IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140205

Docket: 87570

Registry:
Kelowna

Between:

Thomas Allan
Arnason

Plaintiff

And

Jose Alonso Nerio

Defendant

Before:
Master Young
(as Registrar)

Reasons for Decision

[1]            
Mr. Arnason was injured in a motor vehicle accident on June 6, 2008,
and hired Roger Watts of Salloum Watts (the “Law Firm”) to represent him in a
lawsuit against the defendant for damages. After signing a contingency fee
agreement with the Law Firm in 2010, Roger Watts died unexpectedly in 2011.

[2]            
Mr. Arnason continued to be represented by the Law Firm. The matter
was set for a 10-day trial before judge and jury in June 2013. Mr. Arnason
suffered from Post‑Traumatic Stress Disorder (“PTSD”) and a chronic pain disorder.
He had suffered from pre-existing depression and anxiety conditions, some of
which resulted from a 1998 motor vehicle accident. Liability was not in issue.

[3]            
The parties settled this case in April 2013 after mediation. Mr. Arnason
said that he made the difficult decision to settle this matter after mediation.
His financial circumstances at the time were very desperate, and he had to
weigh the risk of going to trial against the possibility of losing his house.
While he did not think the settlement with ICBC compensated his loss fairly, he
viewed it as a compromise. There were some special circumstances. Mr. Arnason
suffered from emotional problems prior to the accident. His marriage ended
after the accident. Immediately before the mediation, his wife was interviewed
and gave evidence that she was going to separate from the defendant before the
accident. Mr. Arnason was very upset by this and did not want his ex-wife
to be called as a witness.

[4]            
The case settled for $100,000 in damages plus costs. The formal offer
from the plaintiff was for $585,000. A formal offer from the defendant was for
$70,000. I understand the major disagreement was in the area of cost of
future care.

[5]            
The parties have been able to settle the number of units on the tariff
at Schedule B, and this decision just deals with disbursements which are in
dispute.

[6]            
The defendant questions the reasonableness of the disbursements based on
its assessment that this was always a $100,000 case. The plaintiff on the other
hand viewed it as a much more significant claim and was of the view that he had
to provide expert opinions to support that significant claim. The fact that the
case settled does not change the fact that the plaintiff was attempting to
prove more significant damages and had to obtain appropriate supporting opinion
evidence. The defendant did not take the position that the plaintiff was
limited to costs as set out under Rule 15.

[7]            
The following disbursements are in issue:

1.     Photocopying

2.     Faxing

3.     Quicklaw

4.     Expert
reports from:

a)    Dr. Pirolli
and Dr. Jones

b)    Dr. Lu
Shaohua

c)     Dr. Eliason,
Dr. Vallentyne and Dr. Hunt

d)    Carole Kennedy

5.     Expert
fees to justify accounts

6.     Disbursement
loan interest

Proving Disbursements Generally

[8]            
This assessment of disbursements is covered by Rule 14-1(5) of the Supreme
Court Civil Rules which says:

Disbursements

(5)        When
assessing costs under subrule (2) or (3) of this rule, a registrar must

(a) determine which disbursements
have been necessarily or properly incurred in the conduct of the proceeding,
and

(b) allow a reasonable amount for those disbursements.

[9]            
An affidavit of justification is an indispensable requirement (Bereti
v. Schuette (1980), 17 C.P.C. 259 (S.C.) at pp. 266-67) as cited by
the B.C. Court of Appeal in Holzapfel v. Matheusik, 1987 CanLII 2659 at para. 10,
which says:

What the Court of Appeal and the
other decisions I have cited do make clear, in my view, is that the
indispensable requirement is an affidavit, from the solicitor responsible for
the preparation of the case, as to the nature and extent of the work done and
verifying that such work was necessary for the full and proper presentation of
the case, and that the fees charged and paid therefor were reasonable in the
circumstances. If there are special circumstance. If there are special
circumstances ‑ such as travel time, or attendance in Court to hear and
advise upon evidence from witnesses for the opposing side or other factors
necessitating attendance for a longer period than that occupied in the actual
giving of evidence – the facts and the necessity therefor should also be set
out.

[10]        
In this assessment, five affidavits of justification have been provided
by counsel and counsel’s legal assistant. Counsel for the defendant gave notice
in advance of what his objections would be to the disbursements, and the
plaintiff has been given the full opportunity to address those objections in
his affidavit of justification; yet, the affidavit of justification falls short
in certain areas, which I will outline below.

Photocopying

[11]        
The claim is for $2,582.30 charged at $0.35 per page. This equates to 7,378
copies in a matter that did not proceed to trial and, in fact, settled two
months prior to trial. The current registrar’s rate for photocopying is $0.25 per
page as set out in Administrative Notice No. AN – 5 published on 2010/07/01.
No justification was given for this volume of photocopying. I can assume from
the number of reports before me that several copies of the reports were made
and forwarded to other experts, to the defendant, and to the plaintiff.

[12]        
The defendant says that where there is a single set of records copied
multiple times, it is suitable for economic bulk copying or scanning. The
defendant provides evidence in the affidavit of Mark Davies at paragraph 12,
which says personal injury practice in the year 2013 does not require
photocopying of multiple thousand pages. Commercial outlets provide scanning
services to reduce hundreds of pages of records to a single disc at (for
example) $0.11 per page with additional discs being available for $8 each. As
an example, 800 pages of clinical records and reports could be forwarded to six
separate examining specialists for $136 (800 times $0.11 equals $88, plus 6
times $8 which equals $48, which equals a grand total of $136).

[13]        
This issue is dealt with in Farrokhmanesh v. Sahib, 2010 BCSC 497
at paras. 55 and 59, where far more detailed affidavit evidence was
provided as to the cost of photocopying at various services and the
difficulties of sending out photocopying for bulk copying. Registrar Sainty
found at paragraph 57 that she agreed with the plaintiff that it is impractical
to send all photocopy jobs out to an independent service provider. She also
agreed that the rates set out in Mr. Ballas’ affidavit are based on large
so-called “bulk” copying jobs. Further, she believed that as a large
institution, the defendant is able to produce copies at a much lower rate than
someone like plaintiff’s counsel who does not have the same buying power or resources
available to him as ICBC. The learned registrar was satisfied that the cost of
copying to the plaintiff was at least equal to the registrar’s rate, and she
allowed copies at $0.25 per page.

[14]        
The bulk scanning method suggested by counsel for the defendant may save
money for the defendant; however, it creates a problem for the plaintiff’s
counsel who has to transport highly confidential medical information to the
copy center, ensure the protection of the plaintiff’s privacy, and arrange to
have the documents returned and checked by staff to ensure that they are properly
collated.

[15]        
Master McNaughton considered the efficiency and cost savings of scanning
documents in Turner v. Whittaker, 2013 BCSC 712. In that case, she was
not asked to disallow photocopying costs but was assessing the cost of in-house
scanning and deciding whether to allow a per-page disbursement, or whether
in-house scanning was an overhead cost and not an allowable disbursement. For
that reason, her conclusions are distinguishable from this case where the
argument is that I should disallow in-house photocopying costs because of the
availability of a more efficient method of bulk scanning from external service
providers. Nonetheless, Master McNaughton’s comments on the efficiency of this
relatively new technology are informative.

[9]        Scanning and preparing electronic copies of
documents for use by experts, for document sharing, and for use in preparation
for, and at discovery and trial, is a reality of today’s litigation practice
and the courts are encouraging this direction. Master Muir expressed this in Naidu
v. Cahill, an unreported decision, released on June 26, 2012. There, she
allowed a disbursement for scanning by an outside document assembly service.

[10]      In Stapleton v. Charambidis, 2010 BCSC 1642,
Master Baker endorsed the use of scanned documents which he felt encouraged
efficiency and, eventually, would reduce costs. I agree with his views. In the
absence of complete evidence, but to encourage the use of electronic documents,
he allowed $500 for scanning. He does not set out the basis on which he arrived
at the allowed amount.

[11]      In this case, the claim is for a per page amount
for in-house document scanning. In his submissions, Mr. Gibson indicated
that Primafact, his firm’s scanning system, was purchased for approximately $50,000.
It requires an ongoing licensing fee for access to the software and for
updates, a maintenance contract, and dedicated staff whose sole function is to
scan and name documents in accordance with a naming protocol.

[12]      In his submissions on behalf of ICBC, Mr. Harris
argues that it is not appropriate to assign a per-page cost for scanning
documents. He submits that, unlike photocopying, which involves equipment,
paper and toner, once a document has been scanned, it is virtual and can be
transferred on disc or memory stick with minimal additional cost. He suggests
that the cost of scanning should be considered an overhead cost.

[13]      Conceptually, because scanned electronic documents
are a substitute for photocopies, and because the courts are encouraging use of
this new technology, I conclude that it is not just an overhead cost and that a
disbursement amount should be allowed. Rather than set a block amount for each
case in which scanning is used, I conclude that it is more appropriate to allow
an amount per page for scanned documents. That is because scanning is intended
to reduce, and eventually replace, photocopying and both processes create an
image of each page of an original document.

[14]      The Administrative Direction with respect to
photocopying allows $0.25 cents per page. I was not persuaded that it is
reasonable to allow the same amount for scanning. I accept that scanning
involves an initial capital outlay for equipment and ongoing support costs
which, based on Mr. Gibson’s submissions, may be higher than those for
photocopying. However, most of those costs would be part of a firm’s overhead.
Scanning does not involve paper and toner; it creates electronic documents
which are viewable and transferrable electronically. That suggests that some lesser
amount is appropriate.

[15]      In all the circumstances, and because the
appropriate rate is not capable of mathematical calculation (at least not on
the evidence before me in this case), I allow scanning charges at the rate of
$0.15 cents a page.

[16]      In determining the reasonableness of the amount
claimed here for scanning, I also consider that scanning serves many purposes.
Here, for example, counsel is greatly assisted in handling the file as the
documents are key-word searchable and, presumably, can be sorted on an issue by
issue basis. They are portable and accessible by computer. They are easily
located in preparation for examinations for discovery and trial and can be put
before a witness quickly. They are also available for digital presentation of
evidence at trial.

[18]      It is inevitable that it will take time for the
legal and medical communities, and the courts, to become fully comfortable with
electronic documents and that, in the interim, there will be an ongoing need
for both scanned copies and photocopies. As a result, it is not possible to
directly correlate a reduction in photocopies and the use of scanned. The
reasonable disbursement amount will therefore be somewhat rough and ready.

[19]      Taking into account the
multiple purposes for scanning documents, and that the concurrent use of two
different technologies has some cost duplication, I reduce the total number of
pages scanned by 20%. It is not reasonable to expect ICBC to compensate for
counsel’s convenience or for duplication.

[16]        
The courts have recognized the efficiency of scanning and have allowed a
per‑page disbursement for this duplicating technology but have not gone
so far as to deny compensation for photocopying because a more efficient
technology exists. I have described some of the inefficiencies of sending
confidential copying to external services. Master McNaughton set out the
evidence of the cost to law firms purchasing the in-house technology. The
profession has not universally adopted scanning technology yet as Master
McNaughton says in paragraph 17 above. Until its use in law firms, medical
offices and courtrooms is commonly accepted, there remains a need for both
photocopying and scanning. It is too high an onus at this time to disallow the
use of the old technology because a more efficient technology exists. I agree
with Mr. Davie that this is the direction the courts should endorse, and I
see evidence in the authorities that it does.

[17]        
Perhaps it is now time to review the administrative notice on
photocopying. This would entail a more in-depth analysis of what scanning and
copying services are available to law firms. In all fairness, it is my belief
that law firms need to be put on notice if the standard is going to change.

[18]        
At this time, I am satisfied that $0.25 per page for photocopying is
reasonable. Given that the plaintiff has not provided me with further
information as to why so many copies were made, I am fixing an arbitrary amount
of $1,500 which is for 6,000 copies at $0.25 per page.

Faxing

[19]        
The claim is for 924 pages at one dollar per page. Again, the plaintiff
was put on notice that this claim is being challenged. There is no affidavit
evidence for the court to establish why faxing was necessary. The same
Administrative Notice No. AN – 5 sets the direction that $0.35 per page is
reasonable. Given that there is no evidence as to why faxing was necessary, I
will reduce the number of pages to 200 at $0.35 per page and allow this claim
at $70.

Quicklaw

[20]        
This claim for $203 is being abandoned by the plaintiff.

Expert Reports

[21]        
Some of the reports are being challenged because it is the defendant’s
position that certain reports were not necessary. Other reports are being
challenged because the defendant’s position is that the rate charged by the
expert is too high. Other reports are being challenged for both reasons.

[22]        
The defendant put the plaintiff on notice of what grounds certain
reports were being challenged. The appropriate response should have been an
affidavit of the solicitor setting out why the report was necessary. In this
case, because of Mr. Watts’ death, some of the justification might be
speculative; however, reports were ordered after his death and these should
have been justified by the solicitor. There is an affidavit of Karen Jestley, a
legal assistant for Mr. Geekie, filed August 7, 2013, setting out the
amounts which were paid to the experts. This affidavit does not address the
issue of necessity but does provide a further breakdown of the rates charged.

[23]        
At the hearing of this assessment, Mr. Geeky made submissions as to
the necessity of each report. He also made submissions on the authorities,
including the often cited decision of Van Daele v. Van Daele (1983), 56
B.C.L.R. 178 (C.A.) which states:

[11]      …The proper
test, it seems to me, from a number of authorities referred to us this morning
is whether at the time the disbursement or expense was incurred it was a
proper disbursement in the sense of not being extravagant [sic], negligent,
mistaken or a result of excessive caution or excessive zeal, judged by the
situation at the time when the disbursement or expense was incurred.

(emphasis
added)

[24]        
A registrar’s discretion in deciding whether to approve disbursements is
explained in Bell v. Fantini (1981), 32 B.C.L.R. 322 (S.C.), at paras. 23
and 24, in the following manner:

[23]      I consider that Rule 57(4) entitles the Registrar
to exercise a wide discretion to disallow disbursements in whole or in part
where the disbursements appear to him to have been incurred or increased through
extravagance, negligence or mistake or by payment of unjustified charges or
expenses. The Registrar must consider all the circumstances of each case and
determine whether the disbursements were reasonably incurred and were
justified. He must be careful to balance his duty to disallow expenses incurred
due to negligence or mistake, or which are extravagant, with his duty to
recognize that a carefully prepared case requires that counsel use care in the
choice of expert witnesses and examine all sources of information and possible
evidence which may be of advantage to his client.

[24]      The Registrar is not
bound to accept an affidavit of counsel that in counsel’s opinion the
employment of the expert or the incurring of the expense was justified or that
it was necessary for the attainment of justice when the Registrar is
considering allowing or disallowing the disbursement under this rule. He should
give careful consideration to any such affidavit and he must weigh what is
deposed to against any affidavit that deposes to the opposite effect. His duty
under the rule is to determine whether the expense is a reasonable and
justifiable expense which should be borne by the unsuccessful litigant.

Dr. Pirolli and Dr. Jones

[25]        
The defendant challenges the necessity of obtaining a report from a
psychologist and psychiatrist. Dr. Pirolli was retained by Mr. Watts
to prepare an assessment of the cause of Mr. Arnason‘s PTSD. Dr. Pirolli
had assessed Mr. Arnason after his previous motor vehicle accident and had
assessed him as being depressed then. It was her opinion that his prior mood
disorder history made him more vulnerable to the development of significant
psychiatric problems following other traumatic events. It was Dr. Pirolli’s
opinion that without the 2008 motor vehicle accident Mr. Arnason would not
have developed PTSD.

[26]        
It is my view that this report was necessary. Dr. Pirolli was in
the perfect position to assess causation because she had treated Mr. Arnason
before and after the subject accident. Mr. Arnason had a complicated
psychological history.

[27]        
Dr. Jones comes to a similar conclusion. Counsel for Mr. Arnason
was of the view that Dr. Pirolli’s report, commissioned by prior counsel,
did not go far enough and was of the view that an assessment from a
psychiatrist was warranted. Given Mr. Arnason’s complicated psychological
history and diagnosis of a personality disorder, I find that a psychiatric
assessment was warranted even if there was some overlap in the assessments.

Dr. Eliason, Dr. Vallentyne and Dr. Hunt

[28]        
The defendant says that there was duplication in retaining these doctors
and that three reports is excessive.

[29]        
Dr. Eliason is the plaintiff’s family doctor. Dr. Vallentyne
is a Kelowna physiatrist and specialist in physical medicine and rehabilitation.
Dr. Hunt is a consultant in pain medicine.

[30]        
I have reviewed all three reports. The family physician’s report does
not add anything that could not have been conveyed in his clinical records. If
other experts had not been retained, then a report from the family doctor might
have been necessary, but given that two other experts were being retained and
summarized the family doctor’s clinical records in their reports, I agree with
defence counsel that it was not necessary to obtain a report from Dr. Eliason.
I will disallow his fee of $935.

[31]        
There is some overlap between the reports of Dr. Vallentyne and Dr. Hunt,
but given that Mr. Arnason does suffer from a chronic pain disorder, I
find it completely reasonable to obtain a report from a physician who has a
focus on pain management in addition to a report from a physiatrist.

[32]        
The charge for Dr. Eliason’s report is disallowed (-$935).

[33]        
The charge for Dr. Vallentyne’s report is allowed as claimed at
$3,922.

[34]        
There may not be a recognized specialty for pain management, but Dr. Hunt
undeniably has vast experience in the “sub-specialty” and is known to this
writer as a qualified expert in the field. He assessed Mr. Arnason over
the course of two days and spent many hours reviewing the other records and
writing his extensive medical legal opinion letter. Having reviewed the
extensive report, I am satisfied that 20 hours working on this assessment
and report is reasonable, as is his hourly rate charge of $300. I will
allow this disbursement, plus the cost of the plaintiff’s travel to Vancouver
and his accommodation while attending this examination.

Spectrum Rehabilitation Services Inc. Functional
Capacity Evaluation and Cost of Future Care Analysis

[35]        
The defendant says that the functional capacity evaluation was totally
unnecessary because Dr. Vallentyne, Dr. Hunt and Dr. Eliason had
already commented on the plaintiff’s limitations.

[36]        
Although it is true that the physicians commented on the plaintiff’s reported
physical limitations, they do not have the resources to test his work and
activity capacity. Ms. Kennedy, an occupational therapist, had the plaintiff
attempt many simulated workplace activities to determine what his true capacity
was, and where she found limitations, she made recommendations for
modifications and aids. This detail is not contained in any other report. The
report is helpful in providing evidence that even when fully motivated and
giving “high effort”, the plaintiff was still physically limited.

[37]        
After determining what assistance the plaintiff might need in the future
to maintain a quality of life that resembled that which he would have led if he
had not been injured, Ms. Kennedy provided evidence of the cost of
providing that assistance. Counsel for the defendant says that this information
is readily available within the public domain and could have been looked up by
a junior legal assistant and incorporated into a notice to admit. Although cost
effective, this method of leading this evidence would expose the plaintiff to
the defendant’s challenge that the unqualified person did not have the
expertise to determine what type of assistance was required. This was a risk
that the plaintiff’s counsel was not prepared to take in preparing for trial.

[38]        
Was it worth the cost of a report to determine what a 63-year-old’s
functional capacity is when he had marginal employment prior to the accident
and was so close to standard retirement age? The evidence was that the
plaintiff was looking forward to re-entering the workplace prior to the
accident. Had he not been injured he might have continued some level of
employment well past the age of 65, especially since his marriage ended and he
was in financial need and in need of social interaction and support.

[39]        
I find that the commission of this report was reasonable and justified
and did not fall into the category of extravagance. Counsel for the plaintiff had
a duty to ensure that all areas of the plaintiff’s claim were supported with
reliable evidence. I find that is what was done here.

[40]        
The cost of the Spectrum Rehabilitation Services Inc. report is allowed
in full.

Expert Fees to Justify Accounts

[41]        
Dr. Jones and Dr. Hunt charged an additional fee plus GST to
provide letters justifying their accounts. This amount will be denied. It is
still my view that a professional should not be permitted to bill the client
for preparing, explaining or justifying his or her account. That is an overhead
expense that should be absorbed as the cost of doing business.

Disbursement Loan Interest

[42]        
The plaintiff claims $6,923.98 in disbursement interest, which counsel
advises me is 15 percent simple interest. This claim came about as a result of
the recent appeal decision of Justice Savage in Chandi v. Atwell and MacKenzie
v. Rogalasky, 2013 BCSC 830.

[43]        
In support of his claim for disbursement interest, the plaintiff has
sworn an affidavit stating that he was attempting to get his job at the airport
back at the time of the accident. After the accident, he was unable to work. His
marriage broke down, and he had to remortgage his house to pay his former wife
her interest in their family assets. His financial situation since the accident
has been precarious. He has spent his inheritance and lives on CPP disability
benefits. It would be impossible for him to afford the thousands of dollars of
expenses that were incurred in preparing and presenting the claim.

[44]        
Mr. Geekie’s legal assistant swore an affidavit attaching a
schedule which lists the new disbursements and a statement that the interest
charges are $6,932.98. It is calculated at 15 percent simple interest, and the
interest begins to accrue when the disbursement is incurred.

[45]        
In submissions, Mr. Geekie advised the court that the Law Firm
lends the money for the disbursements to the client. The contingency agreement
signed by the plaintiff says:

THE CLIENT further agrees to pay
all such disbursements promptly upon request by the Solicitor. The Client
agrees that payment of disbursements incurred confirms the Solicitor’s
authority to incur the disbursement and the Client’s agreement as to the amount
of the disbursements. The Client further agrees to pay interest on all
disbursements at the interest rate of 15% per annum compounded monthly from the
date on which they are incurred by the Solicitor to the date on which they are
paid by the Client

[46]        
In Chandi v. Atwell, Mr. Justice Savage allowed the recovery
of disbursement interest. He decided that he was bound by the decision of Burnyeat
in Milne v Clarke:

[9]        The law in British
Columbia is that interest charged by a provider of services where the
disbursement has been paid by counsel for a party is recoverable as is the
disbursement. The interest charge flows from the necessity of the litigation.
If the disbursement itself can be assessed as an appropriate disbursement, so
also can the interest owing as a result of the failure or inability of a party
to pay for the service provided. In order to obtain the M.R.I., it was
necessary to pay not only the $975.00 cost but also the interest on any unpaid
balances that were not paid immediately. The cost plus interest was the cost of
obtaining the M.R.I. The claim for interest should have been allowed.

[47]        
In Chandi, District Registrar Cameron held that the disbursement
interest was allowable, but he restricted the recovery to the registrar rate.

[48]        
Justice Savage overturned that decision because the learned registrar
applied a formula without considering specific circumstances of the case in
setting an interest rate. Justice Savage found that the terms “necessarily
proper” and “reasonable” in Rule 14-1(5) requires a weighing of circumstances
as opposed using to a formulaic approach.

[49]        
The disbursements in the case before me are extensive. The amounts claimed
are in excess of $20,000. I find that this plaintiff would not have been able
to fund these disbursements, most of which I have found were necessary and
proper for the advancement of this case. It was, therefore, necessary for him
to borrow money in order to advance his case. I will allow interest on the
disbursements; however, I have some concerns about the amount that is claimed.

[50]        
First, I will review some recent authorities dealing with disbursement
interest rates.

[51]        
In Franzman v. Munro, 2013 BCSC 1758, Master McDiarmid concluded
that interest was payable, and he found that the interest rate of 6 percent was
reasonable. It was the amount charged by the law firm, and the learned master
concluded that it was essentially the interest the law firm was paying on its
operating line of credit (a way in which many law firms finance their
operations).

[52]        
In Bodeux v. Tom, 2013 BCSC 2327, Master McDiarmid considered an
agreement to pay disbursement interest of 10 percent that was included in a
contingency fee agreement. He said at paras. 74-76:

[74]      The mere fact that the plaintiff entered into a fee
agreement which provided for charging disbursements at a rate appropriate to be
charged between the client and her lawyer, does not mean that that amount of
the disbursement should be automatically passed on to an unsuccessful litigant.

[75]      For example, retainer agreements often provide that
the law firm will charge its client photocopies at an agreed upon rate. A
photocopy rate allowed by registrars is usually less than the rate agreed to as
between the law firm and its client.

[76]      I am charged with
assessing and allowing a reasonable amount for disbursements. The six percent
allowed in Franzman was a reasonable amount; economic times have not
changed since that decision was rendered in September 2013. I, therefore, allow
the disbursement at six percent of the amount claimed, reducing the $2,730.81
claimed to $1,638.49.

[53]        
I have no evidence before me as to why the Law Firm picked 15 percent
per annum compounded monthly interest to charge its clients. I find it to be an
excessive and extravagant rate when the prime bank interest rate is 3 percent
per annum, and I have to assume that the Law Firm can borrow money at a
rate much lower than 15 percent.

[54]        
In submissions, counsel for the plaintiff said that the rate was higher
than the interest rate the Law Firm was charged because the Law Firm is
providing a service to the client that the client would not be able to finance
on his own. The provision of that service and the fact that the Law Firm takes
on the obligation of repayment and some risk is the reason the Law Firm charges
some additional interest. For me to determine what a reasonable interest rate
is, the Law Firm needed to provide evidence of what rate they were charged and
what the repayment terms were. We are cautioned by Justice Savage in Chandi
that we should not merely apply a formula or fix a registry rate, but we should
consider the circumstances in each case.

[55]        
When the applicant fails to meet its onus to prove its claim, it runs
the risk of having the claim completely defeated. This would prejudice the
plaintiff who has a contractual obligation to pay 15 percent interest. That was
the deal he struck with his lawyer. That does not mean that the defendant
should be required to reimburse that plaintiff in full for at an inflated rate
that includes a profit markup for the Law Firm.

[56]        
In the absence of sufficient evidence, I will therefore rely on my
brother master’s determination that 6 percent per annum simple interest is a
reasonable rate of interest to charge the defendant, having consideration for
the fact that the prime rate has not changed since Master McDiarmid made that
decision in September 2013.

[57]        
The calculation of interest claimed by the plaintiff appears to be
incorrect. Mr. Davie provided a calculation of simple interest at 15
percent annually on disbursements totaling $22,496 and arrived at a figure of
$4,635.

[58]        
I will allow 6 percent simple interest on those disbursements which I
have allowed in this assessment, and I direct plaintiff’s counsel to prepare
the calculation of that interest within seven days of the publication of this
decision. If the parties do not agree on the calculation, I grant liberty to
apply to me to assess that interest calculation.

[59]        
The balance of disbursements set out in the draft bill of costs has been
consented to, so if I have not made reference to a disbursement here, it has
been allowed by consent.

“B.M. Young”

Master
Barbara M. Young