Date: 20060808
Docket: T-141-06
Citation: 2006 FC 958
BETWEEN:
MOST
WANTED ENTERTAINMENT COMPANY INC.
Plaintiff
and
HILARY
DUFF and HOLLYWOOD RECORDS, INC.
Defendants
ASSESSMENT OF
COST – REASONS
PAUL G.C. ROBINSON
ASSESSMENT
OFFICER
[1]
The
Defendant filed its Bill of Costs on February 22, 2006 and requested an
assessment by way of written submissions with regards to the Plaintiff’s motion
received on January 26, 2006 seeking an interlocutory injunction and other
relief. The Plaintiff had requested the motion be heard at a special sitting to
be scheduled on January 31, 2006 or such other date to be fixed in accordance
with the request submitted under Rule 35 of the Federal Courts Rules.
However, the Plaintiff filed a Notice of Abandonment on January 30, 2006
regarding this motion. The proceeding arose from a Statement of Claim in which
the Plaintiff sought:
a.
An
interlocutory and permanent injunction prohibiting the Defendants from
infringing upon the registered trade-mark of the Plaintiff;
b.
Damages
in the sum of $1,000,000.00;
c.
An
accounting of profits unlawfully earned as a result of the Defendants’ infringement
upon the Plaintiff’s trade-mark;
d.
An
order requiring the Defendants to dispose of offending literature, labels,
packaging, advertising, and any and all dyes used in connection with the
infringement;
e.
The
sum of $100, 000.00 in exemplary damages;
f.
Prejudgment
and postjudgment interest on all amounts awarded in accordance with the
provisions of the Federal Courts Acts;
g.
Such
further and other relief as to this Honourable Court may seem just.
[2]
I
issued directions on February 24, 2006 setting a timetable for the filing of
all materials in support and in opposition to the Defendants’ Bill of Costs.
The parties complied with the timetable for the filing of all documentation.
Assessment
[3]
In
the Plaintiff’s Written Submissions, the Plaintiff submits that the Federal
Court “retains the jurisdiction to refuse costs where it is considered
appropriate.” In support of this submission regarding the discretion of the Federal
Court, the Plaintiff refers to Rule 400(6) which states:
400(6) – Notwithstanding any other
provision of these Rules, the Court may
(a)
award or
refuse costs in respect of a particular issue or step in a proceeding;
(b)
award
costs or a percentage of assessed costs up to and including a specified step in
a proceeding;
(c) award all or
part of costs on a solicitor-and-client basis; or
(d) award costs
against a successful party.
In addition, the Plaintiff submits that the
case of Dark Zone Technologies Inc. v. 1133150 Ontario Ltd. [2002]
F.C.J. No. 7 supports their position that they acted reasonably when the motion
was abandoned in a timely fashion and therefore, the Federal Court should
exercise its discretion and not award costs for this motion. Finally the
Plaintiff notes that the Defendants’ offers to settle the costs are relevant to
this matter and should be considered by the Federal Court in exercising its
discretion, since the requested settlement amount by the Defendants was in
excess of what was actually claimed in the Defendants’ Bill of Costs.
[4]
Rule
400 (1) of the Federal Courts Rules confers full discretionary power to
the Federal Court over the amount and allocation of costs. However, I note that
Rule 402 of the Federal Courts Rules states:
402 – 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.
As mentioned above in paragraph [1], the
Plaintiff filed a Notice of Abandonment on January 30, 2006 regarding this
motion. The Defendants submit that they prepared and forwarded two affidavits
to the Plaintiff’s solicitor in opposition to the Plaintiff’s motion on Sunday,
January 29, 2006, as well as the Defendants’ Statement of Defence. It is
obvious to me that the Defendants took a number of procedural steps as
necessary preparation to oppose the Plaintiff’s motion.
[5]
The
phrases contained in Rule 402 “Unless otherwise ordered by the Court or agreed
by the parties…a party…against whom a motion has been abandoned is entitled to
costs forthwith…” are conditions that must be met before the associated costs
may be assessed. It is almost trite to point out that there was no Order of the
Federal Court and there was no agreement of the parties but the Plaintiff did
abandon the motion. It is my opinion that as an Assessment Officer of the
Federal Court as defined by Rule 2 and as directed by Rule 403 of the Federal
Courts Rules, I have the authority to assess these costs as requested by
the Defendants under Rule 402 which I have outlined in the previous sentence as
well as in paragraph [4] above. Therefore, for these reasons, it is appropriate
that I proceed with the assessment of costs.
[6]
The
Defendants have submitted that Rule 400(1) which refers to the discretionary
powers of Court and Rule 400(3) which refers to the factors in awarding costs should
both be considered when awarding the costs for this motion. With these latter
two Federal Courts Rules in mind, I have noted that the Defendants
claimed 7 units for its item 2 (Preparation and filing of Statement of Defence).
As mentioned above, the Statement of Defence, which was only two pages in
length, was forwarded to the Plaintiff on January 29, 2006 and I note that it
was filed on January 31, 2006 in the Toronto Registry. I have reviewed the
entire Court file as well as the Federal Court database entries and I note that
this matter is still an active proceeding in the Federal Court. There are still
a number of procedural steps in the pleading and discovery stages that may or
must take place before this matter is finally adjudicated. Although the information
contained in the Statement of Defence may have been a factor in the Plaintiff’s
decision to abandon the Plaintiff’s motion, in actual fact within the Federal
Courts Rules, the Statement of Defence can be amended to further define the
pertinent issues before the entire matter is finally determined at trial. I
note that the Defendant may claim the unit costs associated with the Statement
of Defence if and when this matter is finally concluded in the Defendants’
favour and if and when the Federal Court awards costs to the Defendants. In my
opinion for the reasons I have outlined in this paragraph, it would be
premature at this time in regard to these specific circumstances to allow the
costs for the Statement of Defence before these events or a “result” takes
place and the matter is concluded by the Federal Court or by the parties. For
these reasons, I do not allow the 7 units claimed by the Defendant as part of
the assessment of the Plaintiff’s abandoned motion.
[7]
The
Defendants have claimed 5 units and 7 units respectively for its item 13
(Counsel fee – preparation for hearing) and item 15 (Preparation of Written
Argument). Under Tariff B of the Federal Courts Rules, item 15 actually
states:
15. Preparation and filing of written
argument, where requested or permitted by the Court.
This assessable service for the preparation
for the hearing and preparation of the written argument are contained within
item 5 of the Federal Courts Rules which states:
5. Preparation and filing of a contested
motion, including materials and responses thereto.
Item 5 contained in Tariff B of the Federal
Courts Rules refers to the actual preparation for the hearing as well as
preparing the responding motion materials. In addition, the phrase “and responses
thereto” specifically refers to the Defendants’ written submissions within the
Defendants’ respective motion record opposing the Plaintiff’s motion materials.
In my opinion, Item 5 captures both item 13 and item 15 within its definition
and description. Therefore, for these reasons, I disallow the 5 units and 7
units respectively claimed for these specific assessable services, item 13 and
item 15.
[8]
The
Defendants have claimed 3 units for its Item 27 (Other Services: correspondence
and negotiation with opposing counsel regarding schedule of motion and schedule
for cross-examinations). Under Tariff B of the Federal Courts Rules,
item 27 actually states:
27. Such other services as may be allowed
by the assessment officer or ordered by the Court.
In my opinion, simple or general
correspondence between the parties and co-ordinating the scheduling of a motion
or cross-examinations are the normal practices and procedures that are
associated with the daily labour of any law firm. I do not believe that it is
appropriate that the Plaintiff be responsible for this type of overhead or this
simple type of work of an office involved in the field of litigation. For these
reasons, in these specific circumstances, I disallow the 3 units claimed for
the Defendants’ item 27.
[9]
The
Defendants have claimed 7 units for their item 5 (Preparation of Response to
Motion). As I outlined above in paragraph [7], this assessable service refers
to preparation and work associated with the Defendants’ opposing motion record
materials. The Defendants’ Written Submissions in support of their Bill of
Costs refers to the preparation associated with the affidavits of Andre Recke
and Connie Guccione that were sent to the Plaintiff’s solicitor, Alvin Meisels,
on January 29, 2006. In addition, the Defendants’ submit that “The memorandum
of fact and law which was to be filed as part of Ms. Duff’s Responding Motion
Record was also substantially completed by January 29, 2006.” Although the
Defendants never filed their opposing motion record, I have no doubt that time
and much effort were expended preparing for the pending Plaintiff’s motion. I
do note the Defendants have provided a copy of the affidavit of Andre Recke,
sworn January 29, 2006, which would have formed part of the responding motion materials.
It is appropriate in these circumstances that I refer to the decision in Grace
M. Carlile v. Her Majesty the Queen, [1997] F.C.J. No. 885 (TO) at
paragraph 26:
…
Taxing Officers are often faced with less than exhaustive proof and must
be careful, while ensuring that unsuccessful litigants are not burdened with
unnecessary or unreasonable costs, to not penalize successful litigants by
denial of indemnification when it is apparent that real costs were indeed
incurred. This presumes a subjective role for the Taxing Officer in
the process of taxation. My Reasons dated November 2, 1994, in
T-1422-90: Youssef Hanna Dableh v. Ontario Hydro cite, [1994] F.C.J. No. 1810,
at page 4, a series of Reasons for Taxation shaping the approach to taxation of
costs. Dableh was appealed but the appeal was dismissed with Reasons by the
Associate Chief Justice dated April 7, 1995, [1995] F.C.J. No. 551. I
have considered disbursements in these Bills of Costs in a manner consistent
with these various decisions. Further, Phipson on Evidence, Fourteenth Edition
(London: Sweet & Maxwell, 1990) at page 78, paragraph 4-38
states that the "standard of proof required in civil cases is generally
expressed as proof on the balance of probabilities". Accordingly, the
onset of taxation should not generate a leap upwards to some absolute
threshold. If the proof is less than absolute for the full amount claimed
and the Taxing Officer, faced with uncontradicted evidence, albeit scanty, that
real dollars were indeed expended to drive the litigation, the Taxing Officer
has not properly discharged a quasi-judicial function by taxing at zero dollars
as the only alternative to the full amount. Litigation such
as this does not unfold solely due to the charitable donations of disinterested
third persons. On a balance of probabilities, a result of zero
dollars at taxation would be absurd. …
[Emphasis added]
Therefore,
based on my reasoning above and relying on the view expressed in Carlile,
above, I allow the 7 units ($840.00) for this assessable service.
[10]
The Defendant has claimed 5 units and 3 units respectively for its
item 8 (Preparation for Cross-examination of R. Ferszt) and item 9 (Attending
on Cross-examination of R. Ferszt). In my opinion, given the circumstances of
the urgency, limited time frame and necessity to prepare for the Plaintiff’s
motion, these assessable services were reasonable and have been justified by
the Defendants. Therefore, I allow 5 units and 3 units respectively for item 8
and item 9 for a total of 8 units ($960.00).
[11]
This
assessment of the Defendants’ Bill of Costs has proceeded by way of written
submissions. It is my opinion that they were simple in nature and both parties
participated in the filing of materials which assisted me in the assessment of
the Bill of Costs. I reduce the Defendants’ item 26 (Assessment of costs:
preparing bill of costs) to 2 units ($240.00) for the reasons I have outlined
in the first two sentences of this paragraph.
[12]
The
Defendants have claimed $1,597.39 which includes GST for the disbursements
associated with the Plaintiff’s motion and supported these disbursements with
the affidavit of John P. Koch, sworn on February 17, 2006. I note that the
Plaintiff has not raised any concerns with regards to the claimed
disbursements. Therefore, I allow the amount of $1,597.39 which includes GST
for these disbursements since they appear reasonable and have been established
by affidavit.
[13]
The
Defendants’ Bill of Costs in T-141-06 is assessed and allowed in the amount of
$2,040.00 for assessable services plus associated GST of $142.80 and
disbursements of $1,597.39 which includes applicable GST for a total of
$3,780.19. A certificate is issued in this Federal Court proceeding for
$3,780.19 payable by the Plaintiff to the Defendants.
“Paul Robinson”
Paul G.C.
Robinson
Assessment
Officer
Toronto,
Ontario
August
8, 2006
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