Date: 20031008
Docket: T-272-99
Neutral citation: 2003 FC 1166
Ottawa, Ontario, Wednesday, this 8th day of October, 2003
Present: THE HONOURABLE MADAM JUSTICE SNIDER
BETWEEN:
CARTER-WALLACE INC.
Applicant
- and -
WAMPOLE CANADA INC.
Respondent
REASONS FOR ORDER AND ORDER
[1] The origin of this motion was Carter-Wallace Inc.'s unsuccessful appeal of a Decision by the Registrar of Trade-marks refusing to expunge a trade-mark registration of Wampole Canada Inc. By Order dated June 20, 2000, Mr. Justice O'Keefe dismissed the application of Carter-Wallace with Wampole's "costs to be taxed". Wampole subsequently submitted a request of an assessment of its Bill of Costs, including as an alternative, that its costs be paid by counsel for Carter-Wallace, MacBeth & Johnson.
[2] In response to the request for an assessment of the Bill of Costs, MacBeth & Johnson prepared and submitted written representations, on its own behalf and not on behalf of any other party named in the assessment request. The main thrust of the law firm's submissions was that there was no basis in law or in fact for Wampole's costs to be paid by the solicitors. In its submission, MacBeth & Johnson also requested that, pursuant to Rule 408(3) of the Federal Court Rules, 1998, the assessment officer assess its costs in defending against the assessment.
[3] In its reply to the submissions of MacBeth & Johnson, Wampole stated that it "withdraws its request that costs be assessed against the solicitors for the applicant Carter-Wallace ....".
[4] In his decision dated August 19, 2003, the Assessment Officer awarded $2,070.00 in costs to Wampole but denied the claim of MacBeth & Johnson to $8,225.00 for defending the request for costs. MacBeth & Johnson has brought this motion, pursuant to Rule 414 of the Federal Court Rules, 1998, for a review of that assessment insofar as its claim for $8,225.00.
Issue
[5] MacBeth & Johnson's request to the Assessment Officer raises the issue of whether an assessment officer can, pursuant to Rule 408, award assessment costs to a party who is not named in the original proceedings but who is named in a request for assessment of costs. In this motion, the first issue for determination is whether the decision of the Assessment Officer should be reviewed.
[6] Assuming that I agree that a review of this decision is appropriate, the parties agree that determination of the issue turns on whether MacBeth & Johnson was a "party" to the proceedings within the meaning of Rule 408(3). That Rule provides that an assessment officer "may assess and allow, or refuse to allow, the costs of an assessment to either party". Thus, if MacBeth & Johnson is not a "party", its motion must fail.
Standard of Review
[7] This Court should not interfere with a decision of an assessment officer "unless the amounts are so inappropriate or his decision so unreasonable as to constitute an error in principle". (I.B.M. Canada Ltd. v. Xerox of Canada Ltd. [1977] 1 F.C. 181 (F.C.A.))
Decision of the Assessment Officer
[8] With respect to the arguments by MacBeth & Johnson before the Assessment Officer, the Officer ruled against awarding such costs. Specifically, the Assessment Officer dealt with this request as follows:
The Federal Courts Act, s. 4 and 5.1 defining the Court, and Rule 2 of the Federal Court Rules, 1998, defining an assessment officer, preclude me from usurping the discretion vested in the Court by Rule 400(1) to award costs. However, a Rule 400(1) award of costs does vest an assessment officer with jurisdiction to decide which items of costs are to be allowed and their quantum. Rule 408(3), which provides that an "assessment officer may assess and allow, or refuse to allow, the costs of an assessment to either party", is an exception in that it would permit me to allow costs in this matter to the Applicant, who does not have a Rule 400(1) award of costs. The language of Rule 408(3) addresses a "party", but does not extend to that party's solicitor of record. Rule 408(3) would permit me to deny the Respondent its costs of the assessment notwithstanding the Respondent's Rule 400(1) award of costs.
...
The Applicant's solicitor expressly characterized its submissions as only on behalf of itself, "either as an interested party or (by analogy to the procedure under Rule 404 and "gap" Rule 4) as solicitor against whom costs are being sought". The Respondent's attempt to have the costs made payable by the Applicant's solicitor was an alternative to its proposition that the third parties be liable for payment of costs owed by the Applicant as a function of the acquisition of the Applicant's debts along with the Applicant itself. The alternative position flowed from an assertion that the Respondent was prejudiced by a failure to disclose, during negotiations to settle costs, the acquisition of the Applicant by third parties. In the circumstances, I decline costs of the assessment in favour of the Applicant.
[9] I note that, in his analysis, the Assessment Officer referred only to the Applicant whereas this specific request was from MacBeth & Johnson on its own behalf. Thus, on the face of the decision, there may have been a misapprehension of the request serious enough to constitute an error in principle. On that basis, I am prepared to review the decision. As discussed below, such an analysis leads me to the same conclusion as that reached by the Assessment Officer, that MacBeth & Johnson is not entitled to its costs.
Analysis
[10] Rule 400(1) provides the Court with full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid. Accordingly, it was fully open to Mr. Justice O'Keefe to determine that costs were to be payable by someone other than the parties named in a proceeding. Mr. Justice O'Keefe did not do that in his order of June 20th. Accordingly, there is no basis upon which Wampole could seek costs against anyone other than Carter-Wallace, the original party to the proceeding. A review of Rules 405 and following clearly indicates a scheme whereby those parties who are required to pay costs and those who are entitled to receive costs engage the Assessment Officer in the mechanics of assessing a Bill of Costs.
[11] Merely being named by Wampole in its original Bill of Costs does not change or expand the restricted role of the Assessment Officer. His lack of jurisdiction was the basis of the submission of MacBeth & Johnson made in response to the request for assessment once the law firm was named. It also appears that Wampole, in withdrawing its claim for costs against MacBeth & Johnson, recognized this lack of jurisdiction.
[12] It follows that MacBeth & Johnson could not be a "party" for the purposes of Rule 408(3) and could not receive any award of costs from the Assessment Officer. For this simple reason, this motion should fail.
[13] MacBeth & Johnson draws my attention to the fact that the request to assess costs against it was withdrawn. In the submission of MacBeth & Johnson, this is the same as an abandonment or discontinuance, a situation that is provided for in Rule 412, which states that the "costs of a proceeding that is discontinued may be assessed on the filing of the Notice of Discontinuance".
[14] With respect to this argument, I do not see the withdrawal of the request as the same or equivalent to an abandonment or discontinuance. MacBeth & Johnson assume that the request against it was a separate proceeding that could be discontinued or abandoned. In this case, only the request for assessment against MacBeth & Johnson was dropped. The substance of the request to the Assessment Officer was the assessment of costs; that request continued despite the withdrawal.
[15] MacBeth & Johnson also argues that, as soon as the firm was served with a Notice of Appointment for assessment and the Bill of Costs to be assessed, in compliance with Rule 406(2), it became an "interested party" to the Bill of Costs.
[16] It is unclear whether MacBeth & Johnson was served as an "interested party" or because they were the solicitors of record for Carter Wallace. In any event, it is a huge leap to say that MacBeth & Johnson, simply because it was served, became a party for purposes of Rule 408. Once again, unless and until the Court made a specific order that costs could be assessed against MacBeth & Johnson, the Assessment Officer was without jurisdiction to award costs against anyone other than the parties to the proceeding.
[17] I note that there are other ways in which MacBeth & Johnson could have clarified and protected its interest. Upon being served with the Notice of Appointment, MacBeth & Johnson could have brought a motion to this Court. By preparing submissions in respect of the Bill of Costs, MacBeth & Johnson appears to have spent 19.5 hours of the time of it senior solicitors to defend itself without taking into account the limited jurisdiction of an Assessment Officer. This is particularly puzzling since the basis of the submission made to the Assessment Officer was that the Assessment Officer was without jurisdiction in this matter.
[18] Finally, I note that an award of costs is discretionary. In my view, MacBeth & Johnson's claim of $8,225.00 is excessive. I note that the costs assessed for the entire action were in the amount of $2,070.00 for both services and disbursements. Accordingly, had the application pursuant to Rule 408 been made before me, I would likely have dismissed it in any event.
Conclusion
[19] For these reasons, the motion will be denied with costs to Wampole.
ORDER
THIS COURT ORDERS THAT:
1. the motion is denied; and
2. costs in the motion are awarded to Wampole Canada Inc.
"Judith A. Snider"
_____________________________
Judge
FEDERAL COURT
Names of Counsel and Solicitors of Record
DOCKET: T-272-99
STYLE OF CAUSE: CARTER-WALLACE INC. v.
WAMPOLE CANADA INC.
DATE OF HEARING: MONDAY, SEPTEMBER 29, 2003
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER SNIDER J.
AND ORDER BY:
APPEARANCES BY: Mr. Frank Farfan
Ms. Judy Wong
For the Applicant
Mr. Kenneth Hanna
For the Respondent
SOLICITORS OF RECORD: Mr. Frank Farfan
MacBeth & Johnson
Barristers & Solicitors
Toronto, Ontario
For the Applicant
Mr. Kenneth Hanna
Ridout & Maybee LLP
Ottawa, Ontario
For the Respondent