Date: 20100223
Docket: T-780-08
Citation: 2010 FC 194
Toronto, Ontario, February 23, 2010
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
JANSSEN-ORTHO INC. and
ALZA CORPORATION
Applicants
and
THE MINISTER OF HEALTH
and NOVOPHARM LIMITED
Respondents
REASONS FOR ORDER AND ORDER
(Costs)
[1]
In
the Reasons for Judgment and Judgment in this matter, it was held that the respondent,
being successful, was entitled to its costs. Paragraph 166 of the Reasons
provided as follows:
[166] The Respondent, Novopharm, is entitled to its costs. I would hope
that the experienced counsel who appeared in this application will be able to
come to an agreement on the costs to be paid. If they are unable to agree on an
amount then I will remain seized to make a further order as to costs. Failing
their agreement, counsel are to provide written submissions as to costs within
15 working days following the date hereof.
[2]
In
light of the inability of the parties to reach agreement on much of anything
during the course of this application, the Court was disappointed but not
shocked to learn the parties could not reach agreement on costs.
[3]
Novopharm
asks the Court to consider a number of allegations when awarding costs:
a.
That
the applicants did not commit to a position on claims construction until
several months after Novopharm’s production was delivered;
b.
That
there were serial requests for largely irrelevant productions;
c.
That
Novopharm requested an early hearing date;
d.
That
there was interference with one of Novopharm’s proposed experts;
e.
That
the applicants engaged in ambush tactics for the purpose of delay;
a.
That
unreasonable position were maintained throughout requiring additional witnesses
and hearing time; and
f.
That
Novopharm was completely successful.
[4]
It
is fair to say that this was hard fought litigation on both sides. I find that
there was no interference with the expert witness Novopharm wished to call.
The situation was that he was in a conflict of interest and had to be excused.
I am not satisfied that any of the other allegations have merit, or where there
is some merit, it is not to an extent deserving of consideration in determining
the costs to be awarded.
[5]
The
applicants ask that Novopharm’s costs be reduced by 25% for what is alleged to
be its inappropriate conduct in prematurely distributing marketing and sales
information with respect to its product before the notice of compliance and
this Court’s decision was issued. I agree with the respondent that if such
conduct occurred it is tantamount to an offence under Section C.08.002(1)(b) of
the Food and Drugs Regulations and section 31 of the Food and Drugs Act.
It is a matter to be resolved and penalized, if appropriate, under that
legislative regime, not through costs.
[6]
Likewise,
the respondent ought not be penalized for the allegations it put forward that
have been rejected.
[7]
The
applicants challenge the fees charged by Dr. Rhodes, one of the respondent’s
experts which they assert are 400% higher than the respondent’s other experts.
They also challenge the additional 17% on his fees he charged “because counsel
was late in its payment.”
[8]
Novopharm
submits that Dr. Rhodes’ “hourly rate for preparation was not higher than the
hourly rate for lead counsel and was, on an objective scale, reasonable for
someone of his level of expertise.” Dr. Rhodes’ hourly rate was higher than
that of most experts ($700 per hour versus $500 per hour). The respondent says
that his total fees charged were higher as he was called upon to do more for it.
He was the respondent’s lead expert and while his accounts are not as detailed
as one would expect, the total time spent is within a reasonable range.
[9]
Although
his hourly rate is high, I cannot say that it is beyond what one would expect
from someone of his stature. Moreover, his discounted rate for prompt payment
is close to that charged by the other significant experts called upon by the
respondent.
[10]
There is some merit, in my view, to the applicants’
submission that they should not be shouldered with the additional 17% because
Novopharm was late in paying the fees charged. As noted, Dr. Rhodes offered a
discount if his bills were paid within 30 days. In my view, the respondent
should only be entitled to reimbursement for the discounted fee payable if the
account was paid in a timely manner.
[11]
The respondent is otherwise entitled to its costs determined
in a manner that is in keeping with recent decisions of this Court.
ORDER
THIS
COURT ORDERS THAT:
1. Novopharm
is to have its costs against the plaintiffs, jointly and severally, in
accordance with the following directions:
a.
No costs are awarded for or against the Minister of Health,
who did not participate in these hearings.
b.
The costs awarded Novopharm shall be assessed at the middle
of Column IV.
c.
Costs (fees and related disbursements) for two counsel at
the hearing, one senior and one junior may be taxed for each day of hearing.
d.
Costs (fees and related disbursements) of two counsel, one
senior and one junior only if present, may be taxed in conducting
cross-examinations. One senior counsel’s costs (fees and related
disbursements) only may be taxed in defending a cross-examination of a
Novopharm witness. No costs are allowed for other lawyers, in house or
external counsel, students, paralegals or clerical persons.
e.
Costs (fees and related disbursements) for interlocutory
motions shall be taxed as follows:
i.
where the Court has previously awarded an amount or level of
costs, that amount or level shall prevail;
ii.
where the Court was silent as to costs, no costs are
ordered; and
iii.
where costs are ordered but silent as to amount or level of
costs, costs are to be assessed for one senior counsel at the mid range of
Column IV.
f.
Costs (fees and related disbursements) for all case
management conferences and pre-trial conferences are to be assessed for one
senior counsel at the mid range of Column IV.
g.
The respondent is entitled to recover the fees paid to its
experts, as set out in its submissions, with the exception of Dr. Rhodes. As
noted above, his fees are to be recovered on the basis of the discounted rate he
charged, regardless as to whether his fees were paid within the 30 day grace
period or not.
h.
All other disbursements charged by the respondent to its
client are to be recovered in full.
i.
Novopharm is entitled to interest on the costs awarded at
the rate of 2.0% from January 18, 2010.
2. With
these directions, it is hoped, again, that counsel will be able to agree on the
amount payable. If within 20 days the parties have not agreed, the costs shall
be determined by the Court. The respondent is to file a submission, not
exceeding 5 pages, with supporting documents (not including those already
submitted) to the Court setting out the amount of fees and disbursements it
submits are payable in accordance with these directions. The applicants shall
then file a response, not exceeding 5 pages, within 10 days, setting out the
amount of fees and disbursements it submits are payable in accordance with
these directions. No further submissions from either party are to be filed.
After reviewing these submissions, the Court, shall fix the costs payable.
"Russel
W. Zinn"
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