June 15, 1995, E.C.B. Control No. 50/92/91 (56 L.C.R. 122)

Between: Bohumil Cejka and Margaret Cejka
Claimants
And: Cariboo Regional District
Respondent
Before: Fiona M. St. Clair, Vice Chair
Appearances: Jeffrey Frame, for the Claimants
Guy E. McDannold, for the Respondent

 

1. THE APPLICATION

On March 29, 1995 I heard the application of the claimants, Bohumil and Margareta Cejka ("the Cejkas") for a review of their bill of costs to September 30, 1994, pursuant to s. 47 of the Expropriation Act, S.B.C. 1987, c. 23 ("the Act"). Section 47 enables a claimant to have the chair or a delegated member of the Expropriation Compensation Board ("the board") review a written bill consisting of "the reasonable legal, appraisal and other costs that have been incurred by him up to the time the bill is submitted." I heard the application pursuant to ss. 25 (5.1), which provides that as vice chair, I may exercise the powers and jurisdiction of the chair under the Act. Subsection 47 (4) provides that "the person conducting the review shall, after taking into account all relevant circumstances, assess the reasonableness of the bill and may make an order with respect to its payment, accordingly."

The bill of costs presented to me sought costs under three headings, one of which (a claim for owners' time and expenses) I was asked not to deal with. The remaining two items consisted of:

a. "costs incurred to Cullis Appraisals & Land Resources Ltd. for professional assistance rendered to February 20, 1993" in the amount of $8,527.90; and

b. "legal costs incurred for defending in the Court of Appeal the right to present a claim" in the amount of $9,249.77.

Mr. Cejka gave oral testimony at the hearing with regard to the first of these two items.

The respondent, Cariboo Regional District ("Cariboo") had not, at the date of the hearing, made any payment toward either of the items.

 

2. CULLIS APPRAISALS & LAND RESOURCES LTD. ACCOUNT

The Cejkas filed, as an exhibit to an affidavit, a copy of an invoice from Cullis Appraisals & Land Resources Ltd. ("Cullis") dated February 20, 1993. Attached to the invoice was a typed list of itemized and dated services, along with individual cost amounts for each item, and a total amount for each year, as well as a global total. There is a typed heading on this list that reads "Charges from 1984 to March 4th 1993". By far the majority of these items begins "discussion re" or "discussion of ". There is one site inspection listed, as well as some letter drafting and receipt of correspondence. There is one item entitled "studying Expropriation Act" for $400, and another entitled "travel to Kamloops to attend hearing" for $756. The first item of the account is dated February 25, 1984 and the last March 4, 1993.

The global total on the second page of the list is $5,562.00, and it is described as being a "total from 1984 to March 4 1993". The invoice, however, describes the fee as "work from 1984 - Feb 15 1993 as agreed", and seeks payment of the amount of $7,970.00, plus goods and services tax of $557.90, for a total of $8,527.90. As stated above, this is the sum sought on the Cejkas' bill of costs. Neither Mr. Cejka nor his counsel provided me with an explanation of the $2,408.00 difference between the two amounts stated as the total fee for service. I have added up the individual items listed on the attachment to the invoice, and I arrive at the same total of $5,562.00 that is set out on that document.

Mr. Cejka testified that he retained the services of Cullis on February 25, 1984, shortly after he first heard that Cariboo intended to place a sewage pipe along the edge of his property. He said that Cariboo at first only offered him $15 for this use of his land, which he found completely unacceptable. As there were no lawyers who practiced expropriation law in Quesnel at the time, he went to Mr. Cullis to be "sort of [his] helper" and advisor in his negotiations with Cariboo for more compensation. During his examination in chief, he testified that the invoice is a real account for what Cullis has charged them, that Mr. Cullis was helpful to them, and that Cullis' services were rendered from 1984 to the point in 1993 when they retained the services of their present counsel. The pleadings filed indicate that the service of the expropriation resolution, and the vesting of the property in Cariboo, took place in the spring of 1991.

Under cross-examination by counsel for Cariboo, Mr. Cejka admitted that he did not know what hourly rate was used in calculating the amount of the invoice, nor how much time Mr. Cullis spent on any of the individual items. With regard to the item for travelling to Kamloops, he admitted that he did not know whether this represented a fee for service rendered on an hourly rate basis, or disbursements for travel expenses.

Counsel for Cariboo also cross-examined Mr. Cejka about the real basis of his arrangement with Mr. Cullis. Two of the questions and answers were as follows:

Q: There was never any intent, either by you or by Mr. Cullis, that he would ever bill you for these discussions that you had had over the years, was there?

A: There was. I beg to differ with you. But, Mr. Cullis was going to get paid by the end of -- by the conclusion.

Q: Let me rephrase it. In 1984 when you retained his services, there was never an agreement that he was going to bill you from time to time and you were going to pay for his services on an ongoing basis, was there?

A: No.

Counsel for the Cejkas maintained that the Cullis account comes squarely within the wording of ss. 44 (3), which provides that

"… a person whose interest or estate in land is expropriated is entitled to be paid costs necessarily incurred by him for the purpose of asserting his claim for compensation or damages."

Counsel for Cariboo, on the other hand, maintained that it is outside the jurisdiction of the board and the intent and scheme of s. 44 and s. 47 to award costs related to the Cullis account. He argued that the time spent by Mr. Cullis was never billed or intended to be billed to the Cejkas until a s. 47 claim could be advanced -- in other words, that it is not a bona fide account. He suggested that none of the time spent by Mr. Cullis has been or would prove to be of assistance to the board. In addition, he maintained that the account was excessive and not reasonable. He cited the following items in this regard: reviews of letters; discussions with politicians; advice on selection of various lawyers; learning the new Act; and travel time. Finally, he argued that the Cejkas' presentation of the account did not meet the standard of evidence of reasonableness required on a s. 47 application.

On this latter point, he referred me to the decision of the late vice chair Watt in Kliman v. School District No. 63 (Saanich) (1992), 48 L.C.R. 204. In that case, the vice chair outlined the type of evidence that is required in order to demonstrate the reasonableness of a legal account or an account of an expert witness in the context of a s. 47 application. He stated that the board requires a succinct statement containing information about the following:

a. details of who is working on the file, and the rationale for employing more than one person, if that is the case;

b. the hourly rates of each individual listed;

c. the relevant circumstances, the stage the case has reached, the complexity and the magnitude; and

d. other pertinent matters -- for example, similar details about the fees of an expert witness who is not a lawyer.

Counsel for Cariboo argued that, even though the Cullis account is not strictly speaking a legal account or an account of an expert witness, these requirements should also apply to it.

Counsel for Cariboo also referred me to the decision of member Ross of the board in Roadmaster Auto Centre Ltd. v. Burnaby (City) (1994), 54 L.C.R. 148. In that case, counsel for the claimant had declined to provide evidence to support the reasonableness of certain items in his firm's legal account, on the basis that to do so "might cause him to reveal to the expropriating authority his client's strategies on the compensation claim." At p. 155 of that decision, Ms. Ross states:

"The review process under s. 47 is designed to be a summary process, but it is not designed to be an automatic or purely mechanical process. I am required to assess reasonableness, though not in a final sense which happens under s. 44. Where the evidence does not allow me to do that because the claimant chooses not to provide information, then I must decline to order advance payment of costs which have not been established to be reasonable."

While counsel for the Cejkas has not declined to adduce evidence about the Cullis account on any such tactical basis, I conclude that he has not provided me with sufficient information about the Cullis account to enable me to assess its reasonableness as I am required to do.

I have no information about Mr. Cullis' hourly rate and how the itemized amount for each service item was arrived at. I have very sketchy information as to why it was reasonable for the Cejkas to have Mr. Cullis "review" so much correspondence between 1984 and 1993. I have no information as to why it was reasonable for Mr. Cullis to have been communicating with politicians on the Cejkas' behalf. I have no information as to whether the $756 item for travel to Kamloops to attend a hearing was reasonable, or even whether it represents travel disbursements or time spent by Mr. Cullis. I agree with counsel for Cariboo that it is not reasonable that Cariboo should have to pay for Mr. Cullis to study the Act for several days.

The dates of the provision of the services covered by the account are also of concern to me. While it has been settled by the board in Creative Stretch Fabrics Ltd. v. Pitt Meadows (District) (1991), 46 L.C.R. 111, that expenses incurred by an owner prior to the service of an expropriation notice but during a time when the owner is aware that an expropriation is about to occur may properly be the subject of s. 47 and s. 44 awards, it is quite unusual that an owner should present an account, like this one, that dates from seven years before the actual expropriation. The difficulty with this arises from whether the costs sought to be recovered are "necessarily incurred" by the Cejkas "for the purpose of asserting [their] claim for compensation or damages", as set out in ss. 44 (3) of the Act. Although this is a s. 47 application, it is useful to refer to s. 44 in order to place the application of s. 47 in context. I did not find Mr. Cejka's testimony on this point helpful, and am of the view that I would have to have more information, perhaps directly from Mr. Cullis, in order to satisfy myself about this. The information emerged through Mr. Cejka's cross-examination that the Cejkas had had at least two lawyers engaging in correspondence on their behalf during the time that Cullis was providing its "assistance" to them. This, along with the answers to the cross-examination questions reproduced above, raises some confusion in my mind as to the nature of the role that Cullis played for the Cejkas, and whether it is one that is properly reimbursable under the Act.

Finally, I have not been provided with an explanation as to why the Cullis invoice claims payment of $8,527.90 (which is also the amount sought on the bill of costs), whereas the itemized statement of services rendered by Cullis provides a total of $5,562.00. I am left wondering whether the words "as agreed" on the invoice might refer to some agreement between the Cejkas and Cullis to pay an additional amount not itemized on the attached statement, but I heard no evidence to that effect.

I therefore find that I do not have sufficient evidence before me to enable me to satisfy myself about the reasonableness of the Cullis account for the purposes of s. 47. On that basis, I decline to award any costs of that account at this time.

 

3. GILLESPIE RENKEMA BURKE LEGAL ACCOUNTS OF MAY 26, 1994 AND JULY 23, 1994

The Cejkas presented two accounts of their legal counsel, Messrs. Gillespie Renkema Burke, dated May 26, 1994 and July 23, 1994, totaling $11,330.66 in legal fees, disbursements and taxes. On their bill of costs, they show a reduction from this amount of $2,080.89, for a claimed total of $9,249.77. The reduction represents the amount granted by the Court of Appeal to the Cejkas by way of costs in the Court of Appeal proceedings to which the two accounts relate.

The matter under appeal was a decision of the board on an application brought by Cariboo to determine whether or not the Cejkas' claim was statute-barred under s. 24 of the Act. The majority of the board held that the claim was not out of time. Cariboo appealed the board's decision to the Court of Appeal. The appeal was heard on June 30, 1994, when the Court of Appeal also found for the Cejkas that the claim was not statute-barred, although for different reasons from those of the board.

The two accounts presented by the Cejkas relate to preparing for and attending at the appeal hearing. As noted above, the Court of Appeal did grant the Cejkas costs of the application, on a party and party basis in accordance with the tariff that applies to proceedings in that court. Counsel for Cariboo, referring to an affidavit of T. Colin E. Stewart filed by Cariboo in this application, informed me that Mr. Burke, acting for the Cejkas before the Court of Appeal, argued that the Court of Appeal should consider granting costs under the Act that governs expropriation proceedings before the board, since the appeal proceedings arose directly from these expropriation proceedings and the Cejkas had no choice but to defend the appeal brought by Cariboo. Counsel for Cariboo advised me that the Court of Appeal rejected this suggestion, and chose instead to award costs under its own statute and tariff. Counsel for the Cejkas did not take issue with the accuracy of any of this.

Counsel for the Cejkas argued that it would be an arbitrary and artificial distinction for me to exclude costs incurred in another forum from the purview of s. 47. To do so, he maintained, would either result in owners choosing not to be represented at the appeal level in appeals brought by expropriating authorities, due to their inability to pay the legal costs, or in their not being fully compensated for their legal expenses in defending such appeals.

Counsel for Cariboo argued that the board has no jurisdiction to award legal costs incurred by the Cejkas in the Court of Appeal. He maintained that those costs do not relate to proceedings before the board, and are only for the Court of Appeal to order if they choose to do so. In support of this argument, he referred me to the decision of Hunter J. of the Supreme Court of this province in Hruschak v. City of Vernon (No. 4) (1993), 50 L.C.R. 1. One of the issues in that case was whether the chair of the board had the authority to award costs incurred by the claimants in seeking leave to appeal to the Court of Appeal. Hunter J. referred, at p. 5, to the decision of Moore Co. Ct. J. sitting as arbitrator in Madsen v. Municipality of Metropolitan Toronto (1970), 1 L.C.R. 204. In that case, the issue was whether the Ontario board had jurisdiction to assess costs concerning legal services provided on an appeal. Moore Co. Ct. J. held at p. 206 of that decision:

"It is for the Court of Appeal to determine costs of matters determined by it. The Court of Appeal has dealt with those costs. The 'Board' is to determine the claimants' costs of the hearing before it … There is nothing in the Expropriations Act, 1968-69, however, which permits the 'Board' to allow costs for other than the hearing before it."

Hunter J. goes on to note that the wording of the Act in this province and the Act referred to in the Madsen case are similar regarding the jurisdiction of the board to award costs.

The learned judge, at p. 7 of the reported decision, also refers to the earlier decision of the Court of Appeal in Jesperson's Brake & Muffler Ltd. v. Chilliwack (District) (1992), 48 L.C.R. 161. He states that:

"… Toy J.A., in chambers, concluded that it was not appropriate under the Expropriation Act for the Court of Appeal to award costs in advance of the appeal being heard but perhaps more importantly stated that the court, upon hearing the appeal, would consider an order for costs to the claimants in the terms permitted in the Act, that is, to quote s. 44 (7), '… the actual reasonable legal, appraisal and other costs …'

Accordingly, I conclude that these costs are a matter for the Court of Appeal, not the chairman. This ground of appeal is dismissed."

It is important to note that, although the Court of Appeal has indicated its willingness in Jesperson's Brake & Muffler Ltd., to consider awarding costs under the scheme set out in the Act, it declined to do so in this case.

Counsel for Cariboo, referring to this aspect of the Court of Appeal's decision, maintained that I would be offending the principles of curial deference (by in effect going against the costs ruling of the Court of Appeal) as well as the law relating to my jurisdiction if I were to award the Cejkas those costs now. Finally, he presented particular objections to certain aspects of the accounts, in the alternative.

An owner's entitlement to costs under the Act is set out in ss. 44 (3), which provides:

"… a person whose interest or estate in land is expropriated is entitled to be paid costs necessarily incurred by him for the purpose of asserting his claim for compensation or damages."

In my view, the words "for the purpose of asserting his claim for compensation or damages" may extend to the asserting of such a claim at an appeal level, as reflected in the decision of Toy J.A. in Jesperson's Brake & Muffler Ltd. However, the awarding of costs before the Court of Appeal is solely within the jurisdiction of the Court of Appeal. The Cejkas sought costs under the Act before the Court of Appeal, and were denied them. I agree with the reasoning of Hunter J. in Hruschak, and consider myself to have jurisdiction only to award costs for matters that are within the jurisdiction of the board. Proceedings before the Court of Appeal are not, clearly, within the jurisdiction of the board.

I note that the chair of the board recently considered a similar application in El & El Investments Ltd. et al. v. The Board of School Trustees of School District No. 36 (Surrey), unreported, February 10, 1995. In that case, the claimant sought costs under s. 47, arising from its counsel's considering and responding to an expropriation-related application brought by the respondent before the Supreme Court of this province. The chair refused to make the award sought, on the basis that he lacked the jurisdiction to do so. He also relied in his reasons on the Hruschak decision. The El & El case is similar to this one in that it was the respondent who brought the application in the other forum, to which the claimant felt compelled to respond. The chair, at p. 3 of the unreported decision, concludes on this point:

… I agree with the respondent that whether or not the chair of the board has jurisdiction to award interim costs does not depend upon who has commenced the proceeding in another forum. Either the chair does or does not have jurisdiction over such costs. Here, I have concluded that the requisite jurisdiction does not exist.

I agree with counsel for Cariboo that I do not have the jurisdiction to make an award of legal costs for either of the legal accounts presented by the Cejkas in this application.

I should point out that I would have come to this conclusion whether or not Mr. Burke, on behalf of the Cejkas, had sought and been denied costs under the Act before the Court of Appeal. If he had not sought costs under the Act before that court, I still would not have any jurisdiction to effectively award costs of a Court of Appeal matter. Only the Court of Appeal, in my view, has the jurisdiction to do that.

Accordingly, I deny the Cejkas' application for a costs award arising from the two legal accounts of their counsel relating to the Court of Appeal proceedings.

 

Government of British Columbia