Date:
20120713
Docket:
T-486-12
Citation:
2012 FC 888
Ottawa, Ontario, July 13, 2012
PRESENT: The Honourable Mr. Justice Mosley
BETWEEN:
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THE GRIEF RECOVERY INSTITUTE,
LLC;
THE GRIEF RECOVERY INSTITUTE
EDUCATIONAL FOUNDATION, INC.;
JOHN W. JAMES AND
RUSSELL P. FRIEDMAN
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Plaintiffs
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and
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1668246 ONTARIO INC. AND ERIC
CLINE,
COLLECTIVELY DOING BUSINESS AS
THE
GRIEF RECOVERY INSTITUTE;
HEATHER BRASSIL; AND
MORNINGTON COMMUNICATIONS
CO-OPERATIVE LIMITED
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Defendants
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REASONS FOR
ORDER AND ORDER
[1]
The
defendants Eric Cline, 1668246 Ontario Inc. and Heather Brassil appeal under
Rule 51 of the Federal Courts Rules, SOR /98-106
(“the Rules”) the Order of Prothonotary Lafrenière issued on June 25,
2012 granting the plaintiffs’ request for special management of this action. The
defendant Mornington Communications Cooperative Limited is not represented on
this motion.
[2]
This
proceeding is an action in which the plaintiff's claim, among other things,
copyright infringement and passing off. The pleadings, initiated on March 6,
2012 and including a counterclaim, have been filed and served within the time
limits set out in the Rules. The parties are thus at the close of
pleadings stage of the action where they must serve their affidavits of
documents in accordance with Rule 223.
[3]
On
Friday, June 22, 2012 the plaintiffs filed a letter with the Federal Court Registry
at Vancouver requesting that the present action be case managed under Rule 383.
In the letter, the plaintiffs noted that the above named defendants had advised
that they would not consent to the request at this stage of the proceeding on
the basis that the request was premature. The plaintiffs submitted that case
management is appropriate for these reasons:
First, the Plaintiffs would like
to obtain a trial date at the earliest availability of the Court. The
Plaintiffs are of the position that they are suffering significant harm by the
ongoing alleged activities of the Defendants, and delay in final resolution of
this matter will continue to increase such harm. Given the current delays in
obtaining trial dates, the Plaintiffs wish to request a trial date at this
time, as allowed in case managed proceedings in accordance with the Federal
Court Practice Notice of May 1, 2009, rather than wait to make such a request
at the pre-trial conference to take place some time from now.
The Plaintiffs will also be
seeking to put in place a scheduling order to ensure that discoveries,
discovery motions and other pre-trial motions proceed in a timely fashion, in
particular towards the trial date that the plaintiff will be seeking as a part
of case management. The Plaintiffs note in this regard that the Practice
Notice of May 1, 2009 generally confirms the availability of case management in
complex litigation such as IP matters with the purpose being to “facilitate,
where possible, scheduling of trials within two years of the commencement of
proceedings”, and, further, that case management may be sought at any time and
“preferably at the outset of a proceeding”.
Given the current delays in
obtaining trial dates, the complex litigation issues involved, as well as the
natures of the parties’ respective businesses that involve a great deal of
traveling which could result in delays in proceeding with discoveries, it is
submitted that having have [sic] this matter case managed will ensure that all
pre-trial matters progress on a schedule that will allow for trial of this
matter to proceed as expediently as possible.
[4]
On
Monday, June 25, 2012 an Order was issued granting the plaintiffs’ request for
case management and fixing a deadline for submitting a joint timetable for
completion of the next steps in the proceeding or to requisition a case
management conference a fixed timetable.
[5]
The
Prothonotary noted that the named defendants did not consent on the ground that
the request was premature. He wrote that he was “satisfied that case management
will be of benefit to the orderly proceeding of the pre-trial steps in this
action, to governing the scope of discoveries, to the management of motions
that may assist in the narrowing of issues and focusing of pleadings, as well
as to the just, most expeditious and least expensive determination of the
action on its merits.”
[6]
The
standard of review applicable
to a prothonotary’s discretionary decisions was established by the Federal
Court of Appeal in Canada v Aqua-Gem Investments Ltd, [1993] 2 FC 425 (FCA)
and endorsed with approval by the Supreme Court of Canada in Z I Pompey
Industrie v ECU-LINE N V, [2003] 1 S.C.R. 450, 2003 SCC 27 at paragraph 18. It was
reformulated somewhat in Merck & co v Apotex Inc, 2003 FCA 488, 315
NR 175 as follows:
Discretionary
orders of Prothonotaries ought not to be disturbed on appeal to a judge
unless:
a)
the questions 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
facts.
[7]
The
defendants do not suggest that the questions in the motion are vital to the
final issue of the case. However, they submit that the Order under appeal
should be set aside as clearly wrong because in exercising his discretion, the
Prothonotary:
a. Was
aware that the defendants did not consent to such an order being granted;
b. Failed
to provide the defendants with an opportunity to be heard which constitutes a
denial of natural justice;
c. Improperly
treated the request for case management as an ex parte motion without
any evidence been filed;
d. Erred
in granting this order on the basis of Practice Notice No. 17 entitled
“Streamlining Complex Litigation” when in fact, the present action is not
complex litigation; and
e. Erred
in law by automatically granting case management on request.
[8]
As
argued by the plaintiffs, all of the facts relied upon by the defendants
including the timing of the pleadings are within the court file on this
proceeding. They have not put forward any evidence or arguments to indicate
that there was any misapprehension of the facts by the Prothonotary. It was
open to him on those facts to form a reasonable assessment, as he did, that
case management would be of benefit to the orderly proceeding of the pretrial
steps in this action. I see no ground upon which I could find that the exercise
of discretion by the Prothonotary was clearly wrong in the sense that it was
based upon a misapprehension of the facts. That leaves the issue of whether the
decision to issue the order was based upon a wrong principle.
[9]
In
support of their argument that they were denied natural justice the
defendants cite Canadian Transit Co v Canada (Public Service Staff Relations
Board), [1989] 3 FC 611 (FCA) at paragraph 16:
Probably
no principle is more fundamental to administrative law at common law than that
of audi alteram partem, a rule of natural justice that parties be given
adequate notice and opportunity to be heard…
[10]
This
statement was made in the context of a discussion of the operation of a statute
authorizing interference with property or civil rights and that was silent on
the question of notice and hearing. Here, no rights were being disposed of. The
defendants concede that they had notice of the request and had conveyed their
opposition to the plaintiffs. Their concern, in essence, is that they did not
have an opportunity to provide their reasons for opposing case management to
the Prothonotary before the decision was made. It is not clear why they could
not have addressed those concerns in a motion in writing under Rules 397 or 397
directed to the Prothonotary.
[11]
For
the proposition that granting case management on request is an error of law the
defendants rely on the reasons of Prothonotary Hargrave in Huang v Canada
(Minister of Citizenship and Immigration), 2003 FCT 196 in which it was
stated at paragraph 2:
Special management is neither
routine nor automatically granted on request. As Chief Justice Richard points
out in Information Commissioner (Canada) v. Canada (Minister of Environment)
(1999), 179 F.T.R. 25 there must be a substantial reason to remove the
proceeding from the timetable set out in the Rules.
[12]
Chief
Justice Richard’s obiter remark in the Information Commissioner decision
and that of Prothonotary Hargrave in Huang reflect a view of special
management that has been superceded by the more recent emphasis on the timely
resolution of disputes. In the matter before Prothonotary Hargrave in Huang,
the applicant had sought special management so as to expedite judicial review
of an interlocutory ruling to adjourn a hearing. Prothonotary Hargrave was of
the view that special circumstances should exist to warrant judicial intervention
at the interlocutory stage as the matter could be resolved by the Board through
some other means. Absent such circumstances, there was no need for judicial
review and, consequently, no need for special management.
[13]
No
authority is cited in support of the defendants’ assertion that the moving
party bears an evidentiary burden to establish the need for special management.
Rule 384 provides that the Court may at any time order that a matter continue
as a specially managed matter. The Rule does not require a motion to the Court
in order for such an order to be made although that is normally the practice. Nor
does the Rule require evidence. The Practice Notice indicates that the request
may be submitted by letter.
[14]
Case
management orders are issued from time to time on the Court’s own motion when
it appears necessary from the court record and from the nature of the
proceedings. See for example Jolivet v Canada (Minister of Justice), 2011
FC 806 at para 32; and Detorakis v Canada (Attorney General), 2009 FC
144 at para 12. To require that such decisions be made only on motion supported
by evidence with the burden of proof on the moving party is inconsistent with
the wording of Rule 384 and the Court’s practice.
[15]
The
Prothonotary’s decision in this matter is open to the criticism that he acted
precipitously in issuing the Order before he received and considered the
defendants’ reasons for opposing the plaintiff’s request. The Prothonotary could
have waited for a few days to give the defendants an opportunity to submit
their reasons in writing as they were apparently preparing to do when the Order
issued. To that extent, I agree with the defendants that their was a breach of
procedural fairness. But I do not accept that the Prothonotary was wrong in
concluding that case management was appropriate in this case nor do I accept
the defendants’ claim that the Order was issued automatically on request. This
was a reasonable decision based on the grounds set out in the plaintiffs’
letter. I also infer that it was based on the Prothonotary’s review of the file
that would have been before him and his experience with similar cases.
[16]
If
I have erred in that finding, I would exercise my discretion to order that the
matter be specially managed. There are ample reasons for doing so disclosed by
the record of the proceeding and the record of this motion. In reaching that
conclusion I have considered the arguments the defendants have advanced to the
contrary on the appeal motion.
[17]
The
defendants submit that this action is not complex litigation similar to
pharmaceutical patent or Notice of Compliance proceedings which may involve
thousands of pages of evidence, technical and scientific subject matter,
extensive discoveries, and multiple experts. They suggest that case management
may, in fact, slow down the proceedings as it will become necessary for the
parties to conform to the Prothonotary’s schedule. That will of course depend
on the parties and the number of interlocutory issues that may need to be
resolved. But having regular access to a case management judge familiar with
the litigation can not be any slower than bringing motions for determination to
a random selection of judges and prothonotaries under the normal procedure.
[18]
As
the plaintiffs point out, the May 2009 Practice Notice is not limited to patent
litigation but covers a broad range of matters where case management will
assist in streamlining procedures to facilitate the scheduling of trials within
two years of commencement of the proceeding. The factual allegations in this
proceeding are lengthy and raise numerous issues for discovery and adjudication
in relation to 117 literary works, five unregistered trademarks, the ownership
of 10 domain names and the existence and enforceability of an alleged 20 year
licensing arrangement between the plaintiffs and the defendants.
[19]
The
defendants contend that case management would be prejudicial to their interests
at this early stage of the proceeding as they would be foreclosed from bringing
a motion for summary judgment or summary trial. This argument is based on Rule
213 (1) which provides as follows:
A party may bring a motion for
summary judgment or summary trial on all or some of the issues raised in the
pleadings at any time after the defendant has filed a defence but before the
time and place for trial had been fixed. [Underlining added]
[20]
In
response, the plaintiffs state that they also have no wish to dispose of their own
rights to bring motions for summary adjudication. Accordingly, in the draft
Scheduling Order sent to counsel for the defendants for review and comment they
have proposed the following clause:
In the event that either parties
wishes to proceed with adjudication of the proceeding, either in whole or in
respect of a specific issue or issue(s) in the proceeding, by way of summary
judgment or summary trial pursuant to Federal Courts Rules 215 or 216,
they may do so, notwithstanding Rule 213 (1) and the prior fixing of a time and
place for trial, as long as such an application for the same is served and
filed no later than _____[with a specific date to be set that would be after
the close of the first round of discoveries and any motions/answers thereof].
[21]
Subject
to the approval of the Court, the proposed clause would appear to be a complete
answer to the defendants’ claim that they would suffer prejudice if this matter
were to be specially managed. It is consistent with the general principle in
Rule 3 that the Rules are to be “interpreted and applied so as to secure the
just, most expeditious and least expensive determination of every proceeding on
its merits”. The question of prejudice set aside, it is difficult to understand
how the defendants’ interests were adversely affected by the Order.
[22]
As
argued by the plaintiffs, this is the type of proceeding that could very easily
get bogged down in discoveries and procedural motions and it would be of
assistance to the parties to have a judge familiar with this matter to
streamline the various pre-trial steps and hearing pre-trial motions to allow
this matter to proceed to trial expeditiously and least expensively. I am not
persuaded by the defendants’ argument that there should be some showing of
delay by the parties prior to the issuance of such an order. The Practice
Notice states that it should be made as early as possible.
[23]
The
appeal is dismissed.
[24]
The
plaintiffs seek solicitor and client costs on the ground that the pursuit of this
motion was unnecessary, fruitless and wasteful. Rule 401 provides that the
Court may award costs of a motion in an amount fixed by the Court and, where it
is satisfied that the motion should not have been brought, it shall order that
the costs be payable forthwith.
[25]
I
agree with the plaintiffs that this appeal should not have been brought. The Order
for special management of this proceeding did not in any way adversely affect
the defendants’ substantive or procedural rights. A less costly resolution
could have been sought by a motion in writing to the Prothonotary to reconsider
his Order. Accordingly, I will exercise my discretion to impose costs against
the named defendants in the amount of $2500 inclusive of disbursements payable
forthwith and in any event of the cause.
ORDER
THIS
COURT ORDERS that:
[1] The
appeal of the Order of June 25, 2012 requiring special management of this
action is dismissed; and
[2] The
plaintiffs are awarded costs payable by the defendants Eric Cline, 1668246
Ontario Inc. and Heather Brassil in the fixed amount of $2500 inclusive of
disbursements and payable within 30 days of this Order and in any event of the
cause.
“Richard
G. Mosley”
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