A-352-81
In the matter of an appeal by Bell Canada con
cerning a decision of the Canadian Radio-televi
sion and Telecommunications Commission, dated
March 9, 1981 (Telecom. Decision CRTC 81-5)
Court of Appeal, Urie, Ryan JJ. and Kelly D.J.—
Toronto, November 29 and 30, 1982; Ottawa,
March 31, 1983.
Practice — Costs — Awarded to interveners in CRTC
general rate hearing — National Transportation Act, s. 73
authorizing award of costs — Lawyer on retainer — Whether
services of such lawyer "costs" within s. 73 — Whether such
lawyer same as salaried employee — Whether intervener en
titled to costs when represented by counsel retained by non-
party — Argument that "costs" contemplates compensation
for expenses incurred — Rate-increase applications differing
from litigation — No lis between applicant and interveners —
Compensation of certain participants by others may be appro
priate — Commission not bound to follow same rules used in
litigation — S. 73 does contemplate "costs" indemnification
for expenses incurred — Commission erred if rejecting concept
— Costs award herein not offending against indemnification
principle — Not established that costs awarded more than
compensatory — Judgment of Russell L.J. in In re Eastwood,
[1975] 1 Ch. 112 (Eng. C.A.) applied — Not established that
relationship with counsel engaged on 'first retainer" basis
same as that between party and salaried lawyer — Not
established that counsel agreed not to look in any event to
interveners for payment — Reasoning in Armand v. Carr, et
al., [1927] S.C.R. 348 applying with greater force to proceed
ing such as rate-determination hearing — S. 73 giving Com
mission broad discretion as to costs — Arguable that Com
mission could award costs of intervener leading helpful
evidence even if intervener not contractually bound — Appeal
dismissed — National Transportation Act, R.S.C. 1970, c.
N-17, ss. 43, 64(2) and (5) (rep. and sub. R.S.C. 1970 (2nd
Supp.), c. 10, s. 65 (Item 32)), 73 — Railway Act, R.S.C. 1970,
c. R-2, s. 2(1).
Telecommunications — Costs awarded to interveners at
CRTC general rate hearing — The Public Interest Advocacy
Centre, a non-party, furnishing counsel — Whether expenses
for such lawyer "costs" within National Transportation Act, s.
73 — Rate-increase applications differing from civil litigation
— No lis between applicant and interveners — Compensation
of certain participants by others possibly appropriate — S. 73
contemplating "costs" indemnification for expenses incurred
— Commission erred if rejecting concept — Indemnification
principle not offended against — Reasoning of Supreme Court
of Canada in Armand v. Carr applying with greater force to
proceeding such as rate-determination hearing — S. 73 giving
Commission broad discretion as to costs — Arguable that
Commission might award costs where helpful evidence led even
if intervener not contractually bound — National Transporta
tion Act, R.S.C. 1970, c. N-17, s. 73.
Bell Canada applied to the Canadian Radio-television and
Telecommunications Commission for a general rate increase.
Interventions were filed by several parties, including the Con
sumers' Association of Canada ("CAC") and the National
Anti-Poverty Organization ("NAPO"), and a hearing was held.
The result was Decision CRTC 78-7. In it, the Commission not
only ruled upon Bell's application, but also purported to exer
cise its discretion under section 73 of the National Transporta
tion Act, by awarding costs to CAC and NAPO. The award to
CAC was subsequently expanded by Decision CRTC 80-1.
Pursuant to the awards, a Taxing Officer issued Taxation
Order 1980-1, which Bell appealed to the Commission.
The costs granted to CAC pertained to legal services per
formed by CAC's counsel. The latter was on a retainer with
CAC; therefore, according to Bell, he was in the same position
as a lawyer who is an employee of his client, receiving a salary
which covers any and all legal services rendered during the
period of employment. No part of the retainer could be
matched with counsel's work in this particular case. He would
have received the same payment from CAC even if CAC had
not intervened, so his efforts in respect of the intervention did
not entail any additional costs for CAC.
In these circumstances, it was argued that the costs awarded
CAC fell outside the ambit of the term "costs" as used in
section 73. Bell contended that section 73 must be taken to
refer only to the costs which might be awarded by a court of
law in a civil suit, and that such costs constitute an indemnity
for expenses actually incurred in proceedings.
Bell sought to apply this same interpretation of section 73
against NAPO, which was awarded costs in respect of both
legal services and disbursements. For the purposes of the rate
case, NAPO and other interveners had retained the services of
The Public Interest Advocacy Centre ("PIAC"), a' non-profit
organization. Mr. Roman, the lawyer who acted for NAPO
with regard to the hearing, was actually on retainer with PIAC.
The agreement between PIAC and the interveners did not
impose upon the latter any definite obligation to pay for the
services of PIAC or Roman, although the Taxing Officer found
that NAPO and the others may have had an understanding
with Roman whereby any costs awarded were to be passed
along to PIAC. Most, if not all, of the disbursements relating to
NAPO's intervention were in fact made by PIAC. Bell main
tained that NAPO neither had paid for the legal services and
disbursements, nor was legally obliged to do so. Consequently,
NAPO had not actually incurred any expenses, and compensa
tion by an award of "costs" could not be ordered. As for PIAC
itself, Bell pointed out that it was not an intervener, and that it
had not been awarded costs.
The Commission dismissed Bell's appeal, whereupon Bell
appealed the dismissal.
Held, the appeal should be dismissed.
Per Ryan J. (Kelly D.J. concurring): Any award of costs
under section 73 must include indemnification as one of its
elements, and the Commission was in error if it intended to
reject this proposition. It may be that the Commission meant to
question only the appropriateness of the particular version of
the indemnification principle developed by the courts, and it is
correct that, in assessing costs in a rate proceeding, the Com
mission is not bound to follow precisely the same rules which
apply in court proceedings. The judgment in Re Bell Canada
and Telecom. Decision CRTC 79-5, which at any rate deals
with an issue very different from the one in this case, is not
authority for restricting the Commission in that way. There are
considerable differences between court processes and those of
the Commission, for which differences allowances must be
made. Furthermore, even if the Commission did regard the
indemnification principle as a non-essential in a section 73
award, that error would be immaterial, inasmuch as the princi
ple was not in fact offended by the awards which were made.
In so far as CAC is concerned, it is unclear from the record
exactly what the terms of counsel's retainer were. However, the
decision of the English Court of Appeal in Re Eastwood
affirms that even in the courts, and even where a lawyer is on
salary, it is not improper to tax a counsel fee as if it pertained
to an independent lawyer; and the same decision also asserts
that such a taxation generally will not go beyond indemnifica
tion of the party represented by, and paying the salary of, the
lawyer. These conclusions would apply all the more forcefully
where counsel is on a retainer. There would be a reviewable
error with respect to CAC's award only if it were shown that
the award provided more than indemnification, but Bell has not
even attempted to demonstrate this. Furthermore, counsel's
involvement in the Bell rate case has made him unavailable to
perform other services for CAC.
In relation to the NAPO award, regard should be had to the
decision of the Supreme Court of Canada in Armand v. Carr.
According to that precedent, it would be proper to deny NAPO
costs for legal services only if there were a binding agreement
prohibiting Roman from looking to the interveners for payment
of his costs under any circumstances. The Taxing Officer made
no express finding of fact that an agreement of this nature
existed. Nor does the evidence support such a finding. There
fore, the fact that Roman appeared as counsel for NAPO and
the others must be taken to have imposed on the interveners an
obligation to pay the reasonable costs of his services. And since,
in the light of Armand, the award relating to legal services
would not have involved an error of law even in a civil action,
the same is unquestionably true in the instant rate proceeding,
given the broad discretion accorded the Commission by section
73.
Although the disbursements for which NAPO was awarded
costs were actually made by PIAC, it does not necessarily
follow that, for taxation purposes, those disbursements were not
costs of NAPO. It is not a legal error to award NAPO costs
with respect to the disbursements in the absence of proof that
NAPO was not even contingently liable for those expenses.
Even where there is no legal obligation on the part of a
particular intervener (such as NAPO) to pay for expenses,
arguably the Commission would still have the power to award
costs to that intervener. This might be the case if the intervener
has made a helpful contribution to the Commission's work—at
least if, as a practical matter, it also is likely that the costs
awarded would be used to compensate the one who incurred the
expenses.
Per Urie J.: In proceedings before a regulatory tribunal,
including those to which section 73 applies, the word "costs"
need not be assigned the meaning that it bears in judicial
proceedings, where, generally speaking, it imports the compen
sation of a successful litigant. Whether an intervener or other
party appearing before a tribunal has incurred liability for
expenses in relation to the appearance is one factor which may
be considered in deciding upon the party's entitlement to costs,
but it is neither the only factor nor even a necessary factor. A
rate-fixing hearing does not involve a lis. Its purpose is to
obtain meaningful reaction from interested parties, who may in
a given case contribute to the Commission's understanding of
the matters before it without having incurred actual, measur
able expenses. Such contributions should be encouraged and
rewarded, and this cannot be done if costs are to be awarded
only as indemnification for expenses actually incurred. Section
73 thus allows the Commission to exercise discretion—as to the
principles applicable and the factors to be considered in the
making of an award.
Re Bell Canada and Telecom. Decision CRTC 79-5 does not
preclude the Commission's awarding costs to a participant who
has not made any actual expenditures. In any event, though,
the comments in that case should be restricted in their applica
tion to the particular issue dealt with therein, especially since
other appellate courts, considering statutes with subject-
matters and wording similar to those of the National Trans
portation Act, have taken the position that entitlement to costs
need not be tied to the principle of compensation.
Thus it cannot be said that the Commission, in dismissing the
appeal, improperly exercised its discretion by applying any
wrong principle.
CASES JUDICIALLY CONSIDERED
APPLIED:
In re Eastwood, [1975] 1 Ch. 112 (Eng. C.A.); Armand
v. Carr, et al., [1927] S.C.R. 348; Re Green, Michaels &
Associates Ltd. et al. and Public Utilities Board (1979),
94 D.L.R. (3d) 641 (Alta. C.A.); Newfoundland &
Labrador Hydro v. Newfoundland & Labrador Federa
tion of Municipalities (1980), 24 Nfld. & P.E.I.R. 317;
65 A.P.R. 317 (Nfld. C.A.).
DISTINGUISHED:
Re Bell Canada and Telecom. Decision CRTC 79-5,
[1982] 2 F.C. 681; 41 N.R. 221 (C.A.).
COUNSEL:
B. Courtois and D. C. Kidd for Bell Canada.
G. MacKenzie and G. van Koughnett for
Canadian Radio-television and Telecommuni
cations Commission.
J. J. Robinette, Q.C. and M. Wolpert for
National Anti-Poverty Organization, Inuit
Tapirisat of Canada, Tagramiut Nipingat Inc.
and S. A. Rowan.
K. J. MacDonald for Consumers' Association
of Canada.
SOLICITORS:
E. E. Saunders, Q.C., Hull, Quebec, for Bell
Canada.
Campbell, Godfrey & Lewtas, Toronto, for
Canadian Radio-television and Telecommuni
cations Commission.
The Public Interest Advocacy Centre,
Ottawa, for National Anti-Poverty Organiza
tion, Inuit Tapirisat of Canada, Tagramiut
Nipingat Inc. and S. A. Rowan.
K. J. MacDonald for Consumers' Association
of Canada.
The following are the reasons for judgment
rendered in English by
URIE J.: I have had the advantage of reading
the reasons for judgment to be delivered by Mr.
Justice Ryan. While I agree with him in his pro
posal to dismiss the appeal, with great deference I
find myself in disagreement with the reasoning
whereby he arrived at that result. It is for this
reason that it is necessary for me briefly to set out
why I have reached the conclusion to which I have
come.
Mr. Justice Ryan has set out the facts and the
relevant statutory authorities in his reasons so that
it will not be necessary for me to- repeat them
except to the extent necessary to make what I have
to say intelligible.
An award of costs, whether in a judicial pro
ceeding or before a regulatory or other tribunal
and apart from some statute or rule or regulation
providing for the contrary, is in the discretion of
the court or tribunal. Under the National Trans
portation Act, R.S.C. 1970, c. N-17 ("the Act"),
section 73' provides the authority for the Canadi-
an Radio-television [and Telecommunications]
Commission ("the Commission") to exercise its
discretion to grant costs in any proceeding before
it. As my brother Ryan pointed out, section 43 of
the Act provides that words and expressions in that
Act have the same meaning as in the Railway Act
[R.S.C. 1970, c. R-2]. In the latter Act section 2
provides that " `costs' includes fees, counsel fees
and expenses".
The principal issue in this appeal is whether the
meaning to be ascribed to the word as it appears in
the Act should be the meaning given it in ordinary
judicial proceedings in which, in general terms,
costs are awarded to indemnify or compensate a
party for the actual expenses to which he has been
put by the litigation in which he has been involved
and in which he has been adjudged to have been a
successful party. In my opinion, this is not the
interpretation of the word which must necessarily
be given in proceedings before regulatory tri
bunals.
I use the word "necessarily" because I have no
doubt that an element which may be considered by
the tribunal in determining the entitlement of a
party appearing before it to costs, is whether or not
the party has incurred liability for expenses for the
purpose of its appearance before the tribunal. It is
not, however, in my view, either the only or a
necessary element. As has been said on other
occasions, the proceedings before the Commission
in a rate-fixing hearing are not adversarial in
nature; there is no lis inter partes. The purpose of
a hearing in such a proceeding is to obtain mean
' 73. (1) The costs of and incidental to any proceeding before
the Commission, except as herein otherwise provided, are in the
discretion of the Commission, and may be fixed in any case at a
sum certain, or may be taxed.
(2) The Commission may order by whom and to whom any
costs are to be paid, and by whom they are to be taxed and
allowed.
(3) The Commission may prescribe a scale under which such
costs shall be taxed.
ingful reaction from concerned and interested par
ties affected by the rate-fixing, whether adversely
or positively. Such parties may or may not have
incurred actual, measurable expenses, such as
counsel fees, in providing input to the proceedings
and yet have contributed in a very real fashion to a
better understanding by the Commission of some
of the issues involved in the proposed rate struc
ture. Such contributions to a better understanding
of the issues should, as I see it, be encouraged and
rewarded. If this is so, obviously such encourage
ment cannot be based solely on indemnification for
actual costs incurred. It is at this point that the
Commission's discretion as to who is deserving of
an award of costs, as to the elements to be con
sidered and the principles to be applied in the
award, is exercised in any of the ways contemplat
ed by section 73.
There are authorities for this view of the appli
cable principle. I will cite only two. Each puts the
proposition succinctly and in a manner which I
adopt. The first is a decision of the Alberta Court
of Appeal arising from an award of costs by the
Public Utilities Board in a rate hearing in Re
Green, Michaels & Associates Ltd. et al. and
Public Utilities Board' in which Clement J.A. at
pages 655-656 of the report put the matter in this
way:
In the factum of the appellants a number of cases were noted
dealing with the discretion exercisable by Courts in the matter
of costs of litigation, as well as statements propounded in texts
on the subject. I do not find them sufficiently appropriate to
warrant discussion. Such costs are influenced by Rules of
Court, which in some cases provide block tariffs, and in any
event are directed to lis inter partes. We are here concerned
with the costs of public hearings on a matter of public interest.
There is no underlying similarity between the two procedures,
or their purposes, to enable the principles underlying costs in
litigation between parties to be necessarily applied to public
hearings on public concerns. In the latter case the whole of the
circumstances are to be taken into account, not merely the
position of the litigant who has incurred expense in the vindica
tion of a right.
2 (1979), 94 D.L.R. (3d) 641 [Alta. C.A.].
The second case to which I will make reference
is a decision of the Newfoundland Court of Appeal
arising out of a rate-fixing hearing by the Board of
Commissioners of Public Utilities at which the
Newfoundland & Labrador Federation of Munici
palities participated and were awarded costs by the
Board to be payable by the public utility. Gushue
J.A., speaking for himself and Morgan J.A., at
pages 325-326 [Nfld. & P.E.I.R.] of the report of
the case of Newfoundland & Labrador Hydro v.
Newfoundland & Labrador Federation of
Municipalities 3 said this:
The same finding applies to the final ground of appeal.
Section 14(1) states clearly that "costs may be fixed at a sum
certain, or may be taxed and the Board may order by whom the
same are to be taxed ..... and the Board may prescribe a scale
under which costs are to be taxed". The statement is clear and
unequivocal and capable of only one meaning. The manner in
which the costs are arrived at, and awarded, is a matter strictly
within the discretion and competence of the Board, and this
Court has no jurisdiction to interfere with that discretion,
unless of course improperly exercised. The fact that a litigant in
a court proceeding is subject to various rules relating to costs is
of no relevance here. The Board may well find in the future (if
it has not already done so) that it is desirable to formulate rules
and regulations and binding scales of fees with regard to cost
awards and to insist upon taxation of bills of costs, but that
once again is within the sole discretion of the Board and, as the
Act presently stands, may not be dictated by this Court or any
other body, save the Provincial legislature.
To briefly summarize, the Board has the unquestioned right
to exercise the specific powers granted it by the Act. Where, as
in this case, there are as well discretionary powers granted, this
Court may not interfere unless it can be demonstrated that the
Board has proceeded on a manifestly wrong principle or exer
cised that discretion for an improper purpose. In my view, this
has not been demonstrated here.
In light of the comments of Gushue J.A., it is
interesting to note that the Commission did, in
fact, prior to the issuance of the Taxing Officer's
order in the case at bar, formulate rules for the
awarding of costs on the hearing of an application
for a general rate increase. Those rules were not in
force at the time the Commission's decision to
award costs to the Consumers' Association of
Canada ("CAC") and National Anti-Poverty
Organization ("NAPO") was made but a draft
thereof had been circulated and the Commission
3 (1980), 24 Nfld. & P.E.I.R. 317; 65 A.P.R. 317 [Nfld.
C.A.].
applied the criteria in the draft rules in determin
ing to which parties costs would be granted.
However, it is not from that decision, No. 78-7,
that the appeal was taken. Rather, it is from the
Commission's Decision 81-5 which held that the
Taxing Officer did not err in principle in awarding
counsel fees to CAC and costs to NAPO. In
reaching that conclusion, the Commission made
the following finding:
In the Commission's view, the application of the principle of
indemnification upon which Bell relies would not be appropri
ate in regulatory proceedings before it. In the Commission's
opinion, the proper purpose of such awards is the encourage
ment of informed public participation in Commission proceed
ings. It would inhibit public interest groups from developing
and maintaining expertise in regulatory matters if, in order to
be entitled to costs, they had to retain and instruct legal counsel
in the manner appropriate to proceedings before the courts in
civil matters. On the other hand, no useful purpose would be
served by requiring public interest groups artificially to arrange
their affairs, by means, for instance, of forgivable debts or
bonus accounts, in order to avoid a restrictive interpretation of
the term "costs".
As I read it, that finding is an amplification of
the Commission's view as to the proper principles
to be applied in awarding costs in rate-application
hearings as expressed in its Decision 78-7. This
Court, as a matter of law, would not have inter
fered with that exercise of the Commission's dis
cretion unless the Court had been satisfied that the
Commission had proceeded on a wrong principle in
arriving at its conclusion. Neither should we inter
fere with its decision in this appeal from Decision
81-5 which, as an expression of its view as to the
inappropriateness of the principle of indemnifica
tion in the award of costs in regulatory proceed
ings, is an extension of the exercise of its discretion
to award costs in such proceedings. As I have
stated, I agree with its view that in proceedings
before the Commission "costs" need not be merely
compensatory. Therefore, the Commission did not
err in dismissing the appeal from the ruling of the
Taxing Officer.
The next question to be examined is whether
that finding is inconsistent with this Court's deci
sion in Re Bell Canada and Telecom. Decision
CRTC 79-5 4 and thus cannot stand.
In that case the only issue before the Court was
whether the applicable statutory provisions were
sufficiently broad to empower the Commission to
require Bell Canada, as an applicant for a rate
increase, to pay for an independent study in con
nection therewith commissioned by the Commis
sion itself. The Court held that the cost incurred
by the Commission in acquiring the study was not
properly assessable against the applicant for the
rate increase. As Mr. Justice Ryan observed, the
issue in that case is obviously quite different from
that pertaining in this case. The essence of the
decision, as I see it, is found in the last two
sentences in the following paragraph found on
[pages 687-688] of the report [F.C.]:
In my view, the word "costs" in section 73 of the National
Transportation Act must, as argued by the appellant, be given
its normal legal meaning according to which the costs of a
proceeding are the costs incurred by the parties or participants
in that proceeding and do not include the expenses of the
tribunal before which the proceedings are brought. (See: Hals-
bury's Laws of England, Third Edition, Vol. 11, p. 293; Bal-
lentine's Law Dictionary, p. 277; Black's Law Dictionary, p.
312; Jowitt's Dictionary of English Law, Vol. 1, p. 507;
Wharton's Law Lexicon, 13th Edition, p. 230.) I do not see any
reason to give it a wider meaning. I am confirmed in this
opinion by the fact that much of the language used in section
73 is normally used in association with court costs. I have in
mind the phrase "costs of and incidental to all proceedings"
(which is found in section 50 of the English Supreme Court of
Judicature (Consolidation) Act, 1925, 15 & 16 Geo. 5, c. 49),
the reference to the possibility that costs be fixed at a sum
certain or taxed and that the Commission prescribe a "scale"
(in the French text: "tarif') of costs. If another interpretation
were to prevail, the Commission would have the right to force
the utility companies which the law obliges to appear before it
to defray part of its expenses. This, in my opinion, would be
contrary to the general policy of the National Transportation
Act following which the expenses of the Commission are to be
paid out of public funds rather than by the utility companies
that are subject to its jurisdiction. [Emphasis added.]
While what was said in the earlier part of the
quoted passage appears to be totally at odds with
my finding that the word "costs" as used in section
73 should be given a broader meaning than that
ascribed to it in the courts, taken in context with
° [[1982] 2 F.C. 681]; 41 N.R. 221 [C.A.].
the last two sentences which clearly relate solely to
the narrow issue before the Court in that case,
there really is not a conflict between the two
findings. I think it is clear that the issue in this
case was not contemplated at all by the Court in
the earlier case. I am fortified in this view by the
following passage from page [687] of the report
[F.C.] which is also contained in a quotation in
Ryan J.'s reasons:
Moreover, even in clearly non-adversarial proceedings like
applications for the approval of rates, there may be cases
where, like in ordinary litigation, it appears just to oblige a
participant in those proceedings to compensate the other par
ticipants for the expenses that they have incurred by reason of
their participation in those proceedings. [Emphasis added.]
Pratte J. in that passage has likened the powers
of the Commission to that of a court in its ability
to indemnify a participant in a hearing before it
for expenses to which such participant may have
been put by so participating. That does not mean,
as I read the passage in the context of the whole of
his reasons, that the Commission is precluded from
awarding "costs", in the broad sense of that word,
to a participant whose contribution has, in the
opinion of the Commission, been of value to it in
assessing the merits of the application even if such
participant had made no actual expenditures, or
only nominal ones.
In any event, what was said in the earlier case
should, as I see it, be limited to the issue that was
then before the Court, viz. the liability of an
applicant to pay expenses incurred by the Commis
sion on its own account for assistance in assessing
the merits of a rate application. It should not be
extended to the issue before the Court in this case,
particularly when there is persuasive authority
from other courts of appeal in respect of statutes in
pari materia embodying much the same language
as that before this Court. Where there is no clear-
cut decision in this Court on the point in issue, as
here, those decisions ought to be accorded defer
ence and weight by this Court and I am prepared
to follow them.
In summary, it is my opinion that it has not
been demonstrated that the Commission improper
ly exercised its discretion by applying a wrong
principle and the appeal should, therefore, be dis-
missed. In the circumstances it is unnecessary for
me to examine and adjudicate upon the other
grounds of appeal.
Accordingly, as required by subsection 64(5) of
the Act [rep. and sub. R.S.C. 1970 (2nd Supp.), c.
10, s. 65 (Item 32)], I would certify an opinion to
the Commission that it did not err in any question
of law or jurisdiction in making the order appealed
from.
* * *
The following are the reasons for judgment
rendered in English by
RYAN J.: This appeal raises issues concerning
costs which may be awarded to interveners in a
general rate hearing conducted by the Canadian
Radio-television and Telecommunications Com
mission ("the Commission"). The appeal was
brought by Bell Canada under subsection 64(2) of
the National Transportation Act 5 ("the Act")
from a decision made by the Commission on
March 9, 1981, Telecom. Decision CRTC 81-5
("CRTC 81-5"). The decision dismissed an appeal
to the Commission from Taxation Order 1980-1,
an order made by Taxing Officer David B.
Osborn. The taxation order was made on February
19, 1980 pursuant to Telecom. Decision CRTC
78-7 ("CRTC 78-7") dated August 10, 1978. In
CRTC 78-7, the Commission awarded costs to a
number of interveners in the 1978 Bell Canada
General Rate Case, including the Consumers'
Association of Canada ("CAC"), and the Nation
al Anti-Poverty Organization, Inuit Tapirisat of
Canada, Tagramiut Nipingat Inc. and S. A.
Rowan (all four of whom are referred to in these
reasons as "NAPO and others"). In CRTC 78-7,
R.S.C. 1970, c. N-17 [rep. and sub. R.S.C. 1970 (2nd
Supp.), c. 10, s. 65 (Item 32)]. Subsection 64(2) provides:
64....
(2) An appeal lies from the Commission to the Federal
Court of Appeal upon a question of law, or a question of
jurisdiction, upon leave therefor being obtained from that
Court upon application made within one month after the
making of the order, decision, rule or regulation sought to be
appealed from or within such further time as a judge of that
Court under special circumstances allows, and upon notice to
the parties and the Commission, and upon hearing such of
them as appear and desire to be heard; and the costs of such
application are in the discretion of that Court.
the interveners to whom costs were awarded were
directed to submit bills of costs to the Taxing
Officer; Bell Canada was directed to submit its
comments with respect to any claim; and a right to
appeal the decision of the Taxing Officer to the
Commission was given to the affected parties. Bell
Canada exercised its right of appeal.
The costs under dispute were awarded by the
Commission under section 73 of the Act, which
reads:
73. (1) The costs of and incidental to any proceeding before
the Commission, except as herein otherwise provided, are in the
discretion of the Commission, and may be fixed in any case at a
sum certain, or may be taxed.
(2) The Commission may order by whom and to whom any
costs are to be paid, and by whom they are to be taxed and
allowed.
(3) The Commission may prescribe a scale under which such
costs shall be taxed. 6
The costs which were awarded to CAC, and
which were disputed, were awarded in respect of
legal services performed in connection with the
Bell Canada General Rate Case by a lawyer who
was engaged on a retainer arrangement by CAC.
Counsel for Bell Canada submitted to us, as he
submitted on the appeal to the Commission from
the taxation order, that such costs are not "costs"
within the meaning of the word as used in
section 73. His submission was that the retainer
arrangement was such as to place the lawyer in the
same position as that of a lawyer who is an
employee of his client and is paid a salary for all
the legal services he provides.
It was also submitted that the costs awarded
NAPO and others were not "costs" under
section 73 because NAPO and others had neither
paid the costs in respect of which the sums were
6 Section 43 of the National Transportation Act provides:
43. In this Part, words and expressions have the same
meaning as in the Railway Act.
Subsection 2(1) of the Railway Act, R.S.C. 1970, c. R-2,
provides in part:
2. (1) In this Act, and in any Special Act as hereinafter
defined in so far as this Act applies,
"costs" includes fees, counsel fees and expenses;
awarded, nor were they legally liable to pay them.
The legal services in respect of which the sums
were awarded as costs were performed by counsel
retained, so it was submitted, by The Public Inter
est Advocacy Centre ("PIAC") to act on behalf of
NAPO and others, PIAC not itself being a party
to or an intervener in the General Rate Case.
Basically, the submission of Bell Canada both
on the costs awarded to CAC and to NAPO and
others was that "costs" in section 73 means "legal
costs", costs that could be awarded in a civil action
in the courts, but not otherwise. It was submitted
that the term "legal costs" necessarily involves
compensation for expenses actually incurred in a
proceeding and, it was said, neither CAC nor
NAPO and others had actually incurred expenses.
The response of CAC and NAPO and others was
that section 73 of the Act confers a discretion on
the Commission to award "the costs of and inci
dental to any proceeding" before it, and to order
"by whom and to whom any costs are to be paid".
"Costs" is not to be read in what was submitted
would be the narrow and technical sense urged by
counsel for Bell Canada, but in the broader and
more flexible way indicated by the nature of the
proceedings conducted by the Commission and the
purposes of those proceedings: a rate hearing bears
little resemblance to, for example, a tort action or
an action for breach of contract, and it would
unduly limit the scope of the discretion granted to
the Commission by the section to interpret "costs"
in the manner urged by Bell Canada. It was
submitted, in the alternative, that even if the prin
ciple of indemnification were applicable to the
award of costs under section 73, the principle had
been satisfied in this case because, on the authori
ties which the respondents cited, CAC had
incurred expenses and NAPO and others were at
the very least contingently liable for expenses.
There was thus, it was said, an adequate legal
basis for the Commission's dismissal of the appeal
to it.
CRTC 78-7 was the decision made by the Com
mission on Bell Canada's application for a general
increase in rates. This appeal is concerned only
with the portion of CRTC 78-7 which deals with
the awards of costs to various interveners, and
more particularly the awards to CAC and to
NAPO and others.
On September 5, 1978, CAC wrote to the Com
mission about the costs awards in CRTC 78-7.
With the concurrence of Bell Canada, the letter of
September 5, 1978 was transformed into a request
to review the portion of CRTC 78-7 dealing with
the awards of costs to certain interveners. As a
result, the Commission issued Telecom. Decision
CRTC 80-1 ("CRTC 80-1"), which modified and
expanded the costs awarded to CAC.
It may be as well to set out the award to CAC
made in CRTC 78-7, as that award was amended
by CRTC 80-1:
In the Commission's view, the Consumers' Association of
Canada represented not only the interests of the Association's
membership but also those of Bell Canada subscribers general
ly. The CAC, through its counsel, Mr. Kane, and its expert
witness, Dr. Gordon, contributed to a better understanding of a
number of relevant issues including that of the relationship
between Bell Canada and its subsidiaries.
The Commission accordingly awards costs to the CAC.
CRTC 78-7 awarded costs to NAPO and others
in this passage appearing at page 111 of the
decision:
Through their counsel, Mr. A.J. Roman, NAPO et al repre
sented a broad spectrum of subscriber interests and made an
important and substantial contribution not only to the Commis
sion's understanding of the relevant issues in the present case,
but also to the fulfillment of the Commission's objectives as set
forth in Decision 78-4.
In the Commission's view also, the cross-examination by Mr.
Roman of a number of the Company's witnesses was clearly
aided by the preparatory work performed by his expert
witnesses.
The Commission accordingly awards costs to NAPO et al
(except for ACCQ which did not request costs).
I will also quote several passages from Taxation
Order 1980-1. At page 5 of this order, the Taxing
Officer said:
Several interveners (NAPO et al) retained the services of the
PIAC and, by virtue of his retainer with PIAC, the services of
Mr. Roman as counsel.
PIAC is a not-for-profit corporation which has the following
objectives:
2. To provide representation to a range of public interests which
are presently unrepresented or underrepresented, in cases of
importance to public interest groups.
And he said at page 6:
It is clear that there was never any obligation flowing from
NAPO et al to either PIAC or Mr. Roman for their services. If
the subject of costs was ever discussed between counsel and
these interveners, the understanding was merely that if costs
should happen to be awarded, they would be given by the
interveners to the PIAC. This understanding is reflected in the
terms of reference of the PIAC. According to Mr. Roman, any
such bill, in the absence of an award of costs, would simply
have had to be written off as an uncollectible debt, a practice
which he submitted would accomplish nothing and would not
be conducive to good client relations.
Generally, at pages 7 and 8, the Taxing Officer
said:
Counsel for NAPO et al submitted that, when it awarded costs,
the Commission must be taken to have known all of the salient
facts of the relationships between PIAC and its clients, NAPO
et al, including the fact that any counsel fee and disbursements
recovered in an award of costs would go to PIAC.
Counsel for Bell Canada did not dispute the claim for disburse
ments as submitted by PIAC, nor did he argue the amount for
counsel fee. Rather, he submitted that the claim for costs by
NAPO et al should be dismissed in its entirety, for one or more
of the following major reasons:
(a) None of the interveners actually incurred the expenditures
being claimed. The jurisprudence with respect to costs in the
courts clearly establishes that costs are intended to be an
indemnity, and where there is no liability, there can be no
indemnity.
(b) The expenses were incurred by the PIAC and not by the
interveners; PIAC was not an intervener and it was not award
ed costs, nor could the decision of the Commission be interpret
ed to mean that it intended to award costs to PIAC.
(c) PIAC did have funding available to cover the expenses
incurred, whether specifically granted for this case or not.
Furthermore, PIAC restricts its services to those clients who do
not have the means to retain other counsel, i.e. a member of the
Bar. This would presumably include counsel who could be
retained in the expectation or by virtue of an award of costs by
the Commission.
He also said, at page 11:
I have reviewed the cases referred to me by counsel for all
parties, but I have not found conclusive authority therein for
purposes of the present case. Most of them deal with costs in a
traditional legal context, and assume a traditional relationship
between counsel, client and tribunal. Regulatory agencies and
public interest interveners pose different problems and, while
legal cases can be a useful guide in the area of costs, particular
ly with respect to quantum, the approach to the problems in
this case cannot, in my opinion, be circumscribed by a strict
application of traditional legal principles. Therefore, I have
interpreted the Commission's decision in light of the knowledge
that public participation is a fragile concept, more talked about
than realized, that public interest advocacy groups offer a
different, but no less valuable, approach to participation than
does the traditional solicitor-client form, and that a restrictive
interpretation of a costs award by the officer responsible for
implementing it would serve no useful public purpose.
I will also quote passages from CRTC 81-5, the
decision of the Commission which dismissed the
appeal from the taxation order. At page 3 of
CRTC 81-5, the Commission said:
Bell raised two issues of principle for the determination of the
Commission in this appeal, expressed by the Company as
follows:
"the Taxing Officer misdirected himself on questions of
principle with respect to the taxation of costs in favour of the
CAC and NAPO et al in that:
[b] in addition, with respect to counsel fees for the CAC and
with respect to all costs taxed in favour of NAPO et al, no
costs were incurred by these intervenors as a result of Bell
Canada's general rate application and these intervenors are,
therefore, not entitled to indemnification for these costs from
Bell Canada."
And at pages 7 and 8, the Commission stated:
The second issue of principle raised by Bell in this appeal
concerned the proper definition of the term "costs". Bell relied
on the fact that the word "costs" is restrictively defined in the
jurisprudence relating to civil litigation to include only indem
nification for costs of litigation actually incurred by
interveners.
Referring first to NAPO et al, Bell argued that PIAC incurred
all costs relating to the participation of NAPO et al in the 1978
Bell rate case. The PIAC is not the intervener to whom costs
were awarded by the Commission. Bell submitted that an
award of costs is only made to a client if that client is liable to
pay costs to his counsel and that, in consequence, the taxing
officer could only indemnify NAPO et al if NAPO et al were
legally required to reimburse PIAC for the costs of the
intervention.
Bell also applied this line of argument to CAC. In the 1978 Bell
rate case, CAC was represented by its general counsel, who
received a regular retainer from CAC. Thus, there was no
indication that CAC would have expended any additional funds
for remuneration of its general counsel because of his participa
tion in the Bell rate case. Bell argued that no counsel fees
should therefore have been awarded by the taxing officer to the
CAC.
In the Commission's view, the application of the principle of
indemnification upon which Bell relies would not be appropri
ate in regulatory proceedings before it. In the Commission's
opinion, the proper purpose of such awards is the encourage-
ment of informed public participation in Commission proceed
ings. It would inhibit public interest groups from developing
and maintaining expertise in regulatory matters if, in order to
be entitled to costs, they had to retain and instruct legal counsel
in the manner appropriate to proceedings before the courts in
civil matters. On the other hand, no useful purpose would be
served by requiring public interest groups artificially to arrange
their affairs, by means, for instance, of forgivable debts or
bonus accounts, in order to avoid a restrictive interpretation of
the term "costs".
The Commission therefore finds that the taxing officer did not
err in principle in awarding counsel fees to CAC and costs to
NAPO et al.
The Bell Canada appeal of Taxation Order 1980-1 is accord
ingly dismissed.
It may be as well, before turning more particu
larly to the legal issues, to recall precisely what is
being appealed: it is the decision of the Commis
sion expressed in these words: "The Bell Canada
appeal of Taxation Order 1980-1 is accordingly
dismissed." The decision of the Commission to
award costs to CAC and to NAPO and others, a
discretionary decision, was not under appeal to the
Commission. The Taxing Officer, in making his
taxation order, was acting pursuant to the Com
mission's decision to award costs; he was not exer
cising a discretion. The Commission could have
allowed an appeal to it if the amounts awarded by
the Taxing Officer had been in issue and found to
be in error, but they were not in issue. The Com
mission could also have allowed the appeal to it if
the taxation order made by the Taxing Officer was
not supportable in law. The critical issue on the
appeal to the Commission, as presented by Bell
Canada, was whether CAC or NAPO and others
had actually incurred expenses which they had
paid or which they were legally liable to pay; if
they had not, it was argued, it was legal error to
award costs to them because such an award would
violate the principle of indemnification inherent in
"legal costs".
The Commission, in its reasons for dismissing
the appeal from the taxation order, addressed, at
pages 7 and 8 of its reasons (in the passage I
quoted above) what it termed "the second issue of
principle raised by Bell in this appeal ... the
proper definition of the term `costs'." I will not
quote the relevant four or five paragraphs again. I
will, however, quote this sentence: "In the Com
mission's view, the application of the principle of
indemnification upon which Bell relies would not
be appropriate in regulatory proceedings before
it." I am not quite sure whether the Commission
meant to reject the principle of indemnification as
a necessary element of an award of costs by it, or
whether it meant simply to question the appropri
ateness of the principle of indemnification "upon
which Bell relies", that is to say, the principle as
developed by the courts in the taxing of costs in
court cases.
I will first consider the sense in which the word
"costs" is used in section 73 of the Act. This Court
had occasion to consider its meaning in Re Bell
Canada and Telecom. Decision CRTC 79-5. 7 In
that case, the Commission had ordered Bell
Canada and B.C. Tel. to pay costs in respect of
studies to be prepared for the Commission by
consultants for use in a public hearing in connec
tion with an application by Bell Canada and B.C.
Tel. for rate increases. The appellant's basic sub
mission was that, for purposes of section 73, "the
costs of a proceeding do not include the expenses
incurred by the tribunal in order to hear and
determine that proceeding" [at page 686 F.C.
Footnote omitted.]. The issue was obviously quite
different from the issue in this case, and the
passages I am about to quote must, of course, be
read with this difference in mind.
In the course of his reasons, Mr. Justice Pratte,
speaking for the Court, said at [pages 687-688
F.C.]:
In my view, the word "costs" in section 73 of the National
Transportation Act must, as argued by the appellant, be given
its normal legal meaning according to which the costs of a
proceeding are the costs incurred by the parties or participants
in that proceeding and do not include the expenses of the
tribunal before which the proceedings are brought. I do not see
any reason to give it a wider meaning. [Footnote omitted.]
Earlier in his reasons, Mr. Justice Pratte had
noted, as had been submitted in that case and was
submitted in this, that an application for a rate
increase differs from ordinary litigation. He said
at page [687 F.C.]:
7 [[1982] 2 F.C. 681]; 41 N.R. 221 [C.A.].
... proceedings before the Commission are different from
ordinary litigation. When a telephone company asks the Com
mission to approve a rates increase which is opposed by
interveners, there is, strictly speaking, no /is between the
applicant and the interveners. However, rates applications are
not the only proceedings that may be brought before the
Commission. Other proceedings, for example complaints
against companies which are subject to the Commission's juris
diction, resemble ordinary litigation. Moreover, even in clearly
non-adversarial proceedings like applications for the approval
of rates, there may be cases where, like in ordinary litigation, it
appears just to oblige a participant in those proceedings to
compensate the other participants for the expenses that they
have incurred by reason of their participation in those
proceedings.
This passage recognizes that in a rate proceed
ing it may well be appropriate to require a partici
pant "to compensate the other participants for the
expenses that they have incurred by reason of their
participation in those proceedings." Again, in the
quotation taken from [pages 687-688], when
speaking of "costs" as carrying "its normal legal
meaning", Mr. Justice Pratte refers to "its normal
legal meaning according to which the costs of a
proceeding are the costs incurred by the parties or
participants in that proceeding ...." It does not,
as I see it, follow that in assessing costs in a rate
proceeding, the Commission is bound to follow
precisely the same rules as would a taxing master
assessing costs in litigation in the courts. Allow
ances would have to be made for differences in the
purposes of the two quite different processes and in
the practices and procedures followed in each. I
am of opinion, however, that the term "costs", as
used in section 73, does carry with it, as an
essential aspect, the element of compensation or
indemnification for expenses incurred in a pro
ceeding. The Commission would thus have been in
error if, in its reasons for dismissing the appeal to
it, it meant to reject the proposition that indem
nification is an essential purpose in an award of
costs under section 73 of the Act. It will not,
however, be necessary to determine precisely what
the Commission meant if, in any event, the indem
nification principle was not offended by the award
of costs to CAC and to NAPO and others. It was,
of course, the respondents' alternative submission
that the principle had not been infringed.
I now turn to the submission that there was
error in law in awarding costs to CAC, having in
mind that the lawyer who represented CAC at the
Bell Canada rate hearing was receiving a "first
retainer" from CAC. I take this to be a submission
that, though CAC incurred an expense by paying a
retainer to counsel to appear for them in all cases
during the period covered by the retainer, no part
of the retainer could be assigned to counsel's
appearance in the Bell Canada Rate Case; counsel
would have received the same sum from CAC even
if CAC had not intervened.
A problem with this submission is that the
record is far from being clear on the terms of the
retainer. The Commission, in its reasons for dis
missing the appeal from the taxation order, simply
referred to Bell Canada's "line of argument" to
the effect that, in the Bell Canada Rate Case
"CAC was represented by its general counsel, who
received a regular retainer from CAC. Thus, there
was no indication that CAC would have expended
any additional funds for remuneration of its gener
al counsel because of his participation in the Bell
rate case." In its letter of September 5, 1978 to the
Commission concerning the costs awarded in
CRTC 78-7, the CAC wrote:
In its decision the Commission declined to award costs
related to the appearance of CAC counsel who was described as
"a full time employee of the Association". In fact he was not a
full time employee but rather represented the Association on a
first retainer basis and did other legal work as well ....
So far as I can tell from the record before us,
CAC did intervene in the Bell Canada Rate Case
and was represented by counsel. In his taxation
order, the Taxing Officer said at page 12:
... the CAC submitted affidavit evidence that counsel "spent
approximately 10 days at the hearings of this case and in excess
of 5 days preparing for it." At the taxation hearing, counsel for
the CAC suggested that the services of counsel should be
evaluated at between $750.00 and $1,250.00 per day. Counsel
for Bell Canada made no submission as to quantum, but agreed
to the principle that the market value of counsel fee would be
acceptable to Bell Canada.
There seems no doubt, as a matter of record,
that CAC was officially represented by counsel
who appeared in the proceedings as such.
I would refer to the English Court of Appeal
decision in In re Eastwood.' In that case, the
Attorney-General had been represented by a sala
ried solicitor; and it seems to me that what Lord
Justice Russell said in the passages I am about to
quote would apply with even greater force to a
solicitor or counsel appearing on retainer. In my
view, by analogy to taxation in a case in the courts,
if would not be error for the Taxing Officer to tax
counsel's fee—as he seems to have done—as if it
were the bill of an independent solicitor or counsel,
having regard in exercising his discretion to the
circumstances of the proceeding. As Lord Justice
Russell said in Re Eastwood at page 132:
It is a sensible and reasonable presumption that the figure
arrived at on this basis will not infringe the principle that the
taxed costs should not be more than an indemnity to the party
against the expense to which he has been put in the litigation.
Lord Justice Russell also said at page 132:
There may be special cases in which it appears reasonably plain
that that principle will be infringed if the method of taxation
appropriate to an independent solicitor's bill is entirely applied:
but it would be impracticable and wrong in all cases of an
employed solicitor to require a total exposition and breakdown
of the activities and expenses of the department with a view to
ensuring that the principle is not infringed, and it is doubtful, to
say the least, whether by any method certainty on the point
could be reached. To adapt a passage from the judgment of
Stirling J. in In re Doody [1893] 1 Ch. 129, 137, to make the
taxation depend on such a requirement would, as it seems to us,
simply be to introduce a rule unworkable in practice and to
push abstract principle to a point at which it ceases to give
results consistent with justice.
A showing by Bell Canada or an admission by
CAC that CAC's counsel represented CAC at the
hearing "on a first retainer basis and did other
legal work as well ..." falls short of establishing
that the costs actually awarded in respect of coun
sel's fee were more than compensatory.
The point, as I see it, is that the Commission
had before it in the Bell Canada Rate Case, as an
intervener, the CAC, which was represented, as a
matter of record, by legal counsel. The Taxing
Officer taxed the CAC bill of costs, as I read his
8 [1975] 1 Ch. 112.
taxation order, as if the CAC had been represent
ed by independent counsel. On the basis of Re
Eastwood, this would not have constituted legal
error, even in a case before the courts, absent a
showing that CAC would be more than indemni
fied by an award of costs on this basis. The most
that can be said in criticism of the award is that
counsel had been retained on a "first retainer"
basis (whatever that may mean). There was not,
however, as I read the record, any effort by Bell
Canada or by anybody else to establish that, that
being so, CAC was more than reimbursed for its
expenses. Bell Canada's case simply was that the
relationship between CAC and its counsel in all
relevant aspects was the same as if there had been
a contract of salaried employment covering all
legal services so that counsel's appearance in the
Bell Canada Rate Case could not have added to
CAC's costs. A finding that counsel was engaged
on a "first retainer" or "regular retainer" basis,
however, falls short of establishing that the rela
tionship was essentially the same, for relevant
purposes, as that between a party and a lawyer
employed by him on salary. The appellant has
failed to persuade me that there was error of law
in the award of costs to CAC. I would merely add
that, to the extent counsel was engaged in the Bell
rate hearing, he was not available to perform other
services. And I would also observe that I do not
find it necessary to decide whether it would have
made a difference if counsel had been on salary.
But I very much doubt that it would have.
In respect of Bell Canada's submission that
CAC is not entitled to costs for counsel's appear
ance in the Bell rate hearing because his retainer
would cover an indefinite number of cases, I would
add another quotation from Lord Justice Russell
in Re Eastwood. He said at pages 129 and 130:
The question of principle involved is whether the taxing master
correctly approached the problem of taxation of costs awarded
to the Crown, having regard to the fact that the Crown was
represented on the originating summons not by an independent
solicitor but by the Treasury Solicitor and his department. The
question of principle would apply equally to the case of a local
government authority, a nationalised industry such as British
Rail, and any industrial concern conducting litigation through
its own legal department of which all the expenses, including
the salaries of solicitors, assistant solicitors and legal execu
tives, are paid by it, and not by instructing an independent
solicitor or firm to act for it.
The provisions of R.S.C., Ord. 62 relating to taxation of costs
awarded to a party to litigation against another party, or as
here to be paid out of an estate or trust fund, are at least
primarily directed to cases where the party has instructed an
independent solicitor: for example, rule 25 requires that the bill
of costs of the successful party to be submitted for taxation
shall enter "professional charges" in a separate column, and be
indorsed with the name or firm of the solicitor "whose bill it
is." Now, except no doubt for purposes of internal accounting,
the employed solicitor or legal department renders no bill to the
employer or organisation: he or it makes no professional
charges. It is however quite clear on authority that it is not
permissible to say that consequently the party is limited to
disbursements specifically referable to the particular litigation
on the ground that the salaries of employees and other general
expenses of the department would have been incurred by the
party in any event.
I will consider next the submission that the
Taxing Officer erred in law in awarding costs to
NAPO and others and, accordingly, that the Com
mission erred in upholding his order. This submis
sion was based on what, it was argued, was a
finding of fact made by the Taxing Officer. I have
already quoted the passage on which counsel
relied, but it may be as well, as a matter of
convenience, to quote it again at this point. At
page 6 of Taxation Order 1980-1, the Taxing
Officer said:
It is clear that there was never any obligation flowing from
NAPO et al to either PIAC or Mr. Roman for their services. If
the subject of costs was ever discussed between counsel and
these interveners, the understanding was merely that if costs
should happen to be awarded, they would be given by the
interveners to the PIAC. This understanding is reflected in the
terms of reference of the PIAC. According to Mr. Roman, any
such bill, in the absence of an award of costs, would simply
have had to be written off as an uncollectible debt, a practice
which he submitted would accomplish nothing and would not
be conducive to good client relations.
Counsel's submission was simple and blunt:
NAPO and others had no expenses. They had paid
for nothing and were under no legal obligation to
pay for anything in connection with their partici
pation in the Bell Rate Case. What expenses were
incurred, were incurred by PIAC, and PIAC was
not even a party to the proceedings. There were
simply no expenses incurred by NAPO and others;
there was nothing for which they could be
indemnified.
In considering this submission, I find Armand v.
Carr, et a1. 9 helpful. In that case, the appellant
(who had been the defendant) had been represent
ed in the courts below and on his appeal to the
Supreme Court by counsel provided by his insur
ance company. The insurer was bound by the
insurance contract to defend the insured in actions
brought against him arising from the event insured
against. The defendant, who had been unsuccessful
below, appealed successfully to the Supreme Court
and was awarded costs. The Registrar refused to
tax costs in his favour because his legal expenses
were to be borne by the insurance company. He
appealed and his appeal was heard and allowed by
the Court.
Chief Justice Anglin reviewed the material
before the Court in this passage at pages 349 and
350:
Upon careful consideration of all the material before us, we
are satisfied that the insurance company instructed its own
solicitors to defend the action not on its behalf but on behalf of
the appellant, thus implementing its obligation "to defend in
the name and on behalf of the insured any civil actions, etc."
The solicitors so instructed entered an appearance in which
they style themselves "solicitors for the defendant" (the appel
lant). For so doing his authority was necessary and was
undoubtedly obtained. Their character as defendant's solicitors
they maintained throughout the litigation in which, from time
to time, the appellant personally took part by making affidavits,
giving evidence, executing a bond, etc. From this course of
conduct his employment of the solicitors who appeared on his
behalf, or his sanctioning their carrying on his defence, is the
only proper inference; and whether it should be taken that the
insurance company, in instructing its solicitors to defend the
action, etc., acted as agent for the defendant, or that he
personally so employed the solicitors, their retainer as his
solicitors in a manner binding upon him admits of no doubt.
Such retainer or employment carries with it personal liability of
the defendant (appellant) for the costs reasonably incurred by
the solicitors pursuant to it, unless there was a contract or
agreement binding on the solicitors excluding such liability.
The Chief Justice then addressed the question
whether there was an agreement between the
9 [1927] S.C.R. 348.
insured and the solicitors excluding the personal
liability of the insured for the costs reasonably
incurred by the solicitors pursuant to the retainer.
He stated, at page 350, that the Registrar had not
made a definite finding,
... that there was an agreement relieving the defendant-appel
lant of all liability to his solicitors such as must be established
by the respondent-plaintiffs, if they would on that ground avoid
payment of party and party costs to the successful appellant.
Adams v. London Improved Motor Coach Builders, Ltd.,
[1921] 1 K.B. 495.
Later, he stated at page 351:
... we feel satisfied of this: that upon the direct evidence in the
case it would be wrong to draw the conclusion that there was an
express bargain that the defendant was not to be liable to the
solicitors for the costs incurred; and, quite apart from the
express evidence that no such arrangement was made, it
appears to us that there was no evidence given on behalf of the
respondents that an express arrangement to that effect had in
fact been made.
Upon the facts in evidence the appellant's right to recover
from the respondents the costs of his appeal awarded to him by
the judgment of this court cannot, we think, be denied.
It seems to me that the critical question is
whether the passage from the reasons of the
Taxing Officer relied upon by counsel for Bell
Canada amounts to an express finding of fact,
accepted by the Commission, that there was an
agreement between NAPO and others and Mr.
Roman that he would not in any event look for
payment of his costs to NAPO and others. The
Taxing Officer did state that there was never an
obligation flowing from NAPO to Mr. Roman for
his services. But this seems to have been a conclu
sion based on the next three sentences in the
paragraph I have quoted above from his decision,
or an inference drawn from them. The Taxing
Officer, in those sentences, appears to doubt that
the subject of costs was even discussed between
NAPO and others and Mr. Roman. I am not sure
what the last sentence in the paragraph means, but
it may simply mean that Mr. Roman never intend
ed to bill NAPO for his services. I would refer to
one other sentence in the Taxing Officer's reasons
at page 5:
Several interveners (NAPO et al) retained the services of the
PIAC and, by virtue of his retainer with PIAC, the services of
Mr. Roman as counsel.
In Armand v. Carr, Chief Justice Anglin said at
page 351:
The evidence is not very definite or very precise. In our
opinion it clearly falls short of establishing any agreement
binding on the solicitors that they should not in any event look
for payment of their costs to the appellant.
This, in my view, applies to this case. In line with
Armand, I would say that the fact that Mr.
Roman appeared on the record of the proceedings
as counsel for NAPO and others, by analogy to
court proceedings, imposed on NAPO and others
an obligation to pay the reasonable costs of his
services unless there was an agreement between
him and them that he would in no circumstances
look to them for his fees. Bell Canada did not
establish that there was an agreement between
NAPO and others and Mr. Roman that he would
in no event be paid by them for his services, nor
was it in my view otherwise established.
I am of opinion that the reasoning in Armand
applies with even greater force to a proceeding
such as the present, a proceeding involving rate
determination. Section 73 of the Act gives to the
Commission a broad discretion to award costs and,
in my view, if it can be said of an award that it
would not constitute error if made by a taxing
master in civil litigation, then it really cannot be
seriously argued that it would constitute error of
law in a rate proceeding.
The costs awarded NAPO and others were not,
of course, limited to costs in respect of the legal
services of Mr. Roman. They covered disburse
ments as well. The application for costs was sub
mitted to the Commission by Mr. Roman on
behalf of his clients, NAPO and others. It was
supported by an affidavit of disbursements. I
gather from the affidavit that most, if not all, of
the payments were made by PIAC. Nonetheless it
would seem to me that it does not necessarily
follow that, for taxing purposes, the costs were not
the costs of NAPO and others. NAPO and others
were interveners on the record. It would not, there
fore, as I see it, be legal error to award them costs
in respect of disbursements, absent proof that they
were not liable, even contingently, for the expenses
which were incurred in their behalf in the proceed-
ings. Once again, I would adopt the words of Chief
Justice Anglin in the Armand case: "The evidence
is not very definite or very precise."
On the view I have taken, it is not necessary to
deal with another possibility. It is, however, in my
opinion, arguable that the Commission could
award costs to an intervener where expenses are
incurred on his behalf, as intervener, in order to
lead evidence and to submit arguments helpful to
the Commission even if the intervener were not
under a strict contractual or other legal obligation
to compensate for these expenses; such an award
might be supportable, at least where, as here, there
was an understanding that, if costs were awarded
to NAPO and others, they would be used to
compensate PIAC; it is arguable that the Commis
sion might be justified in awarding costs to NAPO
and others where, as a practical matter, there was
every likelihood that the costs would be used for
expenses incurred.
I need hardly add that the appellant failed to
show that, in awarding costs to CAC and to
NAPO and others, the Commission acted without
jurisdiction.
I would dismiss the appeal. In accordance with
subsection 64(5) of the National Transportation
Act, I would certify to the Commission the opinion
of this Court that it was not, in the circumstances
of this case, error in law to award costs to CAC
and to NAPO and others; and that, in dismissing
the appeal to it from the taxation order, the Com
mission did not act without jurisdiction.
KELLY D.J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.