Date: 19980225
Docket: T-2799-96
BETWEEN:
KIRKBI AG and
LEGO CANADA INC.,
Plaintiffs,
- and -
RITVIK HOLDINGS INC./GESTIONS RITVIK INC.
and RITVIK TOYS INC./JOUETS RITVIK INC.,
Defendants.
REASONS FOR ORDER
MULDOON, J.
[1] This is a motion brought on behalf of the plaintiffs for an order that the admissibility of certain portions of affidavit evidence, namely paragraphs 28 through 40 and exhibits "O" to "W" of the affidavit of Marc Bertrand, President and CEO of the defendant Ritvik Toys, be determined by a judge of this Court, prior to and apart from trial or summary judgment proceedings.
[2] The plaintiffs are engaged in the design, manufacture and sale of children's building toys and accessories, and in particular, building bricks, sold under the trade mark of LEGO. The defendants are also engaged in the manufacture of children's toys which are marketed under a variety of names, including MEGA BLOCKS.
[3] The main action involves a claim by the plaintiffs that the defendants unlawfully reproduced the LEGO trade mark in advertising and promotional material and that the use of the LEGO trade mark in association with the defendants' building blocks is intended to cause confusion by leaving consumers with the impression that the goods of the defendants are in some way associated with those of the plaintiffs. The plaintiffs allege that the actions of the defendants are contrary to section 52 of the Competition Act, R.S.C. 1985, Chap. C-34 and section 7(b) and (d) and section 22 of the Trade-marks Act, R.S.C. 1985, Chap. T-13.
[4] In response, the defendants filed a statement of defence and counterclaim which alleges that the plaintiffs did not assert any trade-mark rights in the LEGO indicia against the defendants for a period of 7 years. In essence, the defendants argue that the plaintiffs acquiesced to the use of the LEGO indicia. The defendants also argue that the plaintiffs are precluded and estopped from objecting to the use of the LEGO's expired patents. In support of this argument, the defendants adduced a letter written by the former solicitors of the plaintiffs to the defendants in which the solicitor writes:
| Our clients cannot object to your client manufacturing and selling a product which falls within the scope of the teaching of Interlego's expired patents and industrial design registrations [affidavit of Marc Bertrand, Exhibit "O"]. |
[5] The defendants filed a motion for summary judgment, dismissing the plaintiffs' cause of action based on sections 7(b), (d) and 22 of the Trade-marks Act. This motion is to be heard on March 23, 1998.
[6] In support of the defendants' motion for summary judgment, Marc Bertrand swore an affidavit outlining the correspondence exchanged between solicitors for the plaintiffs and defendants to establish a pattern of estoppel. The portions of the affidavit outlining the correspondence and the attached letters are the subject of this present motion. In oral argument, counsel for the defendants agreed that the letters should not be before the Court if the letters are put to the Court to demonstrate the weakness of the plaintiffs' case. However, counsel asserts that the general rule that letters in contemplation of litigation should not be allowed if the content of the letters establishes acquiescence and estoppel on the part of the plaintiffs to the actions of the defendants.
[7] The plaintiffs ask that the admissibility of this evidence be determined prior to the summary judgment hearing pursuant to Rule 474(1)(b) of the Federal Court Rules, C.R.C. 1978, c. 663. This rule provides that:
| (1) The Court may, upon application, if it deems it expedient so to do, |
| (a) determine any question of law that may be relevant to the decision of a matter, or |
| (b) determine any question as to the admissibility of any evidence (including any document or other exhibit), |
| and any such determination shall be final and conclusive for the purposes of the action subject to being varied upon appeal. |
| (2) Upon application for an order that a question be determined under paragraph (1), the Court shall, if it order that the question be so determined, |
| (a) give directions as to the case upon which the question shall be argued, |
| (b) give directions as to whether or not memoranda shall be filed and served by the parties and, if they are to be filed and served, fix time limits for the filing and service of the memorandum of the respective parties, and |
| (c) subject to section 15(2) of the Act, fix a time and place for argument of the question. |
[8] The general procedure for applications of this sort was aptly described by Chief Justice Jackett in Jamieson and Lessard v. Carota, [1977] 2 F.C. 239 (F.C./A) in which he wrote at page 244:
| I deem it expedient, also, to add that, in my opinion, Rule 474, in the ordinary case, contemplates two stages, viz: |
| (a) an application for an order that certain questions be determined and for directions as to the time and place for argument of such questions as well, possibility as the "case" contemplated by Rule 474(2), and |
| (b) argument of the questions, after both parties have had an opportunity to prepare for such argument at a time set aside by the Court for such argument. |
[9] The sole issue put before this Court is to determine whether the argument of the admissibility of evidence should be heard prior to trial. In order to make this determination, it is necessary to examine the purpose and effect of this rule, in the context of the case at bar.
[10] While the Court has, on several occasions determined questions of law pursuant to rule 474(1)(a), questions of evidence have not been so frequently determined. This may be due, in part, to the prevalent use of rule 419 which provides that:
| (1) The Court may at any stage of an action order any pleading or anything, in any pleading to be struck out, with or without leave to amend, on the ground that |
| (a) it discloses no reasonable cause of action or defence as the case may be, |
| (b) it is immaterial or redundant, |
| (c) it is scandalous, frivolous or vexatious, |
| (d) it may prejudice, embarrass or delay the fair trial of the action, |
| (e) it constitutes a departure from a previous pleading, |
| (f) it is otherwise an abuse of the process of the Court, |
| and may order the action to be stayed or dismissed or judgment to be entered accordingly. |
[11] Therefore, while the plaintiffs ask that the admissibility of evidence be determined, the ultimate result they are seeking is to have those portions of the affidavit removed from the affidavit; the same result as a motion under rule 419. Accordingly, the jurisprudence of this rule and rule 474(1)(a) is helpful to the determination of the issue at bar.
[12] The general purpose of rule 474 is to provide determinations which expedite or shorten the trial. The requirements of this rule were best described by Mr. Justice Mahoney in Berneche v. Canada, [1991] 3 F.C. 383 (F.C/A) where he writes at page 388, in respect of subsection (1)(a) of the rule that:
| . . . the Court be satisfied (1) that there is no dispute as to any fact material to the question of law to be determined; (2) that what is to be determined is a pure question of law, and (3) that its determination will be conclusive of a matter in dispute so as to eliminate the necessity of a trial or, at least, shorten or expedite the trial. |
| The last requirement was stated by Jackett C.J. in the following terms in R. v. Achorner [[1977] 1 F.C. 641 (F.C/A) at p. 646]: |
| The duty of the Trial Division . . . was to form a discretionary opinion as to whether it is "expedient", from the point of view of the most efficient carrying of the action, to have the . . . question dealt with before other steps are taken in the action. |
[13] While Mr. Justice Mahoney wrote in regard to questions of law determined under rule 474(1)(a), the second requirement, that the question to be determined is a pure question of law, must also be applicable to questions of evidence determined under this rule. This position is buttressed by the fact that this Court has been reluctant to grant motions under rule 419 to strike pleadings and affidavits prior to trial and/or summary judgment motions where the context of the questionable evidence will need to be adduced at trial.
[14] Certain obiter dicta, the comments of Mr. Justice Strayer in Cantwell v. Canada (Minister of the Environment) (T-2975-90) (November 30, 1990) are helpful. At page 2 of that decision, Mr. Justice Strayer wrote:
| In my view, the power to amend "any document" under rule 303 as applied to affidavits, and the power under paragraph 474(1)(b) of the rules to determine questions of admissibility in advance, should be used with great restraint. Normally such matters are best dealt with by the motions judge before whom the whole issue is argued as he will be in the best position to decide on the relevance of evidence and its general admissibility given the whole context of the case. |
| [Emphasis not in original] |
[15] While his comments were in relation to a motion to strike out certain affidavits on the basis of hearsay under rule 419, it appears that his position seems to be based on the general belief that unless the evidence is obviously inadmissible, or scandalous, or one in which the context of the evidence need not be presented, the resolution ought to be deferred.
[16] More recently, in Figgie International Inc. v. Citywide Machine Wholesale Inc., (1995), 60 C.P.R. (3d) 490 (F.C.T.D.), Mr. Justice Joyal dismissed an appeal from a ruling of the prothonotary, holding that the question of the admissibility of evidence from examinations for discovery should be decided by the judge hearing the motion for summary judgment. This motion was also brought pursuant to rule 419. At page 496, he wrote:
| My own overview of this kind of issue is that rarely will a court make an a priori ruling on admissibility. Except in cases of untimely affidavits, or of evidence which is obviously inadmissible, a court will not hazard a premature determination and will, as experience as [sic] amply shown, prefer to leave the matter to the trial judge. |
[17] This case was cited with approval by Madam Justice McGillis in Hayden Manufacturing Co. Ltd. v. Canplas Industries Ltd., (1995) 64 C.P.R. (3d) 59 (F.C.T.D.), a case involving a motion to strike portions of an affidavit pursuant to rule 419. At page 60 she writes:
| I agree with this statement and have concluded that it would be preferable in this case to have the judge hearing the motion for summary judgment determine the question of the admissibility of the impugned evidence. In particular, the fact that counsel for the defendant was told, during the examination for discovery of the representative of the plaintiff, to pose certain questions to Mr. Hayden, the inventor, may be relevant to the question of the admissibility of the impugned evidence. This decision should be made by the judge hearing the motion for summary judgment. |
[18] Faced with the general reluctance on the part of the Court to determine questions of the admissibility of evidence prior to trial, it appears that rule 474(1)(b) ought simply to be confined to general questions of admissibility, rather than the admissibility of evidence where the context of the evidence is required to be assessed. For the latter type of evidence, it appears that these matters are best left to the trial judge or the summary motions judge to determine, where the context and scope of the evidence can also be assessed.
[19] The motion before this Court does not pertain to the admissibility of evidence in a general sense. Counsel for the defendants agreed that the letters are inadmissible if the letters are put before the Court to establish the weakness of the plaintiffs' case. Thus, in the general sense, the issue as to the admissibility of such evidence has already been agreed to by the parties. In the context of the entire case, however, the matter is still at issue, and ought to be determined by the summary motions judge hearing this case. The summary judgment judge is in the best position to hear the entire scope of the case and can best determine the evidence in its proper setting. The admissibility of this evidence ought not to be determined in a vacuum, as the effect of ruling this evidence inadmissible means that it cannot be adduced at trial. It should be noted that the summary judgment judge has the power to dismiss the action, in whole or in part and therefore the plaintiffs are also able to achieve the same effect as a motion under rule 474 by asking that the issue of the admissibility of evidence be determined by the summary motions judge.
[20] The bringing of such a motion in these circumstances is permissible, but wasteful of the Court's time and resources. It is inexpedient. The defendants' costs of this motion shall be payable by the plaintiffs in any event of the cause.
[21] The parties agreed at the hearing of this case that they could devise a "confidentiality order" in this action. It is really hard to believe that a confidentiality order is needed in this case. Still, it is private law and if the parties truly yearn for such an order, this judge will not, in this instance, obstruct them.
[22] The "model" order appended to the notice of motion is not to this Court's liking. Here are some comments by way of directions for the formulating of a confidentiality order which this judge will tolerate:
1) the party seeking the order, here the plaintiff shall, in consultation with the registry, supply the registry with a sturdy file container with a flap-over, tie-down or otherwise securable closure in which to file confidential documents. [The suggested method of sealing each document separately is clumsy, inaccessible, time-wasting and patience trying, in regard both to access and re-sealing.]
2) the said confidential file shall be appropriately identified by abridged style of cause and docket number and kept separate from the public files and access to it shall be accorded only to the following:
| (a) the, or any, judge of this Court who is adjudicating matters in the proceeding from time to time; |
| (b) such judge's, or judges', respective judicial assistant(s) and law clerk(s); |
| (c) registry officers necessarily handling such Court file, or files; |
| (d) counsel or solicitors of record for the parties; or |
| (e) those designated upon further order of the Court, or in prior written consent of all the parties. |
3) when filing any confidential document, the filing party (i.e. solicitors & counsel) shall bring to the registry a sheet of paper on which shall be legibly typed the style of cause, the docket number and a brief indication of the kind of document, (i.e. letter, response, affidavit, etc.) and a brief indication of the contents, but not so as to breach the confidentiality of the document.
4) the aforementioned sheet of paper bearing on its face "CONFIDENTIAL SUBSTITUTE", shall be placed in its proper sequence in the public file and, like the confidential document which it represents, it shall be stamped by the registry with the date of filing stamped by the registry with the date of filing and accorded the same document number as that confidential document for which it substitutes.
[23] The proposed confidentiality order shall be modified to include the foregoing provisions and to eliminate any provisions inconsistent therewith.
Judge
Ottawa, Ontario
February 25, 1998