ARCHIVED - Telecom Decision CRTC 2002-51

Telecom Decision CRTC 2002-51

Ottawa, 28 August 2002

Appeal of Taxation Order CRTC 2001-5 by Télébec ltée

Reference: 8662-A65-01/00 and 4750-308

The Commission denies an appeal by Télébec ltée of Taxation Order CRTC 2001-5, 29 June 2001, in which the Taxing Officer allowed Action Réseau Consommateur and the Association coopérative d'économie familiale des Bois-Francs $16,720.06 for fees and disbursements.

The Appeal

1.

On 9 July 2001, Télébec ltée (now Société en commandite Télébec (Télébec)) filed an appeal of Taxation Order CRTC 2001-5 (Taxation Order 2001-5), 29 June 2001, under subsection 44(10) of the CRTC Telecommunications Rules of Procedure, requesting that the Commission vary the order so as to reduce, by at least 50%, the fees allowed by the Taxing Officer in the amount of $16,378.19 to Action Réseau Consommateur (ARC) and the Association coopérative d'économie familiale des Bois-Francs (ACEF-BF). Télébec did not appeal the amount of $341.87 allowed for disbursements.

Background

2.

In Costs Orders CRTC 2000-12 and 2000-16, the Commission awarded costs of $800 and $1,200 to ARC and ACEF-BF, respectively, for their participation in the proceeding leading to Télébec ltée - Rate restructuring, Order CRTC 2000-531 (Order 2000-531), 9 June 2000.

3.

In CRTC approves an application to review and vary Order CRTC 2000-531 - Télébec ltée - Rate restructuring, Order CRTC 2001-216 (Order 2001-216), 14 March 2001, the Commission approved ARC and ACEF-BF's application to review and vary Order 2000-531.

4.

In Costs Order CRTC 2001-7, the Commission directed Télébec to pay ARC and ACEF-BF's costs for their application leading to Order 2001-216. That costs order led to Taxation Order 2001-5.

Télébec's position

5.

Télébec submitted that the Taxing Officer erred by failing to consider the work already done in the proceeding which led to Order 2000-531, for which ARC and ACEF-BF had already been compensated in Costs Orders 2000-12 and 2000-16.

6.

Secondly, Télébec submitted that the Taxing Officer erred by rejecting its argument that there had been unnecessary duplication of work resulting from the replacement of ARC staff and ARC and ACEF-BF's decision to use lawyers who were unfamiliar with CRTC proceedings. Télébec argued that it was inappropriate for the Taxing Officer to make it bear the financial burden of the consequences of the fact that ARC and ACEF-BF had to replace staff and chose to hand the case over to lawyers who were unfamiliar with Commission proceedings.

7.

Télébec also submitted that the Taxing Officer allowed fees to six lawyers and analysts and that this number was much too high as ARC and ACEF-BF had made no new argument in their application to review and vary Order 2000-531.

Comments of ARC and ACEF-BF

8.

In their response dated 19 July 2001, ARC and ACEF-BF explained that their analyst on the file, who had been preparing the review and vary application, left ARC's employ during the period when they were analyzing Order 2000-531. They submitted that given this departure and the complexity and legal nature of the matter, they found it necessary to retain the services of outside counsel to continue the work that their analyst had started.

9.

ARC and ACEF-BF submitted that they were entitled to be represented before the Commission and that they should not be penalized by special circumstances relating to departure of a key staff person and the need to retain outside counsel.

10.

ARC and ACEF-BF submitted that the relationship between the amount awarded for the proceeding leading to Order 2000-531 and the amount awarded in the Taxation Order appealed from would have been quite different had they been represented by lawyers in the original proceeding. They also submitted that the amount claimed in the review and vary proceeding leading to Order 2001-216 could have been higher, given that the lawyers did not claim the maximum provided for in the Guidelines for the Taxation of Costs (the Guidelines).

11.

ARC and ACEF-BF submitted that the Taxing Officer took into account the burden that they, as review and vary applicants, had to meet, as well as the complexity of the technical and legal arguments and the particular context of the case. They argued that their review and vary application was based on complex principles of administrative law as well as on elements of technical analysis concerning economic regulation in general and the circumstances of Télébec in particular. They submitted that a number of legal questions were involved and had to be considered and analysed and that the burden in an application to review and vary a Commission decision is considerably higher than the burden in an intervention.

12.

ARC and ACEF-BF submitted that the Taxing Officer had the information needed to make the Taxation Order and that he exercised his discretion in accordance with the intention of the Guidelines.

Reply comment

13.

In reply comments dated 25 July 2001, Télébec submitted that the Taxing Officer did not submit the bill of costs to rigorous scrutiny in that he failed to have regard to the fact that ARC and ACEF-BF made essentially the same arguments in both proceedings and that there was considerable and unnecessary duplication of work as a result of the changes in ARC's staff. Télébec submitted that it did not dispute the absolute right of ARC and ACEF-BF to be properly represented before the Commission, but disputed the decision made by ARC and ACEF-BF to recover, from Télébec and its subscribers, the salaries and fees cause by a duplication of work and the need to train the lawyers in the legislation, procedures and policies of the Commission in review and vary applications.

14.

Télébec noted that in Taxation Order CRTC 2001-4, ARC et al. were allowed $18,945.68 in relation to their participation in the proceeding Restructured bands, revised local loop rates and related issues, Public Notice CRTC 2000-27 (Public Notice 2000-27), 18 February 2000. According to Télébec, the analysis in that proceeding was much more complex.

Test in deciding appeals of taxation orders

15.

So as to not undermine the certainty and finality of taxation decisions, as stated in Telecom Letter Decision CRTC 94-7 at p. 2, the Commission's approach in deciding appeals from taxation orders is as follows:

The basic approach applied by the Commission in ascertaining whether the appeal of a decision of a taxing officer should be allowed is, first to decide whether there are internal inconsistencies in the decision which require correction and, second, to decide whether the principles enunciated by the taxing officer are appropriate for hearings before the Commission.

Commission findings and determination

16.

The Commission notes that the Taxing Officer considered all of Télébec's arguments, and that Télébec has repeated many of the same arguments in its appeal.

17.

Contrary to Télébec's assertion, the Commission finds that the Taxing Officer did take into account the work previously done by ARC and ACEF-BF in the Order 2000-531 proceeding. Moreover, while certain arguments were made by ARC and ACEF-BF, both in that proceeding and in the review and vary proceeding, those arguments accounted for only a small part of their submissions in the latter proceeding and were fleshed out in more detail there. Considerably more work was required in that proceeding than in the original one. That work was more sophisticated and more in depth than in the initial proceeding. ARC and ACEF-BF raised a number of new arguments in the review and vary proceeding, including procedural and legal arguments, supported by legal research and analysis of Order 2000-531.

18.

While there was some duplication of work, the Commission considers that it was necessary in the special circumstances of this case. The Commission considers that the public interest interveners should not be penalized as a result. For the purpose of the proceeding, they had to replace the key staff person who left while working on the review and vary application. Given the legal nature of the work, ARC and ACEF-BF chose outside counsel to replace him. Not having been involved in the original proceeding, the lawyers retained had to become familiar with the matter.

19.

ARC and ACEF-BF had a right to retain counsel of their choice. Even more experienced counsel would have had to become familiar with the issues involved and what had happened. Moreover, their hourly fees might well have been higher. The Commission notes that in the past, the fact that it is reasonable for inexperienced counsel to spend more time has been accepted for taxation purposes. In this regard, see, for example, Taxation Order CRTC 96-8. Finally, the Commission notes that ARC and ACEF-BF took outside counsel's relative inexperience into account by claming hourly rates significantly lower than those set forth in the Guidelines.

20.

The Commission also finds that there was no unnecessary duplication of work as between ARC and ACEF-BF's analysts or as between the analysts and the lawyers.

21.

Télébec's third argument was that the Taxing Officer allowed fees with respect to an excessive number of lawyers and analysts, given that ARC and ACEF-BF made no new argument in their review and vary application. However, as noted above, ARC and ACEF-BF's arguments in the earlier proceeding formed only a small part of their submissions in the review and vary proceeding. Furthermore, the Commission notes that only two people spent the vast majority of the time for which costs were claimed.

22.

In its reply, Télébec made an additional argument that was not before the Taxing Officer, namely that in Taxation Order CRTC 2001-4 (Taxation Order 2001-4), ARC and others had been awarded $18,945.68 in relation to their participation in the proceeding initiated by Public Notice 2000-27, and that that proceeding was much more complex in terms of analysis.

23.

The Commission notes that that proceeding required technical and economic analysis but, unlike the review and vary proceeding, not legal analysis. Moreover, as noted above, in the review and vary proceeding extra work was required because of circumstances beyond ARC and ACEF-BF's control.

24.

The Commission finds that, given the differences in circumstances between the two proceedings, Télébec's comparison with Taxation Order 2001-4 does not establish that the Taxing Officer erred.

25.

The Commission considers that Télébec has not identified any internal inconsistency in Taxation Order 2001-5 that requires correction, and that the principles enunciated by the Taxing Officer are the appropriate ones for Commission taxation proceedings.

26.

Accordingly, the Commission denies Télébec's appeal of Taxation Order 2001-5.

Secretary General

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