Date: 20000531
Docket: T-2799-96
Ottawa, Ontario, this 31st day of May, 2000
PRESENT: THE HONOURABLE MADAM JUSTICE E. HENEGHAN
BETWEEN:
KIRKBI AG and
LEGO CANADA INC.
- and -
RITVIK HOLDINGS INC./GESTIONS RITVIK INC.,
and RITVIK TOYS INC./JOUETS RITVIK INC.
Defendants
REASONS FOR ORDER AND ORDER
HENEGHAN J.
[1] This is a motion brought by Kirkbi A.G. and Lego Canada Inc. (the "Applicants") to appeal the order of Prothonotary Roger R. Lafrenière, made on February 4, 2000. In his decision, Prothonotary Lafrenière ordered that Ritvik Holdings Inc./ Gestions Ritvik Inc., and Ritvik Toys Inc. / Jouets Ritvik Inc. (the "Respondents") answer a number of outstanding refusals and questions taken under advisement. The outstanding refusals and questions taken under advisement stem from the examination for discovery of Marc Betrand, a representative of the Defendants (Respondents in this motion). The examination for discovery was held on September 8 and 9, 1999. At the time of the examination for discovery of Mr. Bertrand, the Respondents asserted that the outstanding questions were subject to privilege. In his order, Prothonotary Lafrenière did not order that all the refusals and questions taken under advisement be answered. Rather, Prothonotary Lafrenière ordered that certain questions be answered.
[2] In this motion, the Applicants seek an order granting the appeal from the order of the Prothonotary and an order requiring the Respondents to answer in writing the remaining questions which they refused to answer during the examination for discovery of their representative, Marc Bertrand.
[3] The Applicants have submitted the following grounds for this motion. First, the Applicants argue that each of the questions listed in Schedule "A" is proper, as each is either relevant to an unadmitted allegation of fact in the pleadings or otherwise relevant. The Applicants add that the questions listed are not subject to privilege and that these questions are not unreasonable nor unnecessary. The Applicants maintain that the questions would not be unduly onerous to answer under Rule 242(1)(d) of the Federal Court Rules, 1998 . Finally, the Applicants submit that the Prothonotary erred in refusing to order that the questions be answered on the grounds that the answers were privileged and that privilege had not been waived.
[4] The standard of review for an appeal of a decision of a prothonotary is articulated in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.). In Aqua-Gem, Isaac C.J., as he then was, wrote:
| ...the proper standard of review of discretionary orders of prothonotaries in this Court should be the same as that which was laid down in Stoicevski for Masters in Ontario. I am of the opinion that such orders ought to be disturbed on appeal only where it has been made to appear that |
| (a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or |
| (b) in making them, the prothonotary improperly exercised his discretion on a question vital to the final issue of the case. |
| In each of these classes of cases, the Motions Judge will not be bound by the opinion of the prothonotary, but will hear the matter de novo and exercise his or her own discretion.1 |
[5] The questions the Applicants are seeking to have answered all relate to a Mr. Léger who formerly acted as legal counsel for the Respondents. The Applicants have argued that the answers to the questions were not subject to privilege and that the Prothonotary erred in refusing to order that the questions be answered. Prothonotary Lafrenière did not provide reasons for his order but he did order that certain refusals and question taken under advisement be answered.
[6] At the hearing, counsel for the Applicants argued that by reason of the Respondents" pleading of estoppel and detrimental reliance, the Respondents" state of mind and understanding of correspondence exchanged between the parties" former solicitors was put in issue. As a consequence of allegedly putting state of mind in issue, the Applicants argued that privilege was waived, either directly or by implication. I do not accept this submission.
[7] Paragraphs 41 - 44 of the Amended Statement of Defence read as follows:
| 41. The Plaintiffs and their predecessors, through their Canadian solicitors acting on behalf of and with the authority of the Plaintiffs" predecessors in title at the time, conceded in a letter dated January 3, 1990 that the Plaintiffs and their predecessors could not object to the Defendants "marketing and selling a product which falls within the scope of the teaching of Interlego"s expired patents and industrial design registrations". The Plaintiffs, therefore, are now precluded and estopped from taking a different position. Further, the Defendants have relied to their detriment on this statement made on behalf of and with the authority of the Plaintiffs and their predecessors in title, and therefore the Plaintiffs are now estopped from asserting otherwise. |
| 42. In the 1990 and 1991 period, the Plaintiffs" predecessors complained about the Defendants" use at the time of the phrase "works with LEGO or DUPLO" on their packaging. Following receipt of this complaint, the Defendants voluntarily and without admitting the validity of this complaint, made changes to their packaging to remove the phrase "works with LEGO or DUPLO", and replace it with the phrase "works with other leading brands". By letter dated February 19, 1991, the same solicitors referred to in paragraph 41 above, again acting on behalf of and with the authority of the Plaintiffs and their predecessors in title, acknowledged receiving samples of the Defendants" new packaging with the phrase "works with other leading brands". The Canadian solicitors wrote "it appears to respond to our client"s objections thereto in Canada based on its registered rights for LEGO and DUPLO". The Plaintiffs, therefore, are now precluded and estopped from taking a different position. In particular the Defendants have relied on the statement made by the Plaintiffs and their predecessors in title to their detriment, and therefore the Plaintiffs are now estopped from complaining about the use by the Defendants of the phrases "works with leading brand" or "works with other brands". |
| 43. The Plaintiffs and their predecessors in title, since the introduction by the Defendants of their MNI and MICRO line of MEGA BLOKS toy construction bricks and related parts in 1989 and 1991, respectively, have never complained until the filing of the Claim in December 1996 that the Plaintiffs or their predecessors in tile had any trade-mark rights in the "LEGO Indicia Trade-mark". The firm of solicitors referred to in paragraph 41 above acting for the Plaintiffs and their predecessors in title in 1989 to 1993 time period, never raised any issues with the Defendants regarding the Plaintiffs" alleged trade-mark rights in the "LEGO Indicia Trade-mark" despite regular correspondence between them. As a result of the Plaintiffs and their predecessors in title not having objected to the Defendants" activities until the filing of the Claim in December 1996 the Defendants reasonably concluded that all the threatened claims of the Plaintiffs and their predecessors in title were now resolved, or at least would not be pursued any further. The Defendants, therefore, have relied to their detriment on the Plaintiffs" and their predecessor-in-title"s actions and inactions, and the Plaintiffs are now estopped from asserting any causes of action in the Claim. |
| 44. Further, by letter dated November 29, 1990, the firm of solicitors referred to in paragraph 41 above acting for the Plaintiffs and their predecessors in title, told the Defendants that the issue of rights in the Plaintiffs" "product shape" were in issue in a pending Federal Court legal proceedings with Tyco Industries (Federal Court Action No. T-2779-84). The solicitors wrote "our clients insist upon reserving their rights in that respect. They are, however, prepared to agree that they will not assert such a claim against your client if they are unsuccessful in their claim on this basis against Tyco, or should they withdraw or abandon such claim." By consent Judgment dated March 25, 1997 in Federal Court Action No. T-2779-84, the action and all counterclaims were dismissed against Tyco, except for the use of the Lego and Duplo marks on packaging and other materials. The Plaintiffs are now precluded and estopped from asserting against the Defendants any of the causes of action based on the "LEGO Indicia Trade Mark". [Emphasis in original.] |
[8] These paragraphs raise the defences of estoppel and detrimental reliance. The Applicants argue that because these paragraphs refer to the exchange of correspondence between former solicitors of both the Plaintiffs and the Defendants, that the Defendants (Respondents in this motion) have thereby put their state of mind in issue, particularly their state of mind with regard to legal advice regarding this correspondence. I am of the opinion that state of mind has not been put in issue.
[9] I am also of the opinion that the defences of estoppel and detrimental reliance are predicated upon the correspondence and not the legal advice exchanged between the Respondents and their solicitors. Therefore, there is no expressed or implied waiver of solicitor-client privilege.
[10] In the result, applying the standard of review which applies to an appeal from a decision of a prothonotary as set out in Canada v. Aqua-Gem Investments Ltd., supra, I am satisfied that the Applicants have not established that the decision of the Prothonotary was clearly wrong or that the Prothonotary improperly exercised his discretion "on a question vital to the final issue in the case.
ORDER
[11] IT IS ORDERED that the appeal be dismissed with costs.
"E. Heneghan"
J.F.C.C.
OTTAWA, Ontario
May 31, 2000
__________________
1 Ibid. at 454.
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