Date: 20100722
Docket: T-1060-08
Citation: 2010 FC 779
BETWEEN:
SISSEL-ONLINE
LTD.
Applicant
and
SISSEL
HANDELS GmbH
Respondent
ASSESSMENT OF
COSTS – REASONS
Charles
E. Stinson
Assessment Officer
[1]
These
reasons apply accordingly in this matter and in Federal Court file T-1061-08
(Sissel-Online Ltd. v. Sissel Handels GmbH). The matters were appeals, heard
together, from two decisions of the Trade-marks Opposition Board addressing the
Respondent’s registration for trademarks associated with pillows. The Court
issued a single Reasons for Judgment and Judgment as the same issues were
raised in both appeals and dismissed both appeals with costs to the Respondent.
I issued a timetable for written disposition of the costs of the Respondent
presented in total at $9,058.80 in a single bill of costs encompassing both
appeals.
[2]
Counsel
for the Applicant wrote without prejudice to opposing counsel objecting to
certain claimed items of costs and advancing a settlement offer totalling $4,800
for both appeals inclusive of all fees and disbursements. Counsel for the
Respondent by letter without prejudice disagreed with the Applicant’s position
on the quantum of costs, but accepted the settlement offer of $4,800 to avoid
the expense of a formal assessment of costs. That acceptance asserted the
requirement that the settlement funds be delivered by February 26, 2010, to be
held in trust for the client failing which the Respondent would proceed with
the assessment of costs.
[3]
Counsel
for the Respondent advised the Registry by letter dated March 5, 2010, that:
… As detailed in the enclosed
correspondence, on January 8, 2010, counsel for the Applicant, Sissel-Online
Ltd., made an offer in the amount of $4,800.00, inclusive of fees and
disbursements, to settle the assessment before the Federal Court. On February
19, 2010, on behalf of the Respondent, SISSEL Handels GmbH, we communicated our
acceptance of the Applicant’s offer.
In view of the above, we requested
consent from counsel for the Applicant to the enclosed draft Order for payment
of the Respondent’s costs in the amount of $4800.00. However, counsel for the
Applicant communicated today that he does not have instructions from the
Applicant in respect of our request and was therefore not in a position to
provide us with his consent to the draft Order.
In
view of the agreement as to the quantum of costs reached between the parties,
we hereby request that costs be assessed at $4,800.00 and that an
Order be issued to reflect the same. Alternatively, we request that the
assessment be suspended until such time as the Respondent may seek enforcement
of the agreement on the quantum of costs before the Court.
[4]
I
advised counsel for the Respondent that I could not issue an order, but that I
could further to my reading of the record issue a Certificate of Assessment for
$4,800 and that said Certificate could be enforced under the Federal Courts
Act and the Federal Courts Rules because an award of costs is part
of a judgment. Counsel for the Respondent requested that I do so.
[5]
Counsel
for the Applicant asserted on March 25, 2010 that the Respondent’s purported
acceptance of the offer added terms of payment, i.e. February 26, 2010 deadline
and monies in trust, not part of the initial offer. Therefore, there was no
proper acceptance of the offer and no settlement and therefore a Certificate of
Assessment would be premature and inappropriate.
[6]
I
advised both counsel on March 26, 2010, that I considered any position in the
record to be without prejudice to date and issued a fresh timetable which
included a direction to the Applicant to advance a suggested assessed total and
details of its underlying calculation. The Respondent renewed its request for
an assessment for $9,058.80. Within the time limit for the Applicant’s reply
material, counsel for the Applicant indicated that his client had terminated
his services and that he expected to bring a motion shortly to be removed from
the record.
[7]
The
Court allowed that motion by Order dated May 27, 2010 requiring service of said
Order by e-mail on the named Vice-President (Dan McDonald) of the Applicant at
a prescribed address and the filing of proof of service by June 4, 2010. The
Applicant’s counsel complied with said terms and is off the record. On June 16,
2010, the Respondent renewed its request for issuance of a Certificate of
Assessment for $9,058.80.
[8]
On
June 30, 2010, I issued the following directions by e-mail to Dan McDonald:
I note for your convenience that:
- the Respondent served and filed its
bill of costs for the above noted matters on December 15, 2009 further to
judgment on August 12, 2009;
- I issued a timetable on February 10,
2010, which was sent to your former solicitor of record (Smiths IP), for
written disposition of the assessment of said bill of costs;
- the Court record discloses a settlement
offer concerning costs dated January 8, 2010 by Smiths IP on behalf of the
Applicant;
- the Court record discloses notice that
the Applicant had terminated the services of Smiths IP and was seeking
alternate counsel by April 14, 2010;
- the Court record discloses notice to
the Registry dated June 16, 2010 by counsel for the Respondent for assessment
of the outstanding bill of costs, said notice having been sent to your
attention consistent with the address in paragraph 1 of the Order dated May 27,
2010.
I
note further that a principal of your company was aware by January 8,
2010 at the latest of the precise details of the Respondent’s claimed costs and
had intended by April 14, 2010 at the latest to instruct new counsel. The
principals of your company have had more than enough time to evaluate the bill
of costs and engage new counsel. I intend to issue my decision on the
assessment of the Respondent’s bill of costs. If your company has any written
submissions to make concerning said assessment, you may serve and file them by
July 8, 2010. If more convenient, you may tender any submissions by reply to
this e-mail transmission with a cc to counsel for the Respondent. Counsel for
the Respondent may make rebuttal submissions if deemed necessary.
[9]
Dan
McDonald advanced these reply submissions on July 8, 2010:
We thank you for your consideration in
this matter and wish to submit copies of two letters, one from our solicitor
and one from the solicitor of the Respondent.
We adopt the comments and position taken
in our solicitor’s letter and note that this matter could have been concluded
but for the additional requirements imposed by the Respondent. We were at that
time willing to sign a Consent Order as proposed by our solicitor.
We remain so and the offer of a Consent Order in the assessment of
$4,800.00 has remained on the table since then and still does.
This assessment is unnecessary as the
amount was agreed between the Respondent and has been set on the date of the
Respondent’s acceptance of our offer. That date was February 19, 2010.
There were two aspects to the
Respondent’s acceptance. The first was a clear and unequivocal acceptance of
the amount. The second was the imposition of an additional term, which was not
accepted by us. It is our position that the additional term the Respondent
attempted to impose does not derogate from the Respondent’s acceptance of the
quantum. We say this as the Respondent did not make its acceptance of the
quantum conditional on our acceptance of the additional term but simply made
their advice to the Court conditional on our acceptance of the additional term.
Given
the situation, it is our position that there should be no costs awarded for
this assessment as it is totally unnecessary.
[10]
The
letters referred to by Mr. McDonald were dated January 8, 2010 from the
Applicant’s solicitor to opposing counsel:
We are in receipt of your proposed Bill
of Costs for the above-referenced applications.
We note that you have claimed two separate
sets of assessable fees (one for T-1060-08 and one for T-1061-08) when, in
fact, the two applications and their respective materials were treated as one.
It would be unfair for the Respondent to recover two sets of fees for what was
a single, unitary appeal.
We also note that you have claimed the
maximum number of units in Column III for all of the assessable fees. The
applications were, at most, of ordinary complexity, and we see no reason why
there should be any departure from the usual scale, i.e. the middle of Column
III.
Finally, you have claimed counsel fees
for Item 15 (preparation and filing of written argument, where requested or
permitted by the Court) and Item 24 (travel by counsel to attend a trial,
hearing, motion, examination or analogous procedure, at the discretion of the
Court). With respect to Item 15, written arguments were not filed with the
Court. If you intend this to refer to the Memorandum of Fact and Law, we note
that those were part of the Respondent’s Records, and the assessable fees
associated with this activity are to be included with Item 2 (preparation and
filing of all defences, replies, counterclaims or respondent’s records and
materials), which you have already claimed. With respect to Item 24, this item
can only be granted at the discretion of the Court. The Judgment is silent on
the issue of counsel fees for travel, and no directions from the Court were
sought with respect to such. Item 24 is therefore not available on this
assessment.
In view of the above, the costs sought in
the proposed Bill of Costs are substantially higher than what could be
reasonably expected in an assessment. Our client is, however, willing to settle
the issue of costs in order to avoid the expense of a formal assessment. We
have been authorized to offer the amount of $4,800 to cover the award of
costs in T-1060-08 and T-1061-08, fully inclusive of all fees and
disbursements. You will appreciate that this represents a very reasonable offer
on the part of the Applicant, especially given the issues with the proposed
Bill of Costs noted above.
If
this offer is of interest to your client, please let us know. This offer will
remain open for acceptance until specifically revoked by the Applicant.
and dated
February 19, 2010 from the Applicant’s counsel to the principals of the
Applicant:
We enclose a copy of a letter from
counsel for SISSEL Handels GmbH regarding the two above applications. In the
letter, counsel for SISSEL Handels GmbH has accepted our offer of $4,800.00 to
cover the award of costs in the applications. They ask that the settlement of
funds be forwarded to them by February 26, 2010, and they will
place them in trust pending disposition of the appeals.
If you wish to proceed with the
settlement, please forward to us a cheque for $4,800.00 payable to “Borden
Ladner Gervais LLP in trust”.
We
also remind you again that we should take steps to discontinue the appeals that
are currently pending in the Federal Court of Appeal in order to avoid any
further liability for costs. If you have any questions or concerns, please feel
free to contact us.
The letter
referred to in the latter’s first sentence was dated February 19, 2010 from the
Applicant’s counsel to the opposing counsel:
We are in receipt of your letter dated
January 8, 2010 proposing settlement on the issue of costs in the above-noted
proceedings in the amount of $4,800.00, inclusive of fees and
disbursements.
While we disagree with your position on
the quantum of costs claimed in the Bill of Costs filed with the Federal Court,
in the interest of expediting matters and in avoiding the expense of a formal
assessment, we hereby accept on behalf of our client the aforementioned
settlement offer.
In view of the direction issued by the
Federal Court on February 10, 2010 requiring that the Respondent serve and file
its materials in support of the assessment by March 5, 2010, please provide us
with the aforementioned settlement funds, which we will hold in trust on behalf
of our client pending disposition of the appeal, by no later than February
26, 2010.
Provided
that we received the aforementioned settlement funds by February 26, 2010, we
will advise the Federal Court that the parties have concluded settlement on the
issue of costs and that the assessment is no longer required. Otherwise, we
will be forced to proceed with the assessment.
[11]
The
Applicant’s counsel advanced rebuttal submissions of July 8, 2010:
…As
noted in our letter of March 5, 2010, there was in fact an agreement between
the parties to settle the issue of costs at $4,800.00. The “additional term”
that the Applicant states was added by the Respondent was, in fact, a demand
for payment of the agreed upon amount. The Applicant refused to pay. As a
result, it was necessary for the Respondent to proceed with the assessment.
As detailed in the Respondent’s
submissions of April 7, 3020, it is submitted that the Respondent has set out
and justified its costs at $9,058.80. The Applicant’s belated attempt to
challenge the proven costs of the Respondent by citing an earlier “accepted”
agreement might have had greater motive force had the Applicant in fact paid
the agreed upon amount. The Applicant did not. Accordingly, the Applicant
cannot rely upon an earlier “accepted” agreement, which the Applicant refused
to pay, as any gauge of the costs that are required to be paid by the
Applicant.
In
view of the foregoing, the Respondent respectfully requests that a Certificate
of Assessment be issued for the amount claimed in the Bill of Costs filed with
the Federal Court on December 15, 2009, namely $9.058.80.
Assessment
[12]
In
Biovail Pharmaceuticals Canada v. Canada (Minister of Health and Welfare),
[2009] F.C.J. No. 858 (A.O.) [Biovail 2009], I considered the
circumstances of two matters with separate records and which had not been
consolidated, but for which separate judgments issued with separate awards of
costs further to a single hearing. There, the judgment limited the successful
party to a single hearing fee. In paragraphs 25 and 26 of Biovail 2009
above, I considered factors such as varied allowances for a counsel fee item
claimed in each matter and costs as an indemnity. The circumstances here were
different, but similar considerations may apply because, as I concluded in
paragraph 26 of Biovail 2009, costs “are an indemnity and not a windfall
or source of profit” and a litigant “cannot claim twice for the same
occurrence”. I reject the portion of the Applicant’s position urging me to
limit the Respondent to one set of counsel fees as the award of costs
contemplated no such limitation. However, the Applicant’s position on amount
resonated with me to some extent.
[13]
I
concluded in paragraph 7 of Starlight v. Canada [2001] F.C.J. No. 1376
(A.O) that the same point in the ranges throughout the Tariff need not be used
as each fee item for the services of counsel is discrete and must be considered
in its own circumstances. As well, broad distinctions may be required between
an upper versus lower allowance from available ranges.
[14]
My
findings in Halford v. Seed Hawk Inc. (2009), 69 C.P.R. (4th)
1, [2006] F.C.J. No. 629 (A.O.), Biovail Corp. v. Canada (Minister of
National Health and Welfare) (2007), 61 C.P.R. (4th) 33,
[2007] F.C.J. No. 1018 (A.O.), aff’d (2008), 64 C.P.R. (4th) 475,
[2008] F.C.J. No. 342 (F.C.) and Abbott Laboratories v. Canada (Minister of
Health) (2008), 66 C.P.R. (4th) 301, [2008] F.C.J. No. 870
(A.O.) [Abbott] set out my views on the threshold of proof for
categories of costs and approach to their assessment. Paragraphs 68 to 72
inclusive of Abbott above summarize the subjective elements and the
notion of rough justice in assessments of costs. In paragraphs 38 to 40 of Aventis
Pharma Inc. v. Apotex Inc., [2009] F.C.J. No. 56 (A.O.), I reinforced my
view that an assessment of costs should reflect the reality of the demands of
litigation. I endorse the practical approach in paragraph 69 of Merck &
Co. v. Canada (Minister of
Health),
[2007] F.C.J. No. 428 (A.O.) aff’d on its point and others, but varied on
others [2007] F.C.J. No. 1337 ( F.C.). Paragraph 14 of Merck & Co. v.
Apotex Inc. (2009), 73 C.P.R. (4th) 423, [2008] F.C.J. No. 1656
(F.C.A.) held that “in view of the limited material available to assessment
officers, determining what expenses are “reasonable” is often likely to do no
more than rough justice between the parties and inevitably involves the
exercise of a substantial degree of discretion on the part of assessment
officers.” This practice of rough justice does not, however, require an
assessment officer to approve any and all claimed items of costs without
question. Disallowances or reductions often occur. I have generally held that a
paucity of evidence may result in conservative allowances.
[15]
I
read the respective records of the parties. This was not the simplest nor the
most complex of matters. Paragraph 12 of the Court’s decision noted that the
“only issue on this appeal is whether the finding that the Respondent had
demonstrated use within the meaning of subsection 4(1) of the Act is
reasonable. That does not minimize the efforts of the Respondent’s counsel to
perfect the record and ready the matter for hearing. However, I think that in
these circumstances the work associated with counsel fee item 13(a)
(preparation for hearing / available range = 2-5 units) was eased by the
considerable work associated with fee item 2 (Respondent’s Record including
Memorandum of Fact and Law / available range = 4-7 units). I allow 6 units
($130 per unit) and 3 units respectively for fee items 2 and 13(a) in each
matter. The Court file indicates a hearing duration of 2 hours 40 minutes. The
Respondent appears to claim for only 1 hour at the maximum 3 units per
hour for fee item 14(a) (first counsel hearing attendance) in each matter. I
allow that as a reasonable assessed result in the circumstances.
[16]
I
held in paragraph 40 of AstraZeneca AB v. Apotex
Inc.,
[2009] F.C.J. No. 1019 (A.O) [AstroZeneca] that fee item 15 was not
intended as additional compensation for fee item 2 work and that “the use
in fee item 2 of the adjective ‘all’ in conjunction with “respondents’ records
and materials” precludes additional compensation using other items such as
fee item 15.” I held similarly in paragraph 27 of Biovail 2009 above. I
therefore disallow the fee item 15 claims.
[17]
Further
to my comments in paragraph 3 of Abbott above, I disallow the fee item
24 claims (travel time of counsel) as there must be a visible direction by the
Court to the assessment officer specifically authorizing fees for the time of
counsel in transit. Such a direction is not, however, necessary to assess
essential and associated travel disbursements, which might include those for
second counsel where relevant.
[18]
Rule
408(3) provides that an “assessment officer may assess and allow, or refuse to
allow, the costs of an assessment to either party.” I do not understand why the
Applicant found the February 26, 2010 deadline so offensive. I agree with the
Respondent that its essence was a demand for payment which I consider, apart
from whether one week was sufficient time for delivery of $4,800, to be
reasonably expected in litigation. I think that the Applicant could have acted
to preclude the necessity for this assessment of costs. The Respondent did not
claim fee item 26 (assessment of costs / available range = 2-6 units) and
should not depend on me to raise it as an assessable cost. I allow 4 units for
fee item 26 in the T-1060-08 matter only.
[19]
The
disbursements are in order. There appears to be an error in the bill of costs,
i.e. $1,127.64 in the listed subtotal instead of $1,339.64 which is actual
subtotal of the individual disbursements. The amount of $212 for couriers
accounts for this discrepancy. As these matters were not consolidated and were
not limited to a single set of costs although heard at the same time,
I have signed a bill of costs in each court file apportioning a disbursement
subtotal of $669.82 ($1,339.64 ÷ 2) assessed respectively to each matter. The
Respondent’s bill of costs in Federal Court files T-1060-08 and T-1061-08 are
assessed and allowed respectively at $3,020.22 and $2,432.62.
“Charles
E. Stinson”
Vancouver, BC
July
22, 2010
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