Date: 20210318

Docket: T-151-16

Citation: 2021 FC 238

Ottawa, Ontario, March 18, 2021

PRESENT: The Honourable Mr. Justice Roy

BETWEEN:

ANGELCARE CANADA INC.

AND

EDGEWELL PERSONAL CARE CANADA ULC AND

PLAYTEX PRODUCTS, LLC

Plaintiffs/

Defendants by counterclaim

and

MUNCHKIN, INC.

AND

MUNCHKIN BABY CANADA, LTD.

Defendants/

Plaintiffs by counterclaim

ORDER AND REASONS

[1] The Defendants/Plaintiffs by counterclaim [the “Defendants” or “Munchkin”] object to the testimony of two witnesses presented by the Plaintiffs/Defendants by counterclaim [the “Plaintiffs” or “Angelcare”]. Their testimony is to be struck from the record, according to Munchkin, because portions of testimonies that relate to nine documents do not meet the required discovery duties. The motion is of a limited scope. The Defendants do not challenge the documents themselves. Only the testimony of two witnesses is said to be objectionable.

[2] The testimony of Mr. Douglas Sweetbaum, the corporate representative for Angelcare, for the purpose of discovery, and the testimony of Mr. Jermaine Powell, on behalf of another Plaintiff, Edgewell Personal Care Canada ULC [Edgewell], also for the purpose of discovery are those impugned at this stage. Mr. Powell substituted for one Erik Rahner who was Edgewell’s corporate representative for one session of discovery, on January 30, 2019.

[3] In essence, it is alleged by Munchkin that the discovery obligations of the Plaintiffs were not fulfilled such that by neglecting to inform themselves, the Plaintiffs’ representatives failed to answer basic questions and, subsequently, they failed in their obligation to update their perfunctory responses with respect to six exhibits. Furthermore, the Plaintiffs also chose to disclose three relevant documents in heavily redacted fashion, which amounts to non-disclosure. As a result, the Plaintiffs are limited in the use that can be made of the redacted documents.

[4] Munchkin claims that both witnesses provided at trial answers to questions that remained unanswered during and after discovery: more information was produced at trial than was offered on discovery. That, says Munchkin, should be sanctioned by the new testimonial evidence thus offered at trial being excluded by virtue of Rules 232 and 248 of the Federal Courts Rules, SOR/98-106 [the Rules]. In the end, the Plaintiffs ought to be sanctioned for their failure to abide by the Rules. In the view of Munchkin, deterrence requires that the testimonial evidence at trial relating to these documents be stricken from the record.

[5] The Plaintiffs, in turn, submit that no leave to offer the evidence is required (Rules 232 and 248 allow for the use of documents even if there is a breach of the Rules) because there was no such violation.

I. What is the evidence to be stricken

[6] It is not disputed that Angelcare and Edgewell produced affidavits of documents as required by Rule 223 of the Federal Courts Rules. Plaintiffs’ corporate representatives were discovered: Mr. Sweetbaum for Angelcare exclusively and Mr. Rahner for Edgewell. Counsel for Munchkin acknowledges that many discovery questions were answered in writing because certain questions could not be answered during the examination for discovery. Undertakings were thus made by the Plaintiffs (Munchkin’s Written representations, para 12). In fact, two undertakings were requested concerning two of the six documents considered herein.

[7] One year after Edgewell’s corporate representative (Mr. Erik Rahner) testified as its corporate representative, Edgewell substituted as its representative Mr. Powell. It appears that Mr. Powell was more knowledgeable, including on topics flowing from the undertakings; furthermore, Mr. Rahner’s availability was limited. It appears that the parties were in agreement that all of the questions asked of Mr. Rahner were not to be re-asked (Exhibit “L” of the Howes affidavit, at p. 11, lines 12 to 19). The answers given by Mr. Rahner to the questions asked were not the subject of further questions. Mr. Powell was asked if he had any corrections to make to the answers already given and he indicated that he had none to offer. There were no complaints either about the inability of Mr. Rahner to answer some questions because of a lack of familiarity with some documents put to him during his discovery. In other words, there was no follow-up following the first discovery session other than answers to undertakings.

[8] There are two series of documents discussed on this motion: I begin with six trial exhibits. They are exhibits 73, 80, 98, 99, 101 (ID only) and 104.

A. Exhibit 73

[9] Ex. 73 is a business record which consists of an internal document, about the Diaper Genie products, that is created by Energizer/Edgewell Personal Care/Playtex for the Sale Leadership Team [SLT]. It constitutes a PowerPoint presentation, or a DECK, that presents information in the form of slides at a fairly high level of aggregation, with financial information blacked out. Mr. Sweetbaum used to run that “business” (the Brand Group of Energizer Personal Care) between 2008 and late 2012. Although the document was prepared after Mr. Sweetbaum’s departure, some time in 2013, his knowledge about the presentation was in my view clearly established: it was a standard document, which was used at Energizer Personal Care/Playtex regularly, what Mr. Sweetbaum referred to as “kind of standard operating procedure” (transcript of day 4 of the trial, on January 28, 2021, p. 126, line 24). Mr. Rahner, when discovered, stated that his familiarity with the document was recent (the day before) which resulted in his incapacity to provide any particulars.

[10] Mr. Sweetbaum offered evidence of his understanding of some of the slides, which is the disputed evidence from his testimony with regard to Ex. 73. Muchkin objects to pages 124 to 138 of the transcript of January 28, 2021. Counsel for Munchkin objected on the basis that Mr. Sweetbaum did not attend the presentation and he was not any more part of Playtex, or Edgewell, at the time the presentation was created. However, counsel did not object if the testimony was concerned with, and limited to, the understanding Mr. Sweetbaum would have (transcript of day 4, on January 28, 2021, p. 136, lines 8 to 21), given his experience acquired in the past.

[11] Mr. Powell also testified concerning Ex. 73. Munchkin objects to his testimony found at pages 24 to 27 of the transcript of day 7, on February 2, 2021. It related to two pages of the presentation concerning frequently asked questions. However, there was no elaboration other to establish that Mr. Powell was familiar with the document, having participated to its creation.

[12] It will be recalled that Mr. Powell became the corporate representative of Edgewell, thus replacing Erik Rahner. In fact, it appears that Mr. Powell, although a relatively low-ranking member of the staff at the time, took part in some way in the preparation of the document because he offered technical inputs towards some pages of the DECK.

[13] As with the other five exhibits, Munchkin claims the Angelcare ran afoul of its obligations at the discovery stage of the process: relevant information and documents were not disclosed by Mr. Rahner. The lack of proper disclosure prevents the testimony of Messrs. Stweetbaum and Powell at trial.

B. Exhibit 80

[14] The next contentious exhibit consists of another presentation, identified as “Diaper Disposal 101”, last updated in December 2013. Both Messrs. Sweetbaum and Powell offered evidence concerning Ex. 80.

[15] The document, ostensibly prepared by Energized Personal Care/Playtex, is presented as dealing with “diaper disposal fundamentals”; it was a document that was updated, bearing a copyright of 2008. In it, one finds basic information about market research, the main attributes of the products, whether they be diaper pails or refills. Moreover, the DECK offers information on the competition, including that diaper cassettes marketed by Munchkin are made compatible with the Playtex Diaper Genie diaper pails (other products than Munchkin’s are featured). I note that the odour protection systems attract significant attention in the DECK.

[16] Once again, Mr. Sweetbaum professed some familiarity with the document. He presented it as a document offering basic information and used in order to familiarize new arrivals in this business; an analogy was made with a college course. Mr. Sweetbaum worked on similar documents when he was still at Energizer, as these kinds of overviews of the business have been continually updated. They are business records. Mr. Rahner testified on discovery that he was unfamiliar with the document, having seen it for the first time the day before.

[17] Counsel for Munchkin objected to Mr. Sweetbaum’s testimony on the same basis as his testimony with respect to Ex. 73. He accepted that Mr. Sweetbaum could testify on his understanding of the document, but not for the truth of its content as such. Counsel for Angelcare argued that Mr. Sweetbaum was an employee of Energizer at the time and that he is currently employed by Angelcare, which should not prevent him from testifying at trial.

[18] As for Mr. Powell, he, once again, was involved in the preparation of Ex. 80, as well as giving the presentation several times to marketers who were rotating within the company.

[19] The objection to the testimony was presented at the hearing on the basis that the corporate representative, Mr. Rahner, did not know anything about the document when asked during his discovery: the discovery obligations was not fulfilled, as additional information was not offered later on.

C. Exhibit 98

[20] The Defendants object to the testimony of Mr. Sweetbaum concerning Ex. 98, which includes testifying about the purpose of the presentation and its intended audience. It consists of another presentation made by Energizer Personal Care/Playtex entitled “Diaper Genie Plans”. It appears to have been produced in 2010. It includes information about a business update for 2010, together with an “Overview of 2010 Diaper Genie offense plan to competitive activity”, and a risk update for 2011 and a 2012-13 innovation roadmap. Like the other DECKS, it is an internal document meant to be confidential. A few slides are dedicated to the competition, including that coming from the Defendants.

[21] The objection to the testimony of Mr. Sweetbaum is in fact similar to other objections. Mr. Sweetbaum contended that this presentation was in the same kind of format as other presentations; it updates senior leadership on the North American business. The witness was at Energizer at the time and he declared that he would have been making the presentation or supporting the presenter who would be reporting to him.

[22] Munchkin’s contention is that Mr. Rahner did not offer any information about the document. He had seen it for the first time the day before his discovery. The objection is again based on Rules 245, 232 and 248.

D. Exhibit 99

[23] This exhibit is entitled “Diaper Genie Plans” and is similar to Ex. 98. It bears the same title, “Diaper Genie Plans” and follows the same format. However, the information conveyed is not the same. The focus of the attempted testimony was page 30 of the DECK. Angelcare’s counsel was attempting to clarify with Mr. Sweetbaum mentions in boxes entitled “Refill Cost Breakdown” and “Pail Cost Breakdown”, regarding “Angel Care fee”, “OH and other expenses” and “Sidney OH”.

[24] The objection was based again on Rules 245, 232 and 248, as the corporate representative, Mr. Rahner, did not know anything about Ex. 99, although Mr. Rahner was able to shed some light on payments made to Angelcare in relation to Angelcare patents in the US. There was an undertaking request made about Ex. 99, at page 30, about the fee charged by Angelcare, being a mark-up that includes the license paid concerning US and Canadian patents.

[25] I note that this is one case where an undertaking about one of the contested exhibits was requested by Munchkin. An answer was provided.

E. Exhibit 101

[26] This concerns another presentation in the nature of a business update, this one entitled “FY 2011 Diaper Genie Business Update”. The DECK focusses on an update centered around Diaper Genie pails and the Diaper Genie marketing plan for 2012. Counsel for Munchkin contended that questions about Ex. 101 were asked during discovery and no answers were provided. Mr. Rahner, during his examination for discovery, testified he had never seen this document. He was unable to provide any insight.

[27] In fact, Mr. Sweetbaum recalled during his testimony seeing that document, the document being one of regular updates offered on an ongoing basis. Information about the purpose of the presentation and its audience was offered. Accordingly, Munchkin objected to the testimony of Mr. Sweetmaum on the same basis as for other presentations already reviewed.

F. Exhibit 104

[28] The exhibit does not concern a presentation. Rather it relates to a confirmatory patent license between Edgewell Personal Care Brands, LLC and Les Développements Angelcare Inc., signed on behalf of Les Développements Angelcare by Mr. Sweetbaum on December 22, 2014. Mr. Rahner, on discovery, did not recognize the two-page document. The document speaks for itself and states on its face that Edgewell confirms having granted Angelcare an exclusive right and license in Canada in the 128 Patent, one of the patents-in-suit. The confirmatory license includes the right to launch, in Canada, proceedings in case there was infringement.

[29] Mr. Sweetbaum did not testify any further on Ex. 104. Munchkin objected on the same basis, i.e. Rules 232 and 245.

G. Commercial relationship between the Plaintiffs

[30] The last objection is concerned with an agreement between Développements Angelcare Inc. and Playtex Products Inc. It consists of a confirmation agreement granting Playtex the exclusive right and license to manufacture and produce the Captiva Diaper System throughout Canada. Playtex also has the exclusive right to promote, sell and distribute the diaper pails and cassettes throughout Canada. The December 22, 2005 document is almost entirely redacted. The unredacted portion of the document confirms that Angelcare granted Playtex Products, Inc. the exclusive right and license to manufacture and produce the Captiva Diaper System. Playtex is to promote, sell and distribute pails and cassettes in Canada. The license agreement specifies the marketing effort required of Playtex. The document provides for a term to the agreement.

[31] The said agreement was amended twice. First on April 15, 2008 when it appears that the term of the agreement was modified. The first amendment appears to comprise other changes, but the rest of the amended document, which runs for two pages, is redacted. The second amendment to the December 22, 2005 document (and perhaps the April 15, 2008 document) involves Edgewell Personal Care Brands, LLC (as successor in interest to Playtex Products, Inc.). The last page of the second amendment, dated December 16, 2015, is at page 12, thus suggesting that the document had risen significantly in length. However, the said document is entirely redacted but for two paragraphs. The term of the agreement is now for a period of 20 years “commencing on the date of the coming into effect of the provisions of Amendment No. 1 to this agreement, being April 15, 2008.” I reproduce the only other paragraph of amendment #2, which is not redacted.

19. A new Section is added as Section 17 of the Agreement between Playtex and Développements, as follows:

“The parties acknowledge that EPC has been granted the exclusive right and license in the Territory under the following patents: Canadian Patent No. 2.640,384, XXXXXXXXXXXXXX XXX XXXXXXXXXXXXXXXXXXXXXXXXXX (collectively, the “Additional Patents”), for a term expiring as at the expiry of the Term of this agreement, as amended, and on the terms and conditions set forth in Sections 1(b), 1(c), the first sentence of Section 1(d), and the first sentence of Section 1(e) (for the purposes of this Section 17, reference therein to “Pails” being deemed to be a reference to “Développement Pails”) of this agreement. EPC acknowledges and agrees that none of the foregoing intellectual property is a patent contemplated by, or is subject to the provisions of, Section 2(d) or 3(d) of this agreement.”

[Redacted and bold in original.]

As can be appreciated, the contents of these agreements are left secret in view of the considerable redactions.

[32] Mr. Sweetbaum was invited to comment and testify on some of the terms of the agreement. That invitation was met with an objection on the basis that the agreement, and its amendments, were not disclosed in that they were extensively redacted. The particular information relative to the financial terms (royalty, mark-up price) of the relationship was not disclosed. Munchkin’s counsel’s position at trial was that Angelcare sought to introduce the economic benefit it derives from the alleged infringement in an attempt to establish the damages suffered. There was even a reference to trial by ambush. The fact that the three documents are, for all intents and purposes, completely redacted implies that there was no disclosure to speak of which, in turn, does not allow the use of the document at trial other than with respect to the few lines left unredacted.

[33] Undertakings were requested. In answer, the additional versions produced contained only slightly fewer redactions. Mr. Sweetbaum, when he testified on discovery, expressed his familiarity with these agreements. However, his recollection was rather limited. He limited himself to stating that entering into the agreement was for the purpose of making money. The basis for the redactions was left unanswered.

[34] At trial, Mr. Sweetbaum was more loquacious: although there was no mention of the financial terms of the agreement in the few portions of the document left unredacted, Mr. Sweetbaum offered evidence on these. That, claims Munchkin, is not admissible because of a lack of discovery.

II. The position of the parties

[35] These objections in the two categories of documents outlined above are concerned with the obligations of the parties during the discovery process, but they are of a different nature. For Munchkin, it appears that the whole burden is on the shoulders of Angelcare which neglected their discovery obligations by failing to present an appropriate corporate representative, one who would be able to answer questions, instead of one who failed to address basic questions and did not update what were perfunctory responses. Furthermore, some heavily redacted documents were disclosed. The information from Messrs. Sweetbaum and Powell who testified at trial was more substantial than that provided on discovery and that should not be allowed. Munchkin goes so far as to argue that Rules 232 and 248 require that their evidence about the documents under review be rejected. This is the appropriate sanction. Above all, Angelcare ought to be punished in order to provide deterrence for the failure to abide by the discovery obligations.

[36] Not surprisingly, Angelcare sees things differently. While the focus of Munchkin is on the obligations of the plaintiff on discovery, that does not fit the scheme of the Federal Courts Rules when considered properly. The Defendants have to act; they cannot remain passive, sit on their hands and wait for the trial to air whatever grievance they may have about the discovery. In fact, Munchkin neglected to use the mechanism provided by the Rules to request and compel the production of the information at issue on this motion. Angelcare speaks in terms of Munchkin seeking to rectify its “imprudence”.

A. Munchkin’s argument

[37] Munchkin is particularly critical of the performance of Mr. Erik Rahner, the corporate representative designated by Edgewell.

[38] Some objective facts ought to be remembered before looking at the argument brought up by Munchkin. After a first round, Mr. Rahner provided a number of written responses to undertakings. According to a chart entitled “Re-Amended Answers to Requests for Undertakings Made During the Examination for Discovery of Erik Rahner held on January 30, 2019”, there were 57 such undertakings. In the case of Mr. Sweetbaum, there were also 57 undertakings. Evidently, Munchkin was very familiar with the possibility of seeking “undertakings”. Two undertakings were even requested with respect to the six exhibits discussed here.

[39] In February 2020, it is Mr. Powell who was substituted for Mr. Rahner. The substitution occurred on consent, the justification given being that Mr. Powell was more knowledgeable and Mr. Rahner having limited availability to conclude the examination for discovery. Mr. Powell, during his discovery, indicated that he had not read the whole transcript of Mr. Rahner’s examination for discovery; furthermore, Munchkin’s counsel seemed to have accepted that not every question asked of Mr. Rahner would be re-asked (excerpt from Powell examination at pages 9 and 11, Exhibit “L” to the Howes affidavit) which, of course, does not mean that some questions cannot be re-asked, contrary to the assertion made at paragraph 25 of the written representations. It is in those circumstances that Mr. Powell declared that he had no corrections to bring to the answers provided by Mr. Rahner. I have not found any indication, and none was pointed out, to suggest that the matter of the absence of knowledge about certain presentations raised during discovery needed to be addressed until trial and could not have been addressed before.

[40] The evidence is compelling that Mr. Rahner was ignorant relative to some of the documents on which he was discovered as a corporate representative. The questions asked concerning exhibits 73, 80, 98, 99, 101 and 104 were met by statements by Mr. Rahner to the effect that he had seen the document for the first time the day before (Ex 73, 80, 98, 99, 101) or had never seen it (Ex 104).

[41] As for the documents identified as addressing the commercial relationship between the Plaintiffs, Mr. Sweetbaum was discovered on them (the December 22, 2005 document together with two amending documents). Mr. Sweetbaum acknowledged having some familiarity with the documents. The witness was more loquacious at trial, providing some evidence about some commercial/financial terms not disclosed before: there was no reference to royalties, mark-up or other financial terms as part of the relationship between the parties that could be found in the small non-redacted portions of those documents. That information on which Mr. Sweetbaum testified in relation to the so-called relationship between the parties had to be under the redactions, according to Munchkin.

[42] The Defendants limit their argument to duties for the person discovered spelled out in the Rules. They are summarized as the duty for the person examined to inform himself and to complete answers when they are inadequate. This leads to the sanction found at Rule 248. Munchkin argues that the corporate representative selected by Angelcare (Sub-rule 237(1)) is under an obligation, according Rule 241, to the effect that “before the examination, to become informed by making inquiries of any present or former officer, servant, agent or employee of the party, including any who are outside Canada, who might be expected to have knowledge relating to any matter in question in the action.” It then relies on Sub-rule 245(1) which reads:

Inaccurate or deficient answer

Réponse inexacte ou incomplete

245 (1) A person who was examined for discovery and who discovers that the answer to a question in the examination is no longer correct or complete shall, without delay, provide the examining party with the corrected or completed information in writing.

245 (1) La personne interrogée au préalable qui se rend compte par la suite que la réponse qu’elle a donnée à une question n’est plus exacte ou complète fournit sans délai, par écrit, les renseignements exacts ou complets à la partie qui l’a interrogée.

[43] The motion movers then proceed to contend that Rule 248 provides the sanction if there is a refusal to provide discovery in responses to a proper question. Rule 248 reads:

Undisclosed information inadmissible at trial

Inadmissibilité des renseignements non divulgués

248 Where a party examined for discovery, or a person examined for discovery on behalf of a party, has refused, on the ground of privilege or for any other reason, to answer a proper question and has not subsequently answered the question, the party may not introduce the information sought by the question at trial without leave of the Court.

248 La partie soumise à un interrogatoire préalable, ou la personne interrogée pour son compte, qui a refusé de répondre à une question légitime au motif que les renseignements demandés sont protégés par un privilège de non-divulgation ou pour tout autre motif, et qui n’y a pas répondu par la suite, ne peut donner ces renseignements à l’instruction à moins d’obtenir l’autorisation de la Cour.

It follows, claims Munchkin, that the testimonies of Messrs. Sweetbaum and Powell when they relate to the six exhibits have to be struck from the record because of the inadequate discovery.

[44] As for the three documents addressing the commercial relationship between the Plaintiffs, they are extensively redacted which is equated, in effect, with a lack of disclosure. Thus, the redacted portions of the documents cannot be used at trial, and the unredacted portions of those documents cannot be used as a springboard to testify about that which has not, in effect, been provided in the appropriate affidavit of documents or on discovery. There is no discovery if a document is almost completely redacted. The faulty discovery results in testimonies about them having to be excluded. As put by counsel for Munchkin at the hearing of the motion, “(s)o the scope of this motion is the testimony relating to the nine documents.” (day 21 transcripts, page 68 at line 18 to 23). The documents are in, the testimony of Messrs. Sweetbaum and Powell is out.

[45] On its review of the law, Munchkin takes an absolutist position; it identifies rules where an obligation is made, an affirmative duty is said to be created. Reference is made to Rules 241 and 245. This translates according to Munchkin into an affirmative duty to inform oneself and to correct answers. It concedes that the obligation is moderated by the principle of proportionality.

[46] Furthermore, it is said that the Defendants do not have any duty in the process. They are on the receiving end of the duties imposed on the Plaintiffs. As put by counsel for Munchkin, “(i)t puts the burden on the parties to disclose or not. And if they chose not to, they have to live with the consequences.” (day 21 transcripts on February 24, 2021, page 99, lines 27-28, and page 100, line 1).

B. Angelcare’s argument

[47] Angelcare argues that the Federal Courts Rules operate quite differently than what is suggested by Munchkin. Munchkin neglected to operate in accordance with the scheme of the Rules, which provides for a mechanism to request information if not satisfied by some answers presented by corporate representatives on discovery. The process created by the Rules is more organic than the picture painted by the Defendants. It follows that the sought-after severe remedy should not be granted to rectify what amounts to imprudence or negligence on the part of the Defendants.

[48] While Munchkin focussed exclusively on what it referred to as an affirmative duty to inform oneself and to correct the record, Angelcare puts its focus on other various avenues that could, and should, have been pursued to remedy deficiencies, according to Munchkin, in the discovery process. In fact, some questions that were not adequately answered, in the view of Munchkin, were made the subject of undertakings. Angelcare’s Responding Motion Record reveals more than one hundred of these.

[49] Thus, if Munchkin were so unsatisfied with the answers given by Mr. Rahner about DECKS used by Edgewell/Playtex, it could have sought an order for substitution, pursuant to Sub-rule 237(3), for a different corporate representative to replace Mr. Rahner. That was not done. In fact, Munchkin sought undertakings with respect to only two of those documents in issue here (Ex. 80 and Ex. 99 (Edgewell productions 70 and 12)). Why these and not others? Angelcare contends that, as for the three documents presented as addressing the commercial relationship between the Plaintiffs, Munchkin never moved to produce a non-redacted version of the license agreement and its amendments.

[50] Angelcare derives from cases like MediaTube Corp. v Bell Canada, 2015 FC 391 [MediaTube] and Lubrizol Corp. v Imperial Oil Ltd., 2000 CanLII 15750, 184 FTR 102 [Lubrizol] that there cannot be an expectation that corporate representatives, especially in complex cases, are informed on every aspect of a case. Munchkin ought to have taken steps, whether it be substituting corporate representative or seeking undertakings, as it indeed did with respect to two presentations in issue in this case. There was ample opportunity to obtain further discovery; the Defendants should not be permitted to seek, after the fact and at trial, to exclude uncontroversial testimony.

[51] Is also taken issue with by Angelcare that corporate representatives refused to answer questions, a prerequisite to a consideration of Rule 248. There was no refusal to answer, but rather there was no pursuing of the questions once Mr. Rahner was incapable to answer questions because of his lack of familiarity with documents. That cannot constitute a refusal when the matter is not even pursued, through undertakings or otherwise.

[52] The reliance put by Munchkin on Rule 245 is misplaced as the Rule was never interpreted as requiring scrutiny of each discovery response if not pursued by the examining party, especially where there are 797 questions. In effect, Angelcare contends that other than Rule 237, there was another avenue for redress if the discovery was deficient: to formulate a proper request for undertaking as it was done in this case more than 100 times.

[53] Finally, Rule 232 has no application in this case, contrary to what argues Munchkin. Angelcare contends that its disclosure of heavily redacted agreements, to the point of leaving very little to see, constitutes proper disclosure. Furthermore, Munchkin did not seek more discovery by way of requests for undertakings.

[54] In a nutshell, the parties in this case both take absolutist positions: one argues that there are affirmative duties on the party providing discovery such that they are on the receiving end of those duties, while the other contends that when unsatisfied with the disclosure received, it is incumbent on that party to seek to rectify the situation.

III. Analysis

[55] There are in my view two distinct issues concerning the nine documents being at the heart of the controversy. They will be addressed in turn. First, the Court will examine the issues about the six exhibits, where the inability to provide information is questioned. Second, the Plaintiffs chose to redact three documents; should they be allowed to rely on those redacted portions to offer further evidence at trial? As indicated earlier, so far as the documents themselves are concerned, it is not disputed that they are validly admitted into this record.

[56] It is not a matter of dispute that the case of Glegg v Smith & Nephew Inc., 2005 SCC 31, [2005] 1 SCR 724 provides a useful set of principles that apply during discovery. Relevance applies at all steps of a civil action, as we are reminded at paragraph 21:

21 It should be mentioned here that the nature of the interests at stake necessarily brings into play a principle that has a moderating effect on the evidentiary process in civil matters, including at the examination on discovery stage, namely relevance. This principle governs both the examination on discovery and the disclosure of records. Although there was little discussion about this in Frenette because of the circumstances of the case, that decision did not establish a principle that an express or implied waiver would authorize unlimited and uncontrolled access to a patient’s medical record. On the contrary, the limits on secrecy are reflected in the principle of relevance, which applies at all stages of a civil action.

More importantly for our purposes, discovery favours trials being conducted fairly: no trial by ambush or surprise. The Court wrote at paragraph 22:

22 This principle applies to examinations on discovery, whether before or after the filing of the defence. At this stage, relevance is assessed mainly in relation to the allegations set out in the pleadings (Lac d’Amiante du Québec Ltée v. 2858-0702 Québec Inc., [2001] 2 S.C.R. 743, 2001 SCC 51, at para. 53; Kruger Inc. v. Kruger, 1986 CanLII 3788 (QC CA), [1987] R.D.J. 11 (C.A.)). The examination on discovery facilitates the disclosure of evidence to ensure that trials are conducted fairly and efficiently. It thus enables a litigant to clarify the bases of the claim against him or her, to assess the quality of the evidence and, occasionally, to determine the appropriateness of carrying on with the defence or at least to better define its framework. Used properly, this procedure can help expedite the conduct of the trial and the resolution of the issues before the court (see Royer, at p. 411; Lac d’Amiante, at paras. 59-60). From this perspective, access to relevant evidence is inevitably linked to the defendant’s right to make full answer and defence. If the relevance of the evidence is contested, the judge must settle the issue.

[My emphasis.]

A few years before, our Court had noted that discovery could prove useful for a number of purposes, including cross-examination, as explained at page 4 of Reading & Bates Construction Co. v Baker Energy Resources Corp., [1988] F.C.J. No. 1025:

The purpose of discovery, whether oral or by production of documents, is to obtain admissions to facilitate proof of the matters in issue between the parties. The prevailing trend today favours broadening the avenues of fair and full disclosure to enable the party to advance his own case or to damage the case of his adversary. Discovery can serve to bring the issues more clearly into focus, thus avoiding unnecessary proof and additional costs at trial. Discovery can also provide a very useful tool for purposes of cross-examination.

[57] However, the access to information on discovery is not without its inherent limitations. Relevance is one. Another is the principle of proportionality, as recognized explicitly by counsel for Munchkin. In order to favor access to justice, the Supreme Court noted in Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87 that “(t)rials have become increasingly expensive and protracted” (para 1), thus threatening the rule of law. That, says the Court, requires a culture shift. The “shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just” (para 2). Later, the Court commented further on the need for proportionality, including in pre-trial procedures:

[31] Even where proportionality is not specifically codified, applying rules of court that involve discretion “includes . . . an underlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation”: Szeto v. Dwyer, 2010 NLCA 36, 297 Nfld. & P.E.I.R. 311,at para. 53.

[32] This culture shift requires judges to actively manage the legal process in line with the principle of proportionality. While summary judgment motions can save time and resources, like most pre-trial procedures, they can also slow down the proceedings if used inappropriately. While judges can and should play a role in controlling such risks, counsel must, in accordance with the traditions of their profession, act in a way that facilitates rather than frustrates access to justice. Lawyers should consider their client’s limited means and the nature of their case and fashion proportionate means to achieve a fair and just result.

[33] A complex claim may involve an extensive record and a significant commitment of time and expense. However, proportionality is inevitably comparative; even slow and expensive procedures can be proportionate when they are the fastest and most efficient alternative. The question is whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication.

[58] The scheme for discovery in the Rules seems to me to provide for proportionality in that the parties are expected to play a role in the process, whether it be the discovery of documents (Rules 222 to 233) or the examination for discovery (Rules 234 to 248).

[59] Affidavits of documents are required and the Rules call for a continuing obligation to serve supplementary affidavits when a party becomes aware of inaccuracies or deficiencies (Rule 226). The Court may intervene, on a motion, where satisfied that an affidavit is inaccurate or deficient (Rule 227), with various sanctions possible. Ultimately, no document shall be used in evidence unless disclosed on a party’s affidavit of documents, or produced for inspection by a party on or subsequent to examinations for discovery, or produced by a witness who is not under the control of a party (Rule 232).

[60] As for examinations for discovery, the Rules provide for a scheme that involves not only the party examined, but also the examiner. In my view, if it is certainly true that the examiner ought not to be surprised and to allow for trial by ambush, I venture to say that the principle applies equally to the party being examined. No trial by ambush. The scheme, as I read it, should not allow for a party to stand back and wait for the trial to spring objections that should, or could, have been avoided had the matter been addressed at the time of discovery. In fact, the Rules provide for mechanisms to address issues well before the trial begins. Both require that the matter be raised at the appropriate time. Fairness and efficiency call for parties to play their respective role according to the scheme of the Rules.

[61] Thus, Sub-rule 237(3) allows for a substitution of a corporate representative:

Order for substitution

Substitution ordonnée

(3) The Court may, on the motion of a party entitled to examine a person selected under subsection (1) or (2), order that some other person be examined.

(3) La Cour peut, sur requête d’une partie ayant le droit d’interroger une personne désignée conformément aux paragraphes (1) ou (2), ordonner qu’une autre personne soit interrogée à sa place.

The case of Liebmann v Canada (Minister of National Defence), [1996] FCJ No. 536, 110 FTR 284, supplies a number of factors to consider, such as the witness being able to give broad discovery, the witness to be substituted being incapable of giving evidence of his own knowledge or by informing himself, the fact that it may be more desirable to have a witness who is closer to the issues in order to be examined, as well as the responsiveness of the witness and the effort made at informing himself. This certainly does not suggest that it is expected, or even appropriate, to let discovery unfold to complain about deficiencies at trial.

[62] Similarly, Rule 244 specifies that the party that is unable to answer a question may be required to become better informed. Rule 241 has its limitations, as it requires the person to be examined to inform himself before the examination. Rule 244 creates for the examining party that it may require for the person examined to become better informed. These undertakings are considered binding as relief from having to submit the information requires the Court’s permission (Premakumaran v Canada, 2005 FC 507, para 9). In a case such as the case at hand, it is not illegitimate for a party who has not been challenged on questions left largely unanswered, for lack of information, to consider the matter closed where it has not been pursued in spite of the availability of tools readily accessible. As a matter of fact, not only were there close to 800 questions for Mr. Rahner, but there were two undertakings with respect to two of the presentations which are now the subject of dispute. Furthermore, the issues were not pursued with Mr. Powell, Mr. Rahner’s successor as the corporate representative.

[63] It is of course true that there exists an obligation for the corporate representatives to inform themselves (Rule 241) before the examination. But that does not make an encyclopedia out of that representative. In fact, the scope of the examination is limited in that the “person being examined for discovery shall answer, to the best of the person’s knowledge, information and belief, any question” (Rule 240) that meets the requirements of clauses (a), (b) and (c). As already noted, the affirmative obligation is to get information before the examination for discovery. There is no evidence on this record that Mr. Rahner neglected to inform himself. The remedy for questions left unanswered is Rule 244. Given the large volume of information to be received, it is doubtful that a corporate representative could possibly have assimilated it completely. I did not find it surprising that some of the presentations that are the subject of this motion were shown to Mr. Rahner on short notice and were in fact unknown to him. It seems to me that these were the types of cases where Rule 244 is an obvious instrument to seek further information from a witness on discovery.

[64] Both parties referred to MediaTube (supra). This is a case that supports the proposition that it is expected that witnesses will not have the answers to every question. It follows that undertakings to provide further answers will be expected and needed, especially in complex litigation as in this case. At paragraph 12, the Court finds:

[12] While Rule 241 is a positive obligation on a witness on an examination for discovery, given the complexities of patent litigation and this case in particular, it would be impossible for any one witness to inform him or herself of all possible information that might be required to be able to answer the questions on discovery. Until a question is asked a witness will only know in a general sense what the issues in the case are. The questions will crystallize the information sought by opposing counsel. No one has a crystal ball to know with certainty what will be asked. That is why undertakings to provide answers are one of the basic fundamentals of examinations for discovery.

[My emphasis.]

At paragraph 20, the point is made that undertakings are appropriate. The further point is made, and I agree with it, that proportionality must be part of the equation:

[20] The Court does not support the over abundance of interruptions in an examination by the use of a quasi objection such as “under advisement”. Witnesses should be permitted to answer proper questions. If the witness does not know the answer then that is the answer and that is when undertakings are appropriate to make further inquiries and provide answers on a follow-up examination or by way of writing if the circumstances are such that answers in writing are acceptable to the party examining. Parties to litigation are expected to generally follow the Rules keeping in mind that flexibility, civility and proportionality must be exercised in all cases.

[My emphasis.]

I have not found any authority to suggest that, in the face of admonitions by the Supreme Court that a culture shift must occur in civil litigation, which specifically entails simplifying pretrial procedure, it would be appropriate to avoid substituting a corporate representative (Sub-rule 237(3)) or avoid seeking undertakings where proper questions are asked. It is, in the words of Prothonotary Aalto, “one of the basic fundamentals of examinations for discovery” (MediaTube (supra), para 12).

[65] Munchkin suggested at paragraph 46 of its written case that there exists an obligation for a person to become informed, in accordance with Rule 241. It must be reminded though that the obligation is clearly spelled out in Rule 241 as being situated “before the examination”. As already found, examination for discovery is not a memory test and the corporate representative cannot be expected to have all the answers all the time. The availability of undertakings is significant. That is reflected in Lubrizol(supra):

[3] It is said that Dr. Schroeck is not a proper representative of the plaintiff Lubrizol Canada Limited. He is not an employee of Lubrizol Canada Limited; he has always been an employee of Lubrizol Corporation, the American parent of Lubrizol Canada Limited, which is a wholly owned subsidiary of the Lubrizol Corporation.

[4] It has been shown, and there is no doubt, that Dr. Schroeck has no particular knowledge of the operations of Lubrizol Canada Limited in Canada. And a number of questions were put to him, which were, in my view, irrelevant, in any event, as to his knowledge of the number of employees and the number of sales offices that Lubrizol Canada Limited might have in Canada, which he could not answer.

[5] The fact that he was unable to answer those questions does not, in my view, demonstrate that he is an improper person to appear on behalf of Lubrizol Canada Limited and to answer questions on its behalf. If he was asked, and I do not know, to give undertakings with respect to certain relevant questions, clearly, he is in a position to obtain the information and to furnish it.

[7] Be that as it may, if questions can be asked which are relevant, they can be asked and Dr. Schroeck is clearly in a position to obtain answers to them and to give undertakings to give answers to them if that is found to be appropriate. The simple fact that we are dealing with a many issued case does not create a right in the defendant to conduct many examinations of many representatives of the plaintiffs.

The solution is not to wait for trial to then invoke Rules 245 and 248. That would not be in line with the scheme, which calls for proportionality. It is rather to seek undertakings or to substitute one corporate representative for another. In fact, one reason why Mr. Powell was offered as a substitute was that he was more knowledgeable.

[66] There are issues with the use that the Defendants want to make to sanction the alleged lack of discovery. Sub-rules 245(1) and (2), and Rule 248 use the following language:

Inaccurate or deficient answer

Réponse inexacte ou incomplete

245 (1) A person who was examined for discovery and who discovers that the answer to a question in the examination is no longer correct or complete shall, without delay, provide the examining party with the corrected or completed information in writing.

245 (1) La personne interrogée au préalable qui se rend compte par la suite que la réponse qu’elle a donnée à une question n’est plus exacte ou complète fournit sans délai, par écrit, les renseignements exacts ou complets à la partie qui l’a interrogée.

Further examination

Reprise de l’interrogatoire

(2) An examining party may require a person providing information under subsection (1) to continue the examination for discovery in respect of that information.

(2) Si une personne interrogée au préalable donne des renseignements en application du paragraphe (1), la partie qui l’a interrogée peut reprendre l’interrogatoire préalable à l’égard de ces renseignements.

Undisclosed information inadmissible at trial

Inadmissibilité des renseignements non divulgués

248 Where a party examined for discovery, or a person examined for discovery on behalf of a party, has refused, on the ground of privilege or for any other reason, to answer a proper question and has not subsequently answered the question, the party may not introduce the information sought by the question at trial without leave of the Court.

248 La partie soumise à un interrogatoire préalable, ou la personne interrogée pour son compte, qui a refusé de répondre à une question légitime au motif que les renseignements demandés sont protégés par un privilège de non-divulgation ou pour tout autre motif, et qui n’y a pas répondu par la suite, ne peut donner ces renseignements à l’instruction à moins d’obtenir l’autorisation de la Cour.

First, Rule 248 has a threshold of the party examined for discovery having refused for any reason to answer proper questions. On the facts in this case, there is no such refusal. Following in the footsteps of Lubrizol, there has not even been an attempt to seek information through requests for undertakings. Had there been these requests, which would have remained unanswered in spite of relevant information being sought, an argument that there was in those circumstances a refusal could have been entertained. But there is no evidence to that effect here. On the contrary, the matter of the inability of Mr. Rahner to answer questions was not pursued, making it reasonable to assume that it had been dropped altogether. After all, follow-up questions in the form of undertakings were numerous, two of which concerning two of the exhibits under consideration in this motion. These are not refusals: they reflect the impossibility for a witness to answer questions because he is not familiar with the documents presented. It was incumbent on the examiner to pursue the matter either under Rule 237(3) by getting a substitute or through undertakings (Rule 244).

[67] As for Rule 245, Munchkin has not established that the person who was examined for discovery [note that Rule 248 speaks of the “party” while Rule 245 speaks of the “person being examined”; the use of different words would suggest different meanings: R. v Esseghaier, 2021 SCC 9, para 52, Marche v Halifax Insurance Co., 2005 SCC 6, [2005] 1 SCR 47, at para 95], in fact, discovered that his answers were no longer correct or complete. Mr. Rahner answered that he was not familiar with the documents put to him. That was his answer at that stage. An examination of the documents reveals that they largely speak for themselves. There were undertakings sought of Mr. Rahner. It was reasonable to conclude that nothing further was required.

[68] It should be recognized that if there were evidence that the exhibits were in fact used as a Trojan horse, or some other improper ulterior motive or purpose, that might well bring in other considerations. But I cannot see in this case any ulterior motive.

[69] To put it another way, the Defendants cannot rely on their lack of fuller discovery to now argue in extremis that questions asked of witnesses at trial in relation to those exhibits have become out-of-bound. Indeed, the questions were rather innocuous, which confirms that there was no Trojan horse.

[70] It follows that the remedy sought by Munchkin concerning Exhibits 73, 80, 98, 99, 101 and 104 is denied and the motion for an order striking from the evidence portions of the testimonies of Messrs. Douglas Sweetbaum and Jermaine Powell in respect of these exhibits is dismissed.

[71] However, I reach a different outcome with respect to the portions of the testimony of Mr. Sweetbaum concerning the so-called “commercial relationship between the Plaintiffs”. In the case of the December 22, 2005 license agreement and its two amendments of April 15, 2008 and December 16, 2015, the Plaintiffs chose to disclose a minimal portion of the documents.

[72] Angelcare contended that it produced these redacted documents well before the examination. That may be so, but that does not explain why the disclosed documents provide so little information. In fact, the two amendments were very slightly adjusted in answers to undertakings, leaving the additional versions of these documents being almost entirely redacted. Mr. Sweetbaum, who testified as the corporate representative for Angelcare, was not forthcoming on discovery about the contents of the agreements, even refusing to answer questions about the basis for the redactions. In the result, it cannot be said that these documents were disclosed; the extent of the disclosure was for a very limited purpose and amounts, in my view, to a lack of disclosure with respect to other issues. As a matter of fact, it is rather the existence of the license agreement that is disclosed, not the content of an agreement and its amendments. Such minimal disclosure should not open the door to using the redacted documents to ask questions over and above that which has been disclosed. Rule 232 provides:

Undisclosed or privileged document

Documents qui ne peuvent servir de preuve

232 (1) Unless the Court orders otherwise or discovery of documents has been waived by the parties, no document shall be used in evidence unless it has been

232 (1) À moins que la Cour n’en ordonne autrement ou que les parties n’aient renoncé à leur droit d’obtenir communication des documents, un document ne peut être invoqué en preuve que dans l’un des cas suivant :

(a) disclosed on a party’s affidavit of documents as a document for which no privilege has been claimed;

a) il est mentionné dans l’affidavit de documents de la partie et, selon celui-ci, aucun privilège de non-divulgation n’est revendiqué;

(b) produced for inspection by a party, or a person examined on behalf of one of the parties, on or subsequent to examinations for discovery; or

b) il a été produit par l’une des parties ou par une personne interrogée pour le compte de celle-ci pour examen, pendant ou après les interrogatoires préalables;

(c) produced by a witness who is not, in the opinion of the Court, under control of the party.

c) il a été produit par un témoin qui, de l’avis de la Cour, n’est pas sous le contrôle de la partie.

It remains obscure why Angelcare acted the way that it did. There must be a reason for the absence of disclosure out of documents running for many pages. It chose to disclose only that which concerned to agreement for Playtex to have the exclusive right and license to manufacture and produce the Captiva Diaper System, as well as to promote, sell and distribute pails and cassettes. Nothing on the financial terms of the agreement is to be found in the unredacted portions of the documents. A paragraph left unredacted in the original agreement speaks of the marketing effort Platex agreed to undertake. There is nothing else. As said by this Court in Apotex Inc. v Sanofi-Aventis, 2010 FC 77, at paragraph 15:

[15] Given the sophistication of the parties and the level of preparation expected of them in the circumstances, the presumption that the absence of a document from the affidavit of document signals that if it exists, a strategic and informed decision has been made that it will not be relied on a trial is all the greater. That being the basis of many of the individual determinations made here, I can see no reason why the parties themselves cannot or should not proceed in this litigation in reliance on the same assumption. I also note that if parties can be confident that their opponent will not be entitled to rely upon such documents to their advantage at trial, it should help reduce the length of discoveries, since parties will have no incentive to insist on production of additional documents merely out of fear of being blindsided at trial.

[My emphasis.]

[73] The fact remains that Angelcare sought to supplement its case as part of its examination of Angelcare’s corporate representative, at trial in the context of these documents. The witness sought to discuss these agreements without having established the appropriate basis to be taken further than the four corners of the unredacted documents. Angelcare did not seek for the Court to exercise discretion and it did not contest Munchkin’s assertion that the agreements contain information about the financial terms of the agreement with Playtex. But they were never disclosed.

[74] At trial, Mr. Sweetbaum, when questioned about these agreements, sought to testify about the economic benefits drawn from the relationship between Angelcare and Playtex. In so doing, the witness offered evidence about financial terms, speaking of royalties and mark-ups for the first time; there was nothing of the sort that is visible on the unredacted portions of the agreement and its amendments. Thus, Angelcare tried to use in evidence in the portion of the trial dedicated to infringement of the patents-in-suit and their validity a heavily redacted document without proper disclosure, thus running afoul of Rule 232. Angelcare suggested that the financial details are not at issue at this stage, the present action being bifurcated. That does explain why it chose to have the witness provide “high-level information”, confirming that Angelcare received compensation of a particular kind in exchange for granting Playtex the exclusive license. But the evidence offered relied on these documents without satisfying the conditions of Rule 232. The evidence from Mr. Sweetbaum ought to be struck from the record.

ORDER in T-151-16

THIS COURT ORDERS:

1. The motion for an order striking from the evidence portions of the testimonies of Messrs. Douglas Sweetbaum and Jermaine Powell in respect of Exhibits 73, 80, 98, 99, 101 and 104 is dismissed.

2. The motion for an order striking from the evidence those portions of Mr. Douglas Sweetbaum’s testimony (transcript of day 4, on January 28, 2021, from page 78, line 12 to page 82, line 12) in respect of the commercial relationship between the Plaintiffs is granted.

3. In view of the divided success between the parties on the motion, there is no adjudication of costs.

“Yvan Roy”

Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:

T-151-16

STYLE OF CAUSE:

ANGELCARE CANADA INC. ET AL

v MUNCHKIN, INC. ET AL

PLACE OF HEARING:

BY VIDEOCONFERENCE BETWEEN OTTAWA (ONTARIO) AND MONTRéAL (QUÉBEC)

DATE OF HEARING:

February 24, 2021

ORDER AND REASONS:

ROY J.

DATED:

MARCH 18, 2021

APPEARANCES:

François Guay

Guillaume Lavoie Ste-Marie

Camille Lachance Gaboury

Denise Felsztyna

Jeremy Want

Matthew Burt

For The PLAINTIFFS/

DEFENDANTS BY COUNTERCLAIM

J. Bradley White

Vincent M. de Grandpré

Faylene A. Lunn

Yeal Mansour

For ThE DEFENDANTS/

PLAINTIFFS BY COUNTERCLAIM

SOLICITORS OF RECORD:

Smart & Biggar LLP

Barristers & Solicitors

Montréal (Québec)

For The PLAINTIFFS/

DEFENDANTS BY COUNTERCLAIM

Osler, Hoskin & Harcourt LLP

Barristers & Solicitors

Ottawa (Ontario)

For ThE DEFENDANTS/

PLAINTIFFS BY COUNTERCLAIM