Date: 20070314
Docket: T-1064-06
Citation: 2007 FC 285
Ottawa, Ontario, March 14, 2007
PRESENT: Madam Prothonotary Mireille Tabib
BETWEEN:
INTERNATIONAL WATER-GUARD
INDUSTRIES INC.
Plaintiff
and
BOMBARDIER INC.
Defendant
REASONS FOR ORDER AND ORDER
[1]
The
Defendant makes a motion seeking an order striking out certain paragraphs of
the Plaintiff’s amended statement of claim, and in the alternative, further
particulars in respect thereof, an order requiring the Plaintiff to comply with
Rule 182(b), and other ancillary relief.
Motion to strike
[2]
This
motion arises in the context of an action for patent infringement. The
Plaintiff recently amended its pleadings to add a claim for punitive damages,
on the basis of the Defendant’s allegedly wilful infringement of the patent,
combined with the fact that the Defendant allegedly used, for the purpose of
infringing the patent, proprietary information that the Plaintiff had
communicated to it in confidence. It is this new claim for punitive damages
and the new allegations of fact on which it is based that the Defendant seeks
to strike.
[3]
The
Defendant argues that this Court has no jurisdiction to determine any claim
based on the agreements pursuant to which the information was disclosed (a
Collaboration Agreement and a Non-Disclosure Agreement between the parties),
since they contain clauses giving exclusive jurisdiction to the Courts of
Quebec over any “action, suit or proceedings arising out of, or connected with”
the agreements. If the Defendant is correct and the Plaintiff is precluded
from relying on a breach of the agreements in this Court, then the claim for
punitive damages rests solely on a claim of wilful infringement; it is common
ground between the parties that wilful infringement alone cannot give rise to
punitive damages, so that the claim would be bound to fail.
[4]
Counsel
for the Defendant conceded at the hearing that, absent the exclusive
jurisdiction clauses of the agreements, the decision in Areva NP GmbH v.
Atomic Energy of Canada Limited, 2006 FC 952, would be applicable for the
proposition that even if the subject matter of the contracts were beyond the
Court’s jurisdiction, it would be arguable that the Defendant’s behaviour in
relation to these contracts may justify punitive or exemplary damages as a
remedy arising out of the alleged infringement. Thus, it is neither plain nor
obvious that this Court does not have jurisdiction ratione materiae
to hear the claim for punitive damages, if same is founded on allegations that
the infringement, in the context of these agreements, justifies punitive
damages.
[5]
Exclusive
jurisdiction clauses can no more remove from the Court a jurisdiction it
otherwise possesses than they can confer upon it a jurisdiction it does not
otherwise have. Exclusive jurisdiction clauses are bargains between the
parties that are typically enforced, not by orders striking pleadings, but by
orders staying proceedings in favour of the forum designated by the agreement.
The Defendant has not sought a stay of the proceedings herein. Accordingly, at
best, the existence of the exclusive jurisdiction clauses in the agreements
might form the basis of an argument that the Plaintiff should be estopped from
indirectly attempting to obtain a determination as to a breach of these agreements
in a Court other than the designated forum, or that in doing so, it is
committing an abuse of process.
[6]
I am aware
of no authority to the effect that instituting proceedings before a Court of
arguably competent jurisdiction in defiance of a contractual exclusive
jurisdiction clause constitutes an abuse of process justifying the striking of
pleadings. Indeed, the well-developed jurisprudence relating to stays of
proceedings to give effect to such agreements tends to preclude such a
conclusion.
[7]
As for the
estoppel argument, it is a defence grounded in equity, not in law. If it is
not pleaded or raised by the Defendant, it cannot be raised by the Court of its
own motion, and therefore does not stand as an obstacle, in law, to the
Plaintiff’s claim. In this regard, it is very much similar to a defence of
limitation, which it has been held cannot properly be pleaded as the basis of a
preliminary motion to strike. The Federal Court of Appeal has held, in Kibale
v. Canada, (1990) 123 N.R. 153, that:
“…a statute of limitations under the
common law does not terminate the cause of action, but only gives the defendant
a procedural means of defence that he may choose not to employ and must, should
he choose to employ it, plead in his defence (see Rule 409). In other words, a
plaintiff is not, in writing his declaration, obligated to allege all the facts
demonstrating that his action was brought in due time. A plaintiff is not
obligated to foresee all the arguments the adverse party might bring against
him. He can wait until the defence is filed and, should the defendant argue
that the action is late, plead in reply any facts disclosing, in his opinion,
that it is not late. It follows that, as Collier J. held in Hanna et al. v.
The Queen (1986), 9 F.T.R. 124, a defendant must plead a statute of limitations
in his defence; he cannot do so in a motion to strike out under Rule 419
because, for the reasons I have set out, an action cannot be said to be late on
the sole ground that the statement does not demonstrate it is not late.”
[8]
The same
can be said of the defence of estoppel in this matter: The Plaintiff cannot be
said to be estopped from pleading a breach of a contract which it agreed to
submit exclusively to the Courts of Quebec on the sole ground that the statement
of claim does not demonstrate why estoppel should not apply.
[9]
Thus, I am
not satisfied that the impugned paragraphs ought to be struck pursuant to
Rule 221.
Particulars
[10]
In
response to the Defendant’s first informal request for particulars, the Plaintiff
provided a copy of all of its responses to request for proposals, as demanded.
It also produced a copy of a series of documents containing allegedly
confidential information disclosed in the course of collaboration between IWG
and Bombardier. The answer to this request for production does not indicate
that these are only some of a larger body of documentation. I take the answer
to be a comprehensive statement of the communications made, in documentary
form, of allegedly confidential information. The Plaintiff’s objection to
providing “details of other communications”, in this context, is to be taken to
refer to communications other than in documentary form. No further documentary
production is therefore required.
[11]
The
Defendant’s argument that the Plaintiff is bound to identify, in the documents
produced, the specific information it claims to be confidential in light of the
publication of the patent application is premised upon the Defendant’s own
interpretation of the terms of the Non-Disclosure Agreement, to the effect that
publicly available information cannot be protected by the terms of the
agreement. The Plaintiff’s response indicates that the Plaintiff takes a
position to the contrary. Particulars are meant to enlighten the Defendant as
to the case it has to meet. To that extent, the Defendant now knows the
factual case it has to meet and is perfectly able to plead its own
interpretation of the facts and contractual provisions. It cannot, through a
motion for particulars, straightjacket the Plaintiff into framing the facts to
conform to the Defendant’s theory of the case.
[12]
As to
particulars of how the Defendant specifically made use of the information in
allegedly infringing the patent, I am not satisfied that it is information
which the Defendant needs in order to respond intelligently to the statement of
claim. The Defendant has the complete record of the documents said to contain
the information in question, clear allegations of how it allegedly infringed
the patent, and the allegation that the information in question made the
Defendant “aware of the advantages and feasibility of circulating potable water
systems for Bombardier Aircraft”, enabling or giving it an advantage in
carrying out the allegedly infringing acts. The Defendant should be perfectly
able to plead intelligently to that allegation.
[13]
The sole
allegation for which particulars are to be provided is the use, in paragraph 26
of the amended statement of claim, of the word “included”, to qualify the
ordinary standards of reasonable business practices from which the Defendant
allegedly departed. The use of this word implies that the Defendant might have
departed from other or further standards of reasonable business practice than
those specifically mentioned. If so, the Defendant is entitled to know what
they are. If not, the Plaintiff must provide that clarification.
Rule 182(b) of the Federal Courts
Rules
[14]
Rule
182(b) is clear and unambiguous. It requires a Plaintiff claiming monetary
relief to specify whether the amount claimed, exclusive of interest and costs,
exceeds $50,000. Although Rule 182(b) may well have been inserted in the Rules
to facilitate the interpretation and application of the rules applicable to simplified
actions, (which could not in any event apply to this action as it seeks
injunctive and declaratory relief), it remains an obligatory prescription for a
statement of claim. The consequence of a Plaintiff’s failure to comply with
the requirement to indicate whether the monetary relief claimed exceeds $50,000
is that it shall be deemed not to exceed that amount (Polchies v. Canada (2003),
238 F.T.R. 254, 2003 FC 961). Accordingly, unless the Plaintiff, within 14
days, serves and files a re-amended statement of claim complying with Rule
182(b), the monetary relief claimed shall be deemed not to exceed $50,000,
exclusive of interest and costs.
Confidentiality
[15]
As
mentioned at the hearing, the evidence filed by the Defendant only establishes
that the Agreements sought to be filed confidentially were intended to be and
have always been treated by the Defendant in a confidential manner. It does
not establish whether commercial or competitive prejudice might be suffered by
the Defendant should these Agreements be placed on the public record, and if
so, whether the importance of the interest to be protected outweighs the public
interest in open and accessible Court proceedings. This is especially
important here as the Agreements have been produced as answers to particulars,
and are therefore deemed to be part of the pleadings, have been referred to and
cited extensively in public motion records, and might very possibly be directly
relied upon in the Defendant’s statement of defence. That part of the
Defendant’s motion is therefore adjourned to allow the Defendant to serve and
file additional evidence in support of that relief. Pending determination, the
documents shall continue to be treated confidentially.
Extension of time to file a defence
[16]
The
Plaintiff will have to file a re-amended statement of claim, if only to comply
with Rule 182(b), and will have to provide particulars as to whether the word
“included”, in paragraph 26, refers to other manners of departing from
reasonable business practices, and if so, which ones. Although the rules
relating to pleadings and particulars do not mandate that particulars should be
incorporated in amended pleadings, it seems to me that as particulars are
deemed to form a part of the pleadings, and as further amendments and
particulars must in any event be made and given, the pleadings would be much
clearer and easier to follow were the Plaintiff to incorporate the particulars
already provided and to be provided in a re-amended statement of claim. The
Plaintiff will have 14 days within which to do so. As the amendments will be
more formalistic than substantive, the Defendant should not need more than 21
days from service of the amended pleading to serve and file its statement of
defence.
Case management
[17]
As
discussed with and consented to by the parties at the hearing, the action will
be designated as a specially managed proceeding.
ORDER
THIS COURT ORDERS that:
1.
This action shall continue as a specially
managed proceeding.
2.
The Plaintiff shall, no later than 14 days from
the date of this order, serve and file a re-amended statement of claim which
shall:
(a)
comply with Rule 182(b), failing which the
monetary relief claimed shall be deemed not to exceed $50,000 exclusive of interest
and costs;
(b)
incorporate all particulars already provided
informally by the Plaintiff to the Defendant; and
(c)
contain particulars as to whether the word
“included”, in paragraph 26 of the amended statement of claim, refers to other
ordinary standards of reasonable business practice than those specifically set
out in that paragraph, and if so, identifying same.
3.
The Defendant shall, no later than 21 days
following service of the Plaintiff’s amended pleading, serve and file its
statement of defence.
4.
That part of the Defendant’s motion seeking a
confidentiality order is adjourned, to allow the Defendant to serve and file,
no later than 21 days from the date of this order, further evidence in support
thereof. The Plaintiff may file additional evidence or representations of its
own within 5 days of service of the Defendant’s evidence; pending
determination, the materials submitted for filing as confidential shall
continue to be treated confidentially.
5.
The parties shall, no later than 20 days
following the date of an order designating a case management Judge or
Prothonotary, serve and file, either jointly or separately, written submissions
as to the further steps to be taken in this proceeding, together with a draft
order setting out a detailed proposed schedule therefor.
6.
Costs of the Defendant’s motion in the cause.
“Mireille Tabib”
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