CITATION: Subway Franchise Systems of Canada, Inc. et al v. Trent University, 2017 ONSC 4562
COURT FILE NO.: CV-17-573356
DATE: 20170728
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SUBWAY FRANCHISE SYSTEMS OF CANADA, INC. and SUBWAY IP INC.
Applicants
– and –
TRENT UNIVERSITY
Respondent
William C. McDowell, Sana Halwani, for the Applicants
Thomas J. Donnelly, Joyce Tam, for the Respondent
HEARD: June 2, 2017
LEDERER J.
[1] This is an application seeking a Norwich Order. A Norwich Order is for discovery in advance of an action being commenced. Its roots are in equity. It derives from the ancient bill of discovery.[^1] Such a bill sought or seeks the disclosure of facts and nothing more. The granting of such an order is rare and extraordinary discretionary relief.[^2] This is as it should be. Freely allowing discovery in advance of an action would fundamentally change the process of the Court. It would lead to the tools of the court being used to search out and investigate speculative actions (the often referred to “fishing expedition”) rather than deal with real and substantive disputes. The policy proposition is that on occasion there may be situations where a party cannot proceed based only on the information available to it. The purpose of an action for discovery "is to enable justice to be done":[^3]
…The objective of a Norwich Order is to ensure that a person who has been wronged will not be prevented from obtaining legitimate redress for that wrong. Taking into account the interests of all the protagonists to the situation at hand, and balancing those interests, the interests of justice favour upholding the Norwich Order.[^4]
[2] The Applicants, Subway Franchise Systems of Canada, Inc. and Subway IP Inc. (“Subway”) are the franchise stores and intellectual property rights-holders in respect of SUBWAY restaurants. On February 24, 2017, the Canadian Broadcasting Corporation (“CBC”) broadcast an episode of its television program, Marketplace, which it promoted as the “Chicken Challenge”. The program claimed to compare various chicken products sold by Subway and its competitors. In particular, the program sought to explore whether the chicken products sold by Subway and some of its competitors were comprised solely or mostly of chicken. The program included a segment in which a technician working in a laboratory at the Respondent, Trent University (“Trent”) explained tests that he had undertaken in preparation for the program. He had taken chicken products of various fast food restaurants and analyzed the DNA. Was it the DNA of chicken or of plants? In the case of Subway the results, as revealed by the technician on the program, reported the product advertised as chicken could be less than 50% chicken. This was less chicken than in any of the competitive product. Subway does not accept the results. It advertises itself as a “healthy” alternative. The reporting of the program has damaged its reputation and its business. Subway is definitive in its view that the program was defamatory. The purport of the program was, apparently, widely reported. Evidently it was referred to as far away and in no less a newspaper than the Washington Post.
[3] As a result Subway has commenced an action against the CBC and the journalist who presented the program. It believes it may have a claim against Trent and possibly the technician who reported on the study. It has asked Trent to produce its mandate as well as the testing protocol and results on which the statements made on the program were based. Trent refused. The refusal was the catalyst for the Application. Subway says it is unsure whether there is a cause of action and seeks the Norwich Order as a means of obtaining the information it needs to determine if there is.
[4] The re-emergence of pre-action discovery occurred in the case from which the Norwich Order takes its name. In Norwich Pharmacal Co. v. Commissioners of Customs & Excise[^5] the Applicant was aware that one of its patents was being violated through the importation of a drug into the United Kingdom. It did not know by whom. The Respondent, as a result of its regulatory role, did know. Norwich Pharmacal Co. brought proceedings against the customs authority for an order compelling the authority to reveal the identity of the party improperly importing the drug. The House of Lords granted the relief sought:
[I]f through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.[^6]
[5] This speaks to the underlying purpose to do justice but reflects on a narrow circumstance for the granting of the order: where the alleged wrong doer (the prospective defendant) cannot be identified. In the time since the basis for the granting of a Norwich Order have broadened. In Canada such orders have been made:
(a) to identify wrongdoers^7 but also,
(b) to evaluate whether a cause of action exists,[^8]
(c) to plead a known cause of action[^9],
(d) to trace assets^10, or to
(e) preserve evidence or property[^11]
[6] In this case, counsel for Subway points particularly to the use of these orders to assist in the evaluation of whether there is a cause of action. He refers to and relies on P. v. T Ltd.[^12] The facts were different there than they are here. The plaintiff, a senior employee of the defendant, was fired. The managing director advised the defendant that serious allegations had been made against him by a third party. He was told nothing of the nature of the complaints or the identity of the informant. The plaintiff attended a disciplinary hearing. He was again refused any further information. The plaintiff was unable to respond adequately to the allegations. He was summarily dismissed without notice or pay in lieu of notice. There was an appeal. It was unsuccessful. The plaintiff complained to an industrial tribunal claiming unfair dismissal. This complaint led to an admission, by the Company, that the plaintiff had been unfairly dismissed. The tribunal ordered the company to re-engage the plaintiff but it refused to do so. As a result, a lawsuit was commenced. The plaintiff applied to the court for an order that the company disclose the details of the allegations made against him and the identity of the person who had supplied the information. The order was made:
It seems to me that in the circumstances of the present case justice demands that Mr. P. should be placed in a position to clear his name if the allegations made against him are without foundation. It seems to me intolerable that an individual in his position should be stained by serious allegations, the content of which he has no means of discovering and which he has no means of meeting otherwise than with the assistance of an order of discovery such as he seeks from me. It seems to me that the principles expressed in the Norwich Pharmacal case, although they have not previously been applied so far as I know to a case in which the question whether there has been a tort has not clearly been answered, ought to be applicable in a case such as the present.[^13]
[7] In the case I am asked to decide the plaintiff is sufficiently certain that a tort has been committed that an action has been commenced against the CBC and the reporter. As for a law suit against Trent, its identity is known as is that of the laboratory technician. The nature of the testing on which of the allegedly defamatory comments are based (DNA testing) was described and the conclusions explained on the program, by the technician. What is requested is not the substance of the allegations (in P. v. T Ltd. a description of the misconduct) but the details of the evidence on which the allegations (in this case that the impugned product contains less than 50% chicken) are based. It is worthwhile, at this point, to review what it is that Subway seeks. The Application lists what follows:
A Norwich Order… requiring that Respondent, Trent University (“Trent”), to provide the following documents and information (the “Information Sought”):
(i) all reports prepared by Trent or agents of Trent in the context of the testing undertaken on behalf of or as requested by the Canadian Broadcasting Corporation (“CBC”) with respect to [Subway] chicken featured in the CBC Marketplace episode airing February 24, 2017, as further described below as the “Trent Tests”;
(ii) documents relating to Trent’s methodology in conducting the Trent Tests;
(iii) documents describing how Trent’s methodology for the Trent Tests was validated;
(iv) manuals for the equipment and reagents used by Trent in conducting the Trent Tests;
(v) any initial statement of work or parameters agreed upon between Trent and CBC concerning the Trent Tests;
(vi) any contracts entered into by Trent and CBC in respect of the Trent Tests;
(vii) any other report related to the testing of [Subway] products conducted by Trent for the purpose of the Marketplace episode airing February 24, 2017, whether at the request of the CBC or otherwise;
(viii) all pages of the lab notebooks or other forms of written notes taken by the individuals who conducted the Trent Tests;
(ix) all raw data, statistical analysis, results of statistical analysis, graphs, charts and figures generated by Trent or its agents in relation to the Trent Tests;
(x) all written communications and any notes or records of oral communications between Trent and CBC in relation to the Trent Tests;
(xi) all internal Trent written communications and any notes or records or all communications relating to the Trent Tests;
(xii) all documents in the possession of Trent showing the chain of custody of [Subway] products from point of purchase to the point of testing by Trent.[^14]
[8] It should be readily apparent that this request goes well beyond what would be required to determine whether or not there is cause of action and enters into the realm of a complete inquiry as to the evidence that could support, question or answer any supposed wrong. It could tilt the playing field by allowing the plaintiff to strategize its entry into the game (commence an action) requiring the defendant to respond, with a statement of defence, in the absence of a similar level of awareness as to the plaintiff’s knowledge, evidence, data and analysis. The Affidavit of David M. Theno (identified as the Acting Global Food Safety Officer for Franchise World Headquarters LLC) relied on in support of the Application makes clear that Subway has already identified that there is a cause of action. Subway has accepted that the information provided by Trent was false. What is sought is the evidence that supports the proposition:
Full investigation of the false information disseminated by Trent requires access to the requested information in Trent’s possession control or power. Without such information, [Subway] will be unable to know how the false information was generated or what was specifically communicated to CBC.[^15]
[9] The concern expressed was that:
The Broadcast contained no explanation on-air or online as to how the Trent Tests were conducted or interpreted, or what information precisely regarding the Trent Tests was communicated to the CBC.[^16]
[10] What the broadcast did contain was a general description of the testing utilized (DNA testing) and the results both of which were spoken by or attributed to the technician.[^17]
[11] I turn now to the applicable legal test. What should the Court consider in determining whether or not to exercise its discretion and grant the order requested? The applicable considerations have been identified as:
(a) whether the applicant has provided evidence sufficient to raise a valid, bona fide or reasonable claim;
(b) whether the applicant has established a relationship with the third party from whom the information is sought such that it establishes that the third party is somehow involved in the acts complained of;
(c) whether the third-party is the only practicable source of the information available;
(d) whether the third-party can be indemnified for costs to which the third-party may be exposed because of the disclosure; and
(e) whether the interests of justice favour the obtaining of disclosure.[^18]
[12] I have no difficulty acknowledging that Subway has provided evidence sufficient to demonstrate that it has a viable or reasonable claim (see para. 11 immediately above), or that it has established that Trent was involved in the acts complained of (see para. 11 immediately above). In its factum, Subway has undertaken to pay to Trent its reasonable out-of-pocket expenses related to the protection of the Information Sought (see para. 11 immediately above).[^19] I am less certain about the remaining two concerns: whether Trent is the only practicable source for the information (see para. 11 immediately above) and whether the interest of justice favour granting the order (see para. 11 immediately above). As to the former, Subway submitted that it has no information that leads it to believe that it could obtain the information sought from any other source, that Trent has not denied that it has that information and has provided no evidence that it is available from any other source.[^20] To my mind, this ignores the obvious. The CBC has it. This was conceded by Subway:
… Further, in contrast to many Norwich applications, the Information Sought is not confidential, commercially sensitive or private. To the contrary, all of the Information Sought is information that Trent either communicated to a third-party, the CBC, or form the basis of Trent’s communication to the CBC.[^21]
[13] In reviewing the involvement of Trent, Subway observed:
In this case, Trent’s involvement goes beyond being a mere witness to the proceedings against the CBC. Rather, Trent was the entity that conducted the testing on which the CBC apparently based its defamatory statements relating to the Applicants. Put differently, at this stage, it appears that without Trent’s involvement, the CBCs defamatory broadcast would not have been possible.[^22]
[14] This being so, it is difficult to see how the CBC could avoid producing this material in the course of its own discovery. For its part, Trent observed:
Now that there is existing litigation against both CBC and Trent, Subway has alternate means to obtain the information requested, through the normal discovery process. As the Court of Appeal noted in GEA, the plaintiff is always free to amend its pleading (or even add new parties) if it obtains evidence on discovery of additional causes of action or claims[^23].
[15] I confess is not clear to me what is being referred to as “existing litigation” as between Subway and Trent. It could be this application or the fact that an Amended Notice of Libel, dated March 9, 2017, has been served on Trent. Trent, in its factum, states that “Subway has already sued Trent for libel and negligence”.[^24] Be that as it may, Trent accepts that it is “obligated to preserve the information sought”.[^25] I am prepared to ensure that this remains so by making it the subject of an order arising from this application.
[16] As to the latter of the two remaining concerns (does the interest of justice favour the granting of the order?) I return to the comment made at the outset. A Norwich Order is and should remain an extraordinary remedy. To make such orders common place or too easy to obtain would change the purpose of discovery and upset the general process of litigation. In this case to deny the order would not impede justice being done. The prospective defendants have been identified (Trent and the technologist), the possible causes of action are apparent (defamation and negligence) and discovery in the normal course is available.
[17] To proceed as requested by the applicants runs the risks raised. To make this point I draw a comparison to actions arising from motor vehicle accidents where the pleadings of the particulars of negligence have long been standardized. They refer to matters such as the competence of the driver, whether the lights were operating, whether the brakes were effective, they suggest that the car was not properly maintained and that the driver was not sufficiently attentive. For the most part these things are not known; they are alleged and enquiries made through production and discovery. Here the issue is the efficacy of the tests conducted by Trent, reported to the CBC and relied on during the course of the program and in the other alleged publication of the results. As with motor vehicle litigation, the associated allegations are common to litigation founded on such investigations. In its factum and the Affidavit of David M. Theno, Subway points to the following as subjects where information is limited and required:
(a) the scope of work and/or instructions CBC gave to Trent;
(b) the methodology Trent used to conduct the Trent Tests, and whether and how that methodology was validated
(c) the equipment and reagents Trent used to conduct the Trent Tests;
(d) the raw data Trent obtained from the Trent Tests, and what statistical analysis was conducted; and
(e) the chain of custody of the [Subway] samples.[^26]
[18] This sort of information is regularly sought where scientific style testing is at the root of a cause of action. I am hard pressed to see any difference between this and the allegation made in a motor vehicle negligence case. If the absence of this information leaves Trent vulnerable to an application for a Norwich Order so it would be for every owner and driver of any motor vehicle involved in an accident that could or might give rise to a law suit.
[19] The idea that this could be so is dealt with by a consideration of whether pre-action discovery is, in the circumstances, necessary for an action to be commenced. The idea that necessity is a prerequisite to the granting of a Norwich Order is discussed, at length, in GEA Group AG v. Ventra Group Co.[^27] and concludes with the following observation:
In my opinion, the precise placement of the necessity requirement in the inventory of factors to be considered on a Norwich application is of little moment. The important point is that a Norwich Order is an equitable, discretionary and flexible remedy. It is also an intrusive and extraordinary remedy that must be exercised with caution. It is therefore incumbent on the applicant for a Norwich Order to demonstrate that the discovery sought is required to permit a prospective action to proceed, although the firm commitment to commence proceedings is not itself a condition precedent to this form of equitable relief.[^28]
[20] To state it plainly, in this case there is no reason why the action being considered cannot be brought and the information, said to be required, to be obtained through the usual process of production and discovery. On behalf of Subway it is said that this is not so. It is submitted that it ignores the requirement that when pleading fraud or misrepresentation particulars are required.[^29] Reliance was placed on the case of Lysko v. Braley.[^30] The Commissioner of the Canadian Football League was fired. Nonetheless, he was paid according to his contract. He was not satisfied and sued seeking damages for, among other things, defamation, injurious falsehood and negligent misrepresentation. The paragraphs in the Statement of Claim alleging defamation were struck:
…[T]he appellant had not pleaded facts upon which to base a prima facie case nor a coherent body of fact showing a defamatory utterance emanating from the defendants. The cases that have considered the matter appear to uniformly require the plaintiff to identify the defendant alleged to have published the defamatory comments.[^31]
[21] Concern was expressed that in the absence of the information sought, any Statement of Claim issued on behalf of Subway would be susceptible to a similar attack. I do not see how this could be. The prospective defendants have been identified and the allegedly defamatory statements are apparent in the program presented by the CBC where they were spoken by and attributed to the laboratory technician, by name. The program and the work leading to it, as revealed during the broadcast, represents the “coherent body of facts” leading to the alleged defamation.
[22] Finally, counsel for Subway suggested that if, in the end, the court was unprepared to order the full array of production proposed there were some requests which stood apart from the particulars of the testing and which could be and should be the subject of an order. In particular, I refer to:
• any initial statement of work or parameters agreed upon between Trent and CBC concerning the Trent Tests,
• any contracts entered into by Trent and CBC in respect of the Trent Tests, and
• any written communications and any notes or records of oral communications between Trent and CBC in relation to the Trent Tests.
[23] On their face, it is apparent that each of these would be available through and subject to production by the CBC.
[24] For the reasons reviewed herein the application is dismissed.
[25] In making this order I wish to be clear. I refer to the Factum of the Respondent Trent University. It makes the following statement:
In the alternative, the scope of production requested is too broad. The sole potential cause of action referred to in Subway’s factum is defamation, and the only information needed to establish the cause of action would be the words spoken or written by Trent and communicated to CBC. There is no justification for Subway to obtain any of the other information and documentation sought in its application, as outlined above.[^32]
[26] I make no finding as to this proposition. To ensure that no action is taken in respect of this position I order that the Respondent, Trent University, preserve, maintain and hold any evidence and information it has in its possession or control reflecting on the testing conducted, the broadcast by the CBC or other publication of the results of that testing and its relationship with the CBC with respect to that testing and publication until such time as it is required for the prosecution of this action, further order of this Court or the consent of the Applicants that it may otherwise be disposed of.
[27] No submissions were made as to costs. If the parties are unable to agree I will consider written submissions on the following basis:
(1) on behalf of the Respondent, Trent University, no later than 15 days after the release of these reasons. Such submissions to be no longer than 4 pages double spaced not including any Bill of Costs, Costs Outline or case law that may be referred to;
(2) on behalf of the Applicants, Subway Franchise Systems of Canada, Inc. and Subway IP Inc., no later than 10 days thereafter such submissions to be no longer than 4 pages double spaced not including any Bill of Costs, Costs Outline or case law that may be referred to; and
(3) if necessary, on behalf of the Respondent, in reply, no later than 5 days thereafter such submissions to be no longer than two pages double spaced.
Lederer J.
Released: July 28, 2017
CITATION: Subway Franchise Systems of Canada, Inc. et al v. Trent University, 2017 ONSC 4562
COURT FILE NO.: CV-17-573356
DATE: 20170728
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SUBWAY FRANCHISE SYSTEMS OF CANADA, INC. and SUBWAY IP INC.
Applicants
– and –
TRENT UNIVERSITY
Respondent
REASONS FOR JUDGMENT
Lederer J.
Released: July 28, 2017
[^1]: GEA Group AG v. Ventra Group Co. [2009] O.J. No. 3457, 2009 ONCA 619, 312 D.L.R. (4th) 160, 76 O.A.C. 198, 96 O.R. (3d) 481 at para. 41
[^2]: Ibid at para. 104
[^3]: Ibid at para. 90 quoting from Straka v. Humber River Regional Hospital (2000), 2000 CanLII 16979 (ON CA), 51 O.R. (3d) 1, [2000] O.J. No. 4212 (C.A.) at para. 36 and see P. v. T Ltd. [1997] 4 All E.R. 200 at the second last paragraph
[^4]: Ibid at para. 35 quoting from the motion being appealed GEA Group Ag v. Ventra Group Co. 2008 CanLII 70043 (ONSC) at para. 41
[^5]: [1974] A.C. 133 (H.L.), [1973] 3 W.L.R. 164, [1973] 2 All E.R. 943
[^6]: Ibid (Norwich Pharmacal Co. v. Commissioners of Customs & Excise) at p. 948 (All E.R.)
[^8]: P. v. T Ltd. [1997], supra (fn. 3)
[^9]: Bankers Trust Co. v. Shapira, [1980] 3 All E.R. 353, [1980] 1 W.L.R. 1274 (C.A.), Leahy v. B. (A.), 1992 CanLII 2798 (NS SC), [1992] N.S.J. No. 160, 113 N.S.R. (2d) 417, 8 C.P.C. (3d) 260, 32 A.C.W.S. (3d) 1048, 309 A.P.R. 417 (S.C. (T.D.))
[^11]: Ibid (Leahy v. B. (A.))
[^12]: Supra P. v. T Ltd. (fn. 3)
[^13]: Supra (fn. 3) at the second last paragraph
[^14]: This list is also found in the Affidavit of David M. Theno, sworn April 13, 2017 at para. 12
[^15]: Ibid at para. 16
[^16]: Ibid at para. 8
[^17]: Affidavit of Kate Costin, sworn April 17, 2017, at Exhibit A (a copy of the Notice of Action naming as Defendants the Canadian Broadcasting Corporation, Charlsie Agro, Kathleen Coughlin and Eric Szeto at para. 10)
[^18]: Isofoton S.A. v. Toronto Dominion Bank (2007), 2007 CanLII 14626 (ON SC), 85 O.R. (3d) 780 (ONSC) at para. 40 (b); GEA Group AG v Ventra Group Co., supra (fn. 1) at para. 51 referring to Alberta (Treasury Branches) v. Leahy (2000) 2000 ABQB 575, 270 A.R. 1 (Q.B.), aff’d (2002), 2002 ABCA 101, 303 A.R. 63 (C.A.), leave to appeal refused [2002] S.C.C.A. No. 235
[^19]: Factum of the Applicants at paras. 60
[^20]: Factum of the Applicants at paras. 57-59
[^21]: Ibid at para. 63
[^22]: Ibid at para. 55
[^23]: Factum of the Respondent Trent University at para. 52 relying on GEA Group AG v. Ventra Group Co., supra (fn. 1) at para. 100
[^24]: Ibid at para. 64
[^25]: Ibid at para. 64
[^26]: Factum of the Respondent Trent University at para. 24 referring to the Affidavit of David M. Theno sworn April 13, 2017, at para. 11
[^27]: GEA Group AG v. Ventra Group Co., supra (fn.1) at paras. 74-87
[^28]: Ibid at para. 85
[^29]: Rules of Civil Procedure R.R.O. 1990, O. Reg 194 at rule 25.06(8):
Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.
[^30]: [2006] O.J. No. 1137, 79 O.R. (3d) 721, 212 O.A.C. 159, 2006 CanLII 9038, 2006 CarswellOnt 1748
[^31]: Ibid ay para. 96 referring to Cassagnol v. Pickering Automobiles Inc., [2001] O.J. No. 4117 (Sup. Ct. J.) at paras. 7 and 12; Craig v. Langley Citizen’s Coalition, 2003 BCSC 124, [2003] B.C.J. No. 141 (S.C.) at paras. 16-19 and Lana International Ltd. v. Menasco Aerospace Ltd. (1996), 1996 CanLII 7974 (ON SC),, 28 O.R. (3d) 343 (Gen. Div.) and at para. 95 to Magnotta Winery Ltd. v. Ziraldo (1995), 1995 CanLII 7122 (ON SC), 25 O.R. (3d) 575 (Gen. Div.)
[^32]: Factum of the Respondent Trent University at para. 65