Date: 19990521 Docket: T-2647-97
BETWEEN:
NATURE'S PATH FOODS INC.,
Plaintiff,
- and -
COUNTRY FRESH ENTERPRISES INC. and SUKHDEVPAUL DHANOA,
Defendants.
ASSESSMENT OF COSTS - REASONS
CHARLES E. STINSON,
ASSESSMENT OFFICER
[1] This action addresses passing off in relation to sesame tahini products. By Order dated December 3, 1998, the Honourable Mr. Justice Rouleau dismissed the Defendants' application for summary judgment with costs to the Plaintiff in any event of the cause. The Plaintiff presents its Bill of Costs on a party and party level at $11,019.94.
The Defendants' Position
[2] The Defendants argue that the Order does not authorize assessment or payment of costs at this stage of the litigation and, in the alternative, that the Bill of Costs is excessive. The Plaintiff has not proceeded with urgency, has not applied for injunctive relief and did not
Page: 2 press for discovery until after the motion for summary judgment was brought. The Defendants filed and served their motion after more than nine months with little action having been taken by the Plaintiff. Counsel did not address the issue of costs in any substantive way at the hearing and the Court did not order the costs payable forthwith. Counsel for the Defendants requested from opposing counsel, but did not receive, authorities confirming the entitlement of the Plaintiff to a determination and payment of costs forthwith prior to the determination of the costs of the substantive issues of the litigation.
[3] The Defendants further argued that Rule 401(2) of the Federal Court Rules, 1998,
requires costs payable forthwith where the Court is satisfied that a motion should not have
been brought or opposed. Here, the Court did not so order. A number of cases:
Waterfurnace Inc. v. 803943 Ontario Ltd. (1991), 50 F.T.R. 19 (F.C.T.D.) Sim v. Canada(1996), 114 F.T.R. 98 (F.C.T.D. - Prothonotary)
affirmed on appeal [Q.L. 1996 F.C.J. No. 1050] (F.C.T.D.) Pawliw v. Canada[Q.L. 1995 F.C.J. No. 835] (F.C.T.D.)
Casden v. Cooper Enterprises Ltd., [1991] 3 F.C. 281 (F.C.T.D.) Coca-Cola Ltd. v. Pardhan, (1997) 75 C.P.R. (3d) 318 (F.C.T.D.) Smith & Nephew Inc. v. Glen Oak Inc. (1995), 64 C.P.R. (3d) 452 (F.C.T.D.) Kirkbi AG v. Ritvik Holdings Inc. (1998), 81 C.P.R. (3d) 289 (F.C.T.D.)
support the proposition that, except in special or extraordinary circumstances, the costs of an interlocutory proceeding should be assessed at the conclusion of the action together with all other costs so that the Assessment Officer has the benefit of the final conclusion concerning the substantive issues of the litigation. This precludes a multiplicity of assessments in the course of an action. Costs of an interlocutory event may still be assessed and be made payable forthwith but the Court must first make a finding of exceptional, frivolous or vexatious circumstances. The mere rejection of an application, as here, does not meet that threshold.
Page: 3
The Plaintiffs Position
[4] The Plaintiff argues that the Defendants have incorrectly characterized its conduct in
this litigation. Regardless, the issues of costs for the substantive action are not relevant to the present issues of costs associated with the summary judgment application. The Defendants' own delay in bringing said application cannot be relied upon against the Plaintiff. The Plaintiff actively pursued discovery and pre-trial directions in the several months prior to the Defendants' application.
[5] The Defendants appear to seek a review of the award of costs. That is not permissible in an assessment of costs. The result in Waterfurnace Inc. (supra) is not relevant because it determined that costs of an interlocutory motion were not payable before the costs of the entire action in order to allow for set-off. The assessment of an interlocutory award of costs in any event of the cause does not prevent subsequent set-off against the costs of the action. The result in Casden (supra) is distinguishable because it involved an assessment of costs for a motion under appeal. Here, there is no pending appeal and the award of costs is final.
Assessment
[6] On May 4, 1999 in T-2019-98: Mennes v. The Attorney General of Canada et al., Pilon A.O. addressed a request by the respondent on assessment for an adjournment pending appeal of the decision giving rise to the award of costs. He concluded that an adjournment would effectively amount to a stay of proceedings not supported by the Rules and in the absence of a motion to stay under section 50 of the Federal Court Act. He considered
Page: 4 jurisprudence suggesting that stays of proceedings are not automatic upon the filing of an
appeal. He refused the adjournment and proceeded with the assessment. With respect, I think that the series of cases advanced before me by the Defendants distinguishes the circumstances in Mennes. They effectively support a finding in the present circumstances that, unless the Court directs otherwise, crystallization and recovery of the amount for an interlocutory award of costs should only occur coincident with the assessment of the award of costs flowing from judgment on the substantive issues of the litigation.
[7] The Plaintiff's argument that the final judgment determinative of the substantive issues
of this litigation could have no relevance for this assessment of the costs of an interlocutory
event cannot succeed given the jurisprudence cited by the Defendants. Those cases assert the
priority of a practical disposition of the elements of litigation. Thus, interlocutory awards of
costs should not ordinarily result in a multiplicity of assessments and collections of costs
possibly increasing the ultimate expense of litigation as opposed to a single process more
efficiently gathering together all issues of costs for an assessment which, per Rule 408(2),
could address set-off. Rule 401(2) provides for, in the discretion of the Court, the exception
to this approach. Here, there was no such exception in the Order disposing of the summary
judgment application. Therefore, I find that the conclusion of the Court in Kirkbi (supra) at
page 313, addressing costs to be awarded on an unsuccessful application for partial summary
judgment, is determinative:
[72] .... In respect of those periods, counsel submits, costs should be assessed on a solicitor and client basis. Counsel urges that Lego's costs should be payable in any event of the cause and forthwith.
Page: 5
[73] In reply, counsel for Ritvik submits that this is not a case for costs on a solicitor and client or other special basis or for an order that costs be payable forthwith.
[74] While I find little utility in Ritvik's statistical analysis, I am generally in agreement with the reply submissions on its behalf. Although, as acknowledged by counsel for Ritvik, I have found evidence filed on its behalf to be "unimpressive", I am not satisfied that that finding alone warrants an order with respect to costs that is out of the normal range or that provides for payment of costs forthwith. Ritvik's motion was brought on the basis of jurisprudence of this Court that supported the bringing of the application, notwithstanding that, to this point, Ritvik has been unsuccessful. Motions for summary judgment, in appropriate cases such as this, should not, in my view, be discouraged by extraordinary awards of costs.
[75] In the result, I conclude that Lego is entitled to its costs, as against Ritvik, on the ordinary scale, payable on the ultimate disposition of this matter, in any event of the cause.
That is, the assessment is premature and I cannot address the Bill of Costs at this time in the absence of a direction for disposition forthwith. I will issue a Certificate stating that the Defendants' preliminary objection to assessment, prior to judgment in this action, of the Plaintiff's Bill of Costs relating to the summary judgment application is allowed.
Assessment Officer
Dated this 21st day of May, 1999 at Vancouver, British Columbia
FEDERAL COURT TRIAL DIVISION NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT NO.: T-2647-97
STYLE OF CAUSE: NATURE'S PATH FOODS INC., Plaintiff,
- and -
COUNTRY FRESH ENTERPRISES INC. and SUKHDEVPAUL DHANOA,
Defendants.
ASSESSMENT IN WRITING WITHOUT PERSONAL APPEARANCE OF PARTIES
ASSESSMENT OF COSTS - REASONS BY: CHARLES E. STINSON ASSESSMENT OFFICER
DATE OF REASONS: MAY 21, 1999
SOLICITORS OF RECORD:
Paul Smith Intellectual Property Law for Plaintiff Vancouver, BC
Edwards, Kenney & Bray for Defendants Vancouver, BC