Forestex Management Corp. v. Lloyd's, 2004 FCA 323

Date: 20040929

Docket: A-75-03

Citation: 2004 FCA 323

BETWEEN:

                                              FORESTEX MANAGEMENT CORP.

                                           J.M.C. FOREST MAINTENANCE LTD.

                                                                                                                                          Appellants

                                                                         - and -

                                                MR. DORNOCH ON BEHALF OF

                                                  UNDERWRITERS AT LLOYD'S

                                  MEMBERS OF LLOYD'S, LONDON, ENGLAND,

                                               MURRAY UNDERWRITERS LTD.

                         CANADIAN NORTHERN SHIELD INSURANCE COMPANY

                                  COMMERCIAL ASSURANCE UNION COMPANY

                                         CHRISTIE - PHOENIX (VICTORIA) LTD.

                                                                                                                                      Respondents

                                            ASSESSMENT OF COSTS - REASONS

Charles E. Stinson

Assessment Officer

[1]                I issued a timetable for written disposition of the bill of costs of the Respondents other than Christie - Phoenix (Victoria) Ltd. (hereafter the "Dornoch Respondents"). The Appellants had commenced Federal Court file T-1421-01 for relief relative to marine insurance and the grounding of the vessel "Texada". The Dornoch Respondents filed a defence in said action. The Federal Court, after noting that the Appellants (Plaintiffs) had not responded in a timely manner to a notice of status review, dismissed the action for delay, but did not mention costs. In submissions in A-75-03, filed in response to a notice of status review of their appeal of said order, the Appellants asserted that they would take certain steps to move this appeal forward. Eventually, the Federal Court of Appeal dismissed this appeal for undue delay with costs in favour of the respondents.

[2]                The Appellants' submissions, as I read them, centre on challenging the award of and the entitlement to costs in the context of Rule 400. The submissions also included a request "to speak to this application", a request opposed by the Dornoch Respondents. For reasons given below, the Appellants' submissions do not assist me in this assessment of costs and I do not think that an oral hearing would remedy that situation.

[3]                A bill of costs, featuring a compound style of cause reflecting both A-75-03 and T-1421-01 and containing the costs for both matters, was filed in each court file. The Court in IBM Canada v. Xerox of Canada Ltd. et al., [1977] 1 F.C. 181 at 182 (F.C.A.), commented unfavourably on the combination of bills of costs for the two different divisions of the Federal Court of Canada. Generally, if faced as here with such a combined bill of costs, I have noted said practice as undesirable, but have assessed it as presented if I felt that no prejudice would result as a function of the preclusion of additional costs to prepare a discrete bill of costs for each division or of the absence of impairment of the formulation of opposing materials. An assessment decision has then been filed in each court file, reflecting the assessment of costs in each division respectively of the Federal Court of Canada.

[4]                That practice became difficult to apply as of July 2, 2003, the date that the Courts Administration Service Act (hereafter the "CAS Act") took effect. The CAS Act, s. 16, continued the divisions of the Federal Court of Canada, but as two distinct courts called the Federal Court of Appeal and the Federal Court respectively. The CAS Act, s. 3, created the Courts Administration Service to provide registry administration for these two courts, as well as the Court Martial Appeal Court of Canada and the Tax Court of Canada. The CAS Act, s. 187(2), provides that all "orders regulating practice and procedure in the Federal Court of Canada... remain in force until amended, repealed or otherwise determined, to the extent that they are not inconsistent with the provisions of this Act." Therefore, I can assess claimed costs in A-75-03 and T-1421-01 respectively and, although I think that the practice of a combined bill of costs for two distinct courts should be discouraged, the amounts in issue and the effect of the relevant law are such, in my opinion, that it would serve no real purpose at this point to require the Dornoch Respondents to break out the costs into separate bills of costs.

[5]                The Appellants' submissions did not address the relevant law governing my jurisdiction for the assessment of the Federal Court costs (T-1421-01). It is sufficient to note only that they object to entitlement to costs, but otherwise I do not rely on said submissions. Rule 400(1), which vests full discretionary power in the Court over awards of costs, means that orders and judgments must contain visible directions that costs have been awarded. Given the Federal Courts Act, ss. 4 and 5.1(1) defining the Court, and Rule 2 of the Federal Court Rules, 1998 defining an assessment officer, the absence, as here, of that exercise of prior discretion by either the Federal Court or the Federal Court of Appeal leaves me without jurisdiction under Rule 405 to assess costs in T-1421-01. Rule 409 does not assist as it only brings Rule 400(3) factors into play once the Court's Rule 400(1) discretion has been visibly exercised. The Dornoch Respondents cited Sax v. Chomyn et al., (1999) 173 F.T.R. 318 (F.C.T.D.), but that does not assist because it addresses entitlement to costs in the discretion of the Court as opposed to an assessment officer. A copy of these reasons are filed today in T-1421-01 and those costs in the bill of costs associated with said action are disallowed. Interlocutory awards of costs could, however, have been assessed at this time, but there were none.

[6]                The Appellants' submissions for A-75-03 were also not of assistance. They argued that, in awarding costs, the Federal Court of Appeal was not aware that the Dornoch Respondents had not formally been served with the appeal and asserted that said respondents, although informally aware of the appeal, were therefore not entitled to costs as they did not come within the jurisdiction of said Court. Further, the Court had no jurisdiction to award costs in the absence of personal service of the appeal upon the respondents.

[7]                I note that the preamble of the judgment dated January 13, 2004, shows that the Court reviewed certain occurrences in the file, including those clearly indicating that the appeal had not been formally served on the respondents. Having regard to the Federal Courts Act, ss. 3 and 5(1) defining the Court, and Rule 2 of the Federal Court Rules, 1998 defining an assessment officer, and consistent with my reasons above, I do not exercise the Rule 400(1) jurisdiction of the Court. In any event, the Court has exercised said jurisdiction here and I do not have authority under Rule 405 to vary its judgment.

[8]                Effectively, the absence of any relevant representations on behalf of the Appellants which could assist me in identifying issues and making a decision leaves the Dornoch Respondents' bill unopposed. My view, often expressed in comparable circumstances, is that the Federal Court Rules, 1998 do not contemplate a litigant benefiting by an assessment officer stepping away from a position of neutrality to act as the litigant's advocate in challenging given item in a bill of costs. However, the assessment officer cannot certify unlawful items, ie. those outside the authority of the judgment and the tariff. I examined each item claimed in the bill of costs and the supporting materials within those parameters. There were items for services of counsel which might have attracted disagreement, but the amount claimed in total for the services of counsel in the bill of costs is generally arguable within the limits of the award of costs as reasonable in the circumstances of this litigation. The timeline gleaned from my perusal of the evidence indicates that the disbursements of $228.09 in the combined bill of costs encompass both matters. My view, often expressed further to my approach in Carlile v. Her Majesty the Queen (1997), 97 D.T.C. 5284 at 5287 (T.O.) and the sentiment of Lord Justice Russell in Re Eastwood (deceased) (1974), 3 All. E.R. 603 at 608, that assessment of costs is "rough justice, in the sense of being compounded of much sensible approximation", is that discretion may be applied to sort a reasonable result for costs equitable for both sides. I allow $50.00 inclusive of GST for disbursements, part of which addresses the expenses of this assessment of costs. The bill of costs of the Dornoch Respondents, presented at $2,495.19, is assessed and allowed at $679.75.

(Sgd.) "Charles E. Stinson"

     Assessment Officer

Vancouver, BC

September 29, 2004

                                                  FEDERAL COURT OF APPEAL

                            NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                          A-75-03

STYLE OF CAUSE:                          FORESTEX MANAGEMENT CORP. et al.

v. MR. DORNOCH et al.

ASSESSMENT OF COSTS IN WRITING WITHOUT PERSONAL APPEARANCE

OF PARTIES

REASONS BY:                                 CHARLES E. STINSON

DATED:                                             September 29, 2004

SOLICITORS OF RECORD: