T-334-95
BETWEEN:
ERA ELECTRONICS (CANADA) LTD.
Plaintiff
and
QUEBEC NORTH SHORE AND LABRADOR RAILWAY
COMPANY INC. and HER MAJESTY THE QUEEN
Defendants
TAXATION OF COSTS - REASONS
MARC D. REINHARDT, Taxing Officer
This taxation of the Defendant Her Majesty the Queen's Bill of Costs on a party and party basis came on for hearing before me on Wednesday, December 4, 1996 in Toronto. Ms. Debra L. Montgomery of the firm Sim, Hughes, Ashton & McKay appeared on behalf of the Defendant Her Majesty the Queen. No one appeared for the Plaintiff although it was duly served with the Appointment and the Bill of Costs.
This action arose originally from an alleged patent infringement supposedly committed by the Defendants through their agent Transport Canada. After the filing of the Statement of Claim and the Defences and Counter-Claims, the matter came to a sudden halt for one of the Defendants namely, Her Majesty the Queen, when on September 9, 1996, the Associate Senior Prothonotary, Mr. Giles, ordered the action of the Plaintiff dismissed against Her Majesty the Queen with costs payable forthwith by the Plaintiff after assessment.
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The Bill of Costs as amended at the hearing runs thus as follows:
TARIFF B NO. OF UNITS VALUE
Ìtem 2:
Preparation and filing of Statement of Defence
including research to prepare Statement of Defence 7 $700.00
Item 4:
Preparation and filing of motion to dismiss
action including materials 3 $300.00
Item 5:
Preparation and filing of motion for plaintiff's affidavit
of documents including materials and responses
thereto as fixed by Order of A.S.P. Giles July 8, 1996 4 $400.00
Preparation and filing of motion for plaintiff's affidavit
of documents including materials and responses
thereto as fixed by Order of A.S.P. Giles July 22, 1996 4 $400.00
Item 6:
Appearance on motion for plaintiff's affidavit of
documents, initially and on second occasion 3 $300.00
Appearance on motion to dismiss action 1 $100.00
Item 7:
Discovery of documents, including listing, affidavit
and inspection 5 $500.00
Item 8:
Preparation for examination for discovery 5 $500.00
Item 26:
Taxation of costs 4 $400.00
Item 27:
Research and investigations in preparation for trial 5 $500.00
TOTAL TARIFF AMOUNTS $4,100.00
DISBURSEMENTS
Photocopies 192.25
Long distance telephone to Montreal and all facsimiles 142.73
Translation charges to translate Statement of Defence
of co-defendant 360.00
Paid for copies of patents 110.00
On-line charges 19.84
Paid postage in excess of regular letter rate 3.40
Paid courier 37.39
Paid for U.S. search re: U.S. Patent No. 4421075 (non-taxable) 123.51
Paid for file history of U.S. Patent No. 4421075 (non-taxable) 129.11
Paid Law Society Levy for opening litigation file 23.48
TOTAL DISBURSEMENTS $1,141.71
TOTAL TARIFF AMOUNTS AND DISBURSEMENTS $5,241.71
+ GST $ 349.24
GRAND TOTAL DUE $5,590.95
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Before allowing, reducing or taxing off any of the amounts claimed for fees and disbursements, I took it upon myself, in the absence of counsel for the Plaintiff, to question somewhat the propriety of some of the items on the Bill and request by way of supplementary written submissions explanations for many of those items. My involvement, however, fell short of taking an adversarial position in these proceedings. In arriving at the following result I also had due regard for the criteria set out in Rule 346(1.1).
Items 2, 4, 6, 7, 8 and 26 are allowed as claimed since they represent, in the circumstances of this case, a fair and reasonable allocation of units. Items 5 and 27 cannot be allowed as claimed and are hereby either disallowed in total or reduced in the following manner.
ITEM 5
Preparation and filing of motion for plaintiff's affidavit
of documents including materials and responses
thereto as fixed by Order of A.S.P. Giles July 8, 1996 4 $400.00
Preparation and filing of motion for plaintiff's affidavit
of documents including materials and responses
thereto as fixed by Order of A.S.P. Giles July 22, 1996 4 $400.00
Counsel for the Defendant, Her Majesty the Queen, argued that, for the sake of convenience, the above costs, already fixed by Orders of the Associate Senior Prothonotary, should be permitted to remain in the within Bill of Costs so that separate enforcement procedures for those amounts are not required.
This assumption by counsel that separate enforcement procedures would not be required may prove to be correct. But for the purposes of this taxation, I must distinguish between the adjudication process itself and the execution phase that normally follows.
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As I explained to counsel at the hearing, the taxation at hand is a separate process not to be confused just for sake of convenience with the adjudication of matters already decided by the Court. The procedure before me deals exclusively with the settling of accounts not already assessed and, in doing so, I have no authorithy or jurisdiction whatsoever to confirm the assessments already made (something I would obviously be doing, albeit indirectly, if I were to include the two awards of Mr. Giles in my taxation). The awards of the Associate Senior Protonotory stand on their own and can be enforced as such. The assessment I am about to make today is also self standing and can ultimately be enforced on its own. As to the point of enforcement, it may reasonably be open to counsel to seek, for sake of convenience or otherwise, the execution of the said assessments in a single writ of execution. In any event of the enforcement procedure, I have to conclude nevertheless that the two Orders of Mr. Giles must be severed from the within adjudicative process.
As an alternative argument, counsel for Her Majesty the Queen submitted that if I were not disposed to allow the costs already assessed by the Associate Senior Prothonotary under Item 5, then I should consider including them under Item 27 of the Tariff where the description of the taxable service reads "Such other services as may be allowed by the taxing officer or ordered by the Court." [The emphasis being furnished by counsel for the Defendant]
I do not equate the two impugned orders of the Court awarding costs as amounting to "Such other services...". I am cognizant that there is a paucity of decisions from taxing officers on what constitutes proper other taxable "services" and that the scope of this Item remains to be seriously tested. The word "services" in Item 27 reasonably contemplates a wide variety of services but it cannot be so broad in scope as to include awards of costs already assessed and ordered by the Court. Again the two orders of the Court stand on their own and are not to be confused with services which may fairly be said to fall within Item 27. Item 5 is thus taxed off in its entirety.
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Item 27:
Research and investigations in preparation for trial 5 $500.00
An award is warranted here under Item 27 for the "services" heretofore described as "research and investigations in preparation for trial". The research and investigation services in question refer to a preliminary issue that arose when the Statement of Claim was filed. At that time, counsel for the Defendant Her Majesty the Queen had to determine whether or not knowledge of the existence and further disclosure of the patent in dispute had to be deemed between the two Departments involved. This issue had an impact on how the Defandant Her Majesty the Queen ultimately crafted its case.
Be that as it may however, the number of units claimed exceeds the limit imposed by Column III (5 vs 3 units). Counsel argued that I had the necessary authorithy and discretion to go beyond the limit set by Column III.
I have held in a prior taxation that my discretion extends only within the parameters of the range set for each Item in a given Column and does not go beyond that - see National Steel Car Ltd. v. Trenton Works Inc., Court file No. T-2863-94, unreported taxation dated May 17, 1996 at pages 5 and 6. In that case, the Defendant was claiming a lower number of units than the minimum prescribed by the Tariff. The rationale used there is equally applicable to the case presently before me where a higher number of units than the maximum prescribed is being claimed. The reasons outlined in National Steel Car Ltd. (supra) accord with the letter and intent of the newly adopted Tariff and I do not propose to depart from it here. I will reduce Item 27 and allow 3 units instead of 5. The counsel fees' portion of the Bill of Costs submitted at $4,100.00 is allowed at $3,100.00.
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The disbursements' portion of the Bill of Costs did not pose great difficulties and counsel for the Defendant Her Majesty the Queen was able to satisfy me that the disbursements incurred were reasonably necessary to the conduct of this case. I would however touch on two heads of claim and make the following comments. The two claims warranting comment are "photocopies" and "Law Society Levy for opening litigation file".
1. Photocopies
In an Affidavit prepared by senior counsel in support of the Bill of Costs, Mr. Timothy M. Lowman, deposed that the firm representing the Defendant, Her Majesty the Queen, charged $0.25 per copy to their client and that $192.25 was the total costs of all photocopies associated with the within litigation.
I explained to counsel that in view of the oft-quoted trilogy1 of cases of the Federal Court of Canada relevant to photocopies charges, I would be hard pressed to allow the amount claimed following such scant evidence contained in an Affidavit. The number of copies made did not pose a problem, but the actual costs to the firm in making the copies must be substantiated. Counsel readily undertook, at the hearing, to provide me in her written submissions with a summary of the actual cost per photocopy. The summary is as follows:
Average number of copies made per month 55,000
Monthly cost of photocopiers $1,500
Average monthly cost of toner $1,000
Average monthly costs of paper $1,600
Average monthly overhead cost for space
occupied by machines and electricity $1,600
Total $5,700
$5,700 divided by 55,000 copies = 11" per page
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Accepting thus the number of copies made in the case at bar to be 769, I arrive at a figure of $84.59 for photocopies (769 x 11") which is allowed instead of the $192.25 originally claimed.
2. Law Society Levy for Opening Litigation File
This is the first time I have encountered this head of claim. Counsel's argument for the inclusion of this amount in the Bill of Costs is simply that the levy is just another "cost of doing business" and should be borne by the client. The levy stems from Rule 50 of the Law Society which requires firms acting for one or more parties to a civil litigation case to pay the Lawyers' Professional Indemnity Corporation a civil litigation levy surcharge of $25 inclusive of GST and PST (the surcharge is now $50). It applies to files opened after April 1, 1995.
The charge is mandatorily levied on all litigation files when opened and is passed on to the client of the firm as a "disbursement". Although this levy is characterized and treated as a disbursement by the firm representing the Defendant Her Majesty the Queen, it may very well turn out to be an overhead expense not properly recoverable on a party and party taxation. It is not without some hesitation that I will allow this item in this case and in the absence of adverse argument because, on its face, its appears to be a proper disbursement. The claim for $25 is therefore allowed. The disbursements' portion of the Bill of Costs presented at $1,141.71 is allowed and taxed at $1,034.05.
The Defendant Her Majesty the Queen's Bill of Costs, submitted at $5,590.95 inclusive of GST is taxed and allowed at $4,423.43 inclusive of GST. A Certificate of Taxation will be issued in this amount.
Marc D. Reinhardt
Taxing Officer
DATED at Ottawa, Ontario, January 17, 1997.
IN THE FEDERAL COURT OF CANADA
TRIAL DIVISION
COURT NO.: T-334-95
BETWEEN:
ERA ELECTRONICS (CANADA) LTD.
Plaintiff
- and -
QUEBEC NORTH SHORE AND LABRADOR RAILWAY COMPANY INC. and HER MAJESTY THE QUEEN
Defendants
___________________________________________________
TAXATION OF COSTS - REASONS
___________________________________________________
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-334-95
| STYLE OF CAUSE: ERA Electronics (Canada) Ltd. v. QNS & L et al. |
PLACE OF TAXATION: Toronto
DATE OF TAXATION: December 4, 1996
REASONS OF TAXING OFFICER: Marc D. Reinhardt
DATED: January 14, 1997
COUNSEL
No one appeared for the Plaintiff
Ms. Debra L. Montgomery for the Defendant HMQ
SOLICITORS ON THE RECORD:
Norman L. Roth
ERA Electronics (Canada) Ltd.
for the Plaintiff
George Thomson
Deputy Attorney General of Canada
Per : Timothy M. Lowman
SIM, HUGHES, ASHTON & McKAY
330 University Avenue
6th Foor
Toronto, Ontario
M5G 1R7 for the Defendant HMQ
__________________
1 The cases are: Re Diversified Products Corp. et al. v. Tye-Sil Corporation Ltd. (1990), 34 C.P.R. (3d) 267 (Fed.T.D.);United Terminals Ltd. v. MNR, T-705-89, unreported decision of C.E. Stinson, T.O.; and F-C Research Institute Ltd. v. HMQ (1995) DTC 5583, G.M. Smith, T.O. See also my own comments in Melo's Food Centre Ltd. v. Borges Food Ltd., T-916-89, unreported, which summarizes and discusses the above trilogy of cases.
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