Date: 20021122
Docket: T-2408-91
Neutral citation: 2002 FCT 1210
BETWEEN:
MERCK & CO. INC. and
MERCK FROSST CANADA & CO.
Plaintiffs
and
APOTEX INC.
Defendant
REASONS FOR JUDGMENT ON FIXED COSTS
[1] By Judgment dated October 11, 2002 costs were awarded, on a solicitor and client basis, fixed in the amount of $1,500,000.00, for fees and disbursements reasonably incurred in this matter, for which the defendant Apotex Inc. and Dr. Bernard Sherman, President and Chief Executive Officer of Apotex at the time when he and his corporation were found to have committed contempt, are jointly and severably liable. These are reasons for that order fixing costs in the amount ordered.
THE BACKGROUND
[2] These proceedings commenced with consideration of the plaintiffs' (hereinafter referred to collectively as "Merck") application for an Order directing the defendant corporation and Dr. Sherman, and initially others against whom the proceedings were later withdrawn, to show cause why they should not be found to have committed contempt of court. Thereafter, more than 40 dates were fixed and utilized for the hearing of interlocutory and stay applications, for appeals to higher courts and for trial hearings in regard to the allegations of contempt and for argument on appropriate penalties and costs.
[3] By Judgment, and Reasons for that, dated March 7, 2000, this Court found contempt had been committed by Apotex and Dr. Sherman. Submissions on appropriate penalties and costs were then requested. The fixing of costs, upon motion by Merck, was ordered by the Court by Supplementary Judgment dated June 5, 2001, after hearing counsel for the parties in regard to principles for costs. The parties were directed to provide advice, either as agreed among them or by separate submissions, concerning an appropriate lump sum for costs on a solicitor-client basis, to be fixed by the Court.
[4] For the plaintiffs, written submissions, including a draft bill of costs incurred in relation to the proceedings on contempt to that stage, were filed on December 1, 2000. Further submissions with a second draft bill of costs were filed on July 16, 2001 in regard to the penalty and cost phases of these proceedings. For Apotex and Dr. Sherman written submissions in relation to costs, were filed in January, February and March 2001, and later, on July 16, 2001, the defendant responded in great detail, to submissions of the plaintiffs. That date in July was to be the date fixed for final written submissions on costs, but correspondence to the Court, from the plaintiffs dated July 18, 2001 and a responding letter on behalf of Apotex and Dr. Sherman dated July 19, 2001, has also been considered.
[5] The arguments on costs have been no less hard fought than the proceedings with regard to contempt and penalties, and the original action for infringement of patent rights. I have considered the arguments. On behalf of Apotex, they are detailed, as though this were an assessment of costs. It is not, and I do not propose to deal with those arguments in detail.
[6] The Court's discretion in awarding costs includes authority in regard to the amount and allocation of costs and the determination of by whom they are to be paid (Rule 400(1)). Costs may be awarded on a solicitor and client basis (Rule 400(6)(c)). In an award of costs the Court may consider relevant factors whether or not those are specifically listed in Rule 400(3). The factors here considered relevant are set out briefly in these Reasons.
[7] As noted in Reasons for Supplementary Judgment dated June 5, 2001, (at paragraphs 18-20) in my opinion, the costs in this case, in relation to fees and expenses reasonably incurred in proceedings leading to findings of contempt, are appropriately based on solicitor and client costs. That is the general practice in costs awarded against a party found to have acted in contempt of the Court (see e.g., Baxter Travenol Laboritories of Canada Ltd. v. Cutter (Canada) Ltd., (1984), 1 C.P.R. (3d) 433 (F.C.T.D.), rev'd but not on this point 14 C.P.R. (3d) 499 (F.C.A.)). In those same Reasons for Supplementary Judgment I set out my decision, and the reasons, that costs in this matter be fixed by the Court, as proposed by the plaintiffs. After prolonged proceedings, carried on over nearly five years from the issue of the Order to show cause until determination of contempt, this process, in my opinion, allows a just, the least expensive, and despite my delay in deciding the matter, possibly the most expeditious determination of costs, in keeping with the objective of the Court's Rules (Rule 3). The proceeding was complex in the assembly and presentation of evidence, prolonged in part to assure fairness where the Charter rights of Dr. Sherman required respect, and in part because each of the parties was represented by senior counsel with busy schedules.
[8] At the end of the day, by their submissions the plaintiffs propose that costs be fixed, on a solicitor and client basis, in the amount of costs billed by their counsel to plaintiffs, excluding any costs incurred in relation to certain appeal proceedings. The total bill of costs, for counsel fees and disbursements claimed to have been reasonably incurred, is in the following amounts:
i) for the initial phase of trial (contempt) and
interlocutory motions $1,785.543.56
ii) for the penalty and costs phases 504, 523.14
iii) i.e., a total of $2,290,066.70
[9] By their joint written submissions Apotex and Dr. Sherman propose that costs be fixed at $822,776.70, or $825,000.00, less GST, for costs and disbursements accepted as reasonably incurred. That amount is the result of deductions from the plaintiffs' total draft bills of costs on the basis of detailed proposals by Apotex and Dr. Sherman for appropriate disallowances and reductions. Those proposals include reductions to certain invoices of the accounting firm Lindquist Avey billed to plaintiffs' solicitors and by them claimed from Merck as disbursements. In the proceedings that firm served as forensic accountants, and one of their principals was called as an expert witness at trial by the plaintiffs.
[10] By their written submissions plaintiffs agree with Apotex and Dr. Sherman that any costs incurred in responding to certain appeals by Apotex to the Court of Appeal (appeals A-505-95 and A-670-95), and in relation to applications for leave to appeal to the Supreme Court of Canada, (in respect of appeals A-81-96, A-86-96, A-87-96, A-100-96 and A-105-96) are not matters for determination in this Court. Those costs are not included in the amounts finally claimed by the plaintiffs to a total of nearly $2.3 million as set out above, though the total does include costs related to proceedings in the Court of Appeal which heard, in October 1996, appeals concerning interlocutory orders dated January 23, 1996, and which costs were ordered to be in the cause by the Court of Appeal. Plaintiffs confirm that no claim for G.S.T. is included in their total. In the result, the amounts proposed by the plaintiffs, and those proposed by Apotex and Dr. Sherman, considered on comparable bases, for costs to be fixed for fees and disbursements reasonably incurred, differ by nearly $1.5 million.
PRINCIPLES FOLLOWED IN FIXING COSTS
[11] The award of costs on a solicitor and client basis is intended to provide full indemnification of costs reasonably incurred in the course of carriage by the plaintiffs of this litigation. In fixing those costs, the Court must carefully consider the costs claimed in relation to the work reasonably required, not on the basis of hindsight with 20/20 vision of what was finally required, and not as an assessment item by item as an assessing or taxing officer would do, but sufficiently reviewed to ensure that costs awarded are reasonably incurred. (See Henry J. in Apotex Inc. v. Egis Pharmaceuticals (1991), 4 O.R. (3d) 321 at 325-326, 329 (Gen.Div.)).
[12] In Murano v. Bank of Montreal (1998), 163 D.L.R. (4th) 21 Mr. Justice Morden, A.C.J.O., writing for the Ontario Court of Appeal, commented (at paras. 96 and 100, respectively):
... It is one thing to say that the fixing of costs is not an assessment item by item according to the tariffs as would be done by an assessment officer, which I accept. It is quite another to countenance not reviewing a "catalogue of itemized charges". Claims for solicitor and client costs in any matter of complexity are invariably broken down into items describing the services performed and the amounts charged for them. These must be reviewed by the judge, as must their total.
...
...The short point is that the total amount to be awarded in a protracted proceeding of some complexity cannot be reasonably determined without some critical examination of the parts which comprise the proceeding. This does not mean, of course, that the award must necessarily equal the sum of the parts. An overall sense of what is reasonable may be factored in to determine the ultimate award. This overall sense, however, cannot be a properly informed one before the parts are critically examined.
[13] I derive an overall sense of what is reasonable in light of the following considerations concerning costs reasonably incurred.
1. They should reflect the significance of relevant factors included in Rule 400(3).
2. They should include only costs that are consistent with those allowed under the rules and jurisprudence of the Court, and they should not include costs for services not generally included within the Court's Tariff B.
3. They should not include costs for which, in the Court's view, there is inadequate explanation.
4. They should include reasonable amounts for fees in light of the services rendered within reasonable limits.
5. The amount fixed should take account of the dual aspect of the plaintiffs' role, not merely to support the authority and dignity of the Court, but also to protect and preserve their own intellectual property interests, and the amount fixed should not be perceived as a form of undue punishment, when appropriate punishment has already been determined. (See Coca Cola Ltd. et al. v. Pardham et al. (2000), 5 C.P.R. (4th) 333, per Lutfy J. at 340 (F.C.T.D.), and Pfizer Canada Inc. v. Apotex Inc. (1998), 80 C.P.R. (3d) 33 at 35, 162 F.T.R. 169 at 170, per Hugessen J. (F.C.T.D.), where, in somewhat special circumstances, costs awarded were less than 10% of the total amount of costs on a solicitor and client basis incurred by the party successfully establishing contempt).
[14] I turn to consider these principles as they apply in this case.
(1) Relevant factors included in Rule 400(3)
[15] Not all the factors included in the Court's Rule 400(3) are relevant in this proceeding. Among the relevant factors, the result of the proceeding, the importance and complexity of the proceeding, and the public interest in having the proceeding litigated have all been considered and these led to the determination that costs be awarded to the plaintiffs on a solicitor and client basis for fees and disbursements reasonably incurred.
[16] Apotex and Dr. Sherman were concerned to defend their positions and to insist, generally without admissions, on proof of the contempt alleged, and ultimately found, an approach that I do not criticize. Nevertheless the result was increased costs for the plaintiffs, indeed for all parties, in the necessary investigation by plaintiffs' solicitors and their accountant adviser, Lindquist Avey, and in the presentation of evidence, when in the final analysis the essential facts were within the knowledge of Apotex and Dr. Sherman. Moreover, three motions to stay the contempt proceedings were brought by Apotex and heard on August 1, 1995, on December 6, 1995, on April 23, 24, 29 and 30, 1998, and a further motion of non-suit by Dr. Sherman was heard on June 29, 1998. Again, these were all within the proper interests of Apotex and Dr. Sherman, but they were unsuccessful and they had implications, not simply for costs of the hearing days required but in extending the time required to deal finally with the evidence and argument concerning the alleged contempt. That time, as earlier noted, was extended in part to accommodate the busy schedules of counsel.
(2) Matters excluded from recovery under tariff B and by jurisprudence
[17] While this is not an assessment under Tariff B, it is relevant to consider what portion of the plaintiffs' claim for costs would be excluded if they were assessed under the tariff. It is urged for Apotex and Dr. Sherman that the following matters included in the plaintiffs' billed costs would not be within costs assessed on that basis.
[18] Claims for services of named law clerks and students rendered were not allowable prior to April 28, 1998 (see McCain Foods Ltd. v. C. M. McLean Ltd. (1980), 51 C.P.R. (2d) 23 at 28 (F.C.A.)). By 1998 amendments of the Court's tariff, costs for these services were first allowed. After that date claims were considered if it were shown that the work performed was of a research nature that might otherwise be done by a lawyer (see Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al. (1999), 2 C.P.R. (4th) 368 at 377, per Reed J.). In this case Merck's claim for services for named law clerks and students prior to April 28, 1998 amount to nearly $140,000. and claims for their services after that date, not otherwise described to be of a professional or a clerical quality, amount to some $17,500. Finally, it is urged, and I agree, that some hourly costs claimed for clerks (in excess of $100./hr.) and students (in excess of $75./hr.) after April 28, 1998, seem excessive, even if their work were established to be of a professional research nature.
[19] Claims for services of "miscellaneous" lawyers, clerks and students, not named, here totalling some $31,000. in the preparatory work for the contempt proceeding, undertaken between April 28, 1995 and December, 1998, would not ordinarily be recoverable costs without explanation of their work, and no real explanation is provided.
[20] Claims for costs on interlocutory motions determined without any specific directions as to costs are said by Apotex and Dr. Sherman to be excluded from recoverable costs awarded in the cause at the end of the day. They rely upon a statement in Orkin, The Law of Costs, at s. 105.7 (2000, Canada Law Book Inc., Aurora) that
if judgment is given for a party without any order being made as to costs, no costs can be assessed by either party, so that when a matter is disposed of on a motion or at trial with no mention of costs, it is as though the judge disposing of the matter had said that he 'saw fit to make no order as to costs'.
That principle has been applied by assessment officers of this Court in Légère v. Canada, [1999] F.C.J. No. 1178 and in Entreprises Blanchet Ltée. v. The Queen, [1989] 2 F.C. D-43. None of these references concerns interlocutory motions related to contempt proceedings and the two decisions of assessing officers are concerned with the final assessment of costs incurred in claims and actions against the Crown.
[21] In this case a number of interlocutory proceedings were dealt with by judges who made no reference to costs in their orders. That was the case
(a) when the plaintiffs' show cause motion was heard and granted on April 27, 1995;
(b) when the defendants' motion to permanently stay the contempt proceedings was heard and dismissed on August 1, 1995;
(c) when the defendants' Rule 324 motion (in writing) to seek an extension of time to appeal the show cause order was dismissed on October 13, 1995;
(d) when the defendants' motion for consideration of preliminary motions, heard Nov. 30, 1996, was adjourned to Dec. 6, 1996, the date set for the hearing to commence;
(e) when plaintiffs' motion to fix a hearing date was heard and disposed of by the A.C.J. on December 19, 1996; and
(f) when the plaintiffs' motion to quash a subpoena issued to Mr. Quesnel, set to be heard on October 17, 1997 (when it was adjourned to be later determined in the course of contempt hearings, and was then allowed).
The costs arising in relation to these interlocutory matters, which Apotex and Dr. Sherman urge be disallowed from the total claimed by Merck, amount to about $116,000. for preparation and attendance at hearings.
[22] In my opinion, except for items (d) and (f), which resulted in adjournments and no substantial increase in hearing dates or costs, in proceedings for contempt the costs of the successful applicant for a show cause order, whose allegations of contempt are subsequently established at trial, are recoverable at the end of the day as costs in the cause, even though no reference is made to costs when the show cause motion is allowed. The show cause motion is akin to a statement of claim, or an application for judicial review, or an order for a reference, in that it is the originating step for discrete proceedings, in this case a trial for alleged contempt. Similarly, in my view the party successful in the award of interlocutory orders in preparations for the hearing of a contempt trial, if also successful at trial, is entitled to costs of the motions though they be granted without order as to costs. An interlocutory motion to stay proceedings, or to seek an extension of time to appeal a decision, if unsuccessfully brought by a party who is later found in the main action to have committed contempt, as in this case were Apotex and Dr. Sherman, should expect to pay costs incurred by the plaintiffs on the defendant's interlocutory motions which the plaintiff successfully resists, even if the orders determining the motions are silent as to costs.
[23] In sum, I am not persuaded that the principle relied upon by the defendant has general application in considering costs arising in relation to interlocutory decisions on motions which do not specify costs, particularly when the main proceedings concern alleged contempt that is subsequently established. The more preferable principles, in my view, are those identified in Friis v. Paramount Bagwash Co. Ltd. (No. 2), [1940] 2 K.B. 654 at 656 (C.A.) where Luxmoore, L.J., for the Court of Appeal, commented with reference to entitlement to costs on an interlocutory order that is silent concerning costs, that a party granted the order, if successful in the action, is entitled to costs of the order as costs in the cause. A party unsuccessful in opposing an interlocutory order, though successful in the action is not entitled to costs of the order as costs in the cause. In my opinion the latter principle for refusing costs in the cause to the successful party, is equally applicable where that same party has been unsuccessful in bringing an interlocutory motion which is disposed of without reference to costs. While the Friis decision is based upon English High Court rules, the principles upon which the decision, and the rules, are based seems to me appropriate in regard to interlocutory proceedings in relation to contempt proceedings.
(3) Costs claimed with inadequate explanation
[24] Claims for disbursements are said by Apotex and Dr. Sherman not to be warranted or not justified by adequate explanation For example:
- for office expenses (some $31,000.), undesignated as to trial purposes, including office rental, business rooms and expenses for photocopying, telephone and fax charges, when counsel had offices in both Ottawa and Toronto where all hearing were held;
- for any expenses of officers of the plaintiff corporations incurred in attendance at hearings in Toronto or Ottawa, (Mr. Murray of Merck & Co. Inc. and Mr. Quesnel of Merck Frosst Canada & Co.);
- for travel time at professional rates of Ottawa-based counsel or staff to attend in Toronto;
- for costs of accommodations and meals at unexplained rates said to be inordinately high; and
- for invoices concerning services rendered by forensic accountants and an expert witness for the plaintiffs by the firm of Lindquist Avey, which the defendants urge are inadequately explained or justified and which in some respects appear to duplicate work also claimed by counsel for the plaintiffs. In this regard the defendant and Dr. Sherman urge that the expenses for these services warrant deductions of some $168,000. from the costs claimed by plaintiffs. I am not persuaded in the circumstances of this case that deductions are appropriate from the claims arising from the services of the accountants which played a key role in the assessment and presentation of evidence of sales by Apotex.
In all, deductions amounting to some $176,600., in addition to the proposed deductions of costs incurred for services of Lindquist Avey, are said to be appropriate by Apotex and Dr. Sherman, from total disbursements of $504,000. claimed as within solicitor and client costs by Merck.
[25] I decline to deal with the specific deductions proposed by Apotex and Dr. Sherman. If I were to do otherwise, I would in effect be assessing costs for the services rendered, a process that I decline to commence. Nevertheless not all of the suggestions of the defendant are without merit and some aspects of the claim for disbursements warrant reduction from the total claimed.
SERVICES RENDERED BY COUNSEL AND CLAIMED BY THE PLAINTIFFS
[26] In earlier Reasons for Supplementary Judgment dated June 5, 2001, after determining that costs should be fixed and on a solicitor and client basis, I commented (at para. 24):
The only issue to be resolved is the amount of an award of costs. For Apotex it is urged that the costs billed by counsel for Merck are unreasonable for a variety of reasons that need not here be repeated. That argument is mainly based in principle since no specifics of the claim for costs are said to be understood by Apotex' solicitors. As for argument that Merck's counsel spent unwarranted time in producing evidence irrelevant to the Court's findings, I simply am not persuaded this was done. Nor am I persuaded by general argument that too many counsel were involved on behalf of Merck. One unusual feature of the case, in my opinion, was that the documentary evidence essential to establish actions by Apotex was in the possession of Apotex or third parties, it was provided by subpoena duces tecum, mainly at the commencement of trial, and it was provided in volume in the form of invoices and shipping documents, requiring substantial work in assessing its possible use for trial. Not all of the time committed to the proceedings resulted from initiatives of the plaintiffs. I am not persuaded that counsel for Merck were employed on an extravagant basis.
[27] I acknowledge that at the time those Reasons were written I had not reviewed in any detail the draft bill of costs submitted by Merck in relation to proceedings up to December 1999, when hearings for evidence in relation to contempt concluded. My comments then, concerning the time spent by counsel for Merck and the number of counsel involved for the plaintiffs, were made with reference to my recollection of the involvement of counsel at the hearings in this matter. At that stage Apotex and Dr. Sherman had not responded in detail to the proposed bill of costs, and that bill did not include work in relation to the final phases of the action concerning penalties and costs.
[28] In light of concerns expressed by Apotex and Dr. Sherman about the time engaged by counsel for Merck and my review of the stages of the proceedings, it is my conclusion that it would not be appropriate in this case to consider all of the time and hourly rates included in the draft bills of costs submitted by Merck's counsel as costs for which Apotex and Dr. Sherman are liable. In short, I do not consider the total claimed as fees for services represents costs reasonably incurred, in the following respects.
[29] The costs claimed for professional fees for preparation, for the contempt proceedings and for interlocutory motions, in my opinion are not reasonably incurred in the sense that they are to be recovered against Apotex and Dr. Sherman. The same conclusion applies to the claim for professional services for attendance at hearings of interlocutory matters and of the trial, where the hours for services rendered, at rates applicable in light of the seniority of counsel involved are generally charged for time that exceeds by more than twice the elapsed time of the hearing. I recognize there are many reasons why the two, i.e., hours claimed and hours elapsed, would differ. Here the services claimed appear to include, at least in some instances, time for travel by Ottawa-based counsel to attend in Toronto, and the hours claimed for hearings are in addition to the substantial hours claimed for preparation for the various hearings.
[30] An outline chronology of the Court's schedule in dealing with the matters raised in the course of proceeding and an interrelated summary of the plaintiffs' professional costs claimed in relation to various phases is attached as Annex A to these Reasons.
[31] From that chronology, based upon written submissions and the plaintiffs' draft bills of costs, an overview indicates that for preparations for interlocutory motions, dealt with by the Court on 13 occasions, mostly less than full days, the plaintiffs claim costs for fees of counsel for 250 hours, and of law clerks and students for 104 hours, in addition to fees claimed for attendance at the hearings of interlocutory motions. Further, preparations for the application for the show cause order, for preparations for the contempt hearing, preparations for final argument on contempt and for preparations for hearing and written submissions on penalties and costs, the plaintiffs' claim fees for professional services of counsel for more than 4850 hours, and services of law clerks and students for a total of nearly 1500 hours. That is very substantial time committed to preparations for hearings which ultimately took a total of 25 days, of which perhaps six were less than full days, in regard to the show cause motion and the ensuing trial. This commitment is in addition to claims made for fees for counsel and for law clerks and students in relation to attendance at hearings. Considering only the hours claimed for preparations by counsel, an average of more than 19 hours or two days was spent by counsel in preparation for each interlocutory hearing occasion, and 194 hours or nearly 19.5 days for each day of hearings for the show cause order and the trial, in addition to claims for attendance at hearings. That does not take any account of the claims for time spent in preparations or at hearings by law clerks or students.
[32] I note that Ms. Lesley Caswell, a student-at-law in 1999 and a lawyer in 2001, serving with counsel for Merck, by sworn affidavits accompanying the two draft bills of costs submitted to the Court avers that having reviewed her firm's accounts she believes the draft bills set out the fees and disbursements reasonably incurred in the proceedings, and that she is informed by the three principal lawyers involved for Merck, and she believes, that the amounts included represent the work effort required to conduct the proceedings. I have no solid ground on which to question the basis for her beliefs, that the work devoted to the case was as set out in the bills of costs, and that it was required in the judgment of counsel for the plaintiffs. In that sense, it might be anticipated that an award of solicitor and client costs would include the bulk of the total costs incurred.
[33] Yet an award of fixed costs, on a solicitor-client basis, for costs reasonably incurred, implies that the award not only bear some reasonable relationship to the costs claimed to have been incurred, but also that the amount fixed not be an unreasonable award against the defendant. In Leenan v. Canadian Broadcasting Corp., [2000] O.J. No. 3435 at para. 28 (Ont. Sup.Ct.), Mr. Justice Cunningham, in setting fixed costs on a solicitor and client basis, compared the time there claimed for preparation time involved for a trial for alleged libel, and said in part:
I recognize that [plaintiff's counsel] spent enormous amounts of time preparing for this very difficult trial. I also recognize that I am not to look at the amount being claimed in hindsight but rather that I should put myself in [counsel's] shoes going into this exercise with an understanding of the obstacles he faced. This I have done. Nevertheless I must conclude that the amount of preparation time being claimed is beyond that which could be considered reasonable for the defendants to have to pay.
Cunningham J. then fixed costs for preparation for the trial at $440,000., somewhat more than defendants there proposed but significantly less than was included in the plaintiff's billed costs.
[34] In Beloit Canada Ltée v. Valmet-Dominion Inc. (1991), 39 C.P.R. (3d) (F.C.A.), a case concerning directions to a taxing officer for costs of appeals, Mr. Justice Mahoney commented for the Court:
While the issues were not, in my view, complex, the volume of the work dealing with a record generated by a four-week trial was exceptional. That bears principally on preparation, but it is not entirely irrelevant to the conduct of the hearing itself. I would also observe that the preparation, as it manifested itself at the hearing, has been very well done. That said, assuming ten-hour working days and 25-day working months, the dedication by counsel of more than nine full working months preparation seems, to say the least, luxurious. I think it preferable to fix a lump sum rather than an hourly rate for preparation.
In this case, Merck costs include preparation time equivalent to more than 19 working months of 250 hours for preparation time for counsel for these proceedings. That is substantially in excess of reasonable costs to be borne by the defendants.
[35] In Pfizer v. Apotex, supra, a case of contempt, Hugessen J. of this Court described an order for payment of costs on a solicitor-client basis in the amount of total costs which the plaintiff had incurred, in the circumstances of that case "would be a swingeing punishment indeed", which he would not impose. It seems clear that in fairness to the defendant, costs "reasonably incurred" have an upper limit. The amount should not be unreasonable in all the circumstances, to the defendants.
CONCLUSION
[36] In the result, I concluded that in recognition of the important role played by Merck in these proceedings, in addition to protecting their interests in intellectual property, costs on a solicitor-client basis should be fixed at $1,500,000. While that is less than two thirds of the total costs billed to the plaintiffs, it is substantially more than the defendants Apotex and Dr. Sherman proposed. It is also very considerably more than the Court's assessment under tariff B would allow.
[37] That sum represents this Court's best judgment of an appropriate award of solicitor-client costs for fees and disbursements reasonably incurred, without constituting an unreasonable burden or a further penalty upon Apotex and Dr. Sherman.
[38] The Judgment issued on October 11, 2002 orders that fixed costs in the amount of $1,500,000. are awarded to the plaintiffs, on a solicitor and client basis, for fees and disbursements as costs reasonably incurred by the plaintiffs, for which Apotex and Dr. Sherman are jointly and severally liable.
(signed) W. Andrew MacKay
____________________________
JUDGE
OTTAWA, Ontario
November 22, 2002.
Annex A
Reasons for Judgment
on Costs for Contempt
Court File T-2408-91
Merck et al. v. Apotex et al.
Contempt Proceedings and Plaintiffs' Claimed Costs for Services
CHRONOLOGY
| Court Arrangements Initiated by P (Plaintiffs) or D (Defendants) |
Plaintiffs' Claimed Costs for Services for Preparations |
|
1. P - Show cause application heard and granted, April 27, 1995 |
A. Preparations for show cause application (Prior to April 27, 1995) Services: Counsel 300 hours Clerks and Students 50 hours |
|
|
B. Preparations for contempt proceedings (i) From April 27/95 to December/98 Services: Counsel 2,612 hours Clerks and Students 1,044 hours (ii) For final argument on contempt Services: Counsel 498 hours Clerks and Students 120 hours (iii) For penalty and costs phases including written submissions Services: Counsel 1,448 hours Clerks and Students 265 hours |
|
2. Interlocutory motions (i) P - for procedural directions, heard June 12/95 |
C. Preparations for interlocutory motions (i) Services: Counsel 18 hours |
|
(ii) D - to stay contempt, heard and dismissed August 1/95 |
(ii) Services: Counsel 5.2 hours Clerks 3.6 hours |
|
(iii) D - motion (R324) decided on written submissions, for extension of time to appeal show cause order - dismissed |
(iii) Services: Counsel 15.4 hours Clerks and Students 7.8 hours |
|
(iv) P - motion re: documents - witnesses Barbeau, Kay, Moore, Roth pursuant to subpoenas, heard July 16/95 |
(iv) Services: Counsel 11 hours |
|
(v) P - motion to quash Quesnel subpoena, adjourned October 17/97; subsequently determined at trial hearing |
(v) Services: Counsel 10.3 hours Clerks and Students 80 hours |
|
(vi) D (and others) - motions for determination of preliminary issues - adjourned November 30/95 to December 6/95, the date set for commencement of trial |
(vi) Services: Counsel 32 hours |
Annex A
Reasons for Judgment
on Costs for Contempt
Court File T-2408-91
|
(vii) D (and others) - motions on preliminary issues heard, December 6/95 (and later dismissed) |
(vii) Services: Counsel 29 hours |
| (viii) P - motion (conference with ACJ) re: date for hearing heard December 19/95 |
(viii) Services: Counsel 5.8 hours |
| (ix) D - motion to stay contempt proceedings heard April 23, 24, 29, 30/98 |
(ix) and (x) Services: Counsel 123 hours Clerks and Students 113 hours |
| (x) D - Dr. Sherman motion for non suit heard July 29/98 |
[Cross examinations (2) by plaintiffs] (services not claimed) |
| [D - Two appeals to Court of Appeal and one motion for leave to appeal to SCC] (services not claimed) |
|
| 3. Trial hearings, in addition to show cause application: July 21, 22, 24, 25/97 September 15, 17, 18, 19/97 October 20, 21, 22, 23, 24/97 November 29/97 December 10/97 February 23, 24, 25, 26/98 November 4 and 5/98 February 19, 20 and 21/99 June 5/01 [24 days for hearings after issue of show cause] |
|
| Judgments rendered March 7, 2002 (re: contempt) January 5, 2001 (re: penalties) October 11, 2002 (re: costs) |
NOTE: In addition to claims for services for preparations, at various stages,
plaintiffs' claims include costs of services, by hourly rates, of counsel,
law clerks and students in attendance at hearings, both interlocutory
and at trial.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2408-91
STYLE OF CAUSE: Merck & Co. and others v Apotex Inc.
PLACE OF HEARINGS: Toronto, February 19, 2001
Toronto, June 5, 2001
Ottawa, September 4, 2001
REASONS FOR JUDGMENT ON FIXED COSTS: The Honourable Mr. Justice MacKay
APPEARANCES:
Mr. Alexander Macklin FOR PLAINTIFFS
Ms. Constance Too
Mr. Harry Radomski FOR DEFENDANT (Apotex)
Mr. David Scrimger
Mr. Nando De Lucas
Ms. Daniela Bassan
Mr. Brian Greenspan FOR DEFENDANT (Bernard
Ms. Sharon Lavine Sherman)
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP FOR PLAINTIFFS
Ottawa, Ontario
Goodmans LLP FOR DEFENDANT (Apotex)
Toronto, Ontario
Greesnspan Humphrey Lavine FOR DEFENDANT (Bernard
Toronto, Ontario Sherman)