Date: 20010719
Docket: T-780-00
Neutral citation: 2001 FCT 809
BETWEEN:
LIFESCAN, INC. and
LIFESCAN CANADA LTD.
Plaintiffs
- and -
NOVOPHARM LIMITED
Defendant
REASONS FOR COST ORDER
LEMIEUX J.:
A. INTRODUCTION
[1] On November 10, 2000, I dismissed with costs the plaintiffs' application for an interlocutory injunction.
[2] The defendant moved the Court for reconsideration in order that:
(a) it shall have its costs of a motion heard by Justice Dawson on May 15, 2000;
(b) it shall have its costs for the motion for interlocutory injunction heard on September 6, 2000 and September 11, 2000, in any event of the cause and payable forthwith pursuant to a bill of costs to be submitted by Novopharm, and considered by this Court;
(c) a direction be issued that the assessment of costs for two counsel be performed under the upper end of Column V of Tariff B or such other Column as this Court may order;
(d) costs of this motion.
[3] I heard oral argument earlier this year and directed the parties to file written representations on the impact which the Federal Court of Appeal's decision in A. Lassonde Inc. v. Island Oasis Canada Inc. et al., (A-102-00, December 21, 2000 (F.C.A.), an interlocutory injunction case which was denied, might have on the matter.
ANALYSIS
(1) Is reconsideration warranted?
[4] The plaintiffs oppose reconsideration. They say the defendant obtained the cost order they requested, that is, "the motion be dismissed with costs". I do not agree because Novopharm also asked the Court for an opportunity to make submissions regarding costs. As well, I did not specifically deal with costs payable on the attendance before Justice Dawson.
[5] I agree with counsel for Novopharm the cost issue should be reconsidered on the basis of paragraph 397(1)(b) of the Federal Court Rules, 1998, (the "Rules") which gives such an opening where « a matter that should have been dealt with has been overlooked or accidentally omitted » .
[6] The matter which was overlooked is when and, in what circumstance, should the costs awarded be payable to Novopharm for the hearing before Madam Justice Dawson and myself, in the light of Novopharm's request, in its memorandum of fact and law, for an opportunity to make submissions regarding costs.
(2) Costs in any event of the cause
[7] I agree with the following principles advanced by counsel for Novopharm:
(1) Pursuant to Rule 401(1) of the Rules, the Court has the discretion in determining the appropriate award of costs on a motion. The judge has the discretion to award costs on a motion to either party, regardless of the outcome of the main matter (see Enterprise Rent-A-Car Co. v. Singer, [1999] F.C.J. No. 1687 (F.C.A.)). It follows costs on a motion for an interlocutory injunction may be made payable in any event of the cause.
(2) The governing policy is that expressed by Justice Rothstein in AIC Ltd. v. Infinity Investment Counsel Ltd., [1998] F.C.J. No. 904 when considering Rule 401. He wrote this at paragraph 11:
While Rule 401(1) still requires that the discretion to award costs be judicially exercised, I interpret the Rules as providing that the discretion is to be exercised in accordance with the policy for awarding costs on motions... that the issue on a motion may not be the issue at trial and that the fixing of costs on a motion is an instrumentality aimed at expedition and focusing the minds of litigants on the costs of litigation.
Justice Rothstein supported the propositions he made by reference to two Ontario cases namely Apotex Inc. v. Egis Pharmaceuticals et al. (1990), 32 C.P.R. (3d) 559 (Ont. Ct. (Gen. Div.)), and Applied Systems Technologies Inc. v. Sysnet Computer Systems Inc. et al. (1992), 41 C.P.R. (3d) 130 (Ont. Ct. (Gen. Div.)).
[8] Plaintiffs suggest costs should be "in the cause" and rely on Thurston Hayes Developments Ltd. v. Horne Abbot Ltd. (1985), 5 C.P.R. (3d) 124 (F.C.A.) and the cautionary comment by Justice Rothstein in AIC, supra, where he stated if the Thurston Hayes case had not been displaced by Rule 401 of the Rules, he would limit it to interlocutory injunction.
[9] I believe this issue has been settled by the Federal Court of Appeal in A. Lassonde Inc., supra. The Court decided Thurston Hayes Developments Ltd., supra, had indeed been overtaken by Rule 401.
[10] I conclude Novopharm should have its costs of the motion before Justice Dawson and before me in any event of the cause. As argued by counsel for Novopharm, relying upon Apotex Inc., supra, a motion for an interlocutory injunction is discreet and the issue whether to grant it is not the issue at trial. Novopharm's entitlement flows from the principle that normally costs follow the event.
(3) Costs payable forthwith
[11] Defendant requests the costs of the interlocutory injunction should be made payable forthwith. Regard must be had to Rule 401 (1) and (2) which reads:
| 401. (1) The Court may award costs of a motion in an amount fixed by the Court.
Costs payable forthwith
401(2)
(2) Where the Court is satisfied that a motion should not have been brought or opposed, the Court shall order that the costs of the motion be payable forthwith.
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401. (1) La Cour peut adjuger les dépens afférents à une requête selon le montant qu'elle fixe.
Paiement sans délai
401(2)
(2) Si la Cour est convaincue qu'une requête n'aurait pas dû être présentée ou contestée, elle ordonne que les dépens afférents à la requête soient payés sans délai.
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[12] In A. Lassonde, supra, Justice Létourneau said subsection 401(2) of the Rules placed a duty on the Court, rather than conferred a discretion upon it, to order costs payable forthwith if the condition stated there is met, namely, if the Court is satisfied the motion for interlocutory injunction should not have been brought or opposed.
[13] In A. Lassonde, supra, the Federal Court of Appeal overturned the trial judge's finding that costs should be payable forthwith because the points raised by the appellant had substance given the uncertainty in the law surrounding irreparable harm.
[14] I agree with Lifescan's position its motion for interlocutory injunction was reasonably brought. I resolved the plaintiffs had made out a serious issue and whether the plaintiffs had met the irreparable harm test was one which warranted careful consideration and analysis.
[15] On this basis, I cannot make a finding the plaintiffs ought not to have brought the motion. As a result, I cannot order the costs be payable forthwith.
(4) The scale of costs
[16] Novopharm requests, for services related to the determination of the merits of the interlocutory injunction, an order directing that the assessment of costs for two counsel be in accordance with the upper end of Column V of Tariff B or such other Column as this Court may order. Novopharm concedes that in respect of the motion before Justice Dawson the mid range of Column III is appropriate.
[17] This point was also covered in A. Lassonde, supra, where the motions judge had directed the assessment of costs be taxed in accordance with Column IV. Justice Létourneau found that Rules 400 and 407 conferred a discretion on the Court. Rule 400(1) has already been reproduced.
[18] Rule 407 provides:
| 407. Unless the Court orders otherwise, party-and-party costs shall be assessed in accordance with column III of the table to Tariff B.
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407. Sauf ordonnance contraire de la Cour, les dépens partie-partie sont taxés en conformité avec la colonne III du tableau du tarif B.
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[19] Novopharm justifies its request for an assessment of costs beyond Column III on the following factors identified by Justice Wetston in Apotex Inc. et al. v. Wellcome Foundation Ltd. et al. (1998), 84 C.P.R. (3d) 303 (F.C.T.D.), which are some of the factors identified in subsection 400(3) of the Rules:
(1) volume of work;
(2) complexity of the legal issues;
(3) nature of the work involved and the fact that party-party costs should bear a reasonable relationship to the actual cost of litigation.
[20] Lifescan replies by saying Rule 407 sets the level at which costs should be assessed (namely at Column III) unless otherwise ordered by the Court and submits there is no reason for doing so because:
(a) the matter was not legally complex drawing my attention to Justice Stone's decision in TRW Inc. v. Walbar of Canada Inc. et al. (1992) 43 C.P.R. (3d) 449 where he said that it was the complexity of legal issues rather than the factual issues that the Court is to consider when dealing with this factor;
(b) Novopharm filed unnecessary affidavits;
(c) relying on Justice Rothstein's decision in Ciba-Geigy Canada Ltd. v. Novopharm Ltd. (1994), 56 C.P.R. (3d) 344, Novopharm unnecessarily wasted time in dealing with the merits of the case on the serious issue prong for the award of an injunction, an issue which I decided in Lifescan's favour.
[21] I will issue a direction to the taxation officer that the costs of the motion heard on its merits for the interlocutory injunction should be assessed at the upper range of Column IV and I do so principally because of the volume of work involved, the nature of the work and the fact that party-party costs should bear a reasonable relationship to the actual cost of litigation; also accepting the principle expressed by Justice Wetston in Apotex Inc., supra, costs should neither be punitive nor extravagant and the present Tariff B strives to accomplish that balance along with the added principle underlying costs which is that an award of costs represents a compromise between compensating a successful party and not unduly burdening an unsuccessful party.
[22] The volume of work was the basis upon which Justice Stone in TRW, supra, said warranted a significant increase in Tariff B. The hearing before me took two full days, Lifescan's motion record consisted of 263 pages, Novopharm's responding record contained 1,757 pages and Lifescan's response motion had 508 pages.
[23] I do not agree with counsel for Lifescan that Novopharm filed unnecessary affidavits. I find that Novopharm was obliged to respond to the numerous issues raised by Lifescan's affiant, Steven Mahon, on such points as whether the product fell within D.S.I.'s licence, product quality issues, and the nature of the confusion in the context of how Novopharm's Novo-Glucose test strips are marketed.
[24] I see no basis for increasing the scale of costs payable to Novopharm based on the complexity of the legal issues taking guidance here from what Justice Stone held in TRW, supra.
[25] I do not accept Lifescan's argument Novopharm's cost award should be frozen at Column III because it unduly argued the merits of the case focussing on serious issue. There were two areas where Novopharm attacked Lifescan's standing but, in the overall context, this mattered little in terms of the conclusion I reached.
[26] Insofar as the motion before Justice Dawson, I do not accept Lifescan's assertion it was simply a scheduling hearing as I understand its main feature was an adjournment request by the defendant opposed by the plaintiffs. Novopharm is entitled to its costs of that motion.
[27] I deal with one last point. Novopharm sought an increase because I found Lifescan had delayed bringing on its injunction application. Novopharm imputed a finding by the Court Lifescan's objective was to keep Novopharm off the market thus justifying an increased cost award (see Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (1999), 2 C.P.R. (4th) 368 (F.C.T.D.).
[28] For purposes of the cost award, I do not take into account the delay factor because it was relevant to the dismissal of the injunction but, in my view, is not relevant per se to the cost issue. I did not make any finding Lifescan made its injunction application for an improper purpose. In the circumstances, to accept Novopharm's argument would be to penalize Lifescan twice.
(5) Cost of this motion
[29] I find that each party should bear its own costs of this motion as success is equally divided.
DISPOSITION
[30] As a result, the defendant is awarded costs, to be taxed by a taxation officer, of the motions before Justice Dawson and before me in any event of the cause payable within 30 days after the disposition of the action. The costs related to the main motion shall be assessed at the upper scale of Column IV of Tariff B with full costs for two counsel. Costs of the motion before Justice Dawson shall be assessed at the middle range of Column III with allowance for one counsel only.
"François Lemieux"
J U D G E
OTTAWA, ONTARIO
JULY 19, 2001
Date: 20010719
Docket: T-780-00
OTTAWA, ONTARIO, JULY 19, 2001
Present: THE HONOURABLE MR. JUSTICE LEMIEUX
BETWEEN:
LIFESCAN, INC. and
LIFESCAN CANADA LTD.
Plaintiffs
- and -
NOVOPHARM LIMITED
Defendant
COST ORDER
The defendant is awarded costs, to be taxed by a taxation officer, of the motions before Justice Dawson and before me in any event of the cause payable within 30 days after the disposition of the action. The costs related to the main motion shall be assessed at the upper scale of Column IV of Tariff B with full costs for two counsel. àCosts of the motion before Justice Dawson shall be assessed at the middle range of Column III with allowance for one counsel only.
"François Lemieux"
J U D G E
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