Décisions de la Cour d'appel fédérale

Date: 20010810

Docket: A-676-97

Neutral citation: 2001 FCA 250

CORAM:        SHARLOW J.A.

BETWEEN:

                                                          MAYTAG CORPORATION,

                                    MAYTAG LIMITED and MAYTAG QUEBEC INC.

                                                                                                                                                     Appellants

                                                                                 and

                                                  WHIRLPOOL CORPORATION and

                                                                 INGLIS LIMITED

                                                                                                                                               Respondents

                                  Dealt with in writing at Ottawa, Ontario, on August 10, 2001

                                     Order delivered at Ottawa, Ontario, on August 10, 2001

REASONS FOR ORDER BY:                                                                                         SHARLOW J.A.

Date: 20010810

Docket: A-676-97

Neutral citation: 2001 FCA 250

CORAM:        SHARLOW J.A.

BETWEEN:

                                                          MAYTAG CORPORATION,

                                    MAYTAG LIMITED and MAYTAG QUEBEC INC.

                                                                                                                                                     Appellants

                                                                                 and

                                                  WHIRLPOOL CORPORATION and

                                                                 INGLIS LIMITED

                                                                                                                                               Respondents

                                                            REASONS FOR ORDER

SHARLOW J.A.

[1]                 The Respondents Whirlpool Corporation and Inglis Limited (collectively, "Whirlpool") own certain patents for dual action agitators for clothes washing machines, including Canadian Patent No. 1,049,803 and Canadian Patent No. 1,095,734. An infringement action commenced by Whirlpool in 1995 against Camco Inc. and General Electric Company (collectively, "Camco") was successful in the Federal Court Trial Division: Whirlpool Corporation v. Camco Inc. (1997), 76 C.P.R. (3d) 150 (F.C.T.D.).    A similar infringement action commenced in 1996 against Maytag Corporation, Maytag Limited and Maytag Quebec Inc. (collectively, "Maytag") resulted in a consent judgment which mirrored the result in the Camco action.

[2]                 Whirlpool's success in both actions was affirmed on January 22, 1999 by the Appeal Division of the Federal Court: (1999), 236 N.R. 330; (1999), 85 C.P.R. (3d) 129; [1999] F.C.J. No. 84 (QL) (F.C.A.). It was further affirmed on December 15, 2000 by the Supreme Court of Canada:Whirlpool Corp. v. Camco Inc., 2000 SCC 67; [2000] 2 S.C.R. 1067; (2000) 263 N.R. 88; (2000) 194 D.L.R. (4^th) 193; (2000) 9 C.P.R. (4^th) 129; [2000] S.C.J. No. 68 (QL) and Whirlpool Corp. v. Maytag Corp., [2000] SCC 68; [2000] 2 S.C.R. 1116; (2000) 9 C.P.R. (4^th) 165; (2000)194 D.L.R. (4^th) 230, [2000] S.C.J. No. 69 (QL). On February 22, 2001, the Supreme Court of Canada dismissed motions by Camco and Maytag for reconsideration.

[3]                 At each stage in the Camco and Maytag matters, Whirlpool was awarded costs. On March 26, 2001, Whirlpool filed motions in the Appeal Division in respect of both the Camco appeal and the Maytag appeal for an order:

(a)        extending the time for bring a motion pursuant to Rule 403(1) of the Federal Court Rules, 1998 for directions to the assessment officer in respect of costs in the appeal, and

(b)        directing that the costs of the appeal be fixed in an amount representing two-thirds of the fees and all of the disbursements incurred by Whirlpool, or alternatively that costs be assessed on one of a number of alternative bases that would result in recovery on a scale higher than that permitted under Column III of Tariff B.

[4]                 Whirlpool made similar motions in relation to costs in the Trial Division in both the Maytag action and the Camco action. Both of Whirlpool's motions in the Appeal Division were stayed until the Trial Division motions were dealt with. On June 21, 2001, Mr. Justice Hugessen denied the motions in the Trial Division: Whirlpool Corp. v. Camco Inc., 2001 FCT 689, [2001] F.C.J. No. 1024 (F.C.T.D.).

[5]                 On July 24, 2001, Whirlpool abandoned its motion in the Appeal Division for increased costs in the Camco appeal. The only remaining matter is Whirlpool's motion in the Appeal Division for increased costs in the Maytag appeal. That is the motion now before me.

[6]                 Specifically, Whirlpool seeks a direction under Rule 403 for a lump sum award of costs in the Maytag appeal in the amount of $19,560 in lieu of the party and party costs already granted, or alternatively directions on one of a number of bases that would result in costs in excess of Column III of Tariff B. The relevant parts of Rule 403 read as follows:

[7]                 Maytag argues that if costs are awarded in a judgment, a motion for directions for a fixed amount of costs cannot be entertained unless the criteria for reconsideration of the judgment, as set out in Rule 397, are satisfied. I cannot accept this argument because it gives no effect to Rule 403(2), which specifically permits a motion for directions with respect to costs even if costs have been awarded in a judgment. Rule 403(2) overrides the more general requirements for reconsideration of a judgment in Rule 397.

[8]                 Maytag argues that Whirlpool's motion for directions under Rule 403 is out of time because, pursuant to Rule 403(1)(a), it should have been made within 30 days of January 22, 1999, the date on which the judgment of the Appeal Division was rendered. Whirlpool argues that its motion is timely because Maytag's appeal was not finally determined until February of 2001, when the Supreme Court of Canada rejected Maytag's motion for rehearing.

[9]                 As I read Rule 403(1)(a), a motion for directions with respect to an award of costs in a division of this Court is to be made within 30 days of the judgment to which the costs relate. In the case of the Maytag appeal, the 30 day period permitted for a motion for directions with respect to costs commenced on January 22, 1999. Whirlpool's motion for directions was not filed until March of 2001, more than two years later. Therefore, the motion for directions is out of time and cannot be considered unless this is an appropriate case to grant an extension of the time in Rule 403(1). Whirlpool's notice of motion includes a motion for an extension of time.

[10]            The purpose of the 30 day time limit and the basis on which it might be extended is explained by Jackett C.J. in Smerchanski v. M.N.R., [1979] 1 F.C. 801 (C.A.), at page 805:

I might add that, as it seems clear to me from a reading of Rule 344(7) with Rule 337(5), it is contemplated that any such application for a direction increasing costs should be made while the matter is sufficiently fresh in the mind of the Court that the Court is in a position to appreciate whether there were present in the particular case circumstances justifying a departure from the normal tariff amounts; and it would, it my view, require very special reasons to warrant a lengthy extension of the time contemplated by Rule 344(7) such as would be required here.

[11]            Rule 344(7) referred to in this excerpt is the predecessor to what is now Rule 403 dealing with a motion for directions as to costs, and Rule 337(5) is the predecessor to what is now Rule 397, dealing with a motion for reconsideration of a judgment. Under the predecessor rules, the time limit for a motion for directions as to costs was determined by reference to the time limit for an application for reconsideration of a judgment. The extension of time that would have been required in the Smerchanski case was approximately three years. However, in that case no application for an extension of time was made.

[12]            As to what might justify an extension of time for a motion for directions under Rule 403, I note that an extension of three months was refused in Ontario Development Corp. v. Minister of National Revenue (1991), 127 N.R. 75, (1991), 92 D.T.C. 6121 (F.C.A.) where the only reason offered for the delay was that counsel for the moving party had misunderstood the applicable rules of court.

[13]            In Engine Leasing Co. v. Atlantic Towing Ltd. (1993), 164 N.R. 394, [1992] F.C.J. No. 1167 (QL) (F.C.A.), the Court affirmed a decision by Mr. Hugessen to deny an extension of time of one and one-half years. The moving party in that case had argued that the motion for directions had not been made within the 30 day period because to do so "would introduce into the Court record elements which may be perceived as susceptible of influencing the appeal." That argument was found to be invalid.

[14]            An extension of approximately one year was granted in Riello Canada, Inc. v. Lambert (1987), 15 C.P.R. (3d) 257, [1987] F.C.J. No. 430 (QL) (F.C.T.D.) when the moving party was self represented and could not have known about some of the items with respect to which special directions were sought until he saw the bill of costs. A short extension of time was granted in Kastner v. Painblanc (1995), 182 N.R. 156, 60 C.P.R. (3d) 228, [1995] F.C.J. No. 545 (QL) (F.C.A.) where counsel for the moving party had informed opposing counsel at the time of judgment of his intention to make a motion for directions, and the delay was satisfactorily explained by counsel as due to the pressure of other work. In Eli Lilly and Co. v. Novopharm Ltd. [1999] 2 F.C. 175, [1998] F.C.J. No. 1828 (QL) (C.A.), an extension of time of approximately one month was granted where the delay was attributable in part to confusion over the Federal Court Rules, 1998 which were then newly enacted, and the delay did not prejudice the other party.

[15]            Whirlpool submits that there are special reasons in this case for allowing the extension. Whirlpool points out that it was not until February of 2001 that liability for costs in the Trial Division and in the Appeal Division were finally known. It is argued on the basis of Rule 3 that the "just, most expeditious and least expensive determination" of the matter of costs would not have been achieved by a Rule 403 motion made at a time when a final determination of liability for costs remained outstanding.

[16]            I am unpersuaded by this argument. The drafters of Rule 403 would have been well aware of the exigencies of litigation, and particularly of the possibility that in any case an appeal might result in a reversal of an order for costs. Yet that knowledge did not deter them from imposing the 30 day limit in Rule 403(1)(a), and did not lead them to substitute a rule that would permit a motion for directions as to costs after the determination of any and all appeals. From this I infer that more weight was placed on the value of timely and certain determination of matters of costs than on the possibility of wasted effort due to appeals.

[17]            Whirlpool also argues that Maytag would suffer no prejudice if the extension were granted. I note that Maytag does not argue that it would be prejudiced if the extension were granted. However, the question of prejudice is only one factor to be taken into account. I must also take into account the reasons for the delay, its duration, and the strength of the arguments in support of the motion for increased costs.

[18]            Having reviewed the material filed by Whirlpool, I am unable to discern any valid reason why this application for directions as to costs in the appeal could not have been made within 30 days of the Judgment on January 22, 1999. At that time, Whirlpool knew that it had succeeded in both the Trial Division and in the Appeal Division. It knew the entire background of its claim against Maytag, including the fact that Maytag started to market its infringing product shortly before the expiry of the patent. It knew the degree of complexity of the case against Maytag, which on the basis of the material before me appears to be no more complex than the case against Camco. It knew that the result in the Maytag matter mirrored the result in the Camco matter, and knew how much extra effort was required in the Maytag matter. It knew the quantum of costs based on the normal tariff, and its actual litigation costs. Nothing happened after January of 1999 to change any of these facts. The only thing Whirlpool did not know in January of 1999 was whether the Supreme Court of Canada would hear Maytag's appeal and if so, what the outcome would be.

[19]            I note as well that there is no indication that in January of 1999 or at any time prior to March of 2001, Whirlpool was entertaining the notion of an application for directions to obtain an increased award of costs. The extension sought is over two years, which I would consider lengthy.

[20]            As to the arguments submitted in support of the motion for increased costs, I note that the principle basis for the motion is the conduct of Maytag in marketing its infringing product so close to the end of the patent period, thus inevitably causing Whirlpool to incur wasteful litigation costs to defend its patent rights. In my view, the material in the motion records falls far short of establishing that Maytag's conduct was as reprehensible as Whirlpool suggests. Nor does the record establish that the Maytag matter was particularly complex, difficult or time consuming, or that it was a "test case". On the contrary, the Maytag matter for the most part simply mirrored the Camco matter. In my view, the arguments in support of the direction for increased costs are relatively weak.

[21]            Taking all of these factors into consideration, I cannot conclude that there is justification for granting an extension of time for the filing an application for directions with respect to costs in the Maytag appeal. The motion will be dismissed with costs.

K. Sharlow

J.A.