May 16, 2000 (69 L.C.R. 263) (BCSC decision 73 L.C.R. 122)
ECB Control No.: 30/93/184, 31/93/184, 32/93/184

REASONS FOR DECISION

1. Application

[1]  The three sets of claimants, the Inghams, the Jamiesons and Mr. Kowalski have each applied for:

a) an adjudication of a portion of the claimants' claim for compensation that was referred to the chair by the board in its decision of June 25, 1996 (reported at 59 L.C.R. 113);

b) a determination of the costs to be awarded to the claimants pursuant to section 45 of the Expropriation Act, R.S.B.C. 1996, c. 125 ("the Act");

c) an award for the costs of this costs hearing.

[2]  Each set of claimants had filed separate applications for determination of compensation but their claims for compensation and later for costs were heard together. The claim for costs on this application includes costs incurred with respect to two expropriations of the claimants' lands, the first of which resulted in a consent order declaring the expropriations to be a nullity and the second of which resulted in a compensation hearing before the board. At the compensation hearing the costs of the first expropriation had been claimed as losses or damages. The board in its compensation decision, however, referred these costs to the chair to be considered along with the costs of the second expropriation. The costs of the first expropriation are in respect of accounts rendered by the claimants' solicitors at the time, two planning consultants, and a communications consultant. The costs of the second expropriation are in respect of accounts rendered by the claimants' new solicitors and a real estate appraisal firm. The total costs claimed by each of the three sets of claimants inclusive of fees, disbursements, and taxes but excluding interest are as follows:

	First expropriation	Second expropriation	Total
Inghams	$8,882.80	$19,129.85	$28,012.65
Jamiesons	$8,882.80	$14,676.18	$23,558.98
Kowalski	$8,882.80	$14,272.15	$23,154.95
	$26,648.40	$48,078.18	$74,726.58

The evidence was that virtually all of these costs, together with other costs not put forward at this review, have already been paid by the three sets of claimants.

[3]  The position of the respondent, the Town of Creston, at the conclusion of this cost review was that, with respect to the costs for the first expropriation, each set of claimants was only entitled to $100 for general advice on the expropriation provided by Mr. Niedermayer, the initial solicitor for the claimants. Creston said that no other costs could be claimed under the Act. With respect to the second expropriation, Creston agreed to the hourly rate charged by Mr. Burke, the Kamloops solicitor who was eventually retained by the claimants, and who acted for them at the compensation hearing. Creston also agreed generally to the time that Mr. Burke spent on behalf of the three sets of claimants. However, Creston took the position that there should be some reduction of Mr. Burke's accounts on the basis of overall reasonableness in relation to the degree of success at the compensation hearing. While it had communicated this position to the claimants before the cost review, it is my understanding that Creston did not agree to a specific sum with respect to Mr. Burke's accounts until the conclusion of the cost review. At the same time, during argument at this cost review, Creston agreed to reimbursement of approximately 87% of the total appraisal accounts from Interwest Property Services (1991) Ltd. to each of the three sets of claimants.

[4]  I conducted the hearing of the application in my capacity as vice-chair, exercising the powers and jurisdiction of the chair under section 26(6) of the Act.

2. Background

2.1 Chronology

[5]  Creston, expropriated a 16.5 foot strip from the front yards of each of the three claimants' premises for the widening of Hillside Street. Creston announced the street-widening project in October 1988 and the claimants were part of a group of mostly elderly residents who opposed the project. The claimants were opposed to losing such a large strip of their front yards and being that much closer to the street. Part of their objection was that they did not see the need for Hillside Street being widened to four lanes when it was not a busy thoroughfare. They also objected to the 16.5 foot strip being expropriated entirely from one side of the street. The claimants were hoping that if Hillside Street was to be widened that it could be widened within its existing right of way, or in the alternative, that the 16.5 feet of land that was required could be taken from both sides of the street. They also suggested other streets that could be widened instead of Hillside Street and the advantages of these options over the Hillside project.

[6]  There were about ten individuals in the group who opposed the street-widening, including the three sets of claimants. They met a few times with the city administrator and raised a number of questions about the project proceeding in the manner that Creston proposed. Mr. and Mrs Ingham were in their sixties at this time and most of the other people in the group were in their seventies. Mr. Ingham took some leadership role in the group. Herb Legg was a son of a friend of the Inghams and he also took an interest in the group's opposition to the project, although he did not live on Hillside Street. Mr. Legg had some experience as a reporter and as a media advisor and he assisted the group in mounting a letter campaign to try to persuade Creston to change its proposed plans for the project. He also appears to have taken on the role as spokesperson and advisor for the group. In late 1989 the group sought legal advice. Their aim continued to be to try to prevent Creston from proceeding with the widening of Hillside Street or, in the alternative, to widen it in a way that would have less impact on their properties. Despite the opposition, Creston continued with its proposed plans to widen the street. Hillside Road had been designated as a grid road in the town's transportation plans as far back as the 1970s. The Province offered a matching grant for improvement to a grid road standard that required a width of 14 metres, and the necessity of the further 16.5 feet. After a certain period of time, Creston had already purchased 16.5 feet from a number of other property owners on the same side of Hillside Street and presumably had some interest in the project proceeding with all the additional land coming from that side of the street. Creston commenced proceedings to pass the first expropriation bylaw in December 1990, filed Form 1 expropriation notices in February 1991 and filed vesting notices for the relevant properties in the Land Title Office in April 1991. After the claimants had retained Mr. Burke, an application for judicial review of the validity of the expropriation was filed and eventually, on March 2, 1992, a consent order was entered declaring this expropriation a nullity.

[7]  Creston immediately began proceedings for a second attempt at expropriation and filed the vesting notices in August 1992. These expropriations eventually led to the compensation hearing before the board from February 26 to 29, 1996, in which the claims were heard together. Reasons for decision were issued on June 25, 1996. The claimants received the following compensation:

A. The Inghams were awarded compensation of $30,359 for their entire claim for the partial taking from two parcels of land. The Inghams had received a total of $25,200 in advance payments. During the hearing, the Inghams and Creston agreed to the amount of compensation for the land taken from the two parcels of $24,800 plus one disturbance damage of $484. The items that remained in issue and were decided by the board included the use of the before and after method of evaluation and the loss in value to the remainder, the loss of amenities in the land taken and their replacement, and the claims for personal losses for the loss of privacy and increased noise as a result of the Inghams now residing closer to the road. In addition to the one agreed expense of $484, the Inghams claimed for a number of different mitigating measures totalling $27,048. The board awarded an additional $5,075 to what had been agreed. The $10,000 claim for personal losses was denied.

The Inghams also claimed for their share of the costs of the first expropriation as damages. During the hearing Creston conceded that the Inghams were entitled to their share of the costs incurred during the first expropriation under section [45]  although Creston reserved the right to argue that much of the claim was not reasonable. Both parties agreed that these costs should be referred to the chair under section [45]. The board awarded the Inghams their reasonable costs under section [45]  including the costs of the first expropriation.

B. The Jamiesons received total compensation of $9,017 for the partial taking. Creston had delivered cheques totalling $3,850 as advance payment but these were never cashed. During the hearing, the Jamiesons and Creston agreed to the amount of compensation for the land taken of $5,600. The Jamiesons claimed $4,905 for two mitigative measures to the remainder plus $6,430 for loss in value to the remainder. The board awarded an additional $3,417. The Jamiesons $10,000 claim for personal losses was also denied. For the same reasons as provided above, the Jamiesons were awarded their reasonable costs including the costs of the first expropriation under section 45.

C. Mr. Kowalski received total compensation of $12,528 for the partial taking. Creston had previously paid $3,100 in advance payment. During the hearing, Mr. Kowalski and Creston agreed to the amount of compensation for the land taken of $7,000. Mr. Kowalski claimed $7,000 for two mitigative measures as well as $7,925 for the loss in value to the remainder. The board awarded an additional $5,028. Mr. Kowalski was not awarded anything for personal losses for loss of privacy and increased noise. He was awarded what the board termed a nominal amount of $500 for his personal losses in being unable to continue his hobby as a ham radio operator as a result of the street-widening. This was from claimed personal losses altogether of $3,400. For the same reasons provided above, Mr. Kowalski was awarded his reasonable costs including the costs of the first expropriation under section 45.

[8]  An appeal from these decisions was taken by the Inghams and Mr. Kowalski's estate. The Court of Appeal allowed the appeal on the issue that the board had erred in construing section [44]  of the Act when it deducted general benefits from the compensation awarded. As a result, the awards for the loss of value of the remaining lands for the Inghams and Mr. Kowalski were set aside. See 66 L.C.R. 161. The Inghams and Mr. Kowalski and Creston could not agree on the awards to be substituted and a further compensation hearing on this issue was held after this cost review was concluded.

3. Jurisdiction

[9]  At the commencement of this cost review hearing, held in Cranbrook, Creston brought a preliminary application claiming that the board did not have jurisdiction under section 45 to hear the Inghams and the Kowalski estate's claims for costs at this time. As a result of the Court of Appeal decision there was a further compensation hearing scheduled for these claimants. Section 45(9) provides:

45 (9) If the board determines the amount of compensation or damages to which a person is entitled, the amount of costs must be determined by the chair.

Creston took the position that the board had not yet determined all of the compensation for the Inghams and the Kowalski estate and therefore the section 45 cost application for these claimants was premature.

[10]  I dismissed Creston's application. Pursuant to section 45(9) the board had determined the amount of compensation. It was true that the Inghams and the Kowalski estate might need to bring a further application under section 45(9) for an additional cost review. There was no wording in section 45(9) requiring that all items of compensation had to be finally determined with all avenues of appeal exhausted before a section 45 hearing on costs could be heard.

4. First expropriation

4.1 Whether costs of the first expropriation are recoverable under section 45

[11]  The costs that related to the first expropriation were claimed as disturbance damages at the compensation hearing. At p. 115 of the reported decision (59 L.C.R. 113) the board states:

At this hearing Mr. Melville, for Creston, agreed that the reasonable costs of the earlier process should be recoverable by the claimants, but he reserved the right to argue that much of the claim was not reasonable. Both parties agreed that those costs should be referred to the Chair for determination under [s.45]  of the Expropriation Act ...

As a result the costs that related to the first expropriation were referred to this cost review.

[12]  The relevant parts of section 45 of the Act are:

45 (1) If there is an inquiry, the inquiry officer may order the expropriating authority to pay a participant the reasonable costs, to be set by the inquiry officer, incurred by the participant for the purpose of participating in the inquiry.

(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.

(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).

(9) If the board determines the amount of compensation or damages to which a person is entitled, the amount of costs must be determined by the chair.

(10) In a determination of costs under subsection (8) or (9), the following considerations must 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 20 (1) and (12) or otherwise;

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

Under section 45(3) costs may be claimed if they are "necessarily incurred by the person for the purpose of asserting his or her claim for compensation or damages".

[13]  Creston submitted that virtually all the work done by the solicitors, the planning consultants and the communications consultant with respect to the first expropriation was to try to stop the expropriation and therefore was not for the purpose of "asserting a claim for compensation". As a result, Creston's position was that all the costs of the first expropriation should be excluded but for $100 for each set of claimants for that portion of Mr. Niedermayer's accounts in which preliminary advice with respect to the taking was provided. Creston also questioned whether the board had jurisdiction to award costs under the Act with respect to the first expropriation, when it was agreed to be a nullity. However, Creston conceded that costs incurred prior to the valid second expropriation can be claimed, as long as they are for the purpose of asserting a claim for compensation.

[14]  The claimants referred me to Dell Holdings Ltd. v. Toronto Area Transit Operating Authority (1997), 60 L.C.R. 81 (S.C.C.) and the comments of Cory J. at p. 91 "that the Act should be interpreted in a broad, liberal and flexible manner...". It was the claimants' position that, if section 45 was interpreted in this manner, then the costs associated with the first expropriation could be claimed.

[15]  Section 45(3) was considered in Nygard v. Surrey (District) (No. 2) (1989), 42 L.C.R. 279 (B.C.E.C.B.). The former chair of this board, J.H. Heinrich Q.C., at p. 284 compared the Ontario and Alberta legislation on reimbursement for costs to the British Columbia provision in section [45(3)]:

In Ontario and Alberta, the reasonable costs actually incurred for the purpose of determining compensation are recoverable from an authority. However, the practice in Ontario is that such costs must be directly related to a compensation hearing, otherwise they are disallowed. [The Ontario provision provides for costs "for the purpose of determining the compensation payable"]  ...

In Alberta, s. 39 of the Expropriation Act, R.S.A. 1980, c. E-16 reads, in part, as follows:

The reasonable legal ... costs actually incurred by the owner for the purpose of determining the compensation payable shall be paid by the expropriating authority.

The Alberta Land Compensation Board has adopted a more liberal interpretation in that all costs are recoverable if incurred as a direct result of the expropriation; it is not required that such costs be directly tied to the compensation hearing.

The chair went on to say that in British Columbia the question of whether costs claimed were necessarily incurred for the purpose of asserting a claim for compensation will depend on the facts in each case and will be reviewed in the context of section [45(3)]  (emphasis added in the original).

[16]  Under section 19(4), if an expropriation is formally abandoned, the owner is entitled to his or her reasonable legal, appraisal and other costs. Under section 45(1) of the Act, if there has been an inquiry into whether the proposed expropriation is necessary to achieve the objectives of the expropriating authority, a participant may be awarded his or her reasonable costs in order to participate. While neither of these sections applies to the present case, they support a liberal construction of section 45(3).

[17]  I note that these costs were originally brought as damages under sections 34 or 40. The relevant parts of these sections provided:

34 (1) An owner whose land is expropriated is entitled to disturbance damages consisting of the following:

(a) reasonable costs, expenses and financial losses that are directly attributable to the disturbance caused to the owner by the expropriation; ...

40 (1) Subject to section 44, if part of the land of an owner is expropriated, he or she is entitled to compensation for

(a) the reduction in market value to the remaining land, and

(b) reasonable personal and business losses

that are directly attributable to the taking or that result from the construction or use of the works for which the land is acquired.

Under these sections the costs or losses need only be "reasonable" and "directly attributable" to the "disturbance" or the "taking" or "result from the construction or use" of the street-widening project. On reflection, these expenditures should likely have been pursued under sections 34 and 40. As a result, in the unusual circumstances of this case, I am not going to entirely exclude the costs arising under the first expropriation by an overly restrictive interpretation of section 45(3). The next step is to consider each of these costs in turn and determine whether the costs were necessary and reasonable.

4.2 Legal bills - first expropriation

4.2.1 Claimants' evidence

[18]  The claimants first sought legal advice in the summer of 1989 from Donald Niedermayer. There were five sets of neighbours, including the three sets of claimants who shared the costs of obtaining advice. Mr. Niedermayer gave sworn evidence at the cost hearing by telephone. Mr. Niedermayer had been a lawyer in practice with the firm Robertson Niedermayer & Miles in Cranbrook, British Columbia. He was called in 1974. His practice had been in general litigation including civil, criminal, and some appearances before administrative boards. He is no longer in practice, and at the time of the cost hearing worked in an educational institution in Mexico. He did not have his files with him and other than some correspondence and bills supplied by the claimants, he was testifying from his memory of the events, some eight years prior.

[19]  Mr. Niedermayer was consulted as to whether Creston could be stopped from pursuing the street-widening project with the resultant 16.5 foot taking. His work initially focussed on enquiring into the issues already raised by the claimants: Creston's reasons for pursuing this option, whether Creston had appropriate budgeting for the project and why Creston wanted to proceed with a street-widening at this time when the traffic counts on Hillside Street were so low. Mr. Niedermayer discussed several options with the group including some type of negotiated compromise, requesting an inquiry under section 10 of the Act after the expropriation had occurred, and making some more general challenge to the expropriation. He indicated that there were certain risks associated with these options including a risk that any legal action might merely delay Creston without stopping the expropriation in the long run. In mid January 1991, after the expropriation bylaw had already been passed, Mr. Niedermayer retained a planning consultant, Ronald Wrigley of Walker Brown Urban Consultants in Calgary, for some help with disputing Creston's street-widening plans on safety or transportation planning grounds. Mr. Wrigley in turn recommended that a transportation engineer be retained and as a result Nick Finn, a transportation engineer with BA Consulting Group Ltd. in Calgary, was retained in mid February 1991. Mr. Finn eventually travelled to Creston and met with Creston employees to discuss the project on March 22, 1991. Advance payments and expropriation documents were served on some of Mr. Niedermayer's clients in early April, 1991 and Mr. Niedermayer advised Creston that it had failed to comply with the requirements set out in section [20]  of the Act with respect to the appraisal reports served with the advance payments. In the midst of preparation for some type of application to fight the expropriation, it appears that there was a dispute between Mr. Niedermayer and Mr. Legg that resulted in Mr. Niedermayer advising the claimants that he would no longer act for the group if Mr. Legg continued as their spokesperson. As a result, Mr. Niedermayer's role ceased in late April 1991. In May 1991 Mr. Niedermayer left his practice for a two year sabbatical in any event.

[20]  Robertson, Niedermeyer & Miles rendered seven accounts from June 4, 1990 until April 17, 1991. The total fees were $6,554, disbursements were $802.35, and GST (after January 1, 1991 only) was $382.44, for a total of $7,738.79. Mr. Niedermayer's hourly rate was $160 and a junior lawyer in his firm, Mr. Daroux, who had less than one year of call, charged $100 per hour. Total hours by Mr. Niedermayer were 24 and by Mr. Daroux were 30, including only half of Mr. Daroux' travel time. There were earlier accounts from Mr. Niedermayer that were not claimed. While the accounts showed total hours billed and the hourly rate for each lawyer, there was not the back up of the lawyer's time sheets of time expended on particular items on particular dates. Nor was there any back up documentation for disbursements, including rates charged for photocopying and faxes.

[21]  As a result of the dispute with Mr. Niedermayer, the claimants consulted Graham Temple, a lawyer who had been in general practice in Creston for 23 years. Mr. Temple gave evidence at the cost hearing. Mr. Temple referred the claimants to Reinhard Burke, a lawyer from Kamloops with experience in expropriation matters. Mr. Temple assisted Mr. Burke who was preparing to bring a petition to challenge the validity of Creston's expropriation, because Mr. Temple was in Creston and Mr. Burke was not. Mr. Temple may have drafted some affidavits and in any event he attended on some of the claimants for swearing of the affidavits and he also filed the petition. In the course of this work he communicated with Mr. Burke. In addition, he helped to negotiate the group's payment of Mr. Niedermayer's outstanding fees.

[22]  The two bills from Mr. Temple from May and July 1991 contained $856 in fees, $549.37 in disbursements, and $91.38 in taxes for a rounded total of $1,497. There was no detail of the number of hours worked and Mr. Temple testified that his hourly rate at the time was either $125 or $150. There was not any back up documentation for disbursements. Mr. Temple halved his fees in his second bill from $812 to $406. There were two later accounts of Mr. Temple that were not claimed.

[23]  The legal accounts from Mr. Niedermeyer and Mr. Temple that are claimed totalled $9,235.79. Each of the three sets of claimants paid their one fifth share of this sum or $1,847.16.

[24]  I note that a petition was brought in Supreme Court by Mr. Burke with respect to the first expropriation that resulted in a consent order declaring that the expropriation was a nullity. No costs are claimed in this review from Mr. Burke for this proceeding. Mr. Temple's file contained a draft Bill of Costs drawn pursuant to the Rules of Court of the Supreme Court of British Columbia for the judicial review procedure, dated April 1992. The total legal fees claimed in this draft Bill of Costs were $1,860, together with $8,539.58 in disbursements. I have no evidence on what costs or disbursements were agreed or certified under this Bill of Costs. Reference is made to this Bill of Costs below because it appears that there was an overlap of expenses billed as disbursements by Mr. Niedermayer and Mr. Temple and claimed in this cost review and expenses claimed as disbursements in the draft Bill of Costs.

4.2.2 Creston's position

[25]  As already described, Creston's position was that under section 45(3) virtually none of the lawyers' accounts for the first expropriation could be claimed. Creston agreed that there was some preliminary advice on the expropriation from Mr. Niedermayer and therefore $500 of the Robertson, Niedermeyer & Miles accounts, or $100 for each set of claimants in this review, should be allowed.

4.2.3 Analysis

[26]  My role on a section 45 cost review is to consider the necessity for and the reasonableness of the costs claimed by the claimants. In Branscombe v. MoTH (No. 3) (1995), 56 L.C.R.138 (B.C.E.C.B.) the then Vice Chair stated at p. 143:

The board's initial objective is to determine whether the nature of the work done was necessary and, if so, to determine whether the amount claimed for it was reasonable. The reasonableness of the amount claimed is to be determined in the context of the statutory direction provided in s. [45(10)], and also with a view to the common law criteria for reasonableness as codified in s. 71.1 of the Legal Profession Act, S.B.C. 1987, c. 25. Among these factors to be considered are the complexity and difficulty of the issues involved, the degree of success, the skill and specialized knowledge required of the lawyers involved and the time reasonably expended.

[27]  As a result of taking the position that virtually all of the costs on the first expropriation were precluded by the terms of section 40(3), Creston did not provide me with any other factors to consider when reviewing the legal accounts on the first expropriation. In Ferguson v. British Columbia (Minister of Forests) (1999), 60 L.C.R. 40 (B.C.E.C.B.) the chair considered the issue of the board raising objections to costs that had not been raised by opposing counsel in the context of an advance cost review under section 48. Although the chair's task in conducting a review of costs generally centres on dealing with the objections of opposing counsel as it is assumed opposing counsel will tend to raise most if not all of the objections that can reasonably be made to an account, the chair stated at pp. 46-47:

I continue to be satisfied that ... interventions [by the board]  are appropriate in light of the statutory duty imposed upon the person conducting the cost review. Under section 48(5) that person must, "after taking into account all relevant circumstances, assess the reasonableness of the bill". In my opinion, the wording of this section requires an assessment of reasonableness of the accounts submitted even though the respondent may not have objected to a particular item.

In my opinion this quotation is applicable to cost reviews under Section 45 although statutory considerations are somewhat different than under section 48. In this case, although opposing counsel had not provided any further objections to the accounts to do with the first expropriation on the basis that they were all excluded by section 40(3), the claimants provided extensive evidence to justify the accounts. There was testimony from every person who submitted an account to do with the first expropriation but for Ron Wrigley, the planner, from whom there was an affidavit. The claimants' evidence sought to address the issues of the necessity of the work, the reasonableness of the account and the basis for the hourly rate. As a result, I do not see that the claimants can be said to be caught by surprise by any intervention that I might make on these issues.

[28]  Dealing first with Mr. Neidermayer's account. In my opinion, Mr. Niedermayer's efforts to negotiate with Creston for a narrower taking was a reasonable step for him to take on behalf of the claimants. The claimants stated that they would have been satisfied if the taking had been narrower or had been equal on both sides of the street. In order to do this Mr. Niedermayer had to have some understanding of traffic analysis issues in Creston and he collected information on this topic from his clients and from Creston. When Creston did expropriate, Mr. Niedermayer advised Creston that it had failed to comply with the procedural steps outlined in section [20]  of the Act. In the circumstances, although Mr. Niedermayer did not achieve any measurable success for the clients, he took a number of reasonable steps to try to achieve some resolution of the matter arising out of the impending expropriation and to mitigate the damages that might be suffered by his clients. In my opinion the costs for those services that attempted to mitigate the threatened expropriation are a legitimate claim.

[29]  However, it is apparent from reviewing the letters in evidence that Mr. Niedermayer did not have previous experience in expropriation matters. Mr. Niedermayer confirmed this during the review, although he stated that he had appeared before other tribunals. Review of Robertson, Niedermayer & Miles' accounts indicates several entries for researching expropriation law and review of cases. This board has stated that, when counsel are inexperienced in expropriation matters, it is reasonable that the authority should not have to pay for the extra time spent on reviewing and researching the law. See Nygard v. Surrey (District) (No. 2). Similarly the hourly rate which the board has allowed is related to the lawyer's experience with expropriation matters. See Gerestein v. District of Abbotsford (No. 2) (1990), 43 L.C.R. 262 (B.C.E.C.B.).

[30]  Another result of Mr. Niedermayer's lack of experience with expropriation matters, it appears to me, was his strategy to seek traffic engineering advice in January or February 1991 after over a year of unsuccessful negotiations with Creston, and after the expropriation bylaw had already passed. The engineer supplied a lot of detailed information but could not change what Creston had made clear from the beginning; namely, that provincial funding was dependent on widening the road such that the 16.5 foot takings from the claimants' properties were necessary. The correspondence and Mr. Niedermayer's evidence indicated that he thought that traffic engineering evidence might support safety concerns as a basis for challenging Creston's plans to widen Hillside Road. Mr. Niedermayer's correspondence indicates that he hoped to use this information at an inquiry under the Act, although he had some concern about his ability to do so when the project appeared to be a linear development. In the alternative, he appears to have contemplated a court challenge under the Charter, on the basis that the project interfered with personal safety. He also said that, if the expropriation went ahead, the traffic engineering evidence could be used in the determination of compensation. In my opinion, a more experienced counsel in expropriation matters would have appreciated that the chance of a successful legal challenge to Creston's project through an inquiry or under the Charter was remote. In my review of the engineer's file it is difficult to see how the work that was done by the engineer could have been used in a compensation hearing, and I am strengthened in this view by the fact that it was not used in the compensation hearing. Creston had already initiated the expropriation proceedings and it ought to have been clear that the town had the power to expropriate and proceed with this project despite the fact that other options were feasible. I am ignoring the procedural errors in Creston's first expropriation for the moment. While the claimants were very anxious that Mr. Niedermayer attempt to stop the expropriation, the authority should not be held responsible for costs for work on this strategy which, in my opinion, counsel ought to have realized was unnecessary and therefore unreasonable at this time. A majority of the itemized work beginning in January 1991 appears to be related to this strategy.

[31]  I also think that the hourly rate for the newly called Mr. Daroux at $100 in 1990-91 was too high when compared with the rates of newly called lawyers allowed by this board for the relevant time frame. See Branscombe where newly called lawyers hourly rates in 1994 were reduced.

[32]  As indicated above, I was not provided with the back up time sheets for Mr. Niedermayer or Mr. Daroux. In the circumstances, I have reviewed Robertson, Niedermayer & Miles' accounts and after considering all of the factors enumerated above, I have made a 60% reduction in the legal fees. This reduces the legal fees to $2,622. I fix the GST at 50% or $191.22. GST was only applicable to the legal services and disbursements after January 1, 1991, although it was largely these services that were reduced. Taking into account that these services were rendered for five separate clients, I calculate the amount allowed to each of the three sets of claimants whose costs are under review as $562.64 including GST.

[33]  I have already indicated that there was no back up information provided on charges for disbursements. One of the disbursements listed on the accounts was a variable charge for word processing on each account totalling $70. I do not have any evidence on this item and the board has rejected fees for word processing in the past as an item that should be included in overhead. See Hruschak Estates v. Vernon (City) (No. 2) (1991), 46 L.C.R. 230 (B.C.E.C.B.) at 236. There are numerous disbursements associated with the planner and the traffic engineer, including higher amounts for long distance telephone and faxes, that the authority should not have to pay since I have found that this work was unnecessary. Finally, I note that a number of these disbursements including the word processing fee and Mr. Daroux's travel expenses appear on the draft Bill of Costs under the Rules of Court for the judicial review procedure that was in Mr. Temple's file. It seems probable that at least some of the more generic charges such as postage, photocopying, long distance telephone, and faxes, are also included on this draft Bill of Costs, as substantial sums are listed for each of these expenses. I have no evidence on the precise amount of overlap between Mr. Niedermayer's disbursements and this Bill of Costs nor do I have any evidence on what Creston paid on this Bill of Costs. There is a likelihood that Creston has already paid the disbursements or a portion of them that are claimed in this cost review. In these circumstances I can award nothing for the disbursements.

[34]  With respect to Mr. Temple's accounts, his services in referring the claimants to Mr. Burke, assisting Mr. Burke, and negotiating an agreement with Mr. Niedermeyer on his fees were no doubt very useful to the claimants. However, the accounts themselves, together with Mr. Temple's testimony, indicate that most of Mr. Temple's time was to assist in the Supreme Court petition that resulted in the first expropriation being declared a nullity. This board does not have jurisdiction to compensate fees for work associated with proceedings taken in the Supreme Court, even where the proceeding arose out of the expropriation. See Hruschak v. Vernon (City) (1993), 50 L.C.R. 1 (B.C.S.C.) and Greatbanks v. Minister of Transportation and Highways (1998), 65 L.C.R. 20 (B.C.E.C.B.). I have already noted that Mr. Burke has quite properly not billed for his time in this proceeding. Mr. Temple's time in relation to the Supreme Court matter can not be claimed either.

[35]  The board has denied accounts from a second law firm in whole or in part on the grounds that an authority should not have to pay for duplicative work arising out of a claimant's preference. Bill's Frontier Restaurant Ltd. v. Minister of Transportation and Highways (1996) 58 L.C.R. 204 (B.C.E.C.B.). However, in this case it does not appear that this is a factor. But assisting in the settlement of Mr. Niedermayer's account, while useful to the claimants, is not a service for which Creston should have to pay.

[36]  After reviewing Mr. Temple's accounts I reduce the fees to $250. To this sum should be added the appropriate GST. The amount allowed for each of the three sets of claimants including GST is $53.50.

[37]  A number of Mr. Temple's disbursements must be related to the Supreme Court petition since a significant portion of his services are related to swearing affidavits and filing documents for the petition. I have no jurisdiction to order that disbursements related to the Supreme Court petition be paid by Creston. Such disbursements should have been claimed in the Bill of Costs for that matter. One of Mr. Temple's disbursements for payment to a process server appears to be listed on the draft Bill of Costs in the Supreme Court proceeding that was in his file. Most of Mr. Temple's disbursements that are claimed in this cost review are for more generic items such as long distance telephone, fax, photocopying and courier. Substantial sums are listed for these items in the draft Bill of Costs. As indicated above, I received no evidence on the degree of overlap between the disbursements billed by Mr. Temple and claimed in this cost review and the disbursements listed on the draft Bill of Costs. Finally, I have no evidence on which disbursements in the draft Bill of Costs have already been paid. In these circumstances I can award nothing for Mr. Temples's disbursements claimed in this cost review.

4.3 Planning bills - first expropriation

4.3.1 Claimants' evidence

[38]  Mr. Niedermeyer retained Ronald Wrigley of Walker Brown Urban Consultants to review the documentation and assist him with challenging Creston's plans for widening Hillside Street. Mr. Wrigley provided an opinion letter to Mr. Niedermayer and recommended that a transportation engineer be retained. The transportation engineer, Nick Finn of BA Consulting Group Ltd. in Calgary, reviewed the documentation and travelled to Creston to meet with town employees about the project. He prepared a draft report.

[39]  Walker Brown rendered one account for $404.05. The planner's fees totalled $325 for five hours at $65 an hour, and disbursements were $7.62. There was also some secretarial time and GST. Mr. Wrigley provided an affidavit that set out the work he had done, his hourly rates and his curriculum vitae. BA Consulting Group Ltd rendered two bills totalling $4,774.27. Mr. Finn gave testimony by telephone. His total time was 33 hours at $105 per hour. There was five hours clerical at $30 per hour and six hours technical support at $35 per hour. Disbursement totalled $636.84. The three sets of claimants had each paid one fifth of these three accounts totalling $5,178.22 or $1,035.64.

4.3.2 Creston's position

[40]  Creston's position was that these disbursements for the draft reporting from the planner and traffic engineer should not be paid as they do not fit under section 45(3). No information from these professionals was ever used in the compensation hearing. Portions of the accounts were claimed as disbursements in the draft Bill of Costs in the Supreme Court proceeding which implied that the claimants regarded them as part of the proceedings to have the first expropriation set aside.

4.3.3 Analysis

[41]  As I have already indicated, in my opinion, Mr. Niedermayer's decision to obtain this planning and traffic engineering advice at this stage in the proceedings was unnecessary and therefore unreasonable. The proper test for a disbursement is whether the disbursement was necessary and proper at the time that it was incurred. Van Daele v. Van Daele (1983), 56 B.C.L.R. 178 (C.A.). In the circumstances, I find that these disbursements were not necessary at the time that they were incurred and therefore they are disallowed.

4.4 Communications consultant - Mr. Legg

4.4.1 Claimants' evidence

[42]  Mr. Legg testified at the hearing. He started attending the meetings of the residents of Hillside Street that opposed the widening, although he was not a resident of Hillside Street himself. Both he and Mrs Ingham agreed that his role was to try to stop the expropriation of 16.5 feet from the claimants' front yards. As a former reporter and media representative, he had some ideas about how to try to generate public pressure to persuade Creston to consider other options. Mr. Legg testified that Mr. Ingham told him to keep track of his time and that they discussed an hourly rate of $90. Mr. Legg explained that he did not expect to be paid unless there was some success in stopping Creston from proceeding with the expropriation and costs were awarded. Mr. Legg reported that there was a meeting of the group that he did not attend which approved this fee arrangement. Mr. Ingham was not called and therefore the only evidence on the terms of Mr. Legg's contract was from Mr. Legg. The only term in writing was the following statement written on all of Mr. Legg's bills - "Payment not required unless action is successful and costs awarded"

[43]  Mr. Legg wrote a number of letters to the town, to the town newspaper, to various MLAs and provincial cabinet members objecting to Creston's plans. These letters and many of the replies that were received were in evidence at the hearing. Mr. Legg also suggested that a lawyer be retained and he appears to have attended most of the meetings with Donald Niedermayer. Mr. Legg stated that because Mr. Niedermayer did not live in Creston he wanted some background information on the project. Mr. Legg volunteered to provide this information. Mr. Legg testified that he told the other members of the group that to the extent that he did the work it would be cheaper than having it done by a lawyer. Mr. Legg created an ongoing file that contained a typed chronology, some information from the provincial government on municipal highway grants, a copy of the Expropriation Act, and some appraisal information. Mr. Legg also kept a clipping file from the local paper with respect to the project. He reported that he provided copies of the clippings and the various letters that he wrote to each of his five sets of clients and the lawyer. Neither Mr. Niedermayer nor Mrs. Ingham was able to confirm whether Mr. Legg was instructed to provide a report and whether he in fact did provide any report to Mr. Niedermayer.

[44]  Mr. Legg rendered seven bills between January 1991 and August 1991. He claimed just under 219 hours at $90 per hour for a total of $19,670 plus disbursements of $288.92. However, to his final bill he added a payment of $20,000 for the summary report. He testified that a lawyer had suggested that such a report might cost $20,000 if the lawyer was to prepare it. However his accounts show that he had already billed at least 27.5 hours or $2,475 for preparing this report. The total bill, including interest of 1.5% per month or $3,143, was $43,101.14. He said that in the fall of 1991 it appeared that the public relations campaign had run its course and that from then on it would be a legal matter. At that time, he explained, it appeared that the judicial review proceeding of Creston's expropriation would be successful - hence his rendering of his final bill and request for payment. He said that he reduced his bill to $30,000. Each of the three sets of claimants paid one fifth of this sum or $6,000 in October and December 1991.

4.2.2 Creston's position

[45]  Since Mr. Legg's role was also to try to stop the expropriation, Creston submitted that his accounts were not recoverable under section 45(3). In addition, there was no precedent for a claimant recovering the costs of a communications or media consultant. Finally, it said, the evidence revealed that Mr. Legg had increased the fees of other professionals by his frequent letters and enquiries, which were not always of assistance. It pointed to a letter from Mr. Niedermayer in which he complained that costs were increased as a result of having to deal with Mr. Legg's numerous communications.

4.2.3 Analysis

[46]  The claimants said that they could not have done the work that Mr. Legg performed. While this may be true, the issue I have to decide is whether Mr. Legg's work was necessary and whether the costs charged were reasonable such that the authority should reimburse the claimants for these costs.

[47]  One issue is whether there was any legal requirement for the claimants to pay Mr. Legg's accounts. In Neill v Minister of Transportation and Highways (No. 4) (1996), 58 L.C.R. 5 (B.C.C.A.) the Court considered the question of a fee for a real estate agent who had a contract with the claimant for a commission payable on the amount of settlement that he might achieve on their behalf. In fact, the real estate agent, although he worked hard over a three year period, was not able to achieve a settlement and the matter went to a hearing. The real estate agent billed the claimants on the basis of his commission calculated on the compensation awarded. Although the then chair of the board agreed that the real estate agent's services were invaluable to the claimants, he rejected reimbursement of the real estate agent's fee under section [45]. Finch J.A. upheld the chair's ruling and stated at p. 18:

In my view, the realtor's account does not fall within the ambit of "other costs" reasonably incurred because it would not be reasonable to compensate the Neills for costs that they were not legally obligated to pay. They were not legally obligated to pay Mr. Jones' account because his retainer was only for the purposes of negotiating a settlement. Whether his assistance proved to be of other value to the Neills does not go to the question of whether they were obliged to pay that account.

[48]  Although neither counsel referred to this case, it appears to me to have some application to the facts in this case. Mr. Legg also had a contract that said that no payment was required "unless action is successful and costs awarded". Mr. Legg requested payment in the fall of 1991 and was paid in December 1991. At that point there was no successful action although Mr. Legg testified that it appeared that the judicial review proceeding would be successful. In March 1992, there was a consent order in the judicial review proceeding that declared the expropriation a nullity. Mr. Temple's file that was in evidence included a draft Bill of Costs under the Rules of Court for the judicial review procedure, dated April, 1992. The total legal costs claimed in this draft Bill of Costs were $1,860. Various disbursements were included but there was no claim for any invoice from Mr. Legg. I have no evidence on what was paid either by agreement or by certification by the Registrar.

[49]  Therefore, at the time that Mr. Legg was paid, in December 1991, there was no legal obligation by the claimants that he be paid. Even if I could be persuaded that the contractual prerequisite for payment to Mr. Legg - "payment not required unless action is successful and costs awarded" - had been met in March 1992, when a consent order was filed declaring the expropriation a nullity, there are other considerations which bear upon whether the costs paid by Mr. Legg should be compensable.

[50]  One of these other considerations is whether any of Mr. Legg's accounts, as an information or media consultant can be a necessary and reasonable expenditure to be claimed from the authority under section 45(3) or, in the alternative in this case, under sections 34 or 40. In 343146 B.C. Ltd. v. Minister of Transportation and Highways (1993), 50 L.C.R. 221 (B.C.E.C.B.) the former chair, Jeanne Harvey, disallowed the fees for the services of an appraiser consultant on the basis that the consultant's services were redundant to those which were reasonably expected from counsel and other experts. To the extent that Mr. Legg charged for services rendered as a spokesperson for the group in its dealings with professionals, it appears to me that the reasoning in 343146 B.C. Ltd. is applicable. His services as a spokesperson were similarly redundant, whether or not his efforts in this role were useful. It is reasonable to expect that, if Mr. Legg had not been involved, the claimants and the lawyers would have found another way to communicate with one another that would have been no less effective.

[51]  To the extent that Mr. Legg's services were for letter writing to politicians and the media, I believe that this is a separate role that can be distinguished from that of a lawyer and is, therefore, not necessarily redundant. I was referred to no cases where expenses for anything similar have been paid. In the circumstances of this case, I do not have to decide on this point.

[52]  Finally there is the issue of reasonableness. Mr. Legg charged for over 218 hours at $90 an hour for a total of $19,670 in fees. After apparently charging them for the time to prepare his "report", he added a $20,000 surcharge for the report without any reasonable explanation (I recognize that he reduced this surcharge to slightly over $10,000 in his final accounting of $30,000 to the claimants and two other clients). This apparent discrepancy was not raised by either party, but it appears to be significant double billing for which I was given no explanation. In my review of this "report" it appeared to be a file containing documents that Mr. Legg had assembled in an orderly way - a copy of the Expropriation Act, a copy of a transportation report, a clippings file from various media sources, correspondence to politicians and the media and their replies, and some documents relating to the properties. The only part of the report that Mr. Legg appears to have contributed himself were a chronology and the letters he had written to politicians and the media. Since the report I was given appeared to be an ongoing file, it is not clear that it was ever provided to counsel as such - at least I was given no clear evidence that it was. It is true that much of the contents of the file were given to Mr. Niedermayer, as references to the various letters etc. show up in Mr. Niedermayer's accounts. Mr. Legg testified that he told the group that he would save them money compared to a lawyer, that it would be cheaper to have things done by him rather than a lawyer. However, I note that his final account of $30,000 was over three times the size of Mr. Niedermayer's and Mr Temple's accounts combined. It is also $4,000 more than the total fees charged to the three sets of claimants for all the professional services by Gillespie Renkema Burke. While I have no doubt that Mr. Legg expended many hours with the claimants, charges of this magnitude for this type of work cannot be reasonable.

[53]  In the circumstances, I disallow Mr. Legg's accounts.

5. Second expropriation

5.1 Legal accounts - second expropriation

5.1.1 Claimants' evidence

[54]  Gillespie Renkema Burke rendered two individual accounts to each set of claimants. Mr. Burke's hourly rate was agreed and there was no evidence from him at the hearing. Attached to his accounts to the Inghams and the Jamiesons were back up documentation for the time expended and the client ledger for the recording of disbursements. No such back up documentation was presented for Mr. Kowalski.

[55]  The first accounts were dated November 30, 1993 and the first work included in these accounts began in May 1993. The work in relation to the petition for judicial review was not claimed. The November 30, 1993 accounts were $3,451.06 to the Inghams, $1,809.17 to the Jamiesons, and $1,468.07 to Mr. Kowalski, including disbursements and taxes.

[56]  Creston paid $2,698.66 of the November 1993 legal account to the Inghams in March 1994. This sum was calculated by reducing Mr. Burke's hourly rate from $185 to $175 and by halving the time indicated for travel. GST had been adjusted accordingly. This left $752 outstanding. There was a letter from Mr. Burke sent at the time saying that less than half his travel time had been included and that therefore he objected to a further reduction of 50%. The back up documentation for the initial payments for costs to the Jamiesons and Mr. Kowalski was not provided and letters from the Ingham file were included instead. Thus I was not given any evidence as to what the advance payment for costs were in the Jamieson and Mr. Kowalski file. Assuming the amount given for the advance for costs in each schedule of costs submitted for this hearing is correct, after deducting the allowance for appraisal costs, it appears that all but $187 and $167 respectively of the initial legal bills to the Jamiesons and Mr. Kowalski were reimbursed.

[57]  The second accounts were dated March 15, 1996, following the hearing. The March 15, 1996 accounts were $10,857.89 to the Inghams, $8,003.31 to the Jamiesons, and $7,940.38 to Mr. Kowalski. The total hours billed by Mr Burke on both accounts to the Inghams were 51.15, to the Jamiesons 40.75, and to Mr. Kowalski 38.75. An associate, Mr. Frame, had also billed 16.5 hours to the Inghams at $100 per hour. Total time billed by both lawyers was 147 hours for $25,820.25 in fees.

[58]  Total legal accounts for the second expropriation were $14,308.95 to the Inghams, $9,812.48 to the Jamiesons, and $9,408.45 to Mr. Kowalski, including disbursements and taxes. There was evidence that the claimants had paid these accounts in full. Total accounts for all three sets of claimants were $33,529.88.

5.1.2 Creston's position

[59]  Creston's position on these accounts was that it agreed to Mr. Burke's hourly rate and, in general, to the time that he had expended. Creston stated that there should be some minor adjustments to the disbursements charges for photocopies and faxes to make them in line with what the board has previously allowed as reasonable. Creston's main objection to the legal accounts was that, when compared to the net amount awarded, the total legal accounts to Mr. Burke were unreasonable. Creston referred me to the factors to be taken into account under section 45(10). This matter was not particularly complex - market value, for example, had been agreed at the hearing. With respect to the degree of success, although the Inghams' and Mr. Kowalski's matters are being reheard as a result of the Court of Appeal decision and as a result the final award is not yet known, the amounts that have been awarded in excess of the advance payment in the three claims are relatively small.

	Claimed Compensation	Award	Advance payment	Legal costs claimed
Inghams	approx $62,000	$30,359	$25,200	$14,308.95
Jamiesons	approx $32,000	$ 9,017	nil	$ 9,812.48
Mr. Kowalski	approx $25,000	$12,528	$3,100	$ 9,408.4

[60]  As can be seen from this chart the net awards in excess of the advance payment range from $5,159 to $9,428. After Creston's relatively small reductions to the Gillespie Renkema Burke accounts with respect to the photocopying and fax disbursement charges, Creston then compared the net awards at the compensation hearing to the legal accounts. During argument at this cost review Creston deducted from the legal accounts any amount in excess of the net award for each claimant. It agreed to reimbursement of legal accounts from Gillespie Renkema Burke for each claimant up to a maximum of the net award as follows:

	Legal costs claimed	Creston's position
Inghams	$14,308.95	$5,059
Jamiesons	$9,812.48	$8,917
Mr. Kowalski	$9,408.45	$9,146

Since the Inghams' account was the greatest in relation to the amount of the net award in excess of the advance payment, Creston's position was that it should be reduced the most. The agreed amount for each claimant assumes reimbursement of $100 for each claimant to Mr. Neidemayer and Creston submits that if greater legal costs were allowed for the first expropriation, these should be considered along with the costs claimed for the Gillespie Renkema Burke accounts in applying the test of overall reasonableness in relation to the amount of the net award. Creston relied on the case of Kliman v. Board of School Trustees, District No. 63 (Saanich) (1992), 48 L.C.R. 204 (B.C.E.C.B.) in which the then Vice Chair, Cliff Watt Q.C., stated at p. 209 " ...a compensation scheme where costs that frequently approach or exceed the amount involved is a scheme that will inevitably attract criticism".

5.1.3 Analysis

[61]  In considering the factors under section 45(10), after reviewing the board decision, I agree with Creston that these three cases were not particularly complex. The initial compensation hearing occupied four days. It is true that because the expropriations were partial takings, there were some unusual legal and appraisal issues raised in determining compensation for reduction in market value to the remaining land. However, the market value of the land taken was agreed during the hearing and there were no business loss claims. The disturbance damages claimed for various remedial measures do not appear to have been complex.

[62]  With respect to the degree of success as measured by the difference between the amount awarded and the advance payment, it is clear that the net awards to date in these three claims are relatively small, ranging from approximately $5,000 to approximately $9,000. I do not agree, however, with Creston's position of comparing the legal costs for each set of claimants to their net award separately and then deducting any legal costs that exceed the relevant net award. This literalist application of section 45(10)(b)(ii) results in Mr. Kowalski obtaining all of his legal costs (after adjustments for disbursements), the Jamiesons' legal costs being reduced only 5% (after adjustments for disbursements), while the Inghams' costs are reduced approximately 65% (after adjustments for disbursements).

[63]  In the Jamiesons' case, the fact that they did not cash their advance payment, has resulted in a larger net award compared to the other two sets of claimants. I do not think that this choice by the Jamiesons should entitle them to greater reimbursement of legal costs merely because their ratio of net award to costs is greater than if they had accepted the advance payment. In the Inghams' case, the fact that they received a larger advance payment for their two lots has resulted in a correspondingly smaller net award. In addition, the Inghams' legal costs are approximately 50% higher then the Jamiesons' or Mr. Kowalski's. Mr. Legg was no longer involved with the group on a paid basis after Mr. Burke commenced the compensation claim and there was evidence that Mr. Ingham acted as spokesperson for the group. In reviewing the Gillespie Renkema Burke accounts, it appears to me that the Inghams' accounts are higher, at least in part, because of their role as the main representative of the group. There are entries for telephone calls and letters to the Inghams and almost no entries for similar items to the other two sets of claimants. There are also many more entries on the Inghams' accounts (on the second account there are twice as many entry dates) than on the accounts of the other two sets of claimants, and most of these additional items appear to me to be of general application for all of the claims. If the other two sets of claimants benefitted to some degree from the legal accounts that were directed to the Inghams, the Inghams's larger legal account should not be used to single them out for a greater deduction. I prefer to consider the three sets of claimants as closely linked and make any necessary adjustments to the Gillespie Renkema Burke accounts in concert.

[64]  I do agree in general with Creston's position that the Act implies some reasonable relationship between the costs claimed and the net amount awarded. In a number of other section 45 decisions, significant reductions have been made to legal accounts because of the relative lack of success as set out in section 45(10)(b)(ii), despite the fact that the board had awarded the claimants 100% of their reasonable costs. See Bill's Frontier Restaurant Ltd. and McKinnon v. School District No. 36 (Surrey) (1997), 61 L.C.R. 9 (B.C.E.C.B.). In this case the three sets of claimants have obtained net awards to date in the approximate range of $5,000 and $9,000 although these amounts are not conclusive with respect to the Inghams and Mr. Kowalski, pending the outcome of the further hearing. While these amounts are relatively small, they represent a significant increase over the advance payments (or the attempted advance payment). Thus the Inghams gained 20% over the $25,200 advance payment, the Jamiesons gained 134% over the attempted advance payment of $3,850, and Mr. Kowalski gained 304% over the advance payment of $3,100. This might be compared with the lack of any improvement on the advance payment in Cokato Dairy and Stock Farms Ltd v Fernie (City) (1998), 64 L.C.R. 242 (B.C.E.C.B.), or the 4% improvement over the advance payment in Bill's Frontier or the 9% improvement in McKinnon. Although the total amounts at issue are relatively small for all three claimants, it can not be said that the claimants met with no success at the compensation hearing in comparison to the advance payments that had been made or offered. I note that the agreements on market value were not made until the hearing had commenced. Therefore, while the net amounts awarded were not very large, it might be said, nonetheless, that the claimants had some reason to proceed to a compensation hearing.

[65]  The actual amounts in issue are a separate consideration. The claimants claimed compensation ranging from $25,000 to $62,000, while the amounts awarded to date are between $9,000 and $30,000. It is true that the three relatively small claims were heard together, and therefore some of the costs have been split between three claimants. However, it is the case that the total costs from Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. are approximately $48,000, which is the same approximate amount that has been awarded to the three claimants to date. I agree with the former vice chair in Kliman that a scheme where the costs frequently approach the amount involved will inevitably attract criticism.

[66]  Another factor to be considered under section 45(10)(b) is the degree of success taking into account the determination of the issues. While there were a number of claims advanced that were not successful, this matter was appealed and there has been a further hearing. In the circumstances I will note only a claim for personal losses for the loss of privacy and increased noise from the road. The Inghams and Jamiesons claimed $10,000 each for this head of damages while Mr. Kowalski claimed $3,400. In Patterson v. British Columbia (1994), 53 L.C.R. 88 (B.C.E.C.B.), (upheld later by the British Columbia Court of Appeal, 62 L.C.R. 89), this board held that non-pecuniary personal losses were not compensable. The board in this case found this authority applicable and denied the claims for personal losses for loss of privacy and increased noise from the road. Only Mr. Kowalski received a nominal sum of $500 compensation under this heading for his particular loss as a ham radio operator as a result of the widening of the road. Given the authority of this earlier decision by the board, it would seem that these claims for personal losses for loss of privacy and increased noise by the three claimants did not enjoy much prospect of success.

[67]  I agree with Creston that the disbursements for photocopying and faxes should be reduced so that they are in line with what the board has found to be reasonable. There is no indication of the rate per page on the accounts but the back up documentation indicates that the charge per page is $0.35 per page. Mr. Burke has previously charged $0.35 in Branscombe v. Minister of Transportation and Highways (1994), 54 L.C.R. 1 (B.C.E.C.B.). The board has customarily allowed $0.15 per page as a reasonable amount for photocopying and on this basis the approximate reduction of the disbursements for photocopying to the Inghams is $230, to the Jamiesons is $213, and to Mr. Kowalski is $210. With respect to the disbursements for faxes, the back up documentation indicates that a flat rate charge of $5.00 per fax was made, with no indication of the number of pages or whether the fax was incoming or outgoing. Following the decision in Greatbanks I allow an average of 4 pages per fax at $0.35 per page instead of a $5.00 flat charge per fax. Finally, I disallow the $15.00 file opening charge for each claimant since I regard such a charge that is not actually expended as part of overhead.

[68]  The legal fees billed by Gillespie Renkema Burke to the three sets of claimants total $25,820.25, while the total costs claimed including disbursements and taxes are $33,529.88. I have also allowed a total of $1,747.20 in legal fees with respect to accounts from Robertson, Niedermayer & Miles and Mr. Temple. After considering all the relevant factors, including the possibility that two of the claimants may have somewhat greater awards in the end, I allow the Gillespie Renkema Burke accounts as follows: to the Inghams $11,000, to the Jamiesons $7,500, and to Mr. Kowalski $7,200 including disbursements and taxes. This amount takes into account the reduction in disbursements detailed above, and a similar reduction in fees to each of the three sets of claimants of between 20% and 25% with the appropriate adjustments in GST and PST.

5.2 Appraisal accounts - second expropriation

5.2.1 Claimants' evidence

[69]  Danny Grant of Interwest Property Services (1991) Ltd. gave appraisal evidence for the claimants. Interwest rendered two accounts for work done for five neighbouring clients including the three sets of claimants. One account was a joint account and was dated March 8, 1994. This account billed for 91 hours of professional services for a total of $5,140, plus disbursements and taxes for a final total of $5,698.31. In this account Mr. Grant billed for 12 hours at $165 per hour. Each set of claimants claimed one fifth of this account or $1,139.66.

[70]  Creston paid $3,110.83 of this account in April 1994 or $1,036.94 for each set of claimants. This was three fifths of the total bill after reducing Mr. Grant's rate from $165 to $125 and adjusting the GST accordingly. This left $102.72 outstanding on this account for each of the three sets of claimants.

[71]  Interwest rendered a second account to each set of claimants on March 11, 1996. In the later accounts each set of claimants was billed for 28.5 hours of professional services or $2,709.15, plus one third of the common disbursements. Mr. Grant billed for 11 hours at $170 per hour on each account. There was back up documentation provided for this account detailing who had done the work, their hourly rate, and the time spent. There was also the ongoing accounting for the various disbursements, together with the division of the common costs into three. The disbursements to the three sets of claimants varied on one item so that the final account was $3,681.24 for the Inghams and $3,724.04 each for the Jamiesons and Mr. Kowalski. Thus the Inghams' total claim for appraisal costs was $4,820.90 and the Jamiesons' and Mr. Kowalski's was $4,863.70. The total appraisal accounts to the three claimants are $14,548.30, including a total of 177 hours of professional services.

[72]  Mr. Grant gave testimony at the cost hearing. He stated that he had been in practice for 31 years and that he specialized in partial acquisitions. He testified that the hourly rates of the people in his firm were reviewed every December in relation to other appraisers and that for the last 10 years he had tried to keep his hourly rate at the top of the range for senior appraisers in the province.

5.2.2 Creston's position

[73]  At the conclusion of the hearing Creston agreed to reimbursement of the appraiser's accounts with the exception of Mr. Grant's hourly rate. Creston submitted that Mr. Grant's hourly rates of $165 and $170 were too high. While Mr. Grant has extensive experience, he is a member of SR/WA (statutory rights of way association) but he is not a member of the Appraisal Institute of Canada. Creston referred us to Ferancik v. Langley (Township), (1997), 62 L.C.R. 291 (B.C.E.C.B.), where the then Vice Chair, Fiona St. Clair, at p. 311 stated that an appraiser's lack of formal AACI designation was one factor in deciding that his hourly rate was too high. Creston agreed to Mr. Grant's time at $125 an hour. Creston also submitted that global reasonableness applied to appraiser's accounts and referred me to Tidmarsh v. Comox-Strathcona (Regional District) (1994), 54 L.C.R. 13 (B.C.E.C.B.) where, primarily on the basis of the small amount in issue, there was a global reduction of both the appraisal account and the legal accounts. When Mr. Grant's time was allowed at $125 an hour and GST was adjusted accordingly, Creston agreed that the Inghams should be reimbursed $4,188.53 in total for appraisal costs, and that the Jamiesons and Mr. Kowalski should each be reimbursed $4,231.33. These sums included the advance payments already received.

5.2.3 Analysis

[74]  Mr. Grant admitted that his hourly rate is set each year to be at par with the most senior appraisers in the province. While it is certainly a high hourly rate, I do not accept Creston's position on the appraisal accounts of merely substituting $125 for Mr. Grant's hourly rate of $165 or $170. The decision in Bill's Frontier makes clear that my task in this review is to determine overall reasonableness.

[75]  One of the statutory factors to be considered is the manner in which the appraisal evidence was prepared. In its decision, the board indicates that it relied on Mr. Grant's reports to obtain the market value of the properties before the taking. Because there has been an appeal from this decision, and a further hearing, I must be careful in accepting all of the board's comments in its initial decision as final.

[76]  While each cost assessment turns on its own particular facts, it is helpful to consider other board decisions that have some similarities. In Bill's Frontier the total appraisal accounts allowed in a case involving a nine day hearing for a partial taking were in the order of $10,800. In Ferancik the appraisal accounts allowed after a four day hearing for a total taking of unimproved land was $12,000. In this case, although there were three reports prepared, there was a significant degree of overlap between them. Mr. Grant testified that the main difficulties in this case arose from the distance that Creston was from his office and the resulting problems in acquiring information since his office did not have much information on Creston in its data bank. While this problem does justify some extra time, the issues were not particularly complex.

[77]  After considering the various factors, I allow the Interwest Property Services (1991) Ltd. accounts at $4,200 to the Inghams and $4,243 each to the Jamiesons and Mr. Kowalski including disbursements and GST. This is almost identical to the amount agreed to by Creston and is equivalent to a similar reduction in fees to each of the three sets of claimants of approximately 15% with the resultant adjustment in GST.

6. Witness fees

[78]  Each set of claimants also claimed witness fees incurred at the compensation hearing. Ken Yaeger was a Cranbrook appraiser who had been retained by Creston to give initial opinions of value for the partial takings. Creston did not rely on Mr. Yaeger's opinion as they had obtained a second appraisal from someone else. The claimants summoned Mr. Yaeger as a witness at the hearing and he submitted a bill for his time for $160.50. At the conclusion of the hearing Creston agreed to this bill and therefore it is allowed.

[79]  George LeClaire was a contractor in Creston who had provided estimates for work on the Jamiesons' and the Kowalski's residences that would ameliorate the impact of the widened road. He also testified at the compensation hearing. He submitted an account for $107 for travelling expenses to attend the hearing. At the conclusion of the hearing Creston agreed to this bill. However, this bill was also included as a disbursement in the Gillespie Renkema Burke accounts to the Jamiesons and to Mr. Kowalski and therefore it is not allowed separately as that would be double recovery.

[80]  Finally Garry Heasman was a bricklayer in Creston who rebuilt the Ingham's chimney. He testified at the compensation hearing and submitted an account for $125 for his travelling expenses. At the conclusion of the hearing Creston agreed to $107 of this bill, at the same rate as Mr. LeClaire. I allow $107 at the same amount as Mr. LeClaire.

[81]  The Inghams and Jamiesons claimed their own travel costs from Creston to Cranbrook to attend the compensation hearing of $250 and $125 respectively. Mr. Kowalski who testified by telephone from his home in Calgary claimed $100 in telephone costs. Creston submitted that there was no evidence for any of these expenses and thus they should be rejected. Photocopies at the hearing in the sum of $7.13 were also claimed and Creston agreed to this cost.

[82]  Section 27(2) of the Act provides:

(2) If practicable and convenient, the board must hold its hearings in the area where the expropriated land is located, unless all parties to a proceeding agree to hold the hearing at some other location.

In this case it was practical to hold the hearing in Cranbrook rather than in Creston where the properties were located. This required the claimants to travel to Cranbrook for the hearing. While there was no evidence in support of the claimants' travelling costs, I am entitled to take notice that Creston to Cranbrook is just over 100 km by road. In the circumstances the travelling costs of the Inghams at $250 and the Jamiesons at $125 are reasonable and I allow these sums. Mr. Kowalski is also entitled to costs that he incurred in talking to counsel and testifying at the hearing from Calgary. There was no evidence offered as to these costs. Nevertheless, in the circumstances I am prepared to allow reimbursement of the $100 claimed for telephone calls.

7. Summary

[83]  I have allowed the following accounts including GST and PST where applicable.

		Inghams	Jamiesons	Mr. Kowalski
First Expropriation
Legal Costs
1.	Niedermayer	$562.64	$562.64	$562.64 (includes taxes)
2.	Temple	$53.50	$53.50	$53.50 (includes taxes)
Consultant Costs
3.	Wrigley	nil	nil	nil
4.	Finn	nil	nil	nil
5.	Legg	nil	nil	nil
Second Expropriation
6.	Legal Costs	$11,000	$7,500	$7,200 (includes taxes)
7.	Appraisal Costs	$4,200	$4,243	$4,243 (includes taxes)
8.	Witness Fees	$53.50	$53.50	$53.50
		$107.00	$7.13
		$ 250.00	$ 125.00	$ 100.00
	Total	$16,226.64	$12,544.77	$12,212.64

8. Interest

8.1 Claimants' position

[84]  Each of the three sets of claimants claimed interest. All three sets of claimants claim a total of $294.18 in interest on the outstanding amount of the first Gillespie Renkema Burke accounts dated November 1993 and the first Interwest Property Services (1991) Ltd. account dated March 1994 from when the advance payments on these accounts were made in March and April 1994 respectively, until April 1996. There was no evidence of any contractual agreement to pay interest between Gillespie Renkema Burke and the claimants but each of the three accounts stated that interest will be charged at a rate of 1 1/2% per month (18% per annum) on all amounts not paid within 30 days of billing date. Interwest billed the claimants collectively and again there was no evidence of any contractual agreement to pay interest. The accounts had a similar provision for interest charges on overdue accounts.

[85]  Each set of claimants also claims interest under section 46 on the whole of the outstanding bill from May 1996 when the second accounts and summary schedule of costs were presented to Creston until the costs are paid.

8.2 Creston's position

[86]  Creston's position was that there was no evidence of obligation to pay interest in that no retainer agreements between the claimants and the relevant professionals had been filed as exhibits.

[87]  I have no evidence of any reasons for Creston's non payment of any amount on the second accounts and schedule of costs that was submitted to them in May 1996 until the review of costs held in June 1999. It appeared that prior to the review, Creston had agreed to Mr. Burke's hourly rate but indicated that it objected under section 45(10) to his total bill in relation to the amounts awarded following the first hearing. During the review itself, Creston agreed to some of the witness fees and other minor matters. During argument it conceded Interwest's account at a reduced hourly rate for Mr. Grant.

8.3 Analysis

[88]  First, there appears to be a problem with the interest calculations advanced for the outstanding balances arising out of the initial accounts from Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. Gillespie Renkema Burke billed the three sets of clients separately and each account was for a different amount ranging from $1,468.07 for Mr. Kowalski to $3,451.06 for the Inghams. Interest was calculated on the outstanding balance of the Ingham account ($752.40) from the date of advance payment until April 1996. This interest calculation totalled $141.50. Although it appears that the outstanding balances for the Jamiesons and Mr. Kowalski were only $187 and $167 respectively, the same amounts for interest, namely $141.50, were claimed for these two claimants as for the Inghams. With respect to the Interwest account there was only $102.72 outstanding for each of the three sets of claimants but the interest claimed appears to be calculated on one fifth of $2,587 or $517.40. In any event, the initial accounts from Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. were reimbursed in a timely way but for the outstanding balances.

[89]  More generally, awards of interest on professional accounts are discretionary and the mandatory element contained in section 46 of the Act does not apply. The board has awarded interest on costs at a section 45 review with respect to evidence about the claimant's contractual obligations to pay interest on a particular professional's account, although in some cases interest has been awarded in the absence of clear evidence of a written retainer agreement. See Tidmarsh v. Comox-Strathcona (Regional District) (1995), 55 L.C.R. 81 (B.C.S.C.); Roadmaster Auto Centre Ltd. v. Burnaby (City) (1996), 58 L.C.R. 305 (B.C.E.C.B.) and El and El Investments Ltd. v. Board of School Trustees of School District No. 36 (Surrey) (No. 3) (1996), 59 L.C.R. 200 (B.C.E.C.B.). In this case there were statements on all of the accounts with respect to interest being paid on overdue accounts, including the Interwest accounts. I note that one of the Interwest accounts that was filed as an exhibit appeared to be a file copy from Interwest's files and was not on letterhead. As a result it lacked the statement with respect to interest, but I am satisfied that the statement was present on the original account.

[90]  I would note that in this case there was evidence that the claimants paid all the accounts that were presented to them. While I do not have the evidence as to when the Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. accounts were paid, the other accounts appear to have been paid relatively promptly and I can infer from this that these bills were also paid relatively promptly. If a claimant promptly pays the account then the professional is owed no interest on his account and it is the claimant himself who is out the money until the authority eventually reimburses him. It seems to me inequitable to deprive the claimants from interest when they are out of pocket directly rather than under the construct that they are obligated to pay interest on an overdue professional's account. The provisions of the Tariff of Costs Regulation, B.C. Reg 189/99 ("the Tariff"), with respect to interest on legal or real estate appraisal costs do not apply to this review. I award the claimants interest on the outstanding accounts from Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. that have been allowed from May 31, 1996, until paid.

[91]  As to the rate of interest, the board has not always accepted the rate prescribed by the professional in his or her agreement with the client. See Roadmaster Auto Centre Ltd. Neither does the statutory rate set out in section 46 apply. See El and El Investments Ltd. In my opinion simple interest at 10% per year from May 31, 1996 is reasonable.

9. Costs of this hearing

[92]  The claimants have claimed the costs of this review. There is no question that the cost review was necessary since no payment on the second accounts from Gillespie Renkema Burke and Interwest Property Services (1991) Ltd. had been made by Creston. It is my understanding that there was no agreement to paying any particular sum on these accounts prior to argument at the conclusion of the cost review. While the degree of success on the costs for the first expropriation was not great, the circumstances for this claim were somewhat unusual. The claimants have enjoyed substantial success with respect to reimbursement of costs for the second expropriation. No evidence was provided to me as to the costs that should be awarded. In the circumstances the claimants are entitled to their actual reasonable costs for the cost review in an amount to be agreed upon or, failing agreement, to be determined by the chair. The Tariff does not apply to these costs.

________________________________
Sharon I. Walls
Vice Chair