Assessment Officer Makes Various Findings Concerning Allowable Costs and Disbursements
Bayer AG, Bayer Healthcare AG and Bayer Inc. v. Novopharm Limited and The Minister of Health, 2009 FC 1230 (Bruce Preston, Assessment Officer)

December 1, 2009

Neil Belmore for Bayer AG, Bayer Healthcare AG and Bayer Inc.
Andy Radhakant and Katrina Reyes for Novopharm Limited and The Minister of Health

At issue in this appeal was the allowability of certain costs and disbursements incurred by the Applicants (Bayer et al.) in relation to their successful application for judicial review. The Court had ordered that the Applicants’ costs and disbursements be assessed in accordance with the top end of Column III of the Federal Court Tariff.

The Assessment Officer’s key findings in respect of costs and disbursements follow:

Second Counsel Fees Under Items 9 and 14(b), and Travel by Counsel Under Item 24
Items 9, 14 and 24 each refer to allowing costs at the direction or discretion of the Court. Phelan J. in awarding costs at the high end of Column III did not award the costs of second counsel or travel costs. As an Assessment Officer is not included in the definition of "Court", the Assessment Officer could not award costs for second counsel under Items 9 and 14(b), or costs for travel by counsel under Item 24.

Disbursements Related to Expert Witnesses
The Respondents (Novopharm and The Minister of Health) questioned the propriety of the Applicants’ expert witness, Dr. George Arcieri, billing 340 hours in relation to drafting a 19 page affidavit. The Respondents argued that Dr. Arcieri was a fact, and not an expert, witness, and was therefore not entitled to have his costs paid. The Assessment Officer found that although Dr. Arcieri gave both fact and opinion evidence, the Court clearly considered Dr. Arcieri an expert witness, which was determinative. However, the Assessment Officer found 340 hours for a 19 page affidavit "somewhat excessive" and allowed only a portion of the requested amount.

The Assessment Officer rejected the Respondents’ argument that an expert’s hourly rate should be limited to one half the rate of the Applicants’ senior counsel.

The Respondents alleged that trips by the Applicants’ counsel to meet with experts (a total of 13 trips to visit 4 experts) in person were unnecessary, and meetings instead could have been accomplished using telephone calls and videoconferencing, for example. The Assessment Officer found that given the complexity of the technical issues and the volume of prior art and affidavit evidence all of the trips by counsel to meet with experts were allowable. This was notwithstanding that two trips were made to an expert’s winter home in Spain.

Reduction of Costs in view of Subsequent Litigation
The Respondents argued that the Applicants’ total assessed costs should be reduced by 25% because the assessment for the present case was being used as a vehicle to recover costs for subsequent litigation that involved the same patents and the same drug. The Assessment Officer found that the two pieces of litigation were independent and rejected the Respondents’ argument. However, the Assessment Officer reduced disbursements that related to both pieces of litigation by 10% on the basis that he was unable to confirm that the Applicants in fact divided the disbursements between the two pieces of litigation as they claimed.

By: Roch Ripley, Gowling Lafleur Henderson LLP