T-620-86
S. P. Thakore (Plaintiff)
v.
The Queen in Right of Canada, as represented by
the Minister of Indian and Northern Affairs
(Defendant)
INDEXED AS: THAKORE V. CANADA (MINISTER OF INDIAN AND
NORTHERN AFFAIRS) (T.D.)
Trial Division, Muldoon J.—Ottawa, January 23,
1989.
Practice — Costs — Defendant awarded taxable party and
party costs, but on diminished scale to mark Court's disap
proval of counsel's misconduct at trial — New Rules empha
sizing Court's full discretionary power over costs, general
practice that costs follow event notwithstanding — Award of
costs increased only where great and exemplary merit on
party's part — Counsel's conduct or deportment considered in
exercise of Court's discretion in awarding costs — Conduct
contemplated by R. 348 (where serious nature of conduct
resulting in award of costs against counsel personally)
distinguished.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Rules, C.R.C., c. 663, RR. 337(2)(b),
344(1) (as am. by SOR/87-221, s. 2), (3)(J) (as am.
idem), (5) (as am. idem), (6) (as am. idem), 346(1.1)
(as am. idem, s. 3), 348.
CASES JUDICIALLY CONSIDERED
APPLIED:
RCP Inc. v. Minister of National Revenue, [1986] 1 F.C.
485 (T.D.); R. v. Pongratz, [1986] 1 F.C. 77 (C.A.);
Solosky v. The Queen, [1977] 1 F.C. 663 (T.D.); affd.
[1978] 2 F.C. 632 ( C.A.); affd. [1980] 1 S.C.R. 821.
CONSIDERED:
Smerchanski v. Minister of National Revenue, [1979] 1
F.C. 801 (C.A.); MacMillan Bloedel (Saskatchewan)
Ltd. v. Consolboard Inc. (1982), 135 D.L.R. (3d) 192
(C.A.); Lord v. Canada (1988), 14 F.T.R. 9 (T.D.).
REFERRED TO:
R. v. CAE Industries Ltd., [1986] 1 F.C. 129 (C.A.); Eli
Lilly and Company v. Makhteshim-Agan (America) Inc.
et al. (1986), 5 F.T.R. 108; 11 C.P.R. (3d) 145 (T.D.);
Crila Plastics Industries Limited v. Ninety-Eight Plastic
Trim Limited (1986), 4 F.T.R. 165; 10 C.P.R. (3d) 226;
9 C.I.P.R. 237 (T.D.); tndalex Ltd. v. Minister of Na
tional Revenue (1986), 1 F.T.R. 1; [1986] 1 C.T.C. 219;
86 DTC 6039 (T.D.); Kindler v. Canada (Minister of
Justice), [1989] 2 F.C. 38 (C.A.); Ottawa Football Club
v. Canada (Minister of Fitness and Amateur Sports),
[1989] 2 F.C. 480 (T.D.).
WRITTEN REPRESENTATIONS BY:
S. P. Thakore on his own behalf.
E. A. Bowie, Q.C. * for defendant.
SOLICITORS:
Deputy Attorney General of Canada for
defendant.
The following are the reasons for disposition of
costs rendered by
MULDOON J.: In the reasons for judgment
released herein on November 24, 1988 [(1988), 23
F.T.R. 194 (F.C.T.D.)], it was noted that at the
request of counsel for the defendant, the parties
were to make their respective written submissions
as to the disposition of costs. They have now done
so.
In the review of the parties' submissions, it is
apparent that each side offered written terms of
settlement to the other and that such terms and
settlement were rejected by the party to whom
they were addressed. Neither party was willing to
accept any compromise proposed by the other
party, because each party considered the settle
ment terms proposed by the other to be unreason
able. The parties stand on an even plane, therefore,
when it comes to considering "any offer of settle
ment made in writing". Of course, neither party is
obliged to settle the litigation on whatever terms
the other party considers to be reasonable simply
to avert a trial.
Although the defendant's counsel adverted on
the last day of the trial audience to some payment
into court, none such is mentioned in the defend
ant's written submissions, and no such payment
was effected. Rule 344(3)(f) [Federal Court
Rules, C.R.C., c. 663 (as am. by SOR/87-221, s.
2] provides that such a payment may be con
* The defendant's counsel named above, in this discrete
proceeding as to costs, is not the defendant's trial counsel
referred to in these reasons.
sidered by the Court in exercising its discretionary
power pursuant to Rule 344(1) [as am. idem].
Newly enacted Rules of this Court regarding
costs were promulgated in SOR/87-221. The
emphasis changed. Although the unspoken and
unspecified general practice that "costs follow the
event" should remain as a general, ordinary dispo
sition, the reformed Rules emphasize that "The
Court shall have full discretionary power over
payment of the costs of all parties involved in any
proceeding". (Rule 344(1)[new].) This states the
law, indeed, but with stress on the full discretion
ary power. The Court's discretion is not fettered
by the lists of matters to be considered, expressed
in Rule 344(3) [as am. idem] and (6) [as am.
idem] and in Rule 346(1.1) [as am. idem, s. 3], so
long as they be in fact considered.
Specifically the new Rules provide:
Rule 344. . .
(2) Costs may be awarded to or against the Crown.
(5) Notwithstanding any other provisions in these Rules, the
Court has the discretionary power
(a) to award or refuse costs in respect of a particular issue or
part of a proceeding;
(b) to award a percentage of taxed costs or award taxed
costs up to and for a particular stage of a proceeding; or
(c) to award all or part of the costs on a solicitor and client
basis.
(6) The Court may give directions to the taxing officer and,
without limiting the generality of the foregoing, the Court in
any particular proceeding may give directions
(a) respecting increases over the amounts specified for the
items in Tariff B;
(b) respecting services rendered or disbursements incurred
that are not included in Tariff B; and
(c) to permit the taxing officer to consider factors other than
those specified in Rules 346(1.1) and (1.2) when costs are
taxed.
There is a notional "watershed" in considering
whether to depart from the ordinarily taxable
costs, which ordinarily follow the event. That
"watershed" is a datum line or zone at or within
which the Court will neither order the costs to be
increased above those ordinarily taxable nor order
them to be diminished below those ordinarily tax-
able. It requires great and exemplary merit on a
party's part to induce the Court to increase the
award of costs and, by nature, such inducement is
not easy to achieve.
The matter may be contemplated from both
sides, but the net effect is that the tariff is rarely
exceeded. Thus, in Smerchanski v. Minister of
National Revenue, [1979] 1 F.C. 801 (C.A.), it
was held that the apparent or real difficulty inher
ing in the litigation, or the volume of solicitors'
and counsel's work, or even the recognized impor
tance of the case do not provide an inevitable and
certain basis for exceeding the tariff. So, also, in
MacMillan Bloedel (Saskatchewan) Ltd. v. Con-
solboard Inc. (1982), 135 D.L.R. (3d) 192, Chief
Justice Thurlow for a unanimous division of the
Federal Court of Appeal, rejected the successful
party's application for increased costs on the basis
of complex and extensive preparation. The decision
was rendered orally, from the bench, on the con
clusion of the applicant's distinguished counsel's
argument, without even calling upon the respond
ent's counsel. Another decision of the Appeal Divi
sion of this Court, which is to be noted in this
regard, is R. v. CAE Industries Ltd., [1986] 1 F.C.
129 especially at pages 180 and 181. Finally, in
abridging an extensive inventory of jurisprudence,
the Court mentions the decision of Mr. Justice
Rouleau of this bench in RCP Inc. v. Minister of
National Revenue, [1986] 1 F.C. 485 (T.D.)
wherein he is reported at page 495 as holding:
I am satisfied that in this case I can take into account the
previous conduct of the respondents which led to this litigation
and it is my duty to consider the whole of the circumstances of
the case and what led to the action, the necessity of lengthy
cross-examinations of witnesses and the unusually prolonged
argument for costs. [Emphasis not in original text.]
In the RCP Inc. case, above cited, the Court, on
one of those rare occasions, permitted the success
ful party's costs to exceed the tariff, and awarded
a global sum, for the above-quoted reasons.
So, in the case at bar, the previous conduct of
the defendant's personnel has been noted in the
reasons for judgment issued in this case at bar at
pages 10 and 11 and again mentioned at page 25,
as the plaintiff alluded to in his written submis-
sions on costs. For comparison, a more serious
instance may be noted in Lord v. Canada (1988),
14 F.T.R. 9 (T.D.), at page 14 wherein Joyal J.
denied costs entirely to the successful defendant.
For that previous conduct, found to be insensitive
and anxiety-inflicting, the Court will not impose
any positive penalty in costs upon the defendant,
but neither does the defendant deserve any medals
for it. (This Court follows the Appeal Division's
judgment in R. v. Pongratz, [1986] 1 F.C. 77, at
pages 87 and 88.) So on this ground too, the
defendant's application for increased costs of and
incidental to this action will be dismissed.
The decision of this Court in RCP Inc. stands
astride the datum, zone or line at which the Court
considers whether or not to increase the successful
party's costs or, on the other side, whether or not
to diminish the award of costs to be taxed by that
party. The RCP Inc. decision imports the factor of
conduct, which in regard to counsel, may be
described as deportment, both professional and
physical.
The Court, at page 30 of the published reasons
for judgment, expressed disapproval of the defend
ant's counsel's deportment. In so far as the trial of
this action is concerned, the matter was moderate
ly serious, but so long as counsel does not persist in
those unacceptable manners, it is not so serious as
to jeopardize counsel's position at the Bar or in his
employment. But, here again, the defendant earns
no medals and indeed ought justly to be penalized
in costs. Justice department counsel appear so
frequently in the Federal Court of Canada that
some of them might tend to take for granted the
liberties, which some arrogate to themselves; and
they lapse into conduct which they observably do
not permit themselves in the provincial superior
courts, if not in all provincial courts. So it was with
the defendant's counsel in the case at bar. Now,
rarely is counsel's conduct all bad or all good. So,
it was with the defendant's counsel again in the
case at bar. The Court recognizes that on several
occasions during the trial he helped the plaintiff,
who appeared without counsel, to find and identify
pertinent documents among the many which were
placed before the Court. That helps to redress the
balance.
The conduct of counsel at trial has been con
sidered in the exercise of the Court's discretion in
awarding costs. The matter is not within the pur
view of Rule 348, because it is not here proposed
to levy any costs against counsel, personally. In
regard to costs of litigation where the matter of
conduct is less serious than that which is contem
plated in Rule 348, but where costs were denied to
the successful party, the following cases in the
Federal Court are noted: Eli Lilly and Company v.
Makhteshim-Agan (America) Inc. et al. (1986), 5
F.T.R. 108; 11 C.P.R. (3d) 145 (T.D.); Crila
Plastics Industries Limited v. Ninety-Eight Plas
tic Trim Limited (1986), 4 F.T.R. 165; 10 C.P.R.
(3d) 226; 9 C.I.P.R. 237 (T.D.); Indalex Ltd. v.
Minister of National Revenue (1986), 1 F.T.R. 1;
[1986] 1 C.T.C. 219; 86 DTC 6039 (T.D.); Kin-
dler v. Canada (Minister of Justice), [1989] 2
F.C. 38 (C.A.), the dissenting reasons of Hugessen
J. concerning the professional conduct of counsel.
Another, even more recent example of disapproved
and objectively offensive conduct of the litigation
precipitating an adverse award of costs—in fact,
solicitor-and-client costs payable by the unsuccess
ful party—is Mr. Justice Strayer's decision in
Ottawa Football Club v. Canada (Minister of
Fitness and Amateur Sports), [ 1989] 2 F.C. 480
(T.D.). That decision accords with good principle.
Adverse exceptional awards of costs are not made
against litigants who are merely and unexception-
ably trying to assert their rights, even if they be
wrong, and accordingly, unsuccessful.
Now, lest there be any misunderstanding, and
for that purpose only, the litany of counsel's unac
ceptable conduct during the trial of this action
ought to be stated, at least in point form. It
consisted of:
—addressing the Court while lounging in his chair;
—wandering about the area of the Courtroom
reserved for counsel, sometimes with his back
turned to the bench, while questioning witnesses
and while addressing the Court;
—carrying and indeed brandishing a wooden stick
(which had become detached from the lectern)
while cross-examining the plaintiff;
—engaging in high-decibel speech, which amount
ed to yelling, addressed to the Court and to the
plaintiff; and
—gratuitously, snidely and irrelevantly suggesting
sotto voce to the plaintiff during cross-examina
tion that the plaintiff had been "run off the
reserve at Cape Croker" an allegation which
was not pleaded, was not relevant to the issues
to be resolved, and which was calculated to
cause turmoil in this plaintiff, appearing without
counsel, as the defendant's counsel ought to
have known.
Enough is enough, and while the Court will not
deny costs entirely to the defendant, it will surely
diminish costs in light of the above. The record
will disclose that the Court either called these
lapses to counsel's attention, or pointedly admon
ished the plaintiff, who acted for himself, not to
imitate the bad habits of his adversary. The record
will also disclose that when, on several occasions,
the plaintiff appeared to be embarking on a
lengthy rebuttal of counsel's gratuitous remark,
the Court both admonished and assured the plain
tiff that such remark was not evidence and was in
any event irrelevant. If the plaintiff had been
represented by counsel of his own, the effect might
well have been different, and less disruptive of the
orderly devolution of the trial.
In light of all this, the plaintiff now seeks to
avoid the payment of any costs whatever to the
defendant. However, it would in the circum
stances, depart too far from the traditional rule
that costs follow the event, to deny the defendant
its costs altogether. After all, the plaintiff chose, as
was his right, to pursue his action and he lost. The
principle is that costs are awarded even against
impecunious prisoners whose suits are dismissed:
Solosky v. The Queen, [1977] 1 F.C. 663 (T.D.);
affirmed without comment on this issue [1978] 2
F.C. 632 (C.A.); and further affirmed, by the
Supreme Court of Canada, again without com
ment [1980] 1 S.C.R. 821. In these circumstances
then, costs are a fortiori to be imposed upon the
plaintiff.
In his written submission as to costs, the defend
ant's counsel asked for:
3.c) all reasonable disbursements incurred by the Defendant
with respect to all of its witnesses who attended the trial,
and remained in Ottawa until discharged by the Court or
tendered to the Defendant for cross-examination (Tariff
A);
Some witnesses whom the defendant had present
at trial under subpoena were called by the defend
ant's counsel to testify orally, some were not so
called and they remained outside of the Court
room. The defendant's counsel decided not to call
this latter group either because he believed that
they would not be needed to sustain the defence
and/or because the parties' estimated time-span
for the duration of the trial would be exceeded.
Having come to his decision about not calling
those persons to be witnesses for the defence, the
defendant's counsel offered to call them for cross-
examination by the plaintiff. The plaintiff wanted
nothing to do with that proposal. In such a circum
stance, the plaintiff ought not to have to contribute
a cent to the defendant's costs of securing the
attendance of any persons whom counsel decided
not to call to testify for the defendant. In that
regard this request is disallowed.
The Court, finally, awards taxable party and
party costs to the successful defendant herein, but
on a diminished scale, in order to mark the Court's
disapproval of the conduct at trial evinced by the
defendant's counsel. In Tariff B [as am. by SOR/
87-221, s. 8], item 1(1)(i); the defendant's counsel
fee will be reduced from what it provides:
l.(l) ...
(i) ... per half day spent in Court, up to $300.00;
down to: "per half day spent in Court, up to
$150.00", and further the sum which the defend
ant might now have taxed on this reduced basis
shall be further reduced by the elimination of one
complete half day (which now could amount to
only $150 at most). The Court's disapproval is
marked by the foregoing reductions of taxable
counsel fees, which reductions the Court considers
to be just right, in the circumstances. This is not to
say that different deplorable circumstances, or fur
ther unacceptable conduct during other trials, will
not carry more costly disapproval. Indeed, if such
again be the case, the Court can guarantee that
the price, in terms of reduction or outright elimi
nation of costs, will surely escalate.
In the result the defendant is awarded reduced
party and party costs as above described after
taxation thereof. The plaintiff, who might still be
without counsel, must realize that the defendant's
costs, after taxation thereof, constitute the judg
ment of the Court for a sum of money which he
will be obliged to pay.
As mentioned in the Court's reasons for judg
ment issued herein on November 24, 1988, the
defendant's solicitors may, pursuant to Rule
337(2)(b), prepare a draft of an appropriate judg
ment to implement the dispositions effected in
those and these reasons, and move for judgment
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.