Date: 20061227
Docket: T-1521-04
Citation: 2006 FC 1555
BETWEEN:
PEAK
INNOVATIONS INC.
Plaintiff
and
PRODUITS PYLEX INC. and
PIERRE CHARETTE
Defendants
ASSESSMENT OF
COSTS – REASONS
Charles
E. Stinson
Assessment Officer
[1]
The
Plaintiff's action alleging industrial design infringement and passing off
relative to an adjustable post support is ongoing and in the discovery stage. I
issued a timetable for written disposition of the assessment of the Plaintiff's
bill of costs, presented under those portions of Rules 402 and 411 addressing
abandoned motions and the associated entitlement to assessed costs forthwith.
402. Costs of discontinuance or
abandonment –
Unless otherwise ordered by the Court or agreed by the parties, a party against
whom an action, application or appeal has been discontinued or against whom a
motion has been abandoned is entitled to costs forthwith, which may be assessed
and the payment of which may be enforced as if judgment for the amount of the
costs had been given in favour of that party.
411. Costs of abandoned motion – The costs of a motion that
is abandoned or deemed to be abandoned may be assessed on the filing of
(a) the notice of motion, together with
an affidavit stating the notice was not filed within the prescribed time or
that the moving party did not appear at the hearing of the motion; or
(b) where a notice of abandonment was
served, the notice of abandonment.
I. The Plaintiff's Position
[2]
The
Plaintiff argued that this sequence of events established its entitlement to costs
forthwith:
(a) After
the Plaintiff failed to secure consent to the filing of an amended Statement of
Claim, the Plaintiff served and filed a motion record for leave to amend.
Coincidentally, the Defendants served and filed a motion record (the Defendants'
cross-examination motion) seeking cross-examination on the Plaintiff's
affidavit of documents and other relief.
(b) Within
a few days, the Defendants consented to an amended pleading on the condition
that they could file an amended Statement of Defence. These pleadings were
filed. When the Defendants, in response to the Plaintiff's query, confirmed
that the Defendants' cross-examination motion would still proceed, the
Plaintiff necessarily served and filed its responding motion record.
(c) After
some time, the Defendants filed a Notice of Abandonment of the Defendants'
cross-examination motion. By letter dated January 13, 2006, the Plaintiff's
solicitor requested payment of the costs associated with responding to the
Defendants' cross-examination motion and noted that "the Defendants
initially insisted on proceeding with the motion even in light of subsequent
amendments to the pleadings and an invitation by the Plaintiff to withdraw the
motion." By responding letter dated January 13, 2006, the Defendants'
solicitor refused payment:
… In a letter dated August 29, 2005, you
stated your position that in view of the delivery by the Defendants of an
Amended Statement of Defence and Counterclaim and the fact that the deadline
for the exchange of affidavits of documents had not yet been reached, a
response from the Plaintiff was not required.
On October 12, 2005, the Plaintiff served
the Defendant a motion record for a motion returnable October 17, 2005 and
later adjourned to October 31, 2005, for particulars to the Further Amended
Statement of Defence and Counterclaim. During the further conversations that
ensure [sic], and in particular during our telephone conversation of
October 26, 2005, we agreed to withdraw the Defendants' motion for production
of documents. You also agreed to adjourn your motion for particulars set for
October 31, 2005 sine die, as confirmed by Mr. Chan's letter dated
October 28, 2005, and to withdraw your motion as per Mr. Chan's letter dated
October 31, 2005. On November 1, 2005, we filed a notice of abandonment for the
Defendants' motion withdrawing the Defendants' motion for production of
documents.
First, it is our position that the
motions were withdrawn upon consent by both parties, and accordingly, an award
of cost [sic] to the Plaintiff for its motion under the circumstances is
inappropriate. Second, we note that the amount proposed by the Bill of Costs
appears rather excessive. In our estimate, and in light of the response
prepared by the Plaintiff, an amount of $450 would be a more realistic figure.
Third, the documents requested by the Defendants have not been produced, and
the issue of lack of document production by the Plaintiff still remains a live
issue in this matter….
[3]
During
the above time period, and subsequent to an order providing for filing of a
Further Amended Statement of Defence and Counterclaim further to the
Plaintiff's motion for relief associated with the Amended Statement of Defence
and Counterclaim, the Plaintiff filed a motion (the Plaintiff's Further motion)
(noted above as served on October 12, 2005) for an order striking certain
paragraphs of the Further Amended Statement of Defence and Counterclaim and for
certain other relief associated with said pleading. The Defendants' solicitor
then proposed certain amendments to address the Plaintiff's concerns and that
the Plaintiff's Further motion therefore be withdrawn. The Plaintiff asserted
that said motion was adjourned. The Defendants had not filed any responding
motion materials.
[4]
The
Plaintiff argued that Rule 402 does not contemplate, for unrelated motions, the
intermingling of entitlements to costs, such as between the Defendants'
cross-examination motion (abandoned) and the Plaintiff's Further motion
(adjourned), the latter having been filed and having had an effect, i.e.
further amendment of the Defendants' pleading, some three and one-half months
after service of the former and not somehow precluding the Plaintiff's Rule 402
entitlement to costs relative to the Defendants' cross-examination motion. The
claimed costs, i.e. mid-range Column III counsel fees and disbursements, are
reasonable given that a motion addressed via written representations requires
more preparation of materials because oral argument will not be available to
supplement them.
II. The Defendants' Position
[5]
The
Defendants argued that this evidence, adding several other occurrences to the
Plaintiff's recitation of events, precludes any entitlement by the Plaintiff to
costs both as a function of Rules 402 and 411 and of the conduct of both sides
in addressing amendments to the pleadings and associated applications for
relief arising therefrom:
(a) Subsequent
to the filing of the Amended Statement of Defence and Counterclaim, the
Plaintiff, in response to the Defendants' request for disclosure of various
categories of documents, asserted by letter that, given amended pleadings and
outstanding exchanges of further affidavits of documents on the amended
pleadings, the Defendants' request was premature because the disposition of the
issue of the sufficiency of document disclosure by the Plaintiff was pending,
i.e. the Defendants' cross-examination motion.
(b) Several
letters and telephone conversations ensued addressing both the Defendants'
cross-examination motion and the Plaintiff's Further motion. These included an
offer to adjourn the Plaintiff's Further motion sine die if not
withdrawn the day before its returnable date. The day before, it was adjourned
by letter from the Plaintiff's counsel indicating that the "parties have
agreed to adjourn the motion sine die." A few days later by letter,
the Plaintiff consented to the filing of a further amended pleading by the
Defendants and requested service thereof so that the Plaintiff's Further motion
could be withdrawn. The Defendants subsequently effected service and filing on
consent of their amended pleading and the Notice of Abandonment of the
Defendants' cross-examination motion.
[6]
The
Defendants argued that, given the Plaintiff's initial position on sufficiency
of document disclosure, ensuing discussions between counsel and successive
amendments by consent of the subject pleadings, the parties effectively agreed
to withdraw their respective motions. The Defendants' Notice of Abandonment
effected this agreement, which fits the exception in Rule 402, i.e. abandonment
without costs payable. It is disingenuous for the Plaintiff to claim assessed
costs on the Defendants' cross-examination motion which was discontinued as
opposed to having been adjourned sine die, as was the contemporaneous
Plaintiff's Further motion. The Defendants argued alternatively that the low
end of Column III counsel fees is appropriate in the circumstances. The
Defendants conceded the $175.00 claimed for photocopies, but argued that the
$32.03 and $16.00 claimed respectively for binding and couriers appear
excessive and are not substantiated by invoices, as is the usual practice.
III. Assessment
[7]
The
exceptions to the operation of Rule 402, i.e. order or agreement, are framed in
the active tense. However, I think that I may, in the spirit of Rule 3
requiring interpretation and application of the Rules to secure "the just,
most expeditious and least expensive determination of every proceeding on its
merits", determine whether an implied agreement existed here for costs. If
I conclude that one did, the corollary implication or conclusion is that the
Plaintiff has reneged on said agreement. Unfortunately for the Defendants, I
cannot conclude on the evidence that such an implied agreement was in place.
The letter dated October 28, 2005, from the Plaintiff's solicitor, confirmed
the adjournment sine die of the Plaintiff's Further motion. The letter
dated October 31, 2005, set out conditions for withdrawal of said motion. These
letters were preceded by a letter dated October 26, 2005, confirming the understanding
by the Plaintiff's counsel of his telephone conversation with the Defendants'
counsel of their agreement to advise the Court on October 28, 2005, of the
adjournment sine die of the Plaintiff's Further motion (returnable at
the time for October 31, 2005) if his client had not instructed him by October
28, 2005, to withdraw the motion. These three letters, dated over a few days,
indicate to me that the Plaintiff's counsel understood clearly the difference
between an adjourned motion as opposed to a withdrawn motion. Although there is
no evidence as to counsel's understanding of the differing consequences
associated with adjournment versus withdrawal, I think it likely that he
understood the difference between the two. I will not surmise whether he had
costs in mind at that point as I think it irrelevant for the Rule 402 issue
framed for my resolution. He adjourned the motion sine die, but did not
withdraw it. In so doing, he did not accede to express or implied conditions
from the Defendants for a waiver of costs associated with the Defendants'
cross-examination motion. The motions, although occurring in proximity, were
discrete interlocutory events. One (the Plaintiff's Further motion) was
adjourned sine die: Rule 402 does not apply to it. One (the Defendants'
cross-examination motion) was withdrawn: Rule 402 applies to it in the absence
of an order or agreement otherwise.
[8]
My
view, often expressed further to my approach in Carlile v. Her Majesty the
Queen (1997), 97 D.T.C. 5284 (T.O.) and the sentiment of Lord Justice
Russell in Re Eastwood (deceased) (1974), 3 All. E.R. 603 at 608, that
assessment of costs is "rough justice, in the sense of being compounded of
much sensible approximation", is that discretion may be applied to sort
out a reasonable result for costs equitable for both sides. I think that my
view is reinforced by the editorial comments (see: The Honourable James J.
Carthy, W.A. Derry Millar & Jeffrey G. Gowan, Ontario Annual Practice
2005-2006 (Aurora, Ont: Canada Law Book, 2005)) for Rules 57 and 58 to the
effect that an assessment of costs is more of an art form than an application
of rules and principles as a function of the general weight and feel of the
file and issues, and of the judgment and experience of the assessment officer
faced with the difficult task of balancing the effect of what could be several
subjective and objective factors. In Almecon Industries Ltd. v. Anchortek
Ltd., [2003] F.C.J. No. 1649 (A.O.) at para. [31], I found certain comments
in the evidence, although self-serving, nonetheless to be pragmatic and
sensible concerning the reality of a myriad of essential disbursements for
which the costs of proof might or would exceed their amount. However, that is
not to suggest that litigants can get by without any evidence by relying on the
discretion and experience of the assessment officer. The proof here is less
than absolute, i.e. the absence of invoices. The paucity of evidence for the
circumstances underlying each expenditure makes it difficult for the respondent
on the assessment of costs and the assessment officer to be satisfied that each
expenditure was incurred as a function of reasonable necessity. The less that
evidence is available, the more that the assessing party is bound up in the
assessment officer's discretion, the exercise of which should be conservative,
with a view to a sense of austerity which should pervade costs, to preclude
prejudice to the payer of costs. However, real expenditures are needed to
advance litigation, a result of zero dollars at assessment would be absurd.
[9]
I
will apply Rules 409 and 400(3)(o) (any other matter considered relevant).
Although these were discrete interlocutory proceedings, there was a linkage
subjective, not technical, in nature as a function of the Defendants' efforts
to move things along regardless of whose conduct was responsible for creating
the issues between these litigants. Those efforts should be rewarded in the
circumstances here by the imposition on the Defendants of only a minimal burden
of costs: I allow the minimum Column III counsel fees. I find the binding (2
copies for filing, 1 copy for service and 1 copy for counsel) and courier
charges for the motion record reasonable and allow them as presented. The
Plaintiff's bill of costs for the Defendants' motion record dated June 27, 2005,
presented at $1,250.23, is assessed and allowed at $865.03.
"Charles
E. Stinson"
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