Docket: T-152-10
Citation: 2011 FC 1345
Ottawa, Ontario, November 22, 2011
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
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CANADIAN GENERIC PHARMACEUTICAL
ASSOCIATION
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Applicant
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and
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THE MINISTER OF HEALTH AND GLAXOSMITHKLINE
INC.
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Respondents
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REASONS FOR ORDER AND ORDER
[1]
On
April 15, 2011, I wholly dismissed the appeal brought by the Canadian Generic
Pharmaceutical Association (“CGPA”) from the Order of Prothonotary Lafrenière
dismissing CGPA’s application for lack of standing. I also awarded costs to
GlaxoSmithKline Inc. (“GSK”) and the Minister of Health.
[2]
GSK
seeks an order for a lump sum award of costs on a substantial indemnity basis,
as the parties have not been able to agree as to how costs should be
apportioned. It requests that costs be fixed in the amount of $20,000
(approximately 75% of its claimed actual fees), and that it be given complete
recovery of its disbursements in the amount of $2,554.43, for a total award of
$22,554.43.
[3]
As
for the Minister of Health, she did not seek her costs on the motion before the
Prothonotary. She now asks for costs in the amount of $2,656.50, calculated in
accordance with Column III of Tariff B of the Federal Courts Rules, SOR/98-106
[Rules], on the basis that the appeal was unnecessary.
[4]
Rule
400(1) gives the Court discretion over costs. Rule 400(3) sets out a
non-exhaustive list of factors that the Court may consider when determining
costs. Rule 407 states that unless the Court orders otherwise, party-and-party
costs are to be assessed in accordance with Column III of Tariff B. The
rationale behind the Tariff is that costs are not intended to fully compensate
a successful party for the costs incurred in a proceeding. The Tariff
represents a compromise between compensating a successful party and not unduly burdening
an unsuccessful party (Apotex Inc v Wellcome Foundation Ltd. (1998), 159
FTR 233 (FCTD), aff’d (2001) 199 FTR 320 (FCA)).
[5]
It
is trite law that the Court’s discretion to award amounts in excess of the
Tariff is the exception and should not be exercised lightly. Costs on a
solicitor-client scale are rarely awarded and even in exceptional cases should
neither be punitive nor extravagant.
[6]
Counsel
for GSK submits that CGPA’s application was completely without merit as it was
held, both at first instance and on appeal, that it was not directly affected
and that there was no evidence that it or any of its member generic
manufacturers intended to make a drug submission for the drug the listing of
which (on the Register of Innovative Drugs) it was challenging. It is also
contended that both parties were represented by experienced counsel, as the
issues raised were complex and involved legal provisions which have been given
little judicial consideration. Finally, GSK argued that they were successful
both before the Prothonotary and in the de novo hearing before me.
[7]
This
is far from sufficient to award costs in excess of the Tariff. An award of
substantial indemnity costs is typically ordered when there has been
reprehensible, scandalous or outrageous conduct. It is interesting to note
that in Air Canada v Toronto Port Authority, 2010 FC 1335 [Air Canada],
upon which GSK relies for its claim, the Court found that the applicant was an
aggressive litigator, threatening interlocutory injunction proceedings until an
early hearing date could be fixed. The Court also found that the applicant was
aware that the Court had no jurisdiction to deal with the matters at hand, as
evidenced by the shifting issues it raised from time to time, including at the
hearing itself. Finally, the Court also took into account that the applicant
made essentially irrelevant allegations as to misconduct and anti-competitive
activity of the respondents.
[8]
None
of these factors which motivated the Court to award increased costs in Air
Canada, above, are present in this case. The conduct of the litigators
representing CGPA was responsible and irreproachable. Far from being vexatious
or taken in bad faith, the proceeding undertaken by CGPA could not be said to
be entirely baseless, and GSK indeed acknowledged that the issues raised in the
motion and the appeal were complex and had not previously been settled.
Finally, CGPA had a genuine interest in bringing this proceeding, as there was
evidence that it would be unlikely that any generic company would individually
bring such a challenge. While the Court rejected that argument, it was clearly
not improper to make it.
[9]
In
light of the foregoing, I am not prepared to deviate from the Tariff, and more
particularly from Column III of the Tariff. It is not one of those cases where
the conduct of a party or its counsel deserves sanctions. When I granted costs
to the Respondents in my original Reasons without any further elaboration, it
was implicit that they were to be calculated in the usual manner in accordance
with Column III of Tariff B. None of the arguments put forward by GSK have
persuaded me to alter my decision in that respect.
[10]
Costs
and disbursements are therefore fixed in the amount of $5,999.43 ($3,445 for
costs and $2,554.43 for disbursements) to GSK and $2,656.50 ($2,600 for costs
and $56.50 for disbursements) to the Minister.
ORDER
THIS COURT
ORDERS that costs in this matter be granted to GSK in the amount of $5,999.43,
and to the Minister in the amount of $2,656.50.
"Yves
de Montigny"
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