Date: 20070725
Docket: A-235-07
Citation: 2007 FCA
259
Present: SHARLOW
J.A.
BETWEEN:
POLARIS INDUSTRIES INC., LEISURE MART AND
RV CANADA CORPORATION
doing business as POWERSPORTS & RV CANADA,
861073 ONTARIO LTD. doing business as WAYNE’S WORLD,
RICK’S PERFORMANCE INC., ELITE
PERFORMANCE PRODUCTS (LONDON) INC.,
FOREST FARM EQUIPMENT LTD., 1070678
ONTARIO INC. doing business as
SPOILED SPORTS, ELK ISLAND SALES INC.,
CYCLE WORKS CALGARY LTD.,
YELLOWHEAD POLARIS INC. doing business as
PARKLAND SLED & ATV,
LETHBRIDGE HONDA CENTRE LIMITED,
COUNTRYSIDE MOTOR SPORTS INC.,
THUNDER CITY POWER & LEISURE LTD.,
ROND’S MARINE LTD., RANDY
GUDMUNDSON doing business as RANDY’S TIRE
& REPAIR, SEA TO SKY
MOTORSPORTS INC., KOOTENAY SLEDS &
WHEELS INC., CYCLE NORTH
ENTERPRISES LIMITED, SCHULTZ MOTORSPORTS
INC., 363337 B.C. LTD. doing
business as M & M PERFORMANCE, JAMES
VINCENT MARK, TREVOR JAMES MARR, K.V. AUTO & TRUCK CENTRE INC., and SUNSET
AUTO SALES LIMITED
Appellants
(Defendants)
and
VICTORY CYCLE
LTD.
Respondent
(Plaintiff)
Dealt with in writing without appearance
of parties.
Order delivered at Ottawa, Ontario, on July 25, 2007.
REASONS FOR
ORDER BY: SHARLOW
J.A
Date: 20070725
Docket: A-235-07
Citation: 2007 FCA 259
Present: SHARLOW J.A.
BETWEEN:
POLARIS INDUSTRIES INC.,
LEISURE MART AND RV CANADA CORPORATION
doing business as POWERSPORTS & RV CANADA,
861073 ONTARIO LTD. doing business as WAYNE’S WORLD,
RICK’S PERFORMANCE INC., ELITE
PERFORMANCE PRODUCTS (LONDON) INC.,
FOREST FARM EQUIPMENT LTD., 1070678
ONTARIO INC. doing business as
SPOILED SPORTS, ELK ISLAND SALES INC.,
CYCLE WORKS CALGARY LTD.,
YELLOWHEAD POLARIS INC. doing business as
PARKLAND SLED & ATV,
LETHBRIDGE HONDA CENTRE LIMITED,
COUNTRYSIDE MOTOR SPORTS INC.,
THUNDER CITY POWER & LEISURE LTD.,
ROND’S MARINE LTD., RANDY
GUDMUNDSON doing business as RANDY’S TIRE
& REPAIR, SEA TO SKY
MOTORSPORTS INC., KOOTENAY SLEDS &
WHEELS INC., CYCLE NORTH
ENTERPRISES LIMITED, SCHULTZ MOTORSPORTS
INC., 363337 B.C. LTD. doing
business as M & M PERFORMANCE, JAMES
VINCENT MARK, TREVOR JAMES MARR, K.V. AUTO & TRUCK CENTRE INC., and SUNSET
AUTO SALES LIMITED
Appellants
(Defendants)
and
VICTORY
CYCLE LTD.
Respondent
(Plaintiff)
REASONS FOR ORDER
[1] The
appellants Polaris Industries Inc., Leisure Mart and RV Canada Corporation and
others (to be referred to collectively as “Polaris”) have appealed the
interlocutory order of Justice Kelen dated May 1, 2007 (2007 FC 466). Before me
is a motion by Polaris to stay the order of Justice Kelen pending the
disposition of the appeal. The respondent Victory Cycle Ltd. (“Victory”)
opposes the motion for a stay.
[2] Victory
is suing Polaris in the Federal Court for trademark infringement in relation to
the registered trademark “VICTORY CYCLE”. The statement of claim was issued on
December 15, 2005 and served on all defendants by February 7, 2006. In March
of 2006, Polaris demanded particulars. Victory responded to that demand in July
of 2006. Polaris took the position that the response was not adequate and filed
a motion for particulars and to strike the statement of claim. Before that
motion was heard, the Federal Court issued a notice of status review.
[3] The
motion and the submissions on the notice of status review were heard by
Prothonotary Milczynski on February 5, 2007. She concluded that Polaris has all
the material facts necessary to plead, and on that basis she dismissed the
motion for particulars. Her order dismissing the motion is dated April 13,
2007. Polaris appealed that order. The appeal was dismissed by Justice Snider
on May 29, 2007. Polaris has appealed the order of Justice Snider (A-276-07).
That appeal is pending.
[4] With
respect to the status review, Prothonotary Milczynski ordered that the action
proceed as a specially managed proceeding and ordered the parties to provide a
consent timetable. The parties could not reach agreement because Polaris wished
to conduct examinations for discovery before filing their statement of defence.
Polaris took the position (and still takes the position) that it is entitled as
of right to discoveries before pleading (Rule 236(2) of the Federal Courts
Rules).
[5] The
Rule 236(2) issue was one of the items discussed in a case management
conference with Prothonotary Milczynski on March 5, 2007. She directed that
Polaris either serve and file its statement of defence or serve its motion
record to strike the statement of claim by March 23, 2007. She also directed a
timetable for the remaining steps to be taken, up to and including the request
for a pre-trial conference.
[6] Polaris
brought a motion in the Federal Court for an order varying the timetable set by
Prothonotary Milczynski. That motion was heard by Justice Kelen on April 23,
2007. He dismissed the motion on May 1, 2007. That is the order under appeal in
the matter before me.
[7] Meanwhile,
the Federal Court proceedings continue. Polaris filed a motion in the Federal
Court for an order extending the time to file their statement of defence until
10 days after the disposition of their appeal. That motion resulted in an order
dated June 11, 2007 requiring Polaris to file its statement of defence by July
13, 2007 (last Friday). I understand that there is another motion pending in
the Federal Court for a further extension of time.
[8] Before
dealing with the stay motion, I must address the request of Polaris to
disregard the response of Victory to the stay motion because it is supported by
an affidavit of a lawyer who practices in association with Victory’s solicitor
of record, and is based in part on information and belief where the source of
the information is Victory’s solicitor of record. Polaris argues, on the basis
of Cross-Canada Auto Body Supply (Windsor) Limited et al. v.
Hyundai Auto Canada, 2006 FCA 133, that the affidavit is
improper and should be disregarded, and also suggests that new counsel should
be appointed for Victory. The affidavit to which Polaris objects states only
uncontested facts about the proceedings in the Federal Court and is appropriate
in all respects. It bears no resemblance to the affidavits in the Cross-Canada
case, which were affidavits of counsel or employees of counsel dealing with
contentious facts in the substantive dispute between the parties. I will not
disregard the affidavit or entertain the suggestion that new counsel should be
appointed for Victory.
[9] In determining whether to grant a stay of an
order pending appeal, the three questions to be asked are (1) whether the
appeal of Polaris raises a serious
issue, (2) if so, whether Polaris will suffer irreparable harm if the stay is not granted and its appeal
succeeds, and (3) if so, whether the
balance of convenience favours granting the stay.
[10] As
to the first question, Victory properly concedes that there is a serious issue
and that the appeal is not frivolous or vexatious. The first test is met.
[11] Polaris
argues that it will suffer irreparable harm if the stay is not granted and its
appeal succeeds. This argument is based on the premise that a defendant has an
unqualified right under Rule 236(2) to conduct its examinations for discovery
before filing its statement of defence. Because the order under appeal requires
Polaris to file its statement of defence without having conducted its
examinations for discovery, Polaris argues that it will have lost its Rule
236(2) right unless the order is stayed.
[12] I
am not persuaded that in the circumstances of this case the filing of a
statement of defence can amount to irreparable harm. The right given to
defendants by Rule 236(2), whether absolute or not, is a procedural right, and
there are few procedural errors that cannot be remedied adequately.
[13] In
this case the action is already subject to case management. If the appeal of
Polaris were to result in a decision that the right of a defendant under Rule
236(2) is absolute and unqualified, as Polaris argues, the order requiring the
statement of defence to be filed would be set aside. The case management judge,
if persuaded that an incorrect application of Rule 236(2) Polaris has caused
prejudice to Polaris, has the discretionary authority to permit the statement
of defence to be withdrawn and to make the necessary changes in the timetable
for the pre-trial proceedings.
[14] In
the absence of irreparable harm, there is no basis for granting a stay. The
motion of Polaris is dismissed. Victory is entitled to its costs of this motion
regardless of the outcome of the appeal.
“K.
Sharlow”
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