Date: 20040405
Docket: A-321-03
Citation: 2004 FCA 140
CORAM: ROTHSTEIN J.A.
BETWEEN:
SUNTEC ENVIRONMENTAL INC.
Appellant
(Defendant)
and
TROJAN TECHNOLOGIES INC.
Respondent
(Plaintiff)
Heard at Ottawa, Ontario, on November 12, 2003.
Judgment delivered at Ottawa, Ontario, on April 5, 2004.
REASONS FOR JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
SEXTON J.A.
Date: 20040405
Docket: A-321-03
Citation: 2004 FCA 140
CORAM: ROTHSTEIN J.A.
BETWEEN:
SUNTEC ENVIRONMENTAL INC.
Appellant
(Defendant)
and
TROJAN TECHNOLOGIES INC.
Respondent
(Plaintiff)
REASONS FOR JUDGMENT
[1] This is an appeal from an order granting the respondent summary judgment in a patent infringement action. Many issues have been raised in the course of argument but the issue which is dispositive of the appeal is the scope of Rule 216 of the Federal Court Rules, 1998 (the Rules) dealing with summary judgment.
[2] The respondent, plaintiff in the action, is the owner of a patent with respect to a device which purifies fluids using ultraviolet light. It manufactures and sells ultraviolet purification systems which are used in the treatment of waste water. The appellant is also a manufacturer of ultraviolet purification systems for waste water and is in competition with the respondent. Both parties sell systems consisting of an array of ultraviolet lamps mounted on a frame, controlled by a ballast, which frames are immersed in a stream of waste water which is purified by the exposure to the ultraviolet light as it flows over and around the device. In the respondent's device, a single ballast, mounted on the frame above the stream of waste water, controls each ultraviolet lamp by means of a lead wire. The appellant's device incorporates a submersible ballast for each tube in the frame thereby doing away with the lead wire as such.
[3] The issues before the motions judge included construction and infringement of the patent and, by way of defence but not counterclaim, invalidity on the basis of anticipation and obviousness, and ownership of the patent. In detailed reasons extending over 40 pages, he found for the respondent on all issues and granted judgment accordingly. Before us, counsel for the appellant, who was not counsel on the motion, raised the issue of the application of Rule 216 in the circumstances of this case, a matter which the motions judge noted in his reasons was "essentially not in dispute before me".
[4] At the start of his reasons, the motions judge accepted as his own the statement of the principles governing summary judgment found in the reasons of Russell J. in Apotex Inc. v. Canada (2003), 25 C.P.R. (4th) 479, 2003 FCT 414:
[9] There is no material disagreement between the parties as to the general principles applicable in a motion for summary judgment under rules 213 - 219 of the Federal Court Rules, 1998. As enunciated in cases such as Granville Shipping Co. v. Pegasus Lines Ltd. S.A. et al. (1996), 111 F.T.R. 189, I am required to find that the claims in question present no genuine issue for trial or that the issue is so doubtful that it deserves no further consideration. Also, each case must be interpreted in its own context and if the necessary facts cannot be found, or if there are serious issues of credibility, the matter should go to trial.
[10] The burden lies with the moving party to establish that here is no genuine issue to be tried, but both parties must "put their best foot forward" to enable the motions judge to decide whether or not there is a genuine issue for trial, and the judge is required to take "a hard look" at the merits and, if possible, make findings of fact and law if the materials allow this. F. Bon Langsdorff Licensing Limited v. S.F. Concrete Technology Inc. (1999), 165 F.T.R. 74, 1 C.P.R. (4th) 88.
[5] The motions judge then proceeded to construe the asserted claims of the patent in light of the evidence of the parties' experts, Dr. Moreland and Mr. Scheible. The evidence of the experts was contradictory and while both were cross-examined on their affidavits, the motions judge noted that neither "was significantly shaken in his expert views on cross-examination". The motions judge came to his own view of the meaning of the expressions which were in issue. He then proceeded to dispose of the issue of invalidity. He concluded that "the evidence before me is sufficient to allow me to conclude that the Glatthar patent [which was alleged to have anticipated the invention] does not contain so clear a direction that a skilled person reading and following that patent '... would in every case and without possibility of error...' be led to the invention claimed in claim 36 of the patent in suit".
[6] The motions judge then addressed the issue of obviousness. He declined to take account of one document, the Heraeus brochure, on the ground that it was undated and that there was no evidence of the date of publication before the Court. He noted that there was no evidence that certain other construction documents which were also alleged to be evidence of obviousness were at any time public documents. He found on the basis of the weakness of the evidence tendered by the appellant that those construction documents were "an unsatisfactory reference in relation to the obviousness of claim 42...". His conclusion was that "based on the evidence before the Court that is relied upon by Suntec [the appellant] and, in particular, by Mr. Scheible to support the position that the claims at issue of the patent are obvious, I conclude that Suntec has failed to discharge the onus on it in this regard".
[7] On the issue of ownership of the patent, a function of inventorship of the invention, the motions judge reasoned as follows:
[51] ... Based upon the weaknesses in the evidence before the Court regarding the Lebannon Installation documents, bearing in mind that on a motion for summary judgment such as this, each party is required to put its best foot forward, and assuming that Suntec has done precisely that and that therefore any evidence that it might present at trial in relation to the Lebannon Installation documents would be no better than that now before the Court, I conclude that Suntec has failed to establish that the inventor of the invention disclosed by the patent in suit is other than Jan Maarschalkerweerd.
[8] The motions judge then moved on to consider the issue of infringement. He compared the evidence of the two experts on the issue. He decided that none of the variants present in the appellant's device, including the submersible ballasts, had a material effect upon the way in which the invention works, that such variants would have been obvious at the date of publication of the patent in suit and that a reader skilled in the art would not have read the patent as requiring strict compliance with the indication that the ballast is to be placed above the waste water.
[9] I reproduce below the motions judge's concluding remarks:
[71] Against the summary judgment principles summarized earlier in these reasons, I am satisfied that the claims made by Trojan in this action, against the evidence that was before me, present no genuine issue for trial and that the outcome with respect to those issues is not deserving of further consideration at a full-blown trial. The necessary facts can be found and there is no serious issue of credibility. While I find the affidavit evidence of both experts to be credible and trustworthy, I prefer the evidence of Trojan's expert on each of the critical issues and I am satisfied that having the evidence of the experts presented at trial where a trial judge would have an opportunity to observe their demeanour and their reactions under cross-examination would not in all likelihood affect the end result in any significant manner. I am satisfied that both parties, through counsel have "put their best foot forward". Trojan has met the burden on it to establish that there is no genuine issue for trial. I am satisfied that I am fully in a position on the basis of the material before the Court and the arguments presented by counsel to make the findings of fact and of law necessary to fully dispose of this action.
[10] These remarks are to be considered in the context of Rule 216:
| 216. (1) Where on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly.
[. . .]
(3) Where on a motion for summary judgment the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment in favour of any party, either on an issue or generally, if the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law. |
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216. (1) Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue qu'il n'existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence. . . .
(3) Lorsque par suite d'une requête en jugement sommaire, la Cour conclut qu'il existe une véritable question litigieuse à l'égard d'une déclaration ou d'une défense, elle peut néanmoins rendre un jugement sommaire en faveur d'une partie, soit sur une question particulière, soit de façon générale, si elle parvient à partir de l'ensemble de la preuve dégager les faits nécessaires pour trancher les questions de fait et de droit. |
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[11] The appellant argued that the motions judge did not consider whether there was a genuine issue for trial but proceeded instead as though he were the trial judge. Counsel took the position that Rule 216(1) required the motions judge to consider whether there was a genuine issue for trial. If there was, then the judge was bound to consider whether he should decide the issue under Rule 216(3). Counsel argued that the motions judge essentially went directly to the point of deciding the issues and in doing so, usurped the function of the trial judge.
[12] Counsel for the respondent was of the view that the motions judge did exactly that which the rule intended him to do. He gave the whole of the evidence "a good hard look" and after having done so, he concluded that there was no genuine issue for trial. To the extent that the rule was designed to dispose of cases without the necessity of a trial where it is possible to do so, the motions judge was correct to proceed as he did.
[13] A fair reading of the motions judge's reasons shows that he concluded that there were no genuine issues for trial because he was able to decide all of the issues on the basis of the affidavit evidence before him. The same fair reading suggests that the motions judge proceeded as he did on the ground that he was required to take "a hard look" at the merits and to make the findings of fact and law which the evidence allowed him to make.
[14] There is no doubt that there is jurisprudence which emphasizes the fact-finding role of a judge hearing a motion for summary judgment. The high-water mark of that approach is found in Collie Woollen Mills Ltd. v. Canada (1996), 96 D.T.C. 6146 (T.D.), where the following appears:
... On my reading of this Rule, a motion for summary judgment should only be denied where:
1) on the whole of the evidence, the judge is unable to find the necessary facts; or
2) it would be unjust to do so.
[15] However, there is also a line of cases which takes a more restrained view of the ambit of a motion for summary judgment. A useful review of those cases is found in Warner-Lambert Co. v. Concord Confections Inc. (2001), 11 C.P.R. (4th) 516, 2001 FCT 139 (T.D.), cited with approval by this Court in Apotex Inc. v. Merck & Co., [2003] 1 F.C. 242. That line of authority is founded upon Feoso Oil Ltd. v. Sarla (The) (C.A.), [1995] 3 F.C. 68, in which this Court expressed its view of what is meant by "no genuine issue for trial". The Court referred to the comments of Henry J. in Pizza Pizza Ltd. v. Gillespie (1990), 75 O.R. (2d) 225, to the effect that the "... the test is not whether the plaintiff cannot possibly succeed at trial; the test is whether the court reaches the conclusion that the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial".
[16] The Court then went on to say:
[14] In my view, the new process available under Rules 432.1 to 432.7 [the predecessor to Rule 216] should not be construed as to prevent a motions judge from doing that which it surely envisages-allowing a summary judgment to be rendered in a proper case with consequent savings in time and expense that a trial would otherwise entail. The intention appears to be that claims or defences clearly without foundation should not take up the time and incur the costs of a trial.
Mintzer v. Canada (C.A.), [1996] 2 F.C. 146 at para. 22 and Kanematsu GmbH v. Acadia Shipbrokers Ltd. (2000), 259 N.R. 201 (F.C.A.) at para. 13 are to the same effect.
[17] A case in this Court which appears to have contemplated a rather lower test is NFL Enterprises L.P. v. 1019491 Ontario Ltd. (1998), 85 C.P.R. (3d) 328 at 331 (NFL Enterprises L.P.), where this Court commented as follows on the threshold for sending a matter forward for trial:
... It is not enough to succeed on a summary judgment motion for a party to put in simply any evidence that if believed would raise a disputable issue of fact. In our view the motions judge erred in treating this affidavit as a serious reason for sending this matter to trial.
[18] A reading of the case shows that this comment was made in the context of an allegation by the defendant that it was decoding the plaintiff's signals pursuant to a written contract with the plaintiff, a contract which it did not produce. As I read that decision, the Court's comment simply reflected the view that there is an obligation on the responding party to do more than allege a defence. It must show that there is evidence capable of supporting that defence, which the respondent in NFL Enterprises L.P., idem, failed to do.
[19] The scope of the summary judgment rules was recently reviewed by this Court in MacNeil Estate v. Canada (Indian and Northern Affairs Department) (MacNeil), 2004 FCA 50. Sexton J.A. reviewed the ambiguity at the heart of subsections 216(2) and 216(3). On the one hand, a judge who finds a genuine issue for trial is to send the matter on for trial in the ordinary course. On the other hand, even where there is a genuine issue, the motions judge can decide the matter if he or she is able to find the facts necessary to decide the questions of fact and law. This ambiguity gives rise to the risk of motions for summary judgment becoming summary trials on affidavit evidence. While both are useful measures in the struggle to contain the length and cost of litigation, one ought not to be confused for the other.
[20] It is not necessary for the purposes of this appeal to define the outer limits of the operation of the summary judgment rules since the limitation which is relevant to this appeal is already well established. The jurisprudence is clear that issues of credibility ought not to be decided on summary judgment applications. See MacNeil, supra, at para. 32. The motions judge was aware of this distinction and was at pains to point out that, in his view, no serious issues of credibility arose. With the greatest of respect, I am unable to agree with the motions judge's assessment.
[21] A useful discussion of the notion of credibility is found in the reasons of O'Halloran J.A. in Faryna v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.) at 356-357:
If a trial Judge's finding of credibility is to depend solely on which person he thinks made the better appearance of sincerity in the witness box, we are left with a purely arbitrary finding and justice would then depend upon the best actors in the witness box. On reflection it becomes almost axiomatic that the appearance of telling the truth is but one of the elements that enter into the credibility of the evidence of a witness. Opportunities for knowledge, powers of observation, judgment and memory, ability to describe clearly what he has seen and heard, as well as other factors, combine to produce what is called credibility, and cf. Raymond v. Bosanquet (1919), 50 D.L.R. 560 at p. 566, 59 S.C.R. 452 at p. 460, 17 O.W.N. 295. A witness by his manner may create a very unfavourable impression of his truthfulness upon the trial Judge, and yet the surrounding circumstances in the case may point decisively to the conclusion that he is actually telling the truth. I am not referring to the comparatively infrequent cases in which a witness is caught in a clumsy lie.
The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. Only thus can a Court satisfactorily appraise the testimony of quick-minded, experienced and confident witnesses, and of those shrewd persons adept in the half-lie and of long and successful experience in combining skilful exaggeration with partial suppression of the truth. Again a witness may testify what he sincerely believes to be true, but he may be quite honestly mistaken. For a trial Judge to say "I believe him because I judge him to be telling the truth", is to come to a conclusion on consideration of only half the problem. In truth it may easily be self-direction of a dangerous kind.
The trial Judge ought to go further and say that evidence of the witness he believes is in accordance with the preponderance of probabilities in the case and, if his view is to command confidence, also state his reasons for that conclusion. The law does not clothe the trial Judge with a divine insight into the hearts and minds of the witnesses. And a Court of Appeal must be satisfied that the trial Judge's finding of credibility is based not on one element only to the exclusion of others, but is based on all the elements by which it can be tested in the particular case.
[22] I take the thrust of this passage to be that the assessment of credibility is not simply a matter of the judge's opinion as to which witness "made the better appearance of sincerity". It also involves an examination of the witness' testimony and "of its consistency with the probabilities that surround the currently existing conditions". A judge's finding of credibility therefore must not be based on "one element only to the exclusion of others, but on all the elements by which it can be tested in the particular case". In cases such as this, one of the elements, though not to the exclusion of all others, is the impression created by the witness giving his evidence in chief and under cross-examination. This is why the jurisprudence is so consistent in holding that credibility issues, broadly defined, should be decided after trial.
[23] It is clear from his Reasons for Order that the motions judge was required to resolve a number of credibility issues. For example:
[19] Counsel for Suntec urged that to the extent that there is a difference of opinion evidenced by the foregoing extracts from the affidavits of Mr. Scheible [the respondent's expert] and Dr. Moreland [the appellant's expert], this Court should prefer the evidence of Mr. Scheible on the basis of his greater experience in the industry and on the basis of the acknowledgement by Dr. Moreland during his cross-examination that Mr. Scheible "... is one of the leading figures in [the relevant] industry". Further, counsel urged, the claims construction "exercise" undertaken by Dr. Moreland was not independently conducted. In the alternative, counsel urged that, given the conflict in the expert evidence, the Court should refuse to grant summary judgment and allow this action to go to trial where the trier of fact would have the opportunity to observe the experts under cross-examination.
[20] With respect, I reach a different conclusion [...] the expression an "electrical lead wire" should not be read restrictively as Mr. Scheible would have us do ...
[24] Later in his reasons, the motions judge quotes the evidence of the respondent's expert, Mr. Scheible, with respect to the question of obviousness:
[43] ... The modifications to the Maarschalkerweerd Patent would have been obvious to a person skilled in the art as of September 13, 1988 and at least as early as January 1988.
[25] He then continues as follows:
[44] Counsel for Suntec urged that the conclusion reached by Mr. Scheible in the above quoted paragraph was not challenged on cross-examination.
[45] By contrast, counsel for Trojan took the court through each of the four (4) references identified by Mr. Scheible in support of his conclusion. He pointed out that the Glathaar Patent was the only one of the four (4) references to deal with a ballast, a central component identified in claim 36 of the patent in suit and therefore in related dependent claims 38 and 40. Given the different environments to which the Glathaar Patent and the patent in suit are directed, I am satisfied on the evidence before the Court that a person skilled in the art relevant to the patent in suit would not consider the Glathaar Patent in an examination into the obviousness of claim 36 and dependent claims 38 and 40.
[26] The motions judge's conclusion is the opposite of the evidence of Mr. Scheible, the respondent's expert. It is a conclusion to which the motions judge came on the basis of a challenge mounted against the evidence by counsel. Clearly, the credibility of the respondent's expert was put into question, and the motions judge was persuaded to give him no credit on this question.
[27] On the issue of infringement, the motions judge reviewed the evidence of both experts and found for the respondent. He summarized his conclusions, with respect to the experts' evidence, as follows:
[71] ... The necessary facts can be found and there is no serious issue of credibility. While I find that affidavit evidence of both experts to be credible and trustworthy, I prefer the evidence of Trojan's expert on each of the critical issues and I am satisfied that having the evidence of the experts presented at trial where a trial judge would have an opportunity to observe their demeanour and their reactions under cross-examination would not in all likelihood affect the end result in any significant matter.
[28] When the motions judge preferred the evidence of one expert to the evidence of the other on each of the critical issues, it is difficult to say that there was no credibility issue. The fact that the motions judge resolved that issue does not mean it did not arise. As the examples cited above show, the motions judge was repeatedly called upon to make determinations based upon his assessment of the credibility of the expert witnesses.
[29] The jurisprudence is consistent that such determinations are best left to a judge who has had the opportunity to hear all of the evidence viva voce.
[30] In all of the circumstances, I am of the view that serious issues of credibility did arise and that, in keeping with the jurisprudence, the motions judge was required to send the matter on for trial. I would therefore allow the appeal, set aside the order of the motions judge and allow the matter to proceed to trial in the ordinary course. The appellant will have its costs here and in the court below.
"J.D. Denis Pelletier"
J.A.
"I agree
Marshall Rothstein J.A."
"I agree
J. Edgar Sexton J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-321-03
STYLE OF CAUSE: SUNTEC ENVIRONMENTAL INC. v. TROJAN TECHNOLOGIES, INC.
APPEAL FROM AN ORDER OF THE TRIAL DIVISION DATED JULY 3, 2003, FILE NO. T-1811-01
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: NOVEMBER 12, 2003
REASONS FOR JUDGMENT OF THE COURT: PELLETIER, J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
SEXTON J.A.
DATED: April 5, 2004
APPEARANCES:
Mr. Robert H.C. MacFarlane FOR THE APPELLANT
Mr. T. Gary O'Neill FOR THE RESPONDENT
Mr. Christopher Van Barr
SOLICITORS OF RECORD:
Bereskin & Parr
Toronto, Ontario FOR THE APPELLANT
Gowling Lafleur Henderson LLP
Ottawa, Ontario FOR THE RESPONDENT