Cite as: Nova Wood-Craft Ltd. v. Hughes, 1992 NSCO 23 1991 IN THE COUNTY COURT OF DISTRICT NUMBER BETWEEN: NOVA WOOD-CRAFT LIMITED - JOHN HUGHES and JOANNE HUGHES * * 1991 IN THE COUNTY COURT OF DISTRICT NUMBER BETWEEN: ' BRADY BUILDING SUPPLY CENTRE LIMITED - JOHN HUGHES and JOANNE HUGHES HEARD: At Bridgewater, Nova Scotia, the 4th day of February, A.D. 1992 BEFORE: The Honourable Judge Charles E. Haliburton, A/J.C.C. DECISION: The 3rd day of March, COUNSEL: Michael K. Power, Esq., for the Plaintiffs Frank E. Demont, Esq., for the Defendants ' D E C I S I 0 N C.BW. No. 8920 TWO PLAINTIFF and -DEFENDANTS * C.BW. No. 8921 TWO PLAINTIFF and -DEFENDANTS A.D. 1992 0 N A P P E A L
' HALIBURTON, A/J.C.C. This is an appeal from costs. Two separate actions Mechanics' Lien Act. Both Claimants throughout by Mr. Power. The actions were commenced in March of 1991. The Defendants did not file and did not represent that proceedings came before Carver, J.C.C. at Bridgewater on the 8th of July, 1991, when the Plaintiffs claims in the absence of the informed that the hearing lasted one-half day. A single Order ' relation to both matters, fixing the debt Building Supply Centre at $46,986.20 and that in favour of Nova Wood-Craft Limited at $12,546.96. Judgment were issued by the Court on the basis of that judgment. The Order for Judgment as presented to the Court and initialled by the Trial Judge included the following at paragraph 3: The Plaintiff shall be entitled to the costs of each action, to be taxed. Pursuant to that Order, a contested taxation took place before Taxing Master David W. T. Brattston on the 26th of September. Two Bills of Costs were taxed question arises with respect to the disbursements those Bills of Costs. This appeal or objection relates solely ' to the "solicitor's fees" "as per Tariff 'A', Scale 3 (basic)". a taxation of party and party were initiated under the have been represented a defence in either matter they had any defence. Both appeared and proved their Defendants. I am variously one and a half hours or for Judgment was taken out in in favour of Brady Separate Certificates of and allowed as presented. No included in
- The Taxing Officer allowed solicitor • s Brady bill and $1,750 on the Nova Wood-Craft bill. Officer has provided reasons for his decision. considered certain issues; as he phrased them: (1) when taxing a party-party Bill of Costs pursuant to an Order of a court, the jurisdiction, authority tariff other than Tariff A or a scale other than Scale 3 (basic)? (2) if a Taxing Master should depart from Tariff A Scale 3 in the case at bar. (3) whether the original proceedings herein were akin to an entry on default, and to be taxed accordingly. ( 4) whether I ought proceedings as one action and accordingly tax costs in a single bill. (5) whether I should apportion the costs. Mr. Demont on behalf raise$ several issues; among them: (1) That the Taxing principle" ih that he failed to apply sections the Mechanics'· Lien Act, R.S.N.S. respectively say: 37 Where more than one action is brought to realize liens in respect of the judge ... may consolidate all the actions fails to take 41(3) ... the least expensive course ... the costs allowed to the solicitor shall in have been incurred if the least expensive been taken. 2 -fees of $4,500 on the The Taxing Mr. Brattston does a Taxing Master possess or discretion to use a · is so possessed, whether I to treat the two original of the Defendants/Appellants Master made an "error in 37 and 41(3) of 1989, c.277. These sections same property, the court or into one, and where a Plaintiff no case exceed what would course had
- 3 (2) That the Taxing Master erred when ' himself to be "fettered" by the apportionment of the costs in the Order for Judgment and that he was, therefore, unable to consider.any apportionment between the Plaintiffs as contemplated by s. Act. (3) That the Taxing Master erred by allowing total costs which are excessive in that the amount allowed represents a penalty to the loser rather than ·a "partial indemnity" to the winner. As Counsel says: The philosophy behind costs has been that costs should reflect a portion of the actual legal the theory of partial indernni ty. article by) R. E. Pizzo, Taxation" (1989) 16 Nova Scotia Law News 37. ' Mr. Power, on behalf argued that since the Defendants had failed to cooperate in any way during the course of the proceedings, they should not now be heard to complain at the result. in connection with his submissions clients sought to have a Consent Judgment, he was advised that financing judgments waul d . not be necessary. matter was actually in the courtroom that the Defendants not be participating in the trial. prepa~ations necessary to a contested action were in place. Before judgment, the Defendants were not interested in assisting or informing the Plaintiffs. ' matter did take one-half day - he considered absence of any reference to 41 ( 1) of the Mechanics' Lien fees incurred, (as expressed in the "The New Tariff System of of the Plaintiffs/Respondents He has produced correspondence which establishes that his in response to which was being put in place and that He was unsure until the would As such, he argues that all He argues that the for the proforma proof of the
- accounts outstanding: that the consolidation of the actions did not depend on the Plaintiffs alone but could have been initiated by the Defendants who might also have participated in .some fashion to promote the use of the "least expensive" method of resolving the issues. Mr. Power argues that the Taxing Officer made no error in the taxation of solicitor's fees Order of the Court as it was involved" was, in effect, decided by the Trial Judge the amount of the judgment and he argues that the matter was "basic" case and ought, therefore, to entitle the Plaintiffs to a standard or "basic" allowance for costs. WAS THE TAXING MASTER RIGHT? It is well established that the discretion exercised by a Taxing Master ought not to be interfered with on an appeal except where it is established that he "fell into error by the exercise of some wrong principle". said that the discretion of the Taxing Officer might be reviewed where "there has been a gross error". Commission v. Rawdon Realties Limited et al, it appears that such a gross error might be found simply on the basis of a grossly disproportionate allowance for costs in the context of the particular circumstances of a case. The powers of a Judge on such appeals are set forth in Rule 63.40 in the following terms: "On an appeal from a taxation, the Court m~y: (a) exercise all the powers of a taxing officer: 4 obligation to apply for a since he dealt with the presented to him. The "amount who fixed a In other cases, it has been Referring to Rent Review 56 N.S.R. (2d) 309,
- 5 (b) review any discretion officer as fully as if the taxation were ' the court in the first instance; and (c) grant such order on the application, including the costs of appeal and taxation, as is just." This rule has been interpreted hearing de novo in appropriate permits the Judge hearing the appeal to exercise a larger than that of the Taxing Master. It is clear that the Taxing Officer was in error. The costs to be allowed here must be determined in the context of the Mechanics' Lien directed that costs be restricted provided the opportunity for simplicity and diminished costs and after limiting the global amount of fees to not more than 25% of . . ' the judgments obtained, the Act provides that in any event;, 41(3)) the solicitor costs "shall in no case exceed have been incurred if the least taken". The principle, then, to be followed in the taxation of these actions arising as they do under the Nechanics' is that the Bills of Costs ought to be allowed on the basis that the actions had been consolidated into one action and pursued in the least expensive manner reasonably available, to the behaviour of the opposing parties. arising in the particular circumstances of this case since both Plaintiffs were represented by one Counsel fact that the actions were not ~ jointly or contiguously. The failure to treat the actions - exercised by the taxing made by as providing for a circumstances. Clause (c) jurisdiction Act. The Legislature has in such actions. Having ( s. what would expensive course had been Lien Act naving regard I see no hardship and, inspi te of the consolidated, they were heard as consolidated for
- purposes of costs, to apply the "least expensive" rule . and to apportion the costs were errors corrected. These are considerations which account. The error made by the Taxing Master, however, was more basic than a failure to apply that principle from the Mechanics' Lien Act. Having directed his mind to the question of "whether a Taxing Master has a jurisdiction or discretion to depart Scale 3 of Tariff A in party-party costs", did have jurisdiction. He then jurisdiction in the context of Order for Judgment that the Plaintiffs "shall be entitled to the costs of each action to be taxed". absence of direction from the· Tri.al Judge, and the scale to be used can Officer. In fact, the Taxing Officer has no such authority or jurisdiction. The Taxing Master jurisdiction and, flowing from that, it is apparent "issues" he addressed were beyond his jurisdiction. to which "costs", meaning counsel fees, will be allowed is only for the Trial Judge who will fix "partial indemnity" philosophy alluded to by Mr. issue no. 3 above. THE NEW RULE 63 Effective with actions 6 in principle which must be I may now take into from he concluded that he proceeded to exercise this the words incorporated in the He concluded that, in the the amount involved be determined by the 'l'axing erred when he assumed such that the The extent them i11 the context of the Demont as his commenced after January 1st,
- 1989, a new regime for the fixing ' into effect in Nova Scotia. Joint Committee which included Scotia Barristers' Society, the Judiciary, from the office of the Attorney General. patterned on a system already in place in the Province of Brunswick. At the time of circulated, with the revised Rule 63, \ . of that committee noting two aspects of the new regime which are relevant to my considerations here. to what I've termed the "partial following terms: ... the recovery of costs should represent a substantial contribution toward the party's reasonable expenses in presenting or defending ' amount to a complete indemnity. The second relevant observation expressed in the following brief sentences. Under the new system, costs will be fixed in a by the Trial Judge. In fixing costs, will be for the Court involved". In a sense, determined by the presiding Judge for fixing costs. The award of costs is in the discretion of the Court. It should perhaps be observed that (Rule 1.05(1) (e) (iii)): in a proceeding in a County Court, the court or a judge thereof, whether sitting in court or in chambers, ' where a clerk of the court has power to act, the clerk of the court. 7 -and taxation of costs came This scheme was developed by a representatives of the Nova and representatives The scheme adopted was New its implementation, there was a letter written on behalf The first of those referred indemnity" philosophy in the a proceeding but should not (my emphasis) contained in that letter was lump sum the first step to determine "the amount this is an artificial amount the purposes of (my emphasis) "the Court" means and
- The philosophy enunciated Committee and the assertion that costs are to be fixed by Court" found its way into the new Rule 63.02 which sets out the general proposition that costs Court". A refinement of that proposition in dealing with party and party costs is enunciated in Rule 63.04. makes it clear that unless the Court otherwise orders, the costs between parties are to be fixed by the Court except in the case \ of default judgments (63.06) and in instances where a proceeding has been settled before judgment (63.10). Part III of Rule solicitor/client bills in general party costs after trial and default the · authority of any Taxing Officer to account without which the solicitor, of course, cannot recover a judgment (Rule 63.27). All enunciated in an article written by R. E. Pizzo, System of Taxation" (1989), 16 Nova Scotia Law News 37. some excerpts from that article . ... The fees will no longer be determined by the number of letters written or documents complexity of the trial and nature of the action .... In recommending the Tariff Statutory Costs & Fees Committee adopted the philosophy that the recovery of substantial contribution towards expenses in presenting or defending should not be a complete indemnity .... Costs are an indemnity compromise·between total cost indemnity (i.e. costs on a solicitor/client basis) and no costs .... 8 -by the Costs and Fees "the "are in the discretion of t~e This latter Rule 63 deals with the taxation of (excluding always party and judgments) and establishes appr.ove. a solicitor's the foregoing was accurately "The New Tariff I quote drafted, but by the system of taxation, the costs shou 1 d represent n a party's reasonable a proceeding, but rather than a penalty ... a
- There are four tariffs for the calculation of costs. Solicitor fees for a litigant entitled to party) costs on a decision or order in a proceeding are determined according to Tariff which default judgments are entered, solicitor fees are calculated according to applied to determine solicitor discontinued actions. disbursements .... Under Tariff •A", the trial judge assesses solicitor's fees at the end of trial. that, by that time, the trial judge is very familiar with the action and is therefore the one most qualified to determine the amount of costs. person best suited to assess costs to fit the merits of the case .... Under Tariff "A", the judge must determine: (a) the •amount involved" in the action; (b) the scale of compensation .•.. In monetary cases, the "amount equal to the amount of damages awarded .... The trial judge is given the discretion to disregard the Tariff system. According to Civil 63.02, costs are in the discretion of the Court. Court may deal with costs at any stage of a proceeding. ' It may also disregard rules 63.03 to 63.15, gross sum in lieu of or in addition to any taxed costs. Tariff "B" ... According to Civil prothonotary shall determine the "amount involved" and shall tax costs. Tariff "C" Tariff "C" applies to discontinued or settled_ taxation is done by the Procedure Rule 63.10. Disbursements are taxed in accordance with Tariff "0". According to Rule 63.10A, disbursements. Mr. Pizzo has analysed what the effect of the new Rule 63 is in his opinion. The letter circulated to the bar by the Costs and Fees Committee indicated 9 -(party and "A". For actions in Tariff "B". Tariff "C" is fees on settled or Tariff "D" deals with The Tariff system assumes He or she is the involved" need not be Procedure Rule The awarding a Procedure Rule 63.06, the proceedings which are It is a hybrid tariff .... This taxing officer under Civil the taxing officer shall tax (My emphasis) what they intended to
- accomplish in their drafting. outlined above reaches the-same conclusion as these writers. the context of this matter, then, the Taxing Master did not have the power on a party and party bill after trial to fix either the amount involved or the scale under costs were to be taxed. His proper course matter to the Trial Judge and determinations. Under the Rule, it is clearly the Trial Judge who must exercise his discretion with respect to both of those elements. Apparen·tly no one raised this question at the time of the taxation. That brings us to the matter of this "appeal" and the question of what, if any, authority or jurisdiction I to hear and dispose of this matter as an appeal under the Rules. THE APPEAL PROCESS The process of appeal Civil Procedure Rules 63.37A through 63.40. of the appeal is limited by Rule described in Rule 63.40. In particular, Rule 63.38(5) has given "cause to pause" in deciding this appeal. 63.38(5) Notwithstanding anything appeal from a taxing officer's party's entitlement to disbursements in a proceeding in which the costs between the parties were determined by a court shall be to the same judge who costs between the parties, orders. 10 My own review of the Rule In which the solicitor's was to return the request him to make those may have from taxation is governed by The subject matter 63.39 and the Court's power contained in this Part, an determination of a determined the unless the court otherwise (My emphasis) ·
- 11 -Not being the "same" ' judge. As previously discussed, regime dealing with party and Trial Judge who is to determine the costs under Tariff that determination can be appealed only to the Appeal Division, under Rule reservations, both Counsel requested and agreed that the jurisdiction to deal with the "appeal" and invited me to tax the counsel fees. Ordinarily, before Judge Carver under Rule failure to fix counsel fees was question could also be properly referred back to Judge Carver. In view of the circumstances however, ' and agreement of Counsel~ exercising the authority of Rule 63.40 (supra), I order that this appeal will be heard and disposed of by me, and will not be confined (63.38(5) and 63.39). The appeal will be allowed insofar as it relates to counsel fees. The disbursements as allowed by the Taxing Master are hereQy confirmed . . FIXING COUNSEL FEES It remains simply to determine the appropriate counsel fee. This case involved a mechanics' Macklem & Bristow, Construction Builders' in Canada cites at page 1-2 the ' J.A. in Clarkson Co. v. Ace Lbr. the following comments: judge, I may be the "wrong" the philosophy of the new party costs is that it is the "A" and Supreme Court, 63.3 7A. Notwithstanding my I assume any "appeal" would have come 63.38(5). Inasmuch as the an apparent oversight, that and the representations to the grounds specified 1 ien action. The text and Mechanics' Liens dissenting judgment of Kelly Ltd. [1963] S.C.R. 110, with
- The lien commonly known unknown to the common law Ontario to a series of statutes ... It constitutes abrogation of the common creates in the specified circumstances the owner's lands which would not exist but for the act and grants to one class of creditors preference not enjoyed by all creditors of debtor ... The owner and other creditors not belonging to the class of lien holders have rights as well. It would seem that the Courts are admonished to have regard for those rights in applying sections 37, 41(1) and 41(3). To paraphrase these three provisions, the Court is authorized to consolidate lienholders into one action to deal with all at once, apportion the costs recovered in the action amongst the several plaintiffs, bearing in mind that the total of such costs shall not "exceed what would have been incurred if the least expensive course had been taken". It is argued on notwithstanding two separate instance, the costs to be allowed consolidated action. I agree. the fact that the total costs claimed are less than total judgments allowed (s. 41(1)). In this particular represented by one Counsel and one witness was called to prove both claims. No defence was filed in relation to the claims and while it was, in any event, establish a prima facie case 12 -as the mechanics' lien was and owes its existence in an law to the extent that it a charge upon a security or the same the actions of all and to behalf of the owner that actions were taken in this ought to be based on a I take that view notwithstanding 25% of the instance, both Plaintiffs were necessary for . the Claimants to on viva voce evidence, the t\vO
- 13 trials were concluded in something less than one-half day. total value of the judgments was just under $60,000. trial date fixed for July 8th, Defence Counsel June 28th, offering to settle for the accounts due plus legal fees and disbursements $1,721. As to costs allm.o1ed in other jurisdictions, again to the text Macklem & Bristow where I find at page 12-26: Suggested Revised Guide to Schedule of Costs Where Lien Filed - Preparation, Appearance and no Actual Trial (Lien Amount) $50,001 to 75,000 I bear in mind that "actual" trial and that the Claimants ' prima facie case. I accept that Plaintiffs' Counsel was obliged to review the necessary documentation with the witness June 28th and Jtily 8th. I accept that Counsel spend one-half day in Court granting of a single Order for transactions. I observe that the Owners/Defendants intervened to ensure that the two actions were consolidntcd nnd in view of their tacit admission consented to judgment, thereby preparation and trial. It is necessary under involved" and to select the Tariff accordance with Schedule "A". In doing so, it is appropriate in The With the Claimants' Counsel wrote to which then totalled I refer Costs $1,200.00 in this case, there was an were obliged to prove a between was obliged to on the trial, leading to the Judgment with respect to both might have of indebtedness, might have obviating the need of both Rule 63.04 to fix the "amount \vhich will be applied in
- this case to consider that approximately that the Claimants, through their Counsel, circuit the process by obtaining a Consent Judgment and that the owners failed to respond to their overtures: did, in fact, refuse to make the admissions necessary to reduce costs: that the two Plaintiffs or Claimants were represented by one solicitor with some resulting required. I fix the "amount involved" at $60,000 to be paid on the basis of Scale 1, for a which shall be apportioned between the Claimants on the basis of one-third to Nova Wood-Craft Building Supply Centre Limited. have disbursements as already allowed by the Taxing Master. relation to Brady Building Supplies, disbursements total $392.68 and in relation to Nova Wood-Craft Limited, disbursements total $385.68. Because it is my view that neither raised the appropriate issues before the Taxing Master, no costs will be allowed to either party on this appeal. DATED at Digby, Nova Scotia, this A.D. 1992. 14 $60,000 is claimed: J attempted to short that the Owners benefit in terms of time total solicitor's fee of $3,225 Limited and two-thirds to Brady In addition, the Claimants will In of the parties 3rd day of March, ADDITIONAL JUDGE OF THE COUNTY COURT OF DISTRICT NUMBER TWO
- 15 -TO: Mr. David Bolivar ' Clerk of the County Court P.O. Box 369 Bridgewater, Nova Scotia B4V 2W9 Mr. Frank E. Demont Coady, Filliter Barristers & Solicitors Suite 208 5880 Spring Garden Road Halifax, Nova Scotia B3H lYl Solicitor for the Defendants/Appellants Mr. Michael K. Power Power, Dempsey & Cooper Barristers & Solicitors P.O. Box 579 Bridgewater, Nova Scotia B4V 2X6 Solicitor for the Plaintiffs/Respondents ' CASES AND STATUTES CITED: Mechanics' Lien Act, R.S.N.S. 1989, c.277 Rent Review Commission v. Rawdon Real ties Limited et al, 56 N.S.R. (2d) 309 "The New Tariff System of Taxation", 16 Nova Scotia Law News 37 Macklem & Brist·ow, Construction Builders' and Mechanics' Liens in Canada, 1990 edition Clarkson Co. v. Ace Lbr. Ltd. ["1963] S.C.R. 110 '
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