W & M Wire & Metal Products Ltd. v. Rachalex Holdings Inc.

W & M Wire & Metal Products Ltd. v. Rachalex Holdings Inc. Court (s) Database Federal Court of Appeal Decisions Date 2007-04-17 Neutral citation 2007 FCA 156 File numbers A-47-07 Decision Content Date: 20070417 Docket: A-47-07 Citation: 2007 FCA 156 Present: LÉTOURNEAU J.A. BETWEEN: W & M WIRE & METAL PRODUCTS LTD. and 921410 ONTARIO LTD. c.o.b. THE DISPLAY BANK Appellants and RACHALEX HOLDINGS INC. and TYRONE NAGTHALL Respondents Dealt with in writing without appearance of parties. Order delivered at Ottawa, Ontario, on April 17, 2007. REASONS FOR ORDER BY: LÉTOURNEAU J.A. Date: 20070417 Docket: A-47-07 Citation: 2007 FCA 156 Present: LÉTOURNEAU J.A. BETWEEN: W & M WIRE & METAL PRODUCTS LTD. and 921410 ONTARIO LTD. c.o.b. THE DISPLAY BANK Appellants and RACHALEX HOLDINGS INC. and TYRONE NAGTHALL Respondents REASONS FOR ORDER LÉTOURNEAU J.A. [1] I am being asked to decide, on an urgent basis, a motion for a stay of proceedings brought pursuant to paragraph 50(1)(b) of the Federal Courts Act and Rules 3, 35(2), 53(1) and (2), 369 and 401 of the Federal Courts Rules. I will make a brief review of the facts leading to this motion. I will then address the issues of irreparable harm and balance of convenience which, in my respectful view, militate in favour of a dismissal of the motion. FACTS AND PROCEEDINGS LEADING TO A MOTION FOR A STAY OF PROCEEDINGS [2] The appellants, W & M Wire & Metal Products Ltd., make a motion to stay the summary judgment hearing scheduled before the Federal Court on April 24, 2004. The date of the hearing was fixed by way of an oral direction from Chief Justice Lutfy. The appellants seek the stay of that hearing pending the determination of an appeal launched against a decision of Hugessen J. of the Federal Court acting as case management judge. [3] The decision of Hugessen J. was rendered on January 12, 2007 pursuant to a motion by the appellants to introduce, by way of affidavit and exhibits attached thereto in the form of an intended expert report, evidence on the issue of the summary judgment. [4] Hugessen J. was of the view that the proposed evidence was not relevant. At paragraph 1 of his reasons for order, he wrote: It deals largely with alleged issues of obviousness and inutility of the patent in suit; those issues have not been raised by the statement of defence or otherwise pleaded. It also purports to introduce a large number of pieces of prior art, none of which have previously been pleaded. [5] The appellants’ motion to file new evidence in the summary judgment hearing came at a time “when the issues both in the action as a whole and in the summary judgment motion had been joined”: see paragraph 2 of his reasons for order. In addition, both sides had filed memoranda of fact and law in preparation of the summary judgment hearing. [6] At paragraph 3 of his reasons, he added the following: To allow the present motion would necessarily result in further substantial delay, not the least of which would be the necessity for amendments to the pleadings, possible further discoveries and cross-examination on affidavits. All of this in my view would cause a prejudice to plaintiff which could not be adequately compensated by an award of costs. [7] I should give additional background information for a better understanding of Hugessen J.’s order to the Judicial Administrator to fix the summary judgment for hearing for the duration of one day. [8] The respondents on this motion, Rachalex Holdings Inc. and Tyrone Nagthall, who are the plaintiffs in the Federal Court, filed a Statement of Claim in the Federal Court in July 22, 2004 seeking 1) a declaration that the appellants have infringed their Canadian patent, 2) interim, interlocutory and permanent injunctions, damages or an accounting of profit and, 3) an order that the appellants deliver up to them the impugned articles as well as the tools and machineries used in infringing the patent. [9] The appellants served a Statement of Defence on October 4, 2004. The Statement of Defence was cast in broad terms. It led to a successful motion by the respondents for particulars. Counsel for the appellants at the time elected to provide particulars broad in terms and limited both in number and as to the issues raised in the Statement of Claim. [10] The particulars were given on January 14, 2005. Pleadings closed with the service of the respondents’ reply on January 27, 2005. Then the respondents served and filed their Notice of Motion for summary judgment as well as affidavit evidence in support of it. [11] On July 12, 2006, at a case management conference, Hugessen J. issued an order finalizing the time-frame for the filing of memoranda of fact and law and set the hearing date on the motion to November 1, 2006. [12] After all the proceedings were completed and shortly before the scheduled hearing on the summary judgment motion, counsel for the appellants withdrew as counsel of record on the basis that he was unable to obtain instructions from his client and his accounts had not been paid: see respondents’ record, page 2, paragraph 12 of the affidavit of Lori-Anne Deborba. The order authorizing withdrawal issued on October 24, 2006. [13] New counsel for the appellants was appointed on November 17, 2006. He filed and served, on January 5, 2007, his motion for leave to file supplementary responding material in connection with the summary judgment motion. It is this motion that was dismissed by Hugessen J. on January 12, 2007. A Notice of Appeal of that decision was filed on January 19, 2007. The appeal is pending before this Court. THE POWER OF THIS COURT TO GRANT A STAY IN THESE CIRCUMSTANCES [14] Paragraph 50(1)(b) of the Federal Courts Act gives this Court the power to stay proceedings in any cause or matter where for any other reason it is in the interest of justice that the proceedings be stayed. [15] A stay can be issued when the proceedings to be held would render an applicant’s appeal moot or pre-empt his right of appeal and, thereby, cause irreparable harm: Bining v. Canada, 2003 FCA 286; Fisaillon v. Canada, [1999] F.C.J. No. 898, at paragraphs 29 and 33. [16] This brings me to the appellants’ allegation of irreparable harm. WHETHER A STAY SHOULD BE GRANTED Irreparable harm [17] I am not satisfied that the appellant would suffer harm, let alone irreparable harm, if the stay is refused. Essentially, the appellants submit that the harm consists in the fact that their pending appeal will become moot and they will be deprived of their right of appeal. [18] The harm alleged by the appellants is at best speculative. It may occur only if the respondents’ motion for summary judgment is granted by the Federal Court. I cannot speculate and assume that the motion for summary judgment will be successful and, on the basis of that speculative assumption, further delay proceedings in the Federal Court. The summary judgment motion has not already been pending for over 14 months. The respondents are entitled to a determination of their claim. [19] Moreover, even if the Federal Court allows the motion, the harm that the appellants allege they will suffer, if there is any, is not irreparable. The appellants can appeal an adverse finding on the summary judgment motion and as well pursue in this Court their appeal against the decision of Hugessen J. denying their motion to adduce supplementary evidence. I do not agree with counsel for the appellants that their appeal will necessarily be rendered moot if the hearing on the summary judgment motion is allowed to proceed. [20] Indeed, if the summary judgment motion is dismissed, the appeal against Hugessen J.’s decision will follow its course. If the motion for summary judgment is allowed, the appellants can appeal that decision and one of two scenarios will ensue. If this Court maintains Hugessen J.’s decision dismissing the supplementary evidence, the appellants will then have to decide whether they want to pursue their appeal against the summary judgment decision. If, on the contrary, this Court finds that the supplementary evidence should have been admitted in the summary judgment proceedings, the appellants will obtain an additional ground in support of their appeal against the summary judgment decision. Balance of Convenience [21] I need not address this factor in view of the conclusion that I have reached on the issue of irreparable harm. I will, however, say this. [22] The appellants had every opportunity and plenty of time to make full answer and defence on the issue raised for trial and on the summary judgment motion. Unsatisfied with what they had done so far, they tried to improve their position by attempting to file supplementary material. The case management judge concluded, as previously mentioned, that the respondents would suffer a prejudice which could not be compensated by an award of costs if the summary judgment proceedings were further delayed. [23] I do not sit on appeal from the decision of the case management judge. However, I surely can see the additional prejudice that would result to the respondents if the summary judgment proceedings are stayed. There is no doubt that a delay of more than 14 months on a motion for summary judgment is prejudicial to an applicant who has complied with the rules and seeks a determination of its claim. Such delay does nothing to improve the image of the administration of justice. I do not think that the balance of convenience justifies an imposition of additional prejudice that is detrimental to the administration of justice when the appellants’ alleged prejudice is speculative and not irreparable. In other words, it is not, in these circumstances, in the interest of justice that the proceedings on the summary judgment motion be further delayed. CONCLUSION [24] For these reasons, I will dismiss with costs the appellants’ application for a stay of the summary judgment hearing to be held on April 24, 2007. “Gilles Létourneau” J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-47-07 STYLE OF CAUSE: W & M Wire & Metal Products Ltd. v. 921410 Ontario Ltd. c.o.b. The Display Bank MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES REASONS FOR ORDER BY: LÉTOURNEAU J.A. DATED: April 17, 2007 WRITTEN REPRESENTATIONS BY: Ellis Fabian FOR THE APPELLANTS Robert B. Storey Christine M. Pallotta Christopher G. Tortorice FOR THE RESPONDENTS SOLICITORS OF RECORD: Barrister and Solicitor Toronto, Ontario FOR THE APPELLANTS Bereskin & Parr Toronto, Ontario FOR THE RESPONDENTS