Date: 19990212
Docket: T-1518-97
BETWEEN:
MAISON DES PÂTES PASTA BELLA INC.,
Applicant,
- and -
OLIVIERI FOODS LIMITED,
Respondent.
REASONS FOR ORDER
MULDOON, J.
[1] On October 19, 1998, two motions were before the Court arising from an assessment of costs conducted by an assessment officer on August 18, 1998 in Toronto. At the conclusion of that assessment hearing, the applicant was ordered to pay to the respondent costs in the amount of $19, 277.21. The applicant, Maison des Pâtes Pasta Bella Inc., now moves for an order that the award of costs be reduced by the sum of $5,015, constituting the award of costs for the assessment itself, and an order for the costs of this motion on a solicitor and client basis. The respondent has filed a cross-motion seeking an order setting aside the assessment officer"s order, and substituting an order awarding increased costs to the respondent in the amount of $45,261.09, as well as an order for the costs of this motion on a solicitor and client basis.
[2] These motions arise from trade-mark expungement proceedings initiated by the applicant on July 16, 1997. Leave was granted on September 24, 1997 to extend the time for the respondent to file its reply material. On February 24, 1998, Prothonotary Morneau denied the applicant"s motion for leave to file additional evidence. Hugessen J. dismissed the applicant"s appeal on March 3, 1998, and awarded costs to the respondent in the amount of $3,500. The applicant then sought leave to discontinue its application, and Hugessen J. granted this request, awarding costs to the respondent on a solicitor and client scale.
[3] Rules 405-414 of the Federal Court Rules, 1998, SOR/98-106 govern the assessment of costs, replacing former rules 346, 347, 349, and 350. In particular, rule 414 provides:
| 414. A party who is dissatisfied with an assessment of an assessment officer who is not a judge may, within 10 days after the assessment, serve and file a notice of motion to request that a judge of the Trial Division review the award of costs. |
| 414. La partie qui n"est pas d"accord avec la taxation d"un officier taxateur, autre qu"un juge, peut demander à un juge de la Section de première instance de la réviser en signifiant et déposant une requête à cet effet dans les 10 jours suivant la taxation. |
[4] The new rules do not change the nature of a review of an assessment of costs; the Court"s function on review remains to determine whether the assessment officer applied the correct principles: I.B.M. Canada Ltd. v. Xerox of Canada Ltd., [1977] 1 F.C. 181 (C.A.).
[5] In Montreal Fast Print (1975) Ltd. v. Polylok Corp. (1984), 1 C.P.R. (3d) 204 (F.C.T.D.), Cattanach J. had this to say,
| ...I propose to treat this application as in the nature of an appeal subject to the constraints thereon which have been well established by subsequent jurisprudence, paramount amongst which is the cardinal principle that if an item does not involve a question of principle but merely a question of amount the taxing officer"s discretion on that item will not be interfered with unless the amount can be shown to be so unreasonable as to suggest that an error in principle must have been the case. |
Thus, the reviewing court may interfere with the taxation of costs if the assessment officer erred in law or in principle, and an error in quantum may amount to an error in principle (see also: Camp Robin Hood Ltd. v. The Queen (1981), 21 L.C.R. 219 at 223 (F.C.T.D.) per Cattanach J.).
[6] It is useful to note at the outset that costs awarded on a solicitor and client scale, as opposed to a party and party scale, are intended to provide complete indemnity to the successful party; the party and party scale provides only a partial indemnity. In Apotex Inc. v. Egis Pharmaceuticals et al. (1991), 4 O.R. (3d) 321 (Ont. Ct. Gen. Div.), Henry J. succinctly articulated the principle behind the solicitor and client scale at page 325, in an effort to clarify the "woolly thinking" characterizing this area of the law:
| The general principle that guides the court in fixing costs as between parties on the solicitor and client scale, as provided in my order, is that the solicitor and client scale is intended to be complete indemnification for all costs (fees and disbursements) reasonably incurred in the course of prosecuting or defending the action or proceeding, but is not, in the absence of a special order, to include the costs of extra services judged not to be reasonably necessary. |
Thus, the unsuccessful party must pay the costs which the successful party would have to pay his or her lawyer, with the caveat that the costs awarded must be those reasonably incurred.
I. Respondent"s Motion
[7] In its motion, the respondent alleges that the assessment officer erred in principle in four instances. The respondent claims the assessment officer erred, first, when he refused to allow any further costs, beyond the fixed amount of $3,500, set by Hugessen J., for the applicant"s motion and appeal for leave to introduce further evidence. Second, the assessment officer is alleged to have erred by refusing to allow any costs associated with the respondent"s motion for an order granting an extension of time or leave to file reply evidence. Third, the assessment officer is alleged to have erred when he refused to allow any costs in regard to the translation of a document in french which was submitted as an exhibit to an affidavit filed by the applicant. And fourth, the respondent claims the assessment officer erred in refusing to allow the respondent costs on the solicitor and client scale for the assessment itself.
1. Costs associated with the applicant"s motion and appeal for leave to introduce further evidence
[8] The assessment officer declined the respondent"s request to "top up" its costs award of $3,500 for the applicant"s failed motion and appeal for leave to file additional evidence. At paragraphs 11 and 12 of his reasons, the assessment officer held,
| On the issue of the scope of costs awarded, it is my view that Hugessen J., when restricting the costs of the motion before the Prothonotary to $3,500.00, thereby excluded this part of the proceedings from his immediately subsequent order granting solicitor/client costs on the discontinuance. Specifically, Hugessen J. stated in his reasons regarding the Prothonotary"s motion that "...the request by the respondent for costs on a solicitor and client scale has not been made out...". |
| I have therefore concluded, as submitted by the applicant, that the fees and disbursements claimed for November 6 and 7, and from December 31, 1997 to and including March 4, 1998, and relating to the motion for leave to adduce additional evidence must be taxed off. |
[9] The respondent argues that when a final award of solicitor and client costs is made, it is unfair for the Court to deny a party the remaining costs from an interlocutory proceeding which are part of the solicitor and client bill: Benner & Associates Ltd. v. Northern Lights Distributing Inc. (1996), 6 C.P.C. (4th) 201 (Ont. Ct. Gen. Div.). The respondent contends that a party who has been awarded costs of a motion on a party and party basis " which the respondent received in the amount of $3,500 " is entitled to have those costs "topped up" pursuant to an order at the end of the proceedings which awards costs to that party on a solicitor and client basis: Polish National Union of Canada Inc. v. Palais Royale Ltd. (1998), 163 D.L.R. (4th) 56, 111 O.A.C. 165 (Ont. C.A.). This is consistent, the respondent argues, with the purpose of solicitor and client costs, viz., providing complete indemnity for all costs reasonably incurred in the course of prosecuting or defending the action or proceeding.
[10] In Benner & Associates Ltd., supra, Benotto J. of the Ontario Court of Justice held at pages 203-204,
| Costs were awarded on a party and party basis to the plaintiff on two interim motions. The defendants" counsel argues that the matter of costs for all the time involved in those motions is now res judicata . I agree that the party and party costs is res judicata; however, it would be unfair to the plaintiff now to be denied recovery of the remaining costs which are part of the solicitor-client bill. I do not question the propriety of the costs awards made. However, they were made as part of interim orders. Both orders turned out to be very important to the ultimate outcome. |
| The trend is for the judge to fix costs at the conclusion of a motion. An order for solicitor and client costs of a motion is rare. For one thing, it would be impossible for the motions judge to know the true impact of the order on the final determination. The defendants" position would mean that a successful party on a motion who recovered party and party costs would be automatically precluded from a further recovery of the remaining costs. This would be unfair and could potentially discourage parties from seeking costs of a motion so as to preserve a right to solicitor-client costs. |
The Court went on to assess solicitor and client costs of those motions, and allowed an amount less than claimed in the bill which was submitted, but one which was nonetheless a substantial increase of the initial award on the party and party scale.
[11] The Court in 131843 Canada Inc. v. Double "R" (Toronto) Ltd. (1992), 11 C.P.C. (3d) 190 (Ont. Ct. Gen. Div.), when considering the same issue, held,
| Costs were awarded to the defendants in certain interlocutory proceedings prior to trial and were presumably granted on a party-and-party basis. The plaintiff submits that the defendants should not now be entitled to recover costs on a different and higher scale. |
| I do not agree. I see nothing to prevent the court from "topping up" a party"s recovery in respect of the costs of such proceedings if, at the end of the trial, the judge is of the opinion"as I was"that the party is entitled to be reimbursed on the solicitor-and-client scale throughout. It is not a question of sitting on appeal from the interlocutory decision; it is simply a question of providing to the successful party the full indemnity that such an award envisions. |
[12] Thus, it appears that the assessment officer erred in principle when he concluded that the second order of Hugessen J. acted to preclude the "topping up" of the first order which related to costs awarded on, presumably, a party and party scale for that particular motion. Hugessen J."s second order awarding costs on a solicitor and client scale means that the respondent is to be reimbursed according to that scale for costs incurred throughout the proceeding, including the applicant"s failed motion and appeal for leave to introduce further evidence.
2. Costs for the respondent"s motion for an order granting an extension or leave to file reply evidence
[13] The assessment officer agreed with the applicant"s argument that, pursuant to rule 410(2), the respondent should not have its costs with respect to its motion for an extension of time to file its reply. Rule 410(2) provides that unless the Court orders otherwise, the costs of a motion for an extension of time shall be borne by the party bringing the motion. The assessment officer noted that there was no specific order of the Court regarding costs for the motion to extend time, and thus the respondent must bear the costs.
[14] The respondent relies on the aforementioned proposition that an award of costs on the solicitor and client scale is intended as complete indemnity for all costs reasonably incurred in the course of prosecuting or the defending the action or proceeding, and argues that the costs associated with the filing of the reply evidence were reasonably incurred.
[15] It appears that the assessment officer has quite properly relied on rule 410(2) in his decision to tax off the fees claimed for that particular motion, and it shall not be interfered with by this judge.
3. Costs for the translation of a document submitted by the applicant as an exhibit to an affidavit
[16] In his reasons, the assessment officer denied the respondent"s claim for translation costs, stating at paragraph 16,
| Since there is no requirement by the Court for the translation of any filed documents from one official language to the other and given similar decisions of assessment officers in this Court, such as M. Reinhardt in the Energy Absorption case (supra) [Energy Absorption Systems Inc. v. Y Boissonneault & Fils Inc., T-2263-86, 30 January 1991, Reinhardt A.O.] and J.F.D. Cousineau in Bénédictine Distillerie de la liqueur de l"ancienne Abbaye de Fécamp v. John Labatt Ltée, [1990] 3 F.C. D-37 (T.D.) referred to by the applicant, the $776.17 inclusive of G.S.T. claimed for translation services is taxed off the respondent"s bill (the actual invoice total was $834.60). |
[17] The respondent argues that its translation costs were reasonably incurred, and thus costs should be allowed, in line with Riello Canada Inc. v. Lambert (1987), 15 C.P.R. (3d) 257 (F.C.T.D.). The cases that the assessment officer made reference to are distinguishable, the respondent contends, on the basis that they deal with the determination of costs on a party and party scale, and not on a solicitor and client scale.
[18] In argument before the Court, the respondent pointed to the taxing officer"s decision in Energy Absorption where costs were allowed for simultaneous translation services conducted for examinations for discovery. The taxing officer reasoned, in that case, that since the Court offers at public expense simultaneous translation services for proceedings in open court, it cannot be considered unreasonable for parties to incur taxable disbursements to avail themselves of such services when not provided by the Court.
[19] In Riello, supra, the defendant was ordered to pay costs to the plaintiff at the conclusion of an action to impeach a patent. The Court allowed costs for translation services; however, those costs were incurred in circumstances far different from those of the case at bar. The translation costs in Riello concerned an expert witness who was retained by the successful plaintiff. What distinguishes that case is the fact that the witness lived in Italy and spoke Italian, thereby requiring translation and interpreter services. This case is of no assistance for the respondent.
[20] The assessment officer"s refusal to admit translation expenses into the award of costs must stand. The Federal Court, as has often been stated, is a national court, and its jurisdiction extends from coast to coast. It is, therefore, a bilingual court in both nature and function, and parties appearing before it may use either of the official languages. Choice of language should not result in the imposition, or burden, of additional costs; indeed, such a result could set a dangerous precedent.
4. Costs for the assessment hearing
[21] In Samsonite Canada Inc. v. Les Enterprises National Dionite Inc. (T-2738-93, May 15, 1995), the assessment officer noted that costs incurred up to and including the taxation hearing may be included in the taxation.
[22] In the case at bar, the assessment officer concluded at paragraph 27 of his reasons,
| Counsel for the applicant suggested that the costs allowed for the assessment should reflect my decision regarding the scope of award issue. Considering that the costs of two motions were taxed off, thereby reducing the bill by approximately 50%, I agree with the applicant that, based on the orders of Hugessen J. regarding costs, some of the preparation time was unnecessary. I therefore reduce the fees for the assessment of costs to $5,015.00. Of the $239.37 claimed for disbursements on the assessment, only $95.12 including G.S.T. is proven satisfactorily and therefore allowed. |
[23] Relying on Montreal Fast Print (1975) Ltd., supra, the respondent argues that where costs awarded on a solicitor and client basis are taxed, that taxation is to be allowed on a solicitor and client basis as well. In that case, the taxing officer allowed the costs for preparing and taxing the bill of costs. He reasoned that since it was the defendant"s default which occasioned the initial order of costs, as well as the taxation of those costs, the defendant should therefore be responsible for those amounts.
[24] In the case at bar, the costs relating to the assessment, set out in the affidavit of Mr. K. Evans (respondent"s motion record, tab 9, p. 9, see attached exhibits L-1 and L-2), amounted to $6,015 for fees and $239.37 for disbursements, for a total amount of $6,254.37. The assessment officer reduced this amount to $5,015 at the assessment hearing, a reduction of $1,239.37. His reason for this decreased award was that some of the preparation time was "unnecessary."
[25] The guiding principle behind awards of costs on the solicitor and client scale is to provide complete indemnification for all costs, including fees and disbursements, reasonably incurred in the course of prosecuting or defending an action or proceeding. The assessment officer did allow costs for the assessment hearing, but not in the amount submitted by the respondent, concluding that some of the costs were unnecessary, although perhaps he could have stated, in the parlance used in the jurisprudence, that they were not reasonably incurred. The amount of the reduction does not appear to constitute an error in principle. Accordingly, the assessment officer"s decision on this point must stand.
II. Applicant"s Motion
[26] The applicant seeks an order setting aside the assessment officer"s award of costs, and substituting for it one which reduces the total amount by $5,015, which constitutes the costs associated with the assessment hearing itself, as well as an order for the costs of this motion on a solicitor and client basis.
[27] In its written submission, the applicant contends that the assessment officer taxed off a total of $32,167 of the total bill of $32,440 submitted by the respondents, and thus it achieved "virtual complete success in the assessment." Given this outcome, the applicant argues, the assessment officer erred in principle in awarding costs of the assessment (applicant"s amended motion record, tab 4, p. 4).
[28] The applicant"s position is clearly based on a misunderstanding of what those amounts represent. In reality, the assessment officer did not tax $32,167 off the total $32,440. Rather, the assessment officer corrected the calculation of fees claimed by the respondent. The correct total claimed was actually $32,167, and of that amount, the assessment officer awarded $19,277.09.
[29] Given this Court"s finding above regarding costs for the assessment hearing " that the assessment officer did not err in awarding costs to the respondent in the amount of $5,015 " the applicant"s motion must fail.
III. Conclusion
[30] In Montreal Fast Print (1975) Ltd., Cattanach J. concluded that the practice of the Court has been that, as a general rule, costs of the review of taxations should not be given except when one of the parties has enjoyed a "substantial success." He made no award of costs against either party upon his review of the taxing officer"s certificate.
[31] This judge sees no reason to depart from this practice in the present case, and, accordingly, no award of costs of this review will be made to either party.
[32] With regard to the finding that the assessment officer erred in concluding that Mr. Justice Hugessen"s order of costs in the lump sum of $3,500 for the applicant"s failed motion and appeal precluded the respondent from having these costs "topped up" by virtue of Mr. Justice Hugessen"s subsequent order awarding the respondent its costs on a solicitor and client scale, the certificate of assessment should be returned to the assessment officer for the necessary reconsideration and amendments.
Judge
Ottawa, Ontario
February 12, 1999