Date: 20110104
Dockets: T-488-10
T-692-10
Citation: 2010 FC 1335
Toronto, Ontario, January
4, 2011
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
|
|
AIR CANADA
|
|
|
|
Applicant
|
|
and
|
|
|
TORONTO PORT AUTHORITY AND PORTER AIRLINES
INC.
|
|
|
|
Respondents
|
|
|
|
|
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
These
Reasons and Judgment are further to those which I issued on July 21, 2010 in
these proceedings. These Reasons are directed to the question of costs. At the
end of the earlier hearing of these applications on the merits I was advised by
Counsel for each of the parties that it was likely that they could come to an
agreement as to costs. This caused me to write in my earlier Reasons (2010 FC
774) at paragraph 114:
Counsel at the hearing advised that the parties may well agree as
to the disposition of costs. I will therefore leave that matter to them,
provided however that if they cannot agree within a reasonable period any one
or more of them may, by a short letter addressed to me, seek a further order
and directions as to costs.
[2]
Unfortunately,
the parties have been unable to agree as to costs and have asked that I
determine the matter. I will do so notwithstanding that an appeal has been
filed by Air Canada from my Judgment.
That appeal has not yet been heard.
[3]
In
my Judgment of July 21, 2010 I dismissed both applications. All parties are
agreed that, in respect of the issues before me, the Respondents Toronto Port
Authority and Porter Airlines Inc. were substantially successful on most of the
issues and certainly in the result. The Respondents have succeeded and each of
them is entitled to costs. The only issue is as to quantum.
[4]
Both
Toronto Port Authority and Porter Airlines Inc. argue that they are entitled to
substantial indemnity for costs and full indemnity in respect of
disbursements. Each has submitted a draft bill of costs and disbursements
indicating the actual costs and the costs sought to be recovered on a
substantial indemnity basis.
[5]
Air
Canada submits that
the costs allowed to each Respondent should not exceed twice the scale of
Column IV of Tariff B (estimated to be $112,000 each) plus all reasonable
disbursements.
[6]
It
is to be noted that Air Canada does not challenge the amounts set out in each
of the Respondents’ Draft Bill of Costs and Disbursements as to quantum nor has
Air Canada provided a
draft bill or other information as to its own Costs and Disbursements. I
conclude, therefore, that as far as the dollar figures set out by the
Respondents’ draft bill are concerned, they are not seriously challenged.
[7]
No
party raised with the Court any offers to settle that would affect the quantum
of costs.
[8]
Toronto
Port Authority submits the following summary as to costs and disbursements, the
requested costs being 75% of the actual costs.
|
Item
|
Full Indemnity Costs
|
Tariff Amount
(Column V)
|
Requested Costs
|
|
Fees
|
$1,410,262.69
|
$69,664.02
|
$1,057,697.02
|
|
Disbursements
|
$194,851.15
|
$194,851.15
|
$194,851.15
|
|
TOTAL:
|
$1,605,113.84
|
$264,515.17
|
$1,252,548.17
|
[9]
Porter
Airlines Inc. submits the following summary as to costs and disbursements, the
requested costs by 75% of the actual costs:
|
Item
|
Tariff Amount
(Column III)
|
Tariff Amount
(Column V)
|
Actual Costs
|
Requested Costs
|
|
Fees
|
$47,014.40
|
$81,171.20
|
$1,672,497.36
|
$1,250,000.00
|
|
Disbursements
|
$156,422.88
|
$156,422.88
|
$156,422.88
|
$156,422.88
|
|
TOTAL:
|
$203,437.28
|
$237,594.08
|
$1,828,920.24
|
$1,406,422.88
|
[10]
Air
Canada has raised
no serious objection as to the quantum nor any serious objection to the
disbursements of each of the Respondents. Its position as to quantum of costs
and disbursements can be summarized as:
Toronto Port Authority:
Costs: $120,000.00
Disbursements: $194,851.15
Total: $314,851.15
Porter Airlines Inc.:
Costs: $120,000.00
Disbursements: $156,422.88
Total: $276,422.88
[11]
Rule
400(1) gives the Court full discretionary power over the amount and allocation
of costs. Rule 400(3) provides a number of matters that the Court may consider
in exercising such discretion including, in sub-rule (o), any other matter that
the Court considers to be relevant.
[12]
In
my earlier Reasons (2010 FC 774) I reviewed the background of these two
applications, the parties, the evidence, the issues and provided a chronology
of important events. These matters need not be repeated here. In brief, these
two applications, which were heard together on common evidence, were hard
fought, complex and completed within seven months of the institution of the
proceedings. While no monetary relief was claimed much depended on the
result. Access to the Toronto Island (Billy Bishop) Airport and
its commercial viability was at stake. No party spared any legal resources in
addressing the matter. Considerable effort was expended by first class legal Counsel
retained by all parties. Time and expense appears not to have been an
impediment.
[13]
These
matters were exceptionally well argued before me. However, I had difficulty,
as my earlier Reasons reflect, with the restating of certain issues and
emergence of new unpleaded issues on behalf of Air Canada.
[14]
Traditionally,
the Federal Court of Canada has been laggard in comparison with other Canadian
superior courts, such as Ontario, in escalating an
appropriate scale of costs. Many cases in the Federal Court involve persons of
limited means who engage the federal government in litigation of one kind or
another. The scale of costs is usually modest in such circumstances or usually
non-existent in cases such as immigration. Complex commercial cases are
frequently those involving intellectual property such as patent infringement actions
or applications made pursuant to Patented Medicines (Notice of Compliance)
Regulations, SOR/93-133 as amended. Still costs in such matters are
assessed largely with reference to the Tariff on one of the higher levels such
as Column IV or V.
[15]
Other
jurisdictions, such as Ontario, have moved away from a
tariff toward concepts of full indemnity or partial indemnity based upon the
actual costs and disbursements incurred in the proceeding. The theory is that
a successful party should not be penalized just because they become engaged in,
or had to resort to, litigation. In so doing however, a Court has to be
mindful that a party, while successful, may not have been entirely successful
or, that the matter was a close call, or that it was one in which the assistance
of a Court in its resolution was essential. Therefore an unsuccessful party
should not be unduly punished by having to bear not only its own expenses but a
large proportion of those of the other parties as well.
[16]
In
the present case I am satisfied that the indemnification approach is the proper
one, the only question being whether that indemnification should be full or
partial and, if partial, what part. As I stated earlier, there appears to be no
genuine dispute as to the quantum of the actual costs and disbursements
incurred. I am satisfied that each of Toronto Port Authority and Porter
Airlines Inc. should recover the full amount of their stated disbursements from
Air Canada.
[17]
As
to costs, Toronto Port Authority and Porter Airlines Inc. ask for recovery of
75% of their actual costs. Air Canada recommends what amounts
to under 10% of those actual costs. In determining an appropriate percentage
of costs I have had regard to Rule 400(3) including other matters as indicated
by sub-rule (o) and find that the following are most relevant:
1. Air Canada was the
aggressor throughout this litigation. It commenced the first application
followed by the second and threatened interlocutory injunction proceedings
until an early hearing date could be fixed. I have noted earlier proceedings
in which Air Canada or its related company Jazz have been involved but do not
take them into account as costs have been or can be assessed in those
proceedings. The point that I consider important is that Air Canada has been
an aggressive litigator and must have been well aware of cost consequences.
2. In the result, I found
that, among other things, the Court had no jurisdiction to deal with the
matters at hand and that there were no “decisions” to engage the Court’s
powers. Air Canada appears to
have been aware that. It seemed to have difficulty getting “traction” in these
proceedings. This appears to have been the cause of the shifting issues it raised
from time to time including at the hearing itself.
3. The stakes
were high
as they dealt with the commercial operation of the Toronto Island
(Billy Bishop) Airport and
Porter’s access and Air Canada’s access to facilities at that
airport.
4. All parties spared no legal expense, time
and effort. Many senior and other counsel were engaged by all parties. Short
timelines put pressure on the lawyers, the witnesses and the litigants. No party
was under any disillusionment as to the costs and risk of costs involved.
5. Air Canada made allegations, ultimately
not proven and essentially irrelevant, as to misconduct and anti-competitive
activity on the part of Toronto Port Authority and Porter Airlines Inc.
Further, Air Canada made unfounded attacks on the
ethics of some of the Respondent’s witnesses.
6. The sums requested by Toronto Port
Authority and Porter are extremely high and well beyond the range of what was
essentially, a two and a half day hearing even if extensive affidavit evidence on
cross-examination was involved.
[18]
Taking these
matters into consideration I find that the Respondent’s request for partial
indemnity for costs at the 50% level of actual costs and full disbursements is
appropriate and will so award. The recovery requested as set are in the draft bill
of costs includes taxes so no additional award in that respect apparently is
needed.
[19]
In the
result, Toronto Port Authority is awarded $705,131.35 for costs and taxes and
$194,851.15 for disbursements which, in total, is $899,982.45. Porter is
awarded $836,248.65 for costs and taxes and $156,422.88 for disbursements
which, in total, is $992,671.53. These awards include applicable taxes.
JUDGMENT AS
TO COSTS
For the Reasons provided:
THIS COURT’S JUDGMENT
AS TO
COSTS is that:
1. The Respondent Toronto Port
Authority is entitled to recover from the Applicant Air Canada the sum of $899,982.45 of
which $194,851.15 is in respect of disbursements. The award includes applicable
taxes;
2. The Respondent Porter Airlines
Inc. is entitled to recover from the Applicant Air Canada the sum of $992,671.53 of which
$156,422.88 is in respect of disbursements. The award includes applicable
taxes.
Email this Content