Beadle v. Pictou Landing First Nation, 2013 NSSC 327

Supreme Court of Nova Scotia Citation: Beadle v. Pictou Landing First Nation, 2013 NSSC 327 Date: 2013-10-28 Docket: Tru No. 392566 Registry: Truro Between: Gerald Lee Beadle, Linda Ann Francis, Jonathan Lee Beadle, Priscilla Marie Beadle, Faron Lee Beadle, Melanie Francis, Rachel Francis, Allan Francis, Travis Francis, Dion Paul, John Francis, Hughie Francis Applicants v. Pictou Landing Micmac Respondent Judge: The Honourable Justice Pierre L.

Muise, J Final Written Submissions: June 25, 2013 Counsel: Gary Richard, counsel for the Applicants Dennis James, counsel for the Respondent INTRODUCTION [ 1 ] By written decision in this matter bearing citation 2013 NSSC 25 , I allowed, in part, the Applicants’ application to appoint an arbitrator to hear and determine their claim for compensation pursuant to paragraph 5.6.1 of the Boat Harbour Trust Settlement Agreement (the “Agreement”). The parties were unable to reach agreement on costs and, further to my invitation to do so, made written submissions on that issue.

This is my decision on costs in relation to that application. POSITIONS OF THE PARTIES [ 2 ] The Applicants seek a lump sum award of costs in the amount of Five Thousand Dollars ($5,000.00), plus disbursements. They initially indicated the disbursements totalled Two Hundred and Twenty-Five Dollars and Nine Cents ($225.09). The subsequent affidavit of their lawyer, Gary Richard, indicated they totalled Five Hundred and Seventeen Dollars and Fifty-One Cents ($517.51). The hearing of the application occupied slightly less than one half day.

Therefore, the highest amount that could be awarded under Tariff C, even applying the maximum multiplier, would be Four Thousand Dollars ($4,000.00). In the Applicants’ view, that amount would not provide substantial contribution to their legal expenses, which it indicates totalled Eight Thousand Five Hundred and Sixty-Eight Dollars ($8,568.00). They assert that the complexity of the matter and its importance to the Applicants supports the use of the maximum multiplier.

I infer that it is their position that the same factors warrant departure from Tariff C and the award of lump sum costs. [ 3 ] The Respondent is of the view that costs should be awarded in accordance with the basic range of costs in Tariff C, without applying any multiplier. It submits that an appropriate award would be One Thousand Dollars ($1,000.00) less Two Hundred and Fifty Dollars ($250.00) to account for the divided success on the application. In its view, the issues on the application to appoint an arbitrator were not complex.

Rather, it is the issues which would ultimately be determined by an arbitrator that are complex. However, it acknowledges that the application require the

interpretation of “an involved Agreement”. It noted that the Applicants’ pre-hearing briefs were not extensive and included only one case reference. The Respondent did not prolong the application. Both adjournments were at the request of the Applicants. The Respondent ought not be responsible for any duplication of work arising from those adjournments.

The Respondent presented its position in full by letter dated June 1, 2011, long before the application was commenced, and continued to respond to the Applicants’ request for documentation. [ 4 ] The Respondent also takes issue with the timesheet entries noted as being applicable to the Application and in relation to the lack of evidentiary basis to support the disbursements.

LAW AND ANALYSIS [ 5 ] Civil Procedure Rule 77.06(3) provides that: “Party and party costs of … [an] application in chambers … must, unless the presiding judge orders otherwise, be assessed in accordance with Tariff C.” [ 6 ] However, Rule 77.07(1) permits a Judge to “add an amount to, or subtract an amount from, tariff costs”. In addition, Rule 77.08 permits a Judge to “award lump sum costs instead of tariff costs”.

[7] As noted by Justice B.A. MacDonald, in point 10, at paragraph 3 of Lubin v. Lubin, 2012 NSSC 93: “Departure from the tariff should be infrequent.” [8] The Court has discretion to award lump sum costs to provide substantial contribution towards a party’s legal expenseswhere the tariff does not accomplish that goal.

However, as noted by Justice Saunders, as he then was, at paragraph 17 of Landymore v.Hardy (1992), (NS SC), 112 N.S.R. (2d) 410 (S.C., T.D.), costs “should represent a substantial contribution towardsthe parties’ reasonable expenses”. (Emphasis by underlying added.) The mere fact that the actual legal expenses exceed an amount forwhich the tariff would provide substantial contribution is not sufficient to stray from the tariff. As noted by Justice Moir, at paragraph13, of Bevis v. C.T.D.

Inc., 2004 NSSC 209, determining an appropriate lump sum “has nothing to do with the particularities of counsel’sretention” and the Court must assess “what would ordinarily be charged by any competent lawyer for like services”. Therefore, thereought to be no departure from Tariff C costs unless there are special circumstances requiring a sufficient level of exceptional legalservices: Armour Group Limited v.

Halifax (Regional Municipality), 2008 NSSC 123, at paragraphs 20, 21, 24 and 25. [9] In the case at hand, the only factor which militates in favour of finding that such special circumstances exist is that of thecomplexity of the matter. That is also a factor to consider in relation to whether a multiplier should be applied to the maximum amountsin Tariff C. Therefore, I will first determine what, if any, multiplier should be used.

Then, I will assess whether the resulting Tariff Ccosts amount to a substantial contribution towards the Applicants’ reasonable level of legal expenses, considering the level of legalservices required by the circumstances. [10] Determining whether the claims were arbitrable involved the

interpretation of a lengthy Agreement, dealing with multiplecompensation accounts and interconnected claims provisions. In addition, the Respondent raised issues beyond whether or not theclaims were arbitrable. In it’s pre-hearing brief it raised issues of: notice to the affected parties; intervention by the Court to preventmanifestly unfair or unequal treatment;

summary judgment; and, denying the request to appoint an arbitrator because of the complexityof the matters in dispute. In addition, in its post-hearing submissions, the Respondent revisited the issue of the Court’s power tointervene in the arbitration and, through the majority of a 16 page brief, addressed the issue of whether the arbitration clause in theAgreement was mandatory or permissive. The requirement to address post-hearing issues added to the expense of the application.

In itspost-hearing brief, the Respondent did concede that the arbitration clause made “arbitration mandatory if elected by one of the parties”. Therefore, it was unnecessary for the Applicants to expend any significant legal resources on that issue. Their three and one-half pagebrief devoted approximately a page and one-quarter to it, which included a reference to one paragraph of one case authority. It alsodedicated approximately a page and one-quarter to the issue of the Court’s role or jurisdiction on an application to appoint an arbitrator.

Its submissions on that issue were limited to reproducing the portion of the Canadian Encyclopedic Digest which I had referred to duringthe hearing, quoting the relevant portions of the case referred to in that digest, and submitting that it supported the Applicants’ view ofthe Court’s role. Therefore, even though 5.7 hours of lawyer time is slotted for post-hearing work, the post-hearing submissions oughtnot to have added significantly to the Applicants’ legal expenses.

Further, the Applicants’ pre-hearing rebuttal brief, which reproducesits initial pre-hearing brief and adds additional comments in response to those of the Respondent, is only six pages long and attaches onecase authority. [11] The Applicants, in support of their application, also filed one four page affidavit without attached exhibits and another threepage affidavit with 12 exhibits attached. Four of those exhibits were quite voluminous.

They included: The Agreement establishing theBoat Harbour Settlement Trust; the Boat Harbour Trust Settlement Agreement; the various releases signed by or on behalf of theApplicants; and, the arbitration award decision in the matter of a claim by Raymond Francis and Dennis Francis, dated July 8, 1998. Irefer to the materials filed by the Applicants to highlight the fact that they were not extensive. [12] The Court in Williamson v. Williams, 1998 NSCA 195 , [1998] N.S.J. No. 498 (C.A), at paragraph 25, stated thefollowing in relation to the meaning of “substantial contribution”: “In my view, a reasonable

interpretation of this language suggests that a ‘substantial contribution’ not amounting to a complete indemnitymust initially have been intended to mean more than fifty and less than one hundred percent of a lawyer’s reasonable bill for the servicesinvolved. A range for party and party costs between two-thirds and three-quarters of solicitor and client costs, objectively determined,might have seemed reasonable.

There has been considerable slippage since 1989 because of escalating legal fees, and costs awardsrepresenting a much lower proportion of legal fees actually paid appear to have become standard and accepted practice in cases notinvolving misconduct or other special circumstances.” [13] This suggests there has been some “slippage” such that an amount below two-thirds and perhaps below one-half would beappropriate absent special circumstances. [14] Justice Oland, for our Court of Appeal, in MacIntyre v.

Cape Breton District Health Authority, 2011 NSCA 3, at paragraph148, noted the Williamson case which counsel had referred to and stated that Justice Freeman “expressed the view that [substantialcontribution] meant more than 50% and less than 100% of a lawyer’s bill for services”. However, in the MacIntyre case, the solicitorclient costs were Seven Hundred Thousand Dollars ($700,000.00) and the trial Judge had awarded a lump sum of Three HundredThousand Dollars ($300,000.00) in costs. That was less than 50% of the lawyer’s bill and, yet was approved by our Court of Appeal.

There was no analysis of what proportion of the solicitor client’s costs represented legal expenses. However, it is some indication that alump sum award of costs need not meet the 50% threshold. [15] As noted by Justice Moir, at paragraph 13 of Bevis: “Courts have usually avoided percentages. Substantial but partial indemnity is a principle, not a formula.” [16] The Applicants’ solicitor, Gary Richard, provided an affidavit attaching his

schedule of hours and

schedule of disbursements

in connection with this “proceeding”. He claims a total of 35.7 hours at Two Hundred and Forty Dollars ($240.00) per hour, for a total of Eight Thousand Five Hundred and Sixty-Eight ($8,568.00). However, it is noteworthy that Mr. Richard, on behalf of the Applicants, sent the notice of arbitration to the solicitor for the Respondent, Dennis James, on March 12, 2012. By letter dated March 21, 2012, Mr. James acknowledged receipt and asked for time to respond. There is a time entry for March 21, 2012, regarding Mr. James’ letter.

The first time entry thereafter is dated March 28, 2012, and relates to drafting the notice of application and order. In my view, any legal services rendered prior to March 28 were not in relation to the application for appointment of an arbitrator. The

schedule of hours includes entries for an articled clerk who became an associate. However, her hours have been written off and are not part of the claim. Amongst the remaining entries there are entries relating to: e-mail, telephone and in person communications with the client; “consents” without any detail as to how they relate to the application; scheduling and communication regarding scheduling; and, reviewing a letter from Doctor Fraser.

In my view, it is not reasonable to expect the Respondent to contribute towards amounts expended by the Applicants for legal services in relation to adjournments sought at its request, unless such adjournments were necessitated by the action or inaction of the Respondent. There is no evidence that that was the case. In relation to the other entries I have listed, my view, on their face, they are not related to the within application, and there is no evidence to make that connection. Therefore, they are not legal expenses reasonably incurred in connection with this application.

The remaining hours total 20.3 hours at Two Hundred and Forty Dollars ($240.00) per hour. That amounts to a total of Four Thousand Eight Hundred and Seventy-Two Dollars ($4,872.00). [ 17 ] However, in my view, analysis of the Agreement would have occupied a significant portion of that time. The brief which accompanied the notice of application, filed May 10, 2012, with the exception of a reference to

article 5.6.1 of the Agreement, referred only to the procedural provisions relating to appointing a tribunal or arbitrator to deal with the claims. Mr. James’ letter of June 1, 2011, to Mr. Richard, outlined the Respondent’s

interpretation of the Agreement, and why it was of the view that a tribunal should not be appointed. Mr. Richard responded by letter dated June 8, 2011, that the

interpretation of the Agreement was a matter “to be addressed in the tribunal process”. By letter dated July 4, 2011, from Mr. James to Mr. Richard, the Respondent asked the Applicants to set out their

interpretation of the Agreement as it “may be helpful to the discussion”. There is no evidence that the Applicants provided the Respondent with their

interpretation. It was obvious from the pre-hearing submissions filed on behalf of the Applicants that they did not conduct a detailed analysis of the Agreement to determine which claims were arbitrable and which claims were not arbitrable. Even the rebuttal brief did not do so. It merely added a reference to

article 5.4.1. The Agreement was clear that the claims for compensation and funding from the Community Development Account, pursuant to

section 6 of the Agreement, for the purpose of relocating, and establishing new residential properties in a new Reserve Community were not arbitrable. It was also clear that any claims requiring compensation from funds referred to in subparagraph 5.4.1(

b) were not arbitrable. [ 18 ] In my view, a detailed analysis of which claims were arbitrable and which claims were not arbitrable ought to have been conducted in advance of the notice of arbitration being served on the Respondent. In addition, that analysis will provide lasting benefit in the pursuance of the claims before an arbitrator. [ 19 ] In my decision on the application I expressed the view that, if the releases signed by or on behalf of the Applicants are valid, the Applicants’ claims would be barred.

The Applicants provided little reason why the releases provided would be invalid, apart from the fact that some of the releases were signed on behalf of persons who were minors at the time. As such, I have concern over the frailty of the claims. However, if the Applicants are ultimately successful in establishing their claims in arbitration, the arbitrator can consider the legal expenses incurred for the purposes of conducting a detailed analysis of the Agreement in awarding costs at that time.

In my view, after deciding whether or not the claims are valid, the arbitrator would be in a better position than I to assess the impact of those legal expenses in arriving at an appropriate costs award. [ 20 ] Despite the limited materials filed by the Applicants, I am of the view that the complexity of the matter, due to the cumbersome

interpretation of the Agreement on the issue of arbitrability, and the need to address the additional issues raised by the Respondent, rendered this matter of sufficient complexity to warrant applying a multiplier of two to the maximum Tariff C costs. That results in a total award of Two Thousand Dollars ($2,000.00) under Tariff C, before considering any deduction for divided success. [ 21 ] In my view, the importance of the application to the Applicants was not such as to warrant a further increase in the multiplier.

Even if no arbitrator was appointed, the merits of the Applicants’ claims could have been adjudicated by this court. It would not have terminated claims which may prove valid. [ 22 ] Considering: that a significant portion of the legal expenses arose as a result of the

interpretation of the Agreement; the direction in Bevis that substantial indemnity is a principle, not a formula, from which to set percentages; that both Williamson v. Williams and MacIntyre v.

Cape Breton District Health Authority suggests that even an amount below 50% may suffice; and, that, in my view, the circumstances of this matter are not sufficiently special to warrant the award of a lump sum amount above Two Thousand Dollars ($2,000.00), I am of the view that, in the circumstances of the case at hand, the most appropriate cost award is one based upon Tariff C applying a multiplier of two. [ 23 ] The Respondent is of the view that awarding the Applicants three-quarters of the Tariff C amount would be reflective of the division of success in the Application.

The Application was to appoint an arbitrator to hear all claims advanced by the Applicants. I only allowed half of the categories of claims as being arbitrable. More specifically, I found that the claims for housing and relocation were not arbitrable. That will have an impact on the ultimate costs and complexity of the arbitration. However, the Respondent also raised a number of issues relating to whether the Court should intervene and refuse to appoint an arbitrator for all claims. It was successful on its submissions regarding the applicability of the Commercial Arbitration Act of Nova Scoti a .

Otherwise, the Applicants were successful. The other issues included: whether arbitration was permissive or mandatory under the Agreement; whether there was proper notice; whether the arbitration should be stayed as being too complex or proper for

summary judgment; the Court’s role in an application to appoint an arbitrator; and whether the Court should intervene to prevent unfair or unequal treatment of a party to the arbitration agreement. [ 24 ] In my view, the issues beyond arbitrability approximately doubled the legal resources needed to address the contest to the application. If the only challenge had been to the arbitrability of the claims, a proper reduction would likely have been in the range of 50%. However, in the circumstances, I am satisfied that a 25% reduction from the Tariff C amount is appropriate.

[ 25 ] In light of the foregoing, I am of the view that an order requiring the Respondent to pay the Applicants One Thousand Five Hundred Dollars ($1,500.00) in costs forthwith will do justice between the parties. [ 26 ] I will now turn to the issue of disbursements. The

schedule of disbursements includes disbursements on and before March 21, 2012, which was the date of Mr. James’ letter asking for time to respond to the notice of arbitration. Those disbursements do not relate to this application. There is no breakdown of the unit price for photocopies. I have no evidence regarding what filed materials were printed as opposed to photocopied. As such, I cannot accurately assess whether the photocopying charges are reasonable. As noted by Justice Warner at paragraph 27 of Burns v.

Sobeys Group Inc. , 2008 NSSC 102 : “The Claimant is obligated to prove its disbursements are actual and reasonable.” [ 27 ] However, judging from the materials filed, I am satisfied that at least Ten Dollars ($10.00) in photocopying charges ought to be allowed. It has not been established what the June 15, 2012 postage/courier charge was in relation to. However, it is clear that the December 13, 2012 postage/courier charge in the amount of Fourteen Dollars and Twenty-Nine Cents ($14.29) was in relation to sending the brief of the same date to Yarmouth.

Therefore, I will allow that disbursement in the amount of Fourteen Dollars and Twenty-Nine Cents ($14.29). There is no dispute in relation to the filing fee and law stamp being appropriately claimed. [ 28 ] The Applicants claimed disbursements for travel. None of the travel dates coincide with the date of the hearing of the application. The office address for the lawyer representing the Applicants is noted as being in Truro, where the application was heard.

In addition, travel expenses for out of town counsel to attend a hearing are not, as a general rule claimable Further, there has been no evidence to establish why travel was reasonably required or reasonably related to the application herein. As such, I will not make any award for reimbursement of disbursements relating to travel. [ 29 ] Therefore, in my view, the disbursements shown to be reasonable and actual in the case at hand total Two Hundred and Forty- Nine Dollars and Thirty-Eight Cents ($249.38).

Conclusion [ 30 ] Based on the foregoing, I conclude and direct that costs are to be paid to the Applicants forthwith, in the amount of $1,500, plus disbursements in the amount of $249.38, inclusive of HST. [ 31 ] I ask the lawyer for the Applicants to prepare the order. Muise, J.