|
Civil Litigation - Unknown Parties. Seismotech IP Holdings Inc. v. Ecobee Technologies ULC
In Seismotech IP Holdings Inc. v. Ecobee Technologies ULC (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal, this from an order of the Federal Court "dismissing the appellants’ motion for a Norwich order ... brought in relation to two simplified actions launched by the appellants against as of yet unidentified consumers who bought and installed smart thermostats in their homes, which, the appellants claim, infringe certain patents they own":II. Norwich Orders
[5] A Norwich order is "“a type of pre-trial discovery which, inter alia, allows a rights holder to identify wrongdoers”" (Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38 at para. 18 (Rogers), citing Alberta Treasury Branches v. Leahy, 2000 ABQB 575 at para. 59, aff’d 2002 ABCA 101 (Leahy)). As this Court stated in Glaxo Wellcome PLC v. M.N.R. (C.A.), 1998 CanLII 9071 (FCA), [1998] 4 F.C. 439 (Glaxo), it is an equitable remedy of "“ancient origin”" (also known as a bill of discovery) which received "“renewed interest”" by the House of Lords in Norwich Pharmacal Co. v. Customs and Excise Comrs., [1974] A.C. 133 (H.L.) (Norwich Pharmacal) (Glaxo at paras. 20–21).
[6] In the Federal Court, a Norwich order can be sought pursuant to that Court’s equitable jurisdiction (Glaxo at para. 33), or pursuant to Rule 238 of the Federal Courts Rules, S.O.R./98-106 (the Rules) (BMG Canada Inc. v. John Doe, 2005 FCA 193 at para. 23 (BMG)). Whatever the source of the Federal Court’s authority, the test for the issuance of such an order is the same (BMG at paras. 30–36). This test requires the plaintiff to show that:a) a bona fide claim exists against the alleged wrongdoer;
b) the person from whom discovery is sought is: (i) more than an innocent bystander, meaning that that person is in some way involved in the matter in dispute; (ii) the only practical source of information available to the plaintiff; and (iii) reasonably compensated for the expenses, including legal costs, arising out of compliance with the disclosure order; and
c) the balancing of the public interests for and against disclosure of the information sought from that person favours disclosure. [7] Only the bona fide and public interest criteria are at issue in this appeal.
III. Standard of Review
[8] Norwich orders are discretionary orders (Glaxo at paras. 24, 34; BMG at para. 28; Prandi v. Salisbury, 2024 BCCA 57 at para. 26 (Prandi)). As such, they are entitled to a high degree of deference, meaning that the role of this Court on appeal is not to substitute its discretion for that of the Motion Judge (Glaxo at para. 34; Prandi at para. 26). Our role is rather to determine whether the Motion Judge correctly directed himself on the applicable law and if so, whether he made a palpable and overriding error in applying that law to the facts (Housen v. Nikolaisen, 2002 SCC 33 at paras. 8, 10 and 36 (Housen); Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215 at para. 79; Prandi at para. 26).
....
[43] The Motion Judge reasoned that the main goal of Norwich orders, which is to facilitate access to justice for right holders unaware of the identity of alleged wrongdoers, was equally important for defendants in cases where meaningfully defending an action would be out of reach, potentially resulting in unfair settlements or unopposed default judgments (Motion Judge’s Reasons at paras. 41–42, 46–47). In this case, "“special considerations”" were given to the fact that: (i) patent litigation is costly and requires expert evidence; and (ii) the action is directed at a large number of individuals, each having modest amounts at stake and lacking in technical skills (Motion Judge’s Reasons at para. 44). At paras 9-41 the court usefully considers the 'bona fide' element, and at paras 42-65 the 'public interest' element, of the discretionary Norwich order test - citing several useful Norwich cases. These passages are prolonged but worth reading for anyone involved in such a motion.
. Lee v. Magna International Inc.
In Lee v. Magna International Inc. (Ont CA, 2021) the Court of Appeal considered an appeal of a denied motion to amend a claim to include unnamed parties:[11] While this is sufficient to dispose of the appeal, we also note that we agree with the motion judge’s refusal to permit a claim to be asserted against proposed unnamed defendants using pseudonyms. Apart from the failure to disclose a cause of action, the allegations against the proposed unnamed defendants are so broad and general and lacking in material facts, including allegations that would attract personal liability, that, even if the “litigating finger” test were to be applied (that the defendants, on reading the pleading, would know what allegations were being made against them), it could not be met. See, for example Bercovici v. Attorney General of Canada, 2019 ONSC 2610, at paras. 30-33. . Stechyshyn v. Domljanovic
In Stechyshyn v. Domljanovic (Ont CA, 2015) the Court of Appeal canvassed some of the law governing the practice of naming unknown parties in lawsuits:[1] On a motion to correct the name of a defendant on the basis of misnomer, as long as the true defendant would know on reading the statement of claim he was the intended defendant, a plaintiff need not establish due diligence in identifying the true defendant within the limitation period: Kitcher v. Queensway General Hospital (1997), 1997 CanLII 1931 (ON CA), 44 O.R. (3d) 589 (C.A.), at paras 1 and 4; Lloyd v. Clark, 2008 ONCA 343 (CanLII), 44 M.P.L.R. (4th) 159, at para. 4.
[2] In this case, after the appellant’s successful misnomer motion substituting the name of the respondent for John Doe, the respondent successfully brought a motion for summary judgment on the grounds that he was not sued until after the expiry of the limitation period and that the appellant plaintiff did not exercise due diligence in identifying the true defendant.
[3] We held that the jurisprudence governing misnomer governed and that in the circumstances, summary judgment ought not to have been granted. Accordingly, we allowed the appeal and indicated reasons would follow. These are those reasons.
.......
[17] The respondent submits that this is not a true case of misnomer because the actual name of the respondent had been ascertained by the appellant on the day of the accident.
[18] This submission ought to have been made by the respondent before Master Muir on the misnomer motion. Generally, a litigant is prevented from raising a matter that should have been the subject of a previous proceeding between the same parties.
[19] If the respondents on the motion for misnomer had raised the issue of due diligence, they would not have succeeded. The respondent Domljanovic would have known on reading the statement of claim that he was the intended defendant. The jurisprudence is clear that, in such circumstances, due diligence does not apply. In Kitcher, the name of the correct defendant was in the plaintiff’s solicitor’s file. In Lloyd, the name of the correct defendant municipality was readily ascertainable by typing in the location of the road in issue. The law that governs the addition of a party after the expiry of a limitation period does not apply.
[20] The respondent’s motion for summary judgment was an indirect attack on the motion for misnomer. It would be a waste of money, time, energy and judicial resources to allow the correct defendant to be added on a motion for misnomer and then to allow a motion for summary judgment on the basis that the correction was made after the expiry of the limitation period. The law does not countenance such impracticality. The law treats the naming of the correctly named defendant as a substitution for the incorrectly named defendant and not the addition of a new party or the initiation of the action against the correctly named defendant.
[21] Accordingly, for these reasons the appeal was allowed, the order granting summary judgment set aside and the action allowed to proceed.
|
