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Ottawa, 24 August 1994
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Taxation Order CRTC: 1994-9
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In re: Northwestel Inc. - Revenue Requirement for 1993, Telecom Decision CRTC 93-20 and Telecom Costs Order CRTC 94-5
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Michael Janigan for the Consumers' Association of Canada (Northwest Territories) (CAC (NWT)).
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Allison Gracie for Northwestel Inc. (Northwestel).
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TAXATION OF COSTS OF THE CAC (NWT)
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Taxing officer: Sylvie Courtemanche
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This order constitutes the taxation of the award of costs to the CAC (NWT) in the case of Northwestel Inc. - Revenue Requirement for 1993, Telecom Decision CRTC 93-20, 21 December 1993 (Telecom Decision 93-20). In Telecom Costs Order CRTC 94-5, an award of costs was given in accordance with subsection 44(1) of the Telecommunications Rules of Procedure (the Rules).
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Northwestel, in its answer to the CAC (NWT)'s Bill of Costs and Affidavit of Disbursements commented on the amount claimed in relation to the CAC (NWT)'s counsel, consultant and expert witness fees and the time spent by these individuals in preparation for this proceeding. Northwestel also submitted comments regarding some of the disbursements claimed by the CAC (NWT), as well as its omission of the 50% credit for Goods and Services Tax (G.S.T.) paid for goods and services used in carrying out G.S.T. exempt activities.
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In its reply, the CAC (NWT) submitted an amended Bill of Costs in the amount of $32,408.97, consisting of $31,838.16 in fees and $593.87 (although my addition shows the total to be $570.87) in disbursements, to reflect, among other things, the 50% rebate on G.S.T. that is available. It also responded to some of the concerns raised by Northwestel in relation to the amounts claimed for work performed by the CAC (NWT)'s counsel, consultant and expert witnesses.
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Counsel and Consultant Fees
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The CAC (NWT) claimed counsel fees of $6,979.50 (excluding G.S.T.), based on an hourly rate of $165 per hour for work performed by Mr. Janigan.
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In determining the appropriate rate for counsel, I have taken into account factors such 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 counsel and similarly situated counsel in previous taxation orders.
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I note that Mr. Janigan was called to the bar in 1980 and has practised civil, labour and administrative litigation before a variety of tribunals and courts. I also note that in Taxation Order 1994-2, Mr. Janigan was awarded an hourly rate of $165. Taking into account the above factors, I am prepared to allow the hourly rate of $165, as claimed.
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In relation to the work performed by Mr. Todd, the CAC (NWT) has claimed $1,909 based on an hourly rate of $165 per hour. I note that in Taxation Orders 1994-2 and 1994-3, Mr. Todd was allowed a rate of $155 per hour. For the same reasons contained in those taxation orders, I will only allow $155 per hour for time spent by Mr. Todd.
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With regard to the preparation time claimed by the CAC (NWT) for work performed by Mr. Janigan and Mr. Todd, I note that Northwestel has argued that the time claimed for these individuals is excessive, since the evidence filed by the CAC (NWT) in this proceeding was similar to what was being prepared by the CAC (NWT)'s expert witnesses in proceedings going on in approximately the same time frame for other federally-regulated telephone companies and, therefore, synergies were or should have been realized. Furthermore, Northwestel argued that from the invoices, it appears that there has been unnecessary duplication of work.
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In reply, the CAC (NWT) stated that the time spent by legal counsel and the consultant, Mr. Todd, was for the purpose of reviewing, editing, and presenting in evidence the material prepared by the expert witnesses, and that there is no overlap between the expert witnesses' work and work performed by Mr. Todd or by counsel. The CAC (NWT) argued that the time spent by counsel and the consultant was required in order to understand the filing and to attempt an intervention, which in this proceeding was on a modest scale. Furthermore, the CAC (NWT) argued that additional time could be justified given the problems experienced with Northwestel's application and its responses to interrogatories. Accordingly, it was impossible for the CAC (NWT) to analyze, question and critique the material in a shorter period of time.
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In this proceeding, the CAC (NWT)'s participation was, for the most part, restricted to the issue of the appropriate rate of return for Northwestel. Further, as noted by Northwestel in its answer, the company did not file expert testimony of its own. I have also considered the fact that it has been several years (1987) since the Commission has conducted a rate proceeding for Northwestel.
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Taking into account all of the above, I am not satisfied that the time claimed by the CAC (NWT) for work performed by counsel and the consultant was necessarily and reasonably incurred. Accordingly, I am prepared to allow 34 hours for work performed by Mr. Janigan and 8.5 hours for work performed by Mr. Todd.
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Expert Witness Fees
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In support of its claim that the total time spent by the CAC (NWT)'s expert witnesses (Drs. Booth and Berkowitz) is excessive, Northwestel submitted that significant portions of the evidence prepared by the CAC (NWT)'s expert witnesses are identical to portions of evidence prepared for the rate proceeding of Bell Canada, AGT Limited and BC TEL in 1993. The main differences noted by Northwestel were that the evidence filed in this proceeding was not as detailed and very few paragraphs were specific to the telephone company or the economy in the relevant serving area. Northwestel also underlined the fact that it had no expert witness testimony of its own to be evaluated and critiqued by the CAC (NWT)'s expert witnesses.
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In response, the CAC (NWT) stated that it structured the involvement of its expert witnesses in a way to minimize costs and to take advantage of synergies developed in other Commission rate proceedings. Notwithstanding this, the CAC (NWT) argued that there are fundamental tasks that are company specific that must be completed and cannot be recapitulated from other proceedings of the same nature. The CAC (NWT) also argued that it may be difficult to retain experts if an unrealistic approach is taken to the taxation of costs of experts who testify in more than one proceeding.
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I note that in Telecom Decision 93-20 the Commission stated that, in this proceeding, Drs. Booth and Berkowitz relied largely on quantitative evidence very similar to that provided by the same expert witnesses in Bell Canada - Revenue Requirements for 1993 and 1994, Telecom Decision CRTC 93-12, 30 August 1993.
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I also note that the Prince Edward Island Consumers' Coalition (PEICC), following an award of costs in Telecom Costs Order CRTC 94-4 for its participation in The Island Telephone Company Limited - Revenue Requirement for 1994, Telecom Decision CRTC 94-8, 30 March 1994 (Telecom Decision 94-8), submitted a Bill of Costs in which it claimed that Drs. Booth and Berkowitz spent 13 days in analyzing and preparing their evidence, as well as to critique the expert testimony filed by the telephone company in that proceeding. Of further note, is the PEICC's reply submission that the 13 days already incorporated major synergies with the rate proceeding involving the Maritime Telegraph and Telephone Company Limited.
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As noted earlier, Northwestel did not file expert testimony in this proceeding and, accordingly, Drs. Booth and Berkowitz were not required to critique and analyze expert evidence. Furthermore, the evidence on the issue of cost of capital filed by the CAC (NWT) in this proceeding was, by its own admission, modest in scale when compared to that prepared by Drs. Booth and Berkowitz in other Commission 1993 and 1994 rate proceedings. I also consider that important synergies should have been made by the expert witnesses given the fact that, in relatively the same time period, they prepared evidence on the issue of cost of capital for the rate proceedings of Bell Canada and AGT Limited.
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Taking into account all of the above, I am not satisfied that the 20 days claimed by the CAC (NWT) for the preparation of the evidence of Drs. Booth and Berkowitz was "necessarily and reasonably incurred". Accordingly, I find that 8 days for the preparation of the experts' evidence to be more reasonable. I note that the $1,100 per diem claimed for preparation represents a 10.5% increase over the $995 allowed in Taxation Orders 1994-2 and 1994-3. For the same reasons stated in those taxation orders, I will only allow $995 per diem for preparation of the expert witnesses' evidence.
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Disbursements
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Northwestel objected to the amount claimed by the CAC (NWT) for internal photocopying and questioned whether the rate of $0.25 per page included costs related to overhead usually deemed to be included in the hourly rate of counsel. It also noted that no receipts had been provided to substantiate a claim of $100 for disbursements from M.K. Berkowitz and Associates Ltd. The company took exception to a claim of $17.12 for G.S.T. on photocopying since the invoices in Exhibit E show that amounts for G.S.T. and provincial sales tax had already been included. Finally, Northwestel questioned whether, in light of Taxation Orders 1993-3 and 1993-4, the CAC (NWT) is subject to any G.S.T. for photocopies made either internally or externally.
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In reply, the CAC (NWT) stated that the rate charged for internal photocopying was within the range charged by most private law firms and that external photocopying was less expensive because of the economies of scale in bulk photocopying operations. The CAC (NWT) also argued that the rate of $0.25 per page had been accepted in previous taxations.
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In relation to the $17.12 for G.S.T., the CAC (NWT) stated it was difficult to calculate the G.S.T. on individual subamounts and, consequently, it would not argue further about the appropriateness of this amount. The CAC (NWT) also stated that G.S.T. is not applicable to internal photocopies and that no such claim had been made in relation to internal photocopies.
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I have concerns with some of the disbursements claimed by the CAC (NWT). As noted earlier, my addition shows the total to be $570.87 rather than the $593.87 claimed. Furthermore, the CAC (NWT) has submitted receipts which substantiate only $469.31 of the $564.89 in disbursements claimed. In this respect, I concur with the comments made by the taxation officer in Taxation Order 94-2 on the matter of providing receipts for all expenses claimed. I note the fact that the CAC (NWT) failed to address in its reply, Northwestel's objection to a claim of $100 for disbursements from M.K. Berkowitz and Associates Ltd. I am also not inclined to accept the CAC (NWT)'s submission in relation to its double counting of the G.S.T. for external photocopying and do not agree that it is difficult to calculate the G.S.T. on individual subamounts. Accordingly, I am not prepared to allow the claim of $17.12 for G.S.T. for external photocopying and, will therefore, allow an amount of $452.19 for disbursements.
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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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Michael Janigan $ 5,610.00
G.S.T. $ 196.35
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John Todd $ 1,317.50
G.S.T. $ 46.12
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Drs. Booth and Berkowitz $ 7,960.00
G.S.T. $ 278.60
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Disbursements
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Long distance telephone and facsimile messages $ 23.21
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Photocopies external $ 240.31
Photocopies internal $ 50.00
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Courier and postage $ 138.67
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G.S.T. $ 14.08
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Total Fees and Disbursements, inclusive of G.S.T. $15,874.84
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Sylvie Courtemanche
Legal Counsel
Canadian Radio-television and Telecommunications Commission
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