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Reply Report as Last Word? Not A Viable Strategy, Says Federal Court


January 19, 2021

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The Federal Court (“FC”) recently reviewed the jurisprudence on reply evidence in Angelcare Development Inc. v. Munchkin, Inc. (2020 FC 1185). The FC refused the motion as the vast majority of the impugned reply report was duplicative of opinions expressed in previous reports. In doing so, it reaffirmed that reply reports cannot be used as a strategy to give the plaintiff the "last word".


Background


Angelcare [“Angelcare”] and Munchkin, Inc. [“Munchkin”] are companies competing in the baby care products market. They are involved in a patent dispute concerning six Canadian patents held by Angelcare for diaper pails and “diaper pail cassettes”.


On August 14, 2020, Angelcare’s expert filed his report-in-chief concerning the alleged infringement of the patent while Munchkin’s expert filed his report-in-chief on the alleged invalidity of the patent. On October 2, 2020, both experts filed reports in response to the other’s report-in-chief. In December 2020, Angelcare brought a motion requesting leave to serve a reply report to Munchkin’s October 2 response.


Munchkin argued the report should not be allowed given that it was either duplicative of opinions already expressed, or properly dealt with by cross-examination or argument. Munchkin alleged Angelcare was either attempting to reiterate its evidence to have the final word or split its case.


The Law on Reply Evidence


The Court surveyed the law on reply evidence, pointing to the concept of “case-splitting” outlined in Halford v Seed Hawk Inc., 2003 FCT 141 [“Halford”]. Halford stands for the general principle that a party must exhaust the evidence they wish to present in the first instance of its presentation. Parties cannot present evidence, wait to see the adverse party’s response, and then reply with additional evidence that simply bolsters their initial position, and covers any weaknesses highlighted.


The FC repeated the four principles found in Halford guiding decisions on the appropriate scope of reply evidence:

  1. Evidence which is simply confirmatory of evidence already before the court is not be allowed.

  2. Evidence which is directed to a matter raised for the first time in cross examination and which ought to have been part of the plaintiff's case in chief is not be allowed. Any other new matter relevant to a matter in issue, and not simply for the purpose of contradicting a defence witness, may be allowed.

  3. Evidence which is simply a rebuttal of evidence led as part of the defence case and which could have been led in chief is not to be admitted.

  4. Evidence which is excluded because it should have been led as part of the plaintiffs' case in chief will be examined to determine if it should be admitted in the exercise of the court’s discretion.

The FC noted these principles have been referred to in a number of recent FC cases (Swist v Meg Energy Corp, 2020 FC 759 [“Swist”], Bauer Hockey Ltd. v Sport Maska Inc., 2020 FC 212 [“Bauer”], and Janssen Inc. v Teva Canada Limited, 2019 FC 1309 [“Janssen”]).


The Court also noted that Janssen served to further clarify what could properly be submitted as reply evidence and what was better addressed in arguments or cross-examination. Mere correction of statements adduced in a responding report is not admissible in reply.


In contrast, Amgen Canada Inc. v Apotex Inc., 2016 FCA 121 [“Amgen] advocates asking whether permitting the evidence would be in the interests of justice and puts forward three factors to assist in determining whether reply evidence ought to be admitted. In some cases, such as Bauer, the FC has used these factors to admit reply reports as exceptions to the rules of reply evidence. However, the FC found Amgen and its progeny to be of limited utility in the case at hand.


The Report Added Nothing New


Instead, the FC relied on the aspects of Janssen, Bauer and Swist that focused on the importance of avoiding unnecessary motions, mere rebuttals, and exploration of shortcomings that could be explored during cross-examination or highlighted in argument.


The FC found that Angelcare’s reply report read largely as an opportunity seized by the expert to re-assert the views expressed before. Though a few clerical corrections were allowed, the rest of the report was denied. The FC noted that it would remain open to the trial judge to reconsider some specific aspects of the reply evidence offered by the Plaintiffs at the trial proper, in case they had applied an overly-broad brush in their consideration of the Reply Report, noting that the Court may rely on rule 280(1.1) of the Rules of the Federal Court.

Authors: Meghan King and Emma Baumann

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