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T-1751-74
William Henry Bowler and Hilda Bowler (Plaintiffs)
v.
The Queen (Defendant)
Trial Division, Thurlow A.C.J.—Ottawa, May 13, 1976.
Practice—Costs—Expropriation—Actions settled—Plain- tiffs seeking order dismissing actions and for solicitor and client costs—Expropriation Act, R.S.C. 1970 (1st Supp.) c. 16, s. 36—Federal Court Act, s. 57(3) and Rule 605.
In an expropriation action, plaintiffs applied for judgment by consent, seeking an order dismissing the action and awarding costs to plaintiffs on a solicitor and client basis.
Held, the motions are dismissed, if no request for oral argument is received by May 25, 1976. Apart from being self-contradictory, the form of order proposed is contrary to Rule 605. If compensation is settled by agreement, adjudication is unnecessary; the agreement prevails, and shall provide for all aspects of the settlement. If a court proceeding is pending when agreement is reached, the agreement should provide for its discontinuance or dismissal without costs, for the court then has nothing to adjudicate or award either party. In the absence of agreement, authority for payment is section 57(3) of the Fed eral Court Act. The Court must take the position that it will not permit the device of a judgment by consent of the parties to take the place of an adjudication on proper material of the actual liability of the Crown. Where liability is adjudged, costs can be awarded. This was an attempt to combine an agreement with a court order which, on its face, would purport to be an award by the Court of a portion of what the parties have agreed on, and would be an award of a kind rare to an ordinary action. This is contrary to the Hooper case ([1942] Ex.C.R. 193) and not authorized or warranted by section 36 of the Expropriation Act. Even if the amounts agreed on could be seen as coming within the meaning of the amount "adjudged" in section 36(2), there is nothing to call for solicitor and client costs.
APPLICATION in writing under Rule 324. SOLICITORS:
Chappell, Bushell & Stewart, Toronto, for plaintiffs.
Deputy Attorney General of Canada for defendant.
The following are the reasons for judgment rendered in English by
THURLOW A.C.J.: This is an application brought under Rule 324 for judgment by consent in an action for compensation for property taken under the Expropriation Act. Similar applications are before me in six other actions. In each case the order now sought is in the following terms:
UPON the consent of the parties being filed, this Court does order and adjudge that the action herein be dismissed and that the Plaintiffs do recover from the Defendant the costs of and incidental to this action to be taxed on a solicitor and client basis.
The applications show an undue lack of care in their preparation. When originally presented the order sought in this and one other case was one dismissing the action "with costs payable on a solicitor and client basis", an order which would have meant an entirely different result from that now sought. Nevertheless it was consented to by solicitors for the plaintiffs. On that occasion coun sel were asked to explain why costs were to be awarded on a solicitor and client basis. The answer received appears later in these reasons.
In four of the seven cases the order originally sought was that the action be dismissed "with costs payable under the Expropriation Act". Counsel were asked to explain what that meant. No explanation has been forthcoming.
In the remaining case the order originally sought asked for "dismissal of the action with costs to the plaintiffs". Such an order is self-contradic tory as the dismissal of the action means that the plaintiffs take nothing by their action. A form or order providing for recovery of party and party costs by the plaintiffs but dismissing the action in other respects was suggested but has not been adopted by counsel in renewing the applications.
Apart from being self-contradictory, the pro posed form of order for recovery by the plaintiffs is contrary to Rule 605, which continues the long established practice under the former Petition of Right Act.
I turn now to the substance of what is involved in the orders as now sought.
Under the Expropriation Act the amount of compensation payable in respect of expropriated property may be settled by agreement of the par ties or by adjudication. But the two methods are not the same. If the settlement is by agreement there is no need of the court or of any adjudication by it. The agreement prevails and it should provide for all aspects of the settlement. If at the time an agreed settlement is arranged a proceeding to determine compensation is pending in the Court, the agreement ought to provide for termination of the proceeding either by discontinuance or dismis sal of the proceeding without costs, as in such an action the Court has nothing to adjudge or to award to either party by way of costs or otherwise'. It is important to bear in mind that in such a case the authority for payment of the amount agreed upon must be found in an appro priation by Parliament for the purpose.
On the other hand, where there is no agreement and the Court determines the compensation, the authority for payment of the amount adjudged is section 57(3) of the Federal Court Act. It should be unnecessary to add that the authority is limited to what the Court adjudges the Crown to be liable to pay. The position of the Court must therefore be that it will not permit the device of a judgment by consent of the parties to take the place of an adjudication on proper material of the actual lia bility of the Crown 2 . Where that liability is adjudged by the Court, costs can be awarded and there are special provisions in the Expropriation Act with respect to them. Section 36 provides:
36. (1) Subject to subsection (2), the costs of and incident to any proceedings in the Court under this Part are in the discretion of the Court or, in the case of proceedings before a judge of the Court or a judge of the superior court of a province, in the discretion of the judge, and the Court pr the judge may direct that the whole or any part of such costs be paid by the Crown or by any party to the proceedings.
(2) Where the amount of the compensation adjudged under this Part to be payable to a party to any proceedings in the Court under section 29 in respect of an expropriated interest does not exceed the total amount of any offer made under
1 I mention "without costs" because under the Rules of the Court a simple discontinuance or a simple dismissal will entitle the defendant to tax and recover his costs against the plaintiff.
2 See The King v. Hooper [1942] Ex.C.R. 193.
section 14 and any subsequent offer made to such party in respect thereof before the commencement of the trial of the proceedings, the Court shall, unless it finds the amount of the compensation claimed by such party in the proceedings to have been unreasonable, direct that the whole of such party's costs of and incident to the proceedings be paid by the Crown, and where the amount of the compensation so adjudged to be payable to such party exceeds that total amount, the Court shall direct that the whole of such party's costs of and incident to the proceedings, determined by the Court on a solicitor and client basis, be paid by the Crown.
I come now to the explanation above referred to, made in response to the Court's inquiry as to the reason for the provision for recovery of solicitor and client costs. It reads as follows:
I have your three letters of April 22, 1976, with respect to the above seven cases.
When these actions were settled it was upon the basis that costs would be paid by the Defendant to the Plaintiffs upon a solicitor and client basis to be taxed by a Taxing Officer of the Court unless the parties could agree on the quantum of costs before taxation. It would appear that the consents previously delivered to us and filed do not adequately express that and I am enclosing for each a new Notice of Motion and Consent together with a draft judgment. These are to be disposed of pursuant to Rule 324 without personal appearance of counsel for the parties.
I trust that these will more accurately reflect the basis of the judgment sought.
It appears to me that what this discloses is an attempt to combine an agreement settling compen sation with an order of the Court, which on its face would purport to be an award by the Court of a portion of what the parties have agreed upon. It would also be an award of costs of a kind rarely given in any ordinary action and then only for very cogent reasons. At the same time it would be likely to be much greater than an award of costs on the party and party scale which would follow as a matter of course under the Rules on a simple discontinuance or simple dismissal of the action.
In my view this is contrary to the principle of the decision of this Court in The King v. Hooper 3 and there is nothing in the language of section 36 of the Expropriation Act to authorize or warrant it. Moreover, even if the amounts of compensation agreed upon could be regarded as falling within the meaning of the amount of the compensation "adjudged" in subsection 36(2), and I think it
3 [1942] Ex.C.R. 193.
cannot, there is nothing in the record, and there should not be 4 , which would show that the situa tion is one in which the payment of solicitor and client costs should be directed.
If counsel wish to argue the matter orally, arrangements will be made to set the motions down for hearing. If no request for such a hearing is received by May 25, 1976, the motions will stand dismissed.
These reasons apply to the applications on files:
T-1751-74, T-1777-74, T-1778-74, T-1779-74, T-1800-74, T-1801-74 and T-2462-75.
See Galway v. The Queen [1974] C.T.C. 454 at 455.
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