COURT FILE AND PARTIES

COURT FILE NO.: 11-51725

DATE: 2014/06/02

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hartley Belway, Plaintiff

AND:

Petro-Canada Fuels Inc. and Canadian General Filters Limited, Defendants

AND:

Dana Canada Inc., Filter Division – Third Party

BEFORE: Justice Rick Leroy

COUNSEL: Karen Borovay, Counsel, for the Plaintiff

Joseph Villeneuve, Counsel for the Defendant Petro-Canada Fuels Inc.

Louise James, Counsel for the Defendant Canadian General Filters Limited

Christopher Chekan, Counsel for the Third Party

HEARD: June 2, 2014

ENDORSEMENT

Motions

[1] The following were before me on May 15, 2014.

[2] The plaintiff moved in Divisional Court, file number 13-1977 for an order dismissing or quashing the third party appeal of Master Roger’s orders dated October 7, 15 and 21, 2013 and for an order providing revised timelines to those established by the Master by order on October 15, 2013.

[3] The third party moved for an order setting the same orders aside and that its motion for a protection order be referred to a judge.

[4] I granted the plaintiff’s motion with costs to be addressed. There were no errors in the Master’s rulings. The orders established timelines for the third party’s protection motion and provided that the documents from the third party containing trade secrets were to be filed in the court file under seal. Pending hearing, Dana’s materials were to be secure against public scrutiny.

[5] The third party asserts that notwithstanding the sealing order and Rule 30.1, its trade secrets might or will be exposed to prying eyes not bound by Rule 30.1 as part of litigation preparation. The Master attempted to address those concerns in the October 15, 2013 endorsement.

[6] Rather than proceed in accordance with the orders, Dana delivered Notice of Appeal. Correspondence was exchanged among counsel for the parties, the gist of which was that Dana insisted on a protection order applied to the proceedings relative to its documentary trade secrets on consent of the other parties because they did not articulate prejudice to their interests by so doing. Dana has not, to date, provided an evidentiary basis for such an order.

[7] In court proceedings, covertness is the exception and openness the rule – CJA s. 137, 135. The test for a protection order was articulated in Sierra Club of Canada v. Canada, 2002 SCC 41, [2002] S.C.J. No. 42. The burden rests with the applicant for protection. Commercial interests that qualify for protection are those that involve a public interest in confidentiality. It is impossible to assess the three elements articulated in those reasons in a vacuum. The analysis requires more than counsel’s bald assertion.

[8] Plaintiff counsel, in correspondence, articulated their views as to why the appeal as constituted could not succeed and notified Dana’s counsel that unless matters moved forward they would be forced to move to dismiss the appeal.

[9] The power to quash an appeal is seldom used and only when the appeal is manifestly devoid of merit.

[10] Master Roger’s orders were interlocutory as opposed to final. The orders were within his authority. They were directed at the procedure to be followed within the process of the motion for the protection order. The appeal route is governed by Courts of Justice Act, subsection 17(a) and not subsection 19(b) or (c). The appeal was brought outside mandated timelines. The Rules allow considerable latitude in excusing delays or wrong routes to appeal in the pursuit of following justice. They were not helpful here.

[11] To succeed on an appeal, the appellant is expected to raise errors in law or fact. The challenge to the Master’s jurisdiction and the constitutionality of his determination are non-starters.

[12] Master Roger’s procedure and sealing order coupled with Rule 30.1 was appropriate. His direction was proper and just.

[13] The consequence of the appeal is that the litigation was at full stop for eight months. Revised timelines are required.

[14] Accordingly, the plaintiff’s motion succeeds with costs and the third party motion fails. The situation remains as it was on October 21, 2013. Dana should move forward with its motion for the protection order with alacrity. I’ve signed the plaintiff’s revised timeline order.

Interim without Prejudice Confidentiality Order

[15] In his submissions, Mr. Chekan referred to the considered reasons for decision of Cumming, J. in CPC International Inc. v. Seaforth Creamery Inc. 1996 CarswellOn 2301 to which was attached an Appendix “A” – Confidentiality Order as part of the reasons. That was not presented to the Master or counsel prior to May 15, 2014.

[16] The Court has the discretion to manage its process. I did not have enough information to establish a sense of whether Dana has a confidential and sensitive trade secret interest in documentary productions that brings public interest in confidentiality. Nor do counsel for the other litigants. The risk may be out there. Master Roger did what he thought appropriate to protect the confidentiality interest claimed pending his ruling.

[17] As a cautionary measure in the context of, at most a brief untested interlude restricting the principle of openness, I determined that an interim without prejudice confidentiality order is an expedient resolution issue pending hearing before the Master.

[18] The indulgence to the third party inherent in the temporary without prejudice order may or may not accord with process under the Rules; however, it allows for documentary production and oral examination with a view to moving the file forward expeditiously while removing Dana’s grievance. My decision to grant a temporary without prejudice order is not to be viewed as recognition of any deficiency in the Master’s orders nor does it have value as precedent.

[19] The draft order prepared by Dana for the May 23rd, 2014 return did not reflect the interim purport of my purpose. The revised order from the plaintiff does and meshes with Master Roger’s orders.

Costs:

[20] Mr. Chekan asked for costs involved in acquiring the temporary without prejudice protection order. As the merit of whether there ought to be a protection order remains at large, the third party achievement is nominal. Nothing substantive has been established. Dana’s position on the motions presented May 15, 2014 was unsuccessful. The third party is expected to move forward on the protection motion with alacrity.

[21] I am alert to the principle of indemnity, the offer to settle and the amount of costs that the unsuccessful party could reasonably expect to pay. Notwithstanding that he has not framed an evidentiary basis for a confidentiality order so that counsel can properly advise their clients, Mr. Chekan’s costs assertion significantly exceeds that of the plaintiff.

[22] As regards the other parties’ claims for costs arising from the Divisional Court appeal, costs are appropriate. The appeal was devoid of merit. The third party initiated unmeritorious steps in the action. The claims relating to the Charter, Constitution and the demand for examination of counsel exasperate principled analysis. It was in the wrong forum. There was blatant disregard for time requirements. The plaintiff offered dispositive analysis to the third party directed to the flaws in its appeal. The plaintiff offered to settle allowing the third party to withdraw and pay only $10,000 costs thrown away. The appeal muddled document production process and forced the plaintiff into moving formally. The correspondence among counsel was voluminous. The third party was not appropriately responsive.

[23] Temporally this file is approaching its third anniversary. The statement of claim was issued June 29, 2011. Documentary discovery is not complete. The third party by its actions imposed a stalemate over the file necessitating the plaintiff’s motion. Dana flouted the objectives inherent in Rule 1.04.

[24] Counsel for the plaintiff and Petro-Canada ask me to attribute perverse motive to Dana and counsel based on “prior discreditable conduct” noted by other judicial officers involved with them. I prefer to disregard that inference and assess the fact situation I have individually, on its merits.

[25] Dana shall pay costs to Petro-Canada and Canadian General Filters in the amount of $4,500.00 HST included each and to the plaintiff the sum of $25,000 HST included, all payable forthwith.

[26] I endorsed the temporary without prejudice confidentiality order and the revised timetable order. I deleted paragraph 11 as that direction is more properly the place of the judicial officer hearing the motion and modified paragraph 3.01 from (h) to (k) to (d) to (g). I deleted paragraph 8 from the draft procedure order.

Justice Rick Leroy

Date: June 2, 2014