Docket: T-705-13
Citation:
2017 FC 495
Ottawa, Ontario, May 25, 2017
PRESENT: The Honourable Mr. Justice Locke
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BETWEEN:
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MEDIATUBE CORP.
AND NORTHVU INC.
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Plaintiffs
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and
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BELL CANADA
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Defendant
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PUBLIC ORDER AND REASONS
(Identical to the Confidential
Order and Reasons issued on May 12, 2017)
I.
Background
[1]
On January 4, 2017, I issued my decision on the
merits of this patent infringement action by the plaintiffs MediaTube Corp.
(MediaTube) and NorthVu Inc. (NorthVu) against Bell Canada (Bell). The neutral
citation of the decision on the merits (the Trial Decision) is 2017 FC 6. In
the Trial Decision, I dismissed the action and the counterclaim, and ordered as
follows in respect of costs:
The plaintiffs shall pay Bell’s costs in an
amount to be determined on the basis of submissions on aspects not addressed in
this judgment, and elevated by 50% for all issues except the punitive damages
claim which are to be calculated on a solicitor-and-client basis.
[2]
The parties were invited to make written submissions
on costs in the days following the Trial Decision. This decision assesses costs
following consideration of the parties’ submissions.
[3]
For reasons particular to the present action, 13
pages of the Trial Decision were devoted to various arguments concerning costs
that were made by the parties during the trial. Important aspects of these
arguments concerned (i) the weakness of the plaintiffs’ theory of infringement,
and (ii) the plaintiffs’ withdrawal, during trial, of their claim for punitive
damages. As suggested in the Trial Decision, I will not revisit my conclusions
related to costs, but I am prepared to take into account issues that were not
dealt with at trial. Accordingly, I start this decision on costs from the
perspective that the plaintiffs shall pay Bell’s costs at the following levels:
a)
For all issues except the punitive damages claim
(the Infringement Case), costs are elevated by 50%; and
b)
For the punitive damages claim (the Punitive
Damages Case), costs are on a solicitor-and-client basis.
II.
The Parties’ Positions
A.
Bell’s Position
[4]
Bell seeks costs in the amount of $7,120,499;
comprising $5,686,576 for the Infringement Case and $1,433,923 for the Punitive
Damages Case.
[5]
The $5,686,576 sought for the Infringement Case
is calculated on the basis of a lump sum representing 50% of Bell’s actual
legal fees for the Infringement Case plus 100% of its disbursements for the
Infringement Case, both amounts then elevated by 50%. As an alternative, Bell
calculates costs with only the legal fees (and not the disbursements) elevated
by 50%. This way, Bell arrives at a figure of $5,129,423 for the Infringement
Case.
[6]
As a further alternative, Bell calculates costs
for the Infringement Case on the basis of Tariff B of the Federal Courts
Rules, SOR/98-106 [Rules], and specifically the top of Column IV of
Tariff B. The amounts sought according to this method of calculation are
$2,154,647 (if both fees and disbursements are elevated by 50%) or $1,655,552
(if only fees are elevated).
[7]
The $1,433,923 sought for the Punitive Damages
Case is based on full indemnification of legal fees and disbursements.
B.
The Plaintiffs’ Position
[8]
The plaintiffs argue that the costs award should
be $1,324,000; comprising $739,000 for the Infringement Case and $585,000 for
the Punitive Damages Case.
[9]
With regard to the Infringement Case, the figure
of $739,000 comes from fees calculated based on the top of Column IV of Tariff
B, and only the legal fees (and not the disbursements) being elevated by 50%.
The plaintiffs also dispute several of the fees and disbursements identified by
Bell in its Bill of Costs.
[10]
The plaintiffs’ figure of $585,000 for the
Punitive Damages Case is based on an argument that costs on a
solicitor-and-client basis are intended to provide substantial indemnity rather
than full indemnity. The plaintiffs also argue that many of Bell’s fees and
disbursements related to the Punitive Damages Case were not reasonable and
hence should not be allowed in the costs award.
III.
Consideration of Issues in Dispute
[11]
I have considered the factors indicated in Rule
400(3) of the Rules in setting the amount of costs. Some of these
factors were already taken into account in the context of the Trial Decision.
With regard to the result of the proceeding, Bell was successful in defending
against the plaintiffs’ claim. With regard to the importance and complexity of
the issues, I find that the matter was of considerable importance to the
parties, and the issues in dispute, especially the factual issues, were
numerous and complex. I have been given no information concerning any offer to
settle which would affect the amount of costs to be awarded. With regard to the
amount of work involved in this matter, I find that it was substantial, but in
keeping with the importance and complexity of the issues.
[12]
The parties agree that a lump-sum award of costs
is appropriate. Accordingly, I have calculated the amount due rather than
sending the matter of costs to an assessment officer.
A.
Preliminary Issue – Separating Costs of the
Punitive Damages Case from Costs of the Infringement Case
[13]
As indicated above, the Trial Decision provides
for a different measure of costs for the Punitive Damages Case than for the
Infringement Case. It is necessary, therefore, to determine which costs
incurred by Bell relate to the Punitive Damages Case. There are several ways in
which the allocation of costs could be done. Some of these ways might yield a
more precise figure but would demand much more work. Other ways of determining
the appropriate allocation of costs are less precise but have the benefit of
being less demanding to calculate. Bearing in mind that the assessment of costs
is rough justice (“in the sense of being compounded of
much sensible approximation”: Lundbeck Canada Inc v Canada (Health),
2014 FC 1049 at para 32, citing Abbott Laboratories v Canada (Health),
2008 FC 693 at para 70, itself quoting from Re Eastwood (deceased)
(1974), 3 All E.R. 603 at 608), I have adopted a relatively simple,
albeit less precise, approach.
[14]
Rather than attempting to determine, for each
step in this matter, whether it concerned the Punitive Damages Case or the
Infringement Case, I prefer to determine a fraction representing the amount of
the total that was devoted to the Punitive Damages Case. At paragraph 257 of
the Trial Decision, I noted that the plaintiffs spent about two and a half
days, or about one third of their case in chief, on the Punitive Damages Case.
The plaintiffs withdrew their claim for punitive damages before Bell began
presenting its case on this issue, and therefore no further time was spent on
it at trial. This offers one rough measure of the fraction of the case that
related to the Punitive Damages Case.
[15]
I am mindful that the amount of time and effort
devoted to the Punitive Damages Case may have evolved during the life of this
proceeding. In Appendix A below, I provide a table indicating the total amount
of time spent in examinations for discovery in this matter, as well as the
fraction that each side argues related to the Punitive Damages Case. I note
that the figures in Appendix A exclude lunch breaks. As shown, the parties are
not far apart on this issue: Bell argues for a fraction of about 34%, while the
plaintiffs argue for about 31%. For the sake of simplicity, I have adopted a
figure of one third as the fraction of examinations for discovery (and
preparations therefor) that relate to the Punitive Damages Case. It follows
that the other two thirds relates to the Infringement Case. I use this
allocation below to simplify the calculation of fees associated with discovery.
[16]
The fraction is different, and the parties are
further apart, when we consider the fraction of time and effort devoted to the
Punitive Damages Case at trial. In Appendix B below, I provide a table similar
to Appendix A, but indicating time spent at trial. Here, Bell argues for a
fraction of about 15%, while the plaintiffs argue for about 10%. With regard to
trial (and preparations therefor), I prefer Bell’s figure of 15% as a better
reflection of the time devoted at trial to the Punitive Damages Case. It
follows that the other 85% relates to the Infringement Case. I use this
allocation below to simplify the calculation of fees associated with trial.
[17]
Having decided on an allocation of costs between
the Punitive Damages Case and the Infringement Case, I turn now to discussion
of the following subsets of costs: (i) fees related to the Infringement Case;
(ii) fees related to the Punitive Damages Case; and (iii) disbursements.
B.
Fees Related to the Infringement Case
[18]
As indicated above, Bell argues that fees
related the Infringement Case should be calculated on the basis of a portion of
the total legal expenses actually incurred by Bell. For their part, the
plaintiffs argue that fees related to the Infringement Case be calculated based
on the top of Column IV of Tariff B.
[19]
In my view, Tariff B should be used as the basis
for calculating costs related to the Infringement Case. The elevation of those
costs by 50% represents a premium on costs. Calculation of costs on the basis
of a portion of the total legal expenses actually incurred represents another
form of premium on costs. Bell’s argument on costs for the Infringement Case
essentially seeks to place one premium on top of another. This is not
appropriate in the present case.
[20]
Having determined that Tariff B should be the
basis for calculating costs related to the Infringement Case, I note that the
parties are in agreement that the appropriate level of costs is the top of
Column IV. I concur.
[21]
It is also my view that the 50% elevation should
apply only to fees and not to disbursements. Though the Trial Decision could
have been more explicit on the point, it should be understood that
disbursements were not intended to be elevated. Elevating disbursements would
make some of the costs awarded higher than those actually incurred. This would
be inappropriate. As normal, disbursements may be included in the costs
calculation at 100% to the extent that they are reasonable.
[22]
Another important issue on which the parties
disagree in the Infringement Case concerns the number of counsel. Bell argues
that two counsel should be allowed (where they were present) for preparation
and attendance at all examinations for discovery, mediations, motions and case
management conferences, and that four counsel (two senior and two junior)
should be allowed for preparation and attendance at trial. The plaintiffs
counter that fees for counsel should be limited to two, one senior and one
junior, throughout.
[23]
In my view, costs should be allowed for two
counsel (one senior and one junior, where present) for preparation and
attendance at all examinations for discovery and all allowed pre-trial
conferences. As usual, fees for junior counsel should be calculated at half the
rate for senior counsel. For preparation and attendance at trial, costs should
be allowed for one senior and two junior counsel.
[24]
The plaintiffs also dispute Bell’s claim of
costs in respect of motions in which costs were not awarded, were already paid,
or were awarded to the plaintiffs. Even where costs were awarded to Bell on
certain motions, the plaintiffs argue that costs should be based on the default
middle of Column III, unless the order awarding costs indicates otherwise.
[25]
Costs of motions granted to Bell but without any
indication as to the amount should be based on the default of Column III: Apotex
Inc v Merck & Co, 2006 FCA 324 at para 15. Bell does not dispute that
account should be taken of costs already paid by the plaintiffs and costs
granted to the plaintiffs in certain motions.
[26]
The plaintiffs also argue that costs should not
be allowed for Bell’s amended pleadings. Given that Bell’s amended pleadings do
not appear to have been necessitated by any amended originating document,
pleading, notice, or affidavit of the plaintiffs, as contemplated by Item A.3
of Tariff B, I accept the plaintiffs’ argument.
[27]
The plaintiffs dispute many of the claims for
costs relating to pre-trial conferences. Bell includes 19 such conferences in
its Bill of Costs. The plaintiffs argue that only four should be allowed: a
pre-trial conference before Prothonotary Milczynski on April 25, 2016, and
three trial management conference before me on April 27, July 5, and August 31,
2016. I agree with the plaintiffs that costs should not be allowed for most of
the others which are case management conferences and mediations. An award of
costs in respect of unsuccessful mediations would be inappropriate. The same is
true of case management conferences, unless the case manager has indicated that
costs should be awarded. However, I would also allow costs relating to a trial
management conference before me on August 17, 2015.
[28]
Bell claims $3,395 for the preparation of a Bill
of Costs related to the Infringement Case by a law clerk. This claim is based
on half of the work she did – the other half relating to the Bill of Costs for
the Punitive Damages Case. The plaintiffs argue that the costs allowed for the
preparation of a Bill of Costs related to the Infringement Case should be
limited to what is provided for in Item G.28 of Tariff B, and that little
should be allowed for the preparation of a Bill of Costs related to the
Punitive Damages Case since law clerk fees are typically unrecoverable. I agree
with the plaintiffs as regards the Infringement Case. However, I will allow
Bell’s claim for the cost of preparing the Bill of Costs related to the
Punitive Damages Case based on the work of a law clerk. I accept that her work
was likely at least as valuable and efficient as could have been achieved by a
lawyer for the same cost.
C.
Fees Related to the Punitive Damages Case
[29]
As indicated above, the assessment of costs
related to the Punitive Damages Case is to be done on a solicitor-and-client
basis. Bell argues that this calls for complete indemnification of all costs
that were reasonably incurred. The plaintiffs argue that complete indemnification
would be excessive, and that costs should instead be calculated on the basis of
a substantial indemnity.
[30]
Bell relies on the following passage from Maison
des Pâtes Pasta Bella Inc v Olivieri Foods Ltd (1999), 86 CPR (3d) 356 at
para 6 (FCTD):
It is useful to note at the outset that
costs awarded on a solicitor and client scale, as opposed to a party and party
scale, are intended to provide complete indemnity to the successful party; the
party and party scale provides only a partial indemnity. In Apotex Inc. v. Egis Pharmaceuticals et al. (1991), 4 O.R.
(3d) 321 (Ont. Ct. Gen. Div.), Henry J. succinctly
articulated the principle behind the solicitor and client scale at page 325, in
an effort to clarify the “woolly thinking” characterizing this area of the law:
The general principle that guides the
court in fixing costs as between parties on the solicitor and client scale, as
provided in my order, is that the solicitor and client scale is intended to be
complete indemnification for all costs (fees and disbursements) reasonably
incurred in the course of prosecuting or defending the action or proceeding,
but is not, in the absence of a special order, to include the costs of extra
services judged not to be reasonably necessary.
Thus, the unsuccessful party must pay the
costs which the successful party would have to pay his or her lawyer, with the caveat
that the costs awarded must be those reasonably incurred.
[31]
The plaintiffs’ argument in favour of
substantial indemnity cites Entral Group International Inc v MCUE Enterprises
Corp (Di Da Di Karaoke Company), 2010 FC 606, in which the Federal Court appeared
to equate solicitor-and-client costs with costs calculated on a substantial
indemnity basis. The plaintiffs also rely on authorities that distinguish costs
on a substantial indemnity basis from costs on a full indemnity basis. However,
these authorities appear to be tied to the specific wording of Ontario’s
Rules of Civil Procedure, RRO 1990, Reg 194 (see r 1.04(5)).
[32]
I prefer to be guided by authorities from the federal
courts on this issue. In addition to those discussed above, I note also the
following passage from Merck & Co v Apotex Inc, 2002 FCT 1210 at
para 11:
The award of costs on a solicitor and client
basis is intended to provide full indemnification of costs reasonably incurred
in the course of carriage by the plaintiffs of this litigation. In fixing those
costs, the Court must carefully consider the costs claimed in relation to the
work reasonably required, not on the basis of hindsight with 20/20 vision of
what was finally required, and not as an assessment item by item as an
assessing or taxing officer would do, but sufficiently reviewed to ensure that
costs awarded are reasonably incurred. [Citation omitted.]
[33]
In my view, the term “solicitor-and-client
costs” in this Court generally contemplates the full amount of a party’s
necessary expenses reasonably incurred. Nothing I have seen in the plaintiffs’
authorities clearly convinces me that solicitor-and-client costs, in this
Court, should be construed to mean anything less.
[34]
The hourly rates charged by Bell’s counsel for
legal services varied over time and between the various lawyers involved in
this matter. In order to simplify my calculations, and in order to rely on
reasonable rates, I have determined that a maximum hourly rate of $800 for
senior counsel and $400 for junior counsel should be applied for this complex
patent action.
[35]
The plaintiffs object to a claim by Bell for
four hours of a senior counsel’s time for review of the Trial Decision. The
plaintiffs argue that there is no information as to who performed this work. In
my view, this claim is reasonable. It would be reasonable for several of the
counsel acting on behalf of Bell in this matter to have reviewed that decision
and, all told, to have spent at least four hours doing so.
D.
Disbursements
[36]
Because the measure of disbursements to be
included in the costs award is the same for the Infringement Case and for the
Punitive Damages Case – 100% of reasonably necessary expenses incurred – it is
not necessary, for the most part, to separate disbursements between the two.
[37]
The plaintiffs argue that disbursements should
be reduced for Bell’s three experts who testified at trial. The plaintiffs
assert that the testimony of these experts was redundant, and therefore the
costs incurred were not reasonable. The plaintiffs propose that the costs
associated with these experts be reduced by 50%. The plaintiffs also challenge
any claim for costs associated with a fourth expert, Michel Proulx, who did not
testify at trial.
[38]
With regard to the three experts who testified
at trial, I agree with Bell that they each brought a different perspective to
the case, and there was no redundancy in having them all testify. I will allow
disbursements in respect of each of them in full. With regard to the expert who
did not testify, I am not convinced by Bell’s arguments that costs related to
his involvement should be included in the calculation of costs. Though Bell
asserts that Mr. Proulx’s testimony was essential to assisting in understanding
the plaintiffs’ infringement case, and that his testimony was rendered
unnecessary only after the plaintiffs dramatically narrowed their case, I have
not been provided enough detail about Mr. Proulx’s expertise or proposed
testimony to convince me that costs associated with him should be allowed.
[39]
Bell claims disbursements related to (i) six
fact witnesses who testified for Bell in relation the Infringement Case, and
(ii) five other fact witnesses who were prepared to testify for Bell in
relation to the Punitive Damages Case. The plaintiffs challenge any expenses
for these witnesses beyond what is contemplated in Tariff A. They argue that
the amounts claimed are for consultancy fees, and should not be included
without information about details of the various consultancy agreements.
[40]
Bell has quite rightly not claimed expenses in
relation to its own employees who testified at trial. For non-employees, fees
paid to fact witnesses may be awarded where they are reasonable. Though it is
difficult to assess reasonableness in the absence of details concerning these
witnesses’ work, I accept that some amount for each witness is reasonable, even
for the witnesses on the Punitive Damages Case who never testified.
[41]
With regard to the Infringement Case, the
expenses claimed by Bell in relation to the following witnesses appear
reasonable to me, and I would allow them in full: Christopher Butler, Martin
Weston, and Donna Gates. Cory Wishak had only recently left the employ of Bell
and, since it is not clear that all of the expenses claimed in relation to his
work dated from after his departure, I will reduce the amount allowed for him
to $2,000. The amounts claimed in relation to Mark Carpenter and Allan Cameron
were substantially higher than for the other fact witnesses. I recognize that
some of this increased amount may be due to their relative seniority, but I
will limit the allowable amount for each of them to $5,000. This yields a total
of $16,193 for Bell’s fact witnesses on the Infringement Case (about 57% of what
Bell has claimed).
[42]
With regard to the five fact witnesses who were
prepared to testify for Bell on the Punitive Damages Case, it is all the more
difficult to assess the reasonableness of the claims because I did not even see
these witnesses. For lack of a better approach, I will allow Bell’s claim here
in the same proportion as I allow it in relation to the Infringement Case: 57%.
[43]
Footnote 43 of the plaintiffs’ cost submissions
makes reference to an apparent error in the costs associated with Martin Cullum,
one of Bell’s intended fact witnesses on the Punitive Damages Case. The
plaintiffs note that Bell claims $12,267.40, whereas Bell’s Schedule A
indicates only $1,875 in expenses associated with Mr. Cullum. It appears that
the confusion comes from the fact that the amount of $1,875 is in reference to
taxable expenses, and another amount ($10,393) is listed in association with
Mr. Cullum in another table in Schedule A relating to non-taxable expenses. The
sum of these two amounts matches Bell’s claim. Though Bell’s Bill of Costs for
the Punitive Damages Case shows the whole amount of $12,267.40 as taxable, I
will maintain the split between taxable and non-taxable amounts as shown in
Schedule A.
[44]
Bell claims disbursements to a third-party
document review and processing company called Epiq. Bell asserts disbursements
totaling $706,247.57. It allocates $204,879.72 of this amount to the
Infringement Case, and $501,367.85 to the Punitive Damages Case. Without giving
a precise breakdown, Bell indicates that it reaches these figures based on an
allocation of 75% to the Punitive Damages Case until February 2015 (after
providing responses to undertakings from the first round of examinations for
discovery) and 25% thereafter. Bell indicates that, to meet the plaintiffs’
Punitive Damages Case, it collected data for over three million documents and
hired Epiq to streamline the review process. This was done using various data
processing techniques and having contract lawyers at Epiq review the documents
for relevance.
[45]
The plaintiffs dispute Bell’s allocation of
expenses between the two cases, arguing that it is arbitrary. The plaintiffs
also argue that no disbursements should be allowed for lawyers’ services.
Further, the plaintiffs argue that the various expert reports and the
How-it-Works documents that were prepared to describe the allegedly infringing
systems indicate that only a limited number of technical documents were
relevant. Finally, the plaintiffs argue that Epiq’s services should be
considered as part of the normal overhead costs of litigation. The plaintiffs
propose that, in relation to Epiq, $100,000 be allowed for the Infringement
Case, and another $100,000 be allowed for the Punitive Damages Case.
[46]
I agree that, in relation to the Infringement
Case, no amount for legal services of contract lawyers at Epiq should be
allowed as disbursements because legal services are already accounted for, to
the extent appropriate, in Tariff B. However, the same restriction does not
apply in relation to the Punitive Damages Case, for which costs are based on
actual expenses reasonably and necessarily incurred.
[47]
I also agree that Bell’s allocation of costs
between the Infringement Case and the Punitive Damages Case lacks
justification. I accept Bell’s post-February 2015 allocation of 25% to the
Punitive Damages Case, but I would bias the pre-February 2015 allocation more
toward the Infringement Case – perhaps about 50/50%.
[48]
I disagree with the plaintiffs’ argument
concerning the simplicity of the Infringement Case on the technical side.
Having presided over the trial, I am satisfied that the issues on the technical
side (including document production) were far from simple. The need for, and
evolution of, the How-it-Works documents are indicative of this fact.
[49]
I do not consider Epiq’s services to be overhead
in the way that Justice Judith Snider considered Summation technology to be in Sanofi-Aventis
Canada Inc v Apotex Inc, 2009 FC 1138 at para 19. I understand Summation to
be a tool that most law firms dealing with patent litigation, and some
sophisticated parties, have regardless of any particular litigation. That does
not appear to be the case for Epiq, which I understand provided services to
Bell that it would not have used but for the present litigation.
[50]
Though I lack sufficient information to be
precise in revising the figures claimed by Bell in relation to Epiq, I am
satisfied that some amount is appropriate. In my view, the amount allowable in
relation to the Infringement Case should be limited to $125,000. For the
Punitive Damages Case, Bell is less constrained in its claim for costs relating
to legal services. In my view, $275,000 is appropriate.
[51]
The plaintiffs also challenge Bell’s claims for
disbursements other than in relation to witnesses and Epiq (Miscellaneous
Disbursements) in the Infringement Case. These claims total roughly $135,000
(about $114,234 taxable and $20,936 non-taxable). The plaintiffs propose that
these amounts be reduced to about $65,195 inclusive of tax. With respect to
taxable disbursements, the plaintiffs seek to reduce substantially
disbursements for which no amounts were deducted for pre-trial steps in which
no costs were awarded to Bell. The plaintiffs also seek to eliminate entirely
taxable disbursements they characterize as overhead. They do not object to
Bell’s claim (in the amount of $37,425) relating to court reporter services.
With respect to non-taxable disbursements, the plaintiffs seek to deny entirely
Bell’s disbursements in relation to prior art searches.
[52]
I agree that some reduction is merited to
reflect the fact that some of the Miscellaneous Disbursements apparently relate
to motions in which no costs were awarded to Bell. I also agree that some of
the Miscellaneous Disbursements should be disallowed because they relate to
overhead: e.g., tabs/binding, books/periodicals/subscriptions, media
preparation. With regard to travel expenses, I accept that the disbursements
are inadequately detailed. However, they should not be denied entirely. Bell’s
claim for taxable Miscellaneous Disbursements in the Infringement Case should
be reduced to $85,000.
[53]
With regard to non-taxable Miscellaneous
Disbursements in the Infringement Case, I agree with the plaintiffs that the
amounts spent on prior art searches seem excessive. In my view, $5,000 is an
appropriate amount for all non-taxable Miscellaneous Disbursements in the
Infringement Case.
[54]
In respect of the Punitive Damages Case, Bell’s
only claim for Miscellaneous Disbursements is $17,099 (taxable) for court
reporter services. The plaintiffs do not object to this claim.
IV.
Calculations
[55]
Having analysed the various issues in dispute, I
turn now to the calculation of costs payable. I have not done this based on a
mark-up of either party’s Bills of Costs. Rather, I have adopted a method that
is the most efficient and expeditious for the preparation of this decision.
A.
Fees Related to the Infringement Case
[56]
As indicated above, fees related to the
Infringement Case are to be calculated based on the top of Column IV of Tariff
B. The figure arrived at in this way is then to be elevated by 50%, with the
exception mentioned below.
[57]
Tariff B comprises the following sections that
are relevant to this decision:
- Originating
Documents and Other Pleadings
- Motions
- Discovery and
Examination
- Pre-Trial and
Pre-Hearing Procedures
- Trial or Hearing
- Miscellaneous
[58]
I will address each of these sections in turn.
(1)
A. Originating Documents and Other Pleadings
[59]
With the removal of Bell’s claim for amendment
of pleadings, the amount allowed in this section is $1,260 as argued by the
plaintiffs.
(2)
B. Motions
[60]
Taking into account:
- the motions in
respect of which costs were already paid by the plaintiffs, were not
awarded to Bell, or were awarded against Bell, and
- that the costs
associated with motions should be calculated on the basis of Column III
unless ordered otherwise in an Order in relation to the motion;
The amount allowed in
this section is -$3,152 (i.e., amount owed by Bell). I arrive at this
figure based on the amounts suggested by the plaintiffs for Bell’s conflict
motion (-$1,932), Bell’s second motion for security for costs (-$1,500) and the
plaintiffs motion appealing Prothonotary Milczynski’s Order regarding routing
tables ($1,400), as well as Bell’s motion to strike (which I calculate to be
-$1,120, being -$700 for preparation and -$420 for attendance).
[61]
Because the measure of costs payable in relation
to interlocutory motions was set before trial, these costs are to be excluded
from the 50% elevation of costs.
(3)
C. Discovery and Examination
[62]
For examinations for discovery and preparation
therefor, I rely on my conclusion above that two thirds of the time spent in
examinations for discovery related to the Infringement Case. I first calculate
the total fees allowable for both the Infringement Case and the Punitive
Damages Case, and then take two thirds of that amount. I also rely on allowance
for two counsel (one senior and one junior).
[63]
The initial amount for preparation for four
examinations for discovery is $6,720, being $4,480 (or 4 × $1,120) for senior
counsel and $2,240 for junior counsel.
[64]
The initial amount for attendance at four
examinations for discovery is $129,528. This is based on a total of 154.2 hours
of examinations (per Appendix A) – (154.2 × 4 × 140) + (154.2 × 2 × 140).
[65]
The total of the foregoing initial amounts is
$136,248, two thirds of which is $90,832.
[66]
To this should be added an amount for
documentary discovery of Bell Canada and Bell Aliant - $2,520 (on which the
parties agree) – yielding a total of $93,352 for this section.
(4)
D. Pre-Trial and Pre-Hearing Procedures
[67]
I allow the following amounts in this section:
- Preparation for
and attendance at trial management conference dated August 17, 2015: $2,520,
being $1,680 for senior counsel and $840 for junior counsel;
- Preparation for
and attendance at pre-trial conference dated April 25, 2016: $2,520, being
$1,680 for senior counsel and $840 for junior counsel;
- Preparation for
and attendance at trial management conference dated April 27, 2016: being
$2,100, being $1,400 for senior counsel and $700 for junior counsel;
- Preparation for
and attendance at trial management conference dated July 5, 2016: being $2,100,
$1,400 for senior counsel and $700 for junior counsel;
- Preparation for
and attendance at trial management conference dated August 31, 2016: being
$2,100, $1,400 for senior counsel and $700 for junior counsel;
- Notice to admit:
$560, as agreed by the parties;
- Preparation for
trial: $26,418, being $13,209 for senior counsel and half that again for
each of two junior counsel.
[68]
The figure for preparation for trial is arrived
at as follows. The trial lasted 18 days. As indicated above, I allocate 85% of
the time spent at trial to the Infringement Case. Accordingly, I calculate the
fees allowable for preparation for the trial as a whole and take 85% of that
amount. For senior counsel, the number of units allowable for preparation for
the trial as a whole (based on Items D.13(a) and D.13(b) of Tariff B) is 9 + (6
× (18 - 1)), or 111. The amount allowed is 85% of 111 × 140: $13,209.
[69]
The total amount allowed under this section is
$38,318.
(5)
E. Trial or Hearing
[70]
The parties agree on an amount of $1,260 for
preparation and filing of written arguments.
[71]
I calculate the counsel fee for trial based on
the total number of hours spent in trial (per Appendix B) and the 85% thereof
that related to the Infringement Case. The initial amount for senior counsel
based on the whole trial is $51,352, being 91.7 hours × 4 × 140. Each of two
junior counsel adds half that amount again (2 × $25,676), yielding a total of
$102,704. 85% of this amount is $87,298.
[72]
The total amount for attendance at trial and
written argument is therefore $88,558.
(6)
G. Miscellaneous
[73]
$980 is allowed under this section as proposed
by the plaintiffs.
(7)
Total Fees Allowed for the Infringement Case
[74]
The total of the amounts allowed in each of the
relevant sections of Tariff B, and the total amount awarded as costs for fees
related to the Infringement Case, are therefore:
|
Section
|
Amount Allowed
|
Elevation
|
Elevated Amount
|
|
A. Originating
Documents and Other Pleadings
|
$1,260
|
50%
|
$1,890
|
|
B. Motions
|
-$3,152
|
n/a
|
-$3,152
|
|
C. Discovery and
Examination
|
$93,352
|
50%
|
$140,028
|
|
D. Pre-Trial and
Pre-Hearing Procedures
|
$38,318
|
50%
|
$57,477
|
|
E. Trial or
Hearing
|
$88,558
|
50%
|
$132,837
|
|
G. Miscellaneous
|
$980
|
50%
|
$1,470
|
|
|
|
|
|
|
|
|
|
|
B.
Fees Related to the Punitive Damages Case
[75]
As discussed above, fees related to the Punitive
Damages Case are to be calculated on a solicitor-and-client basis and without
reference to Tariff B.
[76]
Bell’s Bill of Costs for the Punitive Damages
Case contains amounts under the following headings:
- Examinations for
Discovery and Preparations therefor
- Trial and
Preparation therefor
- Miscellaneous
- Meetings with
Fact Witnesses, Document Collection, Read-Ins
[77]
I will address each of these sections in turn.
(1)
Examinations for Discovery and Preparations
Therefor
[78]
My calculation of fees allowed under this
section is based on one third of discovery time, which I have determined to be
the proportion allocated to the Punitive Damages Case. This yields a figure of
51.4 hours.
[79]
Applying an hourly rate of $800 for senior
counsel and $400 for junior counsel, and accepting Bell’s proposal of two hours
of preparation time for each hour of examination (to which the plaintiffs do
not object), I arrive at a figure of $185,040. This is based on $41,120 for
attendance of senior counsel (51.4 hours × $800), twice that much for
preparation ($82,240), and half these amounts again ($20,560 and $41,120) for
junior counsel.
(2)
Trial and Preparation Therefor
[80]
My calculation of fees allowed under this
section is based on the 15% of trial time that I have allocated to the Punitive
Damages Case. This yields a figure of 13.7 hours.
[81]
Again applying an hourly rate of $800 for senior
counsel and $400 for junior counsel (two are allowed at trial), and again
accepting Bell’s proposal of two hours of preparation time for each hour of
examination, I arrive at a figure of $65,760. This is based on $10,960 for
attendance of senior counsel (13.7 hours × $800), twice that much for preparation
($21,920), and half these amounts again for each of two junior counsel ($5,480
twice and $10,960 twice).
(3)
Miscellaneous
[82]
In this section, Bell claims half of its actual
legal costs for preparing the Bills of Costs and four hours of a senior
lawyer’s time for reviewing the Trial Decision. As indicated above, I find both
of these claims to be reasonable. Accordingly, I allow the amount of $14,080 as
claimed by Bell.
(4)
Meetings with Fact Witnesses, Document
Collection, Read-Ins
[83]
The parties submit that the following amounts
should be allowed for each category in this section:
|
Heading
|
Claimed by Bell
|
Proposed by Plaintiffs
|
|
Meetings with
Fact Witnesses
|
$234,905
|
$150,416
|
|
Document
Collection
|
$103,274
|
$72,630
|
|
Read-Ins
|
$30,272
|
$18,495
|
|
|
|
|
[84]
The basis of the plaintiffs’ proposed reductions
is the hourly rate to be applied, as well as the impropriety of allowing fees
for a law clerk. I agree that fees for a law clerk should not be allowed since
fees for multiple counsel are already allowed. I will allow an hourly rate of
the lesser of $800 or the rate actually charged for senior counsel and the
lesser of $400 or the rate actually charged for junior counsel.
[85]
For each of the categories in this section, I
allow the following amounts:
- Meetings with Fact
Witnesses
|
Name
|
Hours
|
Hourly Rate
|
Amount
|
|
Andrew Reddon
|
29.4
|
$800
|
$23,520
|
|
Steve Mason
|
36.8
|
$777.91
|
$28,627
|
|
Fiona Legere
|
285.9
|
$400
|
$114,360
|
|
Atrisha Lewis
|
56.3
|
$346.64
|
$19,516
|
|
Bart Nowak
|
0.5
|
$389.50
|
$195
|
|
|
|
|
|
|
Name
|
Hours
|
Hourly Rate
|
Amount
|
|
Fiona Legere
|
195.3
|
$400
|
$78,120
|
|
Atrisha Lewis
|
19.9
|
$346.01
|
$6,886
|
|
|
|
|
|
|
Name
|
Hours
|
Hourly Rate
|
Amount
|
|
Andrew Reddon
|
0.8
|
$800
|
$640
|
|
Steve Mason
|
14.5
|
$800
|
$11,600
|
|
Fiona Legere
|
29.0
|
$400
|
$11,600
|
|
Bart Nowak
|
2.0
|
$373.68
|
$747
|
|
|
|
|
|
[86]
The total of these amounts is $295,811.
(5)
Total Fees Allowed for the Punitive Damages Case
[87]
The total of the amounts allowed for each of the
foregoing parts, and the total amount awarded as costs for fees related to the
Punitive Damages Case, are therefore:
|
Section
|
Amount Allowed
|
|
Examinations for
Discovery and Preparations therefor
|
$185,040
|
|
Trial and
Preparation therefor
|
$65,760
|
|
Miscellaneous
|
$14,080
|
|
Meetings with
Fact Witnesses, Document Collection, Read-Ins
|
$295,811
|
|
|
|
|
|
|
C.
Disbursements
[88]
The disbursements that are relevant in this
matter fall into five categories:
- Expert Witnesses
- Fact Witnesses
on the Infringement Case
- Fact Witnesses
Prepared for the Punitive Damages Case
- Epiq
- Miscellaneous
Disbursements
[89]
Disbursements must also be divided between those
that are taxable and those that are non-taxable.
[90]
Under the headings below, I apply the
conclusions from my discussion above of the various issues relating to
disbursements.
(1)
Expert Witnesses
[91]
Bell claims amounts in relation to the three
expert witnesses who testified for Bell and one expert who was prepared to
testify. As discussed above, the full amount for the three expert witnesses who
testified is allowed, but the claim for the expert who did not testify is not
allowed. The allowed amounts (all non-taxable) are therefore as follows:
|
Name
|
Amount
|
|
Richard Jones
|
$156,212
|
|
Henry Houh
|
$318,675
|
|
William Weeks
|
$22,738
|
|
|
|
(2)
Fact Witnesses on the Infringement Case
[92]
Based on my discussion above, the amounts
allowed for each of Bell’s fact witnesses on the Infringement Case are as
follows:
|
Name
|
Amount (Taxable)
|
Amount (Non-Taxable)
|
|
Christopher
Butler
|
[blank/en blanc]
|
$771
|
|
Mark Carpenter
|
[blank/en blanc]
|
$5,000
|
|
Cory Wishak
|
[blank/en blanc]
|
$2,000
|
|
Martin Weston
|
[blank/en blanc]
|
$1,114
|
|
Allan Cameron
|
$5,000
|
[blank/en blanc]
|
|
Donna Gates
|
$2,308
|
[blank/en blanc]
|
|
|
|
|
(3)
Fact Witnesses Prepared for the Punitive Damages
Case
[93]
In my discussion above, I allowed 57% of the
amounts claimed by Bell for fact witnesses who were prepared to testify for
Bell on the Punitive Damages Case. The amounts claimed and allowed are as
follows:
|
Name
|
Amount (Taxable)
|
Amount (Non-Taxable)
|
|
Doug Hanchard
|
[blank/en blanc]
|
$12,044
|
|
Jeff Burney
|
[blank/en blanc]
|
$3,780
|
|
David Cox
|
$5,400
|
[blank/en blanc]
|
|
Martin Cullum
|
$1,875
|
$10,393
|
|
Doug Walls
|
$1,100
|
[blank/en blanc]
|
|
|
|
|
|
|
|
|
(4)
Epiq
[94]
Disbursements related to Epiq are taxable and,
as discussed above, are allowed in the amount $400,000, being $125,000 for the
Infringement Case and $275,000 for the Punitive Damages Case.
(5)
Miscellaneous Disbursements
[95]
In my discussion above, I have allowed the
following amounts for Miscellaneous Disbursements:
|
[blank/en blanc]
|
Amount (Taxable)
|
Amount (Non-Taxable)
|
|
Infringement Case
|
$85,000
|
$5,000
|
|
Punitive Damages
Case
|
$17,099
|
[blank/en blanc]
|
|
|
|
|
(6)
Total Disbursements Allowed
[96]
The total of the amounts allowed for each of the
foregoing parts, and the total amount awarded as costs for disbursements, are
therefore:
|
Section
|
Amount Allowed
(Taxable)
|
Amount Allowed
(Non-Taxable)
|
|
Expert Witnesses
|
[blank/en blanc]
|
$497,625
|
|
Fact Witnesses on
the Infringement Case
|
$7,308
|
$8,885
|
|
Fact Witnesses
Prepared for the Punitive Damages Case
|
$4,774
|
$14,944
|
|
Epiq
|
$400,000
|
[blank/en blanc]
|
|
Miscellaneous
Disbursements
|
$102,099
|
$5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
D.
Conclusion
[97]
The total amount payable by the plaintiffs as
costs is as follows:
|
[blank/en blanc]
|
Amount
|
|
Fees Allowed for
the Infringement Case
|
$373,522
|
|
Fees Allowed for
the Infringement Case
|
$633,581
|
|
Disbursements
|
$1,107,479
|
|
|
|
[98]
With regard to post-judgment interest on the
costs award, the plaintiffs argue that it should be delayed to provide them
with an ability to pay the amount owed without incurring interest charges. This
is a reasonable request.
[99]
The plaintiffs also note that this Court has
declined to apply interest to a costs award: see Mitchell Repair Information
Company LLC v Long, 2014 FC 562 at para 20, and Airbus Helicopters SAS v
Bell Helicopter Texteron Canada Limitée, 2017 FC 170 at para 443. However,
I agree with the reasoning of Justice Roger Hughes in Astrazeneca Canada Inc
v Apotex Inc, 2011 FC 663 at para 5, that a party should not be encouraged
not to pay a Judgment simply because it is cheaper to let the interest
accumulate. Accordingly, I award interest on this costs award.
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