Date: 20070614
Docket: T-142-05
Citation: 2007 FC 635
Ottawa, Ontario, June 14, 2007
PRESENT: The Honourable Barry Strayer
BETWEEN:
EMALL.CA INC. and EMALL.CA
INC.,
carrying on business as CHEAPTICKETS.CA
Applicants
and
CHEAP TICKETS AND TRAVEL INC.
Respondent
REASONS FOR ORDER AND ORDER
[1]
On
March 2, 2007, I issued Reasons for Order in this application for expungement
of the Respondent’s trademarks. I ordered that the trademarks be expunged and
that costs be awarded to the Applicant.
[2]
Subsequently,
the Applicant wished to seek special directions as to the costs and at the
suggestion of the Court, brought a motion in writing for this purpose. While I
initially expressed some doubts about the costs issue being raised at this
point, counsel for the Applicant has satisfied me that this motion is properly
brought under Rule 403 in the form of a request for directions to the
assessment officer.
[3]
Counsel
for the Applicant has also satisfied me that a special direction should be
given under Rule 420. The application for expungement was commenced on January
31, 2005. On October 26, 2005, after each side had served its affidavits and
before there was cross-examination on those affidavits, the Applicant made a
written offer of settlement to the Respondent. By that offer, the Applicant
would withdraw its application for expungement but would be permitted to use
its domain name, CHEAPTICKETS.CA, undertaking always to use the .CA with the
word CHEAPTICKETS. A co-existence agreement would prevent further disputes
between the parties. Each party would discontinue its proceedings against the
other, without costs. The offer was to be left open until commencement of the
hearing of the application, subject to a temporary suspension during the
cross-examination of the Respondent’s affiants. Less than a week later, on
November 1, 2005, the Respondent rejected the offer. During the following
fifteen months, cross-examinations took place and various preparations
continued for the hearing, the application being put under case management. The
actual hearing was on February 7, 2007. The judgment which I have issued is
more favourable to the Applicant than would have been the settlement it
proposed. Its proposed settlement would have left the Respondent’s trademarks
in place and circumscribed to some extent the Applicant’s use of its domain
name. Had the Respondent accepted the offer prior to the cross-examination of
its affiants, the Applicant would have been disentitled to claim any costs. As
the result of my decision, however, the Applicant remains free to use its
domain name in any way it wishes and it is entitled to the costs of the whole
proceeding. Subject to appeal, the Respondent has lost its registered
trademarks. I am therefore satisfied that the case comes within sub Rule
420(1). The Applicant is therefore entitled to party and party costs up to
October 26, 2005 and to double such costs thereafter.
[4]
The
Applicant also asks, as a factor in the exercise of my discretion, to take into
account that the Respondent first commenced this dispute by bringing an action
in the Supreme Court of British Columbia against the Applicant for statutory
passing off. In its defence, the Applicant wished to challenge the validity of
the Respondent’s trademarks but could not do so in the Supreme Court of British
Columbia. It therefore had to commence this proceeding in the Federal Court.
The Applicant contends that this resulted in unnecessary expense in requiring
actions in two courts. It is true that it would have been more efficient for the
Respondent to commence its statutory passing off action in the Federal Court,
particularly considering that the parties are based in two different provinces
as are their lawyers and it would have been simpler to have resort to the
Federal Court whose writ runs throughout the country and it has registry
offices in all major cities.
[5]
The
Applicant requests that I direct a lump sum assessment of costs in order to
save the parties a further expenditure of time and money. The Respondent has
made no specific objection to this other than to say that “…it should not be
deprived of a remedy whereby the parties can argue the merits of the
Applicants’ claim for costs”. That was the purpose of this motion and the
Respondent could have taken issue with any of the specific costs claimed by the
Applicant in its draft bills of costs. I therefore believe it would be in the
interests of justice to order a lump sum assessment.
[6]
The
Applicant suggests, however, that costs should be directed on a solicitor-client
basis. It is well established that generally costs should not be directed on a
solicitor-client basis except where the litigation itself has been conducted
improperly by the losing party. The Applicant suggests that it was improper for
the Respondent to commence its action for passing off in the Supreme Court of
British Columbia instead of in the Federal Court. While, as I have noted, it
would have been more convenient and efficient to have commenced that action in
the Federal Court, the Respondent was legally entitled to choose its forum. I
may have some regard to this in the exercise of my discretion but it certainly
does not justify a solicitor-client award of costs.
[7]
The
Applicant has presented me with draft bills of costs based on Column III,
Column IV, and Column V of Tariff B. The disbursements remain constant
throughout at $10,777.00. These bills of costs are supported by affidavit as
representing the work done and the disbursements paid. While I believe that in
certain respects counsel’s interpretation of certain items in Tariff B might be
open to debate, I think the draft bills roughly approximate what would be
assessed under those columns, in most cases allowing the maximum units. I
believe that Column IV would be a reasonable basis for assessment and,
including a doubling of costs after the offer to settle of October 26, 2005, I
would direct the assessment officer to assess costs in favour of the Applicant
in the lump sum of $48,000.00 including fees, disbursements and GST and the
costs of this motion. (In making an order in this form, I am respectfully
adopting the language of the Federal Court of Appeal in Consorzio del Prosciutto
di Parma v. Maple Leaf Meats Inc., [2003] 2 F.C. 451 (C.A.) at para. 13)
ORDER
THIS COURT ORDERS THAT:
1.
The
assessment officer assess costs to be paid to the Applicant in the amount of
$48,000.00, inclusive of fees, disbursements and GST and the costs of this
motion.
“Barry L. Strayer”
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-142-05
STYLE OF CAUSE: EMALL.CA
INC. and EMALL.CA INC.
carrying on business as CHEAPTICKETS.CA
Applicants
and
CHEAP
TICKETS AND TRAVEL INC.
Respondent
PLACE OF HEARING: Toronto, ON
DATE OF HEARING: February 7, 2007
REASONS FOR ORDER: STRAYER D.J.
DATED: JUNE 14, 2007
APPEARANCES:
Zak Muscovitch
Sean Langan
For
the Applicants
Gregory N.
Harney
For
the Respondent
SOLICITORS
OF RECORD:
MUSCOVITCH
& ASSOCIATES
Barristers
& Solicitors
Toronto, ON For
the Applicants
SHIELDS HARNEY
Barristers
& Solicitors
Victoria, BC For
the Respondent
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