Date: 20080304
Docket: T-139-06
T-140-06
Citation: 2008 FC 298
Ottawa, Ontario, March 4, 2008
PRESENT: The Honourable Madam Justice Simpson
BETWEEN:
T-139-06
J2
GLOBAL COMMUNICATIONS INC.
Plaintiff
and
PROTUS IP
SOLUTIONS INC.
Defendant
AND
BETWEEN:
PROTUS IP SOLUTIONS INC.
Plaintiff by counterclaim
and
J2 GLOBAL COMMUNICATIONS INC. and
CATCH CURVE INC.
Defendants by counterclaim
T-140-06
CATCH CURVE INC.
Plaintiff
and
PROTUS IP SOLUTIONS INC.
Defendant
AND BETWEEN
PROTUS IP SOLUTIONS INC.
Plaintiff by
counterclaim
and
CATCH CURVE INC. and
J2 GLOBAL COMMUNICATIONS INC.
Defendants by counterclaim
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
Defendant and Plaintiff by counterclaim in actions T-139-06 and T-140-06 is
Protus IP Solutions Inc. (Protus). By motion pursuant to Rule 51 of the Federal
Courts Rules, S.O.R./98-106 Protus Appeals the following two orders made by
Tabib P. on July 4, 2007:
1.
An
order requiring Protus to answer questions not answered during the examination
for discovery of its representative, Mr. Simon Nehme (Order #1); and
2.
Orders
refusing Protus’ motion to compel the Plaintiffs J2 Global Communications Inc.
and Catch Curve Inc. (together the Plaintiffs) to answer questions not answered
on the discovery of their representatives Messrs. Zohar Loshitzer and Michael
McLaughlin (Order #2).
[2]
These
reasons deal with preliminary issues which arose during the hearing of the
appeal and which were argued as a motion (the Motion) instead of the appeal.
BACKGROUND
[3]
In
January 2006, the Plaintiffs began their respective actions (T-139-06 and
T-140-06) against Protus. The Plaintiffs are related companies. The actions have
not been consolidated but are proceeding in tandem as case managed actions.
[4]
The
Plaintiffs allege that Protus has infringed Canadian patent No. 2,232,397 (the
397 Patent) and Canadian Patent No. 1,329,852 (the 852 Patent) with its MYFAX
and VIRTUAL FAX services which, in broad terms, involve software which allows
computers to send and receive faxes. Protus denies the allegations and, in
counterclaims, alleges that the patents in issue are invalid and void on a
number of grounds.
THE PRELIMINARY ISSUES
IN THE MOTION
[5]
The
Plaintiffs objected to Protus’ reliance in its appeal submissions on approximately
twenty cases dealing with the propriety of questions on discovery which,
although they were available, were not cited in the motions before Tabib P. In
a related submission, the Plaintiffs objected to Protus making new arguments on
appeal about the relevance of certain discovery questions.
[6]
The
Plaintiffs relied on Mr. Justice O’Keefe’s decision in Starr v. Canada
(Minister of Indian Affairs and Northern Development) 2001 FCT 338 which
was upheld by the Federal Court of Appeal, 2002 FCA 95.
In that case, Justice O’Keefe was considering an appeal from an order of
Prothonotary Lafrenière which required the plaintiffs to provide particulars of
their Statement of Claim to enable the Defendants to prepare a Statement of
Defence.
[7]
In the motion before
Prothonotary Lafrenière, the plaintiffs had relied on one affidavit (the First
Affidavit) and had made no Charter arguments. However, on the appeal before
Justice O’Keefe, the plaintiffs relied on the First Affidavit plus a second affidavit
sworn by the same deponent and a third affidavit sworn by another witness. They
also made Charter arguments for the first time.
[8]
Justice O’Keefe considered, inter
alia, whether he should receive the two new affidavits and hear the Charter
arguments given that neither the evidence nor the submissions had been before
the Prothonotary.
[9]
Justice O’Keefe declined to
receive the new affidavits as they contained evidence which could have been
placed before the Prothonotary but was not. He also said at paragraph 16:
…The role of this Court when sitting in
appeal of the Prothonotary’s order is to decide whether the issues before the
Prothonotary were properly disposed of by him. The role of the Court is not
to decide some other issues that might have been raised before the Prothonotary
and that might have resulted in a different outcome if the necessary factual
basis was established. That is not to say that a new issue can never be
raised on an appeal. In this case, I am not prepared to entertain these new
arguments on appeal as they could have easily been raised before the Prothonotary
by reference to facts that might have established these arguments.
[my emphasis]
[10]
In
my view, Justice O’Keefe’s decision appears to have been based on the fact that
new evidence was sought to be adduced which underpinned the new arguments and which
could have been presented to the Prothonotary.
[11]
The
Plaintiffs further submit that the Federal Court of Appeal in Starr expanded
Justice O’Keefe’s conclusion to say that issues not argued before a Prothonotary
cannot be considered on appeal even if they are not linked to new evidence and
that, when one considers whether a Prothonotary was “clearly wrong”, the
analysis must be done based only on the evidence, case law and submissions which
were before the Prothonotary. The statement relied on was made by Mr. Justice Strayer
at paragraph 4 of the Court of Appeal’s decision. It reads:
I am satisfied that the prothonotary’s
order cannot be impugned on these grounds as these issues were never clearly
put before him by evidence or argument.
[12]
I
am not prepared to conclude that the Federal Court of Appeal’s decision can read
as broadly as the Plaintiffs suggest. In my view, it is limited to its facts in
which the new arguments required new evidentiary support and neither the
arguments nor the necessary facts had been before the Prothonotary.
[13]
The
present case is quite different from Starr. Protus has not adduced new
evidence to show that the Prothonotary was clearly wrong. It only seeks to rely
on decisions which existed when the Prothonotary’s orders were made but which
were not drawn to her attention. It also wants to make arguments about the
propriety of questions on discovery which were not made before Prothonotary
Tabib. In the present case there is no link between the argument of new cases
and issues and a need for new evidence.
[14]
It
seems to me that a decision of a Prothonotary could be clearly wrong because a
motion was inadequately presented. If, as here, relevant cases were not drawn
to the Prothonotary’s attention and all relevant submissions were not made, the
Prothonotary could not be faulted but might nevertheless be clearly wrong when
all the relevant law was considered.
[15]
I
have therefore decided that the Plaintiffs’ preliminary Motion will be
dismissed and that, in this appeal, Protus will be free to argue that Tabib P.
was clearly wrong based on cases and arguments that were not before her.
However, there will be adverse costs consequences for Protus because litigants
must present thorough submissions on motions before Prothonotaries.
THE MATERIALS FOR THE UPCOMING
APPEAL
[16]
Before
Tabib P., Protus organized the questions for her consideration into schedules
by witness and by topic and this is reflected in her orders.
[17]
For
the purpose of this appeal, Protus again organized the questions at issue into schedules
and also organized the Order #2 questions into categories by topic.
[18]
The
difficulty with this approach is that these schedules and categories are not
the same as the ones before Tabib P. Therefore, it is virtually impossible to
cross-reference the questions being reviewed on appeal with those in Prothonotary
Tabib’s orders.
[19]
For
this reason Protus has agreed that, when this appeal is scheduled for
disposition on the merits, the questions will be presented in the format that
was used before Tabib P.
JUDGMENT
THIS COURT ORDERS AND
ADJUDGES that
(i)
The
Plaintiffs’ Motion raising a preliminary objection is dismissed;
(ii)
The
appeals of orders #1 and #2 are adjourned sine die to be rescheduled;
(iii)
In
view, of Protus’ failure to make full submissions with appropriate case
references before Tabib P., Protus is to pay the Plaintiffs’ party to party
costs of this Motion.
“Sandra
J. Simpson”
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