Ottawa, Ontario, June 14, 2007
PRESENT: The Honourable Barry Strayer
BETWEEN:
EMALL.CA INC. and EMALL.CA INC.,
carrying on business as CHEAPTICKETS.CA
and
REASONS FOR ORDER AND ORDER
[1] On March 2, 2007, I issued Reasons for Order in this application for expungement of the Respondent’s trademarks. I ordered that the trademarks be expunged and that costs be awarded to the Applicant.
[2] Subsequently, the Applicant wished to seek special directions as to the costs and at the suggestion of the Court, brought a motion in writing for this purpose. While I initially expressed some doubts about the costs issue being raised at this point, counsel for the Applicant has satisfied me that this motion is properly brought under Rule 403 in the form of a request for directions to the assessment officer.
[3] Counsel for the Applicant has also satisfied me that a special direction should be given under Rule 420. The application for expungement was commenced on January 31, 2005. On October 26, 2005, after each side had served its affidavits and before there was cross-examination on those affidavits, the Applicant made a written offer of settlement to the Respondent. By that offer, the Applicant would withdraw its application for expungement but would be permitted to use its domain name, CHEAPTICKETS.CA, undertaking always to use the .CA with the word CHEAPTICKETS. A co-existence agreement would prevent further disputes between the parties. Each party would discontinue its proceedings against the other, without costs. The offer was to be left open until commencement of the hearing of the application, subject to a temporary suspension during the cross-examination of the Respondent’s affiants. Less than a week later, on November 1, 2005, the Respondent rejected the offer. During the following fifteen months, cross-examinations took place and various preparations continued for the hearing, the application being put under case management. The actual hearing was on February 7, 2007. The judgment which I have issued is more favourable to the Applicant than would have been the settlement it proposed. Its proposed settlement would have left the Respondent’s trademarks in place and circumscribed to some extent the Applicant’s use of its domain name. Had the Respondent accepted the offer prior to the cross-examination of its affiants, the Applicant would have been disentitled to claim any costs. As the result of my decision, however, the Applicant remains free to use its domain name in any way it wishes and it is entitled to the costs of the whole proceeding. Subject to appeal, the Respondent has lost its registered trademarks. I am therefore satisfied that the case comes within sub Rule 420(1). The Applicant is therefore entitled to party and party costs up to October 26, 2005 and to double such costs thereafter.
[4] The Applicant also asks, as a factor in the exercise of my discretion, to take into account that the Respondent first commenced this dispute by bringing an action in the Supreme Court of British Columbia against the Applicant for statutory passing off. In its defence, the Applicant wished to challenge the validity of the Respondent’s trademarks but could not do so in the Supreme Court of British Columbia. It therefore had to commence this proceeding in the Federal Court. The Applicant contends that this resulted in unnecessary expense in requiring actions in two courts. It is true that it would have been more efficient for the Respondent to commence its statutory passing off action in the Federal Court, particularly considering that the parties are based in two different provinces as are their lawyers and it would have been simpler to have resort to the Federal Court whose writ runs throughout the country and it has registry offices in all major cities.
[5] The Applicant requests that I direct a lump sum assessment of costs in order to save the parties a further expenditure of time and money. The Respondent has made no specific objection to this other than to say that “…it should not be deprived of a remedy whereby the parties can argue the merits of the Applicants’ claim for costs”. That was the purpose of this motion and the Respondent could have taken issue with any of the specific costs claimed by the Applicant in its draft bills of costs. I therefore believe it would be in the interests of justice to order a lump sum assessment.
[6] The Applicant suggests, however, that costs should be directed on a solicitor-client basis. It is well established that generally costs should not be directed on a solicitor-client basis except where the litigation itself has been conducted improperly by the losing party. The Applicant suggests that it was improper for the Respondent to commence its action for passing off in the Supreme Court of British Columbia instead of in the Federal Court. While, as I have noted, it would have been more convenient and efficient to have commenced that action in the Federal Court, the Respondent was legally entitled to choose its forum. I may have some regard to this in the exercise of my discretion but it certainly does not justify a solicitor-client award of costs.
[7] The Applicant has presented me with draft bills of costs based on Column III, Column IV, and Column V of Tariff B. The disbursements remain constant throughout at $10,777.00. These bills of costs are supported by affidavit as representing the work done and the disbursements paid. While I believe that in certain respects counsel’s interpretation of certain items in Tariff B might be open to debate, I think the draft bills roughly approximate what would be assessed under those columns, in most cases allowing the maximum units. I believe that Column IV would be a reasonable basis for assessment and, including a doubling of costs after the offer to settle of October 26, 2005, I would direct the assessment officer to assess costs in favour of the Applicant in the lump sum of $48,000.00 including fees, disbursements and GST and the costs of this motion. (In making an order in this form, I am respectfully adopting the language of the Federal Court of Appeal in Consorzio del Prosciutto di Parma v. Maple Leaf Meats Inc., [2003] 2 F.C. 451 (C.A.) at para. 13)
ORDER
THIS COURT ORDERS THAT:
1. The assessment officer assess costs to be paid to the Applicant in the amount of $48,000.00, inclusive of fees, disbursements and GST and the costs of this motion.
“Barry L. Strayer”
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-142-05
STYLE OF CAUSE: EMALL.CA INC. and EMALL.CA INC.
carrying on business as CHEAPTICKETS.CA
Applicants
and
CHEAP TICKETS AND TRAVEL INC.
Respondent
DATE OF HEARING: February 7, 2007
REASONS FOR ORDER: STRAYER D.J.
APPEARANCES:
Zak Muscovitch
Sean Langan
Gregory N. Harney
SOLICITORS OF RECORD:
MUSCOVITCH & ASSOCIATES
Barristers & Solicitors
Toronto, ON For the Applicants
SHIELDS HARNEY
Barristers & Solicitors
Victoria, BC For the Respondent