June 15, 1995, E.C.B. Control No. 50/92/91
(56 L.C.R. 122)
Cejka and Margaret Cejka
M. St. Clair, Vice Chair
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,
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
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
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?
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."
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;
relevant circumstances, the stage the case has reached, the complexity and the
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.
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
"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
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
"… 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.
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.