MacQueen v. Sydney Steel Corporation, 2012 NSSC 461

Supreme Court of Nova Scotia Citation: MacQueen v. Sydney Steel Corporation, 2012 NSSC 461 Date: 20120906 Docket: Halifax No. 218010 Registry: Halifax Between: Neila Catherine MacQueen, Joseph M. Pettipas, Ann Marie Ross, Kathleen Iris Crawford and the Estate of Carl Anthony Crawford by his executor or representative Kathleen Iris Crawford Plaintiffs v.

Sydney Steel Corporation, a body corporate; The Attorney General of Nova Scotia representing Her Majesty the Queen in right of the Province of Nova Scotia, the Attorney General of Canada representing Her Majesty the Queen in right of Canada Defendants Note: This costs decision was given orally following plaintiffs’ successful motion in Supreme Court for class action certification. The Nova Scotia Court of Appeal has set aside the certification order, and will be addressing costs both at the motion in this court and in the Court of Appeal. This decision may therefore be superseded by a Court of Appeal ruling.

It is being released in writing in response to a request from counsel for the Attorney General of Nova Scotia. Judge: The Honourable Justice John D.

Murphy Written Decision: March 5, 2014 { Oral decision rendered September 6, 2012} Counsel: Ray Wagner, QC, Scott Ritchie, QC, Michael Dull, for the plaintiffs Paul Evraire, QC, Angela Green, Melissa Chan, for defendants-Department of Justice (Canada) Agnes MacNeil, Alison Campbell, for defendants- Attorney General of Nova Scotia and SYSCO By the Court: INTRODUCTION [ 1 ] I am going to give a decision with respect to the plaintiffs’ claim for costs of the Class Action Certification Motion.

The usual reservations - I am doing this orally, so it won't be as organized or perhaps as complete as it would have been if I had issued a written decision. I don't know if I am going to do that or not - it depends on a number of things, but if I do I reserve the right to edit the transcript to amplify what I say, to refer in more detail to the facts and the submissions and the authorities, obviously with no change in the result. [ 2 ] I am going to give you a final result this morning with, I think, sufficient reasons that you'll understand the basis of my reaching the conclusion that I did.

I can say that I have considered all your submissions, even if they're not mentioned today - I am not going to go through all your submissions. I will be a little longer than I might otherwise be because I want to put on the record the process that I've gone through. [ 3 ] The certification motion in this matter has a long history; the action was commenced in 2004. Motion for certification as a common law class proceeding was filed in 2007; and while certification remained outstanding, the case was continued as a class proceeding under the new Nova Scotia Class Proceedings Act in 2008.

The certification motion included numerous meetings, discoveries, cross examinations and submissions. [ 4 ] Discovery examinations on certification, according to the information that I've been provided by the parties, comprised 13 days and there were 20 court days of cross examinations and submissions; in addition, there were attendances for decisions; there were case management meetings discussing how things would proceed, some by phone, some in person.

One of the hearing days was devoted to submissions respecting the plaintiffs' amended motion - that was December 15, 2010; and there were also extensive written submissions on the issues by all the parties at various stages - and I have certainly taken all that into consideration in thinking about costs. [ 5 ] The plaintiffs succeeded on the motion. The matter was certified as a class proceeding for most of the common issues and most of the causes of action ultimately sought by the plaintiffs, albeit after some considerable reduction of the scope of the plaintiffs' claim and amended pleadings.

The class boundaries originally sought by the plaintiffs were not approved. The plaintiffs amended their motion, another hearing took place and the Court ultimately certified the proceeding with boundaries narrower than the plaintiffs' amended proposal. Certainly there's nothing here that the parties don't know, but I just want to put things in context.

[6] The position of the parties with respect to costs is as follows. The plaintiffs seek $1.5 million costs for work done by bothWagner's and Siskinds, plus disbursements of $676,443 plus taxes. The plaintiffs say that the $1.5 million represents approximately 50per cent of the actual time spent using charge-out rates which are set out in the plaintiffs’ brief. The plaintiffs say the award they seekshould be payable now. [7] The Attorney General of Canada proposes a costs award of between $150,000 and $500,000 and that's plus disbursements, as Iunderstand it.

The Attorney General of Canada says that the top end of that range, $500,000, represents about 50 per cent of its actualtime-based fee, using though much lower hourly rates than the plaintiffs’ counsel used. The Attorney General of Canada says themotion costs should be payable in the cause or at least partially deferred and not all payable at this stage. [8] The Attorney General of Nova Scotia says the Court should not award costs because the plaintiffs’ claim does not includereasonable detail or supporting documentation.

Alternatively, the Attorney General of Nova Scotia says any award should be in thecause and based on a model which it has constructed - that model is not based on the Attorney General of Nova Scotia's time defendingthe motion, but is a model that it has prepared for what it suggests the applicants would do, that is the plaintiffs would do using rateswhich the Attorney General of Nova Scotia proposes as fair.

They include a maximum of $350 an hour for senior counsel; and then theAttorney General of Nova Scotia's proposal would be to award a 50 per cent recovery calculated on that basis and they suggest that therecovery would be $241,333.

Now I emphasize, that's an alternative position to the Attorney General of Nova Scotia's primary positionthat no costs should be payable. [9] Both defendants say the plaintiffs have not adequately supported the disbursements claimed. [10] I have considered the detailed written submissions which total approximately 90 pages; the schedules and appendices that theparties have provided; in particular, those summarizing or detailing the time spent by counsel; and the authorities.

The authoritiesinclude most class action cost decisions rendered in Ontario in the last ten years; and references to cost principles generally. [11] I am going to make some general comments and conclusions at the start. First, the Rules, in particular Civil Procedure Rule 77provide a wide discretion. The tariffs also contemplate discretion, as does the class action legislation. Lump sum awards are notuncommon in Nova Scotia and not uncommon in other parts of the country. We are not dealing with costs at the conclusion of aproceeding. There hasn't been a trial in this case.

The amount involved has not been ascertained. In my view we're not in the Tariff ‘A'Nova Scotia situation where costs are prima facie awarded on the basis of the amount involved and the trial time involved. In my viewthe motion is more akin to an enhanced chambers application as contemplated by Tariff ‘C'; in that context although the motion is notdispositive of the entire proceeding as Tariff ‘C' sometimes contemplates, there's no dispute that the issues to be determined werecomplex, they were important to the parties and they required a great deal of effort in the preparation and the presentation by counsel.

The authorities generally recognize the significance of certification motions as discrete and important, if not dispositive, steps in a classproceeding. [12] General principles with respect to costs certainly confirm, and I can go through the authorities but it's not necessary to do that,that costs award should recognize the work done and the substantial indemnity principle, although I will say that historically thesubstantial indemnity in Nova Scotia has been pretty low compared to other places; and both our tariff and our court's attitude towards‘substantial' is not as liberal as it is in some places. [13] There is a long-standing principle that costs should be reasonably comparable to awards in similar cases.

On the other hand, Irecognize that there's a school of thought that indicates that comparisons to other certification motions in class action situations may beof limited use and that's recognized in Lambert v. Guidant Corp., 2009 CarswellOnt 8759 (S.C.J.), leave to appeal refused (2009) (ON SCDC), 256 OAC 299 (Div.Ct.), Hague v. Liberty Mutual Insurance Co., [2005] O.J. No. 1660 (Ont. S.C.J.), andin Andersen v. St. Jude Medical Inc., (ON SCDC), 2006 CarswellOnt 710 Ontario (S.C.J.) (Div.Ct.), leave toappeal refused 2006 CarswellOnt 7749 (Ont.C.A.).

However, other decisions in my view still offer some guidance but the particularcircumstances of the case are more important. [14] Both defendants have referred to the criteria in Pearson v. Inco Ltd., (ON CA), [2006] O.J. No. 991 (C.A.). Despite the indication in more recent class action decisions that comparison to other cases may not be terribly helpful, I find that thePearson v.

Inco Ltd. outline of principles and factors to be considered in awarding costs in class actions is still relevant, and they aresummarized or they are set out in both defendants' briefs - in paragraph 34 of the Attorney General of Canada and paragraph 39 in theAttorney General of Nova Scotia - and they are as follows. [15] There's eight or nine points, really only eight that apply here: (1) the normal rules that costs follow the event and that applies inclass actions; (2) costs should reflect what's fair and reasonable; (3) they should, if possible, reflect cost awards made in closelycomparable cases recognizing that comparisons rarely provide firm guidance, and as I say, that's somewhat tempered by more recentdecisions; (4) a certification motion is a vital step and parties expect to devote substantial resources to it; (5) the cost expectation of theparties can be determined by the amount of costs the unsuccessful party could reasonably expect to pay - I don't disagree with that, but Iemphasize that the way we approach costs in Nova Scotia is different than the Ontario practice.

Ontario counsel here are familiar withthe process (and I'm not saying I don’t wish we had this in Nova Scotia sometimes) where all parties submit the costs amount before thehearing that they'll be looking for if they are successful, and then I think supplement that after the hearing.

That obviously has the effectof making it difficult for the loser to say the winner is claiming too much, if the loser indicated his claim would have been greater,so..that is tempered in Nova Scotia because we don't have that practice. [16] Other factors are considerations of: (6) the views of the motions judge concerning the complexity of the issues and what is fairand reasonable; (7) whether the case raises an issue of public importance; and (8) a fundamental purpose of class proceedings is toenhance access to justice. [17] So I have certainly considered those factors and find them relevant. In Pearson v.

Inco Ltd. (supra) incidentally thecertification costs were $90,000, that was the award and I'll come back to that. [18] With respect to applying those principles, in this case I have concluded that costs should be awarded with respect to the

certification motion now and should be payable now, subject of course to the appeal situation and I'll say more about that later. Ourcourt's practice is, if possible, to fix costs at the end of a particular segment or aspect of a proceeding and, unless there's some reason notto do that, to make them payable at the time.

In my view an important significant aspect of this case has been concluded; at the end ofthe certification proceeding a discrete procedural issue has been resolved, subject of course to appeal. [19] So even though the certification motion is not determinative of the entire matter, it did set the procedure. [20] The motion was vigorously opposed by the defendants' choice and I am certainly not criticizing the defendants for persistentopposition - that's contemplated and they're entitled to do that, but the fact remains that the defendants didn't succeed in their oppositionto the certification motion and it would have been possible for the defendants to have conceded certification without making anyadmissions on the merits.

In that context there's no reason, in my view, to depart from the usual practice contemplated by the Rules ofawarding costs now and directing payment at this stage of the proceeding - and I'll say later that the appeal will be taken intoconsideration and costs are not going to be payable before the appeal decision is made, and I'll come back to that. [21] In my view, success on the motion has been determined and the Court should not split the award or reduce the award based ondegrees of success in this case. The plaintiffs’ motion succeeded on essentially all aspects except for the delineation of the boundaries.

The defendants opposed all aspects; distributive costs awards are not encouraged by the courts and I don't think this is an appropriatecase for such an award; and I refer again to Pearson v. Inco Ltd. (supra) and also to McCracken v. Canadian National Railway Co.,2010 ONSC 6026 , [2010] O.J. No. 4650 (Ont. S.C.J.) which addressed those issues. [22] It is not unusual for a party to receive a costs award even though it didn't succeed on every aspect of a claim or a motion. In thiscase there was an issue and the need for a further hearing on an amended motion to address the revised boundaries.

In my view to theextent that time in court is a factor in the award, that can be addressed by excluding the extra time devoted to that particular hearing. Ifthe award is determined on a time basis, or if that's a component of the award, we can subtract some time to reflect the amended motion,which was something that was brought about because of the plaintiffs and not the defendants; and on that point, in doing that, in my viewthere was one extra day needed to address the revised boundary issue advanced by the plaintiffs, and that was December 15, 2010.

Therewas some earlier time in court dealing with evidentiary issues for that hearing, but in my view that time was defendant generated. If Iwere doing it on a time basis, I'd take one day off the court time to reflect that there was an amended motion. So I am going to beawarding costs on the basis that the plaintiffs succeeded on the motion, but to the extent court time is a factor, there'll be a one-dayreduction. [23] I want to address the time-based claims advanced by the parties and I will first address the plaintiffs’. Their claim is based onthe actual time spent for certification.

They put a value on the time worked to be approximately $3 million and suggest a 50 per centreduction for a $1.5 million award; and that's based on hourly rates for lawyers and paralegals and others involved on the plaintiffs’ side,ranging up to $775 an hour. I'll say at this stage that I am not going to award costs today on the basis of some fraction of what plaintiffs’counsel suggests are total hours at various hourly rates.

There are three reasons why I am not going to take that approach. [24] First of all, and I do not mean to be..I am not being critical or disrespectful to any party when I say this, but the plaintiffs’counsel's hourly billing formula that's advanced, in my view, is a fiction in this case. The plaintiff parties are not being billed on thatbasis. The record indicates that plaintiffs’ counsel are being compensated on a different basis in this case and I refer, without readingthem, to the comments in McCracken v.

CNR (supra) at paragraphs 7, 9, 11 and 13 where the counsel were operating on a contingencybasis and where hourly rates were suggested as a basis for fixing costs.

At paragraph 11, the Court in McCracken said and I quote, "Thejurisprudence about awarding costs should be applied to the reality, not to the pretend of class proceedings," and I adopt that view. [25] The second reason I am not going to follow the formula advanced by the plaintiffs is that the information provided by theplaintiffs, by giving only total hours worked per lawyer and hourly rate applied in each year, is just insufficient for the Court tomeaningfully assess the value of the work.

Without a record of what the lawyers did during those hours and how much time was spentper task, I just can't evaluate the reasonableness of the time consumed, I can't determine whether there's duplication and I can't determinewhether charges are appropriate. [26] And the final reason why I am not proceeding on the basis of the formula put out by the plaintiffs is that the hourly rates areunrealistic in my view for fixing costs in this case.

They're beyond any amount which I'm aware has been approved by this Court; they'rebeyond what the Ontario Rules Committee sets as ranges for costs submissions; in fact, in some places they're more than double thoseamounts.

I have to say, I find it disingenuous for the plaintiffs to continually invoke the ‘access to justice' argument as a reason forcertification and in support of class proceedings – as really the guiding principle that the Court should apply in assessing whether a classaction is the preferred procedure – and then suggest that the time devoted to accessing justice warrants compensation up to $775 anhour. I recognize that there are clients in this country who are prepared to pay such amounts for certain legal services and look, I'm notcritical of that.

But I'm not going to determine reasonable party/party costs using those sorts of rates in a case involving damages thatallegedly were suffered by the people of Sydney, Nova Scotia. I just don't think that's an appropriate scale on which to assess costspayable by opposing parties. [27] I am also going to comment on the other parties' time-based claims or the formulas that the other parties, the defendants putforward on a time-calculation basis. I'll deal first with the Attorney General of Nova Scotia's proposal and in my view that model is alsoa fiction.

It doesn't purport to reflect the actual time spent by any party. If the Attorney General of Nova Scotia had for comparisonpurposes revealed its own counsel's time records for work done on its behalf defending the motion, that might have had some relevance,although I clearly recognize that what plaintiffs put into these sorts of cases and what defendants put in are not necessarily comparable,given the way the issues unfold. And I recognize that losing parties' costs submissions are a factor in some jurisdictions and I've talkedabout what happens in Ontario, but that's not what we're dealing with here.

The paying party is not providing particulars of its owneffort, in my view. It's providing a model which I think is unhelpful - for one side in litigation to presume to prescribe how much worktheir opponents should have done without reference to their own docket. So I think that model by the Attorney General of Nova Scotiais at best speculative. [28] The Attorney General of Canada's docket submissions reflect actual time spent and they're not subject to the same level of

criticism; however, it remains difficult to compare plaintiffs’ effort needed in advancing a case like this with the defence effort. [ 29 ] The submissions of the parties about costs in this case tend to be critical of opposing counsel, perhaps more strident than the way the rest of the litigation has been conducted and particularly more strident than what I've seen this morning.

I am not going to revisit and evaluate the defendants' allegations of over-lawyering by the plaintiffs or to dwell on the plaintiffs’ position that the defendants' persistence addressing the merits at the certification stage unduly complicated the motion. I am not here to pick up on criticisms of counsel because in the big picture, and I've said this before, counsel have done a great job on this case, and I don't mind saying that. [ 30 ] The plaintiffs clearly devoted extensive resources to the file.

I know how many lawyers were in court, I was here too; and the defendants did have difficulty sticking to the narrow issues.

But rather than get hung up on those criticisms, I am going to comment only by saying that my cost assessment significantly discounts the plaintiffs’ claim to reflect a more economical allocation of resources and it also recognizes..I've tried to recognize that the time required to address the motion was expanded by the defendants' effort to impugn the merits of the plaintiffs’ claim. [ 31 ] I am going to make a comment about Ontario counsel specifically and this is not to be taken personally and it doesn't result from Mr.

Evraire's comment earlier this morning - I'm assuming you're still happy to come to Nova Scotia.

The defendants were critical of the involvement by the plaintiffs, the retaining by the plaintiffs of two law firms, one of which is from out of province; and the defendants raised that argument, both in the context of the costs claim and the disbursements with respect to travel and so on. [ 32 ] I agree that the plaintiffs' team approach here led to some overlap of responsibility and duplication, and that the defendants should not have to fully bear greater costs resulting from the plaintiffs' multi-lawyer or multi-firm approach. However, I recognize without being in any way critical of Mr.

Wagner's firm, that Siskinds has expertise in class actions which is relatively new territory in Nova Scotia. Neither this Court nor opposing counsel should be critical when Nova Scotia lawyers wisely invite experts in a particular area to participate in advancing a client's claim, where the issues and procedures are novel and complex.

So in my view this case represents an exceptional circumstance where involving out-of-town counsel is not only warranted, but prudent - and it's helpful to all concerned in the interest of justice. [ 33 ] So I'll therefore recognize that a reasonable allowance for that special circumstance can be reflected in the costs award. [ 34 ] Getting down to the nitty-gritty of dollars and cents, I find that although every case is separate, there is some guidance in the tariffs and in the case law.

I've indicated I'll be making a lump sum award, or if I haven't indicated, I'm indicating now that I'll be making a lump sum award, but I've determined the amount only after considering the tariffs and other decisions; and I have kept in mind the plaintiffs’ time and rate-based representations, although tempered for the reasons that I have indicated. [ 35 ] With respect to the tariffs attached to Rule 77 and confirmed by the Order-In-Council in 2004 (and I recognize that it was in 2004 that they were set and that that's eight years ago) I've advised that Tariff ‘A' is not helpful - there's been no trial, no determination of the amount in issue.

But I think Tariff ‘C' can be of assistance and does offer some guidance - it is intended to deal with motions. I recognize that this is a very significant motion (I've said that before); it has not determined the entire matter, but it sets the procedure - it's divisible and I have no hesitation in putting this motion at the top of the ‘motion range' in the tariff, considering its complexity, importance and the effort involved. [ 36 ] The motion involved 20 court days and 13 discovery days. Based on Tariff ‘C' I think we can consider that amount of time and it can be helpful.

I would knock one day, a court day as I said, because of the amended motion, so I would be doing it on the basis of 19 court days and 13 discovery days. Incidentally, I don't disagree with what Justice MacAdam said in the recent decision in Morrison Estate v. Nova Scotia (Attorney General) 2012 NSSC 386 , and I know that two of the parties here were parties to that decision - I don't know if the Attorney General of Canada is familiar with that decision or not - it's a recent decision of Justice MacAdam on costs in a certification hearing.

I don't think the written version has been released yet, but I'll say a little more about it and certainly parties will have access to it in due..but I think, Mr. Wagner, your firm was involved, wasn't it. MR WAGNER: That's correct. [ 37 ] And the Attorney General of Nova Scotia was involved.

He indicated in that case essentially that costs on certification motions are not to be simply mathematical calculations using Tariff ‘C' and I don't disagree with that, but I think that some reference to Tariff ‘C' numbers can be helpful. [ 38 ] In my view, if Tariff ‘C' were the basis on which the Court was awarding costs, and although I'm not strictly confining my award to a Tariff ‘C' basis, I consider there's some guidance there, I would recognize the maximum multiplier of four for the days involved in the hearings.

I'd add a 50 per cent premium for the court days, not for the discovery days, but for the court days to recognize the contribution of out-of-town counsel. The result would, therefore using Tariff ‘C', be a maximum daily figure of $8,000 plus another $4,000 markup for Ontario counsel which would lead to $12,000 a day.

And on $12,000 a day for the cross examinations and the submissions in court, that's 19 days which would be $228,000; I'd add 13 discovery days (although not technically days in court, they were hearing days of one sort) but I would do that at $8,000 because I'm not entirely satisfied that two sets of counsel were needed for all discoveries. That would add another $104,000. That would yield an award of $332,000.

That's not the award I'm making, but I'm just saying that that is one of the factors that I considered. [ 39 ] The plaintiffs would no doubt maintain that such a calculation overlooks the defendants' focus on merits; however, that focus on merits is largely reflected, in my view, by the increased discovery and court time and that's compensated to a significant extent by allowing a daily rate to include those days. [ 40 ] I have also looked at other cases and they are not determinative, as I have already said, but they are helpful. Starting with Pearson v.

Inco Ltd. ( supra ) and I'm not going to go through a litany of cases here, but the issues were similar in Pearson and that makes it relevant. If you look at the award in Pearson , although it was $90,000, it was $7,500 a day ten years ago in 2002 and in my view that doesn't make $8-12,000 a day unrealistic in 2012.

[ 41 ] I have considered the highest awards for certification motions in Ontario, and I also bear in mind that Nova Scotia costs awards are generally significantly less than Ontario and that may or may not be right, but that's the way it is; and I'm not going to change that in one decision. [ 42 ] The particular relevant cases that I have looked at, at the high end of the scale are Anderson v. St. Jude Medical Inc. ( supra ) where the award was either $396,000 or $404,000 for costs exclusive of disbursements depending on which report you take; LeFrancois v. Guidant Corp.

(2008) CarswellOnt 5201 (SCJ) , the defibrillator case was $400,000 - I'm not sure whether that includes disbursements or not - I'll assume that it doesn't, perhaps. In the pacemaker case, Lambert v. Guidant Corp. ( supra ), the fees awarded were $650,000, although I note that the report seems to indicate that there was a great deal of documentation in the work involved in the certification stage of that case including information about all potential class members and that increased the award. In McCracken v. CNR ( supra ) on a partial-indemnity scale in Ontario - the award was $550,000 plus disbursements.

As far as I'm aware, they're the upper-end awards in Ontario. [ 43 ] I have looked at Nova Scotia cases and I have to make the comment that the plaintiffs' request for a $1.5 million award in this case would be the highest amount ever here, to my knowledge, awarded in costs even after trial on a Tariff ‘A' basis. There are not a lot of comparisons, but I don't know of any cases where there was an award of $1.5 million in costs in Nova Scotia. In the Wall v.

Horn Abbot Ltd. 2008 NSSC 4 , the trivial pursuit trial which had 42 days of hearings after all the usual pre-trial procedures, the final award was $1.25 million including disbursements. In Smith and Michelin North America (Canada) Inc. 2008 NSSC 66 , which is generally cited as a very high-end costs decision, there was an award of $500,000 plus disbursements - that involved a claim for payments to a pension fund in amount $268 million.

The only class action decision is Morrison ( supra ) decision and that was a $40,000 award - that was after three and a half days of hearings according to the defence submission in the decision, and I have no basis to disagree with it.

There have been approximately ten times that number of days here. [ 44 ] I am awarding lump sum costs and it is not based on any particular formula or on any particular case, but I have decided in the context of all the foregoing to award lump sum costs of the motion, exclusive of disbursements, in total amount of $400,000, to be divided equally between the Attorney General of Canada and the Attorney General of Nova Scotia unless they agree otherwise and that's up to them.

So the $400,000 award, I should clarify, covers all aspects of the certification motion including some short preliminary motions which we dealt with during certification and they are referenced in the briefs. [ 45 ] With respect to tax, HST, if the plaintiffs are required to remit HST on the award, then that should be reimbursed and divided equally between the defendants unless the defendants reach another basis.

Frankly, I don't know when a plaintiff is operating on a contingency basis if an award of costs is subject to HST or not, and I assume that the parties are much more familiar with that than I am; but if so, then it should be recoverable from the defendants. [ 46 ] Now with respect to disbursements, the plaintiffs claim a total of $676,443 plus tax on the disbursements and that's set out in paragraph 26 of the brief. The details of the disbursements claimed are set out in the plaintiffs’ brief and in the documents attached to the plaintiffs’ brief. They are set out separately for Wagner's and Siskinds.

The brief of the Attorney General of Nova Scotia in Appendix ‘C' does a consolidation of the two law firms' disbursements claim and I find that helpful for ease of reference. I am going to refer to that, they're neatly summarized there, the two firms’. It is subject to a $2,600 discrepancy – I am not going to get hung up on that this morning - that can be dealt with in due course. [ 47 ] I am going to say at the outset that the plaintiffs’ submission on disbursements is just so lacking in detail that I cannot make an award of disbursements now. I need much more detailed information to assess the disbursements.

They are obviously disputed - if they were agreed, I would not have a problem accepting an agreement by the parties, but that's not the case here. I adopt..I am going to refer to certain submissions from the defendants about the way the plaintiffs have presented their disbursements and I am not going to go into a lot of detail, but I refer to the Attorney General of Canada's brief at paragraph 66 to 71, and I'm not going to read everything there and I don't adopt everything there, but I do adopt the following: Class counsel have not filed for the Court's benefit the details of any disbursements claimed.

The Court is expected to assume, without more, the relevance and legitimacy of each disbursement which the taxpayer Defendants will be expected to pay. And at paragraph 68 with respect to travel, mileage and meals - the Attorney General of Canada says, "The Plaintiffs' costs submissions fail to explain why their class counsel now seeks reimbursement of $131,000 for travel, mileage and meals." Under "Agents' Fees and Expert Reports", the Attorney General of Canada says a total of $213,998 for both firms is requested for these items.

The Attorney General of Canada submits that the Court should not permit the plaintiffs to belatedly clarify these disbursements by way of reply cost submissions without providing the defendants an opportunity to respond. And with respect to newspaper subscriptions and ads, the Attorney General of Canada says in paragraph 71 that there is simply no basis nor precedent for the reimbursement of such claimed expenses. [ 48 ] The Attorney General of Nova Scotia makes extensive comment starting at paragraph 140 of its brief about the amount - the level of detail - in the plaintiffs’ disbursement submission.

I am just going to refer to some statements which I adopt from the Attorney General of Nova Scotia's brief. At paragraph 140 and 141 the Attorney General says: The Plaintiffs have requested payment of approximately $675,000 disbursements…in the absence of any supporting documentation or evidence, and with breakdowns which are often so vague it is unclear what costs they refer to or include.

Justice Goodfellow in Wyatt and Franklin sums up the entitlement to payment of disbursements as part of a costs award prepared on a party and party basis: Recovery of disbursements is limited to expenses incurred and normally paid. The strict practice is to file an affidavit of payment of disbursements before recovery. And then the Attorney General goes on at paragraph 142 to say: The Wyatt case made it clear that the disbursement had to have been incurred before payment was allowed.

In addition, it is clear that the practice is to file evidence of disbursements; this practice has been upheld by the Court of Appeal in Nova Scotia in Aalto-Imports,

A. Larsson A.B. v. Fairbanks , 1991 Carswell 80. [ 49 ] And then there are quotes from Orkin The Law of Costs , and I adopt paragraph 9 of Aalto-Imports, A. Larsson AB v.

Fairbanks 1991 CarswellNS 80 , quoting what Orkin said at paragraph 204 in the Second Edition of The Law of Costs – that “costs are an indemnity only.” And continuing, I also adopt what Orkin says at paragraphs 10 and 13 of that passage: Costs which have not been incurred cannot be recovered… Proof that expenditures are necessary, and therefore reasonable is essential to the taxation of disbursements… This ordinarily requires an affidavit proving the expenditure and the necessity of it.

And finally, I note and agree with what the Attorney General says at paragraph 143 of the brief: While Wyatt and Aalto-Imports are older cases, Justice Moir as recently as this year awarded costs at the conclusion of a hearing in terms of a fixed amount of fees plus disbursements and required the successful party to provide an affidavit of disbursements. [See Fotherby v. Cowan 2012 NSSC 182 at para.90.] The Attorney General submits this is the current practice and a reasonable expectation, and I agree.

And finally in paragraph 146 of its brief, the Attorney General of Nova Scotia says: The party claiming disbursements has the burden of demonstrating that they are both reasonable and necessary. In general, parties cannot claim overhead costs as disbursements.

The Plaintiffs in this action claim for a number of categories of items that are more properly viewed as overhead rather than compensable disbursements. [ 50 ] So I agree with those passages that I have read and I'm going to be asking the plaintiffs to submit more information with respect to the disbursements and I will give the defendants a chance to respond - that's going to be the end result here. I don't want to prolong this case for everybody, but I think this is a necessary step.

But before I close, I am going to indicate which categories..in which categories generally I will allow disbursements, subject to providing satisfactory detail and an affidavit with respect to payment. And I'll say right now, in requesting an affidavit with respect to payment, I'm not questioning counsel's integrity or anything of that nature and I don't want it to be interpreted that way, but it's a standard requirement or practice in Nova Scotia - it's routine even in ex parte mortgage foreclosure motions that counsel provide an affidavit supporting the payment of disbursements.

It has been requested here by the defendants and in my view it's a normal practice and it should be followed. [ 51 ] For ease of reference, I'm just going to refer to the categories in the Consolidated Disbursement Listing which the Attorney General of Nova Scotia provides at Appendix ‘C' and I don't want to nickel/dime here, but I'm going to deal with general categories and principles which hopefully will help the plaintiffs in providing a more..a revised more limited and more detailed disbursement claim, and will give the defendants a chance to consider it. [ 52 ] So first of all, the first entry is ‘Couriers'.

Expenses for couriers are recoverable at cost. I don't require detail - I just need the affidavit to indicate that the amounts were paid to the courier, and I don't go any farther. [ 53 ] ‘Faxes' - there's only $26.00 claimed. Faxes in my view in 2012 are included in overhead and that's my approach to faxes. [ 54 ] ‘Copies' - and there is a total of $38,000 claimed for copies here. My practice with respect to copies, if the parties agree on an amount, then I don't have a problem with that, or on that basis.

But if there is no agreement, my approach to copies is that they are recoverable at the firm's cost or at an outside disbursement cost if they farm it out and often major reproductions are farmed out to Kwik Kopy or one of these facilities that are in the business. Before I assess costs or the disbursement allowance for copying, I need to know how many pages were involved, obviously. My approach to photocopying costs in taxations is that copy facilities in law firms shouldn't be treated as a profit center when costs are being assessed.

As between solicitor and client, that is a matter of what the parties charge their clients for photocopying, and that's not the Court's business unless we're being asked to tax a lawyer's bill to his client. But when another party is being asked to pay for costs for photocopying, my practice is that unless there's agreement, it's up to the law firm to prove what the cost is without a profit factor.

Having said that, I realize that can be a whole lot of work for people - in the absence of that, I allow five cents a page for photocopying unless a higher rate is established and if that higher rate reflects the firm's actual cost, I do not have any problem with that.

I can say, however, that I know when I was practicing law my firm made money on photocopying and that was the way it was - I don't know to what extent it's changed, but in my view that is not right in taxation; how it exists with clients is another matter. [ 55 ] ‘Long distance phone calls' - they're allowable at cost, there is no detail needed, just the confirmation that the costs were incurred in an affidavit. Same thing for ‘Postage' - I do not want to get down in the depths over that. [ 56 ] ‘Research', legal research is an issue. There is a claim here for $39,000 legal research.

My practice is not to allow a disbursement for legal research when I am taxing costs. In this case, there is no basis provided for the claim, but in any event in my view it is just not allowable. Given overheads and hourly rates, and I realize I haven't adopted the hourly rates advanced by the plaintiffs, and the availability of technology to do legal research, I consider that part of the cost of doing business.

Computer research is available at annual subscription rates, in my view, as part of overhead costs and I do not allow legal research as a disbursement. [ 57 ] ‘Binding' - it's only a small charge here of $74.00 - again, that's included in the copy charge as far as I'm concerned unless it's sent out for binding and that's a different situation. [ 58 ] The next category is $438,000 for ‘Agents' Fees and Expert Reports', almost $439,000, with no backup other than to indicate that $179,000 was from Siskinds..actually $190,000, I guess, and $250,000 from Wagner's.

I need detail, not the cost of, you know, every stick of gum, but I need detail as to who the expert was, who the agent was, whether it's a fee, whether it's a travel disbursement - I will allow reasonable expert fees which have actually been paid, and I emphasize ‘which have actually been paid' and reasonable travel

expenses for people who give expert evidence - to attend discoveries and to attend cross examination; and possibly, depending on the circumstances, travel expenses to meet counsel to be instructed, that sort of thing, but I have to have some basis rather than just a lump sum of $439,000. Some breakdown - a reasonably detailed itemization as between fees, as between travel, as to which expert we're talking about.

I assume that the experts that we are talking about here are Doctors Lambert, Guidotti and Soskolne, they're the three plaintiffs' experts who testified and despite some criticizing by the defendants of their testimony, both in the costs submissions and other submissions, I am prepared to allow their reasonable fees if they have been paid. One of them indicated they were working voluntarily and if that is the case, then that has to be a factor; and their travel expenses and so on.

I do not want to belabour it, I think you have a sense of what I need. [ 59 ] The same thing for ‘Agent' - I do not know who we are talking about as agents – whether it is lawyers in Sydney to search titles or whatever, I do not know who it is, but I need some detail and I need to know who they were and why their services were incurred.

Maybe there were no agents, I don't know, they are in a category, ‘Agents' Fees and Expert Reports' and maybe that is just a category in your systems - I do not know, I need more information. [ 60 ] There is a fee for ‘Investigation' of $7,000 - I have no idea what that is, but it is certainly not a normal disbursement.

In order to evaluate it, I need to know what it relates to, who the investigator was and what they were investigating and the circumstances of their charge and their payment. [ 61 ] The next one is large, ‘Travel, Mileage and Meals' - $131,000 - I do not know whether that relates only to lawyers in the two firms or whether it relates to parties travelling, such as the plaintiffs coming to Halifax, I just do not know and I need that information to assess it; and to be fair to the defendants, they need to comment on it.

I would be prepared to allow it, I am not saying this is a closed category, but just for guidance, I would be prepared to allow the parties' travel..the parties..the plaintiffs' travel to Halifax for discoveries and cross examination if the discoveries took place in Halifax - I know the cross examinations did; transportation and hotels and so on. If counsel for the plaintiffs went to Sydney for discoveries and I cannot remember where they were held, then, you know, that's a reasonable disbursement.

If lawyers in Halifax went to Sydney to meet the clients, basic transportation for lawyer travel (I am dealing now with Nova Scotia lawyers going to deal with their clients in other parts of Nova Scotia) that's certainly allowable if it's reasonable. [ 62 ] With respect to out-of-province counsel, I am prepared to allow reasonable expenses incurred by one Ontario lawyer travelling to court hearings, to cross examinations in court, to discovery of witnesses advanced by opposing parties (the experts in this case I presume).

When Siskinds came to Nova Scotia, I recognize that there was often more than one lawyer here. I am not saying it was not reasonable to have more than one lawyer here - that's a decision the plaintiffs make for all kinds of reasons - but in my view the defendants should not have to bear the cost of, in addition to local lawyers in the taxation, more than one lawyer coming to Nova Scotia from out of province for these various things.

So certainly economy airfare, hotel expenses for a lawyer for Siskinds to be in Nova Scotia for discoveries, for cross examinations, for submissions, for other meetings including possibly some meetings with clients or travel to meet expert witnesses.

I realize that Siskinds was involved with the experts and that is not inappropriate, but I just need more detail before I can assess it and I need to limit..it needs to be limited to one lawyer. [ 63 ] The other items are relatively small, or minor - ‘Court Filing Fees' - there's no issue, they're certainly appropriate disbursements as long as they're related to the certification and they're referenced in the affidavit and I don't need detailed itemization. [ 64 ] ‘AAV Duplication and Services' - same thing - if that was a disbursement, I need some information about the nature of it being incurred, but it is probably not problematic if some outside agency was engaged to produce maps, that sort of thing - that is a fair disbursement, I have no problem with that. [ 65 ] Same thing with ‘Transcripts' - discovery transcripts, trial transcripts - if they are produced outside the law firm through a transcription agency or something like that, that is certainly a reasonable disbursement, just like long-distance calls are, although they should be confirmed in the affidavit. [ 66 ] ‘Newspaper Subscriptions and Advertisements' - I do not know what that refers to - again, I need some detail.

Subscriptions would normally be very problematic. If there are advertisements with respect to this proceeding; for example, the..well, I cannot think what they'd be now, but if there is an order, that is if there is something that is published pursuant to an order or something like that or a reasonable notice for perspective plaintiffs, then that may certainly be allowable - I just need the detail. [ 67 ] So I hope that I have given you some outline of what I would be prepared to allow, subject to getting the details.

I did not want to just say ‘it's not good enough, I want more.' I do not want you to have to make a career of this case and I am going to allow the defendants time to respond, but again I do not want to..I am not suggesting you get into too much detail in your response; I think I have given you the categories and you can assess reasonableness. I am not shooting any guns as far as time is concerned - if the plaintiffs want to tell me how much time they want, defendants want to tell me how much time – I will go with that.

MR WAGNER: Your Lordship had mentioned the..certainly on the costs award that we wait..until after: [ 68 ] Yes. MR WAGNER: The rendering of decision and does that also apply to the disbursements? [ 69 ] That is going to apply to disbursements too, yes, it seems to me that if the Court of Appeal says, you know, ‘there should not have been any certification here', that I will have to reconsider..or..the costs have to be addressed in that context. MR WAGNER: Yuh, that is fine and.. [ 70 ] And disbursements.

MR WAGNER: Given the fact that that will take some time, you know, I do not think there is an urgency to get this to you other than you want to obviously have it off your plate and as counsel would like to do similarly, maybe by the end of September we will have it

and then by the end of October my friends can respond? [ 71 ] That is all kinds of time as far as I am concerned. I realize you have lots of other files and you do not want to spend the rest of the weekend doing this, so sure that is..that is fine. Okay. So the end of September if that works and the end of October for a reply?

COUNSEL: Yes. [ 72 ] So I guess just to sum up, I think..there is no rush on this, but I think the plaintiffs should do an Order indicating that..and what I would suggest is that costs in amount $400,000 and disbursements in whatever amount we set after the end of October (I don't need the Order before that) will be payable by the defendants to the plaintiffs..I was going to say ten days after the Court of Appeal renders its decision unless the Court of Appeal alters this Court's ruling, in which case we will revisit the costs. Does that make general sense? And I am open to comment on that if..

MR WAGNER: That's fine with the plaintiffs. [ 73 ] And.. MR EVRAIRE: I would just add one caution. It takes awhile to get a cheque out of the government's hands, so the ten days, could we agree, will be a little bit elastic, but we'll aim for it, heh? [ 74 ] Listen, you know if you want 11 days that is fine - it would not be impossible for the government to cut a cheque and cancel it if they get a favourable ruling from the Court of Appeal..look, I hear you, Mr. Evraire, but..

MR EVRAIRE: We'll make best efforts. [ 75 ] But I..I know it takes awhile to get a cheque, but I..this has been a long road..look, if you agree on 30 days I do not care, I.. MR EVRAIRE: We'll make best efforts. MR RITCHIE: We can probably agree, we're not going to be hung up on that’ [ 76 ] No.

But I am trying to make the point, you know, it would not be out of order to direct they be payable now and you would have to go to the Court of Appeal to get a stay – I am not doing that, I do not think that is appropriate, so I..I think the gun should be loaded in case the Court of Appeal finds that this Court was right.. MR EVRAIRE: I guess what's going on in my mind is I'm wondering when..what the effective date of this Costs Order would be?

Are we saying that it'll be effective ten days after the Court of Appeal decision unless.. [ 77 ] I guess..I guess that's the way..to… MR EVRAIRE: Okay, that makes sense. [ 78 ] That's..I don't know how you want to characterize..it's not going to be effective if the Court of Appeal overturns this Court.. MR EVRAIRE: Right.. [ 79 ] And makes a ruling with respect to costs which they..you know, which they probably will. I mean, you may..one of the parties may add costs to the appeal, I..I don't know. MR EVRAIRE: All right.

MR RITCHIE: Just a question really for clarification because I was..I was thinking along the same lines as my friend was and the two issues is..is this cost award effective as of today, but payable after the Court of Appeal? [ 80 ] So you're looking for..are you thinking of interest or are you just.. MR RITCHIE: No no, no no I'm just thinking of..because in the normal course is as I would understand it, your cost award would..would apply.. [ 81 ] Yes.

MR RITCHIE: And then the Court of Appeal would make their own cost award and that's the way I would have thought it would proceed because if you've already said this is separate and distinct, and I'm..that's the way I thought it probably would have worked.

I'm not sure that's the way you framed it? [ 82 ] No, what I was thinking was the costs would be payable..this is a work in progress, so we can talk about this - that it would be payable ten days after the Court of Appeal unless..I'm not planning on revisiting my costs award, I've made a decision.. [ 83 ] MR RITCHIE: That's what I was wary of.. [ 84 ] No, but if the Court of Appeal doesn't say anything about costs, then I guess the award would stand. MR RITCHIE: Correct. [ 85 ] But if the Court of Appeal allows the appeal, it will probably deal with costs.

MR RITCHIE: That's what I would have thought. [ 86 ] They normally do that and frankly, the parties usually invite the Court of Appeal to do that. Whether you'll amend your notices of appeal, one or both of you, to address costs, I don't know. MR RITCHIE: That's what I..yuh, sorry.. MR EVRAIRE: Therein lies the rub because unless the Order is actually made today or within the next week or so, heaven forbid my friend should wish to appeal your Cost Order, he needs to have an order from you, sir, and then.. [ 87 ] If he wants to appeal it, I'll give him an Order, that's..

MR EVRAIRE: I think we need that.. [ 88 ] Or if you do, frankly. MR EVRAIRE: Well yes ah.. [ 89 ] I think we should have a Costs Order. MR EVRAIRE: I agree and I think it should say that it's payable ten days after the Court of Appeal, unless it's otherwise reversed. So the payment date.. [ 90 ] Unless altered by the Court of Appeal then basically. MR RITCHIE: Yes. MR EVRAIRE: Exactly, so the payment date is delayed, but the Order date is as of this week or today. [ 91 ] I'm okay with that. MR RITCHIE: My friend and I are ad idem on that point. MR EVRAIRE: Yes.

Because I think..I think the Court of Appeal wouldn't have jurisdiction, may I suggest? [ 92 ] No you're right, unless there's an order. MR EVRAIRE: To deal with the costs unless there's an order. [ 93 ] Yuh well there's some issue there as to whether they would,.. MR EVRAIRE: Well.. [ 94 ] But I don't want to argue about jurisdiction with the Court of Appeal, it's.. MR RITCHIE: We're agreed then. [ 95 ] Are you okay on that, Ms. MacNeil? MS MACNEIL: Yes I am. [ 96 ] So who wants to prepare the Order? You're getting..I guess the plaintiffs are getting the costs..

MR WAGNER: We'll prepare the Order.. [ 97 ] So it will be..just so I have it, there will be an Order payable ten days after the Court of Appeal decision unless the costs award is altered by the Court of Appeal. MR EVRAIRE: Right. [ 98 ] So it's conceivable that the Court of Appeal could overturn the certification decision and the plaintiffs would still get their costs? MR EVRAIRE: Yes. MR RITCHIE: Correct. [ 99 ] And if the parties want to do something to change that, then you've got your..your avenues. MR EVRAIRE: And I think to deal with the disbursement issue is it's still open ended.

I think the Order can simply say an amount for disbursements to be determined with the consent of the parties at a later date. [ 100 ] Yes, well we can either do it that way or we can wait until after the end of October because nothing is going to happen before then anyway. MR EVRAIRE: Fair enough.

[ 101 ] Whichever way you want, I don't care. MR EVRAIRE: I'll leave that to my friend. MR RITCHIE: We'll..we'll talk about it. [ 102 ] It doesn't matter, there's no money changing hands, so you know.. MR RITCHIE: Yuh. MR EVRAIRE: Yuh, okay. [ 103 ] Now there's one other clarification I want to make on costs, one other issue I want to address and that is the Attorney General of Nova Scotia suggested that the..the $80,000 each paid as part of the settlement by Ispat and Domtar should be deducted from the costs award.

I'm not going to do that and I'm not going to go into detail at this point as to analyzing why, but..again, I'm just not making any order on that point at this stage. There's no motion by the plaintiffs to free those funds. In my view it's up to the plaintiffs to..as I understand what happened at the time, to have those funds applied to costs if they choose to do so.

But, you know, ..those were costs that the two parties who settled their positions paid, as I understand it, for the benefit of the plaintiffs as part of their resolution and it's not appropriate for the defendants to reduce their liability for costs, certainly at the certification stage, because other parties settled on the basis they'd make some contribution to the plaintiffs' costs. Those costs can be dealt with at the plaintiffs’ requests or in a final determination after the merits.

You know, I'd have to revisit the settlement to see how they'd be dealt with, but at this stage, in my view, there's no meritorious argument that they should be deducted from the plaintiffs’ entitlement to certification costs from the defendants. MR RITCHIE: I just wanted to thank you very much for your decision and we'll proceed accordingly. [ 104 ] Okay, thank you. Anything further we need to discuss? MR EVRAIRE: No, except to thank you. [ 105 ] Okay, thanks very much. Murphy J.