Aladdin Industries Incorporated (Applicant)
v.
Canadian Thermos Products Limited and The
Registrar of Trade Marks (Respondents)
Trial Division, Kerr J.—Toronto, May 4;
Ottawa, August 1, 1973.
Costs—Taxation—Jurisdiction—Tariff B—Review of tax
ation by Court—Allowance of additional amounts—Exten-
sion of time for applying for direction—Rules 3(1)(c),.344(7),
346(1).
On March 11, 1969, the Exchequer Court dismissed appli
cant's application to expunge the Thermos company's trade
mark and a motion for extension of time for leave to appeal
was subsequently dismissed by the Supreme Court of
Canada. In December 1972 the Thermos company applied
to tax its costs. The trial judge suggested that costs be taxed
under Federal Court Rule 346(1) subject to review by the
Court. The prothonotary accordingly taxed the costs. The
Thermos company applied for review of the taxation and for
increased costs to be allowed under various items of Tariff
B and for certain disbursements. The Aladdin company
opposed the application on the ground that there could be no
review or allowance of costs in excess of those in Tariff B
except by special direction of the Court in the judgment for
costs or under Rule 344(7).
Held, the Court could allow amounts in excess of those in
Tariff B if, as here, the Court was of opinion that the
circumstances so required, and under Rule 3(1)(c) could
extend the time for giving a direction under Rule 344(7) if,
as here, the Court considered such a direction necessary.
Re Coles and Ravenshear [1907] 1 K.B. 1, applied.
APPLICATION.
COUNSEL:
D. H. MacOdrum for applicant.
D. S. Johnson, Q.C. and I. Hughes for
respondents.
SOLICITORS:
Ridout and Maybee, Toronto, for applicant.
Dennison Associates, Toronto, for respond
ents.
KERR J.—This is an application by the
respondent Canadian Thermos Products, herein-
after called "Thermos", for an order pursuant to
Rule 346(2) of the Rules of this Court reviewing
its party and party bill of costs taxed by J. A.
Preston, Prothonotary, and in particular:
(1) Directing that the costs allowed for ser
vices of solicitors and counsel be increased
pursuant to section 3 of Tariff B, and Rule
344(7);
(2) Directing that the following disburse
ments be allowed pursuant to sections 2(2)
and 3 of Tariff B:
(a) for Air Canada fares between Toronto
and Ottawa for attendances of counsel,
Messrs. Wright and MacOdrum, at the trial;
(b) their expenses while attending at the
trial;
(c) photocopying;
(d) to Robert Frayne and Company for
trade mark research and certified copies.
(3) If necessary, an order extending the time
for bringing this application pursuant to Rule
3(1)(c).
The bill of costs was for $78,711.08. It was
taxed and allowed at $9,386.93.
The proceedings in this case were protracted.
They were commenced in August, 1964, by an
originating notice of motion of an application by
Aladdin to expunge certain trade marks belong
ing to Thermos, but the application did not
come on for trial until October, 1968, and it
lasted 18 days. Judgment was given by me on
March 11, 1969, dismissing Aladdin's applica
tion with costs.
Aladdin filed a notice of appeal from the
judgment to the Supreme Court of Canada on
May 8, 1969. On March 3, 1972, counsel for
Thermos moved for dismissal of the appeal on
grounds of undue delay in bringing it on. A few
days later Aladdin moved for leave to apply for
enlargement of the time for bringing on the
appeal. No transcript of the proceedings at the
trial was available. The appeal was dismissed by
the Supreme Court on March 20, 1972.
No action was taken to tax costs until after
the appeal to the Supreme Court was disposed
of; and meanwhile the Federal Court Act came
into effect.
When the judgment was entered in March,
1969, Rule 263 provided for taxation of costs
by taxing officers, subject to review by the
Court, and the taxing officers had a certain
amount of discretion over the amounts to be
allowed. Consequently no special direction by
the Court was necessary for increase of items in
respect of which the taxing officers were not
limited to a maximum amount. The discretion to
increase or reduce the amounts is now vested in
the Court. See, in this respect, the judgment of
the Federal Court of Appeal delivered by the
Chief Justice in Bourque v. National Capital
Commission [1972] F.C. 527.
On December 18, 1972, counsel for Thermos
wrote to the Administrator of this Court, enclos
ing a draft judgment and a notice of motion,
requesting a date on which the application could
be made returnable. The motion sought a formal
judgment in accordance with the draft (which,
in substance, was for dismissal of Aladdin's
application, with costs to Thermos, to be taxed),
and an order directing the taxing officer to tax
the costs with jurisdiction to increase the
amounts in Tariff B pursuant to Rule 344(7) and
section 3 of Tariff B; in the alternative for
taxation by me pursuant to Rule 350(3); and, if
necessary, an order extending the time for
bringing the application pursuant to Rule
3(1)(c).
The request was referred to me, and as it was
clear that judgment had in fact been entered in
this Court and an appeal therefrom had been
dismissed by the Supreme Court, it seemed to
me that the situation did not call for another
entry of judgment, and I suggested that the
appropriate procedure would be for Thermos to
have its costs taxed under Rule 346(1) subject
to review by the Court upon application of any
party dissatisfied with the taxation. That sugges
tion was conveyed to counsel for Thermos by a
letter from the Assistant Administrator, with a
copy to counsel for Aladdin. Thereupon Ther-
mos proceeded to have its costs taxed by the
Prothonotary—and this application for review
was subsequently filed.
On the review counsel for Aladdin submitted
that Tariff B applies, that the Prothonotary
allowed the costs at their highest level under
that Tariff and in the absence of mistake by him
a review is not in order; and that there can be
no review or allowance of amounts exceeding
those in the Tariff except by special direction
by the Court in the judgment for costs or under
Rule 344(7), and as no such special direction
was given prior to the taxation Thermos has no
right now to have the costs reviewed or to have
any increase of the amounts set forth in Tariff
B.
It may be that I was wrong in suggesting that
Thermos have its costs taxed, subject to review
by the Court. However, Thermos acted on that
suggestion, and I have heard the parties on the
merits of the costs and the application to review
them. I am convinced that some of the amounts
in Tariff B are inadequate to do justice cost-
wise to Thermos in the circumstances of this
case, having regard particularly to the great
volume of work done in preparation for the
trial, and I am mindful of what was said by
Collins, M.R., in Re Coles and Ravenshear
[1907]-1 K.B. 1 at page 4 as follows:
Although I agree that a Court cannot conduct its business
without a code of procedure, I think that the relation of
rules of practice to the work of justice is intended to be that
of handmaid rather than mistress, and the Court ought not to
be so far bound and tied by rules, which are after all only
intended as general rules of procedure, as to be compelled to
do what will cause injustice in the particular case.
Consequently I will review the taxation and
allow amounts above those in Tariff B where I
think that increases should be allowed, on the
basis that it is appropriate and within my power
to do so in the circumstances and that although
Rule 344(7) contemplates a direction from the
Court within a time that has expired in this case,
such time would be extended under Rule 3(1)(c)
if the Court considered that such a direction
was necessary for allowance of increases in
costs in this case.
The following facts will serve to give some
idea of the volume of work and attention
involved on the part of the solicitors and coun
sel for Thermos:
(a) Aladdin filed upwards of 100 affidavits
and more than 42,000 documentary exhibits;
(b) Prior to the commencement of these pro
ceedings Aladdin was a party to litigation in
the United States and in view of the apparent
similarity of issues the proceedings in that
litigation were reviewed and considered by
solicitors and counsel for Thermos;
(c) Particulars totalling 42 pages were filed
by the applicant on December 31, 1965,
which specifically referred to 54 dictionaries
and encyclopedias, 71 scientific books and
text books, 2 works of philologists, 4 cook
books, 34 novels, 39 newspapers, 76 maga
zines, 11 patents, patent abstracts and
designs, 837 written communications to the
original applicant covering the period from
prior to 1961 to 1964 and 6 other specific
instances of alleged generic usage;
(d) Amended particulars were delivered by
the applicant on January 22, 1968, pursuant
to an order dated January 9, 1968, in which
there were included an additional 74 dictio
naries and encyclopedias, 62 scientific books
and textbooks, 3 works of philologists, 11
cookbooks, 8 magazines, 26 newspapers
relating to Dewar obituaries;
(e) The trade mark "THERMOS" had been
used since 1907 by the respondent on virtual
ly all its business documents. Although a fire
destroyed most documents prior to 1957,
there were produced in the respondent's
affidavit on production:
(1) 53 filing cabinet drawers containing
correspondence files including memoranda,
correspondence and shipping orders;
(2) binders containing invoices, repair
charges and credit notes;
(3) boxes and files of other documents
including advertising, tags, wrappers, bro
chures, price lists, cartons and other docu
ments both of the respondent and its
competitors;
(f) Representatives of Aladdin extracted
about 42,000 documents from filing cabinets
of Thermos, for copying;
(g) Examinations for discovery were held of
Mr. Kingdon, General Manager of the appli
cant on June 13, 14 and 15 and of Mr. Parker,
President of Canadian Thermos Products
Limited and its parent company on June 14,
15 and 24. Mr. Kingdon's examination is 372
pages long and has 105 individual exhibits,
plus 90 files containing the 42,000 documents
extracted;
(h) The evidence of the applicant in chief was
filed on June 29, 1968. It consisted of 93
affidavits with about 390 exhibits including 4
exhibits comprising about 700 documents to
gether with the portions from the examination
for discovery of Mr. Parker relied upon and
exhibits thereto;
(i) Aladdin sought leave to adduce about 350
other affidavits;
(j) The affidavit of the President of Thermos
is 103 pages in length and has 547 exhibits,
and there were 176 pages of cross-examina
tion on his affidavit; and there were several
interlocutory applications prior to the trial.
The affidavit of M. N. McCrank states that
the following solicitors for Thermos were
engaged in the conduct of the proceedings for
the times indicated, namely:
Donald J. Wright, Q.C. 925.6
Donald H. MacOdrum 1154.2
Anthony Burke Doran 360.8
Robert J. Wright 1.3
Donald N. Plumley 6.8
Warren S. R. Seyffert 0.7
C. Gordon Michener 13.5
R. Noel Bates 1.3
Malcolm Johnston* 29.5
William L. Hayhurst, Q.C. 30.0
Gareth E. Maybee, Q.C. 3.7
*Malcolm Johnston was also involved as a Trade Mark
Agent to the extent of 280.5 hours.
In addition various law students were engaged
in total of 83.0 hours and A. Leonard Grove, a
Patent and Trade Mark Agent, was engaged
18.0 hours.
Counsel for Thermos provided the Court and
counsel for Aladdin with a "Summary of Dock-
etted Time of Counsel for Respondent", as
follows:
Ridout & Maybee are the solicitors of record for the
respondent. Counsel for the respondent are members of
another firm, but acted in this action (as in other industrial
property litigation) on behalf of Ridout & Maybee.
The counsel for the respondent and the other solicitors in
their firm record the time spent each day on each matter on
a separate sheet referred to as a "docket". These dockets
each carry a brief description of the work done that day in
regard to that matter and the time spent in tenths of an hour.
In preparing the Bill of Costs for taxation the dockets
relating to this action of the solicitors in the offices of
counsel for the respondent were divided among the various
tariff items. These solicitors were D. J. Wright, Q.C. and D.
H. MacOdrum, who appeared as counsel for the respondent
at the trial of this action, A. B. Doran who was extensively
involved in the early preparation of this action, other solici
tors who were involved from time to time including D. N.
Plumley, R. J. Wright, C. G. Michener, R. N. Bates and W.
S. R. Seyffert, certain law-students were also involved
including N. A. Kopperud, A. D. K. MacKenzie, R. Howell,
G. H. Rust d'Eye and W. F. Carney.
On the attached schedule is a summary of the docketed
time of the solicitors and law-students in offices of counsel
for the respondent which has been divided under the various
tariff headings. There is also an indication of the value of
this time if charged at the arbitrary rates indicated. (These
are not necessarily the rates charged to the client, although
none are lower than the 'rates actually charged.)
Messrs. Ridout & Maybee record the time spent by solici
tors and by patent and trade mark agents on cards for each
matter, each day's time being entered on the card. It was
more difficult for us to allocate this time under the various
items and accordingly it is not included on the schedule. The
total time of G. E. Maybee, Q.C., W. L. Hayhurst, Q.C., M.
Johnston and A. L. Grove of this firm are set out in the
Affidavit of Mr. McCrank sworn January 9, 1973,
paragraph 51.
The schedule gives details and indicates that
in preparing the bill of costs hourly rates rang
ing from $10 to $35 were used.
It is a generally accepted principle that party
and party costs are awarded as an indemnity or
partial indemnity to the successful litigant
against costs reasonably incurred, subject to the
express provisions of any applicable statutes
and the tariffs and rules of the court concerned.
The amounts provided in section 2 of Tariff B
for services of solicitors and counsel are intend
ed to be appropriate in the general run of cases
coming before this Court. The amounts may be
increased or decreased by direction of the
Court, and in exercising its discretion to
increase the amounts the Court will, I should
think, have due regard to any special circum
stances, including the complexity, value and
importance to the litigants of the proceedings
and the time and work reasonably involved in
the services. In the present case there are such
special circumstances, and I think that increased
amounts are warranted in respect of some of the
items. I also think that the amounts in section 2
for the general run of cases may be taken and
used as a guide or yardstick in fixing commen
surate increases.
The Prothonotary ruled that the proceedings
be classified as Class III. In my opinion that
ruling was correct, and I direct that the costs be
taxed on the basis that the proceedings are
Class III.
I will now indicate the items in issue (using
the numbers they have in the bill of costs), the
amounts claimed, the amounts allowed on the
taxation, and the docketted time shown in the
said Summary.
SERVICES OF SOLICITORS AND COUNSEL
1. Services prior to examination for discovery:
Tariff B, item 2(1)(a)
(1) Reviewing originating notice of motion, reviewing par
ticulars and amended particulars filed by the applicant and
various attendances with officers of client; attendance of
Messrs. Wright and Doran at the head office of the parent
of the respondent at Groton, Connecticut, to interview
witnesses and review documents; various attendances at
plant location of client in Scarborough, Ontario, to inter
view witnesses and review documents; researching law
relating to trade marks; reviewing United States and Aus-
tralian proceedings and evidence with respect to the simi
lar subject matter; preparing documents and other exhib
its for use at trial; considering law relating to use of
survey evidence; various telephone attendances on the
counsel and solicitors for the applicant; preliminary draft
ing of affidavits for use on hearing of this action; drafting
and delivering reply; drafting and delivering respondent's
notice for production.
Claimed $17,500. Allowed $100. Docketted
time 649.2 hours.
(2) Drafting and delivering respondent's affidavit on pro
duction; reviewing applicant's affidavit on production;
reviewing production documents of applicant; reviewing
over 200,000 documents of the respondent reviewed by
the applicant of which 40,000 selected; preparing exhibits
and evidence for hearing.
Claimed $12,000. Allowed Nil. Docketted time
458.7 hours.
It will be seen that on these 2 items the
Prothonotary allowed only the $100 specified in
Tariff B, section 2(1)(a). He had no discretion
to increase that amount.
I will increase the allowance to $3000.
2. Interlocutory Motions for directions and change of
parties:
Tariff B, item 2(1)( )
(3) Preparing for and attending on application by Aladdin
before Mr. Justice Jackett for directions to set dates.
Claimed $500. Allowed $75. Docketted time
13.7 hours.
The amount allowed is adequate.
3. Examinations for Discovery:
Tariff B item 2(1)(b)
(1) Preparation for examinations for discovery; attend
ance of Messrs. Wright and MacOdrum upon the exami
nations of Messrs. Parker and Kingdon for discovery on
June 13, 14, 15 and 24; reviewing examinations for
discovery.
Claimed $3,000. Allowed $400. Docketted time
127.6 hours.
Mr. Kingdon's examination is 372 pages and
has 105 individual exhibits and 90 files contain
ing the 42,000. documents extracted. Mr. Park-
er's examination is 153 pages.
I will increase the allowance to $1000.
4. Preparation for Hearing:
Tariff B, item 2(1)(d):
(1) Reviewing some 100 affidavits with attached exhibits,
more than 40,000 letters, price lists, and other evidence
filed by the applicant as evidence on June 29, 1968;
obtaining English translation of French language affida
vits; preparing for cross-examination on Mr. Kingdon's
and Professor Avis' affidavits.
Claimed $4,000. Docketted time 181.4 hours.
(2) Drafting and filing on July 31, 1968, affidavit of Mr.
John P. Parker and exhibits thereto, and certified copies
of 13 trade mark registrations and applications; preparing
for cross-examination of Mr. Parker; reviewing admission
dated July 17, 1968, filed by the applicant.
Claimed $6,500. Docketted time 255.2 hours.
The affidavit of Mr. Parker was 103 pages,
with 547 exhibits.
(3) Reviewing reply evidence filed by the applicant on
August 30, 1968, including affidavit with attached exhib
its of Mr. Kingdon, certified copy of registration of trade
mark and certified copy of Canadian Patent No. 140,034;
preparing for cross-examination of Mr. Kingdon on his
reply evidence affidavit.
Claimed $800. Docketted time 24.4 hours.
(4) General preparation for the hearing including prepar
ing cross-examinations on the various affidavits as evi
dence; preparing the affidavits as evidence and preparing
the argument, researching the law with respect to trade
marks.
Claimed $8,000. Docketted time 306.3 hours.
These 4 items totalling $19,300 were allowed
at $350.
I will increase the allowance to $2,500.
5. Motion for leave to adduce further evidence:
Tariff B, items 2(1)(c), (d) or (e)
(1) Reviewing some 350 affidavits and other evidence
filed by the applicant on September 9, 1968, as proposed
additional evidence; preparing for cross-examination of
Mr. Kingdon on his affidavit filed in support of applica
tion to file proposed additional evidence.
Claimed $1,800. Docketted time 723 hours.
(2) Attendance of Messrs. Wright and MacOdrum on
September 11, 1968, on the cross-examination of Mr.
Kingdon on his affidavit in support of application to file
proposed additional evidence.
Claimed $650. Docketted time 24.6 hours.
Cross-examination of Mr. Kingdon is 60 pages.
(3) Preparation for and attendance of Messrs. Wright and
MacOdrum on Aladdin's application before Cattanach J.
for an order to file additional evidence.
Claimed $1,000. Docketted time 40.4 hours.
These 3 items totalling $3,450 were allowed
at $175.
I will increase the allowance to $600.
6. Conduct of Hearing:
Tariff B, item 2(1)(e)
(1) Attendance of Messrs. Wright and MacOdrum on the
cross-examination of Dr. Avis and Mr. Kingdon on their
affidavits on July 10, 11 and 12, 1968.
Claimed $1,700. Docketted time 61.2 hours.
The affidavit of Dr. Avis is 58 pages, and his
cross-examination is 167 pages.
The affidavit of Mr. Kingdon is 12 pages, and
his cross-examination is 266 pages.
(2) Attendance of Messrs. Wright and MacOdrum on the
cross-examination of Mr. Parker on his affidavit on
August 14 and August 15, 1968.
Claimed $800. Docketted time 29.9 hours.
The cross-examination is 176 pages.
(3) Attendance of Mr. MacOdrum on the cross-examina
tion of Mr. Kingdon on his reply evidence affidavit for
one full day, September 24, 1968.
Claimed $200. Docketted time 9.7 hours.
These 3 items totalling $2,700 were allowed
at $600.
The amount allowed is at the rate of $100 per
day, which is the amount in section 2(1)(b) for
examination for discovery and for taking evi
dence. The amount allowed is adequate.
(4) Attendance of Messrs. Wright and MacOdrum before
Mr. Justice Kerr in Ottawa for 18 full days, October 2, 3,
4, 7, 8, 9, 10, 11, 16, 17, 18, 21, 22, 23, 24, 28, 29 and 30
wherein after receiving judgment it was ordered that the
application to expunge the respondent's trade marks was
dismissed with costs.
Claimed $10,250. Allowed $3,800. Docketted
time 381.6 hours.
The amount allowed is at the rate per day in
section 2(1)(e) for conduct of hearing. The
amount allowed is adequate.
7. Services after Judgment:
Tariff B, item 2(1)(f)
(1) Organizing and sorting materials, documents and
exhibits; shipping documents, etc., to the respondent's
plant in Scarborough.
Claimed $800. Docketted time 37.7 hours.
There was correspondence and negotiations
with counsel for Aladdin relating to settlement
re costs.
(2) Drafting bill of costs and taxing the costs.
Claimed $2,000.
These items totalling $2,800 were allowed at
$175. That allowance is adequate.
DISBURSEMENTS
The disallowed disbursements that are
appealed are:
(a) Air Canada fares of Messrs. Wright and MacOdrum
for attendance at trial at Ottawa, $378; and
(b) their hotel and living expenses there, $1,506.25;
(c) photocopying, $1,200. Mr. McCrank's affidavit states
that the expense was in excess of that amount;
(d) to Robert Frayne and Company for trade mark search
in the Trade Marks office in Ottawa and certified copies,
$86.
The solicitors and counsel for Thermos were
located at Toronto. The solicitors and counsel
for Aladdin at the time of the trial were located
at Montreal. The trial was at Ottawa.
Counsel for Aladdin submitted on the review
that those disallowed disbursements were not
"essential for the conduct of the action", within
the meaning of those words in section 2(2)(b) of
Tariff B. The Prothonotary was of the view that
he was limited to a strict interpretation of the
tariff and that any discretion to allow those
disbursements would only be in the Court. I
think that those words in section 2(2)(b) should
not be interpreted so strictly as to mean "indis-
pensably requisite" (which is one of the diction
ary meanings of the word "essential") or to that
effect, but rather as including disbursements
that are reasonably material and important for
the conduct of the action and prudently incurred
in the light of the circumstances at the time.
In Smith Kline & French Inter-American
Corp. v. Micro Chemicals Ltd. (1973) 7 C.P.R.
(2nd) 21, Walsh J. of this Court allowed travel
ling and living expenses of counsel from Ottawa
to Toronto.
I am satisfied that the said disbursements
should be allowed, and I so direct.
Thermos has been successful to a substantial
degree on this review of the taxation of costs,
and accordingly it will have its costs thereof,
which I fix at $100.
In the result $12,000 is allowed for services
of solicitors and counsel and $6,732.18 for dis
bursements, for a total of $18,732.18, and I
direct accordingly.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.