2011 QCCA 112, 2011 QCCA 112

Unofficial English Translation Consortium Promecan inc. (Syndic de) 2011 QCCA 112 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC No.: 200-09-005739-062 (615-11-000793-044) DATE: JANUARY 25, 2011 PRESIDING: Mtre CLAIRE ROBERGE (JR 1080), Court clerk RAYMOND CHABOT INC., in its capacity as trustee for the estate of the debtor, Consortium Promecan Inc. APPELLANT-Respondent trustee v. THE DEPUTY MINISTER OF REVENUE OF QUEBEC RESPONDENT-Applicant And CONSORTIUM PROMECAN INC.

IMPLEADED PARTY-Debtor and AGNICO-EAGLE MINES LTD. and NATIONAL BANK OF CANADA IMPLEADED PARTIES-Impleaded parties JUDGMENT 1 As a result of the judgment rendered on December 18, 2007, allowing the appeal with costs, I am seized with a request for the assessment of the disputed costs; the bill of costs is in the amount of $82,970.80. 2 Counsel for the appellant claimed the amount of $81,057.77 for legal fees, which was vigorously challenged by counsel for the respondent, who argue that an amount of $4,500 would be fair and reasonable in the circumstances.

I would like to point out the quality of counsel’s written submissions as well as the quality of their oral arguments. Both were highly convincing and made relevant references to case law. 3 From the outset, counsel agreed with me as follows: · Because the debtor declared bankruptcy on March 20, 2004, the law applicable to the award of this bill of costs is the law in force before the amendments to the Bankruptcy and Insolvency Act ( BIA ), which came into force on September 18, 2009; · This Court did not determine the costs and gave no indication of the amount of costs to be awarded.

Under subsection 197 (2) of the BIA , the costs shall therefore be taxed as “between party and party”; · Taxing officers must use their discretion to determine the amount of legal fees that would represent fair and reasonable compensation under subsection 197 (5) of the BIA and

section 87 of

Schedule 1 of the Bankruptcy and Insolvency General Rules ; · To determine the amount of these fees, the taxing officer must take into consideration the criteria set forth in Planchcinski (Syndic de) , J.E. 200691 (C.A.), to wit: the nature and value of the dispute, the general conduct of the proceedings, the competence demonstrated by counsel, the number of hours spent on the file by counsel, counsel’s number of years of practice and the reasonable value of similar services rendered in the same district. [4] The issue that this Court had to decide, as stated by the Honourable Nicole Duval Hesler in her reasoning, was the following: is the Deputy Minister of Revenue the owner of the sums of money collected or collectible as GST and QST by the bankrupt supplier at the date of its bankruptcy or, on the contrary, is it merely a creditor of the bankruptcy, who must be collocated according to provisions of the Bankruptcy and Insolvency Act ? [5] To answer this single question, the Court had to answer three subquestions:

1. The legal nature and status of the GST and the QST: property or claim 2. The fungibility or the conditions to claim an identified amount; and 3. The effect of exclusive federal jurisdiction in matters of bankruptcy. [6] Counsel for the appellant argue that the nature, importance, novelty and difficulty of the issue in dispute justify the amount claimed. They emphasize the complexity of the matter and insist that there was a legislative and jurisprudential void. A considerable analytical effort was required concerning bankruptcy as well as taxation and banking matters.

The question in issue had implications that were central to the administration of commercial bankruptcies. They pointed out that the Supreme Court has given leave to appeal. Under

section 40 of the Supreme Court Act , the Court hears a case only if it is of the opinion that it ought to be decided by the Court by reason of its importance. [7] The taxing officer must take into account the number of hours worked by counsel and their experience. Counsel for the appellant stated that many hours were spent on the file by experienced attorneys. By way of indication, they submit that the number of hours spent by counsel as well as by researchers totalled 224.40 hours.

The two principle advocates for the appellant, Mtre Miguel Bourbonnais and Mtre Mason Poplaw, spent 212.5 hours, namely 147 hours for the Mtre Bourbonnais at an hourly rate ranging from $230 to $280 and 65.50 hours for Mtre Poplaw at an hourly rate ranging from $550 to $565. A detailed list shows that the fees consist essentially of preparation, research, and the hearing of the appeal file. [8] Counsel for the respondent acknowledged that an important question of law was involved but stressed that importance does not mean complexity.

The taxing officer must take into account all the following criteria: · Nature and value of the dispute: The facts are simple and were admitted in Superior Court. There was no hearing on the merits, but there were written arguments. The value of the dispute (the amount of the taxes) was $13,572.95; · General conduct of the proceedings: There was one hearing in the Court of Appeal for the three consolidated files, which lasted only one morning for all three appellants.

In addition to the factums, no other documents were required. · Competence demonstrated by counsel: Counsel for the appellant shared the points to be covered with counsel for the two other appellants. · Number of hours spent: Only the hours spent by counsel are to be taken into account. The hourly rate claimed is grossly overstated and resembles more of a taxation established as “between solicitor and client”. By comparison, in Plachcinski , an hourly rate of $150 was under review for a Montreal lawyer with 45 years of practice. The number of hours spent on the file was also exaggerated.

Counsel apparently spent more than 200 hours for a dispute with a value of $13,572.95. Moreover, they had the advantage of taking cognizance of the factums previously produced by the two other appellants. · Counsel’s number of years of practice: At the time, Mtre Poplaw had 20 years of practice and Mtre Bourbonnais, who put in most of the work, had four years of practice. · The reasonable value of similar services rendered in the same district: The hearing took place in Quebec City. According to the Tariff of judicial fees of advocates, c.

B-1, r.13, counsel for the appellant would be entitled to fees of $850. [9] As previously stated, counsel for the appellant claims the amount of $81,057.77 as legal fees.

Taking into account all the criteria previously stated, in particular the nature and value of the dispute, the importance of the issue, the number of hours spent on the file by counsel, and counsel’s number of years of practice, taking into account the fact that the bill of costs must be taxed as “between the parties”, which represents partial compensation as opposed to taxation as “between solicitor and client”, which represents substantial compensation, and taking into account decisions rendered in similar matters serving as a point of reference, I believe that $7,500 represents a fair and reasonable amount in the circumstances. [10] The taxing officer’s auditing power not being restricted to the contestation, I find that certain disbursements must be reduced. [11] First, the fee of $10 for filing the inscription in appeal is not taxable ( Lacombe v .

Sacré-Coeur (Municipalité de) , 2009 QCCA 2495 ). Also, since no tax is payable on a law stamp, the amount of tax added must be subtracted, leaving the amount of $342 for the law stamp of inscription. [12] Concerning the costs of serving the factum, the amount claimed for mileage costs must be subtracted because a bailiff is not entitled to such costs in the case of a proceeding served on an attorney (sec. 19, 1 of the Tariff of fees and transportation expenses of bailiffs , c.

H 4.1, r. 1), leaving the amount of $14 for service, to which taxes are added at the 2007 rate for a total of $15.97. [13] Finally, the amount claimed for mileage costs must be subtracted from the cost of serving the book of authorities for the same reason. The amount claimed for court time must also be subtracted since the conditions for its award were not fulfilled (sec. 23 of the Tariff ). The book of authorities is served in a single copy regardless of the number of volumes. Only the amount of $7 is allowed for service ( Sous-ministre du Revenu v .

Pétroles Irving , J.E. 2002-87 (C.A.) ), to which are added the filing costs ( Imprimerie Quebecor inc. v . ADS Groupe-conseil inc. , AZ-50375811 (C.A.) ) and taxes at the 2007 rate, for a total of $17.09. FOR THESE REASONS, THE UNDERSIGNED: [14] CONTRADICTORILY TAXES the bill of costs in the amount of $9,205.85.

Mtre CLAIRE ROBERGE Mtre Marc-André Russel McCARTHY TETRAULT For the appellant Mtre Pier Olivier Julien LARIVIÈRE MEUNIER For the respondent Date of hearing: January 13, 2011