Date: 20031010
Docket: T-448-98
Citation: 2003 FC 1175
SIMPLIFIED ACTION
BETWEEN:
GEORGE STRACHAN
Plaintiff
(Defendant by counterclaim)
- and -
THE OWNERS AND ALL OTHERS INTERESTED IN
THE SHIP "CONSTANT CRAVING", GRANT HUSDON, ANNE HUSDON,
PACIFIC MARINE ENTERPRISES LTD. AND ALL OTHER PERSONS
HAVING CLAIMS AGAINST THE PLAINTIFF, THE SHIP "KYHITA"
OR THE FUND HEREBY TO BE CREATED
Defendants
- and -
PACIFIC MARINE ENTERPRISES LTD.,
Plaintiffs by counterclaim
- and -
GRANT HUSDON AND ANNE HUSDON
Plaintiffs by counterclaim
SUPPLEMENTARY REASONS REGARDING COSTS
GIBSON J.
INTRODUCTION
[1] This action was initiated by Statement of Claim filed the 18th of March 1998. As the style of cause would indicate, both the Defendant Pacific Marine Enterprises Ltd. and the Defendants Grant Husdon and Anne Husdon filed counterclaims against the Plaintiff. The action as against Pacific Marine Enterprises Ltd. and Pacific Marine Enterprises Ltd.'s counterclaim were dismissed on consent and without costs by order dated the 26th of April 2001. The Plaintiff's action was discontinued against all remaining Defendants by Notice of Discontinuance filed the 12th of September 2002, which was virtually the eve of trial. Thus, when the trial commenced at Vancouver, British Columbia, on the 17th of September 2002, there remained for adjudication only the counterclaim by Grant Husdon and Anne Husdon (the "Husdons") against the Plaintiff, Defendant by counterclaim, George Strachan ("Mr. Strachan").
[2] Judgment issued bearing date the 28th of January 2003. The Husdons were substantially successful on their counterclaim against Mr. Strachan. The final paragraph of reasons for judgment released together with the judgment dealt with the question of costs. That paragraph is in the following terms:
[81] At the close of trial, counsel were in agreement that the question of costs should be left to be dealt with by written submissions, assuming that counsel cannot reach agreement on the subject, to be made following issuance of my reasons and my formal judgment. My judgment will indicate that the subject of costs has been deferred to be dealt with by supplementary judgment following written submissions. If counsel cannot agree on a timetable for written submissions, on the request to the Registry of counsel for either party, I would be prepared to fix a schedule following a teleconference with counsel.
[3] Counsel were unable to reach agreement on the subject of costs. In the result, counsel for the Husdons filed extensive submissions on the issue of costs on the 9th of May 2003. Counsel for Mr. Strachan responded. Counsel for the Husdons replied. On the 23rd of May 2003, counsel for the Husdons filed a related motion record and, once again, counsel for Mr. Strachan responded. Counsel for the Husdons filed brief reply submissions. These reasons respond to counsels' submissions on costs and to the related motion.
[4] The Husdons seek costs on three alternative bases: First, on a solicitor-and-client basis with costs on that basis being fixed at $79,351.68; secondly, on a lump sum increased costs basis of between $45,000 and $55,000; and thirdly, on a lump sum costs basis, but not increased above Tariff, of between $28,000 and $55,000. The Husdons also seek costs fixed at $5000 in respect of the determination of costs. The award of costs sought on a solicitor-and-client basis would exceed the quantum of damages adjudged in favour of the Husdons.
[5] Mr. Strachan urges that the Husdons should be awarded costs in the fixed amount, including disbursements and taxes, of $26,310.62. Mr. Strachan seeks to set-off against that amount $4,000 in his favour in connection with the submissions on costs.
[6] The related motion filed the 23rd of May 2003 and earlier referred to, seeks an order that Mr. Strachan disclose in "... his Affidavit of Documents...", presumably a supplementary affidavit of documents, all documents relating to the settlement with Pacific Marine Enterprises Ltd. and all documents indicating the amount of that settlement, such documents to be produced to the Husdons. The ground urged in support of the motion is that "... the amount paid in that settlement is relevant to the claim of the [Husdons] for solicitor-and-client costs."
BACKGROUND
[7] The background to this action is described at some length in the reasons issued contemporaneously with the judgment for damages in favour of the Husdons dated the 28th of January 2003. Suffice it to say here that the Husdon's pleasure craft the "Constant Craving" was very heavily damaged when Mr. Strachan's pleasure craft the "Kyhita" exploded and burned at its berth in a marina in or near Vancouver, British Columbia. The "Constant Craving" was, at the time of the explosion and fire, moored in an adjoining berth at the same marina. The issues in the portion of the action that went to trial, that is to say the counterclaim of the Husdons against Mr. Strachan, were, essentially, liability, quantum of damages and amount recoverable taking into account the principle of "collateral benefit". The "collateral benefit" issue was raised on behalf of Mr. Strachan and, while ultimately unsuccessful, was an interesting argument based on the particular facts of this matter which potentially provided for a degree of "double recovery" by the Husdons, a result that, in the end, followed.
THE ISSUES
[8] The issues arising on the materials before the Court are the following:
a)whether the Husdons should be provided access to documentation underlying the settlement of Mr. Strachan's action against Pacific Marine Enterprises Ltd. and of Pacific Marine Enterprises Ltd.'s counterclaim against Mr. Strachan;
b)costs, and more specifically,
i)relevant provisions of the Federal Court Rules, 1998;
ii)background;
iii)solicitor-and-client costs;
iv)double costs;
v)costs on an elevated scale;
vi)lump sum costs; and
c)costs on the motion now before the Court and on the issue of costs itself.
ANALYSIS
a)Access to settlement documents
[9] Counsel for the Husdons urges that settlement documentation relating to the settlement between Mr. Strachan and Pacific Marine Enterprises Ltd. is relevant to the issues regarding the Husdons' efforts to seek solicitor-and-client costs or lump sum increased costs because such documentation might well disclose that negligence on the part of Mr. Strachan was acknowledged by him or on his behalf or was likely to be established if the dispute between Mr. Strachan and Pacific Marine Enterprises Ltd. went to trial and further that Mr. Strachan knew or presumed that it was unlikely that he would succeed in his claim for limitation of liability under sections 575 and following of the Canada Shipping Act[1]. If negligence was acknowledged or assumed to be likely to be established, counsel for the Husdons urges that Mr. Strachan should have acknowledged liability on his part toward the Husdons and such an acknowledgment would have very substantially simplified and shortened the trial between them. Indeed, it is urged, it might well have heightened the chances of a settlement between Mr. Strachan and the Husdons.
[10] In Almecon Industries Ltd. v. Anchortek Ltd.[2] my colleague Justice Blanchard wrote at paragraphs 7 and 9:
It is undisputed that an exclusionary rule or privilege applies to protect documents given and prepared by parties in negotiations leading to settlement. As stated in The Law of Evidence in Canada:
It has long been recognized as a policy interest worth fostering that parties be encouraged to resolve their private disputes without recourse to litigation, or if an action has been commenced, encouraged to effect a compromise without a resort to trial. In furthering these objectives, the courts have protected from disclosure communications, whether written or oral, made with a view to reconciliation or settlement. In the absence of such protection, few parties would initiate settlement negotiations for fear that any concession that they would be prepared to offer could be used to their detriment if no settlement agreement was forthcoming...
...
The Court has every interest in encouraging parties to resolve their differences by communicating openly and without fear that their statements would subsequently be used against them. This desirable public policy does not extend to situations where parties advance their interests at the expense of another. Nor does the rule operate to shield evidence of misrepresentation or of dishonest dealing. As stated by Hugessen J.A. in Bertram v. Canada (C.A.):
These quotations make it plain in my view that the concern of the Court is to protect parties from being embarrassed by attempts at concession or compromise or even by confessions of weakness. In short, what parties say against their interest during negotiation is without prejudice in the sense that it cannot subsequently be used against them. The purpose of the rule, however, is not to protect dishonest dealing and there is no policy reason for excluding what one party puts forward in its own interest and to the prejudice of the other. (...) Once there is a prima facie indication of such an attempt to mislead, as there clearly is in the present record, questions designed to elicit information and admissions about such attempt and the circumstances surrounding it are admissible....
[Citations omitted]
[11] The reasons of Justice Sexton, concurred in by Justice Rothstein, in Canadian Broadcasting Corp. v. Paul[3] at paragraphs 25 to 29, while more expansive, are to much the same effect as the reasons of Justice Blanchard.
[12] On the material before me, there is absolutely no evidence of "dishonest dealing" on the part of Mr. Strachan in the negotiation of the settlement agreement with Pacific Marine Enterprises Ltd. Further, there is no evidence on the record before me to indicate that the motivation of Mr. Strachan in settling with Pacific Marine Enterprises Ltd. was, in whole or in part, an acknowledgment of liability on his part or a perception that, if the matter went to trial, he would likely be found to be liable to Pacific Marine Enterprises Ltd.
[13] I find no basis, of a policy nature or otherwise, that would justify, on the facts of this matter, an exception to the general policy that parties should be protected from being embarrassed by attempts at concession or compromise or even by confessions of weakness.
[14] The Husdons' motion for disclosure of documentation relating to the settlement between Mr. Strachan and Pacific Marine Enterprises Ltd. will be dismissed.
b)Costs
i) Provisions of the Federal Court Rules, 1998, relevant to the costs considerations here before the Court
[15] Rules 400(1) and (3) to (6), 401(1), 419, 420(1) and 422 of the Federal Court Rules, 1998[4], read as follows:
| 400.(1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid. ...
(3) In exercising its discretion under subsection (1), the Court may consider
(a) the result of the proceeding;
(b) the amounts claimed and the amounts recovered;
(c) the importance and complexity of the issues;
(d) the apportionment of liability;
(e) any written offer to settle;
(f) any offer to contribute made under rule 421;
(g) the amount of work;
(h) whether the public interest in having the proceeding litigated justifies a particular award of costs;
(i) any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding;
(j) the failure by a party to admit anything that should have been admitted or to serve a request to admit;
(k) whether any step in the proceeding was
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(l) whether more than one set of costs should be allowed, where two or more parties were represented by different solicitors or were represented by the same solicitor but separated their defence unnecessarily;
(m) whether two or more parties, represented by the same solicitor, initiated separate proceedings unnecessarily;
|
400.(1) La Cour a entière discrétion pour déterminer le montant des dépens, les répartir et désigner les personnes qui doivent les payer.
...
(3) Dans l'exercice de son pouvoir discrétionnaire en application du paragraphe (1), la Cour peut tenir compte de l'un ou l'autre des facteurs suivants :
a) le résultat de l'instance;
b) les sommes réclamées et les sommes recouvrées;
c) l'importance et la complexité des questions en litige;
d) le partage de la responsabilité;
e) toute offre écrite de règlement;
f) toute offre de contribution faite en vertu de la règle 421;
g) la charge de travail;
h) le fait que l'intérêt public dans la résolution judiciaire de l'instance justifie une adjudication particulière des dépens;
i) la conduite d'une partie qui a eu pour effet d'abréger ou de prolonger inutilement la durée de l'instance;
j) le défaut de la part d'une partie de signifier une demande visée à la règle 255 ou de reconnaître ce qui aurait dû être admis;
k) la question de savoir si une mesure prise au cours de l'instance, selon le cas : (i) était inappropriée, vexatoire ou inutile, (ii) a été entreprise de manière négligente, par erreur ou avec trop de circonspection;
l) la question de savoir si plus d'un mémoire de dépens devrait être accordé lorsque deux ou plusieurs parties sont représentées par différents avocats ou lorsque, étant représentées par le même avocat, elles ont scindé inutilement leur défense;
m) la question de savoir si deux ou plusieurs parties représentées par le même avocat ont engagé inutilement des instances distinctes;
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| (n) whether a party who was successful in an action exaggerated a claim, including a counterclaim or third party claim, to avoid the operation of rules 292 to 299; and
(o) any other matter that it considers relevant.
(4) The Court may fix all or part of any costs by reference to Tariff B and may award a lump sum in lieu of, or in addition to, any assessed costs.
(5) Where the Court orders that costs be assessed in accordance with Tariff B, the Court may direct that the assessment be performed under a specific column or combination of columns of the table to that Tariff.
(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 assessed 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.
...
401. (1) The Court may award costs of a motion in an amount fixed by the Court.
...
419. Rules 420 and 421 apply, with such modifications as are necessary, to parties bringing and defending counterclaims and third party claims, to applicants and respondents in an application and to appellants and respondents in an appeal.
|
n) la question de savoir si la partie qui a eu gain de cause dans une action a exagéré le montant de sa réclamation, notamment celle indiquée dans la demande reconventionnelle ou la mise en cause, pour éviter l'application des règles 292 à 299;
o) toute autre question qu'elle juge pertinente.
(4) La Cour peut fixer tout ou partie des dépens en se reportant au tarif B et adjuger une somme globale au lieu ou en sus des dépens taxés.
(5) Dans le cas où la Cour ordonne que les dépens soient taxés conformément au tarif B, elle peut donner des directives prescrivant que la taxation soit faite selon une colonne déterminée ou une combinaison de colonnes du tableau de ce tarif.
(6) Malgré toute autre disposition des présentes règles, la Cour peut :
a) adjuger ou refuser d'adjuger les dépens à l'égard d'une question litigieuse ou d'une procédure particulières;
b) adjuger l'ensemble ou un pourcentage des dépens taxés, jusqu'à une étape précise de l'instance;
c) adjuger tout ou partie des dépens sur une base avocat-client;
d) condamner aux dépens la partie qui obtient gain de cause.
...
401. (1) La Cour peut adjuger les dépens afférents à une requête selon le montant qu'elle fixe.
...
419. Les règles 420 et 421 s'appliquent, avec les adaptations nécessaires, au demandeur et au défendeur dans une demande, à l'appelant et à l'intimé dans un appel, ainsi qu'aux parties dans une demande reconventionnelle et une mise en cause.
|
| 420. (1) Unless otherwise ordered by the Court, where a plaintiff makes a written offer to settle that is not revoked, and obtains a judgment as favourable or more favourable than the terms of the offer to settle, the plaintiff shall be entitled to party-and-party costs to the date of service of the offer and double such costs, excluding disbursements, after that date.
...
422. No communication respecting an offer to settle or offer to contribute shall be made to the Court, other than to a case management judge or prothonotary assigned under rule 383(c) or to a judge or prothonotary at a pre-trial conference, until all questions of liability and the relief to be granted, other than costs, have been determined.
|
420. (1) Sauf ordonnance contraire de la Cour, le demandeur qui présente par écrit une offre de règlement qui n'est pas révoquée et qui obtient un jugement aussi avantageux ou plus avantageux que les conditions de l'offre a droit aux dépens partie-partie jusqu'à la date de signification de l'offre et, par la suite, au double de ces dépens, à l'exclusion des débours.
...
422. Aucune communication concernant une offre de règlement ou une offre de contribution ne peut être faite à la Cour - sauf au juge chargé de la gestion de l'instance ou au protonotaire visé à l'alinéa 383c) ou sauf au juge ou au protonotaire lors de la conférence préparatoire à l'instruction - tant que les questions relatives à la responsabilité et à la réparation à accorder, sauf les dépens, n'ont pas été tranchées.
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ii)Background Regarding Costs Submissions
[16] Out of respect for Rule 422, after all questions of liability and the relief to be granted, other than costs, were determined in this action, the Court was provided with the following background information.
[17] A dispute resolution conference took place between the Husdons and Mr. Strachan on the 20th of March 2001. No settlement was reached. On the same date, at a pre-trial conference, it was agreed that the action would proceed as a simplified action and it was determined that the testimony of 15 witnesses would be required. Seven days were allotted for the trial of the action.
[18] At a further pre-trial conference on the 13th of June 2002, the issue of whether or not Mr. Strachan should admit liability was considered. Mr. Strachan determined not to admit liability.
[19] On the 8th of July 2002, in accordance with Rule 420, the Husdons provided Mr. Strachan with a written offer to settle for an amount of $50,000 in damages, such amount being less than the amount eventually awarded in the Husdons' favour. The Husdons proposed that, should the action go to trial and the Defendant admit liability, then in return for that admission, they would be prepared to reduce any award of damages in their favour by 20 percent. On the 11th of July 2002, Mr. Strachan rejected the Husdons' settlement offer, without making a counter offer.
[20] On the 15th of August 2002, counsel for Mr. Strachan provided the Husdons with a proposal intended to simplify the trial. Mr. Strachan proposed that he would abandon his claim of limitation of liability, liability would remain an issue and the parties would agree that damages would either be $49,600 or $18,377.30, contingent on the outcome on the "collateral benefits" issue. Mr. Strachan's proposal was not accepted.
[21] On the 9th of September 2002, Mr. Strachan "increased" his offer to settle from $18,377.30 to $20,000 inclusive of costs. The "increased" offer made specific reference to Rule 420. Once again, the Husdons did not accept the revised offer.
[22] On the 11th of September 2002, Mr. Strachan filed a notice of discontinuance of his limitation of liability claim.
[23] The trial commenced on the 17th of September 2002, and, with interruptions, continued to the 26th of September 2002. Mr. Strachan presented no expert testimony as to the cause of the explosion of the "Kyhita", this notwithstanding that he had caused to be served on the 20th of July 2002, an expert report of a Mr. Roberts which indicated that it was a common practice to utilize an automotive-style battery charger on board pleasure craft such as the "Kyhita". Use of such a battery charger was a central concern during the course of the trial. Mr. Roberts' report was annexed as an exhibit to an affidavit attested to by Mr. Roberts. The affidavit and annexed report was served. It was understood by the Court that Mr. Roberts would be called as an expert witness, out of order, by special arrangement, on Tuesday, the 24th of September 2002. When Court opened on the morning of Tuesday, the 24th of September, counsel advised the Court that Mr. Strachan had elected not to call Mr. Roberts.
iii)Solicitor-and-client costs
[24] In Young v. Young[5], Justice McLachlin, as she then was, with the support of the majority of the panel in this regard, wrote at page 134:
Solicitor-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties. Accordingly, the fact that an application has little merit is no basis for awarding solicitor-client costs; nor is the fact that part of the cost of the litigation may have been paid for by others.
[25] In Apotex Inc. v. Canada (Minister of National Health and Welfare)[6], Justice Malone, for the Court, wrote at paragraphs [7] and [8]:
... In my opinion, the new Rule 400(1) does not confer unfettered discretion. Existing jurisprudence must still be considered including the Supreme Court of Canada's recent decision in Baker which applied the traditional principle namely:
Solicitor-client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.
As well, this Court established a similar rule in its 1986 decision in Amway of Canada Ltd. v. Canada where Mahoney J.A. stated:
Costs as between solicitor and client are exceptional and generally to be awarded only on the ground of misconduct connected with the litigation.
[Citations omitted]
[26] In Roberts v. R.[7], Justice McDonald, with Justice Linden concurring, and in part quoting from and paraphrasing Young, supra, wrote at page 193:
An award of costs on a solicitor and client basis is exceptional. Such awards are "generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties." Furthermore, the fact that one parties [sic] claim has little merit or was "very weak" is no basis for awarding solicitor-client costs.
[27] Finally, in Leung v. Leung[8], Chief Justice Esson considered the meaning of the word "reprehensible" in the context of "reprehensible, scandalous or outrageous" conduct that might justify solicitor-and-client costs. He wrote at paragraph 5:
There is nothing in the conduct of Mr. Leung in relation to this matter which I would call "scandalous" or "outrageous". But "reprehensible" is a word of wide meaning. It can include conduct which is scandalous, outrageous or constitutes misbehaviour; but it also includes milder forms of misconduct. It means simply "deserving of reproof or rebuke".
[28] Thus, where, as here, a party seeks solicitor-and-client costs, the Court must bear in mind that such costs are awarded only in rare instances and where the party against whom solicitor-and-client costs are sought has demonstrated in his conduct of the proceeding "scandalous" or "outrageous" behaviour, or misconduct that is "deserving or reproof or rebuke".
[29] I find on the evidence before the Court that the conduct of Mr. Strachan in the course of this action cannot be characterized as "scandalous" or "outrageous". Nor do I find Mr. Strachan's conduct to be in the nature of misconduct "deserving of reproof or rebuke".
[30] It was known to Mr. Strachan and his counsel that the Husdons had recovered an amount from their own insurers by reason of the damage caused to the "Constant Craving" in relation to the explosion and fire aboard the "Kyhita". Thus, assuming for the moment that an insurer stood behind Mr. Strachan, or even without such assumption, the issue of "double recovery" or "collateral benefit" was alive in this action in circumstances that the Court can only assume are relatively rare. Mr. Strachan and his counsel participated in a dispute resolution conference and in two pre-trial conferences and put forward a proposal designed to simplify the issues, assuming the matter were to go to trial. Albeit belatedly, Mr. Strachan discontinued his limitation of liability claim. Once again, belatedly, Mr. Strachan elected not to call an expert witness and, acknowledging the lateness of the decision not to call that witness, he concedes that some adjustment upwards in costs in favour of the Husdons should result.
[31] I find no basis whatsoever to infer bad faith on the part of Mr. Strachan, no matter how remote might have been his chances of success in defending the counterclaim brought by the Husdons against him. An award of costs on a solicitor-and-client basis is not justified.
iv)Double costs
[32] For ease of reference, I repeat here Rule 420(1):
| 420. (1) Unless otherwise ordered by the Court, where a plaintiff makes a written offer to settle that is not revoked, and obtains a judgment as favourable or more favourable than the terms of the offer to settle, the plaintiff shall be entitled to party-and-party costs to the date of service of the offer and double such costs, excluding disbursements, after that date.
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420. (1) Sauf ordonnance contraire de la Cour, le demandeur qui présente par écrit une offre de règlement qui n'est pas révoquée et qui obtient un jugement aussi avantageux ou plus avantageux que les conditions de l'offre a droit aux dépens partie-partie jusqu'à la date de signification de l'offre et, par la suite, au double de ces dépens, à l'exclusion des débours.
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[33] In the context of submissions for an award of lump sum costs on an increased basis, counsel for the Husdons urges that his clients are entitled to double costs based on their offer of the 8th of July 2002, an offer which was not accepted. In Apotex Inc. v. Syntex Pharmaceuticals International Ltd.[9], Justice Stone, for the Court, wrote at paragraphs [8] to [10]:
[8] In our view, ... what Rule 420(1) requires is an "offer to settle" by a plaintiff, not something that might or might not be viewed as an offer to settle by the opposite party. The consequences under the rule of ill-advisedly rejecting an offer to settle are severe and, indeed, were intended to be severe so as to encourage settlement and put an end to litigation that is of dubious outcome. By the same token, in our view, an opposite party ought not to incur the risk of an award of double costs unless the "offer to settle" is such as is contemplated by the rule.
[9] In TWR Inc. v. Walbar of Canada Inc. ..., in the course of giving directions to the assessment officer arising out of an appeal, Stone J.A. expressed the following views, at 456, with respect to the meaning of the phrase "offer of settlement made in writing" in former Rule 344(3)(g):
It seems to me that the rule requires a much more definite offer, that is, one which is normally capable of acceptance and which, if accepted, would bring the dispute between the parties to an end. The letter of July 17, 1979, is quite indefinite in that the amount Walbar was willing to pay for a licence was described as "a sum related to the estimated cost of litigating Canadian Patent 788,667", the patent in suit. Counsel for TRW described the letter of July 17, 1979, as amounting to no more than a proposal to negotiate a settlement rather than to a definite offer of settlement. I cannot disagree. I regard the letter as merely an attempt to sound out the opposite side on a possible basis for settlement. It cannot be viewed as an "offer of settlement" in the sense of the rule.
In our view, this reasoning applies with equal force to the provisions of Rule 420(1).
[10] If the generous costs advantage afforded by Rule 420(1) is to be available to a plaintiff, the offer to settle must be clear and unequivocal in the sense it leaves the opposite party to decide only whether to accept it or reject it.
[Citation omitted]
[34] The Husdons' offer to settle of the 8th of July 2002, was before the Court. While expressing pessimism about the chances of settlement, counsel for the Husdons indicates that the total claimed was $62,644.76. The written communication concludes "pursuant to Rule 420, my clients offer to settle their claim for $50,000.00."
[35] Against the guidance provided by the Court of Appeal cited, I am satisfied that the Husdons' letter of the 8th of July 2002, was clear and unequivocal in the sense that it left Mr. Strachan to decide only whether to accept it or reject it. Mr. Strachan rejected it. In the result, I am satisfied that the Husdons are entitled to double costs from the 8th of July 2002.
v)Costs on an elevated scale
[36] Apart from the issue of double costs just discussed, counsel for the Husdons urges that the factors identified in Rule 400(3)(i) (j) and (k) (ii) warrant an award of costs above the mid-range of Column III of Tariff B to the Federal Court Rules, 1998. Those factors are, on the facts of this matter, counsel urges, conduct by or on behalf of Mr. Strachan that tended to unnecessarily lengthen the duration of the proceeding, failure by or on behalf of Mr. Strachan to admit liability and steps taken by or on behalf of Mr. Strachan that were taken through negligence, mistake or excessive caution. Counsel for Mr. Strachan urges that, on the facts of this matter, none of the factors cited on behalf of the Husdons warrantS an award of costs in excess of the ordinary range.
[37] On the basis of the considerations outlined earlier in these reasons and in my reasons for judgment, I accept the submissions on behalf of Mr. Strachan. In the result, costs on an elevated scale will be awarded only on the basis of rejection of the Husdons' offer of settlement and on the basis of Mr. Strachan's late decision not to call Mr. Roberts as an expert witnesses.
vi)Lump sum costs
[38] Both parties recommend an award of lump sum costs rather than a reference for taxation. I am in agreement that an award of lump sum costs is appropriate in all of the circumstances. It is time that this litigation should be brought to closure.
[39] Counsel for the Plaintiffs, in his submissions, provides four different bases on which costs, exclusive of disbursements, could be calculated: first, based on the mid-point of Column III, and in this regard, he arrives at a figure of $21,096.62; secondly, based on the high point of Column III for an amount of $26,701.40; thirdly, based on the mid-point of Column IV for an amount of $37,140.87; and finally, based upon the high point of Column V, for an amount of $48,364.80. He concludes that an award of lump sum costs, not on an increased basis but inclusive of disbursements should be between $28,000.00 and $55,000.00.
[40] Counsel for Mr. Strachan urges an award of costs in favour of the Husdons, inclusive of disbursements and an allowance for the late decision not to call Mr. Roberts, in the amount of $26,310.62.
[41] Unfortunately, neither counsel provided the Court with a lump sum figure directly based on the ordinary scale with double costs for the period following the 8th of July 2002. By any measure, substantial costs were incurred in the period between the 8th of July 2002 and the close of trial.
[42] The Husdons claim disbursements in the amount of $6,630.06 and have provided invoices to support the greater part of that amount. Counsel for Mr. Strachan disputes only the portion of claimed disbursements that relate to expert fees charged for time spent in pre-trial meetings with counsel. In support of his position in this regard, he cites Apotex Inc. v. Wellcome Foundation Ltd.[10]. To the contrary, see Merck & Co. Inc. et al v. Apotex Inc.[11] I accept the submissions of counsel for Mr. Strachan in this regard and fix the revised total disbursement claim at $5,406.72.
[43] Rather than remit this matter back to counsel again for recommendation of a specific lump sum amount for fees on the ordinary scale but doubled on that scale after the 8th of July 2002, together with disbursements in the amount that I have fixed and taxes, I propose, rather arbitrarily, to fix an amount within the range of $28,000 to $55,000 that counsel for the Husdons has put forward as representing lump sum costs on the ordinary scale. Taking into account double costs in favour of the Husdons after the 8th of July 2002, I fix that amount at $38,000 for fees, disbursements and taxes.
SUMMARY OF CONCLUSIONS
[44] In summary, an order will go dismissing the Husdons' motion for documentation relating to the settlement reached between Mr. Strachan and Pacific Marine Enterprises Ltd. A supplementary judgment as to costs of the Husdons' counterclaim against Mr. Strachan will go awarding costs to the Husdons against Mr. Strachan in the lump sum amount of $38,000.
COSTS ON THE MOTION BEFORE THE COURT AND ON COSTS SUBMISSIONS
[45] The Husdons were entirely unsuccessful on their motion for access to settlement documentation. Mr. Strachan is entitled to his costs of that motion which I hereby fix at $500.00.
[46] Success on the issue of costs on the Husdons' counterclaim and on the issue of Mr. Strachan's claim for limitation of liability up to the time of its discontinuance was divided. Each side should bear its own costs in that regard. In the result, the supplementary judgment will provide no order as to costs regarding the costs submissions.
Judge
Ottawa, Ontario
October 10, 2003
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