Toronto Dominion Bank v. Hawes, 2011 ABQB 76

Court of Queen ’ s Bench of Alberta Citation: Toronto Dominion Bank v. Hawes, 2011 ABQB 76 Date: 20110210 Docket: 1001 10453 Registry: Calgary Between: The Toronto Dominion Bank Plaintiff - and - Bradley D. Hawes Defendant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice C.L. Kenny _______________________________________________________ [ 1 ] This is an appeal of a taxation by an assessment officer of a subsequent bill of costs filed by the Plaintiff’s lawyer with respect to steps taken by the Plaintiff (“TD”) to enforce their Judgment.

The issue however is much broader than simply the amount that was taxed off by the assessment officer. Background

[ 2 ] TD obtained default judgment against the Defendant (“Hawes”). They then tried to enforce their judgment by retaining counsel to collect on the judgment. Counsel hired a civil enforcement agency to assist in selling land. Certain steps were taken by the agency and an account was rendered to TD’s counsel for those services. Counsel filed a subsequent bill of costs under

Schedule C of the Alberta Rules of Court . The account from the civil enforcement agency was listed as a disbursement. An assessment officer reviewed the subsequent bill of costs and taxed off approximately two thirds of the disbursement. TD appeals the taxation and says that the assessment officer does not have the jurisdiction to tax the account of the civil enforcement agency. Transition [ 3 ] The new Alberta Rules of Court , Alta. Reg. 124/2010 ((the "new Rules") came into force on November 1, 2010.

The legislative provisions relied on by TD have not changed in substance but they have been given new Rule numbers and some provisions which were in the former Rules have now been moved to the Civil Enforcement Act , RSA 2000, c C-15 (the “Act”) and Civil Enforcement Regulation (Alta. Reg. 276/95) (the “Regulation”). Legislation [ 4 ] The relevant legislative provisions are as follows: Civil Enforcement Act 9

(1) The sheriff, on behalf of the Crown, may enter into an agreement with a person under which that person is authorized to operate a civil enforcement agency for the purpose of performing the following functions: ...

Section 13.1 (former Rule 587): In addition to the amount recovered by the judgment, there may be levied under any writ of enforcement (

a) the fees and expenses incurred in enforcing the writ of enforcement, and (

b) interest on the amount recovered. Civil Enforcement Regulation

Section 6.(1) (former Rule 589 in substance): 6

(1) An agency (

a) must provide to the sheriff a current tariff of fees setting out the fees that the agency charges for carrying out a duty or function under the Act, (

b) is only eligible to charge a fee for carrying out a duty or function if a fee for carrying out that duty or function is set out in the agency’s tariff of fees that is provided to the sheriff, and (

c) shall not charge a fee for carrying out a duty or function other than the fee set out in the agency’s tariff of fees that is provided to the sheriff.

(2) An agency may change its tariff of fees that the agency has provided to the sheriff by providing the sheriff with an amended or new tariff of fees.

(3) An agency’s tariff of fees or an amendment to an agency’s tariff of fees is not effective until it is actually received by the sheriff. Alberta Rules of Court (new Rules) 1.9 Except as expressly provided, if there is a conflict or inconsistency between these rules and an enactment, the enactment prevails to the extent of the conflict or inconsistency. 10.29

(1) A successful party to an application, a proceeding or an action is entitled to a costs award against the unsuccessful party, and the unsuccessful party must pay the costs forthwith, notwithstanding the final determination of the application, proceeding or action, subject to (

b) the assessment officer’s discretion under rule 10.41, Assessment Officer [ 5 ] TD is entitled to post-judgment costs for steps taken by them subsequent to the judgment and for the purpose of realizing on their judgment. These are set out in

Schedule C to the new Rules. In the ordinary course, these are reviewed by an assessment officer when submitted for filing. [ 6 ] The assessment officer is guided by the Rules. A party is entitled to all reasonable and proper costs (new Rule 10.41(2)).

The assessment officer, in determining what is reasonable and proper, is to disallow any item that is improper, unnecessary, excessive or a mistake (new Rule 10.41(3)(b)). [ 7 ] In this matter, the civil enforcement agency rendered an account to the law firm for TD for fees and disbursements incurred in following up on the collection of the judgment TD had against Hawes. The account totaled $951.76. The assessment officer reduced certain items and disallowed others in their entirety. The account was taxed down from $951.76 to $300.30.

Civil Enforcement Agencies [ 8 ] Civil enforcement agencies are dealt with under the Act and Regulation. They operate under an agreement between themselves and the sheriff (s.9(1) of the Act).

The agencies are required to provide to the sheriff a tariff of their fees for doing certain things, may only charge the fee set out in the tariff, are not allowed to render a fee for anything that is not set out in their tariff, and the tariff or any amendment to it is not effective until received by the sheriff (s.6(1) Regulation). [ 9 ] The agencies must keep all their records available for review by the sheriff and are subject to audit by the sheriff’s office. [ 10 ]

Schedule 1 to the Regulation sets out a code of conduct for civil enforcement agencies. Included is the requirement that an agency not charge a fee other than as set out in the tariff provided to the sheriff (s.3(

c) of

Schedule 1 of the Regulation). [ 11 ] Under the Act, the agencies can levy fees and expenses incurred in enforcing a writ by adding them to the judgment (s.13.1 of the Act). If they then sell seized property, they are entitled to distribute the proceeds of the sale which distribution would include reimbursement for their fees and expenses as levied under s.13.1. In those cases, their fees and disbursements are not reviewed by anyone subject to the right of a debtor or creditor to ask that the costs be reviewed by a review officer under s.6.1 of the Regulation. The

anomaly therefore, is that a creditor may directly engage an agency and is entitled to full reimbursement of the fees and expenses of the agency as they are added to the judgment. On the other hand, a creditor who hires a lawyer to enforce a judgment, who in turn hires a civil enforcement agency, may have the costs of the civil enforcement agency taxed down by an assessment officer when filing their subsequent bill of costs.

The position of TD and the Civil Enforcement Agency [ 12 ] TD and the agency are of the view that provision is already made in the Act and Regulation to deal with their fees and expenses and that the same should not be subject to review by an assessment officer. They point to Rule 1.9 which says where there is an inconsistency or conflict between the rules and an enactment, the provisions of the enactment prevail. [ 13 ] Most of these subsequent bill of costs are by way of default with no party appearing.

They are submitted by the lawyer for the creditor which lawyer has engaged the agency to realize on their Judgment. The lawyer then receives an account from the agency which they include as a disbursement. That account is required to follow certain rules and conditions as set out in the Act and Regulation. The agency may only bill in accordance with the tariff submitted to the sheriff. Their accounts are subject to audit.

It is therefore difficult to see where they would bill for anything which was improper, unnecessary, excessive or a mistake as set out in new Rule 10.41 as long as the bill conformed with the tariff submitted to the sheriff which is mandatory. This does not preclude a review by a review officer as set out above. [ 14 ] Upon request of the Court, TD and the agency provided the Court with two letters sent to all civil enforcement agencies from the sheriff dealing with fees. These are appended to this Judgment as Appendix “A”.

In general, they express concern about some agencies not charging in accordance with their tariff and reiterate that they must bill in accordance with the tariff or face repercussions for not doing so. The sheriff also expressed concern about failure to properly describe and itemize fees and directed each agency to comply with directives set out by a taxing officer in a decision on the issue. Decision [ 15 ] I am satisfied that the fees and expenses that can be charged by civil enforcement agencies are governed and regulated by the agreement the agencies have with the sheriff’s office.

They must bill in accordance with their tariff. They cannot bill more than the tariff or bill for matters not included in the tariff. By implementing this system under the Act and Regulation, it is implicit that the fees and expenses are reasonable and proper as required under the Rules. [ 16 ] If the agencies do not follow the guidelines set out by the sheriff’s office or the tariff they submit to the sheriff’s office, they are subject to repercussions. They are also subject to an audit by the sheriff’s office to ensure they comply.

Provision is made to allow a debtor to have an account reviewed by a review officer if they are concerned about the account. That the fees and expenses of the agency can be levied and added to the judgment prior to distribution of funds from the sale of seized property without any oversight and yet those same fees and expenses can be subject to taxation by an assessment officer when submitted with a bill of costs makes no sense.

It can only be that the intention was to have the fees and expenses of civil enforcement agencies governed by the Act and the Regulation. [ 17 ] In my view, it is not open to an assessment officer to tax the account of a civil enforcement agency when submitted with a bill of costs for taxation. The appeal is therefore allowed. [ 18 ] As an aside, I would note however, that the account submitted by the agency in this case was vague on several items which no doubt was part of the reason for the taxing down of the account by the assessment officer.

The agency would do well to heed the advice given by the sheriff in his letter of February 6, 2009 in terms of properly identifying and describing the fees and expenses. Heard on the 20 th day of December, 2010. Dated at the City of Calgary, Alberta this 10 th day of February, 2011.

C.L. Kenny J.C.Q.B.A. Appearances: Anthony L. Dekens for the Appellant No one appearing for the Respondent