Docket:
T-2084-12
Citation: 2014 FC 157
Montréal, Quebec, February
20, 2014
PRESENT: The
Honourable Mr. Justice Roy
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BETWEEN:
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UNITED AIRLINES, INC.
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Plaintiff
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and
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JEREMY COOPERSTOCK
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Defendant
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REASONS FOR ORDER AND ORDER
[1]
The Defendant seeks to appeal the ruling of
Prothonotary Richard Morneau of January 3, 2014. The Prothonotary refused
to order the amendment, or the removal, of paragraphs (h) and 31 of the Amended
Statement of Claim which read:
The Plaintiff, United
Airlines, Inc., claims:
(h) damages, profits
and statutory damages, or whichever one or more of those that the Plaintiff may
elect after due inquiry;
31. By reason of the
Defendant’s aforesaid activities, the Plaintiff has suffered and continues to
suffer considerable damages whereas the Defendant has made and continues to
make illegal profits.
[2]
Following examination for discovery of the Defendant,
he was advised on November 25, 2013, with respect to a refusal on the part of
the Plaintiff to answer some questions about the alleged damages, that the Plaintiff “will not be
claiming monetary compensation in the present proceeding for the infringement
of its rights.”
[3]
The Defendant wanted the Statement of Claim to be
amended in order to reflect that the action for copyright infringement and for
trade-mark infringement and passing off would not claim any more for damages.
Evidently, the rest of the action continues on the same basis. Actually, the
Plaintiff continues to claim that damages are incurred. It is rather that it
will not be claiming monetary compensation for those alleged damages.
[4]
Prothonotary Morneau, who is the case management
judge in this matter as per the Order of the Chief Justice of this Court of February
6, 2013, dismissed the Defendant’s request of December 13, 2013, presented
in the form of a request for directions and intervention, to amend the
statement of claim to remove paragraphs (h) and 31 of the Amended Statement of
Claim. He put it in terms of
“… there is no need for an amendment to the plaintiff’s
statement of claim.” This is because counsel for the Plaintiff confirmed by
letter of December 17, 2013, to this Court that “… the Plaintiff made the
decision not to seek monetary compensation at trial, thus narrowing the issues
for trial …”
[5]
Furthermore, Prothonotary Morneau rejected the
request that the Defendant be reimbursed his “costs thrown away.” As I
understand it, these are the costs incurred by the Defendant for the portion of
the examination for discovery dealing with the issue of damages that resulted
in the statement of the Plaintiff that monetary compensation will not be
pursued. The Defendant argues these costs were unnecessarily incurred.
[6]
It is from Prothonotary Morneau’s Order of
January 3, 2014, that appeal is launched pursuant to Rule 51. By Direction
issued on February 6, 2014, Justice Catherine Kane concluded that an oral
hearing, requested by the Plaintiff, was warranted. That hearing took place on
February 18, 2014.
[7]
A Judge of this Court will review de novo an
order of a prothonotary only if the question raised is vital or the order is
clearly wrong. That second branch of the test requires that the exercise of discretion
be shown to be based on a wrong principle or a misapprehension of the facts (Merck
& Co. v Apotex Inc., 2003 FCA 488; [2004] 2 FCR 459).
[8]
Such demonstration by the Defendant has not been
made. Even if I were to review de novo the matter, I would have reached the
same conclusion as that of the Prothonotary and would have exercised the
discretion as he did.
[9]
Contrary to the Defendant’s assertion that he
was merely seeking a direction from Prothonotary Morneau, he was actually
seeking his intervention with respect to these issues - an amendment of the
amended statement of claim, an award of costs (what he called “costs thrown
away”) and the use of a particular file format. The Defendant was successful on
the third request. As for the first two, he presented his arguments. The
Prothonotary responded to the request for intervention sought by the Defendant.
[10]
The Prothonotary’s order accepts the Plaintiff’s
position that the matter will be addressed in the Plaintiff’s pre-trial
conference memorandum. Indeed, the Plaintiff has not reneged on its response to
questions on discovery about more specificity about damages by confirming that
it will not be claiming monetary compensation; it repeated that undertaking on
numerous occasions at the hearing. The Prothonotary agreed that the Plaintiff
would not be subjected to costs thrown away since “it is the conduct and the
answers provided during the discovery of the Defendant that led the Plaintiff
not to seek further damages under the claim.” Put another way, there were no
costs thrown away.
[11]
I cannot see how the issue raised can be
considered to be vital to the final issue of the case. This issue is at best
peripheral at this stage (Seanautic Marine Inc. v Jofor Export Inc., 2012
FC 328). Indeed, the Defendant does not seem to rely on that branch of
the test and rather focuses on the order being clearly wrong because based on a
wrong principle or based on a misapprehension of the facts. But that is not a
light burden, especially in view of the case law that confirms the
reluctance to interfere with decisions on non-vital issues made by a
prothonotary acting as the case management judge (Mushegowuk Council v Canada
(Attorney General), 2011 FCA 133; Apotex Inc v Lundbeck
Canada Inc., 2008 FCA 265; Constant v Canada, 2012 FCA 89).
[12]
I fail to see what principle has been infringed
or how it can be said that the Prothonotary misapprehended the facts. Arguing
that having paragraphs (h) and 31 creates confusion and leaves uncertain the
case the Defendant must meet does not have an air of reality. If that is the
“principle” that the Prothonotary got wrong, the Defendant misses the mark. As
for the misapprehension of the facts, the Defendant argues that the Prothonotary
did not have a transcript of the examination for discovery. The Defendant does
not explain how that could constitute a misapprehension of the facts in view of
the very simple issue the Prothonotary had to decide at this stage in the
proceedings.
[13]
On the issue of the wrong principle, the Defendant
has tried to read Rule 182 (claims to be specified) together with Rule 221
(motion to strike) to argue that emerges a principle that claims must be
amended once an element of the claim will not be pursued. Not only did the
Prothonotary’s decision not consider a motion to strike, which was not made in
the first place by the Defendant, but no authority was submitted that would
suggest that such principle exists. The Prothonotary cannot have been operating
on a wrong principle if that principle does not exist. The Defendant argues
that the statement of claim ought to have been amended. That wish however does
not create an obligation.
[14]
On the issue of costs incurred by the Defendant,
he claims that Rule 402 of the Rules of the Federal Courts allows for
costs to be awarded in his favour. In his written representations, the Defendant
referred to the intent of the rule while he spoke of the use of the rule “by
way of an analogy” in his reply of January 31, 2014. On its face, the Rule
speaks of actions, applications, appeals and motions which have been
discontinued or abandoned. Obviously, the action has not been discontinued
(Rule 165). Rule 402 finds no application here, by analogy or otherwise. More
importantly, discovery will serve the purpose of making the trial process more
efficient by defining the issues and, hopefully, winnowing down to the issues
that deserve to be tried (Bell Helicopter Textron Canada Ltd. v Eurocopter,
2010 FCA 142). If Rule 402 were to be applied as proposed by the Defendant,
this could only create a disincentive to use the examination for discovery to pare
down issues.
[15]
Had I found that a review was warranted, I would
still have concluded that the appeal must fail. I share the view of the
Prothonotary that an amendment of the Plaintiff’s statement of claim is not
needed in view of the concession made by the Plaintiff on the record and on
numerous occasions. There is no confusion and I see no prejudice suffered by
the Defendant. He actually benefits from the conclusion made on the record that
no monetary compensation will be sought in spite of the damages the Defendant
claims it has suffered. It is worth noting that the only concession made by the
Plaintiff is that it will not seek to quantify the damages suffered, and thus
no monetary compensation will be sought, but will continue to argue that it
incurred damages, as it states that it is an essential element of its passing off
action. The concession, while important to the Defendant, does not detract from
the view taken by the Plaintiff that it must still plead damages.
[16]
As for the costs incurred by the Defendant as a
result of his examination for discovery, they have not been unnecessarily
incurred because of an error, for instance. The action has not been
discontinued. I take it that the Prothonotary’s order is to refuse to subject the
Plaintiff to “costs thrown away” at this stage. Were the Defendant to prevail
in the end with costs, these costs, like any others, could be awarded at the
discretion of the trial judge.
[17]
As a result, the appeal is dismissed.
[18]
The parties each seek their costs on this
appeal, with the Defendant adding that in case he is not successful, costs should
not be awarded against him because the Prothonotary, in his view, has not given
sufficient reasons and he raised a novel point of law in arguing that a
“withdrawn/abandoned claim” should not be allowed to stand.
[19]
In my view, costs could be awarded here in order
to sanction a step in the proceedings that was unnecessary and improper. The justification
offered by the Defendant does not satisfy the Court. The question is far from
vital to the final issue of the case and it is quite obvious that the discretion
of the case management judge, who has been involved in this case for one year,
was not based on a wrong principle or a misapprehension of the facts which
were, after all, remarkably simple. Had this litigation been permitted to
follow its course, the issue of the damages would have been reached in due
course with the Plaintiff committing on the record to declining to claim
monetary compensation. The Plaintiff asserts that it would have been confirmed,
once again, at the stage of the pre-trial conference and I have no reason to
doubt that assertion.
[20]
The Plaintiff has suggested a lump sum of
$2,000. In my view, that would be too punitive. After all, the only thing that
is before this Court is the appeal of the Prothonotary’s order, not more
generally how this litigation is conducted. An amount that would signal that
the court process should not be used lightly would have been more appropriate. On
the other hand, a matter that could have been decided, as requested by the Defendant,
on the basis of written representations necessitated an oral hearing, as
demanded by the Plaintiff. In the circumstances, I conclude that no order for
costs should be made.
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