Date: 20050411
Docket: T-1864-00
Citation: 2005 FC 475
BETWEEN:
JOHN LETOURNEAU and
LETOURNEAU LIFE RAIL LTD.
Plaintiffs
and
CLEARBROOK IRON WORKS LTD.
Defendant
REASONS FOR ORDER
STRAYER D.J.
Introduction
[1] This has involved a lengthy appeal from a decision of the learned Prothonotary after an even lengthier hearing before him. It involves an appeal and cross-appeal with respect to the requiring of answers in the examinations for discovery of both principals in a patent infringement and validity case.
Standard of Review
[2] The jurisprudence of this Court in respect of the standard of review on appeals from prothonotaries is succinctly stated in Merck & Co., Inc. v. Apotex Inc. [2004], 2 F.C.R. 459 at 478 (F.C.A.), where it was said:
Discretionary orders of prothonotaries ought not be disturbed on appeal to a judge unless: (a) the questions raised in the motion are vital to the final issue of the case, or (b) the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts.
[3] In my view there are no questions which are the subject of these appeals which are vital to the final issue of the case. I am satisfied that they are no more than disputes over how evidence may or may not be obtained in respect of those issues.
[4] The parties argue that many of the decisions of the Prothonotary are based on relevance and that relevance is not a discretionary matter. They argue that relevance is a question of law and not one on which the Prothonotary has a discretion: therefore I am at liberty to decide questions of relevance de novo. While there is a paucity of authority on this question, I am satisfied that it is more consistent with the role envisaged by Parliament for prothonotaries that deference should be shown to their decisions on matters of relevance just as it would be shown on other preliminary pre-trial matters. As was said by Décary J.A. in the Merck case, supra, at paragraph 22:
In my respectful view it cannot reasonably be said that a standard of review which subjects all impugned decisions of prothonotaries to hearings de novo regardless of the issues involved in the decision or whether they decide the substantive rights of the parties is consistent with the statutory objective. Such a standard conserves neither "judge power" nor "judge time". In every case, it would oblige the motions judge to re-hear the matter. Furthermore, it would reduce the office of a prothonotary to that of a preliminary "rest stop" along the procedural route to a motions judge. I do not think that Parliament could have intended this result.
I respectfully agree with Wetston J. in Hayden Manufacturing Co. v. Canplas Industries Ltd., (1998) 86 C.P.R. 3rd 17, who in considering whether a decision of a prothonotary on matters of relevance was discretionary stated:
I agree that relevance is the test, but I also am of the opinion that the order is discretionary in that the Court must consider whether the Prothonotary had fallen into legal error of law which prevented him from exercising his discretion properly. If so the Court must exercise its own discretion de novo. In other words even if I would have made a different order, unless the Prothonotary erred in the manner described previously, this Court should not interfere. I am of the opinion therefore the order of the A.S.P. in this case is both interlocutory and discretionary.
[5] It was argued that, in a case in which I wrote the reasons, Merck & Co. v. Apotex Inc., [2003] F.C.J. No. 1725, the Court of Appeal had reviewed the decision of a prothonotary on a decision concerning relevance. In fact what that case involved was the kind of issue for the Court as referred to by Wetston J. in Hayden, namely the Court of Appeal concluded that the Prothonotary had made an error of law in exercising his discretion concerning relevance. In effect he had concluded on the basis of the revised Rules of Court that the primary goal was expedition of proceedings and that a prothonotary could refuse to allow even relevant questions on examination for discovery on the basis that they would prolong the proceeding. The Court of Appeal there confirmed that, as a matter of law, relevancy not expedition must be the determining factor, subject to some balancing where even relevant questions could not be worth the time and expense they would require in terms of advancing the case.
Analysis
[6] I have therefore undertaken this analysis having regard to the foregoing paragraphs. In this case the Prothonotary has listened to some three days of argument and has written 74 pages of careful reasons. In this appeal I have listened to one day of argument (the time allotted by this Court, which was insufficient) and received further written submissions.
[7] After a careful review of the material I am satisfied that for the most part the conditions for de novo review of the Prothonotary's conclusions do not exist: there are no issues involved which are vital to the outcome, and in most respects it has not been demonstrated to me that he clearly erred in law or in fact. I shall therefore only cite the matters where I intend to alter his order.
Appeal by Defendants re: Letourneau Examination
[8] Question 1744 - A document much referred to is a letter dated March 2, 1998, from the Plaintiffs' lawyer, Mr. Edwards, concerning the processing of a patent application in the United States concerning the same invention. He asks for the "precise date of first public disclosure" of the invention. This letter was produced by the plaintiffs in the course of discovery of documents and no claim for privilege was made in respect of it. Mr. Letourneau, examinee on behalf of the plaintiffs, was asked the following question.
1744 Q. I'll ask that you make a request of Mr. Edwards to confirm the disclosure to which he's referring to in the third paragraph of this letter and the source of his information for stating or suggesting that disclosure of Mr. Letourneau's invention was made approximately August 18, 1997.
A. Refused on the basis of privilege.
The prothonotary upheld this claim for solicitor-client privilege.
[9] I believe that solicitor-client privilege has not been established in respect of this letter. It is clear that the circumstances giving rise to privilege must be proven: Lumonics Research Ltd. v. Gordon Gould, Refac International Limited and Patlex Corporation, [1983] 2 F.C. 360 (C.A.); 1185740 Ontario Ltd. v. Canada (Minister of National Revenue), [1999] F.C.J. No. 1990 (T.D.). In this case the affidavit of documents asserted no privilege in this document and there was no other evidence before the Prothonotary to establish it. On the face of it the document has already been disclosed. Counsel for the plaintiffs says that because of events in a parallel motion, the particulars of which are not before this Court, the plaintiffs felt obliged to disclose this letter in discovery of documents but only for purposes of establishing priority for the U.S. patent. That may be so, but I believe these particular circumstances said to avoid waiver of privileges and the precise circumstances of the letter should have been the subject of a supporting affidavit. Therefore I conclude the letter is not covered by solicitor-client privilege, and question 1744 should be answered, but only in the sense of asking about the facts which are alleged to have amounted to disclosures (i.e. not seeking a legal conclusion).
Questions 1999, 2017 and Related Documents
[10] This issue concerns a certain episode in which at the request of Mr. Letourneau the plaintiffs' lawyer, Mr. Edwards, prepared a "cease and desist" letter addressed to, among others, the defendant. To the letter are attached documents related to the plaintiffs' patent. Mr. Letourneau delivered this material, or most of it, to Mr. Schellenberg, a principal of the defendant. In issue is a drawing purporting to be Figure 3 of the patent which Letourneau is said to have shown to Schellenberg in lieu of the actual Figure 3 of the patent. The defendant describes this set of materials as the "Sham Application" (i.e. an inaccurate purported copy of the Canadian Patent). In its statement of defence and counterclaim it states that this amounted to a false and deceptive representation which, as I understand it, the defendant believes entitles it to additional damages or disentitles the plaintiffs to any equitable relief.
[11] The questions in issue are:
1999 - Q. And what did you instruct Mr. Edwards to do?
Mr. Smith: Sorry, scope of the instructions given to Mr. Edwards are privileged.
2017 - Q. What did Mr. Edwards give you to take? Did he give you the entire package that we see at Tab 32 or did he just give you the two-page letter?
Mr. Smith: That's privileged. It's communications between solicitor and client.
In its motion before the Prothonotary to seek an order for these questions to be answered, the defendant also sought an order requiring the plaintiff to produce all documents relating to the version of Figure 3 shown to Mr. Schellenberg,, "including all copies of such document and any transmittal of such document or any copies to or from Antony Edwards."
[12] The Prothonotary rejected the defendant's motion in respect of these questions and documents. He first said that there was no evidence of fraud or illegal conduct. (I take it this was intended to show that solicitor-client privilege had not been overridden by its use for criminal purposes). He also said that the solicitor-client communications were protected by privilege.
[13] With respect, I do not believe that solicitor-client privilege existed with respect to the preparation and transmittal of the cease-and-desist letter. When instructions are given by a client to a solicitor to communicate the client's position to another party, those instructions are not privileged because they are intended to be communicated: Ioannidis v. Ioannidis, [1981] 4 W.W.R. 269 at 271 (B.C.C.A.). I therefore believe that question 1999 should be answered. However, an answer to question 2017 could involve advice given by Mr. Edwards to his client which was not intended to be communicated to any one else and therefore need not be answered. Similarly I would order production of copies of any documents transmitted by Mr. Letourneau to Mr. Edwards in relation to the questionable Figure 3, as well as any versions of this Figure 3 delivered to Mr. Schellenberg emanating from Mr. Edwards.
[14] I should also mention that counsel for the plaintiffs argued that none of the relevant pleadings in the statement of defence and counterclaim concerning this version of Figure 3 raised any cause of action triable in this Court, and therefore there should not be examination for discovery in relation to such issues. However, as long as these allegations remain in the pleadings, and the plaintiffs have not successfully moved to strike them out, they help define the parameters of discovery.
Questions 1766, 1768, 1779, 1782
[15] There is an ambiguity in the Prothonotary's decision here. Essentially these questions ask for information and documents pertaining to the prosecution of the Canadian patent. The Prothonotary ordered that they be answered "to the extent that none of the questions extend past the filing date". Counsel say that this is ambiguous: "filing date" could refer to the date of filing of the original application, or the date of filing of the patent. I agree.
[16] It appears to me from the rationale of the Prothonotary's reasons that he intended thereby to refer to the date of issuance of the patent. I believe that otherwise it would be a reviewable error. I shall therefore amend his order accordingly. In doing so I wish to emphasize that this is not a finding that on any given issue these materials have any significant weight. Those are matters for the trial judge to decide.
[17] It would appear that the Prothonotary also intended to deal with question 1766 in the same way but omitted it from his order. I shall make the necessary amendment.
Questions 198, 201
[18] I believe that the learned Prothonotary misunderstood the answer given to question 200. He understood it to mean that the plaintiffs' stanchions are coloured in order to make them highly visible. He therefore refused to order an answer to question 201 which was directed to the reason for so colouring them. In fact the answer to question 200 simply means that because they are brightly coloured they are highly visible. As I agree with the Prothonotary that the question of purpose is potentially relevant (subject to the ruling of the trial judge) I would order an answer to question 201.
Question 767
[19] The Prothonotary concluded that questions concerning written representations by the plaintiffs as to the advantage of their stanchions were relevant, but not this question concerning oral representations. The latter he characterized as requesting an opinion. In principle I believe that oral communication to those outside the plaintiffs' business as to such advantages are as relevant as are the written communications. I will therefore order an answer to question 767 so confined.
Appeal by Plaintiffs re: Schellenberg's Examination.
Category 5: Questions 501, 622, 628
[20] The Prothonotary said in his reasons (at para. 125) that question 628 should be answered. However he did not include it in his order. As I see no error in his original conclusion I will amend the order accordingly in the terms employed by the Prothonotary in his reasons.
Disposition
[21] I will therefore amend the Prothonotary's order to incorporate the foregoing changes but otherwise dismiss these appeals. Success in achieving or resisting changes in the orders of the Prothonotary is divided. I am not persuaded that the outcome of these appeals could have had or will have any significant effect on the outcome of the case, although a great deal of time of the parties and of the Court has been absorbed in the process. I will award no costs.
(s) "B.L. Strayer"
Deputy Judge
FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1864-00
STYLE OF CAUSE: JOHN LETOURNEAU and LETOURNEAU LIFE RAIL LTD. v. CLEARBROOK IRON WORKS LTD.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: February 21, 2005
REASONS FOR ORDER: Strayer D.J.
DATED: April 11, 2005
APPEARANCES:
Mr. Paul Smith FOR THE PLAINTIFFS
Mr. J. Kevin Wright FOR THE DEFENDANT
SOLICITORS OF RECORD:
Paul Smith Intellectual Property Law
Vancouver, British Columbia FOR THE PLAINTIFFS
Davis & Company
Vancouver, British Columbia FOR THE DEFENDANT
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