Shah et al. v. LG Chem, Ltd. et al.
[Indexed as: Shah v. LG Chem, Ltd.]
Ontario Reports
Ontario Superior Court of Justice,
Perell J.
February 3, 2015
124 O.R. (3d) 570 | 2015 ONSC 776
Case Summary
Civil procedure — Motions — Evidence — Affidavits — Defendants moving to dismiss action for want of jurisdiction — Plaintiffs including affidavit of law clerk in their responding material — Plaintiffs seeking leave to file supplemental affidavit of law clerk sworn after cross-examination of deponent of affidavit delivered by defendants — Leave denied — Material in supplemental affidavit not very important to plaintiffs' case on jurisdiction motion and plaintiffs failing to adequately explain why material could not have been included in original affidavit.
The defendants moved to dismiss the plaintiffs' action for want of jurisdiction. The plaintiffs included in their responding motion record an affidavit sworn by F, a law clerk at the law firm of their counsel. After cross-examining N, the deponent of the affidavit delivered by the defendants, the plaintiffs moved under rule 39.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for leave to file a supplemental affidavit of F which referred to material disclosed by N which was allegedly not discoverable to the plaintiffs through publicly available sources. [page571]
Held, the motion should be dismissed.
Leave under rule 39.02(2) should be granted sparingly. While F's supplemental affidavit was relevant to the jurisdiction motion, it was not very important to the plaintiffs' case on that motion. The plaintiffs therefore had a very weak case for arguing that they had met the high threshold for granting leave to file a subsequent affidavit. Moreover, the plaintiffs offered only a feeble explanation as to why F's evidence could not have been included as part of the plaintiffs' pre-cross-examination evidence.
Cases referred to
Brock Home Improvement Products Inc. v. Corcoran (2002), 2002 49425 (ON SC), 58 O.R. (3d) 722, [2002] O.J. No. 931, [2002] O.T.C. 172, 112 A.C.W.S. (3d) 230 (S.C.J.); Catalyst Fund Limited Partnership II v. IMAX Corp., [2008] O.J. No. 873, 2008 8778 (S.C.J.); Lihou v. VIA Rail Canada Inc., [2006] O.J. No. 4451, 153 A.C.W.S. (3d) 59 (Master); Skrobacky (Attorneys for) v. Frymer, [2011] O.J. No. 2468, 2011 ONSC 3295, 16 C.P.C. (7th) 199, 70 E.T.R. (3d) 44 (S.C.J.); Sure Track Courier Ltd. v. Kaisersingh, [2011] O.J. No. 5930, 2011 ONSC 7388 (S.C.J.)
Statutes referred to
Class Proceedings Act, 1992, S.O. 1992, c. 6 [as am.], ss. 12, 35
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 39.02, (2)
Authorities referred to
Perrell, Paul M., and John W. Morden, The Law of Civil Procedure in Ontario, 2nd ed. (Markham, Ont.: LexisNexis Canada, 2014)
MOTION for leave to file a supplemental affidavit.
Jean-Marc Leclerc and Linda J. Visser, for plaintiffs.
Ian C. Matthews, for defendants NEC Corporation, NEC TOKIN Corporation and NEC Canada.
PERELL J.: —
A. Factual and Procedural Background
[1] The plaintiffs, Khurram Shah and Alpina Holdings Inc., bring a motion pursuant to rule 39.02(2) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] for an order granting leave to file the supplemental affidavit of Sylvia Flower, sworn December 17, 2014, for a motion that challenges this court's jurisdiction over the plaintiffs' claims against the defendants NEC TOKIN Corporation and NEC Corporation (collectively, the "NEC defendants").
[2] NEC Canada [Inc.] (the "Inc." is missing in the style of cause), a related corporation, is also a defendant, but it has a principal place of business in Mississauga, Ontario, and it does not bring a jurisdiction motion. [page572]
[3] On June 26, 2013, the plaintiffs, Khurram Shah and Alpina Holdings Inc., commenced a proposed class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6.
[4] The plaintiffs assert a claim on behalf of persons in Canada who purchased lithium ion batteries or consumer products containing lithium ion batteries, such as notebook computers, cellular phones, smartphones, tablet computers, e-book readers, MP3 players, personal digital assistants, handheld global positioning systems and handheld video gaming systems.
[5] In their proposed class action, the plaintiffs allege that the defendants conspired to fix the prices of rechargeable lithium ion batteries manufactured and sold by the defendants between January 1, 2000 and December 31, 2011.
[6] The defendants are LG Chem, Ltd.; LG Chem America, Inc.; Panasonic Corporation; Panasonic Corporation of North America; Panasonic Canada Inc.; Sanyo Electric Co., Ltd.; Sanyo North America Corporation; Sanyo Energy (U.S.A.) Corporation; Sony Corporation; Sony Energy Devices Corporation; Sony Electronics, Inc.; Sony of Canada Ltd.; Samsung SDI Co., Ltd.; Samsung SDI Co., Ltd.; Samsung SDI America, Inc.; Samsung Electronics Canada Inc.; Hitachi, Ltd.; Hitachi Maxell, Ltd.; Maxell Corporation of America; Maxell Canada; GS Yuasa Corporation; NEC Corporation; NEC TOKIN Corporation; NEC Canada [Inc.]; Toshiba Corporation; Toshiba America Electronic Components, Inc.; and Toshiba of Canada Limited.
[7] There is a parallel class proceeding in the United States on behalf of purchasers residing in the United States.
[8] The plaintiffs served their certification record on February 21, 2014, and the certification motion has been scheduled for the week of June 1, 2015.
[9] The NEC defendants have head offices in Japan and, on September 5, 2014, they brought a motion to challenge the court's jurisdiction. In support of their motion, they delivered an affidavit from Tashiro Narita, of the City of Kawaguchi, in the Saitama Prefecture, in the country of Japan.
[10] Mr. Narita deposed that NEC Corporation and NEC TOKIN Corporation did not have direct or indirect sales of lithium ion batteries into Canada. Mr. Narita's affidavit does not contain any information regarding the identity of NEC Corporation's or NEC TOKIN Corporation's customers of lithium ion batteries.
[11] On October 10, 2014, the plaintiffs delivered their responding motion record for the jurisdiction motion, including an affidavit sworn by Sylvia Flower, a law clerk at Siskinds LLP, lawyers for the plaintiffs. Ms. Flower's affidavit attaches [page573] documents from publicly available sources that show connections between the NEC defendants, lithium batteries and Canada. The affidavit also appended documents from the related U.S. proceeding. The NEC defendants did not cross-examine Ms. Flower.
[12] On November 13, 2014, the plaintiffs cross-examined Mr. Narita on his affidavit. The examination took place in California.
[13] Following Mr. Narita's cross-examination, the NEC defendants began to prepare their factum, which was due on December 23, 2014 in accordance with the timetable that had been established by Justice Conway, my predecessor as case management judge for this proposed class action.
[14] On December 17, 2014, without prior notice to the NEC defendants, the plaintiffs brought this motion seeking leave to file a supplemental affidavit of Ms. Flower, sworn December 17, 2014. The plaintiffs' motion was supported by a 12-paragraph affidavit from Kerry McGladdery Dent, a lawyer at Siskinds LLP, that appended the proposed supplemental Flower affidavit.
[15] In her supplemental affidavit, Ms. Flower deposes that in response to questioning, Mr. Narita testified that (a) between 2000 and 2003, NEC Electronics (Europe) GmbH sold lithium ion batteries to Siemens and NEC UK for use in cellular phones, and after April 2003, NEC TOKIN sold lithium batteries to Siemens for use in the manufacturing of cellphones; (b) in 2005, for a period of one and a half years, NEC Corporation and other NEC-affiliated companies supplied lithium ion batteries to Apple for use in the iPod Classic and then subsequently continued to supply Apple lithium ion batteries for replacements, spares or maintenance; (c) after 2005, NEC TOKIN took over the battery packing assembly and sold lithium ion battery packs (which contain the battery cell) to Nintendo for use in Game Boys; and (d) NEC Corporation and other NEC-affiliated companies sold lithium ion batteries to Motorola.
[16] The NEC defendants submit that the plaintiffs have distorted the evidence of Mr. Narita by loose references to "NEC" to suggest that the NEC defendants sold lithium ion batteries to Siemens, Apple, Nintendo and Motorola, without regard to any of the geographic, temporal or corporate qualifications that actually appear in Mr. Narita's evidence. They submit that the new Flower affidavit attempts to misrepresent Mr. Narita's evidence by indicating that it was his evidence that "NEC" sold lithium ion batteries to Siemens, Apple and Nintendo "primarily" for use in cellphones, the iPod Classic and Game Boys, respectively. [page574]
[17] The proposed supplemental affidavit of Ms. Flower appends historical website content indicating that the Siemens (cellular phones), Apple (iPod Classics), Nintendo (Game Boys) and Motorola (cellular phones) products were sold in Canada. In a point that I will return to below, the plaintiffs submit that this information is relevant and important for the court to know for the jurisdiction motion.
[18] In her affidavit, Ms. McGladdery Dent deposes that the customer information disclosed by Mr. Narita was not discoverable to the plaintiffs through publicly available sources.
[19] On January 7, 2015, Ms. McGladdery Dent was cross-examined on her affidavit.
[20] As already noted above, the plaintiffs bring a motion for leave to deliver Ms. Flower's affidavit for the jurisdiction motion.
B. Legal Background
[21] Relevant to the determination of this motion are ss. 12 and 35 of the Class Proceedings Act, 1992 and rule 39.02 of the Rules of Civil Procedure, which state:
Court may determine conduct of proceeding
- The court, on the motion of a party or class member, may make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for the purpose, may impose such terms on the parties as it considers appropriate.
Rules of court
- The rules of court apply to class proceedings.
EVIDENCE BY CROSS-EXAMINATION ON AFFIDAVIT
On a Motion or Application
39.02(1) A party to a motion or application who has served every affidavit on which the party intends to rely and has completed all examinations under rule 39.03 may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion or application.
(1.1) Subrule (1) does not apply to an application made under subsection 140(3) of the Courts of Justice Act.
(2) A party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit or a transcript of an examination conducted under rule 39.03. [page575]
C. Discussion and Analysis
[22] In P.M. Perrell and J.W. Morden, The Law of Civil Procedure in Ontario, 2nd ed. (Markham, Ont.: Lexis Nexis Canada, 2014), at pp. 677-78, I discuss the procedure for a motion. I note that the procedure involves a scheme for the exchange of affidavits. I state:
The procedure for a motion provides for closure or limits the delivery of evidence for the motion. The Rules require that all the parties must submit their evidence before any cross-examinations of opposing parties proceed[.]
In determining whether to grant leave for an additional affidavit or another examination and upon what terms, if any, the court will consider whether the matter raised on the cross-examination was relevant to the litigation, whether the affidavit sought to be filed is responsive to the matter, and whether allowing the delivery of the affidavit would operate unfairly against the adverse party: Nolan v. Canada (Attorney General) (1997), 1997 12213 (ON SC), 38 O.R. (3d) 722 (Gen. Div.); Bloorview Childrens Hospital Foundation v. Bloorview MacMillan Centre, [2001] O.J. No. 1701 (S.C.J.).
On a motion for leave to file a further affidavit, a party should explain why the evidence could not have been included as part of its pre-cross-examination evidence: Brock Home Improvement Products Inc. v. Corcoran (2002), 2002 49425 (ON SC), 58 O.R. (3d) 722 (S.C.J.), but in Nolan v. Canada (Attorney General) (1997), 1997 12213 (ON SC), 38 O.R. (3d) 722 (Gen. Div.), Quinn J. rejected the proposition that leave could only be granted to introduce evidence to respond to a matter that had been raised for the first time during the cross-examination. In First Capital Realty Inc. v. Centrecorp Management Services Ltd., [2009] O.J. No. 4492 at para. 4 (Div. Ct.) (also Knowles (c.o.b. Special Events Marketing) v. Arctic Glacier Inc., 2011 ONSC 682 at paras. 52-54), the Divisional Court adopted this point and also stated that "a flexible, contextual approach is to be taken in assessing the criteria relevant to rule 39.02(2), having regard to the overriding principle outlined in Rule 1.04 of the Rules of Civil Procedure that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute". The Divisional Court held that all the criteria should be weighed and no one criterion was determinative.
[23] The jurisprudence about rule 39.02(2) indicates that (1) leave should be "granted sparingly": Catalyst Fund Limited Partnership II v. IMAX Corp., [2008] O.J. No. 873, 2008 8778 (S.C.J.), at para. 14; Skrobacky (Attorneys for) v. Frymer, [2011] O.J. No. 2468, 2011 ONSC 3295 (S.C.J.), at para. 27; Sure Track Courier Ltd. v. Kaisersingh, [2011] O.J. No. 5930, 2011 ONSC 7388 (S.C.J.), at para. 51; (2) the moving party has "a very high threshold" to meet: Catalyst Fund Partnership II v. IMAX Corp., supra, at para. 14; Skrobacky v. Frymer, supra, at para. 27; Sure Track Courier Ltd. v. Kaisersingh, supra, at para. 51; (3) the rule about the delivery of subsequent affidavits should not be used as "a mechanism for correcting deficiencies in the motion materials": Lihou v. VIA Rail Canada Inc., [2006] O.J. No. 4451, 153 A.C.W.S. (3d) 59 (Master), at para. 24; and [page576] (4) the rule is designed to fairly regulate and provide closure to the evidence gathering process for motions and applications.
[24] In Catalyst Fund Limited Partnership II v. IMAX Corp., supra, Justice Pepall stated, at para. 14: "Rule 39.02 is there for a reason. It imports principles of fairness and economy." In Skrobacky (Attorneys for) v. Frymer, supra, at para. 27, Justice Corrick stated that "Rule 39.02 is designed to prevent, in part, an endless exchange of affidavits and cross-examinations." In Sure Track Courier Ltd. v. Kaisersingh, supra, at para. 44, Justice Goodman stated: "Rule 39.02 is one such rule designed to place finite limits on the evidentiary elements of litigation."
[25] In Brock Home Improvement Products Inc. v. Corcoran (2002), 2002 49425 (ON SC), 58 O.R. (3d) 722, [2002] O.J. No. 931 (S.C.J.), at para. 8, Justice Stinson stated:
Rule 39.02(1) and (2) are an important and integral part of the procedural code governing the conduct of motions and applications. These rules are designed to place finite limits on the evidentiary element of those proceedings, an element that is all-too frequently time-consuming, expensive and drawn-out. These rules oblige the parties to consider the issues and to put all relevant evidence forward before embarking upon cross-examination of the opposite party's witnesses. This is the approach mandated by the rules to achieve the "just, most expeditious and least expensive determination" of motions and applications. Consistent with that approach, it is only in exceptional cases that should resort should be had to rule 39.02(2).
[26] The plaintiffs submit that the court should grant leave for them to file Ms. Flower's supplemental affidavit. They submit that the court has broad jurisdiction under rule 39.02(2) and s. 12 of the Class Proceedings Act, 1992 to permit the filing of affidavits after the completion of cross-examinations and ought to grant leave in the case at bar in the interests of justice. They submit in their factum that the court "would be prejudiced by the absence of the additional evidence because [the court] would be missing important information relevant to the jurisdiction analysis". In this regard, the plaintiffs submit that Ms. Flower's evidence is relevant because the NEC defendants filed evidence to the effect that they had no direct or indirect sales of lithium batteries in Canada and Ms. Flower's evidence is relevant to that issue and provides evidence as to the NEC defendants' customers of lithium batteries by appending historical websites showing that Siemens, Apple, Nintendo and Motorola products were sold in Canada during the relevant period. They say her information only became available to the plaintiffs on the cross-examination of Mr. Narita.
[27] The plaintiffs submit that the NEC defendants are not prejudiced by the delivery of the subsequent affidavit, because [page577] they can cross-examine on the affidavit or file additional responding materials.
[28] I disagree with the plaintiffs' submissions, and in my opinion, having regard to the various factors that guide the court in the exercise of its jurisdiction to grant or refuse leave to file a subsequent affidavit, leave should be denied in the case at bar.
[29] I can begin the analysis by observing an enigmatic irony in the plaintiffs' submission that Ms. Flower's evidence is relevant and important for the court to know for the jurisdiction motion. As became apparent from the NEC defendants' factum and as emerged and was confirmed during the plaintiffs' oral argument, the theory of the plaintiffs' case as to why this court has jurisdiction simpliciter over the NEC defendants does not depend on disproving Mr. Narita's evidence that NEC Corporation and NEC TOKIN did not have direct or indirect sales of lithium ion batteries into Canada.
[30] It seems that the plaintiffs' theory as to why there is a real and substantial connection between the matter, the parties, and Ontario is that the NEC defendants were members of a worldwide conspiracy to fix prices of lithium batteries in Canada and some of the conspirators (not necessarily the NEC defendants) made sales of lithium ion batteries in Canada.
[31] It turns out that Ms. Flower's evidence is only to rebut the NEC defendants' theory as to why this court does not have jurisdiction simpliciter, which theory the plaintiffs submit is legally incorrect, whatever the truth of the underlying facts to support the theory.
[32] Put somewhat differently, the plaintiffs' ironical position is that Mr. Narita's evidence, which is being rebutted by Ms. Flower's subsequent affidavit, is irrelevant to why the court has jurisdiction simpliciter, but it is relevant so that it can be rebutted by Ms. Flower's evidence.
[33] Where this all takes me is that I regard Ms. Flower's subsequent affidavit as relevant to the jurisdiction motion but not very important to the plaintiffs' case on the jurisdiction motion. It follows that the plaintiffs have a very weak case for arguing that they have met the high threshold for the court granting leave to file a subsequent affidavit.
[34] Moving on to the other considerations that guide the exercise of the court's jurisdiction, in my opinion, the plaintiffs offer only a feeble explanation as to why Ms. Flower's evidence could not have been included as part of the plaintiffs' pre-cross-examination evidence. I am not persuaded by the explanation offered in the affidavits of Ms. Flower and Ms. McGladdery Dent as to why the evidence could not have been discovered earlier. [page578]
[35] At this juncture of the proceedings, as best as I can determine, Ms. Flower's information, which appears to be a line of circumstantial evidence to rebut Mr. Narita's evidence, could have been discovered before his cross-examination.
[36] Ironically again, it seems that the better explanation for not discovering the evidence is that at the end of the day, the plaintiffs' case does not depend upon rebutting Mr. Narita, but they now see an opportunity to do so by filing a subsequent affidavit. If this explanation is the real explanation, there is some traction to an argument made by the NEC defendants that the plaintiffs are splitting their case, which is procedurally unfair.
[37] In any event, the plaintiffs' explanation for not presenting Ms. Flower's evidence earlier is a poor explanation and, once again, it follows that the plaintiffs have a very weak case for arguing that they have met the high threshold for the court granting leave to file a subsequent affidavit.
[38] As noted above, however, the plaintiffs submit that it is in the interests of justice to grant leave because the court itself would be prejudiced by the absence of the additional evidence because the court would be missing important information relevant to the jurisdiction analysis.
[39] However, in the context of an adversarial system of justice, where there are rules of civil procedure and rules of evidence, I do not see how the court can be said to be prejudiced if it enforces the rules of civil procedure and the law of evidence.
[40] I cannot speak for the inquisitorial system, because Ontario courts operate under the adversarial system, and under that system, with rules of engagement that include rules of civil procedure and the law of evidence, the opposing parties have a great deal of control over the evidence, and judges are frequently denied important information possibly relevant to coming to a decision or information a judge might just be curious about. That denial of information does not amount to the court being prejudiced. In any event, litigation under an adversarial system is not about the court's interest or curiosity; the administration of justice is about the parties' procedural and substantive rights, not the court's right to have information to decide cases.
[41] In a related argument, the plaintiffs submit that Ms. Flower's affidavit should be allowed because at this early stage of the proceeding, where the plaintiffs have no right of discovery or to compel the delivery of a statement of defence, there is an information gap between the NEC defendants and the plaintiffs, and the plaintiffs' responding materials were, therefore, limited to information that is publicly available. The plaintiffs complain that the NEC defendants did little to minimize the [page579] information gap, and, thus, the plaintiffs were unable to undertake any meaningful analysis of whether the NEC defendants' lithium ion batteries entered Canada through the normal chain of distribution.
[42] The plaintiffs' argument, however, ignores again that even a proposed class action where a worldwide secret conspiracy is alleged is still an action under the adversarial system, and the opposing parties are entitled to be adversarial and they are not obliged to assist the other side in making out their case beyond what the rules of civil procedure require in terms of discovery and notice obligations.
[43] I rather think that in the case at bar it is in the interest of the fair administration of an adversarial system that leave not be granted for the delivery of Ms. Flower's affidavit for the jurisdiction motion. I echo the sentiments of Justice Stinson, noted above, that generally speaking, the rules oblige a party to put his or her case forward before embarking upon cross-examination of the opposite party's witnesses and this approach is designed to achieve the just, most expeditious and least expensive determination of motions and applications, and consistent with that approach, it is only in exceptional cases that resort should be had to rule 39.02(2).
[44] For the above reasons, I dismiss the plaintiffs' motion.
[45] Pursuant to an agreement between the parties, there shall be no order as to costs.
Motion dismissed.
End of Document