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2007-2583(IT)G
TAX COURT OF CANADA
BETWEEN:
PETER SOMMERER
Appellant
– and –
HER MAJESTY THE QUEEN Respondent
ORAL REASONS FOR JUDGMENT ON COSTS MOTION
The attached transcript is the Oral Reasons for Judgement in the Appellant’s motion with respect to costs in the above-noted matter as recorded by the Court Reporter. This transcript has not been certified, confirmed or edited in any manner by the Tax Court of Canada or Associate Chief Justice Rossiter and could contain errors. Copyright in the transcript is held by A.S.A.P. Reporting Services Inc.
Court File No.: 2007-2583(IT)G
TAX COURT OF CANADA
BETWEEN:
PETER SOMMERERAppellant
- and-
HER MAJESTY THE QUEENRespondent
CONFERENCE CALL TO HEAR ORAL REASONS BEFORETHE HONOURABLE JUSTICE CAMPBELL J. MILLER
at Courts Administration Service,200 Kent Street, 2nd Floor, Ottawa, Ontarioon Thursday, July 14, 2011 at 10:30 a.m.
APPEARANCES:
Mr. Daniel Sandler
Mr. Luther Chambers, Q.C.
Also Present:
Ms. Sue Rochon
A.S.A.P. Reporting Services Inc. © 2011
for the Appellant
for the Respondent
Court Registrar
200 Elgin St., Suite 1105Ottawa, Ontario K2P 1L5(613) 564-2727
333 Bay Street, Suite 900Toronto, Ontario M5H 2T4(416) 861-8720
1
1 Ottawa, Ontario
2 Upon commencing on Thursday, July 14, 2011
3 at 10:30 a.m.
4 THE REGISTRAR: The sitting of the
5 Tax Court of Canada at Ottawa is now open.
6 Before the court is the appeal of
7 Peter Sommerer versus Her Majesty the Queen, file
8 2007-2583 (IT)G.
9 For the appellant, Daniel Sandler;
10 and for the respondent, Luther Chambers.
11 The Honourable Justice Miller is
12 presiding.
13 Your Honour?
14 JUSTICE MILLER: Yes. Good morning,
15 Mr. Sandler. Good morning, Mr. Chambers.
16 MR. CHAMBERS: Good morning, Your
17 Honour.
18 MR. SANDLER: Your Honour.
19 JUSTICE MILLER: Yes. I am prepared
20 to give an order with respect to costs in this
21 matter. Later today, I will sign that order, but
22 right now I will give you my oral reasons as
23 follows.
24 Mr. Sommerer brings a motion for
25 an order pursuant to Rule 147 of the Tax Court of
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1 Canada rules, general procedure, for directions
2 increasing costs awarded at trial to an amount in
3 excess of the tariff.
4 Specifically, he seeks 50 per cent
5 of solicitor-client costs to the date of a
6 settlement offer, September 21st, 2010, and 80 per
7 cent of solicitor-client costs after that date,
8 plus disbursements of $83,258 for a total amount
9 sought of $876,293.17.
10 The respondent is prepared to pay
11 costs in accordance with tariff in the amount of
12 fees of $35,400, plus disbursements of $32,789 for
13 a total of $68,189.
14 The parties are intimately
15 familiar with the facts of this case and the nature
16 and the length of these proceedings. It's
17 unnecessary for me to repeat the background, which
18 is clearly set out in my reasons for jUdgement of
19 April 14th, 2011.
20 Before addressing criteria set out
21 in Rule 147(3), which will assist me in the
22 exercise of my discretion in determining the
23 quantum of costs, I wish to address whether there
24 is a threshold test that the parties seeking costs
25 beyond tariff must pass before the judge even
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1 considers the factors set out in Rule 147(3).
2 The respondent argues, relying on
3 former Chief Justice Bowman's comments in
4 Continental Bank, that costs beyond tariff are only
5 justified in exceptional circumstances, though not
6 necessarily egregious circumstances that might
7 justify solicitor-client costs. The appellant
8 responds that there is no such threshold test, that
9 the judge is simply to exercise his or her
10 discretion considering the Rule 147(3) factors.
11 Certainly the wording of Rule 147
12 suggests no threshold test but provides wide
13 discretion to the judge to consider the factors
14 identified in subsection (3) of Rule 147 in coming
15 to a reasoned, balanced decision.
16 I agree with the appellant.
17 Recent cases, such as General
18 Electric with Justice Hogan, the Campbell case
19 with, oddly enough, Justice Campbell, the Jolly
20 Farmer case, Justice Boyle suggest there is no
21 threshold, but that is open to the jUdge to take
22 into account the 147(3) factors.
23 Clearly, cases have suggested this
24 is an exercise that cannot be undertaken
25 capriciously.
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1 Further, cases have supported the
2 proposition that full solicitor-client costs should
3 only be considered in circumstances that might be
4 found to be egregious. But for award of costs above
5 tariff and below solicitor-client costs, it's for
6 the parties to satisfy a judge a consideration of
7 the Rule 147(3) factors should or should not result
8 in costs beyond tariff.
9 This may well represent a
10 departure from former Chief Justice Bowman's
11 comment in Continental Bank that, quote:
12 In the normal course, tariff
13 is to be respected unless
14 exceptional circumstances dictate
15 a departure from it. Such
16 circumstances could be misconduct
17 by one of the parties, undue
18 delay, inappropriate prolongation
19 of the proceedings, unnecessary
20 procedural wrangling, to mention
21 only a few.
22 Closed quotes.
23 Interestingly, I find that these
24 examples given by the former Chief Justice are
25 examples of some of the very factors listed in Rule
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1 147(3), such as: first, conduct of a party to
2 unnecessarily lengthen the duration of the
3 proceeding -- sub (g) of 147(3); or whether any
4 stage was improper or vexatious -- sub (i) of
5 147(3); or refusal of a party to admit anything
6 that should have been admitted -- sub (h) of
7 147(3).
8 In effect, I find support, even in
9 Continental Bank, for the proposition that the
10 judge, in awarding costs beyond tariff, though not
11 solicitor-client costs, simply reviews the Rule
12 147(3) factors to determine an appropriate award of
13 costs beyond tariff.
14 This approach is not, as the
15 respondent might suggest, centred on any principle
16 of punishment. Nor do I agree that it necessarily
17 leads to any litigacion or assessment chill.
18 This approach, I would suggest, is
19 in line with the court's clear shift to recognizing
20 the importance of settlement offers in making an
21 award of costs.
22 This is certainly apparent from
23 recent case law, such as Donato, Ducharme,
24 Langille, and Walsh, as well as from recent
25 Practice Note 17, notwithstanding it has not been
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1 made a rule as yet.
2 I'll have more to say on the
3 impact of the settlement offer in a few minutes.
4 In summary, I find Justice Boyle's
5 concluding comment in Jolly Farmer a propos. Quote:
6 I'm confident that our
7 court's judges can exercise their
8 discretion appropriately, and
9 their discretion will not be
10 fettered by my decision in this
11 case. Indeed, it may be that any
12 risk that the threat of costs
13 deters individual Canadians from
14 pursuing tax appeals where they
15 perceive injustice can be
16 addressed by judges taking a
17 separate approach to awards of
18 costs in excess of tariff in
19 appropriate circumstances where
20 the parties are all well
21 represented.
22 Closed quotes.
23 As pointed out by Mr. Sandler,
24 award of costs is more art than science. And judges
25 of this court are entrusted by the rules to
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1 practice their craft diligently, fairly and
2 responsibly, guided by suggested considerations,
3 but unburdened by rigid formulaic guidelines.
4 I share Justice Boyle's confidence
5 that judges of this court are up to the task.
6 I'll now turn to a consideration
7 of those factors in Rule 147(3) addressed by the
8 parties.
9 First, result of the proceeding.
10 The appellant did obtain the full relief sought,
11 though was not successful in all his arguments,
12 significantly on the issue of whether there was or
13 was not a trust. The result certainly justifies an
14 award of costs, but in the circumstances, in and of
15 itself, is not such an overwhelming victory to
16 warrant significant departure from tariff.
17 Second, the amounts in issue.
18 There was approximately $7 million in taxes and
19 interest in issue. While the amount was certainly
20 significant to Mr. Sommerer, this was not a lead
21 case for other taxpayers with any corresponding
22 multiplication of the amounts in issue. This factor
23 is worthy of some consideration, but again, by
24 itself does not warrant the extent of costs over
25 tariff sought by the appellant.
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Third, importance of the issues.
The appellant suggests this is the first case in
which the court has been called upon:
A) to interpret the scope of
Subsection 75(2) of the Income
Tax Act;
B) to determine whether a
relationship between a foreign
entity and a Canadian taxpayer
is such as to constitute a
trust with a foreign entity, a
trustee of a trust under the
act;
C) to clarify the status of the
foreign entity;
D) to determine whether a tax
convention entered into in
December of 1976 between Canada
and another country based on
the GECD model treaty, which
provides exclusive taxing
jurisdiction to the other
country in respect of a gain
made upon the disposition of
property by a person who is a
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1 resident of the other country
2 is effective to deny Canada the
3 right to tax that gain in the
4 hands of another person
5 pursuant of a tax avoidance
6 provision in this case,
7 Subsection 75(2) of the Act.
8 The Federal Court of Appeal will
9 have an opportunity to rule on these issues as
10 these matters have been appealed. And I agree with
11 the appellant that decisions on these issues will
12 assist the resolution of similar disputes in the
13 future.
14 I also accept that resolution of
15 the application of Section 75(2), the application
16 of the treaty and a clarification of a foundation
17 must all be of interest to taxpayers, but certainly
18 they are of considerable interest and benefit to
19 Canada Revenue Agency.
20 This litigation did not cover any
21 well-worn paths of prior cases but dealt with those
22 identified previously unaddressed issues.
23 The world continues to grow
24 smaller, and international commercial or personal
25 arrangements are becoming more and more prevalent.
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1 The types of issues brought to the court by Mr.
2 Sommerer reflect this international and economic
3 reality. It is important for government and
4 taxpayers to have some certainty on these issues.
5 This is an important factor.
6 Fourth factor: offer of settlement
7 that was made in writing. While, as I've indicated,
8 there are new rules pending in this court
9 addressing the issue of the impact of settlement
10 offers on costs, I share Justice Boyle's views
11 expressed in case of Langille versus the Queen,
12 paragraphs 10 through 12. Quote:
13 As I noted in Jolly Farmer
14 Products, the rules of this court
15 on costs do not specify, as those
16 of several jurisdictions do, that
17 if an unsuccessful party has not
18 accepted a settlement offer at
19 least as favourable as the outcome
20 of the trial, that party is
21 responsible for substantial
22 indemnity or solicitor-client
23 costs from the date of the offer
24 through to the end of the trial.
25 In Jolly Farmer I awarded an
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amount in excess of the tariff
amount on account of such a
settlement offer.
I restate my comments therein
that parties should take seriously
their obligations to consider
settlement offers carefully or run
the risk of increased costs if
they are not more successful at
trial.
Rule 147 specifically refers
to settlement offers as a matter
to be considered in deciding cost
awards. Logically, in most cases,
this could only have been intended
to justify an increase in the
amount of costs awarded beyond the
tariff.
I do not believe that the
absence of an express rule
permitting substantial indemnity
cost awards where an at least as
favourable settlement offer is
rejected leaves this court unable,
as a matter of law or
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1 jurisdiction, to choose to
2 exercise its discretion with
3 respect to costs by making such an
4 award inappropriate in the
5 circumstances.
6 Closed quotes.
7 On September 21st, 2010 the
8 appellant made a written offer to the respondent as
9 follows. Quote:
10 Having regard for the very
11 considerable cost of taking this
12 tax appeal to trial, Mr. Sommerer
13 will accept an inclusion into
14 income of one-sixth of the gain of
15 the foundation from the
16 disposition of the Vienna Systems
17 Corporation shares, reflecting six
18 discretionary contingent
19 beneficiaries existing throughout
20 1998 as full and final settlement
21 of his appeal. This offer is for
22 purposes only of settling the
23 present litigation and would
24 preclude any further tax
25 consequence under the Income Tax
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1 Act in respect of the gains
2 realized by the foundation.
3 As you can appreciate, expert
4 testimony must soon be prepared in
5 time for the trial commencing
6 December 6th, 2010.
7 This offer will remain open
8 until October 8th, 2010 at which
9 time you must begin incurring the
10 expense of engaging experts and
11 preparing expert reports.
12 Closed quotes.
13 End of offer.
14 The respondent rejected the offer,
15 and countered on the basis that 50 per cent of the
16 taxable capital gain realized by the Sommerer
17 Private Foundation was attributable to Mr.
18 Sommerer.
19 The appellant rejected the counter
20 offer and made a second written offer on October
21 27th, 2010, accepting the respondent's alternative
22 argument as set out in the reply that one-fifth of
23 the tax book capital gain made by the Sommerer
24 Private Foundation was FAPI, F-A-P-I, to Mr.
25 Sommerer. The respondent rejected this offer on
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1 November 15th, 2010.
2 The respondent acknowledges there
3 may be tax cases in which a failure to enter into a
4 settlement agreement is relevant and cites the
5 example of where the rejected offer is based on
6 reasonable alternative grounds in accordance with
7 the Income Tax Act.
8 The respondent, however,
9 distinguishes settlements which would result in
10 arbitrary reassessments, contending that such
11 arbitrary settlement offers should not play any
12 part in determining whether one should depart from
13 the tariff in awarding costs.
14 With respect, I fail to see the
15 distinction.
16 Indeed, in this very matter, the
17 Crown did counter with an offer that would have led
18 to what she calls an arbitrary assessment.
19 In my view, the more critical
20 issue for the judge to consider in exercising his
21 or her discretion is the bona fides of the offer.
22 In this case, I have not heard any submissions that
23 the offers were anything other than serious,
24 thoughtful attempts to resolve a very complicated
25 matter.
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1 I appreciate the respondent
2 strives to always reach a principled result. As
3 guardian of the public purse, this is appropriate.
4 But when a case such as this, with its many twists
5 and turns, leaves the respondent herself to engage
6 in haggling over money, I am unswayed by her
7 current argument that I should now ignore similar
8 offers from the appellant.
9 However, even if I accept the
10 respondent's argument that only principled offers
11 can and should be considered by a jUdge in relying
12 on settlement offers in determining an award of
13 costs, I find that is the kind of offer the
14 appellant made.
15 Mr. Sommerer relied upon the
16 respondent's own alternative argument in offering
17 to accept a portion of the taxable capital gains
18 that Mr. Sommerer -- sorry -- accept a portion of
19 the taxable capital gains.
20 Mr. Sommerer got the portion wrong
21 in the first offer and made a second offer agreeing
22 to a one-fifth allocation, believing that to be the
23 appropriate allocation. And certainly, it was the
24 allocation the respondent herself sought in her own
25 reply.
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1 What did the respondent do? It
2 simply rejected the offer without reason.
3 Mr. Chambers now argues that the
4 appropriate allocation should have been one-
5 quarter, and therefore the one-fifth offer was not
6 principled.
7 With respect, this is somewhat
8 specious. The respondent did not, at the time of
9 the offer, say to the appellant: Oops, one-fifth is
10 wrong. It should be one-quarter. The respondent
11 just said no.
12 The respondent, relying on the
13 case of Galway, says the court could not have
14 approved a consent judgement at one-fifth.
15 Frankly, that does not sway me.
16 The respondent could have, and I
17 would suggest should have, pointed out the error in
18 the one-fifth allocation either by letter or, more
19 properly, amending their pleadings.
20 The respondent did neither.
21 I do not accept the respondent now
22 suggesting I should ignore the settlement offer as
23 it was not principled. I find it was a principled
24 offer. But even if it wasn't, it was certainly open
25 to the Crown to accept other than by the route of a
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1 consent judgement.
2 Obviously, the appellant fared
3 better with my decision than he would have if the
4 respondent had accepted either offer. Hindsight is
5 always 20-20. The respondent made a calculated risk
6 assessment, concluding, according to the CRA
7 officer, Mr. Dion, that the respondent's own
8 alternative position was simply not good enough. It
9 required considerable time and expense to find out
10 otherwise.
11 I am influenced by these offers
12 and the respondent's rejection of them and conclude
13 that this factor justifies costs in excess of
14 tariff, certainly with respect to the period
15 subsequent to the offers.
16 I note that in the cases cited
17 earlier of Donato, Longille, Ducharme and Walsh,
18 costs in excess of tariff were awarded entirely,
19 according to Mr. Sandler, on the basis of a
20 settlement offer having been made and rejected.
21 Fifth factor: volume of work. In
22 written submissions, the appellant advises that the
23 time spent by the firm of Couzin-Taylor in this
24 appeal was approximately 3,865 hours, 2,588 of
25 which were spent in preparation for the hearing of
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1 the appeal and were directly related to the
2 complexity and number of issues and extensive
3 research required to prepare for and argue the
4 issues in court.
5 Indeed, it was indicated that
6 about 500 hours were spent researching, formulating
7 and writing the written submissions to assist with
8 oral arguments. Almost 200 hours were spent
9 researching the legislative background of
10 subsection 22(2) of the Act, the predecessor to
11 Subsection 75 (2) .
12 The expression "no stone unturned"
13 leaps to mind.
14 The respondent appears to only
15 have questioned the reasonableness of the hours
16 spent by appellant's counsel's team in connection
17 with discovery, however.
18 The number of documents disclosed
19 pursuant to the respondent's full disclosure
20 request resulted in a list of over 900 documents.
21 The respondent listed 200 documents. A large number
22 of these required translation from German. This
23 naturally increased the already burdensome volume
24 of work.
25 I need little convincing that the
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1 work by both sides was extensive.
2 As is already clear, I do believe
3 some amount in excess of tariff is warranted. The
4 impact of the volume of work goes to quantum. It is
5 always difficult to assess one firm's efforts
6 compared to another's or compared to any normative
7 standard, if there is such a thing.
8 If actual hours spent are the
9 starting point to which a percentage might be
10 applied, are those actual hours to be questioned?
11 By that, I do not mean whether or
12 not they were incurred. Certainly, they were
13 incurred. And further, I have no doubt they were
14 incurred on the principle of thoroughness. But how
15 much should a losing party cover the winning
16 party's diligence?
17 As mentioned, Mr. Chambers
18 challenges the time spent in connection with
19 examinations for discovery.
20 The example I use in this regard,
21 however, to illustrate the dilemma facing the judge
22 is whether the appellant was correct in the hours
23 spent in reaching a conclusion there was no helpful
24 legislative background of Subsection 22(2) of the
25 Act.
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1 Was an additional 180 hours truly
2 necessary to nail that? Who knows? At some point
3 counsel, for any number of reasons, but cost being
4 one of them, decides that enough is enough. Some
5 counsel will reach that decision sooner than
6 others. I don't raise this as a criticism but as a
7 conundrum in determining who should bear the cost
8 of one counsel's decision to pullout all the
9 stops.
10 It's impossible and unwise, I
11 would suggest, to apply any robotic mathematical
12 formula; but I simply bear in mind that there comes
13 a point when counsel cannot expect the other side
14 to cover all the legal costs in extensive research
15 and preparation.
16 All to say I recognize the
17 considerable volume of work and will exercise my
18 discretion in assessing the impact of that in
19 coming to a fair and just award.
20 The sixth factor: the complexity
21 of the issues. The appellant stressed this factor
22 in arguing for a substantial cost award.
23 Again, it takes little convincing
24 me that these matters were complex. I agree this
25 was a lengthy appeal involving complex factual and
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legal questions, which the appellant summarized as
follows:
1) the legal effectiveness of a
transaction entered into in
1996;
2) the characterization of the
relationship between the SPF
and Canadian taxpayers in order
to determine whether such
entity or such a relationship
constituted a trust for the
purpose of Section 75(2) of the
Act;
3) the applicability of Section
75(2) of the Act to a person
who transferred property for
value to a trust;
4) the applicability of the
Canada-Austria Tax Convention
having regard to the basis of
the liability of the SPF to
taxation in Austria;
5) if applicable, the effect of
the convention upon Canada's
right to tax in the hands of a
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Canadian taxpayer the taxable
portion of the gain realized by
an Austrian resident upon the
disposition of shares;
6) whether the SPF was the agent
of the appellant for purposes
of holding and disposing of
property;
7) whether a portion of the
capital gains realized by the
SPF was foreign accrual
property income of the
appellant;
8) whether Section 74.4(2)
applied to deem the appellant
to have received interest in
accordance with that
subsection; and
9) how the French text of
Section 75(2) (a) (i) could be
reconciled with the English
text of that paragraph.
The international context of this
appeal also required the testimony of two experts
from Austria. I note that the respondent expanded
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1 the issues from a concentration on the issue of
2 trust versus corporation and the application of
3 Subsection 75(2) of the Act to add the issues of
4 agency, the timing of the sale of shares, FAPI, and
5 the application of the Canada-Austria Income Tax
6 Convention.
7 Anyone of these issues would
8 require a significant thought, preparation and
9 presentation. Cumulatively, it was an epic task.
10 The correct interpretation of Subsection 75(2) of
11 the Act alone presented the parties with a Rubix
12 cube-like puzzle.
13 So it's an easy conclusion to
14 reach that the legal issues and factual context
15 were complex. It's also easy for me to say that I
16 consider this an important factor in the
17 determination of costs.
18 The hard part is translating that
19 into a dollar amount.
20 The appellant has made no
21 representations with respect to the other factors
22 itemized in Rule 147(3), though I have made note,
23 as indicated, that the respondent added issues
24 throughout the litigation, which she is certainly
25 entitled to do. But at least two of such issues
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1 were dropped at the trial, having left the
2 appellant to prepare for such arguments
3 unnecessarily.
4 I also am influenced
5 No, sorry. Bear with me a moment.
6 In summary, I conclude that due to
7 the importance and complexity of the issues, but
8 mainly due to the settlement offers made by the
9 appellant and rejected by the respondent, that
10 costs in accordance with tariff are not a just
11 reflection of the appellant's entitlement.
12 There is also something of a
13 cumulative effect of such a number of the Rule
14 147(3) factors coming into play.
15 I conclude there should be some
16 significant indemnity for post-settlement costs,
17 yet not so much for pre-settlement costs. Taking
18 into account then the volume of the work, while
19 acknowledging the difficulty in assessing the need
20 for the extent of the work undertaken by
21 appellant's counsel, I direct that costs prior to
22 the settlement offer should be $150,000 and costs
23 post-settlement offer should be $450,000 for a
24 total lump sum of $600,000, plus disbursements,
25 which I will now address.
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1 The appellant lists his
2 disbursements in accordance with tariff as follows:
3 filing fee, $550i Apex translation costs: $10,030i
4 court reporting services at examination for
5 discovery, $4,590i certified copy of trial
6 transcript, $4,108i consulting fees for Albert
7 Oosterhoff, $2,800i fees for Dr. Torggler, the
8 expert witness, $52,898i photocopy charges, $8,279,
9 for a total of $83,258.
10 The respondent challenges the
11 following: the cost of transcript, $4,108i Mr.
12 Oosterhoff's fees of $2,800i and the expert Dr.
13 Torggler's fees of $52,898.
14 With respect to the cost of the
15 transcript and Oosterhoff fees, I accept the
16 respondent's argument that these are not
17 appropriate for the Crown to bear. Parties can
18 normally make arrangements for sharing transcript
19 costs.
20 With respect to Mr. Oosterhoff,
21 who was not called as an expert but appears to have
22 been tapped into for his expertise on the law of
23 trusts as a leading author in that regard, he was
24 not presented to the court as co-counselor as an
25 expert. This is not an appropriate disbursement to
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1 be borne by the respondent, especially in light of
2 the very well regarded senior counsel, acting for
3 the appellant, whose time is being compensated.
4 With respect to Dr. Torggler, the
5 cost of retaining him, described of the Cadillac of
6 experts in Austrian foundations, is trickier.
7 First, I find it was essential to
8 have experts assist me in understanding the
9 Austrian legislation with respect of foundations
10 and how the Austrian courts have interpreted such
11 legislation.
12 The testimony of both Dr. Torggler
13 and Dr. Plesser helped immensely in grappling with
14 the determination of the nature of an Austrian
15 foundation. This, in turn, allowed me to apply
16 Canadian law to figure out whether a trust
17 relationship existed.
18 I concluded a trust did exist
19 under Canadian law, a conclusion contrary to what
20 the appellant thought.
21 Because the appellant was
22 otherwise successful in the end result, should my
23 conclusion on the trust issue be disregarded for
24 purposes of determining who should bear how much of
25 the cost of Dr. Torggler?
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1 Experts are in court to help the
2 judges, not to serve as advocates for one side or
3 the other.
4 I concur with Justice Hogan's
5 comments in the General Electric case at, quote:
6 Costs and disbursements
7 should not be distributed with
8 amounts being determined on the
9 basis of results achieved with
10 respect to specific arguments.
11 Closed quotes.
12 Costs of experts can be recovered
13 as disbursements and are not limited to the $350
14 found in tariff A, provided they are reasonable.
15 I was provided little guidance on
16 the reasonableness of Dr. Torggler's charges
17 compared to other experts on Austrian foundations
18 or legal experts generally.
19 What I do know, however, is that
20 Dr. Torggler charged €400 an hour, except for the
21 trial time where he charged €7,200 a day. If I
22 calculate that latter rate on eight-hour days, Dr.
23 Torggler's charge was €900 a day, well over twice
24 his rate for the -- €900 per hour, sorry, not per
25 day -- well over twice his rate for the preparation
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28
1 of his expert report.
2 I'm not prepared to require the
3 losing side, in these circumstances, to bear such
4 excess, and I limit the three-day trial to Dr.
5 Torggler's, what I will call, regular rates. That
6 reduces the €21,600 charge for the three days to
7 €9, 600.
8 A further €1,379 was charged by
9 Dr. Torggler for post-trial work, which Mr. Sandler
10 described as Dr. Torggler clarifying his testimony.
11 I find that out-of-court
12 clarifying comments by a witness post-trial are not
13 appropriate costs to be borne by the losing side.
14 That goes well beyond what constitutes the cost of
15 an expert's report and appearance that could be
16 charged to the other side. The €1,379 charge is not
17 recoverable.
18 I conclude that all other charges
19 by Dr. Torggler went to the preparation of the
20 expert report and any rebuttal, notwithstanding
21 that his schedule of time worked is not as explicit
22 as the respondent felt it should be.
23 In summary, I reduced Dr.
24 Torggler's charge from €41,001 to €27,622, which
25 converted at the rate of 1.286 is $35,522.39.
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29
1 The allowable disbursements
2 therefore are: translation, $10,030.94; court
3 reporting for examinations, $4,590.40; Dr.
4 Torggler, $35,522.39; and photocopy, $8,279.60 for
5 a total of disbursements of $58,423.33.
6 In conclusion, the appellant is
7 awarded costs of $658,423.33, which includes the
8 disbursements of the $58,423.33.
9 That's all. Thank you. I will sign
10 an order later today and get it to you as soon as
11 possible.
12 Thank you all very much.
13 MR. SANDLER: Thank you, Your
14 Honour.
15 THE REGISTRAR: The court is now
16 closed. You may hang up.
17 Whereupon the conference call ended on Thursday,
18 July 14, 2011 at 11:06 a.m.
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I HEREBY CERTIFY THAT I have, to the best
of my skill and ability, accurately transcribed
the foregoing interview.
Antoinette Forcione, Legal Transcriptionist
A.S.A.P. Reporting Services Inc.(613) 564-2727 (416) 861-8720