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T-433-83
Swing Paints Ltd. (Applicant)
v.
Minwax Company, Inc. (Respondent)
Trial Division, Muldoon J.—Toronto, February 27; Ottawa, March 2, 1984.
Practice — Affidavits — Applicant granted leave to cross- examine respondent's deponents and to file further affidavit evidence — Respondent seeking to cross-examine applicant's further deponents — Counsel proceeding by agreement subject to specific conditions — Respondent confirming agreement — Applicant accepting confirmation of agreement while purport ing to bind respondent to added condition cross-examinations strictly limited to affidavit declarations — Applicant subse quently objecting to cross-examination of one deponent on ground contrary to agreement — Acceptance or rejection of agreement and terms thereof should be unconditional and unambiguous — Applicant's added condition, enfolded within confirmation, diluting unambiguous acceptance — Proceed ings in instant case substantive, albeit summary — Affidavits and cross-examinations effected as evidence on principal matter at issue — Courts requiring deponents submit to cross-examination on matters specifically set forth in affidavit as well as on collateral matters arising from answers — Deponent cannot swear to matters in affidavit and then seek protection from fair cross-examination — Court holding respondent to undertaking further supplementary affidavits would not be introduced — However, no breach of undertaking if useful evidence elicited upon cross-examinations — Federal Court Rules, C.R.C., c. 663, RR. 324, 704(8).
Trade marks — Practice — Expungement proceedings — Affidavits — Cross-examination of deponents — Affidavits and cross-examinations as evidence on matter at issue — Deponent to answer questions on collateral matters arising from answers — Affidavit referring to labels and packaging — Questions as to distinctiveness of mark "Minwax" and design to be answered.
The present matter arises in expungement proceedings rela tive to the respondent's trade mark "Minwax" and design. A statement of material facts and a reply were filed. By order of this Court, the applicant was granted leave (1) to cross-exam ine the deponents in support of the respondent's reply and (2) to file additional affidavit evidence. The respondent appealed the order and sought to cross-examine the applicant's depo- nents. Accordingly, counsel for both parties decided to proceed by agreement, subject to certain specific conditions. The respondent confirmed the agreement in a letter to applicant's counsel. The latter responded by two letters: in the first one, he appeared to confirm the agreement, but in the second one, he purported to bind the respondent to a condition not included in
the agreement, i.e. that the cross-examination of its deponents be strictly limited to declarations contained in the affidavits. All documents were executed. The respondent began cross- examining the deponents. However, the cross-examination of the second deponent was met by objections from applicant's counsel on the ground that the questions posed concerned matters which were not restricted to the four corners of the affidavit. The respondent now moves for an order requiring the deponent to re-attend and submit to cross-examination on his affidavit.
Held, the motion is allowed.
Acceptance of confirmation of an agreement and its terms should be unconditional, and it is both unnecessary and undesirable, in marking acceptance, to rephrase or even to repeat the confirmation with its terms and conditions. Rejection should always be clearly expressed and emphasized, without appearing to comply with some of the terms and conditions, and without endorsing, executing or otherwise using any docu ments forwarded pursuant to the rejected proposals. Both acceptance and rejection should be unambiguous and emphatic.
In this instance, the applicant's counsel's response appears to have been ambiguous. The applicant's added condition, "enfolded" within a confirmation, diluted unambiguous accept ance of the purported agreement. As matters now stand be tween the parties, the respondent is left with a truncated, if not aborted, cross-examination of the applicant's deponent. When the deponent volunteered to make his affidavit, he ought to have known, or to have been advised, that he was thereby assuming the obligation of submitting to cross-examination.
It must be borne in mind that the present proceeding is neither an interlocutory one nor an examination for discovery. It is a substantive, albeit summary, proceeding and, according ly, affidavits are filed and cross-examinations effected as evi dence on the principal matter at issue. With respect to the extent of cross-examinations on affidavits in this kind of matter, courts have held that the person making the affidavit must submit to cross-examination not only on matters specifi cally set forth in his affidavit, but also on those collateral matters which arise from his answers. Indeed, he should answer all questions upon which he can be fairly expected to have knowledge, without being evasive, which relate to the principal issue in the proceeding upon which his affidavit touches, if it does. The applicant contends that its deponent's affidavit addressed only a very narrow matter. Surely, neither a witness testifying viva voce in court, nor a deponent whose affidavit is tendered can be permitted to give what might be termed "hit-and-run" evidence, or skilfully-sculped evidence, only.
The deponent's extent of knowledge and his credibility can be tested by the respondent. Since the affidavit refers to labels and packaging, the deponent should also submit to questions relating to the distinctiveness of the respondent's trade mark and design which are fairly within his knowledge. The deponent cannot be permitted to swear to these matters and then be protected from fair cross-examination. While the Court must
hold the respondent to its undertaking not to seek to introduce further supplementary affidavits, the elicitation of useful evi dence upon any of the cross-examinations of the applicant's deponents does not constitute a breach of that undertaking.
CASES JUDICIALLY CONSIDERED
APPLIED:
Ethicon Inc. et al. v. Cyanamid of Canada Ltd. (1977), 35 C.P.R. (2d) 126 (F.C.T.D.); Re Marchands Ro -Na Inc. and Tefal S.A. (1980), 59 C.P.R. (2d) 139 (F.C.T.D.); Weight Watchers International Inc. v. Weight Watchers of Ontario Ltd. (No. 2) (1972), 6 C.P.R. (2d) 169 (F.C.T.D.); Superior Discount Limited v. N. Perlmutter & Company et al., [1951] O.W.N. 897; Thomson v. Thomson and Elliot, [1948] O.W.N. 137 (H.C.).
COUNSEL:
François Guay for applicant. H. Roger Hart for respondent.
SOLICITORS: ,
Lapointe Rosenstein, Montreal, for applicant.
Rogers, Bereskin & Parr, Toronto, for respondent.
The following are the reasons for order ren dered in English by
MULDOON J.: This matter arises in expunge - ment proceedings under the Trade Marks Act [R.S.C. 1970, c. T-10], relative to Registration No. 141/32136 for "Minwax" and design standing in the respondent's name. The applicant has filed its statement of material facts and the respondent countered with its reply. In support of its reply, the respondent filed several affidavits.
By order of May 30, 1983 [T-433-83], Mr. Justice Decary accorded the applicant leave to cross-examine the deponents in support of the respondent's reply and, as well, leave to file "preuve supplémentaire" pursuant to Rule 704(8) [Federal Court Rules, C.R.C., c. 663]. Following those cross-examinations, the applicant filed the affidavits respectively of Gerald Brendan Cough- lan, Gerald Cayne, François Guay, Jerry Bortnick, Hélène Dulude and Phil Chaimberg, as its further affidavit evidence.
In the meanwhile, the respondent had lodged an appeal in the Appeal Division against Mr. Justice Decary's order. However, the respondent also thought it advisable to seek to cross-examine those who had furnished the applicant's further affidavit evidence. Accordingly, the lawyers for the parties crafted an arrangement in regard to these matters, by exchanging mutual professional undertakings.
By way of confirmation, Mr. Sharpe for the respondent wrote on October 27, 1983 to Mr. Guay for the applicant, as follows:
Dear Mr. Guay:
Re: Swing Paints Ltd. v. Minwax Company, Inc.—Feder- al Court Action No. T-433-83
This letter will confirm our telephone conversations on Tues- day, October 25, and Wednesday, October 26, in regard to the above-noted action.
I confirm that you have advised me that you would be prepared to consent to an Order permitting us to cross-examine Messrs. Chaimberg, Bortnick, Cayne and Coughlan, subject to the following conditions:
(1) all cross-examinations would be completed within thirty days of the date of the order,
(2) the cross-examination of Mr. Chaimberg would take place in Montreal,
(3) the cross-examinations of the remaining individuals would take place in Toronto,
(4) the respondent would pay the reasonable travelling expenses for all of the individuals in attending for such cross-examinations, and
(5) the respondent would discontinue its appeal from the Order granting the applicant leave to cross-examine and to file additional affidavit evidence.
I confirm that I have advised you that the respondent is prepared to accept all of the terms provided that your client consents to the discontinuance without costs. You have indicat ed to me that you do not believe that this will cause any problem and I have advised you that I would prepare the various documentation for your execution. In accordance with the agreement reached and my undertaking, I am therefore enclosing the following documents:
(1) a letter consenting to the disposition of the motion under Rule 324, in triplicate,
(2) a Notice of Motion for Order granting leave to cross- examine, in triplicate,
(3) a Consent to the granting of the Order permitting cross-examination, in triplicate,
(4) a Notice of Discontinuance, in triplicate.
We would ask that you execute all three copies of documents numbers (1), (3) and (4) above, and that you admit service on all three copies of document number (2) above. We would then ask that you return two copies of the four documents to us for filing of [sic] the Registry of the Federal Court of Canada in Toronto or, alternatively, that you file the documents in the Registry of the Federal Court of Canada in Montreal and provide us with one copy of each document for our records.
We look forward to receiving the executed documents or your confirmation that these documents have been filed to gether with copies of the documents, as executed, in due course. In addition, we look forward to receiving confirmation that your unilateral application to fix a date for the hearing of this matter has been withdrawn, and confirm that we will join in the filing of a joint application for time and place of hearing following the completion of the cross-examinations. We thank you for your co-operation in this matter, and remain,
Yours very truly,
The above-mentioned letter was forwarded from Toronto to Montreal by courier, and Mr. Guay responded the very next day, not by one, but by two letters. The "first", in which the promptly signed documents were returned, runs as follows:
[TRANSLATION] Attention: Mr. Kenneth E. Sharpe
RE: Swing Paints Limited
—vs—
Minwax Company, Inc.
Our file: 12037
Dear Colleague:
Please find enclosed two duly-signed copies of each of the
documents you submitted to us, the whole in accordance with
your letter of October 27, 1983.
We wish to confirm that we have withdrawn from the Federal
Court record the unilateral inscription for hearing of the case.
We will join in due course, if possible, in the filing of a joint
application for a hearing.
We also wish to advise you that we agree to the discontinuance
being made without cost to your client.
Hoping this will be satisfactory,
Yours truly,
LAPOINTE ROSENSTEIN
François Guay Ends.
The "second" letter from Mr. Guay to Mr. Sharpe of October 28, 1983, is expressed thus:
[TRANSLATION] Attention: Mr. Kenneth E. Sharpe
RE: Swing Paints Limited
—vs—
Minwax Company, Inc.
Our file: 12037
Dear Colleague:
Further to our recent telephone conversation regarding the
above matter, we wish to confirm the following.
In view of your intention to file a motion to cross-examine Messrs. Jerry Bortnick, Gerald Cayne, Gerald Brendan-Cough- lan and Phil Chaimberg, we will not object to the filing of the said motion, but only on the following conditions:
(a) you discontinue the appeal filed by you against the decision of Raymond G. Decary J., dated May 30, 1983: we will claim no legal costs in this regard;
(b) the cross-examinations of the foregoing persons will have to be completed by the end of November: in this connection, we should point out that Mr. Phil Chaimberg will not be available from November 10 to 19, so his cross-examination should proceed as quickly as possible;
(c) you undertake not to ask the Court for leave to file additional evidence following the cross-examinations of the four persons mentioned above: it is understood in this regard that these cross-examinations will be limited to what is mentioned in the affidavits only, and that you will not use the said cross-examinations to present additional evidence;
(d) all travel costs, including transportation, hotel, meals and any other sum that may be incurred by the witnesses in this connection shall be paid by the respondent;
(e) the cross-examinations of Messrs. Coughlan, Bortnick and Cayne will take place in Toronto and that of Mr. Phil Chaimberg in Montreal.
Please let us know as soon as possible the dates you propose for the cross-examinations so that we may make the necessary arrangements.
Hoping this will be satisfactory, Yours truly,
LAPOINTE ROSENSTEIN
François Guay
Matters proceeded smoothly at first, in that the appeal was duly discontinued and the order for cross-examination of the applicant's deponents, upon consent and pursuant to Rule 324, was signed by Mr. Justice Cattanach on November 7, 1983 [T-433-83]. Pursuant thereto arrangements were made to cross-examine Messrs. Bortnick and Coughlan in Toronto, on November 29, 1983.
Counsel for the respondent conducted and com pleted Mr. Bortnick's cross-examination, without objection by Mr. Guay who appeared there for the applicant. Shortly afterwards the cross-examina tion of Mr. Coughlan began. On this occasion, Mr. Guay declined to permit Mr. Coughlan to answer questions concerning any matters which were not "restricted to the four corners of the affidavit", or "strictly related to what was said in the affidavit",
purportedly pursuant to his agreement with Mr. Sharpe. The applicant's counsel also further elabo rated his objection to the scope of the intended cross-examination, transcribed as follows:
The second reason in [sic] that I really believe that because it is that type of case—a trademark expungement case—the questions should be restricted to what was said by Mr. Cough- lan in his Affidavit. Also, we could have another problem. That is to say, Mr. Coughlan does not really want to answer some questions that could be asked by my confrère or consoeur.
Counsel for the respondent was met by objec tions to most of the questions which were then actually posed, and indeed, most of the eleven pages of transcript (Exhibit "E" to Mr. Sharpe's affidavit) are taken up by the reported objections and discussion by the lawyers. What occurred was a severely truncated cross-examination if one can so dignify the event.
The respondent now moves for an order requir ing Mr. Coughlan to re-attend, at his own expense, and to submit to cross-examination on his affidavit which was sworn on July 29, 1983. Irrespective of the jurisprudence about cross-examination on affidavits in these circumstances, the Court's first task is to determine whether the respondent has agreed to forego the allowable plenitude of such cross-examination.
Litigants are usually well served by lawyers who agree to proceed expeditiously in order that the real matters in dispute can be precisely defined and promptly disposed. Civil litigation between private parties, especially, "belongs" to the liti gants and the Court is always pleased to accom modate solicitors who seek to proceed by agree ment upon interlocutory or even the ultimate matters in issue. When one of the lawyers has expressed confirmation of an agreement and the conditions upon which it is to be performed, the other lawyer ought either to accept the confirma tion and the terms, or to reject them, if they be incorrectly expressed.
Acceptance should be unconditional and it is both unnecessary and undesirable, in marking acceptance, to rephrase or even to repeat the con-
firmation with its terms and conditions. Rejection should always be clearly expressed and empha sized, without appearing to comply with some of the terms and conditions, and without endorsing or executing or otherwise using or dealing with any documents forwarded pursuant to the rejected pro posals. Both acceptance and rejection should be unambiguous and emphatic.
Unfortunately, in this instance the applicant's lawyer's response now appears to have been ambiguous. He appeared to confirm the agree ment, he executed or endorsed the documents and returned them for filing in accordance with the agreement, but then in another letter of the same date he purported to bind the respondent's lawyer by an added condition:
... it is understood in this regard that these cross-examinations will be limited to what is mentioned in the affidavits only, and that you will not use the said cross-examinations to present additional evidence;
"Enfolded" and "wrapped up" within a confirma tion and rephrased repetition—unnecessary and undesirable as they are—conveyed in an added and simultaneously forwarded letter, that added condition diluted unambiguous acceptance, or even rejection, of the purported agreement. It created the problem which is now brought to court for resolution. The applicant contends that the respondent agreed to this condition and the respondent denies that. The parties assume these postures, of course, through their lawyers who apparently failed to agree despite appearances.
If that condition means what the applicant's counsel contends, how now do matters stand be tween the parties? The respondent has discon tinued its appeal. The respondent has given an undertaking to seek no further introduction of supplementary affidavit evidence, but rather to join in the filing of a joint application for time and place of hearing following the completion of the cross-examinations. The respondent is left with a truncated, if not aborted, cross-examination of the affiant, Coughlan. Thus, if the applicant's added condition is to have an effect which prevents the respondent from further cross-examining Mr. Coughlan, then in fairness the respondent should be released from its undertakings. But such a release would be regrettable in terms of proceeding
expeditiously by agreement in this matter of a summary disposition of an expungement applica tion. The parties have already performed most of their undertakings. It would be inequitable, on the other hand, to prevent the respondent from exact ing a reasonably complete cross-examination on Mr. Coughlan's affidavit. When the affiant volun teered to make his affidavit, he ought to have known, or to have been advised, that he was thereby assuming the obligation of submitting to cross-examination.
The matters, to the veracity of which Mr. Coughlan swore in his affidavit, are these:
1. I am the Purchasing Agent of Mumby & Associates Ltd. located at 1830 Mayer Side Drive, Mississauga, Ontario, a position I have held for the last eight (8) years.
2. Since 1976, Mumby & Associates Ltd. has been acting as distributor for Swing Paints Ltd. (hereinafter called "Swing") for its MINWAX line of products throughout Canada.
3. One of the retail stores that was buying from Mumby & Associates Ltd. was Routley's Paint and Wall Paper Inc. located at 1640 Avenue Road in the City of Toronto.
4. To my personal knowledge, since 1976 "SWING" has always packaged and shipped its MINWAX line of products to Mumby & Associates Ltd. in cartons bearing the "Swing" name.
5. Now shown to me and marked as Exhibit "GBC-1" to this my affidavit is a copy of the carton which is used by "Swing" in packaging and shipping its MINWAX line of product [sic] to Mumby & Associates Ltd.
6. All Minwax products sold since 1976 by Mumby & Associ ates Ltd. to retailers in Canada including Routley's Paint & Wall Paper Inc. were packaged and shipped in cartons bearing the "Swing" name similar to Exhibit "GBC-1" to this is [sic] my affidavit.
The respondent contends that Mr. Coughlan's terminology, in which he refers to Swing Paints Ltd. and "its MINWAX line of products", is of great significance, whereas the applicant says that it is of no significance and Mr. Coughlan might as easily have expressed it as "the MINWAX line of products". Whichever be the correct interpreta tion, it could be determined on cross-examination of Mr. Coughlan.
Now, two salient points must be borne in mind as to the nature of this present proceeding and those two points reside in what this proceeding is not. It is not an interlocutory proceeding and it is not an examination for discovery. It is a substan tive, but summary, proceeding and, accordingly, affidavits are filed and cross-examination effected as and for evidence on the principal, substantive
matter at issue. In regard to the extent of cross- examinations on affidavits in this kind of matter Mr. Justice Walsh defined it well in the cases of Ethicon Inc. et al. v. Cyanamid of Canada Ltd. ° and Re Marchands Ro -Na Inc. and Tefal S.A. 2 in which he observed:
The Court must strike a fine balance between on the one hand the desirability of dealing with proceedings of this nature in a summary manner without unduly extending and delaying them by permitting a multiplicity of affidavits, lengthy cross- examination on each and an extensive production of documents, and on the other hand, the desirability of making sure that the Judge called upon to hear the matter on the merits of the originating notice shall have before him all information which is relevant and material to enable him to make a proper decision.'
Certain general principles have emerged in the jurisprudence. Mr. Justice Heald, in his reasons in Weight Watchers International Inc. v. Weight Watchers of Ontario Ltd. (No. 2) 4 incorporated and adopted the following reasons, including this summary:
Summarizing the above it appears that the following requi sites are necessary in order to make a question asked on a cross-examination on an affidavit a proper one:
(1) It must be relevant to the issue in respect of which the affidavit is filed or to the credit of the witness, and the fact that it may incidentally disclose evidence of the witness's case is not of itself sufficient to make it inadmissible.
(2) It must be a fair question.
(3) There must be a bona fide intention of directing the question to the issue in the proceeding or to the credibility of the witness. 5
This summary, preceded by a more elaborate exposition of reasons, was taken from the reasons of Senior Master Marriott in Superior Discount Limited v. N. Perlmutter & Company et a1. 6 That case referred in turn to the judgment of Gale J. in Thomson v. Thomson and Elliot ' in which it was held that cross-examination on an affidavit is not confined within the four corners of the deposition
' (1977), 35 C.P.R. (2d) 126 (F.C.T.D.).
2 (1980), 59 C.P.R. (2d) 139 (F.C.T.D.).
(1977), 35 C.P.R. (2d), at p. 132; (1980), 59 C.P.R. (2d),
at p. 142 [quoting from the Ethicon case].
4 (1972), 6 C.P.R. (2d) 169 (F.C.T.D.).
5 Ibid., at p. 172.
6 [1951] O.W.N. 897, at pp. 897-898. [1948] O.W.N. 137 (H.C.).
but can cover matters pertinent to the determina tion of the issue in respect of which the affidavit was filed.
Here the applicant's counsel represents that Mr. Coughlan's affidavit was filed only in respect of an issue which arose in the applicant's cross-examina tion of the respondent's deponent Mr. Doughty. Mr. Coughlan's affidavit then, it is contended, addresses only a very narrow matter which is, as counsel expressed it: "contre-contre-preuve", in that Doughty countered an issue asserted for the applicant and Coughlan is presented only to coun ter Doughty's testimony on that point. But surely neither a witness testifying viva voce in court, nor an affiant whose affidavit is tendered can be per mitted to give what might aptly be termed "hit- and-run" evidence, or skilfully-sculped evidence, only.
The person making the affidavit must submit himself to cross-examination not only on matters specifically set forth in his affidavit, but also to those collateral questions which arise from his answers. Indeed he should answer all questions, upon which he can be fairly expected to have knowledge, without being evasive, which relate to the principal issue in the proceeding upon which his affidavit touches, if it does.
Here, one cannot expect Mr. Coughlan to know about registrations of trade mark, nor all matters which are at issue here; but he has sworn that since 1976 the applicant has always packaged and shipped its (or "the") Minwax line of products to Mumby & Associates Ltd. in cartons bearing the "Swing" name. He refers to all Minwax products sold since 1976 by Mumby to retailers in Canada being so packaged. He swears these matters to be within his personal knowledge, but in his line of business he must have learned more than these depositions say about Minwax products, Mumby's dealings herein and Routley's Paint & Wallpaper Inc., since 1976. His extent of knowledge and his credibility can be tested by the respondent. Since he mentions labels and packaging, Mr. Coughlan ought to submit to questions about the distinctive ness of them and the mark in issue, in so far as they are fairly within his knowledge and percep-
tions. He cannot be permitted to swear to these matters and then also be protected from fair cross-examination.
Such a cross-examination might well yield evi dence which would be useful for the respondent, or it might not. Objectively, that is a matter of indifference to the Court. However, the respondent has given its solicitors' undertaking not to seek to introduce any further supplementary affidavits, nor to seek cross-examination of affiants other than Messrs. Chaimberg, Bortnick, Cayne and Coughlan and the Court should hold it to that undertaking. It would be no breach of that under taking to elicit useful evidence upon any of those cross-examinations.
During argument, counsel for both parties seemed to accept that, if the respondent should succeed on its motion, Mr. Coughlan should not be required to inform himself so extensively about matters gleaned by hearsay as if he were making discovery on behalf of the applicant, but that he should be required to answer under oath all ques tions pertinent to the matters expressed in his affidavit and collateral matters arising upon those answers, including matters relative to the distinc tiveness of the respondent's trade mark and design which are within his knowledge. That would appear to afford the respondent reasonable scope in cross-examining Mr. Coughlan on his affidavit. So be it.
In the circumstances of what appears to have been a misunderstanding between the respective solicitors for the parties, each side should now bear its own costs, but the costs of this proceeding should abide the outcome, follow the event and be included among costs in the cause.
ORDER
1. IT IS ORDERED that Gerald Brendan Coughlan do re-attend, at his own expense, to submit to cross-examination on his affidavit, sworn on July 29, 1983; and
2. IT IS FURTHER ORDERED that Gerald Brendan Coughlan do answer all questions on such cross- examination which are pertinent to the matters expressed in that affidavit as well as collateral matters arising upon those answers, including mat ters relative to the distinctiveness of the respond ent's trade mark and design ("Minwax") which are within his knowledge; and
3. IT IS FURTHER ORDERED that the costs of or incidental to these proceedings shall abide the outcome of the expungement proceedings and follow the event, to be included in the disposition of costs in the cause.
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