COURT FILE NO.: 11-52293 DATE: 2016/08/12 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Etaliq Inc. Plaintiff – and – Cisco Systems Inc. and Cisco Systems Co. Defendants
COUNSEL: Peter Cronyn and Raymond Murray, for the plaintiff / defendant by counterclaim K. Scott McLean & James M. Wishart, for the defendants / plaintiffs by counterclaim
HEARD: November 12 and 13, 2016
RULING ON MOTION FOR SUMMARY JUDGMENT
CORTHORN J.
Introduction
[1] The defendants bring this motion for summary judgment dismissing the plaintiff corporation’s claim based on the expiration of the applicable limitation period. In the alternative, the defendants seek relief with respect to: a) the examination for discovery of Kenneth Poisson (“Poisson”), in his capacity as the representative of the plaintiff corporation; and b) the treatment of documents produced by the plaintiff corporation and by a non-party, MetaData Consultants Inc. (“MetaData”).
[2] Etaliq Inc. (“Etaliq” or “the plaintiff”) alleges that the defendants misappropriated, retained, and used the plaintiff’s software to develop its own software. Etaliq alleges that the defendants did so in breach of: a) one or more non-disclosure agreements (“NDA”); b) their respective obligations to maintain the confidentiality of the plaintiff’s proprietary information and trade secrets; and c) their respective fiduciary obligations to the plaintiff.
[3] The type of software in issue is a traffic generator system. These systems are intended to assist in the efficient use, control, and automation of electronic data traffic generator equipment (“TGEN”). TGEN is used in the telecommunications industry to simulate and analyze data traffic on and across telecommunications networks and devices for development and testing.
[4] The plaintiff alleges that the defendants: a) obtained Etaliq’s proprietary information following a demonstration of Etaliq software called the Traffic Generator Abstraction Library (“TGAL”), in 2002, for the benefit of the defendants; and b) used proprietary information gained from that demonstration to develop software the defendants call the High Level Tool Application Programming Interface (“HLTAPI”).
[5] The defendants deny that HLTAPI is based in any way on TGAL. The defendants say they developed the software independent of the demonstration of TGAL. The defendants also say that this action, which was commenced in September 2011, is barred by reason of the expiration of the applicable limitation period including on the basis of the discoverability provision of the Limitations Act, 2002, S.O. 2002, c. 24 (“the Act”).
[6] The relief sought by the defendants with respect to the examination for discovery of Poisson arises because of his three roles throughout the relevant period. Poisson is not only the President of Etaliq; he is the President of a consulting company, MetaData. During the relevant period, MetaData supplied consultants to the defendants. Poisson was one of the MetaData consultants working with the defendants.
[7] As part of the documentary discovery process in this action, Etaliq produced documents within its possession, power, and control (i.e. in accordance with the relevant Rules of Civil Procedure, R.R.O. 1990, Reg. 194). In addition, documents were produced by the non-party, MetaData. It was Poisson, in his roles as the president of Etaliq and president of MetaData, who searched for and produced the documents from each company. The defendants seek an order that the contents of the documents produced – regardless of their ultimate source – are ‘binding’ on Etaliq for the purpose of this action.
[8] Throughout this decision the defendants are collectively referred to as “Cisco”. The defendant Cisco Systems Inc. was incorporated and is based in the United States. Cisco Systems Co. was incorporated and is based in Canada. The defendants are, where necessary, referred to individually as “Cisco-US” and “Cisco-Canada”.
The Issues
[9] The primary issue to be determined on this motion is whether a trial of the limitation period issue is required or summary judgment may be granted with respect to the limitation defence. Cisco seeks an order dismissing Etaliq’s claim in its entirety on the basis that the statement of claim, issued on September 9, 2011, was issued subsequent to the expiration of the two-year limitation period. In response, Etaliq says that it is entitled to an order for partial summary judgment – dismissing the limitation defence.
[10] The secondary issues relate to the oral and documentary discovery process and are as follows:
a) On what basis is the examination for discovery of Poisson to continue given that:
i) He is produced as the representative of Etaliq; and
ii) In his roles as a consultant for and president of MetaData he has knowledge, information, and belief relevant to the issues to be determined in the action?
b) Is Cisco entitled to an order that Etaliq is ‘bound’ by the contents of any documents created by Poisson regardless of whether the documents are those of Etaliq, MetaData, or Poisson personally?
Disposition
[11] I find that a trial is not required to determine the limitation period issue. In making my determination I have assumed that the parties presented their respective best cases and put forward the evidence on which they rely in support of their respective positions on the issue.
[12] My decision on the limitation period issue turns on the application of the discoverability principle as defined in sections 5(1)(a) and (b) of the Limitations Act. I find that it was not until September 11, 2009 – when Poisson, acting on behalf of Etaliq, determined that it was the defendants, and not the TGEN vendors, who authored HLTAPI – that the requirements were met for discovery on the part of Etaliq of the potential claim against Cisco:
i) That loss or damage had occurred – namely that TGEN vendors had come into possession of Etaliq’s proprietary information with respect to TGAL;
ii) That the loss or damage was caused by or contributed to by an act or omission – the act being the distribution of Etaliq’s proprietary information by Cisco (i.e. distribution by someone other than Etaliq);
iii) That the act or omission was that of Cisco; and
iv) A proceeding would be an appropriate means by which to remedy that loss or damage.
[13] The application of the discoverability principle is fact-based and highly contextual. Cisco emphasizes the “abilities” which Poisson had, on behalf of Etaliq, to investigate the potential claim over time. In my view, by placing the emphasis on Poisson’s “abilities” as they have, Cisco fails to fully consider the “circumstances” in which Etaliq (including Poisson) was conducting business from 2002 forward; namely subsequent to when Etaliq first demonstrated TGAL to Cisco.
[14] I find that in all of the circumstances, it was reasonable for Etaliq to confirm whether it was Cisco or the TGEN vendors who authored the version of the HLTAPI software of which Etaliq became aware in April 2009, before Etaliq could know that an action against Cisco would be an appropriate remedy.
[15] Having reviewed the extensive evidence and heard the submissions of the parties, I am satisfied that the determination of the limitation period issue does not require a trial of this action. The evidence of Poisson with respect to TGAL and events subsequent to the demonstration of the software to Etaliq is not contradicted or matters critical to the limitation period issue. I was, in any event, required to apply the expanded fact-finding powers afforded to me pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[16] The parties have invested heavily in the motion, as can be seen from the voluminous record. The evidence includes affidavits, transcripts from examination for discovery of Poisson, and transcripts from cross-examinations. The limitation period issue is discrete from the substantive issues in the action. In the circumstances, a determination of the limitation period issue by way of summary judgment motion is expeditious.
[17] In all of the circumstances I find that:
i) A just result can be achieved on this motion;
ii) This action, commenced on September 9, 2011 was commenced within the limitation period; and
iii) The limitation defence is dismissed.
[18] With respect to the ‘discovery’ issues:
a) The motion on behalf of the defendants for the relief set out in paragraphs 1(a) and (b) of their notice of motion (i.e. related to the examination for discovery of Poisson on behalf of Etaliq) is adjourned on the terms set out below; and
b) The treatment to be given to any one of the thousands of documents produced in the context of this action is to be left to the trial judge.
Issue No. 1 – Limitation Period
a) The Positions of the Parties
i) The Defendants
[19] Cisco submits that the determination of the limitation period issue requires consideration of the various roles which Poisson played throughout the relevant period. Cisco says that Poisson cannot artificially separate the knowledge that he gained as a MetaData consultant with Cisco from knowledge gained in his capacity as a principal of Etaliq.
[20] Cisco’s position is essentially that regardless of the acquisition of knowledge and information as a consultant for and president of MetaData, Poisson is one person only and knowledge or information he gained in those roles was available to him in his role as president of Etaliq. As a result, regardless of the role in which Poisson was acting over time, Etaliq knew or ought to have known that it had a prima facie case against the defendants well more than two years prior to September 9, 2011. [1]
[21] With respect to the discoverability principle, Cisco says that the NDA signed by Poisson personally as a MetaData consultant and the NDA signed by MetaData do not provide a ‘shield’ upon which Poisson and, more importantly, Etaliq can rely. The terms of the NDA’s do not explain why it was not until April 2009 that Etaliq began to investigate similarities between TGAL and HLTAPI Cisco says that long before April 2009 Etaliq had “notice in neon” of the similarities between the two software programs.
[22] The elements of that notice were such that a “reasonable person with the abilities and in the circumstances of [Etaliq] ought to have known” of the potential claim against Cisco long before September 2009. Cisco’s position is that the discoverability principle does not require that a plaintiff have every piece of the puzzle. It was not necessary for Etaliq to wait until Poisson confirmed the identity of the Cisco employee who developed HLTAPI, as he says he did on September 14, 2009, for the plaintiff to have discovered the existence of its claim against Cisco.
[23] As a result, Cisco submits that the action commenced in Ontario on September 9, 2011 is statute-barred.
ii) The Plaintiff
[24] Etaliq’s position is that the involvement of MetaData generally and Poisson personally with HTLAPI was peripheral and/or tangential. The information garnered from that involvement was not sufficient, even if it can be attributed to Poisson in his capacity of president of Etaliq, to amount to ‘notice’ of similarities between HLTAPI and TGAL: a) in terms of actual notice of a claim; or b) so as to trigger a requirement, on the part of Etaliq, to exercise due diligence and investigate a potential claim against Cisco.
[25] In addition, Etaliq submits that Poisson was at all times mindful of his obligations and those of MetaData pursuant to the NDA’s which they each signed in favour of Cisco. Poisson is described as scrupulous in his approach to those obligations.
[26] It was not until April 2009, when Cisco returned two laptops to Etaliq that Poisson, in his capacity as President of Etaliq, had information sufficient to trigger the requirement to exercise due diligence. [2] The due diligence exercised by Etaliq at that time was in the form of Poisson carrying out a comparison of TGAL and HLTAPI. The comparison took a number of weeks – at least into June 2009.
[27] Further investigation was required to determine the author of HLTAPI – Cisco or another company (i.e. Ixia, Agilent, or Spirent – three TGEN vendors). It was not until September 11, 2009 that Poisson, in his capacity as president of Etaliq, confirmed that it was Cisco, and not one of the TGEN vendors, that had developed HLTAPI. Thereafter, Poisson continued on behalf of Etaliq to investigate the development of HLTAPI. He was informed that a Cisco employee (Wollenweber), who was present for the 2002 demonstration of Etaliq’s ETA product, was involved in the development of HLTAPI. [3]
[28] Etaliq relies on September 11, 2009 as the start of the two-year limitation period applicable to its claim against Cisco. The action, having been commenced on September 9, 2011, was commenced within the two-year limitation period and the limitation defence is to be dismissed.
b) Summary Judgment
[29] The motion by the defendants for summary judgment is made pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Pursuant to sub-rule 20.01(3), a defendant may, after delivering a statement of defence, move with supporting affidavit material or other evidence for summary judgment dismissing all or part of the claim in the statement of claim.
[30] The moving party bears the onus of proving there is no genuine issue requiring a trial. If the moving party demonstrates a prima facie right to summary judgment then the burden of proof shifts and the responding party bears the onus of demonstrating that there is a genuine issue requiring a trial. [4]
[31] The framework for determination of motions for summary judgment has evolved specifically because of recent amendments to the Rules of Civil Procedure and the decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. [5] As stated by the Supreme Court of Canada:
Summary judgment must be granted whenever there is no genuine issue requiring a trial …
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process: 1) allows the judge to make the necessary findings of fact; 2) allows the judge to apply the law to the facts; and 3) is a proportionate, more expeditious and less expensive means to achieve a just result. [6]
[32] At paragraph 66 of Hryniak, the Supreme Court of Canada set out the approach to be taken by the judge on a motion for summary judgment:
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[33] There has, in recent years, been a particular focus on the expanded powers of the Court as set out in sub-rule 20.04(2.1). In determining whether there is a genuine issue requiring a trial, the court is mandated to consider the evidence submitted by the parties and in doing so the judge may exercise the following powers:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
[34] As noted above, I have applied those additional fact-finding powers to reach my decision in this matter.
c) The Limitations Act, 2002
[35] The plaintiff’s claim against Cisco is subject to the ‘basic’ limitation period set out in s. 4 of the Act – two years from the day on which the claim was discovered. The discoverability principle is addressed in ss. 5(1) (a) and (b) of the Act:
(1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
[36] The discoverability principle includes the application of the presumption set out in s. 5(2) of the Act: “A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.” The parties agree that Etaliq has the onus of proof to rebut this presumption. In doing so, Etaliq must demonstrate that it behaved as a reasonable person in the same or similar circumstances by exercising reasonable diligence in a timely manner to identify the facts giving rise to their claims against Cisco. [7]
d) Chronology
[37] The motion record delivered by Cisco is 3149 pages. Etaliq’s responding motion record is 309 pages. In reaching my decision I have considered the complete record. It is not possible in this ruling to set out in full detail the chronology of events derived from my review of approximately 3,460 pages of evidence, pleadings, a request to admit, a response to request to admit, and other materials. The chronology below sets out the timeline of some of the events critical to my determination of the limitation period issue.
▪ 2000 to 2002
Oct. 2000 Cisco approaches Poisson about presenting one of Etaliq’s products (ETA) to Cisco. Etaliq has not yet been incorporated. Cisco executes an NDA with MetaData. Poisson informs Cisco that a new company will be set up to hold and develop ETA.
Dec. 2000 Etaliq is incorporated and acquires the intellectual property rights to ETA and TGAL from the individual founders of Etaliq. The founders include Poisson and Trottier. [8]
Oct. 2001 Cisco hires Poisson (personally) and three other consultants from MetaData to perform onsite test automation work related to software and hardware features on its GSR (12000) router project. As a condition of hiring, MetaData and each of the consultants are required to execute an NDA.
Oct. – Nov. 2001 Two Cisco employees, who are aware that Etaliq owns and had developed TGAL, approach Poisson regarding the adaptation of TGAL for application to an automation project that MetaData was performing at Cisco. Poisson requests that an NDA be executed as between Cisco and Etaliq. Cisco responds by stating that the terms of the existing NDA between MetaData and Cisco would apply as between Etaliq and Cisco. In addition, one of the two Cisco employees and Poisson agree verbally that the MetaData-Cisco NDA shall apply to all conversations regarding Etaliq and its products.
Oct. – Nov. 2001 Etaliq provides a portion of TGAL known as the Capture Decode to Cisco’s automation environment.
Dec. 2001 Cisco approaches Etaliq about TGAL, in particular as to how it works in combining two of the TGEN’s (Ixia and Agilent). Etaliq again requests that an NDA as between it and Cisco be executed. Cisco’s response is once again to confirm that the terms of the existing MetaData-Cisco NDA shall apply as between Cisco and Etaliq.
Jan. 2002 Etaliq attends at the Cisco offices in San Jose, California for a presentation with respect to TGAL. Cisco employee Kevin Wollenweber (“Wollenweber”) is in attendance. Following the presentation, Cisco and Etaliq commence negotiations for a Master Trial Evaluation Agreement setting the terms pursuant to which Etaliq is to demonstrate TGAL to Cisco. Poisson is intentionally excluded from the negotiation of this agreement because of his continuing role as a MetaData consultant with Cisco.
Feb. 14 – 20, 2002 A demonstration of TGAL is carried out at Cisco, with the software used for a trial in Cisco’s automation environment in both Kanata and San Jose. The demonstration and trial are carried out: a) using TCL expect encoded programming; b) such that Etaliq does not provide Cisco with any source code related to TGAL; and with c) Etaliq disclosing technical and confidential information about TGAL to Cisco.
Feb. 19, 2002 Etaliq and Cisco commence negotiations for a licensing agreement for Cisco’s use of TGAL. Cisco agrees in principle to a yearly licencing fee of $200,000. Poisson is excluded from the negotiations because of his continuing role as a MetaData consultant with Cisco.
Feb. 20, 2002 Cisco informs Etaliq that:
a) Due to a change in Cisco’s business environment they do not have the budget to license TGAL; and
b) Cisco believes that it can produce a similar product – as good as or better than TGAL.
Feb. 20, 2002 Poisson sends an e-mail message to a Cisco employee with whom he has been dealing with respect to TGAL. Poisson expresses his frustrations about what has transpired between Cisco and Etaliq, including with respect to TGAL. The e-mail is sent from Poisson’s MetaData e-mail address and is signed, “Ken”.
Feb. 26, 2002 Wollenweber sends Poisson an e-mail in which he says, “I have deleted/destroyed every copy of [the TGAL] code that I had.”
Feb. 27, 2002 Shawn Scott (a lawyer and shareholder in Etaliq) sends an e-mail message to Poisson (at his MetaData e-mail address) after reviewing the above-noted message from Wollenweber. He says, “Clearly, Cisco has the message that Etaliq does not intend to give up its IP or trade secrets and we should firmly stand by this and if possible watch for any offending activity.”
▪ 2002 to 2008
Nov. 2003 Etaliq enters into discussions with Agilent to develop a version of TGAL for that company. Agilent and Etaliq execute an NDA as part of the negotiations. In a ‘Same Time’ chat with a Cisco employee Doug Slone (“Slone”), and with both individuals on their respective Cisco e-mail addresses, Poisson discusses this potential work for Etaliq with Agilent. During this chat, Slone mentions HLTAPI and the internal Cisco ‘alias’ through which Cisco employees are communicating about HLTAPI. Slone and Poisson are in agreement that they receive a lot of e-mail and, as a result, do not have time to read everything they receive including through an ‘alias’ such as the one in place for HLTAPI.
May 2004 In his dealings on behalf of Etaliq with Agilent, Poisson receives an e-mail message from an Agilent agent. Attached to the e-mail is a Cisco document identified as covered by an NDA between Agilent and Cisco. On receipt of the document, Poisson has no idea why it is attached to the e-mail. Poisson alerts the Agilent agent to same and the e-mail is withdrawn by the Agilent agent. Poisson does not open, review or evaluate the attachment specifically because it is confidential information to Cisco and not covered by an NDA between Cisco and Etaliq. As it turns out, the attachment was an HLTAPI document.
Jan. 2005 Poisson and Trottier, in their respective capacities as MetaData consultants, have a Same Time chat. The essence of the chat is Poisson looking for sample code statistics for handling because the HLTAPI library for the Agilent TGEN with which Cisco is working is missing that particular functionality. As part of the chat, Trottier acknowledges the receipt of “hltapi documentation” sent to him by Poisson.
Feb. 2005 In an e-mail exchange, Poisson confirms to a Cisco employee, Pankaj, his familiarity with HLTAPI stating, “As I stated the best tool I’ve seen in the groups is Concert and I am very familiar with eTest, Marx, and Concert as well as the HLTAPI.”
Nov. 2006 As a MetaData consultant, Poisson is assigned to work on Cisco’s 6VPE project. There are 50 to 100 engineers assigned by Cisco to this project.
2006 – 2007 After several months of work on the 6VPE project, Cisco requests that Etaliq implement a solution through use of its ETA tool.
2007 An agreement is reached and Etaliq provides a trial server and support for the ETA Demo/Trial server at Cisco for the 6VPE project. Etaliq’s work on the project ends when the trial server is set up. [9] A copy of the ETA software is sent to the defendants’ site in San Jose, California.
2007/2008 The ‘demo’ use by Cisco of the ETA software continues for approximately one year, following which Cisco decides to licence the ETA software from Etaliq. The licence is in the form of one server and three user licences.
Jun. 2008 Poisson is contacted by a California-based Cisco employee interested in an ETA demonstration for Cisco`s Business Unit projects. A demonstration is provided remotely and onsite training is requested by the Cisco employee.
Jul. 2008 Poisson travels to California to provide the onsite training. As part of that work, Ixia’s HLTAPI is installed for the Cisco employee to use. Poisson does not open or review any of the files or any detailed information for the Ixia HLTAPI. Poisson is not required to do so because his mandate is to provide training for the ETA software.
▪ 2009
Jan. 2009 Poisson, in his capacity as President of MetaData, receives an e-mail from Cisco with respect to cost-cutting initiatives. Poisson sends an e-mail to MetaData consultants informing them of cost-cutting initiatives on the part of Cisco. Poisson requests information from the consultants to permit him to formulate MetaData’s response to Cisco.
Feb. 2009 Ixia expresses to Poisson an interest in Cisco’s 6VPE automation, including the potential for use of Etaliq’s ETA. The Ixia representative and Poisson do not discuss any details or exchange any information about Cisco’s HLTAPI.
Winter/spring
2009 Cisco pays for the server and two of the three licences related to its licensing of ETA from Etaliq. Cisco informs Etaliq that it is cancelling the third licence for ETA.
Apr. 22, 2009 On behalf of Etaliq, Poisson and Trottier remove the two Etaliq Demo Servers (laptops) for ETA from Cisco’s Kanata location and return them to Etaliq’s offices.
Apr. 22 – 24, 2009 Poisson begins the de-install process on the first of the two Demo Servers, to remove Cisco specific information, so that the servers are available for other client trials. Poisson finds HLTAPI software for an Agilent device on the server. From his recollection and without having reviewed TGAL from years before, the HLTAPI software seems to follow the same methodology architecture, principles and concepts as for TGAL. The HLTAPI software has a copyright notice from Cisco to Agilent.
Poisson makes an inquiry of a Cisco employee and learns that the HLTAPI software is supported and maintained by the traffic generator companies and that it is a specification written by Cisco. On April 23, 2009, Poisson asks the Cisco employee to send him the HLTAPI specification.
Apr. 27, 2009 Poisson receives a copy of the HLTAPI specification from the Cisco employee. Poisson begins the de-install process on the second of the two Etaliq Demo Servers. Poisson finds HLTAPI software for an Ixia product with a copyright notice from Cisco to Ixia.
Apr. 2009 Poisson is bothered by: a) the similarities between the Agilent HLTAPI and Ixia HLTAPI software; b) the possibility that HLTAPI is based on Etaliq’s confidential information from TGAL; and c) the possibility that Cisco shared that confidential information with Agilent, Ixia, and Spirent. Poisson decides to perform a critical analysis of TGAL and HLTAPI to determine whether they are similar. Poisson asks Trottier for and receives from him a copy of the TGAL source code that was shown to Cisco.
May 2009 Poisson commences a critical analysis of TGAL and HLTAPI over a number of weeks. He notes that the HLTAPI specification does not contain the ‘markers’ (document number, author, and reviewer tracking), he expects to see on a Cisco-created product. It takes Poisson until at least the end of May to complete his review the HLTAPI specification and compare it to TGAL. Poisson is, throughout the spring and summer of 2009, continuing his work as a consultant with MetaData at Cisco and in his role as President of MetaData.
Jun. 2009 Poisson expands his investigation to include a review of the code found on the Etaliq Demo Servers. From that review he concludes that the vendors (Ixia and Agilent) are implementing the HLTAPI software. However, he remains uncertain as to whether HLTAPI program files from the vendors were created and/or authored internally by Cisco or by the vendors themselves.
Jul. 2009 Poisson investigates whether the vendors (Agilent, Ixia, and Spirent) have products that look like HLTAPI. He finds a document for a Spirent product that nearly exactly matches the Cisco product and a document for an Ixia HLTAPI. The Spirent document is in German and has to be translated. The vendor documents date back to 2003 (Agilent and Ixia) and 2007 (Spirent).
Poisson remains unclear as to whether Etaliq’s confidential information related to TGAL is, in the form of HLTAPI, being distributed by Cisco ‘outside’ of Cisco (i.e. to TGEN vendors). Poisson continues his investigation.
Sept. 8, 2009 Poisson sends an e-mail to two individuals at Cisco in which he addresses concerns about Cisco attempting to hire six MetaData consultants as employees of Cisco. He suggests that there be a meeting – in-person or otherwise – to discuss the issue.
Sept. 11, 2009 Poisson meets with Ixia and Spirent personnel. He learns that Cisco provided the HLTAPI specification to Ixia in the early 2000’s and to Spirent in 2003 or 2004. Ixia and Spirent confirm to Poisson that they are distributing the HTLAPI. Poisson forms the opinion that Cisco:
a) Created a software specification document that was based on the TGAL confidential information from Etaliq; and
b) Provided that confidential information to other parties including Ixia and Spirent.
Sept. 14, 2009 Poisson uses his MetaData credentials to access confidential information available from Cisco’s internal information system. He does so for the purpose of continuing his investigation of the authorship of HLTAPI.
Sept. 17, 2009 Poisson is informed by a Cisco employee that Wollenweber is the author of HLTAPI.
e) Analysis
[38] In determining the limitation period issue, the three elements of section 5(1) (b) of the Act are considered:
i) The test to be applied is an objective test – based on the reasonable person;
ii) The “circumstances” - in this case the business environment in which the plaintiff and defendants were operating; and
iii) The “abilities” of the person – in this case Etaliq.
[39] In my view Cisco: a) places too much emphasis on the “abilities” of Poisson, regardless of the capacity in which he was acting at any given time; and b) has too narrowly defined the “circumstances” in which Etaliq was conducting business throughout the relevant period. With respect to the circumstances, Cisco focuses on what it describes as the “mixed environment” in which Poisson found himself at Cisco (i.e. his three hats).
[40] The particular circumstances of Etaliq must be considered. [10] In my view, Cisco’s characterization of Etaliq’s circumstances overlooks the broader business environment in which Poisson, Etaliq, and MetaData were operating during the relevant period. That environment includes amongst others, the following factors:
a) There was uncertainty in the high tech industry generally, in particular after what Poisson describes as the “dot.com bust”. It was important for Etaliq to be in a position to work not only with Cisco but also with the TGEN companies;
b) Etaliq’s primary goal is to develop and market its ETA software. Etaliq was of the view that its TGAL product had much more limited potential than ETA. Once Cisco decided in early 2002 that it would not licence TGAL, Etaliq decided to put the development of TGAL on the back burner and to focus on the development and marketing of ETA; [11]
c) That Poisson, Trottier and any number of other MetaData consultants were, in the midst of the dot.com bust, reliant on their respective incomes as consultants. The focus of Poisson, Trottier and their colleagues was to garner sufficient work for MetaData to make a reasonable living and survive; [12]
d) MetaData provided consultants to a number of high tech companies (the defendants, Nortel, Agilent, et cetera). The reputation of MetaData was important to its ability to continue to generate work for the individual consultants and revenue for MetaData. It was therefore important that MetaData and its individual consultants not breach confidentiality agreements into which they entered with the various companies with whom they were working; and
e) Etaliq did business directly with Agilent, Ixia, and Spirent. These three companies are the three biggest providers of TGEN hardware and software. [13] I define the “mixed environment” in broader terms than does Cisco. I find that the “mixed environment” includes these three companies in addition to Etaliq, MetaData, and Cisco.
[41] It is in the context of this broader business or commercial environment that I find that Poisson’s actions from 2002 forward – whether as a MetaData consultant, as President of MetaData or President of Etaliq – were reasonable.
[42] Poisson’s credibility is important in response to the emphasis placed on his “abilities” to know of or, with due diligence, to have discovered, Etaliq’s potential claim against the defendant at a date much earlier than September 11, 2009.
[43] I find Poisson’s explanation for his conduct over time to be credible. From my review of the transcripts of his examination for discovery to date and the cross-examination on his affidavit, Poisson was forthright and unevasive when answering questions. He did not underplay evidence that had the potential to negatively impact Etaliq’s position in the action or on the motion. Nor did he appear to be ‘gilding the lily’ when dealing with matters potentially favourable to Etaliq.
[44] Poisson was forthright in acknowledging the extent and nature of his access to confidential Cisco information while working as a MetaData consultant at Cisco. He described that access in the following terms:
• Each MetaData consultant had full access to all engineering information at Cisco; [14] and
• He is not sure how, if at all, as a MetaData consultant his access to Cisco engineering information was limited. He had “broad broad access”. [15]
[45] Cisco submits that Poisson should, on behalf of Etaliq, have exercised that broad access much earlier than he did (i.e. September 2009) to investigate the similarities between HLTAPI and TGAL and determine whether Etaliq had a claim against the defendants. Cisco also submits that a ‘reasonable’ person with Poisson’s abilities and in his circumstances would have breached his NDA and MetaData’s NDA long before September 2009. Cisco has not, on this motion, filed any evidence in support of the latter submission.
[46] I accept Poisson’s explanation as to why it was not until after the return of Etaliq’s two Demo Servers that, in his capacity as President of Etaliq, he chose to rely on his MetaData credentials to access confidential Cisco engineering information. He was adamant as to the importance of his reputation and that of others with respect to the issue of confidentiality. [16] I accept that Poisson conducted himself in accordance with those principles in 2002 through 2009 in relation to Cisco, MetaData, Etaliq, and other companies with whom MetaData and Etaliq did business.
[47] Cisco asks the court to infer that the timing of Etaliq’s lawsuit is not based on the completion of the exercise of reasonable due diligence but rather with Poisson/Etaliq becoming “furious” with Cisco because of its actions over time – including hiring MetaData consultants as employees, asking MetaData to respond to Cisco’s cost-cutting measures, and repeatedly refusing to invest in Etaliq’s software tools. The types of issues identified are, in my view, within the scope of issues that would be expected in a business environment of this kind. There is, in any event, evidence that the business relationship between MetaData and Cisco continued for a number of years beyond the fall of 2009 – to and including spring/summer 2012. As a result, I do not draw the inference requested by the defendants.
[48] Cisco relies on two affidavits sworn by Trottier. He was cross-examined on both affidavits. On matters significant to the determination of the limitation period issue, Trottier’s evidence is not contradictory to that of Poisson. For the most part Trottier’s evidence supports Poisson’s description of events over time, the nature of the work done by MetaData at Cisco, and the lack of opportunity for Poisson, prior to April 2009 and regardless of his role, to begin to develop an appreciation of the similarities between TGAL and HLTAPI.
[49] Cisco submits that any suggestion by Poisson that he “compartmentalized” his work, thinking, and knowledge within each of his three roles is to be viewed with skepticism and does not stand up to scrutiny. As set out above, I find that Poisson was mindful of his three roles and approached them as ethically as he could in the circumstances.
[50] However, if I am wrong in that regard, and there can, as submitted by Cisco, be no distinction made between “MetaData Poisson” and “Etaliq Poisson”’ then I find that: a) at no time prior to April 2009 was the requirement triggered for Etaliq to exercise due diligence in the investigation of its potential claim against Cisco; and b) it was not until September 11, 2009 that Etaliq ‘discovered’ its claim against Cisco within the meaning of sections 5(1) (a) and (b) of the Act.
[51] In the paragraphs below I review some of the events that Cisco suggests were sufficient to either start the limitation period running against or to trigger the requirement to exercise due diligence on the part of Etaliq.
▪ February 2002
[52] Cisco submits that given the nature and extent of Poisson’s frustration with or anger at Cisco as of February 2002, when the decision was made by Cisco not to license ETA, Etaliq was on notice to the potential for Cisco to take concepts or elements from TGAL which, had been demonstrated by Etaliq to Cisco, and develop internally a tool with the same functionality. Cisco emphasizes the contents of Poisson’s February 20, 2002 e-mail to a Cisco employee. Regardless of the fact that this e-mail was sent using Poisson’s MetaData e-mail address, Cisco’s position is that the substance of the message reflects direct knowledge on the part of Poisson in his capacity as President of Etaliq of the potential for Cisco to rely on Etaliq’s confidential and proprietary information. In his message, Poisson said:
You and I meet [sic] in early 2001 to talk about this and you tell me that there is a portion of our presentation that has been used internally in a new tool. (Was this the concert stuff?) At the time I was somewhat pissed off but “who can fight city hall and win” I thought – AND – I’ve seen many times where someone will say “I can deliver that in XX months, why do we need to buy it from them”, and I’ve seen that this is successful sometimes, but most of the time it is not. We talked about it and thought “they’ll try to build internally and then we can go back and show them ours again, and maybe sell them on it anyway” …
Cisco is going to build something like this themselves so they don’t need us …
Three times now they’ve taken Ideas, Concepts, Implementation techniques and Knowledge from us about what we are doing.
[53] Based on Poisson’s February 20, 2002 e-mail, Wollenweber’s e-mail of February 26, 2002, and Scott’s e-mail of February 27, 2002, [17] Cisco submits that a reasonable person with the abilities and in the circumstances of Poisson (and therefore Etaliq) was required to exercise due diligence with respect to a potential claim against Cisco. I find that as of the end of February 2002 the only knowledge Poisson had, and regardless of the capacity in which he had that knowledge, was of a stated intention on the part of Cisco to develop a software tool internally that would serve the same function as did TGAL. That stated intention and Poisson’s knowledge of it were not sufficient to start the limitation period running or to trigger the obligation to exercise due diligence in the investigation of a potential claim.
▪ Suggested Similarity Between TGAL and HLTAPI
[54] Cisco also relies on suggestions made over time by people inside Cisco to Poisson, while he was working as a MetaData consultant, that there was a questionable similarity between HLTAPI and TGAL. Cisco’s position is that the suggestions made were sufficient by sometime in 2004 to amount to actual notice of the potential claim or to trigger the requirement to exercise due diligence. As a result, it is argued by Cisco that Etaliq “missed the limitation period by miles not metres”.
[55] Poisson acknowledges that these suggestions were made. He is unable to recall who made the suggestions or when they were made.
[56] I find that the ‘suggestions’ made over time of the similarity between TGAL and HLTAPI did not amount to either actual notice so as to start the limitation period running or to a trigger of the obligation on the part of Etaliq to exercise due diligence in the investigation of a potential claim. I make this finding whether the ‘suggestions’ are considered discretely or together with other events prior to the April 2009 return of the two Etaliq Demo Servers.
[57] In my view it would not be reasonable, in the broad commercial context, to require a company such as Etaliq to act upon every suggestion made of the kind described by Cisco. To do so would: a) require a level of vigilance that would detrimentally affect business relationships carried on in good faith; b) lead to a level of distraction that would diminish the efficiencies in the day-to-day business operations; and c) lead to a dysfunctional environment in which to carry out commercial activities.
[58] It is Poisson’s evidence that similar suggestions had in the past been made by Cisco employees to Etaliq. When cross-examined on his affidavit, Poisson gave as an example suggestions made with respect to the ETA tool, following demonstration of it in late 2000 and early 2001. At that time it was suggested to Etaliq that Cisco had used Etaliq’s proprietary information from ETA to modify Cisco’s existing tools, “Concert”.
[59] On receipt of this suggestion Poisson spoke with Etaliq’s lawyer. The conclusion reached by Poisson and the lawyer was that “although [Cisco] may have adapted their current implementation, it in no way resembled [Etaliq’s]”. Poisson explained that, “you can see things that trigger you to do something and then you can go independently to do it in a separate and distinct way.” [18]
[60] In summary, there has to be a level of good faith between the commercial entities and an understanding that products can be created independently even when an example of the end-product has been viewed. I find that it is in the context of this environment that Poisson, MetaData, Etaliq, and Cisco were operating from 2002 forward following the demonstration of TGAL. I find that it was reasonable for Poisson not to act upon the suggestions of similarities between TGAL and HLTAPI. It was reasonable for him to consider that the HLTAPI – to the extent that he was aware of it – was developed by Cisco in “a separate and distinct way” from Etaliq’s TGAL.
▪ Proximity to and Familiarity with HLTAPI
[61] Cisco also submits that from his work as a MetaData consultant at Cisco, Poisson developed a level of familiarity with HLTAPI such that he, in his role as President of Etaliq should have exercised due diligence and investigated the potential similarity between HLTAPI and TGAL. Etaliq’s response is that in his role as a MetaData consultant at Cisco, Poisson never had reason to consider HLTAPI other than from a peripheral and very limited basis. As a result, even if information or knowledge obtained through Poisson’s consultancy work at Cisco can be attributed to Etaliq, Poisson did not garner sufficient information or knowledge about HLTAPI to become concerned that it was based on Etaliq’s proprietary information related to TGAL.
[62] Etaliq submits that the fact that Cisco had developed an application programming interface (“API”) which appeared to serve the same function as TGAL did not necessarily mean that the product developed by Cisco was based on Etaliq’s proprietary information for TGAL. Etaliq’s position in that regard is supported by the evidence of Trottier.
[63] For a number of years, Trottier was in a position similar to that of Poisson in terms of their respective involvement with Etaliq, MetaData, and Cisco. Trottier was a founder of Etaliq, one of the “four principal developers” of TGAL, and the “principal programmer” of TGAL. [19]
[64] Trottier is a shareholder of Etaliq – holding 100,000 shares and 361,000 options to purchase shares in Etaliq. He received many of the shares and options in exchange for unpaid work on Etaliq projects. As of July 2014 (when his first affidavit was sworn) he had never received a dividend and he did not know if the shares had any realizable value. [20]
[65] Trottier worked as a MetaData consultant at Cisco between 2002 and 2009. As a shareholder in Etaliq and as the principal programmer of TGAL, Trottier had reason to be vigilant with respect to Etaliq’s proprietary information, specifically related to TGAL. That Trottier did not personally take any steps to investigate the similarity between HLTAPI and TGAL is in my view supportive of Poisson’s explanation as to why he did not carry out such investigation until April 2009 upon the return to Etaliq of the two Demo Servers.
[66] Trottier provides a measure of the “reasonable person” with the “abilities” and in the “circumstances” of Poisson. Trottier may have been even ‘closer’ to TGAL than was Poisson. There is no evidence that Trottier, when working as a MetaData consultant at Cisco and because of his proximity to and familiarity with HLTAPI, developed a concern at any time prior to April 2009 that HLTAPI was based on Etaliq’s proprietary information for TGAL.
[67] It was not until the spring/summer of 2009, when Poisson showed Trottier a comparison of TGAL and HLTAPI, that he “believed” that HLTAPI and TGAL were highly similar, “suspected” that Cisco had taken concepts or elements from TGAL to develop the HLTAPI tool, and, like Poisson, was “angered” by that possibility.
[68] Poisson’s evidence is that he only dealt with a small subset of the commands and thousands of parameters that comprised HLTAPI. That work with HLTAPI was not sufficient to make him aware of how similar it was to TGAL. Poisson’s evidence in that regard is not contradicted.
[69] When cross-examined on his affidavits, Trottier explained why it was not readily apparent to either him or Poisson that TGAL and HLTAPI were sufficiently similar so as to trigger a concern on either of their parts that HLTAPI was based on Etaliq’s proprietary information. Trottier’s evidence accords with Poisson’s explanation, as set out above, regarding the prior suggested similarities between ETA and a Cisco product. In summary, Trottier’s evidence with respect to his and Poisson’s exposure to the Cisco HLTAPI over time is as follows:
• There were many API’s at Cisco during the relevant period. When working as a MetaData consultant at Cisco, Trottier ran across Cisco API’s, “all the time”. [21]
• The fact that an API performs a function similar to that of another API does not necessarily mean that they work in exactly the same way. There are many ways for an API to perform any given function. [22]
• Simply having knowledge of the existence of HLTAPI would not be sufficient to conclude that its methodology was the same as TGAL. As a starting point a comparison of the specifications of TGAL and HLTAPI would be required to determine whether the specifications were the same. [23]
[70] Having reviewed the two affidavits sworn by Trottier and the transcript of his cross-examination on those affidavits, I find him to be a credible witness. Both when he swore his affidavits and when cross-examined, Trottier was employed by Cisco. Regardless, he did not appear to favour the position of the defendants (i.e. his employer) over that of the plaintiff. From the transcript of his cross-examination, Trottier appeared to testify in a forthright manner.
[71] In summary, based on the evidence of both Poisson and Trottier, I find that to the extent that Poisson was exposed to the existence of the HLTAPI throughout his work as a MetaData consultant at Cisco, that exposure was not sufficient to constitute actual notice of a claim against Cisco or to trigger an obligation on the part of Etaliq to exercise due diligence in the investigation of a potential claim against Cisco.
▪ Poisson’s Investigation – Spring / Summer of 2009
[72] The nature and extent of Poisson’s investigation into HLTAPI throughout the spring and summer of 2009 is set out in the chronology above. When he first became aware of HLTAPI as it appeared on the Demo Servers, Poisson: a) believed that TGAL and HLTAPI are the right solutions for traffic generators; b) believed, irrespective of any similarities between TGAL and HLTAPI that each product could have originated without common knowledge; and c) had no indication that HLTAPI was anything other than developed independent of TGAL. [24]
[73] Poisson’s evidence is that it took him the entire month of May to complete his detailed comparison of HLTAPI and TGAL. Poisson is the only person, from whom there is evidence on this motion, who has seen both the TGAL and the HLTAPI specifications. His evidence as to what was required to identify the nature and extent of the similarities between the two products is not contradicted.
[74] Cisco points out that the TGAL code has not been produced as of this date. Before proceeding with the motion for summary judgment, Cisco could have brought a motion for an order requiring Etaliq to produce the TGAL code. Cisco chose to proceed with the motion for summary judgment without the benefit of the production of the TGAL code. There is no evidence, contradictory to that of Poisson, upon which Cisco is in a position to rely with respect to what was involved to complete a detailed comparison of the two specifications.
[75] Although Poisson was by the end of May or early June aware of similarities between the two software products, he remained uncertain as to who had created HLTAPI. Even as of the end of June, he was uncertain as to whether the authors of the HLTAPI files were from one or more of the TGEN vendors (Ixia and Agilent) or from Cisco. Poisson continued his investigation in July and into September 2009.
[76] Poisson’s evidence as to how he carried out his investigation and the dates of events throughout the investigation is not contradicted by any evidence relied on by the defendants. In his evidence, Trottier confirms, to the extent of his recollection, Poisson’s description of the nature and timing of the investigation of HLTAPI.
[77] Poisson’s uncontradicted evidence is that it was not until his September 11, 2009 meeting with the TGEN vendors that he confirmed that it was Cisco and not the vendors who authored HLTAPI. Section 5(1) (a)(iii) of the Act sets out that part of discovery of a claim is the identification of the person who committed the act or omission upon which the claim is based. In my view, the identification of Cisco as the author of HLTAPI is a “material fact” required for Etaliq to know, in the circumstances, that it had prima facie grounds for inferring that it had a claim against Cisco. [25]
[78] It has repeatedly been said by this Court that it is not enough that a plaintiff has suffered a loss and has knowledge that someone might be responsible. The identity and culpable acts of the wrongdoer must be known or knowable with reasonable diligence. [26]
[79] Cisco argues that Etaliq’s conduct is to be measured based on an objective standard – in terms of what a reasonably prudent person with the abilities and in the circumstances of the plaintiff would have known or done with respect to a potential claim. [27] Cisco has not tendered any evidence from a Cisco employee or an expert in the field of API’s, TGEN’s, et cetera, opining that Poisson/Etaliq knew or ought to have known of the potential claim at any time prior to September 11, 2009.
[80] I recognize that there is a “difference between showing that the plaintiff acted reasonably in delaying [its] lawsuit and showing that the plaintiff could not reasonably have sued earlier”. [28] I find that in the circumstances, it was reasonable for Etaliq to exercise due diligence commencing in April and continuing into September 2009. Etaliq required certainty as to the identity of the author of HLTAPI before pursuing a remedy. Identification of the author of HLTAPI was, in the circumstances of this case, much more than “[a]dditional information [to] support the claim and to help assess the risk of proceeding.” [29]
[81] I find that it would have been unreasonable to require Etaliq to commence an action against Cisco at any date prior to September 11, 2009. Etaliq had business relationships, independent of Cisco, with Agilent, Ixia, and Spirent. Authorship of HLTAPI could not be deemed or inferred specifically because, to the extent that Poisson had knowledge of the existence of HLTAPI, Poisson’s knowledge was that the product was tied to one or more of the TGEN vendors.
[82] It would not have been reasonable to require Etaliq to use a shotgun approach and name five companies (Cisco-US, Cisco-Canada, Agilent, Ixia, and Spirent) as defendants before Etaliq was certain as to identity of the author of HLTAPI. Such an approach runs contrary to the business environment in which these companies operate and to the purposes limitation periods are intended to serve.
[83] A copy of the amended statement of claim is included in the defendants’ motion record [30]. I find that it was not until September 11, 2009 that Etaliq knew or ought to have known of the essential facts pleaded in their statement of claim.
[84] In making these findings I am mindful of the “diligence policy rationale” which underlies limitation statutes. [31]
[85] I agree with the submission on behalf of Cisco the identification of the individual author(s) of HLTAPI (Wollenweber or otherwise) was not required to trigger either the running of the limitation period or the requirement to exercise due diligence. However, given that the action was commenced within two years of the date on which Poisson learned that it was Cisco and not the TGEN vendors who created the HLTAPI specification that he identified from the Demo Servers, that final piece of the puzzle is in my view not relevant to the determination of the limitation period issue.
f) The California Action
[86] The plaintiff’s action in California was commenced on April 28, 2011 and dismissed on July 20, 2011, – with the dismissal effective August 5, 2011.
[87] As set out in the second paragraph of the Order Dismissing Case dated August 5, 2011 (M.R., Vol. 2, Tab 10H, page 307) from the United States District Court Central District of California, the case was dismissed on the basis of forum non conveniens on three conditions:
That Cisco agree to submit to the jurisdiction of the relevant Canadian Court;
That Cisco agree to waive any statute of limitations defense that would not be available in this forum and to toll during the pendency of this action any statute of limitations that had not already expired when the California action was filed; and
That Cisco agrees to make its employees available to give evidence in Canada.
[88] Cisco’s position is that to the extent, if any at all, that the ‘tolling agreement’ applies, it serves to extend the applicable limitation period by 99 days (April 28 to August 5, 2011). It is on this basis that Cisco relies on June 2, 2009 as a critical date for the purpose of the limitation period defence; with that date being two years and 99 days prior to September 9, 2011.
[89] In addition, the extension of the limitation period applies only to the plaintiff’s claims against Cisco Systems Inc. (i.e. the U.S. ‘version’ of Cisco). Otherwise, the claims by Etaliq against Cisco Systems Co. (the Canadian version of Cisco) and claims advanced against Cisco Systems Inc. in that Ontario action that were not included as part of the California action are subject to the two-year limitation period prescribed by section 5 of the Act.
[90] Given my determination on the issue of discoverability, I find that the tolling agreement from the California action does not have any bearing on the outcome of the limitation period issue. I have, in any event, considered the evidence on which the defendants rely with respect to the California action.
[91] To support their position on the tolling agreement and its impact on the Ontario action, the defendants rely on affidavits from: a) Howard Holderness – the lawyer for Cisco Systems Inc. in the California action; and b) Daniel L. Klerman – an expert retained by Cisco Systems Inc. within the context of the Ontario action.
[92] Mr. Holderness includes as an exhibit to his affidavit the written arguments filed on behalf of Cisco-US and on behalf of Etaliq on the motion by Cisco-US in the California action to dismiss the action on the basis of forum non conveniens.
[93] In his affidavit, Holderness says, “Upon a cursory review of the Ontario limitations law, I also came to the view that Etaliq had brought suit in California primarily because it feared that the relevant limitation period in Ontario had expired”. I do not consider that statement as anything other than the ‘view’ of a California attorney who had completed, in his own words, a “cursory review” of Ontario limitation law. That statement is not evidence, opinion or fact-based, relevant to the determination of the limitation period issue.
[94] The plaintiff’s pleading in the California action is included as an exhibit to the Holderness affidavit. The description in that pleading of events in 2009 with respect to the de-installation of the two Demo Servers is much more general than the description of those events set out in the plaintiff’s pleading in this action. The description in the US pleading, however general, is not evidence for the purpose of this motion. In any event, that description is consistent with Poisson’s evidence in regard to those events.
[95] In his affidavit, Holderness emphasizes the manner in which it appears to him that Etaliq addressed the limitation period issue in the context of the California action. He says, “in its Opposition Memorandum, Etaliq acknowledged that ‘there is a statute of limitations concern’ and did not deny that it had attempted to avoid the Ontario statute of limitations by bringing the California action.” The first part of that statement is an incomplete description of the contents of Etaliq’s Opposition Memorandum. The full reference in the Memorandum is as follows, “In addition, there is a statute of limitations concern. Cisco has acknowledged to this Court, that it intends to rely on [the] statute of limitations.”
[96] The manner in which Etaliq responded to the motion in California, including with respect to the limitation period issue, was not unusual. Etaliq’s pleading and other documents filed in the California action are not evidence of the events that occurred in 2002 through 2009. The pleading and other documents do not cause me concern in determining the limitation period issue in the Ontario action.
[97] In summary, there is nothing in the Holderness affidavit or the exhibits attached to it that impacts on either my findings with respect to or my determination of the limitation period issue in this action.
[98] The Klerman affidavit is four paragraphs in length. It includes an introductory paragraph, a paragraph that references the affiant’s October 2014 report as an exhibit, a paragraph in which 10 other exhibits are each listed and described in less than two full lines of text, and a conclusory paragraph that is not substantive.
[99] In summary, the report of Mr. Klerman attached to his affidavit provides the following information:
• Mr. Klerman was retained on behalf of Cisco because of his expertise in the areas of jurisdiction and choice of law.
• He was asked by counsel for Cisco to make certain assumptions with respect to the Ontario statute of limitations and the manner in which it would be applied by an Ontario court to both the contractual and non-contractual claims advanced on behalf of Etaliq.
• A single question was posed to Mr. Klerman: “Assuming that the [US litigation] had proceeded to adjudication in California Court … would the applicable Ontario statute of limitations have been available to Cisco in the California Court in defence of the California Action?”
• Mr. Klerman answers the question in the affirmative, stating that the California court would interpret the provisions of the NDA’s to require the application of Ontario’s statute of limitations to both types of claims (contractual and non-contractual).
[100] Given my findings with respect to the timing of the obligation on the part of Etaliq to exercise due diligence in the investigation of its claim and as to when the two-year limitation period began to run, the opinion expressed by Mr. Klerman is not relevant to the outcome of the limitation period issue on this motion.
Issue No. 2 – Oral and Documentary Discovery
a) Examination for Discovery of Poisson
[101] The examination for discovery of Poisson commenced in October 2013 and continued in March 2014. At the outset of each portion of the examination for discovery, Poisson and counsel for Etaliq confirmed that:
a) Poisson was produced as a representative of Etaliq; and
b) Poisson’s answers to questions posed on the examination would bind Etaliq. [32]
[102] At the conclusion of the second day of Poisson’s examination it was adjourned because the parties, through their respective counsel, were unable to agree as to the basis upon which further questions could be posed of and answers given by Poisson. [33] Cisco takes the position that they are entitled to Poisson’s knowledge regardless of whether he obtained the information in his capacity as the president of Etaliq, as the president of MetaData, as a consultant for MetaData, or in any other manner for that matter. Cisco’s primary concern is that Poisson answer questions on matters relevant to the issues in the action.
[103] The position initially taken by Etaliq is that before answering a question, Poisson is entitled to clarification as to whether the question is being posed of him in his capacity as the representative of Etaliq or in one of his two roles with MetaData. It appears that as the dispute continued, the position taken by Etaliq evolved to the following: In answering any questions posed of him, Poisson is entitled to clarify how he obtained information and/or knowledge – whether it was through Etaliq, through MetaData, or personally.
[104] Cisco relies on the 1983 decision of Master Rodger in Willroy Mines Ltd. v. New Cinch Uranium Ltd. [Willroy] [34] in support of the following general proposition:
As a general matter, the personal knowledge of a corporation’s witness, where relevant, must be disclosed under examination regardless of the capacity in which it was obtained. Such personal knowledge may then be attributed to the corporation, particularly where the witness is the directing mind of that corporation. [35]
[105] There are a number of problems with the reliance by Cisco on the decision in Willroy as support for that general proposition. First, the facts in Willroy are distinguishable from those of the present case. The individual who was being examined for discovery in Willroy was being examined both as the representative of the corporate defendant and in his personal capacity as a defendant named in the action. In the matter before me, the examining parties are concerned only with the examination for discovery of Poisson in his capacity as the representative of the plaintiff corporation. Poisson is not personally a party to the action.
[106] Second, in considering this issue, I have through additional research become aware that there are two lines of cases with respect to the basis upon which the representative of a corporate party is to answer questions on examination for discovery. One such line of cases has been referred to as “the Willroy line of cases”. [36]
[107] The other line of cases stems from the 1938 decision in Fisher v. Pain [Fisher]. [37] The decision in Fisher addressed the impact of then recent changes to the procedural rules governing the manner in which a corporate party could be examined for discovery. It had become possible to examine for discovery either an officer or a servant of the corporate party, with the latter being the change to the rules. In discussing the change, Roach J. said in Fisher:
The purpose of extending the Rule in our own courts so as to include a servant as well as an officer was to enable an opposing litigant to obtain information – that being the purpose of an examination – from an employee of a company who in the peculiar circumstances of the case, although he might not in the technical sense be an officer of the company, was the person whose dealing or conduct gave rise to the litigation. The scope of the examination was not thereby extended. He is still the mouthpiece of the company in the peculiar circumstances of that case. To extend the interpretation of the Rule so as to enable a litigant against a company to examine an officer of that company concerning matters, knowledge of which he acquired not as an officer of the company but in some other capacity, would be assisting the litigant in getting up evidence. That is not the purpose of the Rule […]
The practical result of such an extension would be to enable larger discovery to be obtained from a corporation than from an individual, and no such distinction is intended by the Rule. [38]
[108] It appears, therefore, that a distinction is to be made between the examination for discovery of a representative of a corporate party alone and the examination for discovery of a representative of a corporate party who is, in his or her personal capacity, also named as a party in the action. In the former circumstance, the Fisher line of cases is to be followed. In the latter circumstance, the Willroy line of cases is to be followed. [39]
[109] The Fisher line of cases was not raised by either the defendants or the plaintiff during oral argument and is not addressed in either factum delivered in the matter. I am not satisfied that the relevant law has been considered by the parties. I am reluctant to make a decision on this issue without giving the parties an opportunity to address this issue more fully with respect to both the law and the evidence.
[110] I am concerned that the evidence relevant to this issue may not be before me. From the final pages of the transcript from the second day of the examination for discovery of Poisson, it appears that counsel for the parties had, prior to the commencement of the examination, reached an agreement with respect to the manner in which the examination would proceed. However, the particulars of that agreement are not addressed in the transcript or elsewhere in the record. If that agreement is reflected in writing, then I am of the view that the terms of the agreement should be part of the record on the motion.
[111] This aspect of the defendants’ motion is therefore adjourned and is to be brought back before the Court on the following terms:
a) Each party is to deliver a record related solely to this issue, with the defendants as the moving parties and therefore entitled to deliver a supplementary record if necessary in reply to the plaintiff/respondent’s motion record;
b) On the return of the motion, the parties shall not be permitted to reference their respective records on the motion for summary judgment. Note: This term is included so that the judge hearing the motion with respect to the oral discovery process is not required to search through 3,500 pages of record to identify materials relevant to the narrow issue related to the examination for discovery of Poisson;
c) The motion is to be returned before any judge of the Superior Court of Justice;
d) The motion materials are to be delivered in accordance with the Rules of Civil Procedure; and
e) The costs associated with this aspect of the relief requested by the defendants are to be addressed by the judge hearing the motion on this issue.
b) Documents Produced by MetaData
[112] For a number of reasons, the treatment to be given to documents created by Poisson relevant to the issues in this action is a determination to be left to the trial judge:
a) On a practical basis, it is said that many thousands of pages of documents, including thousands of pages of documents from a non-party (MetaData), have been produced in this action. The documents for which the relief is sought are not included in the motion record. It is therefore not possible (leaving aside practicalities) to examine the documents for their content; and
b) From an evidentiary perspective, without the ability to review the documents a determination cannot be made, even on a preliminary basis (were such a determination appropriate), as to the potential admissibility of the documents. It is not possible to consider, for example, whether a document is to be admitted for the truth of its contents or as evidence of existence of the document. There may be any number of issues to be addressed on a document-by-document basis.
Conclusions
[113] For the reasons set out above, I order as follows:
The plaintiff shall have partial summary judgment against the defendants and the limitation period defence is dismissed.
The portion of the motion related to the examination for discovery of Poisson (paragraphs 1(a) and (b) of the defendants’ notice of motion) is adjourned on the following terms:
a) Each party shall deliver a record related solely to this issue. The defendants, as the moving parties, shall be entitled to deliver a supplementary record, if necessary, in reply to the plaintiff/respondent’s motion record;
b) On the return of the motion the parties shall not be permitted to reference their respective records on the motion for summary judgment;
c) The motion shall be returned before any judge of the Superior Court of Justice;
d) The motion materials shall be delivered in accordance with the Rules of Civil Procedure; and
e) The costs associated with this aspect of the relief requested by the defendants shall be determined by the judge hearing the motion on this issue. In the event the defendants do not pursue the motion, then the costs of this aspect of the relief requested by them shall be determined in due course as part of the costs of the action.
The manner in which the documents produced in this action are to be treated at trial shall be determined by the trial judge.
The motion on behalf of the defendants for the relief set out in paragraphs 1(c) and (d) of the defendants’ notice of motion is dismissed.
Other Matters
[114] At paragraph 78 of her decision in Hryniak, Karakatsanis J. directed that “in the absence of compelling reasons to the contrary, [the motion judge] should also seize herself of the matter as the trial judge.” There are, in the matter before me, “compelling reasons” as to why I shall not remain seized of the matter before me. Those reasons include the following.
[115] First, in determining the limitation defence I have not been required to address the substantive elements of the plaintiff’s claims against the defendants. I am no better-positioned than are my colleagues to address other matters that may arise as the litigation progresses or to preside over the trial of this action.
[116] Second, having dismissed the limitation defence, there are no issues to be ‘carried over’ from the summary judgment motion to the trial of the action. The plaintiff’s substantive claims remain to be determined without reference to my decision on the motion for summary judgment.
[117] Third, I am not scheduled to sit in Ottawa during the months of October, November, and December 2016. My schedule between the date of release of this Ruling and the end of September 2016 is such that there are limited opportunities, if any, for the parties to return before me in the next six weeks. As a result, it will likely be early 2017 before I am available to preside over any other step in this litigation.
[118] Fourth, on the return of the motion, if pursued by the defendants, in relation to the examination for discovery of Poisson in his capacity as the representative of Etaliq, the judge hearing the motion – whether me or one of my colleagues – will be required to consider additional evidence and a more fulsome review of the relevant case law than was before me.
[119] In summary, there will be no loss of efficiency to the parties or to the process by my not remaining seized of the matter.
Costs
[120] In the event the parties are unable to agree upon costs associated with the dismissal of the relief requested in paragraphs 1(c) and (d) of the defendants’ notice of motion they may make written submissions as follows:
a) The submissions shall be limited to a maximum of three pages, exclusive of a bill of costs;
b) Written submissions shall comply with Rule 4 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194;
c) Hard copies of any case law or other authorities relied on shall be provided with the submissions;
d) All submissions, case law, and other authorities shall be on single-sided pages; and
e) Submissions shall be delivered in accordance with the following schedule:
i) On behalf of the plaintiff – within 45 business days following the date of release of this Ruling;
ii) On behalf of the defendants – within 60 business days following the date of release of this Ruling; and
iii) Reply, if any, on behalf of the plaintiff – within 75 business days following the date of release of this Ruling.
Madam Justice Sylvia Corthorn