Law Note - Letters Rogatory: Win or Pay? 

publication 

Winter 2010 - (InBrief Winter 2011, Commercial Litigation Brief Fall 2010 )

InBrief Winter 2011, Commercial Litigation Brief Fall 2010
Counsel defending against Letters Rogatory requests should be aware of two recent Ontario Superior Court of Justice costs rulings. Letters Rogatory are a request from a foreign court to a domestic court and are often used by foreign litigants to obtain evidence from Canadian parties for foreign proceedings or vice-versa .
 
These recent judicial rulings maintain that a party who successfully opposes issuance or enforcement of Letters Rogatory will be entitled to full indemnity costs. In j2 Global Communications v. Protus IP Solutions Inc., Protus successfully responded to an application for enforcement of Letters Rogatory. Protus claimed $32,877.23 in costs, on a full-indemnity scale. In awarding this amount, Mr. Justice Ray said: 

If I were to have granted the application, I would have entertained argument on the issue of whether, since it was an indulgence, the Respondent should be indemnified for all costs. Since the application was dismissed, I can see no reason why the Respondent should not be completely indemnified under these circumstances.

Approximately 10 months later, j2 Global Communications Inc. again found itself in front of the Superior Court of Justice arguing costs in relation to a Letters Rogatory request in j2 Global Communications v. B.C. In this case, the company desired issuance of Letters Rogatory to allow depositions to be taken of individual respondents for use in California litigation against Protus. The individual respondents successfully defended the application. In citing the costs award in j2 Global Communications v. Protus IP Solutions Inc., the judge maintained that the respondents, as employees of Protus, were strangers to the litigation and should also be paid on a full indemnity scale.
 
In j2 Global Communications v. B.C., respondents' counsel had requested $151,445.12 including GST and disbursements of $2,789.23 for its full indemnity costs. The court reduced the amount payable to $107,789.73 on the basis that respondents' counsel allowed fees to rise to an amount in excess of what is reasonable and proportional to the issues at hand and well beyond what the unsuccessful plaintiff could reasonably expect to pay. This award of costs was upheld by the Ontario Court of Appeal.
 
The lesson learned from these decisions is that Ontario courts will, in fact, order full-indemnity costs to parties responding to Letters Rogatory, whether they are attempting to prevent issuance or opposing enforcement of the request. Companies looking to enforce Letters Rogatory should ensure that they meet Ontario's common law test for enforcement. On the other hand, companies resisting enforcement of Letters Rogatory in Ontario have a clear bargaining chip to play in any advance settlement of a Letters Rogatory application or when resisting an overly broad Letters Rogatory request.



This Law Note appeared in the Lang Michener LLP InBrief Winter 2011.