Date: 20070417
Docket: A-47-07
Citation: 2007 FCA 156
Present: LÉTOURNEAU
J.A.
BETWEEN:
W & M WIRE & METAL PRODUCTS LTD.
and
921410 ONTARIO LTD. c.o.b. THE
DISPLAY BANK
Appellants
and
RACHALEX HOLDINGS INC. and
TYRONE NAGTHALL
Respondents
REASONS FOR ORDER
LÉTOURNEAU J.A.
[1]
I am being
asked to decide, on an urgent basis, a motion for a stay of proceedings brought
pursuant to paragraph 50(1)(b) of the Federal Courts Act and
Rules 3, 35(2), 53(1) and (2), 369 and 401 of the Federal Courts Rules.
I will make a brief review of the facts leading to this motion. I will then
address the issues of irreparable harm and balance of convenience which, in my
respectful view, militate in favour of a dismissal of the motion.
FACTS
AND PROCEEDINGS LEADING TO A MOTION FOR A STAY OF PROCEEDINGS
[2]
The
appellants, W & M Wire & Metal Products Ltd., make a motion to stay the
summary judgment hearing scheduled before the Federal Court on April 24, 2004.
The date of the hearing was fixed by way of an oral direction from Chief
Justice Lutfy. The appellants seek the stay of that hearing pending the
determination of an appeal launched against a decision of Hugessen J. of the
Federal Court acting as case management judge.
[3]
The
decision of Hugessen J. was rendered on January 12, 2007 pursuant to a motion
by the appellants to introduce, by way of affidavit and exhibits attached thereto
in the form of an intended expert report, evidence on the issue of the summary
judgment.
[4]
Hugessen
J. was of the view that the proposed evidence was not relevant. At paragraph 1
of his reasons for order, he wrote:
It deals largely with
alleged issues of obviousness and inutility of the patent in suit; those issues
have not been raised by the statement of defence or otherwise pleaded. It also
purports to introduce a large number of pieces of prior art, none of which have
previously been pleaded.
[5]
The appellants’
motion to file new evidence in the summary judgment hearing came at a time
“when the issues both in the action as a whole and in the summary judgment
motion had been joined”: see paragraph 2 of his reasons for order. In addition,
both sides had filed memoranda of fact and law in preparation of the summary
judgment hearing.
[6]
At
paragraph 3 of his reasons, he added the following:
To allow the present
motion would necessarily result in further substantial delay, not the least of
which would be the necessity for amendments to the pleadings, possible further
discoveries and cross-examination on affidavits. All of this in my view would
cause a prejudice to plaintiff which could not be adequately compensated by an
award of costs.
[7]
I should
give additional background information for a better understanding of Hugessen
J.’s order to the Judicial Administrator to fix the summary judgment for
hearing for the duration of one day.
[8]
The
respondents on this motion, Rachalex Holdings Inc. and Tyrone Nagthall, who are
the plaintiffs in the Federal Court, filed a Statement of Claim in the Federal
Court in July 22, 2004 seeking 1) a declaration that the appellants have
infringed their Canadian patent, 2) interim, interlocutory and permanent
injunctions, damages or an accounting of profit and, 3) an order that the
appellants deliver up to them the impugned articles as well as the tools and
machineries used in infringing the patent.
[9]
The
appellants served a Statement of Defence on October 4, 2004. The Statement of
Defence was cast in broad terms. It led to a successful motion by the
respondents for particulars. Counsel for the appellants at the time elected to
provide particulars broad in terms and limited both in number and as to the
issues raised in the Statement of Claim.
[10]
The
particulars were given on January 14, 2005. Pleadings closed with the service
of the respondents’ reply on January 27, 2005. Then the respondents served and
filed their Notice of Motion for summary judgment as well as affidavit evidence
in support of it.
[11]
On July
12, 2006, at a case management conference, Hugessen J. issued an order
finalizing the time-frame for the filing of memoranda of fact and law and set
the hearing date on the motion to November 1, 2006.
[12]
After all
the proceedings were completed and shortly before the scheduled hearing on the
summary judgment motion, counsel for the appellants withdrew as counsel of
record on the basis that he was unable to obtain instructions from his client
and his accounts had not been paid: see respondents’ record, page 2, paragraph
12 of the affidavit of Lori-Anne Deborba. The order authorizing withdrawal
issued on October 24, 2006.
[13]
New
counsel for the appellants was appointed on November 17, 2006. He filed and
served, on January 5, 2007, his motion for leave to file supplementary
responding material in connection with the summary judgment motion. It is this
motion that was dismissed by Hugessen J. on January 12, 2007. A Notice of
Appeal of that decision was filed on January 19, 2007. The appeal is pending
before this Court.
THE POWER OF THIS COURT TO GRANT A STAY
IN THESE CIRCUMSTANCES
[14]
Paragraph
50(1)(b) of the Federal Courts Act gives this Court the power to
stay proceedings in any cause or matter where for any other reason it is in the
interest of justice that the proceedings be stayed.
[15]
A stay can
be issued when the proceedings to be held would render an applicant’s appeal
moot or pre-empt his right of appeal and, thereby, cause irreparable harm: Bining
v. Canada, 2003 FCA 286; Fisaillon v. Canada, [1999] F.C.J. No. 898,
at paragraphs 29 and 33.
[16]
This
brings me to the appellants’ allegation of irreparable harm.
WHETHER A STAY SHOULD BE GRANTED
Irreparable harm
[17]
I am not
satisfied that the appellant would suffer harm, let alone irreparable harm, if
the stay is refused. Essentially, the appellants submit that the harm consists
in the fact that their pending appeal will become moot and they will be
deprived of their right of appeal.
[18]
The harm
alleged by the appellants is at best speculative. It may occur only if the
respondents’ motion for summary judgment is granted by the Federal Court. I
cannot speculate and assume that the motion for summary judgment will be
successful and, on the basis of that speculative assumption, further delay
proceedings in the Federal Court. The summary judgment motion has not already
been pending for over 14 months. The respondents are entitled to a
determination of their claim.
[19]
Moreover,
even if the Federal Court allows the motion, the harm that the appellants
allege they will suffer, if there is any, is not irreparable. The appellants
can appeal an adverse finding on the summary judgment motion and as well pursue
in this Court their appeal against the decision of Hugessen J. denying their
motion to adduce supplementary evidence. I do not agree with counsel for the
appellants that their appeal will necessarily be rendered moot if the hearing
on the summary judgment motion is allowed to proceed.
[20]
Indeed, if
the summary judgment motion is dismissed, the appeal against Hugessen J.’s
decision will follow its course. If the motion for summary judgment is allowed,
the appellants can appeal that decision and one of two scenarios will ensue. If
this Court maintains Hugessen J.’s decision dismissing the supplementary
evidence, the appellants will then have to decide whether they want to pursue
their appeal against the summary judgment decision. If, on the contrary, this
Court finds that the supplementary evidence should have been admitted in the
summary judgment proceedings, the appellants will obtain an additional ground
in support of their appeal against the summary judgment decision.
Balance of Convenience
[21]
I need not
address this factor in view of the conclusion that I have reached on the issue
of irreparable harm. I will, however, say this.
[22]
The
appellants had every opportunity and plenty of time to make full answer and
defence on the issue raised for trial and on the summary judgment motion.
Unsatisfied with what they had done so far, they tried to improve their
position by attempting to file supplementary material. The case management
judge concluded, as previously mentioned, that the respondents would suffer a
prejudice which could not be compensated by an award of costs if the summary
judgment proceedings were further delayed.
[23]
I do not
sit on appeal from the decision of the case management judge. However, I surely
can see the additional prejudice that would result to the respondents if the
summary judgment proceedings are stayed. There is no doubt that a delay of more
than 14 months on a motion for summary judgment is prejudicial to an applicant
who has complied with the rules and seeks a determination of its claim. Such
delay does nothing to improve the image of the administration of justice. I do
not think that the balance of convenience justifies an imposition of additional
prejudice that is detrimental to the administration of justice when the
appellants’ alleged prejudice is speculative and not irreparable. In other
words, it is not, in these circumstances, in the interest of justice that the
proceedings on the summary judgment motion be further delayed.
CONCLUSION
[24]
For these
reasons, I will dismiss with costs the appellants’ application for a stay of
the summary judgment hearing to be held on April 24, 2007.
“Gilles
Létourneau”
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