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Ottawa, 23 March 1993
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Taxation Order CRTC: 1993-4
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In re: AGT Limited - Revenue Requirement for 1992, Telecom Decision CRTC 92-9, and Telecom Costs Orders 92-1 and 92-2
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Me Philippa Lawson for the Alberta Consumers Coalition (ACC), which is comprised of the Consumers Association of Canada (Alberta) (CAC Alberta), the Alberta Council on Aging and the Income Security Action Committee.
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Don Sabey and John Lowe, for AGT Limited (AGT).
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TAXATION OF COSTS OF ACC
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Taxing officer:
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Sylvie Courtemanche
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This order constitutes the taxation of costs awarded to ACC in the case of AGT Limited - Revenue Requirement for 1992, Telecom Decision CRTC 92-9, 15 May 1992. Interim costs were awarded to ACC by Telecom Costs Order CRTC 92-1 (Costs Order 92-1), in accordance with subsection 45(1) of the CRTC Telecommunications Rules of Procedure (the Rules). In that order, the Commission limited ACC's award of interim costs to disbursements, other than those relating to fees, incurred in connection with its intervention in the above-noted matter. ACC was awarded a maximum of $6,500 for the purpose of obtaining transcripts of the proceeding and $13,000 for other disbursements.
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In Telecom Costs Order CRTC 92-2 (Costs Order 92-2), final costs were awarded to ACC in accordance with subsection 44(1) of the Rules. This order indicated that costs associated with ACC's expert witnesses, Drs. Gordon and Gould, should be limited to 75% of the costs incurred.
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ACC submitted a Bill of Costs in the amount of $114,441.09, consisting of $109,419.95 in fees and $22,462.74 in disbursements. Under the terms of Costs Order 92-1, ACC had already billed the amount of $17,441.60.
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In its written comments, AGT stated that it found ACC's Bill of Costs to be in order.
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Request to Review and Vary
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ACC requested that in the event its expert witnesses applied, pursuant to section 66 of the National Telecommunications Powers and Procedures Act (the Act), to review and vary Costs Order 92-2, the taxation of costs for the expert witnesses be delayed until such an application was dealt with. In its comments relating to ACC's Bill of Costs, AGT stated that it did not object to ACC's request to defer the taxation of that portion of its costs attributable to these witnesses.
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On 14 December 1992, Drs. Gordon and Gould applied to have Costs Order 92-2 reviewed and varied. The matter remains outstanding as of the date of this taxation order.
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Consistent with the views expressed in Taxation Order 1993-1, the process by which eligible interveners are reimbursed for their participation in a Commission proceeding consists of two distinct independent phases. After determining whether an intervener should be awarded all, or only a portion of its costs, the process continues with the taxing officer determining what portion of the fees and disbursements claimed were reasonably and necessarily incurred.
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In the second part of the assessment, no reference is made to the performance-based criteria employed in making a costs award. The amount payable is determined by taking the proportion of costs awarded in the costs order, and applying it to the total of the taxed fees and disbursements. Accordingly, where the proportion of costs is varied by the Commission under section 66 of the Act, the varied proportion will be multiplied by the total of taxed fees and disbursements, and depending on whether the proportion is increased or decreased, either the telephone company or the intervener will be ordered to make any necessary payments.
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Therefore, notwithstanding the fact that AGT has not objected to the request to defer that part of the taxation dealing with expert witness fees, I am of the view that no purpose would be served by granting ACC's request, since any determination made herein with respect to which costs were necessarily and reasonably incurred will be unaffected by a potential variance of the Costs Order 92-2. Accordingly, this order will constitute the complete taxation of the Bill of Costs submitted by ACC.
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Counsel Fees
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ACC claimed counsel fees of $37,815 plus Goods and Services Tax (G.S.T.), based on an hourly rate of $100/hour for Ms. Lawson and $150 for Mr. Ian Lawson.
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In determining the appropriate rates for counsel, I have taken into account such factors as year of call to the bar, knowledge and experience in telecommunications matters and experience before regulatory tribunals, particularly experience gained before the Commission. I have also referred to rates allowed to similarly situated counsel in previous taxation orders.
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I note that Ms. Lawson was called to the Bar in 1991 and that, although she has appeared before the Commission in connection with the lengthy proceeding leading up to Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, 12 June 1992, Telecom Decision CRTC 92-12, this was her first involvement in both a construction program review and a revenue requirement proceeding. Accordingly, I have taxed her preparation time at $95.00 per hour.
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In assessing the number of hours claimed for preparation, previous taxation orders have employed the general guideline that the amount of time claimed for preparation should not exceed twice the amount of time claimed for attendance at the public hearing. As has been stressed in previous taxation orders, this ratio is a guideline only, and has in the past been varied where circumstances warrant. In the present case, I note that beyond the issues usually dealt with in a rate hearing, the proceeding in question also dealt with the question of the integrality of AGT Directory Ltd. and AGT, such that the revenues derived from the directory operation should be attributed to the telephone company. I consider this to be a specialized and complex issue which was beyond the scope of a typical revenue requirement proceeding. Therefore, in addition to the number of allowable preparation hours suggested by the 2 to 1 guideline, I have allowed for an additional 25 hours of preparation time, and as a result, I have allowed 187 hours for preparation time. I have disallowed the 5.8 hours claimed for travel time, consistent with previous taxation orders that have determined that travel time not spent preparing should not be allowed (Taxation Order 1988-2).
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I note that in Taxation Order 93-3, Ms. Lawson's claim for an hourly hearing attendance rate was not allowed. The taxing officer in that order, stated that, virtually all Commission taxation orders, have awarded fees for attendance on a per diem basis, as opposed to an hourly rate basis. Consistent with the views expressed in that order, I will set Ms. Lawson's attendance rate on a per diem basis. I consider, in the circumstances, that an award of $590.00 per day for attendance is warranted. In light of the fact the Commission did not sit full days on three separate occasions, I will allow 11.5 days for attendance at a rate of $590.00 per day.
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For the CPR, I will allow the 21.3 hours claimed by Ms. Lawson for preparation time and 2 days for attendance at the same per diem rate as for hearing attendance. ACC also claims an amount in preparation time for the CPR, for work completed by Mr. Ian Lawson. I have taken into account the trend in previous taxations to apply the ratio between preparation and hearing time on a global basis. Accordingly, as the additional time claimed for Mr. Lawson falls within this global ratio, I have allowed the 3.1 hours claimed. Having considered the hourly rate allowed Mr. Lawson in previous CRTC taxation orders, I have taxed Mr. Lawson's preparation time at $145.00 per hour.
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Consultant Fees
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ACC has claimed costs for the work completed by Mr. J. D. Todd in connection with the CPR and Mr. D. McKendry and Ms. C. Baggaley for work completed for the rate hearing. I have allowed the $150/hr rate claimed for Mr. Todd but have reduced the hours claimed from 15 to 14.5 hours for hearing attendance, as I recall the latter as being the correct hearing attendance time for the CPR.
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In the statement of account submitted by Price Waterhouse to ACC, a total of 97 hours at a rate of $200/hr is claimed for Mr. McKendry's work and 33 hours at a rate of $150.00/hr for Ms. Baggaley's work. In considering the total amount of hours claimed by these consultants, I have made use of the same ratio between preparation and hearing time as was used in determining the appropriate amount of hours for counsel. I have also taken into account the previously mentioned trend in taxations to apply this ratio on a global basis. Furthermore, I have allowed, consistent with what was awarded for counsel, 25 additional hours to these consultants in order to prepare for the directory issue. Accordingly, as the total amount of hours claimed for the consultants falls approximately within this global ratio, I have allowed the total amount of hours claimed at the rates listed in the statement of account submitted by Price Waterhouse to ACC.
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Expert Witness Fees
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ACC has claimed the amount of $43,026.94 for fees and expenses in relation to its expert witnesses. A total of 30 days has been claimed for the time spent by the two expert witnesses, Drs. Gordon and Gould in, amongst other things, preparation of evidence, interrogatories, cross-examination and argument. I note that in Taxation Order 1989-2, the most recent taxation order dealing with time claimed by Drs. Gordon and Gould, the Consumers' Association of Canada was awarded costs for 33 days for work performed by these expert witnesses. I consider that the cost of capital issues raised in the AGT proceeding are comparable to those raised in the hearing upon which Taxation Order 1989-2 was based. In the circumstances, I have concluded that the amount of time devoted to preparation is reasonable.
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A per diem rate of $1200.00 has been claimed for the services performed by the expert witnesses. I note that this per diem rate represents a 33.3% increase over the per diem rate of $900.00 awarded in Taxation Order: 1988-1, the most recent taxation order detailing the per diem rate awarded to Drs. Gordon and Gould. I consider such an increase to be excessive. In determining a reasonable per diem rate, I have had regard to various factors including, inflation since 1988, and the fact that these witnesses have appeared before the Commission in one rate proceeding since that time (British Columbia Telephone Company - Revenue Requirement Proceeding for the Years 1988-1989, Telecom Decision CRTC 88-21). I have concluded that in the context of this proceeding, a per diem rate of $1080.00 would be reasonable. Further, I have limited the final award with respect to the fees of Drs. Gordon and Gould to 75% of costs found to be reasonably incurred, pursuant to Costs Order 92-2.
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Volunteer Honorarium
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ACC has claimed the amount of $1,200.00 as volunteer honorarium for the attendance of Ms. L. Arling, President of CAC Alberta. In Taxation Order 1980-1, the intervener Action Bell Canada obtained costs for preparation and attendance time for one of its volunteers. It is clear in that instance, however, that the volunteer was actively involved in the preparation of interrogatories and actually cross-examined the applicant in that proceeding.
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In Taxation Order 1987-4, child care expenses claimed by CAC in relation to a volunteer, were found to be reasonably and necessarily incurred in connection with its intervention. The taxing officer was of the opinion that the issue of whether child care expenses constituted direct or indirect expenses which was raised by the party objecting to this expense was of little importance, since expenses are not recoverable unless they have been reasonably and necessarily incurred by the intervener.
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In the current proceeding, Counsel for ACC has advised that the volunteer did not actively participate in either the preparation of evidence, interrogatories or cross-examination. The nature of Ms. Arling's involvement was restricted to giving instructions or information to Counsel regarding AGT. In my opinion, the amount claimed for her honorarium is clearly inappropriate as it does not represent an amount which was reasonably and necessarily incurred by ACC in connection with its intervention.
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G.S.T.
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ACC, in its Bill of Costs, included an amount for G.S.T. at a rate of 7% in respect of both fees and disbursements. Counsel for ACC confirmed that disbursements claimed for photocopies are not subject to G.S.T. Furthermore, a rebate of 50% of the G.S.T. payable is available in the circumstances of this proceeding. Accordingly, I have allowed an amount for the reimbursement of G.S.T. at a rate of 3.5%, for the services rendered by counsel, the consultants, the expert witnesses, and, where applicable for expenses incurred by ACC.
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Costs as Taxed
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I hereby tax the fees and disbursements as follows:
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Fees:
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Counsel $29,128.01
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Consultant (Todd) $ 5,340.60
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Consultant (McKendry & Baggaley) $25,202.25
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Expert witnesses (Drs. Gordon & Gould) $25,150.00
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Disbursements:
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Expenses incurred by Todd $ 654.33
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Expenses incurred by Price Waterhouse $ 3,982.78
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Expenses incurred by expert witnesses $ 5,537.68
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Transcripts $ 4,611.45
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Travel expenses (counsel) $ 1,992.85
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Taxi expenses (counsel) $ 283.03
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Hotel expenses (counsel) $ 1,392.73
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Meal expenses (counsel) $ 382.14
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Long distance $ 504.60
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Fax $ 329.23
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Courier $ 294.46
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Postage $ 52.65
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Photocopies $ 296.13
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Laptop computer rental $ 335.34
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LESS interim costs paid to date $17,441.60
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Total fees and disbursements $88,028.66
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Sylvie Courtemanche
Counsel
Canadian Radio-television and Telecommunications Commission
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