Date: 20051214
Docket: T-697-02
BETWEEN:
Applicant
and
REASONS FOR ORDER
PROTHONOTARY MORNEAU
Introduction
[1] First of all, this case concerns a motion by the applicant filed on October 12, 2005 (hereinafter the applicant’s confidentiality motion) pursuant to Rules 151 and 152 of the Federal Courts Rules (the Rules) asking the Court to treat as confidential the motion record filed by the latter on August 29, 2005 in support of a written ex parte motion dated August 24, 2005 in which it sought inter alia two chief remedies (hereinafter the applicant’s motion record of August 29, 2005), namely:
- an Anton Piller injunction against the respondent; and
- another remedy against counsel for the respondent (paragraphs 30 and 31 of the notice of motion and paragraphs 26 to 42 of the reasons for motion), (hereinafter the other remedy).
[2] The very existence of this other remedy was disclosed to the respondent for the first time herein and unfortunately for the time being can only be referred to by the phrase “other remedy” as on October 11, 2005, the applicant unexpectedly filed ex parte and in writing pursuant to Rule 369 a motion seeking inter alia this other remedy (hereinafter the applicant’s motion for the other remedy).
[3] In the second part of this analysis, we will look more closely at the process which appears to have led the applicant to take the initiative to file its motion seeking the other remedy. At the same time, the second part of the analysis will dispose of this motion by the applicant.
[4] However, one immediately understands that the respondent has not been able in its reply record to the applicant’s motion for confidentiality to address this other remedy. Learning by surprise about the other remedy sought by the applicant will undoubtedly add to the frustration already experienced by the respondent at having to submit arguments in its reply record on the confidentiality of the applicant’s motion record of August 29, 2005 without knowing the content of the said record. This is clearly a handicap for the respondent which, added to its eventual review of the applicant’s motion record for the other remedy, will have an impact on the costs to be awarded to the respondent if the two motions discussed in these reasons, and the order accompanying them, are dismissed.
[5] However, it should be understood that if the respondent had been allowed to have access to the applicant’s motion record of August 29, 2005 at the outset, this would have rendered the applicant’s motion for confidentiality moot. Where a party announces that it will file a motion for confidentiality, this Court’s practice has been to grant confidentiality on a provisional basis until a formal motion to that effect can be heard and disposed of: hence this Court’s order of October 7, 2005, which the respondent, doubtless overcome by frustration and anger, denounced in a language which at times I think should more properly have been avoided by the respondent and its counsel.
[6] The respondent will also understand that, in accordance with this same approach, the applicant’s motion record of August 29, 2005 and that in support of the applicant’s motion for the other remedy will continue to be confidential until the order accompanying these reasons has become final.
[7] Finally, in the third part of the analysis, the Court will assess the advisability of ordering at this time, of its own initiative, pursuant to Rules 47 and 107, that the examinations for discovery and determination of remedial issues be adjourned until after the completion of the discovery process and trial on the issue of liability – assuming that these must proceed.
Background
[8] The background to all the motions by the applicant mentioned herein above is an action in which the applicant is essentially contending that the respondent infringed its rights by using the trademark “Conservator”.
[9] In its defence and counterclaim, the respondent denies any infringement and submits that the applicant’s trademark is invalid and should be cancelled. Further, the respondent claims compensatory and punitive damages on account of the applicant’s action.
[10] The two parties are competitors in the field of products relating to the preservation or protection of wood.
[11] The Court has no information as to the climate that existed between the two parties before the commencement of this litigation; however, no doubt there is at present an unusually high level of mistrust and suspicion.
[12] This climate of mistrust prevails not only between the parties’ respective representatives, but appears to have emerged rather rapidly between counsel themselves (see in this regard the orders by this Court dated February 21, 2003 and April 25 and May 24, 2005 as well as the direction dated June 28, 2005).
[13] Apparently fearing that the respondent would undertake to destroy information and documents which the applicant was seeking in order to establish the profits which may have been made by the respondent from the alleged infringement, the applicant thought it best to file its motion of August 29, 2005.
[14] It will be recalled that this motion was brought to the Court’s attention in writing pursuant to Rule 369 and also ex parte.
[15] On September 9, 2005, Mr. Justice Lemieux of this Court dismissed this motion. The Court’s order reads as follows:
[translation]
ORDER
WHEREAS the applicant has filed a motion seeking an Anton Piller order;
THE COURT ORDERS:
1. The ex parte motion by the applicant Osmose-Pentox Inc. dated August 29, 2005 seeking an Anton Piller order giving access to certain documents of Société Laurentide Inc. in this matter is dismissed without costs;
2. In my opinion, this motion is premature as the examination of Mr. Buisson on the filing of documents in the possession of Société Laurentide Inc. (the respondent) is to continue (see order by Prothonotary Morneau on July 21, 2005); the applicant’s concerns about the documents filed by the respondent may be further discussed at that stage;
3. I am also of the opinion that this motion is not quite consistent with the Federal Court of Appeal’s judgment on September 20, 2004 and the subsequent directions by Prothonotary Morneau.
[16] On October 6, 2005, unexpectedly finding out that his order of September 9, 2005 had not been communicated to the respondent, Mr. Justice Lemieux rendered an order in which he corrected the situation and required his order of September 9 be communicated to that party without delay.
[17] By an ex parte letter of October 7, 2005, the applicant reacted to this order of October 6 and insisted that its motion record of August 29, 2005 be treated as confidential until the Court ruled on a formal motion filed by it seeking confidentiality for the motion record.
[18] On October 7, 2005, in order to ensure that this forthcoming formal motion by the applicant would not be rendered moot, I rendered an order as mentioned in paragraph 5 above in which I granted the applicant temporary confidentiality for its motion record of August 29, 2005 and required, first, that the latter proceed promptly with the filing of its formal motion for confidentiality, and secondly, that both the applicant’s ex parte letter of October 7, 2005 and the order of the same date be also given to the respondent.
[19] On October 12, 2005, the applicant served and filed its motion for confidentiality.
Analysis
[20] As mentioned earlier, we will first proceed to review the applicant’s confidentiality motion. We will then consider the applicant’s motion filed on October 11, 2005 for the other remedy. Finally, in the third part of its analysis, the Court will assess the advisability of now ordering of its own initiative pursuant to Rules 47 and 107 that the examinations for discovery and determination of the remedial issues be adjourned until after discovery and trial on the question of liability – assuming that these must proceed.
I. Applicant’s motion for confidentiality
[21] On account of the following reasons, this motion by the applicant must be dismissed.
[22] First, in my opinion this request for confidentiality is to say the least belated.
[23] It appears that it is the order by this Court on October 6, 2005 (in which the Court expressly asked that its order of September 9, 2005 be communicated to the respondent) which prompted the applicant to seek confidentiality for its motion record of August 29, 2005, the record containing the motion which was dismissed by the order of September 9, 2005.
[24] Now, and although such a remedy was doomed to failure at the outset, it still appears to this Court that the applicant should in its motion record of August 29, 2005 have anticipated that its motion might be dismissed and asked that, in the event of dismissal, its motion record of August 29, 2005 be treated as confidential.
[25] The applicant’s motion record of August 29, 2005 contains nothing to this effect. It was not even asked that the Court’s forthcoming order not be released to the respondent pursuant to Rule 395.
[26] Moreover, the applicant made no effort between August 29 and September 9, 2005 to correct this situation.
[27] In its order of September 9, 2005, the Court, in addition to dismissing the applicant’s motion, made no confidentiality order regarding either its order or the applicant’s motion record of August 29, 2005. That was natural and logical since the applicant’s motion had been dismissed.
[28] But for the Registry’s failure to release the Court’s order of September 9, 2005 to both parties at the same time, the order of that date and the motion record of August 29, 2005 would have been available to the respondent on or about September 9, 2005.
[29] Even after having received this Court’s order of September 9, 2005, the applicant took no steps to ensure confidentiality. As mentioned above, it was only this Court’s order dated October 6, 2005 which apparently led the applicant to seek confidentiality.
[30] Secondly, the applicant’s basic argument is essentially that it has the right to make a new attempt with its motion since in his order of September 9, 2005 Mr. Justice Lemieux described its motion of August 29, 2005 as premature.
[31] Accordingly, as this motion of August 29, 2005 was initially made ex parte specifically for the purpose of preventing the respondent from destroying information or documents in advance, this potential right to make its motion again would be extinguished if the respondent and its counsel now had access to the applicant’s motion record of August 29, 2005.
[32] I cannot agree with the applicant on this point.
[33] It should be borne in mind at the outset that the Court dismissed the applicant’s motion on September 9, 2005. By implication, therefore, it indicated that it did not agree that there was any immediate risk of the destruction of relevant information. The Court thus did not agree that the respondent was animated by extreme bad faith, as argued by the applicant. I do not now see, unless I were to find of course that the respondent and its counsel are indeed in bad faith, how the disclosure of the applicant’s motion record of August 29, 2005 would be likely to lead the respondent and its counsel to act in such a way. Moreover, any new proceeding by the applicant should be based entirely or substantially on new facts.
[34] Thirdly, in my opinion, the applicant’s motion for confidentiality does not meet the two-part test developed by the Supreme Court of Canada in Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522 (Sierra Club), when the time comes to decide whether a confidentiality order under Rule 151 should be made.
[35] It will be recalled that Rules 151 and 152 read as follows:
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151.(1) On motion, the Court may order that material to be filed shall be treated as confidential.
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151.(1) La Cour peut, sur requête, ordonner que des documents ou éléments matériels qui seront déposés soient considérés comme confidentiels.
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(2) Before making an order under subsection (1), the Court must be satisfied that the material should be treated as confidential, notwithstanding the public interest in open and accessible court proceedings.
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(2) Avant de rendre une ordonnance en application du paragraphe (1), la Cour doit être convaincue de la nécessité de considérer les documents ou éléments matériels comme confidentiels, étant donné l’intérêt du public à la publicité des débats judiciaires.
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152.(1) Where the material is required by law to be treated confidentially or where the Court orders that material be treated confidentially, a party who files the material shall separate and clearly mark it as confidential, identifying the legislative provision or the Court order under which it is required to be treated as confidential.
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152. (1) Dans le cas où un document ou un élément matériel doit, en vertu d’une règle de droit, être considéré comme confidentiel ou dans le cas où la Cour ordonne de le considérer ainsi, la personne qui dépose le document ou l’élément matériel le fait séparément et désigne celui-ci clairement comme document ou élément matériel confidentiel, avec mention de la règle de droit ou de l’ordonnance pertinente.
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(2) Unless otherwise ordered by the Court,
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(2) Sauf ordonnance contraire de la Cour :
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(a) only a solicitor of record, or a solicitor assisting in the proceeding, who is not a party is entitled to have access to confidential material;
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a) seuls un avocat inscrit au dossier et un avocat participant à l’instance qui ne sont pas des parties peuvent avoir accès à un document ou à un élément matériel confidentiel;
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(b) confidential material shall be given to a solicitor of record for a party only if the solicitor gives a written undertaking to the Court that he or she will
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b) un document ou élément matériel confidentiel ne peut être remis à l’avocat inscrit au dossier que s’il s’engage par écrit auprès de la Cour :
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(i) not disclose its content except to solicitors assisting in the proceeding or to the Court in the course of argument,
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(i) à ne pas divulguer son contenu, sauf aux avocats participant à l’instance ou à la Cour pendant son argumentation,
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(ii) not permit it to be reproduced in whole or in part, and
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(ii) à ne pas permettre qu’il soit entièrement ou partiellement reproduit,
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(iii) destroy the material and any notes on its content and file a certificate of their destruction or deliver the material and notes as ordered by the Court, when the material and notes are no longer required for the proceeding or the solicitor ceases to be solicitor of record;
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(iii) à détruire le document ou l’élément matériel et les notes sur son contenu et à déposer un certificat de destruction, ou à les acheminer à l’endroit ordonné par la Cour, lorsqu’ils ne seront plus requis aux fins de l’instance ou lorsqu’il cessera d’agir à titre d’avocat inscrit au dossier;
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(c) only one copy of any confidential material shall be given to the solicitor of record for each party; and
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c) une seule reproduction d’un document ou d’un élément matériel confidentiel est remise à l’avocat inscrit au dossier de chaque partie;
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(d) no confidential material or any information derived therefrom shall be disclosed to the public.
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d) aucun document ou élément matériel confidentiel et aucun renseignement provenant de celui-ci ne peuvent être communiqués au public.
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(3) An order made under subsection (1) continues in effect until the Court orders otherwise, including for the duration of any appeal of the proceeding and after final judgment.
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(3) L’ordonnance rendue en vertu du paragraphe (1) demeure en vigueur jusqu’à ce que la Cour en ordonne autrement, y compris pendant la durée de l’appel et après le jugement final.
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[36] At paragraph 53 of its reasons, pages 543 and 544, the Supreme Court set out as follows the two-part test which should be applied under Rule 151:
. . . A confidentiality order under Rule 151 should only be granted when:
(a) such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and
(b) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings.
[37] On the first part of the test, that of necessity, I do not see what general or important commercial interest of the applicant is supposed to be shown in the latter’s motion record of August 29, 2005, making it necessary to treat the latter as confidential. Perhaps the applicant, having failed in its attempt with the order of September 9, 2005, now wishes its motion record to be kept secret. However, this is not a valid factor. In my opinion, under the guise of a motion for confidentiality, the applicant is really seeking to conceal from the other party the arguments and actions which the Court rejected.
[38] Further, as to the balancing required by the second part of the Sierra Club test, I am of the view that the harmful effects of granting a confidentiality order largely outweigh the beneficial effects, if any, of such an order.
[39] As the Supreme Court noted in that case, there is a public interest in having court proceedings held in public. That interest is very important and certainly takes priority over an application for a motion record to be kept confidential in an ongoing action where the relief sought was denied.
[40] The foregoing reasons apply mutatis mutandis to the alternative remedy sought by the applicant in its confidentiality motion, namely the confidential treatment of a number of documents listed in paragraphs 2(a) to (d) of its notice of motion, since these documents are at the heart of the applicant’s motion record of August 29, 2005.
[41] Also, I do not feel that Rule 4, raised by the applicant at the hearing of its motion, can be of any assistance whatever to the applicant in obtaining the confidentiality order which it is seeking.
[42] Therefore, the applicant’s confidentiality motion shall be dismissed in its entirety.
[43] In view of this ruling on the merits of this motion, the preliminary objections made by the respondent in its reply record are dismissed.
[44] Costs on this motion by the applicant are awarded to the respondent at the level determined in paragraph 57, infra.
[45] In addition, the applicant’s motion record of August 29, 2005 will be available to the respondent and its counsel (and to the public of course) as soon as the order accompanying these reasons shall have become final. In the meantime, so as not to render moot any right of appeal by the applicant from this decision, the confidentiality imposed by my order of October 7, 2005 will be maintained. The parties, and in particular the applicant, will have to act diligently and promptly in pursuing any appeal so that the instant case can proceed normally.
[46] The applicant’s motion seeking the other remedy must now be examined.
II. Applicant’s motion for other remedy
[47] As indicated in paragraph 2, supra, on October 11, 2005, the applicant filed ex parte and in writing pursuant to Rule 369 a motion seeking inter alia the other remedy which it had sought against the respondent’s representative by its motion record of August 29, 2005.
[48] A decision must now be made in these reasons on this motion by the applicant seeking the other remedy, keeping in mind that the applicant’s motion record filed on October 11, 2005 seeking the other remedy ex parte and pursuant to Rule 369 (hereinafter the applicant’s October 11, 2005 motion record) will become available to the respondent and its counsel (and to the public of course) as soon as the order accompanying these reasons shall have become final. In the meantime, so as not to render moot any right of appeal by the applicant from this decision, the confidentiality imposed by my order of October 7, 2005 will be extended to the applicant’s said motion record of October 11, 2005. The parties, and in particular the applicant, will also have to act diligently and promptly in pursuing any appeal so that the instant case can proceed normally.
[49] One cannot help noting, at the outset of the analysis pertaining to this other remedy, that it is unfortunate, to say the least, that the applicant considered filing this motion of October 11, 2005 when the confidentiality of its motion record of August 29 was already the subject of a forthcoming hearing, pursuant to the terms of this Court’s order on October 7, 2005.
[50] The fact that another remedy ex parte has been sought overloads the Court record; this is yet another ex parte proceeding that requires the Court to be very careful so as not to disclose, before a final decision is made, the material to which the applicant has for the moment drawn the Court’s attention ex parte.
[51] Ultimately it may be concluded that the applicant chose to go ahead since the order by Mr. Justice Lemieux of September 9, 2005 only referred expressly to the Anton Piller injunction sought by the applicant. It must therefore be inferred that the applicant was of the view that, on September 9, the Court did not rule on the other remedy. The applicant thus considered itself free to seek that remedy by its motion record of October 11, 2005.
[52] For the reasons that follow, I am of the opinion that the applicant’s motion seeking the other remedy must be dismissed.
[53] Firstly, although the order by Mr. Justice Lemieux dated September 9, 2005 only refers expressly to the applicant’s motion seeking an Anton Piller injunction, the applicant’s complete motion record of August 29, 2005 was before Mr. Justice Lemieux and it is to say the least presumptuous for the applicant to implicitly argue that the Court did not at that time review all the remedies sought by it before dismissing its motion. Although the order of September 9 only discussed expressly the application for an injunction, since the applicant’s motion was dismissed, it must be assumed that the Court then dismissed all the remedies sought by the applicant.
[54] The applicant’s actions since the order of September 9, 2005 tend to confirm this since it did not file a motion pursuant to paragraph 397(1)(b) of the Rules for the Court to deal with a matter, namely the other remedy, which it might have accidentally overlooked on September 9.
[55] At first sight, it seems to me that the remedies sought in paragraphs 3 to 6 of the notice of motion contained in the applicant’s motion record of October 11, 2005 are related to the other remedy and that that document should in any case have been served on the respondent.
[56] Therefore, all of the applicant’s motion seeking the other remedy will be dismissed.
[57] As to the costs pertaining to this latter motion, first and foremost those related to the applicant’s confidentiality motion, the Court will award them generally to the respondent in the amount of $3,500, in view of the reasons given earlier and in view of Rule 400(3)(a), (c), (g) and (i) and (4). All other submissions of the respondent regarding costs are dismissed.
III. Rules 47 and 107 – order for severance
[58] As mentioned in paragraphs 7 and 20, supra, the Court must assess the advisability of now ordering, of its own initiative, pursuant to Rules 47 and 107, that examinations for discovery and the determination of remedial issues be adjourned until after discovery and trial on the question of liability –assuming these must proceed.
[59] The fundamental test that should be kept in mind is that set out by the Court in Illva Saronno S.p.A. v. Privilegiata Fabbrica Maraschino “Excelsior” (T.D.), [1999] 1 F.C. 146 (hereinafter Saronno), at page 154, paragraph 14, where the Court held that:
Accordingly, on the basis of previous authority and in light of the changes introduced by the 1998 Rules, I would formulate the test to be applied under rule 107 as follows. On a motion under rule 107, the Court may order the postponement of discovery and the determination of remedial issues until after discovery and trial of the question of liability, if the Court is satisfied on the balance of probabilities that in the light of the evidence and all the circumstances of the case (including the nature of the claim, the conduct of the litigation, the issues and the remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits.
[60] Before commencing my analysis under this test, I should mention that I am well aware at the outset that, in an order of February 21, 2003, Madam Justice Gauthier of this Court dismissed a motion by the respondent under Rule 107.
[61] That order was made at a relatively early stage of the case, when it was not yet being specially managed.
[62] The same order, which did not contain separate reasons as such, also dealt with several other motions by the parties. In the only preliminary comment which can be directly attributed to its ruling under Rule 107, the Court noted the following:
[translation]
WHEREAS several issues relevant to disposal of the application on the merits are also relevant to an assessment of damages, it is not clear in the case at bar that severance would result in a better administration of justice . . .
[63] It can be seen from this comment that the Court appeared to consider that the applicant was focusing on the damage which it had allegedly suffered. It is now know clear that it was the profits of the respondent which the applicant was quite actively after. In addition, the comment which was just cited was immediately followed by the following:
[translation]
IN VIEW OF the need to ensure that the proceeding goes forward in a diligent and orderly fashion . . .
[64] No doubt that that wish that the proceeding go forward in a diligent and orderly fashion has not been fulfilled. Indeed, the very opposite is true mainly on account of the fact that the applicant considers it is entitled to the respondent’s profits and that the latter would do anything to avoid giving it the information it is seeking, an accusation that the respondent and its counsel most vehemently deny.
[65] Despite all the interlocutory steps that this process, i.e. a claim for profits, has given rise to, and in which the Court has done its utmost to bring the parties together, nothing has been achieved. Indeed, we now see the applicant seeking in August and October 2005 to ask for the remedies which have been reviewed hereinabove.
[66] Therefore, this Court’s order of February 21, 2003 certainly cannot be seen now as a bar to a severance of the proceeding as part of its special management.
[67] With this in mind, it will be recalled that, following the Court’s order of February 21, 2003, I was appointed to assist in the management of the instant proceeding on October 24, 2003. As a practical matter, in the main, the management of the proceeding was assigned to me because such is the usual practice of this Court in the vast majority of cases which are subject to special management.
[68] Now, it seems quite clear that the person responsible for the management of a proceeding enjoys a quite broad discretion in moving a case forward. In Remo Imports Ltd. v. Jaguar Canada Ltd., 2003 FCT 74, dated January 24, 2003, Mr. Justice Gibson of this Court wrote at paragraphs 11 to 13:
[11] In Sawridge Band v. Canada, [2002] 2 F.C. 346 (C.A.), Justice Rothstein, for the Court, wrote at paragraph 11 of the Court’s reasons:
We would take this opportunity to state the position of this Court on appeals from orders of case management judges. Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of a misuse of judicial discretion.
[12] In further reasons issued contemporaneously with the reasons from which the foregoing quote is extracted (2001), 283 N.R. 112 (F.C.A.), Justice Rothstein, once again for the Court, and by reference to the reasons from which the foregoing quotation is drawn, wrote at paragraph [4]:
Questions of joinder and severance are quintessential subject matters of case management. Such questions are to be decided by the exercise of discretion by a case management judge familiar with the proceedings. On appeal, a court would interfere with such decisions only where there is demonstrated a clear misuse of judicial discretion.
[13] I extended the same principles to the role of case management prothonotaries and to the relationship between case management prothonotaries and judges of the Trial Division of this Court sitting on appeal from their decisions (Microfibres Inc. v. Annabel Canada Inc. (2001), 16 C.P.R. (4th) 12 (F.C.T.D.)). At pages 16 and 17 of the cited report of my reasons, I wrote:
Case Management prothonotaries, like Case Management judges, are familiar with the proceedings that they are managing to a degree that a trial judge, sitting on appeal from a prothonotary’s discretionary decision in such a context, usually cannot be.
[69] It should also be noted that the foregoing comments by Mr. Justice Rothstein at paragraph 11 of Sawridge were accompanied by the following comment, which should also be set out:
This approach was well stated by the Alberta Court of Appeal in Korte v. Deloitte, Haskins and Sells (1995), 36 Alta. L.R. (3d) 56, at 58, and is applicable in these appeals. We adopt these words as our own.
This is a very complicated lawsuit. It is the subject of case management and has been since 1993. The orders made here are discretionary. We have said before, and we repeat, that case management judges in those complex matters must be given some “elbow room” to resolve endless interlocutory matters and to move these cases on to trial. In some cases, the case management judge will have to be innovative to avoid having the case bog down in a morass of technical matters. Only in the clearest cases of misuse of judicial discretion will we interfere.
[70] I am also aware that the Court has not recently had a motion before it made by either of the parties under Rule 107, and that, as was the case in Saronno, Rule 107 is normally raised by way of a motion.
[71] However, I consider that it is clear from reading both paragraphs of Rule 47 together and from reading Rule 107 that this Court may of its own initiative at any time – without the need of a motion – order the severance of a proceeding.
[72] Rules 47 and 107 read as follows:
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47.(1) Unless otherwise provided in these Rules, the discretionary powers of the Court under these Rules may be exercised by the Court of its own initiative or on motion. |
47.(1) Sauf disposition contraire des présentes règles, la Cour exerce, sur requête ou de sa propre initiative, tout pouvoir discrétionnaire que lui confèrent les présentes règles. |
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(2) Where these Rules provide that powers of the Court are to be exercised on motion, they may be exercised only on the bringing of a motion. |
(2) Dans les cas où les présentes règles prévoient l’exercice d’un pouvoir discrétionnaire sur requête, la Cour ne peut exercer ce pouvoir que sur requête. |
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107.(1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately. |
107.(1) La Cour peut, à tout moment, ordonner l’instruction d’une question soulevée ou ordonner que les questions en litige dans une instance soient jugées séparément. |
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(2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those applicable to examinations for discovery and the discovery of documents. |
(2) La Cour peut assortir l’ordonnance visée au paragraphe (1) de directives concernant les procédures à suivre, notamment pour la tenue d’un interrogatoire préalable et la communication de documents.
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[Emphasis added.] |
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[73] It is thus possible to take into account the Saronno test in a specially-managed proceeding.
[74] For the reasons that follow, it seems to me to be entirely appropriate to order the severance of the proceeding pursuant to subsection 47(1) of the Rules and Rule 107.
[75] Firstly, although the applicant indicated that its concern is with the respondent’s profits and the Court has thus far echoed this choice in its past orders, the fact does remain that, ultimately, the granting of this remedy is entirely discretionary and it is for the Court to decide, following a hearing on the merits, whether this equitable remedy should be granted.
[76] In Beloit Canada Ltd. v. Valmet-Dominion Inc. (1997), 73 C.P.R. (3d) 321 (Beloit), the Federal Court of Appeal rejected the idea that the appellant had a prima facie right to the other party’s profits. At page 361, it said:
. . . the decision to award an accounting of profits in patent cases is within the discretion of the judge or prothonotary.
[77] At page 362, it went on to say:
In our view, it was within the discretion of the Trial Judge to take into consideration the equitable results of the election of an accounting of profits, based on the complexity and length of proceedings among other considerations.
[78] Although these statements by the Federal Court of Appeal were made in a patent case, I know of no principle which makes them inapplicable to a trade mark case.
[79] In addition to being one possible option, a claim for profits ordinarily gives rise to a lengthy and costly exercise. In this respect, it has been said, in J.M. Voith GmbH v. Beloit Corp. (1993), 47 C.P.R. (3d) 448, at pages 472-73 (varied on appeal but not on this point: see Beloit, supra) that:
The issue is not whether it is available, but whether an accounting of profits is an appropriate remedy in this case. It is certainly not a remedy commonly chosen by a patentee against an infringer because it is exceedingly difficult to handle. The complications of asserting how much profits have been made by the infringer in respect of an invention and how much of his profits are attributable to any one source, is an arduous task. It involves an expensive, time-consuming procedure which is rarely rewarded by the end result . . . I cannot foresee that the intricate procedure which an accounting would involve here would be worth the time and expense that would undoubtedly occur.
[80] In this case, the previous course of the proceeding show suite clearly that, from a practical point of view, a claim for profits is not worthwhile. In the examination for discovery the parties came to grips, inter alia, with remedial issues, and it is time to halt the process at this stage and incite the parties to proceed in view of a hearing on the merits strictly on the issues of liability, namely the question of infringement of the applicant’s trade mark and of the invalidity of that mark.
[81] On these issues of liability, we cannot simply ignore the fact that the applicant was granted an interlocutory injuction against the respondent almost three years ago – that is, since January 2003. At this point, fairness requires this Court to rule on the substantive issues raised by this constellation of facts, rather than keep the parties in the quagmire of discovery on remedial issues.
[82] Therefore, although it might still be argued, as the Court indicated in its order of February 21, 2003, that there are common issues pertaining to liability and relief, at the end of the day, I nevertheless consider, as manager of the proceeding, that, in accordance with the Saronno test, severance is more likely than not to result in a just, expeditious and least expensive determination of the proceeding on the merits.
[83] In this regard, although this Court’s order of September 9, 2005 provides for proceeding with the respondent’s examination, I am of the view that this order is also not a bar to any remedy ordered here.
[84] The Court will accordingly order the severance of the proceeding so that issues of liability, namely the issues of infringement of the applicant’s trademark herein and of the invalidity of that mark, may be decided first, and that remedial issues (profits or damages) may be resolved in a separate proceeding if the Court concludes that the mark at issue is valid and was infringed.
[85] To this end, notwithstanding any past order, it will be ordered that the parties are herewith relieved henceforth of their respective duties to disclose any document and any information relating to remedial issues before the final conclusion of the trial on issues of liability that is, if this has not already been done. Without limiting the generality of the foregoing, this means that the motions to decide objections initially set down for hearing on October 25, 2005 will not be heard and ruled on. Those motions are adjourned sine die.
[86] As to the examinations for discovery on issues of liability, I find, based on my knowledge of the case as manager, that the parties have essentially completed these, and there is no need to return to them or to resume them in any way.
[87] The schedule set by the Court in its order of July 25, 2005 will be replaced by a schedule which will provide that, within 30 days of the order accompanying these reasons becoming final, the applicant will serve and file an application for a pre-trial conference.
“Richard Morneau”
Prothonotary
Montréal, Quebec
December 14, 2005
Certified true translation
François Brunet, LLB, BCL
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-697-02
STYLE OF CAUSE: OSMOSE-PENTOX INC.
v.
SOCIÉTÉ LAURENTIDE INC.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October 25, 2005
REASONS FOR ORDER BY: Richard Morneau, Prothonotary
DATED: December 14, 2005
APPEARANCES:
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Claudette Dagenais José Bonneau |
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For the applicant |
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Patrick Goudreau Kevin O'Brien |
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For the respondent |
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SOLICITORS OF RECORD:
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Dagenais & Associés Montréal, Quebec |
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For the applicant |
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Dunton, Rainville Montréal, Quebec |
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For the respondent |