Express File Inc. v. HRB Royalty Inc., 2004 FCA 341

Date: 20041014

Dockets: A-364-03

A-365-03

Citation: 2004 FCA 341

CORAM:        NOËL J.A.

NADON J.A.

PELLETIER J.A.

BETWEEN:

                                                           EXPRESS FILE, INC.

                                                                                                                                            Appellant

                                                                           and

                                                           HRB ROYALTY, INC.

                                                                                                                                        Respondent

                                       Heard at Ottawa, Ontario, on September 15, 2004.

                               Judgment delivered at Ottawa, Ontario, on October 14, 2004.

REASONS FOR JUDGMENT BY:                                                                    PELLETIER J.A.

CONCURRED IN BY:                                                                                                    NOËL J.A.

                                                                                                                                      NADON J.A.

Date: 20041014

Dockets: A-364-03

A-365-03

Citation: 2004 FCA 341

CORAM:        NOËL J.A.

NADON J.A.

PELLETIER J.A.

BETWEEN:

                                                           EXPRESS FILE, INC.

                                                                                                                                            Appellant

                                                                           and

                                                           HRB ROYALTY, INC.

                                                                                                                                        Respondent

                                                    REASONS FOR JUDGMENT

PELLETIER J.A.

[1]                This is an appeal of the decision of Martineau J. dismissing an appeal from the decision of Prothonotary Morneau in which the Prothonotary ordered that certain portions of an affidavit be struck on the ground that they were hearsay, contrary to Rule 81 of the Federal Court Rules, 1998. The appellant sought to defeat the motion to strike by arguing before the Prothonotary and the Motions Judge that the evidence, which was admittedly hearsay, was nonetheless admissible under the principled exception to the hearsay rule as set out in the line of cases following                R. v. Khan, [1990] 2 S.C.R. 531. Before us, the appellant argued a different case, a fact confirmed by counsel for the respondent. Relying on Canadian Tire Corp. v. P.S. Partsource Inc. (2001), 200 F.T.R. 94, 2001 FCA 8 (P.S. Partsource Inc.), the appellant argued that the Prothonotary and the Motions Judge erred in deciding the question of admissibility at the interlocutory stage since there was no evidence before them that the fact which the appellant sought to prove by the hearsay evidence was a controversial issue.

[2]                The question of controversial issue arises from the following passage in P.S. Partsource Inc.:

[18] Nonetheless, I would emphasize that motions to strike all or parts of affidavits are not to become routine at any level of this Court. This is especially the case where the question is one of relevancy. Only in exceptional cases where prejudice is demonstrated and the evidence is obviously irrelevant will such motions be justified. In the case of motions to strike based on hearsay, the motion should only be brought where the hearsay goes to a controversial issue, where the hearsay can be clearly shown and where prejudice by leaving the matter for disposition at trial can be demonstrated.

(Emphasis added.)

[3]                Had the argument which we heard been put to Prothonotary Morneau and to Martineau J., they would have been called upon to decide, as a preliminary question, whether the impugned evidence went to fact, which was truly in issue in the proceedings. If there is no dispute as to a fact, then there is no good reason to commit judicial resources to an interlocutory inquiry as to the quality of the evidence tendered to prove that fact. The issue of the quality of the evidence in support of a non-controverted fact is one which should be left to the judge hearing the matter on the merits.

[4]                That said, it was the appellant who sought to defend its position before the Prothonotary and the Motions Judge by arguing that the evidence, though hearsay, was admissible. It made that argument twice and the argument was rejected twice. It now argues that the Prothonotary and the Motions Judge applied the wrong test and that their orders should be set aside so that it can make the same argument again before the judge hearing the matter on the merits. I am unable to see how this advances the "just, most expeditious and least expensive determination" of the issue, required by Rule 3. The issue of the admissibility of the hearsay evidence has already been decided twice. As I see no error in the decisions of Prothonotary Morneau or Martineau J., I can see no reason for asking another judge to decide the same question. Having chosen to make its case before the Prothonotary and the Motions Judge on the basis of admissibility, the appellant is bound by the result.

[5]                As a result, I would dismiss the appeal with costs to the respondent.

[6]                The appellant also appealed from the refusal to allow it to file a second affidavit (the second Lonergan affidavit) showing all the steps it took in an attempt to provide more direct evidence of the facts which it sought to prove. That appeal is rendered moot by our disposition

of the first appeal. Therefore, I would also dismiss the appeal with costs to the respondent with respect to the second Lonergan affidavit.

                                                                            "J.D. Denis Pelletier"          

                                                                                                        J.A.

"I agree

     Marc Noël, J.A."

"I agree

     M. Nadon, J.A."

                          FEDERAL COURT OF APPEAL

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKETS:                                         A-364-03

A-365-03

(APPEALS FROM THE ORDERS OF THE FEDERAL COURT DATED JULY 28,

2003 (NO. T-241-02 & T-1059-02)

STYLE OF CAUSE:               Express File, Inc. v. HRB Royalty, Inc.

PLACE OF HEARING:                     Ottawa, Ontario

DATE OF HEARING:                       September 15, 2004

REASONS FOR JUDGMENT

BY:                                                       Pelletier J.A.

CONCURRED IN BY:                      Noël J.A.

Nadon J.A.

DATED:                                              October 14, 2004

APPEARANCES:

SOLICITORS OF RECORD: