BETWEEN:
CONTOUR OPTIK INC.
Plaintiff
AND
HAKIM OPTICAL LABORATORY LTD.
Defendant
REASONS FOR ORDER
LEMIEUX J.:
| [1] Contour Optik Inc. ("Contour"), a corporation incorporated outside of Canada, appeals the November 20, 2000 order of Associate Senior Prothonotary Giles who, without written reasons, granted the defendant Hakim Optical Laboratory Ltd.'s ("Hakim") motion for additional security for costs until the end of discoveries from $5,000 to $27,000 including GST and PST and the amount of $1,000 for the motion before him as costs to the defendant in the cause in this patent infringement action launched on October 12, 2000 involving magnetic clip-on sunglasses covered by Canadian Patent No. 2,223,295. |
| [2] The Senior Associate Prothonotary had before him the affidavit of John R. Morrissey, a senior partner of the law firm representing Hakim, to which was appended a draft bill of costs estimating until the end of the discoveries the costs likely to be taxed if successful at trial at $45,000 including $26,800 in disbursements, a total amount which was amended to $50,000 to account for GST and PST. |
| [3] Contour argues the Senior Associate Prothonotary erred in fact and in law in making the order he did on the grounds that the costs are clearly excessive, unreasonable, speculative and contrary to the amount of costs established by the jurisprudence of this Court in patent infringement cases involving straightforward mechanical patents. |
| [4] Contour pointed to the draft bill of costs where the number of units in column III was always set at the maximum number of units for each item as well as to what is said to be speculative items such as the need for junior counsel at discovery, the speculation surrounding motions to compel answers to undertakings and refusals to give answers in discovery when those discoveries have not been held, and oral examination of the inventor in China (a $10,000 item) when it was probable the inventor would travel to Canada. |
| [5] The difficulty in this appeal is that the Senior Associate Prothonotary did not spell out why he cut back the amount requested by Hakim even accounting for the fact his cut off point was the end of discoveries thereby seemingly disallowing fees of $900 on account of pre-trial conference fees and disbursements of $10,500 for an expert witness and travel. That leaves some $11,000 requested by Hakim but not granted by the Senior Associate Prothonotary. |
Analysis
| [6] Contour's counsel urged me to exercise a discretion de novo relying on the Federal Court of Appeal's in The Ship Jala Godavari v. Canada, 40 C.P.R. (3d) 127. His reliance is misplaced, in my opinion. |
| [7] In the subsequent Federal Court of Appeal decision of Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, at p. 464, Justice MacGuigan, for the majority, said this: |
| Jala Godavari should not, I think, be read as meaning that the prothonotary's discretion should never be respected, but rather that it is subject to an overriding discretion by a judge where the question involved is vital to the final issue of the case. (Error of law is, of course, always a reason for intervention by a judge, and is not in any way in controversy). |
| [8] The Court, in Aqua-Gem, supra, was unanimous in adopting the following test formulated by the Chief Justice, who was in dissent: |
| I am of the opinion that such orders ought to be disturbed on appeal only where it has been made to appear that |
| (a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or |
| (b) in making them, the prothonotary improperly exercised his discretion on a question vital to the final issue of the case. |
| [9] The question of increased security for costs is not a question vital to the final issue of the case and therefore I must be satisfied that the Senior Associate Prothonotary's order was clearly wrong because he exercised his discretion based on an error of law in applying a wrong principle or he misapprehended the facts. |
| [10] I do not accept counsel for Contour's argument that the Senior Associate Prothonotary misapprehended the facts in that he gave too much credence to Mr. Morrissey's affidavit or the speculative nature of some of the items. Hakim's counsel is correct in pointing out the only facts before the Senior Associate Prothonotary were those set out in Mr. Morrissey's affidavit who was not cross-examined. In addition, Contour did not submit any evidence to controvert those advanced by Hakim. This defect cannot be repaired through argument before me in this appeal without an affidavit establishing the facts (Rule 363), facts which in any event were not before the Senior Associate Prothonotary and could only be brought forward with leave of the Court (see Rule 351). |
| [11] I can find no principle which the Associate Senior Prothonotary misapplied. Contour's counsel argued he erred in principle in endorsing the high end units advanced by Hakim and he pointed to case law from this Court. I am not persuaded by this argument. First, the Associate Senior Prothonotary did reduce the sought after security for costs by $11,000 and, second, I find that the cases referred to, which were mainly decided before the changes in the Federal Court Rules in 1998, of limited assistance. Also, I accept the distinction drawn by Hakim's counsel between patent infringement and patent impeachment cases. |
| [12] I make the same finding with respect to Contour's challenge of the $1,000 cost award payable in the cause. The motion before the Senior Prothonotary took nearly two hours and an examination of the tariff for a contested motion indicates the award was in the permissible range. |
| [13] Counsel for Hakim asked for solicitor-client costs on this appeal. I cannot say on the record before me the conduct of Contour has been reprehensible, scandalous or outrageous (see Young v. Young, [1993] 4 S.C.R. 3, at p. 17). |
| [14] In the alternative, Hakim seeks an order granting the costs of this motion on a party-and-party basis payable forthwith under Rule 401 (2). The justification is that column III of Tariff B contemplates costs of this appeal up to $1,500, while column V contemplates costs up to $2,500. Reliance is also placed on Ferguson v. Arctic Transportation Ltd., 118 F.T.R. 154. |
| [15] Rule 401(2) provides that costs shall be ordered payable fortwith where the Court is satisfied a motion should have not been brought or opposed. I am not persuaded Contour's appeal was either frivolous, vexatious or abusive. In the circumstances, I fix costs payable to Hakim in any event of the cause at $1,500. |
| [16] In the result this appeal is dismissed. |
"François Lemieux"
Judge
Montreal, Quebec
December 13, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20001213
Docket: T-1880-00
BETWEEN:
CONTOUR OPTIK INC.
Plaintiff
AND
HAKIM OPTICAL LABORATORY LTD.
Defendant
REASONS FOR ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1880-00
STYLE OF CAUSE:
CONTOUR OPTIK INC.
Plaintiff
AND
HAKIM OPTICAL LABORATORY LTD.
Defendant
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: December 11, 2000
REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE LEMIEUX
DATED: December 13, 2000
APPEARANCES:
Mr. Daniel A. Artola FOR THE PLAINTIFF
Mr. Mark G. Biernacki FOR THE DEFENDANT
SOLICITORS OF RECORD:
McCarthy Tétrault FOR THE PLAINTIFF
Montreal, Quebec
Smart & Biggar FOR THE DEFENDANT
Toronto, Ontario
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