Order No. 2008-AT-A-63

June 27, 2008

June 27, 2008

APPLICATION by Linda McKay-Panos for an award of costs pursuant to section 25.1 of the Canada Transportation Act, S.C., 1996, c. 10, as amended.

File No. U 3570-14/04-1


[1] This award arises from Decision No. 63-AT-A-2008 of the Canadian Transportation Agency (the Agency) dated February 15, 2008 wherein the Agency awarded costs to Linda McKay-Panos in relation to her participation as an intervener in the Agency's investigation of fares and charges to be paid by persons with disabilities who require additional seating to accommodate their disabilities to travel by air on domestic air services (the AFC proceeding). In the AFC proceeding, I was one of the panel members and, as such, have knowledge of this case. As a result, in Decision No. 63-AT-A-2008, I was appointed by the Agency, pursuant to subsection 25.1(3) of the Canada Transportation Act (the CTA) as taxing officer to determine the quantum of costs to be taxed and allowed to Ms. McKay-Panos, which costs shall be paid by Air Canada, Jazz Air LP, as represented by its general partner, Jazz Air Holding GP Inc. carrying on business as Air Canada Jazz, and WestJet (the respondents).


[2] On November 19, 2002, the Agency received an application by the Council of Canadians with Disabilities and other individuals with disabilities against, among others, Air Canada, Jazz Air LP, as represented by its general partner, Jazz Air Holding GP Inc. carrying on business as Air Canada Jazz, and WestJet, for a finding that charges by these carriers applied to persons with disabilities for additional fares or portions of additional fares constitute an undue obstacle within the meaning of section 172 of the CTA.

[3] On May 11, 2006, Ms. McKay-Panos filed with the Agency an application to intervene in the AFC proceeding and on July 5, 2006, by Decision No. LET-AT-A-175-2006, the Agency granted Ms. McKay-Panos the following rights: "participation in the second stage of the oral hearing, scheduled to commence on November 14, 2006, by calling evidence, questioning witnesses produced by parties adverse in interest to her and making oral submissions, all limited to matters pertaining to obesity."

[4] On January 10, 2008, the Agency issued Decision No. 6-AT-A-2008. In that Decision, the parties were required to make their written submissions in support of their application for costs.

[5] On January 16, 2008, Ms. McKay-Panos filed submissions with the Agency pursuant to section 25.1 of the CTA in support of her application for an award of costs relating to her participation as an intervener in a proceeding before the Agency. The Agency, after consideration of the submissions filed by Ms. McKay-Panos and the respondents, determined, in Decision No. 63-AT-A-2008, that costs should be awarded.

[6] Accordingly, by letter dated February 25, 2008, written pleadings were initiated to gather information on the issue of quantum of costs to be awarded. In that letter, the parties were advised that costs would not be awarded on a party and party basis but, rather, that the general principles used in the past by taxation officers assigned by the Agency would be used. These principles include that the costs are compensatory in nature and reflect the costs that the parties actually incurred in the AFC proceeding that are reasonable, direct and necessary to the proceeding. In that regard, Ms. McKay-Panos was advised to submit her Bill of Costs with supporting documents and affidavits.

[7] By letter dated February 26, 2008, Gerard Chouest, on behalf of the respondents, stated that he was not given an opportunity to comment on the method by which the costs would be determined.

[8] On March 7, 2008, a response to Mr. Chouest's letter of February 26, 2008 was sent to the parties which clarified that no decision had been made to award costs on a solicitor-client basis. The parties were also advised that costs would not be awarded on a party and party basis and that the process will provide the respondents with a full opportunity to comment and provide submissions on the reasonableness and the appropriateness of the costs sought before they are assessed.

[9] On March 26, 2008, counsel for Ms. McKay-Panos submitted a Bill of Costs and on April 7, 2008, the respondents submitted their response to Ms. McKay-Panos' Bill of Costs.


[10] While the Agency does not have regulations or rules prescribing tariffs regarding the awarding of costs to a party, I have reviewed previous taxing orders issued by Agency taxation officers to identify common taxing criteria and have reviewed the principles applied by the Courts. I have also examined the arguments of counsel for Ms. McKay-Panos and the respondents to arrive at what I consider to be a fair and reasonable assessment to the extent that the costs claimed are reasonably necessary to permit full and fair participation.

[11] As a further tool in my assessment, I have examined the principles applied by the Courts and Tariff B of the Federal Court Rules, SOR/98-106, which detail counsel fees and disbursements allowable on assessment. I have used this Tariff for general comparison purposes; however, Tariff B establishes an assessment criteria based upon party and party costs, which results in less than full compensation for the successful party. As such, it is only a guide, and is not determinative.

[12] From the principles established by the Courts, I note that solicitor and client costs are generally intended to result in a full indemnity of legal fees and disbursements and are generally awarded only where there has been reprehensible conduct on the part of one of the parties such as delaying tactics, unduly prolonging proceedings or scandalous or outrageous conduct. I will be guided by this principle in my assessment.

[13] In making my determination as to the quantum to be awarded, I was guided by the principle that the costs must be reasonable in the circumstances and must have been incurred directly and necessarily for the purposes of the AFC proceeding. I have also carefully reviewed and analysed each item submitted under the Bill of Costs as well as all submissions made by the parties.


[14] Ms. McKay-Panos has produced time sheets itemizing her various claims. A summary of the Bill of Costs submitted is as follows:

Counsel fees






[15] In reply to Ms. McKay-Panos' cost submission, the respondents submit that the amount recoverable should be:

Counsel fees

$12,275.00 (+5% GST)


$ 7,880.63



[16] While the respondents acknowledge that the intervener is entitled to some level of cost recovery, they submit that this must be strictly limited to work done that was directly and reasonably related to the issue of obesity. In this regard, I am in agreement with the respondents that the fees submitted must be in relation to matters pertaining to obesity as Ms. McKay-Panos's intervener status was limited to her participation in issues pertaining to obesity. However, where amounts claimed are found to be a necessary element to Ms. McKay-Panos' fair participation in the AFC proceeding and represent a fair and reasonable compensation, they will be permitted.

A) Counsel hourly rates

[17] Ritu Khullar and Jo-Ann Kolmes represented Ms. McKay-Panos as her counsel throughout the AFC proceeding. Ms. McKay-Panos has submitted a Bill of Costs requesting the following hourly rates for counsel:

Ritu Khullar

2006 - $235 per hour

2007 - $265 per hour

Jo-Ann Kolmes

2006 - $220 per hour

2007 - $245 per hour

[18] The respondents submit that the hourly rates of both counsel rates are notably higher than the hourly rate claimed by David Baker who acted as principle counsel on the main application in this case. The respondents add that, at most, Ms. Khullar and Ms. Kolmes should be compensated at the same rate claimed by Mr. Baker, namely $225 per hour.

[19] After reviewing the parties' submissions in this matter and noting the seniority and expertise of Mr. Baker, who acted as principle counsel in the AFC proceeding, I am of the opinion that the hourly rate of counsel should not be more than that provided to Mr. Baker. Given that there was no evidence submitted as to the experience and/or year of call to the Bar for either of Ms. McKay-Panos' counsel in this matter, I consider it reasonable to set a rate of $225 per hour for Ms. Khullar and $150 per hour for Ms. Kolmes, the latter which is in keeping with the rate provided to Sarah Godwin, who acted as co-counsel to Mr. Baker in the AFC proceeding.

B) Counsel fees

[20] There is no dispute that the time claimed by counsel in this cost submission was indeed spent; however, it was necessary to review each item provided on the time sheets submitted to arrive at what I consider to be reasonable.

[21] I have reviewed the submissions of the parties and have divided the costs into eight categories which I will deal with separately.

1) Preparation of originating documents (application to intervene)

[22] Ms. McKay-Panos claims $800 for preparation of the originating documents in the AFC proceeding. The respondents have no comments on this matter.

[23] A close review of the time sheets submitted indicates that, in fact, 2.8 hours were spent by Ms. Khullar and 0.3 hours was spent by Ms. Kolmes in the preparation of the originating documents. Using the rates provided above, I accept the following: 2.8 hours at $225 = $630 for Ms. Khullar and 0.3 at $150 = $45, for a total of $675.

2) Attendance at telephone conference (October 4, 2006)

[24] Ms. McKay-Panos submits counsel fees in the amount of $305 which are not disputed by the respondents. I consider this reasonable and accept this cost.

3) Preparation for the hearing and attendance at the hearing on November 21 and 22, 2006

[25] Ms. McKay-Panos has claimed $3,400 for attendance at the hearing and $9,350 for preparation for the hearing. The respondents propose that the Agency use the method of calculation provided for in the Agency's Decision in Lucie Lemieux-Brassard - Taxation of Bill of Costs 1998-AT-A-216 TAX (Lemieux-Brassard), that is, time for attendance at hearing and double time for preparation for the hearing and at 8 hours per day (i.e., 2 days x 8 hours for attendance and 4 days x 8 hours for preparation, for a total of 48 hours x $225 per hour = $10,800).

[26] It is noted from the time sheets submitted that the actual time claimed for the hearing is 14.5 hours. I will therefore allow 14.5 hours for attendance at the hearing x $225 per hour for a total of $3,262.50.

[27] Using the principle applied in Lemieux-Brassard, cited above, I consider it reasonable to award two hours of preparation time for each hour spent at the hearing, which would be 29 hours. I therefore approve the amount of 29 hours x $225 for a total of $6,525 for preparation for the hearing.

4) Preparation of final arguments

[28] Ms. McKay-Panos has claimed $7,500 for the preparation and filing of the final arguments. The respondents submit that only 5 out of the 19 pages of Ms. Khullar's closing statement addressed obesity-related issues, whereas the rest of the statement addressed the scope of the Agency's ability to deal with human rights issues, an argument which was amply addressed by Mr. Baker who acted as principle counsel on the main application in this case.

[29] Ms. Khullar has claimed 7.6 hours and Ms. Kolmes has claimed 26.5 hours for the various items associated with the filing of closing arguments. I have reviewed the time sheets provided by Ms. McKay-Panos and consider that the preparation of the final arguments in AFC proceeding, including arguments relating to human rights issues, is a necessary element to the proceeding. I therefore approve the following fees: Ms. Khullar 7.6 hours x $225 = $1,710 and Ms. Kolmes 26.5 hours x $150 = $3,975, for a total of $5,685.

5) Preparation of written argument on the VIA Rail Canada Inc. case

[30] Ms. McKay-Panos claims $1,500 for preparation of written argument on the VIA Rail Canada Inc. (VIA Rail) case. The respondents submit that all of the submissions made by Ms. McKay-Panos with respect to the VIA Rail decision should not be compensated for the reason that Mr. Baker's arguments were sufficient and inclusive of issues related to obesity; therefore, these submissions were unnecessary and beyond the role of intervener granted to Ms. McKay-Panos.

[31] In making my determination in this matter, I note that Ms. McKay-Panos, as an intervener, was provided, along with the other parties to the AFC proceeding, with an opportunity to comment on the implications of the VIA Rail case and, therefore, I will not disallow this cost. However, a review of the daily logs submitted by Ms. McKay-Panos indicates that there was much duplication regarding the preparation of written argument on the Via Rail case. In light of this, I will allow the following fees for preparation of written argument on the Via Rail case: Ms. Khullar 1.2 x $225 = $270 and Ms. Kolmes 2.9 x $150 = $435, for a total of $705.

6) Travel by counsel to attend the hearing (November 20 and 23, 2006)

[32] Ms. McKay-Panos claims $2,800 for travel to attend the hearing. The respondents cite the Agency's Decision in Gordon Moffat - Taxation of Bill of Costs 2000-R-178 TAX (Moffat) and submit that the amount claimed is excessive and should not be compensated, or if compensated, it should be significantly reduced.

[33] I agree, in part, with the submission of the respondents in this matter. Therefore, in determining the appropriate amount of compensation for the purposes of travel, I find it reasonable to use the default column of Tariff B as a guideline. Using the high end of Column III, the travel time would be costed at $600, each way. I therefore allow travel time at $600 x 2 = $1,200.

7) Consulting with potential expert witnesses

[34] Ms. McKay-Panos has claimed $5,000 for the time spent consulting with a number of potential expert witnesses prior to the hiring of Laurie Ringaert, who was the witness ultimately retained by Ms. McKay-Panos. The respondents submit that this is excessive and should not be compensated as the fee consists of extensive telephone conferences and consultations with persons who were not ultimately retained by Ms. McKay-Panos.

[35] In reviewing this claim, I note that the amount claimed for consulting with potential expert witnesses is higher than the fees and expenses that were actually incurred by Ms. McKay-Panos's expert witness. Because the search for potential witnesses could theoretically take an inordinate amount of time and not result in the successful retaining of a witness, I find that this claim does not meet the test of reasonableness and, therefore, I am disallowing it.

8) Assessment of costs

[36] Ms. McKay-Panos submits the following two amounts for costs:

Application for costs

$ 2,250

Assessment of costs

$ 1,000

[37] The respondents have grouped these two costs together and submit that, in light of the documentation provided by Ms. McKay-Panos, this is an unreasonably high amount. The respondents suggest that 5 hours is appropriate for preparation of costs submissions.

[38] In determining the appropriate amount of compensation for the assessment of costs, I note that preparation of a bill of costs is normally considered an administrative task performed by office staff. In light of this, I find that the appropriate mechanism to determine a fair rate is to use the default column of Tariff B as a guideline. Using the high end of Column III, I therefore allow $720 for the assessment of costs.

Total counsel fees

[39] To summarize the above, I accept the following counsel fees:

Preparation of originating documents

$ 675.00

Attendance at telephone conference

$ 305.00

Preparation for the hearing

$ 6,525.00

Attendance at the hearing

$ 3,262.50

Preparation of final arguments

$ 5,685.00

Preparation of written arguments on the VIA Rail case

$ 705.00

Travel by counsel to attend the hearing

$ 1,200.00

Consulting with potential expert witnesses

$ .00

Assessment of costs

$ 720.00

Total Counsel fees

$ 19,077.50

C) Disbursements

[40] Ms. McKay-Panos claims disbursements in the amount of $11,222.61.

[41] The respondents accept all disbursements with the exception of the photocopy charges and Ms. McKay-Panos' travel charges. The respondents submit that photocopying should be reimbursed at 10 cents per page and that Ms. McKay-Panos' travel charges should not be compensated, particularly as her attendance at the hearing was unnecessary and that she did not, in this case, testify at the hearing.

[42] From my examination, I am persuaded that all disbursements are reasonable and were incurred necessarily and directly for the purposes of the AFC proceeding, with the exception of the following items:

Photocopying charges in the amount of $1,790.75. I am in agreement with the respondents that 10 cents per page is reasonable for photocopy charges. While the Affidavit filed in support of the disbursement of photocopying charges refers to a total amount for photocopying, from the materials submitted, it is impossible to determine, not only the number of pages that were photocopied but the amount claimed per copy. I was therefore unable to calculate this expense by using a per page formula. Keeping in mind that the burden is on the party submitting the costs to show the reasonableness of the costs, with no evidence as to the number of photocopies made, I would have had to estimate the number which I refuse to do, and, therefore, the claim for photocopies is rejected.

Travel Expenses of Ms. McKay-Panos are in the amount of $1,551.98. In determining whether or not to grant this expense, I looked at the practice of the Federal Court in granting travel expenses to parties. The general principle is that the costs relating to a client's attendance at a hearing are not recoverable, especially when the party's attendance at the hearing is not reasonably necessary to the outcome of the proceeding. While I am aware of Ms. McKay-Panos' contribution to the AFC proceeding, the general principle provides that having competent counsel is sufficient. I am therefore disallowing Ms. McKay-Panos travel costs in full.

[43] I therefore allow the following disbursements:

Postage and courier charges

$ 384.99

On-line research

$ 160.10

Long distance telephone charges

$ 318.92

Fax charges

$ 216.20

Expert witness fees for Laurie Ringaert


$ 3,307.10


$ 1,548.17


$ 4,855.27

Travel charges:

For counsel

$ 1,945.15

Total disbursements

$ 7,880.63


[44] I hereby tax the fees and disbursements as follows:

Counsel fees


GST on counsel fees (5%)

$ 953.88


$ 7,880.63

GST on disbursements (5%)* (see Note below)

$ 54.01

Total counsel fees and disbursements


Note: With respect to the disbursements, the GST was already included in the expert witness fees and in the travel charges; therefore, the GST was calculated only on the remaining disbursements, that is postage and courier charges, on-line research, long distance telephone charges and fax charges.

[45] The costs awarded herein shall be paid to Ms. McKay-Panos by Air Canada, Air Canada Jazz and WestJet, which shall each pay 1/3 of the total award of $27,966.02. The award of costs shall be paid within 60 days from the date of this Decision.


Beaton Tulk
Taxing Officer

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