Court File No.

: A-218-14

FEDERAL COURT OF APPEAL

BETWEEN:
DR. GBOR LUKCS
Applicant
and
CANADIAN TRANSPORTATION AGENCY
Respondent

RESPONDING MOTION RECORD OF THE

PROPOSED INTERVENER,
THE PRIVACY COMMISSIONER OF CANADA
(Response to the Applicants motion brought pursuant to Rules 91, 94, 96, and 97
of the Federal Courts Rules)

JENNIFER SELIGY
Legal Counsel
Office of the Privacy Commissioner of Canada
30 Victoria St.
Gatineau, Quebec K1A 1H3
Tel. (direct): (819) 994-5910
Fax:
(819) 994-5863
E-mail:
[email protected]
Legal Counsel for the Privacy Commissioner of
Canada

-2-

TO:

FEDERAL COURT OF APPEAL

Thomas DArcy McGee Building
90 Sparks Street, Main Floor
Ottawa (Ontario) K1A 0H9

AND TO:

DR. GBOR LUKCS

Halifax, Nova Scotia
Email:

[email protected]

Applicant
AND TO:

ODETTE LALUMIRE
Senior Counsel
Canadian Transportation Agency
15, rue Eddy
Gatineau, Qubec K1A 0N9
Telephone:
Fax:
Email:

819-994-2226
819-953-9269
[email protected]

Legal Counsel for the Respondent,

Canadian Transportation Agency

INDEX
TAB

PAGE

1.

Transcript of the Cross-Examination of Patricia Kosseim, October 23, 2014.

2.

Letter from the Canadian Transportation Agency to the Federal Court of

Appeal, October 22, 2014.

25

3.

Written Representations of the Privacy Commissioner of Canada

27

Overview

27

Part I: Statement of Facts

28

Part II: Issues

32

Part III: Statement of Submissions

33

Overview of submissions

33

A. Scope of cross-examination on affidavits

34

B. Procedure for objecting to produce irrelevant documents

35

C. Questions objected to at the cross-examination are irrelevant, beyond

the scope of proper cross-examination, or have been properly answered
already

36

i)

Questions 16-19 and documents sought in paragraph (1) of the

Direction to Attend.

36

ii)

Questions 50 and 52 collateral attack.

38

iii)

Questions 53-54, 56, 60-61, and 67 - Privacy Commissioners

intended submissions

39

D. Remedy and costs

40

i)

Remedy

40

ii)

Costs

41

Part IV: Order Sought

41

Part V: List of Authorities

43

-2-

4.

Statutes and Authorities

45

4-A

Federal Courts Act, RSC 1985, c F-7, s. 18.4(1).

45

4-B

Federal Courts Rules, SOR/98-106, s. 91(2)(c), 109 and 369(2).

46

4-C

Merck Frost Canada Inc.v. Canada (Minister of Health) (1997), 80

C.P.R.(3d) 550 (F.C.T.D.), [1997] F.C.J. No. 1847, affd (1999), 3
C.P.R.(4th) 286 (F.C.A), (1999) 249 N.R. 15 (Fed. C.A.).

48

4-D

Sivak v. Canada (Minister of Citizenship and Immigration), 2011 FC 402.

60

4-E

Simpson Strong Tie Company v. Peak Innovations Inc., 2009 FC 392, affd
2009 FCA 266.

76

4-E

Stanfield v. Canada (Minister of National Revenue) 2004 FC 584.

89

4-F

Sawridge Band v. Canada, 2005 FC 865 (CanLII).

110

4-G

Sam Lvy & Associs Inc. v. Canada (Superintendent of Bankruptcy), [2005]

F.C.J. No. 768.

115

4-H

L.S. Entertainment Group Inc. v. Formosa Video (Canada) Ltd., 2005 FC

1347 (CanLII).

125

4-I

Cherkassy (The) v. Far-Eastern Shipping Co., 1999 CanLII 9198 (FC).

150

4-J

Bayer AG v. Apotex Inc., 1998 CanLII 8327 (FC).

157

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11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

Court File No.: A-218-14

FEDERAL COURT OF APPEAL

BETWEEN:
DR. GBOR LUKCS
Applicant
and
CANADIAN TRANSPORTATION AGENCY
Respondent

WRITTEN REPRESENTATIONS OF THE PRIVACY

COMMISSIONER OF CANADA
OVERVIEW
1.

In his motion of November 14, 2014 (the motion) Dr. Gabor Lukacs (the

Applicant) seeks to compel answers to a series of questions that are irrelevant to the
issues raised in the Privacy Commissioner of Canadas motion for leave to intervene or
beyond the proper limited scope of cross-examination on an affidavit filed in support of
an interlocutory motion in a judicial review application. The Applicant also seeks the
production of documents that are irrelevant to the issue raised in the Privacy
Commissioners motion and beyond the limited requirement to produce documents on
cross-examination on an affidavit.
2.

The Applicants motion should therefore be dismissed.

28
-2-

PART I - STATEMENT OF FACTS

3.

On April 22, 2014, the Applicant filed a notice of application for judicial review of

a refusal of the Canadian Transportation Agency (CTA) to provide the Applicant with unredacted copies of certain documents in the CTAs files, and concerning the CTAs
practices related to the rights of the public to see documents filed with the CTA in the
course of adjudicative proceedings before it.
Notice of Application for Judicial Review, April 22, 2014, Applicants motion record
(Applicants Record), pp. 16-27.

4.

The CTA brought a motion to quash the Applicants judicial review application.

The CTAs motion was dismissed by this Court on September 19, 2014, thereby
confirming for the first time that the Applicants judicial review application would be
heard on its merits.
Lukacs v. Canadian Transportation Agency, 2014 FCA 205, Applicants Record, pp.
183-191.

5.

Following the dismissal of the CTAs motion to quash, the Privacy Commissioner

of Canada (the Privacy Commissioner) sought leave to intervene in the Applicants

judicial review application in order to assist the Court with the interpretation and
application of provisions of the Privacy Act at issue in the Applicants judicial review
application.
Notice of Motion for Leave to Intervene, October 16, 2014, Applicants Record, pp. 2930.

6.

The Privacy Commissioner is an Officer of Parliament charged with overseeing

compliance with the Privacy Act R.S.C., 1985, c. P-21. In so doing, the Privacy
Commissioner has acquired experience and expertise in the interpretation and
application of the Privacy Act.
Kosseim Affidavit, paras. 6-13, Applicants Record, pp. 33-35.

29
-37.

The Privacy Commissioner has frequently sought, and been granted, leave to

intervene where proceedings in the courts involve the interpretation or application of the
Privacy Act.
Kosseim Affidavit, paras. 14-16, Applicants Record, p. 35.

8.

The Applicants judicial review application raises issues of public importance,

among them the interplay between the Privacy Act, other legislation, and the open court
principle. How these issues are resolved could impact federal government institutions
subject to the Privacy Act and the legal framework the Privacy Commissioner applies
when he carries out his mandate to oversee compliance with the Privacy Act.
Kosseim Affidavit, paras. 18-20, Applicants Record, pp. 36-37.

9.

Ms. Kosseim, Senior General Counsel and Director General, Legal Services,

Policy, Research and Technology Analysis Branch for the Privacy Commissioner, swore
an affidavit in support of the Privacy Commissioners motion for leave to intervene on
October 14, 2014.
Affidavit of Patricia Kosseim, October 14, 2014 (Kosseim Affidavit), Applicants
Record, pp. 32-38.

10.

The CTA took no position on the Privacy Commissioners motion for leave to

intervene.
Letter from CTA to Federal Court, October 22, 2014, Privacy Commissioners Motion
Record (Privacy Commissioners Record), Tab 2.

Cross-examination of Patricia Kosseim

11.

The Applicant served Ms. Kosseim with a Direction to Attend for cross-

examination on her affidavit filed in support of the Privacy Commissioners motion for
leave to intervene. The Direction to Attend included a request that she produce:

30
-4(1) all communications in relation to the present proceeding between persons at
the Office of the Privacy Commissioner of Canada and persons outside the
Office; and (2) summaries of complaints referenced in paragraph 11 of your
affidavit and the findings of the Privacy Commissioner in relation to these
complaints.
Exhibit E to Affidavit of the Applicant, sworn November 12, 2014 (Applicants Affidavit),
Applicants Record, pp. 48-49.

12.

In an exchange of emails between counsel for the Privacy Commissioner and the

Applicant, counsel for the Privacy Commissioner indicated to the Applicant the
documents the Privacy Commissioner would provide in response to paragraph (2) of the
Applicants Direction to Attend and referred the Applicant to the Privacy Commissioners
website where the Applicant could also access electronic versions of those documents.
The Privacy Commissioner further indicated to the Applicant that paragraph (1) of the
Applicants Direction to Attend referred to documents that are not relevant to the issues
raised in the Privacy Commissioners motion seeking leave to intervene or to Ms.
Kosseims affidavit, and hence were not producible under Rule 91(2)(c) of the Federal
Courts Rules.
Exhibit H to the Applicants Affidavit, Applicants Record, pp. 58-59.

13.

The cross-examination of Ms. Kosseim took place on October 24, 2014.

14.

In the cross-examination, Ms. Kosseim stated that, on the advice of counsel she

would not be producing any documents in response to paragraph (1) of the Applicants
Direction to Attend.
Transcript of Cross-Examination of Patricia Kosseim, October 24, 2014 (the
Transcript), Question 9, pp. 4-5 of Transcript, Privacy Commissioners Record, Tab
1.

15.

During the cross-examination, counsel for the Privacy Commissioner instructed

Ms. Kosseim not to answer the following questions on the grounds of relevance:

31
-5(i)

Question 16: How did the Office of the Commissioner obtain a copy of the
Notice of Application?

(ii)

Question 17: When did the Office of the Commissioner obtain a copy of
the Notice of Application?

(iii)

Question 18: When did the Office of the Commissioner first learn about
the present application?

(iv)

Question 19: Did anyone at the Office of the Commissioner communicate

with persons at the Canadian Transportation Agency about the present
application?

(v)

Question 50: Did the Privacy Commissioner seek leave to appeal or

otherwise challenge Rule 23(1)?

(vi)

Question 52: Did the Privacy Commissioner seek leave to appeal or

otherwise challenge Rule 7(2)?

Transcript, Questions 16-19 and Questions 50, and 52, pp. 6-9 and pp. 16-17 of
Transcript, Privacy Commissioners Record, Tab 1.

16.

During the cross-examination, the Applicant asked Ms. Kosseim a series of

questions aimed at finding out the precise contents of what the Privacy Commissioners
submissions would be if he were granted leave to intervene. Ms. Kosseim answered the
initial questions as fully as was practical. The Applicant was dissatisfied with the
responses and rephrased his questions several times, following which counsel for the
Privacy Commissioner stated an objection that the question had been answered and
suggested the Applicant move on to another question.
Transcript, Questions 53-57, 60-63, 67, pp. 18-23 of Transcript, Privacy
Commissioners Record, Tab 1.

32
-617.

Following the receipt of the Transcript, the Applicant wrote to counsel for the

Privacy Commissioner requesting answers to certain questions objected to at the crossexamination.

18.

In response, counsel for the Privacy Commissioner communicated the Privacy

Commissioners position that Ms. Kosseim had provided proper answers to certain
questions mentioned in the Applicants email (questions 53-56,60-61, 67) and that the
remaining questions were not relevant to either the Privacy Commissioners motion for
leave to intervene or Ms. Kosseims affidavit. Subject to this position, counsel stipulated
on behalf of the Privacy Commissioner that the answer to two questions (questions 50
and 52) regarding whether the Privacy Commissioner had sought leave to appeal or
otherwise challenge Rules 7(2) and 23(1) of the CTAs General Rules was no.
Exhibit N to Applicants Affidavit, Applicants Record, pp. 76-77.

19.

Following this exchange of correspondence, the Applicant brought the present

motion.

PART II - ISSUES
20.

The motion raises the following issues:

(i)

Whether Ms. Kosseim should be required to answer any of questions 1619, 50, or 52 from the cross-examination on her affidavit;

(ii)

Whether Ms. Kosseim should be required to produce any of the materials

referred to in paragraph (1) of the Direction to Attend;

(iii)

Whether Ms. Kosseim should be required to provide additional answers to

any of questions 53-54, 56, 60-61,or 67 from the cross-examination on her
affidavit; and

33
-7(iv)

What relief should be granted to the Applicant were it proper for

Ms. Kosseim to have answered any of the questions referred to in his
motion.

PART III SUBMISSIONS

Overview of submissions

21.

The Applicants motion seeks to allow him to engage in wide-ranging questioning

on matters not relevant to the Privacy Commissioners motion for leave to intervene or
that are beyond the proper scope of cross-examination on affidavits filed in support of
interlocutory motions.
22.

That scope is determined by the requirement in section 18.4(1) of the Federal

Courts Act that judicial review proceedings be heard and determined without delay and
in a summary way.
23.

The Applicants questions 16-19 and his request for documents under paragraph

(1) of his Direction to Attend are irrelevant and beyond the proper scope of crossexamination on an affidavit in the present circumstances. No answer to these questions
or documents sought will assist in determining any factual or legal issues relevant to the
disposition of the Privacy Commissioners motion for leave to intervene.
24.

Questions 50 and 52, though also irrelevant, have been answered in the interests

of simplifying the issues before this Court and expediting the disposition of this motion.
The Applicants motion is thus moot in regard to these questions.
25.

The remaining questions at issue in the Applicants motion were properly

answered.

34
-8A.

Scope of cross-examination on affidavits

26.

It is firmly established that a cross-examination on an affidavit is far more limited

in scope than an examination for discovery. This is particularly so where the crossexamination is on an affidavit filed in a judicial review application, which section 18.4(1)
of the Federal Courts Act requires be heard without delay and in a summary way.
Federal Courts Act, RSC 1985, c F-7, s. 18.4(1); Merck Frost Canada Inc.v. Canada
(Minister of Health) (1997), 80 C.P.R.(3d) 550 (F.C.T.D.) at para.4, affd (1999), 3
C.P.R.(4th) 286 (F.C.A); see also Sivak v. Canada (Minister of Citizenship and
Immigration) 2011 FC 402 at paras.12-14, and Simpson Strong Tie Company v. Peak
Innovations Inc. 2009 FC 392, at paras 19, 20, 24, affd 2009 FCA 266, at para 8.

27.

Questions that are in the nature of a fishing expedition are improper and will be

disallowed.
Stanfield v. Canada (Minister of National Revenue) 2004 FC 584 at paras. 18-22, 23, 26;
Sawridge Band v. Canada, 2005 FC 865 (CanLII), at paras. 4 and 9.

28.

In order for a question to fall within the proper scope of cross-examination, two

conditions must be met. First, a question must be formally relevant in the sense that it
regards facts set out in the deponents affidavit. Second, a question must be legally
relevant, in the sense that it regards a fact whose existence or non-existence could
contribute to determining if the remedy sought can be granted or not.
Sam Lvy & Associs Inc. v. Canada (Superintendent of Bankruptcy), [2005] F.C.J. No.
768 at para. 13; See also Merck Frosst Can. Inc. v. Canada (Min. of Health), [1997]
F.C.J. No. 1847 at paras. 7-8, affirmed (1999) 249 N.R. 15 (Fed. C.A.).

35
-929.

Where an affidavit is adduced in an interlocutory proceeding, as is the present

case with regards to Ms. Kosseims affidavit in support of the Privacy Commissioners
motion for leave to intervene, cross-examination is limited to those matters that are
relevant to the determination of the motion itself, and not the application on the merits:
Cross-examination on the affidavit should be limited to the issue raised by the motion
to which the affidavit relates.
Sawridge Band v. Canada, 2005 FC 865 (CanLII) at para. 11; See also Merck Frosst
Can. Inc. v. Canada (Min. of Health), [1997] F.C.J. No. 1847, affirmed (1999) 249 N.R.
15 (Fed. C.A.).

B.

Procedure for objecting to produce irrelevant documents

30.

Rule 91(2)(c) of the Federal Courts Rules provides that a direction to attend may

direct the person to be examined to produce for inspection at the examination in

respect of a cross-examination on an affidavit, all documents and other material in that
persons possession, power or control that are relevant to the application or motion.
This Rule, as it relates to an affiant, only requires the production of documents in that
persons possession, power or control that are relevant to the application or motion.
(Emphasis added).
Federal Courts Rules, SOR/98-106, s. 91(2)(c).
Simpson Strong Tie Company v. Peak Innovations Inc. 2009 FCA 266, at paras. 5 and
8.

31.

This Court has held that, Rule 91(2)(c) is precise with respect to production of

documents for cross-examination on affidavits and is to be preferred over the more

generally worded provision of Rule 94 dealing with oral examinations.
Simpson Strong Tie Company v. Peak Innovations Inc., 2009 FC 392, at para. 26, affd
2009 FCA at para. 8; Federal Courts Rules, SOR/98-106, s. 94(2), Applicants Record,
p.154.

32.

This Court has upheld the procedure whereby, when there is a disagreement as

to whether a document requested in a direction to attend should be produced in

accordance with Rule 91(2)(c), the party opposing the production states the objection at

36
- 10 or before the cross-examination. The party is not required to seek a motion under Rule
94 seeking relief from production.
Simpson Strong Tie Company v. Peak Innovations Inc. 2009 FC 392, at para. 26, affd
2009 FCA 266.

33.

Accordingly, the Applicants assertion that the person or party directed to

produce documents in a direction to attend must apply under Rule 94(2) to seek relief
from the Court from the production of documents is incorrect. A party objecting to a
request for production of irrelevant documents is not obliged to use Rule 94.

C.
The questions objected to at the cross-examination were irrelevant, beyond
the scope of proper cross-examination, or have been properly answered already
i) Questions 16-19 and documents sought in paragraph (1) of the Direction to
Attend
34.

Any answers to questions 16-19 or documents sought in paragraph (1) of the

Direction to Attend are irrelevant and beyond the proper scope of cross-examination of
an affidavit in support of an interlocutory motion in a judicial review application. No
answer to these questions or documents sought will assist in determining any factual or
legal issues relevant to the disposition of the Privacy Commissioners motion for leave
to intervene.
35.

As seen above, the scope of cross-examination on affidavits and the

documentary production that can be requested on such cross-examinations is limited. It

is not an examination for discovery.
36.

Questions of when and how the Privacy Commissioner became aware of the

Applicants judicial review application (questions 16-18) are irrelevant to the issue of
whether the Privacy Commissioner should be granted leave to intervene in the
Applicants judicial review application in accordance with Rule 109 of the Federal Courts
Rules.

37
- 11 37.

Rule 109 imposes no fixed time limit for seeking leave to intervene. It sets no

specific stage in proceedings for when a party can seek leave to intervene. When or
how a proposed intervener became aware of a proceeding available on the public
record of the Court is not relevant in determining whether to grant leave to intervene.
38.

Timeliness is assessed primarily in terms of whether permitting intervention at

the time when it is sought would unduly disrupt or delay the proceedings. No answer to
any of questions 16 to 18 would be relevant to this assessment. When or how the
Privacy Commissioner became aware of the application will not assist the Court in
determining whether allowing an intervention at the time it is in fact proposed would
unduly delay or disrupt the proceedings. Undue delay or disruption to the proceedings,
not the passing of any set period, will make an intervention untimely.
Canada (Attorney General) v. Pictou Landing First Nation, 2014 FCA 21 at para 32
(intervention sought well after filing of notice of appeal; granted when intervention
would cause only three weeks delay in hearing of appeal), Applicants Record, p.
200; Canada (Ministry of Citizenship and Immigration) v. Mugesera, 2003 FCA 84, at
paras 2, 4 (intervention sought after requisition for hearing filed and two years after
appeal begun; allowing intervention would have unduly disrupted proceedings),
Applicants Record, p. 193; Canada (Attorney General) v. Siemens Enterprises
Communications, 2011 FCA 250, paras 3-5 (intervener filing motion one week before
scheduled written hearing of merits of appeal, well after appeal books filed), Applicants
Record, p. 166.

39.

Whether the OPC had any contact with the CTA (question 19) or any documents

between persons at the Office of the Privacy Commissioner and persons outside the
Office (paragraph (1) of the Direction to Attend) are equally irrelevant to the timeliness
issue. The timeliness of a proposed intervention is a matter of what stage in the
proceedings it is brought, not when a proposed intervener may have learned of an
application or who the proposed intervener may have communicated with prior to
seeking intervention.
40.

Moreover, the Applicants questions 16-19 and the request for documents in

paragraph (1) of the Direction to Attend are a fishing expedition. In particular, the
Applicant has not demonstrated how hypothetical contacts between the CTA and the

38
- 12 Privacy

Commissioner

might

somehow

demonstrate

whether

the

Privacy

Commissioners motion for leave to intervene is timely.

41.

Accordingly, Ms. Kosseim should not be required to answer any of questions 16-

19 from the cross-examination on her affidavit, nor should she be required to produce
documents of the nature requested in paragraph (1) of the Direction to Attend.
ii) Questions 50 and 52 collateral attack
42.

Questions 50 and 52, although irrelevant, have been answered in the interests of

simplifying some of the issues before the Court and expediting the disposition of this
motion. The Applicants motion is thus moot in regard to these questions.
Exhibit N to Applicants Affidavit, Applicants Record p. 76.

43.

In any event, the Applicants speculation that the Privacy Commissioner might

seek to use its intervention as a vehicle for a collateral attack on the CTAs General
Rules is not a proper basis for these questions. A collateral attack can only be made
against a judgment or a decision of an adjudicative nature. The issuance of the CTAs
General Rules is not such a decision. Moreover, nothing in Ms. Kosseims affidavit or
the Privacy Commissioners motion for leave to intervene indicate any such intention
whatsoever.
44.

Accordingly, Ms. Kosseim should not be required to answer any of questions 50

and 52.

39
- 13 -

iii) Questions 53-54, 56, 60-61, and 67 - Privacy Commissioners intended

submissions
45.

In this series of questions, the Applicant sought precise details of what

submissions the Privacy Commissioner intends to make in the Applicants judicial

review application (questions 53-54 and 56) and how the Privacy Commissioners
submissions will differ from those of the CTA (questions 60-61 and 67). These
questions were posed in a cross-examination held before either party to this judicial
review application had filed its application record.
46.

In her responses to these questions, Ms. Kosseim supplemented to the extent

practicable the information on these points already set out in the Privacy
Commissioners Notice of Motion, her affidavit in support of it and the written
representations filed in support of that motion. This material and Ms. Kosseims
responses on her cross-examination are sufficient to allow the Court to determine
whether the Privacy Commissioner has met the relevant parts of the tests for permitting
intervention.
Privacy Commissioners Notice of Motion, paras. 3-5, Applicants Record, p. 30;
Privacy Commissioners Written Representations, paras. 3-10, ibid., pp. 40-42; Kosseim
Affidavit paras. 3-5, 9-13, 17-21, ibid., pp. 32-37.
Canadian Airlines International Ltd. v. Canada (Human Rights Commission) (F.C.A.),
[2010] 1 FCR 226, at para. 8 (tests 4,5,6), Applicants Record, p. 175; Canada
(Attorney General) v. Pictou Landing First Nation 2014 FCA 21, at para. 11 (tests I,II, III,
IV), Applicants Record, p. 200.

47.

A proposed intervener is not required to specify the nature of its submissions at

the level of detail sought by the Applicant in the line of questioning set out in questions
53-54, 56, 60-61, and 67. On the contrary, this Court has not established a high
threshold of detail for the statement of what a proposed interveners position would be if
it is granted leave.
Canadian Airlines International Ltd. v. Canada (Human Rights Commission) (F.C.A.),
[2010] 1 FCR 226, at para. 8, Applicants Record, p. 175.

40
- 14 48.

Ms. Kosseim answered these questions with as much precision as possible in

light of the fact that neither the Applicant nor the CTA had filed its submissions in the
judicial review application. The degree of detail sought by the Applicant could only be
provided if a proposed intervener prepared its intervener submissions in advance of the
parties own written arguments, based on speculation as to what these might contain,
and in advance of knowing whether intervener status would be obtained. This level of
specificity is not required.
Canada (Attorney General) v. Pictou Landing First Nation 2014 FCA 21, at para. 11,
Applicants Record, p. 200.

49.

Accordingly, Ms. Kosseim should not be required to provide additional answers

to any of questions 53-54, 56, 60-61,or 67 from the cross-examination on her affidavit.
D.

Remedy and costs

i) Remedy

50.

The Privacy Commissioner submits that the Applicants motion should be

dismissed.
51.

The Privacy Commissioner submits that the Applicant should have 10 days from

the date on which the Court disposes of this motion to serve and file his response to the
Privacy Commissioners motion for leave to intervene, in accordance with the period set
out in Rule 369(2) of the Federal Court Rules.
52.

Alternatively, should the Court consider that any of the questions in issue should

be answered, the appropriate remedy in the circumstances would be to order Ms.

Kosseim to answer those specific questions in writing, or alternatively, to re-attend for
cross-examination on such questions.
53.

The relief sought by the Applicant in paragraphs 1 and 2 of Part IV of his motion

(dismissal of the Privacy Commissioners motion for leave to intervene or striking of Ms.

41
- 15 Kosseims affidavit) is excessive and disproportionate in the circumstances. Granting
this relief in the current circumstances would be inconsistent with other cases where the
Court has granted such relief.
L.S. Entertainment Group Inc. v. Formosa Video (Canada) Ltd., 2005 FC 1347 (CanLII)
(statement of defence struck out for failure to attend an oral examination); Cherkassy
(The) v. Far-Eastern Shipping Co., 1999 CanLII 9198 (FC) (statement of claim struck out
where plaintiff ignored four court orders for production of documents); Bayer AG v.
Apotex Inc., 1998 CanLII 8327 (FC) at para. 11: as a general rule, affidavits will be
struck if the deponent does not appear for cross-examination.

iii) Costs
54.

The Applicants motion should be dismissed and he should therefore not be

awarded costs.
55.

In particular, there is no basis for an award of costs personally against Ms.

Kosseim. An affiant does not become personally liable for costs for following the
reasonable advice of counsel as to whether a question should be answered on crossexamination.

PART IV ORDER SOUGHT

56.

For the reasons set out above the Privacy Commissioner respectfully seeks the

following orders:
1) an order dismissing the Applicants motion;
2) an order that there be no costs of the motion;
3) such further or other order as shall seem just to this Honourable Court.

43
- 17 -

PART V LIST OF AUTHORITIES

STATUTES and REGULATIONS
TAB
4-A.

Federal Courts Act, RSC 1985, c F-7, s. 18.4(1).

4-B.

Federal Courts Rules, SOR/98-106, s. 91(2)(c), 109, 369(2).

AUTHORITIES
TAB
4-C.

Merck Frost Canada Inc.v. Canada (Minister of Health) (1997), 80 C.P.R.(3d)

550 (F.C.T.D.), [1997] F.C.J. No. 1847, affd (1999), 3 C.P.R.(4th) 286 (F.C.A),
(1999) 249 N.R. 15 (Fed. C.A.).

4-D.

Sivak v. Canada (Minister of Citizenship and Immigration), 2011 FC 402.

4-E.

Simpson Strong Tie Company v. Peak Innovations Inc., 2009 FC 392, affd
2009 FCA 266.

4-F.

Stanfield v. Canada (Minister of National Revenue) 2004 FC 584.

4-G.

Sawridge Band v. Canada, 2005 FC 865 (CanLII).

4-H.

Sam Lvy & Associs Inc. v. Canada (Superintendent of Bankruptcy), [2005]

F.C.J. No. 768.
Canada (Attorney General) v. Pictou Landing First Nation 2014 FCA 21.
Applicants Record, p. 200.
Canada (Ministry of Citizenship and Immigration) v. Mugesera 2003 FCA 84.
Applicants Record, p. 193

44
- 18 -

Canada (Attorney General) v. Siemens Enterprises Communications 2011

FCA 250.
Applicants Record, p. 166.
Canadian Airlines International Ltd. v. Canada (Human Rights Commission)
(F.C.A.), [2010] 1 FCR 226.
Applicants Record, p. 175
4-I.

L.S. Entertainment Group Inc. v. Formosa Video (Canada) Ltd., 2005 FC 1347
(CanLII).

4-J.

Cherkassy (The) v. Far-Eastern Shipping Co., 1999 CanLII 9198 (FC).

4-K.

Bayer AG v. Apotex Inc., 1998 CanLII 8327 (FC).

45

Federal Courts Act, RSC 1985, c F-7, s.

18.4(1).

Loi sur les Cours fdrales, LRC 1985,

c F-7, art. 18.4(1).

Hearings in summary way

Procdure sommaire daudition

18.4 (1) Subject to subsection (2), an

application or reference to the Federal
Court under any of sections
18.1 to 18.3 shall be heard and
determined without delay and in a
summary way.

18.4 (1) Sous rserve du paragraphe (2),

la Cour fdrale statue bref dlai et
selon une procdure sommaire sur les
demandes et les renvois qui lui sont
prsents dans le cadre des articles
18.1 18.3.

46

Federal Courts Rules, SOR/98-106, s.

91(2)(c), 109 and 369(2).

Rgles des Cours fdrales, DORS/98106, art. 91(2)(c), 109 et 369(2).

Direction to attend

Assignation comparatre

Production for inspection at examination

Production de documents pour examen

91 (2) A direction to attend may direct

the person to be examined to produce
for inspection at the examination

91 (2) Lassignation comparatre peut

prciser que la personne assigne est
tenue dapporter avec elle les
documents ou lments matriels qui :

(c) in respect of a cross-examination on

an affidavit, all documents and other
material in that person's possession,
power or control that are relevant to the
application or motion
Leave to intervene
109. (1) The Court may, on motion,
grant leave to any person to intervene in
a proceeding.
Contents of notice of motion
(2) Notice of a motion under subsection
(1) shall
(a) set out the full name and address of
the proposed intervener and of any
solicitor acting for the proposed
intervener; and
(b) describe how the proposed
intervener wishes to participate in the
proceeding and how that participation
will assist the determination of a factual
or legal issue related to the proceeding.
Directions
(3) In granting a motion under
subsection (1), the Court shall give
directions regarding
(a) the service of documents; and
(b) the role of the intervener, including
costs, rights of appeal and any other

c) sont en sa possession, sous son

autorit ou sous sa garde et qui sont
pertinents la requte ou la
demande, dans le cas o elle est
assigne pour subir un contreinterrogatoire concernant un affidavit.
Autorisation dintervenir
109. (1) La Cour peut, sur requte,
autoriser toute personne intervenir
dans une instance.
Avis de requte
(2) Lavis dune requte prsente pour
obtenir lautorisation dintervenir :
a) prcise les nom et adresse de la
personne qui dsire intervenir et ceux
de son avocat, le cas chant;
b) explique de quelle manire la
personne dsire participer linstance
et en quoi sa participation aidera la
prise dune dcision sur toute question
de fait et de droit se rapportant
linstance.
Directives de la Cour
(3) La Cour assortit lautorisation
dintervenir de directives concernant :
a) la signification de documents;

47

matters relating to the procedure to be

followed by the intervener.
Motions in writing
369. (2) A respondent to a motion
brought in accordance with subsection
(1) shall serve and file a respondent's
record within 10 days after being served
under rule 364 and, if the respondent
objects to disposition of the motion in
writing, indicate in its written
representations or memorandum of fact
and law the reasons why the motion
should not be disposed of in writing.

b) le rle de lintervenant, notamment en

ce qui concerne les dpens, les droits
dappel et toute autre question relative
la procdure suivre.
Procdure de requte crite
369. (2) Lintim signifie et dpose son
dossier de rponse dans les 10 jours
suivant la signification vise la rgle
364 et, sil demande laudition de la
requte, inclut une mention cet effet,
accompagne des raisons justifiant
laudition, dans ses prtentions crites
ou son mmoire des faits et du droit.

48

Page 1

Indexed as:

Merck Frosst Canada Inc. v. Canada (Minister of Health)

Between
Merck Frosst Canada Inc. and Merck & Co., Inc., applicants,
and
The Minister of Health, the Attorney General for Canada,
Apotex Inc. and Apotex Fermentation Inc., respondents
[1997] F.C.J. No. 1847
[1997] A.C.F. no 1847
146 F.T.R. 249
80 C.P.R. (3d) 550
1997 CarswellNat 2661
79 A.C.W.S. (3d) 609
Court File No. T-1273-97
Federal Court of Canada - Trial Division
Ottawa, Ontario
Hugessen J.
Heard: October 6, 9 and 10, 1997
Oral Judgment: October 10, 1997
(24 paras.)
Practice -- Discovery -- Examination -- Objections to questions.
This was an application by Merck to compel answers to questions asked at a cross-examination on
an affidavit. The respondent Minister of Health issued a notice of compliance for a drug
manufactured by the respondent, Apotex. There was a dispute as to whether the drug violated a
patent held by Merck. Merck brought a breach of patent action against Apotex. It also sought

49

Page 2

judicial review of the decision to issue the notice of compliance. Merck cross-examined Apotex's
chairman and the Minister's director of the bureau of pharmaceutical assessment on their affidavits.
Merck sought to compel the chairman and director to answer questions objected to during the
cross-examination.
HELD: The application was granted. Apotex's chairman and the director of the bureau of
pharmaceutical assessment were ordered to re-attend cross-examination to answer the questions.
Merck was not entitled to compel answers in regard to non-compliance by the Minister with acts or
regulations in respect of the issuance of the notice of compliance. However, Merck was entitled to
enforce compliance by both Apotex and the Minister with regulations in regard to intellectual
property rights which did not relate to public health and safety. Apotex and the Minister were
directed to answer questions related to Apotex's drug submissions to the Minister, notices of
withdrawal, deficiency, the impugned drug manufacturing process and product monographs.
Statutes, Regulations and Rules Cited:
Food and Drug Act.
Food and Drug Regulations, C.R.C., c. 870.
Patented Medicines (Notice of Compliance) Regulations, SOR/ 93-133, s. 7.
Counsel:
R. Charlton and L. Cresthol, for the applicants.
A. Lesprance and F. Couto, for the respondents, Minister of Health and the Attorney General for
Canada.
H. Radomski and A. Brodkin, for the respondent, Apotex Inc.
D. McCaffrey, Q.C., and J. Myers, for the respondent, Apotex Fermentation Inc.

1 HUGESSEN J. (Reasons for Order, orally):-- The background to this litigation has been very
recently and very thoroughly set out by my brother McKay J. in reasons delivered only a few days
ago. Without apology, I set it out again in his words:
Apotex Inc. was granted a Notice of Compliance (NOC) under the Food
and Drug Regulations, C.R.C., c.870, by the respondent Minister of Health in
relation to Apo-lovastatin tablets on March 26, 1997. That drug product is a
generic version of the Merck lovastatin medicine sold in Canada under the
trade-mark MEVACOR[Registered] for which Merck had earlier obtained an
NOC in 1988 for treatment of elevated levels of cholesterol, and subsequent
NOC's for other treatments.

50

Page 3

The NOC was granted to Apotex after the Court had dismissed an
application by Merck for an order of prohibition under the Patented Medicines
(Notice of Compliance) Regulations, SOR/93-133 (the "Regulations"). The
decision of my colleague Mr. Justice Rothstein, dated March 26, 1997, (Court
file T-1305-93) was made following expiry of the 30 month statutory stay under
s.7 of the Regulations. In accord with those Regulations Apotex had applied for
an NOC and by notice of allegation had advised Merck that Apotex' generic
product would not infringe Merck's patents in relation to its lovastatin product.
Apotex had later issued a second notice of allegation, in relation to its application
for an NOC, which led to a second application for a prohibition order by Merck
under the Regulations, but Apotex subsequently withdrew the second notice of
allegation in February 1997.
From subsequent inquiries, through access to information requests, and by
requests to the Ministry of Health, it appeared to Merck that the product
monograph for Apo-lovastatin, approved with Apotex' NOC on March 26, 1997,
referred to the Apotex product utilizing a microorganism, Aspergillus obscurus,
which is said by Merck to be essentially the same as that which is the subject of
Merck's patents. Thereafter, the Health Department advised that the product
monograph for Apo-lovastatin was in error, since the process by which the
product was produced, at the time of the grant of the NOC, was one that utilized
another microorganism, Coniothyrium fuckelii. The department indicated an
amended product monograph would be issued correctly identifying the
microorganism used by Apotex. On July 11, 1997 after this proceeding had
commenced the Minister issued a letter to Apotex enclosing a new cover page
and page 1 for the product monograph earlier approved, correcting what were
considered clerical errors.
On June 12, 1997, the applicants Merck filed a statement of claim alleging
infringement of their patents, for their lovastatin product, by Apotex in its
production and sale of Apo-lovastatin. In that action (T-1272-97) the respondents
Apotex are defendants. In that action Merck seeks various declaratory orders
concerning infringement by Apotex, concerning the validity of Merck's patents,
concerning unfair competition and passing off by Apotex, and also a permanent
injunction against the defendants, delivery up of infringing product, damages or
an accounting of profits, punitive damages, costs and interest. All forms of relief
sought are directed against the defendants Apotex, and the Minister and the
Attorney General, respondents in this proceeding, are not joined as parties or

51

Page 4

intervenors in the action.

On the same day, June 12, 1997, this proceeding by originating notice of
motion was filed by the applicants Merck against the respondent Ministers, and
Apotex respondents were subsequently joined as parties. The application as filed
seeks judicial review of the decision of the Minister of Health made on March
26, 1997 to issue the NOC to Apotex in respect of its Apo-lovastatin product.
The application seeks four interim and interlocutory orders against the Minister
of Health, directing, until final determination of this application, that the Minister
revoke or suspend the NOC issued March 26, 1997 to Apotex, and also an order
prohibiting him from issuing a new or amended NOC to Apotex for lovastatin
until the Minister requires Apotex to file a new submission for that product and
Apotex has sent a new notice of allegation to Merck in respect of lovastatin in
accord with the Regulations. An order prohibiting review of any further or
amended submission of Apotex until it has filed a new submission and complies
with the Regulations is also sought, as is a permanent order revoking or
suspending the NOC granted March 26, 1997, presumably after hearing of this
application. Generally similar interim relief but directed to the Apotex
corporations was sought by Merck in its action in T-1272-97 and by motion.
Merck sought, in both this application and in its action, interim injunctive relief.
That was denied by my colleague Mr. Justice Dub, by Orders dated July 2,
1997.
Affidavits were filed, three by Merck in support of its application, one on
behalf of the respondent Minister of Health by Mary Elizabeth Carman, Director
of the Bureau of Pharmaceutical Assessment of the Therapeutic Products
Directorate of Health Canada, and two on behalf of Apotex Inc. by Dr. Bernard
Sherman, Chairman of that corporation. Apparently in the course of
cross-examination of Ms. Carman, responses to questions and to requests for
production of documents were extensive, and the Department of Health was
prepared to be open and frank in its disclosure of matters related to the decision
of March 26, here in question. From that and from cross-examination of Dr.
Sherman on his affidavit, the Merck applicants believe there are additional facts
which would strengthen their case. That development, and the form of their
initial originating notice of motion, which, under grounds for the application, sets
out a detailed statement of allegations of fact upon which Merck applicants rely,
led Merck to move for leave to amend the originating notice of motion. The draft
of the amendments proposed and Merck's applications, filed at the same time, for
orders for the affiants Ms. Carman and Dr. Sherman to re-attend and answer
further questions earlier refused or objected to, led to the respondents Apotex'

52

Page 5

motion to convert these proceedings to an action. Two days after that motion was
filed and the day before this application was heard, Merck filed an amended
statement of claim in the action in file T-1272-97, as they were entitled to do, no
defence having yet been filed by Apotex. Those amendments delete from the
statement of claim, references in the earlier version which duplicated, or at least
reflected, some of the matters dealt with in this application for judicial review.
2 McKay J. dismissed both Merck's motion to amend its application and Apotex's motion to
convert the proceedings to an action.
3 I am now seized of the motions to compel answers to a large number of questions which were
objected to during the cross-examinations of Ms. Carmen and Mr. Sherman, as well as for
production of documents.
4 It is well to start with some elementary principles. Cross-examination is not examination for
discovery and differs from examination for discovery in several important respects. In particular:
a)
b)
c)
d)
e)

the person examined is a witness not a party;

answers given are evidence not admissions;
absence of knowledge is an acceptable answer; the witness cannot be required to
inform him or herself;
production of documents can only be required on the same basis as for any other
witness i.e. if the witness has the custody or control of the document;
the rules of relevance are more limited.

5 Since the objections which have given rise to the motions before me are virtually all based upon
relevance, I turn, at once, to that subject.
6 For present purposes, I think it is useful to look at relevance as being of two sorts: formal
relevance and legal relevance.
7 Formal relevance is determined by reference to the issues of fact which separate the parties. In
an action those issues are defined by the pleadings, but in an application for judicial review, where
there are no pleadings (the notice of motion itself being required to set out only the legal as opposed
to the factual grounds for seeking review), the issues are defined by the affidavits which are filed by
the parties. Thus, cross-examination of the deponents of an affidavit is limited to those facts sworn
to by the deponent and the deponent of any other affidavits filed in the proceeding.
8 Over and above formal relevance, however, questions on cross-examination must also meet the
requirement of legal relevance. Even when a fact has been sworn to in the proceding, it does not
have legal relevance unless its existence or non-existence can assist in determining whether or not
the remedy sought can be granted. (I leave aside questions aimed at attacking the witness's personal
credibility which are in a class by themselves). Thus, to take a simple example, where a deponent

53

Page 6

sets out his or her name and address, as many do, it would be a very rare case where questions on
those matters would have legal relevance, that is to say, have any possible bearing on the outcome
of the litigation.
9 I pause at this point to deal with an argument put forward by the applicants which seeks to draw
a parallel between the disallowance of questions based on absence of legal relevance and
interlocutory motions to strike out parts of affidavits on the same grounds. The case primarily relied
on is the decision of the Court of Appeal in Pharmacia Inc. v. Canada (1994), 58 C.P.R. (3d) 209,
which held that, with very few exceptions such interlocutory motions could not be allowed in an
application for judicial review. The argument is made, if I understand it correctly, that objections
based on absence of relevance of questions put in cross-examination on an affidavit fall into the
same category as motions to strike the underlying parts of the affidavit itself and should, therefore,
also be disallowed. I entirely reject this argument. There is indeed a parallel between motions to
strike and objections taken on grounds of legal relevance but it is quite different from what the
applicants suggest. The policy consideration underlying the decision in Pharmacia, supra, was based
on the statutory admonition that applications for judicial review should be heard expeditiously and
in a summary way; allowing interlocutory motions to strike allegations would defeat that policy.
Equally, the same considerations militate strongly against allowing parties to waste their own and
the Court's time and effort (to say nothing of money) in interminable questioning on matters that
can have no conceivable impact on the outcome. I would only add that the fact that the opposite
party, in answer to irrelevant allegations in an affidavit, files equally irrelevant allegation to counter
them, does not make either set of allegations relevant.
10 Turning now to the specifics of the present case, it is my view that the law is clear that Merck,
as a patentee and holder of an NOC for a medicine does not have any right to raise non-compliance
by the Minister with the Food and Drug Act or the Regulations made thereunder in respect of the
issuance or proposed issuance of an NOC to another drug manufacturer. Specifically, Merck does
not have the right to object to the issuance of an NOC to Apotex for the same medicine for which
Merck holds an NOC on the grounds of non-compliance with that Act and those Regulations by
either Apotex or the Minister. I think that that proposition flows clearly and unequivocally from two
decisions of the Court of Appeal confirming two decisions by Trial judges of this Court: Glaxo
Canada Inc. v. Canada (1990), 31 C.P.R. (3d) 25, affirming (1987), 18 C.P.R. (3d) 206, and Merck
Frost Canada Inc. v. Canada (1994), 55 C.P.R. (3d) 302, affirming (1994), 53 C.P.R. (3d) 368.
There are other decisions of the Trial Division of this Court to the same effect. I am not persuaded
that any of these decisions were given per incuriam.
11 Some of the cases have used concepts such as absence of standing and non-justiciability as a
convenient shorthand to describe this limitation on the patentee's rights. Seizing on this the
applicants argue, based on such cases as Canada v. Finlay, [1986] 2 S.C.R. 607, Canada v.
Borowski, [1981] 2 S.C.R. 575 and Operation Dismantle v. Canada, [1985] 1 S.C.R. 441, that they
do indeed have standing and that the issues that they raise are, in fact, justiciable. The argument
mistakes the form for the substance. It is not lack of standing or justiciability in the strict sense of

54

Page 7

those words which prevents the applicants from raising non-compliance with the health and safety
concerns of the Food and Drug Act, and Regulations; it is simply that those matters are of no
concern to them and cannot be raised by them in an attack on a decision of the Minister to issue an
NOC. It is the Minister himself who is charged with the protection of the public health and safety
and no private interest of the applicants arises from his alleged failure to perform his duties with
respect to other persons.
12 As an exception to the foregoing, however, the Patented Medicine (Notice of Compliance)
Regulations - the "linkage" Regulations - do give the Merck applicants a right, at the very least by
implication, to enforce compliance by both Apotex and the Minister with those Regulations and to
object to the issuance of an NOC on the grounds of non-compliance therewith. The linkage
Regulations, however, do not have the effect of incorporating into themselves the whole of the Food
and Drug Act and Regulations so as to create any right for the applicants to enforce the latter. Their
clear and evident purpose is to provide an additional patent protection to the patentee in respect of
his intellectual property rights and they have absolutely nothing whatever to do with public health
and safety.
13 As I understand it, one of Merck's principal contentions in these judicial review proceedings is
that there was non-compliance with the linkage Regulations as a result of the non-concordance or
lack of sequence in the timing as between Apotex's new drug submissions and its notices of
allegation and detailed statements made pursuant to the linkage Regulations. I make no comment as
to the merit of that contention as a matter of law and it will fall to be determined by the judge who
hears the application for judicial review. I do, however, for the reasons previously stated, think that
Merck has the right to raise the point and that, accordingly, questions which go to establish the
factual foundation for the argument have legal relevance.
14 This brings me to the particular subject matter of these motions. The questions objected to and
now sought to be answered are listed in Annexes 1 and 2 to the applicants' memorandum of fact and
law. They are very numerous and many, if not most of them, are cast in too general terms and are
too unfocused to be admissible as such. That is not, however, the basis on which they have been
objected to and it would be unfair, in the circumstances, to simply disallow them on that ground.
Indeed, on the basis of the categories under which the questions have been grouped and the very
thorough argument which the parties have presented to me over the last three days, I think it is
possible for me to give a ruling which will not only allow these cross-examinations (and any others
which may be outstanding) to be completed in very short order, but also permit the establishment of
a realistic timetable for the filing of application records well prior to the hearing date fixed for
January 26, 1998.
15 I take the categories as they are listed at pages 18 and following of the applicants'
memorandum:
16

1) Apotex's first new drug submissions (1993)

55

Page 8

Questions relating to and production only of those parts of Apotex's 1993

new drug submission (including any refiling or amendment thereof) for
Apo-lovostatin which permit the identification of the micro-organism(s) intended
to be used in the production process are allowed; likewise, witnesses must
produce any notices of allegation and detailed statements filed or served by
Apotex in respect of lovostatin and give the date of such filing and/or service;
17

2) Apotex's refiled new drug submission (1995)

The same question and productions are allowed with respect to the 1995
new drug submission save to the extent that such questions and documents have
already been answered or produced under category 1) above;

18

3) Notices of Withdrawal, Deficiency or Non-compliance

While I fail to see the relevance of notices of deficiency or
non-compliance, questions relating to the withdrawal of any new drug
submission by Apotex respecting lovostatin or any part of such new drug
submission and production of any documents giving effect to such withdrawal
are allowed.

19

4) The micro organism Aspergillus obcurus

The micro organism Aspergillus obcurus not being part of the process for
production of the drug for which an NOC was issued by the Minister to Apotex
in March 1997, questions relating thereto are irrelevant. However, since Mr.
Radomski has agreed to produce items 52 and 77 relating to the withdrawal of
the process using obscurus that concession should be given effect to and those
items answered;

20

5) Notifiable change
Questions relating to any "notifiable change" submitted regarding
Apo-lovostatin and production of relevant documents only insofar as they pertain
to the identification of the micro-organism intended to be used in the process are
allowed. This will include Mr. Radomski's concession with respect to items 114
and 116;

21

6) Product Monographs for Apo-lovostatin

Questions relating to the product monograph(s) are irrelevant and are
disallowed save insofar as such product monograph(s) may form part of the
answers or productions previously ordered. In addition items 140 and 144 have

56

Page 9

been conceded by Mr. Radomski and are allowed;

22

8) Minister's Involvement and Activities under the Act1

Most of the questions in this category are repetitive of matters already
dealt with. To the extent that they are not, they seem to be based on an attempt
either to show an apprehension of bias, a ground of review not invoked in these
proceedings, or to demonstrate Apotex's bad character and general disregard for
what Merck views as the spirit and letter of the Linkage Regulations. They are
irrelevant and are disallowed;

23

11) Additional Indications

These questions are irrelevant to the decision to issue the notice of
compliance which is under attack in these proceedings. They are disallowed.

24 Before closing, I may say that I have the distinct impression that virtually all of the matters for
which I have ordered answers or productions are already available to Merck and are in fact largely
non contentious. That may have some bearing on the question of costs on which I invite
submissions.
ORDER
Ms. Carmen and Mr. Sherman are ordered to re-attend and to answer the questions and make
the productions detailed hereinabove.
The respondents having enjoyed a substantial measure of success and the applicants having
sought costs on a solicitor and client basis, costs in the amount of $3,000.00 are awarded to the
respondent Apotex payable in any event of the cause.
HUGESSEN J.

1 It will be noted that some of the categories have been dropped and accordingly the numeral
sequence is incomplete.

57

Page 1

Indexed as:

Merck & Co. v. Canada (Minister of Health)

Between
Merck & Co., Inc., and Merck Frosst Canada Inc., appellants
(applicants), and
The Minister of Health, the Attorney General for Canada,
Apotex Inc., and Apotex Fermentation Inc., respondents
(respondents)
[1999] F.C.J. No. 1536
[1999] A.C.F. no 1536
249 N.R. 15
3 C.P.R. (4th) 286
92 A.C.W.S. (3d) 1061
Court File No. A-718-97
Federal Court of Appeal
Montral, Qubec
Marceau, Desjardins and Ltourneau JJ.
Heard: September 22 and 23, 1999.
Oral judgment: September 23, 1999.
(4 paras.)
Practice -- Appeals -- Appeal from interlocutory order.
Appeal by Merck from the decision of a motions judge that certain questions were not required to
be answered on the cross-examination of an affiant, and denying Merck standing to question the
Minister of Health's decision to issue a Notice of compliance. On the cross-examination, the
motions judge found that information concerning the exercise by the Minister of his duties in

58

Page 2

assessing the safety and efficacy of a drug were not relevant to the proceedings.
HELD: Appeal dismissed. There was no basis for interfering with the motion judge's decision
sustaining the objections raised to the cross-examination. By denying Merck standing to question
the Minister's decision to issue the Notice of compliance, the motions judge followed the principles
laid down in prior court rulings.
Statutes, Regulations and Rules Cited:
Food and Drugs Act, R.S.C. 1985, c. F-27.
Food and Drug Regulations, C.R.C., c. 870.
Court Note:
Appeal against an Order of the Trial Division rendered October 10, 1997, Trial Division File No.
T-1273-97, [1997] F.C.J. No. 1847.
Counsel:
Robert P. Charlton and Leigh D. Crestohl, for the appellants.
Francisco Couto, for the respondent (Minister of Health and Welfare and the Attorney General of
Canada).
Harry Radomski and David Scrimger, for the respondent (Apotex Inc.).
John A. Myers, for the respondent (Apotex Fermentation Inc.).

The judgment of the Court was delivered orally by

1 MARCEAU J.:-- We are all of the view that the interlocutory decision of a motions judge in
the Trial Division to sustain objections raised during the cross-examination of an affiant in a judicial
review proceeding should not be disturbed. The grounds on which the objections were taken were
that the documents requested and the information sought - which were all concerned with the
exercise by the Minister of Health of his duties under the Food and Drugs Act, R.S.C. 1985, c. F-27,
and the Food and Drug Regulations, C.R.C., c. 870, in assessing the safety and efficacy of a drug
for which he issued a Notice of compliance under the authority of the Food and Drug Act - were not
relevant to the proceedings.
2 In our judgment, the learned motions judge was right in denying the appellant standing to
question before the Court, in these proceedings, the validity of the Minister's decision to issue the

59

Page 3

Notice of compliance on the sole basis that the Minister's findings as regard the safety and efficacy
of the drug would have been reached in an unsatisfactory manner. By deciding as he did, the
motions judge was simply abiding by principles set down by many rulings of this Court and based,
in our opinion, on a proper understanding of the type of responsibilities assigned to the Minister by
Parliament in this context, as well as the nature of the judicial process and the role of a court of law.
3 As to the award of costs by the motions judge, we cannot say that the discretion granted to him
by the Rules of the Court was exercised "unjudicially" in the circumstances of this case.
4

The appeal can therefore only be dismissed with costs.

MARCEAU J.

60

Case Name:

Sivak v. Canada (Minister of Citizenship and Immigration)

Between
David Sivak, Luci Bajzova, Monika Sivak, and Lucie Bajzova,
Applicants, and
The Minister of Citizenship and Immigration, Respondent
And between
Milan Lasab, Milada Lasaboya, and Elvis Kulasic, Applicants,
and
The Minister of Citizenship and Immigration, Respondent
And between
Miroslav Sarkozi, Andrej Balog, Zaneta Balogova, Galina
Balogova, Viktor Sarkozi, Andrej Balog, Andrej Balog, Marie
Balogova, and Lukas Balog, Applicants, and
The Minister of Citizenship and Immigration, Respondent
[2011] F.C.J. No. 513
2011 FC 402
98 Imm. L.R. (3d) 308
29 Admin. L.R. (5th) 94
2011 CarswellNat 1066
387 F.T.R. 265
Docket IMM-5543-10
Federal Court
Toronto, Ontario
Russell J.
Heard: February 11, 2011.
Judgment: March 31, 2011.

Page 1

61

Page 2

(51 paras.)
Civil litigation -- Civil procedure -- Actions -- Availability -- Motions for orders that three judicial
a review applications be converted into actions allowed -- Applicants were of Roma ethnicity who
unsuccessfully asserted refugee claims against the Czech Republic -- Applicants claimed that the
Board's reliance upon the Issue Paper, and the context in which it was produced, gave rise to an
institutional bias -- Allegations of institutional bias raised could not be properly determined within
parameters of a judicial review application but required the full panoply of a trial.
Motions for orders that three judicial a review applications be converted into actions. The applicants
were of Roma ethnicity who unsuccessfully asserted refugee claims against the Czech Republic. In
each case, the Refugee Board relied upon an Issue Paper authored by the Board's Research
Directorate. The applicants claimed that the Board's reliance upon the Issue Paper, and the context
in which it was produced, gave rise to an institutional bias that affected their claims as well as those
of other Roma claimants where adequate state protection findings were made that relied upon the
Issue Paper. The applicants argued that the usual judicial review process had not served them well
to date and they sought a more thoroughgoing approach that would allow them and the Court to
examine whether the use of the Issue Paper and the full context in which it was produced gave rise
to an institutional bias. The applicants also claimed that they had obtained inadequate document
production from the respondent and thus sought the full discovery process available in an action.
HELD: Motions allowed. If these matters proceeded as judicial review applications, the Court
would not have before it all that it needed to decide the principal issues. The applicants were not
merely engaged upon a fishing expedition. The applicants' allegations of institutional bias could not
be safely disregarded as mere speculation. The rules of cross-examination and document production
as they pertained to the judicial review context had not yielded the evidence required to decide the
issue of institutional bias. This case required the full panoply of a trial because it raised issues of the
utmost importance to the integrity of, and public perception regarding, the immigration system.
These issues could not be decided on the basis of the record that had been assembled or that could
be assembled for judicial review.
Statutes, Regulations and Rules Cited:
Federal Courts Act, R.S.C. 1985, c. F-7, s. 18.4(1), s. 18.4(2)
Counsel:
Rocco Galati, for the Applicant.
Mary-Louise Wcislo and Prathima Prashad, for the Respondent.

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Page 3

REASONS FOR JUDGMENT AND JUDGMENT

RUSSELL J.:-THE MOTIONS
1 I have before me three related motions that raise important procedural issues about how to deal
with applications before the Court currently being pursued by Roma people from the Czech
Republic.
2 The common thread to the materials is that the cases involve claimants of Roma ethnicity who
unsuccessfully asserted refugee claims against the Czech Republic and that, in each case, the RPD
in rendering its decisions relied upon a document authored by the Research Directorate of the
Immigration and Refugee Board (IRB). The document is called "Issue Paper, Czech Republic,
Fact-Finding Mission Report on State Protection" (Issue Paper) and is dated June 2009.
3 The Applicants feel that the RPD's reliance upon the Issue Paper, and the context in which it
was produced, gives rise to an institutional bias (real or apprehended) that affects their claims as
well as those of other Roma claimants where adequate state protection findings were made that
relied, in whole or in part, upon the Issue Paper.
4

Specifically, on file IMM-6306-09, the motion is for:

1.

2.

3.

An order, pursuant to section 18.4 (2) of the Federal Courts Act,

converting the within judicial review into an action and to be joined with
the proceedings in IMM-5543-10 as well as joining the within
proceeding(s) with any action for damages filed by the Applicants herein
and/or in IMM-5543-10;
In the alternative to (1) above, an order compelling the Respondent's
affiant, Mr. Gordon Ritchie, to answer the questions refused on
cross-examination, and compelling production of the documents refused as
part of the Tribunal Record;
Certification of the within proceedings, whether by way of action or
judicial review, as a class-action proceeding with the following classes:
a.

b.

all Czech Roma claimants awaiting disposition of their RPD hearing

whose hearing has not commenced prior to the issuance of the Issue
Paper;
all Czech Roma claimants whose hearing commenced prior to the

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c.

Page 4

June, 2009 Issue Paper, but whose decision was not released until
after the issuance of the June, 2009 Report;
all Czech Roma claimants who received a negative RPD decision in
which the RPD relied on the June, 2009 Issue Paper, in whole or in
part, to render a negative decision and whose case is,
i.
ii.

either before the Federal Court on judicial review; or

no judicial review was filed;

but in either event in (i) or (ii), the claimants are awaiting a PRRA;
d.

all Czech Roma claimants who were denied by the RPD, based on
the June, 2009 Issue Paper, and who have;
i.
ii.

either filed a PRRA and are awaiting a decision; or

have not filed a PRRA but are awaiting removal;

but in either event in (i) or (ii) have not yet been removed;
e.

f.

4.
5

all Czech Roma claimants, who were denied by the RPD, based on
the June, 2009 Issue Paper, who are "removal ready" and may be
legally removed;
all Czech Roma, who were denied by the RPD, based on the June,
2009 Issue Paper, who have been removed.

Costs of this motion and such further relief as counsel may advise and this
Court deems just.

On file IMM-5543-10, the motion is for:

a.

b.
c.

An order, granting oral argument on the within leave application, and the
granting of leave, for special circumstances, as set out by the Federal Court
in Aguiar v Canada, [1991] F.C.J. No. 181;
An order that the within motion be heard at the same time as the motion
proposed in Sivak, et al. v Canada, IMM-6306-09;
In all other respects, order(s), Mutatis Mutandis, to those sought in Sivak,

64

d.
6

Page 5

et al., v. Canada, IMM-6306-09, and the motion record therein, to be heard

concurrently with the within motion;
Costs of this motion and such further relief as counsel may advise and this
Court deems just.

On file IMM-6448-10, the motion is for:

a.

b.

c.

An order granting oral argument on the within leave application, and the
granting of leave, for special circumstances, as set out by the Federal Court
in Aguiar v Canada;
An order that the within motion be heard at the same time as the motions
proposed in Sivak, et al. v Canada, IMM-6306-09 and Sarkozi et al. v.
Canada, IMM-5543-10;
In all other respect, order(s), Mutatis Mutandis, to those sought in Sivak, et
al., v. Canada, IMM-6306-09, d. Costs of this motion and such further
relief as counsel may advise and this Court deems just.

7 While each motion is related to the central issue of institutional bias and the most just and
expeditious way of dealing with applications before the Court that involve this concern, I think it is
best to address each motion in turn rather than attempt a global assessment of what is at stake
substantively and procedurally.
8 At the hearing of these motions before me in Toronto on February 11, 2011 counsel agreed and
suggested to the Court that the motions be modified in the following ways:
a.

b.

That the class action certification issue should be argued and dealt with at a
separate hearing following my determination on the other issues raised.
The time of that further hearing will be set following consultation with
counsel;
That instead of the Applicants in IMM-6448-10 and IMM-5543-10 seeking
to have their leave applications determined following oral argument on the
basis of special circumstances, I will personally review and decide these
leave applications as a prelude to and as part of these motions.

The Court is an agreement with these modifications.

IMM-6306-09
9 This motion is about how best to deal with the allegations of institutional bias arising from the
Issue Paper in the case of these particular Applicants, as well as how to address numerous other
applications by failed claimants who may feel they have been similarly mistreated.
10

The Applicants feel that the usual judicial review process has not served them well to date and

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Page 6

they are asking the Court to impose a more thoroughgoing approach that will allow them and the
Court to examine whether the use of the Issue Paper by the RPD, and the full context in which it
was produced, does give rise to an institutional bias, apprehended or otherwise.
11 The Applicants have cross-examined Mr. Gordon Ritchie (the Director of the Research
Directorate with the operations branch of the national headquarters office of the IRB) on the
affidavit he swore on behalf of the Respondent, and they do not think that Mr. Ritchie has provided
all of the answers and the documentation to which they feel they are entitled, or that the Court will
need to decide this matter. Hence, they want the Court to either order Mr. Ritchie to answer the
refused questions and produce the refused documents, or to convert their judicial review application
to an action so that they can avail themselves of the full discovery process.
The Refused Questions
12 In my view, the Respondents are correct to emphasize that cross-examination during the
course of judicial review differs significantly from examination for discovery. As Justice Hugessen
made clear in Merck Frosst Canada Inc. v Canada (Minister of Health), [1997] F.C.J. No. 1847, at
paragraph 4:
It is well to start with some elementary principles. Cross-examination is not
examination for discovery and differs from examination for discovery in several
important respects. In particular:
a.
b.
c.
d.
e.

the person examined is a witness not a party;

answers given are evidence not admissions;
absence of knowledge is an acceptable answer; the witness cannot be required to
inform him or herself;
production of documents can only be required on the same basis as for any other
witness i.e. if the witness has the custody or control of the document;
the rules of relevance are more limited.

13 I also agree with the Respondent that judicial review is a summary process and is not intended
to involve the procedural thoroughness that comes with an action. This is why cross-examination on
affidavits in judicial review proceedings is far more limited in scope than examination for discovery
and, apart from questions going to a witness' credibility, is limited to relevant matters arising from
the affidavit itself. See Hoffmann-La Roche Ltd. v Canada (Minister of National Health and
Welfare), [1997] 2 F.C. 681, 126 F.T.R. 21, 72 C.P.R. (3d) 362 (T.D.).
14 Having reviewed the transcript of the cross-examination, it is my view that if the Court now
orders Mr. Ritchie to answer the refused questions, the Court would in effect, be allowing the
Applicants to treat their judicial review application as equivalent to an action by allowing
cross-examination to become more like discovery. In my view, if something approaching discovery

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Page 7

is required before this dispute can be effectively adjudicated, then the Applicants should be required
to satisfy the test under section 18.4(2) of the Federal Courts Act to have their judicial review
application converted to an action, rather than distorting the summary process and creating some
kind of hybrid. Section 18.4 (1) of the Federal Courts Act says that an application "shall be heard
and determined without delay and in a summary way." This sounds peremptory to me. To order Mr.
Ritchie to answer the refused questions and produce the refused documents would, in my view,
change the nature of these summary proceedings. The only exception to section 18.4 (1) is
specifically provided for in section 18.4 (2) of the Act:
The Federal Court may, if it considers it appropriate, direct that an application for
judicial review be treated and proceeded with as an action.
I will come to this subsection later but, for the moment, I think that, because of the range and depth
of information that the Applicants are seeking through Mr. Ritchie, they should really have to
satisfy the test for conversion rather than retain a summary procedure in conjunction with what
would, in effect, be a substantial amount of discovery.
15 Where I do part company with the Respondent on this first issue is with regard to the
Minister's assertion that the refused questions are just not relevant. The fact that Mr. Ritchie has
already answered almost 500 questions and voluntarily provided answers to six undertakings, which
included another 600 additional pages of documents, does not render answers to the refused
questions unnecessary or irrelevant. My review of the transcript and the questions refused suggests
to me that they are all directly relevant to the issues surrounding institutional bias that are focused
upon the Issue Paper and which the Applicants want the Court to assess.
16 In effect, then, if this matter were to proceed as a summary judicial review application, it is
my view that relevant information would be missing that is required for the Court to determine the
central issue of institutional bias.
Access to Information
17 The Respondent also says that the type of information sought by the Applicants through the 13
refused cross-examination questions is available to them through an access to information request
and, because the Applicants have not made such a request, they should not be entitled to the
information through cross-examination of Mr. Ritchie.
18 In fact, the Respondent goes so far as to say that the Applicants failure to make an access
request "signifies their view that such information is not crucial or important to their case; if they
really wanted such information, an access request could have been made when this litigation was
commenced in December of 2009."
19 I find neither of these arguments convincing. In my view, it is mere speculation to suggest that
the Applicants could find out through an access request all of the relevant facts that Mr. Ritchie can

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Page 8

provide to the Applicants and the Court. An access request involves many pitfalls and contingencies
that could result in an inadequate evidentiary base for this application. In any event, the Respondent
has put forward Mr. Ritchie and the Applicants are entitled to cross-examine him. The right to
cross-examine is not curtailed simply because the Applicants may be able to obtain relevant
information from another source. In my view, the prime concern must be whether the Court can
decide the issues raised in the application on the basis of the evidence that is now on the record.
20 The suggestion that the Applicants do not really want this information because they did not
initiate an access request in December of 2009 is not tenable. Mr. Ritchie swore his affidavit in June
2010. Given the issues raised in their application, I see nothing insincere in the Applicants
attempting to obtain as part of these proceedings what they feel the Court will need to decide a
crucial issue of their application.
Additional Documents
21 Similar issues arise under this topic as discussed above. The Respondent points out that the
Applicants just will not accept that the obligation on the RPD to produce documents as part of the
Certified Tribunal Record pursuant to Rule 17 of the Federal Court's Immigration and Refugee
Protection Rules is far different from, and much more limited, than the onus upon a defendant in an
action to locate, list and produce relevant documents.
22 The record that the RPD is required to produce under Rule 17 is hardly likely, in my view, to
assist the Court in a situation where there are allegations of bias on the part of the decision maker.
The Respondent seeks to sidestep this problem on the grounds that the Applicants have produced no
factual evidence of bias and are simply on a fishing expedition to find evidence that will support
their bare allegations. In particular, the Respondent attacks the admissibility of the affidavit sworn
by Ms. Amina Sherazee on behalf of the Applicants because it "suffers from exactly the same fatal
defects and legal shortcomings as her affidavit filed in Huntley: it is speculative, fails to explain the
basis for her beliefs or knowledge, contains argument and legal opinion and constitutes no more
than an expression of her own unsubstantiated and argumentative conclusions."
23 As the Respondent points out, if additional documentary disclosure is sought due to an
allegation of some impropriety on the part of the tribunal, adequate facts to support the allegation of
impropriety must be presented. As the Federal Court of Appeal confirmed in Access Information
Agency Inc. v Canada (Transport), 2007 FCA 224 at paragraph 21:
When dealing with a judicial review, it is not a matter of requesting the
disclosure of any document which could be relevant in the hopes of later
establishing relevance. Such a procedure is entirely inconsistent with the
summary nature of judicial review. If the circumstances are such that it is
necessary to broaden the scope of discovery, the party demanding more complete
disclosure has the burden of advancing the evidence justifying the request. It is
this final element that is completely lacking in this case. (Emphasis added)

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Page 9

24 In The Access Information Agency case the Federal Court of Appeal was dealing with Rule
317 of the Federal Court Rules. Rule 17 may be even more restrictive in terms of what the RPD is
compelled to produce, and the jurisprudence concerning the limits on cross-examination of a
witness may well mean that very little emerges as part of the usual document production process
that will help the Court in situations where bias is alleged. This does not mean, of course, that an
applicant can make a bare allegation of bias and then be allowed to go on a fishing expedition to
find evidence that will support that allegation. I do not believe, however, that this is the case before
me.
25 I have reviewed Ms. Sherazee's affidavit. It suffers from many of the faults mentioned by the
Respondent, but it is not totally on a par with the inadmissible affidavit Ms. Sherazee swore in
Huntley, and there are portions of her affidavit in this case that cannot be dismissed out of hand:
1.

2.
3.

4.

5.

6.

7.

Ms. Sherazee represents Roma people on a regular basis and she has
personal knowledge of this area of law and the conditions under which
Roma people come to her for advice;
She refers to public statements made by the Minister of Immigration to the
effect that refugee claims from the Czech Republic can be false or bogus;
She refers to the fact-finding mission to the Czech Republic that, in her
experience, was unprecedented and that was intended to determine whether
there was state protection for Roma refugees in the Czech Republic;
She cites and produces comments of the Minister of Immigration on the
Issue Paper following its release and the imposition of visa restrictions on
the Czech Republic;
She points to the statistics regarding overall acceptance rates for Czech
Roma and their decline during the time when the Minister of Immigration
was making his public comments and following the release of the Issue
Paper.
She points out (and a large component of her legal practice involves Roma
refugees) that, to her knowledge, nothing has happened to improve the
plight of the Czech Roma between 2008 and the present that would
account for the severe drop in positive acceptance statistics;
She also points out deficiencies in the Issue Paper and the way it was
produced, and the extent to which it remains inexplicably silent about the
vast majority of persecution suffered by the Czech Roma. In other words,
she questions its methodology.

26 It is possible to take issue with this affidavit and, possibly, to exclude portions of it for the
reasons given by the Respondent, and there may well be justifiable explanations for the facts
presented that will alleviate or dispel any concerns about bias. I am not in a position at this stage to
assess the significance of what Ms. Sherazee has brought to the Court's attention through her
affidavit. In my view, however, it contains sufficient acceptable evidence by someone who is

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Page 10

knowledgeable about Roma refugees to justify the request for further disclosure, whether that
disclosure occurs as part of the judicial review process or as a result of conversion of this
application to an action. It renders the Applicants' allegations of bias as something more than bald,
unsupported, assertions.
Conversion to Action
27 In my view, the important question for the Court at this juncture is whether this application
should be converted to an action under subsection 18.4 (2) of the Federal Courts Act.
28 To begin with, I agree with the principles and accept the authorities dealing with conversion
put forward by the Respondent.
29 A judicial review application should only be converted to an action in those infrequent cases
where the relevant facts cannot be satisfactorily established and weighed through affidavit evidence.
The test is not whether trial evidence would be superior, but whether affidavit evidence is
inadequate. See Macinnis v Canada (Attorney General), [1994] 2 F.C. 464 (F.C.A.); and Chen v
Canada (Minister of Citizenship and Immigration), 2004 FC 1573.
30 I would like to point out, however, that in Drapeau v Canada (Minister of National Defense),
(1995), 179 N.R. 398 (Fed. C.A.), the Federal Court of Appeal made it clear that subsection 18.4(2)
of the Federal Courts Act places no limits on those considerations which may be taken into account
in deciding whether to allow a judicial review application to be converted into an action, but that the
desirability of facilitating access to justice and avoiding unnecessary cost and delay are relevant
factors.
31 I would also like to point out that, in the more recent case of Assoc. des crabiers acadiens inc.
v Canada (Attorney General), 2009 FCA 357, the Federal Court of Appeal again set out the purpose
and scope of conversion under section 18.4(2) of the Federal Courts Act at paragraphs 34-39:
34.

35.

36.

Nonetheless, Parliament did provide an exception to judicial review at subsection

18.4(2) of the Act. This measure overrides the usual procedure and allows
judicial review applicants to have their existing application for judicial review
converted into an action.
The conversion into an action is not effected by operation of law. It is submitted
to the Federal Court for review and must be justified. The Court is vested with
the discretionary authority to accept an application for conversion "if it considers
it appropriate."
The proceedings that citizens may use to challenge administrative decision,
namely, the application for judicial review and its conversion into an action when
judicial review is applied for in the Federal Court, are ultimately aimed at
attaining and meting out administrative justice that is timely, efficient and
equitable, both for citizens and the administration.

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37.

38.

39.

Page 11

The courts have developed certain analysis factors that apply to an application
for conversion so as to better frame the exercise of the discretion set out at
subsection 18.4(2). It goes without saying that each case involving an application
for conversion turns on its own distinct facts and circumstances. And, depending
on those facts and circumstances, the individual or collective weight of the
factors may vary. We will now go over those factors. [Emphasis added.]
The conversion mechanism makes it possible, where necessary, to blunt the
effect of the restrictions and constraints resulting from the summary and
expeditious nature of judicial review. These are, for example, far more limited
disclosure of evidence, affidavit evidence instead of oral testimony, and different
and less advantageous rules for cross-examination on affidavit than for
examination on discovery (see Merck Frosst Canada Inc. v. Canada (Minister of
Health) (1998), 146 F.T.R. 249 (F.C.)).
Therefore, conversion is possible (a) when an application for judicial review does
not provide appropriate procedural safeguards where declaratory relief is sought
(Haig v. Canada, [1992] 3 F.C. 611 (F.C.A.)), (b) when the facts allowing the
Court to make a decision cannot be satisfactorily established through mere
affidavit evidence (Macinnis v. Canada) [1994] 2 F.C. 464 (F.C.A.)), (c) when it
is desirable to facilitate access to justice and avoid unnecessary cost and delay
(Drapeau v. Canada (Minister of National Defence), [1995] F.C.J. No. 536
(F.C.A.)) and (d) when it is necessary to address the remedial inadequacies of
judicial review, such as the award of damages (Hinton v. Canada, [2009] 1
F.C.R. 476. [Emphasis added.]

32 I also note that my colleague, Mr. Justice Pinard, has recently looked at this issue in Huntley v
Canada (Minister of Citizenship and Immigration), 2010 FC 407 at paragraphs 7 and 8 and has
noted that, in order to convert, the Court must find procedural or remedial inadequacies with the
normal judicial review process and that conversion should only be granted "in the clearest of
circumstances" and only on an exceptional basis when the Court "feels the case cries out for the full
panoply of a trial."
33 This is a case about institutional bias. It is also a case in which the Applicants are claiming
damages. If this matter proceeds as a judicial review application I do not believe that the Court will
have before it all that it needs to decide the principal issues, nor do I believe that, in this case, the
Applicants are merely engaged upon a fishing expedition and that they are simply speculating that,
if conversion occurs, hidden evidence will come to light.
34 I do not believe that every institutional bias case requires conversion to an action and I am
well aware that this Court and the Federal Court of Appeal have decided allegations of institutional
bias in the past without the need to convert. See, for example, Geza v Canada (Minister of
Citizenship and Immigration), 2006 FCA 124.

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Page 12

35 Looking at what has transpired to date in this application, however, I think the following have
to be noted:
a.

b.

c.

d.

For all of its faults, the Sherazee affidavit convinces me that the
Applicants' allegations of institutional bias cannot be safely disregarded as
mere speculation. Something significant happened around the time of the
Issue Paper and there is some evidence to suggest that what happened
could at least be perceived in full context as giving rise to a reasonable
apprehension of bias. It is worth remembering that, in writing the reasons
for the Federal Court of Appeal in Geza, Justice Evans acknowledged that
he could not "point to a single fact which, on its own, is sufficient to
establish bias" (paragraph 58), but he concluded that the apprehension of
bias test was satisfied in that case "given the high standard of impartiality
to which the Board is held in its adjudicative capacity...";
The rules of cross-examination and document production as they pertain to
the judicial review context have not, in my view, yielded the evidence that
the judge who hears this matter will need to decide the issue of institutional
bias. The Respondent has chosen to assert those rules - in my view
appropriately - and has pointed out that cross-examination is not discovery.
On the facts of this case, however, that means that the Court will not be
able to decide the bias issue on the basis of affidavit evidence;
If I were to order Mr. Ritchie to answer the refused questions and produce
relevant documents required to decide this case in the context of judicial
review, I would, in effect, be obscuring the important distinctions between
cross-examination and discovery;
In my view, this case "cries out for the full panoply of a trial" because it
raises issues of the utmost importance to the integrity of, and public
perception regarding, our immigration system, and I do not think these
issues can be decided on the basis of the record that has been assembled, or
that could be assembled, for judicial review

The TeleZone Decision

36 The Respondent says that the Applicants cannot claim damages in the same action as they are
seeking to have their negative refugee decision subjected to administrative law remedies. The
Respondent says that, if the Applicants wish to claim damages, then they have to commence a
separate action. As authority for this position, the Respondent cites the recent Supreme Court of
Canada decision in Canada (Attorney General) v TeleZone Inc., 2010 SCC 62 and, in particular,
paragraph 52 of that decision which reads as follows:
All of the remedies listed in s. 18(1)(a) are traditional administrative law
remedies, including the four prerogative writs -- certiorari, prohibition,

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mandamus and quo warranto-- and declaratory and injunctive relief in the
administrative law context. Section 18 does not include an award of damages. If
a claimant seeks compensation, he or she cannot get it on judicial review. By the
same token, the plaintiff in a damages action is not entitled to add a
supplementary claim for a declaration or injunction to prevent the government
from acting on a decision said to be tainted by illegality. That is the domain of
the Federal Court.
37 It is not entirely clear to me why the Respondent is raising this issue at this time. Presumably,
if the Respondent's position is correct, then the judge who eventually hears and deals with this
dispute will rule accordingly. At this stage, however, the Respondent appears to be suggesting that
the Court should not convert this application to an action because the Applicants are seeking
damages and so are required to commence separate proceedings if they want to claim compensatory
relief, which they can do at any time. Hence, the Respondent argues, the judicial review application
should continue without conversion and there are no remedial inadequacies to justify conversion
because the Applicants can, and must, commence a separate action for their damages claim.
38 In so far as it is necessary for me to consider this argument at this stage of the proceedings, it
is my view that the Respondent is mistaken in reading TeleZone to say that separate proceedings in
this Court are required in a case such as the one before me.
39 In TeleZone, the Supreme Court of Canada was dealing with a case that had come out of an
Ontario court. In the present case, I am dealing with proceedings that began in the Federal Court so
that there are no Federal Court domain issues that stand in the way of this Court dealing with the
traditional administrative law remedies as set out in section 18 of the Federal Courts Act, and where
section 18.4(2) of the Federal Courts Act specifically allows conversion to an action where the
Court feels it is appropriate.
40 In TeleZone, the Supreme Court of Canada made it clear that plaintiffs in an action for
damages in the courts of Ontario are not entitled to add a supplementary claim that will result in a
trespass on the jurisdiction of the Federal Court.
41 The Respondent concedes that there is no bar to the Applicants claiming damages in this
Court. The section 18 relief they seek is the exclusive domain of this Court; and section 18.4 (2)
specifically permits conversion to an action. Hence, in my view, there is no jurisdictional bar to
allowing the Applicants to seek damages and section 18 relief in the same action.
42 In the related Supreme Court of Canada case of Parrish & Heimbecker Ltd., v Canada
(Agriculture and Agri-Food), 2010 SCC 64, I think this position is made clear at paragraphs 17-18
and 21:
For the reasons given by Binnie J. in the companion decision of Canada
(Attorney General) v. TeleZone, 2010 SCC 62, the Crown's arguments must fail.

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Page 14

Unlike in TeleZone, the Federal Court's jurisdiction is not at issue in this appeal.
Parrish brought its action in the Federal Court. However, the correct procedure action or application for judicial review - is at issue. Section 17 of the Federal
Courts Act gives the Federal Court concurrent jurisdiction over claims for
damages against the Crown. Section 18 of the Federal Courts Act does not
derogate from this concurrent jurisdiction. There is nothing in ss. 17 or 18 that
requires Parrish to be successful on judicial review before bringing its claim for
damages against the Crown.
[...]
For the reasons given in TeleZone, the Federal Court should have decided
Parrish's claim for damages without requiring it to first be successful on judicial
review.
43 In Hinton v Canada (Minister of Citizenship and Immigration), 2008 CarswellNat 1937, 2008,
the Federal Court of Appeal made it clear that section 18.4 (2) addresses the procedural
shortcomings of a judicial review application, but also the remedial ones, including the inability to
claim damages on judicial review. Once an application for judicial review is converted to an action,
a claim for damages can be advanced in that action. I see nothing in TeleZone that changes this
authority. TeleZone does not say, in my view, that section 18 remedies and damages cannot be
claimed in the same action in the Federal Court.
44

I believe the following paragraphs from Hinton are instructive in this case:
49.

50.

I am not convinced that subsection 18.4(2) should be read narrowly so as to only

apply to the procedural aspects of an action, such as discoveries, the admission of
viva voce evidence, and the like. It is well recognized that the right to treat an
application as if it were an action is to compensate for certain procedural
inadequacies with the process underlying applications. In my mind, however, I
think it may sometimes also be appropriate to consider the remedial inadequacies
of an application for judicial review, as well. One problem with applications for
judicial review is that a remedy for damages cannot be sought. In most
applications for judicial review, this is not a major concern as the desired remedy
will usually lie in the form of mandamus, certiori, or a declaration. Where it is of
concern, however, is when a totally separate action afterwards may be necessary
in either Federal Court or a provincial court to advance a claim for damages: this
is a potentially undesirable situation.
Sometimes, such as the case at bar, it may prove too cumbersome to initiate a

74

54.

Page 15

separate action for damages either concurrently with, or subsequent to, an

application for judicial review. Instead of attempting a joinder, which is
sometimes inevitable, employing subsection 18.4(2) of the Federal Courts Act to
allow a claim for damages in a "converted" action should also be available. In
cases such as this one, it may even economise on scarce judicial resources.
I conclude on this issue with one caveat. It would be an error to permit a claim
for monetary relief to be decided prior to determining the underlying basis for
liability - namely, the validity of the governmental decision, or in this case, the
regulation. Indeed, this is the logical way in which other actions proceed. In
patent infringement cases, the questions of the validity of the patent and
infringement of the patent are considered before one explores the question of
damages. Similarly, in tort law cases, liability is established before damages are
addressed. In a case such as this one, although all the evidence on both issues
may be heard together, vires ought to be decided first before the question of
whether the class members are entitled to a partial refund is addressed.

Conclusions
45 Notwithstanding various arguments advanced by the Respondent, I think the central issue for
me to decide at this stage is whether the Applicants have satisfied the test laid out in the relevant
jurisprudence for conversion to an action. For reasons given above, I believe that they have.
IMM-5543-10
46 As agreed by counsel at the hearing, there is no need for me now to consider whether the leave
application in this case should be argued orally. I have reviewed the leave application and I have
granted leave.
47 In my view, there is sufficient commonality between IMM-6303-09 and IMM-5543-10 in
terms of legal and factual issues, parallel evidence and the likelihood that the outcome of one case
will resolve the other to warrant joinder. See Sivamoorthy v Canada (Minister of Citizenship and
Immigration), 2003 CarswellNat 650, 2003 FCT 307. As I see nothing to distinguish this case from
IMM-6306-09 as regards conversion to an action, I adopt my own reasons and determine that this
application shall be converted to an action and joined with IMM-6306-09.
IMM-6448-10
48 As agreed by counsel at the hearing, there is no need for me now to consider whether the leave
application in this case should be argued orally. I have reviewed the leave application and I have
granted leave.
49 As I see nothing to distinguish this case from IMM-6306-09 and IMM-5543-10 as regards
joinder and conversion to and an action, I adopt my own reasons and determined that this

75

Page 16

application shall be converted to an action and joined with IMM-6306-09 and IMM-5543-10.
Class Action Certification
50 As counsel requested, and the Court has agreed, the class-action certification aspects of these
motions will be dealt with at a further hearing following the decision on conversion, leave and
joinder. The time will be set after consultation with counsel to address the certification issue and to
decide costs issues on all of the motions. Following the issuance of these reasons and judgment
counsel should provide the Court with availability dates or, if a brief case management conference
is required, let the Court know when they could be available for that.
Certification of Questions
51 As regards the issues I have decided in this portion of the motions, I agree with the
submissions of Respondent's counsel that no serious question for certification arises at this stage.
JUDGMENT
THIS COURT'S JUDGMENT is that
1.
2.
3.

RUSSELL J.

Leave to commence judicial review is granted in IMM-6448-10;

Leave to commence judicial review is granted in IMM-5543-10;
The judicial review applications in IMM-6306-09, IMM-6448-10, and
IMM-5543-10 are converted to actions in accordance with section 18.4 (2)
of the Federal Courts Rules and said actions shall be consolidated.

76

Page 1

Case Name:

Simpson Strong-Tie Co. v. Peak Innovations Inc.

Between
Simpson Strong-Tie Company Inc., Applicant, and
Peak Innovations Inc., Respondent
And between
Simpson Strong-Tie Company Inc., Applicant, and
Peak Innovations Inc., Respondent
[2009] F.C.J. No. 530
2009 FC 392
344 F.T.R. 217
Dockets T-1570-07, T-1571-07
Federal Court
Toronto, Ontario
Mandamin J.
Heard: February 23, 2009.
Judgment: April 21, 2009.
(29 paras.)
Intellectual property law -- Trade-marks -- Procedure -- Applications -- Discovery -- Documents -Appeal by applicant from dismissal of a motion for production dismissed -- The parties were
involved in trade-mark registration appeal proceedings -- The applicant sought extensive
production of documents in relation to cross-examination of the respondents' affiants -- The
Prothonotary found that the production sought overreached, and that no proper foundation for
further production was laid in cross-examination -- The court ruled that the Prothonotary did not
err in finding that Rule 91(2)(c) limited document production in cross-examination on affidavits to
documents in the possession, power or control of the affiants -- Federal Courts Rules, Rule
91(2)(c).
Civil litigation -- Civil evidence -- Documentary evidence -- Affidavits -- Cross-examination on --

77

Page 2

Appeal by applicant from dismissal of a motion for production dismissed -- The parties were
involved in trade-mark registration appeal proceedings -- The applicant sought extensive
production of documents in relation to cross-examination of the respondents' affiants -- The
Prothonotary found that the production sought overreached, and that no proper foundation for
further production was laid in cross-examination -- The court ruled that the Prothonotary did not
err in finding that Rule 91(2)(c) limited document production in cross-examination on affidavits to
documents in the possession, power or control of the affiants -- Federal Courts Rules, Rule
91(2)(c).
Civil litigation -- Civil procedure -- Production and inspection of documents -- Scope -- Production
by non-parties -- Appeal by applicant from dismissal of a motion for production dismissed -- The
parties were involved in trade-mark registration appeal proceedings -- The applicant sought
extensive production of documents in relation to cross-examination of the respondents' affiants -The Prothonotary found that the production sought overreached, and that no proper foundation for
further production was laid in cross-examination -- The court ruled that the Prothonotary did not
err in finding that Rule 91(2)(c) limited document production in cross-examination on affidavits to
documents in the possession, power or control of the affiants -- Federal Courts Rules, Rule
91(2)(c).
Statutes, Regulations and Rules Cited:
Federal Courts Rules, SOR 98-106, Rule 91(2)(a), Rule 91(2)(c), Rule 94, Rule 94(1), Rule 94(2)
Trade-marks Act, R.S.C. 1985, c. T-13, s. 56
Counsel:
Kenneth D. McKay, for the Applicant.
Paul Smith, for the Respondent.

REASONS FOR JUDGMENT AND JUDGMENT

1 MANDAMIN J.:-- The Applicant, Simpson Strong-Tie Company Inc., appealed a decision of
the Registrar of Trade-marks. In the course of the appeal proceedings, the Respondent, Peak
Innovations Inc., filed certain affidavits. The Applicant served Directions to Attend on the affiants
for cross-examination on their affidavits. The Directions sought extensive document production by
the affiants. Neither the affiants nor the Respondent provided documents they considered beyond
the scope of the affidavits. At the cross-examination, the affiants refused to answer Simpson
Strong-Tie's questions about the documents requested in the Notice to Attend.

78

Page 3

2 Simpson Strong-Tie then brought a motion before the case management Prothonotary for
production of documents and re-attendance of the affiants to answer refused questions. The
Respondent opposed the motion.
3 The case management Prothonotary dismissed the Applicant's motion. Simpson Strong-Tie now
appeals the Prothonotary's Order dismissing its application for production of documents sought in
the Direction to Attend and for answers to the questions refused in the cross-examination on
affidavit.
Decision Under Appeal
4 The Prothonotary observed the Directions to Attend and required the affiants to produce an
extensive list of documents. He considered the majority of the Applicant's questions, for which
answers were refused, to be about documents which Simpson Strong-Tie sought in its Directions to
Attend. The Prothonotary considered the Applicant's remaining questions on cross-examination to
be equally wide in scope. They were, in the Prothonotary's view, beyond the reach of the specific
knowledge of the two affiants.
5 The Prothonotary noted that the Applicant's questions arose during cross-examination on
affidavits rather than on examination for discovery.
6 The Prothonotary acknowledged the Applicant's submissions that witnesses are required to
produce documents referred to in the Directions to Attend and that the Federal Courts Rules, SOR
98-106, contemplated that a witness in a proceeding may be compelled to produce documents
reaching beyond the scope of the affidavit upon which they were cross-examined. However, he
agreed with the Respondent's submission that the questions were not focussed on the affidavits and
matters deposed therein, rather to efforts to obtain production of documents not within the
possession, power or control of the affiants.
7 The Prothonotary considered Rule 91, and more particularly 91(2)(c), directly applicable to the
issue in the motion. That Rule provides that a party intending to conduct an oral examination shall
serve a Direction to Attend on the person to be examined. Rule 91(2)(c) is specific to
cross-examination on affidavit and requires the documents to be produced are those documents "in
that person's possession, power or control" (emphasis in Prothonotary's reasons) that are relevant to
the application. He contrasted this wording with Rule 91(2)(a) which deals with examinations for
discovery and refers to documents "in the possession, power or control of the party on behalf of
whom the person is being examined" (emphasis added). The Prothonotary held that on a plain
reading of Rule 91(2)(c) the documents to be produced are only those in the affiant's possession,
power or control.
8 The Prothonotary concluded that a Direction to Attend which seeks "all documents" in the
Respondent corporation's files are documents not necessarily in the possession, power or control of
the affiants. He decided that in its Directions to Attend, the Applicant had overreached what the

79

Page 4

affiants were required to produce.

9 The Prothonotary acknowledged that where a proper foundation was laid in cross-examination,
a party could be required to obtain the production of additional documents. He found that the thrust
of questions refused in the Applicant's cross-examinations on affidavit did not seek to lay a
foundation to demonstrate the documents were in the possession of the affiants.
10 The Prothonotary ruled the questions arising from the Directions to Attend were not proper
and need not be answered. Finally, he decided the remaining questions refused by Peak Innovations
were questions to which argument was not directed or dealt with matters that were not relevant,
were privileged, or exceeded the scope of the affidavits. On these, the Prothonotary decided that
Simpson Strong-Tie was free to argue in the course of the proceeding that an adverse inference
could be drawn against Peak Innovations for failing to produce those documents.
11 In result, the Prothonotary dismissed the Applicant's Motion for production of documents
sought in the Direction to Attend and for answers to the questions refused in the cross-examination
on affidavit.
Issue
12 The issue in this appeal is whether the Prothonotary erred in holding that on cross-examination
on an affidavit the production of documents and answers to questions thereto was governed by Rule
91(2)(c) and that the Rule limited document production in cross-examination on affidavit to
documents in the possession, power or control of the affiants.
Standard of Review
13 Discretionary orders of Prothonotaries ought not to be disturbed on appeal unless they are
clearly wrong in the sense that the exercise of discretion was based on a wrong principle or
misapprehension of the facts or that they raise questions vital to the final issue of the case. Canada
v. Aqua-Gem Investments Ltd., [1993] F.C.J. No. 103 (F.C.A.)
14 In Merck & Co., Ltd. v. Apotex Inc., 2003 FCA 488, Justice Dcary decided that a judge
should first determine whether the question is vital to the final issue. Secondly, whether "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." Merck at para. 19.
Legislation
15

Rule 91 of the Federal Rules of Court provides:

Direction to attend

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Page 5

91.(1) A party who intends to conduct an oral examination shall serve a direction
to attend, in Form 91, on the person to be examined and a copy thereof on every
other party.
Production for inspection at examination
(2)

A direction to attend may direct the person to be examined to produce for

inspection at the examinatio n
(a) in respect of an examination for discovery, all documents and other
material in the possession, power or control of the party on behalf of whom
the person is being examined that are relevant to the matters in issue in the
action;
(b) in respect of the taking of evidence for use at trial, all documents and
other material in that person's possession, power or control that are
relevant to the matters in issue in the action;
(c) in respect of a cross-examination on an affidavit, all documents and
other material in that person's possession, power or control that are
relevant to the application or motion; and
(d) in respect of an examination in aid of execution, all documents and
other material in that person's possession, power or control that are
relevant to the person's ability to satisfy the judgment.

16

Rule 94(1) provides:

Production of documents on examination

94. (1) Subject to subsection (2), a person who is to be examined on an oral
examination or the party on whose behalf that person is being examined shall
produce for inspection at the examination all documents and other material
requested in the direction to attend that are within that person's or party's
possession and control, other than any documents for which privilege has been
claimed or for which relief from production has been granted under rule 230.

81

Page 6

Relief from production

(2)

On motion, the Court may order that a person to be examined or the party on
whose behalf that person is being examined be relieved from the requirement to
produce for inspection any document or other material requested in a direction to
attend, if the Court is of the opinion that the document or other material
requested is irrelevant or, by reason of its nature or the number of documents or
amount of material requested, it would be unduly onerous to require the person
or party to produce it.

Analysis
17 The underlying proceeding is an appeal by the Applicant, Simpson Strong-Tie, of the decision
of the Registrar of Trade-marks (Opposition Board) of the Trade-marks Office. Simpson Strong-Tie
had opposed the Respondent's application for registration of the trade-mark at issue: No. 1,205,529.
This opposition was refused by the Opposition Board and the trademark has been registered.
Simpson Strong-Tie appealed the decision pursuant to section 56 of the Trade-marks Act, R.S.C.
1985, c. T-13, by filing a Notice of Application in Federal Court seeking an order granting its
appeal, an order setting aside the decision of the Registrar of Trade-marks, and an order directing
the Registrar of Trade-marks to refuse the registration of the trademark.
18 I begin by noting that the Prothonotary's decision refusing Simpson Strong-Tie's motion
relates to an interlocutory matter and not to an issue vital to the final outcome. As such the
Prothonotary's order ought not to be disturbed on appeal unless it is clearly wrong in the sense that
the exercise of discretion was based on a wrong principle or misapprehension of the facts. Merck,
supra.
19 The Applicant submits that Rule 94(1) requires that the person or party to produce the
documents required and that the onus was on the recipient to apply under Rule 94(2) to seek relief
from the Court from the production of documents. Further the Applicant submits that Rule 91(2)(c)
allows the person issuing the Direction to Attend to ask for production of "all documents and other
material ... relevant to the application or motion." Simpson Strong-Tie submits the Prothonotary did
not deal with its submission and instead put the onus on the Applicant contrary to Rule 94(2).
20 The Applicant also submits the Federal Court Rules on the Direction to Attend provide for the
production of all documents relevant to the application. It cited the decision of Justice Snider in
Sawridge Band v. Canada, 2005 FC 865, specifically:
In my view, the most succinct statement of the current state of the law on the
scope of cross-examination on an affidavit, in the context of an interlocutory
motion such as this, is set out by Reed J. in Castlemore Marketing Inc. v.
Intercontinental Trade and Finance Corp. [1996] F.C.J. No. 201, at para. 1:

82

Page 7

An affiant is required to answer questions on matters which have been set out in
the affidavit as well as any collateral questions arising from his or her initial
answers. In Bally-Midway Mfg. Co. v. M.J.Z. Electronics Ltd. (1984), 75 C.P.R.
(2d) 160, Mr. Justice Dub stated that cross-examinations on affidavits are
confined to "the issues relevant to the interlocutory injunction and/or all
allegations contained in the affidavit". In [Weight Watchers International Inc. v.
Weight Watchers of Ontario Ltd. (No. 2) (1972), 6 C.P.R. (2d) 169 (F.C.T.D.)],
Mr. Justice Heald relied upon jurisprudence which held that a person
cross-examining on an affidavit was not confined to the area within the four
corners of the affidavit but could cover any matter relevant to the determination
of the issue in respect of which the affidavit was filed. In addition to being
relevant, the question of course must not be of such a general nature that it
cannot be intelligently answered, and the Court will exercise its discretion and
disallow any question which it considers in the nature of a "fishing expedition".
21 I note that in Sawridge, Justice Snider was dealing with an interlocutory motion by which the
plaintiffs sought an order that the defendant produce an alternative witness who was a more
informed affiant than the paralegal who prepared the affidavit that listed certain documents. Justice
Snider declined to grant the requested relief because, in addition to not specifying questions they
wished to ask, the plaintiffs appeared to propose to cross-examine on the contents of the documents
beyond the limited purpose for which they were put forward. Justice Snider held that such
cross-examination would extend beyond the matters in respect of which the affidavit was filed.
22 The Applicant also refers to decisions in Bruno v. Canada, 2003 FC 1281, and Autodata Ltd.
v. Autodata Solutions Co., 2004 FC 1361. Bruno dealt with a situation where the examining party
failed to specify the production of documents in a Direction to Attend before examining a witness.
23 In Autodata, Prothonotary Tabib was considering an application made in the course of an
appeal under section 56 of the Trade Marks Act which is the same type of proceeding as the instant
case. She was considering whether production and answers were required in a situation where an
undertaking to produce documents had been given. She echoed the Federal Court of Appeal
decision in Merck Frosst Canada Inc. v. Canada (Minister of Health), [1997] F.C.J. No. 1847,
where it was stated that cross-examination is not examination for discovery in that the deponent is
not a party and the deponent can be required to produce only documents within his or her custody or
control, and the rules of relevance are more limited.
24 In my view, the three aforementioned decisions do not compel an interpretation of Rule
91(2)(c) different than the interpretation settled on by the Prothonotary. Rather, the decisions tend
to support the Prothonotary's decision, especially Autodata. Prothonotary Tabib made the
distinction between proceedings in an action and an application, the later involving a more restricted
and summary procedure.

83

Page 8

However, a cross-examination on affidavit is not a discovery, and an application

is not an action. An application is meant to proceed expeditiously, in summary
fashion. For that reason, discoveries are not contemplated in applications. Parties
cannot expect, nor demand, that the summary process mandated for applications
will permit them to test every detail of every statement made in affidavits or in
cross-examinations against any and all documents that may be in the opposing
party's possession. If a party is not required to "accept" a witness' bald assertion
in cross-examination, it is however limited in its endeavours to test that assertion
to the questions it may put to the witness and the witness' answers in the course
of the cross-examination. To the extent documents exist that can buttress or
contradict the witness' assertion, production may only be enforced if they have
been listed, or sufficiently identified, in a direction to attend duly served pursuant
to Rule 91(2)(c) (see Bruno v. Canada (Attorney General), [2003] F.C.J. 1604). I
reiterate: a cross-examination on an affidavit is the direct testimonial evidence of
the witness, not a discovery of the party. (underlining added)
25 The Applicant, Simpson Strong-Tie, proceeded in its appeal of the Registrar of Trade-marks
decision by way of a Notice of Application. In choosing to proceed by application, it must observe
the limitations that are attendant on application proceedings.
26 I agree with the Prothonotary that Rule 91(2)(c) is directly applicable. The language of Rule
91(2)(c) is precise with respect to production of documents for cross-examination on affidavits and
is to be preferred over more generally worded provision of Rule 94 dealing with oral examinations.
27 The remaining matters the Applicant raises assume success in this application and deal with
case management questions. Given the Applicant does not succeed in the central issue and given
that case management is in the hands of the Prothonotary, I decline to address those issues. The
Applicant should return to the case management Prothonotary for direction in respect of those
matters.
Conclusion
28 I conclude that the Prothonotary's Order ought not to be disturbed since it is not clearly wrong
in the sense that the exercise of discretion was based on a wrong principle or misapprehension of
the facts.
29

Costs are awarded to the Respondent, Peak Innovations Inc.

JUDGMENT

THIS COURT ORDERS AND ADJUDGES that:

1.

The application is dismissed.

84

2.

Costs are awarded to the Respondent.

MANDAMIN J.
cp/e/qlecl/qlpxm/qlaxw/qlced

Page 9

85

Page 1

Case Name:

Simpson Strong-Tie Co. v. Peak Innovations Inc.

Between
Simpson Strong-Tie Company Inc., Appellant, and
Peak Innovations Inc., Respondent
[2009] F.C.J. No. 1126
[2009] A.C.F. no 1126
2009 FCA 266
397 N.R. 201
180 A.C.W.S. (3d) 403
Docket A-196-09
Federal Court of Appeal
Toronto, Ontario
Sexton, Blais and Layden-Stevenson JJ.A.
Heard: September 14, 2009.
Oral judgment: September 14, 2009.
(10 paras.)
Civil litigation -- Civil procedure -- Discovery -- Production and inspection of documents -Objections and compelling production -- Appeal by Simpson Strong-Tie Co. from order upholding
Prothonotary's dismissal of appellant's application for production of documents dismissed -Appellant had sought production of documents in the direction to attend and for answers to the
questions refused in the cross-examination on affidavit -- Issues raised in application were not vital
to the final outcome -- No wrong principle was applied.
Appeal by Simpson Strong-Tie Co. from an order upholding a Prothonotary's order dismissing the
appellant's application for production of documents sought in the direction to attend and for answers

86

Page 2

to the questions refused in the cross-examination on affidavit. The Prothonotary ruled that in its
direction to attend the appellant had overreached as to what documents the affiants were required to
produce. The Prothonotary also ruled that the appellant had failed to lay a proper foundation in
cross-examination to demonstrate that the documents were in the possession of the affiants.
HELD: Appeal dismissed. The motion judge was correct in deciding that the issues raised by the
appellant's application were not vital to the final outcome. The Prothonotary gave extensive reasons
in dismissing the motion. The decision was not based upon a wrong principle or upon a
misapprehension of the facts. The Prothonotary applied the correct principles regarding the scope of
cross-examination as it related to the requirement to produce documents pursuant to a direction to
attend.
Statutes, Regulations and Rules Cited:
Federal Courts Rules, Rule 91(2)
Appeal from an order of the Honourable Mr. Justice Mandamin dated April 21, 2009, in Docket No.
T-1570-07, [2009] F.C.J. No. 530.
Counsel:
Kenneth D. McKay for the Appellant.
Paul Smith for the Respondent.

The judgment of the Court was delivered by

1 BLAIS J.A. (orally):-- This is an appeal of an order by Justice Mandamin of the Federal Court
(motion judge) dated April 21, 2009 upholding an order by Prothonotary Aalto dated December 31,
2008 whereby he dismissed the appellant's application for production of documents sought in the
direction to attend (DTA) and for answers to the questions refused in the cross-examination on
affidavit.
2 To succeed, it must be demonstrated that the motion judge's decision was plainly wrong in the
sense that it was based on an error of law or a misapprehension of the fact, pursuant to the decision
of our Court in Merck & Co., Inc. v. Apotex Inc. [2004] 2 F.C.R. 459 , 2003 FCA 488 (Merck)
whereby:
Discretionary orders of prothonotaries ought not to be disturbed on appeal to a

87

Page 3

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.
3 We are of the view that the motion judge was correct in deciding that the issues were not vital
to the final outcome.
4 Turning to the second element of the test established in Merck, above, the motion judge
examined whether the prothonotary was clearly wrong in the exercise of his discretion.
5 In the instant case, in dismissing the motion, the case management prothonotary ruled that in its
DTA, the appellant had overreached as to what documents the affiants were required to produce.
Rule 91(2)(c) as it relates to an affiant only requires the production of documents "in that person's
possession, power or control that are relevant to the application or motion."
6 Further, the prothonotary ruled that the appellant had failed to lay a proper foundation in
cross-examination to demonstrate that the documents were in the possession of the affiants and
hence obtain the production of additional documents (Order of Prothonotary Aalto dated December
31, 2008, pages 6-7).
7 The prothonotary gave extensive reasons in dismissing the motion. It was not based upon a
wrong principle or upon a misapprehension of the facts. The motion judge did not err on this count.
8 Regarding the scope of cross-examination as it relates to the requirement to produce documents
pursuant to a DTA, we are of the view that the prothonotary applied the correct principles discussed
in Merck Frosst Canada Inc. v. Canada (1997), [1997] F.C.J. 1847 (F.C.T.D.) affirmed [1999] FCJ
No. 1536 (F.C.A.). The motion judge did not find any error with respect to this issue. Neither do
we.
9 In j2 Global Communications, Inc. v. Protus IP Solutions Inc., (2009 FCA 41, 387 N.R. 135),
Justice Evans explained that because of the discretionary and interlocutory nature of motions,
appellants have a heavy burden to meet before the Federal Court of Appeal will overturn a decision
(at para 5). He further stated:
Because of their intimate knowledge of the litigation and its dynamics,
prothonotaries and trial judges are to be afforded ample scope in the exercise of
their discretion when managing cases...since this Court is far removed from the
fray, it should only intervene in order to prevent undoubted injustices and to
correct clear material errors (at para 16).
10

This appeal will therefore be dismissed with costs.

88

BLAIS J.A.

Page 4

89

Case Name:

Stanfield v. Canada (Minister of National Revenue M.N.R.)

Between
Hugh Stanfield, Greta Anderson, Robert Anderson, Donald
Apolczer, Carol L. Apolczer, James C. Ayearst, Elizabeth
Joan Ayearst, Christine Banville, Brent Beyak, David G.
Blissett, James L. Brady, Keith Brooke, George Burden,
Donald Carey, Patricia Carpenter, Alan Carpenter, Maria
Clarke, Kenneth Clarke, Julia S. Cundliffe, Kate A.
Davis, Larry Davis, Allan De Haan, Herb Demars, Terrance
Dunford, Irvine J. Dyck, Norma Farenick, Stephan
Fralick, Renee Gallant, Roy Gallant, Mary Gelpke, Paul
Gelpke, Dianne Germain, Ben Goertzen, Martha Goertzen,
Peter Graboski, Frank Graf, Gary H. Grueter, David R.
Hackett, Eric R. Harrison, Kenneth Allan Hay, John A.
Higgins, Geoffrey Hilliard, William Johnson, Peter
Leger, Edna L. Lindal, Robert Lindal, Wayne Garry
Martin, Ed MacIntosh, Robert Mcginn, Terence Meadows,
Robert Naber, Edith Nelson, Garth L. Nelson, Glenn
Parker, John L. Parsons, Helen Parsons, Danny Pawlachuk,
Joseph Pennimpede, Irene Pennimpede, Brenda Quattrin,
Garry Reimer, Neil Reinhart, Glen Robbins, Luc Roberge,
Joan Ellen Sabourin, Paul Wyatt Sabourin, Mark Sampson,
Susan Scott, Philip Scott, Michael Slade, Kazik
Smilowski, Frances Smilowski, Candice Stanfield, Seona
Stephen, John G. Stephen, Gregory Stevens, Jennifer
Stevens, Roger G. Stogre, Brian E. Stoutenburg, Lesley
Suggitt, James H. Suggitt, Scott Thomson, Allan Tolsma,
Tom Tolsma, Agnes Dorothy Tolsma, Andrew Trojner, Mary
Trojner, Jim R. Trojner, George H. Wadsworth, Sharon
Wadsworth, Glenys Whelan, Earl Wilkes, David J.
Williams, Mildred Williamson, Kerry Wilson, Harvey Yarn,
David Zevick, Preben Andersen, Daniel M. Arrigo, Robert
P. Blair, Stephen P. Burke, Brent Carlson, Fiona
Douglas-Crampton, Helen Fadden, Reid Frederick, Edgar
Giesbrecht, John Gordon, Gary Hammer, John F. Heathe,

Page 1

90

Page 2

Judith A. Kostuk, Ron A. Krowchuk, Larry Ledoux, Penny

Ledoux, Ernest Reimer, Laurie Reimer, Maxwell Thompson,
applicants, and
The Minister of National Revenue, respondent
[2004] F.C.J. No. 719
[2004] A.C.F. no 719
2004 FC 584
2004 CF 584
255 F.T.R. 240
[2004] 3 C.T.C. 125
2004 D.T.C. 6419
130 A.C.W.S. (3d) 917
Docket T-1554-02
Federal Court
Vancouver, British Columbia
Hargrave, Prothonotary
Heard: February 3, 2003.
Judgment: April 20, 2004.
(69 paras.)
Civil procedure -- Discovery -- Production and inspection of documents -- Objections and
compelling production -- Examination for discovery -- Range of examination -- Fishing expeditions
-- Civil evidence -- Witnesses -- Examination -- Cross-examination -- Limitations -- Documentary
evidence -- Affidavits -- Cross-examination on -- Compelling attendance by subpoena -- Subpoena
duces tecum -- Taxation -- Income tax -- Enforcement -- Production of information -- Offences -Tax evasion or avoidance.
Application by Stanfield seeking production of additional documents on which to further
cross-examine the Crown's deponent on her affidavit, as well as an order that the deponent re-attend
for further cross-examination and be required to provide proper answers. In 2002, Stanfield received

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a questionnaire and request for information from the Minister concerning currency and commodity
transactions. He was also informed that while he was not under investigation, a criminal
investigation regarding those types of transactions was being undertaken. Stanfield applied for a
declaration that the letter requesting information was invalid, and for an order prohibiting the
Minister from proceeding against him for failure to respond to the letter. The Crown's deponent
worked in the audit, as opposed to investigation, section of the Canada Customs and Revenue
Agency. In 2003, the deponent was cross-examined on her affidavit. Stanfield claimed that the
deponent failed to adequately inform herself as to the nature for the request for information, or the
predominant purpose of the investigation.
HELD: Application granted in part. The Crown's deponent was ordered to re-attend for further
cross-examination, and was ordered to further inform herself on certain issues, and produce certain
documents. There was no clear evidence indicating whether the predominant purpose of the
investigation was to conduct an audit or a criminal investigation. Given the information he had
received and the wording of the questionnaire, Stanfield was reasonably concerned that he may still
be under investigation. Accordingly, the Crown's deponent was required to inform herself and
produce documents for the purposes of cross-examination. While the request for documents made
by Stanfield was too broad, certain documents requested were ordered produced. The principal file
was ordered produced, since, though beyond the scope of the deponent's affidavit, it was indicative
of the Minister's course of conduct. The minutes of meetings between the audit and investigative
groups were also ordered produced, as were the directives issued to the audit group by the
investigative group. The deponent was directed to provide proper answers to certain relevant
questions.
Statutes, Regulations and Rules Cited:
Federal Court Rules, Rule 91, 94.
Income Tax Act, s. 231.1(1), 231.2(1).
Counsel:
Edwin G. Croft and Elizabeth Junkin, for the applicants.
Robert H. Carvalho, for the respondent.

REASONS FOR ORDER

1 HARGRAVE, PROTHONOTARY:-- On 17 August 2002 the Minister of National Revenue
(the "MNR"), had become concerned about what are characterized as "tax loss arrangements", being

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in the nature of currency and commodity transactions, spanning a year end, upon which various
taxpayers had claimed losses. The MNR therefore sent to the Applicant, Hugh Stanfield, demand in
the form of a questionnaire under cover of a letter dated 27 August 2002, the letter containing the
statement:
Please be advised that a criminal investigation regarding the promotion of
transactions of the type claimed on your income tax return has been undertaken.
You are not under investigation at the present time but we wish to advise you that
any information submitted may be provided to our Investigations Division for
review.
The letter did not say that the recipient would never be under investigation. This uncertainty
concerned Mr. Stanfield, who wondered why he should hand over information to the Minister if he
was in fact under investigation. He was concerned enough that he sought review of the Minister's
demand.
2 Mr. Stanfield, in due course, was joined by other concerned taxpayers who now make up the
Applicants in this judicial review proceeding. The proceeding is for a declaration that the letter
requesting information is invalid or unlawful and that the Minister be prohibited or restrained from
taking any action or proceedings against the Applicants for failure to respond to the 27 August 2002
letter.
3 The Applicants' position is based upon Jarvis v. The Queen [2002] 3 S.C.R. 757, the effect of
which is summed up by Justices Iacobucci and Major, at pages 765-766:
Ultimately, we conclude that compliance audits and tax evasion investigations
must be treated differently. While taxpayers are statutorily bound to co-operate
with CCRA auditors for tax assessment purposes (which may result in the
application of regulatory penalties), there is an adversarial relationship that
crystallizes between the taxpayer and the tax officials when the predominant
purpose of an official's inquiry is the determination of penal liability. When the
officials exercise this authority, constitutional protections against
self-incrimination prohibit CCRA officials who are investigating ITA offences
from having recourse to the powerful inspection and requirement tools in ss.
231.1(1) and 231.2(1). Rather, CCRA officials who exercise the authority to
conduct such investigations must seek search warrants in furtherance of their
investigation.
In essence, taxpayers must cooperate with Canada Customs and Revenue Agency (the "CCRA")
audits for tax assessment purposes, even though the result may be a regulatory penalty, but an
adversarial relationship crystallizes when the predominant purpose of the inquiry is the
determination of a penal liability: when this line is crossed the CCRA no longer has recourse to
inspection and requirement procedures under the Income Tax Act, but must obtain search warrants

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in order to further their investigation.

4 On the present motion the Applicants seek additional documents on which to cross-examine
further on an affidavit sworn on behalf of the Crown and that the Crown's deponent re-attend for
further cross-examination to answer questions already asked and to answer proper questions arising
out of any additional documents which are ordered produced.
5 The result of this motion, based upon the Jarvis case and the law is mixed success. In order to
demonstrate the route to rulings for and against the Applicants I begin with background
commencing in the spring of 1999, for there are many events, well before a formal delivery of a file
by the Audit branch of the CCRA to the Investigations Division, which might bear on a
crystallization of an adversarial situation and preclude information gathering under sections
231.1(1) and 231.2(1) of the Income Tax Act, forcing the CCRA Investigations to proceed by way
of search warrant in order to gather information for prosecution purposes.
BACKGROUND
6 The submissions of the Applicants are based on events going back to tax loss arrangements in
1998. The involvement of the Respondent's witness, Ms. Deanna Pumple, the deponent of a 31
October 2002 affidavit which is relied upon by the Minister in opposing the judicial review
application, is as an auditor. Ms. Pumple worked with the Tax Avoidance Division of the
Verification and Enforcement Division of CCRA, which is apparently an audit section. The initial
audit related to a 1998 tax loss arrangement referred to the Union Cal Trading Joint Ventures which
were, as I have already indicated, currency and commodity transactions straddling a year end, are
described by Ms. Pumple as vehicles to realize losses and defer recognition of income. She audited
about three quarters of the Applicants.
7 Apparently because of the connection between 1998 tax loss arrangements and 1999 tax
returns, Ms. Pumple decided, sometime in the first part of 2000, to review the tax returns of those
Applicants whom she was auditing, for the 1999 taxation year. This subsequently became a national
project, rather than merely one done by Ms. Pumple in the Vancouver Island taxation services
office. Thus other CCRA auditors also became involved in reviewing the 1999 tax returns of the
Applicants.
8 In April 2001 members of the CCRA Investigations Division met with the auditors from the
Tax Avoidance Division, who included Ms. Pumple, to share information. As a result of a request
by the Investigations Division Ms. Pumple referred various of her files to them and created a
chronology for their assistance. At about this point the Investigations Division instructed the Tax
Avoidance Division to cease auditing the 1998 and 1999 returns.
9 The Investigations Division was involved for the purpose of evaluating whether the Applicants
were involved in criminal activities. From time to time Ms. Pumple received requests for and
forwarded additional information to the Investigations Division. This seems to have been an

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ongoing process, with Ms. Pumple from time to time taking or seeking directions from the
Investigations Division.
10 Some time after April of 2001 a Mr. Kuhn, of Tax Avoidance in Vancouver, was seconded to
work for the Investigations Division in Vancouver. He was a member of what was called the Global
Prosperity Group Team in the Investigations Division, working directly with its members, although
he held himself out as belonging to Tax Avoidance. From the transcript of the examination of Ms.
Pumple it is clear that he at least acted as the liaison person between the Tax Avoidance and the
Investigations groups.
11 About a year after the Investigations group became involved, March 2002, the Investigations
Division told the Tax Avoidance Division to recommence the audit for 1998, the result being a
Notice of Reassessment for 1998.
12 In July 2002 Investigations told Tax Avoidance to recommence auditing the Applicants for
their 1999 and 2000 taxation years. This resulted in Ms. Pumple and various other Tax Avoidance
officers sending out letters and attached questionnaires, the subject of the present judicial review
application.
13 Between June 2002 and September 2002 there was a regular exchange of information between
Investigations and Tax Avoidance. Examples of the exchange of information show up in a series of
emails from Mr. Kuhn, the liaison person between Investigations and Tax Avoidance, instructing
CCRA officers as to the audit approach to be taken upon resumption of audit activities. As an
example of the interrelationship of the two groups, at the time of the cross-examination of Ms.
Pumple, in January of 2003, the tax returns of many of the Applicants were still in the possession of
Investigations.
14 The Applicants set out in the material that Ms. Pumple did not always have personal
knowledge and this is reasonable enough given the magnitude of the project. To inform herself Ms.
Pumple communicated with other Tax Avoidance officers. She determined where various of the tax
returns were located. However she did not make any inquiries of the head office of the CCRA or
speak with anyone at Investigations. Counsel for the Applicants goes on to make a case that Ms.
Pumple had really only limited knowledge, for she knew nothing about internal communication
within the CCRA, the communications path between head office and Investigations, the concept of
a tax shelter, and the role of Investigations. She was unable to speak for Investigations. Further, Ms.
Pumple did not prepare the letter or questionnaire at issue, although she did sign the letter. The
discovery does indicate that Investigations had some input in drafting the letter, specifically I think
the advice of the criminal investigation and that the recipient was not at that point under
investigation. From the point of view of the Applicants, the evidence of Ms. Pumple and the
documents that she brought with her to the cross-examination do not, in their view, make clear the
predominant purpose of the investigation itself, the concept of predominant purpose demonstrating,
in some instances, in the crystallization of an adversarial relationship. Thus the Applicants submit

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they are unable to determine both whether an adversarial situation has crystalized and the clear line
between provision of information in an audit setting and the right to refuse information, except as
against a search warrant, in an investigation setting.
15 Ms. Pumple also refused to answer a number of questions put to her on cross-examination as
irrelevant.
16 The result of the refusals as to documents and questions is the present motion. I will turn first
to the general request for documents contained in the Direction, to Ms. Pumple, to Attend.
CONSIDERATION
Production of Documents by way of Direction to Attend
17 The Applicants refer to a Direction to Attend pursuant to Rule 91, served on Ms. Pumple,
which requests that she bring with her an exceedingly broad range of documents, including:
all documents and records, including but not limited to electronic documents, in
the possession of the Respondent with respect to or mentioning any Applicant for
the taxation years affected by this Application, including, but not limited to: ...
18 The particular documents which are then outlined, but in very general terms, extend to
virtually all documents related to this matter held by Canada Customs and Revenue Agency,
including those held by the Investigations Division. Certainly, on its face, the Rule 91 Direction to
Attend (as elaborated upon in Rule 94) is broad in that on cross-examination the witness must bring
"... all documents and other material in that person's possession, power or control that are relevant
...". However, Rule 91 may not be used to expand production of documents on judicial review so
that the process becomes similar to discovery of documents in an action. Certainly a court must
have before it sufficient documents to provide an adequate factual record. It is in the interest of
justice that production not be limited so as to handicap an applicant. However production of
documents in a judicial review setting ought not to be such as to expand the intent of judicial review
as a relatively speedy remedy. Rather, production is limited to what is required by relevancy, in the
context of judicial review and as set out in the case law.
19 By way of example, even in the case of an action, where there is full discovery of all relevant
and produceable documents, such a broad request for documents, say that contain in a subpoena
duces tecum, may come close to abusing the process of the Court.
20 Examining further this concept of too broad a production of documents being abuse of
process, I would refer to the views of Mr. Justice MacKay in Merck & Co. Inc. v. Apotex Inc.
(1998) 80 C.P.R. (3d) 103 at 107-108. There it concerned Mr. Justice MacKay that by describing
and seeking documents too generally and too broadly in the subpoena duces tecum, a party was in
effect on a fishing expedition. This use of a subpoena duces tecum was inappropriate. In Merck Mr.

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Justice MacKay quashed two subpoenas which sought a range of documents similar to the range
sought this instance. He required the documents be both discreetly described and significant to the
issues before the Court in order "... to avoid further 'sweeps' of the records" (page 108).
21 Mr. Justice Pelletier, as he then was, in Bristol-Myers Squibb Co. v. Canada (Attorney
General) (2002) 18 C.P.R. (4th) 353, a judicial review matter, was not about to allow the use of a
Rule 91 Direction to Attend to expand production of documents beyond what was allowed pursuant
to Rule 317, that is the documents from the tribunal.
22 Just as in Merck v. Apotex a broadly worded subpoena duces tecum cannot be used to expand
production of documents beyond all reason so may a Rule 91 Direction to Attend not be used in
order to obtain documents beyond what is required on judicial review and all the more so given the
reasoning and conclusion in Bristol-Myers Squibb (supra). In short, a Rule 91 Direction to Attend
cannot be used to obtain full discovery of documents as is the clear intent in this instance. Of
course, as Mr. Justice MacKay went on to point out in Merck v. Apotex (supra) that his denial of a
general production of documents did not prevent the Plaintiff from making a further subpoena
seeking documents described with greater particularity. Keeping in mind, as I have said, that
production is limited to what is required by relevancy, determined in the context of judicial review
and by the case law, the present denial of wholesale production of documents, by way of a Direction
to Attend, does not bar the Applicants from making more limited and specific requests for
documents.
Relevance and the Scope of Cross-Examination
23 The concept of relevancy is more limited in judicial review than it is in an action. For this
proposition and as a basic survey of the principles of cross-examination, I would refer to Merck
Frosst Canada Inc. v. Canada (Minister of Health) (1997) 80 C.P.R. (3d) 550. In that case, at page
555, Mr. Justice Hugessen began with the proposition that cross-examination is not examination for
discovery: it differs from examination for discovery in various particular aspects which he sets out
as:
a)
b)
c)
d)
e)

the person examined is a witness not a party;

answers given are evidence not admissions;
absence of knowledge is an acceptable answer; the witness cannot be required to
inform him or herself;
production of documents can only be required on the same basis as for any other
witness, i.e. if the witness has the custody or control of the document;
the rules of relevance are more limited.

At issue in Merck Frosst was relevance, an important aspect in the present instance. Therefore it is
useful to consider what Mr. Justice Hugessen went on to say:
Since the objections which have given rise to the motions before me are virtually

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all based upon relevance, I turn, at once, to that subject.

For present purposes, I think it is useful to look at relevance as being of two
sorts: formal relevance and legal relevance.
Formal relevance is determined by reference to the issues of fact which separate
the parties. In an action those issues are defined by the pleadings, but in an
application for judicial review, where there are no pleadings (the notice of
motion itself being required to set out only the legal as opposed to the factual
grounds for seeking review), the issues are defined by the affidavits which are
filed by the parties. Thus, cross-examination of the deponents of an affidavit is
limited to those facts sworn to by the deponent and the deponent of any other
affidavits filed in the proceeding.
Over and above formal relevance, however, questions on cross-examination must
also meet the requirement of legal relevance. Even when a fact has been sworn to
in the proceeding, it does not have legal relevance unless its existence or
non-existence can assist in determining whether or not the remedy sought can be
granted.
Important principles arise out of these passages. First, formal relevance is based on issues of fact,
defined by pleadings in an action and by affidavits in judicial review; second, Mr. Justice Hugessen
pointed out that in his view, cross-examination on an affidavit "... is limited to those facts sworn to
be the deponent and the deponent of any other affidavits filed in the proceeding.", in essence
requiring a factual basis for cross-examination, obtainable from any filed affidavit; and third, legal
relevance governs in determining whether the remedy sought is available.
24 Whether cross-examination is strictly limited to the facts sworn to in the total of the affidavits
filed in a matter is of interest. Certainly, Mr. Justice Muldoon, in Swing Paints Ltd. v. Minwax Co.
Inc. [1984] 2 F.C. 521 at 530-531, took a more expansive view, citing sound authority. He felt that
the deponent of an affidavit ought not to be able to hide behind skilfully sculpted evidence, but the
cross-examination should extend beyond the four corners of an affidavit to encompass "Matters
pertinent to the documentation of the issue in respect of which the affidavit was filed." (ibid page
531), that it should extend to collateral questions arising from answers and also matters upon which
the witness could fairly be expected to have knowledge, relating to the principal issue in the
proceeding, touched upon by the affidavit:
The person making the affidavit must submit himself to cross-examination not
only on matters specifically set forth in his affidavit, but also to those collateral
questions which arise from his answers. Indeed he should answer all questions,

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upon which he can be fairly expected to have knowledge, without being evasive,
which relate to the principal issue in the proceeding upon which his affidavit
touches if it does.
Also on point is Monsanto Canada Inc. v. Novopharm Ltd. (1996) 118 F.T.R. 92 where, at pages 93
and 94, Mr. Justice MacKay adopted a passage from a decision of Madam Justice Reed, in
Castlemore Marketing Inc. v. Intercontinental Trade and Finance Corporation et al., an unreported
16 February 1996 decision in file T-2498-95:
"The applicable tests to determine what questions should be answered on
cross-examinations on affidavits are set out in Upjohn Inter-American
Corporation v. Canada (Minister of National Health and Welfare and Attorney
General) et al. (1987), 10 F.T.R. 37. See also Weight Watchers International Inc.
v. Weight Watchers of Ontario Ltd. (No. 2) (1972), 6 C.P.R. (2d) 169 (F.C.T.D.).
An affiant is required to answer questions on matters which have been set out in
the affidavit as well as any collateral questions arising from his or her initial
answers. In Bally-Midway Mfg. v. M.J.Z. Electronics Ltd. (1984), 75 C.P.R. (2d)
160, Mr. Justice Dub stated that cross-examinations on affidavits are confined to
'the issues relevant to the interlocutory injunction and/or all allegations contained
in the affidavit'. In Weight Watchers (supra), Mr. Justice Heald relied upon
jurisprudence which held that a person cross-examining on an affidavit was not
confined to the area within the four corners of the affidavit but could cover any
matter relevant to the determination of the issue in respect of which the affidavit
was filed. In addition to being relevant, the question of course must not be of
such a general nature that it cannot be intelligently answered, and the Court will
exercise its discretion and disallow any question which it considers in the nature
of a 'fishing expedition'".
This clearly extends cross-examination not only beyond the four corners of the affidavit, but also to
questions collateral to answers and to matters "relevant to the issue in respect of which the affidavit
was filed": it is also in line with Swing Paint (supra).
Obligations of the Witness to Inform Herself or Himself
25 A further point which I should touch upon is whether the deponent of an affidavit may be
required to inform herself or himself for the purpose of cross-examination. Certainly Mr. Justice
Hugessen, in Merck Frosst (supra) was of the view that the person examined, being a witness and a
party, could not be required to inform himself or herself. Yet in Bland v. National Capital
Commission (1989) 29 F.T.R. 232 Mr. Justice Martin, after canvassing a large section of the case
law, including contrary case law in Laflamme Fourrures (Trois-Rivires) Inc. v. Laflamme
Fourrures Inc. (1986) 3 F.T.R. 48, a decision of Mr. Justice Walsh, did send the witness in Bland
out to inform himself. This approach is consistent with that of Mr. Justice Nadon, as he then was, in

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Merck & Co. v. Apotex Inc. (1996) 110 F.T.R. 155 that "... a deponent has a duty to inform himself
on matters in issue which are within his knowledge or means of knowledge." (page 149).
26 Moreover, and this still deals with a witness obtaining further information, the deponent of an
affidavit may be required to produce documents, for cross-examination, in addition to those referred
to in an affidavit, but with a limitation that cross-examination upon an affidavit will not be as free
ranging as examination for discovery, nor will production of documents be as broad as on
examination for discovery:
In my view, the cross-examination upon an affidavit in support of a motion for an
interlocutory injunction ought not to be as wide-ranging as an examination for
discovery. In the latter proceeding the witness must inform himself, provide
answers and produce documents relevant to all the issues raised in the pleadings.
The cross-examination upon an affidavit, however, must be confined to the issues
relevant to the interlocutory injunction and/or all the allegations contained in the
affidavit. In other words, the affiant must answer questions and produce
documents relating to all the issues relevant to the interlocutory motion, plus
questions on all the other statements he may have volunteered within the four
corners of his affidavit. The cross-examiner cannot use the affidavit as a vehicle
to obtain all the information and all the documents that might be useful at trial.
(Bally-Midway Mfg. Co. V. M.J.A. Electronics Ltd. et al. (1983) 75 C.P.R. (2d)
160 (F.C.T.D.)) [Emphasis added]
Here I recognize that Bally-Midway involved cross-examination on an affidavit in a proceeding in
an action, however it demonstrates that cross-examination on an affidavit can go to documents
beyond the affidavit, although it is narrower than an examination for discovery.
27 There are differences in the approach taken to cross-examination and the breadth of
production of documents on cross-examination in many of the reported cases. It may well be that
from time to time the nature of the proceeding will mandate slightly fuller production of documents
and of answers: here I have in mind particularly where the witness is really an agent of a party. To
elaborate, to allow a lower echelon witness, who has very little knowledge of concepts, of what
happened and of what is at stake, to hide behind a narrow affidavit, is improper. To allow such
would encourage litigants, who in effect are relying upon the witness as agent, to produce a
marginal witness. For example corporate and government litigants might be encouraged to produce
as a deponent a witness with limited knowledge and involvement. To countenance such would not
only foster injustice, but also waste the time and money of all concerned, including litigants, the
public and the Court. However I shall now turn to a current decision which has expanded the scope
of cross-examination on an affidavit.
28 The final case to which I shall refer, as to the scope of cross-examination and production of
documents, is Stella Jones Inc. v. Mariana Maritime S.A., [2000] F.C.J. No. 2033, a 6 December

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2000 decision of the Federal Court of Appeal, docket A-52-00. At trial the judge took a very limited
approach to cross-examination on an affidavit and production of documents, essentially limiting
such to cross-examination within the affidavit and to a consideration of only the documents which
were attached to the affidavit. The Court of Appeal held that previous dealings were relevant and
that the deponent might be cross-examined on information which he could have obtained from a
co-defendant. The Court of Appeal also required the production of booking notes and bills of lading
with respect to previous shipments which, on a reading of the trial decision, unreported 21 January
2000 in docket T-1942-98, were not mentioned in the affidavit material and production of which
was denied by the Motions Judge. In essence what the Court of Appeal has done in Stella Jones is
not only to broaden cross-examination on an affidavit so that it may extend to relevant matters well
beyond the four corners of the affidavit, but also to broaden production of documents by requiring
production of material related to previous dealings, being relevant documents clearly outside of the
affidavit material itself. The Court of Appeal was of the view that it was not open to the motions
judge to exclude the possibility that previous dealings might shed relevant light. Of course
cross-examination and document production arising out of cross-examination are bounded by what
is relevant, including relevance as discussed by Mr. Justice Hugessen in Merck Frosst (supra) and
by the Court of Appeal in Stella Jones Inc. (supra).
29 I put emphasis on the Court of Appeal decision in Stella Jones Inc. because I do not accept the
argument of Crown that in requiring answers or documents I should not go back in time beyond the
27 August 2002 letter, or perhaps not earlier than 6 June 2002, when there was both some sort of
decision apparently made, by the Investigations Division, that the audit process ought to be
recommenced, for to take a more limited approach would deny the consideration of all relevant
factors as mandated by the Supreme Court in Jarvis (supra). I also note that in June of 2002 the
CCRA contemplated a form of the 27 August 2002 letter. Further, the evidence on this motion
indicates that at the time of the cross-examination of Ms. Pumple, in January of 2003, material
related to some of the Applicants had not been returned to the Audit Division, but was still with the
Investigations Division.
Minister's Predominant Purpose
30 Before turning to the requests for individual documents, answers to specific questions and the
matter of re-attendance for further cross-examination, I should consider the nature of the
predominant purpose test referred to in Jarvis (supra). The propriety of a requested document or
answer may depend on their relevancy in the context of the predominant purpose test. More
specifically, the Supreme Court of Canada has suggested an open-ended list of factors which may
go to indicate whether the line, between a cooperative audit for tax assessment purposes and the
crystallization of an adversarial relationship when the predominant purpose of an investigation is a
determination of penal liability, has been crossed.
31 In Jarvis the Supreme Court of Canada speaks of the necessary balance required between the
principle against self-crimination and the need to make all evidence available in order to do

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fundamental justice, in essence a tension between privacy and state interest (see pages 795 and
797). In Jarvis, just as in the present instance, a liberty issue is at stake, there being no presumption
of confidentiality, for once an auditor has information or documents, that material may go to the
Investigations Division.
32 The predominant purpose test is not satisfied by a mere suspicion raised by minor contact
between auditor and investigator: that does not signify a cross of the Rubicon between the section
231 requirement that documents be produced to an auditor and a clear adversarial relationship
between the taxpayer and the Minister.
33 Jarvis teaches that there is no crystallization until there has been a formal referral of a file to
the Investigations Division, however in the present instance, there was such a referral followed by a
return of the file to the Audit Division, where upon the Audit Division sent out the 27 July 2002
letter to which was attached the very pointed investigation type questionnaire, raising more than a
mere suspicion relating to the predominant purpose.
34 Certainly, applying Jarvis, where a file has been sent to the Investigations Division, that is a
factor going to define the relationship between the taxpayer and the CCRA, just as is the reason for
the return of the file from the Investigations Division to the Audit Division. As the Supreme Court
of Canada observed at page 806 in Jarvis, one must consider whether the return of the file is
because the Investigations Division has declined to take part on the basis there should merely be an
audit, or because there is another agenda, that of allowing the Audit Division to use their easy entry
into the taxpayer's records to obtain evidence to support a later prosecution and penal liability.
Included in the factors to examine which may bear on determination of the one dominant purpose of
the CCRA are:
(a)

(b)
(c)
(d)
(e)
(f)

(g)

Did the authorities have reasonable grounds to lay charges? Does it appear
from the record that a decision to proceed with a criminal investigation
could have been made?
Was the general conduct of the authorities such that it was consistent with
the pursuit of a criminal investigation?
Had the auditor transferred his or her files and materials to the
investigators?
Was the conduct of the auditor such that he or she was effectively acting as
an agent for the investigators?
Does it appear that the investigators intended to use the auditor as their
agent in the collection of evidence?
Is the evidence sought relevant to taxpayer liability generally? Or, as is the
case with evidence as to the taxpayer's mens rea, is the evidence relevant
only to the taxpayer's penal liability?
Are there any other circumstances or factors that can lead the trial judge to
the conclusion that the compliance audit had in reality become a criminal

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investigation?
[Jarvis at 806-807]
This list contains a broad range of factors and moreover is, as I have said, open-ended.
35 If a question or a document might be relevant and proper on cross-examination, using my
earlier analysis, and might reasonably go to establishing the predominant purpose of the Minister's
inquiry, such questions are answerable and such documents are produceable. Relevant and
produceable questions and documents may, on the basis of the Federal Court of Appeal decision in
Stella Jones Inc. (supra), include those which bear on the earlier dealings or relationships between
the Applicants and the Minister and also the relationship, from time to time, between the
Investigations Division and the Audit Division.
36 Just as there may be no clear and absolute line between a CCRA investigation and a CCRA
audit there is, in the present instance, no clear and absolute evidence indicating whether the
predominant purpose has gone from an initial audit intent, to an investigative and penal intent and
whether it reverted to an audit purpose when the file subsequently went from the Investigations
Division to the Audit Division, for there is no clear indication that the audit process will be the final
disposition. As I read the transcript of the cross-examination of Ms. Pumple, who signed the 27
August 2002 letter, it is, as set out in that letter, that the Applicants are not presently under
investigation, although "... a criminal investigation regarding the promotion of transactions of the
type claimed on your income tax return has been undertaken.". The 27 August 2002 letter is thus far
from an assurance that the Applicants are not at risk of a very real criminal investigation. Moreover,
the cross-examination of Ms. Pumple establishes that she had no direct personal knowledge that the
Applicants were not under criminal investigation and that she had made no inquiries of the
Investigations Division personnel who might have personal or direct knowledge as to what the
Investigations Division intended of the criminal investigation.
37 Here I accept various indicia, as submitted by counsel for the Applicants, that those
individuals reasonably believed that they had been and perhaps continue to be under investigation
by the Investigations Division for a number of reasons including:
1.
2.

3.

The files of the Applicants went to the Investigations Division in April of

2001.
From that time until at least January of 2003 there was regular contact
between the Audit Division and the Investigations Division as to the 1998
through 2001 taxation years.
An Audit Division's employee, Mr. Kuhn, worked with the Investigations
Division for some time, although still maintaining, or holding himself out
as a member of the Audit Division.

103

4.
5.

6.

Page 15

In March 2002 the Investigations Division instructed the Audit Division to

recommence gathering information for the 1998 taxation year.
In July of 2002 the Investigations Division instructed the Audit Division to
recommence gathering information in respect of the 1999 and 2000
taxation years and at that point the Audit Division sent out letters and
questionnaires, the questionnaire being a point to which I will shortly
return.
Between June of 2002 and September of 2002 there was a regular
exchange of information and emails between the Investigations Division
and the Audit Division as to the approach to be taken on resumption of
audit activities.

All of this reasonably raises alarm, on the part of the Applicants, that they may still be under
investigation, or at least that there may be a clearly contemplated investigation and that for practical
purposes there has been a crystallization of an adversarial relationship between the applicant
taxpayers and the tax officials, with the predominant purpose of the inquiry being the determination
of penal liability, once documents have been gathered from the Applicants by the Audit Division
through the so-called cooperative approach with the taxpayers.
38 Counsel for the Applicants urged a thoughtful reading of the questionnaire sent out by the
CCRA with the 27 August 2002 letter. The letter itself calls upon the taxpayers to produce a very
thorough and comprehensive package of documents and information. In effect it is a letter
requesting books and records: the questionnaire clearly goes far beyond being a request for books
and records, but seeks a good deal of information which either was clearly not covered in the
extensive production request in the letter and indeed, looks for information which one might be hard
pressed to justify merely on the basis of an audit. A thoughtful reading of the questionnaire can
easily lead one to the conclusion that the questionnaire was not something dictated by the needs of
and drafted by the Audit Division, but rather is a far more pointed and searching request for
information which could well have bearing on the criminal investigation. Finally, and this has direct
bearing on the provision of answers and production of documents well before June of 2002, Ms.
Pumple did agree, in cross-examination, that the review by the CCRA of the 1998 taxation year was
connected to an ongoing review of the taxation years 1999 through 2001, and that investigations
undertaken by the CCRA dealt not only with the 1998 taxation year, but also with the 1999 through
2001 taxation years. Indeed, it is fair to say that investigations as to the 1998 taxation year were
relevant to the subsequent three taxation years, all being a part of one investigation over a number
of years.
Applicants' Requests for Documents
39 Question 50 in the 13 January 2003 transcript of the cross-examination of Ms. Pumple refers
to a so-called principal file sought by way of the Direction to Attend. As I have indicated, the
request in the Direction to Attend is too broad. The result could, in itself, be both a fishing

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Page 16

expedition and a part of a full discovery of documents. However the cross-examination then
proceeded, with the marking of a document at question 53 called "Unioncal Trading Joint Venture
Binder Index", a document prepared by Ms. Pumple which describes what is contained in the
principal file. The Defendant has refused to produce the principal file, even though acknowledging
that the principal file is relevant to the extent of the 1999 and 2000 taxation years, but denying its
relevance with regard to the 27 July 2002 letter.
40 Either the document is relevant or it is not: one does not measure relevance in degrees along a
scale. The file described by the index which has been produced may well provide background and a
basis for the development of and the actual letter of 27 July 2002, information by which to test the
predominant purpose of the actions of the Minister as carried out by the CCRA. Moreover, the file
requested is apparently in Ms. Pumple's filing cabinet. Its production, as a relevant bundle of
documents is justified, for while it may be outside of the four corners of Ms. Pumple's affidavit, it
certainly would be indicative of a course of conduct on the part of the Minister and may well have
bearing on the issue the Applicants bring to the Court, including the predominant purpose of the
CCRA inquiries. The so-called principal file, referred to in question 50 and following, is to be
produced.
41 Question 58 of the 20 January 2003 transcript is the culmination of answer 52, a babbled and
somewhat incomprehensible answer by a discombobulated witness unsure of both what she knew
and whether she should tell what she knows. The answer at question 52 certainly establishes a
meeting by Ms. Pumple with the Investigations Division in April of 2001. Counsel for the
Respondent says the result was a cease and desist direction to the Audit Division by the
Investigations Division, which continued until June 2002.
42 However, answer 52 also raises the likelihood that a taxpayer, involved in one of the tax loss
arrangements had, with her lawyer, come to the Investigations Branch: Q So Investigations asked
you to refer to them. Do you know how Investigations became aware of this project?
A I have some -- I have some knowledge.
Q Can you please tell us about that?
A I hope I'm allowed to say -- I mean I don't know, it -- as far as I understand it,
two things probably precipitated their involvement. But the one thing that I
actually have direct knowledge of is that an individual who was involved in one
of the Unioncal Trading Joint Ventures came forward with her lawyer to -- to
Investigations. And so this woman was involved in -- in one of the Unioncal
Trading Joint Ventures, and that was the tie-in that -- enough of a tie-in -- I'm
speculating on what -- what Investigations did there, so I probably shouldn't say
that. But that's -- that precipitated them finding that, oh, right, Victoria has some
Unioncal Trading Joint Ventures files, and -- and so does Penticton. I think those
were the two. And then -- then Investigations said after they looked at what they

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Page 17

got, I assume -- I mean I'm assuming all sorts of things here. But it's logical to
assume that they looked at the information that was provided to them, saw a
connection and said, right, we had -- we had a meeting and they said, write up
what you know.
The reference to "Unioncal Trading Joint Ventures" is apparently what the CCRA called the present
grouped tax loss arrangements.
43 There are minutes of the April 2001 meeting, Ms. Pumple having a copy but not producing it.
While at this point there is nothing to indicate that there were grounds to lay charges, the action of
transferring the files to the Investigations Division does fall within one of the factors to consider
suggested by the Supreme Court of Canada in Jarvis.
44 Production of this material was initially denied on the grounds that Ms. Pumple was not
required to produce anything or to inform herself of anything. However, on the case law, that is not
the situation (supra, paragraphs 25 through 29) and all the more so in that Ms. Pumple has the
minutes in her possession. On the basis of the case law which I have canvassed, including as to
production of material relating to previous dealings, the minutes should be produced.
45 Question 67 of the 20 January 2003 transcript involves a write up of what Ms. Pumple thought
she knew when she transferred the audit files to the Investigations Division. I do not see that some
sort of a covering memorandum, clearly given by a witness who, from her testimony, seems to have
little or no idea what was going on, is anything more than a fishing expedition, for the Applicants
have established that the files were, at that point, transferred from the Audit Division to the
Investigations Division. Moreover, Ms. Pumple's view of what might or might not be happening has
no relevance as to the intent of the Minister evidenced by whatever Investigations Division decided
to do. The referral document, question 67, need not be produced.
46 Questions 114, 128 and 136, from the 20 January 2003 transcript, deal with so-called green
light memoranda, being memoranda from the Investigations Division to the Audit Division, if I
understand it correctly, to go ahead with an audit and the issuance of various letters. Some of that
material apparently relates to the carrying forward of losses, however this line of questioning leads
toward and culminates in question and answer 136, establishing that various audits and notices of
reassessment being sent to Mr. Stanfield.
47 Here we have a situation specifically touched upon by the Supreme Court of Canada in Jarvis,
the apparent return of the files from the Investigations Division to the Audit Division. The
directives from the Investigations Division could conceivably show an intent by the investigators to
use the auditors as their agents in the collection of material. This is a reasonable possibility given
the pointed and searching request for information which, I have already noted, could well have
bearing on the criminal investigation. It is material which should be examined in order to go toward
the determination of the predominant purpose of the Minister. What I will refer to generally as the
directives of the Investigations Division to the Audit Division to proceed, referred to in questions

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Page 18

114, 128 and 136, are to be produced.

48 Question 595 of the 20 January 2003 transcript refers to chronologies prepared by various
auditors of the Applicants, early in 2001, being information, judging from the lead up to question
595, which might relate to the investigation by the Investigations Division. This material is similar
to that sought and which I have denied, in question 67. It need not be produced.
49 At question 793 of the 20 January 2003 transcript at issue is discussion of a meeting of 16
January 2003 and the production of minutes or other documents relating to that meeting. The
essence of the objection to production is that a 16 January 2003 meeting cannot possibly shed any
light on the 27 August 2002 letter and that the meeting was to discuss an upcoming statutory bar.
The second branch of the objection may have some validity. However the Supreme Court, in Jarvis,
intends that one look at all of the surrounding factors and it may be that the meeting did deal with
information being collected by the Audit Division and again I refer to the probing questionnaire sent
out by the Audit Division, indeed a questionnaire which would seem to taint what has taken and is
taking place. The question 793 material is to be produced.
Applicants' Request for Answers
50 All of the questions to which the Applicants seek answers arise out of the 20 January, 2003
transcript.
51 Questions 53 to 55 deal with a meeting with the Investigations Division at their request, in
April 2001. At issue is the date of the meeting. I have considered the submissions of counsel and
have re-read the passages at issue and the questions leading there. I do not see either formal
relevance or legal relevance, as discussed by Mr. Justice Hugessen in Merck Frosst Canada (supra).
The actual date of the April 2001 meeting is immaterial and need not be provided.
52 Question 69 deals with a different aspect of the April 2001 meeting. From the questions and
answers leading up to that question, which is whether anyone from head office was involved in the
meeting, it is clear that counsel for the Applicants had become frustrated by the apparent lack of
knowledge of Ms. Pumple and of her professed ignorance as to what her job was, and therefore
finally asked whether there was anyone from head office present, someone who perhaps could give
a more lucid account of what the meeting was about. Thus the request for the name of someone who
was at the meeting who might actually know what happened.
53 There has certainly never been any property in witnesses and that is the tenor of Mr. Justice
Berger's discussion as to naming witnesses in Ansley v. Ansley [1973] 5 W.W.R. 181, the historic
aspects of decision being interesting in that the decision predates the codification of the point in the
British Columbia Rules of Practice. There is a similar codification in Federal Court Rule 240
requiring the provision of names and addresses of witnesses on examination for discovery. But of
course Rule 240 applies only to examination for discovery in actions, not cross-examination on
affidavits.

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54 Somewhat more relevant is the decision of Mr. Justice Rothstein, as he then was, in Merck
Frosst Canada Inc. v. Canada (1994) 75 F.T.R. 97 at 99, where he adopts the view that
cross-examination on an affidavit must be relevant, must be fair and that "There must be a bona fide
intention of directing the question to the issue in the proceeding or the credibility of the witness."
(page 99). It may well be that counsel for the Applicants is, in this instance, trying to test the
credibility of the witness who, while in attendance, seems to have no idea what happened at the
meeting in April of 2001. To the contrary, counsel for the Respondent says that this is a fishing
expedition. However the question goes beyond that. Counsel for the Applicants is merely trying to
find out what happened at a meeting about which the witness can recall little. It is clear from the
discussion of counsel, at question 69, that there is a testing of the witness going on, the witness
having said that she made appropriate inquiries, but a reading of the transcript demonstrates it is
increasingly less likely that she had done so. The witness does, in subsequent questions, set out who
in fact was at the meeting. However, the simple, proper and relevant question is whether anyone
from head office was involved and that should be answered.
55 Questions 147 and 148 raises the issue of when the witness believed the 1999 audits had
commenced. Counsel for the Applicants has the best answer he is going to obtain, from the witness,
as to when she believes the audit commenced, at questions 163 and 164. There the witness confirms
that the audit was ongoing in the year 2000. The questions need not be further answered.
56 At question 181 the issue is whether the department had made a decision to issue
reassessments for the 1999 and 2000 taxation years. Counsel has an answer to that at question 182,
being a negative answer.
57 At questions 187 and 188 the issue is whether, there being an upcoming time bar, from the
context I think for the 1999 taxation year, seeking waivers from the taxpayers has been considered.
Here I question the relevance of the inquiry. However the witness does volunteer that no waiver has
been requested. Thus the answer has already been provided.
58 At question 199 at issue is whether the Tax Department has considered levying penalties for
the 1999 year. Again, that has been answered, in the negative, at question 201.
59 Question 207 is quite speculative, the issue being whether there was any reason why penalties
would not be levied for the 1999 year. The answer by the witness is that no decision has been made.
I do not see the relevance of exploring something that has not come about and seems not to be
directly connected to the predominant intent, or any other aspect of this proceeding. The question
need not be answered.
60 Question 239 asks the date at which Mr. Kuhn, of the Audit Division, went over to Special
Investigations. This deals with the secondment of Mr. Kuhn to the Investigations Division. Counsel
for the Crown agrees, in the transcript, to provide a date for the secondment, or at least a date as
close as possible. Thus an answer to the question is pending.

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61 At question 540 at issue are the names of 60 or 70 Applicants the cases of whom Mr. Kuhn
might have been involved with. Here there is no relevance unless the taxpayers involved in those
cases are also Applicants in the present proceeding. Counsel for the Crown goes on to agree to
provide that information, to the extent that the Crown's witness is required to inform herself. All of
this bears on the general conduct of the CCRA and whether it was consistent with a criminal
investigation, whether an auditor was acting as an agent for the Investigations Division and bears on
a conclusion as to whether the compliance audit has in reality become a criminal investigation. The
question is to be answered.
62 At question 792 counsel asks, whether at the meeting on 16 January 2003, there was any
discussion as to the passage of information from the Audit Division to the Investigations Division,
with the response being to the effect that whatever happened in January of 2003 is irrelevant. Yet if,
for example, that topic had come up, it would certainly be relevant within the framework set out by
the Supreme Court in Jarvis. Counsel for the Respondent suggests that this is a fishing expedition.
However, it is clearly an element that would fall within Jarvis and is needed in order to determine
the predominant purpose of the inquiry. The question is to be answered.
63 At question 793 the issue is whether the subject of Ms. Pumple's cross-examination was
discussed in the course of the 16 January 2003 meeting. Counsel for the Crown makes the point that
he has not coached or discussed the cross-examination with Ms. Pumple and that I accept. I do not
see the relevance of discussion by the witness, with others in her department, as to what is going on
in the legal proceedings. There is a lack of relevance. The question need not be answered.
64 At question 862 at issue is whether Ms. Pumple had any communication, as a member of a
group of CCRA people dealing with the files of the Applicants, about any different path that might
have been followed, as opposed to that set out in Exhibit 4, being material prepared by a Mr.
Makeno. Here I see neither formal nor legal relevance. All the more so in that the question deals
with a decision as to penalties which has not been made. The question need not be answered.
65 The thrust of question 1142 is whether the names of the Applicants, all of whom are being
audited for the 1999 and 2000 taxation years, came to the Audit Division by way of the
Investigations Division: counsel objects to the question as irrelevant. However, counsel does get an
answer at questions 1142 through 1145 to the effect that the Investigations Division, or as it is
called in this instance, "Special Investigations", did not furnish any of the names of the Applicants
to the Audit Division for auditing. There need be no further answer to question 1142.
CONCLUSION
66 Success has been mixed. However it is appropriate in this instance that Ms. Pumple re-attend
for further cross-examination, informing herself where that is required, for as I have pointed out a
witness can neither hide behind an overly carefully drafted affidavit, nor be a proper witness, in the
sense of being an agent for a large entity, without making reasonable inquiries so as to become
informed. Ms. Pumple will therefore answer questions as required in these reasons and all proper

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questions arising both from those answers and from the documents produced.
67 In a complex cross-examination on an affidavit, just as in the case of a complex discovery,
there is often need for a re-attendance, almost as a matter of course. That should not necessarily be
equated with the situation involving a contrary witness, who often must re-attend at his or her own
expense, although being an uninformed witness can approach that situation. All of the
circumstances considered, the costs of re-attendance will be costs in the cause.
68

Success having been mixed, the costs of this motion will also be in the cause.

69 Time for the filing of the Applicants' Record is extended until 20 days after the further
cross-examination has been completed.
HARGRAVE, PROTHONOTARY
cp/e/qw/qlaim/qlhcs

110

Case Name:

Sawridge Band v. Canada

Between
Sawridge Band, plaintiff, and
Her Majesty the Queen, defendant, and
Native Council of Canada, Native Council of Canada
(Alberta), Non-status Indian Association of Alberta and
native Women's Association of Canada, interveners
And between
Tsuu T'ina First Nation (formerly the Sarcee Indian
Band), plaintiff, and
Her Majesty the Queen, defendant, and
Native Council of Canada, Native Council of Canada
(Alberta), Non-status Indian Association of Alberta and
Native Women's Association of Canada, interveners
[2005] F.C.J. No. 1087
[2005] A.C.F. no 1087
2005 FC 865
2005 CF 865
140 A.C.W.S. (3d) 242
Dockets: T-66-86A, T-66-86B
Federal Court
Ottawa, Ontario
Snider J.
Heard: In writing.
Judgment: June 17, 2005.
(13 paras.)

Page 1

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Page 2

Civil evidence -- Witnesses -- Examination -- Cross-examination -- Civil procedure -- Applications

and motions.
Motion by Sawridge Band for an order compelling the Crown to produce an informed witness to
respond to Sawridge's cross-examination on affidavit. The Crown filed a motion to determine
whether witnesses proposed to be called by Sawridge could have offered admissible and relevant
information. In support of its motion, the Crown filed an affidavit attaching several documents
relied on by the Crown. The affidavit made no mention of the documents. Sawridge sought to
cross-examine the affiant. Sawridge claimed the affiant did not have sufficient knowledge about the
documents to be cross-examined.
HELD: Motion dismissed. Sawridge's request was of a general nature. Sawridge did not provide the
court with a list of proposed questions. It made no attempt to cross-examine the affiant before
bringing the motion. The documents were related to the main action. Cross-examination on affidavit
was not the appropriate procedure to raise questions about the main litigation. The documents had
no relevance to the Crown's underlying motion. The proposed cross-examination extended beyond
the matters in respect of which the affidavit was filed.
Statutes, Regulations and Rules Cited:
Federal Court Rules Rule 369
Counsel:
No counsel mentioned.

REASONS FOR ORDER AND ORDER

1 SNIDER J.:-- The genesis of this motion by the Plaintiffs is an interlocutory motion by the
Defendant, Her Majesty the Queen (the "Crown"). The Crown, in her motion, seeks to determine
whether some of the witnesses whom the Plaintiffs propose to call at trial can offer relevant and
admissible testimony on the matters in issue in the actions. In support of her motion, the Crown
includes the affidavit of Lana Dolezal. The first part of Ms. Dolezal's affidavit consists of an
account of events related to the motion. The second part of the affidavit attaches copies of
documents (the "Documents") which are relied upon by the Crown, in her Written Representations.
Ms. Dolezal makes no statements or comments about the Documents but merely attaches them to
her affidavit.
2

In the motion before me, made in writing pursuant to Rule 369 of the Federal Court Rules, the

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Page 3

Plaintiffs seek an order instructing the Crown to produce an informed witness to respond to the
Plaintiffs' cross-examination on the affidavit, as submitted in the Plaintiffs' letter dated January 12,
2005. The relevant portion of that letter is as follows:
First, I wish to cross examine on the affidavit filed by the Crown sworn January
6, 2005 in support of their recent motion... .
The affidavit was sworn by a paralegal in the Edmonton Regional office of the
Department of Justice named Lana Dolezal. Much of the affidavit provides
background material most of which is non contentious. However, in the affidavit
beginning at paragraph 13 there are attached a number of documents concerning
federal government policy on self government; the implementation of the
inherent right of aboriginal self government; agreements between Her Majesty
the Queen and the Sawridge Band; and a discussion paper with respect to the
Sawridge Band government negotiations which was apparently prepared by the
Department of Indian Affairs dated July 7, 1989. I wish to cross examine with
respect to these paragraphs and documents.
I want to say at the outset that I do not believe that a paralegal is the correct
person to answer the kinds of questions that I intend to ask with respect to these
documents and I am going to ask the Crown to produce an informed person who
can answer questions. For example, my preference would be to ask those who
prepared and are responsible for these policies procedures and documents to be
produced to answer questions. The Crown has chosen to rely on these
documents. I believe it is only fair that someone who can answer questions in
relation to them be produced... .
3 As noted, the requested relief is that I order the Crown to produce a different person to respond
to questions about the Documents. However, the first issue to be determined is whether the
Plaintiffs have any right to compel answers of the deponent, Ms. Dolezal. This is a threshold
question. If the Plaintiffs cannot compel the chosen deponent to respond, it follows that another
person should not be compelled to answer the questions.
4 In my view, the most succinct statement of the current state of the law on the scope of
cross-examination on an affidavit, in the context of an interlocutory motion such as this, is set out
by Reed J. in Castlemore Marketing Inc. v. Intercontinental Trade and Finance Corp. [1996] F.C.J.
No. 201, at para. 1:
An affiant is required to answer questions on matters which have been set out in
the affidavit as well as any collateral questions arising from his or her initial
answers. In Bally-Midway Mfg. Co. v. M.J.Z. Electronics Ltd. (1984), 75 C.P.R.

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Page 4

(2d) 160, Mr. Justice Dub stated that cross-examinations on affidavits are
confined to "the issues relevant to the interlocutory injunction and/or all
allegations contained in the affidavit". In [Weight Watchers International Inc. v.
Weight Watchers of Ontario Ltd. (No. 2) (1972), 6 C.P.R. (2d) 169 (F.C.T.D.)],
Mr. Justice Heald relied upon jurisprudence which held that a person
cross-examining on an affidavit was not confined to the area within the four
corners of the affidavit but could cover any matter relevant to the determination
of the issue in respect of which the affidavit was filed. In addition to being
relevant, the question of course must not be of such a general nature that it
cannot be intelligently answered, and the Court will exercise its discretion and
disallow any question which it considers in the nature of a "fishing expedition".
5 The Plaintiffs relied on many cases to support their position on this motion. However, none of
those cases reach conclusions or express views that are in disagreement with the foregoing extract
from Castlemore Marketing.
6

Applying these principles to the case before me, I would dismiss this motion.

7 The first difficulty with the motion before me is that the Plaintiffs' request is of a general nature
making it impossible for any meaningful response. The Plaintiffs have not provided any information
on the specific nature of its proposed cross-examination. All we have are general statements that the
Plaintiffs want to ask questions about the Documents.
8 To support their motion, the Plaintiffs referred me to a number of cases where deponents were
compelled to respond to questions or to inform themselves in order to respond. However, I find this
jurisprudence to be unhelpful since, in all of those cases referred to, particular questions or lines of
question had been identified by the moving party. In this case, the Plaintiffs have made no attempt
to question Ms. Dolezal before bringing this motion and, thus, could not bring to this Court any
evidence that particular questions had been refused. Nor have they set out a list of proposed
questions. Further, the Plaintiffs have not provided me with any jurisprudence where this or any
Court compelled an affiant to inform himself about and answer questions that were not specified or
were described in general terms such as are before me.
9 A party attempting to reply to a motion to compel answers to questions or to compel production
of an affiant who can respond must surely be able to clearly understand what information is being
sought by the moving party. In this case, both the Crown and this Court are left in the dark, having
to speculate as to the questions that are to be posed. In effect, the Plaintiffs seek to conduct a
"fishing expedition". On this basis alone, the motion should be dismissed.
10 Further, even if I speculate or infer, from the filed motion materials, the specifics of the
intended questions, I would still dismiss the motion. It appears that the Plaintiffs wish to examine
Ms. Dolezal, or others, on the background and contents of a series of documents related to a matter
that may or may not be part of the main litigation. In my view, cross-examination on this particular

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affidavit is not the appropriate vehicle for raising questions related to the pleadings themselves.
11 The Plaintiffs submit that the Crown has chosen to rely on the Documents and that "it is only
fair" that they be allowed to cross-examine on those Documents. I am not persuaded that the Crown
has relied on the Documents in the broad manner suggested by the Plaintiffs. The Crown has put
forward the Documents for a limited purpose, that being to show that negotiations between the
Crown and the Plaintiff Sawridge Band pursuant to the Crown's self-government policy were
conducted on a "without prejudice" basis. Thus, it would be improper to allow the Plaintiffs to
cross-examine on the content of the Documents; the content of the Documents is not a matter in
respect of which the affidavit was filed. Cross-examination on the affidavit should be limited to the
issue raised by the motion to which the affidavit relates. In my view, any questions that go beyond
the question of whether the negotiations were privileged or other matters specifically addressed in
the Crown's motion would have no impact on the outcome of the underlying motion of the Crown
and should, thus, be disallowed.
12 Given that the Plaintiffs have not persuaded me that I should compel Ms. Dolezal to respond
to any questions posed on cross-examination as are suggested (but not specifically set out), it
follows that I am not prepared to compel the Crown to produce a person to respond. In any event,
the Plaintiffs provided me with no authority, within the Federal Court Rules or elsewhere, which
requires a party to produce an informed deponent in place of the person who swore the affidavit.
13

In summary, I decline to grant the requested relief on the basis that:

1.
2.

The Plaintiffs have not identified with any specifics the questions they
wish addressed by Ms. Dolezal or any other affiant;
If the Plaintiffs propose to cross-examine on the contents of the Documents
beyond the limited purpose for which they are put forward by the Crown in
her motion, such cross-examination would extend beyond the matters in
respect of which the affidavit was filed.
ORDER

This Court orders that the motion is dismissed with costs payable forthwith.
SNIDER J.
cp/e/qlspg

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Page 1

** Translation **

Case Name:

Sam Lvy & Associs Inc. v. Canada (Superintendent of

Bankruptcy)
Between
Sam Lvy & Associs Inc. and Samuel S. Lvy, trustee,
applicants, and
Alain Lafontaine, respondent
[2005] F.C.J. No. 768
[2005] A.C.F. no 768
2005 FC 621
2005 CF 621
Docket T-1616-04
Federal Court
Montral, Quebec
Blanchard J.
Heard: April 25, 2005.
Judgment: May 4, 2005.
(26 paras.)
Civil evidence -- Documentary evidence -- Affidavits -- Cross-examination on -- Application to
overrule objections raised by the deponent of an affidavit on a cross-examination allowed in part -Questions that were relevant were allowed and the objections raised against such questions were
set aside.

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Page 2

Application by Sam Levy & Associes Inc. for an order to overrule objections of the respondent
Superintendent of Bankruptcy -- Levy was a trustee in bankruptcy -- It was investigated to
determine if its activities violated the Bankruptcy and Insolvency Act and whether a hearing was
justified -- Superintendent in May 2001 directed Levy to take six conservatory measures -- Purpose
of these measures was to preserve the assets under its administration -- Levy applied for judicial
review after the Superintendent in February 2004 refused to lift or amend the measures -Superintendent was cross-examined on his affidavit and raised the objections that were the subject
of this application -- Objections pertained to the relevance of the questions that were asked and
related to two issues -- Issues were whether Levy could cross-examine on every paragraph of the
affidavit and whether it could cross-examine on the paragraphs related to the investigation -HELD: Application allowed in part -- Levy could cross-examine on the facts set out in the affidavit
provided that the questions were legally relevant -- Subject of the judicial review application was
the February 2004 decision and not the original May 2001 decision that imposed the measures -Questions about the measures and the February 2004 decision were allowed and the objections
raised against them were overruled -- Questions regarding the facts that surrounded the issuance of
the measures in May 2001 were not legally relevant -- Questions about them were disallowed and
the objections raised against them were sustained.
Statutes, Regulations and Rules Cited:
Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 14.01(1), s. 14.03
Canadian Bill of Rights, s. 1(a), s. 2(e)
Federal Court Rules, SOR/98-106, s. 83
Counsel:
Daniel Des Aulniers, for the applicants.
Robert Monette, for the respondent.

REASONS FOR ORDER AND ORDER

BLANCHARD J.:-INTRODUCTION
1

This is a motion to obtain an order overruling the objections raised by the respondent during a

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cross-examination on affidavit.
2

By means of this motion, the applicants ask this Court to

(1)
(2)

(3)
(4)

allow the motion;

allow the applicants to cross-examine the respondent on all paragraphs of his
affidavit and, more specifically, on the reasons for and circumstances
surrounding the conservatory measures issued on May 10, 2004;
grant the applicants an extension of time to file their record at a later date to be
determined by the Court; and
make no order as to costs, unless contested.

BACKGROUND
3 The respondent is acting in his capacity as a delegate of the Superintendent of Bankruptcies.
The applicants are trustees in bankruptcy. On July 14, 2000, the respondent instructed Michel Leduc
to investigate the applicants' activities and prepare a report to determine if breaches of the
Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the BIA) justified holding a hearing into the
trustees' conduct.
4 On May 10, 2001, the respondent, pursuant to the authority granted to him by the BIA, directed
the applicants to take six distinct conservatory measures. These measures were primarily aimed at
preserving the assets under the applicants' administration.
5 On January 16, 2004, the applicants asked the respondent to lift or amend the conservatory
measures, which the respondent refused to do on February 12, 2004. The applicants are therefore
applying for judicial review of this decision.
6 On February 17, 2005, the respondent was cross-examined on his affidavit. Respondent's
counsel raised several objections. The applicants are asking this Court to overrule those objections.
ANALYSIS
7 The right to cross-examination on affidavit is provided for under section 83 of the Federal
Court Rules, SOR/98-106, as amended by SOR/2002-417 and SOR/2004-283 (the Rules).
83. Cross-examination on affidavits
A party to a motion or application may cross-examine the deponent of an
affidavit served by an adverse party to the motion or application.
***

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83. Droit au contre-interrogatoire

Une partie peut contre-interroger l'auteur d'un affidavit qui a t signifi par une
partie adverse dans le cadre d'une requte ou d'une demande.
8 The applicable case law has established a number of basic rules governing the scope of a
cross-examination on affidavit.
9 First of all, a cross-examination on affidavit should not be confused with an examination for
discovery, since the former is much more restricted in its scope. Hugessen J.A., in Merck Frosst
Canada Inc. v. Canada (Minister of Health), [1997] F.C.J. No. 1847 (QL)), named the most
important points distinguishing the two proceedings:
It is well to start with some elementary principles. Cross-examination is not
examination for discovery and differs from examination for discovery in several
important respects. In particular:
(a)
(b)
(c)
(d)
(e)

the person examined is a witness not a party;

answers given are evidence not admissions;
absence of knowledge is an acceptable answer; the witness cannot be required to
inform him or herself;
production of documents can only be required on the same basis as for any other
witness i.e. if the witness has the custody or control of the document;
the rules of relevance are more limited.

10 Hugessen J.A. added that, in the context of an application for judicial review, it is the
affidavits filed by the parties that define the formal relevance of the issues. He wrote:
Formal relevance is determined by reference to the issues of fact which separate
the parties. In an action those issues are defined by the pleadings, but in an
application for judicial review, where there are no pleadings (the notice of
motion itself being required to set out only the legal as opposed to the factual
grounds for seeking review), the issues are defined by the affidavits which are
filed by the parties. Thus, cross-examination of the deponents of an affidavit is
limited to those facts sworn to by the deponent and the deponent of any other
affidavits filed in the proceeding.
11 Hugessen J.A. went on to explain that the questions asked on cross-examination must also
meet the requirement of legal relevance:
Over and above formal relevance, however, questions on cross-examination must

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also meet the requirement of legal relevance. Even when a fact has been sworn to
in the proceeding, it does not have legal relevance unless its existence or
non-existence can assist in determining whether or not the remedy sought can be
granted. (I leave aside questions aimed at attacking the witness's personal
credibility which are in a class by themselves). Thus, to take a simple example,
where a deponent sets out his or her name and address, as many do, it would be a
very rare case where questions on those matters would have legal relevance, that
is to say, have any possible bearing on the outcome of the litigation.
12 The ability to object to questions is necessarily related to the scope of a cross-examination on
affidavit and limited by the context of this proceeding. With reference to the scope of the
cross-examination, the deponent is entitled to refuse to answer if the proper scope of the
cross-examination is exceeded: Global Television (Global Lethbridge, a Division of CanWest
Global Communication Corp.) v. Communications, Energy and Paper Union of Canada, 2002 FCA
376.
13 In the case at bar, the respondent's arguments clearly indicate that the objections relate to
relevance. Thus, according to the case law, to determine if an objection based on relevance has
merit, we must
(1)

(2)

consider the question's formal relevance, that is, whether it regards facts
set out in the deponent's affidavit or in another affidavit filed in connection
with the case; and
consider the question's legal relevance, that is, whether it regards a fact
whose existence or non-existence could contribute to determining if the
remedy sought can be granted or not.

14 The applicants submit that it is very important that the respondent be cross-examined on the
way in which the investigations that led to the conservatory measures were carried out. The
applicants are particularly concerned about the conduct of investigator Michel Leduc, the author of
one of the reports which the respondent used as a basis for issuing the conservatory measures, for
the following reasons:
(1)

(2)

(3)
15

on January 19, 2005, in a similar case, Superintendent Mayrand, the

delegated authority, rendered a decision to the effect that investigator
Michel Leduc should no longer be allowed to investigate the professional
conduct of trustees;
the same investigator, Michel Leduc, investigated the present case, so it is
therefore important, according to the applicants, to know how Mr. Leduc
conducted his investigation; and
Michel Leduc was acting on behalf of the respondent.

The applicants feel that they need to know the reasons and circumstances that led to the

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conservatory measures in order to understand the decision to maintain those measures. They argue
that prohibiting them from asking the respondent questions about the respondent's affidavit is
contrary to the Rules and to the principle of a cross-examination on affidavit. The applicants say
that, if the facts raised by the respondent cannot be contradicted or explained, they will be unable to
file their records.
16 In reply, the respondent submits that the 31 objections raised during his cross-examination on
affidavit have merit. The respondent contends that the dispute before this Court with regard to the
judicial review sought by the applicants consists in determining if there are grounds to review the
respondent's February 12, 2004 decision to refuse to lift the conservatory measures.
17 The respondent points out that the applicants chose not to contest the May 10, 2001 decision
before this Court, even though this avenue was open to them. Therefore, they cannot try to do the
same thing indirectly by means of judicial review.
18 It is helpful to consider the remedy sought by the applicants in connection with their
application for judicial review. They claim the following remedies:
(1)
(2)

(3)

(4)

(5)

allow the application for judicial review;

set aside the February 12, 2004 decision of respondent Alain Lafontaine
upholding all of the conservatory measures issued against the applicants on May
10, 2001;
say and declare that there is no objective threat to the integrity of the assets
administered by trustees Samuel S. Lvy and Sam Lvy & Associs Inc. as at
February 13, 2004, and that consequently section 14.03 does not apply in the
present case, and set aside for all intents and purposes the conservatory measures
directions given on May 10, 2001, by the respondent Alain Lafontaine;
declare that upholding the conservatory measures issued pursuant to section
14.03 of the Bankruptcy and Insolvency Act violates paragraphs 1(a) and 2(e) of
the Canadian Bill of Rights; and
declare the conservatory measures upheld by Alain Lafontaine in his February
12, 2004 decision to be null.

19 It was agreed at the hearing that the questions and objections at issue in this motion raise two
fundamental questions:
(1)
2)

Can the applicants cross-examine on every paragraph of the affidavit?

Can the applicants cross-examine on the paragraphs relating to the
investigation carried out by investigator Michel Leduc?

20 With regard to the first question, I am of the opinion that the principles set out by Hugessen
J.A. in Merck Frosst, supra, apply. The applicants may cross-examine on the facts set out in the
affidavit, provided the questions are legally relevant.

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21 The legal relevance of the questions must be determined in light of the legal debate regarding
the judicial review application before this Court, that is, whether there are grounds to review the
respondent's February 12, 2004 decision not to set aside or amend the conservatory measures
directions issued on May 10, 2001. That these measures are in dispute is not contested; in fact, the
respondent concedes this point. At paragraph 15 of his affidavit, he states the following:
[TRANSLATION] At issue in this case are the conservatory measures that I
issued on May 10, 2001, and my February 12, 2004 decision to have them remain
in force; the disciplinary report, meanwhile, is currently before the
Superintendent of Bankruptcies delegate, the Honourable Mr. Justice Fred
Kaufman, retired, of the Quebec Court of Appeal. [Emphasis added.]
22 However, the respondent does indicate in his affidavit that his decision to refuse to lift or
amend the conservatory measures was in no way based on the interim report of investigator Michel
Leduc; rather, it was based on the respondents' failure to provide explanations relating to their
professional conduct.
[TRANSLATION]
17.

18.

The events subsequent to the issuance of the conservatory measures on

May 10, 2001, show that, despite the numerous occasions when the
trustees could have explained their conduct and in so doing have said
conservatory measures lifted, the trustees deliberately avoided any sort of
debate before a court of law or administrative tribunal that would allow
them to explain their version of events and their actions as trustees in
bankruptcy.
Thus, since May 10, 2001, the applicants have still not explained the
misconduct upon which the conservatory measures are based or the acts
mentioned in the disciplinary report.

...
31.

32.

To this day, the applicants have made no attempt to explain how I erred in
my assessment of the facts set out at paragraph 23 of this affidavit or how
my "reasonable grounds to believe" that the assets should be preserved
were baseless.
I might very well have decided to lift the conservatory measures if I had
been provided with satisfactory explanations for the omissions,
irregularities and misconduct set out at paragraph 23 of this affidavit, thus
avoiding the array of proceedings filed by the applicants in Superior Court,

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the Quebec Court of Appeal and the Supreme Court of Canada, as well as
with the delegate of the Superintendent of Bankruptcy and, now, before
this honourable Court.
...
48.

At any rate, and as mentioned in the preceding, the applicants never

provided me with any explanation whatsoever for the deficiencies in their
administration as set out at paragraph 23.

...
79.

Rather than exercise their right to be heard and argue their position as
provided for under subsection 14.01(1) of the BIA and possibly put an end
to the conservatory measures by explaining their conduct, the trustees
instead chose to initiate an array of proceedings aimed at avoiding this
hearing, which could have taken place as early as 2002.

...
92.

93.

I issued the conservatory measures, including those named in this

application, on May 10, 2001, because I had reason to believe that the
assets administered by the applicants were at risk, given the applicants'
conduct and, more specifically, the facts set out at paragraph 23 of this
affidavit. Since that time, two avenues have been open to the trustees to lift
or terminate the conservatory measures. On the one hand, the trustees
could have marshalled supporting evidence to demonstrate to the
undersigned that the grounds on which said measures were issued were
erroneous, in which case the undersigned would have gladly considered
lifting them. On the other hand, in proceeding with the hearing on their
professional conduct, they would have had an excellent opportunity to
explain to delegate Kaufman why the allegations upon which the
conservatory measures were based were incorrect.
Neither of these avenues was taken by the trustees, such that, to this day,
there are still reasonable grounds to believe that action on my part was
required to preserve the assets, and there is nothing to warrant making any
changes in this regard.

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23 It is important to note that the applicants did not contest the May 10, 2001 decision to issue
conservatory measures. The subject of judicial review is the February 12, 2004 decision not to lift
or amend the conservatory measures. These measures, which are set out at paragraph 23 of the
respondent's affidavit, are thus still in force.
24 To meet the requirement of legal relevance, the applicants, in conducting their
cross-examination on affidavit, must ask questions about facts whose existence or non-existence can
help determine if the remedy sought can be granted or not. In this case, these facts concern the
February 12, 2004 decision and the conservatory measures still in force, but not the issuance of
those measures, which arose out of the May 10, 2001 decision. The latter decision is not the subject
of the judicial review in this case.
25 Consequently, and subject to the ultimate ruling of the reviewing judge, the questions
concerning the conservatory measures themselves and the February 12, 2004 decision not to lift or
amend them are allowed, and the objections raised against them are overruled. The questions
concerning the facts surrounding the issuance of the conservatory measures on May 10, 2001, are
not legally relevant; therefore, those questions are disallowed, and the objections raised against
them are sustained.
26 More specifically, the objections sustained include, but are not limited to, those raised by the
respondent to the questions posed by the applicants with regard to the following facts:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)

the respondent's authority to intervene to have legislative provisions

amended;
the training offered to investigator Michel Leduc;
the respondent's professional history;
the name of the person who decided to appeal delegate Kaufman's decision
to postpone the disciplinary hearing;
whether investigator Michel Leduc met with one of the applicants;
whether the respondent collaborated with other individuals in issuing the
conservatory measures;
other cases under the respondent's responsibility;
the events that occurred after the conservatory measures were issued and
that are the subject of a dispute before the Quebec Superior Court; and
whether the respondent stated that delegate Kaufman would not be
assigned any more cases.

In my view, these questions have no legal relevance, in that they could not have any bearing on the
outcome of the dispute. These objections are sustained.
ORDER
THE COURT ORDERS:

124

1.
2.

3.

The motion is granted in part.

The questions regarding the conservatory measures themselves and the February
12, 2004 decision not to lift or amend them are allowed, and the objections to
them are overruled. The questions regarding the facts surrounding the issuance of
the conservatory measures on May 10, 2001, are not legally relevant and will not
be allowed. The objections against them are therefore sustained.
More specifically, the objections sustained include, but are not limited to, those
raised by the respondent to the questions posed by the applicants with regard to
the following elements of the affidavit:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)

(i)

4.

5.

the respondent's authority to intervene to have legislative provisions

amended;
the training offered to investigator Michel Leduc;
the respondent's professional history;
the name of the person who decided to appeal delegate Kaufman's
decision to postpone the disciplinary hearing;
whether investigator Michel Leduc met with one of the applicants;
whether the respondent collaborated with other individuals in issuing
the conservatory measures;
other cases under the respondent's responsibility;
the events that occurred after the conservatory measures were issued
and that are the subject of a dispute before the Quebec Superior
Court; and
whether the respondent stated that delegate Kaufman would not be
assigned any more cases.

An extension of time is granted to the applicants so that they may file their
record at a time agreed upon by the parties in accordance with a schedule
to be drawn up jointly by the them and filed with the Court within 15 days
following the date of this order.
There is no order as to costs.

Certified true translation : Michael Palles

cp/e/qw/qlecl

Page 10

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Case Name:

L.S. Entertainment Group Inc. v. Formosa Video (Canada)

Ltd.
Between
L.S. Entertainment Group Inc. China Star Pictures
Limited, Film City (Hong Kong) Limited, Flea Market
Production Limited, Foreign Exchange Films Limited,
Imperial International Limited, Long Shong Pictures
(H.K.) Ltd., One Hundred Years of Films Company Limited
and Win's Entertainment Ltd., plaintiffs, and
Formosa Video (Canada) Ltd., Shun Po Chan and Mandy Hui
Mei Chen, defendants
[2005] F.C.J. No. 1643
[2005] A.C.F. no 1643
2005 FC 1347
2005 CF 1347
281 F.T.R. 99
48 C.P.R. (4th) 401
142 A.C.W.S. (3d) 1031
Docket T-1795-01
Federal Court
Vancouver, British Columbia
Gibson J.
Heard: In writing.
Judgment: September 30, 2005.
(81 paras.)

Page 1

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Page 2

Intellectual property law -- Copyright -- Infringement -- Remedies -- Damages -- Seizure -- Video

store ordered to pay damages and deliver up copies of copyrighted films to copyright holder -Copyright Act, R.S.C. 1985, c. C-42, s. 34(1), s. 38.1.
Civil procedure -- Pleadings -- Striking out pleadings or allegations -- Grounds -- Failure to
disclose a cause of action or defence -- False, frivolous, vexatious or abuse of process -- Motion to
strike Statement of Defence for non-attendance of defendant at examination for discovery, and for
failure to disclose an arguable defence, allowed -- Federal Court Rules, Rule 221(1).
Civil procedure -- Costs -- Special orders -- Increase in scale of costs -- Costs above ordinary
scale ordered where defendants acted in bad faith prior to and during legal proceedings -Copyright Act, R.S.C. 1985, c. C-42, s. 34(3).
Motion by LS Entertainment and several other companies for an order striking Statements of
Defence filed by Formosa, Chen, and Chan, and granting LS summary judgment. LS was a British
Columbia corporation which claimed ownership of the copyright in 158 Asian-language films. The
other plaintiff companies were Hong Kong corporations that also claimed copyright ownership for
the films. LS was the wholesale distributor of the films in Canada and the only active plaintiff in the
action. LS claimed Formosa and Chen, the manager of Formosa, had infringed its copyright. Chan
was Chen's spouse. Formosa was a chain of retail video stores which distributed, rented, and sold
copies of the films over which LS claimed copyright. Formosa claimed it sold the films with the
written, implied, or oral permission of the plaintiff companies. Pursuant to an Anton Piller order,
copies of 14 films were seized from Formosa. LS had made a prior motion to strike Formosa's
Statement of Defence, resulting in an order that Chen attend examinations in Toronto. Neither Chen
nor any other Formosa representative attended on the scheduled date, but LS consented to an
extension of time for Chen to attend for examination. On the new date, Chen again failed to attend,
and the court ordered Chen and Formosa to pay LS's costs for this adjournment. Cheques forwarded
by Formosa to satisfy the costs judgment were dishonoured. Two brief notes from Chen's doctor
were presented as evidence she was too sick to attend either examination.
HELD: Motion allowed. Chen and Formosa were ordered to pay LS damages of $14,000, or $1,000
per film seized, and were ordered to deliver up to LS all infringing material. They were ordered to
pay costs of $17,500 and disbursements of $3,450. The doctor's notes provided by Chen were
inadequate. Chen's failure to attend justified striking her Statement of Defence. Formosa's Statement
of Defence was also struck, because it was too vague to demonstrate there was a serious question of
law to be argued. Because Chen and Formosa acted in bad faith both before and during the
proceedings, they were ordered to pay costs above the ordinary scale. LS's action against Chan was
dismissed.
Statutes, Regulations and Rules Cited:
Copyright Act, R.S.C. 1985, c. C-42, ss. 5, 34(1), 34(3), 36(2), 38.1, 38.1(1), 38.1(2), 38.1(3),

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38.1(4), 38.1(5), 39, 41(1), 53(2)

Federal Courts Act, R.S.C. 1985, c. F-7, ss. 36, 37
Federal Courts Rules, 1998, SOR/98-106, Rules 4, 96, 97, 97(d), 124, 125, 210, 221(1), 369,
369(4), 397
Counsel:
Gary J. McCallum, for the plaintiffs.
Bruce M. Green, for the defendants.

REASONS FOR DECLARATION, ORDER AND JUDGMENT

GIBSON J.:-INTRODUCTION
1 These reasons arise out of a motion filed on behalf of the Plaintiffs on the 16th of September
2004 seeking an order:
1.

2.

3.

Striking out the statement of defence of Formosa Video (Canada) Ltd.

("Formosa") and Mandy Hui Mei Chen ("Chen") and granting default
judgment to the plaintiff [sic] with respect to these two defendants.
Costs of the within motion, costs of aborted attendance at examinations for
discovery, and costs of the action to the plaintiffs calculated at the highest
scale.
And for such further and other relief as to this Honourable Court may seem
just.

2 The Plaintiffs sought a hearing date for the motion "... on a date and at a time and place to be
determined by the Administrator."
3 By a Supplementary Motion Record filed the 14th of December 2004, the Plaintiffs requested
that the motion be dealt with in writing pursuant to Rule 369 of the Federal Courts Rules, 19981.
4 Counsel for the Defendants replied by motion record filed the 17th of January 2005, urging that
the Plaintiffs' motion be dealt with by this Judge, as case management judge, and that it be dealt
with in open hearing and not in writing. Counsel also briefly urged against the merits of the motion

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based on three affidavits in reply.

5

Counsel for the Plaintiffs filed written representations in reply on the 18th of January 2005.

6 Counsel for the Plaintiffs filed a further Supplementary Motion Record, dealing with the issues
of damages and costs, on the 25th of February 2005. This latter document was responsive to an
Order of this Court dated the 24th of January 2005, providing a timetable for further filings. In
addition to the further filing on behalf of the Plaintiffs, the Court's Order contemplated the filing of
responsive materials on behalf of the Defendants by the 18th of March 2005. The Order further
provided that, in the exercise of the Court's discretion under Rule 369(4), the Plaintiffs' motion
would be disposed of in writing after the 18th of March 2005.
7 By letter dated the 11th of March 2005, the Court was advised by counsel for the Defendants
that counsel were withdrawing from representation of the Defendants. Counsel advised that there
would be a Notice of Intention to Act in Person forthcoming from the Defendants. No such notice
has been received by the Court. Further, no further submissions have been received from the
Defendants or from anyone purporting to represent the Defendants.
8

Against the foregoing, the Court belatedly turns to consideration of the Plaintiffs' motion.

BACKGROUND
a)

The Statement of Claim

9 In their Statement of Claim, the Plaintiffs allege that they are, individually, the owners in
Canada of the copyright in 158 scheduled Asian-language "films" (the "films in issue") described as
films of television programs and motion pictures. They further allege that L.S. Entertainment Group
Inc. ("L.S. Entertainment") is, amongst other things, a wholesale distributor of Asian-language
video products for the home-viewing market in Canada, including the films in issue, and possesses
in Canada a right, title and interest, protected by the Copyright Act2 in the films in issue that belong
to the other Plaintiffs. They note that L.S. Entertainment is "... the active plaintiff in these
proceedings; the other plaintiffs [being] parties pursuant to section 36(2) of the Copyright Act
[who] do not intend to take part in the proceedings as copyright owners."
10 L. S. Entertainment is a British Columbia corporation with its registered office located in
Richmond, British Columbia. The other plaintiffs are alleged to be Hong Kong corporations that
carry on the business of film production or film distribution or both.
11 The Plaintiffs allege that the Defendants have infringed copyright in the Asian-language films
in issue in respect of each of which the copyright has been registered in the Copyright Office of
Canada with certificates of copyright registration having been duly issued.
12

The Plaintiffs plead and rely on the presumptions set out in subsection 53(2) of the Copyright

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Act which reads as follows:

53.(2) A certificate of registration of copyright is evidence that the copyright
subsists and that the person registered is the owner of the copyright.
***
53.(2) Le certificat d'enregistrement du droit d'auteur constitue la preuve de
l'existence du droit d'auteur et du fait que la personne figurant l'enregistrement
en est le titulaire.
13 The Plaintiffs further allege that Formosa Video (Canada) Ltd. ("Formosa") is a privately held
British Columbia corporation with its registered office located in Burnaby, British Columbia, and
with three (3) principals, each of whom was, at the relevant time, an officer or director or both of
Formosa. They allege that Formosa carried on a business consisting of a chain of four (4) retail
video stores located in and around Vancouver, British Columbia, from which it distributes, rents
and sells, among other things, Asian-language motion pictures in VHS video-cassette tape format
and VCD and DVD formats, amongst others, to members of the general public for the purpose of
home viewing. They allege that the defendant Mandy Hui Mei Chen, is the spouse of Shun Po Chan
and is the manager of Formosa.
14 In addition to very substantial damages including exemplary damages, or, alternatively, an
accounting of profits, the Plaintiffs claim a declaration that copyright subsists in the films in issue,
that one or another of the Plaintiffs is the copyright owner of each of the films in issue and that L. S.
Entertainment possesses a right, title and interest, protected by the Copyright Act, in the copyright
in the films in issue belonging to the other plaintiffs. They seek injunctive relief, an Anton Piller
Order providing for the custody and preservation of any seized infringing copies of the films in
issue, delivery up at the Defendants' expense of infringing copies and related materials, equipment
and records, pre-judgment and post-judgment interest and costs.
b)

The Anton Piller Order and Its Execution

15 On the 15th of October 2001, following an ex parte hearing and based upon a five (5) volume
motion record filed the 10th of October 2001, an Anton Piller Order herein, extending to fifteen
(15) pages plus schedules, issued in favour of the Plaintiffs against premises of Formosa at 4819
Kingsway, Burnaby, British Columbia "... and such other business premises, locations, motor
vehicles, and other places and things located within the Province of British Columbia, as may be
owned, occupied, or used for the operation of [Formosa's business] by the Defendants or by their
respective directors, officers, employees, servants, agents, successors or assigns or by any
corporation associated or affiliated with the Defendants ...". The Order extended to "... certain
Asian-language motion pictures in VHS video-cassette tape format, the titles of which are set out in
Schedules A through I annexed [to the Order] and for which L. S. Entertainment Group Inc. ... owns
the exclusive Canadian rights ... .". The extensive terms of the Order appear under the following

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headings: Commencement & Duration of Order, Subject of Order: The Films, Premises, Authorized
Persons, Functions of Authorized Persons, Rights of Defendants, Obligations of Defendants,
Obligations of Plaintiffs, Disposition of Things & Materials Seized, Hours of Entry, Interim
Prohibitory Injunction, Motion Ex Parte & In Camera, Sealing of Documents, Plaintiffs'
Undertaking, Dispensing with Compliance with Certain Rules, Terminology & Interpretation, and
Costs.
16 The Statement of Claim earlier referred to and forming part of the materials that were before
the Court on the Motion for the Anton Piller Order was filed on the 19th of October 2001.
17 The Anton Piller Order was executed at Formosa's premises at 4819 Kingsway, Burnaby,
British Columbia, on the 8th of November 2001. Five (5) persons attended at the premises on behalf
of the Plaintiffs, a solicitor, a bailiff, two (2) representatives of L. S. Entertainment and an
interpreter. A "Report to the Court made pursuant to the Anton Piller Order" was filed with the
Court on the 15th of November 2001 in support of a Motion, filed the 14th of November 2001,
seeking a review of the execution of the Anton Piller Order. According to that report, during the
course of the execution, as the attending solicitor attests, the defendant Mandy Hui Mei Chen was in
attendance, a solicitor on behalf of the Defendants was contacted and consulted and the full contents
of the Anton Piller Order were explained to those in attendance. Thirty six (36) VCR video-tapes of
fourteen (14) titles (the "seized films") and ten (10) "back-up" computer discs containing rental
records, client lists and lists of customers who then had videos under rental were seized and carried
away.
18 As earlier noted, by motion filed the 14th of November 2001, the Plaintiffs sought a review of
the execution of the Anton Piller Order, as required by that Order. Hearing of the review motion has
on five (5) separate occasions been adjourned by this Court, the last such adjournment order being
dated the 27th of May 2002 when the motion was adjourned sine die "pending settlement
discussions between the parties". By the same adjournment order, a motion filed on behalf of the
Defendants on the 2nd of April 2002 "... for, inter alia, an order setting aside the ex parte Anton
Piller Order ... dated October 15, 2001 ..." was also adjourned sine die.
19 The materials seized during the execution of the Anton Piller Order presumably remain in the
possession or control of the Plaintiffs or their solicitor.
c)

The Statement of Defence

20 On the 8th of January 2002, a Statement of Defence was filed on behalf of the Defendants.
Following a number of paragraphs reflecting specific denials of allegations in the Statement of
Claim, the substance of the Statement of Defence concludes with the following paragraphs:
13.

In reply to paragraph 18 of the Statement of Claim, the Defendants say and the
fact is that the activities complained of at all times were done with the consent
and licences of the Plaintiffs, whether written, implied or oral.

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14.

15.

16.

17.

18.

19.

21

Page 7

In reply to the Statement of Claim as a whole, the Defendants deny that the Films
are protected by copyright in Canada and deny that the Plaintiffs or any of them
are the owners of copyright in Canada in the Films.
More particularly, the Defendants deny that the Films are original works or are
proper subject matter for copyright protection. The Defendants further deny that
the author or maker of the Films are qualifying authors or makers under section 5
of the Copyright Act or that the first publication occurred in a treaty country.
The Defendants further deny that any authors of the Films were employed by any
Plaintiff under a contract of service and deny that the Films were made in the
course of their authors' employment. Further, the Defendants deny that any
Plaintiff has obtained a valid assignment of copyright or any exclusive rights in
the Films, in which copyright exists, which is denied.
In further reply to the Statement of Claim as a whole, having regard to
paragraphs 15, 16 and 17 [sic] above, any registration of copyright in the Films
relied on by the Plaintiffs is invalid, void and of no effect.
Further in reply to the Statement of Claim as a whole, the Defendants say, and
the fact is, that they were not aware of the subsistence of copyright in the alleged
works, which copyright is denied, and had no reasonable ground for suspecting
the subsistence of copyright in the alleged works. The Defendants say that the
Plaintiffs are not entitled to any remedy, but if they are is [sic], then in view of
s.39 of the Copyright Act the Plaintiff is [sic] not entitled to any remedy other
than an injunction.
The Defendants plead that the claims of the Plaintiffs are barred by subsection
41(1) of the Copyright Act. The Defendants further plead that the Plaintiffs are
barred by laches and acquiescence from pursuing any claim.

In the result, the Defendants seek the dismissal of the Plaintiffs' action with costs.
d)

Relevant Interlocutory Orders

22 Two (2) earlier motions to strike the Statement of Defence were filed on behalf of the
Plaintiffs. The first was adjourned sine die. With respect to the second motion to strike and grant
default judgment against Formosa and Mandy Hui Mei Chen, I, then acting as case management
judge, recited the following findings in an Order dated the 8th of January 2004:
THE COURT being satisfied that the written answers to written questions on the
examination for discovery of Mandy Hui Mei Chen as agreed to on the oral
examination for discovery of Ms. Chen at Vancouver, British Columbia, on the
20th of December, 2002 are, as alleged on behalf of the Plaintiffs, "... so devoid
of meaningful content as to be tantamount to a complete refusal to answer the
questions";

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Page 8

AND THE COURT further noting that the material filed herein on behalf of the
Defendants simply fails to respond to the Plaintiffs' allegation that the
Defendants "... undertook during the oral examination for discovery to provide
copies of Formosa's computer records with respect to the Films that are the
subject of this action, and then subsequently refused to do so";
I then denied the Plaintiffs' motion on the following terms:
...
2.

3.

4.

The Defendant Chen shall attend to be further examined for discovery on

behalf of herself and Formosa at Toronto, at their own expense and at a
time to be agreed upon by counsel but in any event no later than sixty (60)
days from the date of this order, to answer all proper questions asked in the
written examination dated the 15th of January, 2003 and all proper
questions deriving from answers given.
Formosa and Chen shall, within sixty (60) days from the date of this order,
comply with the undertaking given by Chen in response to question 124 on
her oral examination for discovery above referred to, as that undertaking is
amplified by questions 123 and 125 on the said examination and
notwithstanding the caveat placed on the record with respect to such
undertaking by counsel for Chen and Formosa in response to question 127
on such examination for discovery.
The Plaintiffs are entitled to their costs of this motion, calculated on the
ordinary scale, and payable by the Defendants in any event of the cause.

23 By further order dated the 5th of March 2004, following consultation with counsel, I put in
place a Dispute Resolution Conference to be held in Vancouver, British Columbia on a day during
the week of the 14th of June 2004, to commence at 9.30 a.m., Vancouver time, and to continue for
not more than one (1) day.
24 By further order of the 5th of March 2004, I amended my order of the 8th of January to
substitute for the sixty (60) day period referred to in the first substantive paragraph quoted above
from that Order a date of the 30th of April 2004 for Mandy Hui Mei Chen's attendance at Toronto
for further examination for discovery on behalf of herself and Formosa.
25 By order dated the 6th of April 2004, the Dispute Resolution Conference fixed for a day in the
week of the 14th of June 2004, was more specifically fixed for Thursday the 17th of June 2004 to
commence at 9.30 a.m., Vancouver time, and to continue for not more than one (1) day. On that
day, counsel for the Plaintiffs and a representative of the Plaintiffs with full authority on behalf of
the Plaintiffs to agree to any negotiated settlement attended at the time and place fixed, together
with counsel for the Defendants who was without full authority to agree to a settlement on behalf of

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Page 9

the Defendants. Neither Mandy Hui Mei Chen nor anyone else with full authority on behalf of the
Defendants attended. No notice that Mandy Hui Mei Chen or another person having full authority
would not attend was provided to the Court or to the Plaintiffs. In the result, on the same date, I
ordered:
The Dispute Resolution Conference herein scheduled for this day is adjourned
sine die with costs of the day, fixed at Seven Hundred and Fifty Dollars
($750.00) payable by the Defendants to the Plaintiffs forthwith and in any event
of the cause.
The Defendants may take no further step in this proceeding, other than a step
previously ordered by this Court to be taken or a step responsive to a step
hereafter taken on behalf of the Plaintiffs until evidence satisfactory to the Court
of payment of the costs, hereby ordered to be paid, is filed with the Court.
No evidence of payment of the costs so ordered has, to this date, been filed with the Court.
THE PLAINTIFFS' SUBMISSIONS IN SUPPORT OF THE MOTION NOW BEFORE THE
COURT
26 Counsel for the Plaintiffs urges in support of this motion to strike the Defendants' Statement of
Defence and enter default judgment against the Defendants, Formosa and Mandy Hui Mei Chen
("Chen") that they have failed to comply with three (3) orders of this Court, namely, my order of the
8th of January 2004 regarding re-attendance by Chen in Toronto for continuance of her examination
for discovery, as that order was amended, my order of the 5th of March 2004, as supplemented,
regarding attendance at a Dispute Resolution Conference in Vancouver on the 17th of June 2004
and my order of the 17th of June 2004 requiring payment of costs of that day by the Defendants to
the Plaintiffs, forthwith and in any event of the cause.
27 With respect to the first order, Chen not having attended in Toronto by the 5th of March 2004,
on request on her behalf, the time for such attendance was extended first, to the 30th of April 2004.
By agreement of the parties, attendance was scheduled for the 29th of April 2004 but, due to
circumstances impacting counsel for the Plaintiffs that were unquestionably beyond his control,
time for compliance was further extended to the 31st of May 2004, this time at the request of the
Plaintiffs. The Plaintiffs served on Chen and Formosa a direction to attend for further examination
for discovery on the 31st of May 2004. Chen subsequently advised the Plaintiffs, through counsel,
that she was unavailable on that date because she was purportedly in Taiwan. In the result, the
Plaintiffs consented to an extension of time for Chen's attendance on the examination until the 11th
of June 2004. On that date, the Plaintiffs and their counsel attended at the fixed time and place but,
without explanation, neither Chen nor her counsel attended. The Plaintiffs submit that they incurred
out-of-pocket costs as a result of the adjournment on the 31st of May and Chen's non-attendance on
the 11th of June, which costs the Defendants have refused to pay.

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Page 10

28 As earlier noted, following consultation with counsel, the Court, by order, fixed the 17th of
June 2004 as the date for a Dispute Resolution Conference to be held at a specified time and
location in Vancouver. The Plaintiffs attended represented by counsel and an officer of L. S.
Entertainment who had authority to bind the Plaintiffs. While counsel for Chen attended, Chen did
not herself attend. Counsel provided a medical certificate that, in the view of counsel for the
Plaintiffs, a view shared by the Court, was entirely too vague to justify Chen's non-attendance.
Since that date, no further or better medical certificate has been provided.
29 Finally, once again as earlier noted, the Court by order fixed costs of the day for the 17th of
June, 2004, payable forthwith by the Defendants to the Plaintiffs. Two (2) and perhaps three (3)
cheques were written by one or another of the Defendants in the amount fixed. Although the
cheques written were delivered to the Plaintiffs, they were dishonoured when presented.
30 Counsel for the Plaintiffs concludes his written submissions in this regard in the following
terms:
This failure [that is to say the provision of cheques in payment of costs of the day
on the 17th of June, 2004 that were subsequently dishonoured] substantiates the
Plaintiffs' submission that Chen's conduct in May and June [of 2004] had little to
do with her health and everything to do with an arrogant and contemptuous
refusal to abide by court orders.
RESPONDING SUBMISSIONS ON BEHALF OF THE DEFENDANTS
31 Counsel for the Defendants submits that the Plaintiffs themselves were complicit in the failure
of the parties to comply with this Court's order that Chen attend for discovery in Toronto by the 31st
of May 2004 in that they agreed to waive strict compliance with that Order by agreeing to
re-schedule the examination for the 11th of June 2004. Counsel further submits that Chen was
unable to attend on the rescheduled date "due to health reasons", which allegation is supported by
an affidavit of a solicitor for Formosa and Chen, not counsel for Formosa and Chen on this matter.
32 With respect to the non-attendance of Chen at the Dispute Resolution Conference on the 17th
of June 2004, counsel submits that the non-attendance was satisfactorily addressed by the Court's
"costs penalty" order issued on that date.
33 Finally, counsel submits that the non-payment of the costs order "... was not intentional but, at
least in the case of the third cheque, likely resulted from the delay in presentation of the cheque,
since other cheques written at the same time cleared."
THE ISSUES
34 In a Supplementary Motion Record Re: Damages & Costs filed the 25th of February 2005,
counsel for the Plaintiffs wrote:

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Page 11

Given that these representations are made without an oral hearing the Plaintiffs
are waiving their claim for a declaration. The Anton Piller Order was granted.
Damages for conversion are no longer granted under the Copyright Act. An
interlocutory injunction was granted and the Plaintiffs are seeking a permanent
injunction. The Plaintiffs are not pursuing their claim for exemplary damages; to
the extent that the defendants' conduct during the course of these proceedings
may warrant censure, that fact will be discussed below in the representations on
costs. The Plaintiffs are not seeking an accounting of profits.
The Plaintiffs are seeking the pleaded relief for a permanent injunction, statutory
damages rather than general damages, delivery-up, interest, costs, and GST as
applicable.
35 In the result, the following issues remain on this motion: first, whether or not an order striking
out the Statement of Defence and granting default judgment as against Formosa and Chen is
justified; secondly, whether or not a disposition of the claim as against the defendant Shun Po Chan
is appropriate; and thirdly, assuming that the Statement of Defence is struck out as against Formosa
and Chen and that default judgment is granted against them, whether the reliefs now claimed
against Formosa and Chen are justified, those reliefs being a permanent injunction, statutory
damages, delivery up which the Court assumes includes forfeiture of the seized films and related
back-up records, interest on statutory damages, and costs in favour of the Plaintiffs, inclusive of
Goods and Services Tax.
36 Finally, and somewhat peripherally, confidentiality in respect of aspects of the Court's file and
the status of counsel for the Defendants before the Court given the letter of the 11th of March 2005
from counsel for the Defendants indicating that he and his firm are withdrawing from representing
the Defendants in this action, particularly in light of the fact that no notice of intention to act in
person has since been filed on behalf of all or any of the Defendants, remain to be briefly dealt with.
ANALYSIS
37 By order of the then Associate Chief Justice of the Federal Court of Canada, now the Chief
Justice of the Federal Court, dated the 3rd of June 2003, I was designated as Case Management
Judge in this matter. In the result, I have had a close association with this file since that date, and
indeed, for some weeks prior to that date. The materials, including affidavits, filed on the motion
here under consideration are, in some respects, rather sketchy. Thus, once again in some respects, I
will rely on my general knowledge of the file as Case Management Judge and, in particular, on my
recorded notations of dealings with counsel for the Plaintiffs and for the Defendants and, more
particularly, on those notations as they relate to Orders that I have issued on this file.
a)

Striking Out of the Statement of Defence as Against Formosa and Chen and
Default Judgment

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38

Page 12

Rule 221(1) of the Federal Court Rules, 19981 (the "Rules") reads as follows:
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)
(b)
(c)
(d)
(e)
(f)

discloses no reasonable cause of action or defence, as the case may be,

is immaterial or redundant,
is scandalous, frivolous or vexatious,
may prejudice or delay the fair trial of the action,
constitutes a departure from a previous pleading, or
is otherwise an abuse of the process of the Court,
and may order the action be dismissed or judgment entered accordingly.
***

221. (1) tout moment, la Cour peut, sur requte, ordonner la radiation de tout ou
partie d'un acte de procdure, avec ou sans autorisation de le modifier, au motif,
selon le cas :
a)
b)
c)
d)
e)
f)

qu'il ne rvle aucune cause d'action ou de dfense valable;

qu'il n'est pas pertinent ou qu'il est redondant;
qu'il est scandaleux, frivole ou vexatoire;
qu'il risque de nuire l'instruction quitable de l'action ou de la retarder;
qu'il diverge d'un acte de procdure antrieur;
qu'il constitue autrement un abus de procdure.

Elle peut aussi ordonner que l'action soit rejete ou qu'un jugement soit enregistr en consquence.
39 It is trite law that Hunt v. Carey Canada Inc.3 stands for the proposition that, in circumstances
such as those enumerated in Rule 221(1), the test in Canada to strike out a pleading is whether it is
plain and obvious that the pleading discloses no cause of action or defence. This proceeding, despite
the length of time it has been before the Court, has not proceeded to a stage where it is possible to
say with any degree of confidence that the Defendants' Statement of Defence discloses no
reasonable defence. Thus, the Plaintiffs cannot succeed with the relief of striking the Statement of
Defence as against Formosa and Chen on the basis of Rule 221.
40 But that is not the end of the matter. The opening words of Rule 97 of the Rules and paragraph
(d) of that Rule read as follows:

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97.

Page 13

Where a person fails to attend an oral examination or refuses to take an oath,

answer a proper question, produce a document or other material required to be
produced or comply with an order made under rule 96, the Court may
...
(d)

dismiss the proceeding or give judgment by default, as the case may be;

...
[emphasis added]
***
97.

Si une personne ne se prsente pas un interrogatoire oral ou si elle refuse de

prter serment, de rpondre une question lgitime, de produire un document ou
un lment matriel demands ou de se conformer une ordonnance rendue en
application de la rgle 96, la Cour peut :
...
d)

ordonner que l'instance soit rejete ou rendre jugement par dfaut, selon le
cas;

...
[je sousligne]
The reference to Rule 96 in the opening words of Rule 97 is inapplicable on the facts of this matter.
41 As earlier noted in these reasons, this Court ordered Chen to re-attend for examination for
discovery on behalf of herself and Formosa at Toronto, and at their own expense, at a time
eventually extended by further order to the 31st of May 2004. Efforts to negotiate a date and time
for re-attendance within the time provided proved unsuccessful. In the result, counsel for the
Plaintiffs made an appointment at the official examiner's office for the 31st of May 2004 and served
a direction to attend. Chen alleges she was in Taiwan on that date. In the result, without consultation
with the Court, the deadline of the 31st of May 2004 was extended so that the examination for
discovery could be resumed in Toronto on the 11th of June 2004. Counsel for the Plaintiffs attended
at the agreed time and at the agreed place. Neither Chen nor her counsel appeared. Counsel for the
Plaintiffs was later advised that Chen's failure to attend was due to ill health.

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Page 14

42 Whether by failure to agree to a date for re-attendance before the end of May 2004 or by
failure to attend, without notice, on the 11th of June 2004, or both, I am satisfied that Chen, on
behalf of herself and Formosa, breached an order of the Court within the contemplation of Rule 97.
43 By letter dated the 16th of June 2004, counsel for the Defendants advised the Court and, by
copy, counsel for the Plaintiffs as follows:
I am informed through Ms. Chen's Mandarin-speaking counsel, John Mao, that
for medical reasons, on her doctor's recommendations, Ms. Chen is unfortunately
unable to attend the Dispute Resolution Conference scheduled for tomorrow. She
is apparently under medication and cannot attend either in person or by
telephone. Last Friday, June 11, 2004 Ms. Chen was scheduled to attend the
continuation of her examination for discovery in Toronto and I learned that
morning that she had not attended for health reasons. I have been provided this
morning by Mr. Mao with a doctor's note, copy attached, prepared in respect of
June 11, 2004 and Mr. Mao has this morning been advised that her doctor is
providing a further report today on her condition and her inability to attend
tomorrow, which I will forward to the Court on receipt. Unfortunately, there is
no other officer or manager to represent Formosa Video (Canada) Ltd. at
tomorrow's Conference.
The doctor's note referred to in the foregoing quotation is in the following terms:
To Whom It May Concern:
For health reasons Ms. Chen could not go to Toronto June 11, 2004.
A similar note dated the 16th of June 2004 simply provides:
For medical reasons she [Ms. Chen] could not attend medical [sic] proceedings
tomorrow June 17, 2004.
44 Counsel for the Plaintiffs urges that the medical certificates or notes provided are entirely
inadequate. Counsel for the Plaintiffs, by letter dated the 24th of June 2004, requested more detailed
reports. No written response was received. In a telephone conversation with counsel for the
Defendants, counsel for the Plaintiffs was apparently advised that more detailed information was
forthcoming. In the material before me, an officer of L. S. Entertainment attests that no more
detailed report was ever received.
45 I share the view of counsel for the Plaintiffs that the medical notes received were entirely
inadequate. In addition, they were both received too late to prevent inconvenience and expense
being incurred.

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Page 15

46 While this Court's order fixing the date, time and place of the Dispute Resolution Conference
is not directly within the contemplation of Rule 97, I am satisfied that its effect was to create a
situation directly analogous to the first situation contemplated by Rule 97 and, as urged on behalf of
the Plaintiffs, I am prepared to rely on Rule 4 of the Rules to treat breach of the Order fixing the
Dispute Resolution Conference as tantamount to a breach of an Order to attend an oral examination.
47 Once again, as earlier indicated in these reasons, at the aborted Dispute Resolution
Conference, I ordered the Defendants to forthwith pay costs of the day to the Plaintiffs in the fixed
amount of seven hundred and fifty dollars ($750.00). The Plaintiffs allege that two (2) cheques in
payment of such costs were sequentially provided by the Defendants, both of which were
dishonoured. The Defendants urge that three (3) cheques were sequentially provided and that the
Plaintiffs should have been more assiduous in pursuing the cashing of at least the last of the
cheques.
48 I reject the position of the Defendants and determine that the conduct of the Defendants in
response to the costs order was contemptuous of an order of this Court. That being said, the costs
order is not an order within the contemplation of Rule 97.
49 In Kuzmich v. Canada (Minister of Citizenship and Immigration)4, Justice McGillis noted that
the authority granted by Rule 97(d) to dismiss a proceeding or give judgment by default is
discretionary. On the facts before her, she exercised her discretion to dismiss an application for
judicial review. I determine to exercise my discretion in a similar manner and will strike out the
Statement of Defence against the Defendants Formosa and Chen by reason of the failure of Chen to
comply with an order requiring her, on her own behalf and on behalf of Formosa, to re-attend for
further examination for discovery. In doing so, I also rely on Chen's failure to attend, without
adequate excuse or timely notice, at the Dispute Resolution Conference scheduled for the 17th of
June 2004, in contravention of an Order of this Court that I regard as creating a situation analogous
to the situations that are directly within the contemplation of Rule 97. I arrive at this conclusion
taking into account the failure of the Defendants to comply with the costs order earlier referred to
and taking into account the general conduct of Chen, on behalf of herself and Formosa, as it has
come to my attention during the time when I have been Case Management Judge of this proceeding
and as reflected in the materials before me on this motion. I also take into account Chen's affidavit
that is before me on this motion in which she describes herself as the Manager of Formosa and the
notation in a letter dated the 16th of June 2004 from counsel for the Defendants to the Court in
which it is indicated that there is no other officer or manager of Formosa to attend the Dispute
Resolution Conference. I extrapolate from this statement and from the conduct of Chen throughout
the proceeding that she is the sole person with authority to speak for Formosa in respect of this
proceeding and has throughout acted and spoken for Formosa, or failed to act and speak for
Formosa, as well as for herself, without adequate notice and evidence of supportable reason.
50

Rule 210 reads as follows:

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Page 16

210. (1) Where a defendant fails to serve and file a statement of defence within the
time set out in rule 204 or any other time fixed by an order of the Court, the
plaintiff may bring a motion for judgment against the defendant on the statement
of claim.
(2) Subject to section 25 of the Crown Liability and Proceedings Act, a motion under
subsection (1) may be brought ex parte and in accordance with rule 369.
(3) A motion under subsection (1) shall be supported by affidavit evidence.
(4) On a motion under subsection (1), the Court may
(a)
(b)
(c)

grant judgment;
dismiss the action; or
order that the action proceed to trial and that the plaintiff prove its case in
such a manner as the Court may direct.
***

210. (1) Lorsqu'un dfendeur ne signifie ni ne dpose sa dfense dans le dlai prvu
la rgle 204 ou dans tout autre dlai fix par ordonnance de la Cour, le
demandeur peut, par voie de requte, demander un jugement contre le dfendeur
l'gard de sa dclaration.
(2) Sous rserve de l'article 25 de la Loi sur la responsabilit civile de l'tat et le
contentieux administratif, la requte vise au paragraphe (1) peut tre prsente
ex parte et selon la rgle 369.
(3) La preuve fournie l'appui de la requte vise au paragraphe (1) est tablie par
affidavit.
(4) Sur rception de la requte vise au paragraphe (1), la Cour peut :
a)
b)
c)

accorder le jugement demand;

rejeter l'action;
ordonner que l'action soit instruite et que le demandeur prsente sa preuve
comme elle l'indique.

Here a statement of defence was filed which will now be struck as against Formosa and Chen. I am
satisfied that, in such circumstances, default judgment is available both under Rule 97(d) and under
Rule 210 against Formosa and Chen since the effect of striking the Statement of Defence, as against
them, is tantamount to no defence having been filed on their behalf.
51 Allied Colloids Ltd. v. Alkaril Chemicals Ltd.5 appears to stand for the proposition that
default judgment should not be invoked where serious questions of law can be argued, or the facts
are not clear and undisputed. Here, by their Statement of Defence, the Defendants put into issue the
questions of existence of copyright in the films in issue, ownership of copyright in the films in issue

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Page 17

and the rights of L. S. Entertainment in Canada in relation to the films in issue. That being said,
those issues, which are clearly serious issues, are put into play by the Statement of Defence in only
the most general of terms and nothing further of substance, since the Statement of Defence, has
been put forward by the Defendants with respect to those issues.
52 By contrast, on the application for an Anton Piller Order herein, very extensive evidence was
put before the Court as to the existence of copyright, ownership of copyright and the rights in
Canada of L. S. Entertainment in respect of the films in issue. Certificates of registration of
copyright in each of the films in issue, in each case indicating L. S. Entertainment Group Inc. as the
owner for all purposes in Canada, were put before the Court. Subsection 53(2) of the Copyright Act
provides as follows:
53.(2) A certificate of registration of copyright is evidence that the copyright
subsists and that the person registered is the owner of the copyright.
***
53.(2) Le certificat d'enregistrement du droit d"auteur constitue la preuve de
l'existence du droit d'auteur et du fait que la personne figurant l'enregistrement
en est le titulaire.
53 A judge of this Court was satisfied on the application for issuance of the Anton Piller Order
that, at least on a prima facie basis and on an ex parte application, the evidence of the existence of
copyright and of ownership and related rights in Canada was sufficient to justify the issuance of an
Anton Piller Order.
54 In light of the foregoing, particularly, the generality of the allegations in the Statement of
Defence, the extensive evidence put forward by the Plaintiffs on the application for the Anton Piller
Order, including the certificates of registration, and the conclusion of a judge of this Court that
issuance of an Anton Piller Order was justified, I am satisfied that the Defendants have not met the
threshold test stated in Allied Colloids Ltd., supra, by demonstrating that there is here a serious
question of law to be argued or facts that are unclear and substantially disputed.
55 This Court, on a not infrequent basis, grants default judgment and a declaration, injunctive
relief and damages in circumstances where a statement of claim has been filed, an Anton Piller
Order has been issued and executed and the defendant or a defendant fails to appear on the hearing
of a motion for review of the execution of the Anton Piller Order and fails to file a statement of
defence within the time provided. Assuming the foregoing practice to be warranted, and I make that
assumption, as a matter of principle, it is not in the interests of justice to encourage persons against
whom an Anton Piller Order is executed, to obstruct and ignore the process of this Court for
personal gain, and I am satisfied that that is what has happened here. In the result, I am prepared to
not only grant judgment against Formosa and Chen, but also to grant significant relief.

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b)

Page 18

Disposition of this Proceeding as Against Shun Po Chan

56 The material before the Court on this motion is silent with respect to Shun Po Chan ("Chan").
No relief is sought against him on the motion here before the Court. A review of the totality of the
material before the Court indicates that he has not been active in the proceeding and that the
Plaintiffs have not pursued the proceeding against him. In light of my determination to strike the
Statement of Defence and to grant default judgment as against Formosa and Chen, and in light of
my foregoing brief comments with respect to Chan and my experience as Case Management Judge
on this matter, I will dismiss this proceeding as against Chan. If, in the view of counsel for the
Plaintiffs, such a result in respect of Chan is inappropriate within the contemplation of Rule 397, I
remain prepared to reconsider this aspect of my declaration, order and judgment given the fact that
it is being taken on my sole initiative and in the absence of submissions from either party.
c)

Reliefs Against Formosa and Chen

i)

A Declaration and a Permanent Injunction

57 The indication earlier referred to that the Plaintiffs are waiving their claim for a declaration is,
in the view of the Court, to some extent inconsistent with the indication that the Plaintiffs continue
to seek a permanent injunction as against Formosa and Chen. In the Court's view, a finding of the
existence, as between the Plaintiffs and Formosa and Chen, of copyright in the Plaintiffs in the films
in issue is a condition precedent to a permanent injunction and, as well, to statutory damages and
delivery up. In the result, the Court will treat the submission on behalf of the Plaintiffs that they are
waiving their claim for a declaration as a waiver only in respect of a declaration in rem.
58 I regard a declaration of validity and ownership of copyright, as between the Plaintiffs on the
one hand and Formosa and Chen on the other, as a condition precedent to the granting of a
permanent injunction as against Formosa and Chen. Also, as earlier indicated in these reasons, I am
satisfied that, on the evidence before the Court, such a declaration is justified. Further, an
interlocutory injunction has now been in place for almost four years. Against the foregoing, a
declaration as between the Plaintiffs and Formosa and Chen will issue, and a permanent injunction
will issue against Formosa and Chen with respect to the films in issue, substantially in the form
proposed on behalf of the Plaintiffs.
ii)
59

Statutory Damages

Section 38.1 of the Copyright Act provides as follows:

38.1 (1) Subject to this section, a copyright owner may elect, at any time before
final judgment is rendered, to recover, instead of damages and profits referred to
in subsection 35(1), an award of statutory damages for all infringements involved
in the proceedings, with respect to any one work or other subject-matter, for

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which any one infringer is liable individually, or for which any two or more
infringers are liable jointly and severally, in a sum of not less than$500 or more
than$20,000 as the court considers just.
(2)

(3)

Where a copyright owner has made an election under subsection (1) and the
defendant satisfies the court that the defendant was not aware and had no
reasonable grounds to believe that the defendant had infringed copyright, the
court may reduce the amount of the award to less than$500, but not less
than$200.
Where
(a)
(b)

(4)

(5)

there is more than one work or other subject-matter in a single medium,

and
the awarding of even the minimum amount referred to in subsection (1) or
(2) would result in a total award that, in the court's opinion, is grossly out
of proportion to the infringement, the court may award, with respect to
each work or other subject-matter, such lower amount than$500 or$200, as
the case may be, as the court considers just.

Where the defendant has not paid applicable royalties, a collective society
referred to in section 67 may only make an election under this section to recover,
in lieu of any other remedy of a monetary nature provided by this Act, an award
of statutory damages in a sum of not less than three and not more than ten times
the amount of the applicable royalties, as the court considers just.
In exercising its discretion under subsections (1) to (4), the court shall consider
all relevant factors, including
(a)
(c)

the good faith or bad faith of the defendant; (b) the conduct of the parties
before and during the proceedings; and
the need to deter other infringements of the copyright in question.
***

38.

(1) Sous rserve du paragraphe (2), le titulaire du droit d'auteur peut, comme s'il
en tait le propritaire, recouvrer la possession de tous les exemplaires contrefaits
d'oeuvres ou de tout autre objet de ce droit d'auteur et de toutes les planches qui
ont servi ou sont destines servir la confection de ces exemplaires, ou engager
leur gard des procdures de saisie avant jugement si une loi fdrale ou une loi
de la province o sont engages les procdures le lui permet.

144

(2)

(3)

(4)

Un tribunal peut, sur demande de la personne qui avait la possession des

exemplaires et planches viss au paragraphe (1), de la personne contre qui des
procdures de saisie avant jugement ont t engages en vertu du paragraphe (1)
ou de toute autre personne ayant un intrt dans ceux-ci, ordonner la destruction
de ces exemplaires ou planches ou rendre toute autre ordonnance qu'il estime
indique.
Le tribunal doit, avant de rendre l'ordonnance vise au paragraphe (2), en faire
donner pravis aux personnes ayant un intrt dans les exemplaires ou les
planches, sauf s'il estime que l'intrt de la justice ne l'exige pas.
Le tribunal doit, lorsqu'il rend une ordonnance vise au paragraphe (2), tenir
compte notamment des facteurs suivants :
a)

b)

(5)

Page 20

la proportion que reprsente l'exemplaire contrefait ou la planche par

rapport au support dans lequel ils sont incorpors, de mme que leur valeur
et leur importance par rapport ce support;
la mesure dans laquelle cet exemplaire ou cette planche peut tre extrait de
ce support ou en constitue une partie distincte.

La prsente loi n'a pas pour effet de permettre au titulaire du droit d'auteur de
recouvrer des dommages-intrts en ce qui touche la possession des exemplaires
ou des planches viss au paragraphe (1) ou l'usurpation du droit de proprit sur
ceux-ci.

60 Section 38.1, as enacted by S.C. 1997, c. 24, came into force on the 1st of October 1999, with
application to proceedings commenced after that date and where the infringement to which the
proceedings relate occurred after that date. There is thus no question that it is applicable on the facts
of this matter. There is little case law annotated under the section.6 That being said, there is no
dispute that section 38.1 is modelled closely on equivalent American legislation that has been the
subject matter of a significant range of case law cited on behalf of the Plaintiffs.
61 Turning to subsection 38.1(1), the Plaintiffs' election here was clearly made before final
judgment. The Plaintiffs seek statutory damages in the amount of $1,000 for each of the fourteen
(14) seized films, an amount toward the lower end of the range provided in subsection 38.1(1).
62 Counsel for the Plaintiffs urges that subsection 38.1(2) is inapplicable on the facts of this
matter. In support of this submission, counsel cites the affidavit of Michael Leung sworn the 28th of
September 2001 and filed in support of the application for an Anton Piller Order herein. More
particularly, counsel refers to paragraphs 27 to 39 of that affidavit wherein Mr. Leung details the
manner in which the Plaintiffs' alleged copyrights in the films in issue were brought to the attention
of the Defendants. This evidence remains uncontradicted in substance on the material before the

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Court. I accept counsel's submissions in this regard.

63 Subsection 38.1(3) provides for circumstances in which the minimum award of statutory
damages may be reduced. Counsel for the Plaintiffs urges that the Court not exercise its discretion
under this subsection. Once again, I accept counsel's submission in this regard.
64

Subsection 38.1(4) is clearly not applicable on the circumstances of this matter.

65 I turn then to the factors to be considered by a court in exercising its discretion regarding the
award of statutory damages. Subsection 38.1(5) details three factors: the good faith or bad faith of
the Defendants; the conduct of the parties before and during the proceedings; and the need to deter
other infringements of the copyrights in question, while noting that a court should consider all
relevant factors. I have accepted that the Plaintiffs' claimed copyrights in the films in issue were
brought to the attention of the Defendants. The Defendants nonetheless continued to display and
rent out copies of the films in issue and would appear to have also made copies of the films in issue
without the authorization of the Plaintiffs. I am satisfied that, in advance of the commencement of
these proceedings, the Defendants acted in bad faith. Further, as discussed earlier in these reasons, I
am satisfied that the conduct of the Defendant Chen, both on her own behalf and on behalf of
Formosa, during the course of these proceedings, has been reprehensible. Finally, given the nature
of the business in which the Defendants are engaged and the nature of the films in issue and other
films and like material in which the Plaintiffs claim copyright, I am satisfied that deterrence is a
significant factor.
66 In Wing v. Van Velthuizen7, Justice Nadon, then of this Court, wrote at paragraph [74] of his
reasons:
In my opinion, statutory damages should be granted. The infringement in this
case was blatant; the Respondent reproduced the Diary in its entirety. Although
the Respondent was not publishing the Diary in bad faith from the start, she was
warned several times that her conduct was infringing the Applicants' copyright.
She refused repeatedly to cease infringing the copyright and attempted to sell
"her" copyright to the Applicants for the sum of US $125,000. In my opinion, as
of the moment she received notice of her infringement, her conduct was
reprehensible. In addition, with regard to the third criteria [sic], and considering
the Respondent's behaviour, there is a definite need to deter further infringement
of the copyright in question. ...
With the exception of the reference to the Defendant or Respondent there herself claiming copyright
and attempting to sell "her" copyright, I am satisfied that all of the foregoing is equally applicable
here. Justice Nadon reduced the amount of statutory damages claimed by half, to $10,000 for
infringement of a single copyrighted work. I am satisfied that the amount claimed here, $1,000 in
respect of each of the fourteen (14) seized films in issue, some or all in multiple copies, is entirely
reasonable. I will award statutory damages in favour of the Plaintiffs and against the Defendants

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Page 22

Formosa and Chen, jointly and severally, in the aggregate amount of $14,000.
iii)

Delivery Up

67 Subsection 34(1) of the Copyright Act specifically contemplates the remedy of delivery-up.
That subsection reads as follows:
34.

(1) Where copyright has been infringed, the owner of the copyright is, subject to
this Act, entitled to all remedies by way of injunction, damages, accounts,
delivery up and otherwise that are or may be conferred by law for the
infringement of a right.

[emphasis added]
***
34.

(1) En cas de violation d'un droit d'auteur, le titulaire du droit est admis, sous
rserve des autres dispositions de la prsente loi, exercer tous les recours -- en
vue notamment d'une injonction, de dommages-intrts, d'une reddition de
compte ou d'une remise -- que la loi accorde ou peut accorder pour la violation
d'un droit.

[je sousligne]
68 As noted earlier in these reasons, certain films and back-up computer records were seized on
behalf of the Plaintiffs and taken into their possession or control, or that of their counsel, during the
execution of the Anton Piller Order issued herein at Formosa's premises at 4819 Kingsway,
Burnaby, British Columbia. Those films and back-up computer records will be ordered forfeited to
the Plaintiffs, to be disposed of as they see fit.
69 Once again in Wing v. Van Velthuizen, supra, Justice Nadon wrote at paragraphs [75] and
[76] of his reasons:
The Applicants are entitled to delivery up according to subsection 34(1) of the
Act. I will repeat the passage from Canada v. James Lorimer and Co., [1984] 1
F.C. 1065, supra, at p. 1073, on the issue of delivery up:
It likewise follows that, where the infringing work is found to include any
substantial part of a work in which copyright subsists, the copyright owner
is to be deemed owner of all copies of the infringing work and all
production plates and is prima facie entitled to the assistance of the Court
in gaining possession of them. The onus is on the infringer to establish
grounds upon which the Court may properly exercise its discretion against

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Page 23

granting such relief.... Those grounds must lie in the conduct of the
copyright owner, not in the conduct or motives of the infringer.
In my opinion, delivery up of all infringing material should be granted. The Respondent has not
established any reason why this relief should not be granted. The Respondent might not stop selling
or distributing any copies that she has in her possession.
70 Once again, I am satisfied that the same might be said here. Delivery up of all copies of the
films in issue, in the possession or under the control of either Formosa or Chen, will be ordered.
iv)

Interest

71 Sections 36 and 37 of the Federal Courts Act2 provide that, in respect of a cause of action
arising in a province, the laws relating to pre-judgment interest and post-judgment interest in
proceedings between subject and subject that are in force in the province apply to proceedings such
as this. I am satisfied that this cause of action arises entirely within the province of British
Columbia.
72 Counsel for the Plaintiffs has provided no submissions on the question of interest thus,
apparently, leaving it to the Court to determine the applicable laws and the resulting formulation for
pre-judgment and post-judgment interest. The Court declines to accept this responsibility. There
will be no award of pre-judgment or post-judgment interest.
v)

Costs and Goods and Services Tax

73 By contrast to the want of submissions regarding interest, counsel for the Plaintiffs provides
extensive submissions on the issue of costs indicating that the actual amount of fees incurred in this
proceeding, on behalf of the Plaintiffs, has been $51,500 and that the total of disbursements and
goods and services tax on disbursements amounts to $3,467.98. Counsel goes on to request an
award approximating one-third of actual fees, that is to say $17,500, and actual disbursements and
goods and services tax on disbursements.
74 Subsection 34(3) of the Copyright Act provides that the costs of all parties in any proceeding
in respect of the infringement of a right conferred by that Act shall be in the discretion of the court.
This accords with the general rule regarding costs reflected in the Rules of this Court.
75 I am satisfied that an award of costs above the ordinary scale is justified in this proceeding,
given the conduct of the Defendants, Formosa and Chen. Further, I am satisfied that a lump sum
award is appropriate to avoid the difficulties that one can anticipate would be encountered in
securing a formal assessment of costs. In the result, an award of costs will go in favour of the
Plaintiffs against the Defendants Formosa and Chen, jointly and severally, in the amount of $17,500
for fees, an amount that, in the Court's view, is entirely reasonable, and in the rounded amount of
$3,450 in respect of disbursements and goods and services tax on disbursements.

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Page 24

PERIPHERAL MATTERS
a)

Confidentiality

76 The Court file in respect of this matter was originally opened under the style of cause
"Confidential v. J. Outtrim", presumably with a view to preserving confidentiality with respect to
the application for an Anton Piller Order and, on the issuance of that Order, to continue the
confidentiality pending execution of the Order. Those objectives appear to have been fulfilled. It is
not in the least evident to the Court, at this stage, why any element of confidentiality in respect of
the Court file should continue to be maintained and indeed, the Anton Piller Order itself indicates
the confidentiality has been lifted. That reality is not noted on the file. The Court's judgment and
order herein, in the interest of open access to proceedings before this Court, will lift all aspects of
confidentiality with respect to the Court's file.
b)

Status of Counsel for the Defendants

77 Early on in these reasons, the Court noted that counsel for the Defendants wrote to the Court
on the 11th of March 2005 to advise the Court that "we", that is to say the firm of solicitors
representing the Defendants, are "...withdrawing from representing the Defendants in this action."
The letter continues by indicating that it is understood that the Defendants will be self-represented
and that a Notice of Intention to Act in Person will shortly be filed. There is no evidence that any
such Notice has been filed or otherwise received by the Court.
78 Rules 124 and 125 provide that a party may change or remove its solicitor of record or appoint
a solicitor of record by serving and filing a notice in a particular form and that a solicitor of record
may seek an order of the Court ordering his or her removal from the record. Neither of the
methodologies for removal of the solicitors of record for the Defendants have been followed. A
mere letter from counsel advising the Court that he or she is withdrawing from representing a party
is insufficient. In the circumstances, the firm of Oyen Wiggs Green & Mutala remains of record for
the Defendants in this proceeding.
SUMMARY
79

This action will be dismissed as against the Defendant Chan.

80 The statement of defence herein will be struck out as against the defendants Formosa and
Chen and judgment by default will go in favour of the Plaintiffs against Formosa and Chen
declaring that, as between the Plaintiffs and Formosa and Chen, copyright in the films in issue
subsists in favour of the Plaintiffs, enforceable in Canada by the Plaintiff L.S. Entertainment,
providing a permanent injunction against the Defendants Formosa and Chen from infringing the
Plaintiffs' copyright in the films in issue, granting statutory damages in the amount of $14,000 in
favour of the Plaintiffs, jointly and severally as against the Defendants Formosa and Chen,
providing for forfeiture to the Plaintiffs of the seized films and back-up computer records and for

149

Page 25

delivery up to the Plaintiffs by the Defendants Formosa and Chen of all copies of the films in issue
that are under their possession or control, and for costs in favour of the Plaintiffs, jointly and
severally against the Defendants Formosa and Chen, in the aggregate amount of $20,950 inclusive
of fees, disbursements and goods and services tax.
81 All aspects of confidentiality in respect of the Court file in this matter will be lifted. The firm
of Oyen Wiggs Green & Mutala remain solicitors of record for the defendants to the date of
judgment.
GIBSON J.
cp/e/qw/qlklc/qlhcs

1 S.O.R./98-106.
2 R.S., 1985, c. C-42.
1 S.O.R./98-106.
3 [1990] 2 S.C.R. 959.
4 [1998] F.C.J. No. 1655 (F.C.T.D.).
5 (1990), 34 C.P.R. (3d) 426 (F.C.T.D.).
6 See: Canadian Copyright Act Annotated, Carswell, 2002, looseleaf, to release 3,
editors-in-chief, Richard, Carrire, Lger, Robic, Nahabedian and Grenier; and Hughes on
Copyright & Industrial Design, 2nd edition, Butterworths.
7 (2001), 9 C.P.R. (4th) 449 (F.C.T.D.).
2 R.S.C. 1985, c. F-7.

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150

Cherkassy(The)v.FarEasternShipping
Co.,1999CanLII9198(FC)
Date:

19991215

Docket: T89194
Citation:Cherkassy(The)v.FarEasternShippingCo.,1999CanLII9198(FC),
<http://canlii.ca/t/1j1lh>retrievedon20141123

Citedby0documents

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Date:19991215

Docket:T89194

Actioninremagainstthevessel"Cherkassy"andthevessel"Anadyr"
(asistership)andinpersonamagainsttheownersandcharterers
ofthevessel"Cherkassy"
BETWEEN:
PIONEERGRAINCOMPANYLTD.,
M/SSAMPATINDUSTRIALANDCONSTRUCTION
CO.LTD.,ALLOTHERSHAVINGANINTEREST
INTHECARGOLADENONBOARD
THEVESSEL"CHERKASSY",

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Plaintiffs,
and
FAREASTERNSHIPPINGCO.(FESCO),
THEOWNERSANDCHARTERERSOFTHE
VESSELS"CHERKASSY"AND"ANADYR"
ANDTHEVESSELS"CHERKASSY"AND"ANADYR",
Defendants.

REASONSFORORDER
MR.JOHNA.HARGRAVE,
PROTHONOTARY
[1]Thesereasonsariseoutofamotiontostrikeoutastatementofclaimforcargo
damagebyreasonofbreachesofoursuccessiveOrdersfortheproductionofspecific
relevantavailabledocuments.Themotionissuccessfulbecausethebreachinthisinstance
constitutesconductamountingtoabuse.
[2]Inmoredetail,theactionitselfinvolvesaclaimforwettingdamagetoaportionofa
cargoofdriedpeascarriedfromVancouvertoBombayanddischargedatMumbai,India.
Thereisnodoubtthatsomeofthepeasbecamewetduringoceancarriage,howeverthe
Defendant,FarEasternShippingCo.,quiteproperly,wishedtobecertainastotheactual
amountofdamagessufferedonceallofthecargohadbeensold.Afteraseriesofrequests,
motions,andpartialdiscoveries,theDefendantwasunabletoobtainfromM/SSampat
IndustrialandConstructionCo.Ltd.(alsoreferredtoas"Sampat")theproductionof
documentsorderedbytheCourt.ThusthismotiontostrikeouttheStatementofClaim,not,
asmighthavebeenargued,onthebasisofdelayandlackofinterestonthepartofthe
Plaintiffs,aswasthecaseinTrusthouseForteCaliforniaInc.v.GatewaySoap&Chemical
Co.(1999),1998CanLII8897(FC),86C.P.R.(3d)28(F.C.T.D.),butonthebasisofa
breachofaseriesofspecificordersfromtheCourtforproductionofdocuments.Thisresult
isadrasticone,buttheresultreflectsthecircumstances.However,theresultisnota
reflectionuponcounselforthePlaintiffs,oruponthecoPlaintiff,PioneerGrainCompany
Ltd.,oruponsubrogatedunderwriters.
[3]Beginningwithsomerelevantproceduralevents,theDefendanthasnotbeenableto
obtainproductionofacertainandspecificrunofcomputerproduceddocumentsfromthe
Plaintiff,M/SSampatIndustrialandConstructionCo.Ltd.,ofBombay,documents
acknowledgedbySampattoexist,instoragenearCalcutta.Thedocuments,beingclearly
relevant,fortheyconsistoforiginalcomputerprintouts,includinginvoices,preparedfortax
purposes,aredocumentsbywhichtheDefendantmighttestthedamagesclaimed:the

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relevanceofsuchmaterialisclearlysetoutinRedpathIndustriesLtd.v.TheCisco,1993
CanLII3025(FCA),[1994]2F.C.279(F.C.A.).InTheCiscothePlaintiffsugarrefiner
blendedsmallamountsofdamagedrawsugarwithundamagedsugar,sharplyreducingthe
damageclaim.HeretheDefendantwishestoexplore,bythediscoveryprocess,asimilar
possibility.
[4]Turningtotheprosecutionoftheclaim,thisactionforsome$350,000(US)was
commencedinAprilof1994,aboutayearafterthecargowasshipped.Induecourse,the
actionhavingapparentlylanguished,theCourtissuedaNoticeofStatusReview,ineffecta
showcauserequestrequiringthePlaintiffstoexplainwhytheactionoughtnottobe
dismissedfordelay.FromthesubmissionstotheNoticeofStatusReviewitisclearthat
soundmarketvalueofthecargoonarrivalwasacontentiousissue,thattheDefendanthad
requesteddocumentsbearingonthesoundmarketvalue,leadingtothedeterminationofthe
quantumoftheclaimandthatthematerialbywhichtotestthesoundmarketvaluehadnot,
intheDefendant"sview,beenproduced.Thisbringsustoaseriesofmotionsandordersfor
productionofdocumentsandforexaminationsfordiscovery.
[5]ThePlaintiffshad,betweenthelossin1993andtheproductionoftheiraffidavitof
documentsnearlythreeyearslater,14February1996,ampletimetoconsider,learnabout
andunderstandtheircaseandtodeterminewhatwasrequiredtoprovethatcase.However,
thePlaintiffs"affidavitofdocumentswasdemonstrablydeficientforitcontainedlittleorno
materialastosale,storage,handlingorfinaldispositionofthecargoofpeas.Requestsfor
thatmaterialwereineffective.Asaresulton29March1999theDefendantobtainedan
OrderthatthePlaintiffsprovideafurtherandbetteraffidavitofdocumentsbythe19 thof
April,1999,beinganunswornaffidavitinviewoftheshorttimeframe,fortheDefendant
wishedtogetonwithexaminationsfordiscoveryinIndia.TheOrderwasfairlyspecific
requiringproductionofdocumentsbywhichtoestablishsoundmarketvalueofthecargo:
1.ThePlaintiffsshallprovideanunswornfurtherandbetteraffidavitofdocuments,by
19April1999,containingthetypeofdocumentssetoutinSchedule"A"tothemotion,
namely:
1.AllofthePlaintiffs'claimdocumentsincludingthoseuponwhichitintendstorely
toestablishsoundmarketvalueofthecargoandalldocumentsrelatingtotheultimate
dispositionofthecargo.
2.AlldocumentsofthePlaintiffsrelatingtotheinternalhandlingandorre
conditioning,warehousing,transport,contractsandinvoicesforsaleshowingtheprice
obtainedforalloftheallegedlydamagedcargoandforallofthesoundcargodischarged
fromthevesselCherkassy.
3.AlldocumentsofthePlaintiffsrelatingtothedisposalandordestructionofany
portionoftheallegedlydamagedcargoincludingtruckandweightreceipts,tallycheck
sheetsandgovernmentcertificates.
Theaffidavitshallbeswornatthefirstreasonableopportunity
2.ThePlaintiffsshallproducethedocumentslistedinthefurtherandbetteraffidavitby
19April1999

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[6]ThePlaintiffsfailedtocomplywiththeOrderbythe19thofApril.Giventhebreach
oftheOrderandtheapparentlackofcooperation,theDefendantobtainedasecondOrder,
20April1999,requiringthePlaintiffstoproduceawitnessfromSampat,arepresentativeof
thesurveyorwhoattendedatthedischargeofcargoand,again,allofthedocumentsordered
onthe29thofMarch.
[7]ThePlaintiffsignoredthissecondOrder,althoughthewitnessfromSampat,Mr.
Kothari,saidthatallofthespecificoriginaldocumentsandinvoicessoughtbythe
DefendantwerelocatedinawarehouseinGauhati,northofCalcutta.
[8]ThePlaintiffs,failingtoproducetherequesteddocumentsduringthenextdozen
weeks,theDefendantbroughtamotioninJuly,1999,seeking,amongotherthings,tostrike
outtheStatementofClaimor,asoneofseveralalternatives,afurtherorderforafurtherand
betteraffidavitofdocumentsandthatthenexttriptoIndia,tocompletethediscoveryof
Mr.Kothari,beatthePlaintiffsexpense.Idecidedthatthemotiontostrikeout,inviewof
failuretocomplywithpreviousOrders,cameperilouslyclosetosuccesshowever,because
itwouldbeaDraconianremedy,thePlaintiffsoughttohaveanotheropportunitytoproduce
documentsandthusanotherspecificOrderastowhatmustbeproduced,includingthe
documentssaidtobeattheGauhatiwarehouse,withthePlaintiffspayingthecostsand
disbursementsofDefendant"scounselandcourtreporterfortheirsecondattendancein
India.Productionwastobeaccomplishedonorbefore20September1999.
[9]ThePlaintiffswereapparentlyunabletoprovidethedocumentswithintherequired
time.TheythusbroughtamotionbeforeAssociateChiefJusticeRichard,ashewasthen,to
obtainfurthertimeforproduction.Theysucceededonthatmotion,forwhiletheAssociate
ChiefJusticerequiredproductionofthedocumentsaspreviouslyordered,heextendedthe
timeforproductionuntil10a.m.on3November1999,withexaminationsfordiscoveryin
Indiatobecompletedbythe5thofNovember1999.HereIwouldnoteandthisisnot
contradicted,thattherewasanstatementbyPlaintiffs"counsel,totheAssociateChief
Justice,thatifdocumentationwerenotproducedtheactionmustbedismissed.Thisbrings
ustothepresentmotionandtheeventsleadinguptoit.
[10]TheDefendanthasestablished,ondiscovery,thattheoriginalcomputerprintouts,
whichweredonefortaxpurposes,areinawarehouseatGauhati,ineasternIndia,wherethe
actualrecordsoftheBombayoperationofM/SSampatIndustrialandConstructionCo.Ltd.
arekept.CounselfortheDefendantalsoestablishedthatthediscoverywitnessknewthat
therewere,asoftheNovember1999discovery,fouroutstandingFederalCourtOrdersfor
productionofspecificdocuments,butreasonedthatsimilarmaterialmightbereproducedby
computerandthusitwasnotnecessarytoproducetheearlierspecificmaterial.Moreover,
thewitnesssaidthattogotoGauhatiandbringthedocumentsbackwouldcostalotof
money.ThewitnesssuggestedthatcounselwasmostwelcometotraveltoGauhatiand
searchforthedocumentshimself.Hereonenotesacertainlackofinterestinthewhole
proceedingbythePlaintiffs"witness,butprobablyM/SSampatIndustrialandConstruction
Co.Ltd.hadalreadybeenpaidoutbytheirsubrogatedunderwriters.Indeed,thewitness
deposed,atpage135ofthediscoverytranscript,throughcounsel,that:
Theinvoicesforallthesalesexistinaledger,inabook,andthey"vebeenmarked,but
thesecannotbeproduced,theyhavetokeepthem,sowhatthey"vedoneisfromtheir
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computer,they"veproducedanexactsamecopyoftheinvoices.
Thus,intheviewofthewitnessproducedbySampat,therewasnoneedtoproducethe
documentsfromGauhati.
[11]Finally,thatwitness,Mr.Kothari,said,onthe5November1999discoveryinIndia,
thatSampathadcheckeditsfilesinGauhatiandthematerialinthosefileswasthesameas
thecomputerinBombaywouldproduceandthus:"...therewasnopointinbringingthe
samedocumentsfromGauhatitohere."(Page164ofthetranscript).IneffectMr.Kothari,
inthefaceoffourCourtOrders,seemedtobemakingsomedecisionastotherelevance
bothofasmallbundleofdocumentsandoftheCourt"sOrders.
[12]CounselforthePlaintiffs,doingthebestthathemightforhisclients,soughtto
rationalizethefailuretoproduceasaculturalmisunderstandingandanerroronthepartof
counselwhodidnotrealizethatwhiletheoriginalinvoicesgeneratedfortaxpurposeswere
inGauhati,thatmaterialwasinfactcomputergenerated,withtheoriginalinformationbeing
inthecomputer.Thatisputtingthebestpossiblelightonthematter,butitdoesnotexplain
thefailuretoproduceaccessiblespecificdocumentsinthefaceoffourclearandspecific
CourtOrders.
[13]NordidthePlaintiffsseektomitigatethesituationbyoffering,eitherbyaffidavitor
evenbyletterproducedinthePlaintiffs"motionbrief,tobringthedocumentsfromGauhati.
Indeed,giventheleadtimeonthepresentmotionitwouldhavebeenasimplematterfor
M/SSampatIndustrialandConstructionCo.Ltd.tohavethedocumentsbroughtfrom
GauhatitoBombayanddeliveredorfaxedtocounselfortheDefendants.Alternately,given
thelargeamountatstake,someonecouldhavebeensentfromCanadatoGauhatitobring
thedocuments,forSampatsays,throughitswitness,thatitknowsexactlywherethe
documentsarelocated.Instead,neartheveryendofthehearingofthepresentmotion,when
itbecamefairlyobviousthatthingswerenotgoingwellforthePlaintiffs,counselforthe
PlaintiffsofferedtotrytobringthedocumentsfromGauhati.Thiswasfartoolategiventhe
pasthistoryofthePlaintiffsignoringtheOrdersoftheCourtforproduction.
[14]DespitevarioussubmissionsbycounselforthePlaintiffs,includingthattheoriginal
documentisinthecomputerandallelseisacopy,atissuehereisnotthenatureof
informationstoredelectronicallyinacomputer,informationwhichMr.Kotharidesposed,
ondiscovery,thathecouldimmediatelyprintout50timesifasked.Certainlyadocument
includesanymaterialwhichiscapableofbeingread,computerpreservedrecordsbeingno
exception,solongasitisestablishedthattherewasnoimproperuseofthecomputerand
thatitwasoperatingproperly.Butthatisnottheissuehere.
[15]AtissueisthebreachoffourCourtOrders,withsomerationalization,butwithout
anyexcuse.Nowacourtwillnotgenerallystrikeoutaclaimwhenproductionofdocuments
doesnotcomplywithacourtorder,forthatisadrasticremedy.Yetordersaremeanttobe
obeyedsolongasitisreasonablypossibletodoso.Whenthefailuretocomplyisconduct
amountingtoanabuseanactionwillbeterminatedandhereIwouldrefertoSmithPacking
Corporationv.GainvirTransportLtd.(1992),46F.T.R.62,adecisionofMr.Justice
MacKay.InSmithPackingtheplaintiffssoughttostrikeoutadefencebecausealistof
documentsfiledbythedefendant,pursuanttoCourtOrder,didnotcomplyeitherwiththe

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Court"sOrderorwiththeFederalCourtRules.Mr.JusticeMacKaynotedthat:
Thereliefsought,strikingthedefence,isaverydrasticremedyforproceduralfailureandit
oughtnottobeprovidedexceptwhereitisveryclearthatthedefendantparty"sconduct
constitutesanabuseoftheprocessoftheCourt.(Page70)

[16]InthepresentinstancethereisaclearabusebyaPlaintiffwhohasignoredfour
CourtOrdersforproductionofdocuments,eventhoughthedocumentsare,bythe
Plaintiffs"ownadmission,inexistenceandavailable.TheDefendantsareentitledtosee
thatspecificsetofdocuments.TheyhavebeenfrustratedtimeandagainbyaPlaintiffwho
seemstohavenointerestinproducingthedocumentsandwhoispreparedtoruntherisk
associatedwithignoringfourspecificCourtOrders.Theactionisthusdismissedbyreason
ofabuseofprocess.
[17]CounselfortheDefendantssoughtcostsonanenhancedscale.Todosomightbe
justifiedinordertobringhomeapointtoawaywardlitigant.However,inthepresent
instancethesanctionofhavingalargeclaimstruckoutissufficient.Costs,midrangein
ColumnIIIaresufficienttogotowardtheDefendants"costs.

(Sgd.)"JohnA.Hargrave"
Prothonotary
December15,1999
Vancouver,BritishColumbia
FEDERALCOURTOFCANADA
TRIALDIVISION
NAMESOFCOUNSELANDSOLICITORSONTHERECORD
COURTFILENO.:T89194
STYLEOFCAUSE:PIONEERGRAINCOMPANYLTD.,M/SSAMPAT
INDUSTRIALANDCONSTRUCTIONCO.LTD.,ALLOTHERSHAVINGINTEREST
INTHECARGOLADENONBOARDTHEVESSEL"CHERKASSY"
v.
FAREASTERNSHIPPINGCO.(FESCO),THEOWNERSAND
CHARTERERSOFTHEVESSELS"CHERKASSY"AND"ANADYR"ANDTHE
VESSELS"CHERKASSY"AND"ANADYR"

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PLACEOFHEARING:VANCOUVER,B.C.
DATEOFHEARING:December6,1999
REASONSFORORDEROFMR.JOHNA.HARGRAVE,PROTHONOTARY
DATED:December15,1999
APPEARANCES:
Mr.JeanFrancoisBilodeauforthePlaintiffs
Mr.ThomasHawkinsfortheDefendants
SOLICITORSOFRECORD:
SprouleCastonguayPollack
Montral,PQforthePlaintiffs
Campney&Murphy
Vancouver,BCfortheDefendants

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157

BayerAGv.ApotexInc.,1998CanLII8327
(FC)
Date:

19980821

Docket:

T3596

Other

82CPR(3d)452154FTR229

citations:
Citation:

BayerAGv.ApotexInc.,1998CanLII8327(FC),<http://canlii.ca/t/49zn>retrieved
on20141123

Citedby3
documents

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Date:19980820Docket:T3596andT59196
BETWEEN:
BAYERAGandBAYERINC
Applicants.
AND
APOTEXINC.andTHEMINISTEROFNATIONALHEALTHANDWELFARE
Respondents.
REASONSFORORDER
ROTHSTEIN,J.:
[1]IncourtfilesT3596andT59196Apotexmovestostrikeareplacementand
replyaffidavitfiledbyBayeronthegroundsthatApotex'agreementtothefilingofthe
affidavitandtheconsentcourtorderallowingitwereobtainedbymisrepresentation.'
1There.isnorighttofileareplyorareplacementaffidavit.Acourtorderauthorisingsuch

filingisrequired.
Page:2[2]Therelevantfactsarethese.Theseareprohibitionapplicationsunderthe
PatentedMedicines(NoticeofCompliance)Regulationsinrespectofthemedicine
Ciprofloxacin.OneofApotex'allegationswasthatBayer'spatentwasinvalidbecauseit
wasobtainedwithoutdisclosuretotheCanadianPatentOfficeofpriorChileanpatent
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proceedingscoveringCiprofloxacin,andbecausetheChileanpatentapplicationwasfiled
morethanoneyearbeforetheCanadianpatentapplication.ToaddressthisissueBayerfiled
theaffidavitofRamonLeiva,aChileanlawyerandpatentattorney.Inresponse,Apotex
filedtheaffidavitofVladimirGarciaHuidoboro,alsoaChileanlawyerandpatentattorney.
[3]Itappearsthatalthoughcrossexaminationonhisaffidavitwouldberequiredand
hewouldbeaskedtofileareplyaffidavittotheaffidavitofMr.Huidoboro,Mr.Leivadid
notwanttoparticipatefurtherintheproceedings.BayerwasinformedbyitsChileanagent
thatMr.Leiva'sreasonfornotwishingtoparticipatefurtherwasonaccountofsevereheart
diseaseinJune,1996,afterthefilingofhisoriginalaffidavit.BayeradvisedApotexofthis
information.BecauseillnesswasthereasonforMr.Leivanotbeingabletoparticipate
further,ApotexagreedthattheLeivaaffidavitcouldbewithdrawnandthatareplyaffidavit
ofSantiagoLarraguibelZavala,aChileanlawyerandpatentattorney,couldbeutilizedby
BayerbothinreplyandinreplacementfortheLeivaaffidavit.TheZavalaaffidavitwould
bebothareplacementfortheLeivaaffidavitandareplytotheHuidoboroaffidavit.Nadon,
J.grantedaconsentmotionbyBayertofiletheZavalaaffidavit.'
'TheactualsequenceofeventswasthatBayerappliedtofileareplyaffidavit.The
affidavitcontainedevidencewhichwasinreplacementfortheLeivaevidence.Afterthe
affidavitwasfiledApotexdidnotobjecttothereplacementportionofthatevidence
becauseoftherepresentationmadetoitrelativetoMr.Leiva.
Page:3[4]ThroughitscontactsinChile,Apotexsubsequentlyascertainedthatthe
storyregardingMr.Leiva'sillhealthinJuneof1996mayhavebeenuntrue.Apotex
conductedaninvestigationandfoundoutthatMr.Leivahadnotbeenillatthattime.Indeed
ApotexobtainedanaffidavitfromMr.Leivahimselftothateffect.InthisaffidavitMr.
LeivastatesthatheadvisedBayerwhenhesignedhisfirstaffidavitthathedidnotwishto
beinvolvedfurtherandthathisrefusaltoprovideafurtherreplyaffidavitwasbasedonhis
originalstatedintentionnottoparticipatefurther,andnotonanysubsequentillhealth.
[5]ApotexnowsaysitwouldneverhaveagreedtotheZavalaaffidavithadthealleged
illhealthofMr.Leivanotbeenrepresentedtoitandthatitwouldhavesimplymovedto
striketheoriginalLeivaaffidavitifMr.Leivadidnotappearforcrossexamination.Asa
resultofMr.Leivanotparticipatingfurtherandthemisrepresentationwhichwasthebasis
fortheZavalareplacementevidence,ApotexsaysthatboththeLeivaandZavalaaffidavits
shouldbestruck.
[6]Whilethereissomedisputeastoexactlywhosaidwhattowhomandwheninthe
affidavitevidenceandcrossexaminations,Ifindasafact,onabalanceofprobabilities,that
Mr.LeivadidrepresenttoBayer'sChileanagentthathedidnotwishtoparticipatefurther
becauseofillhealthandthatsuchrepresentationwasmadeonlyafterhehadbeenaskedto
filearespondingaffidavit.Theotheralternative,thatBayer'srepresentativeinChilemade
upthestoryaboutMr.Leiva'Sillhealthisnotlikely.Indeedtheillhealthstorywas
basedonheartdiseasewhichMr.Leivaadmits,althoughhesayshehadaheartattackafew
years
Page:4earlierandwasingoodhealthinJuneof1996.Itwouldbeastrangecoincidence
thatthedetailsofMr.Leiva'shealthproblemswouldbeknowntoBayer'sagentunlessthey
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weretoldtohimbyMr.Leiva.Inadditionthereiscorrespondenceattherelevanttime
betweenBayer'sChileanagentandMr.LeivathatisonlyconsistentwithMr.Leiva's
ongoingparticipation,oratleastBayer'shonestbeliefthatMr.Leivawouldcontinueto
participate.HadMr.Leivarefusedtoparticipateimmediatelyaftersigninghisfirstaffidavit,
thissubsequentcorrespondencewouldnotlogicallyfollow.
[7]Apotexpointstosomelapsesandinconsistenciesinthecrossexaminationof
Bayer'sChileanagentbutIdonotconsiderthemmaterial.InthecircumstancesIam
satisfiedwiththetruthofBayer'saccountofthefacts.
[8]Whatoccurred,however,stillamountstowhatIwouldrefertoasaninnocent
misrepresentationbyBayerwhichledApotextoagreetothereplacementaspectofthe
Zavalaaffidavit.Whileanalogiesmustbemadewithcare,thecircumstancesheresuggestto
meaparalleltoaninnocentmisrepresentationinthecontextofcontractlawwhichcould
giverisetorecisionofthecontract.HerethismightgroundanargumentbyApotexthat
sinceApotexagreedtoLeiva'saffidavitbeingwithdrawnbecausehedidnotappearfor
crossexaminationandZavala'sreplacementevidencebeingsubstitutedonthebasisofan
innocentmisrepresentationbyBayer,thattheLeivaaffidavit,thereplacementZavala
evidenceandApotex'replyevidencetotheLeivaevidenceshouldbestruck.Thissolution
wouldtakeaccountofMr.Leiva'sfailuretoappearforcrossexaminationandthe
misrepresentation
Page:5givingrisetotheZavalareplacementevidence.InotherwordsonlytheHuidoboro
evidence,totheextentitwasnotinresponsetoLeiva'sinitialevidence,andtheZavala
evidence,onlytotheextentitrepliedtoHuidoboro'sindependentevidence,shouldremain.
[9]However,therearetwodifficultieswiththissolution.FirstApotexrefusesto
withdrawanyportionofHuidoboro'sevidence,i.e.thatportionwhichisinresponsetothe
LeivaaffidavitaswellasthatportionwhichisindependentoftheLeivaevidence.It
seemssomewhatinconsistentforApotextoinsistthatBayer'soriginalandreplacement
evidencebestruckbutthatApotex'evidenceinreplytothestruckevidenceshouldremain.
Moresignificantly,however,thereisapracticalproblemofsegregatingtheresponseand
independentevidenceofHuidoboroandthereplacementandreplyevidenceofZavala.
Indeed,therehasalreadybeencrossexaminationonbothaffidavitsanditwouldseem
unrealistictotrytosegregatethecrossexaminationsasbetweenwhatshouldbestruckand
whatshouldremain.Thehearingonthemeritsoftheprohibitionapplicationisscheduled
forOctober5,1998andthefilingofnewaffidavitsandengaginginnewcrossexaminations
of.deponentsinChile,includingmotionsforsame,isnotapracticalalternative.
[10]Inthecircumstances,whiletheinitialLeivaaffidavitshouldbestruckbecausehe
didnotappearforcrossexamination,astheHuidoboroaffidavitwillremaininitsentirety,
theZavalaevidenceshouldalsoremain.WhileApotexhasbeenthevictimofaninnocent
misrepresentation,Ithinkthisminimizestheprejudice(if
limitedproceedings.ApotexhashadtheopportunitytocrossexamineMr.Zavalaanditis
y)anddisruptioninthesetime
Page:6fullyopentoApotextoargueonthemeritsofBayer'spositionwithrespectto
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ChileanPatentLawandproceedingsinsupportofitsallegationthatBayer'sCanadian
patentforCiprofloxacinisinvalid.Iamsatisfiedthatwhilethisresultisnotperfection,itis
adequate.
[11]InproceduraldisputessuchasthisoneinwhichtheCourtisrequiredtoexerciseits
discretionhavingregardtofairnessandtheexpeditionofproceedings,eachcasewillturn
onitsownfacts.However,itisimportanttonotethat,asageneralrule,affidavitswillbe
struckifthedeponentdoesnotappearforcrossexaminationandreplacementaffidavitswill
notbeallowediftherearenotjustifiablegrounds.
[12]Apotex'motiontostriketheoriginalLeivaaffidavitisgranted.Itsmotiontostrike
theZavalaaffidavitandcrossexaminationisdismissed.Apotex'alternativerelief,that
Leiva'ssecondaffidavitrelatingtohisillhealthbeadmittedaspartoftherecordis
dismissed.Itsusefulnessintheproceedingsonthemeritshasnotbeenestablished.
[13]ItwastheinnocentrepresentationmadebyBayerthathasgivenrisetothese
proceedings.AlthoughBayerhasbeensuccessfulonthismotion,therewillbenoawardof
costs.
Toronto,OntarioAugust21,1998
"MarshallRothstein"
Judge
FEDERALCOURTOFCANADANamesofCounselandSolicitorsofRecord
COURTFILENO.:T3596andT59196
STYLEOFCAUSE:BAYERAGandBAYERINCv.
APOTEXINC.andTHEMINISTEROFNATIONALHEALTHANDWELFARE
PLACEOFHEARING:TORONTO,ONTARIO
DATEOFHEARING:FRIDAY,AUGUST21,1998
REASONSFOR
ORDERBY:ROTHSTEIN,J.
DATED:FRIDAY,AUGUST21,1998
APPEARANCES:Mr.NeilBelmore
REPRESENTINGBAYERAG,etal
Mr.HarryRadomskiMr.AndrewBrodkin
REPRESENTINGAPOTEXINC.,etal
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SOLICITORSOFRECORD:
Gowling,Strathy&Henderson4900CommerceCourtWest,POBox438,
Stn.CommerceCourtToronto,OntarioM5L1J3
FORBAYERAG.,etal
Goodman,Phillips&VinebergBox24,2400250YongeStreet,Toronto,Ontario
M5B2M6
FORAPOTEXINC.,etal

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Court File No.: A-218-14

FEDERAL COURT OF APPEAL

BETWEEN:
DR. GBOR LUKCS
Applicant
- and CANADIAN TRANSPORTATION AGENCY
Respondent

RESPONDING MOTION RECORD OF THE

PROPOSED INTERVENER,
PRIVACY COMMISSIONER OF CANADA
(Response to the Applicants motion brought pursuant to Rules
91,94, 96, and 97 of the Federal Courts Rules)

JENNIFER SELIGY
Legal Counsel
Office of the Privacy Commissioner of Canada
30 Victoria St.
Gatineau, Quebec K1A 1H3
Tel. (direct): (819) 994-5910
Fax:
(819) 994-5863
E-mail:
[email protected]
Legal Counsel for the Privacy Commissioner of
Canada