Date: 20030205
Docket: T-992-92
Neutral citation: 2003 FCT 127
BETWEEN:
ALMECON INDUSTRIES LTD.
Plaintiff
- and -
ANCHORTEK LTD., EXPLOSIVES LIMITED
ACE EXPLOSIVES ETI LTD.
and WESTERN EXPLOSIVES LTD.
Defendants
REASONS FOR ORDER
OREILLY J.
[1] The defendants seek to set aside a certificate of assessment issued by Assessment Officer Mr. Charles Stinson on December 23, 2002. Mr. Stinson denied the defendants' request to delay the assessment of costs until after final determination of appeals pending in this matter, currently scheduled to be heard in Toronto on February 10-11, 2003.
[2] The plaintiff was successful in its action for patent infringement before Gibson J. in a judgment issued on December 19, 2001. Gibson J. subsequently issued a Supplementary Order - Costs on May 23, 2002.
[3] The defendants argued before me that the assessment of costs was premature. Two arguments were made: First, the defendants submitted that, in light of the fact that the appeals are soon to be heard, the interests of justice favoured a delay in the assessment of costs until the appeals are disposed of. Second, the defendants suggested that Gibson J. contemplated that the matter of costs could only be settled after damages had been assessed. I will deal briefly with each of these arguments in turn.
A. The Proximity of Appeals
[4] The defendants have appealed both judgments of Gibson J. - the decision on the merits, as well as the decision on costs. The appeals will be heard within days of this motion. The defendants argue, citing Rule 3, that a just, expeditious and inexpensive approach to the matter of costs requires that the assessment take place after the disposition of their appeals. They argue that, if they are successful, any assessment of costs that takes place at this stage would have to be redone later.
[5] In their submissions on costs before Gibson J., the defendants suggested repeatedly that a determination on costs should await a final disposition of the merits. Gibson J. does not address this possibility specifically in his decision on costs. However, in the context of the submissions before him, I take Gibson J.'s silence on the matter as a rejection of the suggestion that the assessment should not proceed.
[6] Counsel for the defendants on this motion, Mr. Jeremy Want, was not able to cite any case law supportive of the proposition that cost assessments should await determination of pending appeals. In his view, this absence of jurisprudence reflects the reality that parties commonly agree to suspend the assessment of costs in such situations. That leaves it to the Court to determine what should happen in cases where, as here, the parties do not agree.
[7] Mr. Henry Lue, Counsel for the plaintiff, referred the Court to cases where cost assessments were not delayed pending appeals: Monsanto Canada Inc., et al. v. Schmeiser, et al. (2002), 19 C.P.R. (4th) 524 (F.C.T.D.); Dableh v. Ontario Hydro (1994), 84 F.T.R. 102, 57 C.P.R. (3rd) 387 (F.C.T.D.); and Mennes v. Attorney General of Canada (T-2019-98) (A.O). I find the Dableh case particularly relevant. There the plaintiff had applied for a stay of a cost award pending appeal. MacKay J. held that the grounds for a stay were not present, even though the plaintiff was at risk of personal bankruptcy. In the matter before me, the defendants did not seek a stay. Nor did they did argue that grounds for issuing a stay were present.
[8] The defendants attach significance to a letter sent to their Counsel by Counsel for the plaintiff on November 22, 2002. The plaintiff's Counsel proposed a change of venue for the appeals (to Toronto) so that an early date could be obtained and noted that "such an early determination of the appeal is appropriate given the position of the defendants that the taxation of costs and the reference be postponed until the appeal is determined". The defendants suggest that the letter indicates a willingness on the part of the plaintiff to forego the assessment of costs until after the appeal, so long as the defendants agreed to an early date. While the defendants are to be commended for cooperating in achieving an early date for its appeals, I do not read the letter as amounting to a concession on the part of the plaintiff regarding the timing of the cost assessment.
[9] Based on the foregoing, I see no reason to conclude that the Assessment Officer erred in dismissing the defendants' request to have the cost assessment delayed until the determination of their appeals.
B. Decision of Gibson J. on Costs
[10] After setting out his directions to the Assessment Officer, Gibson J. states:
All of the foregoing being subject to any determination in accordance with Rule 420 regarding any written offer to settle that has not at this time been made known to the Court.
The defendants rightly point out that Gibson J. was acknowledging that consideration of Rule 420 may necessitate an adjustment of costs. This is evidence, in their view, that Gibson J. expected there to be no assessment of costs until damages had been ascertained.
[11] Rule 420 permits costs to be doubled in circumstances where a plaintiff is successful in obtaining a judgment as favourable, or more favourable, than the terms of a settlement offer. Obviously, this Rule can apply only at a point in time when damages are known. In this case, the matter of damages was outstanding. Accordingly, say the defendants, costs can only be assessed with certainty after the calculation of damages.
[12] However, Rule 420 operates in a limited way. It does not require a complete re-calculation of costs - its operation may simply cause a previous calculation to be increased by a mathematical factor. Its existence does not stand in the way of a timely assessment of costs.
[13] Further, I would not read Gibson J.'s decision in the manner suggested by the defendants. On the contrary, by identifying a single factor that might affect the quantum of costs at a later point, one may infer that Gibson J. saw no impediment to the immediate assessment of costs in accordance with his directions.
[14] Accordingly, I see no reason why the assessment of costs cannot proceed without further delay.
C. Disposition
[15] This motion is dismissed. The assessment of costs shall proceed before Assessment Officer Stinson without further delay.
[16] Counsel for the plaintiff requested its costs on this motion on a solicitor-client basis. I am not satisfied that this is a proper case for such a measure. The plaintiff shall have its costs on the motion on a party and party basis, to be assessed by Mr. Stinson.
[17] Both Counsel urged me to set out a schedule for the assessment. The first step, cross-examination of Mr. Ronald E. Dimock, Counsel for the plaintiff, shall take place within one month of the hearing of the appeal. A hearing on the assessment itself shall take place within two months of the hearing of the appeal.
"James W. O'Reilly"
Judge
OTTAWA, Ontario
February 5, 2003
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
DOCKET: T-992-92
STYLE OF CAUSE: ALMECON INDUSTRIES LTD. v. ANCHORTEK LTD. EXPLOSIVES LIMITED, ACE EXPLOSIVES ETI LTD. and WESTERN EXPLOSIVES LTD.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: February 4, 2003
REASONS FOR ORDER OF: The Honourable Mr. Justice O'Reilly
DATED: February 5, 2003
APPEARANCES:
Mr. Henry Lue FOR THE PLAINTIFF
Mr. Jeremy E. Want FOR THE DEFENDANTS
SOLICITORS OF THE RECORD:
Dimock Stratton Clarizio LLP
Toronto, Ontario FOR THE PLAINTIFF
Smart & Biggar
Ottawa, Ontario FOR THE DEFENDANTS
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