Date: 20150317
Docket: T-2058-12
Citation: 2015 FC 339
BETWEEN:
VOLTAGE PICTURES LLC
Plaintiff
and

JOHN DOE and JANE DOE
Defendants
and

TEKSAVVY SOLUTIONS INC.
Responding Party
and

SAMUELSON-GLUSHKO CANADIAN
INTERNET POLICY AND PUBLIC
INTEREST CLINIC
Intervener

REASONS FOR ORDER

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ARONOVITCH P.
I.

Background

[1]

The plaintiff, a film production company called Voltage Pictures LLC (Voltage),

commenced the underlying action against unidentified “Doe” defendants alleging that they
engaged in illegal file sharing over the Internet and thereby infringed on the plaintiff’s rights in
certain cinematic works.

[2]

After initially identifying the defendants by their Internet Protocol (IP) addresses,

Voltage approached their Internet service provider, TekSavvy Solutions Inc. (TekSavvy), to
obtain their names and addresses in order to pursue the litigation. TekSavvy asked Voltage to
first obtain a court order but otherwise said it would not oppose the motion.

[3]

Accordingly, Voltage brought a motion under Rule 238 of the Federal Courts Rules,

SOR/98-106 (Rules) for an order to compel production of the names and addresses of subscribers
associated with roughly 2,000 IP addresses that it had identified. Prothonotary Aalto heard and
disposed of the motion by way of Reasons for Order and Order (the Order) dated February 20,
2014: Voltage Pictures LLC v John Doe and Jane Doe, 2014 FC 161 (Voltage)).

[4]

As noted by Prothonotary Aalto, this type of order is also referred to as a “Norwich”

order, taking its name from the House of Lords decision Norwich Pharmacal Co v Customs &
Excise Commissioners, [1974] AC 133 (Norwich Pharmacal), which established the right of
parties to have discovery of non-parties by means of an “equitable bill of discovery” if necessary

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to ascertain the identity of unknown defendants. The Federal Court of Appeal in BMG Canada
Inc v Doe, 2005 FCA 193 at paras 30 and 32, 252 DLR (4th) 342 (affirming BMG Canada Inc v
Doe, 2004 FC 488 at paras 10-14, 250 FTR 267 (BMG)) found that the legal principles which
apply to the equitable bill of discovery apply equally to the test under Rule 238 of the Rules.

[5]

Having considered the applicable principles and weighed Voltage’s right to defend its

copyright against the subscribers’ rights to privacy and concerns about possible misuse of their
information, Prothonotary Aalto concluded that Voltage had met the test under Rule 238 and that
the motion should be granted, with certain safeguards.

[6]

Prothonotary Aalto ordered TekSavvy to disclose to Voltage, to the extent it was able, the

contact information of customer accounts associated with the IP addresses identified by Voltage.
The Order included a provision that Voltage pay TekSavvy “All reasonable legal costs,
administrative costs and disbursements incurred by TekSavvy in abiding by this Order.” Any
disputes arising in relation to these costs were left to be resolved by the case management judge.

[7]

The intended scope of the Order and the reasonable costs incurred by TekSavvy in

abiding with the Order now come to be assessed by way of the present motion, the parties to the
motion have widely divergent views of what the Order covers.

[8]

TekSavvy claims recovery of a total of $346,480.68 on a full indemnity basis to make it

whole for the costs it says it incurred as a result of Voltage’s motion. Voltage for its part takes a
diametrically opposite view, saying that the effect of the Order is prospective and covers only

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those costs incurred following the issuance of the Order. In the alternative, Voltage says that
TekSavvy has not proven its costs and is not entitled to any costs. In the further alternative,
based on its own calculations, Voltage argues that TekSavvy is entitled no more than $884.00.

[9]

TekSavvy’s interpretation of the Order’s meaning is too expansive, Voltage’s too narrow.

Neither position, in my view, is justifiable on the evidence or at law.
II.

Facts and submissions of the parties

[10]

TekSavvy is a relatively small telecommunications and Internet service provider (ISP),

with roughly 280 employees, based in Chatham, Ontario. TekSavvy’s principal affiant in support
of its claim is Marc Gaudrault, its Chief Executive Officer. He attests to the fact that the costs
incurred by TekSavvy were especially significant because at times “effectively everyone in the
company was occupied with responding to and addressing the motion brought by Voltage.”

[11]

Gaudrault’s affidavit sets out the timeline of the events giving rise to its claim for various

costs. We learn that the first contact was made by way of an inquiry by Barry Logan, of Canipre
Inc. (Canipre), on behalf of Voltage. Logan contacted TekSavvy on October 10, 2012, through
an online information request in order to discuss serving materials for a court order to deliver
subscriber information, and to request information about how TekSavvy would determine the
information from a technical view point.

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[12]

E-mail exchanges ensued between Logan and Christian Tacit, TekSavvy’s corporate

counsel, as well as Logan and Patrick Misur, TekSavvy’s Director of Corporate Systems, who
provided the requested technical information.

[13]

On November 1, 2012, Voltage sent TekSavvy draft motion materials identifying over

4,500 IP addresses for which it sought subscriber information, and proposing a motion date of
November 19, 2012.

[14]

By November 14, 2012, TekSavvy had retained Nicholas McHaffie at Stikeman Elliot

LLP to advise them in respect of the motion. McHaffie advised John Philpott, counsel for
Voltage, of TekSavvy’s intention to provide prior notice of Voltage’s motion to affected
subscribers in order to notify them of the issues at stake and allow them to take any steps they
deemed necessary, including seeking legal advice or being represented at the hearing of the
motion.

[15]

Philpott took the view that notice was not required at law and would delay the

proceeding, but offered to continue cooperating, provided that doing so did not delay or
prejudice his client, and agreed to postpone the motion until December 10, 2012, to allow for
notices to be sent.

[16]

Gaudrault explains that, in the two years prior to Voltage’s request, TekSavvy had

undertaken only 17 correlations of IP addresses to locate contact information for subscribers. The
work was performed manually, taking between one and two hours per correlation. The

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correlation of thousands of IP addresses with timestamps covering a two month period (and thus
180 daily log files), one-by-one, using TekSavvy’s manual system would have thus required an
inordinate amount of time. TekSavvy therefore had to plan and implement a new process to at
least partially automate the process. The new approach consisted of eight-steps described in
Gaudrault’s affidavit, and required a number of senior TekSavvy officers and staff members.

[17]

The preliminary steps of correlating IP addresses with subscriber information

commenced on November 14, 2012. On November 28, 2012, Voltage sent TekSavvy a revised
list which consisted of 2,114 IP addresses with notice to TekSavvy that it intended to proceed
with its motion on December 17, 2012. TekSavvy undertook the necessary correlation of
Voltage’s revised list. Once made, TekSavvy ran the correlation a second time, with two lists in
order to find discrepancies. On December 4, 2012, six days after receipt of the revised list of IP
addresses, this verification yielded a final list of subscriber information for approximately 1,130
subscribers.

[18]

On December 10, 2012, TekSavvy sent notice to the affected subscribers and issued a

press release regarding Voltage’s request and the pending motion.

[19]

In order to reduce the overall number of telephone and e-mail inquiries and to efficiently

convey information to its subscribers, TekSavvy created an online portal tool. On December 13,
2012, TekSavvy sent an e-mail notice to all of its customers, some 200,000 at that time,
informing them of the portal and providing answers to the frequently asked questions concerning
the Voltage motion.

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[20]

Over the next several days, TekSavvy received reports from some recipients of the notice

indicating that they had not been TekSavvy customers at the relevant time or that there were
other errors in the identification of subscribers. Despite the double-checks it had already
conducted, TekSavvy learned that some of the subscriber information was inaccurate. It therefore
undertook further confirmation and verification of its information. On December 16, 2012, the
eve of the then hearing of the motion, TekSavvy discovered that it had incorrectly notified 42
subscribers and had failed to notify an additional 92 subscribers.

[21]

The motion did not proceed as scheduled on December 17, 2012. TekSavvy requested an

adjournment in order to correct the identified errors and allow the Canadian Internet Policy and
Public Interest Clinic (CIPPIC) to seek leave to intervene. The adjournment was granted by
Justice O’Keefe.

[22]

Justice Mandamin granted a further adjournment on January 14, 2013, pending

disposition of CIPPIC’s motion to intervene, which Madam Prothonotary Tabib granted on
February 13, 2013. Voltage’s motion for third party discovery was ultimately heard on June 25,
2013.

[23]

TekSavvy’s provides evidence to the effect that Voltage’s motion generated considerable

interest and concern among TekSavvy’s then-current subscribers, potential subscribers, and the
general public. This resulted in a massive increase in telephone and online inquiries, comments
and complaints to TekSavvy. Gaudrault says that in the days before the December 17, 2012
return date of the motion, at one point TekSavvy was receiving 4,000 to 6,000 calls per day, of

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which 90 percent were related to Voltage, had as many as 200 telephone calls in queue for
response, and had employees working overtime to field inquiries.

[24]

Gaudrault attests to the fact that the attention and interest generated by Voltage’s motion

was also manifested in a much more negative way. TekSavvy, Voltage, and Canipre were each
victims of distributed denial-of-service (DDoS) attacks, in which hackers disable a website or
online business by manipulating a huge number of computers to flood a targeted host with
communication requests. Given the targets (TekSavvy, Voltage, and Canipre) and the timing of
the attacks (which started on December 15, 2012), Gaudrault attributes the DDoS attack to the
Voltage motion.

[25]

TekSavvy’s systems were not able to respond to the attack. It was therefore forced to

spend time finding and implementing a solution from a third-party provider, Arbor Networks, in
order to “harden” its defences against future DDoS attacks.

[26]

Culminating from all of these events, TekSavvy presents its bill of costs and claim for

$178,820.98 in legal costs, $108,616.68 in administrative costs, and $60,043.02 in
disbursements. TekSavvy insists that these costs were incurred “in acting on Voltage’s request
for contact information and thus abiding by the Order,” and says that but for Voltage’s motion, it
would not have incurred any of these costs and expenses.

[27]

TekSavvy takes the view that its costs must be assessed in the context in which they were

incurred. Voltage’s request for information relating to more than 2,000 IP addresses in the

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context of a civil proceeding was unprecedented for TekSavvy, and indeed in Canada.
Responding to the request required TekSavvy to undertake significant technical measures to
accurately correlate the large number of IP addresses to customer account information;
communicate with individuals registered to these accounts to ensure they had appropriate notice
of the request; respond to a massive increase in customer inquiries relating to the Voltage
motion; take legal advice, including representation on the motion; and respond to a malicious
DDoS attack on its business.

[28]

On the recommendation of its investigative firm, Canipre, Voltage made a deliberate

tactical decision to name TekSavvy as respondent to its motion due to its small size. TekSavvy
argues therefore, that the costs flowing from that decision are appropriately borne by Voltage
based on the Order and Voltage’s undertaking to reimburse the reasonable expenses incurred by
TekSavvy.

[29]

TekSavvy had expressly advised Voltage from the start that, given the mass of

information sought and TekSavvy’s size, it would be a substantial undertaking for TekSavvy and
would take significant resources away from the operations of its business. TekSavvy estimated
the length of time needed for the correlation as taking between ten and fifteen days. Knowing
this, Voltage chose to pursue its motion, and give an undertaking as to costs. TekSavvy urges
therefore, that Voltage ought not to be allowed to now resile from its undertaking.

[30]

For its part, Voltage describes a claim of more than $350,000.00 associated with

identifying contact information for some 1,100 IP addresses as “grossly inflated” and prohibitive

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given that, under the new legislative regime, the maximum fine for copyright infringement is
$5,000.00. Voltage maintains that this “scandalous,” inflated claim is nothing more than a
collateral attack on the Prothonotary’s Order meant to frustrate its purpose and implementation.

[31]

Voltage points out that in order to comply with the “Notice and Notice” provisions of the

Copyright Modernization Act, SC 2012, c 20 which came into force in January of 2015, ISPs will
have to correlate IP addresses completely free of charge. This statutory requirement, for Voltage,
signifies recognition of the fact the correlation of IP addresses by ISPs is considered a cost of
doing business, and that the associated costs are negligible.

[32]

According to the plaintiff, developing jurisprudence in Europe is also beginning to

recognize these principles. Voltage cites the UK decision Twentieth Century Fox Film
Corporation and others v British Telecommunications plc (No 2), [2011] EWHC 2174 (Ch) at
para. 32 (Fox), which affirms that ISPs are commercial enterprises that make a profit from
offering services that are used to infringe the rights of copyright holders and that “[a]s such, the
costs of implementing the order [to provide client information] can be regarded as a cost of
carrying on that business.”

[33]

Voltage argues that a large swath of the costs claimed by TekSavvy must be denied as

they result from TekSavvy’s “shameless” campaign of marketing and self-promotion through the
media and through its communications with its subscribers and the public alike, which TekSavvy
engaged in extensively and which, according to Voltage, inured to TekSavvy’s advantage by
enhancing its reputation and greatly increasing the ISP’s customer base.

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[34]

According to Voltage, most ISPs have their customers’ contact information readily

available to them. It takes “minutes” for them to correlate an IP address to its associated
customer information and, for large requests, simple programs can be written in minutes to
correlate thousands of IP addresses at the press of a button. The cost of correlating IP addresses
is so low that most ISPs don’t even charge for the service.

[35]

Voltage relies on the opinion of Steven Rogers, an expert in databases and electronic

evidence, to the effect that it should reasonably have taken a total of fourteen hours to correlate
the subject IP addresses, at a cost of $884.00, including legal fees. Any significant deviation
from this number, says Voltage, is unreasonable, contrary to the fundamental legal principle of
fairness, and would have a severe chilling effect on all future, similar litigation.
III.

The scope and application of the Order

[36]

TekSavvy takes the view that the cost terms of Prothonotary Aalto’s Order are intended

to have the effect described in Norwich Pharmacal, namely, to ensure that the applicant bears the
“full costs of the respondent” and any expense incurred by the third party in providing the
information ordered to be produced (Norwich Pharmacal, at para 100; emphasis added).

[37]

Prothonotary Aalto thoroughly reviewed the Canadian, English, and American

jurisprudence on this issue, citing the principles of reimbursement and indemnification set out in
those cases, including specific reference to the principle to be taken from BMG that “any order
made will not cause undue delay, inconvenience and expense to the third-party or others”
(Voltage, at para 45).

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[38]

TekSavvy maintains that Prothonotary Aalto’s expansive language and reference to the

three heads of costs indicate that that the Order was not a de minimis order.

[39]

Rather, TekSavvy says, the Order should be read as intending to give effect to the

principle of indemnification that is to be gleaned from the jurisprudence which, according to
TekSavvy, is that an “innocent third party” to the litigation, in TekSavvy’s circumstances, must
be made whole; be fully indemnified for any and all costs incurred in connection with a motion
for a Norwich-type order, not limited to the tariff or ordinary scale observed for the parties to the
litigation; and be subject only to the reasonableness of those costs.

[40]

In effect, TekSavvy proposes that damages are the appropriate measure to assess its costs

– that is, for TekSavvy to be placed in the position it would have been in but for Voltage’s
motion.

[41]

I find no support for that view in the jurisprudence or Prothonotary Aalto’s Order. More

to the point, TekSavvy has produced no cases where, in similar circumstances, costs have been
ordered to be paid, or assessed to be paid, on that basis.

[42]

Lord Cross of Chelsea, in Norwich Pharmacal, distinguishes between the legal costs of

the party responding to a motion or applying for third party discovery, and the reimbursement of
expenses incurred in complying with the Order as follows: “The full costs of the respondent of
the application” and “any expense incurred in providing the information would have to be borne
by the applicant” (at para 100; emphasis added).

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[43]

Justice von Finckenstein reiterates this distinction in BMG. In that case, the Court was

seized of a motion similar to the one at issue in this case, brought by members of Canada’s
recording industry seeking disclosure of subscriber information from five Canadian ISPs. At
paragraph 13, Justice von Finckenstein refers to the following principle to be gleaned from
Norwich Pharmacal and Glaxo Wellcome PLC v Canada (Minister of National Revenue), [1998]
4 FC 439 at para 24, 162 DLR (4th) 433 (CA): “the person from whom discovery is sought must
be reasonably compensated for his expenses arising out of compliance with the discovery order
in addition to his legal costs.”

[44]

Justice von Finckenstein goes on as follows at para 35:
[35] Clearly the process that is sought to be imposed on the ISPs
would be costly and would divert their resources from other tasks.
Given that the ISPs are in no way involved in any alleged
infringement, they would need to be reimbursed for their
reasonable costs for furnishing the names of account holders, as
well as the legal costs of responding to this motion.
[Emphasis added]

[45]

In that case, the Court ultimately denied the motion but awarded the costs of the motion

to the third party ISPs who had opposed it.

[46]

The decision of the Court of Queen’s Bench of Alberta in Alberta (Treasury Branches) v

Leahy, 2000 ABQB 575, 270 AR 1 (Leahy), on which TekSavvy relies, does not bear out the
proposition that the principle of reimbursement of costs endorsed in Norwich cases is akin to the
measure of damages.

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[47]

In Leahy, the Court considers an application to set aside a number of ex parte orders

which permitted the Alberta Treasury Branch to trace funds and obtain production of documents
from third party financial institutions. At paragraph 106, Justice Mason summarizes the factors
that the court must reference in considering an application for “Norwich relief”:
[…]
(iv) Whether the third party can be indemnified for costs to which
the third party may be exposed because of the disclosure, some
refer to the associated expenses of complying with the orders,
while others speak of damages; […]

[48]

The statement is made by way of a general summary without any reference to specific

cases or orders of any court. The ex parte Norwich orders at issue in Leahy provide only that the
plaintiff “would pay the reasonable fees incurred in complying with the order” (at para 159).

[49]

While a Norwich order remains a discovery remedy that is out of the ordinary, orders

requiring ISPs to provide contact information for their subscribers are not new or uncommon,
whether in the context of the posting of defamatory materials (York University v Bell Canada
Enterprises (2009), 99 OR (3d) 695 (Sup Ct) (York University); Pierce v Canjex Publishing Ltd.,
2011 BCSC 1503, 27 BCLR (5th) 397 (Pierce)), or of alleged infringement of intellectual
property rights (BMG; Voltage Pictures LLC v Jane Doe, 2011 FC 1024, 395 FTR 315 (Voltage
2011)). Indeed, TekSavvy acknowledges that the only uncommon aspect of Voltage’s motion is
in the number of IP addresses that are identified.

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[50]

Of note, in each of the above cases where the application for disclosure of information is

granted, the costs payable by the rights holder to the ISP in question are restricted to the costs of
complying with the order to produce the contact information sought by the applicant.

[51]

In York University Justice Strathy found that “the costs of compliance were nominal and

had been met” (at para 39). In Voltage 2011, a case much like the present, Justice Shore held that
there were sufficient grounds to issue an order for discovery of three ISPs. Justice Short allowed
Voltage to proceed with an examination for discovery of the ISPs in order to obtain the customer
information associated with the IP addresses it had identified, and required Voltage to reimburse
the costs of complying with the order. Justice Shore described these costs as follows: “any
reasonable expenses incurred by Bell Canada, Cogeco Cable Inc. and Videotron GP in collecting
the personal information identified in [the first paragraph of his order].” No costs were awarded
on the motion as the ISPs in that case, as in this one, had required a court order but had not
opposed the motion.

[52]

Pierce is to the same effect. Having concluded that the Norwich order was justified, the

Court ordered the reimbursement of the third party’s costs of compliance with the order which
the Court described as constituting “all reasonable costs incurred” by Canjex, the publisher of a
website, “for the retrieval, production and delivery of identifying information […]” (at para 32).

[53]

In my view, Prothonotary Aalto’s order is consistent with the jurisprudence in intent,

scope, and application. He states in his reasons that, the “production of such information [if
ordered]” should not cause delay, inconvenience, or costs to TekSavvy, and that TekSavvy

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would be “reimbursed for its reasonable costs in providing the information” (Voltage at paras
135 and 46; emphasis added).

[54]

I ascribe no special significance to the fact that Prothonotary Aalto identifies three heads

of costs to be reimbursed. The legal costs, the administrative costs, and the disbursements he
identifies are not independent costs, they are recoverable only insofar as they are directed to and
incurred for the purposes of “abiding by this Order” to produce the requested subscriber
information. There is no basis in the jurisprudence or in Prothonotary Aalto’s reasons to give any
broader scope or meaning to the plain language of his order.

[55]

Had Prothonotary Aalto intended TekSavvy to be compensated, in full, for any costs that

it would have incurred “but for the motion” or “in connection with the motion,” I am confident
he would have so ordered.

[56]

I will proceed on the basis that the costs which Voltage is required to reimburse are

limited to those incurred in abiding with the Order, that is, to locate and produce the required
contact information of the subscribers identified by their IP addresses. It remains to be
determined, on the evidence, what those costs are and whether they are reasonable, by which I
mean “reasonably necessary” to give effect to the Order (Fontaine v Canada (Attorney General),
2012 ONSC 3552 at para 7).

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IV.

TekSavvy’s notices to affected clients

[57]

TekSavvy claims the costs associated with its notice to affected subscribers as its costs of

implementing the Order.

[58]

As noted above, there was an exchange between counsel regarding the necessity for

TekSavvy to give notice to its affected clients. Despite thinking notice was not required, Voltage
agreed to an extension of time to allow TekSavvy to give notice to its affected subscribers, on the
condition that it be undertaken without prejudice to his client. At Voltage’s request, the notice
included a request that affected clients not destroy any evidence of their online activities pending
the disposition of the motion.

[59]

The notices were sent out on December 10, 2012. They inform the named recipient of the

motion and of the fact that one of the IP addresses at issue is associated with the recipient’s
account. The notice includes copies of the motion materials as well as assurances that customer
information will not be disclosed without a court order.

[60]

The notice refers recipients to a TekSavvy website where they can become familiar with

their rights and obligations under copyright law, and suggests that the recipient might wish to
seek independent advice. The notice also includes the date at which the motion, at that time, was
scheduled to be heard as well as contact information for TekSavvy’s marketing department.

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[61]

TekSavvy maintains that its approach to notice was entirely appropriate as the Rules,

generally, and Rule 238 in particular, are premised on a system of providing notice to parties and
those whose rights are potentially affected. Notice allows those whose interests are before the
Court to be aware of what is occurring, seek legal advice as appropriate, and respond or appear
to the motion if they so choose.

[62]

TekSavvy points to Justice Strathy’s statement in York University that: “It may be, that in

an appropriate case, the Internet service provider should be required to give notice to its
customer for the purpose of enabling the customer to make submissions as to whether the order
should be granted.” The Court went on to note that: “this was suggested in Dendrite
International Inc. v Doe above, and was done by Google, apparently on its own initiative, in the
Cohen v Google Inc. case” (at para 38).

[63]

That said, Justice Strathy also noted that notice did not appear to have been given as a

matter of course in other cases involving Norwich orders, and concluded that it wasn’t necessary
to do so in that case (York University at para 24).

[64]

While the Court has the discretion to order a party to give notice, the Rules do not require

TekSavvy to have provided notice of the motion to its affected clients. TekSavvy acted
voluntarily and on its own initiative. Whether it acted out of altruism or self-interest is irrelevant.

[65]

I do not accept the argument that the notice served to verify the correlation as it led to a

more accurate identification of affected customers, and that the resulting costs should therefore

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be subsumed in the costs of abiding with the Order. This appears to be an explanation after the
fact. Notice was not given to ensure the accuracy of the correlation. There is nothing in the
notices or in the exchanges of counsel to suggest that the purpose of the notice was anything
other than to inform subscribers of the motion and to provide them with an opportunity to seek
legal advice, or to appear at the motion.

[66]

That said, the costs incurred from rechecking and correcting information following the

notice would be recoverable, if identified and proven.
V.

The legal costs of implementing the Order

[67]

TekSavvy’s legal costs include those of its outside counsel, Stikeman Elliot

($123,580.98), and its corporate counsel, Tacit ($54,240.00), for a total of $178,820.98.

[68]

The bill of costs for Stikeman Elliot’s services is appropriately particularized and fully

supported by itemized invoices and ledgers for advice provided to TekSavvy by two senior
lawyers.

[69]

The lion’s share of Stikeman Elliot’s costs relate to advice, preparation, and attendance at

the motion before Prothonotary Aalto, as well as preparation and attendance at the various
interlocutory motions, or in respect of preliminaries to those motions.

[70]

Voltage points out that, ordinarily, a party to a motion who takes no position is not

entitled to any costs, let alone to the costs claimed by TekSavvy on a full indemnity basis for two

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senior counsel on a routine discovery motion. Indeed, the cost orders in BMG as well as in
Voltage 2011 attest to that proposition. In the first case, costs were awarded to the ISPs who had
opposed and argued the motion; in the second, no costs were awarded to the ISPs in question as
they had not opposed the motion.

[71]

In my view, the more important barrier to the recovery of those costs rests on the fact that

TekSavvy has conflated the legal costs of the motion with the legal costs of abiding by the Order,
and now seeks to recover the former as the legal costs of complying with the Order.

[72]

While TekSavvy did not oppose the motion for a Rule 238 order and did not file a written

record, TekSavvy’s counsel did attend the motion to make oral representations. As such,
TekSavvy, a party to the motion, was entitled to ask for its costs, leaving it to Prothonotary Aalto
to assess the appropriate level or amount. It appears, however, that the costs of the motion were
not addressed as the Order is silent as to costs.

[73]

Whatever the reason, the parties’ failure to address the costs of the motion is an oversight

that cannot now be remedied by subsuming them within the legal costs of abiding by the Order.
This applies equally to the legal costs claimed on account of TekSavvy’s attendances at the
motion to intervene and the various motions to adjourn. In that connection, counsel for TekSavvy
conceded at the hearing of this motion that the costs of appearing before Justice Mandamin for a
further adjournment could not be claimed as Justice Mandamin explicitly determined that no
costs should be awarded in respect of the adjournment.

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[74]

In any case, were the costs of the motion recoverable, it would not be on a solicitor client

basis, as claimed by TekSavvy. There is no support for TekSavvy’s contentions that cost orders
in Norwich cases are not subject to the ordinary tariff or that costs of a motion for discovery of a
third party are awarded on the basis of full indemnity. To the contrary, the costs awarded to ISPs
who had opposed the motion for discovery in BMG were based on the tariff.

[75]

The unique feature of this motion was in the number of IP addresses at issue and the

apparent interest it generated. Complex motions are routinely brought under the Rules and costs
awarded subject to the discretion of the judge, pursuant to Rule 400 and following, based on the
tariff subject only to the submissions of parties that may justify costs on an elevated scale, or at
full indemnity.

[76]

I note that TekSavvy has not submitted a bill of costs based on the tariff. Thus, if these

costs were recoverable and the Court wished to order costs on the ordinary scale, it would not be
able to assess them on this evidence.

[77]

Finally, I need not comment on the entries to Stikeman Elliot’s bill that are on account of

“Reviewing draft and revised press releases,” “Reviewing and revising draft blog posts,” and
“Review talking points; interviews; conference call re media lines,” to name a few. These and
other similar items are irrelevant to the implementation of the Order and not recoverable.

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[78]

I also need not comment on the evidence of Philpott taking issue with the manner in

which TekSavvy or its counsel allegedly drove up these costs as I have had no reference to the
evidence.

[79]

Having reviewed the bill of legal costs, I am satisfied that the following legal costs alone

fall within the scope of the Order: the costs of McHaffie’s communication with counsel for
Voltage concerning time zones or timestamp information necessary to carry out the correlation
and those of reviewing and providing advice on Prothonotary Aalto’s Order. I fix these at
$4,500.00.

[80]

As for Tacit’s costs, they are not recoverable as they do not fall within the ambit of the

Order, or because his services that may relate to the implementation of the Order cannot be
identified or quantified on the evidence.

[81]

Gaudrault says that Tacit’s retainer by TekSavvy “in the relevant period” was monthly

rather than hourly. Tacit did not himself provide a bill of costs or time sheets in relation to his
services. Rather, Gaudrault attaches “estimates” of Tacit’s monthly costs for advice with respect
to Voltage’s motion, including representing TekSavvy in the litigation as co-counsel, and giving
advice related to customer communication, IT issues, call centre issues, and privacy matters.
Neither specific tasks, nor the time at which they were performed or the length of time it would
have taken to complete them, are identified.

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[82]

Most of the items identified are unrelated to the implementation of the Order. Tacit’s

advice or involvement related to the performance of the look-up or correlation exercise required
to locate accurate contact information for TekSavvy subscribers cannot be identified or
determined on the evidence. I do not comment on whether any cost items might be excluded due
to overlap with items also claimed by Stikeman Elliott.
VI.

The administrative costs of implementing the Order

[83]

The administrative costs are divided into two categories: the “technical” and the

“operational” administrative costs.

[84]

The “operational” administrative costs are the costs of dealing with the increased volume

of phone and e-mail inquiries, as well as communications with subscribers and the public. These
costs are addressed separately below.

[85]

The “technical” administrative costs include the measures taken by TekSavvy to effect

the correlation of IP addresses with client accounts, and the work involved in the eight-step
process described by Gaudrault. Net of the costs associated with the notice that was sent to
affected clients that TekSavvy has claimed under this heading, and subject to my findings below
regarding the inclusion of the system’s upgrade, these costs fall squarely within the ambit of the
Order and, if proven, are fully recoverable.

[86]

Gaudrault’s evidence is that the initial analysis of Voltage’s request, the planning and

design of the new system to partially automate and simultaneously process multiple IP addresses,

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required the participation of senior staff, including TekSavvy’s Chief Information Officer, Pascal
Tellier. The various technical steps were carried out by a team reporting to Tellier, led by Misur.
The team included Rick Glassford, Systems Administrator; Chris Sologak, Systems Support
Technician; and Pascal Gagnon, Desktop Support.

[87]

As described by Gaudrault and elaborated on by Gaudrault and Tellier on cross-

examination, the correlation process involved locating, transferring, and decompressing the
relevant RADIUS logs based on the timestamps provided by Voltage. TekSavvy stores IP
assignment information in these compressed files, which are created daily and stored on a
number of different servers. According to TekSavvy, this work required only a few hours and
was undertaken on the basis of the longer list of 4,500 IP addresses.

[88]

Next, because each RADIUS log contains millions of lines of data, TekSavvy needed to

design and run a Structured Query Language (SQL) server to comb through the information and
locate the usernames associated with the exact IP address/timestamp combinations requested by
Voltage. Setting up the server, loading the RADIUS logs, and searching through the data
required numerous hours and the participation of many individuals, partially due to problems
with Voltage’s timestamps and the need, at different points, to manually verify results and
eliminate redundancies.

[89]

Finally, having found the usernames associated with the IP addresses provided by

Voltage, TekSavvy needed to clone, load, and search through their subscriber database in order
to match the usernames to the relevant customer account information. This process – dubbed the

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correlation or look-up – also took many hours and required the participation of Tellier, with
several stages performed manually. The actual search process was carried out with the shorter
list of 2,114 IP addresses, which Voltage had since provided.

[90]

TekSavvy ran these correlation searches – that is, of the RADIUS log search and the

subscriber database – a second time in order to verify any discrepancies. The resulting list
yielded subscriber information for approximately 1,130 individuals. According to TekSavvy, this
last step, like the first look-up, took many hours and involved multiple employees.

[91]

Accordingly, TekSavvy bills a total of $22,570.00 for 424 hours of work, billed at an

“approximate” hourly rate of $125.00 for Tellier and $47.50 for the other team members. The
tasks which correspond roughly to the eight steps described by Gaudrault and corresponding
hours worked by Tellier and the four-member team are summarized in a single appendix attached
to the affidavits of both Gaudrault and Tellier.

[92]

Gaudrault says he asked team members to keep track of and record their time dedicated

to the process. The tracking was reported to Tellier, who recorded and compiled the information.
Based on his knowledge of the time TekSavvy employees spent on the project, Gaudrault
believes that the hours claimed are reasonable and indeed conservative compared to the actual
time spent.

[93]

Tellier attests to the fact that he was directly involved in and supervised the process of

identifying TekSavvy subscriber accounts associated with the IP addresses. He reviewed the

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affidavit of Gaudrault and believes that the summary of the work performed summarized in the
appendix fairly describes the process that TekSavvy undertook.

[94]

Based on Tellier’s involvement and knowledge of the project, as well as the information

reported to him, Tellier believes that the hours set out in the appendix are “a fair representation”
of the time worked by himself and the four team members.

[95]

Voltage objects to the admissibility of Gaudrault and Tellier’s evidence as constituting

hearsay, and urges the Court to dismiss the evidence on that basis. Voltage asks the Court to
instead rely on the evidence of its two main affiants, Rogers and Logan, and Rogers’ in
particular, in assessing what should be the reasonable costs of identifying and retrieving the
required account information.

[96]

Voltage also takes issue with the inclusion of certain steps as coming within the Order, in

particular, TekSavvy’s costs of setting up its new system (planning, software creation, and the
building of servers), which Voltage argues are not part of the search and correlation which alone
may be considered as the costs of implementing the Order. Voltage points to Fox as authority for
the proposition that time spent by ISPs in setting up systems to undertake IP address correlations
should be absorbed by ISPs as part of their cost of doing business. If an ISP is going to be in the
business, Voltage says, it should have the systems in place necessary to identify subscriber
information and to process IP addresses in whatever numbers.

 Page: 27
[97]

On the first ground regarding hearsay, Voltage makes several points. First, Gaudrault and

Tellier did not themselves do the work of correlating the IP addresses. As revealed on crossexamination, it was Misur, not the affiants, who created the appendix setting out the hours of
work. Gaudrault’s and Tellier’s evidence is therefore inadmissible hearsay. Additionally, the
times noted in the appendix as well as the hourly rates are merely estimates as TekSavvy
employees did not keep time sheets or time logs of the work that was done. Finally, the
individuals who carried out the work did not produce their own evidence even though they had
direct personal knowledge of the facts.

[98]

Given the above, Voltage urges the Court to draw an adverse inference and either strike

out or give little weight to Gaudrault’s and Tellier’s evidence on point.

[99]

Voltage invites the Court to instead accept Rogers and Logan’s evidence regarding

reasonable costs of the required correlation. Rogers is the founder and principal of Digital
Evidence International, Inc., a firm that provides Internet investigation services and computer
forensic analysis. He is a former member of the RCMP with extensive experience in conducting
and managing Internet investigations.

[100] While he speaks to other matters as well, the bulk of Rogers’ evidence consists of his
review of the eight step process described in Gaudrault’s affidavit that TekSavvy undertook to
fulfill Voltage’s request. Rogers provides commentary on the work he believes each step
requires, an estimate of the employee time involved at each stage, and the level and number of
employee(s) needed for the job. In certain instances, Rogers suggests alternative processes

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available to TekSavvy, disagrees with the necessity for a step (such as analysis at the initial
stage), or highlights possible mischaracterizations and redundancies. He notes the more common
use of automated systems at various stages, such as during the transfer, decompression, and
loading of the RADIUS logs, which requires only machine time rather than human involvement.
By his final tally, Rogers estimates that the total human time required to complete Voltage’s
request would be fourteen hours, as opposed to the fifteen business days claimed by TekSavvy.
He says that almost all of the steps could have been completed by a junior system administrator
or programmer.

[101] Logan is the owner and principal of Canipre, the company retained by Voltage to track
illegal Internet downloads of its cinematic works. His evidence covers a range of topics, many of
which are irrelevant to the assessment of the quantum of the costs of abiding with the Order
(about which I say more below). As to TekSavvy’s claim for the costs under discussion, Logan
first provides evidence about the frequency of government requests for subscriber information,
as well as the speed and low cost with which these requests are typically fulfilled.

[102] Logan’s principal evidence, intended to show that TekSavvy’s costs of correlation are
unreasonable, is based on his conversations with employees of the six named ISPs, including
TekSavvy, whom he contacted regarding their practices and costs of identifying subscriber
information. Through these conversations, Logan learns that ISPs generally keep an archive of IP
address assignments and, once a request is made, will input the provided IP address(es) and
timestamp(s), which will reveal the associated customer(s). Typically, this operation is quick and
inexpensive, taking only minutes, with no processing costs other than employee time. Where the

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number of IP addresses needing to be correlated increases, so too will employee time and costs.
However, Logan states that, overall, each request will nevertheless typically only take a minute
and cost between $1 and $3.

[103] Based on his survey information, including the annual salaries of technicians typically
tasked with responding to court ordered IP correlations, he estimates that the whole job should
have cost between $538.44 and $692.32.

[104] On Voltage’s first ground of objection, that is that Gaudrault’s and Tellier’s evidence
constitutes hearsay and is inadmissible, I would characterize TekSavvy’s evidence as a mix of
hearsay and direct evidence based on knowledge.

[105] Gaudrault’s description of the steps of the new system was adopted by Tellier who was
involved in the design and supervision of the process. Tellier can speak directly to his own
involvement, as well as the hours and costs attributed to him as senior staff. While the steps in
the correlation process were carried out by Misur and his team, Tellier was their direct supervisor
and as such, in my view, can reliably attest to the accuracy of the hours set out in the appendix to
his affidavit.

[106] The hourly rates that are charged for the various team members are admittedly
“approximations” of the hourly costs of each based on their annual salaries. There is no
explanation as to exactly how the hourly rate is calculated. However, TekSavvy’s evidence on
this point was not shaken on cross-examination, and the annual salaries of the team members

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given on cross examination were substantially more than the salaries on which Rogers and Logan
base their calculations.

[107] TekSavvy argues that requiring affidavits for each member of the team would be
disproportionate. Indeed, under Rule 81(1) of the Rules, affidavits that are normally required to
be confined to facts within the knowledge of the deponent, in the case of motions, may be sworn
instead on information and belief, subject, as Voltage rightly points out, to the Court drawing an
adverse inference from a party’s failure to adduce evidence based on personal knowledge.

[108] However onerous, TekSavvy would have been better advised to provide its best evidence
on this critical point. That said, I am satisfied in this instance that there is sufficient direct
evidence, as well as reliable evidence based on information and belief, as to the work performed
and the hours required to carry out the work to preclude either dismissing or giving little weight
to the evidence of Gaudrault and Tellier.

[109] In addition, I find no reason to prefer the evidence of Rogers and Logan as to the
reasonableness of the steps undertaken by TekSavvy, the time taken to execute them, or the
resources employed for that purpose.

[110] Rogers’ evidence is based on his experience and what he refers to as “normal business
practice.” He did not conduct a similar correlation himself, nor did he start from assumptions that
reflected TekSavvy’s reality or any knowledge of its infrastructure, policies, or systems. Rogers
conceded on cross-examination that his opinion was based on incorrect assumptions, for

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example, an assumption that TekSavvy’s process for responding to Voltage’s request was the
same as that used for earlier requests from law enforcement. He also admitted that one of the
examples he provided to the Court as to what TekSavvy could have done instead (using IAS Log
Viewer) was not only something he was unfamiliar with but something he himself would not
have done. He would have used an SQL server, as TekSavvy did.

[111] Accordingly, I did not find Rogers’ evidence as to how a hypothetical look-up process
might be set up and the time required to execute its functions informative of whether TekSavvy
acted reasonably in its response to Voltage’s request or helpful in assessing the reasonableness of
the time taken by TekSavvy to perform certain functions using its home system.

[112] For the same reason, I have given no weight to Logan’s second-hand evidence regarding
the costs that other ISPs incur when conducting correlations. Logan’s evidence does not establish
what systems most ISPs have in place to effect correlations, let alone their degree of efficiency in
carrying out that function. Even if the evidence on point were clear or reliable, it would not be
relevant in the circumstances. Similarly, the fact that correlations are carried out at no cost under
statutory regimes, or that system upgrades to allow for the correlation of large numbers of IP
addresses are considered a cost of doing business in other jurisdictions, is neither persuasive nor
relevant in the circumstances.

[113] It is TekSavvy’s costs that are ordered to be paid. TekSavvy’s evidence is uncontradicted. As a smaller ISP with a history of correlating IP addresses to account information

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manually, one at a time, it was not set up for large-scale requests and its systems required
significant adaptation to deal with a list of over 2,000 IP addresses.

[114] The Order does not distinguish between the correlation and the systems necessary to
carry it out. The adaptations to TekSavvy’s look-up process were necessary to effect the required
correlation and, in my view, its costs are thereby encompassed by the Order. Put another way, in
this respect Voltage has to take TekSavvy as it finds it.

[115] While TekSavvy may have derived a benefit from the situation, TekSavvy will not be
able to claim the costs of its upgraded correlation process again in the context of future requests.
What’s more, if such costs are to be excluded, it is up to the parties to see that the cost order
reflects their intentions.

[116]

I have two final points. First, Voltage initially produced more than 4,000 IP addresses for

correlation and, despite having later reduced this number, in my view, bears responsibility for
any portion of the work undertaken by TekSavvy on that basis. Voltage cannot now seek to
exclude those costs.

[117] In the same vein, and my second point, Voltage cannot argue that the correlation work
that TekSavvy carried out prior to the issuance of the Order was done to enable TekSavvy to
give notice, that it was therefore carried out at TekSavvy’s own risk, and that it should not be
compensated. The Order is not limited in time and, in any case, must be taken to include

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recovery of the costs of the correlation that had already been done, given that Prothonotary Aalto
was aware that such work had been carried out when he issued the Order.

[118] In sum, having reviewed TekSavvy’s claim for technical administrative costs, I find that
it has proven costs in the amount of $17,057.50. In arriving at this sum I have excluded costs of
“Preparation of information for court” and one half of the costs of “Second check/QA
verification” as these were not identified and supported by evidence. Moreover, at the hearing of
the motion, TekSavvy failed to explain what was meant by “QA verification.”
A.

The “operational” administrative costs of implementing the Order

[119] Under this heading, TekSavvy seeks to recover the sum of $81,524.12 for expenses
incurred in communicating with affected and non-affected subscribers and the public; creating an
online portal tool for the use of subscribers; and responding to a higher volume of inquiries and
complaints. The claim, including overtime, is on account of the work performed by supervisors
and staff in the e-services department, at the call centre, and in the marketing department.

[120] These tasks, which Gaudrault refers to as “work relating to TekSavvy’s reputational
impact,” are, in effect, TekSavvy’s costs of marketing, promotion, and customer relations, which
I consider to be TekSavvy’s costs of doing business. Consequently, I disallow these costs. I do
not consider them recoverable as they are unrelated to the identification and production of the
required customer information, and fall outside the ambit of the Order.

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VII.

Disbursements

[121] The bill of costs prepared by TekSavvy sets out the disbursements of Stikeman Elliot in
the amount of $4,585.42. This amount relates to attendance at the motion and various
interlocutory proceedings. Given that the costs of the various motions are not recoverable, the
disbursements are not as well. The amount is therefore disallowed.

[122] Similarly, I would disallow the sum of $55,457.60, a “disbursement” paid by TekSavvy
to Arbor Networks to implement “system upgrades and hardening.” TekSavvy undertook these
upgrades to respond to a greatly increased volume of inquiries and to sustain DDoS attacks.
These costs of maintaining and strengthening its systems are TekSavvy’s costs of doing business
and are not contemplated in the costs of abiding by the Order.
VIII.

Conclusion

[123] In sum, I am satisfied that TekSavvy has proven a total of $21,557.50 as its legal costs,
administrative costs, and disbursements of abiding with the Order.

[124] Both parties point to the importance of this finding as a precedent. In my view, the
precedential value of this particular assessment of the costs of complying with an order to
provide contact information is quite limited as my findings are confined to the facts of this case.
Orders directing recovery of an ISP’s costs of complying are commonplace. Cases assessing and

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fixing the costs of compliance are not, most likely because those costs are usually not
controversial as between rights holders and ISPs.

[125] This case suggests the steps that can be taken to avoid such controversy. The best
practice, in my view, would be for the rights holder to ascertain, in advance, with clarity and
precision, the method of correlation used by the ISP, as well as the time and costs attendant on
the execution of the work based, to begin, on a hypothetical number of IP addresses. The parties
should agree and preferably formalize their agreement prior to the rights holder preparing and
serving its motion to secure an order of the Court. It goes without saying that a court order is
required in every case as a condition precedent to the release of subscriber information.

[126] In the case of a smaller ISP, the rights holder cannot approach the issue with any
preconceived notion based on its experience with larger or other ISPs. I open a parenthesis here
to say that there is a chain of e-mails, as described by Logan on cross-examination, showing
preparatory discussions and exchanges of technical information of the sort I am suggesting.
Regrettably, however, no agreement was concluded as to process or costs.
IX.

Other matters and costs of the assessment

[127] As is apparent from their submissions, both parties are intent on disparaging each other’s
business practices. Voltage, through Logan, led lengthy evidence on all manner of extraneous
matters such as the prevalence of Internet piracy in Canada affecting the ability of rights holders,
in particular the film industry, to profit from their products; the technology of file sharing and
data transfers through the BitTorrent Protocol used by TekSavvy to create an environment that

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facilitates illegal downloading; and TekSavvy’s attempts to seize the opportunity of the motion
to promote itself and its services through the media, blogs, and chat rooms.

[128] By the same token, Voltage is made out to have purposely targeted TekSavvy because of
its size, and had to unfairly bear the burden of Voltage’s onerous request and its intrusions on the
privacy of TekSavvy’s subscribers.

[129] I have given no weight or consideration to the extraneous evidence or submissions of the
parties as they are irrelevant to the question at hand, being the assessment of costs. I have,
however, considered these matters as going to the costs of the assessment. It may be said that
success is divided and that costs should therefore not be awarded. Rather, no costs of the
assessment will be awarded because neither party should be rewarded for its conduct: TekSavvy,
without justification, has greatly exaggerated its claim, while Voltage has unreasonably sought to
trivialize it based on unreliable and largely irrelevant evidence.

[130] An order will go accordingly.

"Roza Aronovitch"
Prothonotary
Ottawa, Ontario
March 17, 2015

 FEDERAL COURT
SOLICITORS OF RECORD
DOCKET:

T-2058-12

STYLE OF CAUSE:

VOLTAGE PICTURES LLC v JOHN DOE AND JANE
DOE and TEKSAVVY SOLUTIONS INC. and
SAMUELSON-GLUSHKO CANADIAN INTERNET
POLICY AND PUBLIC INTEREST CLINIC

PLACE OF HEARING:

OTTAWA, ONTARIO AND BY VIDEOCONFERENCE
IN TORONTO, ONTARIO

DATE OF HEARING:

DECEMBER 8, 2014

REASONS FOR ORDER:

ARONOVITCH P.

DATED:

MARCH 17, 2015

APPEARANCES:
Mr. James Zibarras
Mr. Nicholas McHaffie

FOR THE PLAINTIFF
FOR THE RESPONDING PARTY

SOLICITORS OF RECORD:
Brauti Thorning Zibarras LLP
Barristers and Solicitors
Toronto, Ontario
Stikeman Elliott LLP
Barristers and Solicitors
Ottawa, Ontario

FOR THE PLAINTIFF

FOR THE RESPONDING PARTY