Federal Court Decisions

 

Date: 20121029

Docket: T-299-05

Citation: 2012 FC 1257

Ottawa, Ontario, October 29, 2012

PRESENT:    The Honourable Mr. Justice Scott

 

BETWEEN:

	CATHERINE LEUTHOLD
		Plaintiff
	and
	CANADIAN BROADCASTING CORPORATION and JERRY MCINTOSH
		Defendants

 

           REASONS FOR ORDER AND ORDER

 

I.          Introduction

 

[1]               Further to this Court’s judgment rendered on June 14^th, 2012 (Leuthold v Canadian Broadcasting Corporation, 2012 FC 748) [Leuthold], the Defendants bring this motion pursuant to Rule 403 of the Federal Court Rules, SOR/98-106 [Rules], requesting that an order be made containing directions to the assessment officer with respect to costs.

 

II.        Relief Sought

 

[2]               More particularly the motion, in its conclusion, seeks:

[translation]

1.         An order that the costs be awarded in their favour as of August 9, 2005, at double the tariff set out and in accordance with the upper scale of column IV of Tariff B;

2.         That the Court give directions to the assessment officer allowing assessment of costs for:

a)                  a second attorney for all stages of proceedings, including the hearing;

b)                 the fees and disbursements of the experts heard at the hearing;

c)                  all disbursements, including travel expenses for witnesses, photocopy fees, online research fees, transcript fees for examinations for discovery and the hearing, long distance fees, fax fees, postage and courier fees and other administrative fees;

d)                 interest on fees and disbursements since June 14, 2012;

e)                  costs for this motion;

f)                  any other order that this Honourable Court could consider fair and reasonable.

 

[3]               For the following reasons, the Defendants’ motion is granted in part.

 

III.       Facts

 

[4]               On February 18^th, 2005, the Plaintiff, Catherine Leuthold, began her action for copyright infringement, claiming at that time recovery of her damages on the basis of 3,080.71 CAD (2,500.00 USD) for each unauthorized reproduction of the Stills and each broadcast of the Stills, against the Defendants, the Canadian Broadcasting Corporation [CBC] and Jerry McIntosh (the Defendants).

 

[5]               On August 9^th, 2005, the Defendants served an offer to settle (offer) to the Plaintiff for an amount of thirty seven thousand five hundred dollars US (37 500 USD) plus interest. The offer also included the costs of the action up to the date of the offer on a party and party basis.

 

[6]               The Defendants’ offer contained no admission of liability for infringements and was rejected by the Plaintiff.

 

[7]               Plaintiff made three offers to settle.

 

[8]               The Defendants conduct led to approximately two additional years of proceedings.

 

[9]               The Plaintiff’s taxable income in 2006 was 20,661 USD.

 

[10]           The trial began on February 6^th, 2012.

 

[11]           The Plaintiff sought exemplary damages against Defendant CBC, for 25,000 CAD, and against Defendant McIntosh, for 10,000 CAD.

 

[12]           The Plaintiff had also been asking for 15, 000 CAD in punitive damages but abandoned that portion of her claim at the trial.

 

[13]           The Plaintiff also asked for an accounting for profits.

 

[14]           The Defendants admitted infringement for six communications to the public.

 

[15]           The Defendants refused to admit any infringement of the Plaintiff’s rights.

 

[16]           The opinion of the Defendants’ expert was not adopted by the Court.

 

[17]           The Court refused to order an accounting for profits or an injunction (Leuthold at paras 147 and 161).

 

[18]           The Defendant McIntosh was not held personally responsible for infringement because his actions were not the result of a deliberate act or any negligence on his part (Leuthold at para 171).

 

[19]           The Court refused to order exemplary damages against the Defendants because the infringements were the result of honest mistakes (Leuthold at para 159).

 

[20]           On June 14^th, 2012, the Defendant, CBC, was ordered to pay, jointly and severally with each Broadcasting Distribution Undertaking [BDU], 19,200.00 USD in damages to the Plaintiff (cf. Leuthold).

 

[21]           The Court ordered a greater amount per infringement than what was claimed.

 

[22]           The CBC was also ordered to pay the Plaintiff an additional 168.74 CAD in generated revenues. 

 

[23]           The Court deferred its decision on costs to a special hearing to be set after the parties received the Court’s judgment (Leuthold at para 174).

 

[24]           On July 13^th, 2012, the Defendants filed their notice of motion in accordance with Rule 403 of the Rules.

 

[25]           On July19^th, 2012, the Court set a date for the hearing of the motion to Thursday, August 23^rd, 2012.

 

[26]           On August 7^th, 2012, the Defendants filed their written representations.

 

[27]           On August 14^th, 2012, the Plaintiff filed her written representations.

 

IV.       Issues

 

1.                  Are the Defendants entitled to their costs at double the rate they are assessed at?

2.                  Are the Defendants entitled to have their costs against the Plaintiff assessed at the upper end of column IV of Tariff B?

 

V.        Relevant legislation

 

[28]           The applicable rules of the Federal Court Rules, SOR/98-106, are appended to this decision.

 

VI.       Submissions of the parties on issue 1

 

1.         Are the Defendants entitled to their costs at double the rate they are assessed at?

 

A.        The Defendants’ submissions

 

[29]           The Defendants argue they are entitled to double their costs from the date they served their offer. They argue that the two conditions required by Rule 420(2) of the Rules are met, namely:

(1)        The Plaintiff obtained a judgment less favourable than the offer (the offer was for 37, 500 USD while the Plaintiff obtained a judgment for 19,200 USD plus 168.74 CAD);

(2)        The offer was made at least 14 days before the trial began (the offer was served August 9^th, 2005 and the trial began on February 6^th, 2012), and it was not withdrawn and did not expire before the trial began.

 

[30]           Based on the above, the Defendants argue that they should receive their costs at twice the rate decided upon, from the date they served their offer to the date of judgment. They emphasize that the offer made was nearly double the judgment received by the Plaintiff. The Defendants also refer the Court to the judgment of Justice D. Tremblay-Lamer in ITV Technologies Inc v WIC Television Ltd, 2005 CF 744 at para 11.

 

B.        The Plaintiff’s submissions

 

[31]           The Plaintiff does not dispute any of the factual claims above. She does not agree, however, that based on those facts, the Defendants should receive double their costs.

 

[32]           The Plaintiff submits that the awarding of double costs does not occur automatically once the conditions of Rule 420(2) are satisfied. Their award is still subject to the absolute discretion of the Court pursuant to Rule 400. In deciding how to exercise that discretion, the Plaintiff submits that the Court should take into account the factors listed in Rule 400(3). 

 

[33]           The Plaintiff notes firstly that the Defendants’ offer contained no admission of liability or wrongdoing. The Plaintiff then underlines that the Plaintiff had herself made three good-faith offers to settle and that, with regards to the first offer, the Defendants had asked for an extension of the deadline to accept but then failed to reply by the extended deadline. This, the Plaintiff asserts, made the extension request appear like nothing more than a delaying tactic.

 

[34]           Dealing next with her refusal of the Defendants’ offer, the Plaintiff asserts that the Defendants did not provide her with sufficient and reliable information concerning the Defendants’ advertising and subscription revenues as well as the number and scope of the infringements. There was also a complete lack of information as to the BDUs’ revenues. Finally, when the Plaintiff learned of the hundreds of potential infringements by the BDUs, she claims this justified refusing the Defendants’ offer.

 

[35]           The Plaintiff additionally notes that the lack of financial disclosure is what led to her request for an accounting of profits.

 

[36]           The Plaintiff’s attorney also underlined certain facts related to the length of time that elapsed before discovery could take place.

 

[37]           She then concluded that the Defendants’ conduct led to approximately two additional years of proceedings.

 

VII.     Analysis of the first issue

 

A.        General principles of costs

 

[38]           The basic principle in the awarding of costs is that the Court has “full discretionary power over the amount and allocation of costs” (Rule 400(1) of the Rules). The Court may consider the factors listed in Rule 400(3) in exercising that discretion. The case law has added another principle, namely that the Court’s goal in awarding costs should be “a compromise between compensating a successful party and not unduly burdening an unsuccessful party” (Apotex Inc v Wellcome Foundation Ltd, 84 CPR (3d) 303, 159 FTR 233, at para 7).

 

1.         Are the Defendants entitled to their costs at double the rate they are assessed at?

 

[39]           The Defendants are entitled to their costs at double the rate they are assessed at pursuant to Rule 420(2) of the Rules for the following reasons.

 

[40]           Firstly, the Defendants’ offer complies with the conditions required by Rule 420 to justify being awarded double costs at the rate assessed by the Court, namely:

(1)        The Plaintiff obtained a judgment less favourable than the offer (the offer was for $37, 500 US while the Plaintiff obtained a judgment for $19 200 US plus $168.74 CAN);

(2)        The offer was made at least 14 days before the trial began (the offer was served August 9^th, 2005 and the trial started on February 6^th, 2012), and it was not withdrawn and did not expire before this later date.

 

[41]           The Plaintiff acknowledges that the Defendants’ offer met the conditions of Rule 420 of the Rules. She does not, however, agree that double costs should necessarily be awarded. The Plaintiff reminds the Court that it has absolute discretion and is not required to award double costs in the face of an offer that meets all conditions.

 

[42]           To support this assertion, the Plaintiff relies on Canwell Enviro-Industries Ltd v Baker Petrolite Corp, 2002 FCA 482 [Baker], which at paragraph 4(b) states:

“As I understand Rule 420(2)(b), where a defendant makes an offer to a plaintiff which is rejected and the plaintiff then fails to obtain judgment (which is the case here), the defendant is automatically entitled to a doubling of the taxable fees thereafter "unless otherwise ordered by the Court". In this situation there is no need for the defendant to show that the offer was more generous to the plaintiff than the outcome. I am inclined to order otherwise than a doubling, however…”

 

In that instance the Court of Appeal then went on to increase the Defendants’ costs by 50% (rather than 100%) because it believed the offer was not a true compromise (the notion of "compromise (or incentive to accept)" has since been analyzed as an essential element of an offer satisfying the conditions of Rule 420(2) (cf. M.K. Plastics Corp. v Plasticair Inc, 2007 FC 1029 at para 39).

 

[43]           The Plaintiff’s argument for refusing double costs can be distinguished from Baker, however, in that the Plaintiff never argued before us that the Defendants’ offer was not a compromise. When treating the Defendants offer in the context of Rule 400(3)(e) (“any written offer to settle”), the Plaintiff focuses more on the fact that she did not have sufficient information to make a reasoned decision on the offer. This lack of sufficient information, the Plaintiff argues, was mostly due to the Defendants’ uncooperativeness in providing information to evaluate her claim. She also underlines the fact that she made three good-faith offers to the Defendants.

 

[44]           It is the Plaintiff’s position that the Court should consider all the Rule 400(3) factors in exercising its discretion in awarding double costs. The only case where a Court recognized factors other than those related to the quality of offer was Monsanto Canada Inc v Schmeiser, 2002 FCT 439 at paras 14-15.

 

[45]           It is the Court’s view that it must look primarily at the factors that existed at the time of the offer when deciding whether to double costs. In Sun Construction Co. Ltd v Canada, 2001 FCT 447 at para 39, the Court cites Mr. Justice Orsborn in Burton v Global Benefit Plan Consultants Inc, (1999) 183 Nfld. & P.E.I. 86 at paras 10 and 11 [Burton], on the notion of offers to settle:

[10]      After reviewing decisions from other jurisdictions I noted, at paras. 21-22:

 

“It is clear that, across Canada, the imposition of severe and adverse cost consequences is seen as necessary in order to encourage the making and acceptance of reasonable settlement offers prior to trial. . . . ”

 

[11] . . .

 

“Faced with an offer to settle, a party must objectively assess the economics of proceeding further. As Pattison phrased it, this “... is where the substantive and economic analyses of the value and risk of seeing a lawsuit through to judgment converge”. A party may decide to accept the offer or to itself make an offer. If, having assessed the offer, it chooses to do nothing, that choice carries with it the implicit determination that the party is satisfied that it will achieve a better result at trial. This is the party's own determination to make - it knows the strengths and weaknesses of its case. But such a determination also indicates that the party is willing to accept the risk of proceeding further. There is a willingness to accept the consequences of being wrong. A party who has offered to settle should not bear the expense of proceeding to trial because of the other party's over-optimistic assessment of its case . . . ”

 

[46]           The facts in the case at bar show that the Defendants’ offer was for 37,500 USD plus interest and costs. The Plaintiff had consented to the use of five of her photographs for 2,500 USD (Leuthold at para 21). Furthermore, Ms. Leuthold, was not a wealthy person at the time of the offer. The Defendants argue that the Plaintiff held an “over-optimistic” assessment of her claim and unwisely refused their reasonable offer.

 

[47]           The Plaintiff counters by arguing that “it is not in the public interest to deter litigants       from pursuing a reasonable claim owing principally to a fear of an award of costs”. The Plaintiff insists the award sought (i.e. 21, 554, 954.25 CAD), while on its face enormous, was based on a reasonable evaluation of damages per infringement. The amount was large because of the number of potential infringements, particularly by the BDUs. The issue of the “number of infringements that result from a transmission by a programming undertaking to [numerous] BDUs” was important (Plaintiff’s Written Representations [PWR] at para 27). The resolution of the question required a careful analysis of sections of the Copyright Act, RSC 1985, c C-42 [Copyright Act] and the Broadcasting Act, SC 1991, c 11 [Broadcasting Act], as well as the testimonies of two expert witnesses. A claim that required such extensive analysis cannot be easily dismissed as unreasonable. Finally, the Plaintiff adds that “[t]he importance of the issues in dispute justifies relieving the Plaintiff of the burden of paying substantial [...] costs” (PWR at para 29).

 

[48]           The Court disagrees with the Plaintiff’s argument that the importance of the issue meant that her decision to litigate the issue was reasonable. Given the offer from the Defendants, the Plaintiff’s decision to forego the offer and risk spending large amounts of money litigating a claim is not necessarily reasonable. As mentioned in the passage taken from Burton, cited above, a party that refuses a reasonable offer to settle is considered to be confident that it will be awarded more at trial. If you are not confident, then you should accept a reasonable offer or be willing to accept the risk of proceeding further.

 

VIII.    Submissions of the parties on issue 2

 

2.         Are the Defendants entitled to have their costs against the Plaintiff assessed at the upper end of column IV of Tariff B?

 

A.        The Defendants’ position

 

[49]           The Defendants referred the Court to Rule 407 of the Rules that allows the Court to assess costs at a rate other than column III of the table of Tariff B. They also underline the Court’s ability to award costs according to a higher column and its “full discretionary power” as to the amount of costs referred to in Rule 400(1) of Rules. They cite Novopharm Limited v Sanofi-Aventis Inc, 2007 FCA 384 at paras 8-10, by way of confirmation.

 

[50]           The Defendants then turned to Rule 400(3) of the Rules that provides a list of factors to consider. The Defendants point to the following factors as favouring both the award of costs according to the upper end of column IV and costs for having a second senior attorney participate in the proceedings:

 

[51]           The Defendants concede that the Plaintiff succeeded in her claim for copyright infringement for six unauthorized transmissions of her work but remind the Court that these infringements were admitted in the joint book of documents before the trial started.

 

[52]           Furthermore, they submit, the Plaintiff was unsuccessful in the majority of her other claims, notably, accounting for profits, exemplary damages and an injunction. The Defendants therefore conclude that the results of the proceedings were largely in their favour.

 

B.        The Plaintiff’s position

 

[53]           The Plaintiff responds with her own list of claims on which, in addition to the copyright infringement claim, she was successful, namely a claim for delivery up, profits of the Defendant CBC, and the destruction of electronic copies of infringing works. Thus, according to the Plaintiff, she was the more successful of the two parties.

 

[54]           The Plaintiff also insists that the Defendants never admitted to the infringement. She cites the Defendants’ Re-Amended Defence dated April 3, 2009, as containing, rather, a number of defences designed to avoid liability for the infringements.

 

C.        Parties’ respective positions on Rule 400(3)(b) and Rule 400(3)(c)

 

(1)        The amounts claimed and the amounts recovered

 

(a)          Defendants’ position

 

[55]           The Plaintiff’s total claim in damages for copyright infringement against the Defendants totalled 21, 554,954.25 CAD. The Defendants submit that the claim was grossly exaggerated as evidenced by the award granted on June 14^th, 2012, which was only equivalent to 0.1% of the claim.    

 

[56]           As a result of the amount at stake, further to the amendments introduced by Plaintiff in 2007, the Defendants submit that the matter became more lengthy and complex. For example, more than one pre-trial conference was required.

 

[57]           The Defendants also argue that the CBC is a public organization and, therefore, a large amount of taxpayer money was expended due to the outlandish amount of the claim.  

 

[58]           Lastly, the Defendants note that had the Plaintiff valued her damages around the amount that she was awarded (i.e. around 20,000 USD), her action would have been governed by Rules 292 to 299 of the Rules. Her action would have been far less costly. This is another factor to be considered under Rule 400(3)(n) of the Rules.

 

[59]           For all these reasons, the Defendants argue that the exaggerated amount of the Plaintiff’s claim favours an assessment for costs at the upper end of column IV of Tariff B, as well as for the costs for two attorneys at each step of the litigation from the date the offer was served.

 

(b)       Plaintiff’s position

 

[60]           The Plaintiff responds that the difference between the amount claimed in damages from that awarded is the result of the Court’s interpretation of both the license agreement of October, 2002 and the number of infringements the Plaintiff alleged.

 

[61]           Had the Court ruled in favour of the Plaintiff on those important, non-trivial issues and awarded the same amount (3,200 USD) that it did for the six infringements, the total would have been close to the total amount claimed by the Plaintiff.

 

[62]           For these reasons, the Plaintiff argues that her claim cannot be considered frivolous, unreasonable or exaggerated.

 

[63]           Additionally, the Plaintiff reminds the Court that it awarded a higher amount per infringement than she claimed and rejected the position of the Defendants’ expert as to the value of the photographs or a license of same.

 

(2)        The importance and complexity of the issues

 

(a)       Defendants’ position

 

[64]           The Defendants note firstly that intellectual property cases are generally more complex than other types of litigation and that it is not unusual for costs to be assessed at the upper end of column IV of Tariff B. They cite Novopharm Limited v Eli Lilly and Company, 2010 FC 1154 at paras 5 and 7 [Novopharm Limited] and Bonds v Suzuki Canada Inc, 2003 FCT 611 at para 33, in support of those claims.

 

[65]           They argue that the case raised a number of difficult questions that required a close analysis of the Copyright Act and the Broadcasting Act.

 

[66]           The Defendants also submit that the case was long, expensive and required two experts and five ordinary witnesses. The numerous proceedings that took place before the trial required, according to them, the presence of two attorneys.

 

[67]           Finally, the Defendants point out that the amount of work due to the complexity of the matter is a factor that justifies costs being assessed at the upper end of column IV of Tariff B. It also justifies that the costs for two attorneys at each step of the litigation be awarded.

 

 

(b)       Plaintiff’s position

 

[68]           Due to its nature and the number of issues and parameters that were dealt with, the Plaintiff takes the position that the case was important but not very complex.

 

[69]           The Plaintiff emphasizes the importance of the issues treated. The case involved, according to Plaintiff’s counsel, some very important issues of copyright and broadcasting law, including the interpretation of paragraphs 2.4(1)(c) and 3(1)(f) of the Copyright Act, as well as the issue of quantum to be awarded in the context of negotiated licenses.

 

D.        Plaintiff’s additional Rule 400(3) arguments

 

[70]           The Plaintiff also argues that applying a number of other factors in Rule 400(3) of the Rules to the facts should deter the Court from awarding double costs at the upper end of column IV of Tariff B.

 

[71]           The additional factors to be considered are:

 

 

(1)        The apportionment of liability

 

[72]           On this factor, the Plaintiff points out that solely the Defendants were found liable for both the infringements and the ambiguity in the license.

 

(2)        Whether the public interest in having the proceeding litigated justifies a particular award of costs

 

[73]           The Plaintiff argues that the issues debated and decided upon in this matter are of great importance for copyright law, both in Canada and generally in other Countries. Specifically, the Plaintiff points to 1) the question of the number of infringements that result from a transmission by a programming undertaking to multiple BDUs; and 2) the interpretation and use of copyright licenses in determining the amount awarded for infringement.

 

[74]           The Plaintiff argues that had she been deterred by the rules governing costs, these important issues would never have been litigated. It is in the public interest not to deter a reasonable and important claim from coming before the courts due to a fear of costs awards.

 

(3)        Any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding 

 

[75]           The Plaintiff’s attorney also underlined the following facts:

(1)        He had to send seven letters in order to finally set a date for the examination for discovery;

(2)        Mr. McIntosh was not in a position to answer the Plaintiff’s questions concerning the CBC’s intentions regarding the License;

(3)        Mr. McIntosh was unable to answer questions of a technical nature;

(4)        Mr. McIntosh was unable to identify for the Plaintiff an individual who could answer her questions;

(5)        Defendants refused to provide another witness for discovery;

(6)        The Defendants made 39 undertakings during the examination of Mr. McIntosh, on December 7, 2005, and took 10 months to fulfill them;

(7)        In the fall of 2007, the Plaintiff, through independent research, discovered the approximate number of BDUs that carried Newsworld programming and the fact that the scope of alleged infringements included hundreds of BDUs.

 

[76]           He then concluded that the Defendants’ conduct led to approximately two additional years of proceedings.

 

[77]           All in all, the Plaintiff submits that the Defendants’ uncooperative conduct in the context of examination for discovery led to approximately two additional years of proceedings. The Plaintiff highlights the independently discovered information regarding the number of BDUs that carried Newsworld (information she had requested from the Defendants), which necessitated further examination, additional proceedings and a Re-Amended Statement of Claim.   

 

(4)        Whether any step in the proceeding was improper, vexatious or unnecessary, or taken through negligence, mistake or excessive caution

 

[78]           The Plaintiff submits that the Defendants’ actions in delaying and being unprepared for examination for discovery mentioned above is as an example of improper, if not, vexatious conduct.

 

[79]           The Plaintiff also labels the fact that Defendants raised many defences throughout the seven years of proceedings, only to drop them at trial, as another example of improper, if not vexatious conduct.

 

(5)        Any other matter that the Court considers relevant

 

[80]           The Plaintiff submits that the Court should consider the relative strength and resources of the parties under this factor. The Plaintiff had very limited resources with which to pursue her claim (20,661 USD in 2006) compared to the Defendants’ resources. 

 

[81]           The Plaintiff also underlines the fact that the Defendants’ expert’s opinion was not adopted by the Court as relevant to the awarding of costs for said expertise.

 

IX.             Analysis of the second issue

 

2.         Are the defendants entitled to have their costs assessed at the upper end of column IV of Tariff B?

 

[82]           The Defendants are not entitled to have their costs assessed at the upper end of column IV of Tariff B.

 

[83]           Rule 407 of the Rules specifies that party-and-party costs are assessed according to column III of the table of Tariff B, unless the Court orders otherwise. As both parties submit, the factors the Court may consider when assessing the scale of costs are those found in Rule 400(3).

 

[84]           The Defendants highlighted three factors that they believe justify having their costs assessed at the upper end of column IV of Tariff B, namely, the result of the proceedings, the amounts claimed and amounts recovered, and the importance and complexity of the issues.

 

[85]           With respect to the complexity factor, the Defendants correctly point out that intellectual property cases are generally more complex and are often assessed at the upper end of column IV of Tariff B (the default scale, column III, usually applying to cases of average complexity). The Defendants cite Novopharm Limited, cited above, at paras 5 and 7. In Sanofi-Aventis Canada Inc v Novopharm Ltd, 2009 FC 1139 at para 13, Justice Snider notes:

[13] In my view, the upper end of Column IV is appropriate, and not simply because this award “splits the difference”. A review of recent jurisprudence on the issue of awards in intellectual property trials indicates that this scale recognizes the significance and complexity of the various issues in such a trial (see, for example, Johnson & Johnson Inc. v. Boston Scientific Ltd., 2008 FC 817, 2008 FC 817, [2008] F.C.J. No. 1022, at para. 15; Adir Costs, above, at para. 9-11; Kirkbi AG v. Ritvik Holdings Inc., 2002 FCT 1109, 2002 FCT 1109, [2002] F.C.J. No. 1474, at para. 10)…

 

[86]           The Defendants also cite a copyright case where column IV of Tariff B was applied on account of “volume and nature of the work involved” (cf. Bonds v Suzuki Canada Inc, 2003 FCT 611 at para 33).

 

[87]           Both parties have submitted, in their representations, that this case involved a large amount of work and legal analysis.

 

[88]           The Defendants also argue that the Plaintiff failed on a number of claims that she brought, notably, claims for an accounting for profits, exemplary damages and an injunction. The Plaintiff was nonetheless successful in her central claim for infringement which, at any rate, was subject to an admission on the part of the Defendants. The Defendants were thus required to expend time and resources on a number of claims that were ultimately not accepted by the Court.

 

[89]           The Plaintiff rightly asserts that she was not only successful on her infringement claim but also on her claims for delivery up, profits of the CBC and the destruction of electronic copies of infringing works. The Plaintiff also underlines that the Defendants never did admit liability for infringement. In the Court’s view this last issue is divided. 

 

[90]           The last factor the Defendants raise is the amounts claimed and amounts recovered (Rule 400(3)(b)). The Defendants submit that the amount claimed was completely exaggerated (around 100 times more than what was awarded). It increased the complexity of the case and required them to devote more time to litigating it. The Plaintiff, as mentioned above, submits that the award sought was based on a reasonable evaluation of damages per infringement.  

 

[91]           The Plaintiff, in turn, lists the following additional factors which the Court should take into consideration:

(1)        the public interest in having the proceeding litigated (400(3)(h)).

(2)        the Defendants’ unwillingness to cooperate throughout the examination for discovery (discussed above in section V) (400(3)(i) and (k));

(3)        the relative strength of the parties in terms of resources (400(3)(o));

(4)        the fact that the opinion of Defendants’ expert was not adopted by the Court (400(3)(o)).

 

[92]           With regards to the Defendants’ uncooperative behaviour (Rule 400(3)(i)), the Court finds that the Defendants’ comportment with respect to the discovery of Jerry McIntosh bordered on vexatious (cf. Apotex Inc v Sanofi-Aventis, 2012 FC 318 at para 15). On the applicable column of the tariff, the Court concludes that the appropriate column is column III of tariff B, for the following reasons. The case did raise some important issues, yet these were not as complex as the Defendants assert. Firstly, the expert opinions filed dealt with the scope of the license on the one hand and the value of the photographs on the other. The opinions had no link to the issue of the number of infringements and the consequent entitlement to the very significant amount of damages claimed.  Secondly, while it is true that costs in intellectual property cases are often awarded on column IV, in the majority of such instances, the Court is faced with patent litigation involving pharmaceuticals where the amounts at stake and the duration of the cases, discoveries and procedural incidents far eclipse the five witnesses and two experts heard in the present case.

 

[93]           A final sub-issue on which the parties disagree is whether the Defendants should receive costs for a second attorney. The Defendants cite Novopharm Limited, cited above, at para 8, where costs for second counsel were allowed due to the large amount of work and complex issues litigated. Another guiding principle behind this practice is “that party and party costs should bear a reasonable relationship to the actual costs of litigation” (Porto Seguro Companhia de Seguros Gerais v Belcan SA, 2001 FCT 1286 at para 24),.

 

[94]           The Plaintiff opposes the awarding of costs for a second attorney. Having concluded that the case was not of such complexity as to warrant the allowing of costs under column IV of Tariff B, the Court fails to see how such a case can warrant granting costs for a second attorney. For one, the Plaintiff was able to conduct her case with just one attorney. Additionally, the second attorney’s involvement at trial was limited to the cross-examination of the Plaintiff’s expert witness. Consequently, the Court rejects the claim for costs for a second attorney.

 

ORDER

 

In light of the reasons above THIS COURT ORDERS that

(1)        the costs be awarded in their favour as of August 9, 2005, at double the tariff set out and in accordance with column III of Tariff B;

(2)        the assessment officer allows assessment of costs for:

(a)        the fees and disbursements of the experts heard at the hearing;

(b)        all disbursements, including travel expenses for witnesses, photocopy fees, online research fees, transcript fees for examinations for discovery and the hearing, long distance fees, fax fees, postage and courier fees and other administrative fees;

(c)        interest on fees and disbursements since June 14, 2012;

 

less a 25% deduction given the vexatious conduct of the defendants during the discovery of defendant Jerry McIntosh.

 

 

"André F.J. Scott"

ANNEX

 

Rules 400(1), 400(3), 403(1), 403(2), 403(3), 407, 420(2) and 420(3) of the Federal Court Rules, SOR/98-106, provide as follows:

 

 

FEDERAL COURT

 

SOLICITORS OF RECORD

 

 

DOCKET:                                         T-299-05

 

STYLE OF CAUSE:                        CATHERINE LEUTHOLD

                                                            v

                                                            CANADIAN BROADCASTING CORPORATION

                                                            and

                                                            JERRY MCINSOTH

 

 

MOTION HELD VIA VIDEOCONFERENCE ON AUGUST 23, 2012 FROM OTTAWA, ONTARIO AND MONTRÉAL, QUÉBEC

 

 

REASONS FOR ORDER

AND ORDER:                                  SCOTT J.

 

DATED:                                            October 29, 2012

 

 

 

ORAL AND WRITTEN REPRESENTATIONS BY:

 

Me Daniel O'Connor	FOR THE PLAINTIFF
Me Christian Leblanc Me Alain Dussault	FOR THE DEFENDANTS

 

SOLICITORS OF RECORD:

 

Daniel O'Connor, Lawyers Pointe-Claire, Québec	FOR THE PLAINTIFF
Myles J. Kirvan Deputy Attorney General of Canada Montréal, Québec	FOR THE DEFENDANTS