Date: 20041005
Docket: T-1029-03
Citation: 2004 FC 1367
Toronto, Ontario, October 5th, 2004
Present: Roger R. Lafrenière, Esquire
Prothonotary
BETWEEN:
WHIRLPOOL PROPERTIES INC.
WHIRLPOOL CANADA INC.
Plaintiffs
(Defendants by Counterclaim)
and
LG ELECTRONICS CANADA INC.
LG ELECTRONICS INC.
Defendants
(Plaintiffs by Counterclaim)
REASONS FOR ORDER AND ORDER
[1] The Plaintiffs, Whirpool Properties, Inc. and Whirlpool Canada Inc. (hereinafter referred to in the singular as "Whirlpool"), seek to compel the attendance in Canada of a representative of the Defendant, LG Electronics Inc. ("LG Korea"), for the purposes of examination for discovery. Whirlpool requests, in the alternative, that LG Korea be required to pay all costs associated with conducting the examination for discovery in Korea, including airfare, hotel accommodations, and meal allowances for two counsel, a court reporter and a translator.
[2] The Defendants, L.G. Electronics Canada Inc. (LG Canada) and L.G. Korea, oppose the motion on the grounds that an agreement is already in place between the parties regarding the location and scheduling of each of the examinations for discovery to be conducted in this proceeding. According to the Defendants, the parties agreed that both representatives of Whirlpool Canada Inc. and LG Canada would be examined in Toronto, that the representative of Whirlpool Properties, Inc. would be produced in Chicago, and that the examination of the LG Korea's representative would proceed in Korea.
[3] The following can be ascertained from a review of the letters exchanged between counsel for the parties between May and July 2004, attached as exhibits to the affidavits filed on this motion.
[4] Discussions between counsel for the parties regarding a timetable for the completion of steps in the litigation began in May, 2004. In a letter to Whirlpool's counsel dated June 11, 2004, counsel for the Defendants proposed a timetable for completion of examinations for discovery, including a deadline for the resolution of any disagreement regarding scheduling that could arise between the parties. The proposed timetable specified that any motion to determine the place, manner and expenses of the examinations for discovery, pursuant to Rule 90(2) of the Federal Court Rules, 1998, would be brought by July 12, 2004. It also included the deadline of August 13, 2004 for the completion of the examinations for discovery.
[5] On June 15, 2004, counsel for Whirlpool wrote that he was generally in agreement with the Defendants' proposed breakdown in steps, but suggested that September 24, 2004 would be a more realistic deadline for completion of examinations. Counsel for the Defendants responded by letter dated June 16, 2004 that he was reluctant to push back the date for completion of examinations unless it became necessary. Following a further exchange of correspondence, counsel for the Defendants wrote to counsel for Whirlpool on July 6, 2004. His letter dealt with a number of scheduling matters, and focussed on the examinations for discovery, as follows:
As for where our clients' representatives will be produced, the representative of LG Electronics Canada, Inc. will be produced in Toronto. I will get back to you as soon as possible as to whether the representative of LG Electronics Inc. will be produced in Korea.
[6] Counsel for Whirlpool responded by letter dated July 8, 2004, expressing surprise that the representative of LG Korea might be examined in Korea. His letter stated, in part, as follows:
We are surprised by your suggestion that representative for LG Electronics Inc. might be examined in Korea. While we have indicated that we were available to conduct the examination on August 17, 2004 and August 18, 2004, this was based on our understanding that these witnesses would be produced in Canada. Given the necessary travel time and other practical considerations, the examination of LG Electronics' representatives in Korea is impractical and would significantly delay the completion of discoveries in this case. Please advise us of your client's position as soon as possible. As you know, we need to file a timetable by July 12, 2004.
[7] Further proposals and counter-proposals were exchanged between counsel, however the parties were unable to reach an agreement on the timetable by July 12, 2004. That day, counsel for Whirlpool wrote to counsel for the Defendant, countenancing, for the first time, the possibility that the examination of the representative of LG Korea would take place in Korea. His letter stated in part as follows:
Also enclosed is a proposed letter to the Court. While we are available to conduct examinations on August 17, 2004 and August 18, 2004, we are unfortunately not available to travel to Korea during the days preceding and following those dates. Accordingly, it will be necessary to find alternative dates for the examination of the representative for LG Electronics Inc. if the examination is to be held in Korea. We propose to revise the timetable if mutually convenient dates are not available before October 15, 2004.
[8] Steps taken by Whirlpool after July 12 serve to confirm that an agreement regarding the conduct of examinations was eventually reached between counsel. First, the timetable set out in the draft order submitted by the parties to the Court on July 19, 2004 no longer provided for a motion pursuant to Rule 90(2). The reference to such an interlocutory step in an earlier draft was evidently removed because of the agreed upon schedule for the various examinations for discovery. Second, examinations for discovery have since begun in accordance with the schedule of the examinations for discovery of the parties' representatives, as proposed by the Defendants. Third, the examination for discovery of the representative of LG Korea has since been scheduled for October 28 and 29, 2004 in Korea, and Whirlpool's counsel has made arrangements to hold it at the Canadian Embassy in Korea. Such acquiescence seriously undermine Whirlpool's contention that no agreement was ever reached.
[9] The Defendants have been operating on the basis that discovery of the representative of LG Korea would be taking place in Korea, and have been consistent in their position. The same cannot be said about Whirlpool. On the evidence before me, I conclude that Whirlpool agreed, albeit reluctantly, to the Defendants' request that the discovery of the LG Korea's representative be held in Korea in return for conducting the examination of the representative of Whirlpool Properties, Inc. in Chicago.
[10] The matter of agreements under Rule 90(2) was considered in Marvel Characters, Inc. v. Randy River Inc. [2003] F.C.J. No. 1242, in which I wrote at para. 8:
If parties in an action are unable to agree upon a time and place for examinations, a motion may be brought under Rule 90 of the Rules to settle any disagreement. Moreover, in a specially managed proceeding, the parties have the option of informally seeking directions from the case management judge or prothonotary under Rule 385. However, given the scarcity of judicial resources, parties should be encouraged to agree, as they typically do, upon the time and place of examinations between themselves. Once an agreement is reached, the parties should be expected to honour that agreement, or face consequences provided by Rule 97.
[11] In the absence of any evidence of fraud or unconscionable terms, a scheduling agreement between parties should be respected. Whirlpool ought to have factored in the substantial costs associated with conducting an examination in Korea during the course of negotiations leading to a schedule for examinations. It is not open to them to refuse to honour the agreement simply because the costs are higher than anticipated.
[12] It appears that the only arrangements that still needed to be addressed by the parties were the costs related to a court reporter and translator. Counsel for the Defendants proposed that Whirlpool pay the travel and accommodation expenses of the court reporter, and that the Defendants pay the travel and accommodation expenses of the translator. Such a compromise appears reasonable in the circumstances.
[13] At the conclusion of the hearing, I inquired whether the parties had considered less expensive options for discovery of LG Korea's representative, such as a written examination, or conducting the examination by video conference. Counsel for the parties agreed to discuss the matter further.
ORDER
THIS COURT ORDERS that
1. Unless the parties agree to a different method of examination, the examination for discovery of the representative of LG Electronics Inc. shall be held in Seoul, South Korea.
2. Each of the parties shall be responsible for their costs and expenses associated with the examination for discovery of the representative LG Electronics Inc., subject to any order that the Trial Judge may make, and those costs and expenses shall remain in the discretion of the Trial Judge.
3. The Plaintiffs' motion is dismissed with costs payable to the Defendants fixed in the amount of $1,250.00 payable in any event of the cause.
"Roger R. Lafrenière"
Prothonotary
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1029-03
STYLE OF CAUSE: WHIRLPOOL PROPERTIES, INC.
WHIRLPOOL CANADA INC.
Plaintiffs
(Defendants by Counterclaim)
and
LG ELECTRONICS CANADA, INC.
LG ELECTRONICS INC.
Defendants
(Plaintiffs by Counterclaim)
DATE OF HEARING: SEPTEMBER 20, 2004
PLACE OF HEARING: TORONTO, ONTARIO.
REASONS FOR ORDER
AND ORDER BY: LAFRENIÈRE P.
DATED: OCTOBER 5, 2004
APPEARANCES BY:
Kelly Gill For the Plaintiffs
John A. MacDonald
John Cotter For the Defendants
SOLICITORS OF RECORD:
Stephane Caron / David Covert
Gowling, Lafleur, Henderson LLP
Ottawa, Ontario For the Plaintiffs
John Cotter/ Tara James
Osler, Hoskin & Harcourt
Toronto, Ontario For the Defendants
FEDERAL COURT
Date: 20041005
Docket: T-1029-03
BETWEEN:
WHIRLPOOL PROPERTIES, INC.
WHIRLPOOL CANADA INC.
Plaintiffs
(Defendants by Counterclaim)
and
LG ELECTRONICS CANADA INC.
LG ELECTRONICS INC.
Defendants
(Plaintiffs by Counterclaim)
REASONS FOR ORDER
AND ORDER
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