PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
Plaintiff
and
POLARIS INDUSTRIES INC., LEISURE MART AND RV CANADA CORPORATION doing business as POWERSPORTS & RV CANADA,
861073 ONTARIO LTD. doing business as WAYNE’S WORLD,
RICK’S PERFORMANCE INC., ELITE PERFORMANCE PRODUCTS (LONDON) INC., FOREST FARM EQUIPMENT LTD., 1070678 ONTARIO INC. doing business as SPOILED SPORTS, ELK ISLAND SALES INC., CYCLE WORKS CALGARY LTD., CYCLE WORKS LTD. doing business as CYCLE WORKS MOTORSPORTS, YELLOWHEAD POLARIS INC. doing business as PARKLAND SLED & ATV, LETHBRIDGE HONDA CENTRE LIMITED, COUNTRYSIDE MOTOR SPORTS INC., THUNDER CITY POWER & LEISURE LTD., ROND’S MARINE LTD.,
RANDY GUDMUNDSON doing business as RANDY’S TIRE & REPAIR,
SEA TO SKY MOTORSPORTS INC., KOOTENAY SLEDS & WHEELS INC., CYCLE NORTH ENTERPRISES LIMITED, SCHULTZ MOTORSPORTS INC., 363337 B.C. LTD. doing business as M & M PERFORMANCE,
JAMES VINCENT MARR, TREVOR JAMES MARR, K.V. AUTO & TRUCK CENTRE INC., and SUNSET AUTO SALES LIMITED
Defendants
REASONS FOR ORDER AND ORDER
[1] The defendants bring this motion for an order varying the timetable fixed by Prothonotary Milczynski in a Direction issued during a case management conference on March 5, 2007 (the Direction).
Background
[2] The plaintiff’s statement of claim in this trade-mark infringement action was issued on December 15, 2005 and served on all of the defendants by February 7, 2006.
[3] Since then, the defendants have demanded documents and particulars. A motion for particulars was heard on February 5, 2007 before Prothonotary Milczynski, who dismissed the motion in its entirety in an Order on the basis that the defendants have all the material facts necessary to plead their statement of defence.
[4] Pursuant to a notice of status review, Prothonotary Milczynski ordered that the action proceed as a specially managed proceeding. The parties were ordered to provide the Court with a consent timetable for the remaining steps in the action up to and including the request for a pre-trial conference.
[5] The parties were unable to consent on a timetable. The issue on which the parties’ scheduling positions most substantially differ is whether the timetable should allow for the defendants’ discovery of the plaintiff before filing a statement of defence as contemplated by Rule 236(2) of the Federal Courts Rules, SOR/1998-106.
[6] At the case management conference held on March 5, 2007, Prothonotary Milczynski directed that the defendants either serve and file their statement of defence or a motion to strike the claim by March 23, 2007. Prothonotary Milczynski also set the timetable for the remaining steps in the action up to the request for a pre-trial conference. The defendants seek to vary this timetable to allow for the discovery of the plaintiff before filing a statement of defence.
Relevant Rules
[7] The relevant provisions of the Federal Courts Rules are as follows:
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General principle
3. These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits.
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When examination may be initiated
236. (1) Subject to subsection (2), a party may examine an adverse party for discovery only if (a) the pleadings are closed and the examining party has served its affidavit of documents; (b) the pleadings are closed and the adverse party consents to the examination being conducted before the examining party has served its affidavit of documents; or (c) the adverse party is in default of serving and filing its pleadings and leave of the Court has been obtained. (2) Subject to subsection (3), a defendant may examine a plaintiff at any time after the statement of claim is filed. (3) Where two or more defendants are represented by the same solicitor, none of them may examine the plaintiff before filing a defence unless all of them examine the plaintiff at the same time.
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Principe général
3. Les présentes règles sont interprétées et appliquées de façon à permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible.
[…]
Conditions préalables
236. (1) Sous réserve du paragraphe (2), une partie ne peut interroger au préalable une partie adverse que si, selon le cas : a) les actes de procédure sont clos et la partie qui interroge a signifié son affidavit de documents; b) les actes de procédure sont clos et la partie adverse consent à ce que l’interrogatoire préalable soit tenu avant que la partie qui interroge ait signifié son affidavit de documents; c) la partie adverse n’a signifié ni déposé aucun acte de procédure et la Cour a donné son autorisation. Interrogatoire après le dépôt de la déclaration (2) Sous réserve du paragraphe (3), un défendeur peut interroger le demandeur à tout moment après le dépôt de la déclaration. Restriction — Plus d’un défendeur (3) Lorsque deux ou plusieurs défendeurs sont représentés par le même avocat, aucun d’eux ne peut interroger le demandeur avant d’avoir déposé une défense, à moins qu’ils n’interrogent le demandeur tous en même temps.
[…]
Pouvoirs du juge responsable de la gestion de l’instance 385. (1) Le juge responsable de la gestion de l’instance ou le protonotaire visé à l’alinéa 383c) tranche toutes les questions qui sont soulevées avant l’instruction de l’instance à gestion spéciale et peut : a) donner toute directive nécessaire pour permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible; b) sans égard aux délais prévus par les présentes règles, fixer les délais applicables aux mesures à entreprendre subséquemment dans l’instance; c) organiser et tenir les conférences de règlement des litiges et les conférences préparatoires à l’instruction qu’il estime nécessaires; d) sous réserve du paragraphe 50(1), entendre les requêtes présentées avant que la date d’instruction soit fixée et statuer sur celles-ci.
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Powers of case management judge 385. (1) A case management judge or a prothonotary assigned under paragraph 383(c) shall deal with all matters that arise prior to the trial or hearing of a specially managed proceeding and may (a) give any directions that are necessary for the just, most expeditious and least expensive determination of the proceeding on its merits; (b) notwithstanding any period provided for in these Rules, fix the period for completion of subsequent steps in the proceeding; (c) fix and conduct any dispute resolution or pre-trial conferences that he or she considers necessary; and (d) subject to subsection 50(1), hear and determine all motions arising prior to the assignment of a hearing date. |
Issue
[8] At issue in this motion is whether the timetable fixed by the Prothonotary’s Direction ought to be varied so as to allow the defendants to examine the plaintiff before filing a statement of defence.
Analysis
[9] The jurisprudence clearly establishes that the purpose of discovery before filing a defence is to assist the defendant in preparing the defence by discovering the case it has to meet. It is not intended to allow fishing for evidence to ground a defence: F.P. Bourgault Industries Air Seeder Division Ltd. v. Flexi-Coil (1994), 58 C.P.R. (3d) 433 (Fed. C.A.).
[10] During the hearing of this motion, the defendants stated that the reason for seeking early discovery was not to obtain information necessary for the filing of its defence—although plainly discovery would allow the defendants to mount a more fulsome defence—but for the purpose of obtaining information to support a motion to strike or a motion for summary judgment.
[11] The Court notes that, while the defendants were served with the statement of claim in February 2006, they did not claim any right to examine the plaintiff until a full year later. The Court also notes that, although the defendants were obliged under the Prothonotary’s Direction to file their statement of defence or a motion to strike by March 23, 2007, they did not do so. Instead, the defendants filed this motion to vary the timetable on March 23, 2007.
[12] Rule 3 of the Federal Court Rules requires that the Rules be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. The plaintiff is a relatively small company manufacturing motorcycles in Canada, and the main defendant, Polaris Industries Inc., is a major international company which has allegedly begun manufacturing motorcycles with the same trademark registered by the plaintiff in Canada. In my view, the parties’ significant difference in financial strengths is a relevant consideration in exercising the Court’s discretion to vary the timetable already set by the case management Prothonotary.
[13] At the hearing of this motion, I allowed a recess for 30 minutes to allow the parties to negotiate a mutually acceptable timetable. The negotiations were unsuccessful. Upon resuming the hearing, I reserved my decision and invited the defendants to propose a revised schedule which would not delay the action and would be acceptable to the plaintiff. I intimated at that time that I was inclined to dismiss the motion if an acceptable alternative timetable could not be provided.
[14] The defendants then filed an amended alternative timetable, and the plaintiff provided submissions in reply. In order to avoid any delay in reaching the final step of the pre-trial process governed by the Direction--namely the request for a pre-trial conference--the defendants’ timetable proposes to compress both rounds of discovery for each party, including motions to compel. Under the original timetable, six months were given to complete only the first round of discoveries excluding motions to compel. The original timetable, however, contemplated that both parties would conduct discoveries simultaneously. Under the defendants’ proposed timetable, the parties would conduct discoveries sequentially since the defendants would first examine the plaintiff under Rule 236(2). As a result, both parties have significantly less time to attend to pre-trial matters including discovery and related motions. It is eminently foreseeable that the result of such an ambitious schedule will be further delays and costs, as the parties will need to return to Court to seek extensions as necessary. The Court finds that this proposed schedule is not expeditious, not the least expensive determination of the proceeding on its merits and not just, particularly in view of the financial inequality of the two parties to support this litigation.
[15] While there is merit to the defendants’ argument that the Rule 236 provides a right to examine a plaintiff before filing a defence, the scope of that right is not unlimited. The right to examine a plaintiff before filing a defence must be interpreted in light of its purpose, which, as noted above, is to assist the defendant in discovering the case it has to meet. In her Order dated April 13, 2007 dismissing the defendants’ motion for particulars, Prothonotary Milczynski found:
...that sufficient material facts have been pleaded for the Defendants to understand the nature of the claim they are to meet, and to prepare a statement of defence.
Based on the Prothonotary’s finding that the defendants have been provided with sufficient material facts to understand the case they have to meet, I am of the view that the examination of the plaintiff for discovery at this stage prior to filing a defence is contrary to Rule 3 and is contrary to the Order and Direction from the Prothonotary under Rule 385(1)(a) of the Federal Courts Rules, which sets the schedule necessary for the just, most expeditious and least expensive determination of the proceeding on its merits.
[16] The Court concludes that this motion to vary the schedule of the case management Prothonotary should be dismissed without prejudice to the right of the defendants to seek leave from the Prothonotary for an extension of time to file their statement of defence.
[17] The plaintiff has requested that the costs of this motion be payable forthwith.
ORDER
THIS COURT ORDERS that:
This motion to vary the timetable fixed by Prothonotary Milczynski is dismissed with costs to the plaintiff to be assessed at the mid-range of Column III of Tariff B payable forthwith.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2203-05
STYLE OF CAUSE: VICTORY CYCLE LTD.
PLAINTIFF
and
POLARIS INDUSTRIES INC. ET AL
DEFENDANTS
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: April 23, 2007
APPEARANCES:
Mr. Rohit Parekh
Mr. Ken McKay
SOLICITORS OF RECORD:
Sheppard, Shalinsky, Brown
Toronto, Ontario
Sim, Lowman, Ashton, & McKay LLP
Toronto, Ont.