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Ottawa, 8 March 1993
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Taxation Order CRTC: 1993-1
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In re: Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues - Telecom Decision CRTC 92-12 and Telecom Costs Orders CRTC 91-5 and CRTC 92-7
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Rosalie Daly-Todd, for the Consumers' Association of Canada (CAC).
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Bernard A. Courtois, for Bell Canada (Bell).
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Ralph A. Davis for British Columbia Telephone Company (BC Tel).
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Daniel M. Campbell, for Maritime Telegraph and Telephone Company Limited and The Island Telephone Company Limited (MT&T/Island Tel).
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D.R. Tarrant, for Newfoundland Telephone Company Limited (Nfld Tel).
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William G. Murray, for Unitel Communications Inc. (Unitel).
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No one for B.C. Rail Telecommunications and Lightel Inc (BCRL).
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No one for The New Brunswick Telephone Company Limited (NB Tel).
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TAXATION OF COSTS OF THE CAC
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Taxing Officer: Allan Rosenzveig
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This order constitutes the taxation of costs awarded to the CAC in the case of Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12 (Decision 92-12).
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In Telecom Costs Order CRTC 91-5 (Costs Order 91-5), the Commission granted the CAC an award of interim costs limited to disbursements for a single hard copy of transcript for the above-noted proceeding, not to exceed a maximum of $25,000. The Order provided that 60% of the costs awarded were payable by the applicants to the main proceeding, with the remaining 40% payable by the respondent telephone companies. Unitel and BCRL were directed to contribute to their 60% share, and the respondent telephone companies were directed to contribute to their 40% share, in proportion to their operating revenues from telecommunications activities.
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Final costs were awarded to the CAC by Telecom Costs Order 92-7 (Costs Order 92-7), in accordance with subsection 44(1) of the CRTC Telecommunications Rules of Procedure (the Rules). In that Order, the Commission determined that the CAC was entitled to all of its transcript disbursements and 35% of its other costs. Costs were to be paid to the CAC by the applicants and respondents to the main proceeding in the same proportions as set out in Costs Order 91-5.
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The CAC submitted a Bill of Costs in the amount of $382,261.40, claiming $332,533.33 in fees, $9,318.31 in costs for consultation with the CAC membership and the public, and $40,109.76 in disbursements. Along with its reply to comments submitted regarding its Bill of Costs, the CAC filed a revised Bill of Costs and supporting material in the amount of $381,703.50, consisting of $332,503.33 in fees $9,318.31 in consultation costs, and $39,881.86 in disbursements.
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Comments regarding the CAC's Bill of Costs were received from Bell, B.C. Tel, MT&T/Island Tel, Nfld Tel and Unitel. Neither NB Tel nor BCRL chose to file comments. Following receipt of the CAC's reply, I wrote the CAC on 21 December 1992, requesting further information and clarifications. The CAC responded in early January 1993.
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In the course of the taxation, which proceeded by way of written submissions, the following issues were raised and discussed.
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Request to Review and Vary
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On 3 September 1992, the CAC filed with the Commission, pursuant to section 66 of the National Telecommunications Powers and Procedures Act (the NTPPA), an application to review and vary that part of Costs Order 92-7 that limited the CAC's recovery to 35% of its non-transcript costs.
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Bell argued that the taxation of the CAC's Bill of Costs should not proceed until the Commission has adjudicated on the request to review and vary. Both Bell and Nfld Tel stated that their comments were submitted without prejudice to their right to make further submissions following the Commission's disposition of the section 66 application. The reply of the CAC did not address this issue.
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I note in this regard that the process by which the Commission allows eligible interveners to be reimbursed for their costs of participation is comprised of two distinct and independent processes. The first is the award of costs itself, in which the Commission determines, based on the criteria set out in section 44(1) of the Rules, whether the intervener in question should be reimbursed for any of its costs, and if so, whether it should receive all of its costs or only a portion thereof. In the other, the Taxing Officer determines what portion of the fees and disbursements claimed by a successful applicant for costs were reasonably and necessarily incurred.
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This latter assessment is made without reference to the performance-based criteria employed by the Commission in making an award of costs. To determine the amount payable, the proportion of costs awarded in the costs order is applied to the total of the taxed fees and disbursements. Should the proportion of costs awarded be subsequently increased or decreased by the Commission, pursuant to section 66 of the NTPPA, the revised proportion will be multiplied by the total of the taxed fees and disbursements and the telephone company or the intervener, as the case may be, will be ordered to make any necessary payments.
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Therefore, I do not accept Bell's argument that the taxation should not proceed at this time, since any determination made herein with respect to those costs that were necessarily and reasonably incurred will be unaffected by a potential variance of Costs Order 92-7. I note that, in the event that the Costs Order is varied such that the aggregate of the award of costs as taxed (the total payable figure in the calculation at the end of this Taxation Order) and any funding that the CAC has received from outside sources to fund its intervention exceeds the total costs taxed, I will be required to make an adjustment to the amount payable, pursuant to section 44(7) of the Rules to prevent double recovery. Accordingly, unless the award of costs is increased to a level in which double recovery would occur, this Taxation Order will constitute the complete taxation of the Bill of Costs submitted by the CAC.
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Recovery of Pre-application Costs
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Bell, B.C. Tel and MT & T/Island Tel took issue with the amounts claimed by the CAC that related to expenses incurred prior to the filing of the Unitel application that was the subject of the proceeding that led to Decision 92-12. The expenses in question include the costs of a study by T.M. Denton Consultants Inc., apparently intended to assist the CAC in developing a position on the anticipated application for long distance competition in Canada. In its reply, the CAC argued that these measures were undertaken to ensure that the CAC took the position on the issues that was most advantageous to residential consumers. The CAC also noted the importance and complexity of these issues.
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I note that section 76 of the NTPPA authorizes the awarding and taxation of "costs of and incidental to any proceeding before the Commission" and that section 44(6) of the Rules requires that costs shall not exceed those incurred "in connection with" the intervention in question. In Taxation Order 1991-2, I rejected claims for some pre-hearing expenses since they amounted to research on issues of only peripheral relevance or consideration of other potential forums for relief. I note that this is not the case here. I further note that I indicated in Taxation Order 1991-2 that I was prepared to allow some costs for preparation expenses incurred prior to the date on which the proceeding in question was commenced, provided that they related to matters relevant to the intervention. Finally, I note that it was well known that Unitel would be making application to the Commission for the right to provide interconnected long distance voice service, some time before Unitel actually filed its application. In my view, it was reasonable for the CAC to conduct research, a short time prior to the filing of Unitel's application, in preparation for the anticipated application, and the expenses associated therewith were incidental to the proceeding and were incurred in connection with its intervention.
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Staff and Secretarial Expenses
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The CAC has claimed fees and expenses associated with work performed by several employees of the CAC, including the Executive Director, a Project Officer and a Secretary. In addition, the CAC has claimed costs incurred in hiring a temporary secretary.
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B.C. Tel and Unitel submitted that there is no evidence that the CAC actually incurred any additional cost as a result of the involvement of either the Executive Director or the Project Officer in the proceeding in question. MT&T/Island Tel argued that fees for employees who are not lawyers are not normally recoverable as costs and that no argument had been advanced to depart from this practice. Unitel noted that it is contrary to the practice of the Ontario civil courts to allow for costs for support services, and argued that this should also be the case with taxations before the Commission. Unitel also submitted that there was no established "market rate" for the Executive Director or the Project Officer, nor did either of these employees forego other billings to participate in the CAC intervention. Nfld Tel submitted that the salaries of the employees in question are funded through general operating revenues and argued that it was not reasonable for the CAC to recover these costs when it is presumably part of the mandate of the CAC to involve itself in such issues on behalf of its constituents.
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In its reply, the CAC stressed the complexity of the proceeding that resulted in Decision 92-12 and the importance of the issues raised therein. It argued that in this case, it was entirely reasonable that the services of more than the standard lawyer-plus-expert-witness were reasonably and necessarily incurred. The CAC also submitted that many of the comments received showed a lack of appreciation for the manner in which the CAC is funded. It indicated that staff are funded primarily through project funds, federal government funding and intervener funding received for participation in interventions such as the one in question.
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In the case of Bell Canada v. Consumers' Association of Canada et al., [1986] 1 S.C.R. 190, the Supreme Court of Canada held that the Commission was empowered, in performing taxations of costs, to take a broad view of the application of the principle of indemnification or compensation. In that Case, the Court specifically found reasonable the Commission's practice of allowing for costs relating to in-house counsel. I note that taxing officers have in the past allowed for costs associated with the participation of counsel and analysts that were employees of the CAC (see, for example, Taxation Order 89-2).
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However, in my view, a distinction should be drawn between the roles of counsel and analysts, who actively participate in proceedings before the Commission, and other employees whose chief function is to determine the intervener's policy and strategy and instruct counsel accordingly. In my view, to allow the amounts claimed in relation to the work performed by the Executive Director and Project Officer would be akin to allowing for the time expended by a litigant, as opposed to counsel, in a civil action. Accordingly, I have disallowed the amounts claimed for these employees.
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With regard to secretarial expenses, Bell, B.C. Tel and MT&T/Island Tel argued that secretarial expenses were usually considered to be included in the rate charged by counsel. In its reply, the CAC argued that due to the amount of paperwork generated by the proceeding leading to Decision 92-12, the CAC incurred additional secretarial expenses over and above those which would be recoverable under the fees obtained for counsel. I note that, with regard to Commission proceedings, the practice is to disallow such claims, since secretarial expenses are considered to be in the nature of overhead (most recently, see Taxation Order 1990-4). I also note that in support of the number of hours claimed for its counsel and consultants, the CAC has argued that its claim is reasonable in light of the scope and complexity of the proceeding in question. In my view, there is an implicit relationship between the amount of secretarial support required and the number of hours logged by counsel. I am not prepared, in the present case, to depart from the usual practice of considering secretarial expenses to be in the nature of overhead, particularly given the amounts claimed for counsel and the consultants. Accordingly, I have disallowed the claims made for secretarial expenses, including the disbursements claimed for a temporary secretary.
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Fees
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(a) Counsel
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The CAC claimed fees of $52,500 for its in-house counsel, based on a rate of $125 per hour. The CAC claimed 8 hour preparation days and 9 hour hearing days, to a total of 50 days, divided as follows: general preparation - 10 days; pre-hearing preparation - 15 days; hearing participation - 20 days; final argument - 5 days.
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B.C. Tel submitted that the claim of $1125 per diem for hearing days was excessive, noting that in Taxation Order 1991-1, this amount was awarded to what B.C. Tel submitted was more experienced counsel. Nfld Tel suggested that the amounts claimed were excessive based on the experience of counsel, and suggested that a $550 per diem, such as was allowed to junior counsel in Taxation Order 1990-1, was appropriate. Unitel noted that in Taxation Order 1991-2, it was recognized that there is a general distinction between the rates charged by counsel affiliated with public interest organizations and those associated with private law firms.
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I note that the CAC's counsel was called to the Bar of New York State in 1983, and Ontario in 1989. She has five years of experience in civil litigation, including cases involving competition law issues. I also note that junior counsel in the taxation order to which Nfld Tel referred had been called to the bar approximately one year before she participated in the proceeding in question. Finally, I note that counsel with a five year call and little experience in telecommunications regulation was allowed $125 per hour in Taxation Order 1991-3.
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As noted above, the CAC's claim for counsel hours is based on 9 hour hearing days and 8 hour preparation days. Consistent with many previous taxation orders, I have elected here to assess preparation time based on an hourly basis and attendance time on a per diem basis. I have calculated the latter with reference to a 7 hour day.
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In the circumstances, I am prepared to allow $875 per diem for hearing attendance and the $125/hr claimed for preparation time. I will allow the 240 hours claimed for preparation time and the 20 days claimed for hearing time.
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(b) Consultants
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The CAC claimed fees totalling $222,003.33 for the work performed by T.M. Denton Consultants Inc., based on a rate of $135 per hour for Mr. Denton and $110 per hour for Mr. Kieferle. This amount, which I believe should be $222,033.33, also included fees for the pre-application study referred to earlier. With respect to Mr. Denton, the CAC claimed 524.4 hours for preparation and 214.2 hours for hearing attendance. For Mr. Kieferle, the CAC claimed 544 hours for preparation and 252 hours for hearing attendance.
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Several of the respondents objected to the rates claimed with respect to Mr. Denton. Noting that expert witnesses were allowed $900 per day preparation and $1100 per day attendance in Taxation Order 1991-4, Bell submitted that, in view of the Commission's finding in Costs Order 92-7 that not all aspects of the CAC's participation had contributed to a better understanding of the issues, Mr. Denton should be allowed no more than $900 per diem. B.C. Tel noted that the daily attendance rate claimed for Mr. Denton was higher than that awarded in Taxation Order 1991-1 to counsel with more experience before the Commission and a longer call. B.C. Tel also submitted that Mr. Denton's role was closer to that of consultant than counsel and argued that he should therefore be allowed a lower hourly rate, based on previous taxations of the CAC's counsel and analyst team in the late 1980's. B.C. Tel suggested that the daily attendance rate for Mr. Denton should not exceed $700. MT&T/Island Tel submitted that Mr. Denton's legal and consultative roles should be segregated and charged accordingly. With respect to Mr. Denton's role as counsel, MT&T/Island Tel noted that although he was called to the bar in 1974, Mr. Denton has not practised law and accordingly should be taxed as junior counsel. In its reply, the CAC noted that the hourly rate claimed for Mr. Denton was his standard hourly rate, charged to a numher of other clients.
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In determining the appropriate hourly rate for Mr. Denton, I am mindful of the fact that, for a person called to the bar in 1974, he has little experience practising law. At the same time, although this apparently was Mr. Denton's first appearance before the Commission, I note that he has extensive experience in telecommunications matters. With regard to Bell's submission that Mr. Denton's allowed hourly rate should be lowered in view of the finding that not all aspects of his participation contributed to a better understanding of the issues by the Commission, I consider that this amounts to confusing the costs process with the taxation process. As noted above, it is the Commission that makes a finding regarding an intervener's contribution to a better understanding of the issues, and this finding is already reflected in the award of costs, whether full or partial, that is set out in the costs order from which a taxing officer derives his or her authority. While I admit some attraction to MT&T/Island Tel's suggestion that Mr. Denton's counsel and consultant roles be separated for taxation purposes, I note that such a separation is all but impossible in the present case. In the result, in this taxation I am not distinguishing between Mr. Denton's consultant and counsel roles, but rather have assessed all his work at a single rate for each of preparation and attendance. In future taxations, I will expect a breakout of the time spent in each of those roles. As with Ms. Daly-Todd, I have assessed Mr. Denton's time on an hourly basis for preparation and a per diem basis for attendance. In all the circumstances I will allow $135 per hour for preparation and $945 per hearing day.
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All of the parties who commented submitted that the amount of attendance and preparation time claimed for Mr. Denton was excessive. Many pointed out that Mr. Denton appeared to have made up his account to the CAC based not on hours actually spent, but on mechanical adherence to the guideline employed in previous taxation orders that preparation time should generally not exceed twice the amount of time claimed for hearing attendance. Unitel noted that the amount claimed for Mr. Denton and Mr. Kieferle was far in excess of that claimed for the consultant employed by the National Anti-Poverty Organization and Rural Dignity of Canada (NAPO/RDC) in the same proceeding. Unitel also submitted that the CAC should not be allowed to "double count" for hours claimed for Mr. Denton, as counsel, and for Ms. Daly-Todd, and argued that it was unclear whether the CAC should even be allowed fees for both junior and senior counsel, submitting that this determination is historically made by the tribunal, not a taxing officer. Bell suggested that the 2 to 1 guideline is only available to counsel and has never been used with respect to hours claimed by a consultant.
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In its reply, the CAC noted that Mr. Denton, Mr. Kieferle and Ms. Daly-Todd worked as a team throughout the proceeding in question and submitted that this arrangement was appropriate given the scope and complexity of the proceeding. The CAC also submitted that the 2 to 1 guideline was not used to trump up non-existent billings, but was used as a cut-off for the amount of preparation time actually expended, in recognition of taxation precedents.
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With regard to Unitel's submission that the amount of time claimed for Mr. Denton and Mr. Kieferle is excessive in view of the amount claimed for the consultant retained by NAPO/RDC, I note that the latter did not prepare evidence, did not cross-examine witnesses, and generally was involved in the proceeding in a very limited way. Since the scope of participation of the consultants for the CAC and NAPO/RDC was so vastly different, I do not find Unitel's comparison to be appropriate. I also note that, contrary to Unitel's suggestion, it has traditionally been the taxing officer that determines the appropriate number of counsel that is appropriate for a given intervener.
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However, I find the account of T.M. Denton Consultants Inc. to be problematic on a number of counts. Firstly, given that in the account general preparation time has been calculated by simply doubling the attendance time claimed, it does appear that the 2 to 1 guideline was slavishly adhered to. In this regard, I note that taxing officers have pointed out on several occasions that the guideline is only a guideline and that the appropriate ratio of preparation to hearing time may vary according to the circumstances of the case. The CAC has suggested that the actual number of hours spent was actually in excess of this amount and the claim was reduced in recognition of what would likely be allowed. I would think it preferable that in all cases the amounts claimed in a bill of costs should reflect the actual costs incurred, since this allows for a fairer assessment of what costs were reasonably and necessarily incurred. I note in passing that taxing officers have at times allowed claims in excess of the 2 to 1 guideline, in recognition of the circumstances of the case.
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The account submitted to the CAC by Mr. Denton's firm sets out fairly precise breakdowns of the number of hours spent on various aspects of the CAC intervention. However, when asked to substantiate some of these figures, Mr. Denton indicated that he was unable to do so since he did not, in fact, record his hour-by-hour attendance or preparation, but rather kept track of his time on a half-day basis. He also noted that he has discarded his 1991 engagement calendar, which contained records of time spent (albeit on a half-day basis) and stated that he was "extremely reluctant to engage in any form of calculation that would result in giving a falsely accurate picture to the CRTC." I am troubled by how such a seemingly precise statement of account, based at least in part on hours spent, was produced based on records kept on a half-day basis. I am further troubled by the fact that Mr. Denton discarded his records prior to the CAC's costs being taxed, thereby making a more precise assessment of the time actually logged impossible. I would note that the onus is on an applicant for costs to document and substantiate its claim.
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I am mindful of the fact that consultants are, as here, occasionally retained on a fixed fee basis and I note Mr. Denton's suggestion that the Commission might contemplate some changes to the taxation process to allow for this practice. At the same time, I am unable to envision a method, other than an analysis of time spent, which would allow for a fair assessment of which costs were reasonably and necessarily incurred. Regardless of the compensation arrangements made between an intervener and any consultants, experts or counsel that it may retain, parties applying for costs would be well advised to keep reasonable records of the time expended by those for whose participation a claim for costs is made.
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In his statement of account, Mr. Denton has claimed 10 days hearing attendance for days on which he cross-examined witnesses or was himself cross-examined with respect to the evidence submitted by the CAC. I will allow the 10 days claimed. I note in passing that no distinction is usually made between time spent in cross-examination and general attendance time.
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Mr. Denton has claimed only 30% of his remaining hearing attendance time, in recognition of the fact that he was also attending on behalf of another client, the City of Toronto. In this regard, Mr. Denton has claimed 124.2 hours, which represents 30% of 46 nine-hour days. As noted above with respect to time claimed for CAC counsel, I prefer to assess claims for attendance time on a per diem basis, in this case based on 7 hour hearing days. I also note that, since the hearing in question lasted 56 days, Mr. Denton's claim suggests that he was in attendance throughout the hearing. Due to the destruction of Mr. Denton's records, I am unable to assess this claim with precision; however, I note that Bell has submitted that Mr. Denton was not in attendance every day of the hearing. Indeed, this is consistent with my recollection. When given an opportunity to address whether he was, in fact, in attendance at the hearing at all times, Mr. Denton was unable to assist me. In the circumstances, I am not prepared to allow 5 of the 46 remaining attendance days. In the result, I will allow 30% of 41 attendance days, or 12.3 days, in addition to the 10 days spent in cross-examination, for a total of 22.3 days attendance.
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With respect to preparation time, I am of the view that the 524.4 hours claimed is excessive. In this regard, I note that in total the CAC has claimed over 1300 hours for preparation, in addition to the time spent on the pre-application study referred to above. I note that two other interveners that received costs awards with respect to the proceeding leading to Decision 92-12, the British Columbia Old Age Pensioners' Organization et al. (BCOAPO et al.) and NAPO/RDC, claimed totals of 722.8 and 283.7 hours preparation time, respectively. I am mindful of the fact that these interveners did not participate to the same extent as the CAC, nor did they file evidence, as the CAC did, and I am prepared to make some allowance for these factors; however, I am still of the view that the number of hours claimed for preparation is excessive in the circumstances.
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With regard to the CAC's evidence, the "Residential Telephony" study, I note that the CAC has been unable to provide me with more than an estimate ("eight weeks a person, two persons, five days a week, seven hours a day"...) of the amount of time expended on this project, despite a request for a more precise figure and despite the fact that the preparatory work for this study has been included in the total hours claimed by the CAC for the preparation time of the consultants. Indeed, I find that the estimate provided by Mr. Denton in this regard, 560 hours between himself and Mr. Kieferle is itself excessive. I also refer to my earlier remarks concerning the adequacy of the account submitted by Mr. Denton's firm. In the circumstances, I will exercise the discretion vested in me as a taxation officer and allow 400 hours preparation time for Mr. Denton.
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With respect to the hourly rate claimed for Mr. Kieferle, Bell and B.C. Tel suggested that Mr. Kieferle's hourly rate should be reduced proportionate to any reduction made to Mr. Denton's hourly rate. MT&T/Island Tel submitted that since Mr. Kieferle is not a member of the bar, no costs should be allowed for him and that the necessity of neither a second consultant nor a third counsel had been shown. With respect to the number of hours claimed for Mr. Kieferle, many of the respondents submitted it was excessive, and questioned the apparent mechanical application of the 2 to 1 guideline.
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I note at the outset that there is no requirement of membership to a bar in order to qualify for costs. In the past, costs have been allowed for consultants, articling students and legal assistants. The proceeding leading to Decision 92-12 was unprecedented in size and scope, various parties deployed large teams, and I do not consider unwarranted the CAC's use of an economist in addition to Ms. Daly-Todd and Mr. Denton. With respect to the hourly rate claimed, I note that Mr. Kieferle was trained as an economist, and while this was apparently his first foray into the realm of telecommunications, he has been involved in economic analyses of several industries. As my starting point, I note that in several taxations through the mid to late 1980's, the CAC's in-house analyst (who had considerably more telecommunications experience than Mr. Kieferle) was allowed a per diem of $550 for preparation and $600 for attendance. However, these amounts were all that had been claimed, and the last of these taxations was made some 3 years prior to the proceeding in question. I note that unlike the CAC's previous analyst, Mr. Kieferle took no active part in the hearing. Accordingly, I do not consider a separate attendance rate to be appropriate. In the circumstances, I will allow an hourly rate of $100.
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I will allow for 28 attendance days for Mr. Kieferle, or 196 hours, based on the consultants' arrangement of billing the CAC for 50% of Mr. Kieferle's time and billing their other client, the City of Toronto, for the remainder. I find the 544 preparation hours claimed for Mr. Kieferle to be excessive, for the same reasons given with respect to preparation time claimed by Mr. Denton. In the circumstances, I will allow for 425 hours for preparation, for a total of 621 hours preparation and attendance.
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Disbursements
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Bell and Nfld Tel noted that over one quarter of the disbursements claimed by the CAC were unsupported by receipts. B.C. Tel submitted that there was insufficient material on the record to assess the reasonableness of the CAC's allocation of its audited telecommunications project expenditures. Bell and Nfld Tel also submitted that the amounts claimed for courier, postage and long distance telephone and facsimile charges were well in excess of those claimed by either NAPO/RDC or BCOAPO et al. with respect to the proceeding in question.
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In its reply, the CAC advised that it had calculated its disbursements by allocating a portion of its audited telecommunications project expenditures proportionate to the share of federal funding dedicated to the proceeding which led to Decision 92-12. The CAC also argued that its communications costs may have been higher than other interveners due to the membership structure of the CAC, which necessitated frequent communications with representatives from across the country.
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As a general rule, I find acceptable the CAC's practice of calculating disbursements by allocating a portion of its telecommunications project expenses, which I note have been audited in satisfaction of the requirements of Consumer and Corporate Affairs Canada (CCA).
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Unlike the law firms whose disbursements are usually examined in taxation proceedings, the CAC has no clients and therefore no reason to assign every disbursement to the client for whom the disbursement was incurred. While full documentation and receipts are obviously preferable, I do not consider it reasonable to require an organization like the CAC to develop and implement a disbursement tracking system solely to serve the Commission's taxation process.
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However, I am concerned that receipts have not been provided for some disbursements for which receipts could readily have been provided, such as taxis, accommodation, meals and parking. In future taxations, I will not be inclined to allow such claims, absent supporting documentation. I would also request that readily identifiable expenditures be clearly identified and not merely be labelled as "miscellaneous", thereby requiring follow-up requests for information.
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In the circumstances, I find the disbursements in the CAC's amended claim to have been reasonably and necessarily incurred.
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Treatment of Other Funding
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Section 44(7) of the Rules requires that taxing officers take into account financial assistance from government or other sources in determining the amount of costs to be awarded. The CAC indicated in its Bill of Costs that it had received the amount of $114,000 from CCA to help fund the CAC's intervention in the proceeding that led to Decision 92-12. B.C. Tel submitted that this amount should be deducted from the total of the CAC's allowed costs and that the CAC should be entitled to recover 35% of the balance, plus its transcript costs. Nfld Tel submitted that the Commission should deduct the amount received from CCA from any amounts ultimately awarded to the CAC. The CAC appears to have argued that in cases where an intervener is awarded less than full costs, it should be entitled to make up the shortfall from federal government funds.
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I note that where interveners are awarded full costs, it has been the practice of taxing officers to deduct any direct outside financial assistance from the total otherwise payable, in order to prevent double recovery; however, I have been able to locate only one previous case where an intervener that had received outside financial assistance was awarded only a portion of its costs. In Taxation Order CRTC 1982-1, the Taxing Officer declined to deduct a sum of direct government funding from the costs payable, allowing the intervener in question (coincidentally, the CAC) to use that funding to help defray that portion of its costs not covered by the Commission's cost award; however, the Taxing Officer did deduct from the costs payable the amount of the government funding in excess of the shortfall between the total costs as taxed and the costs awarded.
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In that case, the Taxing Officer reasoned that a partial award of costs is not a penalty levied against the intervener, but a determination of those aspects of the intervention that contributed to a better understanding of the issues by the Commission. He further reasoned that to deduct any outside funding from the costs payable would discourage interveners from seeking funds from outside sources to aid in mounting interventions before the Commission.
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I further note that the ruling of the Taxing Officer in Taxation Order CRTC 1982-1 was appealed to the Commission pursuant to section 44(10) of the Rules. In Bell Canada, General Increase in Rates - Appeal of Taxation Order 1982-1, Telecom Decision CRTC 83-11, the Commission dismissed the appeal, finding as follows:
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The Commission has concluded, therefore, that the taxing officer did not err in applying the
words "take into account" in subsection 44(7) of the Rules only to ensure that the aggregate of
the outside funding and the award of costs did not exceed the total of the costs incurred by the
intervener in connection with its intervention.
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I agree with this approach. Accordingly, I have determined that the CAC should be able to use its CCA funding to help defray the remaining 65% of its costs.
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Goods and Services Tax
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I note that GST has been included in the Bill of Costs relating to both the fees of the consultants and disbursements. It is my understanding that registered charities and eligible non-profit organizations are entitled to receive a 50% credit on GST paid on goods and services used in carrying out GST-exempt activities. Commission staff has been informed by the CAC's counsel that the CAC will be eligible for this credit on all GST paid in relation to this intervention. Accordingly, I have deducted 3.5% from the total of the allowed disbursements and 50% of the GST claimed with respect to the consultant fees.
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Costs as Taxed
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I note that Costs Order 92-7 awarded the CAC all of its transcript costs and 35% of its other costs. Accordingly, I have deducted the transcript costs from the total taxed costs, calculated 35% of the remainder, and added back the outstanding transcript costs to determine the amount payable. I hereby tax the fees and disbursements as follows:
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Fees
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Counsel $ 47,500.00
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Consultants 167,054.91
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Total Fees 214,554.91
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Disbursements
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Transcripts 26,909.42
Parking & Mileage 386.58
Courier 569.23
Postage 1,006.42
Office Supplies 345.56
Airfare 754.21
Taxis 87.24
Accommodations 313.47
Meals 187.00
Long Distance Telephone/Fax 2,731.14
Misc. Office Expenses 672.13
Photocopies 1,051.46
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Less 3.5% (GST credit) 1,225.49
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Total Disbursements 33,788.37
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Total Taxed 248.343.28
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Less transcript costs
already recovered 25,000.00
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Less remaining transcript costs 1,909.42
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Sub-total 221,433.86
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35% of this amount 77,501.85
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Plus remaining transcript costs 1,909.42
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Total Payable 79.411.27
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As noted above, this amount is to be paid to the CAC forthwith by the respondents to the CAC application for costs in the same proportions as set out in Costs Order 91-5.
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Should Costs Order 92-7 be varied by the Commission, the respondents to the CAC's application for costs will be directed to make any further payments required, calculated by reference to the Sub-total set out above. Consistent with my finding regarding the treatment of outside funding, should the award be varied such that the aggregate of the funding and the total payable exceeds the total costs as taxed, I will deduct the amount of the excess from the total payable.
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Allan Rosenzveig
General Counsel, Telecommunications
Canadian Radio-television and Telecommunications Commission
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