Date: 20010910
Docket: T-1294-99
Neutral citation: 2001 FCT 1005
BETWEEN:
ROBERT MONDAVI WINERY
Applicant
- and -
SPAGNOL'S WINE & BEER MAKING SUPPLIES LTD.
Respondent
REASONS FOR ORDER
NADON J.
[1] This motion by the respondent Spagnol's Wine and Beer Making Supplies Ltd., is an appeal from the decision of Prothonotary Lafrenière, dated July 13, 2001, pursuant to which he granted leave to the applicant, Robert Mondavi Winery, to serve and file the Supplementary Affidavit of Michael Beyer, sworn on March 21, 2001.
[2] I need not set out the relevant facts, as they are thoroughly summarized and reviewed by the learned prothonotary in his Reasons for Order.
[3] The proceedings giving rise to this litigation are expungement proceedings commenced by the applicant as a result of its failure to register its trademark WOODBRIDGE for wine. The Trademarks Office examiner refused registration of the applicant's trademark on the ground that the mark was confusing with that of the previously-registered trademark of the respondent, WOODBRIDGE ESTATE AND DESIGN. That trademark was registered on November 25, 1994. The respondent claims use of its trademark since 1991. As to the trademark WOODBRIDGE for wine, the applicant submits that it first sold wine in Canada in association with the trademark WOODBRIDGE in August 1989.
[4] For the reasons that follow, this appeal will be dismissed.
[5] The prothonotary's decision, which the respondent attacks in this appeal, dealt with a motion by the applicant, under rule 84(2) of the Federal Court Rules, 1998[1], for an order granting the applicant leave to serve and file the additional affidavits of Michael Beyer and Ellice Sanguinetti. The learned prothonotary, by his order of July 13, 2001, granted leave with respect to the Beyer affidavit, but refused leave in respect of the Sanguinetti affidavit. This appeal by the respondent is directed at the prothonotary's order regarding the Beyer affidavit.
[6] Rule 84(2) has been considered, on a number of occasions, by this Court. I will refer to two decisions of this Court. Firstly, in Ruggles v. Fording Coal Ltd. et al. (1999), 168 F.T.R. 106 (F.C.T.D.), Prothonotary Hargrave made, at pages 108-109, the following remarks regarding the test to be met under rule 84(2):
[5] Rule 84(2) provides that:
"A party who has cross-examined the deponent of an affidavit filed in a motion or application may not subsequently file an affidavit in that motion or application, except with the consent of all other parties or with the leave of the court.
This provision is similar to that found in the previous Federal Court Rules As rule 332.1(6).
[6] The law as to filing of supplemental affidavit material after cross-examination is set out by Mr. Justice Dubé in Guylaine Coté v. The Queen, an unreported 27 May 1992 in action T-1206-89, Mr. Justice Dubé referred to rule 332.1(6), considered various earlier cases and concluded that three tests emerged from that case law, tests to be satisfied in order to obtain the leave of the court:
(1) was the information in the affidavit available before the cross-examination?
(2) are the facts established by the supplementary affidavit relevant to the case?
(3) might the filing of the supplementary affidavit cause serious prejudice to the other parties?
The way in which these tests are phrased does not indicate whether one or all must be satisfied, however it is clear from the decision that all of these elements must be considered and balanced. I now turn to the affidavits in question. [Emphasis added]
[7] The Jones and Noonan affidavits, which the defendants seek to file in response to and after cross-examination of Mr. Ruggles on his affidavit, do not meet all of the tests set out Coté v. the Queen (supra). Mr. Ruggles, in his affidavit material, set out that the designation of Ms. Paulhus, as a defendant, was as a result of her name appearing on the copies of the material which he had prepared. On cross-examination Mr. Ruggles alluded to conversations which he had had with Messrs. Jones and Noonan, after he had seen the infringing material, to the effect that he wondered what Ms. Paulhus was doing using his material. The Jones and Noonan affidavits are brief and carefully worded. Mr. Jones, while agreeing that Mr. Ruggles had spoken to him about the use by Fording of the material, denies that Ms. Paulhus' name came into the conversation and further deposes that he said nothing to indicate that Ms. Paulhus was responsible for the copying or preparation of the video in question. Mr. Noonan says he has no recollection of any conversation, but then goes on to say, and here is an inconsistency, that he definitely did not discuss Judy Paulhus' involvement in the preparation or use fo the video. I now turn to the application of the tests set out in Coté.
[8] Beginning with the first branch of the test, the material in the affidavits was always available and might have been a part of the original motion for the costs of Judy Paulhus. Second, the affidavits are only marginally useful, for there is no reason, based on what is set out in the affidavits, why Judy Paulhus ought not to have initially been made a defendant. Indeed, given that Ms. Paulhus' name appeared on the copied material, together with the possibility that she might have been acting independent of Fording, it could well have been negligent not to name her as a defendant and to leave her as such until it turned out that Fording would be responsible for her name appearing on the material and her use of the material in the sale of Fording's condominium units. Third, as to prejudice, the affidavits of Messrs. Jones and Noonan, would have to be tested by cross-examination to determine several factors, including whether the conversations alleged by Mr. Ruggles, but denied by Messrs. Jones and Noonan, took place in some other time frame, for the subject matter, said by Mr. Ruggles to form a part of those conversations, would have been a very natural subject matter of conversation between Mr. Ruggles and Fording employees. Further cross-examination and further affidavits would add little to the real issue to be determined, the costs to which Ms. Paulhus is entitled.
[9] With all of this in mind, particularly the minimal impact of the Jones and Noonan affidavits and given the relatively small amount involved, the defendants do not have leave to file the Jones and Noonan affidavits.
[7] Secondly, in Salton Appliances (1985) Corp. et al. v. Salton Inc. (1999), 4 C.P.R. (4th) 491 (F.C.T.D.), Lemieux J. also had occasion to examine rule 84(2). After citing the rule, the learned judge opined as follows, at pages 496, 497 and 498:
[12] Rule 84(2) found its place in the former Rules as rule 332.1(6). The former Rules also contained rule 332.1(7) (which is not contained in the current Rules) which provided that "[T]he Court may grant leave to a party to file an affidavit in a motion after the party cross-examines the deponent of an affidavit where the Court is satisfied that the party should be allowed to respond to a matter raised in the cross-examination". Current rule 39.02(2) of the Ontario Rules of Procedure, R.R.O. 1990, Reg. 194, is framed in terms similar to former rule 332.1(7).
[13] I also note as background that when the new Rules came into force, Rule 312, in the context of application, now provides for additional affidavits with leave from the Court. The two new Rules 84 and 312 should, in my view, yield similar interpretations.
[14] Taking all of the factors, noted below, into account I am of the view the plaintiffs should have leave to file t he further affidavit of Jerry Solomon provided that he forthwith be available for cross-examination.
[15] I am satisfied the issue of whether the defendant sold to Salton Canada warming trays with glass tops without any logo is highly relevant, is in the interest of justice and will be beneficial to the Court in determining whether an interlocutory injunction should be granted.
[16] I am satisfied Rule 84(2), read in its context and against the history of the former Rules, is designed to deal with matters that arise during cross-examination for which there is a need to address by way of further affidavit with leave of the Court.
[17] The cases decided by this Court and by the Ontario Courts recognize the relevancy of the preposed affidavit, absence of prejudice to the opposing party, assistance to the Court, and the overall interest of justice are relevant factors to be taken into account in deciding whether leave to f8le a further affidavit should be granted. [See Hiram Walker Consumers Home Ltd. v. Consumers Distributing Co., court file T-4539-80 (F.C.T.D.) [reported 63 C.P.R. (2d) 93]; Gingras v. Canadian Security and Intelligence Service (1987), 19 C.P.R. (3d) 283 (F.C.T.D.); Bayer AG v. Canada (Minister of Health) (1994), 83 F.T.R. 318, 58 C.P.R. (3d) 377 (F.C.T.D.); Eli Lilly v. Apotex Inc. (1997), 144 F.T.R. 189, 77 C.P.R. (3d) 154 (F.C.T.D.).
[18] As I view the law on the point in this Court there is the additional requirement as to the non-availability of the material in the proposed affidavit prior to cross-examination; a supplementary affidavit cannot be a substitute for putting available information to a deponent on cross-examination. A further affidavit is not designed to repair answers which cross-examining counsel wishes he did not get. Moreover, normally, parties are obliged to disclose all available information before cross-examination so as to avoid splitting the evidence.
[19] The defendant, in my view, will not be prejudiced because the motion for interlocutory injunction is to be heard only at the end of May 2000, and there is ample opportunity for the defendant to move the Court and for the Court to act should it be in the interest of justice.
[20] Finally, I am satisfied that the plaintiffs met the test of a matter arising during cross-examination which could not reasonably be foreseen with reasonable diligence. It was only during cross-examination that Mr. Cruz identified the warming tray with the MAXIM logo sold to Weil as being identical to the warming trays sold to Salton Canada. It must also be kept in mind that Mr. Cruz had previously stated in his affidavit he did not have any backup material. In addition, it was only during cross-examination the plaintiffs learned the defendant only produced warming trays with logos. In my view, this was a new information of relevance arising during cross-examination. (See Merck Frosst Canada Inc. v. Canada (Minister of Health) (1998), 229 N.R. 33, 82 C.P.R. (3d) 417 (F.C.A.))
[8] Finally, I would like to refer to the decision of Quinn J. of the Ontario Court (General Division) in Nolan v. Canada (Attorney General) (1997), 38 O.R. (3d) 722 (Ont. Ct. (Gen Div)). The rule at issue before Quinn J. was rule 39.02(2) of the Ontario Rules of Procedure, which reads as follows:
39.02 (2) A party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit or a transcript of an examination conducted under rule 39.03.
[9] After noting that a number of his colleagues had interpreted rule 39.02(2) as requiring, as a threshold, that the affidavit sought to be adduced in evidence had to contain information which had been raised for the first time in cross-examination, Quinn J. proceeded to explain why he could not agree with that view of the rule. At pages 727-729, he puts his arguments in the following terms:
I must say, with the greatest of respect to the learned jurists who decided the cases just mentioned, that I find myself in disagreement with the restrictive interpretation they have given to the rule. Rule 39.02(2), by its ordinary meaning, does not require that the matter contained in the affidavit sought to be delivered must have been introduced for the first time during the cross-examination. Put another way, the rule does not preclude such an affidavit addressing a matter that was placed in issue prior to the cross-examination. The rule speaks of being permitted to respond to any matter "raised at the cross-examination". Had it been intended to limit the operation of the rule to "new" matters raised on the cross-examination, that easily could have been accomplished by the drafters of the rule.
The restrictive interpretation of the rule reflected in the foregoing line of cases can lead to unfairness (by punishing a litigant for the oversight of his or her counsel) and injustice (by excluding evidence which might be of assistance to the court in arriving at a just determination of the matter in dispute). Obviously there are sound policy reasons why the barrage of affidavits, which unfortunately characterize many motions and applications, should be controlled; however, an unduly restrictive interpretation of rule 39.02)2) is an inappropriate solution.
In my view, the rule should be given its ordinary meaning. The question to be asked is this: Was any matter raised, on the cross-examination of an affidavit delivered by an adverse party, to which the moving party ought now to be permitted to respond? The answer to that question requires a consideration of the following:
1. Is the matter that was "raised on the cross-examination" relevant to the litigation?
2. Is the affidavit, sought to be filed, itself responsive to the matter that was raised on the cross-examination?
3. If the leave sought is granted, will it operate unfairly against the adverse party? In my view, "unfairness" should be equated with non-compensable prejudice. On a motion of this variety costs should serve as the leavening; in addition to the costs of the motion in which leave is sought, if an adjournment of the substantive motion or application is required, there would be the costs thrown away, as well as the costs associated with preparing responding affidavits and conducting additional cross-examinations. Preferably the costs should be fixed and payable forthwith. Where the leave is sought to cure some blatant shortcoming in the efforts of counsel, there may be instances justifying his or her personal liability for all or a part of the costs.
4. If the leave sought is granted, what additional terms (apart from costs and an adjournment), if any, are just?
The subject-matter of the affidavit which the moving party at bar desires to deliver is highly relevant to the issues in the litigation. Even if that subject-matter was touched upon in affidavits delivered prior to the cross-examinations, it is now raised with a new focus: a new perspective. In my view, it is important, for the just determination of the issues in the litigation, that this subject-matter be thoroughly addressed by means of additional affidavit evidence and further cross-examinations, if necessary. With such a result, there is no unfairness, as I have defined that term, to the adverse party.
[10] In his written submissions, and before me at the hearing, counsel for the applicant argued that this appeal was based on the erroneous proposition that if information was available before cross-examination, this Court was barred from exercising its discretion to allow a party to file an affidavit containing that information after cross-examination had taken place. I agree entirely. I am satisfied that the rule, as interpreted by this Court, requires the judge or the prothonotary to consider and balance the following factors in deciding whether leave ought to be granted in the circumstances of the case. Firstly, the Court must ask itself whether the facts set out in the further affidavit are relevant to the litigation. Secondly, the Court must ask itself whether the information proposed to be adduced in the further affidavit was available before cross-examination, and finally, the Court must ask itself whether the filing of the supplementary affidavit will cause prejudice to the other side.
[11] The prothonotary had to consider all of the above factors and after balancing them, he had to decide whether leave ought to be granted. In the circumstances, he came to the conclusion that leave in regard to the Beyer affidavit was appropriate. The respondent has not convinced me that in reaching that conclusion, the prothonotary either failed to exercise his discretion judicially or made an error of law.
[12] With respect to the first factor (relevancy), the learned prothonotary noted that the respondent did not dispute that the proposed evidence was relevant to the central issue of the expungement proceedings.
[13] With respect to the second factor (availability of the information prior to cross-examination), the prothonotary found that the information in question had been available to the applicant prior to cross-examination. At paragraph 11 of his Reasons, the prothonotary states:
[11] The Applicant acknowledges that the supplementary affidavits contain evidence which was available prior to cross-examination. Clearly the decision by counsel to withhold the information, on the expectation that it could possibly come out on cross-examination, was wrong. This is a significant factor which militates against granting the relief sought by the Applicant.
[14] With respect to the third factor (prejudice to the other side), the prothonotary concluded that any prejudice suffered by the respondent could be remedied by an appropriate order with respect to further cross-examination and the opportunity to adduce further evidence, and an appropriate order as to costs. At paragraph 12 of his Reasons, the learned prothonotary states:
}12] Dealing next with the third factor, the parties have yet to file their respective records in this proceeding. Any procedural unfairness that the Respondent may have suffered can be addressed by allowing the Respondent to conduct further cross-examination and to adduce further evidence, coupled by an appropriate allowance for costs thrown away.
[15] I should perhaps here refer to the decision of Sharlow J. (as she then was) in J.L. De Ball Canada Inc. v. 421254 Ontario Ltd. et al. (1999), 5 CPR (4th) 352. In that case, the plaintiff objected to the defendants' attempt to adduce further evidence after cross-examination. In concluding that the evidence objected to ought to be admitted, Madam Justice Sharlow, at pages 360-361, stated:
I have concluded that all the evidence adduced by the Defendants should be admitted including the affidavit of Mr. Vettesse sworn September 28, 1999. The Plaintiff's concerns as to adequate and late disclosures are valid, and are not excused by the Defendants' professed mistakes or misunderstandings. However, the remedy for the Defendant's failure to meet its disclosure obligations is not [sic] exclude the evidence in this motion, but to make an appropriate allowance in an order for costs.
[16] That is precisely what Prothonotary Lafrenière did in the matter before him. His Order, as it appears at paragraphs 17 and 18 of his Reasons, reads as follows:
[17] The Applicant is granted leave to serve and file the additional affidavit of Mr. Michael Beyer, attached as Schedule A to the Notice of Motion.
[18] The Respondent is granted leave:
(a) to file further affidavit evidence in response to the additional affidavit of Mr. Michael Beyer referred to in paragraph 1 above; and
(b) to cross-examine Mr. Beyer in respect of such affidavit.
[17] Further, he made an order for costs, in the following terms:
[19] Costs incurred in respect of:
(a) the preparation for, conduct of, any travel expenses and other reasonable and related expenses and disbursements incurred in respect of the cross-examination of Mr. Beyer;
(b) the preparation and filing of additional affidavit evidence including, if deemed appropriate by the Respondent, additional expert evidence and all other reasonable and related expenses and disbursements; and related expenses; and
(c) the preparation of the Respondent's affiants for and attendance at cross-examination, if any, and any other reasonable and related expenses and disbursements;
shall be payable to the Respondent on a solicitor and client basis in any event of the cause.
[20] Costs of this motion are fixed at $3,000.00, inclusive of disbursements, payable to the Respondent in any event of the cause.
[18] In my view, the conclusion reached by the prothonotary that leave ought to be granted to the applicant in regard to the Beyer affidavit, coupled with leave being granted to the respondent to file further affidavits in response to the supplementary affidavit of Mr. Beyer and the right given to the respondent to cross-examine Mr. Beyer on his further affidavit, is unassailable.
[19] The respondent raised a number of additional points, which I will now address.
[20] Firstly, the respondent argues that the prothonotary failed to apply the decision rendered by Heneghan J. on January 11, 2001. According to the applicant, Madam Justice Heneghan held that the evidence contained in Mr. Beyer's supplementary affidavit was not relevant. I disagree. Firstly, in his Reasons for Order, the learned prothonotary, as I have already indicated, pointed out that the respondent did not dispute the relevancy of the information contained in Mr. Beyer's affidavit. Secondly, Mr. Beyer's affidavit was not before Madam Justice Heneghan, and therefore, she did not make any pronouncements in regard to that affidavit. In any event, it cannot seriously be argued, in my opinion, that the information which the applicant seeks to introduce by way of the Beyer affidavit, namely, labels of Woodbridge Wine for the years 1987 and 1988, is irrelevant.
[21] The respondent also submits that the prothonotary erred in granting leave to the applicant to file the supplementary affidavit of Mr. Beyer, notwithstanding his finding that the affidavit constituted an attempt to buttress the applicant's case. In my view, there is no merit to this argument.
[22] The respondent also submits that the prothonotary erred by interpreting rule 84(2) in a manner permitting the deliberate flouting of the rule. Again, in my view, there is no merit to this argument. The prothonotary considered all of the factors required by the test and concluded that, in the circumstances, leave ought to be given with respect to the Beyer affidavit, subject to appropriate safeguards being put into place to ensure that the respondent was able to fully respond to the further affidavit. In reaching that conclusion, the prothonotary determined that there had been no attempt by the applicant to conceal the information for strategic purposes. The prothonotary also concluded that there was no evidence that the applicant had acted recklessly or in bad faith. He then stated, at paragraph 15 of his Reasons:
[15] Having weighed all three factors in the exercise of my discretion under Rule 84(2), I conclude that it would serve the interests of justice to allow the Applicant to file the supplementary affidavit of Michael Beyer, subject to appropriate safeguards being put into place to ensure the Respondent is able to fully respond to the application.
[23] The respondent also argues that the prothonotary erred in considering irrelevant factors, and that he erred in not concluding that the applicant's motion to adduce further evidence constituted an abuse of process. Again, I see no merit in these arguments.
[24] Lastly, the respondent argues that the prothonotary erred in failing to find that the respondent would suffer serious prejudice if leave was granted to the applicant to file the further affidavit of Mr. Beyer. Firstly, the respondent has failed to persuade me that the prothonotary was wrong in concluding that the respondent would not suffer serious prejudice if he granted leave. Secondly, I, like the learned prothonotary, am of the view that the respondent will not suffer serious prejudice. Any prejudice suffered will be amply compensated by the Order made by the prothonotary with respect to costs and with respect to the respondent's right to file additional evidence in response to Mr. Beyer's affidavit and to cross-examine him on his further affidavit.
[25] For these reasons, the respondent's motion will be dismissed with costs in favour of the applicant.
Marc Nadon
JUDGE
O T T A W A, Ontario
September 10, 2001
[1] Rule 84 reads as follows:
84. (1) When cross-examination may be made - A party seeking to cross-examine the deponent of an affidavit filed in a motion or application shall not do so until the party has served on all other parties every affidavit on which the party intends to rely in the motion or application, except with the consent of all other parties or with leave of the Court.
(2) Filing of affidavit after cross-examination - A party who has cross-examined the deponent of an affidavit filed in a motion or application may not subsequently file an affidavit in that motion or application, except with the consent of all other parties or with leave of the Court.
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