A-430-79
The Queen (Appellant) (Defendant)
v.
Manitoba Fisheries Limited (Respondent)
(Plaintiff)
Court of Appeal, Pratte and Heald JJ. and
Maguire D.J.—Winnipeg, November 30, 1979;
Ottawa, January 29, 1980.
Practice — Costs — Motion pursuant to Rule 394(7) direct
ing an increase in Tariff B on taxation of costs allowed — Test
case — Parallel cases not related to the action — Whether or
not appeal from order granting increased costs should be
allowed — Federal Court Rule 344(7).
This is an appeal from a decision of the Trial Division
granting respondent's motion under Rule 344(7) "for an order
directing an increase in Tariff B on the taxation of costs in this
cause ...." Respondent commenced an action in 1975 seeking
a declaration that it was entitled to be compensated for the loss
of its business and goodwill. Seven other companies brought
similar actions against appellant but respondent's action was
the only one to go to trial. Although the Federal Court, Trial
Division and the Federal Court of Appeal dismissed the action,
the Supreme Court of Canada reversed those judgments, grant
ed the declarations sought, and ordered that respondent be paid
"its costs in all Courts". Following that judgment, the respond
ent presented the motion which was granted by the decision
under attack.
Held, (Pratte J. dissenting) the appeal is dismissed.
Per Heald J.: One of the main bases relied on by the Judge of
first instance for directing an increase in costs was that subject
action was in the nature of a test case. There was ample
evidence upon which he could so conclude. The Judge of first
instance quite properly issued the directions which he did to the
Taxing Officer. The practice adopted by counsel in this case
and in the seven other actions affected by the decision of the
Supreme Court of Canada in this case is one which needs to be
encouraged rather than discouraged. Rather than proceeding
with eight parallel actions at an equal pace, with the result that
much larger costs would have been incurred, the plaintiffs and
their counsel chose to proceed with one case, for a final
determination of the very important legal principle established
in this action by the Supreme Court of Canada.
Per Pratte J. dissenting: Costs must relate to the action.
Respondent is not entitled, as a result of the judgment in its
action, for any costs for things done in relation to other actions
in the Court. The additional work and responsibility resulting
from the "test nature" of the case had nothing to do with
respondent's action but related exclusively to the seven other
similar actions pending in the Court. Respondent is not entitled
to be paid any costs by reason of the fact that its counsel, in
addition to representing its interests, also represented the inter
ests of other persons who were not directly involved in the
proceedings.
APPEAL.
COUNSEL:
L. P. Chambers, Q.C. for appellant (defend-
ant).
K. M. Arenson for respondent (plaintiff).
SOLICITORS:
Deputy Attorney General of Canada for
appellant (defendant).
Arenson & Arenson, Winnipeg, for respond
ent (plaintiff).
The following are the reasons for judgment
rendered in English by
PRATTE J. (dissenting): This is an appeal from a
decision of the Trial Division granting respond
ent's motion under Rule 344(7) "for an order
directing an increase in Tariff B on the taxation of
costs in this cause ...."
In 1975, the respondent commenced an action
against the appellant seeking a declaration that it
(the respondent) was entitled to be compensated
by the appellant for the loss of its business and
goodwill. Seven other companies brought similar
actions against the appellant. The respondent's
action was the only one that went to trial. It was
dismissed both by the Trial Division and by this
Court. Those judgments, however, were reversed
by the Supreme Court of Canada which granted
the declaration sought by the respondent and
ordered that it be paid "its costs in all Courts".
Following that judgment, the respondent presented
the motion which was granted by the decision
under attack.
The learned Judge below stated as follows his
reasons for allowing the respondent's application
[[1980] 1 F.C. 36 at pages 48-49]:
As I see the situation in the present case the engagement of
two additional counsel cannot properly be described as a
luxury. This was a test case, the result of which was to decide
the rights of seven other companies that were in the same
position as the applicant. The two additional counsel were also
counsel for several of those seven companies. It was highly
important that counsel for the applicant, conducting a test case,
make sure that all the facts that might be considered, by
counsel for the other companies as well as by himself, to be
relevant to the issues, were ascertained, considered, and pre
sented fairly and fully to the Court, whether by way of an
agreed statement of facts, or by parol or documentary evidence
at the trial. Similarly, it was necessary, both in the various
steps leading up to trial and at the trial itself, and subsequently,
in deciding upon and proceeding with appeals to the Court of
Appeal and Supreme Court, that counsel for the applicant be
fully informed on all the points of law which counsel for the
other companies thought applicable.
All of the eight companies had a great deal of money at stake
in this action. The closest possible collaboration between the
applicant (plaintiff) and the other seven companies was needed
to make certain, so far as was humanly possible, that the test
case was handled throughout in a thoroughly efficient manner.
Only by such collaboration could the other seven companies
feel satisfied that their rights were being fully protected in the
proceedings in the test case. Undoubtedly, numerous discus
sions and conferences were held, and necessarily so, throughout
the various steps in the proceedings in the Trial Division and in
the Court of Appeal. The simplest and most effective way to
secure full cooperation was to engage counsel for some of the
other companies as additional counsel in the test case. Doing so
was in my opinion a prudent and well warranted step.
I am of the opinion that the applicant should be entitled to
tax higher costs than are provided in Tariff B, Class III. I base
my conclusion on the test nature of the case and the greatly
increased responsibility and work resulting therefrom.
For those reasons, the learned Judge made the
order under attack, the operative part of which
reads as follows:
... it is hereby ordered that the Application is granted, and
that, pursuant to Rule 344(7) of this Court and Tariff B,
section 2, subsection (3), the fees of the Applicant's (Plaintiffs)
counsel be taxed at an increased amount, subject to the follow
ing special directions:
The Taxing Officer is directed to consider that this is a test
case and to what extent that fact has increased the responsibili
ty and work of counsel for the Applicant (Plaintiff), particular
ly in connection with conferences and consultations held in the
course of preparation and steps taken prior to the hearings of
the trial and appeal, with the two additional counsel engaged
by the Applicant (Plaintiff). He should consider the reason
ableness of the time spent on the various items in the bills of
costs by reason of it being a test case, and what would be a fair
fee, in the circumstances, to allow for such extra responsibility
and time. As I have held that the Applicant (Plaintiff) was
justified in engaging two other counsel in addition to its first
counsel, the Taxing Officer should consider what would be a
fair fee to allow each of them for his services both prior to and
at Court hearings, which fee should in each case be at a lower
rate than that allowed for the first counsel. Throughout the
Taxing Officer is to bear in mind that costs in question are
party and party costs and that party and party costs are not
designed to provide full reimbursement of all costs incurred in
the litigation, but only a reasonable portion thereof.
The Applicant's costs of this motion may be taxed as part of
the costs.
I am of opinion that this decision cannot stand.
The respondent's motion raised the question of the
costs to which the respondent itself was entitled as
a consequence of the final judgment in the
respondent's action. It is clear, in my view, that
those costs must relate to that action. The respond
ent is not entitled, as a result of the judgment in its
action, to any costs for things done in relation to
other actions in the Court. The learned Judge
below granted the respondent an increase in costs
by reason of the additional work and responsibility
resulting from the "test nature" of its case. How
ever, that additional work, that additional respon
sibility, had nothing to do with the respondent's
action but related exclusively to the seven other
similar actions pending in the Court. The respond
ent is not entitled to be paid any costs by reason of
the fact that its counsel, in addition to representing
its interests, also represented the interests of other
persons who were not directly involved in the
proceedings.
It is my view, therefore, that the Judge of first
instance erred when he held that the "test nature"
of the respondent's case justified an increase in the
respondent's costs. As the material filed in support
of the application does not show, in my opinion,
that the respondent's case was otherwise so excep
tional as to warrant an increase in the Tariff B
costs, it follows that I would allow the appeal, set
aside the decision of the Trial Division and dismiss
the respondent's motion. I would not make any
order as to costs.
* * *
The following are the reasons for judgment
rendered in English by
HEALD J.: I have had the advantage of reading
the reasons for judgment herein of my brother,
Pratte J. With deference, I am unable to agree
with him that the Judge of first instance erred and
that the appeal herein should be allowed.
On May 1, 1969, the respondent was put out of
business by the activities of the appellant. This was
found, on the evidence, to be a fact, by the Trial
Judge. The Trial Judge also found, on the evi-
Bence, that this respondent and his former com
petitors were unfairly treated. From then until the
judgment of the Supreme Court of Canada on
October 3, 1978, the appellant refused to compen
sate the respondent and others in a like position.
From the commencement of the litigation in
November of 1974, the respondent submits that it
was required to engage solicitors and counsel for
almost 500 hours to bring the claim to the end of
the proceedings in the Federal Court of Appeal.
The appellant's position was that the costs should
be limited to a total figure of $3,650 as provided in
Tariff B, which based on the amount of hours
expended by counsel amounts to approximately
$7.30 per hour.
One of the main bases relied on by the Judge of
first instance for directing an increase in costs was
that subject action was in the nature of a test case.
In my view, there was ample evidence upon which
he could so conclude. The reasons for judgment of
the Trial Division make numerous references to
the evidence establishing to the satisfaction of the
learned Trial Judge that there were a number of
other companies in a position similar to that of the
plaintiff in this case. For example, at page 26 of
the Appeal Book [at page 459 of the published
judgment], the learned Trial Judge said:
I am satisfied from the evidence of Mr. Marder, Mr. Lazaren-
ko and Mr. Page, that the plaintiff company and others like it
had, even in that highly competitive field, over the years, built
up individual clienteles.
He also found (A.B. p. 38) that the practical effect
of the Freshwater Fish Marketing legislation ".. .
has been to put the plaintiff and others out of
business." There are also several references in the
reasons for judgment of the Supreme Court of
Canada and the Federal Court of Appeal to the
fact that other companies were in a similar posi
tion to this respondent. At the hearing before us,
respondent's counsel stated that the learned Judge
of the first instance, before dealing with this
motion for increased costs, had earlier granted a
motion for judgment on three of the other cases
based on an agreement with the Crown that this
case was to be the test case. Apparently the four
remaining cases have not yet been settled but
counsel for those plaintiffs have been encouraged
to submit claims for judgment. I am therefore of
the view that the Judge of first instance was
correct in holding that this case was in the nature
of a test case, or was, at the very least, a case, the
result of which has dictated the result in three
other actions in this Court to date, and quite
possibly, a further four actions very soon. In my
opinion, the Judge of first instance quite properly
issued the directions which he did to the Taxing
Officer and I would not interfere with them. The
practice adopted by counsel in this case and in the
other seven actions affected by the decision of the
Supreme Court of Canada in this case is one
which, in my view, needs to be encouraged, rather
than discouraged. Rather than proceeding with
eight parallel actions at an equal pace, with the
result that much larger costs would have been
incurred, the plaintiffs and their counsel chose
rather to proceed with one case, for a final deter
mination of the very important legal principle
established in this action by the Supreme Court of
Canada.
They should not, in my view, be penalized for
adopting such a course. To hold them strictly to
the items in the Tariff would penalize them severe
ly. For these reasons I would dismiss the appeal
with costs.
* * *
The following are the reasons for judgment
rendered in English by
MAGUIRE D.J.: This is an appeal from a deci
sion of the Trial Division granting respondent's
motion under Rule 344(7) "for an order directing
an increase in Tariff B on the taxation of costs in
this cause ...."
I have had the opportunity of reading the rea
sons for judgment of Mr. Justice Pratte and of Mr.
Justice Heald.
I substantially agree with the reasons for judg
ment and decision arrived at by Mr. Justice Heald
and accordingly concur with his judgment.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.