T-167-80
Baxter Travenol Laboratories of Canada, Limited,
Travenol Laboratories Inc. and Baxter Travenol
Laboratories Inc. (Plaintiffs)
v.
Cutter (Canada), Ltd. (Defendant)
Trial Division, Marceau J.—Ottawa, June 17 and
18, 1982.
Practice — Patent infringement — Application for order
re-opening trial and allowing amendments to pleadings in
relation to issue of damages on basis of information obtained
after judgment rendered that defendant involved in abnormal
dealings, during and after trial, for disposition of infringing
products on hand — Based on this information, plaintiffs
seeking punitive and exemplary damages, neither of which
were sought at trial — Plaintiffs asserting Rules 496 and 420
permit re-opening of trial and amendment of pleadings for
purpose of dealing with claim — Plaintiffs further arguing
that, in alternative, Rule 1733 permits variation of trial judg
ment as it relates to question of damages and references to be
held in connection therewith, on ground of fraud — Motion
dismissed — Federal Court Rules 420, 496, 1733.
This is a motion brought by the plaintiffs, after judgment
had been rendered in an action for patent infringement, for an
order pursuant to Rule 496 reopening the trial for the purpose
of having the issue of damages reconsidered and pursuant to
Rule 420 allowing amendments to the statement of claim and,
alternatively, for an order pursuant to Rule 1733 for a variation
of the trial judgment as it related to the question of damages
and conduct of references to be held in that respect, on the
ground of fraud.
At the conclusion of the trial the defendant launched an
appeal against the judgment and brought a motion for a stay of
the reference proceedings which were to be held in accordance
with its terms. The plaintiffs, on cross-examining an officer of
the defendant company on his affidavit in support of that
motion, obtained facts relating to abnormal dealings carried
out by the defendant during and after the trial for the purpose
of disposing of all infringing products it had on hand. Based on
this information the plaintiffs, in connection with an election
for damages or an accounting of profits made in accordance
with the trial judgment, claimed punitive and exemplary dam
ages. When, at discovery, they sought to compel answers to
questions relevant to that claim the Court held that because the
original judgment had not awarded punitive or exemplary
damages the plaintiffs could not become entitled to them
through its election.
Held, the motion is dismissed. The Court's decision refusing
to allow questions relating to punitive and exemplary damages
is binding. The pleadings in an action that has been tried and
disposed of by judgment cannot be amended in order to
introduce an entirely new issue which was not available in the
action. In this case, the conduct giving rise to liability occurred
during the trial and after. It therefore did not form part of the
evidence, pleadings, or issues addressed by the Trial Judge and
cannot now be considered by this Court. With regard to Rule
1733, that Rule cannot be used to grant relief for a cause of
action not raised in the action nor can it be used when the
validity of the judgment is in no way put into question. The
Rule permits the bringing of a motion to review and set aside a
judgment because of new evidence or on the basis of fraud;
however, in this case there was no fraud committed upon the
Court nor was there an attack made on the regularity of the
judgment as rendered.
CASE JUDICIALLY CONSIDERED
REFERRED TO:
Lesyork Holdings Ltd. et al. v. Munden Acres Ltd. et al.
(1977), 13 O.R. (2d) 430 (C.A.).
COUNSEL:
D. F. Sim, Q.C. and C. E. R. Spring for
plaintiffs.
G. E. Fisk for defendant.
SOLICITORS:
Sim, Hughes, Toronto, for plaintiffs.
Gowling & Henderson, Ottawa, for defend
ant.
The following are the reasons for order ren
dered in English by
MARCEAU J.: This is an application of a most
unusual nature. Brought in the course of extremely
involved proceedings that have already given rise
to three appeals still pending, it has to be put into
context for its purpose and meaning to be properly
understood.
The plaintiffs commenced an action for patent
infringement against the defendant in January
1980. The action went to trial on November 19,
1980, subject to an order of the kind contemplated
by Rule 480. On December 11, 1980, the Trial
Judge delivered his reasons for judgment: he found
the patent in issue to be valid and to have been
infringed and he directed that the appropriate
judgment implementing his conclusions be pre
pared by counsel and submitted for approval. The
formal judgment was signed on December 18,
1980. An appeal was immediately launched
against this judgment.
The judgment, of course, contained provisions as
to the liability of the defendant for damages and to
the references that were to be conducted with
respect thereto. The conduct of the references was
to be assured in four steps: (1) a discovery on the
issues of extent of infringement, damages sus
tained by the plaintiffs and profits made by the
defendant; (2) a reference to determine whether
the plaintiffs were entitled to claim the defendant's
profits; (3) depending on whether they were en
titled to the profits at all, an election by the
plaintiffs as to whether they wanted damages or an
accounting of the profits and, finally, (4) a refer
ence to determine the quantum of damages or the
profits depending on the election, if any, made.
The defendant promptly moved to stay the refer
ence proceedings pending disposition of the appeal
against the judgment, and, in support of its
motion, submitted the affidavit of one Thomas
Maxwell, its Vice-President and Chief Executive
Officer. That motion to stay was rejected, but it
had given the plaintiffs the opportunity to cross-
examine Mr. Maxwell on his affidavit. In the
course of Mr. Maxwell's cross-examination, it was
revealed that, during and after the trial, the
defendant had managed to dispose of all of the
infringing products it still had on hand by abnor
mally increasing its sales to the Canadian Red
Cross (the sole purchaser of the products in
Canada), and by removing the rest of its stock to
the office of its parent company in California,
U.S.A. Apparently, the plaintiffs had had some
advance warning of abnormal dealings by the
defendant since the trial but nevertheless this was
the first time they were in a position to verify the
facts. In their view, the defendant's conduct was
not only insolent and malicious, it was showing
contempt for their rights and even for the Court
itself.
The plaintiffs' first reaction to the information
newly acquired was to seek to have the defendant
cited for contempt of court. They were unsuccess
ful: it was decided that the facts alleged, even if
proved, did not amount to contempt, a decision
that was upheld on appeal although leave to fur
ther appeal has been granted by the Supreme
Court. The plaintiffs' second reaction was to serve
notice, in their formal election, that they con
sidered themselves entitled to punitive and exem
plary damages. They were again to be frustrated:
when they sought to compel answers to questions
on discovery relevant to any punitive and exem
plary damages, an order of this Court decided that
the judgment did not award punitive and exem
plary damages and that the election made pursu
ant to that judgment could not give rise to an
entitlement thereto. This order is, of course, the
subject of the third appeal hereabove mentioned.
The application which is before the Court today
will now be readily understood. In the words used
in the notice of motion it is for an order:
1) Pursuant to the Rules of this Court and in particular Rule
420, allowing the amendments to the Statement of Claim as set
out in the proposed Amended Statement of Claim, marked as
Schedule "A" hereto.
2) Pursuant to the Rules of this Court and in particular Rule
496, that the trial held on November 19, 20, 21, 24, 25 and 26,
1980, be re-opened before a Judge sitting in the Trial Division
for the purposes of expanding the issues of damages on the
reference which the Trial Judge directed in paragraphs 4 and 5
of his Judgment dated December 18, 1980.
3) Giving directions with respect to - the - re-opening - of - the-trial
on the issues of damages and setting a schedule therefor.
4) Or in the alternative, pursuant to the Rules of this Court and
in particular Rule 1733, for a variation of the Judgment upon
the ground of matter arising subsequent to the making thereof
and subsequently discovered, or to impeach the portions of the
Judgment dealing with the issue of damages in the conduct of
the reference on the ground of fraud.
5) Giving directions with respect to the procedure and setting a
schedule therefor.
6) Such further and other order including directions as to this
Honourable Court may seem just.
Counsel for the plaintiffs made a very skillful
presentation of his motion, but nevertheless he
failed to convince me that it was a motion the
Court has jurisdiction to entertain.
The decision of this Court dated December 4,
1981, T-167-80, which refused to allow questions
relating to punitive and exemplary damages is, of
course, a decision which is binding upon me. The
basis for that decision is to be found in the follow
ing passage of the Judge's reasons:
The issue before me is greatly simplified because we are dealing
with a judgment of this Court which has already been pro-
nounced and which, of course, makes no mention of exemplary
or punitive damages. Nor should it be surprising that this
subject does not form a part of the judgment since it did not
form a part of the pleadings. More fundamentally, upon the
plaintiffs' own submission, some of the actions which allegedly
give rise to the defendant's liability for this extraordinary relief,
occurred during the trial but did not form any part of the
evidence at trial, and still others happened after the conclusion
of the trial. Obviously then, this judgment could not properly
have addressed such liability on the part of the defendant.
The issue of punitive or exemplary damages is
therefore an issue which was not available in the
action and could not be adjudicated upon in the
judgment. It is an entirely new issue. Now, it
seems to me simply inconceivable that the plead-
ings in an action which has not only been tried but
has already been disposed of by judgment can be
amended in order to introduce and submit to the
consideration of the Court a new issue. Rules 420
and 496 referred to by the plaintiffs in their notice
of motion can have no application once judgment
has been rendered. It is true that Rule 1733'
contemplates the possibility of bringing a motion
(instead of a fresh action, as in other jurisdictions)
to review and set aside a judgment because of new
evidence or on the basis of fraud. But, no fraud has
been committed upon the Court here and no attack
is made on the regularity of the judgment as
rendered. What is sought is a variation of the
judgment so as to have it dispose of a new issue,
and an issue which, in any event, does not, and
cannot form part of the pleadings. Rule 1733, as I
understand it, cannot be used to grant relief for a
cause of action not raised in. the action nor can it
be used when the validity of the judgment is in no
way put into question. The need for finality in
litigation requires that this be so. (Compare
Lesyork Holdings Ltd. et al. v. Munden Acres
Ltd. et al. (1977), 13 O.R. (2d) 430 (C.A.).)
The Court, therefore, is, in my view, entirely
without jurisdiction to make the order sought and
I have no choice but to dismiss the motion. It will
' Rule 1733. A party entitled to maintain an action for the
reversal or variation of a judgment or order upon the ground of
matter arising subsequent to the making thereof or subsequent
ly discovered, or to impeach a judgment or order on the ground
of fraud, may make an application in the action or other
proceeding in which such judgment or order was delivered or
made for the relief claimed.
be dismissed without costs, however, as I think
that in the circumstances it would not be appropri
ate to award costs.
ORDER
The motion is dismissed without costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.