Date: 19990505
Docket: T-1948-95
BETWEEN:
HAROLD RUGGLES,
Plaintiff,
- and -
FORDING COAL LIMITED and
JUDY PAULHUS,
Defendants,
AND BETWEEN:
FORDING COAL LIMITED,
Plaintiff by Counterclaim,
- and -
HAROLD RUGGLES,
Defendant by Counterclaim.
REASONS FOR ORDER
MR. JOHN A. HARGRAVE,
PROTHONOTARY
BACKGROUND
[1] This action involves a claim of copyright infringement and a similar counterclaim. The Plaintiff is said to have a copyright in real estate advertising material and in a video, which he prepared in order to sell a block of Fording Coal Ltd. ("Fording") condominium units at Elkford, British Columbia. Fording subsequently decided to sell the balance of the units itself. The material prepared by Mr. Ruggles was used by the Defendants, at least in the sense, as it now apparently turns out, that Fording duplicated the advertising material and inserted the name of Ms. Paulhus, one of the Defendants, into the material and Ms. Paulhus handed out the material, in order to advertise and to sell the balance of the condominium units.
[2] Mr. Ruggles, on finding Ms. Paulhus' name inserted into copies of the material which he had prepared and, perhaps for other reasons which are not particularly relevant, named both Fording and Ms. Paulhus as Defendants.
[3] Examinations for discovery were held in late November and early December of 1998. At some point between the completion of that discovery and a neutral evaluation held 27 January 1999, the Plaintiff decided it was appropriate to discontinue the action against Ms. Paulhus. However, the Plaintiff did not move particularly quickly on the discontinuance, there being some discussion as to whether it might be done without costs. That waiver of costs proved not to be possible. As a result, on 10 March 1999, Ms. Paulhus brought a motion for summary judgment to have the action against her dismissed. Before the motion was to be heard Mr. Ruggles discontinued the action against Ms. Paulhus. However there remained, out of that motion, a claim for costs on a solicitor-client basis, or alternatively, for costs at the higher end of the Court Tariff.
[4] Mr. Ruggles filed an affidavit in response to the motion for costs. He was cross-examined on that affidavit. This brings us to the first issue, whether Ms. Paulhus might file further affidavit material after the cross-examination of Mr. Ruggles.
CONSIDERATION
Filing Affidavits After Cross-Examination
[5] Rule 84(2) provides that:
| A party who has cross-examined the deponent of an affidavit filed in a motion or application may not subsequently file an affidavit in that motion or application except with the consent of all other parties or with the leave of the Court. |
This provision is similar to that found in the previous Federal Court Rules as Rule 332.1(6).
[6] The law as to filing of supplemental affidavit material after cross-examination is set out by Mr. Justice Dubé in Guylaine Coté v. The Queen, an unreported 27 May 1992 in action T-1206-89. Mr. Justice Dubé referred to Rule 332.1(6), considered various earlier cases and concluded that three tests emerged from that case law, tests to be satisfied in order to obtain the leave of the Court:
| (1) was the information in the affidavit available before the cross-examination? |
| (2) are the facts established by the supplementary affidavit relevant to the case? |
| (3) might the filing of the supplementary affidavit cause serious prejudice to the other parties? |
The way in which these tests are phrased does not indicate whether one or all must be satisfied, however it is clear from the decision that all of these elements must be considered and balanced. I now turn to the affidavits in question.
[7] The Jones and Noonan Affidavits, which the Defendants seek to file in response to and after cross-examination of Mr. Ruggles on his Affidavit, do not meet all of the tests set out in Cote v. The Queen (supra). Mr. Ruggles, in his affidavit material, set out that the designation of Ms. Paulhus, as a defendant, was as a result of her name appearing on the copies of the material which he had prepared. On cross-examination Mr. Ruggles alluded to conversations which he had had with Messrs, Jones and Noonan, after he had seen the infringing material, to the effect that he wondered what Ms. Paulhus was doing using his material. The Jones and Noonan affidavits are brief and carefully worded. Mr. Jones, while agreeing that Mr. Ruggles had spoken to him about the use by Fording of the material, denies that Ms. Paulhus' name came into the conversation and further deposes that he said nothing to indicate that Ms. Paulhus was responsible for the copying or preparation of the video in question. Mr. Noonan says he has no recollection of any conversation, but then goes on to say, and here is an inconsistency, that he definitely did not discuss Judy Paulhus' involvement in the preparation or use of the video. I now turn to the application of the tests set out in Coté
[8] Beginning with the first branch of the test, the material in the affidavits was always available and might have been a part of the original motion for the costs of Judy Paulhus. Second, the affidavits are only marginally useful, for there is no reason, based on what is set out in the affidavits, why Judy Paulhus ought not to have initially been made a defendant. Indeed, given that Ms. Paulhus' name appeared on the copied material, together with the possibility that she might have been acting independent of Fording, it could well have been negligent not to name her as a defendant and to leave her as such until it turned out that Fording would be responsible for her name appearing on the material and her use of the material in the sale of Fording's condominium units. Third, as to prejudice, the affidavits of Messrs. Jones and Noonan, would have to be tested by cross-examination to determine several factors, including whether the conversations alleged by Mr. Ruggles, but denied by Messrs. Jones and Noonan, took place in some other time frame, for the subject matter, said by Mr. Ruggles to form a part of those conversations, would have been a very natural subject matter of conversation between Mr. Ruggles and Fording employees. Further cross-examination and further affidavits would add little to the real issue to be determined, the costs to which Ms. Paulhus is entitled.
[9] With all of this in mind, particularly the minimal impact of the Jones and Noonan affidavits and given the relatively small amount involved, the Defendants do not have leave to file the Jones and Noonan affidavits.
Entitlement of Ms. Paulhus to Costs
[10] On the facts initially at the disposal of the Plaintiff, that Ms. Paulhus was responsible for sales of condominium units, that her name was on the marketing material, including the video over which Mr. Ruggles claims copyright, and that she was using the material in a sales campaign it was quite proper to name Ms. Paulhus as a defendant.1 There is no evidence of any bad faith at this point: Mr. Ruggles, as touched upon in cross-examination on his affidavit, may have had doubt as to the competence of Ms. Paulhus to act as a real estate agent, but that does not indicate bad faith or an abuse of process. Mr. Ruggles perhaps made some statements and certainly sent out a letter, the latter to the Chief Executive Officer of Fording, perhaps in the heat of the moment and certainly an ill advised letter, but that does not detract from a good reason, at the time, to make Ms. Paulhus one of the Defendants on the basis of the use of her name on advertising material and her use of that material.
[11] I have also considered whether the pleadings ought to have raised any warning to Mr. Ruggles indicating Ms. Paulhus ought to have been let out of this action at an earlier stage. The issue of the involvement of Ms. Paulhus, in the alleged infringement, raised in the Statement of Claim, is not met, either in the defence or in the amended defence, except by a general denial and the assertion that the material in question was not used by the Defendants. This denial of use is maintained even in the amended defence of 29 March 1999, despite the clear fact of the use of the video and of the other advertising material both by Fording Coal and by Ms. Paulhus, who was apparently Fording's employee.
[12] Ms. Paulhus was produced for discovery, along with a supplemental affidavit containing her production of documents. It apparently turned out, from her discovery evidence, that she did not copy the material over which copyright is claimed by Mr. Ruggles, but that it was done by someone else in the Fording company. This discovery was in November of 1998. Thus there was some delay, but not a great delay, in filing the discontinuance of the claim against Ms. Paulhus, 30 March 1999.
[13] It may well be that the filing of the discontinuance, which was touched upon at the neutral evaluation of this matter by the Court, held in Calgary 27 January 1999, was finally precipitated by the early March 1999 filing of a notice of motion to have Ms. Paulhus removed as a defendant, using summary procedure.
[14] Given that Ms. Paulhus was reasonably a party Defendant to this proceeding until her examination for discovery, was represented by the same counsel as was Fording and is an integral part of Fording's case, the only real additional costs were in preparation for and attendance at discovery, discovery of her own documents and preparation of the summary judgment material. I say this because the Defendants were represented by one counsel and, for the most part, treated as one party: here I would refer to Southern Property Rentals Ltd. v. Delight Touche Inc., a 12 February 1999 of Mr. Justice Hembroff of the Alberta Queen Bench. Mr. Justice Hembroff concluded that:
| It would be an odd finding to suggest two parties, acted for in the same law suit by the same counsel and advancing the same position should not be treated the same way in the matter of costs. (page 3) |
[15] The Kastner v. Painblanc decisions, that of Mr. Justice Richard, as he then was, reported (1995), 60 C.P.R. (3d) 174 and that of Mr. Justice Hugessen of the Federal Court of Appeal, 24 February 1995 in file A-39-94, and relied upon by the Defendant to enhance an award of costs, may be distinguished. In The Kastner cases enhanced costs were awarded by Mr. Justice Richard by reason of the heavy workload in getting the action dismissed. Mr. Justice Hugessen enhanced preparation and hearing costs by reason of a finding of abuse. Neither judge awarded the full solicitor/client costs which were sought.
[16] In the present instance there is no real evidence of abuse. The preparation of the material by which to have the action dismissed was substantial, but not an overly heavy or complex task. Costs here ought to be within a usual range, except to the extent of costs brought about by the Plaintiff's delay in discontinuing against Ms. Paulhus.
[17] At issue, on this basis, are any costs peculiar to Ms. Paulhus and costs thrown away during the delay following the discovery of Ms. Paulhus and up to the discontinuance. As this motion is very much subsidiary to what the action is all about, there is no point in requiring the parties to tax costs. Based upon Federal Court Tariff B, I allow Ms. Paulhus, for discovery of documents, preparation for examination for discovery, and counsel's attendance on discovery, the sum of $1,000. This is not intended to be an indemnity and that is clear from the Tariff applied by the Federal Court. Moreover, some of the discovery process was in all likelihood common. These were expenditures necessary in the law suit and, as I say, should not be taxed on any special basis. The cost thrown away, and this is a separate matter, was that of preparation of the summary judgment material. There is no reason why this cost should not be taxed on a usual basis, for the Defendants have not established any malice or bad faith, on the part of Mr. Ruggles, but merely some delay. Preparation of the summary judgment motion falls under item 5 of Federal Court Tariff B. I allow this item, mid range in column 4, at $600. In that Ms. Paulhus is now out of these proceedings it is appropriate that she should have these costs, as a complete settlement of her claim for costs, within a reasonable time.
[18] In that success on the present motion has been mixed, costs will be in the cause.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
May 5, 1999
FEDERAL COURT TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
HEARING DATED: May 5, 1999
COURT NO.: T-1948-95
STYLE OF CAUSE: Harold Ruggles
v.
Fording Coal Limited and Judy Paulhus
PLACE OF HEARING: Vancouver, BC
REASONS FOR ORDER OF
MR. JOHN A. HARGRAVE, PROTHONOTARY
dated May 5, 1999
APPEARANCES:
Mr. Benjamin Bullock for Plaintiff
Mr. Doug Mills for Defendants
SOLICITORS OF RECORD:
Huckvale & Co.
Lethbridge, AB for Plaintiff
Burnet, Duckworth & Palmer
Calgary, AB for Defendants
__________________1 See the affidavit of Judy Paulhus, filed 10 March 1999, at paragraphs 6 and 7 as to her use of the brochures and the video in question.