Date: 20001019
Docket: T-1564-97 and T-1565-97
BETWEEN:
CANADIAN OLYMPIC ASSOCIATION
Appelant
- and -
OLYMEL, SOCIÉTÉ EN COMMANDITE
and
THE REGISTRAR OF TRADE-MARKS
Respondents
REASONS FOR COSTS ORDER
LEMIEUX J.:
[1] Olymel, Societé en Commandite ("Olymel") by motion under Rule 369 of the Federal Court Rules, 1998 (the "Rules") sought several orders concerning costs awarded to it by the Court in resisting two appeals by Canadian Olympic Association ("COA") made under section 56 of the Trade-mark Act, challenging two decisions of the Registrar of Trade-marks granting Olymel's two trade-mark applications.
[2] Olymel sought:
| (1) under Rules 419 and 420, the doubling of its party-and-party costs from the date it made an offer to settle the appeals; |
| (2) under subsection 400(4) a lump sum cost award in lieu of any assessed costs; |
| (3) under subsection 400(5) the fixing by the Court or the giving of directions by the Court to the assessment officer that the costs assessed under Tariff B be the maximum number of units in Column IV; and |
| (4) the inclusion of specific costs and disbursements. |
[3] I am not prepared to issue a lump sum cost award in lieu of assessment. COA resisted proceeding in this manner arguing that a detailed analysis of the two Bills of Costs delivered by Olymel as part of its motion materials was a cumbersome way to deal with the assessment. I agree. In my view, the assessment of the Bills of Costs in the two appeals should take place before an assessment officer as contemplated under Rule 405, subject to the following directions.
THE OFFER TO SETTLE -- THE DOUBLING OF FEES
[4] On September 29, 1997, Olymel's solicitor wrote to the solicitors to COA the following letter:
| On behalf of our client, Olymel, Société en Commandite, we hereby confirm our client's offer to settle both these Appeals on condition that the Appellant discontinue these two Appeals on the basis that the two decisions of the Opposition Tribunal be sustained whereby the Appellant [sic] two oppositions are rejected with costs payable to the Respondent/Applicant. This offer is open until the Hearing of this matter or unless revoked earlier by Olymel, Société en Commandite. |
| We reserve the Respondent's right to refer to their Offer to Settle when dealing with costs. |
[5] Counsel for COA says Olymel's September 29, 1997 offer is not an offer to settle within the meaning of the Rules because that offer contains no element of compromise or alternatively it is vague and uncertain and not capable of acceptance. Moreover, in the further alternative, COA says that the words "unless otherwise ordered by the Court" in Rule 420 empower the Court to order something less than double costs.
[6] The question whether an offer to settle must contain an element of compromise was considered by the Ontario Court of Appeal dealing with a somewhat analogous provision under the Ontario Rules of Civil Procedure in the cases of Data General (Canada) Ltd. v. Molnar Systems Group Inc. et al. (1991), 6 O.R. (3d) 409 and recently in Walker Estate et al. v. York Finch General Hospital et al., 169 D.L.R. (4th) 689. Those two cases stand for the proposition that, under the Ontario Rules, an element of compromise is not an essential feature of an offer to settle but its absence can be a relevant factor to be taken into account in ordering otherwise under the words "unless the Court orders otherwise" under Ontario Rule 49.
[7] Madam Justice Reed, in Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al., [1999] 2 C.P.R. (4th) 368, did not specifically deal with the issue of whether an element of compromise was an integral part of an offer to settle but seems to assume that it was.
[8] In Apotex, supra, Apotex, as plaintiff, had offered to settle an action for a declaration of non-infringement and patent invalidity on the basis it would discontinue the action on a without costs basis, and the defendants would acknowledge that Apotex's formulation of the tablets was non-infringing and would consent to the Minister issuing Apotex its notice of compliance.
[9] At page 376 of the reported case, Madam Justice Reed said this at paragraph 17:
| Also, a compromise is present in the offer. The plaintiff's formulation would have been acknowledged as non-infringing, but the attack on the patent's validity would have been discontinued. A disallowance of the action would have left the defendants' patent unchallenged. As counsel for the plaintiff notes, there was also room for a counter offer, the defendants could have offered to licence the plaintiff. |
[10] At least for the purposes of the cost award before me which does not arise in an action but in the context of an appeal from the Registrar of Trade-marks awarding Olymel two trade-mark registrations, I am of the view that the ingredient of compromise (or incentive to accept) is an essential element of an offer to settle. Other considerations may apply when considering an offer to settle liquidated or unliquidated damages in an action.
[11] The purpose of the offer to settle rule, as pointed out by Morden A.C.J.O. in Data General, supra, is to encourage the termination of litigation by agreement of the parties -- more speedily and less expensively than by judgment of the Court at the end of a trial. He added the impetus to settle is a mechanism which enables a plaintiff to make a serious offer respecting his or her estimate of the value of the claim which will require the defendant to give early and careful consideration to the merits of the case.
[12] As argued by counsel for COA, Olymel's offer contained no element of compromise although it was made after Olymel had filed its respondent's memorandum of fact and law which, in my view, was not so persuasive and convincing as to render COA's continuation of the appeal without merit. In the circumstances, it was a request that COA capitulate an arguable appeal. Olymel's offer did not, in my view, advance the purposes of the offer to settle provision of the Rules.
[13] Without an element of compromise in analogous situations, an offer to settle could simply become a very easy mechanism for a respondent to obtain double costs and clearly, such a device is not within the intent of the Rules.
[14] I make another observation. Rule 420 only applies where the offer to settle is not revoked. Olymel's offer to settle terminated at the hearing of the appeals before the Court.
[15] In any event, the words "unless otherwise ordered by the Court" under paragraph 420(2) confer a discretion upon the Court to award or direct less than the doubling of party-and-party costs from the date of the service of the offer. In my view, in the circumstances, Olymel is not entitled to the doubling of its costs from the date of the offer to settle.
INCREASE FROM TARIFF B, COLUMN III
[16] Rule 407 provides that unless the Court orders otherwise, party-and-party costs shall be assessed in accordance with Column III of the Table to Tariff B. Rule 400 provides the Court's authority to direct that an assessment be performed under a specific column or combination of columns of the Table to that Tariff taking into account the factors prescribed in subsection 400(3).
[17] In Apotex, supra, Madam Justice Reed, at page 372, indicated that Column III level costs are designed to address a case of average complexity involving an average amount of work.
[18] Counsel for Olymel referred to three subsection 400(3) factors namely, the weakness of COA's case, the written offer to settle and the amount of work involved.
[19] I am not prepared to direct that the assessment officer assess Olymel's bills of costs at the maximum number of units in Column IV of Tariff B. COA's case was not a weak one, the Court finding the Registrar had committed an error of law. In addition, Olymel's offer to settle was not genuine in that it contained no element of compromise. Moreover, the amount of work is a proper consideration for the assessment officer to take into account in determining the scale for the number of units under Column III.
OTHER COSTS MATTERS
[20] I leave to the assessment officer the determination of Olymel's claim for fees paid to articling students and law clerks. I point out that Madam Justice Reed in Apotex, supra, at page 377, discussed this aspect of the matter.
[21] I do the same with the issue raised by counsel for the COA whether it was proper for Olymel to submit two separate bills of costs in these two appeals which were consolidated, at least for hearing.
[22] All other cost issues raised by counsel for Olymel and counsel for COA are left to the assessment officer.
CONCLUSION
[23] For the reasons given, Olymel is not entitled to the doubling of its party-and-party costs pursuant to the offer to settle rule and is only entitled to costs assessed by the assessment officer under Column III of the Table to Tariff B. All other cost issues raised shall be determined by the assessment officer. COA shall recover its costs on this motion, at the Column III scale.
J U D G E
OTTAWA, ONTARIO
OCTOBER 19, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS ON THE RECORD
COURT FILE NOS.: T-1564-97 & T-1565-97
STYLE OF CAUSE: CANADIAN OLYMPIC ASSOCIATION - AND -
OLYMEL, SOCIÉTÉ EN COMANDITE ET AL
DATE OF MOTION IN WRITING: JUNE 16, 2000
REASONS FOR COSTS ORDER OF THE HONOURABLE MR. JUSTICE LEMIEUX
APPEARANCES:
| Mr. Kenneth D. McKay FOR THE APPELANT |
| Mr. J. Guy Potvin FOR THE RESPONDENTS |
SOLICITORS OF RECORD:
| Sim, Hughes, Ashton & McKay FOR THE APPELANT |
Barristers & Solicitors
Toronto, Ontario
| Potvin Law Office FOR THE RESPONDENTS |
Ottawa, Ontario
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