Date: 20031028
Docket: T-3016-92
Citation: 2003 FC 1258
BETWEEN:
MILLIKEN & COMPANY AND
MILLIKEN INDUSTRIES OF CANADA LTD.
Plaintiffs
- and -
INTERFACE FLOORING SYSTEMS (CANADA) INC.
Defendant
Assessment Officer
[1] A copy of these reasons is filed today in court file T-1212-95 and applies there accordingly. The Plaintiffs alleged that the Defendant infringed their copyright relative to a design (hereafter, the "Mangrove Design") for carpet tiles installed at the Calgary International Airport in 1991 and 1992. This action was eventually joined with court file T-1212-95 (the only plaintiff being Milliken & Company: hereafter" Milliken") which addressed copyright and industrial design infringement relative to the Mangrove Design for carpet tiles installed in 1995 at the same airport. At trial, Milliken received a consent judgment with costs for the industrial design issues. Both actions relative to the copyright issues were dismissed with costs. In court file T-3016-92, the Defendant's counterclaim for copyright infringement relative to its Interface Design for carpet tiles was dismissed with costs. The Plaintiffs' appeals were dismissed with costs.
[2] Both sides agreed that their apportionment arguments below addressing fees would also apply to associated disbursements. Both sides agreed that the Defendant's industrial design infringement liability, settled at $13,820.30, would be offset against any costs found owing by the Plaintiffs to the Defendant (to be done informally between the parties). At the outset of the hearing before me, the Defendant objected to short notice of the Plaintiffs' material and asked for $2,500.00 for the day's appearance. The Plaintiffs asserted that the parties had been aware of one another's bill of costs and position for several months as a function of failed negotiations. In the circumstances, I will not allow anything extra for the Defendant's appearance. Neither side included item 26 claims for the assessment of costs. My inclination would have been to allow the same for each side, with no application of apportionment, resulting in amounts cancelling out each other given that each side claimed interest on costs from the same date. Therefore, I have not added any allowance in each side's bill of costs for the assessment of costs. The presentation of items below generally follows the order in which they were argued because both sides built upon previous positions as they addressed each item in turn. However, I have grouped certain items not argued together if they were related. The agreements achieved between counsel before me for fees and disbursements were noted on the bills of costs as assessed, but not in these reasons: I commend counsel for their civility throughout in resolving several such issues.
[3] The Defendant characterized this litigation as three claims, two actions, one set of discoveries, one trial and one appeal and noted that the Plaintiffs' solicitor maintained a single office file for it (the Plaintiffs' solicitor interjected to note that two office files eventually became one file). The Defendant argued that most of the allegedly infringing sales were the subject of T-3016-92 and were the driving force in the litigation, ie. copyright infringement issues represented approximately 95% of the work, leaving about 5% associated with industrial design. The settlement correspondence supports that premise, ie. the April 29, 1997 overture from the Plaintiffs sought $350,000 for copyright infringement compared to the agreed-upon $13,820.30 above for industrial design infringement. The Defendant noted that the Plaintiffs' November 12, 1997 settlement offer addressed copyright, but not industrial design and estimated potential damages, inclusive of interest, but exclusive of costs, at between $300,000.00 and $700,000.00. The Defendant asserted that the Plaintiffs pursued their copyright infringement claims despite success in the industrial design infringement claim because the implications of injunctive relief relative to copyright were much more significant.
[4] The Defendant argued that the costs associated with its copyright counterclaim (the Interface Design) are easily distinguishable from those associated with the Plaintiffs' copyright actions (the Mangrove Design) because of the differences in their respective patterns. As well, the single sale of approximately 660 square yards of carpet tile in 1995 means that the approximately 11,500 square yards at issue in T-3016-92 makes 1991-1993 the key time period in this assessment of costs. Effectively, T-1212-95 was a footnote to the substantive issues addressed by T-3016-92. The Defendant asserted that the Plaintiffs pursued these copyright claims notwithstanding reasonable settlement offers, ie. $60,000.00 inclusive of everything, and notwithstanding obvious problems with proving what they had pleaded, ie. their failure to lead evidence at trial on the creation date of the Mangrove Design. There were separate affidavits of documents with some overlap, but oral discoveries were conducted in an omnibus fashion for all claims and actions. The trial addressed only the Plaintiffs' copyright claims given prior disposition of the industrial design and counterclaim issues.
[5] The Plaintiffs argued that this was an amalgamated proceeding consisting of three causes of action: (1) the 1991, 1992 and 1995 sales of carpet tiles with the Mangrove Design and for which the factual issues of copyright infringement were not difficult; (2) the Defendant's copyright infringement counterclaim for a completely different design (the Interface Design) and (3) the 1995 industrial design infringement claim (the Mangrove Design) which is significant relative to issues of apportionment of costs for discoveries. The Plaintiffs were forced to incur costs to prepare for all three causes of action because the Defendant did not consent to dismissal of (2) and judgment in (3) until the morning of the first day of trial. The Defendant's proposed apportionment above of 95% to copyright and 5% to industrial design does not account for the counterclaim. These three causes of action were distinct and should be considered separately for the purposes of costs. The Plaintiffs argued that the Tariff does not permit an assessment of costs as proposed by the Defendant.
(Tariff)
Item 2: Statement of Defence (T-3016-92), 6 units claimed, available range 4 - 7 (hereafter, the numbers in brackets following the claimed units represent the available range)
Item 2: Statement of Defence (T-1212-95), 6 units claimed (4 - 7)
Item 1: Statement of Claim (T-1212-95), 6 units claimed (4 - 7)
Item 2: Defence to Counterclaim (T-3016-92), 6 units claimed (4 - 7)
[6] Initially, counsel for both sides agreed before me that I should give the same amount for each side's pleadings. However, their subsequent submissions backed away from that agreement. Counsel also agreed before me that the 81% apportionment asserted in T-1212-95 (13 of 16 paragraphs in the statement of defence) as attributable to copyright infringement should be reduced to 50% and that 50% should also apply to Milliken's pleading in T-1212-95.
[7] The Plaintiffs argued that 4 units are sufficient for a statement of defence (T-3016-92) addressing only two distinct and simple sales. The counterclaim occupied 13 of 27 paragraphs. The Plaintiffs argued that 4 units are sufficient for the statement of defence (T-1212-95) because the work done for the defence in T-3016-92 for comparable infringing sales simplified the work in T-1212-95. To the extent that the work for T-3016-92 did not assist T-1212-95, the claimed costs should still be reduced because the Defendant is not entitled to costs associated with the industrial design portion of its defence.
[8] The Defendant referred to the Plaintiffs' premise above to argue that only 4 units should be allowed for the statement of claim (T-1212-95) because its preparation was simplified by work already done in T-3016-92. As well, the work associated with the failed attempt in T-3016-92 to include an industrial design cause of action simplified the work to ready that cause of action in T-1212-95. The Defendant argued that the potential liability asserted by the Plaintiffs justified costs in the upper end of the range for the defences in both T-3016-92 and T-1212-95. The outcome at trial was a function of factual issues pleaded by the Plaintiffs, but not proven. The Defendant asserted that the defences were not merely blanket denials and represented serious consideration, ie. the defence in T-3016-92 was not filed until almost two years after institution and after motions to strike.
[9] Counsel for both sides agreed on 4 units (no apportionment to apply) for the Plaintiffs' Defence to Counterclaim (T-3016-92), as well as figures for several associated disbursements, but the Defendant did object to $121.00 for photocopies. The Defendant argued that the disbursement figures were not a function of precise records, but rather of proposed activity reports for the client, and suggested $10.00 would be reasonable given that no research was necessary for a defence in this type of action. The Plaintiffs argued that pleadings require research and suggested $25.00.
ASSESSMENT
[10] The Rules and Tariff do not use the term "apportionment", but I think that Rule 400(1) and 6(a) likely and collectively allow for that concept. The dilemma for costs represented by T-1212-95, relative to apportionment, illustrates neatly the operation of interlocutory process in the resolution of litigation. That is, the issues of causes of action are framed by pleadings, discarded or distilled via discoveries and motions, and those remaining are addressed at trial. That results occasionally, as here in T-1212-95, in success by both sides relative to discrete causes of action and an award of costs for each. The assessment of costs process must then sort out how to attribute the costs for a single document, such as a pleading, which led to success for one cause of action and failure for another cause of action (here, success for Milliken on industrial design and failure on copyright, both as a function of a single statement of claim: similarly, success for the Defendant on copyright and failure on industrial design, both as a function of a single statement of defence). There are at least two acceptable approaches to address such issues of costs as a function of our Rules and Tariff: (i) allow a lower amount from the available range so as to factor out costs attributable to the failed portion of the document and (ii) apportion between causes of action once an amount suitable for the work in creating the document is selected from the available range.
[11] I concluded at paragraph [7] in Bruce Starlight et al. v. Her Majesty the Queen [2001] F.C.J. 1376 that the same point in the ranges throughout the Tariff need not be used as each item for the services of counsel must be considered in its own circumstances. I have read the pleadings and the interlocutory reasons in the court files. I think that the work to frame pleadings in T-3016-92 should have simplified the work for T-1212-95. However, as noted in Bruce Starlight, supra, some generalization is required between the values in available ranges. These pleadings were not the simplest nor the most difficult to address. I allow 6 and 4 units respectively for the defence in each of T-3016-92 and T-1212-95. I allow 4 units for the statement of claim in T-1212-95. As for the $121.00 for photocopies in the Plaintiffs' bill of costs, I allow $15.00.
Item 5: Defendant's preparation for Plaintiffs' motion dated April 29, 1993, appealing the decision striking the Statement of Claim (T-3016-92): appeal allowed with costs in the cause on October 7, 1993, 6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
[12] The Defendant argued that the importance of resolution in a bilingual country of ambiguities of interpretation between the French and English sections of the Copyright Act relative to the Convention of Berne of 1886 justifies allowances at or near the maximum. This was a novel issue of law vital to the Plaintiffs' entire 1992 copyright action. Both sides used senior counsel for these issues which were eventually decided by the Federal Court of Appeal.
[13] The Plaintiffs characterized this motion as a "pleadings content" matter addressing a straightforward issue of law in a single and simple cause of action and for which the minimum 3 units would ordinarily be sufficient for item 5 preparation. However, the importance of the language issue (French and English) justifies 4 units. The Plaintiffs argued that such "pleadings content" motions do not justify anything above the minimum for items 5 and 6. Therefore, 1 unit per hour for the item 6 appearance is appropriate for a matter lasting two hours.
ASSESSMENT
[14] I find merit in the Defendant's position in these circumstances, at least for item 5 preparation which I allow as presented at 6 units. I allow the item 6 appearance as presented at 3 units per hour: the subtleties of differences here between French and English versions of the statute by themselves do not justify the maximum, nor does the threat often faced by Plaintiffs of having its litigation derailed at an early stage by itself justify the maximum, but the confluence of these factors are notable enough to warrant the maximum in these circumstances.
Item 18: Plaintiffs' (Respondents') preparation of appeal book for Defendant's appeal of the October 7, 1993 Order (A-590-93): appeal dismissed on September 7, 1994, costs to the Plaintiffs (Respondents), 1 unit claimed (1)
Item 19: Plaintiffs' (Respondents') preparation of memorandum and fact of law, 7 units claimed (4 - 7)
Item 22(a): Appearance on appeal, 3 units claimed (2 - 3)
[15] These Federal Court of Appeal items were included in the Plaintiffs' bill of costs for T-3016-92 and relate to the Federal Court decision above dated October 7, 1993, addressing the Convention of Berne of 1886 issues. Counsel for both sides agreed that their results for items 19 and 22(a) should be the same as my allowances for the Defendant's items 5 and 6 above for the October 7, 1993 Order, subject to my conclusions concerning the Defendant's objections to the admissibility of these costs. The Defendant objected to item 18 because the Plaintiffs had no role in preparation of the appeal book. The Defendant argued that paragraph 105.3.1 at page 1-14 in The Law of Costs, Second Edition, Mark M. Orkin Q.C. (2001), which suggests that the phrase "costs to the defendant" has been construed as costs to defendant in the cause, means that the Plaintiffs are precluded from item 19 and 22(a) claims for this interlocutory appeal because their 1992 cause of action was ultimately unsuccessful.
[16] For associated disbursements of $88.75, $54.18 and $1.58 respectively for photocopies, facsimiles and telephone, the Plaintiffs asserted that an appeal case requires such essential and reasonable disbursements including service copies of documents at $0.25 per page. The Defendant argued that most of these charges pre-date the order under appeal and the lack of activity, ie. no factum, did not justify any disbursements. If anything is allowed, it should be about $40.00 comparable to the Defendant's disbursements for the Plaintiffs' April 29, 1993 motion.
ASSESSMENT
[17] Paragraph 105.3.1 in The Law of Costs, supra, refers to Digiandomenico v. Ramos (1994) 92 B.C.L.R. (2d) 286 (S.C. Master), which in turn cites Aziz v. Aziz (1986) 3 B.C.L.R. (2d) 385 (S.C.). I do not think Aziz, supra, applies because the relevant issue there addressed orders silent as to costs. Rule 400(1) in this Court precludes orders or judgments silent as to costs as authority to claim costs. As for Digiandomenico, supra, with respect, I do not think that I would arrive at the same conclusions for an order or judgment not silent as to costs per my reading of Aziz, supra, and because the Rule 400(1) discretion in this Court for interlocutory costs is exercised independently from the result of the judgment, except where expressly provided by language such as "costs in the cause". As well, I doubt that the Rule 400(1) jurisdiction of the Federal Court of Appeal, even for interlocutory appeals, is fettered by a Rule 400(1) award of costs in a judgment of the Federal Court. I allow the item 18 claim as I routinely do for successful respondents because both sides have real obligations in ensuring proper preparation of appeal books. Memoranda were filed in this matter. I allow item 19 and 22(a) claims at 6 units and 3 units per hour respectively. I allow the disbursements as presented because I think their total, regardless of issues with the evidence, reflects the appropriate sense of austerity for costs reasonable for such an interlocutory appeal.
Item 5: Defendant's preparation for Plaintiffs' motion dated November 18, 1993, appealing the decision striking amendments in the Amended Statement of Claim (Rule 1104) (T-3016-92): appeal allowed on December 14, 1993, with costs in the cause, 6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
Item 5: Defendant's preparation for its Rule 419(1) (a) motion dated November 1, 1993, to strike industrial design infringement amendments in the Amended Statement of Claim (T-3016-92): allowed on March 18, 1994, with costs to the Defendants, 6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
Item 5: Plaintiffs' preparation for Defendant's motion December 21, 1993, renewing its Rule 419 application to strike the Plaintiffs' industrial design amendments
(T-3016-92): dismissed on January 17, 1994, with costs to Plaintiffs in any event of the cause, 6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
[18] The Defendant noted that the Court's order dated December 14, 1993, in allowing the appeal relative to Rule 1104 issues, inadvertently addressed the Defendant's Rule 419(1)(a) motion, notwithstanding the parties' agreement before the Court to defer the Rule 419 arguments. This necessitated a subsequent application for directions to permit full argument on the Rule 419(1)(a) issues in turn leading to the March 18, 1994 order striking the industrial design amendments. On January 17, 1994, the Associate Senior Prothonotary dismissed the Defendant's December 21, 1993 motion on the basis that the December 14, 1993 decision had already addressed Rule 419 issues.
[19] The Defendant argued that its item 5 and 6 claims at or near the upper end of the available ranges reflect the importance of these interlocutory issues to the Plaintiffs' entire 1992 industrial design claim. They required the use of senior counsel. The fact that the Court required two distinct hearings to ultimately resolve these issues in favour of the Defendant, effectively ending the Plaintiffs' industrial design claim, coupled with the confusion leading to the premature disposition of the Rule 419 issues on December 14, 1993, demonstrate the difficulty of these proceedings. The Defendant argued that nothing should be allowed for the Plaintiff's item 5 preparation relative to the January 17, 1994 order because the merits of Rule 419 issues were never actually argued given that counsel spent their time that day trying to explain to the Associate Senior Prothonotary the inadvertent disposition on December 14, 1993 of Rule 419 issues not yet argued. As well, no preparation was required additional to that required for the December 14, 1993 appearance. The Defendant suggested 1 unit per hour for item 6 as this was a simple procedural matter.
[20] The Plaintiffs relied on its "pleadings content" argument above to assert that 3 units and 1 unit per hour for each of the Defendant's item 5 and 6 claims respectively are sufficient. This matter was procedural only and the seniority of counsel for appearances of two hours each should not be a factor. The Plaintiffs argued that my allowance for their costs awarded by the January 17, 1994 order should be the same as the Defendants for the March 18, 1994 order because the Plaintiffs' preparation for January 17, 1994, was as if the merits of the Rule 419 issues would be argued.
[21] Counsel agreed on figures for all disbursements for the Defendant except $185.70 (motion to strike industrial design amendments) for a hotel. The Defendant argued that it was a suite with a configuration suitable for working. The Plaintiffs argued that, in the absence of proof of reasonableness, the charge seems high, but left it to my discretion.
[22] Relative to $411.75 and $56.94 respectively for photocopies and facsimiles (motion renewing Rule 419 application), the Plaintiffs conceded there may have been some extra expense, but it was necessary to copy authorities. The Plaintiffs argued that the Defendant's view of what is required for photocopies is generally too restrictive and suggested $50.00 for photocopies, but asserted the $56.94 for facsimiles should remain as is. The Defendant argued that these charges are excessive for a brief motion and suggested $25.00 for each item.
ASSESSMENT
[23] I think that the Rule 419 issues were more difficult to resolve than the Rule 1104 issues. Relative to the December 14, 1993 order, I allow the Defendant's item 5 and 6 claims at 5 units and 2 units per hour respectively. Relative to the March 18, 1994 order, I allow the Defendant's item 5 and 6 claims as presented at 6 units and 3 units per hour respectively. Relative to the January 17, 1997 order, I agree that it was prudent for Plaintiffs' counsel to have prepared as if there would be a full airing of the Rule 419 issues: I allow the item 5 claim as presented at 6 units. However, my understanding from the submissions before me is that some time was spent on January 17, 1994, trying to explain to the Court what had happened to cause the confusion. My initial inclination was to allow 1 unit per hour for item 6, but I note the importance of these issues to the Plaintiffs and the presence of senior counsel on their behalf. In the circumstances, I allow 2 units per hour.
[24] As for the hotel charge in issue for the Defendant, I will apply my conclusions concerning discretion in Grace M. Carlile v. Her Majesty the Queen (1997), 97 D.T.C. 5284 at 5287 and the sentiment of Lord Justice Russell in Re Eastwood (deceased) (1974) 3 All. E.R. 603 at 608, that assessment of costs is "rough justice, in the sense of being compounded of much sensible approximation", in sorting out a reasonable result for costs. Notwithstanding my comments on fees, I do not think a special working area in counsel's hotel room was necessary for this interlocutory event. The affidavit of Mary Mutchler sworn October 4, 2001, does not address this charge. Counsel may not have had access to programs comparable to government or corporate discounts. I allow $120.00. For the Plaintiffs' two disbursements in issue, I allow $50.00 and $45.00 respectively for photocopies and facsimiles.
Item 5: Plaintiffs' preparation for the Defendant's motion dated August 20, 1997, to amend its Statement of Defence (T-3016-92): allowed on September 8, 1997, with costs to the Plaintiffs in any event of the cause and with any further costs which are a direct consequence of the late amendment to be reserved to the trial judge, 6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
[25] The Plaintiffs agreed that this was a procedural pleadings motion, but noted it was brought late in these proceedings. The Plaintiffs sought costs thrown away, but that issue was reserved to the trial judge (two subsequent orders dated November 17, 1997, dismissing the Plaintiffs' motion to strike the amended pleading and allowing the Defendant's motion for an extension of time to file the amended pleadings, each provided for submissions on costs thrown away, after delivery of judgment, as a result of these amendments). The Plaintiff conceded that items 5 and 6 could be reduced to 4 or 5 units and 1 or 2 units per hour respectively.
[26] The Defendant noted that this was a straightforward motion, requiring only 35 minutes and not the one hour claimed, to particularize its position regarding the Plaintiffs' lack of standing to pursue copyright infringement. Junior counsel appearing for the Plaintiffs had only to respond to argument, but not to lead any argument. The issue of costs thrown away should not be a factor favouring the Plaintiffs because the trial judge ultimately ruled against them on that issue. The Defendant suggested 3 units and 1 unit per hour for items 5 and 6 respectively.
[27] Counsel agreed on figures for all associated disbursements except $56.51 and $66.70 respectively for telephone/facsimile and binding. The Plaintiffs conceded that some of the $56.51 could relate to other matters and suggested $20.00. The Plaintiffs argued that binding should be treated the same as photocopies, ie. a service purchased from a disinterested third party supplier. The Defendant suggested $10.00 for telephone/facsimile given that couriers were also claimed and asserted that nothing should be assessed for binding because it is overhead for a law firm.
ASSESSMENT
[28] I allowed 4 units for item 5. It appears from the Court's order that some progress additional to an amendment of pleadings was achieved on September 8, 1997. The opposing affidavits for this motion addressed some discovery issues and the order included a timetable further to some of that evidence. I allow 2 units per hour for item 6. I routinely approve binding as proposed by the Plaintiffs, ie. a service purchased from a disinterested third party supplier. I allow $20.00 and $35.00 respectively for telephone/facsimile and binding.
Item 7: Defendant's affidavit of documents (Jeffrey Casselman) sworn March 30, 1995 (T-3016-92), 4 units claimed (2 - 5)
Item 7: Plaintiffs' affidavit of documents (Eugene P. Willimon) sworn January 12, 1995 (T-3016-92: Milliken Industries of Canada Ltd.) (supplementary affidavit sworn August 30, 1995), 5 units claimed (2 - 5)
[29] Counsel for both sides agreed to leave the 83% apportionment (calculated as a function of the number of documents attributable to the main claim as opposed to the counterclaim) as is in the Defendant's bill of costs for the fees and disbursements associated with this item only. The parties agreed before me that I should apply 33% apportionment to the affidavit of Milliken Industries of Canada Ltd. (hereafter "Milliken Canada"), and allow the same number of units for each side's affidavit. The Defendant argued that a mid-range value of 4 units is appropriate. The Plaintiffs noted that some of the documents were straightforward correspondence and that some addressed the counterclaim and suggested 2 or 3 units for the Defendant.
ASSESSMENT
[30] I have read the various affidavits of documents in the court files. I allow 3 units each for these two affidavits.
Item 7: Defendant's affidavit of documents (Jeffrey Casselman) sworn August 24, 1995 + supplementary affidavit of documents (Jeffrey Casselman) sworn October 11, 1995 (T-1212-95), 4 units claimed (2 - 5)
[31] The Defendant argued against a mechanical division of costs among three causes of action because each cause was not necessarily equivalent to one another. The counterclaim and the industrial design causes of action were simply footnotes to the copyright cause of action and were not factors in the Plaintiffs' assertion of copyright infringement representing serious interference with the Defendant's right to do business. The Defendant claimed 95% apportionment of fees and disbursements to the copyright cause of action because these documents dated prior to 1995 and were therefore irrelevant to the industrial design cause of action. Most related to the main copyright issues. Therefore, the Plaintiffs' proposed apportionment below of 47.5% is inappropriate because proceedings are being assessed as opposed to causes of action. The Defendant argued that the mid-range claim of 4 units for two affidavits at a key point in the proceeding is appropriate.
[32] The Plaintiffs argued that some of these documents address both industrial design and copyright causes of action and that the Defendant would not have produced them in T-1212-95 unless they were relevant to both causes. Since one document addresses only industrial design and the remaining 19 documents address both industrial design and copyright equally, the apportionment should be 47.5 % for both fees and disbursements. Relative to mechanical division among causes of action, the Plaintiffs noted that documents 11-20 in the supplementary affidavit are exactly as listed for documents 14-23 in the supplementary affidavit sworn October 11, 1995 (T-3016-92) and suggested an allowance of 2 units only.
ASSESSMENT
[33] As noted above, the apportionment of costs as an approach in a bill of costs, to address work done relative to various awards of costs, is acceptable, but I must keep in mind that these awards were made independent of one another. That is, I am not necessarily bound to apply apportionment. However, it makes sense in these circumstances of possible blended application of these documents to multiple causes of action with differing results. I allow 3 units and apply the 83% apportionment used above in T-3016-92.
Item 7: Milliken's affidavit of documents (Terry Moyer) sworn August 29, 1995
(T-1212-95), 5 units claimed (2 - 5)
[34] The parties agreed before me to 2 units, but disagreed on apportionment. They agreed to a reduced total of $10.00 for disbursements not subject to apportionment. The Plaintiffs argued that three (artistic work, confirming assignment and tender document) of the six documents listed were attributable to both industrial design and copyright, one (renewal certificate) to industrial design and two (copyright registrations) to copyright meaning that 42% (2½ of six documents) apportionment should apply.
[35] The Defendant argued that the Court's judgment ultimately discounted the confirming assignment and therefore it cannot be a factor for costs. The Defendant argued that the artistic work was significant only for the copyright issues and that its value relative to industrial design was limited to registration, which is irrelevant here for costs. The Defendant conceded that the tender document related to both industrial design and copyright, but asserted that, for purposes of costs, it should be considered attributable only to copyright. Therefore, the apportionment should be one of six or 17%.
ASSESSMENT
[36] I allow 42% apportionment.
Item 8: Defendant's preparation for discovery of Defendant (Jeffrey Casselman) on
October 11, 1995 (T-3016-92 and T-1212-95), 5 units claimed (2 - 5)
Item 9: Defendant's attendance on October 11, 1995, 3 units claimed (0 - 3)
Item 8: Defendant's preparation for discovery of Milliken Canada (Jim Davidson) on October 12, 1995 (T-3016-92 and T-1212-95), 5 units claimed (2 - 5)
Item 9: Defendant's attendance on October 12, 1995, 3 units claimed (0 - 3)
Item 8: Defendant's preparation for discovery of Milliken (Robert Yates) on
October 12, 1995 (T-3016-92 and T-1212-95), 4 units claimed (2 - 5)
Item 9: Defendant's attendance on October 12, 1995, 3 units claimed (0 - 3)
Item 8: Plaintiffs' preparation for discovery of Defendant on October 11, 1995,
5 units claimed (2 - 5)
Item 8: Plaintiffs' preparation for discovery of Milliken and Milliken Canada on
October 12, 1995 (T-1212-95), 5 units claimed (2 - 5)
Item 9: Plaintiffs' attendance on October 12, 1995 (Milliken), 3 units claimed (0 - 3)
Item 9: Plaintiffs' attendance on October 12, 1995 (Milliken Canada),
3 units claimed (0 - 3)
Item 9: Plaintiffs' attendance on October 11, 1995 (Defendant) (T-1212-95),
3 units claimed (0 - 3)
[37] Counsel for both sides agreed that whatever I give for the Defendant's items 8 and 9 before apportionment, I should give for the Plaintiffs' items 8 and 9, subject to the Plaintiffs' stipulation that the item 8 allowance for Mr. Yates should be 1 unit less than for Mr. Casselman and Mr. Davidson. As well, they agreed that their apportionment arguments would apply to the fees and disbursements. The Defendant argued for maximum allowances because this litigation put considerable damages in issue and required senior counsel. The Plaintiffs characterized these discoveries as straightforward and argued that 2 units for each item 8 and 1 unit per hour for each item 9 would be appropriate.
[38] Counsel for both sides agreed that the October 11, 1995 transcript totalled 201 pages, that eight pages addressed general questions about witness and corporate status, that 172 pages addressed development and manufacture of the Defendant's Interface Design, that 13 pages addressed the counterclaim, that one page addressed industrial design and that seven pages addressed the alleged copyright infringing sales in T-3016-92. Of these, counsel agreed that the 13 pages and one page apply to the Plaintiffs and the seven pages apply to the Defendant.
[39] Relative to its claims of 94% and 77% (calculated as function of attributable transcript pages) apportionment for Mr. Casselman and Mr. Davidson respectively, the Defendant argued that T-1212-95 would not have been brought, but for the bringing of T-3016-92. The 1992 action addressed 95% of the sales making the 1995 action with its single sale simply a convenient addition. Paragraph [13] of the Court's reasons for order dated April 24, 1998 (addressing costs thrown away) concluded that the Plaintiffs pursued T-3016-92 despite knowing that its case was seriously flawed. The facts of one small discrete sale in 1995 are easily distinguishable from the considerable sales at issue in T-3016-92. The Defendant argued that the Plaintiffs' suggestion to split attribution of the eight pages is unfair because the underlying assumption, that T-1212-95 stood on its own, is incorrect. Alternatively, the Defendant argued that the Plaintiffs' notion of separate discoveries for each of three causes of action is faulty given that there were at least six causes of action: (i) 1991 sales re copyright, (ii) 1992 sales re copyright, (iii) late 1992 sales re copyright, (iv) counterclaim, (v) 1995 sale re copyright, and (vi) 1995 sale re industrial design. Using the Plaintiffs' approach, the Defendant gets four of six causes of action and therefore 67% of the eight pages of transcript are attributable to its costs.
[40] The Defendant argued that fundamental differences between copyright and industrial design law mean that the copyright and industrial design proceedings, and their associated costs, were completely severable, in turn meaning that the 172 and eight pages are all attributable to the Defendant's costs for the copyright proceedings. That is, in copyright law, unlike industrial design law, given that the Defendant was acting as a function of instructions from the Calgary Airport, its defence was that the allegedly offending design was created independently. Therefore, the Plaintiffs required these 180 pages to determine how the Defendant arrived at its design in order to determine whether there was copyright infringement. By contrast, alleged copying of a design is not a material element of proof for industrial design infringement. Rather, the Plaintiffs needed to compare what was registered with what was sold and therefore would not have been interested in the genesis of the Defendant's design. In summary for October 11, 1995 (discovery of Mr. Casselman), the Defendant argued that 187 of 201 pages of discovery transcript or four of six causes of action were attributable to its costs. This litigation represented potentially considerable damages and required senior counsel.
[41] Counsel for both sides agreed for October 12, 1995 (Mr. Yates: 76% apportionment claimed by the Defendant) that the discovery transcript totalled 53 pages, that three pages addressed copyright and were attributable to the Defendant's costs, that 19 pages addressed industrial design and were attributable to the Plaintiffs' costs, that six pages addressed general questions and that 25 pages addressed the title issue in copyright relative to the Plaintiffs' Mangrove Design, but disagreed about their relevance for industrial design. The Defendant noted that item 8 for Mr. Yates was claimed at 4 units only because the examinations of the other two persons were longer and more detailed.
[42] The Defendant applied its apportionment argument above to the six pages, ie. either 100% or _ as a function of four of six causes of action. Relative to the 25 pages, the Defendant noted the trial judge's reasons, 83 C.P.R. (3d) 470 at 481-484, addressing Milliken's difficulty in proving its case. Specifically, Milliken failed to explain why it did not advance available evidence validating its standing to pursue copyright infringement, thereby leaving it open to the trial judge to draw an adverse inference. This evidence was not available at the time of discovery. The Defendant argued that these 25 pages must therefore be attributable to the Mangrove Design copyright issues. The alternative position, ie. _ apportionment, is not applicable here because these discovery pages addressed only title. The references (pages 16 and 33 of the transcript) to industrial design are inconsequential clarifications in a series of pages addressing copyright title. The discovery transcript (page 34, Q. 110) indicates that industrial design was not an issue prior to September 1, 1992. These 25 pages, addressing copyright title, should not be attributable equally between copyright and industrial design simply as a function of the appearance of one line addressing industrial design. The trial judge's reasons outline details of the genesis of the Mangrove Design, which were relevant for copyright law, but irrelevant for industrial design law.
[43] The Plaintiffs argued, relative to eight of 201 pages (October 11, 1995 discovery of Mr. Casselman) that these combined proceedings consisted of three distinct causes of action, ie. copyright, counterclaim and industrial design, each with their own set of costs. The Defendant's interpretation of the Court's decision concerning costs thrown away is irrelevant here. If the Defendant had not delayed, until just prior to trial, in dropping two causes of action, there would not be apportionment issues. Therefore, apportionment should be a function of causes of action and of time spent. As such, these eight pages should be split equally between copyright and industrial design because their questions would have been necessary if there had only been an industrial design cause of action. The Plaintiffs disagreed with the Defendant's premise concerning the 172 and eight pages and argued that the genesis of the Defendant's design was very relevant to the industrial design action. Therefore, these pages should be split equally between the Plaintiffs' and the Defendant's costs. The Plaintiffs, in summary, asked for apportionment as a function of 104 of 201 pages relative to costs claimed by the Defendant for the discovery of Mr. Casselman. The Plaintiffs asserted that the facts of this litigation, involving few sales with few differences among them, means therefore that 2 units and 1 unit per hour respectively for all items 8 and 9 in the Plaintiffs' and the Defendant's bills of costs would be appropriate.
[44] Relative to costs claimed by the Defendant for the discovery of Mr. Davidson, the Plaintiff asserted that his discovery transcript was 226 pages, instead of the 236 pages shown in the bill of costs, consisting of 173 pages addressing the 1992 copyright action (counsel agreed that these were attributable to the Defendant's costs), 44 pages addressing the counterclaim (counsel agreed that these were attributable to the Plaintiffs' costs), leaving nine pages subject to apportionment. Counsel agreed that the apportionment arguments above for October 11, 1995 (Mr. Casselman) would apply here respectively on the basis of the Plaintiffs claiming 50% of the nine pages and the Defendants claiming all nine pages, or alternatively _ of them as a function of four of six causes of action.
[45] For the 25 pages of transcript in issue above for Mr. Yates on October 12, 1995, the Plaintiffs asserted that they addressed how Milliken acquired title to the Mangrove Design relative to both copyright and industrial design. Therefore, 50% apportionment should apply since the 1992 and 1995 copyright cause of action and the 1995 industrial design cause of action flowed from and were a function of the same facts surrounding acquisition of the Mangrove title. The multiple references in the discovery transcript to industrial design (p. 16, Q. 49; p. 33, Q. 108) support 50% apportionment. As well, question 126 indicates that questions 119-125 may include industrial design. The Plaintiffs asserted that pages 16 and 33 make it clear that the rights being acquired were both copyright and industrial design. The Plaintiffs claimed 50% apportionment for the six pages (general questions) in issue for Mr. Yates.
[46] Counsel agreed to figures and withdrawals for several disbursements associated with the Plaintiffs' preparation and attendance items, except for $225.50 and $291.88 respectively for photocopies and colour/oversize photographs. The Plaintiffs moved the $291.88 to its item 13(a) trial preparation item below and argued that it did not duplicate other work and is comparable to what was agreed upon for the Defendant. The Plaintiffs suggested $50.00 for photocopies. The Defendant argued that some of the costs would have related to the main copyright cause of action and suggested $25.00 in total for both.
ASSESSMENT
[47] The events and apportionment issues in this litigation illustrate that resolution of causes of action can be fragmented, ie. by settlement, withdrawal, dismissal or success. The order dated August 10, 1995, which consolidated T-3016-92 and T-1212-95 for the purpose of trial, provided that there be common evidence and discovery where relevant. The Court partially granted the Plaintiffs' motion for summary judgment and dismissed the Defendant's counterclaim (copyright) as statute-barred insofar as it concerned non-injunctive relief with costs against the Defendant. Subsequently, the Court dismissed the balance of the counterclaim on consent with costs against the Defendant. In this litigation, the Defendant prevailed on copyright and the Plaintiff (Milliken) prevailed on industrial design. I think that there was likely blurring of events, in the context of two trial files, resulting in discrete resolutions here of different causes of action. In my opinion, I need to step down to individual causes of action to sort out the related assessment issues for costs.
[48] Copyright drove this litigation, but the fragmentation of costs as a function of the apportionment issues before me does not diminish the authority of each independent Rule 400(1) award of costs. I think that the 1995 action would have been resolved in some manner other than trial, but for the 1992 action which addressed a relatively greater volume of sales and which drove this litigation generally. In so concluding, I do not intend that the Plaintiffs' success in portions of the litigation be trivialized. I recognize and accept that a holder of intellectual property rights cannot be passive and is bound by law to take active and vigorous steps, including litigation, to assert and protect such rights.
[49] The reasons for judgment of the Federal Court of Appeal (A-120-98, A-121-98) dated January 26, 2000, provide a convenient summary of the facts and issues in this litigation. When read with the several interlocutory reasons in the trial files, I think that the reality of this litigation was threefold: a copyright cause of action (or a cluster of such causes of action) as a function of multiple installations of carpet tile allegedly infringing the Plaintiff's Mangrove Design, a copyright cause of action (or a cluster of such causes of action) via counterclaim as a function of multiple installations of carpet tiles allegedly infringing the Defendant's Interface Design, and an industrial design cause of action as a function of an installation of carpet tiles allegedly infringing the Plaintiffs' Mangrove Design. However, that results in an imbalance in favour of the Plaintiffs relative to the costs implications for the copyright cause of action. Therefore, while I do not necessarily agree with the Defendant's proposition for six causes of action, ie. because one might argue that each installation relative to the counterclaim generated its own cause of action, I think that its result of 67% apportionment is appropriate.
[50] While the presence of fragmentation surely caused some complexity, I do not think that these events warrant the maximums as claimed. I felt that some consideration had to be given to the presence of industrial design issues. I allow items 8 and 9 at 4 units and 2 units per hour respectively for each of Mr. Casselman and Mr. Davidson in the Defendant's bill of costs. The apportionment, relative to Mr. Casselman, is 63% for the Defendant as a function of this calculation: [(8 + 172) x 67% + 7] ) 201 x 100%. The apportionment, relative to Mr. Davidson, is 79% for the Defendant as a function of this calculation: [(9) x 67% + 173] ) 226 x 100%. I allow items 8 and 9 at 3 units and 2 units per hour respectively for Mr. Yates in the Defendant's bill of costs. His apportionment is 45% for the Defendant as a function of this calculation: [(6 + 25) x 67% + 3] ) 53 x 100%. I will apply apportionment percentages in the Plaintiffs' bill of costs (items 8 and 9 getting the allowances agreed upon above between counsel: one variation is that given Plaintiffs claim only a single item 8 addressing both Mr. Davidson and Mr. Yates, I allowed 4 units in the circumstances) as a function of these calculations: (a) for Mr. Casselman, [(8 + 172) x 33% + 13 + 1] ) 201 x 100% = 37%; (b) for Mr. Davidson, [(9) x 33% + 44] ) 226 x 100% = 21% and; (c) [(6 + 25) x 33% + 19] ) 53 x 100% = 55%. The item 9 appearance (for discovery of Milliken and Milliken Canada) was listed separately in the Plaintiffs' bill of costs for each of the counterclaim and industrial design matters. As my calculation groups counterclaim and industrial design together, I have adjusted the bill of costs, as assessed, accordingly. I allow $50.00 for the photocopies in issue in the Plaintiffs' bill of costs. The Plaintiffs' bill of costs, unlike the Defendant's bill of costs, did not isolate the disbursements relative to each of Mr. Casselman, Mr. Davidson and Mr. Yates, thereby making it necessary to choose an apportionment percentage somehow achieving a fair result: I took the average of 37%, 21% and 55% from above = 38% to apply to the disbursement total of $2,280.77 (after adjustments and reductions) shown twice (at pages 9 and 14 of the bill of costs).
Item 27: Defendant's preparation, answers, review of responses and follow-up for continued examination for discovery in writing of Mr. Casselman (letters dated June 19 and 28, 1996) further to order dated March 11, 1998, 2 units per hour claimed for 18.3 hours (the Defendant's counsel added 0.8 hours for June 27, 1996 to the 17.5 hours claimed in the bill of costs per exhibit O to the affidavit of Mary Mutchler sworn October 4, 2001) (1 - 3)
Item 27: Defendant's preparation as above for continued written discovery of Mr. Davidson and Mr. Yates (letter dated July 18, 1997), 3 units per hour claimed for 11.5 hours (1 - 3)
Item 27: Defendant's preparation as above for continued written discovery of Mr. Casselman (letters August 2 and September 15, 1997), 3 units per hour claimed for 10 hours (1 - 3)
Item 27: Defendant's preparation as above for continued written discovery of Mr. Casselman (letters September 24, 30 and October 9, 1997), 3 units per hour claimed for 6.4 hours (1 - 3)
Item 27: Defendant's preparation as above for continued written discovery of Mr. Davidson and Mr. Yates (letters October 9, 23 and 27, 1997), 3 units per hour claimed for 3 hours (1 - 3)
Item 27: Defendant's preparation as above for continued written discovery of Mr. Davidson and Mr. Yates (letters dated October 31 and November 3, 1997),
3 units per hour claimed for 1.5 hours (1 - 3)
[51] On March 11, 1998, in T-3016-92, the Court ordered that "in respect of discovery conducted in writing, the defendant is entitled to costs using a Unit Value to be determined by the Taxing Officer per hour reasonably expended for preparing, answering, and reviewing responses to, written questions on discovery." The Defendant noted that the claim at 2 units per hour is for junior counsel and the claims at 3 units per hour are for senior counsel. The Defendant indicated that its submissions above for oral discoveries should generally apply here as these written discoveries were a continuation of oral discoveries. These were not routine follow-up questions, but rather questions addressing serious and numerous concerns such as the Plaintiffs' standing to assert copyright infringement, a key factor in the trial judge's decision. The 18.3 hours, addressing 47 questions, addressed things such as design development, details of sales including timing and what notice was given of copyright relative to the Mangrove Design in the context of the basis for copyright violation and a number of other factual issues. The Defendant argued that the Plaintiffs' position below imposes an artificial ceiling as a function of party and party costs and undoes what the trial judge's order intended, ie. party and party costs approaching the actual costs. As well, questions on oral discovery occur one after another at a rate not comparable to written questions and answers. For the latter, information must be compiled from several sources and revised into something comprehensible (Note: counsel for the Plaintiffs interjected to assert that this work should have been the subject of affidavit evidence, to which counsel for the Defendant replied that the necessity for such work is self-evident). The Defendant argued that this written discovery (the 18.3 hours) was a substantive discovery on its own and not just a simple follow-up.
[52] The Defendant made the same argument for the 11.5 hours (96 questions) and noted that the order recognized that this approach would minimize the executive time of the witness. The Defendant made the same argument for the ten hours (49 questions) and noted that the Plaintiffs focused on development of the Interface Design. The Defendant argued that I should draw an adverse inference from the fact that the Plaintiffs led no evidence concerning the amount of its work on these written discoveries. The Defendant made the same argument for the 6.4 hours (98 questions) and for the three hours (39 questions). The Defendant asserted that this latter discovery addressed issues of Milliken's standing to assert copyright infringement with particular regard to the artistic origins of the Mangrove Design and details surrounding its purported acquisition of rights to the design, a key factor in the trial judge's decision. It was only at trial that the final revelations concerning these issues emerged in the evidence with significant adverse effect on the Plaintiffs' standing to have proceeded to trial. The Defendant argued that this demonstrates that the Plaintiffs' proposed ratio formula imposing a ceiling does not equate to the reasonable costs ordered by the trial judge. The Defendant made the same argument for the 1.5 hours (29 questions).
[53] For the 18.3 hours, the Plaintiffs argued that the March 11, 1998 order is unusual because it addressed an activity normally covered by item 9 appearance fees. This order intended a reasonable allowance of both hours and dollars over-all. The Plaintiffs argued that the ranges for items 8 and 9 represent a limit on party and party costs and are not intended to be solicitor-client costs, but the Defendant here is effectively asking for solicitor-client costs. It is unreasonable, for 47 follow-up questions in writing, to claim 18.3 hours exceeding the nine hours taken for approximately 909 questions for Mr. Casselman's oral discovery. The evidence discloses repeated revisions which equate to excessive costs for the work of a junior lawyer and for which I should impose a ceiling. The Plaintiffs asserted that entries such as for June 14, 1996 (exhibit O to the Mutchler affidavit), "lengthy telephone conferences... re status and strategy for actions and re outstanding questions... preparing answers to outstanding questions, letter to...", represent irrelevant work and are indicative of an unreasonable number of hours. The Plaintiffs argued that an allowance of thousands of dollars for a few follow-up questions would be unreasonable in party and party costs and suggested 47/909 of my allowance for items 8 and 9 relative to Mr. Casselman. The Plaintiffs asserted that apportionment is still a factor for these items and suggested the same formula used for oral discoveries.
[54] The Plaintiffs made the same argument for the 11.5 hours (total of 1,168 oral questions) and suggested 96/1168 of my allowance for items 8 and 9 relative to Mr. Davidson and Mr. Yates. The Plaintiffs disagreed with the Defendant's notion that these written discoveries displaced oral discoveries because, if they had occurred as oral discoveries, the number of hours for item 9 would have been much less than the 11.5 hours claimed. Some dollars would still have to be added, however, to account for item 8 preparation. The Plaintiffs made the same argument for the ten hours and suggested 49/909 of my item 8 and 9 allowances. On the assumption that the lawyer is merely transcribing what the client tells him, ten hours is unreasonable for 49 questions when compared to a time frame of something less than an hour if they had been asked orally. The Plaintiffs asserted that their own preparation time is irrelevant because they did not receive costs and therefore do not have to prove what the Defendant is obligated to prove.
[55] The Plaintiffs made the same argument for the 6.4 hours, 3 hours and 1.5 hours and suggested 98/909, 39/1168 and 29/1168 respectively of my item 8 and 9 allowances. The Plaintiffs argued that, as the order does not specify item 27 and its range of 1 - 3 units, I have the discretion to apply something else, including fractions of units and lesser hours than claimed, to achieve the reasonable result contemplated in the order. The Plaintiffs noted that this last submission was not an alternative to its ratio formula above, but rather demonstrates that, for each written discovery, the ratio formula sets only a ceiling and my allowance could be much lower. For example, for the three hours and assuming approximately $2,800.00 for Mr. Davidson and Mr. Yates under items 8 and 9, the ceiling would be 39/1168 of $2,800.00 = $93.00, but my allowance could be much lower.
ASSESSMENT
[56] I have difficulty with the Plaintiffs' proposition because the time required to prepare for discovery can vary depending on the circumstances. Further, I would expect item 8, being a global amount somewhat limited in terms of accounting for variances of hours from case to case, to achieve a lower percentage for party and party costs as compared to solicitor-client costs than could be expected for item 9, being predicated on a value per hour perhaps approaching in some instances the market value for lawyers depending on the experience of individual counsel or the region in which the service is performed. The order did not refer to solicitor-client costs, but it could be argued that it effectively granted such costs. My difficulty with that is that the motion specifically referred to item 27. As well, there was nothing about it or the supporting affidavit to suggest the order sought was punitive, the element almost always associated with solicitor-client costs, notwithstanding the material in the record concerning the Plaintiffs' awareness of difficulties with its case. Equally, there is nothing in the record to suggest that the term "reasonably expended" in the order limited the Defendant to party and party costs. In my experience, the available range in item 8 does not generally achieve the 35 - 50% of actual solicitor-client costs usually perceived as the desirable standard for party and party costs.
[57] The order linked reasonableness to a unit value per hour, but not to over-all dollars. The June 14, 1996 entry isolated by the Plaintiffs is interesting because the "status and strategy for actions", lumped in with the work on written discoveries all under a charge for 3.5 hours, is likely case preparation ordinarily associated with item 13 and outside the authority of the order. It is not clear whether that was a consideration in the calculation of the 18.3 hours claimed. There are examples of work, ie. motions, witness interview statements, notice to admit, amendment of pleadings and several others, sprinkled throughout the invoices and which are also lumped in with work on written discoveries and for which the extent to which such work was factored out is not clear. The average hourly rates for the invoices, without regard to the presence of non-discovery work, are $200.00, $315.00, $335.00, $322.00 and $342.00.
[58] The order represented a departure from the ordinary restriction under item 8 preparation which precludes a calculation of costs as a function of an hourly rate. As well, I simply do not think that costs for written discoveries can easily be compared to preparation for and appearance on oral discoveries. The bill of costs, unlike for the oral discoveries, did not apply apportionment to these services. Although I appreciate the consistency of the Plaintiffs' position relative to their apportionment arguments above for the oral examinations, I think that its result is too severe. I concede, however, that apportionment should be a consideration and my allowances reflect that. In the circumstances of this case, I will allow a unit value per hour and a number of hours to achieve what I think is the over-all result intended by this order for work which blended services ordinarily associated with both item 8 preparation and item 9 appearances as well as additional services in the nature of follow-up for outstanding questions. It is a result which is more than the usual party and party costs, but less than solicitor-client costs. The allowances are: (a) for the claim of 18.3 hours, 2 units per hour for 14 hours; (b) for 11.5 hours, 3 units per hour for 8.5 hours; (c) for 10 hours, 3 units per hour for seven hours; (d) for 6.4 hours, 3 units per hour for four hours; (e) for 3 hours, 3 units per hour for two hours and (f) for 1.5 hours, 3 units per hour for 1.5 hours.
Item 5: Plaintiffs' preparation for its motion dated May 28, 1996 to compel discovery responses by J. Casselman: allowed on June 10, 1996 with costs (T-3016-92),
6 units claimed (3 - 7)
Item 6: Appearance, 3 units claimed (1 - 3)
[59] The Plaintiffs argued that such "refusals" motions are not usually complex, but do require labour-intensive preparation justifying the claims here close to or at the maximum in the ranges. The Defendant argued that item 5 should be reduced to 3 units because the preparation was a simple listing of the questions refused to be answered. The Defendant conceded the four hours claimed for appearance, but suggested a reduction to 2 units per hour because the issues were simple and required only a junior lawyer to appear. This would give $1,100.00 for this motion which is comparable to the lump sum award of $1,000.00 for fees (included in the Plaintiffs' bill of costs and which counsel agreed could be made part of the assessed total dollars), with disbursements left for assessment, awarded in favour of the Plaintiffs for the Defendant's discovery "refusals" motion dated June 3, 1996.
ASSESSMENT
[60] I think that preparation would involve more than simply listing outstanding questions. I allow 5 units and 2 units per hour for items 5 and 6 respectively.
Item 5: Plaintiffs' preparation for its summary judgment motion dated
September 23, 1996: allowed in part on December 2, 1996, with costs
(T-3016-92), 6 units claimed (3 - 7)
Item 8: Plaintiffs' preparation for cross-examination of J. Casselman on his affidavit sworn October 11, 1996 (T-3016-92), 5 units claimed (3 - 7)
Item 9: Attendance on October 25, 1996, 3 units claimed (1 - 3)
[61] The Plaintiffs argued that the consequences of this event were serious in stopping a portion of the Defendant's counterclaim for being statute-barred and therefore 6 units are justified for preparation for the motion, particularly given the Defendant's agreement to 3 units per hour under item 6 (attendance) for the costs awarded to the Plaintiffs in the summary judgment proceeding (the Plaintiffs received costs for the Defendant's motion heard at the same time to file the affidavit of I. Bialowas). For this motion, counsel agreed on figures for several disbursements, including withdrawal of a claim for transcript of hearing. The Defendant reiterated its objection above to $28.60 for bindery and noted that law firms do not exist as business centres for photocopies, facsimiles and bindery. The Defendant argued that 5 units are sufficient because the supporting affidavit was a simple compilation of discovery evidence. The Plaintiffs agreed to item 9 at 2 units per hour and suggested 3 units for item 8 given the length of the affidavit. The Defendant suggested 2 units for item 8 given that the cross-examination lasted only ½ hour by teleconference, and not the one hour claimed.
ASSESSMENT
[62] I allow 6 units, 3 units and 2 units per hour (for one hour) respectively for items 5, 8 and 9. I allow $18.00 for the bindery in issue in the Plaintiffs' bill of costs.
Item 4 Plaintiffs' preparation of its motion in writing dated August 1, 1995 to consolidate court files T-3016-92 and T-1212-95: granted on August 10, 1995, for the purposes of discovery and trial with costs in the cause,
3 units claimed (2 - 4)
[63] The Plaintiffs reduced their claim to 2 units and suggested 50% apportionment. The Defendant suggested 33% apportionment per its causes of action proposition above.
ASSESSMENT
[64] I allow 2 units with 33% apportionment.
Item 10 Plaintiffs' preparation for pre-trial conference held March 21, 1997,
5 units claimed (3 - 6)
Item 11 Attendance by conference call, 3 units claimed (1 - 3)
Item 10 Defendant's preparation for pre-trial conference held March 21, 1997,
5 units claimed (3 - 6)
Item 11 Attendance by conference call, 3 units claimed (1 - 3)
[65] Counsel agreed that I should make the same allowance for each side's item 11. The Defendant argued that several matters under Rule 263 required detailed preparation, but the Court precluded the opportunity to discuss settlement by simply setting a trial date. The Defendant suggested 3 units for the Plaintiffs' item 10. The Defendant argued that the Plaintiffs' claim of 2 hours for item 11 should be limited to 0.1 hours being the actual time claimed by the Defendant. The Defendant suggested 100% or 67% apportionment in its favour per its argument above. The Plaintiffs conceded 3 units for its item 10 and argued for 3 or 4 units for the Defendant's item 10. The Plaintiffs argued for 50% apportionment as a function of having had to prepare at this stage for two causes of action which the Defendant had not yet abandoned and in which the Plaintiffs were eventually successful. That should be balanced against the Defendant's success in the two copyright causes of action.
[66] Counsel agreed on amounts for disbursements in the Plaintiffs' bill of costs, except for $33.75 and $19.75 for photocopies. The Plaintiffs suggested $20.00. The Defendant again noted the brevity of this conference and suggested $10.00.
ASSESSMENT
[67] I allow items 10 and 11 for both sides at 3 units and 1 unit per hour respectively, with 67% apportionment in favour of the Defendant. The conference lasted four minutes. Counsel would have had to check in with the Court Registrar prior to commencement. I allow 0.30 hours. The Plaintiffs claimed certain disbursements twice (to reflect apportionment), once under the counterclaim and once under industrial design, but agree that only one set of disbursements applies. I allow $20.00 for photocopies with 33% apportionment to apply.
Item 12 Defendant's Notice to Admit Facts dated October 27, 1997, 3 units claimed
(1 - 3)
Item 12 Defendant's Notice to Admit Documents dated October 27, 1997, 2 units claimed (1 - 3)
[68] Counsel agreed on the 40% apportionment claimed (six of 15 facts) for the Notice to Admit Facts. The Defendant reduced its claim for that document to 2 units. The Plaintiffs argued for 1 or 2 units because of few facts to address. The Defendant reduced the 84% apportionment claimed for the Notice to Admit Documents to 79% (down from 16 to 15 of 19 documents) and argued for the 2 units claimed because of the decisions required on whether to list documents. The Plaintiffs argued that 1 unit is sufficient because this was a simple listing of documents.
ASSESSMENT
[69] I allow 2 units and 1 unit respectively for the Notice to Admit Facts and the Notice to Admit Documents.
Item 5 Defendant's preparation for Plaintiffs' motion dated May 16, 1997 to set a
Rule 474 question (T-3016-92): dismissed with costs on June 19, 1997,
6 units claimed (3 - 7)
Item 6 Attendance on June 19, 1997, 3 units claimed (1 - 3)
[70] The Defendant asked to add these items to its bill of costs as a function of an alternative position to its argument above in paragraph [15] addressing the meaning of the term "with costs". That is, the Defendant did not claim costs for these items because that would have been inconsistent with its position above concerning the Plaintiffs' entitlement to costs. Should I find in favour of the Plaintiffs above, I should allow introduction of these two items accordingly. This matter required preparation of responding materials, cross-examination and an appearance of one hour plus disbursements of $600.00 for airfare and taxis.
[71] The Plaintiffs noted that Diagiandomenico, supra, was irrelevant because its costs were not, as here, argued at the end of a motion. The intent here was to give costs regardless of the outcome at trial. The Plaintiffs agreed to disbursements of $600.00, but argued for only 3 - 4 units for item 5 because the motion was straightforward. The same argument applies to item 6 because this motion simply repeated summary judgment issues argued previously: 1 unit per hour is sufficient.
ASSESSMENT
[72] I allow 5 units and 1 unit per hour for items 5 and 6 respectively.
Item 13(a) Defendant's preparation for trial, 5 units claimed (2 - 5)
Item 13(b) Defendant's preparation for trial per day after first day, 3 units claimed (2 - 3)
Item 13(a) Plaintiffs' preparation for trial (T-3016-92), 5 units claimed (2 - 5)
Item 13(a) Plaintiffs' preparation for trial (T-1212-95), 3 units claimed (2 - 5)
[73] The Defendant argued that apportionment does not apply to its trial preparation because it succeeded in the main copyright infringement action. The Defendant argued that the trial, at which the Plaintiffs led seven witnesses, involved complicated questions of law leading to a two-day hearing by the Federal Court of Appeal which usually does not sit that long. The costs claimed are much less than what was actually paid by the client.
[74] The Plaintiffs applied their apportionment arguments above to the Defendant's item 13. The Plaintiffs argued that, although the legal issues here were interesting, this matter was straightforward as compared to a patent validity case, for example, and therefore 3 units and 2 units respectively for items 13(a) and 13(b) would be sufficient. The actual amount billed to the client is irrelevant because this is not a solicitor-client assessment.
[75] The Plaintiffs suggested for both of its items 13(a) that I give whatever I give to the Defendant. The Plaintiffs asserted that it is only speculation below by the Defendant that counsel overlooked the costs provision in the outstanding April 29, 1997 letter of offer from the Plaintiffs proposing dismissal of the counterclaim without costs. Significant trial preparation relative to potential injunctive relief was required because said offer was not accepted.
[76] The Defendant disagreed with making the Plaintiffs' item 13(a) allowance in T-3016-92 a function of the Defendant's item 13(a) allowance because the only remaining issue for trial in the counterclaim was injunctive relief which did not require substantial preparation. The counterclaim was such a trivial issue between the parties that the Defendant overlooked the opportunity to escape costs, represented by the outstanding settlement proposal from the Plaintiffs for no costs upon dismissal, when it consented to the form of the order dismissing the counterclaim with costs and which was ultimately entered on November 17, 1997. Per its argument above, the Defendant suggested 2 units for the Plaintiffs' item 13(a) preparation (T-1212-95). As well, the Defendant suggested 50% apportionment, to which the Plaintiffs agreed, because the Plaintiffs succeeded only on industrial design, but not copyright.
[77] Relative to the disbursements of $6,168.25 associated with the Defendant's trial preparation, counsel agreed on figures for all items except $2,771.68 for photocopies. The Defendant noted that this amount was a function of $0.25 per page for copies for its own use, the Court and the Plaintiffs. These included a number of authorities not ultimately used, but which were prudent to have available for any eventuality in a trial venue remote from counsel's home base. These copies also included students' memoranda, discovery and production materials. Supervising counsel monitored what was copied for relevance and reasonableness. The Plaintiffs recognized the Defendant's caution in ensuring completeness of materials, but suggested a reduction to $2,000.00 being approximately what the Plaintiffs spent.
[78] As they had done with certain other counsel fee items, the Plaintiffs listed the same disbursements associated with trial preparation once for the counterclaim (T-3016-92) and again for industrial design (T-1212-95) in order to assert apportionment. The Defendant objected to all of them, ie. expert C. MacKenzie ($9,543.01), fact witness B. McFarlane ($2,268.00) and several other disbursements totalling $5,236.25 (photocopies, postage, binding, slides, automated research, courier, mileage, filing fees, taxi, facsimiles, telephone, photographs, prints, reproductions and colour/oversize photocopies: these last four addressing trial exhibits). The Defendant argued that these charges do not address the counterclaim and the 33% apportionment claimed for them is not valid. They are effectively the Plaintiffs' thrown away costs under the guise of the counterclaim, ie. trial exhibit items such as photographs ($1,193.64) and prints ($92.61) plus Mr. McFarlane all relate to the main copyright claim, but not the counterclaim. The Defendant suggested 5% apportionment for these disbursements, except that nothing should be allowed for Mr. McFarlane because he had nothing to do with the counterclaim.
[79] The Defendant argued that Mr. MacKenzie's account should be reduced to $500.00 because it does not disclose the division of work between the main copyright claim and the counterclaim. As well, it shows a round trip train fare ($93.12) between Florence and Rome, unrelated to this litigation, included as the equivalent charge for airfare not claimed in the account. The Defendant argued that it is not liable to pay for what might have been, ie. a hypothetical amount. The Defendant asserted that his expert affidavit contained only a few pages without much detail and its appendices simply consisted of documents produced between the parties. His charge for nine days' preparation for a one-day appearance is excessive particularly given his evidence addressed the main copyright claim for which the Plaintiffs did not receive costs. The Defendant argued that the Plaintiffs' concession below to remove his US $1,500.00 fee for his testimony in Court does not resolve the lack of evidence concerning what else in his account is not attributable to the counterclaim.
[80] The Defendant made a similar objection for industrial design. Trial exhibits such as coloured photocopies cannot address industrial design since the evidence for that was in black and white, whereas the evidence for the main copyright claim was in colour. The Defendant asserted that the industrial design claim was not in issue after the first five minutes of the trial. Both Mr. McKenzie and Mr. McFarlane gave evidence on the main copyright issues, but not industrial design, because the trial judge issued consent judgment on the latter at the start of trial: neither should receive appearance fees.
[81] Relative to the counterclaim, the Plaintiffs argued that the Defendant's position above effectively re-argues apportionment. The Plaintiffs argued that preparation for trial meant preparation up to the moment of commencement of trial and necessarily included the counterclaim, industrial design claim and the copyright claims. Therefore, the Defendant's suggestion of $500.00 for Mr. MacKenzie is unreasonable. The Plaintiffs argued that US$3,600.00 for nine days of preparation and travel for one day in court are reasonable, but agreed to remove the US$1,500.00 for his day of testimony as not attributable to the counterclaim. Counsel for both sides agreed that some of the work in the balance of his account was attributable to the counterclaim. The Plaintiffs asserted that their apportionment argument above applies here.
[82] Relative to industrial design, the Plaintiffs argued that Mr. MacFarlane's evidence would have been relevant and therefore his airfare ($2,168.00) to place him at the trial venue was justified. The Defendant's materials acknowledge that he testified about how the contract to supply carpet tiles to the Calgary airport was obtained and on the evolution of the custom Milliken design for the airport. Mr. MacFarlane was subpoenaed and, given that nothing was settled for any of the various claims until the morning of trial, he had to come. The Plaintiffs conceded that, if settlement had occurred earlier, ie. the previous week, nothing would be assessable for him relative to industrial design. However, given the late settlement, his costs are assessable and then susceptible to apportionment as above. The Plaintiffs conceded that coloured photocopies and other coloured materials would not have addressed industrial design.
ASSESSMENT
[83] I think that this litigation was more difficult to prepare for trial than to actually argue at trial. The interlocutory events were not necessarily the most difficult matters when viewed individually, but collectively they complicated case preparation. Conversely, they did contribute to isolating and defining issues for trial. Paragraph [7] of Bruce Starlight, supra, reads:
The structure of the Tariff embodies partial indemnity by a listing of discrete services of counsel in the course of litigation, not necessarily exhaustive. The Rules are designed to crystallize the pertinent issues and eliminate extraneous issues. For example, the pleading and discovery stages may involve a complex framing and synthesizing of issues leaving relatively straightforward issues for trial. Therefore, each item is assessable in its own circumstances and it is not necessary to use the same point throughout in the range for items as they occur in the litigation. If items are a function of a number of hours, the same unit value need not be allowed for each hour particularly if the characteristics of the hearing vary throughout its duration. In this bill of costs, the lower end of the range for item 5 and the upper end of the range for item 6 are possible results. Some items with limited ranges, such as item 14, required general distinctions between an upper and lower assignment in the range for the service rendered.
[84] I allow 5 units and 3 units per day respectively for the Defendant's items 13(a) and 13(b). Given the approach in the bills of costs to this point, my first inclination was to apply apportionment as above at least up to and including the first day of trial after which only the copyright infringement cause of action remained outstanding. However, apportionment considerations here are different than for discoveries, at least for the Plaintiffs' bill, because they claimed trial preparation in T-3016-92 and T-1212-95 respectively for each of the counterclaim and industrial design issues, whereas the Defendant claimed trial preparation once for the two files (which had been consolidated for the purposes of trial). The Plaintiffs' bill of costs presented each item 13(a) as subject to apportionment. That the Defendant did not do so for item 13(a) or (b) presumes preparation addressed specifically to copyright and I have no reason to doubt that. Therefore, I decline to apply apportionment to the Defendant's bill of costs. The awards of costs for the copyright, industrial design and counterclaim causes of action operate independently of one another. The Plaintiffs could not take the injunctive portion of the Defendant's counterclaim lightly. However, that cause of action did not necessarily require preparation equivalent to that by the Defendant. Disposition of the counterclaim (T-3016-92) and of the industrial design cause of action (T-1212-95) occurred on consent on the first day of trial. I extend similar consideration to the Plaintiffs and decline to apply apportionment, at least for fees, because I think that apportionment would not result in proper indemnification, particularly for the counterclaim which essentially exists as an independent action. In these circumstances, I allow 2 units for item 13(a) in each of T-3016-92 and T-1212-95, not subject to apportionment.
[85] The proof for photocopies ($2,771.68) is less than absolute. The Mutchler affidavit does not suggest extra copies generally considered unnecessary in party and party costs, ie. for the client. There is a difference between authorities prepared to address a cause of action resolved early and those prepared as back-up to primary authorities. I allow $2,200.00.
[86] To the extent that it is applicable here, I apply my approach in Merck & Co. Inc. et al. v. Apotex Inc., [2002] F.C.J. No. 1116 (A.O.), affirmed by [2002] F.C.J. No. 1357 (F.C.T.D.) and in Bayer AG et al. v. Apotex Inc. et al. [2002] F.CJ. No. 1693 (A.O.) to the expert account of Mr. MacKenzie. Settlement can occur literally as the parties walk into the courtroom. Therefore, I agree with the Plaintiffs that case preparation for the various causes of action was prudent and essential regardless of their outcome. Some charges, ie. airfares, can be apportioned in hindsight, but at the time of payment, a litigant could not ordinarily ask the airline to break down, in its invoice, the dollars attributable to each cause of action. There is no simple way to address the $17,047.26 in issue in the Plaintiffs' bill of costs. I think the Defendant's position is tenable, but its suggested reductions may be too much. In the circumstances, I think a reasonable result in total for industrial design and the counterclaim, and which reflects apportionment considerations, is $5,800.00.
Item 14(a) Attendance at trial of 1st counsel for Defendant, 3 units claimed (2 - 3)
Item 14(b) Attendance at trial of 2nd counsel: 50% of Item 14(a) calculation per Order dated March 11, 1998
[87] The Defendant argued that its claimed costs were justified by a trial lasting four days, including two days for argument, and involving cross-examination of factual and expert witnesses, including nuances of testimony concerning the acquisition of the design in issue and inferences about the creation date which were key issues at trial. The Plaintiffs applied its item 13 argument above, ie. that this was not the most complex matter in the context of column III costs, and suggested 2 units per hour for the 28 hours claimed. The Plaintiffs withdrew their objection to the item 14(b) claim.
[88] Relative to the associated disbursements of $6,708.49, counsel for both sides agreed on figures for all items except $373.00, $273.66 and $78.02 respectively for computer printer rental, rental car and gas. The Defendant argued that three-deck printer models in 1997 were bulky and not easily transported, ie. between Toronto and Ottawa. As well, its disconnection, proper packaging and re-connection would have been difficult. The Defendant argued that the Plaintiffs' position implicitly concedes the use of a printer was permissible and puts only quantum in issue. It would have cost more than the Plaintiffs' suggested $200.00 below to ship the materials to the trial venue. The Defendant asserted that the rental car was needed to get to late night service centres for things such as binding and also for moving materials back and forth.
[89] The Plaintiffs argued that computer printer rental is part of a law firm's overhead. The rental car could have been used to transport a printer. The Plaintiffs argued that the price to ship ten boxes of materials would have been cheaper than the cost for a rental car, fuel and meals for the driver. The Plaintiffs suggested $200.00 in total.
ASSESSMENT
[90] This is not a matter for which 2 units or 3 units per hour throughout best captures partial indemnity. I allow 12 hours and 16 hours respectively at 3 and 2 units per hour for item 14(a). Item 14(b) follows accordingly. As for the three disbursements in issue, I am not convinced that $200.00 is a feasible and reasonable result. I allow them as presented. As above for objections to binding, I rejected the overhead submissions.
Item 4 Defendant's preparation for its motion dated March 6, 1998, for directions to the assessment officer: granted on March 11, 1998, 3 units claimed (2 - 4)
Item 5 Defendant's preparation for Plaintiffs' motion dated March 10, 1998, for thrown away costs: denied on April 24, 1998, 6 units claimed (3 - 7)
Item 6 Appearance on April 3, 1998, 3 units claimed (1 - 3)
[91] For item 4, the Defendant argued that 2 units would be too minimal and unreasonable, compared to 3 units, relative to the actual cost to the client. The Plaintiffs suggested 2 units because this matter was straightforward.
[92] For items 5 and 6, the Defendant argued that since Plaintiffs' counsel in his opening statement at trial put the Court and the Defendant on notice that, should they be unsuccessful, they would apply for costs thrown away, this motion and its order were a continuation of the trial, ie. effectively part of the trial and judgment. The Court, in its order dated March 11, 1998 reconsidering the terms of pronouncement of the judgment dated February 5, 1998, dismissed the Plaintiffs' action with costs in T-3016-92 subject to any further order regarding costs thrown away made pursuant to the order dated November 17, 1997, as a result of amendments to the Statement of Defence. The Defendant argued that the collective effect was to award it costs of the thrown away motion. Paragraphs [12] and [13] of the Court's reasons dated April 24, 1998 in particular refuse to blame a Defendant faced with Plaintiffs who proceeded to trial despite an awareness of serious deficiencies in their case.
[93] For items 5 and 6, the Plaintiffs argued that the "further" order referred to in the March 11, 1998 order was, in fact, the April 24, 1998 order which did not award costs. That is, the words "subject to" in the March 11, 1998 order represented a separate disposition for costs and precluded application of the March 11, 1998 order to the event of the costs thrown away motion which itself occurred separate and distinct from the trial. The Plaintiffs argued that the April 24, 1998 order did not award any costs, but if costs are allowed to the Defendant, the associated disbursements are conceded as presented.
ASSESSMENT
[94] This passage from the Court's reasons dated April 24, 1998, is useful in resolving the meaning of this phrase in the March 11, 1998 order "Plaintiffs' action in T-3016-92 is dismissed with costs, subject to any further Order regarding costs thrown away":
[7] Costs thrown away are those which are wasted for work rendered useless as a result of the amendment sought, either because an issue has been withdrawn, abandoned or otherwise rendered moot. The expression is well illustrated in the following example given by Bouck J. In Cominco Limited v. Westinghouse Canada Limited et al.:
For example, a plaintiff may completely change his case in midstream from one of negligence to one of breach of trust. To meet this new allegation a defendant may have to entirely revise his defence and conduct new examinations for discovery. The old defence and the old discovery would have become useless and so the defendant would be entitled to the cost of these proceedings because he was put to the expense of defending allegations in negligence which were subsequently abandoned by the plaintiff and changed to breach of trust. It is as if the plaintiff's case for negligence was dismissed or discontinued and a fresh action for breach of trust was begun.
But some amendments do not establish an entirely new claim. Often there is no need for a defendant to amend his defence after a plaintiff has amended his statement of claim. If a new discovery is required it might just be for a limited purpose and most if not all of the earlier discovery might still be useful. In that sense the cost of the earlier discovery would not have been completely "thrown away". Only a part would have ben lost.
[8] Costs thrown away must be distinguished from costs of and incidental to an amendment which are costs incurred from the time of the amendment onwards and are part of the award of costs after the event at trial. As stated in Cominco:
...[I]t seems the term "costs thrown away" is a phrase which is often included in an order where one party is given an adjournment of a trial or leave to amend or both. It would also appear to cover the same ground as an order for "costs of and incidental to" an adjournment or an amendment as the case may be.
Any costs incurred by the defendant from the time of the amendment onwards would seem to be at large; that is to say they follow the event after the trial. In this instance if the plaintiff succeeds, it gets these costs. If the defendants win, the costs are theirs. All of these orders are, of course, subject to the discretion of the trial Judge.
[Citations omitted]
[95] This passage undermines the Defendant's position because it appears to suggest that costs thrown away are not part of the award of costs after trial. Put another way, costs thrown away are distinct from the award of costs after trial because they are associated with a single occurrence, ie. adjournment or amendment, at one point in time in the continuum of litigation, but not the several events along the continuum of litigation, ie. pleadings, discoveries, case preparation, appearance at trial, that an award of costs after trial embraces. For example, costs thrown away further to an amendment address work prior to the amendment and which the amendment rendered useless.. Any work after the amendment is not part of this "useless" work, but rather is work caught up generally in the several events along the continuum of litigation. Any costs associated with this latter work are costs at large, ie. not costs thrown away, but costs which may ultimately be recoverable as part of an award of costs after trial. From a simpler perspective, a motion for costs thrown away is interlocutory and is not a continuation of the trial. Interlocutory motions, being incidental to trial, can and do occur after trial. Their events are distinct from the event at trial. An order silent as to costs lacks the requisite and visible exercise of the Court's Rule 400(1) authority for costs. I refuse the item 5 and 6 costs claimed. As for item 4, I think it was an oversight by Plaintiffs' counsel that he did not object to costs because the March 11, 1998 order was also silent as to costs. I am loath to interfere with settlement between parties or even an assertion of no position taken. If that, however, leaves me with no jurisdiction, I cannot act. I sometimes will allow an amount for such items if I think that other items not claimed might have been added to the bill as a comparable amount. This bill of costs was detailed, but there likely are other items not claimed which might balance this amount, ie. the costs in the cause awarded on March 24, 1994, in a consent order (T-3016-92) requiring the Defendant to serve its affidavit of documents. In the circumstances, I allow the minimum 2 units.
Item 19 Defendant's Memorandum of Fact and Law (A-120-98 and A-121-98): Plaintiffs' appeal against the trial judgment dismissed with costs on
January 26, 2000, 7 units claimed (4 - 7)
Item 22(a) Defendant's appearance at appeal, 3 units claimed (2 - 3)
[96] The Defendant argued for maximum allowances as a function of significant amounts in issue plus complex legal arguments resulting in a two-day appeal hearing longer than the usual one-half or one day duration. The memoranda of fact and law from both sides were voluminous and the Court's reasons devoted several pages to issues such as lack of direct evidence of creation date of the design in issue and the extent of statutory protection of rights. The Plaintiffs conceded the 14.5 hours claimed for item 22(a) and suggested a reduction to 2 units per hour as this was not the most complicated Column III case possible. Its duration was irrelevant for costs. The Plaintiffs suggested 5 units for item 19 for the same reasons. Counsel for both sides agreed on $2,671.58 for the disbursements.
ASSESSMENT
[97] I allow 5 units for item 19. For item 22(a), I allow 8.5 hours at 3 units per hour and 6 hours at 2 units per hour.
Doubling of Costs under Rule 420
[98] Paragraph 35 of the Defendant's written representations summarized the settlement correspondence:
. . .
(a) April 25th, 1997 offer from the defendant proposing settlement of all Milliken claims in both actions for $60,000 inclusive of all liability including costs, with the defendant to undertake not to manufacture and sell the carpet tile at issue, and to discontinue its counterclaim, with the parties exchanging mutual releases...;
(b) April 29th, 1997 offer from the plaintiffs proposing the defendant pay $350,000 plus the plaintiff's party-and-party costs, and dismiss its counterclaim...and
(c) November 12th, 1997 from the plaintiffs estimating the potential recovery by the plaintiffs at between $550,000 and $875,000, not including pre-judgment interest beyond 1997, or post-judgment interest. This includes taxable costs of well in excess of $100,000 including the trial....
Note: The April 29, 1997 offer included a provision that the dismissal of the counterclaim be without costs.
[99] The Defendant argued that the April 25, 1997 settlement offer should apply for doubling under Rule 420. The Plaintiffs did not receive any damages which could be compared to the $60,000.00 and, subject to the amount of the Plaintiffs' assessed costs, the Defendant's offer was more favourable than the judgment. The Defendant noted that the parties settled its liability for industrial design infringement at $13,820.30 to be offset by any assessed costs payable by the Plaintiffs to the Defendant. The Plaintiffs settled or conceded so many items of costs during the assessment hearing that the total could not exceed $60,000.00. Therefore, the Defendant is entitled to Rule 420(2) doubling of fees from April 25, 1997 to the date of judgment.
[100] The Defendant referred to paragraphs [12] and [13] of the Court's reasons dated April 24, 1998 (costs thrown away) criticizing the Plaintiffs for pushing ahead with a trial despite serious deficiencies in their case, and argued that the Plaintiffs' unreasonable settlement offers ranging up to and over $900,000.00 warrant approval of doubling for the Defendant as a function of its much more reasonable settlement overtures.
[101] The Defendant argued that the Plaintiffs' reliance on discretion and equity is misplaced because the language of Rule 420 is mandatory and entitles the Defendant to doubling in the absence, as here, of the Court otherwise ordering. Rule 420 does not authorize an assessment officer to make such orders. The Defendant argued that Camco Inc. et al. v. Whirlpool Corporation et al. (1999) 85 C.P.R. (3d) 129 (F.C.A.), relied upon by the Plaintiffs, actually supports the Defendant's position. That is, the Plaintiffs should have addressed their position on doubling of costs to the trial judge. The Defendant argued that the wording of Rule 407 implies that the Court and an assessment officer are separate and distinct. As well, the wording for counsel fee items such as item 14(b), ie. "...second counsel, where Court directs...", implies the same distinction. If the Plaintiffs' position below is correct, an assessment officer would have the discretion to assess costs other than under Column III. The Defendant argued alternatively that, if I conclude I have the jurisdiction to refuse doubling under Rule 420, I should not so refuse because no stigma attaches to the Defendant for consenting to judgment. If the Plaintiffs' logic is followed to its inevitable conclusion, the trial judge would not have awarded costs of the main copyright claim to the Defendant.
[102] The Plaintiffs argued that costs are completely in the discretion of the Court and that doubling of fees under Rule 420 is not automatic: Sanmammas Compania Maritima v. "Netuno" (1995), 102 F.T.R. 181 at para 28 (F.C.T.D.) and Camco Inc., supra. The term "Court" includes assessment officers and therefore the latter have the discretion to refuse doubling. The Plaintiffs noted that this litigation featured three different disputes, ie. the Plaintiffs asserted copyright and industrial design and the Defendant asserted its copyright counterclaim. At the commencement of trial, the Defendant agreed to consent judgment on both industrial design and the counterclaim, meaning that the Defendant was not successful in two of the three disputes. That is the context in which paragraphs [12] and [13] of the reasons dated April 24, 1998 (costs thrown away) should be read. The Plaintiffs noted that, at the end of the day, only the Defendant had infringed intellectual property rights, ie. industrial design, and therefore it would be inequitable to enrich an infringer with double costs particularly given that would result in an amount for costs approximately five times that of the damages agreed upon as a function of the industrial design judgment.
ASSESSMENT
[103] The Federal Courts Act, ss. 4 and 5.1 defining the Court and Rule 2 of the Federal Court Rules, 1998 defining assessment officer mean that the terms "Court" and "assessment officer" refer to separate and distinct entities. Therefore, I do not have the authority to make the "otherwise" order contemplated by Rule 420. The primary thrust of the case law cited by the Plaintiffs would be in support of a motion for an "otherwise" order under Rule 420, which I have concluded is beyond my jurisdiction. Successful litigants do not require explicit directions in awards of costs in order to claim Rule 420 doubling. The Rule 400(1) award of costs by the Court automatically triggers the imperative language of Rule 420, but there is still discretion left to the assessment officer to refuse doubling if an offer was not realistic or could not properly be evaluated, ie. see Caricline Ventures Ltd. v. ZZTY Holdings Limited et al. [2002] F.C.J. 1524 (A.O.). The settlement offers disclose striking differences in the settlement amounts proposed by the respective parties. That does not, in these circumstances, suggest that the Defendant's position was untenable. Therefore, the Defendant shall have doubling of fees from April 25, 1997 to February 5, 1998, pursuant to Rule 420(2)(b).
[104] The Defendant's bill of costs, presented at $97,930.63, is assessed and allowed at $72,774.45. The Plaintiffs' bill of costs, presented at $36,955.91, is assessed and allowed at $19,110.36. The parties agreed that the Alberta Judgment Interest Act would apply. The relevant dates for its application to the Plaintiffs' bill of costs are September 7, 1994 to the date of collection for appeal costs (A-590-93) and February 5, 1998 for action costs. The relevant dates for its application to the Defendant's bill of costs are January 26, 2000 to the date of collection for appeal costs (A-120-98 and A-121-98) and February 5, 1998 to the date of collection for action costs.
(Sgd.) "Charles E. Stinson"
Assessment Officer
Vancouver, B.C.
October 28, 2003
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-3016-92
STYLE OF CAUSE: MILLIKEN & COMPANY AND
MILLIKEN INDUSTRIES OF CANADA LTD.
- and -
INTERFACE FLOORING SYSTEMS
(CANADA) INC.
PLACE OF HEARING: Toronto, ON
DATE OF HEARING: November 15 and December 14, 2001; June 6, 2002
REASONS FOR ASSESSMENT OF COSTS: CHARLES E. STINSON
DATED: October 28, 2003
APPEARANCES:
James E. Mills FOR PLAINTIFFS
Michael E. Charles FOR DEFENDANT
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP FOR PLAINTIFFS
Ottawa, ON
Bereskin & Parr FOR DEFENDANT
Toronto, ON