Date: 19990210
Docket: T-1712-97
BETWEEN:
AIC LIMITED
Plaintiff
- and -
INFINITY INVESTMENT COUNSEL LTD.,
INFINITY FUNDS MANAGEMENT INC.,
RICHARD CHARLTON, DAVID SINGH,
JEFFREY LIPTON and GRANT JUNG
Defendants
REASONS FOR ORDER AND ORDER
BLAIS J.
FACTS:
[1] This is a motion for an order declaring that the defendants are entitled to costs forthwith in accordance with Rule 402 of the Federal Court Rules, 1998;
[2] On March 25, 1998 the plaintiff commenced summary judgment proceedings against the defendants on the basis of an alleged settlement agreement between the parties;
[3] The summary judgment motion was heard by Mr. Justice Rothstein on March 30 and April 1 to 4, 1998, and dismissed by judgment dated May 5, 1998;
[4] By order dated June 10, 1998 Mr. Justice Rothstein awarded the defendants their costs which he fixed in the amount of $43,000.00;
[5] By notice of appeal dated May 15, 1998 the plaintiff appealed the judgment and by notice of appeal dated June 19, 1998, the plaintiff appealed the costs ordered;
[6] By notice of discontinuance dated September 23, 1998, the plaintiff discontinued its appeals of the judgment and cost order;
[7] Following the discontinuance, the defendants are requesting $800.00 in additional costs in accordance with Item 17 of Tariff B which was amended before the Tribunal for Item 18 of Tariff B;
ISSUES:
| 1- Does the application of Rule 402 of the Federal Court Rules entitle Infinity (the Defendants) to the $43,000.00 costs forthwith? |
| 2- Is Infinity entitled to costs having done almost nothing to justify being granted with those costs even though the plaintiff decided to issue a discontinuance of its appeal? |
Defendant's Arguments:
[8] The defendants suggest that costs "forthwith" as provided in Rule 402 includes all costs incurred in relation to the stream of proceedings terminated by the discontinuance and are not subject to any technical limitation. While the costs order does not order that the defendants' costs for the plaintiff's dismissed motion for summary judgment be paid forthwith, it is submitted that this fact in not determinative of the present motion. The defendants suggest that the new Rule 402 replaces old Rule 1211; this old Rule 1211 restricted the costs payable to the costs of the appeal;
[9] In the new Rule 402, however, the words "costs of the appeal" have been deleted and this new provision simply states that the party against whom the particular proceeding has been discontinued is entitled to costs forthwith. The defendants suggest, though, that the costs payable under Rule 402 are all costs relating to the stream of proceedings terminated by the discontinuance be it an action, application, appeal or motion, and are not limited to any particular step therein;
[10] Relating to the additional costs of $800.00, the defendants suggest that the affidavit of Arnold Ceballos, sworn February 3, 1999, at paragraph 11, states that:During the period June to July 1998 counsel for the parties discussed and arrived upon an agreement as to the contents of an appeal book to be filed on the appeal from the judgment.
This affidavit constitutes evidence is that the work was done and that the costs of the appeal should be established at $800.00 (8 hours x $100.00).
Plaintiff's Arguments:
[11] The plaintiff suggests that the defendants' argument and application of the Rule 402 have no foundation.
[12] The plaintiff suggests that where the appeal has been discontinued, as was the case here, that the defendants are entitled to the costs of the appeal (as assessed).
[13] The plaintiff suggests that the "appeal" as defined in Rule 2 of the Federal Court Rules, 1998, means "an appeal within the meaning of rule 335". Rule 335, in turn, provides that an appeal is the step taken in the Court of Appeal. Accordingly, Rule 402 and the reference therein to "costs" cannot encompass the "stream of proceedings" or the motion by the plaintiff for summary judgment.
[14] The plaintiff suggests that if Mr. Justice Rothstein wanted the costs to be paid forthwith he would have stated so precisely.
[15] The plaintiff suggests that Rule 402 of the Federal Court Rules, 1998, contemplates an assessment of the costs of the abandoned proceeding (here, the appeals).
[16] The plaintiff suggests that under Rule 402: "a party is entitled to costs of the abandoned proceeding only, which in this case are the appeals. Since Mr. Justice Rothstein did not order that the costs of the motion for summary judgment be "payable forthwith", those costs are payable at the conclusion of the action."
[17] The plaintiff also suggests that if this Court was going to make a decision that the costs of the motion for summary judgment be payable forthwith, it would be a variation of the decision of Mr. Justice Rothstein that cannot be done;
[18] On the second point which is the costs of the appeals, the plaintiff suggests that the defendants' motion to obtain those costs lacks an evidenciary basis for the claim for costs of the appeal;
THE RULES APPLICABLE:
[19] Rules 2 and 335, 401, 402, 405, 406, 407, tariff B, of the Federal Court Rules, 1998, state as follows:
| Rule 2, definition of "appeal":
referred to in rule 335. |
" appel " Instance visée à la règle 335. |
| 335. This Part applies to
|
335. La présente partie s'applique aux appels suivants :
|
||||||
|
Costs of motion |
|||||||
|
Dépens de la requête
|
| Costs payable forthwith
|
Paiement sans délai
|
| Costs of discontinuance or abandonment
|
Dépens lors d'un désistement ou abandon
|
| Assessment by assessment officer
|
Taxation par l'officier taxateur
|
| Obtaining appointment
|
Convocation
|
| Notice of appointment
|
Avis de convocation
|
| Assessment according to Tariff B
|
Tarif B
|
Rule 1211 of the Federal Court Rules, 1993, states:
| 1211. (1) An appellant may discontinue his appeal by filing a notice stating that he discontinues the appeal, and serving the notice on the respondent. (2) Upon a notice having been given under paragraph (1), the appellant shall pay the respondent's costs of the appeal. Such costs may be taxed; and payment may be enforced as if judgment for the amount thereof had been given in favour of the respondent against the appellant. |
1211. (1) Un appelant peut se désister de son appel en déposant un avis indiquant qu'il se désiste de l'appel, et en signifiant cet avis à l'intimé. (2) Après avoir donné un avis en vertu de l'alinéa (1), l'appelant doit payer les frais d'appel de l'intimé. Ces frais peuvent être taxés; et le paiement peut en être poursuivi par exécution forcée comme s'ils avaient été adjugés par jugement rendu en faveur de l'intimé et contre l'appelant. |
ANALYSIS:
[20] If we refer to Table of Concordance A page xi we see that the new Rule 402 replaces Rule 345, 346(3) and 1211(2);
[21] I have reviewed the decision of the Associate Senior Prothonotary in Waterfurnace Inc. v. 803943 Ontario Ltd., [1991] F.C.J. No. 912 (T.D.). Giles A.S.P. states:
| ... I adopt the reasoning in Banke Electronics in support of my decision that the costs awarded on an interlocutory motion are not payable until the conclusion of the trial unless specifically ordered payable forthwith or payable forthwith after taxation. |
| ... |
| I deduce from that statement that the costs of interlocutory proceedings are not payable before the costs of the action are determined, otherwise set-off would not be possible. |
[22] I also reviewed the Mayflower Transit Ltd. v. Marine Atlantic Inc. case:
| Of course, in the usual run of events costs follow the success in the outcome of proceedings and on interlocutory matters, it is the general practice that costs simply become costs in the cause and are then settled as costs may be awarded in the final outcome. |
[23] My understanding of Rule 402 is that the defendants are entitled to their costs relating to the appeal that have to be paid forthwith.
[24] The decision by Justice Rothstein dismissing the motion for summary judgment and awarding the defendants with costs of $43,000.00 is an interlocutory judgment, and even though there is no doubt that those costs will be paid by the plaintiff to the defendant, Justice Rothstein decided not to make those costs payable forthwith and Rule 402 says that only the costs of the appeal are payable forthwith.
[25] The defendants have shown evidence that they are entitled to the costs of $800.00 on the discontinuance of the appeals.
CONCLUSION:
[26] The motion of the defendants is granted only in part;
[27] The defendants are entitled to costs established at $800.00 on the discontinuance of the appeal, that are payable forthwith pursuant to Rule 402;
[28] The defendants' costs in the amount of $43,000.00 are not payable forthwith;
[29] The costs of this present motion are established to $1,000.00 payable forthwith by the plaintiff to the defendants pursuant to Rule 400(1).
Judge
Ontario
February 10, 1999
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-1712-97
| STYLE OF CAUSE: AIC LIMITED |
- and -
INFINITY INVESTMENT COUNSEL LTD., INFINITY FUNDS MANAGEMENT INC.,
RICHARD CHARLTON, DAVID
SINGH, JEFFREY LIPTON and GRANT JUNG
DATE OF HEARING: 1999
PLACE OF HEARING: ONTARIO
REASONS FOR ORDER BY: BLAIS J.
DATED: 1999
APPEARANCES:
For the Plaintiff
For the Defendants
SOLICITORS OF RECORD:
| Barrister & Solicitor |
For the Plaintiff
| For the Defendant |
FEDERAL COURT OF CANADA
Date: 19990210
Docket: T-1712-97
Between:
| AIC LIMITED |
Plaintiff
- and -
| INFINITY INVESTMENT COUNSEL LTD., INFINITY FUNDS MANAGEMENT INC.,RICHARD CHARLTON, DAVID SINGH, |
JEFFREY LIPTON and GRANT JUNG
Defendants
REASONS FOR ORDER AND ORDER