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Ottawa, 15 March 1993
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Taxation Order CRTC: 1993-2
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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, Telecom Costs Order CRTC 91-4 and Telecom Costs Order CRTC 92-5
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Michael P. Doherty, for the B.C. Old Age Pensioners' Organization, the Council of Senior Citizens' Organizations, West End Seniors' Network, Senior Citizens' Association, Federated Anti-Poverty Groups of B.C. and Local 217 IWA Seniors (BCOAPO et al.).
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Bernard A. Courtois, for Bell Canada (Bell).
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Ralph A. Davis, for British Columbia Telephone Company (B.C. Tel).
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D.R. Tarrant, for Newfoundland Telephone Company Limited (Newfoundland Tel).
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William G. McMurray, 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 Island Telephone Company Limited.
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No one for Maritime Telegraph and Telephone Company Limited.
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No one for The New Brunswick Telephone Company Limited.
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TAXATION OF COSTS OF BCOAPO et al.
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Taxing Officer: Lorne Abugov
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This order constitutes the taxation of costs awarded to BCOAPO et al. 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, 12 June 1992 (Decision 92-12).
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Interim costs were awarded to BCOAPO et al. by Telecom Costs Order CRTC 91-4, 22 April 1991 (Costs Order 91-4), in accordance with subsection 45(1) of the CRTC Telecommunications Rules of Procedure (the Rules). In that order, the Commission limited BCOAPO et al.'s award of interim costs to disbursements, other than those relating to fees, incurred in connection with its intervention in the above-noted matter. BCOAPO et al. was awarded a maximum of $75,700 for the purpose of obtaining transcripts of the main proceeding and a maximum of $11,500 for other disbursements. Costs Order 91-4 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 BCOAPO et al. by Telecom Costs Order CRTC 92-5, 30 June 1992 (Costs Order 92-5), in accordance with subsection 44(1) of the Rules. Costs were to be paid to BCOAPO et al. by the applicants and respondents to the maln proceeding, in the same proportions as set out in Costs Order 91-4.
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BCOAPO et al. submitted a total of four Bills of Costs, amounting in the aggregate to $151,875.90, consisting of $89,445 in counsel fees (net of GST) and $62,430.90 in disbursements. Of that latter amount, $37,636.10 had already been billed by BCOAPO et al. under the terms of Costs Order 91-4, leaving an amount of $114,239.80 in fees (the latter net of GST) and disbursements outstanding.
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Written comments with respect to the costs claimed by BCOAPO et al. were submitted by Bell, B.C. Tel, Newfoundland Tel and Unitel. Following receipt of BCOAPO et al.'s reply, I sought further information by way of a letter dated 23 November 1992. BCOAPO et al. responded in early January 1993.
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In the course of the taxation, the following issues were raised and discussed:
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Counsel Fees
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a) Senior Counsel
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None of the parties submitting comments objected to the amount of time claimed for preparation and attendance at the central hearing by Mr. Gathercole, senior counsel for BCOAPO et al. Unitel noted, however, that in the absence of actual dockets, it was unable to assess critically the number of hours claimed by Mr. Gathercole for preparation time. Notwithstanding the absence of actual dockets, I am satisfied that the amount of time claimed by Mr. Gathercole for PreParation is reasonable.
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All of the parties questioned the quantum of the per diem fee of $1800 requested by senior counsel for attendance at the central hearing as well as the hourly fee claimed for preparation time ($225).
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With regard to the quantum of the attendance fee, Bell pointed out that Mr. Gathercole was seeking a per diem rate that represented an increase of 71.4% over the amount of $1,050 awarded to him in Taxation Order 1990-1. Bell also noted that the preparation rate claimed by senior counsel for BCOAPO et al. of $225 per hour amounted to a 30.5% increase over the rate of $180 per hour allowed to him in Taxation Order 1990-1. Bell referred to Taxation Order 1989-6 as reflecting a recognition by the Commission that increases could be granted for inflation and additional experience where the increases were found to be warranted. Bell noted that the rate of inflation since the making of Taxation Order 1990-1, was 8.5%.
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Additionally, Bell pointed out that in Taxation Order 1989-6 Mr. Gathercole was compensated for 22 years experience (having been called to the bar in 1967). Bell argued that the additional 2 years experience should not have a significant impact on the rate allowed for Mr. Gathercole in this proceeding. Accordingly, Bell submitted that Mr. Gathercole should not be allowed an increase greater than 9% over the rate allowed in Taxation Order 1990-1 or a maximum rate for preparation time of $195 per hour.
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Bell referred to Taxation Order 1989-6 as support for the proposition that, absent any compelling reason for a disproportionately larger increase in the rates proposed for attendance time than for preparation time, any adjustment for inflation and additional experience should be approximately the same for attendance and for preparation. Accordingly, Bell submitted that, allowing for a similar increase of 9% for inflation and added experience, Mr. Gathercole should be restricted to a per diem attendance rate of no more than $1.145.00
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Both B.C. Tel and Newfoundland Tel noted that the fees claimed in respect of Mr. Gathercole represented an increase of approximately 18% over the preparation fee allowed to Mr. Gathercole in Taxation Order 1991-1 and a 60% increase over the attendance fee allowed in the same order. B.C. Tel and Newfoundland Tel argued that no justification had been provided for increases of this size. Newfoundland Tel submitted that any increase should be limited to the amounts allowed in Taxation Order 1991-1, plus an adjustment for inflation. B.C. Tel suggested that, in the absence of any compelling argument to the contrary, the attendance and preparation rates allowed for Mr. Gathercole should be the same as those awarded in Taxation Order 1991-1. If an increase is allowed, B.C. Tel submitted that it should be limited to an adjustment for inflation since 11 February 1991, the date of Taxation Order 1991-1.
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Unitel noted that because the Commission uses a market rate approach and in light of the depressed state of the national economy, Mr. Gathercole should be limited to a maximum hourly preparation rate of $190 and the same attendance rate as set out in Taxation Order 1990-1 i.e. $1,050.00.
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In its reply, BCOAPO et al. noted that the Commission uses a market rate to assess costs and pointed out that none of the parties had suggested that the rates claimed were greater than prevailing market rates. BCOAPO et al. suggested that billing rates in Toronto would be a relevant benchmark. BCOAPO et al. understood that the market rate in Toronto for a lawyer of Mr. Gathercole's experience was approximately $400 per hour.
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BCOAPO et al. took issue with the submission of Bell that Taxation Order 1989-6 supported the proposition that increases for inflation and added experience must be found to be warranted before they could be allowed. BCOAPO et al. stated that it was clear on a reading of the Taxation Order in question that the Commission did not intend to limit rate increases to inflation. Additionally, BCOAPO et al. pointed out that, contrary to the submission of Unitel, because British Columbia had not felt the economic recession, market rates had, in fact, increased.
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I note that all of the parties objecting to the counsel fees claimed by BCOAPO et al. in respect of Mr. Gathercole have based their comments on the rates awarded by the Taxing Officer to BCOAPO et al. in either Taxation Order 1990-1 or 1991-1. For the purposes of establishing the appropriate rates for preparation and attendance time in the present case, I have taken as my starting point Taxation Order 1991-1, with increments for inflation and added experience.
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As noted, in Taxation Order 1991-1, the Taxing Offlcer allowed, in effect, amounts of $190 per hour in respect of preparation time for Mr. Gathercole and $1,125 per day for attendance. In this Bill of Costs, BCOAPO et al. has claimed for preparation and attendance time, rates of $225 per hour and $1800 per day respectively for Mr. Gathercole. These amounts represent increases of approximately 18% and 60% respectively over the fees allowed by the Taxing Officer in Taxation Order 1991-1. In my opinion, BCOAPO et al. has advanced no compelling reason for the disproportionately larger increase proposed for attendance time as compared to preparation time. While I am prepared, if warranted, to allow a certain measure of difference between the adjustments for preparation and attendance time, I am of the view that the adjustment differential proposed by BCOAPO et al. is quite excessive.
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In assessing whether any increase in counsel fees attributable to inflation and additional experience acquired by Mr. Gathercole is warranted, I note that according to the Consumer Price Index for Vancouver published by Statistics Canada, inflation increased by approximately 3% between the dates of the review meeting giving rise to Taxation Order 1991-1 (28 and 29 November 1990) and the commencement date of the central hearing in the proceeding leading to Decision 92-12 (15 April 1991). Accordingly, for the purposes of this taxation, I consider that an inflation increment of approximately 3% is appropriate.
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I am also of the view that an increment to account for Mr. Gathercole's added experience before the Commission as well as his increased seniority at the Bar, is warranted. In light of these considerations, I will allow an hourly rate of $205 for preparation time, representing an increase of approximately 8% relative to the rate allowed for Mr. Gathercole in Taxation Order 1991-1.
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In determining an appropriate per diem attendance rate for Mr. Gathercole, I have taken into account, among other things, the nature of the proceeding that led to Decision 92-12. I have no difficulty in concluding that based on the criteria enunciated in Taxation Order 1989-3, the long distance proceeding is one in which a higher rate for preparation time than for attendance time, can be justified. This proceeding involved multiple interveners, a lengthy central hearing and related to matters that were complex and innovative requiring detailed preparatory work.
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In light of the foregoing, I have decided that it is appropriate to set a lower attendance rate than preparation rate for Mr. Gathercole. However, in view of the unique and difficult nature of this proceeding, I have also decided that a modest additional increment for attendance time is warranted.
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In light of these considerations, I have concluded that some upward adjustment of the attendance rate in Taxation Order 1991-1 is warranted. However, I consider the increase proposed by BCOAPO et al. to be excessive. Instead, I will allow a per diem rate of $1,260 for attendance time, representing an increase of approximately 12% relative to the attendance rate previously allowed for Mr. Gathercole .
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I have, therefore, taxed the fees claimed by Mr. Gathercole at 157.2 hours of preparation time at $205 per hour, totalling $32,226, and 19.5 days of attendance at the central hearing at a per diem rate of $1,260, totalling $24,570.00
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Accordingly, the total combined fee awarded to Mr. Gathercole is $56,796.00 (net of GST).
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b) Junior Counsel
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Ms. Braha
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None of the parties submitting comments objected to the amount of time claimed for preparation by Ms. Braha, junior counsel for BCOAPO et al. Unitel noted, however, that in the absence of actual dockets, it was unable to assess critically the number of hours claimed by Ms. Braha for preparation time. Notwithstanding the absence of actual dockets, I am satisfied that the amount of time claimed by Ms. Braha for preparation is reasonable.
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All of the parties questioned the quantum of the hourly fee of $150 requested by Ms. Braha for preparation.
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Bell noted that Ms. Braha was called to the Bar in 1988 and was allowed $85.00 per hour preparation time in Taxation Order 1990-1.
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Bell suggested that the preparation time rate in this instance should be calculated by reference to the preparation rate allowed by the Taxing Officer in Taxation Order 1990-1, with increments for inflation and added experience. At the same time, Bell recognized that a slightly greater increase should be given to Ms. Braha for her added 2 years of experience as compared to Mr. Gathercole. Accordingly, Bell submitted that a 10% increase from the rate allowed in Taxation Order 1990-1 would be appropriate, resulting in a maximum rate of $95.00 per hour.
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Both Newfoundland Tel and B.C. Tel noted that the claim of S150 per hour preparation time for Ms. Braha represented an increase of approximately 58% over the preparation time allowed for Ms. Braha in Taxation Order 1991-1 ($95 per hour) and that no justification had been given for this increase. Newfoundland Tel submitted that the rate for Ms. Braha should be the same as that set out in Taxation Order 1991-1, plus an unspecified inflation adjustment. B.C. Tel submitted that in the absence of any compelling argument to the contrary, the rate allowed for Ms. Braha should also be the same as that awarded in Taxation Order 1991-1, with an adjustment for added experience and inflation since the making of the Order i.e. 11 February 1991 .
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For its part, Unitel submitted that Ms. Braha should be allowed an hourly rate for preparation time not to exceed $90.00.
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In its reply, BCOAPO et aL. reiterated the same submissions it made concerning Mr. Gathercole, noting that the market rate in Toronto for a lawyer of Ms. Braha's experience was approximately $195 per hour.
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In determining the preparation rate for Ms. Braha, I have taken as my starting point Taxation Order 1991-1, with increments for inflation and added experience. In Taxation Order 1991-1, the Taxing Officer allowed, in effect, an amount of $95 per hour for Ms. Braha. In the present instance, BCOAPO et al. has claimed $150 per hour for preparation time for Ms. Braha. The amount sought for Ms. Braha represents an increase of approximately 58% over the rate allowed by the Taxing Officer in Taxation Order 1991-1.
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In assessing whether any increase in counsel fees attributable to inflation and added experience acquired by Ms. Braha is warranted, I am prepared to allow the same inflation increment as I allowed for Mr. Gathercole i.e approximately 3%.
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Though I note in passing that the Taxing Officer in Taxation Order 1989-4 came to a different conclusion, I am of the view that the increase attributable to added experience should carry more weight in the case of a junior counsel such as Ms. Braha than for a senior counsel such as Mr. Gathercole. I am satisfied that Ms. Braha is at a stage in her legal career where there is opportunity to acquire experience and knowledge at an incrementally faster rate than is the case for more senior counsel. I also note that in its submission, Bell was willing to accept a greater increase for Ms. Braha than for Mr. Gathercole in the context of added experience. I will, therefore, allow an hourly rate of $105 for preparation time, representing an increase of approximately 10.5% relative to the rate previously allowed for Ms. Braha.
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Accordingly, I have taxed the fees claimed by Ms. Braha at 41.5 hours of preparation time at $105 per hour, for a total amount of $4,357.50 (net of GST).
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Mr. Doherty
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None of the parties submitting comments objected to the amount of time claimed for preparation by Mr. Doherty, junior counsel for BCOAPO et al. With respect to the absence of actual dockets, Unitel made the same observations as it did in connection with Mr. Gathercole and Ms. Braha. Despite the absence of these dockets, I am satisfied that the amount of time claimed by Mr. Doherty for preparation is reasonable.
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All of the parties questioned the quantum of the hourly fee of $150 requested by Mr. Doherty for preparatlon.
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Bell noted that Mr. Doherty is junior to Ms. Braha, having been called to the Bar in 1989. Bell submitted that the claim in respect of Mr. Doherty should not be higher than that of Ms. Braha. At the same time, Bell suggested that because it was unclear whether Mr. Doherty had previous experlence in telecommunications proceedings before the Commission (unlike Ms. Braha), the Commission might be justified in setting his rate lower than that of Ms. Braha. Both B.C. Tel and Newfoundland Tel agreed with Bell's submission that Mr. Doherty should be awarded less than Ms. Braha to reflect the difference in experience.
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Unitel submitted that Mr. Doherty should be allowed a preparation rate not to exceed $90 per hour, i.e. the same rate as Unitel had proposed for Ms. Braha.
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In its reply, BCOAPO et al. reiterated the same submissions it made concerning Mr. Gathercole and Ms. Braha, noting that the market rate in Toronto for a lawyer of Mr. Doherty's experience was approximately $180 per hour.
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BCOAPO et al. also stated that while it did not agree with the submission that there should be a difference in rates between lawyers called to the Bar one year apart, it would be prepared to agree to different rates, provided that the rate applicable to Ms. Braha were increased from the claimed level. BCOAPO et al. noted its understanding that in terms of market rates, S150 per hour was lower than the norm for a lawyer such as Ms. Braha who was called to the Bar in 1988. Otherwise, BCOAPO et al. contended that the preparation rate of $150 per hour should be allowed to stand.
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I agree with the various submissions noting that the hourly rate for preparation time should reflect the fact that Mr. Doherty has less experience, not only at the Bar but also before the Commission, than Ms. Braha. Accordingly, I will allow Mr. Doherty an hourly rate for preparation time of $100. I have, therefore, taxed the fees claimed by Mr. Doherty at $100 per hour for 85 hours of preparation time for a total amount of $8,500.00 (net of GST).
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Disbursements
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In its fourth Bill of Costs, BCOAPO et al. included a $16,163.42 payment for transcript Volumes 20 to 48. Bell, B.C. Tel, Newfoundland Tel and Unitel all objected on the ground that BCOAPO et al. had already claimed this expense by way of its third Bill of Costs dated 8 July 1991 and had been reimbursed pursuant to Telecom Costs Order 91-4. In its reply, BCOAPO et al. acknowledged that the transcripts in question should not have been claimed in the fourth and final Bill of Costs. Accordingly, I will deduct this amount.
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BCOAPO et al. also included a $201.36 payment to the Journey's End Hotel in Toronto for the nights of 23-24 May 1991 in its affidavit of disbursements of 5 July 1991.
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Bell objected to the claim on the ground that Mr. Gathercole had claimed expenses for those nights at a hotel in Ottawa. In its reply, BCOAPO et al. acknowledged that this payment should not have been claimed. Accordingly, I will disallow the claim for this particular cost.
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BCOAPO et al. claimed $2,514.38 for travel and accommodation in its fourth Bill of Costs. Unitel noted that no receipt had been provided for the accommodation portion (a $538.13 payment to the Ottawa Hilton Hotel) and objected to the air travel on the ground that the only supporting documentation specific to air travel provided by BCOAPO et al. referred to a flight taken on dates (13 and 15 September 1991) apparently unrelated to the central hearing. In order to clarify these matters, I requested BCOAPO et al. to provide me with the actual hotel receipt as well as the actual tickets (or legible copies) of all airline flights claimed in the various Bills of Costs. Alternatively, I indicated that if the airline tickets were no longer in its possession, I would be prepared to accept an affidavit from Mr. Gathercole setting out his travel details. BCOAPO et al. replied that because he no longer had the relevant records in his possession, Mr. Gathercole was not in a position to provide the air tickets or copies, nor could he set out the details in an affidavit. BCOAPO et al. also noted that it had unsuccessfully tried to obtain a copy of the hotel receipt.
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Because there is supporting documentation (in the form of a VISA statement) relating to the payment to the Ottawa Hilton Hotel and because the date of the payment is consistent with the timeframe of the central hearing, I am prepared to allow the claim for $538.13.
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On the issue of air travel, two questions need to be addressed. The first is the class of travel allowed for interveners. The documentation submitted by BCOAPO et al. relating to Mr. Gathercole's air travel showed that he travelled business class between Vancouver and Ottawa. Bell, B.C. Tel and Unitel all objected to air travel costs being claimed at a rate higher than that for economy class. In its reply, BCOAPO et al. did not address this particular issue. In determining this matter, I must have regard to the requirement set out in subsection 44(6)(b) of the Rules that costs awarded not exceed "those necessarily and reasonably incurred". In my view, business class air travel is not a necessary and reasonable cost to enable an intervener to participate in a Commission proceeding. I note, at the same time, that BCOAPO et al. provided no justification for the business class claim. Accordingly, I will only allow costs in respect of air travel to be claimed at the economy class rate, together with all applicable taxes. I am informed that the economy class return airfare Vancouver-Ottawa during the timeframe of the central hearing was $1,434. Thus, I am prepared to allow a total cost of $1,434 plus Air Transportation Tax and GST.
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The second question is the number of return flights claimed as compared to the number in fact undertaken. In the absence of actual tickets or copies, I must draw my inferences from the supporting documentation supplied by BCOAPO et al. In its various Bills of Costs, BCOAPO et al. claimed a total of five Vancouver-Ottawa return flights, whereas, based on the evidence before me, including, in particular, the VISA statements supplied by BCOAPO et al., I conclude that Mr. Gathercole only undertook four return flights. Accordingly, I am prepared to allow costs for air travel on the basis of four return flights at $1,434 (plus Air Transportation Tax and GST) per return flight.
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I am concerned over the adequacy of the documentation provided by BCOAPO et al. to support its claim for air travel and accommodation (in the case of the Ottawa Hilton Hotel). The ability of a Taxing Officer to carry out his or her duty is greatly assisted by the provision of proper supporting documentation. Accordingly, for future taxations, I will expect to receive actual receipts or copies for accommodation and actual or copies of air tickets used.
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Though BCOAPO et al. did not include GST in its Bill of Costs with respect to counsel fees, I am informed that this was the result of an omission and that GST is, in fact, required to be paid on the counsel fees that are the subject of this Taxation Order. In the circumstances, I have decided that it is reasonable to include the GST component with respect to the fees awarded to the senior and the junior counsel for BCOAPO et al. I also note that GST has been paid on the disbursements claimed except for a claim of S1.030.31 for in-house photocopies and a claim of $90.77 for miscellaneous expenses, both of which would not appear to be subject to GST. I sought and obtained confirmation that, unlike the position with other organizations, no rebate on GST paid is available in the circumstances of this particular case. Accordingly, I have allowed costs relating to GST at the full rate of 7% with respect to both fees and those disbursements in respect of which GST has been paid.
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Costs as Taxed
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I hereby tax the fees and disbursements (inclusive of GST at a rate of 7%) as follows:
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Fees:
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Richard J. Gathercole $ 60,771.72
W. Anita Braha $ 4,662.52
Michael P. Doherty $ 9,095.00
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Total Fees $ 74,529.24
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Disbursements
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Air Travel 6,308.72
Accommodation 3,595.14
Meals 870.00
Taxis & Car 1,053.58
Rental Telephone & Fax 618.24
Photocopies 1,267.95
Postage & Courier 791.69
Office Supplies 484.53
Transcripts 28,280.64
Miscelaneous 128.12
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Total $43,398.61
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Total Fees & Disbursements $117,927.85
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Less:
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Costs Already Recovered $ 37,636.10
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Total Fees and
Disbursements Owing $ 80,291.75
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As noted above, this amount is to be paid to BCOAPO et al. by the applicants and the respondents to the main proceeding in the same proportions as set out in Costs Order 91-4.
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Lorne Abugov
Senior Legal Counsel
Canadian Radio-television and Telecommunications Commission
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