CCH Canadian Ltd. v. Law Society of Upper Canada (T.D.)* [2000] 2 F.C. 451
| Date: 20000121 |
Docket: T-1618-93
BETWEEN
CCH CANADIAN LIMITED
Plaintiff
- and -
THE LAW SOCIETY OF UPPER CANADA
Defendant
- and -
Court File No.: T-1619-93
BETWEEN:
THOMSON CANADA LIMITED c.o.b. as
CARSWELL THOMSON PROFESSIONAL PUBLISHING
Plaintiff
- and-
THE LAW SOCIETY OF UPPER CANADA
Defendant
- and -
| Court File No. T-1620-93 |
BETWEEN:
CANADA LAW BOOK INC.
Plaintiff
- and -
THE LAW SOCIETY OF UPPER CANADA
Defendant
REASONS FOR SUPPLEMENTARY JUDGMENT AS TO COSTS
GIBSON J.
BACKGROUND
[1] In draft reasons for judgment herein distributed to counsel prior to the issuance of the substantive judgment in these actions on the 9th of November, 1999, I wrote:
| At the close of the hearing of this matter, counsel requested an opportunity to make submissions regarding costs on the basis of distributed draft reasons for judgment. These draft reasons for judgment will be distributed in accordance with that request. I would propose to arrange a brief teleconference with counsel to discuss the issue of costs shortly after the draft reasons have been distributed. If there is agreement to a conclusion that both sides should bear their own costs in light of the importance of the issues dealt with in this litigation, the lack of Canadian jurisprudential guidance in the area and the lack of full success on either side, I will so provide in my judgment. If further time is requested to make written submissions of a detailed nature or if a request to reconvene on the issue of costs is received, I will consider the request. |
In the event, the substantive judgment and supporting reasons issued very shortly after draft reasons were provided to counsel. The reasons in support of the substantive judgment concluded with the following very brief paragraph:
| A supplementary judgment as to costs will issue following receipt of written submissions. |
Written submissions as to costs were received in December, 1999. I have now had an opportunity to fully consider those submissions. In the result, these reasons are issued in support of a supplementary judgment as to costs.
POSITIONS OF THE PARTIES
[2] In written submissions on behalf of the plaintiffs, counsel notes that the plaintiffs achieved limited success in their actions and that the defendant was wholly unsuccessful in its counter-claim against each of the plaintiffs. In the result, counsel concluded as follows:
| We respectfully submit that, in view of the jurisprudence and the divided success in these actions, it would be appropriate in this case that an order issue to the effect that each party bear its own costs in these actions. Such an order would also be appropriate in view of the lack of decisive Canadian jurisprudence on a number of the issues addressed in these actions. |
[3] Not surprisingly, counsel for the defendant urges a different result. The defendant"s submissions concluded in the following terms:
| The Defendant submits that this Court should follow the general rule and that costs should follow the event and, in so doing, award costs in favour of the Defendant. In the Defendant"s submission, the complexity of the legal issues involved in these actions, combined with the factors discussed above, necessitate an award of costs to the Defendant to be assessed under the maximum upper end of column IV of Tariff B. In addition, the Defendant requests specific directions to the assessment officer along the following general lines: (1) the full expert fees paid to Mr. Stephen Cole be awarded; (2) the full travel expenses paid to Mr. Sylvano Carlesso to ensure his attendance in Toronto from Timmins be awarded; (3) full reimbursement of all photocopying expenses paid by the Defendant be awarded; and (4) that counsel fees be awarded for three counsel and one student. |
The "...factors discussed above,..." refer to the defendant"s view that it should be entitled to an award of costs on an enhanced basis in that: the plaintiffs commenced three separate actions; their actions were cast too broadly and without specificity both in terms of the publications at issue and the reliefs sought with the result that the actions were a "moving target" never fully defined until the opening of trial; the legal issues raised were "extremely complex" and of "significant importance" from legal and public policy perspectives; the plaintiffs refused to admit that the custom photocopy service was operated on a "cost-recovery" basis and not for profit; and the result was, it urged, overwhelmingly in its favour, particularly when its counterclaim is viewed, as it submits it should be, as in the nature of an "affirmative defence".
APPLICABLE PROVISIONS OF THE FEDERAL COURT RULES, 19981
[4] Rule 400(1) provides that the Court has full discretionary power over the amount and allocation of costs and the determination by whom they are to be paid. Rule 400(3) describes a range of factors that the Court may consider in exercising its discretion. Those factors include, but are not limited to, the following:
| (1) the result of the proceeding; |
| (2) the importance and complexity of the issues; |
| (3) the amount of work; |
| (4) whether the public interest in having the proceeding litigated justifies a particular award of costs; |
| (5) any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding; |
| (6) the failure by a party to admit anything that should have been admitted or to serve a request to admit; |
| (7) whether any step in the proceeding was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution; |
| (8) whether two or more parties, represented by the same solicitor, initiated separate proceedings unnecessarily; |
| (9) whether a party who was successful in an action exaggerated a claim, including a counterclaim or third party claim (particularly in the context of rules regarding simplified actions); and |
| (10) any other matter that the Court considers relevant. |
ANALYSIS
[5] As a general rule, costs should follow the event.2 Where success has been fairly evenly divided, there should normally be no order as to costs.3
[6] The defendant was almost entirely successful in defending against the claims of the plaintiffs. By contrast, the defendant was wholly unsuccessful in asserting its counterclaim. I reject the submissions of counsel for the defendant that the counter-claim was an "affirmative defence". The counterclaim raised the issue of copyright infringement by the defendant through the operation of the self-copying service in its Great Library.4 At least that portion of the defendant"s counterclaim could not possibly be described as an "affirmative defence"; in fact, it raised whole new issues that were at no time raised by the plaintiffs. Weighed together, I am satisfied that the defendant was more successful than the plaintiffs; success could not be said to be "evenly divided". On the other hand, it could not be said that one side was fully successful.
[7] I am in agreement with the submissions of counsel for the defendant that the issues raised in this litigation are of general importance and of significant complexity. Preparation for trial and presentations at trial involved a very substantial amount of work on both sides. There was, I am satisfied, a substantial public interest, both in policy terms and in legal terms, in having this matter determined. However, that factor does not of itself, in my view, justify a particular award of costs.
[8] I find it difficult to determine why three separate actions were commenced and carried forward by the plaintiffs. That being said, all three plaintiffs were represented by the same counsel, the actions were heard together, the claims and counterclaims were identical and there was no dispute at trial that materials prepared for use at trial, testimony at trial and exhibits filed at trial uniformly applied to all three actions.
[9] I am in agreement with the submissions of counsel for the defendant that the plaintiffs" allegations as set out in the statements of claim and the reliefs sought were extraordinarily broad and without specificity. As indicated in the reasons in these matters dated the 9th of November, 1999, it was only at the beginning of the trial that the plaintiffs focussed their claims. It was also not until the beginning of trial that the plaintiffs dropped very significant claims for relief and focussed their remaining substantive claim, that being for a permanent injunction, even though that claim continued to be stated in very broad terms. In summary, the plaintiffs presented an amorphous and moving target. While I am not satisfied that the conduct of the plaintiffs, at least once the trial commenced, "unnecessarily lengthened the duration of the proceedings", it certainly complicated the preparation for and presentation at trial for the defendant.
[10] The same might be said in reverse with respect to the conduct of the defendant in serving and filing a notice of constitutional question approximately one month before the commencement of the trial. The nature of the defendant"s constitutional defence was not at all clear until after the presentation of evidence at trial when extensive written argument was filed and amplified by oral argument. I have no difficulty finding that the plaintiffs were put to substantial additional work in attempting to anticipate and prepare for the ill-defined constitutional argument.
[11] The defendant submits that the plaintiffs should have admitted, in advance of trial, to the fact that the defendant"s custom photocopy service was operated on a cost-recovery basis and not for profit. Counsel for the defendant submits that, in failing to make the admission, the plaintiffs substantially increased the cost of this litigation to the defendant by requiring the defendant to obtain expert opinion evidence on the issue. I cannot agree with the position of the defendant in this regard. I find that it was entirely reasonable for the plaintiffs to question whether or not the custom photocopy service was in fact operated on a cost recovery basis only.
[12] I find no basis on which to conclude that any step in these actions was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution. This finding is in spite of my earlier comments regarding commencement of three separate actions, failure on the part of the plaintiffs to specifically define their claims and the reliefs sought prior to the commencement of trial, extension by the defendant of its counterclaim to cover self-copying services, and failure by the defendant to effectively define its constitutional defences at an earlier stage of the proceedings. None of these factors, in my view, fits the description of an improper, vexatious or unnecessary step or amounted to a step taken through negligence, mistake or excessive caution.
[13] Taking all of the foregoing into account, I conclude that this is an appropriate case for each party to bear its own costs. In reaching this conclusion, I place particular emphasis on the factors of divided result, the complexity of some of the legal issues and the lack of Canadian jurisprudential guidance on some of those issues, and the public interest in having these actions litigated.
[14] In the result, I need not consider the submissions of counsel for the defendant regarding specific directions to an assessment officer. That being said, I will comment briefly on those submissions.
[15] As noted earlier, I am satisfied that it was not unreasonable for the plaintiffs to put the defendant to its proof of the fact that its custom photocopy service was operated on a cost-recovery basis only and not for profit. Thus, I would provide no special direction regarding the expert fees paid to the witness Mr. Stephen Cole. Similarly, it was in no sense unreasonable to put the defendant in the position where it felt obliged to ensure the attendance of Mr. Sylvano Carlesso as a witness. I would provide no special direction regarding Mr. Carlesso"s full travel expenses. Furthermore, I am not satisfied that the conduct of the plaintiffs in commencing three separate actions rather than one consolidated action, or in any other regard, would justify full reimbursement to the defendant for its photocopying expenses. I find no basis to conclude that a significant portion of those expenses related to the manner of proceeding by separate actions, particularly when the plaintiffs were represented by the same counsel and only one trial, and one set of documents for trial, was required. Finally, if counsel fees were awarded on either side, I would regard it as appropriate that those fees be fixed for two counsel and one student only.
CONCLUSION
[16] For the foregoing reasons, a supplementary judgment will issue providing that there will be no order or judgment as to costs in each of these three actions.
___________________________
Judge
Ottawa, Ontario
January 21, 1999
__________________2 Merck & Co. v. Novopharm Ltd. (1998), 82 C.P.R. (3d) 457at 464 (F.C.T.D.).
3 Lubrizol Corp. v. Imperial Oil Ltd. (1996), 67 C.P.R. (3d) 1 at 25 (F.C.A.).
4 See paragraphs 189 to 192 of the reasons in this matter dated the 9th of November, 1999.