Ottawa, Ontario, January 18, 2007
PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
WARREN WESSEL and WESTMEN OILFIELD RENTALS (ALBERTA) LTD.
and
AND BETWEEN:
CANSCO LTD.
Plaintiff by Counterclaim
and
WARREN WESSEL and WESTMEN OILFIELD RENTALS (ALBERTA) LTD.
Defendants by Counterclaim
REASONS FOR ORDER AND ORDER
[1] The defendant, Cansco Ltd., appeals the decision of Madam Prothonotary Tabib dated November 17, 2006, which set aside her order dismissing the action on status review.
Background
[2] The plaintiff’s action is for the alleged infringement of Canadian Patent 2,206,675 (the Patent). The defendant has denied infringement and has further alleged invalidity on a number of grounds by way of defence and counterclaim.
[3] On July 25, 2006, the Federal Court issued a Notice of Status Review ordering the plaintiffs to show cause why the action should not be dismissed for delay by September 5, 2006. The plaintiffs did not provide submissions in response to the Notice of Status Review. As a result, Madam Prothonotary Tabib ordered the plaintiffs’ action to be dismissed for delay on September 12, 2006 (the dismissal order).
[4] On September 6, 2006, after the show cause deadline, the plaintiffs assigned the benefits of this action to a new party, Weatherford International Ltd. (Weatherford). The plaintiffs retained new counsel, Borden Ladner Gervais LLP (BLG), who filed a Notice of Change of Solicitors and became the plaintiffs’ new solicitors of record on September 12, 2006. The plaintiffs then applied to set aside the Order pursuant to Rule 399 of the Federal Courts Rules, S.O.R. 1998/106.
[5] On November 17, 2006, Madam Prothonotary Tabib set aside the dismissal order and allowed the action to continue as a specially managed proceeding (the reinstatement order). In her reinstatement order, Prothonotary Tabib stated:
Upon reviewing the motion record of the Plaintiffs, I am satisfied that the Plaintiffs, both through their previous solicitor of record and new solicitors of record, upon becoming aware of the notice of status review, took reasonable steps to ensure that written representations in response would be served and filed within the time set out in the notice of status review. I am satisfied that the only reason they failed to do so was a clerical error committed by the new solicitors of record for the Plaintiffs in entering the date for the service and filing of these representations as September 15, 2006 rather than September 5, 2006. On the evidence before me, I am fully satisfied that had that error not been made, the Plaintiffs would have taken all necessary steps to meet that deadline.
Thus, I am satisfied that it would have been appropriate and remains appropriate now to extend the time within which the Plaintiff could serve and file written submissions on status review. I have the benefit of the submissions that the Plaintiffs’ new solicitors of record had begun drafting and had intended to serve and file within the deadline they erroneously took to be September 15, 2006. I am satisfied that if those submissions had been before me when I made the Order of September 12, 2006, I would not have dismissed the action for delay. What the representations show, which was not apparent on a reading of the recorded entries, is that after the close of pleadings, the parties had exchanged affidavits of documents and that the Plaintiffs had communicated with the Defendant in the spring of 2006 to schedule discoveries, and that these discoveries were delayed in view of ongoing discussions between the Plaintiffs and Weatherford International Ltd. for the assignment of the relevant patent. I am thus satisfied that the Plaintiffs have put forward a reasonable explanation for the delay. Furthermore, I am satisfied that the draft written submissions did, and do put forward a reasonable proposal for moving the matter forward expeditiously.
[Emphasis added]
[6] The defendant appeals the reinstatement order on the basis that the plaintiffs failed to show, pursuant to Rule 399(1)(b) of the Federal Courts Rules, firstly, that an accident or mistake was the reason they failed to file submissions by September 5, 2006 and, secondly, a prima facie case why the dismissal order should not have been made. The defendant argues that there is no evidence from the plaintiffs or their former solicitor, Prowse Chowne LLP, on either aspect of this test. The defendant submits that, at all times up to September 5, 2006, the plaintiffs were represented by Prowse Chowne LLP. The plaintiffs’ evidence must therefore have demonstrated an error by themselves or Prowse Chowne LLP, rather than by BLG, which did not have authority to act on the plaintiffs’ behalf until September 12, 2006.
[7] The only evidence before the Court was an affidavit of David T. Madsen, a solicitor at BLG, which indicates that BLG wrongly recorded the deadline to respond to the Notice of Status Review. This evidence, the defendant argues, is irrelevant to the issue of whether there was an accident or mistake resulting in the failure to file submissions by September 5, 2006, since BLG did not act for the plaintiffs and had no authority to make submission on their behalf when the Show Cause deadline expired.
Standard of review
[8] Rule 51 of the Federal Courts Rules provides for the appeal of a prothonotary’s order to a judge of the Federal Court. In Merck & Co. v. Apotex Inc., 2003 FCA 488, the Federal Court of Appeal held at paragraph 19:
Discretionary orders of prothonotaries ought not be disturbed on appeal to a judge unless:
a) the questions raised in the motion are vital to the final issue of the case, or
b) the orders 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.
[9] The defendant argues that the reinstatement order is vital to the final issue of this action because, had the application leading to the reinstatement order been decided differently, the action would have been dismissed. The defendant argues that the Court should therefore conduct a de novo review of the prothonotary’s decision to issue the reinstatement order.
[10] In determining whether the reinstatement order is indeed vital to the final issue of this action, I am guided by the Federal Court of Appeal’s judgment in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.), in which MacGuigan J.A. stated at page 464:
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.
[Emphasis added]
[11] For the reasons described in Aqua-Gem, above, I am satisfied that the reinstatement order must be considered vital to the final resolution of the case and therefore warrants a de novo review on appeal.
Issue
[12] The issue raised in this appeal is whether the Dismissal Order ought to be set aside and the action reinstated.
Analysis
[13] The issuance of a reinstatement order is governed by Rule 399(1)(b) of the Federal Courts Rules:
|
Setting aside or variance 399. (1) On motion, the Court may set aside or vary an order that was made […] (b) in the absence of a party who failed to appear by accident or mistake or by reason of insufficient notice of the proceeding, if the party against whom the order is made discloses a prima facie case why the order should not have been made.
|
Annulation sur preuve prima facie 399. (1) La Cour peut, sur requête, annuler ou modifier l’une des ordonnances suivantes, si la partie contre laquelle elle a été rendue présente une preuve prima facie démontrant pourquoi elle n’aurait pas dû être rendue : […] b) toute ordonnance rendue en l’absence d’une partie qui n’a pas comparu par suite d’un événement fortuit ou d’une erreur ou à cause d’un avis insuffisant de l’instance. |
[14] The plaintiffs must therefore first demonstrate that the dismissal order was made by reason of some accident or mistake. The dismissal order was made pursuant to Rule 382(2)(a), which requires a plaintiff to show reason why it has delayed in the prosecution of action:
|
382. […] Powers of Court on status review (2) At a status review, the Court may (a) require a plaintiff, applicant or appellant to show cause why the proceeding should not be dismissed for delay and, if it is not satisfied that the proceeding should continue, dismiss the proceeding; […]
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382. […] Pouvoirs de la Cour (2) À l’examen de l’état de l’instance, la Cour peut : a) exiger que le demandeur ou l’appelant donne les raisons pour lesquelles l’instance ne doit pas être rejetée pour cause de retard et, si elle n’est pas convaincue que l’instance doit être poursuivie, rejeter celle-ci; […] |
Accordingly, the plaintiffs must demonstrate that they failed to show cause by reason of some accident or mistake. The defendant argues that, because there was no evidence of an accident or mistake by the plaintiffs or their solicitors at the time of the deadline for showing cause, Prothonotary Tabib erred in setting aside the dismissal order under Rule 399(1)(b).
[15] The time period for filing materials on status review is not set by statute; rather, they are set at the Court’s discretion under Rule 382. Unlike a prescription period where a certain action must occur before a particular date, the Court has discretion on status review and on setting aside or varying an order. The defendant’s argument, in my view, overemphasizes the importance of the date on which the plaintiffs formalized their change of solicitor from Prowse Chowne LLP to BLG. While it is clear that the Notice of Change of Solicitor was not filed until one week after the September 5, 2006 deadline, it is reasonable to expect that the timing of this filing was driven by the same error which led BLG to believe mistakenly that the status review was not due until September 15, 2006. Certainly the plaintiffs’ former counsel, Prowse Chowne LLP, ought to have taken the necessary steps to ensure the plaintiffs had satisfied the status review requirements before the appropriate deadline or sought other arrangements in their capacity as the plaintiffs’ solicitors of record. Although no evidence was submitted on behalf of Prowse Chowne LLP to establish its role, if any, in the error or accident that led to the dismissal of the plaintiffs’ action, I am satisfied based on the explanation provided in the Madsen affidavit that the plaintiffs’ failure to file its status review before the appropriate deadline was the result of an accident or error within the meaning of Rule 399(1)(b). This is a solicitor’s slip.
[16] The second requirement for the reinstatement order is that the plaintiffs disclose a prima facie case why the dismissal order should not have been made. The defendant argues that there was no evidence led by the plaintiffs concerning their reasons for delay in prosecuting the action.
[17] As noted by Prothonotary Tabib in the reinstatement order, the parties had exchanged affidavits of documents and the plaintiffs had communicated with the defendant in the spring of 2006 to schedule discoveries. These discoveries were delayed in view of the ongoing discussions between the plaintiffs and Weatherford for the assignment of the Patent. Like Prothonotary Tabib, I am satisfied that the plaintiffs put forward a reasonable explanation for the delay.
Conclusion
[18] It is clear to the Court that a mistake or solicitor’s slip explains the failure by the plaintiff’s new counsel to make submission in response to the Rule 380 status review, that the plaintiff clearly intended to prosecute the litigation, and that the parties had been active working on the action in 2006. For these reasons, the appeal is dismissed with costs in the amount of $1,000 payable to the plaintiffs in the cause.
ORDER
THIS COURT ORDERS that:
1. The defendant’s appeal of Prothonotary Tabib’s Order of November 17, 2006 is dismissed; and
2. Costs are awarded to the plaintiffs in the cause in the amount of $1,000.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1226-05
STYLE OF CAUSE: WARREN WESSEL AND WESTMEN OILFIELD RENTALS (ALBERTA) LTD. v. CANSCO LTD.
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: January 11, 2007
APPEARANCES:
|
Mr. Frank Tosto
|
FOR THE PLAINTIFF (DEFENDANTS BY COUNTERCLAIM) |
|
Mr. Michael P. Theroux
|
FOR THE DEFENDANT (PLAINTIFF BY COUNTERCLAIM) |
|
Mr. Walker McLeod
|
FOR THE DEFENDANT (PLAINTIFF BY COUNTERCLAIM) |
SOLICITORS OF RECORD:
|
Borden Ladner Gervais LLP Calgary, Alberta |
(DEFENDANTS BY COUNTERCLAIM) |
|
Bennett Jones LLP
|
FOR THE DEFENDANT (PLAINTIFF BY COUNTERCLAIM) |