the Tariff include:
| 2 | This
regulation applies to costs payable under sections 45 and 48 of the Act if the
costs claimed were incurred on or after the date this regulation comes into force. |
| 3 | (1) | If
costs are payable under the Act, they must be assessed as follows: |
| | | (a) | legal
costs must be assessed under Schedule 1; | | | | (b) | real
estate appraisal costs must be assessed under Schedule 2. | | (2) | When
making an assessment of costs under section 45 or 48 of the Act, the reviewer
must allow those costs under the tariff that were proper or reasonably necessary
to conduct the proceeding. | | 5 | (1) | In
addition to the costs allowed on a review under the tariff, the reviewer may allow
a reasonable amount for expenses and disbursements that were necessarily and properly
incurred in the conduct of the proceeding. | [14]
The main difficulty with Mr. Garrett's argument is that he has focussed on only
parts of sections 45 and 48 and the presence or absence of the word necessary.
One of the principal rules of construction is that legislation should be read
as a whole. After considering all of the relevant parts of sections 45 and 48,
I agree with the Ministry that section 48(6) directly incorporates section 45(7),
which in turn incorporates section 45(3). Further, under the Tariff, section 5(1)
states that the reviewer must consider both whether the costs were reasonable
and whether they were necessarily and properly incurred in the conduct
of the proceeding. These considerations apply in either a section 45 or section
48 review. In C.R. All Trucks Ltd. v. British Columbia (Minister of Transportation
and Highways) (2000), 69 L.C.R. 197 (B.C.E.C.B.) I commented at para 29 that
the Act and Tariff should be read together in a manner that seeks to avoid conflict.
Although the word necessary does not occur in section 48, reading section
48, section 45, and the Tariff together leads me to the conclusion that in a section
48 review one of the factors that I must consider is whether the costs were necessary
to conduct the proceeding and whether the expenses have been necessarily incurred
in the conduct of the proceeding. What is more, this issue has previously been
addressed. In Chu v School District No. 36 (Surrey) (2001), 72 L.C.R. 89
(B.C.E.C.B.) the Chair, having similarly referred to sections 48(6), 45(7) and
45(3) of the Act and section 3(2) of the Tariff, concluded at para 74 that the
reviewer must determine what is "necessary" and "reasonable"
in a section 48 review of a Tariff account. It follows that I reject Mr. Garrett's
argument. [15] Further, the issue of whether costs are
reasonable has been given consideration in a number of cases of this board.
In one of the first cost decisions of this board, Nygard v. Surrey (District)
(No. 2) (1989), 42 L.C.R. 279 (B.C.E.C.B.), the former Chair, J.H. Heinrich
Q.C., considered at some length the meaning of the word reasonable with
respect to costs. He reviewed dictionary definitions, a number of taxation cases
and the factors listed in the Legal Profession Act, S.B.C. 1987, c. 25,
s. 71.1(2). Aspects to be considered in assessing reasonableness included the
importance of the matter, the degree of skill and competence that was required,
and what had been achieved. Although Nygard was a final review under what
is now section 45 of the Act, this discussion of what is meant by reasonable
costs has some application to reviews under section 48 as well. Indeed, Susan
E. Ross, a former member of the board, stated in a section 48 review in Roadmaster
Auto Centre Ltd. v Burnaby (City) (No. 2) (1994), 54 L.C.R. 148 (B.C.E.C.B.)
at 159: My function is to determine whether
the costs claimed on this review are reasonable within the meaning of s. [48(5)].
I have no hesitation in concluding that the assessment of reasonableness, even
at the s. [48] stage, can include consideration of factors such as the amount
of the compensation claim, the complexity of the issues outstanding between the
parties, costs which have already been paid by the respondent, duplication within
and between accounts especially where multiple law firms have been retained to
work for the claimant on these proceedings, and the degree of progress achieved
by the services and expenses for which advance payment is being sought. Thus,
the word reasonable with respect to an assessment of costs has been interpreted
to mean more than the hourly rates and time expended. In fact, the cases specifically
say that reasonableness is not founded solely on hours spent and rate charged.
See Gerestein v. District of Abbotsford (No. 2) (1990), 43 L.C.R. 262 (B.C.E.C.B.)
at 268. A consideration of reasonableness includes a number of other aspects
such as any duplication in the accounts, the amount of the claim, and what has
been achieved to date. 4. Sufficiency
of Evidence in a Section 48 Review [16] There is still
the second issue of determining in the context of an interim cost hearing whether
sufficient evidence has been presented that the accounts are reasonable and properly
incurred. The following oral passage from the Chair, Robert W. Shorthouse, in
one of the first cost decisions under the Tariff, Yue v. Surrey (City)
(2000), 74 L.C.R. 64 at p 66, is of assistance: I
recognize that an interim cost review - and the Board has often made this point
- is a summary process; that not every detail need be disclosed and that there
is some appreciation on the part of the Board, that disclosure of a great deal
of information could prejudice the claimants' case, or its strategy for proceeding
with the case. On the other hand, the Board has often in the past made the point
that without full disclosure of everything that might be taking place, ... it
must be within the ingenuity of counsel to be able to provide some reasonable
indication that a particular amount of work has been performed, the nature of
the work performed and the time expended, in order ... to allow me to make an
assessment of the necessity for and the reasonableness of what is being done. [17]
The first point is that the onus is on the claimant to provide sufficient evidence
as to the reasonableness and necessity of the accounts. See Ferguson v. British
Columbia (Minister of Forests) (1998), 63 L.C.R. 219. [18]
A second factor to be proved in a section 48 review is whether the claimant has
"incurred" costs. In Chu the chair discusses at some length beginning
at para 33 what evidence is required in the presentation of a Tariff bill
to establish that costs or expenses have been incurred. In his affidavit filed
three weeks before the hearing Mr. Leakey states that the five accounts from the
four experts have been paid. He also states that Wayneroy has incurred legal expenses
in connection with the expropriation. This evidence goes beyond what is required
as set out in Chu and as a result I am satisfied that Wayneroy has incurred
these costs. I note that this was one of the particulars requested by the Ministry
at an earlier stage that does not appear to have been specifically provided at
that time. [19] As indicated above, the Ministry sought
particulars of the expert accounts on receipt and Wayneroy provided some information
on a number of accounts, the details of which are described separately on each
account below. The Ministry took the position that it still did not have enough
particulars. Wayneroy stated it did not want to provide any further details at
this stage and it was not required to do so. Counsel for the Ministry conceded
Wayneroy was not required to provide the details but suggested if it did not do
so then it may not be successful in its claim for interim costs. The Ministry
relied on Roadmaster where the claimant's counsel had taken a similar position
and said he was not prepared to explain the reasonableness of the bill in detail
at a section [48] review, in order to protect the claimant's strategies. At p.
155 this board said: I see [counsel for the
claimant's] stance as a choice the claimant is entitled to make, but one that
also has consequences insofar as it handicaps the process for assessment of the
reasonableness of the accounts. The review process under s. [48] is designed to
be a summary process, but it is not designed to be an automatic or purely mechanical
process. I am required to assess reasonableness, though not in a final sense which
happens under s. [45]. Where the evidence does not allow me to do that because
the claimant chooses not to provide information, then I must decline to order
advance payment of costs which have not been established to be reasonable. [20]
With these principles in mind I will now review each of the accounts in turn. 5. Coast
Forest Management Ltd. Invoices [21] The first account
dated November 20, 2000 was for $7,798 in fees and $389.29 in expenses for a total
of $8,187.29. The second account dated January 12, 2001 was for $3,792.50 in fees.
Thus, the two accounts totalled almost $12,000 excluding GST. Back up documentation
from Coast Forest Management Ltd. included time dockets that indicated the employees
who had worked on the file, the hourly rate for each employee, the date of the
work, a brief descriptor of the work (such as timber cruising, valuation report
and meeting with client) and how long it had taken. [22]
In response to a request for particulars, Mr. Harvey stated in a letter to Mr.
Aberdeen in April 2001 that Coast Forest was instructed to estimate the net market
value of timber removed from the parts taken in the expropriation and to estimate
the reduction of the net value that resulted from premature harvesting. It was
also instructed to estimate the net value of merchantable timber remaining on
the 160 acre parcel and from that result to estimate the reduction in value because
of loss of road access to market. These instructions were later summarized and
repeated in Mr. Leakey's affidavit. [23] On July 31, 2001,
the respondent forwarded a cheque for $2,000 in payment of these two accounts
subject to two conditions: that the invoices had been incurred pursuant to section
45(3) and 48(1) of the Act, and that the cheque was tendered without prejudice
to the Ministry's right to have the bills reviewed in the future. It is not clear
to me whether the claimant in fact returned the cheque but any final allowance
of costs is subject to deduction for monies already received. In his affidavit
Mr. Aberdeen says that he determined the amount of this cheque on the basis of
other Coast Forest invoices. Two invoices for timber cruises on other partial
takings were approximately $2,000. These invoices were attached to one of his
affidavits. A few weeks before this application was heard Ms. Crowhurst, respondent's
counsel, put her objections to the Coast Forest accounts in writing. The primary
objection was that there was a significant duplication of effort between staff
members for Coast Forest, including extensive meetings with the claimant, touring
of the subject property, and report writing. As a general point, Ms. Crowhurst
submitted that Wayneroy's claim for disturbance damages was unclear and continually
shifting. This meant that it was very difficult to assess necessity and reasonableness
of all the experts' accounts, totalling over $23,000 without GST. [24]
Erich Geddert, one of the more senior employees on Coast Forest's time sheets
as evidenced by his hourly rate, wrote a letter in response to Ms. Crowhurst's
objections and this was attached to one of Mr. Leakey's affidavits. Mr. Geddert
stated that there was no duplication of effort by staff members. Cruising was
always done in two person crews and report writing was also routinely done by
more than one employee. Meetings with the clients were necessary to obtain the
necessary information including the boundaries of the property. The invoices for
$2,000 that the Ministry was using as comparisons were based on small properties
between 1.7 and 11.5 hectares while the Wayneroy property was 89 hectares. [25]
At the hearing Ms. Crowhurst amplified her objections to these invoices. There
was no dispute with Coast Forest's professionalism. However, the Ministry did
dispute the instructions and terms of reference provided to Coast Forest. While
a claimant can set any terms of reference it wishes, the respondent should only
have to pay for work that is reasonable and necessarily incurred to assert the
claim for compensation. There were a number of meetings with the clients including
some meetings after initial drafts of the report had been prepared. She objected
to the justification for the meetings being to determine the boundaries of the
property; the appropriate way to convey information about the boundaries of a
property was to provide a survey. There appeared to be excessive time allocated
to report writing and review. While a timber cruise of the whole property may
be justified, depending in part on the highest and best use, it may be that this
extensive survey is for development of the property rather than to assert its
claim for compensation. [26] Mr. Garrett's position had
been that consideration of necessity for the expert's account at this stage was
premature and he did not make any arguments in the alternative. He did suggest
that it was inevitable in this complex claim that the claims for disturbance damages
would change, and be amended as further understanding of the facts emerged. [27]
As indicated above there is extensive case authority that I must consider both
the necessity and reasonableness of accounts presented at section 48 reviews.
Coast Forest's accounts are almost $12,000. The accounts are detailed and I accept
that the specified time has been spent on timber cruising and preparing a report.
However, I agree with the Ministry that there appeared to be meetings with the
clients on four different occasions after the initial tour of the property; for
one of those meetings there are charges for attendance by three different employees.
Without further information I do not think that the Ministry should have to pay
for all of the time spent in these meetings. I reduce the account by $200 for
attendance at meetings with clients. [28] More importantly,
I agree that we do not have much evidence on the terms of reference and whether
the work that was done was reasonably necessary to assert the claim for compensation
and damages. All we have is Mr. Harvey's explanations in his letter in April (and
essentially repeated by Mr. Leakey in one of his affidavits), Mr. Geddert's letter,
and the pleadings. I have reviewed the most recent pleadings and, while I acknowledge
that there are unusual facts in this claim, I agree that the claims for loss of
timber are confusing. For example, a few of the paragraphs that deal with timber,
read as follows:
| 5. | The
market value of the claimant's bare land remains undetermined at this time, but
the standing timber on the part remaining of the 160 acre parcel has been valued
(as hereinafter set out) for the purpose of inclusion in the Before and After
appraisal of the land, and on which to prepare a footing for the claim for disturbance
damages or business loss on account of now being required to build a logging road
to gain access to the Duncan Bay Main toll road, in the place of the usable access
and egress through the Bob Winnig property that obtained before the takings, and
to pay tolls to use a private road to take the logs to market. |
| 6. | The
net market value of the cruised stand of 13,777 cu metres of merchantable timber
on the part remaining of the 160 acre parcel was $1,142,527, or more, depending
on what figure the Board accepts as the cost of logging in a 1 year "pass"
following upon the date of the taking. | | 7. | In
the calculation of the Before and After appraisal figures in respect of the standing
timber on the 160 acre parcel, for the After there is to be reckoned a toll paid
in the course of a 1 year "pass" of the stand to haul the logs over
a paved portion of the Duncan Bay Main Road, the toll calculated at $1.24/cu m
x 2 km = $34,167, which the Claimant claims, indirectly, to be taken into account
as a result of the calculation of the Before and After appraisal of the land,
with the standing timber forming part of the market value of the land; or, if
not that, then, in the alternative, directly, as disturbance damages or a business
loss. | | 9. | As
to para 8 above, the timber on the parts taken was taken prematurely, such that
a notional buyer would have allowed it to grow to optimum harvest age in the year
2019 before harvesting. In this respect, the net value of the timber taken prematurely
as of the date of taking is estimated at, and claimed at a figure of $220,050,
or more, (depending on what the Board accepts as a cost of logging). |
The lack of clarity in the pleadings
and the lack of evidence with respect to the facts make it more difficult to establish
that the work was reasonably necessary. I do not agree with the Ministry's submission
that Coast Forest's fees for other timber cruises on other properties are of any
assistance when I have no details of the terms of reference or the size of property
in these cases. In the circumstances, I allow 50% of Coast Forest's fees and expenses
after excluding GST and the $200 deducted above. Wayneroy can raise these accounts
again at a section 45 hearing after a compensation hearing or settlement of the
claim, if such a hearing becomes necessary. 6. Western
Survey Service Ltd. Invoice [29] This account from
Western Survey Service Ltd., dated November 22, 2000, was for $5,632 without GST.
There is a charge for 64 hours over nine days between September 20 and October
27, 2000 at $88 per hour. The invoice states that it was for a site survey of
the property, including field work to establish contours for quantity reports.
Bruce Cottrell's name is on the invoice but there is no indication of what it
is he does. No payment has been made on this account. [30]
In response to a request for particulars, Mr. Harvey stated in a letter to Mr.
Aberdeen in March 2001 that Bruce Cottrell, the principal of Western Survey Services,
was instructed to estimate quantities of rock and gravel from the land taken in
the expropriation. He was also asked to provide an estimate of the potential for
a rock quarry from this land. Finally, he was asked to locate gravel pits of commercial
value on the remainder of the subject property and to estimate gravel production
in order to estimate the cost of hauling that gravel on the private logging road
known as the Duncan Bay Main Road. This hauling cost was being claimed as a disturbance
damage. These details were largely reiterated in Mr. Leakey's affidavit. [31]
Ms. Crowhurst, put her objections to the Western Survey account in writing a few
weeks before this application was heard. The Ministry's position was that the
since the loss of rock was plead as a disturbance damage related to loss of access
no valuation of the rock was required to quantify this lost access. There was
also a concern that this work may have been for the Supreme Court action which
evidently is in the nature of a claim for nuisance for backflooding but which
also included an application for an order to permit Wayneroy to enter the expropriated
property and to conduct sampling and testing of the subsurface rocks. At the hearing
Ms. Crowhurst pointed out that we did not know the qualifications or expertise
of Mr. Cottrell. She also commented on the changing nature of the claim through
two amendments to the Form A and statements made in the Supreme Court application
and suggested that Mr. Cottrell's work may have been something of a fishing expedition
to try and find information to make a claim. Without further particulars from
Wayneroy the Ministry was hampered in its determination of whether this work was
incurred to assert Wayneroy's claim for compensation or damages. [32]
I have less evidence with respect to this invoice than I had with respect to Coast
Forest's invoices. I also have very little evidence as to whether this work was
reasonably necessary to assert Wayneroy's claim. The most recent pleadings are
again not clear with respect to the claims for loss of merchantable rock. While
I accept that there is some basis for Western Survey being retained, in the circumstances,
I allow 40% of Western Survey's fees after excluding GST. Again, Wayneroy may
raise these accounts again at a section 45 hearing if one becomes necessary. 7. Ross
Glover Invoice [33] This account dated November 28,
2000 from Ross Glover, British Columbia Land Surveyor, was for $580 in fees and
$95 in expenses for a total of $675 without GST. The invoice states that the work
was for a field survey of Eve Road and a sketch to submit to the respondent. The
number of hours for two persons are provided but there was no breakdown of the
time spent nor the hourly rate. The expenses are listed as including vehicle,
title searches. photocopying, field supplies and computer but there is no breakdown
of these items. No payment has been made on this account. [34]
When asked to provide particulars in April 2001, Mr. Harvey stated that Mr. Glover
was asked "to lay out a plan to obtain road access to what remains of the ... parcel
by bypassing the imaginary Eve Road 33 foot road allowance to comply with Fisheries'
requirements". He went on to say that Wayneroy was applying to the Ministry's
district office with respect to this road and the survey was required as part
of the application. [35] In her letter delivered a number
of weeks before the hearing Ms. Crowhurst stated that survey work for Eve Road
was unrelated to the taking or the construction of the Highway as Eve Road was
not constructed before the taking. [36] The facts with
respect to Eve Road and the claims being made were confusing but Mr. Aberdeen
provided some further evidence in one of his affidavits. Eve Road was the legal
but unconstructed access to the property before the taking while actual access
was by the private logging road known as the Duncan Bay Main Road. After the taking,
the smaller eastern remainder only had access from the unconstructed Eve Road
and the larger western remainder only had access from the private logging road.
The Ministry's district office had given all required approvals for a rerouted
Eve Road to be constructed but no work had been done. [37]
Although the pleadings are not clear on this issue, I am satisfied that Mr. Glover's
work is necessary for Wayneroy to assert its claim and reduce his account only
10% after excluding GST for lack of particulars on hourly rates and breakdown
of expenses. 8. Westwater
Mining Ltd. Invoice [38] This account dated March 30,
2001 is for $5,100 without GST. The work is for a report by C. Gwyneth Cathyl-Bickford,
a geologist, on "the geology and sandstone resource potential" on the
property that was taken. The account states that it was for 7.5 days work at $680/day
which for an eight hour day I extrapolate was at $85.00 per hour. This report
has been provided to the respondent, apparently in respect to the Supreme Court
application and a few pages of it were provided to me. [39]
Mr. Leakey's affidavits provided a detailed account of why this geological report
was used in the Supreme Court action although it was really in furtherance of
the expropriation claim. [40] In her letter delivered a
number of weeks before the hearing Ms. Crowhurst stated that several letters from
counsel state that this work was requested in order to be used in the Supreme
Court action and Mr. Leakey's affidavit supports this. During the hearing she
emphasized the board's lack of jurisdiction for costs that were incurred in another
forum, even when the work in the other forum was directly related to the expropriations.
It was irrelevant that the application in the Supreme Court was really to further
the expropriation claim and Westwater Mining's report would not be used any further
in the Supreme Court action in nuisance. She referred me to two cases in which
the claimant had been refused costs incurred in the Supreme Court for applications
that were also related to the expropriation proceedings: El and El Investments
Ltd. v. Board of School Trustees of School District No. 36 (Surrey) (No. 3) (1994),
55 L.C.R. 229 (B.C.E.C.B.) and Greatbanks v. Minister of Transportation and
Highways (1998), 65 L.C.R. 20 (B.C.E.C.B.). In addition to her submission
that the board lacked jurisdiction to award these costs, she submitted that this
report was really a preliminary report about what explorations would have to be
done to provide a valuation report on the rock and gravel on the subject property. [41]
I agree with the Ministry that the evidence establishes that Westwater Mining's
report was prepared to be used in the Supreme Court application. The case law
in such circumstances is clear that the board has no jurisdiction over the costs
incurred in a different legal forum, even when the work is directly related to
asserting the claim for compensation or damages before this board. In Greatbanks
the issue was whether the board could award costs incurred when the claimant had
successfully applied to the Supreme Court with respect to an aspect of the OCP
as it affected the valuation of the expropriated property under the Act. The former
Vice-Chair, Fiona M. St Clair, stated at p 33 that this legal question had been
determined in the past "by several rulings that this board has no jurisdiction
to grant costs that relate to activities before the Courts". As a result
I disallow the Westwater Mining account. It may be that a further account from
Westwater Mining for other work may be properly claimed. Depending on the evidence,
even this account may be considered again at a section 45 hearing if one becomes
necessary. 9. Legal
Tariff Account [42] The Tariff account for legal costs
from Robert. J. Harvey Q.C, dated August 31, 2001 claims units for six items at
Scale 3 as follows:
| Item | Description | | Fixed | Min. | Max. | Claimed |
| 1 | Correspondence,
conferences, instructions
or meetings with a claimant and counsel
relating
to a claim, whether before or after
commencement, for which provision is
not made elsewhere in this tariff | | | 1 | 20 | 20 |
| 3 | Reviewing
and advising in relation to a payment
made pursuant to section 20 of the Act,
for each payment | | 2 | | | 2 |
| 4 | Instructing
expert witness if witness prepares
a report, for each expert (maximum of
3 witnesses, without leave) - to instruct 2 experts | | | 1 | 5 | 5 |
| 5 | Every
process for commencing and
Prosecuting a claim before the board | | | 1 | 10 | 10 |
| 12 | Preparation
for application referred to in
Item 13, for each day of hearing
Opposed | | 3 | | | 3 |
| 13 | Interlocutory
application for each day
If opposed | | 5 | | | 5 |
| Total | | | | | 45 |
Thus the total Tariff account claimed is 45 units
x $180 or $8,100.00. There was no claim for any disbursements. [43]
Ms. Crowhurst put her objections to the Tariff account in writing a few weeks
before this application was heard. The Ministry's position was that the following
number of units were appropriate:
| Item | | Units |
| 1 | | 3
units | | 3 | | 2
units | | 4 | | 3
units | | 5 | | 5
units | | 12 | should
be item 14 | 1 unit fixed for
1/2 day application to assess costs | | 13 | should
be item 15 | 2 units fixed for
1/2 day application to assess costs or perhaps nil | | Total | 14
or 16 units | The Ministry also disputed
Scale 3 and said that the units should be assessed at Scale 2 as it was a matter
of ordinary difficulty and importance. This provided an estimation of legal costs
of very approximately $2,000. A payment had been made to the claimant shortly
before the hearing based on this position. [44] At the
hearing Mr. Garrett conceded that counsel had misunderstood how the Tariff on
interim legal costs was supposed to work and something less than maximum units
should be allowed for those items where there was a range of units.
9.1 Appropriate Scale [45]
Wayneroy says that Scale 3 is appropriate because it is a complicated matter involving
a partial taking that bisects the property. There are issues to do with loss of
access, timber value, sandstone value, and loss of subsurface rights. The Ministry
replies that the claim is one of ordinary difficulty that the claimant has chosen
to litigate in a complicated way. [46] This board has previously
canvassed the difficulty of deciding the appropriate scale on a section 48 cost
claim where there is often relatively little information. See Chu v School
District No. 36 (Surrey) (2001), 72 L.C.R. 89 (B.C.E.C.B.). Having reviewed
the pleadings and the evidence contained in the affidavits, in my opinion, the
presumption found in section 4(3) of the Tariff in favour of Scale 2 for has not
been rebutted for the purpose of this section 48 cost review. This issue might
be reconsidered following the compensation hearing if a section 45 review becomes
necessary. 9.2 Items under the Tariff for
Legal costs [47] The only evidence I have
with respect to the legal work is the pleadings and the affidavits attaching correspondence
between Mr. Harvey and Ms. Crowhurst or Mr Aberdeen. In addition Mr. Leakey's
affidavit says that legal expenses have been incurred. In other section 48 reviews
under the Tariff the board has been assisted by the actual account to the client
with the back up time sheets and disbursement accounts or, in the alternative,
an affidavit from counsel stating the approximate number of hours that might be
categorized under items with a minimum and maximum range of units. While actual
time spent is not necessarily indicative of the number of units that are appropriate
(see Chan v Vancouver (City) (2001), 74 L.C.B. 68 (B.C.E.C.B.) and Topping
v. British Columbia (Minister of Transportation and Highways) (2000), 73 L.C.R.
72 (B.C.E.C.B.)), I have no such information to assist me in this application.
The Ministry has however, conceded specified units on various items. [48]
I will deal first with the items that have fixed number of units. Item 3 is for
advising in relation to an advance payment. The evidence establishes that advance
payments were made in February 2000. I do not have any evidence as to legal advice
being made in relation to these payments but the Ministry has agreed that 2 units
as claimed should be allowed for this item. I agree with this submission and allow
2 units. [49] I also agree with the Ministry that Items
12 and 13 for preparation and attending an interlocutory application should be
properly claimed as Items 14 and 15 for preparation and attendance at an assessment
of costs. The hearing lasted approximately 2 1/2 hours and therefore under section
4(7) the number of units for Items 14 and 15 are fixed at 1 unit and 2 units respectively.
The Ministry submitted that I might disallow the units for the hearing because
the hearing might have been avoided if Wayneroy had provided more particulars
as requested. On the other hand Wayneroy has been allowed interim costs in excess
of those which the Ministry had agreed to pay in advance. I note, however, that
a number of positions taken by the claimant at this cost assessment were at odds
with earlier cost decisions and had little chance of success. I allow 1 unit for
Item 14 and 2 units for Item 15. [50] Item 4 is for instructing
an expert if he or she prepares a report. The Tariff account is claiming for instructing
two experts, Mr. Geddert of Coast Forest and Mr. Cottrell of Western Surveying.
The Tariff provides for a minimum of 1 unit and a maximum of 5 units for each
expert. Section 4(6) of the Tariff provides that when an item provides for a range
of units, the reviewer must have regard to the principle that "one unit is
for matter upon which little time should ordinarily have been spent", "the
mid-point of the range is for matters upon which an average amount of time should
ordinarily have been spent", and "the maximum number of units is for
matters upon which a great deal of time should ordinarily have been spent".
Again I am hampered as to the lack of evidence as to what Mr. Harvey has done
in terms of instructing those two experts. I allow a total of 3 units as already
agreed by the Ministry. [51] Item 5 is for commencing a
claim before the board and there is a range of 1 to 10 units. I have evidence
of separate pleadings for the two properties, an amended single pleading, and
a further amended pleading. Mr. Leakey's affidavit indicated that some amendments
to the Form A had been made as a result of an initial misapprehension by counsel.
Ms. Crowhurst suggested that the Ministry should not have to pay for mistakes.
I allow 5 units for this item at this stage, the same number that the Ministry
has agreed. [52] Finally Item 1 is for correspondence and
meetings for which provision is not made elsewhere in the Tariff. There is a range
of 1 to 20 units. The Ministry has agreed to 3 units for this item. From the evidence
in the affidavits with respect to this Item I allow 4 units. [53]
Thus the total number of units allowed is 17 units at Scale 2 or $2,380. Although
PST is not claimed pursuant to section 5(2) I will allow it since I assume Mr.
Harvey charges Wayneroy PST in compliance with the provincial legislation. No
disbursements were claimed on this account. 10. Summary [54]
The summary of the accounts that have been allowed are as follows:
| 1. | Coast
Forest | November 30, 2000 | $3,993.65 |
| 2. | Coast
Forest | January 12, 2001 | $1,896.25 |
| 3. | Western
Survey | November 22, 2000 | $2,252.80 |
| 4. | Ross
Glover | November 8, 2000 | $ 607.50 |
| 5. | Westwater
Mining | March 30, 2001 | nil |
| 6. | Robert
J. Harvey Q.C. | August 31, 2001 | $2,546.60
(including PST) | | Total | $11,296.80 |
This total is subject to set off for
any payments made by the Ministry to Wayneroy with respect to these costs to date. |