Date: 19980323
Docket: T-1719-91
BETWEEN:
CANADIAN PACIFIC FOREST PRODUCTS LIMITED
and ALL OTHER CARGO INTERESTS AS ENUMERATED
IN ANNEX "A" ATTACHED TO THE STATEMENT OF CLAIM
Plaintiffs
- and -
TERMAR NAVIGATION CO. INC. and
FOREST PRODUCT CARRIERS (INTERNATIONAL) LTD.
Defendants
REASONS FOR COSTS ORDER
[Delivered from the bench at Montreal, Quebec
on Wednesday, March 18, 1998, as edited]
ROTHSTEIN J.:
[1] This is a motion for costs by the plaintiffs who were successful in this action. The plaintiffs initially sought $288,330.47 in fees and $80,684.61 disbursements for a total of $369,015.08. At the hearing they reduced this sum by $10,000 on account of a prior interlocutory award of costs by Noël J. The sum of $369,015.08 represents costs on a solicitor and client basis.
[2] At the outset of the hearing, plaintiffs' counsel conceded that while he was critical of the way in which defendants' counsel had proceeded with the case, defendants' counsel could not be said to have acted in a reprehensible or abusive manner such that an award of solicitor and client costs would be justified.
[3] In the alternative, the plaintiffs seek costs in accordance with the maximum number of units under column IV of Part II of Tariff B and, pursuant to Rule 344.1(1) of the Federal Court Rules, C.R.C. 1978, c. 663 (as amended), a doubling of counsel fees since December 9, 1991 as a result of a settlement offer made that day. Under this alternative, the plaintiffs' counsel fees, as claimed, amounted to $152,600 with disbursements of $80,684.61 for a total of $233,284.61.
[4] The defendants concede that the plaintiffs are entitled to costs but challenge a number of specifics and in particular, the doubling of the counsel fee since December 9, 1991. The defendants provided no specific calculation of their estimate of costs because they were of the view that once the primary issues were decided by this Court, the matter would be referred to the taxing officer for detailed calculation.
[5] This case arose out of an incident at sea in February 1989. The action was commenced by the plaintiffs for a negative declaration of liability in 1991. The matter came on for trial in 1997. The amount at issue was approximately $550,000 U.S. which, when converted to Canadian funds at the exchange rate agreed upon between the parties, would amount to approximately $640,000. In addition, there is interest. While $640,000 is a significant amount, the plaintiffs' solicitor and client costs of almost $370,000 appear to be out of proportion. I do not know the defendants' costs but it is obvious that, in total, solicitor and client costs for all parties exceed $500,000 and probably approach or exceed the principal of the claim itself.
[6] There is no justification for a relatively straightforward case taking eight years to get to trial. Nor is it apparent why the solicitor and client costs seem to be out of proportion to the amount at issue. I do not have sufficient information to know why the costs are out of proportion. However, I would take this opportunity to observe that counsel have an obligation to bring cases forward on an efficient and timely basis.
[7] I turn to the issues. There is no indication that defendants' counsel engaged in misconduct which would justify an award of costs on a solicitor and client basis and that portion of the plaintiffs' claim is dismissed. The plaintiffs alternatively argue that this is a case which justifies costs calculated according to the maximum number of units under column IV. They argue that the plaintiffs were entirely successful, that there was a large volume of work, and that the conduct of the defendants lengthened the proceedings. The fact that the plaintiffs were successful is not a reason to depart from column III costs. Ultimately, the case was decided on an interpretation of contractual documents. There was nothing particularly creative or otherwise extraordinary about the arguments. It is true there was an extensive volume of work. But this itself does not justify departing from column III. It is the conduct of the defendants that, if anything, would justify moving to column IV. In this respect, I have had regard to the criteria of Tremblay-Lamer J. in Sanmammas Compania Maritima S.A. v. The "Neptuno" (1995), 102 F.T.R. 181 at 185 which I summarize as follows:
| (1) Did one party make a simple case complex? |
| (2) Did one party adopt dilatory tactics to avoid an early trial? |
| (3) Did one party unnecessarily lengthen the duration of proceedings? |
Of course, these considerations are not exhaustive. For example, a case involving a very large amount might justify departing from column III. However, when conduct of a party is the basis of the argument to depart from column III, these are the types of considerations to which the Court will have regard.
[8] Here, I think that both parties made a relatively simple case complex. The defendants did raise a number of common law arguments which they either withdrew at or prior to trial or which were found to be of little merit. Theirs was a rather wide ranging and unfocussed approach which undoubtedly lengthened and complicated the proceedings.
[9] However, the plaintiffs also introduced the issue of general average which both plaintiffs' and defendants' experts at trial agreed was irrelevant in this case. The general average issue also gave rise to considerable lengthening of the trial and pre-trial proceedings.
[10] The defendants seem to have adopted a rather relaxed attitude with regard to the pace of proceedings. The plaintiffs had to make a number of motions to keep the matter moving. However, I do not see any evidence of dilatory tactics. Perhaps had the plaintiffs not themselves unnecessarily complicated the proceedings, it would have been appropriate to depart from column III in view of the defendants' lax and rather unfocussed approach to the litigation. But the plaintiffs were responsible for some delay and complication themselves. In all the circumstances, I do not think it is justifiable to move to column IV of the Tariff.
[11] Should costs be doubled because of the plaintiffs' offer of settlement? On December 9, 1991, the plaintiffs made their first offer to settle. However, that offer took the form of an agreement to agree. The plaintiffs' offer was to treat the defendants' loss as general average expenses. However, the offer went on to state:
| |
We have not made a detailed calculation of what this amounts to in money terms, but providing that the principle is acceptable we will be happy to work with you and with your Adjusters to arrive at a figure which would be mutually acceptable. |
|
[12] If the parties could not agree on what was mutually acceptable, there could be no settlement. While an offer need not be in monetary terms as such, it at least must be ascertainable according to a formula. The December 9, 1991 offer was not, in my opinion, ascertainable. It was not an offer within the terms of Rule 344.1.
[13] On April 10, 1992, the plaintiffs made the following offer:
| |
CPFP interests are prepared and agree to pay a G.A. [General Average] contribution calculated on the basis of the amounts claimed as special charges being brought into the average adjustment as general average expenditures. |
|
The defendants say that general average was not the proper basis for an offer. While that may be true, the basis of the offer is the defendants' claim of special charges brought into the average adjustment. Defendants agree this amount was ascertainable. As such, I think it could be considered an offer within the meaning of Rule 344.1.
[14] However, the defendants say this offer lapsed or was "not left on the table" by the plaintiffs. As to lapse, no authority was cited. Counsel simply said that the offer would lapse after a "reasonable" period of time which he suggested would be about one month. However, if that is the case, an offering party would have to keep renewing its offer every month to keep it alive. This is not contemplated by Rule 344.1.
[15] Defendants' counsel says that the offer should have been in express words to the effect that the offer was to remain open until revoked. Rule 344.1 does not place such a requirement on the offeror. In the context of ongoing litigation, in the absence of some action or correspondence that expresses or implies that the offer is being revoked, I see no reason why an open-ended offer does not remain open indefinitely. As to the offer not being left on the table, there is some conflicting evidence as to verbal communications between counsel. However, even defendants' counsel, in his affidavit, says that plaintiffs' counsel had said that the plaintiffs might pay up to $100,000 if the defendants were to "put that amount on the table". According to the evidence, the sum of $100,000 exceeded the April 10, 1992 offer.
[16] I am satisfied the April 10, 1992 offer remained open until May 12, 1997 when the plaintiffs, in writing, increased their offer to US $100,000 plus costs. This offer remained open until September 17, 1997 when plaintiffs' counsel wrote to defendants' counsel renewing the April 10, 1992 offer. Thereafter, the April 10, 1992 offer remained open. I am satisfied from the evidence that on and after April 10, 1992 the plaintiffs had made ascertainable offers to the defendants which could have been accepted. The only revocation of offers by the plaintiffs was by way of making subsequent offers. Each of the offers was more favourable to the defendants than the judgment at trial. The plaintiffs are entitled to a doubling of their costs, from April 10, 1992 excluding disbursements, in accordance with Rule 344.1.
[17] Rather than referring the matter to the Taxing Officer, I would exercise my discretion to award a counsel fee on a lump sum basis under Rule 344.4. In doing so, I have had regard to column III of Tariff B generally but I have not adhered to it slavishly. Plaintiffs are awarded $50,000 which I would double to $100,000 and deduct $5,000 for fees not subject to doubling as relating to the period prior to April 10, 1992. The total fees, therefore, would be $95,000.
[18] I turn to disbursements in the plaintiffs' bill of costs totalling $80,684.61. I would disallow the following disbursements:
| (1) The sum of $2,877.35 being expenses of the plaintiffs' expert incurred as a result of the postponement of the trial. I think that Noël J. totally disposed of costs for the postponement with his award of $10,000 to the plaintiffs and the matter of those costs is res judicata. |
| (2) Travel by counsel. I would disallow the sum of $2,000 being costs of one attendance by plaintiffs' counsel to the United Kingdom to meet with United Kingdom counsel which I cannot, on the evidence, connect to the progress of this litigation. |
| (3) Fees and disbursements of United Kingdom and Danish counsel. These are solicitor and client fees which are claimed here as disbursements. However, there is no evidence that plaintiffs' counsel in this Court required the services of foreign counsel for this litigation. As I understand it, these costs were incurred in part when it appeared this case might proceed in Denmark. This has nothing to do with the case in this Court. It also appears that plaintiffs' counsel met with United Kingdom counsel to discuss various legal issues, but I do not see how that relates to this case. United Kingdom counsel could not assist with respect to Canadian law. It appears the plaintiffs did incur these costs but for the Court to recognize them, they must have something to do with the litigation in this Court. I am not satisfied, on the evidence, that they do. The sum of $37,926.79 is disallowed as a disbursement. |
| (4) Plaintiffs' representatives' attendance at trial. Certainly, plaintiffs are entitled to be present at trial. However, I do not see why the cost of their attendance is a proper disbursement to charge to the defendants. The sum of $1,402.76 is disallowed. |
[19] In the result, plaintiffs are entitled to disbursements of $36,477.71. In total, the plaintiffs are awarded $95,000 fees, $36,477.71 disbursements for a total of $131,477.71.
"Marshall Rothstein"
J U D G E
WINNIPEG, MANITOBA
MARCH 23, 1998
Date: 19980323
Docket: T-1719-91
BETWEEN:
CANADIAN PACIFIC FOREST PRODUCTS LIMITED
and ALL OTHER CARGO INTERESTS AS ENUMERATED
IN ANNEX "A" ATTACHED TO THE STATEMENT OF CLAIM
Plaintiffs
- and -
TERMAR NAVIGATION CO. INC. and
FOREST PRODUCT CARRIERS (INTERNATIONAL) LTD.
Defendants
Heard at Montreal, Quebec, on Wednesday, March 18, 1998.
Order delivered at Winnipeg, Manitoba on March 23, 1998.
REASONS FOR COSTS ORDER BY: THE HONOURABLE MR. JUSTICE ROTHSTEIN
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT NO.: T-1719-91
| STYLE OF CAUSE: CANADIAN PACIFIC FOREST PRODUCTS LIMITED and ALL OTHER CARGO INTERESTS AS ENUMERATED IN ANNEX "A" ATTACHED TO THE STATEMENT OF CLAIM |
v.
| TERMAR NAVIGATION CO. INC. and FOREST PRODUCT CARRIERS (INTERNATIONAL) LTD. |
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: March 18, 1998
REASONS FOR COSTS ORDER
OF THE COURT:
The Honourable Mr. Justice Rothstein
DATED: March 23, 1998
APPEARANCES:
Mr. Kenrick Sproule and Mr. Francis Rouleau
for the Plaintiffs
Mr. Nick Spillane and Mr. D. McGuire
for the Defendants
SOLICITORS OF RECORD:
Sproule, Castonguay, Pollack
1, Place Ville-Marie, suite 2330
Montreal (Quebec)
H3B 3M5
for the Plaintiffs
McMaster, Meighen
100, rue de la Gauchetière Ouest, suite 900
Montreal, (Quebec)
H3B 4W5 for the Defendants
FEDERAL COURT OF TRIAL
Date: 19980323
Docket: T-1719-91
BETWEEN:
CANADIAN PACIFIC FOREST PRODUCTS LIMITED and ALL OTHER CARGO INTERESTS AS ENUMERATED IN ANNEX "A" ATTACHED TO THE STATEMENT OF CLAIM
Plaintiffs
- and -
TERMAR NAVIGATION CO. INC. and FOREST PRODUCT CARRIERS (INTERNATIONAL) LTD.
Defendants
REASONS FOR COSTS ORDER
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