[1] This unopposed appeal is from an order of the Federal Court dated January 28, 2004. By that order the Court dismissed the appellant's action for failure to show cause why the action should not be dismissed for delay. The order reads in part: "This action be and it is hereby dismissed for delay". No reasons for the order were given by the Motions Judge.

[2] The action, for trade-mark infringement, was commenced by Statement of Claim filed in early December 2002. The Statement of Defence and the Counterclaim were filed in late January 2003. The plaintiff's Defence to the Counterclaim was filed near the end of February of the same year. On April 23, 2003, the parties exchanged affidavits of documents and in June they agreed to consider the possibility of settling the dispute. It was not, however, until December 16, 2003 that the first formal settlement negotiations took place. Between October 23, 2003 and December 16, 2003 the parties were able to conclude a non-disclosure agreement which enabled them to exchange relevant information while attempting to settle the dispute. As the parties were unable to reach agreement on December 16, 2003, they scheduled a further meeting to continue their negotiations on January 14, 2004.

[3] On December 18, 2003, the Administrator issued the Notice of Status Review pursuant to rule 381. That notice required the appellant to show cause by written submissions to be filed on or before January 19, 2004 why the action should not be dismissed for delay. It also recited that more than 360 days had elapsed since the filing of the Statement of Claim and that no requisition for a pre-trial conference had been filed. The appellant served and filed written submissions January 5, 2004. In those submissions the appellant summarized the steps that had been taken by the parties with respect to pleadings and discovery of documents as well as the attempts that were underway between the parties to conclude a settlement, all as outlined above. The appellant then proposed the following plan of action in paragraph 7 of the submissions:

The parties have made and are continuing to make a good faith attempt to resolve the matters in dispute. In the event that a settlement cannot be reached in the action, following a concerted effort, the plaintiff intends to proceed with the action and to schedule examinations for discovery of the defendants.

[4] Rule 380 authorizes the Court to fix the time and place for a status review in the circumstances therein described which includes the fact that "360 days have elapsed since the issuance of the statement of claim and no party has filed a requisition for a pre-trial conference under rule 258". Rule 382 confers a broad discretionary power on the judge or prothonotary who conducts the review. The rule enables the Court to dismiss the proceeding for delay, or allow it to proceed and to couple the permission with an order that the proceeding continue "as a specially managed proceeding".

[5] In Baroud v. Canada (1998), 160 F.T.R. 91 (T.D.), at paragraphs 4 and 5, Hugessen J. proposed the following two-part test to be applied in exercising the discretion under rule 382:

In deciding in what manner to exercise the wide discretion granted to it by rule 382 at the conclusion of a status review, it seems to me that the court needs to be concerned primarily with two questions:

1) what are the reasons why the case has not moved forward faster and do they justify the delay that has occurred?; and

2) what steps is the plaintiff now proposing to move the matter forward?

The two questions are clearly interrelated in that if there is a good excuse for the case not having progressed more quickly, the court is not likely to be very exigent in requiring an action plan from the plaintiff. On the other hand, if no good reason is advanced to justify the delay, the plaintiff should be prepared to demonstrate that he recognizes that he has a responsibility to the court to move his action along. Mere declarations of good intent and of the desire to proceed are clearly not enough.

[6] We are of the view that the lack of reasons for the January 28, 2004 order dismissing the action for delay renders it impossible for this Court to carry out a proper review of that order with a view to determining whether the Baroud test was faithfully applied. As we have seen, written submissions in response to the Notice of Status Review were before the Motions Judge. Yet the appellant's explanations for the delay and its proposed plan of action were not explicitly addressed. In these circumstances, we are of the view that intervention by this Court is justified and that the Court should exercise the rule 382 discretion de novo by giving the judgment that the Federal Court should have given: see Grenier v. Canada, [2001] F.C.J. No. 147 (Court file No. A-474-00) (C.A.).

[7] The appellant contends that it was acting within the spirit of rule 257 after the close of pleadings by entering into settlement discussions and, indeed, that rule 258 contemplates the completion of such discussions before a requisition for a pre-trial conference can be presented with a view to advancing the action towards trial. In the present case, once the pleadings were closed, the appellant ought to have attempted to schedule the respondents' examinations for discovery pursuant to rule 236. Nothing prevented the appellant from doing so despite the parties' focus on a possible out-of-court settlement. The appellant did set forth an action plan in its written submissions to the Motions Judge. That plan is somewhat vague in that it contains no specific deadlines for concluding the negotiations or for commencing examinations for discovery. At the same time the plan is not entirely spurious, and in our view it represents a recognition on the part of the appellant of its responsibility to move the action along and a sincere commitment to do so. It is clear from the record that the delay here in issue extended over a period of 8 months or less and that while no steps under the Rules were taken during that period to advance the action towards trial the parties attempted to and did engage in good faith negotiations with a view to settling the dispute as, by the Rules, they were obliged to do. Moreover, the action itself was not long outstanding having been commenced less than 14 months before it was dismissed on January 28, 2004. This Court is content to allow the action to continue but only on the basis that if a requisition for a pre-trial conference is not filed on or before September 1, 2004, the Administrator shall serve a further Notice of Status Review pursuant to rule 381.

[8] In the result, the appeal will be allowed, the order of the Federal Court dated January 28, 2004 set aside and the action permitted to continue on the basis that if a requisition for a pre-trial conference is not filed on or before September 1, 2004, the Administrator shall serve a further Notice of Status Review pursuant to rule 381.

"A.J. STONE"

J.A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-103-04

APPEAL FROM AN ORDER OF THE FEDERAL COURT OF CANADA DATED JANUARY 28, 2004, FEDERAL COURT OF CANADA FILE NO. T-2034-02

STYLE OF CAUSE: INFONET SERVICES CORPORATION v. MATROX ELECTRONIC SYSTEMS LTD. ET AL.

PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: April 21, 2004

REASONS FOR JUDGMENT OF THE COURT (Stone, Sexton, Evans JJ.A.)

RENDERED FROM THE BENCH BY: Stone J.A.

APPEARANCES:

Ms. Barbara A. McIsaac, Q.C. for the Appellant

SOLICITORS OF RECORD:

McCarthy Tétrault LLP for the Appellant

Ottawa, Ontario

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Infonet Services Corp. v. Matrox Electronic Systems Ltd., 2004 FCA 162

Citations2004 FCA 162

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2004 FCA 162