Date: 20011220
Dockets: T-2129-98
T-2130-98 through T-2139-98
and T-2141-98 through T-2148-98
Neutral citation: 2001 FCT 1422
BETWEEN:
KETTLE VALLEY WINERY LTD.
BLUE MOUNTAIN VINEYARD & CELLARS LIMITED
LARRY PASSMORE dba BELLA VISTA VINEYARDS
ALEX NICHOL and KATHLEEN NICHOL dba NICHOL VINEYARD
EDGAR SCHERZINGER dba SCHERZINGER VINEYARDS
IAN SUTHERLAND and GETA SUTHERLAND dba POPLAR GROVE WINERY
HANS NEVRKLA dba LARCH HILLS WINERY
Applicants
- and -
VINTNERS QUALITY ALLIANCE OF CANADA
Respondent
REASONS FOR ORDER
MacKAY J.
[1] These Reasons deal with the dismissal, by separate Order now issued, of a motion by the applicants ("Kettle Valley et al.") for costs, or for solicitor and client costs, incurred in relation to these proceedings.
Background
[2] All of the applications, by wine producers in British Columbia in Court files T-2129-98, T-2130-98 through T-2139-98 and T-2141-98 through T-2148-98, raise similar issues. These concern a variety of specified marks, of which notice was published in 1997 by the Registrar of Trade-marks (the "Registrar"), of the adoption and use of the marks ("official marks") by the respondent Vintners Quality Alliance of Canada ("VQA"), pursuant to subparagraph 9(1)(n)(iii) of the Trade-marks Act, R.S.C. 1985, c. T-13 as amended (the "Act"). These applications, in the form of appeals from the Registrar, were ordered to be consolidated under file T-2129-98, for purposes of adjudication. That consolidated application was then ordered to be heard with a similar application by the Institut National des Appellations D'Origine in Court file T-71-99, and an application, for judicial review of similar Registrar's decisions, filed by the Magnotta Group of companies in Court file T-481-99.
[3] The hearing was set down, to deal with all applications, to commence on January 22, 2001. On January 5, 2001, the Kettle Valley applicants filed a notice of motion seeking leave of the Court to amend the notice of application originally filed, by adding judicial review as a procedural basis for challenging the decisions of the Registrar. On the same day, January 5, VQA, the respondent in all the applications, advised the Registrar of Trade-marks, and on January 9 the Court and the applicants were advised, that VQA withdrew the publication of the marks in question. Implicitly this was tantamount to withdrawing its claim to the official marks published by the Registrar in 1997. The Court was advised that this action was undertaken at the request of the federal government which proposed to establish an official national standard for Canadian-produced wines.
[4] As a result of VQA's decision and settlement with VQA of concerns between them, the applicant Institut National Des Appellations D'Origine discontinued its application in Court file T-71-99. It did not appear for the scheduled hearing.
[5] Counsel appearing for Kettle Valley et al. participating in the consolidated application in Court file T-2129-98, advised that his clients accepted the fact of VQA's withdrawal of its claim to official marks and would not pursue at the hearing their motion for appeal or for leave to seek judicial review. Nevertheless, Kettle Valley et al. did not discontinue its application. Rather, since the withdrawal by VQA was undertaken just before the scheduled hearing, Kettle Valley applicants sought costs of their application. In correspondence to VQA dated January 19, 2001, acknowledging receipt of advice about VQA's action, Kettle Valley et al. gave notice that they would seek solicitor-client costs from VQA from the date of VQA's notice. At the hearing counsel for Kettle Valley et al. moved for solicitor-client costs throughout for work undertaken in preparation of their applications.
[6] This application, now limited to the matter of costs, was heard before that of the Magnotta companies in Court file T-481-99, and decision was then reserved pending an opportunity to consider fully the submissions in regard to Magnotta's claim. Thereafter, at the conclusion of argument for the respondent, devoted almost exclusively to Magnotta's claim, counsel for VQA asked that costs on a party-and-party basis be awarded to VQA against Kettle Valley et al., since their application had not been discontinued.
[7] Written submissions from counsel for Magnotta and for VQA were received at and after the oral hearing. An Order and Reasons are now issued in that matter (see Magnotta Winery Corporation et al. v. Vintners Quality Alliance, Court file T-481-99) and a separate Order with these Reasons now dismisses the claim for costs of the applicants Kettle Valley et al. and allows costs to VQA in regard to the consolidated application by Kettle Valley et al.
Analysis
[8] The claim for solicitor-client costs is urged on principles the applicants urge are derived from awards in certain proceedings under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 ("NOC regulations"). It is urged that those cases support the principle that where a party renders unnecessary a proceeding which it had itself precipitated, an award of solicitor-client costs is appropriate. There are two cases where, despite withdrawal of a notice of allegation on the eve of the hearing of an application for prohibition precipitated by that notice, an award of solicitor-client costs has been upheld, even though the application for prohibition was dismissed for mootness. (See: Bayer A G et al. v. Minister of National Health and Welfare et al. (1997), 77 C.P.R. (3d) 129 at 135-136 (F.C.T.D.), and A.B. Hassle v. Canada (Minister of National Health and Welfare (1999), 3 C.P.R. (4th) 73, [1999] F.C.J. 1464 (QL) (F.C.A.).)
[9] Two other cases, urged in support of the principle here urged, for solicitor-client costs, are, in my opinion, exceptional since in both the award of solicitor-client costs was in essence based on consent of the parties. (See: Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) and Apotex Inc. (1997), 72 C.P.R. (3d) 468 at 480 (F.C.T.D.), and Merck Frosst Canada Inc. et al. v. Canada (Minister of National Health and Welfare) and Apotex Inc. (1997), 76 C.P.R. (3d) 501 at 505-506 (F.C.T.D.).)
[10] In my opinion proceedings under the NOC regulations are not a model for dealing with costs, about which there is no consent, in these proceedings. Under those regulations, the first step for a party seeking to obtain approval for marketing a prescription drug that is already subject to patent is to serve a notice of allegation on the patent holder. The latter may then, if the parties cannot resolve the matter, apply to this Court for an order of prohibition directed to the Minister to decline approval of a notice of compliance sought by the party not holding the patent. In this case the proceedings were commenced by the Kettle Valley applicants seeking to appeal or for judicial review of a decision of the Registrar of Trade-marks to publish notice of adoption and use of certain marks as official marks by VQA. Since the statute provides no system for notice of an application for, and possible objection to, an official mark, or for an appeal of the Registrar's decision, an appropriate process for questioning that decision appears to be by judicial review under s. 18.1 of the Federal Court Act, R.S.C. 1985, c. F-7, as amended. (See: Ontario Assn. of Architects v. Assn. of Architectural Technologists of Ontario, (2000) 9 C.P.R. (4th) 496 (F.C.T.D.) per McKeown J.; and File NET Corporation v. The Registrar of Trade-Marks et al., (2001) F.C.J. No. 1223 (F.C.T.D.) per Blais J.).
[11] I am not persuaded that the respondent should be required to pay costs on any basis, let alone on the basis of solicitor-client costs. The latter basis would provide costs at a higher level than if the application for judicial review had been heard and the applicants had been successful, assuming there would be no special circumstances and no scandalous or outrageous conduct on the part of or on behalf of VQA that would provide a usual basis for an award of solicitor-client costs.
[12] Moreover, in the application by Magnotta in file T-481-99 which raises essentially the same issues as this application, my decision, now filed, is that the Court would not interfere to set aside the decision of the Registrar to publish notice of the adoption and use of the official marks by the respondent. There is no basis to assume that Kettle Valley applicants would have been successful on their application and there is no basis for an award of costs to them even on a party-and-party basis in this application.
Conclusion
[13] There is, however, a basis for awarding costs on a party-and-party basis against the Kettle Valley applicants and in favour of VQA, as asked. There are two grounds for this. Kettle Valley et al. did not discontinue its application, indeed the application continued although argument was limited to costs. It is unlikely the application would have succeeded, for reasons similar to those in regard to the claim by Magnotta (file T-481-99). Further, as pointed out in the reasons in that case, VQA, the respondent had agreed with VQAO, at the behest of the Government of Ontario, that it would not, after the date of that agreement in June 2000, seek to enforce its claim to the official marks in question against VQAO, any member of VQAO, or any other party. That was known to Kettle Valley et al. long before the scheduled date for hearing in January 2001. I am not persuaded that pursuing the application thereafter was a necessary, or even an appropriate, course of action. In these circumstances, the applicants are not entitled to costs on any basis.
[14] At the same time, these circumstances do warrant an award of costs in favour of VQA against Kettle Valley et al., on a party-and-party basis in an amount the parties may agree upon or, failing agreement on or before January 21, 2002, as may be assessed under the Court's tariff upon application thereafter by VQA.
[15] Thus, the motion by Kettle Valley et al. for costs or for costs on a solicitor-client basis, as introduced at the hearing of this application on January 22, 2001, is dismissed, as is their alternate claim for costs on a lesser basis. Costs, as requested, on a party-and-party basis, are ordered in favour of VQA.
(signed) W. Andrew MacKay
_____________________________
JUDGE
OTTAWA, Ontario
December 20, 2001.
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