Date: 20060912
Docket: T-432-05
Citation: 2006 FC 1085
Montréal, Quebec, the 12th day of September 2006
Present: Richard Morneau, Prothonotary
BETWEEN:
IPL
INC.
Plaintiff/
Defendant by Counterclaim
and
HOFMANN
PLASTICS CANADA INC.
Defendant/
Plaintiff by Counterclaim
REASONS FOR ORDER AND ORDER
[1]
This is a motion by the plaintiff and defendant by counterclaim
(hereinafter IPL) for the production of audited financial statements and
monthly reports of operating costs (the Documents) prepared by the defendant
and plaintiff by counterclaim (hereinafter Hofmann) in the course of its
business.
[2]
It must be said at the outset that this motion was made in an action for
patent infringement and invalidity.
[3]
Early in the dispute and before the discoveries, IPL elected to seek the
profits that Hofmann has made.
[4]
By motion under section 107 of the Federal Courts Rules (the
Rules), Hofmann requested that the issues of liability and profits be
determined separately.
[5]
This motion under section 107 has yet to be heard on the merits.
Nonetheless, IPL proceeded to cross-examine the deponent of the affidavit filed
by Hofmann in support of its motion (the affidavit of Paul Kalia).
[6]
Paul Kalia is the Vice-President of Hofmann. In the first seven
paragraphs of his affidavit, Mr. Kalia attempts to establish that Hofmann
manufactures a wide range of products, including, but not limited to, the
alleged infringing products. According to Mr. Kalia’s allegations, it is
extremely difficult, if not impossible, to isolate the various production
parameters and the costs specifically associated with the alleged infringing
products.
[7]
In paragraph 8 of his affidavit, Mr. Kalia concludes:
In view of what I set out
above, for at least the following types of expenses it would be extremely difficult
or impossible to separate out the costs that were specifically associated with
tamper-evident pails and containers, and even more difficult to separate out
the costs associated with a specific line of tamper-evident pails and
containers: . . .
[8]
It appears that the overall purpose of this affidavit is to establish
that it will be impossible or very difficult to adduce evidence of the profits
specifically associated with the infringing products.
[9]
On August 15, 2006, Mr. Kalia was cross-examined on his affidavit.
[10]
During the cross-examination, Mr. Kalia explained several times and in
several different ways why he finally arrived at the conclusion set out in
paragraph 8 of his affidavit.
[11]
At a certain point, in an apparent attempt to verify the truth of Mr. Kalia’s
allegations, a legitimate goal in itself initially, IPL focused its questions
on the basis for halting the valuation of the inventories for purposes of the
audited financial statements. Mr. Kalia answered that this valuation was
established on the basis of monthly reports of operating costs.
[12]
IPL then tried to obtain a copy of those financial statements and
monthly reports. These Documents are not mentioned in or attached as exhibits
to the affidavit of Mr. Kalia. Hofmann objected to this request.
[13]
I am allowing Hofmann’s objection and, therefore, dismissing IPL’s
motion. First, I find that the following instructive comments by my colleague
Tabib in Autodata Ltd. v. Autodata Solutions Co., [2004] F.C.J. No. 1653
and the case law cited therein are perfectly applicable to the case at bar,
especially since IPL’s motion is made in the context of another motion
(i.e. Hofmann’s motion under section 107), and a motion must
be treated in an even more summary fashion than an application for judicial
review:
19
However, a cross-examination on affidavit is not a discovery, and an
application is not an action. An application is meant to proceed expeditiously,
in summary fashion. For that reason, discoveries are not contemplated in applications.
Parties cannot expect, nor demand, that the summary process mandated for
applications will permit them to test every detail of every statement made in
affidavits or in cross-examinations against any and all documents that may be
in the opposing party's possession. If a party is not required to
"accept" a witness' bald assertion in cross-examination, it is
however limited in its endeavours to test that assertion to the questions it
may put to the witness and the witness' answers in the course of the cross-examination.
To the extent documents exist that can buttress or contradict the witness'
assertion, production may only be enforced if they have been listed, or
sufficiently identified, in a direction to attend duly served pursuant to Rule
91(2)(c) (see Bruno v. Canada (Attorney General), [2003] F.C.J. 1604). I
reiterate: a cross-examination on an affidavit is the direct testimonial
evidence of the witness, not a discovery of the party.
[14]
Second, after reviewing the complete transcript of Mr. Kalia’s
cross-examination, I find that the request by IPL for production of the
Documents is, in large part, a fishing expedition, and that IPL’s obtaining the
Documents would, in a way, undermine the merits of the motion Hofmann will be
making under section 107.
[15]
For these reasons, this motion by IPL is dismissed, with costs in the
cause.
ORDER
THIS COURT ORDERS that the motion by IPL is
dismissed, with costs in the cause.
Richard
Morneau
Certified true
translation
Mary Jo Egan
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