T-4449-80
AM International, Inc. (Plaintiff)
v.
National Business Systems, Inc., Leigh Instru
ments Limited and J. Stable Industries, Inc.
(Defendants)
Trial Division, Walsh J.—Toronto, June 1;
Ottawa, June 5, 1981.
Practice — Patents — Motion for an order requiring the
plaintiff to provide particulars to the denial of certain para
graphs in the statement of defence and counterclaim in the
form of a fair and substantial answer under Rule 414, or
striking out certain paragraphs of the reply and defence to
counterclaim — Statement of defence contains representations
made by the plaintiff in its patent applications — Plaintiff
replied by denial and joinder of issue — Whether a mere
denial of facts which apparently appear from documents of
record is sufficient — Whether Rule 414 applies to an answer
to a statement of defence — Motion allowed in part — Federal
Court Rules 403, 409, 413, 414, 415.
MOTION.
COUNSEL:
Kenneth D. McKay for plaintiff.
J. Nelson Landry for defendants.
SOLICITORS:
Donald F. Sim, Q. C., Toronto, for plaintiff.
Ogilvy, Renault, Montreal, for defendants.
The following are the reasons for judgment
rendered in English by
WALSH J.: Defendants move for an order:
A. requesting plaintiff to provide in its reply and
defence to counterclaim particulars, in the form
of a fair and substantial answer under Rule 414,
to the denial of paragraphs 5(1)(a), 5(8),
6(1)(a) and (b), 6(8), 6(14), 7(1)(a), 7(8),
7(14), 8, 9, 30, 31(a),(b) and (c), 32(a) and (b),
33 and 35 of the statement of defence and
counterclaim; or in the alternative
B. striking out paragraphs 5 and 21 of the reply
and defence to counterclaim,
on the grounds that the said reply and defence to
counterclaim does not present an arguable cause of
defence, is frivolous and vexatious, may embarrass
the fair trial of the action and otherwise consti
tutes an abuse of the process of the Court in that
the said pleading was not filed within the delay
stipulated in Rule 403 and, furthermore, circum
stances for the denials are not fairly and substan
tially enunciated in accordance with Rule 414.
Defendants rely primarily on Rule 414, Rule
413, Rule 403 and Rule 415 which latter deals
with motions for particulars. The provisions of
Rule 409 must also be considered in applying these
Rules since paragraph (1) (a) of Rule 403 requires
an answer or reply if it is needed in order to
comply with Rule 409, which requires that a party
shall plead specifically any matter that he alleges
makes a claim or defence of the opposite party not
maintainable, that if not specifically pleaded,
might take the opposite party by surprise, or that
raises an issue of fact that does not arise out of the
preceding pleading. Moreover, paragraph (1)(b) of
Rule 403 requires an answer or reply to admit any
allegations of fact in the defence that plaintiff
knows to be true as required by Rule 413(1)(a)
which Rule, except in the case of a simple joinder
of issue, requires that where a party pleads to a
pleading of an opposite party he shall either admit
the allegations of fact which he knows to be true,
or plead lack of knowledge of them, or deny those
that he intends to challenge.
While Rule 403 also permits the plaintiff to file
an answer or reply by way of simple joinder of
issue to close pleadings the word "may" is used in
this connection, but the mandatory mark "shall" is
used with respect to compliance with Rules 409
and 413(1)(a). Rule 403 requires plaintiff to file
the answer or reply within 15 days after service of
the defence unless that time is extended by the
Court. Defendants' statement of defence to the
amended statement of claim was served on April 2,
1981, and a reply and defence to counterclaim was
filed by plaintiff on April 22 followed by an
amended reply and defence to counterclaim on
May 12, 1981. In view of the complicated facts in
this patent action these delays are not greatly
excessive and I therefore extend the time for filing
the amended reply and defence to counterclaim to
the date on which it was filed. It is this document
which defendants now attack on its merits invok
ing Rule 414 which reads as follows:
Rule 414. When a party in any pleading is dealing with an
allegation of fact in the previous pleading of an opposite party,
he shall not deny it evasively but shall deal with the point of
substance; and when a matter of fact has been alleged with
various circumstances, it shall not be sufficient to deny it as
alleged along with those circumstances, but a fair and substan
tial answer must be given.
While plaintiff's counsel contended that this
only applies to a statement of defence and not to
the answer made thereto since issue could have
been joined without the filing of any such answer
there is no merit to this argument. Plaintiff did not
choose to simply join issue, and it is doubtful
whether this would have been sufficient in any
event in view of the provisions of Rules 403, 409
and 413(1)(a), but instead opted to make the
answer, the contents of which are now being
attacked. Rule 414 refers to "any pleading" and to
"the previous pleading of an opposite party" and is
of a general nature so that an answer to a defence
must follow the same rules as the defence itself.
This is abundantly clear when one reads Rules
403, 409, 413, and 414 together. In the case I of
Richard v. Hall' Middleton J.A. at page 214
refers to the statement of Jessel M.R. in Thorp v.
Holdsworth (1876) 3 Ch. D. 637, when he said:
It is well to say that in construing the pleadings with
regard to Order xix., rule 22 [the corresponding English
rule], I shall construe them strictly. It was intended that they
should be construed strictly, in order specially to enable the
plaintiff to know what the real issue between him and the
defendant was. The whole object of pleading is to bring the
parties to an issue, and the meaning of the rules of Order xix.
was to prevent the issue being enlarged, which would prevent
either party from knowing, when the cause came on for trial,
what the real point to be discussed and decided was. In fact,
1 (1928) 62 O.L.R. 212.
the whole meaning of the system is to narrow the parties to
definite issues and thereby to diminish expense and delay.
Middleton J.A. goes on to say:
In that case there was a general denial of a paragraph
containing many allegations. Of this, the Master of the Rolls
says: "I cannot make out what he means." "It is the very object
we have always had in view, in pleading to know what the
defendant's version of the matter is in order that the parties
may come to an issue.... That is not hard upon a defendant; it
is the proper mode of carrying on the administration of justice.
That is the meaning of the rules.... In future ... I shall insist
upon the rules of pleading being complied with."
At page 215 he states:
I venture to refer to a valuable discussion in Odgers on
Pleading, 9th ed., p. 155 et seq., and to the author's remark (p.
168), after pointing out that too wide general denials are
inexpedient as indicating a conscious weakness on the part of
the pleader, "How far should the pleader confine himself to
merely traversing? Should he not, after denying his opponent's
story, go on to add his own version of the matter? ... It is
sometimes most desirable to do so, in order to shew clearly
what is the matter in dispute."
Under our rules, confirmed by many decisions, it is not only
desirable but obligatory upon the pleader to adopt this course,
"even though this may involve the assertion of a negative."
The Rules of this Court may be somewhat differ
ent in wording but the same principles apply
requiring precise pleadings so that the real points
in issue can be defined and limited and the eventu
al trial of an action thereby shortened. It cannot be
denied that is the purpose of the Rules.
Before applying these principles to the present
case it is necessary to have some understanding of
the matters in issue. The litigation concerns credit
card imprinters which by means of a roller running
over a plate imprint on the invoice information
about the purchaser appearing on his credit card
and also the merchant's name and address which is
on another plate. Three Canadian patents are
involved in the present proceedings for inventions
designed to overcome the difficulty that, because
of slight differences in thickness of the cards,
information did not always appear clearly on the
invoice. The Canadian patents which are involved
are conveniently referred to as the Maul patent
obtained in 1965, the Gruver, Johnson and Sei -
fried patent obtained in 1967, and the Johnson
patent, also obtained in 1967 simultaneously to the
preceding one. These were also obtained in the
United States. A fourth patent which can be
referred to as the Brown patent was obtained in
the United States in 1973 but no such patent was
obtained in Canada. Later patents were for
improvements to the original patents, some of the
distinctions being in some cases very fine, so it was
necessary when plaintiff applied for them to make
certain statements which according to defendants
had the effect of narrowing the scope of the earlier
patents. These statements, in some cases with
direct quotations from the representations made
appear in paragraphs 8, 9, 30, 31, 32 and 33 of the
statement of defence to the amended statement of
claim and have met merely with a denial and
joinder of issue in paragraphs 5 and 21 of the
amended reply and defence to counterclaim. These
representations were either made or not made in
connection with the patent applications referred to,
and if they were in fact made plaintiff should
admit this unless it is the intention to deny that the
persons who made the representations were not
authorized to do so on behalf of plaintiff, in which
event this should be stated.
A mere denial of facts which apparently appear
from documents of record is clearly insufficient
and can only have the effect of prolonging the
hearing unnecessarily. While the legal conse
quences of these admissions may well be an
arguable issue, what the pleadings are dealing with
is the fact that they were made. Particulars must
therefore be given in the form of a fair and
substantial answer to the general denials contained
in paragraphs 5 and 21 of the reply of paragraphs
8, 9, 30, 31(a),(b) and (c), 32(a) and (b) and 33 of
the statement of defence and counterclaim.
Paragraphs 5(1)(a), 6(1)(a) and (b) and 7(1)(a)
all deal with the defence that the Canadian patents
are null and void since the alleged inventions were
not new having regard to the common knowledge
of the art. The burden is on defendants to prove
this and a mere denial by plaintiff in its amended
reply and defence to counterclaim putting defend
ants to the strict proof thereof is proper without
further particulars being required.
Paragraphs 5(8), 6(8) and 7(8) contain the
defence that the claims are broader than the
alleged invention described in the disclosure,
giving an example. Here again it is the responsibil
ity of defendants to establish this and the mere
denial by plaintiff in paragraph 5 of the amended
reply and defence to counterclaim is sufficient
without further particulars. With respect to para
graphs 6(14), 7(14) and 35 which allege that the
alleged invention was in each case sold in Canada
prior to the date of plaintiff's Canadian patent
here again it is defendants who must endeavour to
prove this so that the denials in paragraphs 5 and
21 of the amended reply and defence to the coun
terclaim are sufficient without further particulars
being required from plaintiff.
This disposes of the request for particulars in
paragraph A of the motion. With respect to para
graph B paragraphs 5 and 21 in the amended reply
and defence to counterclaim are struck but with
leave to amend so as to provide the particulars
ordered, while at the same time repeating the
general denial of the other paragraphs of the
statement of defence.
ORDER
Plaintiff shall within 20 days provide particulars
with respect to its amended reply and defence to
counterclaim in the form of a substantial answer
under Rule 414 to the denials in paragraphs 5 and
21 thereof of paragraphs 8, 9, 30, 31(a),(b) and
(c), 32(a) and (b) and 33 of the statement of
defence and counterclaim. The denials of the alle
gations in paragraphs 5(1)(a), 6(1)(a) and (b),
7(1)(a), 5(8), 6(8) and 7(8) and 6(14), 7(14) and
35 of the statement of defence and counterclaim
and requiring defendants to make strict proof
thereof are sufficient without further particulars.
Paragraphs 5 and 21 of the amended reply and
defence to counterclaim are struck with leave to
amend in accordance with this order. Costs in the
event.
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.