Executive Summary: Key Legal and Evidentiary Issues

• Assessment of costs focused on the legitimacy, necessity, and reasonableness of legal fees and disbursements claimed under the Federal Courts Rules.

• Jurisdictional boundaries of an assessment officer, particularly regarding the authority to award travel costs and post-judgment interest.

• Evaluation of whether taxes (HST) on legal services and disbursements were properly supported and allowable.

• Consideration of the appropriateness of claims for second counsel’s expenses in complex litigation.

• Application of set-off and partial allowances where claims were excessive, unsupported, or only partially justified.

• Determination of the relevance of parties’ conduct during settlement negotiations for the quantum of costs.

Facts of the case

This case involves a dispute over the assessment of legal costs following the dismissal of an appeal in the Federal Court of Appeal. The Appellants, Seismotech IP Holdings Inc. and Seismotech Safety Systems Inc., had previously appealed a decision involving Ecobee Technologies ULC, Apple Canada Inc., and Apple Inc. The appeal was dismissed, and costs were awarded to the Respondents, to be calculated according to Column III of Tariff B of the Federal Courts Rules. The present decision addresses the process and outcome of assessing those costs.

Procedural history and submissions

After the dismissal of the appeal, the Respondents initiated the assessment of costs by filing a Bill of Costs and supporting materials. The Appellants challenged several items, arguing that some claims were excessive, unsupported, or not permitted under the Rules. Both sides submitted affidavits, written representations, and documentary evidence. The assessment officer was tasked with determining which costs and disbursements were reasonable, necessary, and allowable under the Federal Courts Rules and relevant jurisprudence.

Discussion of policy terms and rules

The assessment was governed by the Federal Courts Rules, specifically Tariff B, which outlines the framework for awarding legal costs and disbursements in federal litigation. Key considerations included the complexity and importance of the issues, the conduct of the parties, and the necessity of expenses claimed. The assessment officer also examined the limits of their authority, particularly regarding travel costs and post-judgment interest, which require explicit directions from the Court.

Key findings and analysis

The assessment officer allowed most claims for legal services, such as preparation of the appeal book, memorandum of fact and law, and requisition for hearing, with some adjustments based on the evidence. Claims for travel by counsel were scrutinized, and only reasonable and necessary expenses were allowed. The officer found that the involvement of a second counsel was justified due to the complexity and public interest in the case. Disbursements for travel, accommodation, meals, printing, and online research were allowed in part, with reductions where claims were found to be excessive or unsupported. Taxes on legal services were disallowed due to insufficient evidence that they were actually paid and not recoverable by input tax credits. The officer also clarified that awarding post-judgment interest was outside their jurisdiction.

Ruling and outcome

The assessment officer concluded that the Respondents’ Bill of Costs was to be allowed in the amount of $7,482.19, payable by the Appellants to Apple Canada Inc. and Apple Inc. No post-judgment interest was awarded, and the officer issued a certificate of assessment accordingly.