Date: 20030819
Docket: T-272-99
Citation: 2003 FC 990
BETWEEN:
CARTER-WALLACE INC.
Applicant
- and -
WAMPOLE CANADA INC.
Respondent
ASSESSMENT OF COSTS - REASONS
Charles E. Stinson
Assessment Officer
[1] This appeal, from a decision of the Registrar of Trade-marks refusing to expunge the Respondent's trade-mark WAMPOLE, was dismissed with costs. Counsel for the Respondent advised the Court that the Applicant had been split up and acquired by third parties, but that the Respondent still wished to proceed with assessment in writing of its bill of costs. Initially, the Respondent argued that I should direct that any assessed costs be made payable to one or more of the third parties, or alternatively by the solicitor of record for the Applicant. The Respondent subsequently withdrew from that position and asked that the assessment of costs proceed against the Applicant only.
The Applicant's Position
[2] The Applicant's solicitor of record (hereafter, the "Applicant's solicitor") argued that the Respondent's unexplained delay in pursuing its entitlement to costs is effectively an abandonment of its claim to costs and it is therefore no longer entitled to costs as against anyone. Alternatively, the Applicant's solicitor argued further to Rules 409 and 400(3)(i), (k) and (o), that the conduct of the Respondent, ie. unnecessary lengthening of these proceedings in pursuing costs and inclusion of improper claims of costs against third parties and the Applicant's solicitor, should result in minimum or nil costs assessed under Column III. As well, said factors warrant the use of a unit value of $100.00, being the value in effect at June 29, 2000, the date of the award of costs. The Applicant's solicitor argued that there is no evidence that disbursements were actually incurred or even necessary. The Respondent's failure to identify the number of pages photocopied or sent by facsimile means that the reasonableness of the amount paid per page cannot be assessed. The Applicant's solicitor argued that all claims should therefore be disallowed, particularly given the Respondent's delay in proceeding.
[3] The Applicant's solicitor argued that the Respondent's conduct in pursuing costs personally as against the Applicant's solicitor of record was frivolous, based on misleading representations and represented an abuse of process. The Applicant's solicitor argued that Canada (A.G.) v. Kahn, (1998) 160 F.T.R. 83 (F.C.T.D.), therefore entitles the solicitor of record to solicitor-client costs of $8,225.00 (revised up from $7,225.00) payable forthwith for the solicitor's time defending itself on the assessment of costs. The Applicant's solicitor asserted that, given no evidence of an attempt to confirm the Applicant's legal status for the purpose of collection, the Respondent's proposition for collection from third parties, or from the Applicant's solicitor of record, was premature and effectively an attempt to circumvent the enforcement provisions of the Rules.
[4] The Applicant's solicitor argued that Rule 402, or by analogy thereto, entitles it to costs of the assessment forthwith by reason of the Respondent's withdrawal of its request for costs assessed against the solicitor for the Applicant, or any other third party. The Applicant's solicitor should be reimbursed for its unnecessary costs as a function of the Respondent's conduct in (a) making a baseless claim for costs against the Applicant's solicitor of record; (b) refusing to withdraw said claim in the face of an invitation to do so; (c) thereby forcing the Applicant's solicitor of record to defend itself and (d) further to that requirement to defend, then withdrawing the claim for costs. Rule 408(3) expressly vests an assessment officer with the authority to assess costs of the assessment. The Applicant's solicitor is entitled to costs calculated at either the solicitor-client level or on the basis of compensation for lost time as a self-represented litigant. In the case of a lawyer as a self-represented litigant, the two scales are essentially equivalent because both relate to the lawyer's regular hourly rate and the time spent.
[5] The Applicant's solicitor argued that Canada (A.G.) v. Kahn, supra, was not limited to the expense of retaining legal counsel and expressly included compensation for lost time in defending oneself in what ultimately was an unnecessary proceeding. The Respondent's position put the Applicant's solicitor in precisely that position, ie. having to defend itself against costs, and therefore the solicitor is entitled to an award of costs. Further, John Doe v. Canada (A.G.) infra and Turner v. Canada infra are irrelevant because costs of the proceeding, which are entirely within the discretion of the Court under Rule 400, are to be distinguished from the costs for defending one's interest on an assessment related to the proceeding, which are expressly within the authority of the assessment officer under Rule 408(3).
The Respondent's Position
[6] The Respondent argued that the circumstances of this case justify assessment at the upper end of Column III costs. The Respondent referred to its letter to the Court dated September 4, 2002, in which it advised of unsuccessful negotiations to settle costs and of the difficulties that acquisition of the Applicant by third parties could cause relative to satisfaction of the award of costs, and argued that the referral by the Court of said letter to an assessment officer does not amount to improper, vexatious or unnecessary conduct. The Respondent had to proceed to an assessment of costs. The Respondent argued that, as Rule 400 vests the Court with full discretion over the allocation of costs, it was not improper or vexatious to have requested that costs be assessed against third parties. Further, as Rule 404 authorizes the Court to award costs against a solicitor considered responsible for undue delay or other misconduct, it was not improper or vexatious to have requested that costs be assessed against the Applicant's solicitor. The Respondent argued that the Applicant's delay, or that of its solicitor, in making details known of the acquisition of the Applicant by third parties put the Respondent to unnecessary costs relative to negotiations for settlement of costs, which the Respondent attempted to expedite by reducing its demands, made without full knowledge of underlying complications having the potential to interfere with collection of those costs.
[7] The Respondent argued that any delays in pursuing costs (between October 23, 2000 and January 16, 2001, and between April 8 and June 19, 2002) were occasioned by the Applicant or its solicitor. The Respondent argued that an award of costs is not limited in time and that at least some delay before proceeding to an assessment of costs was necessary to permit settlement negotiations between the parties. If the Respondent was responsible for any delay, the assessment officer can address that by refusing interest for the relevant portion of time.
[8] The Respondent argued that factors weighing in its favour concerning the quantum of costs allowed are: (i) per Rule 400(3)(a), the Applicant was unsuccessful; (ii) per Rule 400(3)(i), the Applicant delayed from October 23, 2000 to January 16, 2001 in responding to the draft bill of costs and (iii) per Rule 400(3)(k) and (i), no step taken in this proceeding was improper, vexatious or unnecessary. The Respondent asserted that claimed disbursements such as photocopying, facsimiles, long distance charges, postage, printing and legal research are ordinary costs incurred in litigation.
[9] The Respondent argued that, given that the Court had awarded it costs, it should not be penalized by having costs awarded against it for having sought assessment to quantify costs, including clarification of issues concerning responsibility to pay said costs. The Respondent argued that Canada (A.G.) v. Kahn, supra, does not apply because it addressed reimbursement of a lay litigant for the expense of legal counsel providing advice concerning unnecessary litigation commenced and discontinued by the opposing party. The proceedings here resulted in an unfavourable judgment against the Applicant.
[10] The Respondent argued, further to John Doe v. Canada (A.G.) [2002] F.C.J. No. 1042 (F.C.T.D.) and Turner v. Canada [2001] F.C.J. No. 250 (A.O.), that an assessment officer, who is not a judge, has no jurisdiction to award costs. The Court has not made the Respondent liable for costs of the assessment. The Respondent asserted that the $8,225.00 sought by the Applicant for the assessment of costs are approximately three times the costs sought by the Respondent for successfully defending this appeal on its merits. Solicitor-client costs are awarded only if there has been reprehensible, scandalous or outrageous conduct: see Baker v. Canada (Minister of Citizenship and Immigration) [1999] 2 S.C.R. 817. The Respondent asserted that its conduct was entirely reasonable in pursuing assessment of its costs awarded by the Court and for which the Court referred questions of enforcement to an assessment officer. The Respondent claimed judgment interest on costs from June 29, 2000 (the date of the award of costs) to the date of payment, further to the Courts of Justice Act, R.S.O. 1990, c. 43, ss. 127-130.
ASSESSMENT
[11] The Federal Courts Act, s. 4 and 5.1 defining the Court, and Rule 2 of the Federal Court Rules, 1998, defining an assessment officer, preclude me from usurping the discretion vested in the Court by Rule 400(1) to award costs. However, a Rule 400(1) award of costs does vest an assessment officer with jurisdiction to decide which items of costs are to be allowed and their quantum. Rule 408(3), which provides that an "assessment officer may assess and allow, or refuse to allow, the costs of an assessment to either party", is an exception in that it would permit me to allow costs in this matter to the Applicant, who does not have a Rule 400(1) award of costs. The language of Rule 408(3) addresses a "party", but does not extend to that party's solicitor of record. Rule 408(3) would permit me to deny the Respondent its costs of the assessment notwithstanding the Respondent's Rule 400(1) award of costs.
[12] The Respondent initially sought a direction of the Court concerning the implications, for the assessment of costs, of the acquisition of the Applicant by third parties. The Court directed that the request be referred to an assessment officer. I subsequently issued the timetable for written submissions. Those events spanned several weeks. The Applicant's solicitor would have been aware that the Respondent intended to pursue costs. Although it was fair for the Respondent to have raised its concern about the third parties involved in the acquisition of the Applicant, I think that concern was irrelevant to the assessment of costs and more properly would be an issue in that stage of litigation for the enforcement and collection of the award of costs, as opposed to this stage, ie. assessment to quantify the award of costs.
[13] The Applicant's solicitor expressly characterized its submissions as only on behalf of itself, "either as an interested party or (by analogy to the procedure under Rule 404 and "gap" Rule 4) as solicitor against whom costs are being sought". The Respondent's attempt to have the costs made payable by the Applicant's solicitor was an alternative to its proposition that the third parties be liable for payment of costs owed by the Applicant as a function of the acquisition of the Applicant's debts along with the Applicant itself. That alternative position flowed from an assertion that the Respondent was prejudiced by a failure to disclose, during negotiations to settle costs, the acquisition of the Applicant by third parties. In the circumstances, I decline costs of the assessment in favour of the Applicant. Although I conclude that this is not a matter for which costs of the assessment should be denied to the Respondent, I think that there were difficulties with the Respondent's alternative position. I allow only the minimum 2 units under item 26 (assessment of costs).
[14] I concluded at paragraph [7] in Bruce Starlight et al. v. Her Majesty the Queen [2001] F.C.J. 1376 that the same point in the ranges throughout the Tariff need not be used as each item for the services of counsel must be considered in its own circumstances. As well, I concluded that some generalization is required between the values in a given range. This litigation was neither the most complex nor the simplest of matters. I allow 5 units, 4 units and 2 units per hour respectively for items 2 (preparation of respondent's materials), 13(a) (preparation for hearing) and 14(a) (appearance at hearing). All units are allowed at $110.00 per hour.
[15] Applying my view of the threshold for assessment of costs further to Re Eastwood (deceased), (1974) 3 All E.R. 603 at 608, Grace M. Carlile v. Her Majesty the Queen 97 D.T.C. 5284 at 5287 (A.O.), James L. Ferguson v. Arctic Transportation Ltd. et al., Docket T-1941-93 on July 29, 1999 (A.O.) and Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada, [1999] F.C.J. No. 464, I find that all the disbursements presented are assessable, but their proof is less than absolute. They total $708.59, which I reduce to $640.00.
[16] The Respondent's bill of costs, presented at $3,018.59, is assessed and allowed at $2,070.00 with interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. 43, ss. 127-130, from June 29, 2000 to the date of payment.
(Sgd.) "Charles E. Stinson"
Assessment Officer
Vancouver, B.C.
August 19, 2003
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-272-99
STYLE OF CAUSE: CARTER-WALLACE INC.
- and -
WAMPOLE CANADA INC.
ASSESSMENT OF COSTS IN WRITING WITHOUT PERSONAL
APPEARANCE OF PARTIES
REASONS BY: CHARLES E. STINSON
DATED: August 19, 2003
SOLICITORS OF RECORD:
MacBeth and Johnson
Toronto, ON for Applicant
Ridout & Maybee LLP
Ottawa, ON for Respondent
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