Date: 20031007
Docket: T-1836-90
Citation: 2003 FC 1163
BETWEEN:
ELDERS GRAIN COMPANY LIMITED
and
CARLING O'KEEFE BREWERIES OF CANADA LIMITED
Plaintiffs
AND:
THE VESSEL M/V "RALPH MISENER" AND THE OWNERS
AND ALL OTHERS INTERESTED IN THE VESSEL M/V "RALPH MISENER"
and
MISENER HOLDINGS LIMITED
and
MISENER SHIPPING
Defendants
REASONS FOR ORDER
NADON J.
[1] The defendants, who were successful on the main action and on their counterclaim, seek an order directing the taxing officer to tax their bill of costs in accordance with the high side of Column V of Part II of Tariff B. Further, they seek to double their costs as of March 11, 2002, by reason of an offer of settlement made on that date. They also seek leave to tax, pursuant to items 14(b) and 24 of Tariff B, the services of a second counsel and counsel's travel time to attend the trial, hearings and applications.
[2] In Consorzio del Prosciuotto di Parma v. Maple Leaf Meats Inc., 2002 FCA 417, October 28, 2002, the Court of Appeal was faced with a motion for increased costs brought under Rule 403. In concluding that the motion should be allowed and that the applicant's costs should be increased over and above the costs taxable under Column III of Tariff B, Rothstein J.A., for the majority, enunciated a number of guidelines relevant to the assessment of costs. At paragraphs 5 to 11, he explains the guidelines in the following terms:
[5] The respondent has submitted that twelve issues were raised on appeal and each required a full response. The issues involved complex questions of fact, including having to deal with expert evidence and survey methodology. The argument in the appeal lasted close to a whole day.
[6] I am satisfied in the circumstances of this case, that the respondent should be awarded increased costs. This is an intellectual property matter involving sophisticated clients. Where, as here, numerous issues are raised on appeal and the issues involve complex facts and expert evidence, the amount of work required of respondents' counsel justifies increased costs. To the argument that the complexity of this case was no greater than that of most intellectual property cases that come before this Court, I would say that such cases frequently present complex facts and give rise to difficult issues.
[7] The increased costs to be awarded are party-party costs. They do not indemnify the successful party for its solicitor-client costs and they are not intended to punish the unsuccessful party for inappropriate conduct.
[8] An award of party-party costs is not an exercise in exact science. It is only an estimate of the amount the Court considers appropriate as a contribution towards the successful party's solicitor-client costs (or, in unusual circumstances, the unsuccessful party's solicitor-client costs). Under rule 407, where the parties do not seek increased costs, costs will be assessed in accordance with Column III of the table to Tariff B. Even where increased costs are sought, the Court, in its discretion, may find that costs according to Column III provide appropriate party-party compensation.
[9] However, the objective is to award an appropriate contribution towards solicitor-client costs, not rigid adherence to Column III of the table to Tariff B which is, itself, arbitrary. Rule 400(1) makes it clear that the first principle in the adjudication of costs is that the Court has "full discretionary power" as to the amount of costs. In exercising its discretion, the Court may fix the costs by reference to Tariff B or may depart from it. Column III of Tariff B is a default provision. It is only when the Court does not make a specific order otherwise that costs will be assessed in accordance with Column III of Tariff B.
[10] The Court, therefore, does have discretion to depart from the Tariff, especially where it considers an award of costs according to the Tariff to be unsatisfactory. Further, the amount of solicitor-client costs, while not determinative of an appropriate party-party contribution, may be taken into account when the Court considers it appropriate to do so. Discretion should be prudently exercised. However, it must be borne in mind that the award of costs is a matter of judgment as to what is appropriate and not an accounting exercise.
[11] I think this approach is consistent in today's context with the observations of Nadon J. (as he then was) in Hamilton Marine and Engineering Ltd. v. CSC Group Inc. (1995), 99 F.T.R. 285 at paragraph 22:
I indicated to counsel during the hearing that there was no doubt that, in most cases, the fees provided in Tariff B were not sufficient to fully compensate a successful party. I also indicated to counsel during the hearing that, in my view, the Tariff necessarily had to remain the rule and that an increase of tariff fee was the exception. By that I mean that the discretion given to the Court to increase the tariff amounts pursuant to rule 344(1) and (6) of the Federal Court Rules was not to be exercised lightly. Put another way, the fact that the successful party's legal costs were far superior to the amounts to which that party was entitled under the Tariff, was not in itself a factor for allowing an increase in those fees.
[Emphasis added]
[3] Although the applicant in Consorzio, supra, was seeking a lump sum award and not a different column of Tariff B, the words of Rothstein J.A. remain apposite. With the above guidelines in mind, I turn to the main issue, i.e. whether the taxing officer should be directed to tax the defendants' bill of cost in accordance with the high side of Column V of Part II of Tariff B.
[4] Notwithstanding Mr. O'Connor's forceful arguments, I have not been persuaded that the defendants should be allowed to tax their costs in accordance with the high side of Column V. Although the case was not a straightforward case in terms of the relevant legal and factual issues, it still does not, in my view, deserve an assessment on the high side of Column V. However, I am satisfied that the defendants' costs should be greater than those to which they would be entitled under Column III of Tariff B. I will therefore direct the taxing officer to tax the defendants' costs in accordance with the high side of Column IV.
[5] The second issue which is before me is whether the defendants are entitled to double their costs as of March 11, 2002, when they made an offer of settlement to the plaintiffs. In a letter dated March 11, 2002, counsel for the defendants wrote to counsel for the plaintiffs in the following terms:
Finally, you will recall that in January, we made an offer to settle this matter on a drop-hands basis whereby each party would discontinue its action and pay its own costs. Your clients refused our offer which is why we are preparing for trial. Now that the opinions of our experts are in your hands, we would simply like to remind you that we have not been instructed to withdraw the offer we made and indeed it has not been revoked by our principals and should perhaps now receive further consideration from your client. Although the offer is made without prejudice, we reserve the right to bring it to the attention of the Court on the question of costs under rules 419 et seq. of the Federal Court Rules, 1998.
[6] On the same day, the plaintiffs categorically rejected the defendants' offer to settle.
[7] By their offer, the defendants were prepared to discontinue their action in consideration of the plaintiffs discontinuing their action. I am satisfied that this offer is one that falls under Rule 420(2), which provides as follows:
| 420. (2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked,
(a) if the plaintiff obtains a judgment less favourable than the terms of the offer to settle, the plaintiff shall be entitled to party-and-party costs to the date of service of the offer and the defendant she be entitled to double such costs, excluding disbursements, from that date to the date of judgment; or
(b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment.
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420. (2) Sauf ordonnance contraire de la Cour, lorsque le défendeur présente par écrit une offre de règlement qui n'est pas révoquée et que le demandeur:
a) obtient un jugement moins avantageux que les conditions de l'offre, le demandeur a droit aux dépens partie-partie jusqu'à la date de signification de l'offre et le défendeur a droit au double de ces dépens, à l'exclusion des débours, à compter du lendemain de cette date jusqu'à la date de jugement;
b) n'obtient pas gain de cause lors du jugement, le défendeur a droit aux dépens partie-partie jusqu'à la date de signification de l'offre et au double de ces dépens, à l'exclusion des débours, à compter du lendemain de cette date jusqu'à la date de jugement.
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[8] As the defendants' offer was in writing and was never revoked, I am of the view that they are entitled to double their costs as of March 11, 2002.
[9] With respect to the last two issues, i.e. those falling under items 14(b) and 24 of Tariff B, I see no reason why the defendants should not be entitled to tax the services of a second counsel and to tax counsel's travel time to attend the trial, hearings and applications, and I will therefore so direct the taxing officer.
"M. Nadon"
JUDGE
O T T A W A, Ontario
October 07, 2003
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1836-90
STYLE OF CAUSE: ELDERS GRAIN CO. LTD. et al v. THE "RALPH MISENER" et al.
PLACE OF HEARING: Montreal QC
DATES OF HEARING: September 19, 2003
REASONS FOR JUDGEMENT : Nadon J.
DATED: October 07, 2003
APPEARANCES:
Normand Laurendeau FOR PLAINTIFFS
John G. O'Connor FOR DEFENDANTS
Jean Grégoire
SOLICITORS OF RECORD:
Robinson Sheppard Shapiro FOR PLAINTIFFS
Montreal QC
Langlois Gaudreau O'Connor FOR DEFENDANTS
Quebec City QC
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