A-562-75
Brouwer Turf Equipment Limited and Gerardus
Johannes Brouwer (Appellants) (Plaintiffs)
v.
A and M Sod Supply Limited and Marcel Van de
Maele (Respondents) (Defendants)
Court of Appeal, Jackett C.J., Pratte J. and
MacKay D.J.—Toronto, May 20, 1976.
Practice—Patent infringement—Appeal from order of Trial
Division dismissing application for order under Rule 480 that
profits be, after trial, subject of a reference—Purpose of Rule
480(b),(c)—Federal Court Rule 480.
Appellants appealed an order of the Trial Division dismissing
an application for an order under Rule 480 that damages and
profits, in a patent infringement action in which appellants
were plaintiffs, be, after trial, the subject of a reference.
Appellants claimed that the purposes of Rule 480(b) and (c)
were (1) to protect the integrity of the confidential financial
affairs of the parties until such information must be disclosed
to enable the Court to fix damages, and (2) to ensure that
purely mechanical calculations which can more easily be done
by a prothonotary or other officer do not unnecessarily engage
this Court's time at formal trial proceedings.
Held, the appeal is dismissed. (1) No such right to confiden
tiality can be implied in this Rule. It cannot be said that it is
wrong for a trial judge to refuse an application under Rule 480
when it is based exclusively on a desire by plaintiff to keep
confidential as long as possible certain information pertinent to
the establishment of his cause of action. (2) Purely "mechani-
cal calculations" are not, as such, beneath the dignity of the
Trial Judge. The real purpose of leaving the Rule 480 class of
matters to a reference is to minimize the expense of an action.
It is a matter of discretion to forecast whether the most
economical manner of conducting any particular action is to
have plaintiff prove his whole case in the first instance, so that,
if he ultimately loses, costs of establishing profits or losses will
have been thrown away, or whether such questions should be
left until the substantive rights have been established, in which
case, there may be the costs of two trials, and two sets of
appeals. It is a matter of discretion for the Trial Judge, and his
decision is not to be set aside, except for manifest error. The
general principle is that plaintiff must make out the whole of
his case in the first instance, and, in the absence of consent, or
"reasons bearing on the conduct of the action as a whole", Rule
480 should not be invoked to set such principle aside.
APPEAL.
COUNSEL:
C. F. Scott for appellants.
D. H. MacOdrum for respondents.
SOLICITORS:
Rogers, Beres kin & Parr, Toronto, for
appellants.
Ridout & Maybee, Toronto, for respondents.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is an appeal from an order
of the Trial Division dismissing an application for
an order under Rule 480 that the matter of dam
ages and profits, in a patent infringement action in
which the appellants are plaintiffs, be, after trial,
the subject of a reference.
Rule 480 reads, in part, as follows:
Rule 480. (1) Any party desiring to proceed to trial without
adducing evidence upon any issue of fact including, without
limiting the generality thereof,
(a) any question as to the extent of the infringement of any
right,
(b) any question as to the damages flowing from any
infringement of any right, and
(c) any question as to the profits arising from any infringe
ment of any right,
shall, at least 10 days before the day fixed for the commence
ment of trial, apply for an order that such issue of fact be, after
trial, the subject of a reference under Rules 500 et seq. if it
then appears that such issue requires to be decided.
The application for an order for a reference,
which was made on September 29, 1975, was
supported by an affidavit dated September 24,
1975, showing, inter alia, that
(a) the plaintiff was ready to proceed to exami
nations for discovery;
(b) the corporate plaintiff is engaged in the
business of making and selling sod harvesting
machines and the "financial affairs of the Plain
tiffs are not so far as is possible, public
knowledge";
(c) the sod harvesting machine manufacturing
industry in which the corporate plaintiff com
petes is intensely competitive, and disclosure of
the corporate plaintiff's financial affairs to its
competitors would be likely to give such com
petitors a significant advantage and would be
likely to cause serious harm to the corporate
plaintiff; and
(d) because information as to its affairs would
probably get to its competitors "the corporate
Plaintiff wishes not to disclose its financial
affairs to the Defendants until after the question
of whether the Defendants have infringed the
patents of the Plaintiffs is determined by this
Honourable Court."
In dismissing the application, the learned Trial
Judge said:
In the absence of consent and of compelling reasons bearing
on the conduct of the action as a whole, conventional proce
dures should be maintained.
I should be content to dismiss the appeal for the
reasons given by the learned Trial Judge, which, in
my view, succinctly and completely state why the
application should have been dismissed.
However, for such help as it may be in connec
tion with the application of Rule 480, I propose to
discuss the argument put forward on behalf of the
appellant. For that purpose, I think it is sufficient
to refer to the foundation for that argument as set
forth in paragraph 10 of the appellant's memoran
dum, which reads:
PART III
ARGUMENT
10. It is respectfully submitted that the purpose of Rule 480(b)
and (c) is, inter alia, two-fold:
(i) to protect the integrity of the confidential financial
affairs of the parties to an action until such time as such
information must be disclosed in order to enable the Court to
fix a quantum of damages; and
(ii) to ensure that purely mechanical calculations do not
unnecessarily engaged [sic] this Honourable Court at formal
trial proceedings when such calculations can more easily be
done before a Prothonotary or other officer.
It is respectfully submitted that on both accounts, the matter of
the calculation of damages or an accounting of profits in this
Action, should be so referred.
Dealing first with the "purpose" of Rule 480 as
propounded by subparagraph (i) of paragraph 10,
no authority is cited for the proposition that` the
Rule is designed "to protect the integrity of the
confidential financial affairs of the parties ..."
and I am of opinion that no such right to confiden-
tiality can be implied in this Rule, which was made
pursuant to powers for making procedural rules. In
so far as a plaintiff at least is concerned, I am of
opinion that it cannot be said that it is wrong for a
trial judge to refuse an application under Rule 480
when that application is based, as this application
was, exclusively on a desire by the plaintiff to keep
confidential as long as possible information perti
nent to the establishment of his cause of action.
With reference to the "purpose" of Rule 480 as
propounded by subparagraph (ii) of paragraph 10,
I am of the view that it is not put in proper
perspective. Purely "mechanical calculations" are
not as such beneath the dignity of the Trial Judge.
The real purpose of leaving the Rule 480 class of
matters to a reference, as I understand it, is to
minimize the expense of an action. It is a matter of
discretion in any particular action to forecast
whether the most economical manner of conduct
ing the action is to have the plaintiff prove his
whole case in the first instance so that, if the
plaintiff ultimately loses on the merits, the cost of
establishing profits or losses will have been thrown
away or whether such questions should be left until
the substantive rights have been established in
which event there may be the costs of two trials
and two sets of appeals instead of the costs of one
trial and one set of appeals. It is impossible to
enumerate in a general way all the factors that, in
a particular case, may or should be taken into
account by the Trial Judge in reaching a conclu
sion on this question. In my view, however, within
broad limits, it is a matter of discretion for the
Trial Judge and his decision will not be set aside
on appeal unless he has committed manifest error.
What is clear, in my view, is that, as the learned
Trial Judge has indicated, the general principle is
that the plaintiff must make out the whole of his
case in the first instance; and, in the absence of
consent or of "reasons bearing on the conduct of
the action as a whole", Rule 480 should not be
invoked to set that principle aside.
In considering the operation of Rule 480,
account should be taken of Rule 466' which is the
companion rule concerning examination for
discovery.
One other matter having to do only with the
conduct of the appeal should be mentioned. In
addition to the material that was before the
learned Trial Judge, the parties have seen fit to put
before this Court a "Memorandum of Agreed
Facts". No authority for this Court taking this
material into account has been cited and, in the
absence of an order under Rule 1102, 2 which
would only be granted in exceptional circum
stances, in my view, this memorandum is not
properly before the Court and should not be taken
into account by this Court.
In my opinion the appeal should be dismissed
with costs.
* * *
PRATTE J. concurred.
* * *
MACKAY D.J. concurred.
'Rule 466 reads as follows:
Rule 466. Where, prior to the time when an examination for
discovery is being conducted or discovery or inspection of
documents is being obtained or given under these Rules, an
order has been made under Rule 480 that an issue of fact be,
after trial, the subject of a reference, the discovery or inspec
tion shall not extend to such issue of fact.
2 Rule 1102 reads as follows:
Rule 1102. (1) The Court of Appeal may, in its discretion,
on special grounds, receive evidence or further evidence upon
any question of fact, such evidence to be taken by oral
examination in court, or by deposition, as the Court may
direct.
(2) In lieu of the Court receiving evidence or further
evidence under paragraph (1), it may direct a reference
under Rule 500 as though that rule and Rules 501 to 507
were incorporated in this Part as far as applicable.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.