March 6, 1997, E.C.B. Control No. 56/92/135 (61 L.C.R. 9)

Between:Stephen McKinnon and Doreen McKinnon
And:The Board of Trustees of School District No. 36 (Surrey)
Before:Robert W. Shorthouse, Chair
Appearances:James H. Goulden, for the Claimants
Michael C. Woodward, for the Respondent



The claimants, Stephen McKinnon and Dorreen Annabelle McKinnnon, have applied to the chair of the Expropriation Compensation Board (the "board") for the following orders:

1. Pursuant to section 44 of the Expropriation Act, S.B.C. 1987, c. 23 (the "Act"), a determination of the costs to be paid by the respondent, The Board of Trustees of School District No. 36 (Surrey), to the claimants in this matter;

2. Pursuant to section 12 of the Expropriation Compensation Board Practice and Procedure Regulation, B.C. Reg. 452/87 (the "Practice Regulation"), an order that production be made of the respondent's accounts for legal services rendered in connection with this matter;

3. Interest; and

4. Costs of this hearing.

Apart from the section 44 hearing costs themselves, the costs claimed are in respect of accounts rendered by the claimants' solicitors, the firm of Bull, Housser & Tupper ("Bull Housser"), as well as by a real estate appraisal firm, Interwest Property Services Ltd. ("Interwest"). They total $46,880.03 inclusive of fees, disbursements, taxes and interest, on account of which the respondent has previously advanced the sum of $11,497.46.



The claim for costs arises out of the respondent's acquisition in December of 1991 of two contiguous unimproved lots owned by the claimants in the District of Surrey. The acquisition, for a school project, was achieved by way of an agreement under section 3 of the Act. At that time the respondent made an advance payment to the claimants in the amount of $101,900 pursuant to section 19 of the Act. Of this amount $100,000 was the respondent's estimate of the market value of the two lots based upon an appraisal which it had commissioned. The remaining $1,900 was the respondent's estimate of the disturbance damages payable. However, on June 22, 1992, the claimants filed with the board an application for determination of compensation alleging that the combined value of the lots was actually $156,000. They also claimed an unquantified amount of disturbance damages, interest and costs. The claimants' compensation claim in respect of market value was based upon an appraisal report prepared for them by Interwest. Subsequently, in February 1994, Interwest prepared a revised report in which the estimated combined value of the lots was adjusted upward to $170,000. At the compensation hearing, the claimants alleged this higher amount. Shortly before the hearing began, the respondent, relying upon a further appraisal report of its own, increased its advance payment on account of market value to $112,000.

The compensation hearing took place in Vancouver over a five-day period from March 21 to March 25, 1994. By consent the claimants' claim was heard together with that of two other owners, Macdonald Frederick Buchanan and Gwendolyn Anne Buchanan (the "Buchanans"). The Buchanans' property, which nearly adjoined that of the claimants, was also acquired by the respondent for the school project. Although the Buchanans and the claimants retained separate counsel, they utilized the same appraiser. Most of the issues raised were common to both claims and much of the evidence overlapped.

The board rendered its decision in respect of the claimants' claim on October 13, 1994 (reported at 54 L.C.R. 23). It concluded that the total market value of the two lots at the date of valuation was $122,500, that is, $10,500 more than what the claimants had already been paid but $47,500 less than what they claimed. The board held that the claimants were entitled to interest under both subsections 45 (1) and (4) of the Act. It also said that they were entitled to their actual reasonable legal, appraisal and other costs pursuant to section 44 of the Act, adding, however, its opinion that reasonable appraisal costs payable by the respondent did not include the costs of two appraisal reports from Interwest. The claim for disturbance damages was disallowed. The board rendered a companion decision in the Buchanan claim on October 7, 1994 (reported at 54 L.C.R. 43).



At an early stage of the section 44 hearing, the parties addressed the claimants' motion for an order for production of the respondent's accounts for legal services rendered in this matter and I made an oral decision, dismissing the application. The issue of whether an expropriating authority can be compelled to disclose its costs incurred in a proceeding before the board is sufficiently important for the future conduct of cost reviews that I consider it useful to set out my reasons in this written cost decision. I propose to deal with this issue now, before embarking upon a detailed review of the claimants' costs, because the claimants argued that the issue bears upon my determination of whether their own costs are reasonable in the circumstances.

The essence of the claimants' position was that a comparison of the time and money expended by the respondent in defending its case ought to be a key factor in my assessment of the overall reasonableness of what the claimants spent. This, they argued, is consistent with the often stated purpose underlying the costs regime within the Act which is to place expropriated owners on a "level playing field" with expropriating authorities. What they sought in this instance was disclosure of the respondent's legal accounts.

The claimants asserted their right to discovery of the respondent's legal accounts pursuant to Rule 26 of the Supreme Court Rules which has been adopted in section 12 of the board's Practice Regulation. It was their position that the legal accounts were or could be relevant and that, at this stage of the proceedings, they were not protected by solicitor-client privilege. At the least, they submitted, the global numbers involved ought to be produced. They referred me to section 171 (4) of the School Act, S.B.C. 1989, c. 61, which requires the financial statements of a school board to be published for distribution to the public. They also cited a cost decision of the Nova Scotia Supreme Court, Stevenson v. Lawrencetown (Village) (1994), 54 L.C.R. 91, in which the Court had compared the appraisal costs incurred by the expropriating authority with those incurred by the expropriated owner in arriving at a determination of the reasonableness of the owner's costs.

The respondent submitted that on a section 44 application the onus remains at all times with owners to prove, on a balance of probabilities, the reasonableness of the costs they have incurred in asserting a claim for compensation. There is no legal onus cast on the expropriating authority, by producing its own accounts, to show that the accounts tendered for payment by an owner are not actual or reasonable costs. The respondent questioned whether its own costs were relevant in the sense that they would somehow assist in my determination. In any case, the respondent argued, there was no authority to suggest that I had jurisdiction to order production of the respondent's legal accounts which, it maintained, fell within the scope of a continuing solicitor-client privilege. According to the respondent, the privilege which attached to the school board's legal file in this matter, including the aggregate amounts billed for legal services, was unaffected by the provision of the School Act which merely addresses the publication of financial statements. The Stevenson case, said the respondent, does not stand for the proposition that anyone has authority to order disclosure of an expropriating authority's accounts. In that instance, it appears, the authority had voluntarily put its own appraisal costs in evidence. Moreover, according to the respondent, there was a distinction to be drawn between appraisal accounts and legal accounts, the former of which may not enjoy a common law or statutory privilege from disclosure whereas the latter clearly would.

Having considered these submissions, I dismissed the claimants' application on several grounds. First, on the narrower issue of privilege, the claimants offered no authority for the proposition that accounts rendered to the respondent client by its solicitors, the disclosure of which was not waived by the client, did not properly form part of the protected information in the solicitor's file. Nor did they cite authority to show that any such privilege would be lost once matters reached the stage where the main compensation decision had been rendered and that what remained was simply a decision as to the claimants' costs. In the absence of such authority, I was persuaded that the respondent's legal accounts were, and remained, subject to a claim of solicitor and client privilege. Accordingly, even if I had jurisdiction generally to order the disclosure of the respondent's accounts, I would not order the legal accounts to be produced.

Second, on the broader issue of jurisdiction, there is nothing in the Act which expressly directs or authorizes a review of the expropriating authority's costs as part of the process of determining the necessity and reasonableness of the costs which an expropriated owner has incurred. I am not convinced that such jurisdiction would arise by necessary implication. In my view, neither section 171 (4) of the School Act nor the Stevenson decision assisted the claimants on this application.

Third, even if I was in error on the issues of jurisdiction and privilege, I nevertheless remained unpersuaded that the respondent's legal accounts would offer a particularly useful or relevant body of evidence to assist me in the determination which I must make. The considerations involved in defending against a compensation claim may be quite different from those which underlie the presentation of the claim. A mere comparison of the global costs incurred would, in my view, pose more questions than it answered. Only a thoroughgoing examination of both the respondent's and the claimants' accounts might reveal whether their respective solicitors approached and conducted the case in a manner sufficiently parallel to make comparison meaningful. It was my conclusion that I would be embarking upon a very time-consuming exercise probably to little or no avail.

It occasionally happens in cost reviews before this board that an expropriating authority voluntarily discloses its own costs and asks the chair or vice chair to take those costs into account. Not surprisingly, this has usually been the case where the authority considers the costs it has incurred to be modest in comparison with those which the expropriated owner is claiming. Absent objection from the other side, such information has generally been received. However, I am unaware of any decision of this board indicating that the expropriating authority's costs ought to play a role, or have in fact figured, in determining the necessity or reasonableness of those of an owner.

Finally, as I also noted in my oral decision, the board has established a considerable body of jurisprudence on the issue of whether particular costs incurred by owners for the purpose of asserting their claims for compensation or damages are reasonable costs in relation to the common law and statutory considerations that I am to take into account. Although the jurisprudence on costs before the board continues to develop, in my view it is unnecessary to extend the reach of the cost review to embrace a whole new body of evidence comprising the respondent's legal accounts the probative value of which I consider to be lacking.



4.1 Statutory Considerations on Review

I have already noted that the board, in its compensation decision, awarded the claimants their reasonable legal and appraisal costs. When fixing those costs, I am required to consider certain statutory criteria. These are set out in section 44 (11) of the Act as follows:

44. (11) In a determination of costs under subsection (9) or (10), the following considerations shall be taken into account:

(a) the number and complexity of the issues;

(b) the degree of success, taking into account

(i) the determination of the issues, and

(ii) the difference between the amount awarded and the advance payment under section 19 (1) and (11) or otherwise;

(c) the manner in which the case was prepared and conducted.

It is the respondent's position that the legal and appraisal accounts presented for payment in this matter are, as respondent's counsel phrased it, "grossly excessive taking into consideration the very small amount at stake, the very small degree of success, the simplicity of the issues, the very small difference between the advance payment and the ultimate result, and the manner in which the case was presented."

I will consider the manner in which the claimants prepared and conducted their case, pursuant to section 44 (11) (c), when examining each of the legal and appraisal accounts in detail. Before turning to those accounts, however, I make the following observations about how the criteria set out in sections 44 (11) (a) and (b) apply to this matter. They are based upon my assessment of the submissions made at this cost hearing as well as my reading of the compensation decision.

First, I am inclined to agree with the respondent that this was a comparatively simple case. In fact, I did not understand the claimants to seriously challenge that proposition. The case involved a determination of the highest and best use and market value of the claimants' two unimproved contiguous lots as of December 20, 1991, the agreed valuation date. There was no shortage of appraisal data available to assist in making those determinations and nothing to suggest that the exercise was other than routine, but for one factor. That factor was the claimants' assertion that the value of their lots had been negatively impacted by "project influence", that is, that the respondent's acquisition of the two lots was part of a larger scheme for park and school development the planning for which predated the acquisition by several years. It was the claimants' position that, but for the scheme, their lots would have been serviced or in the process of being serviced by the valuation date because they were in the "eventual path" of residential development in the neighbourhood. They therefore invoked the application of section 32 (d) of the Act which states that, in determining the market value of land, no account is to be taken of any increase or decrease in its value resulting from "the development or prospect of development in respect of which the expropriation is made." The claimants argued that, in the circumstances, their lots should be valued as though serviced and imminent for development through use of the development approach. On this point, I should perhaps observe that the applicability of section 32 (d) was not a novel issue before the board when this case was heard; it had been considered in two earlier expropriation decisions. Apart from the market valuation issue, the case also involved a determination of disturbance damages, but that claim was limited to the issue of whether the claimants were entitled to compensation on account of property purchase tax and conveyancing costs for each of the lots.

Second, on the determination of the issues at the compensation hearing, it is apparent that the claimants enjoyed little success. For them the central issue was the applicability of section 32 (d), but the board was not satisfied on the evidence that "project influence" had impacted the highest and best use or market value of the lots. Instead, the board found the highest and best use of the lots at the valuation date to be "their existing use; that is, residential holding lots subject to rezoning and awaiting services." (p. 33). In determining market value, the board rejected the development approach. It accepted to a large degree the estimation of value derived by the respondent's appraiser in utilizing the direct comparison approach. Whereas he had opined a total value of $112,000, the board initially concluded a total value of $112,400 based upon its own analysis of the comparable sales. At p. 40, however, the board went on to find as follows:

Allowing for the reasonable delay necessary for rezoning, the board is satisfied that the market would have been prepared, at the date of valuation, to pay a premium of 9% for these Properties because of the more immediate potential for development, but for the scheme. Thus, the board concludes a value of $61,258 per Lot for a total value for the Properties of $122,516, rounded to $122,500.

The only other issue was disturbance damages. In that respect, although the claimants had already received from the respondent an advance payment towards disturbance damages, the board disallowed their claim under this head of compensation at the hearing. It accepted the respondent's argument and held that the claimants had failed to meet the onus of proving that they had actually incurred or paid expenses in the form of either conveyancing fees or property purchase tax.

Third, in measuring the degree of success by the difference between the amount awarded ($122,500) and the amount of the advance payments made ($113,900), I consider that the claimants' success was modest indeed. It is true that the board, in awarding compensation, did not exercise its discretion under section 44 (5) so as to deny the claimants any part of their reasonable costs. However, in assessing what quantum of costs are reasonable in the circumstances, I take note of the observation made by a former chair of this board that the Act implies some reasonable relationship between the costs claimed and the difference between the amount awarded and the advance payment: see Gerestein v. Abbotsford (District) (1990), 43 L.C.R. 262 at p. 268.

4.2 The Legal Accounts

The claimants retained the firm of Bull Housser in June of 1991, some six months prior to the date of acquisition, to represent them in this matter. Bull Housser has continued to act for them throughout all stages of the proceedings since that time, including the compensation hearing which concluded in late March of 1994. The firm rendered five statements of account, each of which was forwarded for payment to the respondent, and which now form the subject of this cost review. At the cost hearing the claimants made some minor adjustments to the accounts as presented to reflect their acceptance of changes to certain hourly rates and disbursement charges and to correct one arithmetical error. The billing summary, which takes those adjustments into account, is as follows:






Nov. 29, 1991





Mar. 31, 1992





Apr. 7, 1993





Feb. 17, 1994





Oct. 27, 1994










4.2.1 Fees

At one stage or another a total of six lawyers and a student recorded billable time on this file, although several of them had only a peripheral involvement. A.K. McKinnon had initial contact with the clients, billing 0.2 hours at $175 per hour. Ms. Jeanne Watchuk spent 1.2 hours at $175 per hour to render tax advice. Mr. David Bursey recorded 8.5 hours at $185 per hour (adjusted at the cost hearing to $175 per hour) reviewing documents and preparing an opinion. Mr. James Goulden provided general assistance in preparing the matter for hearing for which he billed 5.5 hours at $120 per hour. Seven hours of student time were devoted to study of the law mostly at $70 per hour.

The two main practitioners involved were Mr. Robert Seeman and Mr. Daniel R. Bennett. Mr. Seeman, a junior solicitor with the firm having been called to the bar in 1990, had general conduct of the claimants' file from June of 1991 until July of 1993. He negotiated the section 3 agreement and attempted to settle the matter on behalf of the claimants. He also prepared the application for determination of compensation, handled document discovery, and initially arranged for and reviewed the first appraisal report from Interwest. Mr. Seeman logged a total of 41.5 hours, of which he billed the first 11.7 hours at the rate of $120 per hour, the next 16.2 hours at $125, then 9.4 hours at $135, and the last 4.2 hours at the rate of $140 per hour.

Mr. Bennett was called to give evidence and was cross-examined at length during this cost hearing. At the time that he took over conduct of the file, he was a lawyer of five years' experience, practising in the civil litigation area before both courts and tribunals, and about to be made a partner of the firm. Although the present case was the first full hearing in which he appeared as lead counsel before the board, Mr. Bennett had previous involvement with expropriation matters. Even so, he testified that only five per cent or less of his practice at the relevant time actually concerned expropriation; the larger focus was on the field of municipal law generally. Mr. Bennett's tasks on this file included reviewing documents, including a large number from the City of Surrey obtained under order of the board after a contested application, attending at examinations for discovery, meeting on-site and elsewhere with the claimants' appraiser and reviewing the appraisal reports of both parties, preparing for hearing, and conducting the claimants' case during five full days of hearing. In all, Mr. Bennett recorded 96.5 hours of billed time, approximately half of which fell within the five-day period of the hearing itself. He testified that his usual fee rate to clients after becoming a partner in February of 1994 was $175 per hour but that, in recognition of what the firm understood to be the board's guidelines on fees, he had reduced it on this file. Accordingly, 4.7 hours were billed at the rate of $165 per hour in the Bull Housser account dated February 17, 1994 and the remaining 91.8 hours were billed at $160 per hour in the account dated October 27, 1994.

In summary, the legal accounts presented for review reveal that counsel for the claimants billed a total of 160.4 hours in the prosecution of this case at an average effective rate of about $146 per hour. The claimants say that these fee costs reflect an efficient handling of the file and are entirely reasonable for a matter that lasted over three years and culminated in a five day hearing before the board.

The claimants cite two earlier cost decisions of the board in support of their position. In Tidmarsh v. Comox-Strathcona (Regional District) (1994), 54 L.C.R. 13, the pleadings disclosed a compensation claim for $21,261, net of costs and interest, which was settled without the aid of discovery or a compensation hearing for $15,000. The claimants presented for review legal accounts detailing 197 hours of billed time and totalling $30,331.63 in fees, disbursements and applicable taxes. The disbursements included the cost of $2,200 for the claimants' appraisal. The chair, who held that the case was not complex and that the numbers involved did not warrant time billed equating to over $23,000 in fees, fixed the reasonable legal and appraisal costs, including relevant taxes, at $23,000. In Branscombe v. British Columbia (Minister of Transportation and Highways) (1994), 54 L.C.R. 1, the claimants were allowed nearly 300 hours of billed counsel time amounting to almost $50,000 for what their counsel described as a "pretty average run of the mill case" which, nevertheless, led to a seven and a half day hearing and resulted in an award for market value some $69,500 above the $200,000 advance payment, together with further compensation, interest and costs.

The respondent objects to the size of the legal fee account by reference to both the mandatory considerations set out in the Act and previous cost decisions which have pronounced on the reasonableness of particular fee charges. With respect to section 44 (11), apart from pointing out that the case was simple and the degree of success small -- observations which I have already considered and accepted -- the respondent also says, in effect, that the presentation of the case by claimants' counsel was so flawed as to justify a reduction in legal fees. As to the reasonableness of the fees charged by particular lawyers on the file, the respondent argues that there was unnecessary duplication of effort and that the hourly rates charged are excessive.

In the respondent's submission, this case warranted no more than 70 hours of legal counsel time comprising 10 seven-hour days -- five days for preparation and five for hearing. The respondent says that an appropriate blended fee rate for the lawyers engaged on this file was $135 per hour at most. Allowing additionally the small amount charged for tax advice, the respondent submits that the appropriate global award for legal fees, even had the claim been wholly successful, calculates only to the sum of $9,660 rather than the sum of $23,553.50 actually charged.

A review of the board's reasons in this matter lends weight to the respondent's assertion that the claimants' case was flawed in the manner in which it was prepared and conducted. Primarily, the problem was an evidentiary one and it related to both of the issues before the board at the compensation hearing. The claimants, to support their theory of "project influence" and bring into play the application of section 32 (d), needed to show that, but for the scheme, the progress of neighbouring subdivision developments would have offered them the opportunity, before or near the date of taking, to co-operate with developers in securing service connections to their own lots. However, the board observed at p. 33 of its decision:

If such a premise were to be supported, one would have expected to hear from developers in the area who had indeed adjusted their development or pursued alternative subdivisions accordingly. There was no evidence before the board that the developers who were involved in the nine subdivisions identified would have done anything differently, but for the scheme, whether that be in relation to the park or the school site. Similarly, there was no evidence that any co-operative development proposal by individuals had been considered but abandoned as a result of the impact of the scheme.

Similarly, in disallowing the claimants' disturbance damage claim, the board stated at p. 41: "No evidence was led to establish that either a conveyance fee or property purchase tax has been incurred or paid by the claimants."

The respondent's contention that there was unnecessary duplication of effort among lawyers conducting the claimants' case stems from the fact that Mr. Bennett took over from Mr. Seeman and had to spend time acquainting himself with the file. As I understood the argument, either Mr. Seeman, who was a solicitor rather than a litigator, should not have involved himself with the matter or he should have seen it through to its conclusion. Citing the decision of former chair Harvey of this board in 343146 B.C. Ltd. v. British Columbia (Minister of Transportation and Highways) (1993), 50 L.C.R. 221 at pp. 227-8, the respondent says that where legal services are provided by more than one lawyer within a firm, a respondent cannot be expected to be responsible for the additional time necessary to ensure that co-counsel or replacement counsel are current on the file.

I have already outlined the discrete tasks performed by the respective lawyers involved. In my opinion, those tasks were appropriate to their specialized areas of practice. The fact is that Mr. Seeman left Bull Housser in the early summer of 1993 to run for political office and, although he evidently returned to the firm briefly toward the end of the year, he departed again in the spring of 1994. The circumstances are such that, in my view, it was reasonable and perhaps unavoidable for the claimants to change counsel. In any case, from my review of the legal accounts in this matter, I am unable to identify any significant element of duplication.

Arguing that the fee rates charged by both Mr. Seeman and Mr. Bennett are excessive, the respondent submits that, in the case of legal counsel without particular or extensive experience in expropriation matters, hourly rates must be set at levels which reflect the actual experience. Since Mr. Seeman was only in his second year of practice when he assumed conduct of the file, the respondent suggests that his initial billing rate of $120 should be reduced to what the board in Tidmarsh considered appropriate for one junior associate, that is, $100 per hour. As for Mr. Bennett, who had six years' practice experience at the date the compensation hearing concluded and charged $160 per hour for his services, the respondent again cites the cost decision in 343146 B.C. Ltd. where a rate of $125 per hour was held to be appropriate for one lawyer who was at the time a six year call.

I agree that prior cost decisions fixing hourly rates offer a useful guide to what the board considers reasonable although each determination turns on its own facts and, in particular, on the state of the evidence as to an individual lawyer's experience and as to what is commonly being charged in the marketplace. In a letter written some months after the conclusion of this cost hearing, Mr. Goulden, counsel for the claimants, brought to my attention the cost decision of the board's vice chair in Summit Enterprises Ltd. v. Kamloops (City) (1995), 57 L.C.R. 24. He submitted, on the basis of that decision, that I should take into account an extract from a 1994 survey of legal rates for British Columbia undertaken by the Canadian Bar Association which he said supported the claimants' position that the hourly fee rate charged by Mr. Bennett on this file was reasonable. Mr. Woodward for the respondent wrote to object to the admission of this evidence, but no formal application followed from either party. The board has since held in other decisions that such evidence may be admitted, subject to weight, as at least some indicator of current hourly rates in the marketplace.

From my review of the evidence available to me on this cost application, as well as of other cost decisions of the board, I conclude that some adjustment should be made in the hourly rates. I would be inclined to allow Mr. Seeman's reasonable time at $100 per hour in 1991 when his involvement with the file began, rising to perhaps $130 per hour by 1993 when it concluded. I consider that an appropriate hourly rate for Mr. Bennett's reasonable time would be on the order of $150 per hour. Consistent with what I have determined in respect of these lawyers, I would also adjust the hourly rate for Mr. Goulden, newly called in 1993, to $100 per hour.

Although I agree with the respondent that this was a small and simple case, both initially and throughout, I am unable to accept the respondent's submission that claimants' counsel could reasonably have prosecuted the matter from start to finish in only 70 hours. I am satisfied that the time entries in the legal accounts reflect neither avoidable duplication of effort nor an overly time-consuming approach on the part of claimants' counsel to the matters at hand. In my view, the expenditure of approximately 160 hours of counsel time was not unreasonable in the circumstances of this case.

An appropriate adjustment in the hourly rates would result in the total allowable legal fees being reduced from $23,553.50 to just over $22,000. However, taking into account evidentiary deficiencies in the manner in which the case was prepared and conducted and the small degree of success actually achieved, a further reduction is indicated. Accordingly, I allow the legal fee costs in this matter at $18,000.

4.2.2 Disbursements

The disbursements of $1,040.67 itemized within the legal accounts seem modest and did not attract much criticism from the respondent. The only issue pursued at the hearing had to do with facsimile costs. Mr. Bennett testified that Bull Housser normally charges out facsimiles at $2 per page but that he had reduced the charges on this file to $1 per page. In total, the claim for facsimile costs amounted to $44. Mr. Woodward for the respondent cited the decision in Tidmarsh where the chair allowed fax charges at $0.20 per page. Later cost decisions of the board have allowed $0.35 per page. Before the hearing concluded, the parties agreed that an appropriate adjustment should be made, and accordingly, I would reduce the amount recoverable on facsimile costs to $15.40. Otherwise, the disbursements are allowed as presented.

It follows that goods and services tax and provincial sales tax, where applicable, will need to be adjusted on the legal costs which I have allowed, comprising $18,000 in fees and $1,012.07 in disbursements. A precise recalculation of provincial sales tax is difficult because it applied only to the last two of the legal accounts rendered. For the sake of simplicity and certainty, I propose to make an allowance for it on those two accounts pro rata to the total amount of fees allowed. Therefore, goods and services tax is allowed in the sum of $1,329.71 and provincial sales tax in the sum of $999.68 for a total of $2,329.39 on account of taxes.

4.3 The Appraisal Accounts

The appraisal firm of Interwest, first retained by or on behalf of the claimants in August of 1991, rendered three invoices in respect of its services. The account summary is as follows:






Dec. 6, 1991





Oct. 6, 1992





Mar. 31, 1995










4.3.1 Fees

Mr. D.H. Hall, AACI, a junior appraiser with the firm, initially took on the assignment of appraising the claimants' lots. He completed a first draft of the appraisal report just before the section 3 agreement was concluded, in December of 1991. In the succeeding months, he refined and upgraded his analysis which included giving some consideration to the section 32 issue. Mr. Hall assisted in finalizing what I will refer to as the claimants' first appraisal report dated April 13, 1992. His involvement in the file thereafter was peripheral. Mr. Hall recorded 54.75 hours of billable time for his services, 48.25 hours of which he charged out at $75 per hour and the remainder at $80 per hour.

Mr. Danny R. Grant, a principal of Interwest, eventually superseded Mr. Hall in carrying forward the appraisal assignment. He was examined and cross-examined extensively at this cost hearing. Mr. Grant, who is designated SR/WA by the International Right of Way Association, has been a fee appraiser since 1967 and has a long history of involvement in expropriation matters, including numerous attendances in the role of expert witness at hearings before the board. He testified that he became involved in this case originally in a supervisory and review capacity, co-signing with Mr. Hall the first appraisal report. Later, when Mr. Hall returned to England to deal with a family tragedy, Mr. Grant assumed full conduct of the file. His tasks included researching subdivision developments in the vicinity with an eye to the section 32 issue, researching and analyzing further comparable sales, reviewing the respondent's appraisal reports, doing site inspections together with claimants' counsel and assisting in preparation for the compensation hearing. He prepared what I will refer to as the claimants' second appraisal report, dated February 18, 1994. Mr. Grant was qualified as an expert witness and gave evidence at the compensation hearing in relation to that report. In total, Mr. Grant recorded 58.7 hours of billable time, the initial nine hours of which he charged at the rate of $150 per hour, and the remainder at the rate of $165 per hour.

Additionally, two employees of Interwest recorded a total of 39.5 hours engaged in such matters as updating information, ordering and compiling data, reviewing searches, structuring the appraisal report, and performing general office functions. C.C. Chan recorded 3.5 hours at $50 per hour, and Devin Grant logged 36 hours at $40 per hour. Mr. Grant testified that their work was in the nature of a research rather than a clerical function.

In summary, the Interwest accounts presented for review reveal that the appraisal firm billed a total of 152.95 hours for its services in this matter at an average effective rate of about $100 per hour. The claimants say that, although the appraiser's bills are "admittedly significant", they are reasonable based on the evidence. That Interwest also acted as appraiser to the neighbouring Buchanans in their compensation claim, charging them a much lower amount, is also a factor which in the claimants' submission goes to the question of overall reasonableness.

The respondent's initial objection to the Interwest accounts is founded on the premise that Mr. Grant was not qualified under the Act to prepare the appraisal reports tendered and therefore no appraisal costs respecting him were, as a matter of law, available. Respondent's counsel acknowledged that Mr. Grant's credentials were not challenged during the compensation hearing. He nevertheless now referred me to section 44 (8) which provides that appraisal costs are "those reasonable costs incurred by a person who has been accredited by an institute or body prescribed by the Lieutenant Governor in Council." Section 8 of the Expropriation Act General Regulation, B.C. Reg. 451/87 (the "General Regulation") states:

Appraisal Report

8. For the purpose of section 19 (2) of the Act, the following persons may prepare appraisal reports:

(a) a person designated A.A.C.I. by the Appraisal Institute of Canada;

(b) a person designated as a Certified Appraiser R.I. (B.C.) by the Real Estate Institute of British Columbia;

(c) in respect of partial takings only, a person designated SR/WA by the International Right of Way Association.

Mr. Grant holds neither of the designations AACI nor RI (B.C.) and, although he is designated SR/WA, this matter involved a full rather than partial taking.

I am unable to accept the respondent's submission in this respect. In my opinion section 8 of the General Regulation is clearly limited to appraisal reports which an expropriating authority, pursuant to section 19, is required to prepare and serve on an owner at the time of expropriation in connection with the making of an advance payment. There is no other regulation in place pursuant to section 44 (8) of the Act prescribing the required credentials of appraisers. Absent any such regulation I conclude that it is for the panel hearing a compensation claim in each instance to decide, on the basis of evidence provided, whether a person tendered by the claimant as an expert in the field of appraisal possesses the necessary formal qualifications or experience to give opinion evidence in relation to an appraisal report that he or she has prepared. As I have already noted, Mr. Grant was so qualified, and it follows that his costs fall within the scope of my review.

The respondent's alternative position is that an appropriate award of appraisal costs should comprise no more than what was contained in the first two invoices rendered by Interwest, totalling $6,009.18 (which the respondent has already reimbursed), together with Mr. Grant's reasonable time for testifying at the compensation hearing, calculated to be seven hours at $150 per hour, for a grand total of $7,132.68. This contrasts with the claimants' claim for appraisal costs totalling some $17,135.88.

The respondent objects to the overall size of the appraisal accounts presented on the following grounds:

(1) The board's expressed opinion (at p. 42 of its compensation decision) that one appraisal report, carefully researched and drafted, rather than the two reports actually prepared, would have served the claimants properly;

(2) The commonality of the work done in this matter with that in the Buchanan case, the invoicing for which here amounts to a subsidy of the Buchanans.

(3) The initial use of a junior qualified appraiser, Mr. Hall, at a fee rate of $75 to $80 per hour, followed by the decision to use Mr. Grant as the primary appraiser at a fee rate ranging from $150 to $165 per hour;

(4) Excessive time spent, given the simplicity of the appraisal exercise involved, wherein the appraisers for both parties essentially agreed on highest and best use and selected many of the same comparables;

(5) The appraiser's assessment of the section 32 issue and his reliance on the development approach to valuation, neither of which the board accepted;

(6) The careless, inconsistent and confusing nature of the appraiser's evidence.

In my opinion, some of these objections are well founded while others carry little or no weight. I will deal with each of them in turn.

As to the first ground, I consider the board's suggestion limiting reasonable costs to one appraisal report, although not perhaps binding upon my determination of the issue, to be helpful and persuasive since the panel which heard the compensation claim was obviously in the best position to assess the utility of the appraisal evidence provided. To some extent, however, the issue turns upon what the board actually meant by "one appraisal report". What I have termed the first appraisal report was produced in April of 1992, the second in February of 1994. I do not read the board's decision as meaning that the claimants may only seek reimbursement for the reasonable costs incurred in preparing that first appraisal report and not the reasonable costs of any additional appraisal research and analysis later considered to be necessary to the claimants' case. In my opinion, such additional work reasonably undertaken and performed is recoverable. It was Mr. Grant's evidence, which I accept, that upon review of the board's compensation decision, he "restated" the final Interwest account by deleting the time and expense directly involved in writing and assembling the second appraisal report. It therefore seems to me that the respondent's first ground of objection has already been addressed.

The second ground of objection flows from the fact that Interwest was retained by both the claimants and the Buchanans. The respective appraisals were performed at about the same time. Mr. Grant under cross-examination agreed that there was a "substantial identity" between the two appraisals. Both dealt with unserviced municipal lots with the same highest and best use. The same comparables were used in estimating market value. The only real difference, according to Mr. Grant, was in the "imminence of development" of the respective properties. Mr. Grant gave expert evidence in both compensation claims which were, of course, heard together. He divided his costs for attendance at the hearings evenly between the Buchanans and the claimants. Apart from that, however, there is a significant disparity between the amounts charged by Interwest to the claimants and to the Buchanans. Evidence received in the Buchanan cost claim, which I heard successively with this matter, indicates that their appraisal costs totalled $7,391.35, only about 43 per cent as much as the claimants'. One reason for this was that the Interwest appraiser spent so much more time conferring with claimants' counsel and assisting in the preparation of their case for hearing than in the Buchanan matter. The respondent says that Interwest's invoicing in the claimants' case constitutes a subsidy of the Buchanan claim.

I have some difficulty with the respondent's position on this point. As the accounts reveal, the Buchanans did save themselves some money by using the same appraiser as the claimants and being carried along to a considerable degree by the appraiser's work on behalf of the claimants. However, I accept the claimants' argument that the work done on their behalf and for which they were billed was work that would otherwise have been performed on each of the cases separately. Accordingly, it seems to me that some overall savings in appraisal costs were very likely achieved. To the extent that those costs are found to be reasonable and the respondent is held responsible for reimbursing them, it is the respondent who is the beneficiary of this arrangement.

As to the third ground of objection, it is undoubtedly the case that Mr. Hall's replacement by Mr. Grant as primary appraiser on the file, at roughly double Mr. Hall's hourly rate, greatly increased the appraisal costs incurred thereafter. However, just as was the case with the succession of claimants' counsel in this matter, the question is whether the change was reasonable or avoidable and whether any unnecessary duplication of effort resulted. Mr. Grant testified that it was common practice within the firm to make use of junior appraisers wherever feasible as a cost-saving measure to clients. Mr. Hall, he said, by the spring of 1994 was just reaching the stage in terms of experience where the firm considered that he would be professionally competent to give evidence at a hearing. However, he added, it was always the anticipation that either Mr. Grant or another senior appraiser would testify at the hearing of this matter. Any doubt on that point was removed with Mr. Hall's temporary departure from the firm shortly before the scheduled hearing for family reasons. I accept that the course of conduct followed in this respect was reasonable and, perhaps, ultimately unavoidable in the circumstances. I am also satisfied that Mr. Grant at all times during Mr. Hall's tenure on the file acted in a supervisory and review capacity such that, when he assumed primary conduct, no significant duplication occurred since he was already well acquainted with the case. His fee rate at the relevant time, while certainly at the upper end of what the board has previously considered reasonable, seems supportable for a person of Mr. Grant's experience.

The fourth ground of objection is, in my view, more compelling. I accept that this case involved an appraisal exercise simple in scope and enlarged only by the claimants' focus on the "project influence" issue. Indeed, Mr. Grant under cross-examination acknowledged that there was "nothing exotic or terribly difficult" about it and that even the section 32 issue did not make it "overly complex". No planning evidence was assembled and no technical feasibility study or the like prepared. The first appraisal report was completed by April of 1992 following the total expenditure of around 64 hours of appraisal time resulting in just over $5,400 in professional fees. These are itemized in the first two Interwest accounts. All of the remaining time (nearly 90 hours) and fee cost (close to $9,900) itemized in the third Interwest account was incurred in the seven or so weeks prior to and including the compensation hearing. A large part of it reflects Mr. Grant's efforts to find and analyze other properties and developments, or to re-analyze existing ones, in light of the underlying assumptions which informed his second appraisal report. Even allowing for reasonable time spent on other necessary matters related to the hearing, it seems to me that the third Interwest account reflects excessive time spent in the circumstances of this case.

It is instructive to compare the third Interwest account of March 31, 1995, with an earlier Interwest account dated March 8, 1994, which the respondent produced in evidence at this cost hearing. The earlier account, which was evidently prepared for settlement purposes, was not formally before me for review because, as Mr. Grant testified, it had been subsumed within the later "restated" account. My copy of the March 8, 1994 account contains no itemized time entries, but it does summarize the hours spent on the file by each individual at Interwest during the billing period. In that account Mr. Grant is shown to have recorded 18.5 hours of billable time during the period up to when the account was rendered. The restated account of March 31, 1995 itemizes all time entries. During the same billing period as in the earlier account, Mr. Grant is now shown to have recorded 32.8 hours of billable time. This apparent discrepancy was not addressed by either party during the cost hearing, but in my view lends weight to the perception that some of the later appraisal costs seem inflated.

The respondent's fifth ground of objection goes to the degree of success achieved on determination of the issues at the hearing in relation to the time spent and expense incurred. Clearly, a good deal of Mr. Grant's time was devoted to his investigation and assessment of alleged "project influence" which the board found was not proven. This is a result which I must take into account in assessing the reasonableness of the Interwest accounts. It is somewhat unclear to me whether the genesis of the theory rested with Mr. Grant or whether he simply proceeded on an assumption provided to him by claimants' counsel. In any case, the theory foundered for lack of evidence, the responsibility for which can only partly be laid at the feet of the appraiser. The other part lay in the claimants' failure or inability to call witnesses at the hearing to support it.

The board also rejected the development approach to valuation upon which the claimants' appraiser had ultimately relied. At p. 36 it stated:

The board is not persuaded on the evidence that the required degree of imminence [of development] was prevalent in this case, despite the optimism of the claimants.

Respondent's counsel cited the decision of the board in Devick v. British Columbia (Minister of Transportation and Highways) (1994), 52 L.C.R. 212 at p. 232. In that case an appraiser's "wildly optimistic report", which relied on the development approach, was found to have been of no assistance to the board and its cost was disallowed. In this instance both the claimants' and the respondent's appraisers considered the development approach. As well, both made use of the direct comparison approach. In awarding costs, the board did not conclude that the claimants' appraisal report had been of no assistance; it simply expressed the opinion that a particular limit be placed on the appraisal costs recoverable. Accordingly, the board's rejection of the development approach advanced by the claimants' appraisers is relevant to my determination of their reasonable costs, but it does not indicate a result as severe as that reached in the Devick decision.

Be that as it may, the board was critical of what it found to be several unexplained inconsistencies leading to confusion in Mr. Grant's evidence on behalf of the claimants. This leads to the sixth ground of objection to the appraisal accounts. Three examples will suffice.

First, on the subject of highest and best use, the board commented at p. 27 of the reported decision:

It is unclear to the board whether the claimants are asserting that the highest and best use of the Lots was as rezoned serviced lots at the date of taking, or a continuation of their existing use as residential holding lots subject to rezoning and awaiting services. Mr. Grant's conclusions, as previously cited, are inconsistent. If it is his opinion that the "properties would have been cooperatively serviced by the owners . . . at the time of taking", then the highest and best use of the Properties must necessarily be serviced lots. Yet in the same paragraph Mr. Grant says that the highest and best use is considered as residential holding lots. Further, Mr. Grant valued each as an unserviced lot.

Second, on the subject of market value, the board said this at p. 34:

Clearly, there is consensus on value between the appraisers retained by the respondent, but the appraiser retained by the claimants appears to be at odds between his two reports, even though they both have the same effective date and physically there was no change in the properties.

Third, in arriving at an estimation of market value, Mr. Grant relied heavily on one comparable which had sold in December of 1989 for $65,000 but was in fact actually listed at the valuation date of December 1991 for $59,500. The board noted that the first appraisal report of April 1992 considered this listing of an unserviced lot at $59,500 as a useful indication of an "upper limit of value" for the claimants' property. However, the second appraisal report of February 1994 made an upward adjustment of the comparable's value to $88,400. The board commented at p. 37:

Mr. Grant was unable to explain to the satisfaction of the board why he relied on an adjusted value of $88,400 when the comparable was listed for $59,500 at the valuation date.

Such glaring inconsistencies by an experienced appraiser on issues central to the board's determination at the compensation hearing reflect negatively on the manner in which the claimants' case was prepared and conducted and, in my view, should reasonably lead to cost consequences. In so deciding, I refer to my discussion of the principles which apply to expert costs in Bill's Frontier Restaurant Ltd. v. British Columbia (Minister of Transportation and Highways) (1996), 58 L.C.R. 204, a section 44 decision rendered after the hearing of this cost matter. The relevant passages are at pp. 221 and 222.

In summary, I accept in large measure the last three of the respondent's objections to the overall size of the appraisal fee account and conclude that a substantial reduction is warranted in the amount which I should allow. I fix the reasonable fees recoverable from the respondent with respect to the Interwest accounts at $9,000, which is roughly 60% of the fee cost claimed.

4.3.2 Disbursements

As with the legal accounts, the facsimile charges were the only items of disbursement within the appraisal accounts which drew any objection from the respondent. Interwest appears to have charged faxes at $1 per page. The amount at issue is $75. I fix the amount allowed for faxes at $0.35 per page, which has the effect of reducing the disbursement account by $48.75. Accordingly, total disbursements recoverable amount to $661.83.

It follows that goods and services tax will need to be adjusted on the appraisal costs which I have allowed, comprising $9,000 in fees and $661.83 in disbursements. I calculate the adjusted amount to be $676.33.

4.4 Summary

My review of the claimants' costs in this matter is summarized below:


Costs Claimed

Costs Allowed

Costs Paid

















From this review I have determined that there remains owing to the claimants on account of their reasonable legal and appraisal costs pursuant to section 44 the sum of $20,187.16.

4.5 Interest on Outstanding Accounts

The next question is whether the claimants should be awarded interest on the unpaid balance of the accounts which I have allowed and, if so, from what date and at what rate. Since the decision of the Supreme Court of British Columbia in Tidmarsh v. Comox-Strathcona (Regional District) (1995), 55 L.C.R. 81, 54 A.C.W.S. (3d) 696, it is clear that reasonable interest expenses incurred on professional accounts are recoverable under the Act. However, as respondent's counsel asserts, and I accept, Tidmarsh is also authority for the view that an award of interest on costs is discretionary. The availability of such an award depends upon the particular circumstances of each case. Cost decisions of the board rendered after the date of hearing of this application have also set out certain principles and guidelines for determining the appropriateness of an interest award, albeit in the context of an application for advance costs pursuant to section 47: see Roadmaster Auto Centre Ltd. v. Burnaby (City) (1996), 58 L.C.R. 305 at pp. 311-319; El & El Investments Ltd. v. School District No. 36 (Surrey) (1996), 59 L.C.R. 200 at pp. 207-212; El & El Investments Ltd. Stephanie Perla Chuchman and George Chuchman v. The Board of School Trustees of School District No. 36 (Surrey), unreported, E.C.B. No. 17/94/126, October 24, 1996, at pp. 19-22.

The claimants assert a claim for interest on the outstanding legal accounts on the basis that the respondent failed to meet its statutory obligations with respect to advance payment of costs and that the claimants have, accordingly, incurred interest charges on those unpaid accounts. Each of the Bull Housser invoices contains the following clause:

This account is payable upon receipt. If it is unpaid within 30 days after the invoice date, interest will be charged at an annual rate of 15%, charged monthly.

The claimants did not ask for interest on the outstanding appraisal account, presumably because it had only been rendered about one month before the final cost hearing.

The respondent argues that no interest should be awarded on the accounts because, on the evidence at this cost hearing, the claimants' retainer with their solicitors did not address interest, the claimants have not been asked to pay and have not paid any interest, and the respondent made generous advance payments of costs pursuant to section 47 along the way. In the circumstances of this case, the respondent says, it was reasonable to withhold payment on later accounts presented to it until after the board rendered its compensation decision and, also perhaps, until after I rendered my decision on costs.

I am unable to accept the first two of the respondent's arguments. Although there was no separate written retainer agreement, in my view the clause which appears in each of the Bull Housser accounts is evidence of a standard retainer agreement covering interest. Although the claimants have not actually paid any interest pursuant to that agreement, in my opinion they have incurred an obligation to do so. Accordingly, I determine that the claimants have established a threshold entitlement to interest.

In dealing with the respondent's other arguments, it is useful first to review the chronology of the various accounts presented for payment and the manner in which the respondent addressed them.

The respondent has paid in full the first three of five legal accounts rendered to the claimants by Bull Housser. The payments totalled $5,488.38 and no question concerning interest arises in respect of them. The fourth account dated February 17, 1994, in the amount of $3,943.75 (later adjusted) was presumably forwarded for payment to the respondent approximately one month prior to the start of the compensation hearing. This account therefore fell within the scope of section 47 of the Act. Section 47 (1) provides that an owner may, before the compensation hearing has commenced, submit a written bill to the expropriating authority consisting of the reasonable legal, appraisal and other costs that the owner has incurred up to the time the bill is submitted. Pursuant to section 47 (2), the respondent had an obligation either to pay the bill promptly or to apply to have it reviewed by the chair. In this instance, the respondent did neither. The fifth account, in the amount of $18,147.48, is dated October 27, 1994, more than seven months after the conclusion of the compensation hearing. It was not therefore subject to the provisions of section 47 and, as with the previous account, the respondent has made no payment with respect to it.

Although the question of interest did not arise in connection with the appraisal accounts at this cost hearing, the respondent's treatment of those accounts is nevertheless germane to my determination of the interest issue. The respondent has paid in full the first two Interwest accounts totalling $6,009.08. I noted earlier that, in March of 1994, Interwest rendered a further account in the sum of $5,325.42 which was later subsumed in the much larger third and final bill dated March 31, 1995. The March 1994 account was presented for payment to the respondent about one week before the compensation hearing began. The respondent paid nothing at the time and continued to resist requests for payment on the basis that it was awaiting the board's compensation decision. Mr. Woodward, counsel for the respondent, wrote to Mr. Bennett, claimants' counsel, on May 17, 1994 as follows:

In view of the School District's application under Section 44 (5) of the Act on conclusion of the hearing, and in view of the earlier, without prejudice, advance payments of legal and appraisal costs made to your client, we do not intend to take any action in respect of this matter at the present time. We will contact you regarding this matter once the Board's decision is in hand.

The board's decision was rendered on October 13, 1994, and although it had discretion under section 44 (5) to award the claimants less than all of their costs, the board did not exercise its discretion to do so. Nevertheless, the respondent made no further payments on account of either appraisal or legal costs. Mr. Woodward wrote again to Mr. Bennett on October 19, 1994 to say:

Certainly the costs paid to date strike us, in terms of the amount in issue, and in terms of what the Board has had to say about Mr. Grant's work, as "reasonable".

Beyond suggesting that what had already been paid by way of costs was "reasonable" in the circumstances, the respondent at no time prior to this cost hearing set out its objections to the unpaid accounts. At the cost hearing itself, respondent's counsel (as I understood him) submitted that an appropriate award of legal costs should be on the order of $9,600 for fees and about $1,000 for disbursements together with the applicable taxes. This contrasts with what the respondent had already paid to the claimants to date on account of legal costs of slightly less than $5,500. In other words, there was an appreciation on the part of the respondent that it likely would be required to pay more toward costs than it had already advanced.

I accept that it was reasonable in the circumstances for the respondent to await the board's compensation decision before deciding whether to make any further payment on account of costs. However, upon the board's determination awarding actual reasonable costs, I am not satisfied that it was reasonable for the respondent to do nothing further if it wished to avoid incurring liability for interest. In my view, the claimants are entitled to be indemnified for the reasonable interest costs they have incurred on the amount of the outstanding legal accounts which I have allowed. Accordingly, interest will run on the amount of $15,858.08 from October 27, 1994, the date of the last legal invoice and some two weeks after the board's decision was rendered, until paid. Under the circumstances, no interest will be assessed on the outstanding appraisal costs which I have allowed in the amount of $4,329.08 provided that amount is paid promptly, that is, within 30 days of the date of this decision.

As to the rate of interest charged, the cost decisions of the board referred to above have considered what constitutes a reasonable rate of interest and I am satisfied that the conclusions reached in those cases are applicable to this matter. Accordingly, I allow as reasonable from my review of all the circumstances of this claim a simple rate of interest of 12% per annum.

4.6 Section 44 Costs

The final cost review in this matter occupied the whole of one hearing day and portions of two subsequent days. Both Mr. Bennett, principal counsel for the claimants, and Mr. Grant, the claimants' appraiser, were called to give evidence and, because Mr. Bennett testified, his associate Mr. Goulden presented the claimants' case for costs.

The claimants take the position that they should be entitled to the reasonable costs of preparation for and attendance at the section 44 cost hearing, including the costs of their failed application for an order for production of the respondent's legal accounts. Even though that application did not succeed, they submit that it raised an arguable issue of general importance. The claimants suggest that I should allow them a fixed amount of $3,000 to take into account both Mr. Goulden's preparation and attendance time as well as witness fees for Mr. Bennett and Mr. Grant. Their actual costs, they say, will likely exceed that figure.

The respondent submits that no costs should be awarded to the claimants in respect of their application for document production which, the respondent argues, wasted in excess of half a day at the hearing. With respect to the rest of the hearing, the respondent says that no costs ought to be awarded for the attendance of either Mr. Bennett or Mr. Grant because the claimants' retainers with both Bull Housser and Interwest are silent as to witness fees. In the respondent's submission, a global award in the amount of $400 would be appropriate compensation for the claimants' section 44 costs.

I am persuaded that it is desirable where possible to fix a global award of costs for a section 44 review in order to avoid the still further protracted process of having a hearing into the cost of a cost review. In this instance, the claimants broke down their estimated costs as follows: $1,500 to $2,000 for Mr. Goulden's preparation and attendance as counsel; $850 for Mr. Grant's preparation and attendance as witness; and $650 for the time Mr. Bennett spent as witness. For the purpose of making my determination, I accept these amounts as a reasonable estimate of the actual costs incurred.

It seems to me that the statutory considerations under section 44 (11) also have relevance to my determination of section 44 hearing costs. In that regard I would observe, firstly, that despite the lamentable length of this decision, the issues raised on this cost review were, for the most part, neither particularly novel nor overly complex. Only the accounts of one law firm and one firm of appraisers were before me for review. Although they spanned a three year period, the accounts were neither numerous nor lengthy. Disbursements were scarcely at issue. The interest question, argued in light of the judgment already rendered in Tidmarsh, was not pursued in depth. There were perhaps two novel issues, one raised by the respondent involving the qualifications of the appraiser and the other raised by the claimant concerning production of the respondent's legal accounts. Neither received what I might describe as probing legal analysis. I am therefore inclined to question whether this matter fully justified the expenditure of upwards of $2,000 of legal counsel time.

Secondly, it is apparent that the claimants' success was somewhat divided on determination of the issues at this cost hearing. The claimants did not persuade me on authority that I could or should order production of the respondent's legal accounts, although I accept that the question itself was of some importance to the future conduct of cost reviews before the board. As to their reasonable costs, the claimants have been allowed $31,679.62, which is $13,078.97 less than what they claimed but $20,187.16 more than what the respondent paid them in advance. These figures are exclusive of interest, and on that issue, the claimants also largely succeeded. In the result, it appears to have been necessary and reasonable for the claimants to proceed to a section 44 review.

Thirdly, in the preparation for and conduct of their case at this cost review, the claimants' decision to call Mr. Bennett and Mr. Grant to give viva voce evidence, rather than simply obtaining their affidavits, doubtless had the effect of increasing the actual costs incurred. However, the respondent had not particularized its objections to the accounts in question prior to the hearing, and it seems to me that the claimants acted prudently in the circumstances in incurring some additional cost. The testimony of both witnesses proved useful to my determination of costs. I am not persuaded by the respondent's argument that witness costs somehow fell outside the scope of the respective retainers of Bull Housser and Interwest.

Taking into account all of the foregoing considerations, I allow the reasonable costs incurred by the claimants on this section 44 hearing in the amount of $2,000 inclusive of fees, disbursements and tax.



Government of British Columbia