Docket: T-1304-10
Citation: 2011 FC 960
Toronto, Ontario, October 14, 2011
PRESENT: Kevin R. Aalto, Esquire, Prothonotary
BETWEEN:
|
|
BBM CANADA
|
|
|
|
Applicant
|
|
and
|
|
|
RESEARCH IN MOTION LIMITED
|
|
|
|
Respondent
|
|
|
|
|
AMENDED REASONS FOR ORDER AND ORDER
[1]
This
motion to convert this application to an action follows on the heels of a
decision of the Federal Court of Appeal (2011 FCA 151) in this application.
The Federal Court of Appeal overturned a decision of the Federal Court which
ordered this application to proceed as an action.
[2]
Briefly,
by way of background, in this application BBM Canada (BBM), formerly Bureau of
Broadcast Measurement alleges that RIM infringes certain trademarks which use
the letters “BBM” either alone or with other text or graphic elements. BBM
operates as a not-for-profit corporation and is a supplier of impartial
television and radio ratings data. It has been in business since 1944.
[3]
In
2010 RIM began promoting its Blackberry Messenger service using the mark BBM.
Thus, in this application BBM claims infringement, damages for infringement,
depreciation and loss of goodwill and passing off, punitive damages, injunctive
relief and delivery up.
[4]
Shortly
after this application was commenced, RIM brought a motion to strike on the
grounds that there was no jurisdiction in the Federal Court to determine any of
the issues by way of application and that the application should be dismissed
without prejudice to the right of BBM to seek the same relief by way of
action. The hearings judge determined that the matter should not proceed by
way of application and ordered the matter to proceed by way of action. The
order of the hearings judge was appealed and the Federal Court of Appeal
determined that this matter could proceed by way of application. The Federal
Court of Appeal concluded that in fact there was jurisdiction in the Federal
Court to determine the issues by way of application but added “without deciding
the point, it may be possible to move for an order converting an application to
an action.” [para.35]
[5]
Thus,
this motion was brought to convert this application to an action. It must be
noted that the appeal dealt with whether a claim for damages and other relief
flowing from trade-mark infringement, depreciation of goodwill and passing off
may be brought by way of application or whether such a proceeding must be by
way of action. The appeal decision was in response to an initial motion to
strike the application in which the hearings judge determined that the matter
must proceed as an action. It is also to be observed that the appellate court
said “it may be possible” to move to convert from an application to an action.
The language used by the Federal Court of Appeal is curious as it is not a
definitive statement that such a motion may in fact be brought. The
“possibility” of bringing a motion to convert is discussed in greater detail
below.
[6]
The
material before the Court on this motion to convert comprises only the notice
of motion, notice of application, the two affidavits (without exhibits) filed
by the BBM, a statement of defence (4 pages) prepared following the initial
decision that this matter continue as an action, and, the written
representations.
[7]
RIM
argues that the BBM’s causes of action are both factually and legally complex.
As such, an application is an inappropriate type of proceeding for such complex
matters. It is further argued that it is prejudicial to RIM to continue this
proceeding as an application because there is no requirement to disclose
relevant documents in a party’s power possession or control; only
cross-examination is allowed which does not require undertakings to obtain
relevant information not within the deponent’s knowledge; and, there are issues
of credibility which are ill-suited to be determined on a paper record. Of
course, none of these arguments have changed since the original hearing to
strike and the appeal.
[8]
It
is clear the Federal Court of Appeal was alive to several of these concerns.
It is noted in the reasons of the Court at para. 33 that the issues in this
proceeding were too complex to be determined by application. The Court dealt
with this submission as follows:
[34] First, not all such proceedings
are so complex that they are not amenable to determination by application. This
is evidenced by PharmaCommunications Holdings Inc. v. Avencia International
Inc., 2008 FC 828, 67 C.P.R. (4th) 387; aff’d 2009 FCA 144, 392 N.R. 197.
There, an applicant moved by way of application for a declaration and a permanent
injunction in respect of its claim that the respondent had engaged in statutory
passing off. The matter proceeded to conclusion without any apparent objection
that the application had been improperly commenced.
[35] Second, the fact that a
litigant may generally choose to proceed by way of action or application does
not mean that every case is amenable to adjudication by application. In any
particular case, circumstances such as the relief sought, the extent
credibility is in issue or the need for discovery may make it inappropriate for
a proceeding to be commenced by application. In light of this, motions may be
brought challenging the appropriateness of proceeding by application. For
example, without deciding the point, it may be possible to move for an order
converting an application to an action. See, for example Havana House Cigar
& Tobacco Merchants Ltd. v. Worldwide Tobacco Distribution Inc., (2008), 73
C.P.R. (4th) 131 (F.C. Proth.) where an application brought under section 34 of
the Copyright Act, cited in the reasons of the Judge, was ordered to proceed as
an action. Motions may also be brought under Rule 316. While Rule 57 provides
that an originating document shall not be set aside only because a different
originating document should have been used, there may be, at the least, cost
consequences for choosing an inappropriate originating document.
[9]
Thus,
the issue is whether RIM, on this motion, can now have this application
converted to an action. As noted above, the Federal Court of Appeal did not
determine whether a motion to convert an application which was not a judicial
review proceeding could be brought but only that it “may be possible”.
[10]
The
Federal Courts Rules provide for two types of originating proceedings –
an action or an application. Each is governed by its own procedure. An
action, generally speaking, encompasses pleadings which identify the issues,
require production of all relevant documentation, oral discovery followed by a
pre-trial and trial with viva voce evidence. An application, on the
other hand, is intended to be a summary proceeding. It does not engage the
full panoply of procedural requirements of an action. It also is heard on a
paper record comprising by way of evidence only the affidavits of the parties and
the cross-examinations thereon which are not as extensive as discoveries and
are primarily limited to the issues raised in the affidavits.
[11]
In
Sivak v. Canada (MCI) 2011 FC 402, the Honourable Mr. Justice James
Russell had occasion to consider the conversion of a judicial review
application to an action. He noted:
[29] A judicial review application
should only be converted to an action in those infrequent cases where the
relevant facts cannot be satisfactorily established and weighed through
affidavit evidence. The test is not whether trial evidence would be superior,
but whether affidavit evidence is inadequate. See Macinnis v Canada (Attorney General), [1994] 2
F.C. 464 (F.C.A.); and Chen v Canada (Minister of Citizenship and
Immigration), 2004 FC 1573.
[30] I would like to point out,
however, that in Drapeau v Canada (Minister of National
Defense), (1995), 179 N.R. 398 (Fed. C.A.), the Federal Court of Appeal made it
clear that subsection 18.4(2) of the Federal Courts Act places no limits on
those considerations which may be taken into account in deciding whether to
allow a judicial review application to be converted into an action, but that
the desirability of facilitating access to justice and avoiding unnecessary
cost and delay are relevant factors.
[31] I would also like to point out
that, in the more recent case of Assoc. des crabiers acadiens inc. v Canada
(Attorney General), 2009 FCA 357, the Federal Court of Appeal again set out the
purpose and scope of conversion under section 18.4(2) of the Federal Courts Act
at paragraphs 34-39:
34. Nonetheless,
Parliament did provide an exception to judicial review at subsection 18.4(2) of
the Act. This measure overrides the usual procedure and allows judicial review
applicants to have their existing application for judicial review converted
into an action.
35. The
conversion into an action is not effected by operation of law. It is submitted
to the Federal Court for review and must be justified. The Court is vested with
the discretionary authority to accept an application for conversion “if it
considers it appropriate.”
36. The
proceedings that citizens may use to challenge administrative decision, namely,
the application for judicial review and its conversion into an action when
judicial review is applied for in the Federal Court, are ultimately aimed at
attaining and meting out administrative justice that is timely, efficient and
equitable, both for citizens and the administration.
37. The
courts have developed certain analysis factors that apply to an application for
conversion so as to better frame the exercise of the discretion set out at
subsection 18.4(2). It goes without saying that each case involving an
application for conversion turns on its own distinct facts and circumstances.
And, depending on those facts and circumstances, the individual or collective
weight of the factors may vary. We will now go over those factors.
[Emphasis added.]
38. The
conversion mechanism makes it possible, where necessary, to blunt the effect of
the restrictions and constraints resulting from the summary and expeditious
nature of judicial review. These are, for example, far more limited disclosure
of evidence, affidavit evidence instead of oral testimony, and different and
less advantageous rules for cross-examination on affidavit than for examination
on discovery (see Merck Frosst Canada Inc. v. Canada (Minister of Health)
(1998), 146 F.T.R. 249 (F.C.)).
39. Therefore, conversion is
possible (a) when an application for judicial review does not provide
appropriate procedural safeguards where declaratory relief is sought (Haig
v. Canada, [1992] 3 F.C. 611 (F.C.A.)), (b) when the facts allowing the
Court to make a decision cannot be satisfactorily established through mere
affidavit evidence (Macinnis v. Canada) [1994] 2 F.C. 464 (F.C.A.)), (c)
when it is desirable to facilitate access to justice and avoid unnecessary cost
and delay (Drapeau v. Canada (Minister of National Defence), [1995] F.C.J.
No. 536 (F.C.A.)) and (d) when it is necessary to address the remedial inadequacies
of judicial review, such as the award of damages (Hinton v. Canada, [2009]
1 F.C.R. 476. [Emphasis added.]
[32] I also note that my colleague,
Mr. Justice Pinard, has recently looked at this issue in Huntley v Canada
(Minister of Citizenship and Immigration), 2010 FC 407 at paragraphs 7 and 8
and has noted that, in order to convert, the Court must find procedural or
remedial inadequacies with the normal judicial review process and that
conversion should only be granted “in the clearest of circumstances” and only
on an exceptional basis when the Court “feels the case cries out for the full
panoply of a trial.”
[12]
Thus,
at least in judicial review proceedings, conversion to an action should only
occur in the clearest of cases.
[13]
As
noted above, the Federal Court of Appeal did not determine whether a motion to
convert an application, not a judicial review proceeding, could be brought but
observed, without deciding, that it “may be possible”. No doubt this
observation was made because there is no provision in the Federal Courts
Rules or the Federal Courts Act which gives a party the right to
seek the conversion of an application to an action. It is to be remembered
that section 18.4(2) speaks only of conversion of an application for judicial
review not a regular application.
[14]
In
Havana House Cigar & Tobacco v. Worldwide Tobacco, [2008] 73 C.P.R.
(4th) 131 (FC), the Court had occasion to consider the conversion of an
application involving copyright infringement to an action. It is to be noted
that the Copyright Act in section 34 permits, inter alia, an
infringement proceeding to be brought either by way of application or action.
In that case it was noted:
There have been other cases which have
considered the conversion of an application to an action in the context of the
Act. For example, in Canadian Private Copying Collective v. Fuzion Technology
Corp., 2005 FC 1557, Justice Hughes considered the issue at some length and
made the following observations:
[11] In non-judicial review cases,
one being KRAFT CANADA INC. v. EURO EXCELLENCE INC. (2003), 25 CPR (4th) 224 a
prothonotary of this Court considered an application by a respondent to convert
a proceeding brought by way of application under section 34(4) of the Copyright
Act, to an action. The prothonotary proceeded by way of analogy to section 18.4
of the Federal Courts Act and declined to make such a conversion on the basis
of insufficient evidence. In MERCK FROSST CANADA INC. v. CANADA (MINISTER OF
HEALTH) (1997), 76 CPR (3rd) 468 a judge of the Federal Court was asked to
convert an Application brought under the Patented Medicines (Notice of
Compliance) Regulations, SOR/93-133 to an action. Such proceedings must be
brought by way of application and it was the respondent who sought conversion. The
Court declined to convert the proceeding on the bases that it did not appear to
be expedient to do so. No consideration was given as to whether section 18.4(2)
was appropriate for doing so.
[12] There may be a suggestion that
there is an inherent power in the Court to control its own process, thus to
convert an application to an action where, as Rule 3 says, it may be
"just, most expeditious and least expensive". If there is, there is
no merit in saying that an action is more expeditious or less expensive than an
application. Is it "just"? Here the Applicant had a choice,
application or action, it chose application. No statute or rule compelled that
choice, there is no suggestion that the Applicant was coerced or deceived into
making that choice. It seems now that the applicant regrets that choice because
it may not have put in its case as fully as it might or now sees more
opportunity to gain further evidence in an action. The only evidence before
this Court that might be compelling in that regard is paragraph 4 of the
Geldbloom affidavit which says "CPCC wishes to convert the present
application into an action in order to adduce new evidence...". This
is not sufficiently compelling to justify a conversion of the Applicant's own
choice in proceeding by was of application, to an action.
[13] In summary, section 18.4 (2) of
the Federal Court Act is not applicable to proceedings commenced under section
34(4) of the Copyright Act; Rule 107 of the Federal Courts Rules is not
applicable. Even if there were inherent jurisdiction, which is by no means
certain, no compelling reason for conversion where the choice was made
initially by the party now seeking conversion, has been shown. That part of the
motion is dismissed.
[15]
In
that case, it was the Applicant that sought the conversion of the application
to an action. Justice Hughes found that there was no compelling reason put
forward by the Applicant to justify the conversion of the application to an
action. The only evidence put forward by the Applicant was that it sought to
adduce new evidence to support its position by way of production and
discovery. This was held to be insufficient.
[16]
It
is to be noted that Section 34(6) of the Act which provides that “[t]he court
in which proceedings are instituted by way of application may, where it
considers it appropriate, direct that the proceeding, be proceeded with as
an action”. This section was addressed by Justice Hughes in the Canadian
Private Copying Collective case but conversion was not permitted as the
Applicant had chosen to proceed by application and therefore the case did not
justify conversion.
[17]
These
appear to be the main authorities and legislation that discuss the
conversion of an application to an action. There is no definitive answer in
these cases as to whether it can be done although it is implicit in Kraft
Canada Inc. v. Euro Excellence Inc. (2003) 25 CPR (4th) 224. But, on
balance, it seems logical if a judicial review application can be converted to
an action – a proceeding which is inherently suited to the application
procedure – a trademark infringement case commenced as an application can also
be converted to an action. The jurisdiction to do so may be found in either the
Court’s inherent jurisdiction to control its own process or in Rule 3 which
dictates that “These Rules shall be interpreted and applied so as to secure the
just, most expeditious and least expensive determination of every proceeding on
its merits”. Applying the approach directed by Rule 3 I conclude that it is
possible to bring a motion for conversion in an application.
[18]
The
next consideration is to determine on what basis an application may be
converted to an action. In Kraft, conversion was denied as there was an
insufficient evidentiary base. Other cases have held that an applicant ought
not to be lightly denied the choice of proceeding. Here, RIM has already
tested a number of its arguments in its motion to strike. While the Federal
Court of Appeal only determined that trademark infringement and its attendant
remedies can be sought in an application, the concerns of the RIM as to why
this type of proceeding should be an action were considered.
[19]
The
considerations under which it is appropriate to convert an application to an
action in the face of opposition form the applicant include the following:
·
The
applicant’s choice of proceeding should not lightly be interfered with
·
The
procedures on an application do not provide sufficient procedural safeguards to
ensure fairness to the respondent
·
There
may be steps taken by the applicant which militate against the respondent’s
right to fully and fairly defend the application. Such matters may include:
§
an
applicant relying on affidavit(s) from a person or persons not directly
involved with the issues
§
failure
by an applicant to produce relevant documentation
§
unwarranted
interference by the applicant’s counsel by refusing proper and relevant
questions on a cross-examination
·
The
number of issues
·
The
complexity of the issues
·
Number
of parties
·
Possible
cross-applications or multiplicity of proceedings
·
Credibility
of the parties is central to a determination of the issues
[20]
This
list is not exhaustive but provides considerations on a motion to convert. It
is apparent that it will not be known at the outset of an application which of
these considerations might apply. Credibility, for example, will only be
apparent once the evidence of the parties is exchanged. Further, the complete
scope of the issues in dispute will not be clear until the evidence is
exchanged. Thus, given that the arguments of the RIM are those that are
anticipatory without the benefit of having the evidence of the parties before
the Court this motion is premature.
[21]
RIM
also argues that it is not in keeping with the policy of Rule 3 that cases
should be adjudicated in the just, most expeditious and least expensive manner
to permit this case to proceed as an application. To bring a motion after the
exchange of evidence or after cross-examinations will incur additional expense,
cause delay and utilize scarce judicial resources. It is always troubling that
choice of process may create delay and unnecessary expense in a proceeding.
However, at this juncture of the proceeding there is insufficient evidence to
indicate that it is the wrong process. The party seeking to change the process
has the onus of demonstrating that the process chosen will not accomplish the
objectives of Rule 3.
[22]
The
Federal Court of Appeal has determined that an application is an appropriate
form for such a proceeding as this and BBM is therefore entitled, prima
facie, to its choice of proceeding. It may very well be that as the
application unfolds there will be complications or procedural unfairness to RIM
which dictates that this proceeding would be better conducted as an action.
RIM is free to raise the issue again if such transpires.
[23]
In
support of this matter continuing as an application, BBM argues that this is a
simple case. BBM also argues that there is no evidence before the Court to
demonstrate complexity, serious issues of credibility or that RIM will be
prejudiced by continuing this matter as an application. Indeed, even if
credibility becomes a major point of contention in the proceeding there is a
provision in the Federal Courts Rules that affords the hearings judge
the opportunity to hear viva voce evidence. Rule 316 provides that in
special circumstances the Court may authorize a witness to testify in Court in
relation to an issue of fact raised in the application.
[24]
Thus,
considering several of the factors noted above, BBM chose to proceed by
application and should not be lightly deprived of the choice of proceeding;
there are only two parties; the issues are not unduly complex, at least at this
stage; there is no multiplicity of proceedings; and BBM has filed evidence from
key people involved in the case. It remains to be seen as the case unfolds if
RIM will be prejudiced by virtue of being compelled to proceed by way of
application.
[25]
On
a final note, this matter is case managed. The case management regime in the
Federal Court is particularly well-suited to deal with any issues which may
arise that RIM or for that matter, BBM perceive as being prejudicial to their
rights to present their case fully and fairly.
[26]
The
motion is dismissed with costs to BBM fixed and payable forthwith in the amount
$1000. However, the dismissal is without prejudice to the right of RIM to
bring another motion to convert should circumstances change such that a more
compelling case can be made for conversion to an action.
ORDER
THIS COURT
ORDERS that:
1.
This
motion is dismissed without prejudice to the right of the Respondent to bring a
further motion to convert.
2.
Costs
are hereby fixed and payable to the Applicant in the amount of $1000 inclusive
of HST.
“Kevin
Aalto”
Email this Content