T-2332-85
Iscar Limited and Iscar Tools Inc. (Plaintiffs)
v.
Karl Hertel GmbH, Karl Hertel GmbH Verkaufs
KG and Hertel Carbide Canada, Inc. (Defendants)
INDEXED AS: ISCAR LTD. V. KARL HERTEL GMBH (T.D.)
Trial Division, Jerome A.C.J.—Toronto, February
14; Ottawa, April 14, 1989.
Federal Court jurisdiction — Trial Division — Jurisdiction
of prothonotary — Appeal from dismissal of application to
strike — Prothonotary having jurisdiction to decide such
applications — Federal Court Act, s. 46(1)(h) authorizing
judges of Court to make rules relating to powers of prothono-
taries — R. 336(1)(g), giving prothonotary power to dispose of
interlocutory applications assigned by Associate Chief Justice,
not illegal delegation of authority — Jurisdiction of prothono-
tary to hear interlocutory applications derived from s. 46(1) —
Power to exercise jurisdiction found in R. 336(1)(g) — Cases
dealing with conferring of jurisdiction on provincially-
appointed official distinguished as prothonotaries appointed
by Governor in Council as provided for in Act, s. 12 —
Prothonotary's decision not based on wrong principle of law or
misapprehension of facts.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the Copyright Act, S.C. 1988, c. 15, ss.
11, 24.
British North America Act, 1867 (The), 30 & 31 Vict., c.
3 (U.K.) [R.S.C. 1970, Appendix II, No. 5].
Copyright Act, R.S.C., 1985, c. C-42.
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2,
5, 12, 15, 46 .
Federal Court Rules, C.R.C., c. 663, RR. 336, 419(1).
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Polson Iron Works v. Munns (1915), 24 D.L.R. 18 (Alta.
S.C.); McGrath v. St. Phillip's (1985), 150 A.P.R. 276
(Nfld. C.A.); Display Service Ltd. v. Victoria Med. Bldg.
Ltd., [1958] O.R. 759 (C.A.).
REFERRED TO:
Wagon-Wheel Concessions Ltd. v. Stadium Corp. of
Ontario Ltd., [1989] 3 F.C. 460 (T.D.).
COUNSEL:
Mark K. Evans for plaintiffs.
Roger T. Hughes, Q.C. for defendants.
SOLICITORS:
Smart & Biggar, Toronto, for plaintiffs.
Sim, Hughes, Dimock, Toronto, for defen
dants.
The following are the reasons for order ren
dered in English by
JEROME A.C.J.: This appeal from the decision
of the Associate Senior Prothonotary dismissing
the defendants' application to strike out the plain
tiffs' statement of claim [[1989] 3 F.C. 468], came
on for hearing at Toronto, Ontario, on December
12, 1988. Before arguing the merits of the appeal,
the defendants raised the issue of the jurisdiction
of a prothonotary to strike out a pleading pursuant
to Rule 419(1) of the Federal Court Rules
[C.R.C., c. 663]. This same issue was raised before
me on January 30, 1989 in the case of Wagon-
Wheel Concessions Ltd. v. Stadium Corp. of
Ontario Ltd. [ [ 1989] 3 F.C. 460] . On February
14, 1989, I gave reasons from the bench indicating
that the prothonotary does have jurisdiction to
decide applications pursuant to Rule 419(1) and
that these brief written reasons would follow.
Given the importance of this issue, I have com
bined the arguments presented in both cases in
these reasons. My decision on the question of the
prothonotary's jurisdiction under Rule 419(1) will
therefore apply to both cases.
Rule 419(1) provides:
Rule 419. (1) The Court may at any stage of an action order
any pleading or anything in any pleading to be struck out, with
or without leave to amend, on the ground that
(a) it discloses no reasonable cause of action or defence, as
the case may be,
(b) it is immaterial or redundant,
(c) it is scandalous, frivolous or vexatious,
(d) it may prejudice, embarrass or delay the fair trial of the
action,
(e) it constitutes a departure from a previous pleading, or
(/) it is otherwise an abuse of the process of the Court, and
may order the action to be stayed or dismissed or judgment
to be entered accordingly.
Counsel in both actions raised several arguments
in support of their contention that only a judge of
the Federal Court has jurisdiction to decide an
application brought pursuant to Rule 419(1).
First, it was argued that the term "The Court" in
Rule 419(1) means a judge of the Federal Court
since pursuant to section 2 of the Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10 "Court" or
"Federal Court" means the Federal Court of
Canada. Section 5 which sets out the composition
of the Federal Court of Canada refers to the Chief
Justice, the Associate Chief Justice and the re
maining number of judges to be appointed to the
Court. Since prothonotaries are not specifically
mentioned in section 5, counsel argued that any
reference to "the Court" in the Act or the Federal
Court Rules is restricted to a judge of the Court.
The appointment of prothonotaries is provided
for in subsection 12(1) of the Federal Court Act:
12. (1) The Governor in Council may appoint as prothono-
taries of the Court such fit and proper persons who are
barristers or advocates in any of the provinces as are, in his
opinion, necessary for the efficient performance of the work of
the Court that, under the Rules, is to be performed by them.
The specific duties and functions of the prothono-
taries are to be determined by the Federal Court
Rules (subsection 12(3)). Subsection 46(1) of the
Act authorizes the judges of the Court to make
general rules and orders. Paragraph 46(1)(h) pro
vides that:
46. (1) Subject to the approval of the Governor in Council
and subject also to subsection (4), the judges of the Court may,
from time to time, make general rules and orders not inconsist
ent with this or any other Act of the Parliament of Canada,
(h) empowering a prothonotary to exercise any authority or
jurisdiction, subject to supervision by the Court, even though
such authority may be of a judicial nature;...
The limitation on that authority, in subsection
46(4) pertains to the publishing of proposed rules
and orders in the Canada Gazette and the invita
tion to make representations. In accordance with
the authority granted in subsection 46(1), the
judges of the Court made Rule 336 specifying the
powers of the prothonotaries. The relevant portions
of that Rule are as follows:
Rule 336. (1) Notwithstanding Rule 326(1), a prothonotary
shall have power
(a) to do anything that he is by these Rules authorized to do,
(g) to dispose of any interlocutory application assigned to
him specially or to any prothonotary, by special or general
direction of the Chief Justice or of the Associate Chief
Justice, ...
(3) Every order or decision made or given by a prothonotary
under this Rule is as valid and binding on all parties concerned
as if it had been made or given by the Court.
Pursuant to Rule 336(5) decisions or orders of a
prothonotary (other than judgments under Rules
432 to 437) may be appealed to the Court.
Counsel for the appellant in the Wagon-Wheel
Concessions Ltd. case argued at length that a
prothonotary appointed pursuant to section 12
does not have jurisdiction to decide questions of
law or other matters traditionally reserved to a
judge. After reviewing the historical duties of both
prothonotaries and masters, counsel concluded and
I quote from paragraph 16 of counsel's written
argument:
16. It is therefore not within the competence of the Federal
Parliament, using its power to establish a Court, to confer upon
an officer of the Court a power to decide questions of law,
which traditionally had been the exclusive jurisdiction of a
Judge at the time of Confederation. Taken to the extreme, it
could not have been intended that Parliament had the power to
give a non-judge sufficient power or authority to make him
practically a Judge.
In the very case heavily relied upon by counsel
throughout his arguments, Poison Iron Works v.
Munns (1915), 24 D.L.R. 18, at page 20, Harvey
C.J. of the Alberta Supreme Court points out on
the contrary that:
It is true that the office of Master is one of comparatively
recent origin in this Court, and it is also true that the duties
which the Master performs were, before the creation of the
office, largely performed, as far as they then existed, by the
Judges of the Court, but it by no means follows that he is
therefore a Judge any more than it would follow, if a Judge
acted as clerk of his own Court, swearing the witnesses, making
records and performing other clerical duties, that a clerk, to
relieve him of those duties would be a Judge. There is, however,
the important difference that the duties performed by the
Master in relief of the Judges are, to a considerable extent at
least, judicial in their character.
Counsel further relied upon McGrath v. St. Phil-
lip's (1985), 150 A.P.R. 276 (Nfld. C.A.); and
Display Service Ltd. v. Victoria Med. Bldg. Ltd.,
[1958] O.R. 759 (C.A.) to support his contention
that paragraph 46(1)(h) is invalid since Parlia
ment cannot after providing for the appointment
of prothonotaries give authority to the judges of
the Court to make rules empowering the prothono-
taries to perform judicial functions traditionally
performed by a judge. I have thoroughly reviewed
each of these cases and I am satisfied that they are
not relevant to the jurisdictional issue raised here
since those cases dealt with the conferring of juris
diction on a provincially-appointed official. In
Display Service Ltd. v. Victoria Med. Bldg. Ltd.,
Schroeder J.A. found the jurisdiction conferred on
the master in violation of section 96 of the British
North America Act, 1867 (The) [30 & 31 Vict., c.
3 (U.K.) [R.S.C. 1970, Appendix II, No. 5]] for
the following reasons [at page 774]:
It requires no more than a superficial examination of the
sections of the Mechanics' Lien Act to which I have referred to
compel the conviction that in enacting the provisions of s. 31(1)
the legislature has purported to vest in an officer of the
Supreme Court of Ontario, judicial power which can be validly
exercised only by a superior, District, or County Court or by a
tribunal analogous thereto. In my opinion this legislation pur
ports to confer upon the master or assistant master a jurisdic
tion which broadly conforms to the type of jurisdiction exer
cised by such Courts. As the masters and assistant masters are
appointed by the Lieutenant-Governor in Council and not by
the Governor General of Canada, the legislation plainly consti
tutes a violation of s. 96 of the British North America Act and
must be held invalid as being legislation which is beyond the
competency of the provincial legislature to enact.
Here, however, subsection 12(1) provides for the
appointment of prothonotaries by the Governor in
Council.
The argument which gave me the most difficulty
and which was raised by both counsel involves the
principle of "delegatus non potest delegare".
Counsel contended that section 46 delegates to the
judges of the Court the power to make rules
relating to, among other things, the powers of
prothonotaries (paragraph 46(1)(h)). That author
ity cannot be further delegated as Rule 336(1)(g)
has done:
Rule 336. (1) ... , a prothonotary shall have power
(g) to dispose of any interlocutory application assigned to
him specially or to any prothonotary, by special or general
direction of the Chief Justice or of the Associate Chief
Justice, ...
In accordance with my authority under section 15
and the jurisdiction given prothonotaries to dispose
of interlocutory applications under Rule
336(1)(g), I issued practice note 3 providing for
the hearing of interlocutory applications, with
specified limitations, by the senior and associate
senior prothonotary. In my view, this does not
constitute any further delegation. It is clear from
paragraph 46(1)(h) of the Act that Parliament did
not intend prothonotaries to act simply as proce
dural officers of the Court. On the contrary, it is
clear from that section that Parliament intended
prothonotaries to have jurisdiction of a judicial
nature. In order to exercise that jurisdiction, how
ever, there must be a Federal Court Rule empow
ering the prothonotary to do so, hence Rule 336.
The jurisdiction of the prothonotary to hear inter
locutory applications springs from subsection
46(1). The power to exercise that jurisdiction is
found in Rule 336(1)(g). The exercise of that
jurisdiction is limited to "any interlocutory
application assigned to him specially or to any
prothonotary, by special or general direction of the
Chief Justice or of the Associate Chief Justice".
Applications to strike a pleading under Rule
419(1) are clearly interlocutory applications
despite the fact that the decisions may finally
determine the matters. The jurisdiction of pro-
thonotaries to hear them does not originate in our
rule or my practice note, but in the Federal Court
Act.
I am therefore satisfied that the Associate
Senior Prothonotary did not err in concluding that
he had jurisdiction to hear these applications
under Rule 419(1).
I will now consider the merits of the appeal from
the decision of the Associate Senior Prothonotary
not to strike out the plaintiffs' statement of claim
in Iscar Ltd. v. Karl Hertel GmbH.
By statement of claim filed on October 25,
1985, the plaintiffs allege copyright infringement
by the defendants by:
(i) importing, making, etc. tools which are
three-dimensional reproductions of drawings
owned by Iscar Limited; and
(ii) preparing, distributing, etc. brochures, cata
logues and packaging material containing two-
dimensional reproductions of the defendants'
tools identified in (i) above.
By notice of motion filed June 10, 1988, the
defendants sought an order striking out the plain
tiffs' statement of claim on the ground that it
discloses no reasonable cause of action (Rule
419(1)(a)). By order dated November 4, 1988, the
Associate Senior Prothonotary dismissed the
application.
Both before the prothonotary and myself, coun
sel for the defendants argued that the defendants'
conduct did not amount to copyright infringement
under the Copyright Act, R.S.C., 1985, c. C-42, as
it read at the time of the alleged infringement. In
any event, An Act to amend the Copyright Act,
S.C. 1988, c. 15, assented to June 8, 1988, includes
the following:
11....
46.1 (1) The following acts do not constitute an infringe
ment of the copyright or moral rights in a work:
(a) applying to a useful article features that are dictated
solely by a utilitarian function of the article;
(b) by reference solely to a useful article, making a drawing
or other reproduction in any material form of any features of
the article that are dictated solely by a utilitarian function of
the article;
(c) doing with a useful article having only features described
in paragraph (a) or doing with a drawing or reproduction
that is made as described in paragraph (b) anything that the
owner of the copyright has the sole right to do with the work;
or
(d) using any method or principle of manufacture or
construction.
(2) Nothing in subsection (1) affects the copyright or the
moral rights in a record, perforated roll, cinematograph film or
other contrivance by means of which a work may be mechani
cally reproduced, performed or delivered.
24. Subsection 46(1) and section 46.1 of the Copyright Act,
as enacted by section 11, apply in respect of any alleged
infringement of copyright occurring prior to, on or after the day
on which section 11 comes into force.
Counsel argues that section 24 was clearly enacted
to take away any right that the plaintiffs may have
had to bring an action in respect to the alleged
infringement of copyright. This argument was
rejected by the Associate Senior Prothonotary.
It is well established that an appeal from a
decision of a prothonotary is not a trial de novo. I
must therefore be convinced that the decision was
based on a wrong principle of law or a misappre
hension of the facts, and I am not. For an applica
tion under Rule 419(1)(a) to succeed, it must be
plain and obvious that the pleading discloses no
reasonable cause of action. Where the statement of
claim establishes a possible cause of action it will
not be struck.
Clearly, the defendants' denial that their actions
constitute infringement as known to the law is the
basic issue of this, and indeed any lawsuit. Let us
assume that the defendants' analysis of the legal
effect of the 1988 amendments is sound. The
plaintiffs cannot be denied the opportunity to per
suade a Trial Judge either that the plaintiffs
escape the impact of them on factual grounds, or
to the extent that the amendments purport to deny
the plaintiffs their remedy retrospectively, they are
bad law.
For these reasons, the appeal is dismissed. Costs
in the cause.
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