Date: 20040611
Docket: T-630-02
Citation: 2004 FC 851
Ottawa, Ontario, this 11th day of June, 2004
PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE
BETWEEN:
VOGO INC.
Plaintiff
- and -
ACME WINDOW HARDWARE LTD.
and 627749 ALBERTA LTD.
Defendants
Docket: T-1361-03
AND BETWEEN:
VOGO INC.
Plaintiff
- and -
TAM NGUYEN
Defendant
REASONS FOR ORDER AND ORDER
O'KEEFE J.
[1] By orders dated October 29, 2003, Madam Prothonotary Tabib granted the plaintiff, Vogo Inc.'s ("Vogo") motion to consolidate the proceedings in T-630-02 and T-1361-03, and dismissed the defendant Tam Nguyen's ("Nguyen") motion to strike, stay or order further particulars with respect to action T-1361-03.
[2] This proceeding is a motion by the defendants, Acme Window Hardware Ltd. ("Acme") and Nguyen, for an order appealing the October 29, 2003 consolidation order, an award of costs in any event of the cause on a solicitor-client basis or on such other basis as deemed appropriate by this Court; and such further and other relief as this Court deems fit and proper.
[3] Secondly, the defendant Nguyen seeks an order appealing the October 29, 2003 dismissal of his motion to strike or stay Court action T-1361-03 or for further and better particulars; an award of costs in any event of the cause on a solicitor-client basis or on such other basis as deemed appropriate by this Court, payable forthwith; and such further and other relief as this Court deems fit and proper.
Background
[4] In the underlying proceeding, Vogo alleges that the defendants Acme, 627749 Alberta Ltd ("627749 Alberta") and Nguyen are liable for patent infringement of its "cam lock" patent,
Canadian Letters Patent No. 1,269,120 (the "Patent") which relates to window locking mechanisms.
[5] Acme is in the business of manufacturing, importing and selling window components. 627749 Alberta is the majority shareholder of Acme, and Nguyen is the president and a director of Acme.
[6] Acme and 627749 Alberta were named as defendants in action T-630-02, commenced on April 15, 2003. After discovery examination of Nguyen as a representative of Acme was completed in T-630-02, Vogo commenced action T-1361-03, naming Nguyen personally for alleged patent infringement.
[7] Nguyen filed a motion to strike the statement of claim in T-1361-03, to stay the action until the final determination of action T-630-02 or, in the further alternative, for further and better particulars.
[8] Vogo filed a motion to consolidate the actions in T-630-02 and T-1361-03.
The Decisions under Appeal
[9] Madam Prothonotary Tabib (the "Prothonotary") dismissed Nguyen's motion, not convinced that any of the grounds for striking pleadings set out in Rule 221(1) applied. The Prothonotary rejected Nguyen's argument that it was improper for Vogo to bring a separate action and seek consolidation rather than make a motion to add him as a defendant to action T-630-02. The Prothonotary held that Vogo's statement of claim in action T-1361-03 was not immaterial, redundant, scandalous, frivolous, vexatious, prejudicial, a departure from a previous pleading or otherwise an abuse of the process of the Court and therefore refused to strike or stay the proceedings.
[10] The Prothonotary also denied Nguyen's request for further particulars in T-1361-03 on the basis that in the context of the two actions being consolidated, Nguyen had sufficient knowledge of the case asserted against him to be able to plead intelligently.
[11] By a separate order, the Prothonotary granted Vogo's motion for consolidation on the basis that the two actions were based on the same alleged act of infringement, the witnesses in the two actions would be the same, counsel were the same, consolidation would avoid a multiplicity of proceedings, would promote an expeditious and inexpensive determination of the issues in dispute and was necessary to avoid the real possibility of contradictory judgments on the underlying issue of infringement. The Prothonotary further reasoned that consolidation would not likely delay the conduct of either of the actions or otherwise result in any prejudice to the defendants.
[12] These proceedings are the appeals of the Prothonotary's decisions.
Nguyen's Submissions
(Appealing the Dismissal of the Motion to Strike and for Other Relief)
[13] Nguyen submits that the Prothonotary's decision raised questions vital to the final resolution of the case, so on appeal this Court must exercise its own discretion de novo: Canada v. Aqua-Gem Investments Ltd. (1993), 149 N.R. 273 (F.C.A.).
[14] Nguyen submits that the Prothonotary erred in not addressing that the two actions were identical except for the parties named as defendants, and that Vogo itself had commenced the multiplicity of proceedings so allowing consolidation would only prevent undue expense that Vogo itself had caused.
[15] Nguyen submits that, in essence, Vogo was attempting to add him as a defendant to T-630-02 and that the Prothonotary erred by inferring that he had an onus to show why he should not be a defendant in T-630-02, rather than placing an onus on Vogo to demonstrate why he should be a defendant to T-630-02.
[16] Nguyen states that his motion to strike was filed and served before Vogo's motion to consolidate was properly filed and served. On this basis, Nguyen contends that his motion should have been dealt with prior to any consideration of Vogo's motion.
[17] Nguyen further submits that the Prothonotary was obliged to address his evidence of being unaware of the Patent when he designed three of Acme's window handles and that once he was aware of the Patent, he took steps to avoid infringement in designing a fourth window handle.
[18] Nguyen submits that the Prothonotary erred in dismissing his motion for further and better particulars when Vogo has provided no particulars as to his personal actions that amount to wilful infringement.
[19] Finally, Nguyen submits that the Prothonotary's decision is clearly wrong as it was based on a wrong principle of law and a misapprehension of the facts. In addition, Nguyen states that the decision raises questions vital to the final resolution of the case that are deserving of review by a trial judge.
Vogo's Submissions
(Responding to Nguyen's Appeal of the Dismissal of the Motion to Strike and Other Relief)
[20] In response, Vogo argues that Nguyen is unable to appeal the dismissal order because he took a fresh step in the consolidated action by moving to bifurcate the issues of liability and remedy.
[21] Vogo submits that a stay of proceedings and an order for particulars are both interlocutory in nature since they are not vital to the final resolution of the case. Relying on Aqua-Gem, supra, Vogo submits that this Court should not exercise its discretion de novo on this appeal, but instead should only overturn the Prothonotary's order if it is clearly wrong in the sense that the discretion was based upon a wrong principle or misapprehension of the facts. Vogo submits that Nguyen has not met the onus of showing that the Prothonotary was clearly wrong in her decision.
[22] Even if this Court exercises its discretion de novo, Vogo submits that the Prothonotary was correct to dismiss Nguyen's motion because there was no basis to strike the action in T-1361-03, there were no grounds to stay the action in T-1361-03 and the pleadings are sufficient so particulars should not have been ordered.
[23] With respect to striking the action in T-1361-03, Vogo asserts that a pleading should only be struck if it is plain and obvious that it will fail at trial. Vogo submits that a director and officer of a corporation, such as Nguyen, can be held liable for patent infringement where they engage in deliberate, wilful and knowing conduct that is likely to constitute infringement: Mentmore Manufacturing Co. Ltd. et al. v. National Merchandise Manufacturing Co Inc. et al (1978), 40 C.P.R. (2d) 164 (F.C.A.). On this test, Vogo argues that its allegations against Nguyen in his personal capacity have a legal basis on which it could succeed at trial and that Nguyen failed to meet the burden of proving the claim should be struck.
[24] Vogo also contends that the affidavit of Nguyen sworn November 10, 2003 should be disregarded because on appeal, this Court should only consider the material that was before the Prothonotary, not new material. Furthermore, Vogo states that under Rule 221(2), no affidavit evidence can be introduced on a motion to strike.
[25] Vogo also submits that the Prothonotary properly dismissed Nguyen's motion to stay the proceedings in T-1361-03, as there were no grounds for a stay. Vogo submits that it was in the interests of justice for the stay to be denied and for the two related actions to be consolidated.
[26] Vogo further submits that it was proper for the Prothonotary to refuse Nguyen's request for further particulars, as the statement of claim is sufficient to enable the defendant to file a defence and the request was simply a delay tactic. Vogo argues that if there is a finding of infringement, there will clearly be a finding of deliberate wilful infringement as Nguyen has admitted to attempting to design around the Patent.
[27] In sum, Vogo argues that the Prothonotary carefully considered Nguyen's motion to strike, stay or for particulars and correctly decided to dismiss it. As such, Vogo argues this appeal of the Prothonotary's order should be dismissed, with costs in any event of the cause, payable forthwith.
Nguyen's Submissions in Reply
(Appealing the Dismissal of the Motion to Strike and for Other Relief)
[28] In reply, Nguyen submits that the order of filing the dismissal order and consolidation order is a matter of record and disputes that it, or Nguyen's position that his motion should be decided before the consolidation request was considered, are new issues that were not before the Prothonotary.
[29] Nguygen contends that an appeal of the dismissal order is not a fresh step that would deprive him of the ability to appeal the Prothonotary's order. Nguyen was obligated to bring his appeal of the dismissal order under the consolidated style of cause based on the timing of the Prothonotary's decisions.
[30] Nguyen submits that the dismissal order is clearly wrong because it misapprehended the facts and failed to consider his evidence that he took steps to design around the Patent.
[31] Nguyen disputes that Rule 221(2) prevents him from submitting affidavit evidence in support of a motion to strike. On its own terms, Rule 221(2) prohibits evidence on motions to strike based on Rule 221(1)(a). Nguyen contends that since his motion to strike was based on not only Rule 221(1)(a) but Rule 221(1)(b)-(f), he was permitted to submit evidence to support his position.
[32] Nguyen submits that the action in T-1361-03 is frivolous, vexatious and by Vogo's own admission, duplicitous in that the allegations raised in both actions are identical.
[33] Nguyen submits that even if Vogo is successful in proving infringement by Acme, it does not necessarily follow that he is also liable in his personal capacity, since Vogo has not disputed the evidence that Nguyen was either unaware of the Patent or made attempts to design around the Patent. This, in Nguyen's view, supports the action in T-1361-03 being struck.
[34] Nguyen contends that further particulars must be ordered in T-1361-03 regarding his actions that allegedly constitute infringement, since Vogo's pleading only alleges that he directed Acme to infringe the Patent.
Acme and Nguyen's Submissions
(Appealing the Consolidation Order)
[35] The appellants, Acme and Nguyen, submit that the Prothonotary's consolidation order raises questions vital to the final resolution of the case, so on appeal, this Court must exercise its own discretion de novo: Aqua-Gem, supra.
[36] Acme and Nguyen argue that the consolidation order should be overturned for many of the same reasons it is alleged that the dismissal order should be overturned. Specifically, Acme and Nguyen submit that the Prothonotary erred in granting the consolidation order:
1. When Vogo had not sufficiently demonstrated that the Acme and Nguyen would not suffer an injustice;
2. Without addressing that the two actions were identical except for the parties named as defendants and that it was Vogo itself that had commenced the multiplicity of proceedings so allowing consolidation would only prevent undue expense that Vogo itself had caused;
3. Even though Vogo had not directly demonstrated that Nguyen should be a defendant to T-630-02;
4. Before consideration and decision of Nguyen's motion to strike, since the motion to strike was filed before the motion to consolidate;
5. Even thought it was premature because the order was made before the pleadings in T-1361-03 were closed. Nguyen had not yet filed a Statement of Defence when the two actions were consolidated. Acme and Nguyen submit that consolidation should not have been decided before the the issues in T-1361-03 were fully determined by a complete set of pleadings.
[37] Finally, Acme and Nguyen submit that the Prothonotary's decision is clearly wrong as it was based on a wrong principle of law and a misapprehension of the facts. In addition, Acme and Nguyen state that the decision raises questions vital to the final resolution of the case that are deserving of review by a trial judge.
[38] Acme and Nguyen request that their appeal of the consolidation order be allowed with costs payable forthwith, in any event of the cause.
Vogo's Submissions
(Responding to the Appeal of the Consolidation Order)
[39] Vogo submits that because consolidation orders are not vital to the final resolution of the case, the Prothonotary's order should only be overturned if it is clearly wrong, in the sense that the discretion was based upon a wrong principle or misapprehension of the facts: Aqua-Gem, supra. Vogo argues that the Prothonotary's decision was correct and that Acme and Nguyen have not met their burden of proving it should be overturned on appeal.
[40] Vogo submits that consolidating actions T-630-02 and T-1361-03 achieves the policy goals underlying Rule 105, namely, avoiding multiple proceedings, promoting expeditious and inexpensive determinations of matters, and fulfilling the true interests of the parties.
[41] Vogo further argues that consolidation of T-630-02 and T-1361-03 is in the interests of justice because the subject matter of the two proceedings are essentially the same, the witnesses are the same, the evidence in the two proceedings is parallel and conflicting outcomes should be avoided.
[42] Vogo submits there is a legal basis for its claim of infringement against Nguyen in his personal capacity and that if it is successful in proving infringement by Acme, the basis of that infringement is the deliberate actions of Nguyen in designing around the Patent but failing to do so.
[43] Vogo submits that by bringing a motion to bifurcate the consolidated action on November 4, 2003, Acme and Nguyen have taken a fresh step under the consolidated action and have thereby waived their right to appeal the consolidation order.
[44] Relying on Dawe v. Canada (2002), 220 F.T.R. 91, 2002 FCT 486, Vogo argues that the affidavit of Nguyen sworn November 10, 2003 should be disregarded because a review of the Prothonotary's decision should be on the basis of material that was before her, not on the basis of new material.
[45] Vogo requests that the appeal of the Prothonotary's consolidation order be dismissed with costs payable forthwith, in any event of the cause.
Acme and Nguyen's Submissions in Reply
(Appealing the Consolidation Order)
[46] In reply, Acme and Nguyen maintain that the consolidation order was filed only after the motion to strike T-1361-03 and furthermore, filing dates are a matter of record and not a new issue that should be disregarded by this Court sitting in review of the Prothonotary's order.
[47] Acme and Nguyen dispute that the prematurity of consolidation before the pleadings closed in action T-1361-03 is a new issue that was not before the Prothonotary. Acme and Nguyen submit they made argument in their original responding motion record that consolidation was premature, so this argument is properly considered by this Court sitting in review of the Prothonotary's decision. Acme and Nguyen further submit that the Prothonotary was clearly wrong in consolidating the actions when a statement of defence in T-1361-03 was not yet filed.
[48] Acme and Nguyen state that Vogo has not challenged Mr. Nguyen's evidence that he was not aware of the Patent and once aware, designed around the Patent.
[49] Acme and Nguyen submit that it is disingenuous of Vogo to commence a duplicitous action and then move to consolidate the actions before pleadings have closed in one of the actions to minimize the expense of its own course of conduct.
[50] Vogo's statement that if infringement by Acme is proven, infringement by Nguyen necessarily follows is disputed. Acme and Nguyen contend that Vogo's statement that they failed to design around the Patent should be disregarded as no evidence has been adduced to this effect.
[51] Acme and Nguyen submit that the motion to bifurcate the issues of liability and remedy in this case is not a fresh step that deprives them of the right to appeal the consolidation order because the motion time lines were dictated by order of the Prothonotary. Based on the time lines set by the Prothonotary, Acme and Nguyen allege that waiting for the outcome of an appeal of the consolidation order would have deprived them of the opportunity to file a bifurcation order. In this circumstance, it is submitted that the motion to bifurcate should not be considered a fresh step in the consolidated action that deprives the defendants of their right to appeal the consolidation order.
Issues
[52] The central issues raised by the parties can be stated as follows:
1. Should the appeal of the Prothonotary's order dismissing the motion to strike, stay or order particulars in action T-1361-03 be allowed?
a) What standard of review applies to the Prothonotary's decision?
b) Does the consolidation of the actions or Nguyen's motion to bifurcate preclude any appeal of the Prothonotary's order?
c) Are there grounds to strike the statement of claim in action T-1361-03?
d) Are there grounds to stay the action in T-1361-03?
e) Are there grounds to order Vogo to provide further particulars in action T-1361-03?
2. Should the appeal of the Prothonotary's consolidation order be allowed?
a) What standard of review applies to the Prothonotary's decision?
b) Does Nguyen's motion to bifurcate constitute a fresh step that precludes any appeal of the Prothonotary's consolidation order?
c) Are there grounds for this Court to intervene?
Relevant Statutory Provisions and Regulations
[53] Section 50 of the Federal Courts Act, R.S.C. 1985, c. F-7 provides for stays of proceedings in the interest of justice:
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50. (1) The Federal Court of Appeal or the Federal Court may, in its discretion, stay proceedings in any cause or matter
. . .
(b) where for any other reason it is in the interest of justice that the proceedings be stayed. |
50. (1) La Cour d'appel fédérale et la Cour fédérale ont le pouvoir discrétionnaire de suspendre les procédures dans toute affaire:
. . .
b) lorsque, pour quelque autre raison, l'intérêt de la justice l'exige. |
[54] Rule 51 of the Federal Court Rules, 1998, S.O.R./98-106 governs appeals of prothonotary's orders:
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51. (1) An order of a prothonotary may be appealed by a motion to a judge of the Trial Division. |
51. (1) L'ordonnance du protonotaire peut être portée en appel par voie de requête présentée à un juge de la Section de première instance. |
[55] Consolidation of actions and stays of proceedings are provided for in Rule 105, requests for particulars in Rule 181, striking pleadings in Rule 221 and costs in Rule 400 of the Federal Court Rules, 1998, supra:
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105. The Court may order, in respect of two or more proceedings,
(a) that they be consolidated, heard together or heard one immediately after the other;
(b) that one proceeding be stayed until another proceeding is determined; or
. . .
181. A pleading shall contain particulars of every allegation contained therein, including
(a) particulars of any alleged misrepresentation, fraud, breach of trust, wilful default or undue influence; and
(b) particulars of any alleged state of mind of a person, including any alleged mental disorder or disability, malice or fraudulent intention.
221. (1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it
(a) discloses no reasonable cause of action or defence, as the case may be,
(b) is immaterial or redundant,
(c) is scandalous, frivolous or vexatious,
(d) may prejudice or delay the fair trial of the action,
(e) constitutes a departure from a previous pleading, or
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105. La Cour peut ordonner, à l'égard de deux ou plusieurs instances:
a) qu'elles soient réunies, instruites conjointement ou instruites successivement;
b) qu'il soit sursis à une instance jusqu'à ce qu'une décision soit rendue à l'égard d'une autre instance;
. . .
181. L'acte de procédure contient des précisions sur chaque allégation, notamment:
a) des précisions sur les fausses déclarations, fraudes, abus de confiance, manquements délibérés ou influences indues reprochés;
b) des précisions sur toute allégation portant sur l'état mental d'une personne, tel un déséquilibre mental, une incapacité mentale ou une intention malicieuse ou frauduleuse.
221. (1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout ou partie d'un acte de procédure, avec ou sans autorisation de le modifier, au motif, selon le cas:
a) qu'il ne révèle aucune cause d'action ou de défense valable;
b) qu'il n'est pas pertinent ou qu'il est redondant;
c) qu'il est scandaleux, frivole ou vexatoire;
d) qu'il risque de nuire à l'instruction équitable de l'action ou de la retarder;
e) qu'il diverge d'un acte de procédure antérieur;
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(f) is otherwise an abuse of the process of the Court,
and may order the action be dismissed or judgment entered accordingly.
(2) No evidence shall be heard on a motion for an order under paragraph (1)(a).
400. (1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.
. . .
(3) In exercising its discretion under subsection (1), the Court may consider
(a) the result of the proceeding;
(b) the amounts claimed and the amounts recovered;
(c) the importance and complexity of the issues;
(d) the apportionment of liability;
(e) any written offer to settle;
(f) any offer to contribute made under rule 421;
(g) the amount of work;
(h) whether the public interest in having the proceeding litigated justifies a particular award of costs;
(i) any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding;
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f) qu'il constitue autrement un abus de procédure.
Elle peut aussi ordonner que l'action soit rejetée ou qu'un jugement soit enregistré en conséquence.
(2) Aucune preuve n'est admissible dans le cadre d'une requête invoquant le motif visé à l'alinéa (1)a).
400. (1) La Cour a entière discrétion pour déterminer le montant des dépens, les répartir et désigner les personnes qui doivent les payer.
. . .
(3) Dans l'exercice de son pouvoir discrétionnaire en application du paragraphe (1), la Cour peut tenir compte de l'un ou l'autre des facteurs suivants:
a) le résultat de l'instance;
b) les sommes réclamées et les sommes recouvrées;
c) l'importance et la complexité des questions en litige;
d) le partage de la responsabilité;
e) toute offre écrite de règlement;
f) toute offre de contribution faite en vertu de la règle 421;
g) la charge de travail;
h) le fait que l'intérêt public dans la résolution judiciaire de l'instance justifie une adjudication particulière des dépens;
i) la conduite d'une partie qui a eu pour effet d'abréger ou de prolonger inutilement la durée de l'instance; |
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(j) the failure by a party to admit anything that should have been admitted or to serve a request to admit;
(k) whether any step in the proceeding was
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(l) whether more than one set of costs should be allowed, where two or more parties were represented by different solicitors or were represented by the same solicitor but separated their defence unnecessarily;
(m) whether two or more parties, represented by the same solicitor, initiated separate proceedings unnecessarily;
(n) whether a party who was successful in an action exaggerated a claim, including a counterclaim or third party claim, to avoid the operation of rules 292 to 299; and
(o) any other matter that it considers relevant.
(4) The Court may fix all or part of any costs by reference to Tariff B and may award a lump sum in lieu of, or in addition to, any assessed costs.
(5) Where the Court orders that costs be assessed in accordance with Tariff B, the Court may direct that the assessment be performed under a specific column or combination of columns of the table to that Tariff.
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j) le défaut de la part d'une partie de signifier une demande visée à la règle 255 ou de reconnaître ce qui aurait dû être admis;
k) la question de savoir si une mesure prise au cours de l'instance, selon le cas:
(i) était inappropriée, vexatoire ou inutile,
(ii) a été entreprise de manière négligente, par erreur ou avec trop de circonspection;
l) la question de savoir si plus d'un mémoire de dépens devrait être accordé lorsque deux ou plusieurs parties sont représentées par différents avocats ou lorsque, étant représentées par le même avocat, elles ont scindé inutilement leur défense;
m) la question de savoir si deux ou plusieurs parties représentées par le même avocat ont engagé inutilement des instances distinctes;
n) la question de savoir si la partie qui a eu gain de cause dans une action a exagéré le montant de sa réclamation, notamment celle indiquée dans la demande reconventionnelle ou la mise en cause, pour éviter l'application des règles 292 à 299;
o) toute autre question qu'elle juge pertinente.
(4) La Cour peut fixer tout ou partie des dépens en se reportant au tarif B et adjuger une somme globale au lieu ou en sus des dépens taxés.
(5) Dans le cas où la Cour ordonne que les dépens soient taxés conformément au tarif B, elle peut donner des directives prescrivant que la taxation soit faite selon une colonne déterminée ou une combinaison de colonnes du tableau de ce tarif. |
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(6) Notwithstanding any other provision of these Rules, the Court may
(a) award or refuse costs in respect of a particular issue or step in a proceeding;
(b) award assessed costs or a percentage of assessed costs up to and including a specified step in a proceeding;
(c) award all or part of costs on a solicitor-and-client basis; or
(d) award costs against a successful party.
(7) Costs shall be awarded to the party who is entitled to receive the costs and not to the party's solicitor, but they may be paid to the party's solicitor in trust. |
(6) Malgré toute autre disposition des présentes règles, la Cour peut:
a) adjuger ou refuser d'adjuger les dépens à l'égard d'une question litigieuse ou d'une procédure particulières;
b) adjuger l'ensemble ou un pourcentage des dépens taxés, jusqu'à une étape précise de l'instance;
c) adjuger tout ou partie des dépens sur une base avocat-client;
d) condamner aux dépens la partie qui obtient gain de cause.
(7) Les dépens sont adjugés à la partie qui y a droit et non à son avocat, mais ils peuvent être payés en fiducie à celui-ci. |
Analysis and Decision
[56] Issue 1
Should the appeal of the Prothonotary's order dismissing the motion to strike, stay or order particulars in action T-1361-03 be allowed?
Nguyen made a motion to the Prothonotary to strike or stay action T-1361-03
or for further and better particulars. The Prothonotary denied this motion and Nguyen now appeals that decision. As the facts are similar to the consolidation order appeal, both appeals were argued together before me.
[57] a) What standard of review applies to the Prothonotary's decision?
In dismissing Nguyen's motion, the Prothonotary made three decisions. The first decision was not to strike the statement of claim in action T-1361-03 for any of the grounds listed in Rule 221(1) of the Federal Court Rules, 1998, supra. Following the jurisprudence contained in Aqua-Gem, supra, this would be a question vital to the final issue of the case, so I must exercise my discretion de novo.
[58] The second decision that the Prothonotary made was not to stay the proceedings in action T-1361-03 pending the determination of action T-630-02. I am of the opinion that the Prothonotary's decision not to stay the proceedings in action T-1361-03 is not a question vital to the final issue of the case and ought not to be disturbed unless the Prothonotary's exercise of discretion was based on a wrong principle or a misapprehension of the facts.
[59] The third decision made by the Prothonotary was not to order Vogo to provide particulars of its statement of claim pursuant to Rule 181. A prothonotary's order for particulars is not a question vital to any final issue of the case and must not be disturbed on appeal unless the prothonotary's exercise of discretion was based on a wrong principle or on a misapprehension of the facts: 1029894 Ontario Inc. v. Dolomite Svenska Aktiebolag, [1999] F.C.J. No. 1719 (T.D.) (QL).
[60] b) Does the consolidation of the actions or Nguyen's motion to bifurcate preclude
any appeal of the Prothonotary's order?
The purpose of the "fresh step" rule is to prevent a party from acting inconsistently with its prior conduct in the proceeding. By pleading in response to a statement of claim, for instance, a defendant may extinguish their right to complain of fatal deficiencies in the allegations made against them. The fresh step rule aims to prevent prejudice to a party who has governed themselves according to the procedural steps taken by the opposing side, where it would be unfair to permit a reversal in approach.
[61] Here, Vogo argues that Nguyen's motion to bifurcate the issues of liability and remedy bars his appeal of the Prothonotary's order because it was a fresh step under the consolidated action. I am not persuaded that the consolidation order itself or Nguyen's motion to bifurcate the issues of liability and damages bars any appeal of the Prothonotary's order, based on the facts of this case. As Nguyen pointed out, the procedural time line was dictated by the timing of the Prothonotary's decisions.
[62] c) Are there grounds to strike the statement of claim in action T-1361-03?
Nguyen submits that the statement of claim discloses no reasonable cause of action, is immaterial and redundant, scandalous, frivolous or vexatious, would prejudice or delay the fair trial of the action, constitutes a departure from a previous pleading and is an abuse of the Court.
[63] Nuyen filed affidavit evidence on this motion. Vogo argued that affidavit evidence is not admissible on a motion to strike made pursuant to Rule 221. My reading of Rule 221(2) leads me to conclude that Rule 221(2) only prohibits evidence being led on a motion made pursuant to Rule 221(1)(a). In this case, Nguyen's motion to strike was based on all the grounds set out in Rule 221(1). The jurisprudence of this Court also has established that, subject to limited exceptions which do not apply here, the appeal of a prothonotary's order should be based only on the evidence that was before the prothonotary. Consequently, the new affidavit of Nguyen, to the extent that it contains evidence that was not before the Prothonotary, is not admissible on this appeal.
[64] Nguyen submits that his motion to strike and for other relief should have been considered separate, apart and prior to the issue of consolidation and since it was not, that this appeal should be allowed. I do not agree with this proposition.
[65] The Prothonotary made reference to the contents of Vogo's statement of claim in her decision. The Prothonotary stated that Vogo's statement of claim specifically alleges that Nguyen looks after all the business of Acme and it specifies the ownership interest of the defendant. The Prothonotary also noted that the statement of claim alleges that Nguyen "personally designed the allegedly infringing window locks sold by Acme at a time he was aware of the Plaintiff's patent, thus constituting (if the allegations are proven) wilful and wrongful interference of the Plaintiff's patent." The Prothonotary also noted that the statement of claim states that "the Defendant is the directing will of Acme, that it [he] makes the decisions as to the course of action of Acme and that after the Plaintiff requested Acme to stop its activities, the Defendant personally made the decision that Acme should continue selling the allegedly infringing locks."
[66] Having reviewed the materials, I would exercise my discretion de novo and arrive at the same conclusion as did the Prothonotary when she ordered that the motion to strike the claim on the various grounds set out in Rule 221 should be dismissed.
[67] d) Are there grounds to stay the action in T-1361-03?
The Prothonotary's order, in this respect, should only be overturned if it was clearly wrong in the sense of being based on a wrong principle or upon a misapprehension of the facts. I have reviewed the Prothonotary's decision and I am of the view that the refusal to grant the stay in action T-1361-03 was not clearly wrong in the Aqua-Gem, supra sense. The appeal of this aspect of the Prothonotary's decision is therefore dismissed.
[68] e) Are there grounds to order Vogo to provide further particulars in action T-
1361-03?
The question of whether or not particulars should be ordered is a matter that is not vital to the final issue of the case so the Prothonotary's refusal to order Vogo to provide particulars should only be disturbed if it was clearly wrong as set out in Aqua-Gem, supra.
[69] Regarding the motion for particulars, the Prothonotary's decision stated as follows:
As regard the motion for particulars, I find, in the context of the two actions to be consolidated, of the representations made in support of the numerous motions that have been brought in these two actions, and of the discovery of Mr. Nguyen as a representative of the Defendant Acme in file T-630-02, that the Defendant does have sufficient knowledge of the case asserted against him to be able to plead intelligently. It may be that for the purposes of trial, the pleadings would need to be further clarified and narrowed. However, the sole determination which I am required to make at this point is whether the pleadings as they stand are sufficient for the Defendant to plead. I am of the view that they are.
[70] It is obvious from her decision that the Prothonotary recognized that, considering the Rule 181 jurisprudence, particulars required for pleading are not as broad as they are for trial: IBM Canada Ltd. v. Printech Ribbons Inc. (1994), 77 F.T.R. 147 (T.D.).
[71] The defendant, Nguyen, argues that Vogo has provided no particulars as to his personal actions that amount to wilful infringement, however, a review of paragraphs 3 and 4 of the statement of claim in action T-1361-03 indicates otherwise. It is specifically alleged that Nguyen looks after all of the business of Acme, designed the locks for Acme that allegedly infringe Vogo's Patent while he was aware of the Patent and directed Acme to continue selling the allegedly infringing locks. It is my view that these allegations are sufficiently particular to allow Nguyen to plead in defence.
[72] I am therefore of the opinion that the Prothonotary was not clearly wrong in the sense that the exercise of her discretion was based upon a wrong principle or upon a misapprehension of the facts. The decision of the Prothonotary must stand.
[73] The appeal of the Prothonotary's decision regarding the motion to strike and other relief is, on this basis, dismissed with costs to Vogo.
[74] Issue 2
1. Should the appeal of the Prothonotary's consolidation order be allowed?
a) What standard of review applies to the Prothonotary's decision?
MacGuigan J.A. of the Federal Court of Appeal stated the following, with respect to the standard of review to be applied to an appeal of a prothonotary's decision, in Canada v. Aqua-Gem, supra at paragraph 95:
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following [page463] in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourciere J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(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) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
And at paragraph 98:
The question before the prothonotary in the case at bar can be considered interlocutory only because the prothonotary decided it in favour of the appellant. If he had decided it for the respondent, it would itself have been a final decision of the case: A-G of Canada v. S.F. Enterprises Inc. et al. (1990), 90 DTC 6195 (F.C.A.) at pages 6197-6198; Ainsworth v. Bickersteth et al., [1947] O.R. 525 (C.A.). It seems to me that a decision which can thus be either interlocutory or final depending on how it is decided, even if interlocutory because of the result, must nevertheless be considered vital to the final resolution of the case. Another way of putting the matter would be to say that for the test as to relevance to the final issue of the case, the issue to be decided should be looked to [page465] before the question is answered by the prothonotary, whereas that as to whether it is interlocutory or final (which is purely a pro forma matter) should be put after the prothonotary's decision. Any other approach, it seems to me, would reduce the more substantial question of "vital to the issue of the case" to the merely procedural issue of interlocutory or final, and preserve all interlocutory rulings from attack (except in relation to errors of law).
[75] The decision made by the Prothonotary in this case was whether or not two actions should be consolidated. This question is an interlocutory decision which is not vital to the final issue of the case. Thus, I must determine whether the decision of the Prothonotary to grant consolidation of the two actions was clearly wrong in the sense that the exercise of discretion was based upon a wrong principle or a misapprehension of the facts: Z. I. Pompey Industrie v. E.C.U.-Line N.V., [2003] 1 S.C.R. 450, 2003 SCC 27.
[76] The Prothonotary, in her decision, decided to grant consolidation because the two actions were based on the same alleged act of infringement with the only difference being that in action T-630-02, the defendant was Acme, which manufactured and sold the allegedly infringing articles and in action T-1361-03, Vogo seeks to find the defendant, Tam Nguyen personally liable for deliberately, wilfully and knowingly designing the infringing articles and directing the defendant Acme to manufacture and sell the same.
[77] The Prothonotary also stated that the witnesses in the two actions will be the same, counsel are the same, that consolidation would avoid a multiplicity of proceedings and the promotion of an expeditious and inexpensive determination. As well, the Prothonotary found that consolidation would avoid the possibility of conflicting judgments on the issue of infringement. Finally, the Prothonotary found that the consolidation order would not result in any delay in the conduct of the actions and that the consolidation order would not result in any prejudice to the defendants in either action.
[78] b) Does Nguyen's motion to bifurcate constitute a fresh step that precludes
any appeal of the Prothonotary's consolidation order?
I have already ruled on this point in the motion to strike and I would adopt the same
position in this portion of this motion.
[79] c) Are there grounds for this Court to intervene?
It is my opinion that the Prothonotary considered the appropriate factors in concluding that consolidation was appropriate in this case. It follows that the Prothonotary was not clearly wrong in the sense that her exercise of discretion was based upon a wrong principle or upon a misapprehension of the facts and therefore, her decision with respect to consolidation should not be disturbed on appeal.
[80] Acme and Nguyen suggest that the Prothonotary should have heard Nguyen's motion to strike prior to dealing with Vogo's motion to consolidate, however, I find no merit to this argument.
[81] Acme and Nguyen's appeal of the Prothonotary's consolidation order is therefore dismissed with costs to Vogo.
ORDER
[82] IT IS ORDERED that:
1. The appeal of the defendant, Nguyen, of the Prothonotary's order dated October 29, 2003, dismissing Nguyen's motion to strike the statement of claim, or to stay the proceedings in action T-1361-03 until the proceedings in action T-630-02 are dealt with by the Court, and a motion for further and better particulars in action T-1361-03, is dismissed with costs to the plaintiff, Vogo.
2. The appeal of the defendants, Acme and Nguyen, of the Prothonotary's order dated October 29, 2003 and the subsequently amended order dated November 3, 2003, allowing the consolidation of action T-630-02 and action T-1361-03 is dismissed with costs to the plaintiff, Vogo.
"John A. O'Keefe"
J.F.C.
Ottawa, Ontario
June 11, 2004
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-630-02 and T-1361-03
STYLE OF CAUSE: VOGO INC.
- and -
ACME WINDOW HARDWARE LTD.
And 627749 ALBERTA LTD.
AND BETWEEN:
VOGO INC.
- and -
TAM NGUYEN
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: January 13, 2004
REASONS FOR ORDER AND ORDER OF O'KEEFE J.
APPEARANCES:
Daryl Schnurr
FOR PLAINTIFF
Jay Haugen
FOR DEFENDANTS
SOLICITORS OF RECORD:
Miller Thomson LLP
Kitchener, Ontario
FOR PLAINTIFF
Parlee McLaws LLP
Edmonton, Alberta
FOR DEFENDANTS