PRESENT: The Honourable Madam Justice Snider
BETWEEN:
INTERTECH MARINE LIMITED, a body corporate
Plaintiff
and
RICARDO MENÉNDEZ, MARIA MENÉNDEZ,
THE OWNERS AND ALL OTHERS INTERESTED IN
THE YACHT "NAUTICA” and the Yacht “NAUTICA”
Defendants
[1] In Reasons for Judgment and Judgment (Intertech Marine Ltd. v. Menéndez and others, 2006 FC 1445, 134 A.C.W.S. (3d) 1001, [2006] F.C.J. No. 1811 (F.C.) (QL)) which followed a trial of the issues, this Court concluded that the Plaintiff was entitled to certain relief as against the Defendants. As discussed below, the Plaintiff was awarded only a very small portion of the amount claimed and the counterclaim of the Defendants was dismissed.
[2] The parties were advised that, if they could not agree on the issue of costs, they could make further submissions to this Court. They did so. These Reasons address the matter of costs to be awarded on the unusual circumstances of this case.
[3] An award of costs is in the discretion of the Court, with such discretion being exercised judicially with regard to the principles and factors enumerated at Rule 400(3) of the Federal Courts Rules, SOR/98-106. As a general rule, costs should follow the event (Merck & Co. v. Novopharm Ltd. (1998), 82 C.P.R. (3d) 457 at 464 (F.C.T.D.), 152 F.T.R. 74).Where success has been fairly evenly divided, there should normally be no order as to costs (Lubrizol Corp. v. Imperial Oil Ltd. (1996), 67 C.P.R. (3d) 1 at 25 (F.C.A.), [1996] 3 F.C. 40, 197 N.R. 241). However, a defendant need not be successful in both its defence and counterclaim in order to be entitled to its costs; if successful in defending the main action, such a defendant is entitled to costs (Illinois Tool Works Inc. v. Cobra Anchors Co., 2003 FCA 358 at para. 11, 312 N.R. 184, 29 C.P.R. (4th) 417).
[4] In the case before me, the Defendants were almost entirely successful in defending against the claims of the Plaintiff. The Court’s award of $13,273.71 was less than 6% of the total initial claim of $247,773.77 by the Plaintiff. This Court concluded that, because of the award of $13,273.71, the arrest of the yacht was lawful. Thus, the Defendants were not successful in asserting their counterclaim based on the lawfulness of the arrest. However, when the decision of the Court is viewed in its entirety, success was not evenly divided; the end result was that the Plaintiff was almost entirely unsuccessful. Accordingly, costs should be awarded to the Defendants.
[5] The Plaintiff relies on CCH Canadian Ltd. v. Law Society of Upper Canada (2000),184 D.L.R. (4th) 186, 4 C.P.R. (4th) 129 (F.C.T.D.) in arguing that each party should bear its own costs. In my view, this case is readily distinguishable. In reaching his conclusion in CCH, above at para. 13, Justice Gibson commented that, “I place particular emphasis on the factors of divided result, the complexity of some of the legal issues and the lack of Canadian jurisprudential guidance on some of those issues, and the public interest in having these actions litigated”. In contrast, the issues were not complex in the litigation before me; rather, the Court was dealing with a relatively straight-forward contractual dispute between two parties that raised no public interest issues.
[6] The behaviour of the parties throughout the litigation process is also a relevant factor. A review of the Court file demonstrates that the Plaintiff did not pursue this litigation with the vigour and interest that one would expect. Although the delays may not amount to an abuse of process, the fact is that the litigation was unnecessarily prolonged due to the actions and inactions of the Plaintiff, thereby causing an increase in the Defendants’ costs. This factor favours the Defendants.
[7] In the unusual circumstances of this case, I am prepared to award a lump sum in lieu of assessed costs, as permitted by Rule 400(4) of the Federal Courts Rules, and to order that the costs be set off against amounts owing to the Plaintiff pursuant to my judgment. The practicality of this matter is that the Plaintiff is a defunct company. Thus, it is unlikely that the Defendants will be able to collect on any award of costs or to recover the additional costs associated with an assessment. The interests of justice are best served by an immediate lump sum award that will allow the parties to move forward to final resolution of this matter.
[8] I do not have before me the exact bill of costs of the Defendants and the associated support documentation. However, I note that the Plaintiff, in response to the Defendants’ submissions on costs, did not dispute their claim that “the Defendants’ actual costs, if assessed, would far exceed $27,000”. I agree; an award of $27,000, on the facts of this case would be a reasonable and conservative lump sum award and I will exercise my discretion to award this amount.
[9] As noted, after trial of this dispute, I adjudged that the Plaintiff was entitled to the following:
- Recovery of the sum of $13,273.71;
- Reasonable storage, insurance, movement and other expenses incurred by the Plaintiff in relation to the arrest of the yacht Nautica; and
- Interest from between October 1, 2001 to the date of judgment.
[10] Any award to which the Plaintiff is otherwise entitled under the judgment will be reduced by the $27,000 in costs awarded to the Defendants. The Plaintiff submits that the costs of storage, movement and other expenses are in the amount of $20,810.94. While I have no reason to doubt that these amounts are not reasonable, I also note that the Defendants have not made submissions on these calculations. I trust that the parties will be able, without the assistance of the Court, to reach agreement on this number and on the amount of interest payable. If not, I will remain seized of the matter.
ORDER
This Court orders that:
- Costs, fixed in the amount of $27,000, are awarded to the Defendants;
- The costs of $27,000 are to be set off against the amounts awarded to the Plaintiff in the action, those being:
- The sum of $13,273.71;
- Reasonable storage, insurance, movement and other expenses incurred by the Plaintiff in relation to the arrest of the Nautica, such amount not to exceed $20,810.94; and
- Interest from between October 1, 2001 to the date of judgment.
- If the parties cannot agree on the net amount of the award, further submissions may be made to this Court, provided that such submissions are made no later than June 30, 2007.
“Judith A. Snider”
________________________
Judge