Date: 20071221
Docket: T-1873-07
Citation: 2007
FC 1364
Ottawa, Ontario, December 21, 2007
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
MICROSOFT
CORPORATION
Plaintiff
and
CARMELO CERRELLI,
9061-8240 QUEBEC INC., 9069-8697 QUEBEC
INC.,
9126-6411 QUEBEC INC., 9134-7245 QUEBEC
INC.,
9140-1349 QUEBEC INC., 9145-2029 QUEBEC
INC.,
VSOP WEB INC., SYSTÈMES IVORCOM INC.,
TECHNOLOGIES KUMO INC., MAXIMUS TÉLÉCOM
INC.,
INFODMI CORP., CARMELO CERRELLI (A
TRUST),
CARMELO CERRELLI TRUST, CERRELLI TRUST,
CERRELLI FAMILY TRUST, CERRELLI CHILDREN
TRUST,
JOHN DOE, JANE DOE AND DOE CO.
Defendants
SUPPLEMENTAL REASONS FOR ORDER
AND ORDER AS TO COSTS
[1]
On
November 19, 2007, I granted the plaintiff’s motions to validate the execution
of the Seizure before Judgement Order and of the Anton Piller/John Doe Order,
and to convert the Interim and Mareva Injunction Orders into interlocutory
orders. These Orders were initially issued by my colleague Justice Harrington
on October 30, 2007 and were to remain valid only for a period of fourteen days
from the date of service.
[2]
The
plaintiff also asked for its solicitor/client costs incurred for the
preparation of these Orders and the presentation of the motions. I concluded as
follows:
[37] The defendants clearly acted in bad
faith when they continued trafficking in counterfeit copies of Microsoft
software and associated material, despite Justice Harrington’s judgment, and in
avoiding payment of the sums awarded in that judgment. The plaintiff is
therefore entitled to a lump sum costs calculated on a solicitor-client basis.
The exact amount will be fixed by this Court after considering the parties’
representations on this matter.
PARTIES’ SUBMISSIONS
[3]
The
parties were therefore given a delay to provide further submissions on the
issue of costs. The plaintiff claims a total amount of $415,434.74, including professional
services fees and disbursements. It asserts that those costs were reasonable in
regards to the complexity of the extraordinary remedies sought and the urgency of
the matter. The plaintiff emphasises the defendants’ bad faith and the existence
of few realistic alternatives, other than extraordinary remedies, available to
enforce its rights.
[4]
The
defendants have not filed any additional submissions on the issue of costs and
rely on the representations made in their initial memorandum of fact and law. Their
submissions to the effect that solicitor/client costs should not be granted
have been overtaken by my earlier decision. They also submitted that they have
cooperated in the execution of the Orders. Moreover, the defendants asserted
that the plaintiff’s demand for costs is no less than an attempt to recover the
costs that were awarded in the file T-1502-00.
GENERAL PRINCIPLES ON COSTS
[5]
Costs on a
solicitor/client basis are granted exceptionally; a party’s conduct has to be
reprehensible, scandalous or outrageous. This principle was outlined in a
number of cases, such as Young v. Young, [1993] 4 S.C.R. 3; Baker v. Canada (Minister of Citizenship and
Immigration),
[1999] 2 S.C.R. 817; Apotex Inc. v. Canada (Minister of National Health and
Welfare)
(2000), 9 C.P.R. (4th) 289; and Mackin v. New Brunswick (Minister of Finance); Rice v. New Brunswick, [2002] S.C.R. 405.
[6]
Justice
Harrington defined a “reprehensible”, “scandalous” and “outrageous” conduct in
the previous file T-1502-00 (2007 FC 659) as follows:
[16] “Reprehensible” behaviour is that
deserving of censure or rebuke; blameworthy. “Scandalous” comes from scandal
which may describe a person, thing, event or circumstance causing general
public outrage or indignation. Among other things, “outrageous” behaviour is
deeply shocking, unacceptable, immoral and offensive (see: Oxford Canadian
Dictionary)
AWARD OF COSTS
[7]
The
defendants’ conduct is tinted with bad faith; as I previously mentioned, they
continued counterfeiting copies of Microsoft products, despite Justice
Harrington’s judgment. The plaintiff has filed a motion for contempt of court regarding
this violation. They also avoided the payment of the sums awarded to the
plaintiff in this judgment. Nevertheless, I note the defendants’ collaboration with
the Anton Piller Order, which certainly facilitated its execution.
[8]
Further,
the present file is intimately related to the previous court file T-1502-00. As
the files rest on substantially similar facts, it is reasonable to think that a
significant amount of work was already completed. Indeed, I note that it may
be difficult to separate the fees incurred by the plaintiff in file T-1502-00
and those incurred in the present instance.
[9]
I also
believe that the legal issues were of minor complexity, mainly because they had
been assessed in the previous court file. Of course, I agree that the Anton
Piller and Mareva Orders are extraordinary remedies that are complex; they necessarily
required unique research solely for the purpose of the present proceeding given
that they were not sought in the previous court file.
[10]
The
plaintiff has requested $257,878.75 on a solicitor/client basis. In light of my
observations above, I will award the plaintiff a lump sum payment representing
one half of the requested amount. I consider it
reasonable to fix the costs on solicitor/client basis to $128,939.38. The
plaintiff can still claim the remaining costs from the contempt of court proceedings.
[11]
I will
allow the entire amount of $157,555.96 for disbursements incurred, which
includes the experts’ fees.
[12]
In
conclusion, I will award a lump sum of $286,495.34 in respect of
solicitor/client costs and disbursements.
ORDER
THIS COURT ORDERS that the defendants pay
jointly and severally a lump sum of $286,495.34 to the plaintiff, payable
forthwith from the monies frozen according to the Mareva Injunction Order and
paid into Court pursuant to the Order to deposit into Court granted on November
9, 2007.
"Yves
de Montigny"
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