Date: 20110921
Docket: A-220-10
Citation: 2011 FCA 264
Present: MAINVILLE
J.A.
BETWEEN:
DYWIDAG SYSTEMS INTERNATIONAL,
CANADA, LTD.
Appellant
and
GARFORD PTY LTD.
Respondent
REASONS FOR ORDER
MAINVILLE J.A.
[1]
The
appellant has submitted a motion seeking orders from this Court (a) allowing it
to file an amended Notice of Appeal in this file A-210-10 (the “Bifurcation
Appeal”); (b) ensuring that this appeal will be heard immediately after the
hearing of the appeal in Court file A-421-10 (the “Competition Act
Appeal”); (c) providing a schedule for the perfection of this appeal and of the
Competition Act Appeal; (d) granting such further and other relief as
the Court may permit; and (e) granting costs on the motion.
Procedural history
[2]
The
respondent in this appeal (“Garford”) had filed a Statement of Claim in the
Federal Court seeking, inter alia, various remedies in relation to
alleged patent infringements by the appellant (“Dywidag”) as well as damages
and compensation pursuant to subsection 36(1) of the Competition Act,
R.S.C. 1985, c. C-34. These claims are vigorously contested by Dywidag, which
has also counterclaimed against Garford by notably seeking from the Federal
Court various patent invalidity declarations.
[3]
By
motion dated July 24, 2009, Dywidag sought an order bifurcating the liability
phase of the action from the damages or accounting for profits phase. A
Prothonotary of the Federal Court granted this motion and ordered bifurcation.
Garford appealed this order to a judge of the Federal Court, and on May 28,
2010 Justice Zinn allowed Garford’s appeal and set aside the bifurcation order
for reasons cited as 2010 FC 581. Dywidag now appeals to this Court.
[4]
In
the context of this Bifurcation Appeal, Dywidag brought a motion to stay or to
suspend the order of Justice Zinn until this Court determines the appeal. This
motion was dismissed by Justice Stratas J.A. on September 17, 2010 in reasons
cited as 2010 FCA 232. The combined effects of the orders of Justice Zinn and
of Justice Stratas J.A. are that the action before the Federal Court is not
bifurcated, the liability and remedial issues are to be dealt with together in
the Federal Court, and production and disclosure of documents on all issues
related to the action may proceed in that court pending the disposition of this
Bifurcation Appeal.
[5]
However,
in reasons for judgment dated October 6, 2010 and cited as 2010 FC 996, Justice
Russell of the Federal Court granted Dywidag’s motion for a summary judgment
dismissing that part of Garford’s claims relating to damages and compensation
pursuant to subsection 36(1) of the Competition Act on the basis that
the relevant limitation periods had expired before the action was commenced.
Garford has appealed this judgment to this Court in file A-421-10.
[6]
It
should be noted that on January 4, 2011 the Court was informed that, in order
to facilitate mediation, the parties had entered into a “Litigation Standstill
Agreement” concerning the Federal Court proceedings, the Bifurcation Appeal and
the Competition Act Appeal. It seems that the parties now seek to
proceed with both appeals.
[7]
Though
the proceedings in the Bifurcation Appeal are well advanced (the parties have
already filed their respective memorandum of fact and law), the proceedings in
the Competition Act Appeal are still at a preliminary stage since the
Appeal Book has not been filed.
Submissions on the
motion
[8]
Dywidag
asserts that the Bifurcation Appeal is inextricably linked to the Competition
Act Appeal in light of the following comments of Justice Zinn at paragraph
21 of his reasons:
In my view, only if there was
no claim under the Competition Act would the Prothonotary’s order have
been proper. Accordingly, I am of the view that this appeal must succeed at
this time, as the claims under the Competition Act are part of the
plaintiff’s action and it cannot establish liability without that information.
Consequently, the judgment of Justice
Russell dismissing the Competition Act claims and the eventual judgment
of this Court upholding or dismissing the appeal of that judgment in the Competition
Act Appeal are pertinent factors to be taken into account in an eventual
decision of this Court concerning the Bifurcation Appeal.
[9]
For
its part, Garford argues that there are many issues at stake in the Bifurcation
Appeal other than the Competition Act claims. Garford further argues
that the proposed amendment to the Notice of Appeal would be prejudicial since
it would not have an opportunity to prepare and submit an amended argument
concerning the issues raised by this amendment.
[10]
Garford
also opposes any order providing that both appeals be heard one after the other
since this could delay the hearing of the Bifurcation Appeal. Garford asserts
that it “is possible that the case manager [in the Federal Court] will not
order discoveries to be heard until the Bifurcation Appeal has been disposed of
[…] If hearing the matters together would delay hearing the Bifurcation Appeal,
then the Appeals should not be heard together” (par. 23 of Garford’s written
representations).
Analysis
[11]
The
Court may, on motion, allow a party to amend its Notice of Appeal on such terms
and conditions as will protect the rights of all parties. In general, the Court
will allow such an amendment if it serves the interest of justice and does not
result in an injustice which is not compensable in costs.
[12]
The
judgement of Russell J. dismissing the Competition Act claims before the
Federal Court, as well as the eventual decision of this Court in the Competition
Act Appeal, may affect the determination of the Bifurcation Appeal. Though
there may be other reasons to grant or to dismiss the Bifurcation Appeal which
could be eventually considered by this Court, the Competition Act claims
were certainly a factor in Justice Zinn’s reasons for refusing bifurcation. The
amendment to the Notice of Appeal shall thus be granted. An order will be issued
concurrently with these reasons allowing Dywidag to file within ten days an
amended Notice of Appeal in the Bifurcation Appeal and an amended memorandum of
fact and law. Garford shall have a further ten days to submit an amended
memorandum of fact and law addressing the issues raised by the amendment.
[13]
Rule
105 of the Federal Courts Rules allow the Court to order, in respect of
two or more proceedings, that they be (i) consolidated, (ii) heard together, or
(iii) heard one immediately after the other. The criteria taken into account to
consolidate proceedings are not the same as those taken into account to hear
proceedings together or one immediately after another. Though the Bifurcation
Appeal and the Competition Act Appeal should not be consolidated, it is
logical and efficient that they be heard by the same panel of this Court and
one after the other in light of the possible impact which the eventual decision
of this Court in the Competition Act Appeal may have on the Bifurcation
Appeal.
[14]
I
do not accept Garford’s claim that the possible additional delays entailed by
hearing the appeals one after the other would be prejudicial in that it may
further impede the progress of discoveries in the Federal Court. Justice
Stratas J.A. refused to stay the order of Justice Zinn refusing bifurcation,
the practical effect of which was to allow the production of documents and the
disclosure of information to proceed on all issues in the Federal Court.
Following the judgment of Justice Russell dismissing the Competition Act claims,
there may be practical case management difficulties for producing documents and
disclosing information related to these claims, but these difficulties are to
be addressed through the case management process in the Federal Court.
[15]
I
further note that the Competition Act Appeal is still at a preliminary
stage though it was first initiated by Garford on November 5, 2010, more than
ten months ago. Though Garford’s inaction in perfecting this appeal may be in
part attributable to the “Litigation Standstill Agreement” entered into by the
parties, it is now clear that this appeal should be perfected by Garford
without further delay. Thus, for the purpose of addressing some of Garford’s
concerns resulting from Dywidag’s motion, and for the purpose of facilitating
an expeditious hearing of both appeals, an expedited scheduling order shall be
issued in the Competition Act Appeal ensuring that the appeal shall be
perfected within the next 75 days.
[16]
The
judgment of Russell J. was issued after the Bifurcation Appeal was initiated.
Consequently the amendment to the Notice of Appeal and the requirement that the
Bifurcation Appeal be heard immediately after the Competition Act Appeal
are not the result of any error, mistake or inadvertence of either Dywidag or
Garford. Consequently, I see no reasons to order costs on this motion to either
party.
"Robert
M. Mainville"
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