Date: 20040129
Docket: T-1040-02
Citation: 2004 FC 144
Ottawa, Ontario, this 29th day of January 2004
Present: THE HONOURABLE MR. JUSTICE HARRINGTON
BETWEEN:
INTERBOX PROMOTION CORPORATION
Plaintiff
and
9073-0433 QUÉBEC INC., CARRYING ON BUSINESS
UNDER BAR CAFÉ GOODFELLAS
AND THE OTHER DEFENDANTS
ANNEXED HEREWITH
Defendants
REASONS FOR ORDER
[1] A prize fight may only last minutes in the sports arena. Some of the repercussions may go on for years in the legal arena. So it is with four boxing matches in Montreal.
[2] Interbox was the promoter. It staged the fights at the Molson Centre, as it was then known, negotiated television rights, arranged for videotaping and made the video and audio feed available on a pay for view basis. Establishments such as bars, restaurants and clubs could show the program to their customers against payment of a fee.
[3] The four boxing matches which have come to the attention of this Court are:
- the second Hilton vs. Ouellette fight on May 28th, 1999 (Court docket T-1788-99);
- Gatti vs. Hutchinson, September 8, 2000 (T-1073-02);
- Hilton vs. Thobella, December 15, 2000 (T-1040-02); and
- Lucas vs. Thobella, November 30, 2001 (T-1042-02).
[4] The basic allegation in each of the four actions is that various establishments illegally showed the boxing matches without paying the required fee. Interbox then sought payment from those establishments. Those who refused to pay were sued for allegedly infringing Interbox's copyright. A great number of defendants, separate each from the other, were sued.
[5] Interbox chose to focus its attention on the first action T-1788-99, and acted diligently in bringing it to trial. However, after filing replies to statements of defence in the other three actions it did nothing until it received notices of status review. It responded to the notices, as did some, but not all, defendants. As regards the defendants who made representations, Prothonotary Morneau dismissed the actions as against them for delay. Interbox has appealed those orders.
[6] Seeing the treatment given to those defendants who replied to the notice of status review, and taking into account that Interbox has now obtained a favourable judgment in T-1788-99, some of the remaining defendants have brought on applications in which they seek leave to file late replies to the notices of status review. It is their hope that they will then be treated on the same basis as the defendants who had replied and that the actions will also be dismissed as against them.
[7] Interbox's appeals and all the other motions were heard together in Montreal on January 12, 2004. These reasons apply to the merits of all the motions, whether by way of appeal, or otherwise, heard that day.
[8] Following amendments to the Federal Court Rules in 1998 the parties and their solicitors no longer control procedural delays. Consensual extensions of the delays are very limited (Rule 7).
[9] Rule 380 in Part IX of the Rules entitled "Case Management and Dispute Resolution Services", requires the Court to fix a time and place for a status review if more than 180 days have elapsed from the issuance of the statement of claim and the pleadings are not closed, or 360 days have elapsed and no party has filed a requisition for a pre-trial conference.
[10] Since no requisition for a pre-trial conference had been filed in actions T-1040-02, T-1042-02 and T-1073-02, the Administrator served notices of status review, signed by the Chief Justice, requiring the plaintiff to show cause by written submissions why the actions should not be dismissed for delay.
[11] In its representations in answer to the notices, Interbox pointed out that it had settled with a number of defendants, had discontinued against some of them, would produce an affidavit of documents in the very near future and that the actions were left in abeyance because the first case, T-1788-99 (Hilton vs. Ouellette), had just gone to trial before Martineau J. Apart from a few minor details, that action was identical to the three actions subject to status review, except that the defendants were different. It was submitted that, in all likelihood, Martineau J.'s decision would decide the legal issues in dispute.
[12] Some of the defendants responded, and some did not. Although the responses differed slightly, the overall position was that they were not aware of action T-1788-99 or that it had just gone to trial. They were not privy to any agreement to treat that case as a test case, and to be bound by the result. Some had written to the plaintiff's solicitors enquiring as to their intentions or as to possible dates for examinations for discovery, and had not been favoured with a reply.
[13] Interbox, in turn, replied that it was prepared to proceed to examinations for discovery as soon as practicable.
[14] Prothonotary Morneau dismissed the actions as against the defendants who had replied to the notice of status review, but did not as regards the defendants who had not. The only reasons he gave is that he took into account the representations of the defendants.
STANDARD OF REVIEW
[15] Rule 51 provides that any order of a prothonotary may be appealed by motion to a judge. In a tour de force the Federal Court of Appeal held in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, that discretionary orders of prothonotaries should not be set aside unless they are clearly wrong in that the discretion was exercised upon a wrong principle or a misapprehension of the facts or the order raised questions vital to the final issue of the case. Aqua-Gem was cited with approval by the Supreme Court in 2003 SCC 27">Z.I. Pompey Industrie v. Ecu-Line N.V., 2003 SCC 27, 224 D.L.R. (4th) 577.
[16] Just last month the Federal Court of Appeal decided in Merck & Co. v. Apotex Inc., 2003 FCA 488, that it would be simpler to slightly reformulate the test because a judge should first determine whether the questions raised are vital to the final issue. It is only when they are not that a judge needs to engage in the process of determining whether the order was clearly wrong. The test as reworked by Décary J.A. now reads:
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.
[17] Nothing can be more final than a dismissal of an action. Consequently, I am entitled to exercise my discretion de novo. Were the orders not so final, I would not have interfered because they were not based on wrong principles or on a misapprehension of the facts.
[18] In the exercise of my discretion, I come to a conclusion somewhat different from that of Prothonotary Morneau. Like him, I would not have dismissed the actions against the defendants who made no representations in reply to the notice of status review. However, unlike him, I would not have dismissed the action against those who did reply. I would have ordered that the actions continue as specially managed proceedings. This is how I reached that conclusion.
ANATOMY OF AN ACTION
[19] In the normal course, the plaintiff files a statement of claim, the defendant files a statement of defence, and the plaintiff has the option of filing a reply. Thereafter, each party gives production of documents, at the heart of which is a comprehensive affidavit. This is followed by oral examinations for discovery of a representative of each party. Usually, the representative is not in position to answer each and every question to which objection is not taken, and so undertakings to inform and to subsequently answer are given and accepted. The obligation upon a defendant to file an affidavit of documents is not contingent upon the plaintiff having first filed its affidavit. Both parties are under the same obligation (Rule 223).
[20] There are any number of reasons why a pre-trial conference may not be requisitioned within 360 days from the issuance of the statement of claim. The action may have been taken to prevent time bar with the subrogation rights of plaintiffs' underwriters still under negotiation. Repair of damage is sometimes deferred. This is quite common in ship collision cases. It is often very difficult and time-consuming to collect and review documents in preparation of affidavits of documents. Debates can arise as to relevancy of documents. It is often complicated to schedule examinations for discovery, enquiries to answer undertakings can be complex, and there can be legitimate debate over the sufficiency of the answers given to undertakings arising from discoveries.
[21] In none of those cases should the action be dismissed for delay. The more appropriate course is for the Court to order that the action continue as a specially-managed proceeding, following which the case management judge will set a time-frame for completion of subsequent steps in the action.
[22] The difficulty with this case is that Interbox, perhaps in an effort to divide and conquer, perhaps not, did not level with the defendants, did not propose a stay of proceedings and never sought directions from the Court, although it was free to do so at any time. Defendants, so apprised of the situation, would at least have had the option of seeking leave to intervene in T-1788-99, or to ask that the cases be joined.
DISCRETION DE NOVO
[23] A case very frequently cited as to the manner in which discretion should be exercised pursuant to Rule 382 is that of Hugessen J. in Baroud v. Canada (1998), 160 F.T.R. 91, where he said:
In deciding in what manner to exercise the wide discretion granted to it by Rule 382 at the conclusion of a status review, it seems to me that the Court needs to be concerned primarily with two questions:
1) what are the reasons why the case has not moved forward faster and do they justify the delay that has occurred?; and
2) what steps is the plaintiff now proposing to move the matter forward?
The two questions are clearly inter-related in that if there is a good excuse for the case not having progressed more quickly, the Court is not likely to be very exigent in requiring an action plan from the plaintiff. On the other hand, if no good reason is advanced to justify the delay, the plaintiff should be prepared to demonstrate that he recognizes that he has a responsibility to the Court to move his action along. Mere declarations of good intent and of the desire to proceed are clearly not enough. Likewise, the fact that the defendant may have been lax and may not have fulfilled all his procedural obligations is largely irrelevant: primary responsibility for the carriage of a case normally rests with a plaintiff and at a status review the Court will look to him for explanations.
[24] The defendants also relied strongly upon Multibond Inc. v. Duracoat Powder Manufacturing Inc. (1999), 177 F.T.R. 226, a decision of McGillis J. That case has to be read with some care. The plaintiff had taken no steps in over four years which led the learned judge to say at paragraph 22:
A review of the procedural history of this matter confirms that the plaintiff failed, on the status review, to provide a reasonable explanation to justify its inordinate delay. (my emphasis)
In this particular case the delays are counted in months, not years. It should also be kept in mind that when Multibond filed its statement of claim it had one year to effect service. That delay has now been shortened to 60 days, which in itself expedites the trial of an action. Although it would have been better for Interbox to consult with opposing counsel and with the Court, I find the reasons for the delay acceptable, but only just. We must all keep in mind that each telephone call, each fax, each letter and each motion drives up the overall cost of litigation. This should not be taken as meaning that inaction on the part of a plaintiff should be condoned. Each case raised the same points of law on which there was no jurisprudence. Given that T-1788-99 was proceeding to trial, had it so applied there was a reasonable prospect that Interbox might have obtained a short stay of the other three actions.
[25] The defendants in these cases, just as in Multibond, claim a prejudice in that delays may make it difficult for them to keep track of their witnesses, who are fairly mobile. In Multibond, Associate Senior Prothonotary Giles had, in response to the defendant's reply to the notice of status review which was to the effect that the delays prejudiced it, called upon it to bring on a motion for dismissal for want of prosecution pursuant to Rule 167. McGillis J. criticized that decision. However, I would not have gone that far. Under Rule 167, a defendant "who is not in default of any requirement of these Rules may bring on a motion dismissal because of undue delay". None of the defendants, at least on the material before me, could have brought on such a motion because none has served an affidavit of documents as required by the Rules. Although the prime burden is naturally upon the plaintiff to advance the case, the role of the defendant cannot be completely ignored.
[26] The defendants' reliance upon France-Canada Éditions et Publications Inc. v. 2845-3728 Québec Inc., [1993] F.C.J. No. 321 (QL), a decision of Prothonotary Morneau, is also misplaced. In that case the plaintiffs attributed delay to the fact that there was other litigation with respect to relevant trade-marks which had not yet been resolved. However, the point I take from that case is that more than five years had passed from the time the statement of claim had been issued.
[27] Reliance was also placed on another decision of Prothonotary Morneau in Ferrostaal Metals Ltd. v. Evdomon Corp., (2000), 181 F.T.R. 265, appeal dismissed by Denault J. (196 F.T.R. 66) and appeal therefrom also dismissed (2001 FCA 297). However, in that case the action was dismissed not at the notice of status review stage, but only after the case had been ordered to be continued as a specially-managed proceeding and delays set down by the Court were not respected.
[28] Reverting to Aqua-Gem, reference was made therein to the decision of the English Court of Appeal in Allen v. Sir Alfred McAlpine & Sons Ltd., et al, [1968] 1 All. E.R. 543. The three cases heard together under that citation dealt with applications to have actions dismissed for want of prosecution. The delays in question extended over several years.
[29] Although the circumstances of a status review initiated by the Court differ somewhat from an application by a defendant to have an action dismissed for want of prosecution, drawing upon Diplock L.J.'s reasoning at pages 555-556 I do not think that these particular actions should have been dismissed upon the first notice of status review.
What then are the principles which the court should apply in exercising its discretion to dismiss an action for want of prosecution on a defendant's application? The application is not usually made until the period of limitation for the plaintiff's cause of action has expired. It is then a Draconian order and will not be lightly made. It should not in any event be exercised without giving the plaintiff an opportunity to remedy his default, unless the court is satisfied either that the default has been intentional and contumelious, or that the inexcusable delay for which the plaintiff or his lawyers have been responsible has been such as to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible at the earliest date at which, as a result of the delay, the action would come to trial if it were allowed to continue. It is for the defendant to satisfy the court that one or other of these two conditions is fulfilled. Disobedience to a peremptory order of the court would be sufficient to satisfy the first condition. Whether the second alternative condition is satisfied will depend on the circumstances of the particular case; but the length of the delay may of itself suffice to satisfy this condition if the relevant issues would depend on the recollection of witnesses of events which happened long ago.
[30] The time bar issue is unclear. If the cause of action arose in a province, in this case Quebec (the fights took place in Quebec and all parties are based in Quebec), then a three-year limitation applies by virtue of section 39 of the Federal Courts Act and Article 2924 of the Civil Code of Quebec. However, it is open to argument that the signal was "pirated" from U.S. satellite operators. An argument then lies under section 39 of the Act that there is a six-year limitation. Even on the defendants' best arguable case at least one newly constituted action, that covering T-1042-02, would still be timely. In any event the prime fact in each defence is whether or not the match in question was shown in the establishment in question. If the defendants are concerned that they will lose track of their witnesses over time, there are means available to them to preserve evidence. The reality is that although the cases are important to Interbox in terms of the legal issues and the overall quantum, the amount of the actions as directed against each defendant is rather modest.
APPLICATIONS BY DEFENDANTS TO TARDILY REPLY TO
NOTICES OF STATUS REVIEW
[31] The notices of status review were addressed to all parties, but only called upon the plaintiff to show cause within a fixed delay. The defendants, although under no obligation, could have made representations if they saw fit. If they were unhappy with the Prothonotary's orders they should have, within 10 days, appealed pursuant to Rule 51. They did not do so. In any event, the point is somewhat moot in that had they made representations in a timely fashion, they would have made the same remarks as those who did, and Interbox's actions are permitted to continue as against these defendants.
[32] The one exception is Gestion Cheers (Pointe Claire) Inc. in action T-1073-02. Its position is that it can find no record of having been served with the notice of status review, although it readily concedes having been served with Interbox's reply, as well as the reply of other defendants in that action. Interbox did not put Cheers to proof.
[33] Cheers' best position is that the order of Prothonotary Morneau continuing the action as against it was ex parte. Under Rule 399, the Court may set aside such an order if the party against whom it was made discloses a prima facie case why the order should not have been made. Cheers' material is the same as the material filed by other defendants. Since I have granted Interbox's appeals, Cheers has not disclosed a prima facie case.
[34] In accordance with Rule 382, I am satisfied that actions T-1040-02, T-1042-02 and T-1073-02 should continue as specially-managed proceedings before he or she or those designated by the Chief Justice.
COSTS
[35] Although Interbox has been successful, I award it no costs on its motions by way of appeal from the Prothonotary's orders, or on the other motions. Had it paid closer attention to the Rules and not voluntarily left these actions in abeyance, albeit only over a relatively short period of time, none of these motions would have been necessary.
"Sean Harrington"
JUDGE
Ottawa, Ontario
January 29, 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1040-02
STYLE OF CAUSE: INTERBOX PROMOTION CORPORATION
and
9073-0433 QUÉBEC INC., CARRYING ON BUSINESS
UNDER BAR CAFÉ GOODFELLAS AND THE OTHER DEFENDANTS
ANNEXED HEREWITH
PLACE OF HEARING: MONTREAL, QUEBEC
DATE OF HEARING: JANUARY 12, 2004
REASONS FOR ORDER : HARRINGTON J.
DATED: JANUARY 29, 2004
APPEARANCES:
Daniel Artola FOR PLAINTIFF
FOR DEFENDANTS,
Jean-Marie Fontaine Les Cantines du Québec Inc.
Robert Cox Place Gestion Cheers (Pointe Claire) Inc.
Dominic Desjarlais Placements Sergakis Inc., 9033-0366 Québec Inc., Moonshine Grill & Bar, 2961-2603 Québec Inc.
Basile Angelopoulos Société en Commandite Francan, 3296008 Canada Inc., 9100-7245 Québec Inc., 9111-1963 Québec Inc.
Anthony Giammaria 9017-5845 Québec Inc. (Bar Spurs)
Angelo Caputo 9073-0433 Québec Inc. (Bar Café Goodfellas
Stephan Trihey 9001-7666 Québec Inc. (Taverne Hymus)
Nicole Giguère Place Côte de Liesse (Bar Francis)
SOLICITORS OF RECORD:
McCarthy Tétrault
Montreal, Quebec FOR PLAINTIFF
FOR DEFENDANTS,
Gowling Lafleur Henderson Les Cantines du Québec Inc.
Montreal, Quebec
Lamarre Linteau Montcalm Placements Sergakis Inc., 9033-0366
Montreal, Quebec Québec Inc., Moonshine Grill & Bar, 2961-2603 Québec Inc.
De Man, Pilote Place Gestion Cheers (Pointe Claire)
Montreal, Quebec Inc.
Angelopoulos, Kiriazis Société en Commandite Francan,
Montreal, Quebec 3296008 Canada Inc., 9100-7245 Québec Inc., 9111-1963 Québec Inc.
Rigutto & Associés 9017-5845 Québec Inc. (Bar Spurs)
Montreal, Quebec
Caputo, Famularo & Buttino 9073-0433 Québec Inc. (Bar Café
Montreal, Quebec Goodfellas
Hart, Saint-Pierre 9001-7666 Québec Inc. (Taverne
Montreal, Quebec Hymus)
Cordeau, Clément & Associés Place Côte de Liesse (Bar Francis)
Montreal, Quebec
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