[1] A copy of these Reasons is filed today in Court file T-1609-97, Caricline Ventures Ltd. v. Farside Clothing Ltd. and Farside Skateboards & Snowboards Ltd., and applies there accordingly. These actions, addressing trade-mark infringement relative to sales of clothing, footwear and accessories, were heard together. The Plaintiff presents one bill of costs, encompassing both matters, further to Judgment in its favour. The record extensively documents the relative positions of the parties concerning costs and my summary thereof includes, as appropriate, supplementation of those positions advanced at the hearing before me. The Plaintiff included a detailed errata concerning the Defendants' submissions: I have not summarized it, but I considered it in my decision.
The Defendants' Position
[2] The Defendants asserted that these actions addressed trade-mark infringement of a word mark with no design features. The confusion between the Defendants' mark "Farside" and the Plaintiff's mark "Pharsyde" started some months after the respective openings of the Plaintiff's and Defendants' stores. The Plaintiff obtained a registered trade-mark about two years after its store opening. The Defendants asserted that the Court, at a case management conference, characterized the Plaintiff's mark as not strong and urged mediation because of a feeling both sides were at risk in proceeding to trial.
[3] The Defendants argued that the Plaintiff effectively seeks double costs for two actions which should have been consolidated given that the same counsel represented all parties throughout, the allegations in both actions were the same and discoveries of all parties occurred at the same time. That is, the parties treated both actions at all times as consolidated, including the trial at which only four witnesses were called, none of whom were experts. The Defendants argued that the Plaintiff proceeded as if the trial would address liability with damages reserved to a later hearing, yet unnecessarily sought production of extensive financial documents not ultimately entered at trial. As well, its discovery of the Defendants' representative was unnecessarily labourious and repetitive relative to issues factual in nature and easily understood. The Defendants argued that the forwarding by the Plaintiff of an individual Request to Admit for each action under cover of a letter acknowledging that the Requests were identical, and the need for only a single document from the Defendants in response, demonstrates the unnecessary costs caused by the Plaintiff's insistence on maintaining separate actions. The Defendants asserted that the practice is that an award of Column III costs mandates the mid-point of ranges unless otherwise directed. As well, the Plaintiff cannot claim twice under items 5 and 15 for the motion addressing the waiver of privilege issue which interrupted the trial.
[4] The Defendants argued that the Court's Order setting the trial venue in Edmonton, over the Plaintiff's strong objections, was an attempt to encourage settlement via mediation. The Plaintiff refused reasonable and inexpensive attempts at mediation as opposed to a costlier trial. The Defendants noted that their witness, Hafis Devji, led evidence at trial speculating on communications to counsel concerning a trade-mark application. In attempting to resolve this evidence, a folder from the law office of Defendants' counsel was produced which inadvertently included privileged litigation documents. The Defendants argued that the Plaintiff's unnecessary and fruitless position on the issue of waiver of privilege resulted in a four-month adjournment virtually doubling the costs of trial. The Court did not find the Defendants' position to be unreasonable nor did it discredit Mr. Devji, but simply characterized his evidence as "uncertain".
[5] The Defendants argued that the record undermines the Plaintiff's assertion of the importance to it of the mark, ie. at the time of institution of this litigation, it had used this weak mark for two years and had registered it less than eight months before. The Defendants asserted that the Plaintiff tried to intimidate them with economic clout. The Defendants asserted that the Plaintiff rejected more sensible and cost-effective steps, i.e. its refusal to pay conduct monies for Azim Devji to fly from Toronto to Edmonton, precluding hotel costs because he could have stayed with his family, for discovery at the same time as Hafis Devji. As a result, counsel for both sides each required airfares and hotel costs to fly to Toronto. Further, the Plaintiff's counsel claims five days for the Toronto trip for a discovery lasting less than two hours.
[6] The Defendants argued that it is trite law that a settlement offer is revoked by a subsequent offer. That is, relative to the reference to revocation in Rule 420(1), the Plaintiff's settlement offer dated January 26, 2001 was a new offer with terms different from its initial settlement offer dated October 4, 2000. Negotiations ensuing from this initial offer were ultimately unsuccessful. The Defendants argued that, therefore, the January 26, 2001 letter effectively revoked the earlier offer. Further, jurisprudence such as Henry Global Immigration Services v. Canada (Minister of Citizenship and Immigration), 158 F.T.R. 110, suggests that an offer to settle immediately prior to trial (January 29, 2001) should not be a factor for increased costs. The Defendants argued that the Plaintiff's jurisprudence addresses old Rule 344.1 containing language for revocation dissimilar to current Rule 420.
[7] The Defendants argued that no disbursements are assessable from the conclusion of trial to the date of Judgment. The Defendants asserted that the record discloses the Plaintiff's solicitor of record relying in some areas on lawyers in both its Toronto and Vancouver offices, but not in other areas so as to reduce costs, i.e. Vancouver counsel travelling to Toronto for discovery. As well, the Plaintiff spent $1,670.97 unnecessarily for agents to investigate the Defendants' Toronto operations, as opposed to using its law firm's Toronto staff.
[8] The Defendants argued that lack of complexity, i.e. design issues, precluded any need for some 3,500 photocopies and 850 colour copies of trial exhibits. As well, other photocopying and binding charges are excessive. The Defendants argued that surcharges on disbursements, such as long distance, facsimiles, couriers and computer searches, imposed by the Plaintiff's law firm, are not reasonable nor assessable. The unexplained $500.98 for search and filing costs, additional to $690.00 for filing fees, appears to duplicate the search component in the $1670.97 above for agents' fees. The Defendants argued that $5,603.59 for trial transcripts, obtained during the trial adjournment, represents a luxury not assessable in these circumstances.
[9] The Defendants argued that the Plaintiff should be reimbursed only for reasonably priced hotels. Both counsel for the Plaintiff each claim a hotel room throughout trial: the Defendants should be responsible only for one double occupancy room at a reasonably priced hotel. As well, the Plaintiff's counsel did not book faresavers despite knowing the trial date well in advance. The Defendants asserted that meal charges exceed guidelines for public servants. The Defendants asserted that the Plaintiff's counsel used taxis as opposed to convenient and cheaper airport shuttles.
The Plaintiff's Position
[10] The Plaintiff argued that this litigation was essential to protect its mark and associated goodwill and noted that the trial Judge acknowledged the considerable number of issues and exhibits. The Plaintiff asserted that the record discloses obstructive and evasive conduct by the Defendants throughout. The Plaintiff argued per Rule 400(3)(a) that, contrary to the results at trial for the Defendants, including their counterclaim, it was successful on every contested point as well as receiving special directions under item 24 for travel of counsel to discoveries and trial. The Plaintiff argued per Rule 400(3)(c); (e); (g) and (j) respectively, that it was important to spend considerable time and money to protect its mark relative to these Defendants vigorously opposing this litigation and who have appealed; that written offers to settle may be considered whether or not Rule 420 applies; that the record discloses over 1000 hours of lawyers' time billed and unbilled and that the record discloses conduct by the Defendants frustrating orderly admissions throughout. The Plaintiff argued per Rule 400(3)(i) that it was not obligated to submit to judicial mediation and that the result at trial justified its position. The Plaintiff argued that the Defendants' conduct created the waiver of privilege problem at trial and, the Court having ruled thereon including costs in the cause ultimately payable by the Defendants, they cannot now reargue entitlement to costs. The Plaintiff asserted that the waiver of privilege issue was critical to its position and argued that the Court's adverse finding of credibility for the witness, Hafis Devji, justifies its position and should not be a negative factor tending to reduce costs.
[11] The Plaintiff argued, per Mon-Oil Ltd. v. Canada [1994] 3 F.C. D-27 (T.O.), Florence v. Canada (Air Transport Committee) [1991] 2 F.C. D-32 (T.O.) and Merck Frosst Canada Inc. v. Canada (Minister of National Health & Welfare) (1998) 77 C.P.R. (3d) 166 (Fed. T.D.), that the reasonableness of costs should be assessed in light of the circumstances existing at the time they were incurred, as opposed to hindsight. The Plaintiff asserted that the Defendants incorrectly characterize the parties as treating these actions and the trial as consolidated. The Court's Reasons acknowledged that the actions had separate issues. The Plaintiff cited Knappett Construction Ltd. v. Canada (Minister of Labour) [1999] F.C.J. No. 308 (T.D.) and Del Zotto v. Canada (Minister of National Revenue) [1995] F.C.J. No. 34 and argued that previous versions of the Federal Court Rules, although not displaying the express distinction in current Rule 105 between proceedings consolidated, heard together or heard one immediately after the other, were held to have said distinction. The Plaintiff argued that an Assessment Officer lacks jurisdiction to vary an award of costs and, the Court not having limited it to one set of costs for two actions, it can assess costs for each action consistent with Beaulieu v. Canada [2000] F.C.J. No. 2126 (A.O.).
[12] The Plaintiff noted that it did not claim twice for items common to both actions, such as travel and trial preparation and appearance, but that many tasks, including pleadings, particulars, productions and some discoveries, had been completed separately prior to the February 7, 2000 Order directing these actions to be heard at the same time, or one following the other, in the discretion of the presiding judge, on liability and injunctive relief with damages to be deferred to a reference. The Defendants themselves issued separate Requests to Admit in 1999. The Plaintiff argued that the Court's Reasons recognized that the pleadings addressed different cities and issues. For example, the Toronto Defendants did not counterclaim. As well, the Plaintiff used separate Requests to Admit to preclude jeopardy to individual positions particular to each action. The Plaintiff asserted that the Defendants could have moved for consolidation. The Plaintiff acknowledged some common issues, but asserted there were also issues particular to one action or the other. If the performance of a task in one action simplified the corresponding task in the other action, the Plaintiff claimed fewer units for the latter task.
[13] The Plaintiff argued that its October 4, 2000 settlement offer was clearly superior to the results achieved at trial by the Defendants. The January 26, 2001 settlement offer elaborated on aspects of the earlier offer, or could be considered as an overture at compromise consistent with the first offer continuing to be in effect. The Plaintiff asserted that nothing in the second letter revoked the first letter, as contemplated by Rule 420(1), and the Defendants' position does not suggest that the terms in the second letter were inferior to the results at trial. The Plaintiff argued that, regardless of whether the second offer is deemed to have revoked the first offer, jurisprudence such as Canadian Pacific Forest Products Ltd. v. Termar Navigation Co. [1998] F.C.J. No. 834 and Gravel and Lake Services Ltd. v. Bay Ocean Management Inc. [2002] F.C.J. 357 hold that successive offers to settle do not jeopardize the use of the initial settlement offer date for doubling because the purpose of the Rule is to encourage serious settlement offers precluding the considerable costs of trial. A defendant can pick one in a series of unrevoked settlement offers and a plaintiff could then agree to settle on that basis: Henry Global Immigration Services, supra, is not relevant here. Alternatively, the Plaintiff argued per Hi-Qual Manufacturing Ltd. v. Rea's Welding & Steel Supplies Ltd. (1994) 55 C.P.R. (3d) 289 (T.D.) that, if Rule 420 does not apply, its settlement offer still warrants increased costs under Rule 400(3)(e) to reflect the actual costs from the date of the offer.
[14] The Plaintiff asserted that the practice is not to limit Column III costs to the mid-point of ranges and cited Starlight v. Her Majesty the Queen 2001 FCT 999 (A.O.) as authority that each fee item should be considered in its own circumstances. The Plaintiff claimed at the low or mid-range for most items, generally claimed the higher value if only two choices were available and claimed the maximum or higher value for a limited number of items described below.
[15] The Plaintiff argued that the Defendants' conduct during oral and document discovery, i.e. obstinance, dilatoriness, incompleteness, staggered production, evasiveness, poor preparation and negligence (loss of important documents), justifies items 7, 8 and 9 at or near maximums in the available ranges. The Plaintiff argued that the record discloses difficulties with Requests to Admit in turn justifying item 12 claims at or near the maximum. As well, the complexity and importance of the issues justifies item 13 and 15 claims at or near the maximum. The Court indicated that it was not necessary to give directions for the Plaintiff to claim item 15 for written argument. By implication, this extends to the second item 15 claimed for the waiver of privilege motion. The Plaintiff asserted that it did not refuse to fly Azim Devji from Toronto for discovery, but that it agreed to discover him in Edmonton if he flew there bearing his own costs. The Plaintiff noted that the Rule provides for discovery in a location closest to one's residence and therefore it was not obligated to pay said travel costs. The Plaintiff added a claim under item 3 for amendment to pleadings necessitated by disclosure during discovery in T-1609-97 only of a new store. The Plaintiff added two item 27 claims for Reply to Notice of Status Hearing in each action. The Plaintiff also added to the bill of costs a claim totalling $1,437.96 for disbursements addressing this assessment of Costs. The Plaintiff argued that costs do occur after trial and are assessable, i.e. the hearing fees levied by the Registry under Tariff A2.
[16] The Plaintiff argued that Carlile v. The Queen, 97 D.T.C. 5284, holds that absolute proof of disbursements is not required and that the evidence here meets the threshold for assessment. The Plaintiff argued that colour photographs were essential to provide the best possible evidence of both the nature of its operations and of the money and effort invested to develop its mark. By comparison, the Defendants spent considerable time describing the look and surroundings of their operations. The Plaintiff asserted that the Defendants' position on binding of its book of exhibits overlooks the need for multiple copies at trial and that there is no basis to suggest that the Registry's charges for photocopies were unreasonable or inappropriate.
[17] The Plaintiff argued that the law firm's surcharges to address necessary operating costs for items such as long distance tolls do not represent a profit on costs as they were billed to the client. The Plaintiff's law firm has staff dedicated to only such services and this surcharge addresses the associated cost to the client. Given that the Defendants' counsel proposed charging $100.00 to receive a facsimile for which the Plaintiff claimed only $8.07 to send, the Defendants' position is unreasonable.
[18] The Plaintiff argued that the Defendants' position misrepresents the nature of the agents' fee by attributing all of the $1,670.97 to private investigators when, in fact, that amount included other services such as photocopying. As well, the fact that most of these charges addressed Edmonton, in which the Plaintiff's law firm had no staff, undermines the Defendants' position. The Plaintiff noted that Toronto office staff did perform some of the investigatory work, but third party help was still essential. The Plaintiff argued that the Defendants' tendency to exaggerate and give imprecise and self-serving testimony justified these costs incurred for proper preparation. The Plaintiff argued that the lengthy adjournment during trial justified trial transcripts and noted that the Court's reasons cited the transcripts. These transcripts are necessary for the ensuing appeal.
[19] The Plaintiff argued that the Court's award of item 24 fees for the travel of counsel to discovery and trial implicitly included associated disbursements. The Defendants have not demonstrated how the travel charges are excessive, i.e. the objection to the Westin Hotel in Edmonton, close to the courthouse and having a business centre essential for assembly of materials, and at which the trial judge also stayed. The Plaintiff asserted that the various hotels used were not the most luxurious and represented appropriate living standards in convenient locations. The proximity of the Westin Hotel precluded the need for taxis on most days. Taxis were necessary at times given the amount of material and equipment necessary for trial in Edmonton, including transport to and from airports. The government rate is not available to law firms, but the travel agent always sought the best available hotel rates. The Plaintiff argued that limiting assessable costs to double occupancy rooms would be unreasonable given that a hotel room doubles as a home away from home and as a working space and given that the Court awarded fees for two counsel to travel to Edmonton for the trial.
[20] The Plaintiff argued that, given the volatility of legal schedules and the possibility of short notice adjustments, discount faresavers were not required per Dableh v. Ontario Hydro [1995] 2 F.C. D-8 (T.O.), affirmed (T-1422-90) April 17, 1995 (T.D.) and Hagwilget Band Council v. Canada (Minister of Indian Affairs and Northern Development) [1998] F.C.J. No. 922. Fares upgraded to business class were not included in the bill of costs. The Plaintiff argued that the requirement for a weekend stay to obtain the faresaver rate used explains the several days for the January 2000 trip to attend discovery, but the overall cost was still less than if a full economy fare had been used. As well, at the time, success at trial and an award of costs were uncertain. The Plaintiff noted that the record disclosed difficulty in setting the second date for discovery and that counsel finally set the date unilaterally for Toronto, which it could not have done for Edmonton without consent. The Plaintiff argued generally that the travel costs were reasonable given litigants in Toronto, Edmonton and Vancouver and the Defendants' insistence on trial in Edmonton.
Assessment
[21] Consistent with the observation of the trial Judge in paragraph [10] of his May 15, 2002 directions for costs, I do not think that these matters were particularly complex or that they raised novel issues of law. Importance as a factor in costs is relative and should not be discounted simply because litigation may be significant only for its particular parties. My impression, based on the record and the unfolding before me of this assessment of costs, including a teleconference in advance to set parameters for the exchange of materials, is that these litigants may have had general difficulties in dealing with one another in turn possibly inducing higher costs than normal. Regardless, the practice is that, unless the Court specifically restricts a successful litigant to a single set of costs for multiple proceedings, such as in Bertha L'Hirondelle et al. v. Her Majesty the Queen 2002 FCA 367, that litigant may assess separate costs for each proceeding unless there are services common to all and clearly inappropriate, as here for trial preparation and appearance, for multiple indemnification. I agree that the record establishes difficulties on the part of the Defendants (which I do not attribute to their counsel) in moving this litigation forward. Therefore, I allowed fee items as presented except where I felt adjustments were warranted. There is no principle of costs mandating the mid-point of ranges in the absence of an express direction of the Court to do so.
[22] I allow the fee items for pleadings as presented. I allow the addition of item 3 (amended Statement of Claim in T-1609-97) for 4 units. The Defendants objected generally to duplication of costs, but did not specifically address Orders silent as to costs. I have no authority to substitute my discretion for that of the Court under Rule 400 (1). Given challenges in other areas to my jurisdiction, I remove the units claimed under item 4, addressing an uncontested motion concerning confidentiality of documents, as the Court's decision was silent as to costs. I allow the counsel fees under item 5 for the waiver of privilege motion as presented at 6 and 3 units respectively for first and second counsel. These were difficulties not attributable to the Plaintiff during the production and discovery stages. Therefore, I allow the item 7, 8 and 9 fees as claimed including a second item 8 for each preparation for the resumption of discoveries of Azim and Hafis Devji (interval of approximately nine months): the circumstances warrant such allowances.
[23] I doubt that settlement was ever much of a possibility, but case management conferences were still relevant for this litigation. I allow fees for items 10 and 11 as presented at 4 and 2 units respectively for the February 3, 2000 conference, but I reduce the 5 and 3 units claimed under items 10 and 11, for the May 3, 2000 conference, to 4 and 2 units respectively. The four claims under 12 for Responses to Request to Admit and for Requests to Admit are allowed as presented at 2 or 3 units. I allow fees under item 13 as claimed for trial preparation, including the higher value of 3 units, from the available range of 2-3, for trial preparation after the first day: per Starlight v. The Queen, supra, broad distinctions are required between an upper versus lower allowance from such ranges. The same consideration applies to item 14 (appearance at trial) for which I allow the higher value available. I agree with the trial Judge's assertion that no express direction is required for item 15: the written argument was permitted and submitted. The item 15 claim for trial is allowed as presented at 7 units. However, item 5 above already addresses materials for the waiver of privilege motion, including argument. Item 15 falls under the subheading "E. Trial or Hearing" and not "B. Motions", under which item 5 is found. I disallow the 4 units claimed under item 15 for the waiver of privilege motion.
[24] Further to the direction of the Court permitting item 24 for first and second counsel at trial, and for first counsel for various discovery dates, the Plaintiff claimed for each at 4 units from the available range of 1-5. There are obvious difficulties in attempting to link case preparation requirements to an appropriate point in a range for a lawyer caught in travel status. As noted above, I think that this litigation was in some ways more difficult than the facts warrant: in the circumstances, I will allow these item 24 claims as presented. I allow item 26 for the assessment of costs as presented at 4 units, plus $1,405.01 (which includes GST, but excludes the law firm surcharges for the reasons below) for the disbursements added at assessment. The four claims under item 27, including the two added at assessment, for responses to demands for particulars and for replies to Notice of Status Hearing, are allowed at the low or mid-point of the range as presented.
[25] I have considered the photocopy charges claimed at $5,969.04 consistent with Carlile v. The Queen, supra, and with Local 4004, Airline Division of Canadian Union of Public Employees v. Air Canada, Docket T-323-98 on March 25, 1999 (A.O.), as well as noting the evidence that secondary or cautionary copies of authorities were made. I endorse the sentiment (addressing counsel fees) concerning the practical approach to costs of Lord Justice Russell in Re Eastwood (deceased) (1974) 3 All E.R. 603 at 608:
... In our view, the system of direct application of the approach to taxation of an independent solicitor's bill to a case such as this has relative simplicity greatly to recommend it, and it seems to have worked without it being thought for many years to lead to significant injustice in the field of taxation where justice is in any event rough justice, in the sense of being compounded of much sensible approximation... my emphasis
and allow $4,750.00 (of which $100.00 is attributable to B.C. Courthouse Library copies not subject to GST). In this allowance, I have taken into consideration and allowed colour copies: I think that analysis of a word mark devoid of design features still benefits from the trial judge seeing the mark as it appears on site. I allow long distance telephone tolls, long distance facsimile tolls, couriers, postage, fees to the Receiver General, UBC law library search, conduct monies, disposable camera and local travel charges of $522.43, $68.30, $512.96, $13.38, $690.00, $15.00, $120.00, $39.57 and $50.36 respectively, exclusive of any law firm surcharges thereon for the reasons below. I allow the agents' fees and search fees as presented at $1,670.97 and $500.98 respectively. Consistent with my views in James L. Ferguson v. Arctic Transportation Ltd. et al., Docket T-1941-93 on July 29, 1999 (A.O.), I think that computer-assisted research is assessable. Some of the searches may extract cautionary or secondary authorities. In addition to diligent representation of one's client, counsel have a duty to advise the Court on the law. In the circumstances, I reduce the $2,653.36 (excluding surcharges) to $2,050.00.
[26] Hotels offer a variety of booking rates and are often strict about qualification for the better rates. Double occupancy rooms as a standard in litigation costs are simply inappropriate. Faresavers continue to require weekend stays. In the bill of costs before me, some meal charges exceeded public service guidelines, but not exorbitantly. In some instances, fast food outlets were utilized. The record does not suggest anything outrageous for travel by counsel for the May 4 and 5, 1999 and January 21, 2000 discoveries in Edmonton and the January 24, 2000 discovery in Toronto: I allow the associated disbursements totalling $2,083.95 and $942.41 as presented respectively for these Edmonton and Toronto trips. The record indicates that, for travel costs for counsel during trial, meal charges appearing in invoices were removed and replaced with the flat public service rate. As well, the evidence is that airfare for the Plaintiff's witness to attend the trial was claimed at the same amount as for counsel because the receipt had been lost. I allow these latter costs at $1,532.00 as presented, including living expenses. I allow the $8,392.92 as claimed in total for two counsel for travel costs to Edmonton for the trial in January and June, 2001 (six days of sitting in total).
[27] I disallow the $5,603.59 claimed for trial transcript and allow the balance of the $7,768.55 claimed for discovery transcript. It was likely inevitable that Plaintiff's counsel would consider it prudent to order trial transcript during the adjournment. The record discloses that the trial Judge did as well. Extraordinary circumstances must exist for trial transcript to form part of assessable costs at the trial level. The presence here of experienced intellectual property counsel precludes that notion in these circumstances. I think that both the trial Judge and counsel guaged the credibility of Hafis Devji without the necessity of trial transcript.
[28] I disallow the law firm surcharges on disbursements. They might be arguable at the solicitor-client level. They do not originate with a disinterested third party provider of a service in the nature of a disbursement i.e. couriers. Rather, although they are calculated as a direct function of said third party's charges, they originate within the law firm, albeit for the time of a staff member not called to the bar. The general compensation in party and party costs as a partial indemnity is limited by the fee items in Tariff B and I do not think that the nature of these surcharges can be stretched to associate them with disbursements generally indemnified at their full value as limited by reasonable necessity.
[29] For the doubling issue under Rule 420(1), my initial inclination is to apply it from the date of the first offer because the result at trial for the Defendants fell short of its provisions regardless of any subsequent adjustments in settlement overtures from the Plaintiff and therefore the Defendants should bear, from the earliest possible date, the associated consequences of costs for failure to accept. My reading of The Law of Costs Second Edition Mark M. Orkin Q.C. (2001) paragraph 214 at pages 2-117, 2-118 and 2-137, as well as the text of cases in footnotes 811, 814, 906 and 906.1 thereto, suggests that such failures to accept settlement offers do not necessarily trigger costs consequences from the date of the first offer and that determination of the appropriate date for such consequences is a function of the circumstances surrounding the offers. For example, factors considered may include progressively increased or decreased offers, whether offers can co-exist, the timing of offers and whether an offer is capable of inducing settlement. The issue of multiple settlement offers has been carefully argued in a number of jurisdictions without necessarily achieving a universal approach.
[30] I think that two offers existed in this litigation. I think that January 26, 2001, the date of the second offer, is the applicable date for doubling. In so concluding, I found Diefenbacher v. Young 123 D.L.R. (4th) (Ontario Court of Appeal) 641 at 646-48 inclusive useful:
...The final point of appeal concerns the costs implications arising from successive offers to settle made by the plaintiff. On June 14, 1988, the plaintiff offered in writing to settle for $34,500 inclusive of claim and interest with costs to be assessed or agreed upon. The offer was stated to expire at the commencement of the trial. On November 20, 1990, the plaintiff made a further offer to settle for $20,000 plus prejudgment interest, the costs to be assessed and the offer to terminate at the commencement of the trial. There is nothing in the second offer explicitly rescinding the first offer. Both offers were well below the recovery at trial and the issue was, therefore, whether the plaintiff should recover solicitor-and-client costs from the date of the first offer or from the date of the second offer. The trial judge, after indicating some indecision, found that the second offer was not a withdrawal of the first offer and that the solicitor-and-client costs should be awarded from the date of the first offer.
The appellants argue that the second offer is implicitly a withdrawal of the first offer and thus that the first offer should be ignored in making an award of costs under rule 49.10.
The trial judge's hesitancy over this issue can be readily understood. There is no clear answer found in the language of Rule 49. It is clear from rule 49.04 that a notice of withdrawal must be in writing,, but this could be by implication in the second written notice. Such an implication would be plain if a plaintiff made a higher demand in the second notice. On the other hand, there is nothing in Rule 49 to prevent two offers from being outstanding at one time and, although an earlier offer by a plaintiff of a higher amount than the second offer might appear to be irrelevant to the defendant, it would arguably be still outstanding. Further, if, as here, the first offer was stated to be effective to the date of trial, it would arguably be operative if the second offer was formally withdrawn. The question is whether the second offer implicitly withdraws the plaintiff's earlier higher offer. In technical semantics it does not do so, yet in the ordinary understanding of litigants proceeding towards a trial the earlier offer would be considered a piece of history and off the table.
Examining the issue at the level of the purpose which Rule 49 serves, it is certainly salutory to encourage the plaintiffs to be flexible as realities change through production and discovery and interviews with witnesses, and to lower their demands as may be appropriate from time to time. On the other side, defendants should be encouraged to increase offers as circumstances dictate. Both these tendencies would be encouraged by offering the benefit of a costs award to the date of the earliest offer that was more beneficial to the opposite party than the judgment awarded.
On the other hand, the offer to settle is intended to be a simple and straightforward gesture to the opposite party calling upon that party to make a decision based upon the then apparent risks of litigation, to accept or proceed forward and bear the risk of costs consequences from that day forward. If a plaintiff offers successively to accept $40,000, $20,000 and then $10,000 in settlement, the defendant can accept the $10,000, and pay party-and-party costs to that date. If the earlier offer is considered to remain effective, then the risk involved in refusal is different than the consequences of acceptance. Acceptance may involve a costs obligation of $4,000, while rejection may impose a risk of solicitor and client costs to an earlier date that may be $8,000. This is arguably fair as a lever to encourage settlement, but is a compounding complication which detracts from the simplicity of looking at a single offer and assessing a risk at a single point in time.
Conceding that the answer is elusive, I lean to adopting the parlance and normal understanding of a litigant that a decreasing offer by a plaintiff and an increasing offer by a defendant, without reference to the earlier offer, is by implication a withdrawal of the earlier offer. Its reality has disappeared in the ongoing negotiations and dealings between the parties and, prior to the present judicial debate of the issue, it is not sensible to consider that the parties would give thought to the earlier offer, in the context of costs consequences, after the second offer.
In the future, parties making second offers may choose to stipulate that the earlier offer (higher, in the case of a plaintiff's offer) remains outstanding. This would eliminate any implication to the contrary and would leave intact the incentive to make more reasonable offers as events develop. At the same time, it would alert the opposing party to the risk that the second offer may be withdrawn or that the first offer may be operative when compared to the trial judgment. Thus, the decision in this case can be considered as reflecting the fair perception of the parties to the offers exchanged, rather than dictating a principle upon which Rule 49 should be applied.
I would therefore grant leave to appeal the costs and allow the appeal to the extent of limiting the entitlement of the plaintiff to solicitor and client costs to the date of the second offer and forward...
Notwithstanding the presence therein of an informal settlement offer deemed to be of no effect, the discussion in Agala v. Agala [1999] B.C.J. No. 1641 (British Columbia Supreme Court) concerning revocation of offers by subsequent offers was relevant. As well, the discussion in Mackenzie v. Brooks [1999] B.C.J. No. 2411 (British Columbia Court of Appeal) was instructive concerning settlement counter-offers not revoking prior offers of the opposing party as distinct from the traditional law of contract and concerning the notion of co-existing avenues to settlement. This Court, in Canadian Pacific Forest Products Ltd. v. Termar Navigation Inc. supra, applied the date of an earlier settlement offer, but as a function of an express statement in writing renewing the earlier offer, and stated in paragraph 16 that the "only revocation of offers...was by way of making subsequent offers".
[31] The wording of Rule 420 does not expressly require written revocation of an offer so as to avoid the doubling penalty for costs from the date of said offer. The last sentence of the October 4, 2000 letter (the initial offer) states that a formal settlement and license agreement would have to be prepared giving effect to the proposed terms. That did not, in my opinion, make said offer unmeasurable as compared to judgment and therefore not relevant for the triggering of the doubling penalty for costs relative to the threshold discussed (for former Rule 344.1) in Canadian Pacific Forest Products Ltd., supra. The letter dated October 27, 2000, following exchanges between the parties flowing from the initial offer, included language to this effect: "does not agree", "will not agree", "clear disagreement", "no point attempting to work out" and "appears that this dispute will not be settled". The January 26, 2001 letter (the second offer) did not expressly revoke the initial offer, but did include a draft settlement and license agreement. The record does not suggest it was identical or comparable to the one proposed in the initial offer so as to effectively make the second offer a simple confirmation that the initial offer remained current. The second offer incorporated some elements of the initial offer, but its express delineation of detailed restrictions effectively revoked the initial offer.
[32] The comments, on November 28, 2000 in Docket T-2408-91 (Merck & Co. Inc. et al. v. Apotex Inc.) at page 4 of the Second Supplement to Report of the Referee on a Reference for an Accounting of Profits, that as "a practical matter, as any litigator is aware, offers of settlement have been tendered countless times literally as the parties enter the courtroom", reflect the shifts in position inherent to litigation and are relevant here. The Defendants could have adequately assessed the second offer for the purpose of settlement, given the events and information available to that date, even if the offer was made only 3 days before trial. The unfolding of events at trial leading to adjournment for several months, and the lack of evidence of revocation, perhaps surprisingly of that second offer, indicate that the Defendants may have had extra time not ordinarily available to assess such an offer. Doubling under Rule 420(1) applies from January 26, 2001. I think that the substantial portion of item 13 preparation for a trial set to commence January 29, 2001 likely occurred prior to January 26, 2001, but may have continued during the adjournment. In the circumstances of 4 days of trial followed by another 2 days after an adjournment of several months, I allow 10 units of the 19 units claimed for doubling relative to item 13.
[33] The bill of costs of the Plaintiff, presented at $108,320.72, is assessed and allowed at $98,648.79.
(Sgd.) "Charles E. Stinson"
Assessment Officer
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1608-97
STYLE OF CAUSE: Caricline Ventures Ltd. v. ZZTY Holdings Limited et al.
PLACE OF HEARING: Vancouver, B.C. and Edmonton, Alberta by teleconference
DATE OF HEARING: July 23, 2002
REASONS FOR ASSESSMENT OF COSTS : CHARLES E. STINSON
DATED: November 1, 2002
APPEARANCES:
J. Kevin Wright FOR PLAINTIFF
Carmen L. Plante FOR DEFENDANTS
SOLICITORS OF RECORD:
Davis & Company FOR PLAINTIFF
Vancouver, B.C.
Bishop & McKenzie LLP FOR DEFENDANTS
Edmonton, Alberta
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