Coca-Cola Ltd. v. Pardhan
T-2685-95
MacKay J.
8/7/97
10 pp.
Motion for costs arising from execution of Anton Piller order, application for interlocutory injunction-Defendants shipping, selling Coca-Cola produced in Canada for Canadian market, abroad where not having licence to deal with product-Plaintiffs submitting case unusual, warranting award of costs at interlocutory stage as: (1) incurring very substantial costs (in excess of $100,000) for preliminary proceedings, solicitors' costs, substantial disbursements to pay investigators simply to acquire evidence to commence action, these proceedings-Extended investigation, substantial initial costs necessitated by manner in which defendants' business dealings organized-Business based in home of one named defendant, without attribution there or business communications address openly available through public sources-Much of defendants' operations said to be carried on surreptitiously, in sense defendants not prepared to publicly advertise, acknowledge business in usual business circles in Canada, even though plaintiffs' estimating sales of about $6 million by defendants in 1995, based on records seized under Anton Piller order-Statement of defence substantially struck out; no amended defence filed-Plaintiffs submitting with no representations on merits by defendants, no affidavit evidence indicating argument in support of lawful business activity by defendants, action may not proceed further as effectively disposed of by interlocutory injunction-Plaintiffs not seeking costs on solicitor and client basis-Submitting fixed costs of $30,000 on party and party basis, costs for disbursements for expenses of investigators in executing Anton Piller order (allegedly in excess of $40,000) plus taxes, should be allowed at this stage-Issue whether, in all circumstances, plaintiffs' success in interlocutory proceedings thus far warranting award of costs-Court's discretion in relation to costs, while apparently unlimited under R. 344, must be exercised on judicial principles-Discretion granted by R. 344 sufficient to include authority, in appropriate case, to order payment of security for costs at interlocutory stage, but only in exceptional circumstances-Unless exceptional circumstances, costs not generally dealt with, seldom awarded, in interlocutory proceedings before trial-Costs at this stage generally treated as "in the cause", to be determined ultimately by trial judge, following trial: Thurston Hayes Developments Ltd. et al. v. Horn Abbot Ltd. et al. (1985), 5 C.P.R. (3d) 124 (F.C.A.)-In narrow circumstances of particular cases, Court suggesting exceptional factors possibly warranting award of costs following interlocutory proceedings before trial-Failure to defend action, when not actively pursued by plaintiffs in preparing for trial, not basis for awarding costs at this stage-Defendants allegedly engaging in activities in Canada supporting so-called "grey marketing" abroad-Whether such activity constituting infringement under Trade-marks Act may be serious issue at trial in light of Smith & Nephew Inc. v. Glen Oak Inc., [1996] 3 F.C. 565 (C.A.) wherein Court dealing with alleged grey marketing in Canada of goods from abroad bearing trade mark owner's marks-Circumstances herein not warranting exceptional action to award costs at this stage given serious issues to be tried-Application dismissed.