Date: 20100315
Docket: T-426-04
Citation: 2010 FC 292
BETWEEN:
SHMUEL HERSHKOVITZ,
SYSTÈMES DE SÉCURITÉ PARADOX LTÉE
-
PARADOX SECURITY SYSTEMS LTD.,
and
PINHAS
SHPATER
Plaintiffs
(Defendants by Counterclaim)
and
TYCO
SAFETY PRODUCTS CANADA LTD.,
Defendant
(Plaintiff by Counterclaim)
ASSESSMENT OF
COSTS – REASONS
DIANE PERRIER,
ASSESSMENT OFFICER
[1]
This
is a taxation of defendant’s (plaintiff by counterclaim) bill of costs
following a judgment from the Court on March 12, 2009 that dismissed plaintiffs’
action and allowed defendant’s counterclaim concerning the infringement and validity
of Canadian Patents No. 2,169,670 (the ‘670 patent) and No. 2,273,148
(the ‘148 patent) and related disclaimers.
[2]
On
May 12, 2009, the Court rendered an Order as to costs granting costs in favour
of Tyco Products Canada Ltd. (Tyco). The Order granted costs at the high
end of column IV. Since Tyco made an offer to settle as per rule 420 of the Federal
Courts Rules, the Court granted claim costs from January 19, 2006
calculated at double the rate for assessable services. It also allowed costs of
a second counsel at 50% of the amount calculated for the first counsel with
respect to attendance in Court at the trial, for motions, discoveries and examinations,
pre-trial procedures, and preparation and filing of written submissions at the
close of trial. It also granted expert fees and reasonable disbursements of the
expert Kabal. All other reasonable disbursements in the case, including the
costs of attendance of Tyco representatives at trial, are granted. Interest on
all costs and disbursements shall run from the date of final judgment that is
March 12, 2009.
[3]
On
July 15, 2009, defendant filed its bill of costs and requested that it proceeds
in writing. On August 18, 2009, letters were sent to parties fixing a
timetable to file written representations. On August 19, 2009, plaintiffs sent
a letter to the Registry requesting that the taxation be postponed until a
determination in the appeal becomes final. On August 25, 2009, defendant sent a
letter to the registry responding to plaintiffs’ letter stating that the
judgment of the Court was final and that defendant was entitled to costs
notwithstanding the appeal. Both parties filed their written representations as
requested but defendant filed an affidavit with its reply and an amended bill
of costs. I have allowed Raisa MacLeod’s affidavit in support of disbursements.
On October 21, 2009, I sent directions to both counsel for the filing of
written representations in reply and in rebuttal. Both parties filed their
written representations. I am now ready to assess the defendant’s amended bill
of costs.
[4]
Defendant’s
bill of costs has been amended on September 28, 2009. So all the items claimed
in the amended bill of costs will be discussed in the following paragraphs.
[5]
Item
2 – Statement of defence and counterclaim filed on April 19, 2004 (9 units) is
allowed as claimed.
[6]
Item
3 – Amended statement of defence and counterclaim amended on October 26, 2005
(7 units) is allowed as claimed.
[7]
Item
4 – Motion of Digital Security Controls Ltd. for a bifurcation order and
reference after Trial filed on June 25, 2004 (5 units) is allowed as claimed.
The Order of Prothonotary Morneau rendered on September 13, 2004 granted the
motion with costs in the cause so this item can be allowed.
[8]
Item
5 – Response to plaintiffs’ motion for an order directing the defendant to
secure and preserve documents (9 units) which was filed on February 22, 2005
and withdrawn March 10, 2005 is disallowed. As per rule 402 of the Federal Courts
Rules, once a motion is withdrawn, the other party is entitled to costs. Plaintiffs
state in their reply that there is no indication that the defendant engaged in
any “preparation” or “filing” of a response as contemplated in tariff B, item
5. Defendant in its rebuttal states that rule 402 of the Federal Courts Rules
does not require demonstrating actual “preparation” and “filing”. “The need for
such a demonstration would be illogical: it would require a party to actually
file material and responses to abandoned motions to be entitled to these costs”.
I do agree with plaintiffs’ submissions that item 5 requires defendant to prove
actual “preparation” and “filing” of a response and in this case, I do not find
any indication that defendant had filed documents in response to the motion. I
did look at the time-frame between the moment the motion was served upon the
defendant on February 22, 2005 and the adjournment of the motion to March 21,
2005 on February 24, 2005 and the time the motion was withdrawn on March 10,
2005 so this is a short period of time to prove that something had been done by
defendant. In the affidavit of Raisa MacLeod in support of the bill of costs,
there is no statement that defendant may have started working on a Response to
the motion. The Order of the Court on costs leaves me with no choice than allowing
item 5 or disallowing it at the highest level. Contrary to the case at bar, in
the case Most Wanted Entertainment Company Inc. v. Hillary Duff and
Hollywood Records Inc., 2006 FC 958,
[2006] F.C.J. No. 1211 (QL) at paragraph 9, the assessment officer allowed 7
units for the preparation and filing of a withdrawn motion although the
defendants never filed their opposing motion record but defendants provided a
copy of the affidavit of Andre Recke sworn January 29, 2006 which would have
formed part of the responding motion materials. The memorandum of fact and law
was completed by January 29, 2006. In view of the circumstances of the present
case, I will disallow item 5 because there is no proof that defendant prepared
or filed a response to the motion.
[9]
Item
5 – Motion of Tyco to compel Mr. Pinhas Shpater to re-attend dated February 14,
2006 (9 units) is allowed as claimed. The Order of Prothonotary Morneau
rendered on March 16, 2006 granted the motion with costs.
[10]
Item
5 – Response to plaintiffs’ motion to order examination of John Peterson dated
July 20, 2006 (9 units) is allowed as claimed. The Order of Mr. Morneau, Prothonotary
rendered July 26, 2007 dismissed plaintiffs’ motion with one set of costs to
each Tyco and Mr. Peterson.
[11]
Item
5 – Response to plaintiffs’ appeal of dismissal of motion to order examination
of John Peterson filed on September 22, 2006 (9 units) is allowed as claimed.
The Order of Mr. Justice Harrington rendered on October 16, 2006 dismissed plaintiffs’
appeal with costs.
[12]
Item
6 – Hearing before Prothonotary Morneau in Montréal on August 30, 2004 re:
motion for bifurcation (9 units) is disallowed because the Order of
Prothonotary Morneau dated August 30, 2004 is silent as to costs.
[13]
Item
6 – Hearing before Prothonotary Morneau in Montréal on September 13, 2004
re: motion for bifurcation is allowed at 4 units. As for the duration of
the motion, plaintiffs stated that the duration of the motion should not be
more than 15 minutes as per the minutes of hearing that show that the hearing
lasted 2 minutes (9:30 a.m. to 9:32 a.m.). Defendant argued that an hour
should be granted because the attendance at hearings and that actual hearing
time often extends beyond what is indicated by the clerk. I have always
considered that the duration of hearings is the time spent into Court but in
order to have a full unit, I will allow 15 minutes for the hearing of this
motion.
[14]
Item
6 – Hearing before Prothonotary Morneau in Montréal on March 13, 2006 re: motion
to compel Mr. Pinhas Shpater to re-attend (4 units x 3 hours) is allowed as
claimed. The motion was granted with costs.
[15]
Item
6 – Hearing before Prothonotary Morneau in Montréal on July 24, 2006 re: motion
to order examination of John Peterson (4 units x 1 hour) is allowed as claimed.
The motion was granted with costs.
[16]
Item
6 – Hearing before Harrington J. in Montréal on September 25, 2006 re: appeal
of dismissal of motion to order examination of John Peterson (4 units x 4
hours) is allowed at 4 units but the duration of the motion according to the
minutes of hearing is 2.5 hours (11:33 a.m. to 12:43 p.m. and from
1:29 p.m. to 2:42 p.m.). I tend to agree with paragraph 24 of plaintiffs’
written representations that the duration of the hearing should not take into consideration
the lunch hour. It is the time spent into Court. I will allow 2.5 hours for the
hearing of the motion.
[17]
Item
7 – Affidavit of documents of Digital Security Controls Ltd. dated June 22,
2004 (9 units) is allowed as claimed.
[18]
Item
8 – Preparation for cross-examination on discovery of plaintiffs’ witness
Shmuel Hershkovitz on January 19, 2005 (8 units) is allowed as claimed.
[19]
Item
8 – Discovery of plaintiffs’ witness Pinhas Shpater on January 20 and 21, 2005
(8 units) is allowed as claimed.
[20]
Item
8 – Preparing for cross-examination on discovery of Tyco’s witness Joe Buccino
held on March 30, 31 and April 1, 2005 (8 units) is allowed as claimed.
[21]
Item
8 – Discovery of plaintiffs’ witness Pinhas Shpater on November 30, 2005 (8
units) is allowed as claimed.
[22]
Item
8 - Preparing for cross-examination on discovery of plaintiffs’ witness Pinhas
Shpater on May 25, 2006 (8 units) is allowed as claimed.
[23]
As
for items 9 - Examination for discovery, plaintiffs submit that the claim for 7
hours per day for examination of discovery is excessive. Defendant has provided
no support for 7 hours for each day. The transcripts of the various
examinations for discovery do not indicate the beginning and finishing times
for each day. A full day of examination for discovery begins around 9:30 a.m.
or 10:00 a.m. and ends around 4:30 p.m. or 5:00 p.m. with at
least one hour for lunch. A full day of examination would be no more than 6
hours. In the absence of direct evidence of the time of each examination it is
reasonable to consider the number of pages of the resulting transcripts.
[24]
Defendant
argued that the time specified in transcripts is to be treated similarly to
Court docket and index entries: it is not an absolute guide for assessing
attendance at the examination and the actual examination time often extends
beyond mere attendance. Reasonableness of the time claimed should thus prevail.
Defendant’s claim of 7 hours per day for each of the 8 days of examination for
discovery is reasonable and should be allowed.
[25]
I
do not agree with defendant’s argument that the time for attendance at
examination for discovery should be allowed at 7 hours because at exhibit RM-01
of the affidavit of Raisa MacLeod in support of defendant’s bill of costs at
page 43, there is an invoice that states that for the examination of Mr. Pinhas
Shpater on May 25, 2006 the duration of the examination lasted 2.5 hours for a
transcript of 117 pages. Therefore, I will allow (4 units x 2.5 h) for this
examination for discovery. This will be the same for the examination of Joe
Buccino on April 1, 2005 because the transcript for the examination of
discovery is 112 pages. As for the examination for discovery of Shpater on November
30, 2005, the transcript is 92 pages so I will allow 2 hours.
[26]
As
for the examination for discovery of plaintiffs’ witness, Shmuel Hershkovitz,
on January 19, 2005, I will allow 4 units but for the duration of the hearing I
found that according to the number of pages of transcript (250 pages), 6 hours appears
reasonable. Therefore, I will allow for the transcript of Shapter January 20,
2005 and Shapter, January 21, 2005, 6 hours that I found reasonable. This will
be the same for the transcript of Joe Buccino on March 30 and 31, 2005.
[27]
Item
10 – Preparation for pre-trial conference held on July 18, 2007 in Montréal, Quebec,
including preparation and drafting of Tyco’s pre-trial conference memorandum (8
units) is allowed as requested.
[28]
Item
10 – Preparation for trial management conference held on October 20, 2008 in
Ottawa, Ontario including Tyco’s Trial Management Conference Form pursuant to
Mr. Justice Martineau’s direction of October 7, 2008 (8 units) is allowed as
requested.
[29]
Item
11 – Pre-trial conference held in Montréal, Quebec, on July 18,
2007 before Prothonotary Morneau is allowed at 4 units but the duration of the
pre-trial conference lasted 1.5 hours according to the minutes of hearing (9:35 a.m.
to 11:05 a.m.). I do agree with plaintiffs’ written representations at
paragraph 34 that no more than these times should be assessed.
[30]
Item
11 – Trial management conference held in Ottawa, Ontario on
October 20, 2008 before Mr. Justice Martineau is allowed at 4 units for a
duration of 1.75 hours as per the abstract of hearing (9:42 a.m. to
11:22 a.m.).
[31]
Item
12 – Tyco’s request to admit facts dated September 18, 2008 is allowed at 4
units as requested.
[32]
Item
13(a) – Preparation for the hearing held in Montréal from November 3,
2008 to December 4, 2008 is allowed at 9 units as requested.
[33]
Item
13(b) – Preparation for a 21‑day hearing held in Montréal from
November 3, 2008 to December 4, 2008 is allowed at 6 units for 21 days as requested
in the defendant’s amended bill of costs.
[34]
Item
14(a) – Appearance of first attorney on behalf of defendant for a 21‑day
hearing in Montréal,
Quebec, from
November 3, 2008 to December 4, 2008 before Mr. Justice Martineau is allowed at
4 units x 130 hours. As mentioned earlier, the duration for the trial is
limited to the time in Court without the lunch. Therefore, the duration of the
trial as per the minutes of hearing is reproduced here:
November
3, 2008 (9:35 a.m. to 12:00 noon) 2.5 hours,
November
4, 2008 (9:34 a.m. to 11:45 a.m. and 1:50 p.m. to 4:45 p.m.) 5:25
hours,
November
5, 2008 (9:35 a.m. to 12:10 p.m. and 1:46 p.m. to 4:30 p.m.)
6.00 hours,
November
6, 2008 (9:33 a.m. to 12:25 p.m. and 2:00 p.m. to 4:40 p.m.)
5.5 hours,
November
7, 2008 (9:40 a.m. to 12:25 p.m. and 2:10 p.m. to 4:30 p.m.)
5.5 hours,
November
10, 2008 (9:34 a.m. to 12:30 p.m. and 1:20 p.m. to 5:10 p.m.)
7 hours,
November
12, 2008 (9:35 a.m. to 12:20 p.m. and 2:20 p.m. to 5:15 p.m.)
5.75 hours,
November
13, 2008 (9:36 a.m. to 12:00 noon and 1:30 p.m. to 5:25 p.m.)
6.5 hours,
November
15, 2008 (9:34 a.m. to 12:45 p.m. and 2:05 p.m. to 4:33 p.m.) 5.75
hours,
November
17, 2008 (9:30 a.m. to 12:45 p.m. and 2:05 p.m. to 4:32 p.m.)
5.75 hours,
November
18, 2008 (9:30 a.m. to 12:25 p.m. and 1:50 p.m. to 4:40 p.m.)
6 hours,
November
19, 2008 (9:35 a.m. to 12:35 p.m. and 1:50 p.m. to 4:40 p.m.)
6 hours,
November
20, 2008 (9:35 a.m. to 12:34 p.m. and 1:50 p.m. to 4:50 p.m.)
6 hours
November
21, 2008 (9:30 a.m. to 12:30 p.m. and 2:00 p.m. to 4:00 p.m.)
5 hours,
November
24, 2008 (9:37 a.m. to 12:35 p.m. and 1:45 p.m. to 4:30 p.m.)
6 hours,
November
25, 2008 (9:35 a.m. to 12:35 p.m. and 2:00 p.m. to 4:43 p.m.)
5.75 hours,
November
26, 2008 (10:37 a.m. to 12:35 p.m. and 1:40 p.m. to 5:40 p.m.) 6
hours,
November
27, 2008 (8:45 a.m. to 12:25 p.m. and 1:35 p.m. to 4:45 p.m.)
6.75 hours,
December
1, 2008 (9:37 a.m. to 12:45 p.m. and 1:45 p.m. to 5:55 p.m.)
7 hours,
December
2, 2008 (8:35 a.m. to 12:30 p.m. and 2:10 p.m. to 4:15 p.m.)
6 hours,
December
3, 2008 (9:33 a.m. to 12:45 p.m. and 1:45 p.m. to 5:30 p.m.)
7 hours,
December
4, 2008 (9:30 a.m. to 12:30 p.m. and 1:35 p.m. to 5:10 p.m.)
6.5 hours.
Total: 129.5 hours or 130 hours.
[35]
As
for item 14(b) concerning second counsel fees, the Court, in its Order
rendered on May 12, 2009 at paragraph 4, mentions that costs of a second
counsel at 50% of the amount calculated for the first counsel with respect to
attendance in Court at the trial, for motions, discoveries and examinations,
pre-trial procedures, and filing of written submissions at the close of trial were
granted. In reading this paragraph, I do agree with defendant’s written
submissions at paragraph 13 that the Court extends second counsel not only to
attendance in Court but also to documents that were filed in support of the
attendance into Court. However, I do not agree with defendant’s written submissions
that pre-trial procedures includes items 1, 2 and 3 and items 22 to 27. Subparagraph
D of the table of tariff B includes only items 10, 11, 12 and 13. So, I will
allow second counsel fees in the amount of $61,945 (prior to January 19, 2006: $12,025
and after January 19, 2006: $49,920) for:
1) attendance in
Court at trial under sub-paragraph E of the table of tariff B (item 14(a))
2) for motions
under sub-paragraph B of the table of tariff B (items 4, 5 and 6)
3) discovery and
examinations under sub-paragraph C of the table of tariff B (items 7, 8 and 9)
4)
pre-trial
procedures under sub-paragraph D of the table of tariff B (items 10, 11, 12
and 13)
5)
preparation
and filing of written submissions at the close of trial under sub-paragraph E
of the table of tariff B (item 15).
[36]
Item
15 – Preparation of Tyco’s closing submissions (9 units) is allowed as claimed.
[37]
Item
26 – Assessment of costs (7 units) is allowed as claimed. Defendant should be
allowed to claim for the assessment. This is an item that is constantly allowed
once there is an assessment.
[38]
Item
27 - Preparation of a joint and concise list of issues to be determined at
trial pursuant to direction of Prothonotary Morneau dated June 20, 2007 is
denied because this item has already been compensated under item 13(a)
of Tariff B.
[39]
Item
27 – Preparation of an agreed statement of facts and admissions pursuant to
order of Prothonotary Morneau dated August 28, 2007 is denied because this item
has already been compensated under item 12 of tariff B.
[40]
Item
27 – Preparation of a joint book of documents pursuant to the Order of Prothonotary
Morneau dated August 28, 2007 is denied because this item has already been
compensated under item 7 of tariff B.
[41]
Item
27 – Preparation of written response pursuant to direction of Mr. Justice
Martineau rendered on December 22, 2008 is allowed as requested because this is
an exceptional service required from counsel.
[42]
Item
27 – Preparation of written response pursuant to direction of Mr. Justice Martineau
rendered on February 12, 2009 is allowed for the same reasons as mentioned in
paragraph 41.
[43]
First
counsel fees have been awarded prior to January 19, 2006 in the amount of $26,130
and first counsel fees from January 19, 2006 in the amount of $101,790 for a
total of $127,920.
[44]
Double
the fees were granted by the Court in its Order so I will allow the amount of
$151,710 (first counsel fees from January 19, 2006: $101,790 and second counsel
fees from January 19, 2006: $49,920) from the date of the judgment.
[45]
The
total for counsel fees are: $385,552.78 ($341,575 + $17,078.75 (PST) + $26,899.03
(GST)).
The total of
$341,575 comprises the following counsel fees:
|
First
counsel fees prior to January 19, 2006 :
|
$26,130
|
|
First
counsel fees from January 19, 2006 :
|
$101,790
|
|
For
a total of:
|
$127,920
|
|
Second
counsel fees prior to January 19, 2006:
|
$12,025
|
|
Second
counsel fees after January 19, 2006:
|
$49,920
|
|
For
a total of:
|
$61,945
|
|
Doubled
fees for first counsel from January 19, 2006 :
|
$101,790
|
|
Doubled
fees for second counsel from January 19, 2006:
|
$49,920
|
|
For
a total for doubled counsel fees:
|
$151,710
|
Disbursements
[46]
Stenographer
and Court Reporter fees will be allowed in the amount of $9,419.25 for the
transcript of the discoveries and the Federal Court fees for Court reporter
during trial. The transcripts during trial are not allowed as these
disbursements will be recovered in the appeal disbursement. See Pardee
Equipment Limited v. Canada, [1998] F.C.J. No. 751 (QL) (T.D.) at paragraph
12.
[47]
Bailiff
services will be allowed in the amount of $91.20. I do agree with plaintiffs’
written representations at paragraphs 50 and 51 that the additional charge for
urgent delivery should not be allowed because there was no urgency related to
these services. I have also refused the filing into Court by bailiff for the
notice of motion to compel Pinhas Shpater, the filing in Court of a response to
motion to order examination of John Peterson and the filing in Court of
response to appeal of dismissal of motion to order an Examination of John
Peterson as the filing of these documents is already included in items 4 or 5
of the table of tariff B. I have allowed the filing in Court of defendant’s
pre-trial conference memorandum because item 10 of the table of tariff B does
not include filing in its definition. The filing into court of Dr. Kabal’s expert
report has been allowed as this document was filed pursuant to the pre-trial
conference, item 10 of table of tariff B does not include filing in its
definition.
[48]
Expert
fees and disbursements – I will allow the expert fees of Dr. Kabal with
the PST and GST because I think that PST and GST is an amount that should be
paid as per the applicable Tax legislation as mentioned in paragraphs 37 and 38
of defendant’s written submissions. I will allow the invoice concerning Joachim
Thieman, who is Mr. Kabal’s assistant who prepared the circuit analysis and
simulation for a telephone line coupler because as mentioned by defendant in
its written submissions at paragraphs 39 and 40 the hourly rate of Mr. Thieman was
$60 compared to $400 for Dr. Kabal and also because these expenses appear
reasonable and necessary for the case at bar. Therefore, I will allow
$151,649.43 for Dr. Kabal’ expert fees and disbursements.
[49]
As
for expenses of Mr. John Peterson’s witness during trial the amount of $937.93
is allowed because it is reasonable and uncontested.
[50]
The
expenses of Tyco representative’s Joe Buccino during examination and trial have
been challenged on the first class airfare. I do not agree with defendant’s
written representations at paragraph 43 where it is stated that it is not
unreasonable for a party’s representative to travel in business class.
Defendant refers to the case Goodman Yachts LLC v. Penguin Boat Int. Ltd.
(2002), F.T.R. 29 where it is stated that: “That business class air travel is
reasonable between India and Singapore and Vancouver, does not
mean that such a premium mode of travel is in order in all instances. Indeed, I
hesitate to establish any fixed distance or time as a guide, after which
economy class become unreasonable. However, litigants should keep in mind that
in many instances business class air fare will be both reasonable and just.” I
do think that in this case, the airfare should be the economy travel because
Mr. Buccino travelled by economy class in most of his travels except for one.
[51]
The
disbursements for internet, telephone, laundry and parking for Mr. Buccino will
be allowed because as mentioned by defendant in its written representations at
paragraph 42, Mr. Buccino was away from home for 5 weeks in Montréal and
he continued assuming his function of Tyco’s Vice-President engineering so he
requires communications means such as internet and telephone. I do see laundry
as a basic requirement. I found these expenses necessary and reasonable.
[52]
Defendant
claimed a taxi charge of $45 for transportation from hotel to hotel. Plaintiffs
in their written representations at paragraph 57 states that the $45 taxi
charge for transportation from hotel to hotel should be a personal charge and not
at the charge of plaintiffs. I agree with plaintiffs submissions that this taxi
charge is personal and plaintiffs should not have to pay for this expense.
[53]
As
for meals claim, I do not think that plaintiffs should pay for meals for counsel
that were not on travel status so I have corrected the different requests for
meals. I have allowed the amount of $17,683.01 for Mr. Joe Buccino, Tyco
representative, during examination and trial.
[54]
As
for the expenses of Hannah S. Lim, there are two contentions: the first one is a
$40 taxi charge on November 9, 2008. I do not think that this amount should be
allowed as this expense is not covered within the disbursement allowed for
travel because as mentioned in paragraph 52, it is a personal charge. As for
the second contention, this is for the hotel charges where the expenses for 5
days from November 2 to 7, 2008 were higher than the fees paid for Mr. Buccino,
Tyco’s representative. We have to be reminded that when you booked a hotel as
mentioned in paragraph 48 of defendant’s written submissions the room pricing
discrepancy is related to the hotel pricing policy, room availability, length
of stay and time of reservations. So I found the hotel charges reasonable and I
will allow the amount claimed for this expense because on other nights Ms.
Lim’s accommodation was lower and reasonable. As for Ms. Lim meals, I have
disallowed part of meals when it included Tyco counsel because counsel was not
on travelling status. I have allowed the amount of $7,068.22 for Ms. Lim
expenses.
[55]
Defendant
requested $31,743.03 in photocopy, binding and scanning charges. As mentioned
by defendant in its written submissions, it may be reasonable to make copy for
the different documents that are filed by the other party but in a taxation
plaintiffs should only pay for the photocopies of the documents that were filed
by the defendant and we must have proof that they were done. A list with a
client’s account is no sure proof that a disbursement was made but sometimes
this is the only thing that we possess in a file in order to determine if the
disbursement is reasonable and necessary. I do feel that binding and scanning
charges should be allowed partly because I found that in this case it is
reasonable and necessary to allow it. In the circumstances of the case, I will
allow for photocopy, binding and scanning charges the following amount of $10,475.20
that I found necessary and reasonable for the case at bar.
[56]
Facsimile
charges will be allowed in the amount of $21 as claimed in the amended bill of
costs.
[57]
Defendant’s
online search charges are claimed at $5,700.62. At paragraph 71 of plaintiffs’
written submissions, plaintiffs submit that no more than half the claimed
amount should be allowed. Defendant submits that the amount claimed should be
allowed. I will allow $4,560.50 because I found it reasonable and necessary
disbursements for the case at bar.
[58]
Defendant’s
miscellaneous disbursements have been allowed in the amount of $10,956.82. I
have allowed prior art search in the amount of $5,000.97 and the reimbursement
of Messrs. Hershkovitz and Shpater’s air travel in the amount of $5,955.85
because it is reasonable and necessary to the conduct of the case. As for the
creation of timeline panel for trial and the creation of 5 large panels for
trial in the amount of $1,523.81 and $451.50, these amounts are disallowed
because I do not think that plaintiffs should pay for an expense that defendant
created in order to assure its defence in the case at bar.
[59]
Disbursements
presented at $247,966.20 are allowed at $213,511.23.
Timing of assessment of
costs
[60]
Plaintiffs
submit in his written representations in opposition to the bill of costs at
paragraphs 79, 80 and 81 that the appeal of the March 12, 2009 decision that
led to the award of costs to the defendant is currently pending. Plaintiffs
requested that the taxation of costs in this matter be postponed until a
determination on the appeal becomes final. In the alternative, if the costs of
this action are taxed without awaiting the outcome of the appeal, the plaintiffs
requested that they be relieved of the obligation to pay any award of costs
until a determination on the appeal becomes final. The plaintiffs also
requested that they be permitted to pay such amount to their solicitors to hold
in trust for payment to the defendant in the event that the appeal is not
successful.
[61]
Defendant
states in its written submissions at paragraphs 71 to 73 that the appeal of the
decision of March 12, 2009 has no effect on assessment and defendant refers to
the case National Bank of Greece S.A. v. Polar Paraguay (The), [1988] 1
F.D.D-9, 9W.D.C.P.307 (T.D.) where it says: “[O]ngoing matters between [the
parties] cannot prevent the [successful party] from being paid the costs owing
to it in virtue of the Order of [the Court]”. Defendant mentions that
plaintiffs appeal Mr. Justice Martineau’s decision but they no longer
appeal his ruling that the ‘148 patent is invalid. Defendant states that even
if plaintiffs were successful in appeal, defendant would still be entitled to
costs related at least to the ‘148 patent proceedings. Defendant submits that
costs are payable forthwith and refers to the case Marshall v. Canada,
2006 FC 1017, dated August 23, 2006 at para. 2.
[62]
Plaintiffs
in their written submissions in reply refer to paragraph 72 of defendant’s
written submissions where the defendant asserts that, regardless of the result
of the appeal, it would be entitled to costs related to one of the patents in
suit because the patent is no longer in issue. Plaintiffs affirm that the two
patents in suit are essentially the same patent. The two patents differ only in
their claims, one with claims to a circuit and the other with claims to a
method. The plaintiffs submit that there has only been one basic invention in
issue between the parties in this action and that the plaintiffs will be
entirely successful in their action if even a single claim is held to be both
valid and infringed following the appeal. Plaintiffs also refer to the 2
decisions cited by defendant and argue that both decisions are distinguishable
from the facts of the present case. The plaintiffs note that the decision in National
Bank of Greece was rendered after a final judgment by the Federal Court of
Appeal. The plaintiffs also not that the Marshall decision was
rendered more than 18 months after the underlying decision granting costs.
[63]
Defendant
in its written submissions in reply maintains that it is entitled to costs
related to at least the ‘148 proceedings even if plaintiffs were successful in
appeal. It also mentions that it is trite law that a same invention cannot be
the object of two patents as it would amount to double patenting. Defendant
mentions that this is clearly not an issue for the assessment officer, but that
the proper forum for making representation as to the unity of the inventions
claimed in the ‘670 and ‘148 patents was the Commissioner of Patents in the
mid-90s. Defendant reiterates the fact that plaintiffs had two patents which
were declared invalid by the Court. Plaintiffs appealed the Court’s decision
with respect to one patent but not the other. Defendant is entitled to costs
for the patent with respect of which there is no appeal.
[64]
I
would like to point out that only the Court has the power to allow costs on a
judgment in virtue of rule 400(1) of the Federal Courts Rules. The assessment
officer’s role is to quantify the costs once the Court has awarded them to a
party. I would also refer to the case Baird v. Canada, 2006 FC
1045, [2006] F.C.J. No. 1321 (QL) at para. 3 where it is stated that :
“The existence of outstanding appeals does not prevent the defendant from
proceeding with these assessments of costs: see Culhane v. ATP Aero Training
Products Inc., [2004] F.C.J. No. 1810 (A.O.) at para. [6]”. Therefore, the
assessment officer has no jurisdiction to allow any requests from plaintiffs as
to the payment of costs. In my view, the taxation must proceed.
Request for hearing
[65]
Plaintiffs
reiterated their request for an oral hearing at paragraph 82 of their written
submissions although the assessment officer indicated by letter dated August
18, 2009 that the taxation of costs in this action will be in writing. Given
the large amounts at stake, plaintiffs request that they be permitted to make
oral representations on the matter of costs.
[66]
Defendant
submitted at paragraph 77 of defendant’s written submissions that oral
representations are not necessary. Defendant submits that the assessment
officer has before her the material necessary to exercise her discretion.
[67]
As
per rule 408 of the Federal Courts Rules, I think that each party had an
opportunity to make their arguments concerning the taxation of the bill of
costs. I decided that this matter could be dealt with in writing. I do admit
that there is a large amount at stake but due to the fact that there was an
order on costs allowing defendant’s counsel fees at the maximum of column IV that
in itself ensured a taxation of a costly bill of costs.
[68]
Interest
has been granted on all costs and disbursements and shall run from the date of
the final judgment, that is March 12, 2009 as per the Order of the Court
rendered on May 12, 2009.
[69]
Therefore,
the defendant’s amended bill of costs presented at $712,610.48 is assessed and
allowed at $599,064.01. A certificate of taxation will be issued for this
amount.
MONTRÉAL,
QUEBEC
March
15, 2010
“Diane
Perrier”
ASSESSMENT OFFICER
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