Date:
20120127
Docket: A-500-06
Citation: 2012 FCA 29
BETWEEN:
NOVOPHARM LIMITED
Appellant
and
JANSSEN-ORTHO INC. and
DAIICHI PHARMACEUTICAL CO., LTD.
Respondents
ASSESSMENT OF
COSTS - REASONS
Bruce Preston
Assessment Officer
[1]
By
Judgment dated June 7, 2007, the Court dismissed this appeal with costs. On
August 23, 2007, the Court dismissed the Appellant’s motion for reconsideration
of this Judgment, with costs of this motion at the top end of Column V of
Tariff B. The Respondent Janssen-Ortho Inc. (Janssen) has filed a Bill of Costs
for each of these decisions. These reasons will address the costs for both
Bills of Cost; however, a separate Certificate of Costs will be issued for each
one.
[2]
These
matters were heard together with the assessment on file T-2175-04 (Janssen et
al v. Teva). At the hearing of the assessment, counsel for both parties agreed
that the assessment of the appeal and the motion for reconsideration would
proceed based on the written submissions previously filed and on any submissions
common to file T-2175-04.
Appeal
Fees
[3]
Having
reviewed the submission of the parties, it is apparent that the only assessable
service in dispute is Item 22. At paragraph 107 of their Rebuttal Submissions,
counsel for Janssen removed the amount claimed for Item 13, preparation for
trial or hearing, from the Bill of Costs. Further, Items 19 and 26 are not
contested by the Appellant and are allowed as claimed.
[4]
Concerning
Item 22 (counsel fee on hearing of appeal), the only submission by the
Appellant is that Janssen has not deducted the time for lunch from the hours
claimed.
[5]
By
way of rebuttal Janssen argues that the time claimed for attendance was
calculated based on the length of the days in court.
[6]
In
Aventis Pharma Inc. v. Apotex, 2009 FC 51, it was held that the
time for lunch breaks should be factored out of any calculation for counsel
time per hour in Court (see also: Estensen Estate v. Canada (Attorney
General), 2009 FC 152 (Estensen), Aventis Pharma Inc v. Apotex
Inc, 2008 FC 988, Mercury Launch & Tug LTD v. Texada Quarrying Ltd,
2009 FC 331, Astra Zeneca AB v. Apotex Inc, 2009 FC 822). In keeping
with these decisions and my findings in Janssen v. Teva, 2012 FC 48, I
find that lunch breaks may not be included in the calculation of counsel time
in court. The hearing of the appeal was held on March 13 and 14, 2007. On the
first day, the Court sat from 10:00 AM until 5:00 PM. On the second day, the Court
sat from 9:30 AM until 12:30 PM. Given a total duration of 8 hours over two
days and removing the time for lunch on the first day of the appeal, I find
that the appeal had a duration of approximately 7 hours. However, given that it
is perfectly reasonable and necessary for counsel to arrive in advance of the
hearing in order to get settled prior to the hearing’s commencement, Item 22 is
allowed as claimed for a total of 8 hours.
Disbursements
[7]
Counsel
for the Appellant has not disputed Janssen’s claims for facsimiles, long
distance calls or court reporting services on the appeal. Having reviewed the
Court record I find these disbursements to be reasonable and justified and
allow them as claimed.
[8]
Janssen
has claimed $16,924.25 for photocopies produced internally and $18,668.66 for
photocopies produced by an external service provider. Counsel for the Appellant
submits that Janssen has not provided any evidence showing why these copies
were necessary. At paragraph 109 of their Responding Submissions, counsel for
the Appellant argues:
The invoices Janssen has submitted
do not offer any clarity. The amounts on the external invoices do not correlate
with the amounts in the Bill of Costs. Janssen has claimed almost $13,457.39
for photocopies made in a two week period from November 29, 2006 to December
13, 2006. At $0.25 per page, this amounts to 53,829 copies. During this time,
the only activity was a motion for a stay of the trial decision. Costs were not
awarded to Janssen for this motion. Janssen has not established that any copies
were required during this period, let alone the 50,000 plus copies it claims to
have made.
[9]
The
Appellant contends that as Janssen was provided with the Appeal Book and only
needed to copy its factum and authorities, allowing $3,000 for photocopies
would more than fairly compensate Janssen for the cost of all copies required
for the appeal.
[10]
In
rebuttal, Janssen submits that it is standard practice in the legal profession
not to keep detailed records of how many copies were made of which document. Counsel
further argues:
The appeal book consisted of
53 volumes. At 375 pages per volume, that is almost 20,000 pages of material.
Typically only one volume is provided to counsel, so it is reasonable that
copies would be made for lawyers working on the case, and a file copy. Making
just two copies would amount to almost 40,000 pages [sic], which would make up
a large portion of the photocopies claimed by Janssen. Page 703 of the record,
refers to a photocopy and binding charge of over $10,000 for close to 60,000
pages on January 5, 2007, the date of service of the appeal book. Likewise,
page 669 of the record refers to internal photocopy orders for roughly $7,000
on January 5, 2007.
[11]
Janssen
has claimed for a grand total of $35,592.91 in photocopies for the appeal. Given
the amount claimed, I found the substantiation for photocopying to lack
evidence concerning the number of copies produced, what they were related to
and their necessity. Although this was an appeal with a substantial number of
documents, I find the amount claimed to be excessive. The Appeal Book contains
15,041 pages. Counsel has claimed approximately $17,000.00 for the photocopying
of the Appeal Book. Although, I am in agreement with counsel for Janssen that
it is reasonable that counsel would require more than the one copy of the
Appeal Book served on them by the Appellant, I find it reasonable to allow for
two photocopies of the Appeal Book. Given the number of pages found in the
Appeal Book and allowing for $0.25 per page, I allow $7,520.50 for the
photocopying of the Appeal Book. Further, it appears that some of the
photocopies claimed relate to the Appellant’s motion for a stay of the trial
Judgment and Janssen’s motion for costs. As costs were not awarded for these
motions, any photocopies made for them will not be allowed.
[12]
There
are numerous claims for photocopies made on dates for which there appears to be
no evidence of filings with the court or exchange of documents between the
parties. In addition, at page 752 of Janssen’s Costs Submissions there is a
claim for $1,122.39 in photocopies made on August 10, 2007. This appears to be
a separate claim from the claim for photocopies relating to the motion for
reconsideration but the expense was incurred after the final judgment had been
rendered. If these copies relate to the motion for reconsideration, they should
have been claimed under that Bill of Costs. These amounts will not be allowed
as there is no evidence concerning what they relate to and no evidence of
necessity. Notwithstanding these gaps in the evidence, I find that the number
of photocopies required in this appeal would have been extensive, including a three
volume Book of Authorities and a Compendium of Documents for the Court. Therefore,
photocopying is allowed for one lump sum of $17,178.09 to cover both internal
and external photocopies.
[13]
Janssen
has submitted a claim for $3,820.75 for binding. The Appellant argues that
binding is overhead and cannot be recovered. In support, counsel refers to Minde
v. Ermineskin Cree Nation, 2009 FCA 128 and Morphy v. Canada (Attorney
General), 2009 FC 190.
[14]
By
way of rebuttal, Janssen submits that binding is recoverable and that most of
the amount claimed was charged on January 7, 2007, shortly after the appeal
book was served by the Appellant.
[15]
At
the hearing of the assessment, counsel for Janssen submitted that the binding
is not reusable as it was used for filings with the Court. Having reviewed the
Disbursement Summary for binding found at Tab 7 of Exhibit C of the Affidavit
of Mira Rinnie, it is apparent that the amount claimed for the majority of the
binding ($3,109.80) was expended in one event on January 8, 2007. Although I
have not been provided with evidence confirming what this binding was for, from
a review of the court record and in keeping with Janssen’s submissions concerning
photocopies, it appears that this charge relates to the binding of copies of the
Appeal Book. As the Appeal Book had been previously filed with the Court by the
Appellants, I find that the vast majority of the binding claimed was not
related to filings with the Court. Therefore, in keeping with my decision in Janssen
(supra), I will reduce the claim for binding by $3,109.80. Further,
having reviewed the six pages of entries in the Disbursement Summary, it is
noted that the vast majority of the binding events had no correlation with
filing dates. On the other hand, I was able to correlate four dates for binding
events with filings in the Federal Court of Appeal. As I find that it is only reasonable
or necessary to allow for internal binding when there is a correlation between
the binding and Court filings, binding is allowed at $148.30.
[16]
Concerning
Janssen’s claims for scanning
and Summation, the Appellant submits that the invoices supplied by Janssen suggest
that this amount was an in-house charge. Further, the only cost of in-house
scanning is staff time, which is unrecoverable overhead. Counsel argues that
Janssen has provided no explanation as to why any scanning costs were
necessary. Having regard to Summation document management services, the Appellant
argues that the cost of Summation is not recoverable. Further, counsel
submitted that Janssen had already paid to have the Trial record entered into
Summation and has not explained why a subsequent charge was necessary.
[17]
By
way of rebuttal, Janssen submits that the trial record and appeal book were
different documents and Summation had to be performed for each to provide easy
access to the documentation. Counsel argued that, given the size of the appeal
book, it was critical that counsel have access to a portable, electronic,
searchable copy while preparing for and attending the appeal.
[18]
It
is clear from a review of page 793 of Janssen’s Costs submissions that Janssen
has claimed scanning at $0.25 per page. Having reviewed the invoices found at
tab 37 to the Affidavit of Mira Rinne, it is apparent that the commercial rate
for scanning is $0.17 per copy. As I am satisfied that the scanning claimed was
reasonable and necessary, and in keeping with my decision in Janssen (supra),
I allow scanning at $0.17 per page for a total of $150.00.
[19]
Concerning
Summation, at the hearing of the assessment, counsel for Janssen submitted the
Reasons for Judgment and Judgment as to Costs in Adir and Servier Canada
Inc. v. Apotex, 2008 FC 1070. In that decision, the Court held that the
parties agreed to the use of Summation at trial and the unsuccessful party did
not object to reasonable disbursements relating to the cost of Summation
technology. Counter to this, counsel for the Appellant submitted the Reasons
for Judgment on Costs in Sanofi-Aventis Canada Inc. v. Apotex Inc., 2009
FC 1138. In that decision the Court held that Summation is part of the normal
overhead costs of litigation. It is noted that the Court did not indicate in
that decision that Summation was part of the overhead of a law office.
[20]
Considering
the above factors, and in keeping with Sanofi-Aventis (supra) and
my reasons concerning Summation in Janssen (supra), the claim for
Summation is not allowed.
[21]
Concerning
taxis and meals, the Appellant argues that both of these charges were incurred
locally and are therefore not recoverable.
[22]
By
way of rebuttal, counsel for Janssen contended that taxis and meals are common
expenses in litigation when counsel is working late.
[23]
At
the hearing of the assessment, counsel for Janssen conceded that taxi fares for
travel to and from work and meals for counsel should be deducted. As I have
been provided with no evidence that the claims for taxis and meals were for
anything other than counsel working late, the claims for taxis and meals are
not allowed.
[24]
Concerning
Janssen’s combined claim of $1,050.10 for QuickLaw and LexisNexis, at paragraph
118 of their Responding Submissions, the Appellant submits:
…. Janssen has not established
that all this research was necessary. Many charges postdate the filing of
Janssen’s memorandum of fact and law. Some of the charges postdate the hearing
of the appeal. These charges cannot reasonably be considered necessary.
[25]
In
rebuttal, counsel for Janssen submits that case law research is an accepted
part of patent litigation and is considered a reasonable and necessary
component of preparation for an appeal.
[26]
Although
I agree with counsel for the Appellant, that legal research conducted after the
appeal may not be allowed, I find that legal research conducted up to the commencement
of the appeal, even after the filing of the memorandum of fact and law, is
reasonable as new decisions which may affect the pending appeal could be
rendered at any time. Therefore, deducting QuickLaw research conducted after
the hearing of the appeal and allowing all other on-line case law research,
QuickLaw and LexisNexis are allowed for a total of $973.17.
[27]
Having
regard to Janssen’s claim of $158.00 for process servers, at paragraph 119 of
their Responding Submissions, the Appellant argues that process servers are not
necessary for filings in the Court of Appeal.
[28]
By
way of rebuttal, Janssen contends that process servers are a reasonable and
necessary cost incurred in document-intensive litigation.
[29]
Counsel
for the Appellant submitted that it is not necessary to use process servers in the
Federal Court of Appeal. However, no jurisprudence in support of this
contention has been provided. It has been held many times that costs should not
be assessed from the perspective of hindsight (see: Dableh v. Ontario Hydro [1994] F.C.J.
No. 1810). As I find it reasonable that Janssen incurred expenses for process
servers for the service and filing of documents, I allow the claim for process
servers as presented.
Motion for Reconsideration
[30]
The
Appellant’ motion for reconsideration proceeded in writing. As mentioned in
paragraph 1 above the Court dismissed the motion and awarded costs to the
Respondents at the top end of Column V of Tariff B.
[31]
It
is noted that the Appellant does not contest the billable services claimed. Therefore
Items 21 and 26 are allowed as presented. Further, the Appellant does not
contest Janssen’s disbursements for binding, courier and QuickLaw. Therefore, having
reviewed the Court record I find these disbursements to be reasonable and
necessary and allow them as claimed.
[32]
Concerning
Janssen’s claim of $261.75 for photocopying, the Appellant’s only submission is
that the amount allowed per page should be reduced to $0.11 per page.
[33]
By
way of rebuttal, counsel for Janssen argued that photocopies should be allowed
as they are reasonable and necessary when responding to a motion.
[34]
In
keeping with my decision in Janssen (supra) and already having
allowed photocopies at $0.25 per page at paragraph 11 above, the claim for
photocopying is allowed as presented.
[35]
The
only other contested disbursement is Janssen’s claim for process servers. Once
again, the only argument put forward by counsel for the Appellant was that
process servers are not required for filing in the Federal Court of Appeal. In
keeping with my decision at paragraph 29 above, I find the claim for process
servers reasonable and necessary and allow it at $314.40, as claimed.
Interest
[36]
Janssen
has claimed post judgment interest from the date of judgment. The Appellant
submits that the Federal Court of Appeal did not award Janssen post-judgment
interest and that an assessment officer has no jurisdiction to award interest
or set an interest rate. In support, counsel referred to Wilson v. Canada,
2000 DTC 6641at paragraphs 46 to 48. Then, at paragraph 120 of its Responding
Submissions, the Appellant argues:
….The cause of action underlying these
proceedings (the manufacture and sale of levofloxacin in Canada) arose in more than one
province (as Janssen admitted in the Statement of Issues served in connection
with its damages reference). Accordingly, any right Janssen may have to
post-judgment interest must flow from s. 37(2) of the Federal Courts Act,
not s. 37(1) as Janssen seems to suggest….
[37]
By
way of rebuttal, Janssen contends that an assessment officer may allow interest
when not explicitly awarded by the Court. In support, counsel referred to Bayer
AG v. Novopharm Ltd, 2009 FC 1230. Counsel also refers to Morin v.
Canada, 2002 FCT 898 which relies on Wilson (supra).
Further, Janssen argues that the Appellant has made no specific reference to
Janssen’s alleged admission that the cause of action falls under s. 37(2) of
the Federal Courts Act. Finally, Janssen submits that interest should be
allowed under s. 37(1) of the Federal Courts Act, at 6 %, not
compounded, per the Ontario Courts of Justice Act.
[38]
The
decision in Wilson (supra) stems from an appeal from an
assessment of costs. In Wilson, the Court reversed the
assessment officer’s decision on the issue of interest. At paragraph 46 in Wilson, the Court
held that when interest has not been awarded by the Court, an assessment
officer may not award interest or set an interest rate on an assessment.
However, the Court also held that an assessment officer does not have the
jurisdiction to deny interest either. Further, at paragraph 38 of Wilson, after a
thorough analysis of the law related to post judgment interest, the Court held:
….At all times he was entitled to post-judgment interest, but
there was jurisdiction in the Court, not apparently exercised in these cases,
with respect to disallowance of interest, the interest rate and the period over
which interest would be paid. The exercise of the Court's discretion would be
governed either by jurisprudence of this Court or the Ontario Courts, depending
upon whether the judgment was rendered prior to February 1, 1992.
Therefore, although I lack jurisdiction to
award post judgment interest, in the assessment before me, I find that the
Court did not exercise its jurisdiction to disallow post judgment interest.
Consequentially, post judgment interest runs from the date of judgment.
[39]
Having
reached this conclusion, I must determine whether Section 37(1) or Section
37(2) of the Federal Courts Act is applicable to the calculation of
interest. Section 37 reads:
37. (1) Except as otherwise provided in any other
Act of Parliament and subject to subsection (2), the laws relating to interest
on judgments in causes of action between subject and subject that are in force
in a province apply to judgments of the Federal Court of Appeal or the Federal
Court in respect of any cause of action arising in that province.
(2) A
judgment of the Federal Court of Appeal or the Federal Court in respect of a
cause of action arising outside a province or in respect of causes of action
arising in more than one province bears interest at the rate that court
considers reasonable in the circumstances, calculated from the time of the
giving of the judgment.
[40]
Appellant
argued that section 37(2) of the Federal Courts Act is applicable to the
calculation of interest as the cause of action arose in more than one province.
Having reviewed the Statement of Issues, at paragraphs 6 and 9, I find that
both Janssen and Teva are corporations located in Toronto, Ontario. Further, I
can find no admission by Janssen in the statement confirming that s. 37(2) of
the Federal Courts Act is applicable to the issue of interest. This
being the case, I find that s. 37(1) of the Federal Courts Act should be
used in determining post judgment interest as both companies have head offices
in Ontario. Therefore, in keeping with the finding in Wilson (supra)
and utilizing the approach in Bayer (supra), I find that post
judgment interest, pursuant to section 37(1) of the Federal Courts Act,
runs from the date of judgment. Therefore, interest shall be calculated
according to the laws relating to interest, on judgments in causes of action
between subject and subject, which are in force in the province of Ontario.
G.S.T.
[41]
The
Appellant submits that Janssen has claimed for G.S.T. when G.S.T. had already
been included in the amount claimed for given disbursements. At paragraph 125
of their Responding Submissions, the Appellant argues:
As Janssen bears the burden of
establishing its right to recover G.S.T., its entitlement to recover G.S.T.
should be assessed conservatively. In Astrazeneca
AB v Apotex Inc., the Court
awarded only approximately one third of the amount claimed for G.S.T. as a
result of inadequate evidence and improper claims. A similar reduction is
appropriate in this case. Janssen should be limited to G.S.T. on only one third
of its taxed costs.
[42]
By
way of rebuttal, Janssen submits that a 10 percent reduction in the amount of
G.S.T. claimed is appropriate.
[43]
Having
reviewed the Disbursement Summaries provided in the Affidavit of Mira Rinnie, I
find that a 10 percent reduction in G.S.T. is not sufficient as several claims
included G.S.T. To allow a second claim would be duplicitous. On the other
hand, a reduction of 66 percent as suggested by the Appellant is too severe.
Therefore, under the circumstances of this file, in order to account for the
G.S.T. already included in the disbursements claimed, the G.S.T. claimed by
Janssen will be reduced by 25 percent on the taxed disbursements claimed and
allowed.
[44]
Finally,
counsel for the Appellant submitted that the costs awarded to the Appellant in
the order of the Honourable Madam Justice Sharlow dated March 9, 2007 must be
set-off against the amount allowed. Having reviewed the order of March 9, 2007
I find that the order awards the Appellant costs in the amount of $1,500.00. Therefore,
as I have been presented with no evidence that the amount owing has been paid,
the $1,500.00 will be set-off from the total amount allowed for the appeal.
[45]
For
the above reasons, the Bill of Costs for the appeal, presented at $76,746.47,
is assessed and allowed for a total amount of $25,550.98 plus interest from the
date of judgment. Also, the Bill of Costs for the motion for reconsideration,
presented at $2,718.84, is assessed and allowed for a total amount of $2,710.87
plus interest from the date of judgment. A certificate of assessment will be
issued for each Bill of Costs.
“Bruce Preston”
Toronto, Ontario
January 27, 2012
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