Red Label Vacations Inc. v. 411 Travel Buys Ltd., 2015 FC 743 (Mr. Bruce Preston, Assessment Officer)
June 11, 2015.
David Alderson, Gilbertson Davis LLP for the Plaintiff.
Evan L. Tingley, Baldwin Sennecke Halman LLP for the Defendant.
What begins as a non-descript application of Tariff B reveals itself as a gripping lesson in the law of costs, applied to modern IP litigation.
In January 2015, Mr. Justice Manson dismissed the Plaintiff’s claims that the Defendant used the Plaintiff’s metatags in violation of the Copyright Act and the Trademarks Act. The Defendant was awarded costs under Tariff B Column III.
A series of compelling issues were raised before the assessment officer:
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During the discovery of a third party, counsel to the Defendant purported to represent the witness and raised objections. Because counsel had not attended that discovery on behalf of the Defendant, the assessment officer refused to award costs for counsel’s preparation and attendance.
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In January 2014, the parties attended a mediation session, which led to an examination for discovery in March 2014. The parties agreed that this particular discovery “emanated” from the mediation. The assessment officer refused to grant costs because parties should be encouraged to mediate their disputes and should not face costs consequences when they do not reach a settlement.
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Counsel had not invoiced all of the work for which the Defendant sought compensation under the Tariff. The assessment officer refused to award costs for those services for which the client is not liable to its lawyer.
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A party who does not explain why particular disbursements were necessary leaves the issue to the discretion of the assessment officer. While it would be absurd not to award any disbursements, an assessment officer must exercise his discretion conservatively, “with the sense of austerity which should pervade costs, to preclude prejudice to the payer of costs.”
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The Defendant made two offers to settle, both of which were open at the start of the trial. The first offer requested that the Plaintiff discontinue its action in exchange for $2. The second offer requested that the Plaintiff discontinue its action in exchange for an agreement not to use the Plaintiff’s trademarks. The assessment officer ruled that the second offer contained an element of compromise sufficient to attract the application of Rule 420 and the doubling of costs from the date of the second offer.
By: Greg Moore, Joli-Coeur Lacasse LLP