



COURT OF APPEAL FOR ONTARIO

CITATION: Etaliq Inc. v. Cisco Systems Inc., 2017 ONCA 271

DATE: 20170403

DOCKET: C62688

Juriansz, Lauwers and Hourigan JJ.A.

BETWEEN

Etaliq Inc.

Plaintiff/Defendant by way of counterclaim

(Respondent)

and

Cisco Systems Inc. and Cisco Systems Co.

Defendants/Plaintiffs by way of counterclaim

(Appellants)

James M. Wishart, for the appellants

Peter J. Cronyn, for the respondent

Heard: May 29, 2017

On appeal from the judgment of
    Justice Sylvia Corthorn of the Superior Court of Justice, dated August 12, 2016.

ENDORSEMENT

[1]

The respondent brought an action claiming the appellants improperly used
    confidential and proprietary information the respondent had disclosed to them
    in 2002. The respondent filed its action on September 9, 2011. The appellants
    moved under r. 20 to strike the claim on the basis that it was statute-barred
    by the
Limitations Act
.

[2]

In their motion, the appellants also sought orders declaring that the
    evidence on discovery of Kenneth Poisson, the principal of the respondent,
    would be binding on the respondent for all purposes, irrespective of the source
    of his knowledge, and could be used for all purposes against the interests of
    the respondent. The reason for that is that Mr. Poisson was also a principal of
    MetaData, a company associated with the respondent, and on behalf of MetaData
    had provided consulting services to the appellants and had access to
    information allegedly relevant to the discoverability of the respondents
    claim.

[3]

The motion judge issued an order granting the respondent partial summary
    judgment dismissing the appellants limitations defence, and adjourning the
    portion of the motion related to the examination for discovery of Mr. Poisson.

[4]

The appellants appeal from the motion judges dismissal of their
    limitations defence.

[5]

The motion judge found, at para. 50, that even if no distinction were
    made between Mr. Poissons knowledge acquired through MetaData and the
    respondent, the respondents obligation to exercise due diligence in the
    investigation of its potential claim against the appellants was not triggered
    prior to April, 2009. Further, she found, at para. 71, that to the extent Mr.
    Poisson was exposed to the appellants affairs through his work as a MetaData
    consultant, that exposure was not sufficient to constitute actual notice of a
    claim against [the appellants] or to trigger an obligation on the part of [the
    respondent] to exercise due diligence in the investigation of the potential
    claim against [the appellants].

[6]

We are not persuaded by the appellants argument that the motion judge
    made palpable and overriding errors of fact, and of mixed fact and law. The
    motion judge was called upon to consider a large and complex record and make
    findings. There was an evidentiary basis for all of her findings. It is not our
    function on appeal to reweigh the evidence.

[7]

The appellants also submitted the motion judge erred in law in her
    application of the reasonable diligence test. The appellants argue that she
    excused the respondent from making earlier inquiries that it refrained from
    making in order to avoid damaging its business prospects.

[8]

The submission, in our view, is based on isolated sentences of the
    motion judges reasons taken out of context. In considering all the
    circumstances, the motion judge had to consider the particular position of Mr.
    Poisson, who was subject to a non-disclosure agreement while working as a
    consultant to the appellants and other clients. She recognized the importance
    in the industry that individual consultants not breach confidentiality
    agreements into which they had entered. The record contained Mr. Poissons
    explanation why it was not until the appellants returned the respondents two
    demo servers that he discovered Cisco software that was potentially based on
    the respondents proprietary specification. He then embarked on a technical
    inquiry in breach of his confidentiality agreement. The motion judge accepted
    Mr. Poissons statement of the importance of his reputation with respect to
    confidentiality and his explanation of his ability to have discovered the
    respondents potential claim against the appellants at a date earlier than
    September 11, 2009.

[9]

We are satisfied the record supported the motion judges finding that
    the respondent, exercising reasonable diligence, could not have discovered its
    claim until September 11, 2009.

[10]

The parties contested the significance of the question the motion judge
    left open in the portion of the motion she adjourned. That interlocutory
    question is not one with which we are concerned. This appeal was taken from the
    motion judges final decision dismissing the limitations defence. In proceeding
    with their summary judgment motion, the appellants were obliged to put their
    best foot forward. As explained above, we are not persuaded there is any basis
    to interfere with the motion judges decision finally dismissing the
    appellants limitation defence.

[11]

The appeal is dismissed. The respondents costs of the appeal are fixed
    in the amount of $20,000, all-inclusive. In the absence of agreement, the
    quantum of the respondents costs of the motion below is referred to the motion
    judge.

"R.G.
    Juriansz J.A."

"P.
    Lauwers J.A."

"C.W.
    Hourigan J.A."


