Bojangles' International, LLC v. Bojangles Café Ltd., 2005 FC 272

Date: 20050221

Docket: T-1466-04

Citation: 2005 FC 272

BETWEEN:

                                            BOJANGLES' INTERNATIONAL, LLC

and BOJANGLES' RESTAURANTS, INC.

                                                                                                                                           Applicants

                                                                           and

                                                        BOJANGLES CAFÉ LTD.

                                                                                                                                        Respondent

                                                        REASONS FOR ORDER

HARGRAVE P.

[1]         By this Federal Court application the Applicants appeal the 9 June 2004 rejection, by the Registrar of Trade-marks, of their opposition to a trade-mark application for Bojangles Café, filed by the Respondent. By the present motion the Respondent challenges some of the affidavits tendered on behalf of the Applicants on the basis that they have been sworn by partners, associates and employees of the Applicants' solicitors of record. However the full background, relevant for this motion, is somewhat more complex.

SOME RELEVANT BACKGROUND

[2]         The Trade-mark Opposition Board rejected the Applicants' opposition to the registration by the Respondent of the trade-mark Bojangles Café, in part because the Applicants, in that proceeding, failed to establish, beyond inferences to be drawn from some broad statistical information, that its trade-mark, Bojangles', used primarily in the United States and to some extent in other jurisdictions, but not in Canada, was well known in Canada. To this end the Applicants sought to bolster their position, as to recognition of its American trade-mark in Canada, with the affidavits of a number of Canadians who had travelled in the United States from time to time. Some of these affidavits were solicited and attained by Applicants' counsel in house from partners, associates and employees at Smart and Biggar. Here I note that the partner who organized those affidavits will no longer be appearing as one of the counsel involved on the overall application.

[3]         The six affidavits that are at issue were all sworn in September of 2004 and were forwarded to counsel for the Respondent on 24 September 2004: by letter of 8 October 2004 counsel for the Respondent suggested that Smart & Biggar ought not to be acting as counsel when members of the firm were engaging in giving evidence and moreover that the affidavits in question were not limited to uncontested procedural matters. There followed correspondence between counsel and on 3 December 2004 counsel for the Respondent, among other things, pointed out that, in his view, it was inappropriate for Smart & Biggar to act as counsel when members of the firm and the firm's employees had sworn affidavits to be relied upon in the hearing, suggesting either that Smart & Biggar could withdraw as solicitors of record, or that the affidavit evidence be withdrawn or not used.

[4]         Counsel for the Applicants sought to mitigate the possible impropriety by advising that the deponents of the affidavits would be represented, on cross-examination, by counsel from another firm. He went on to say that counsel for the Respondent should make any formal objection as soon as possible, but that if the issue is left until the hearing, counsel for the Applicants would raise the issue of prejudice. In that letter, of 6 December 2004, counsel for the Applicants also observed that he did not expect the exchange of correspondence would have any effect on cross-examinations arranged for the following week: I mention this because counsel for the Applicants made reference, on the hearing of this motion, to the intransigence of counsel for the Respondent, who objected to the affidavits, yet cross-examined on three of them. One of the problems with instantaneous communications by email is that letters and memos are churned out, often with little forethought and never looked at again: no wonder such exchanges can lead to confusion and contrary positions.

[5]         All of this led to the filing of a motion, 20 January 2005, on behalf of the Applicants, to force the Respondent to make a formal objection, by way of motion, to the affidavits. The Respondent, in order to bring the matter to a head and avoid confusion at the time of the hearing of the application, brought the present motion, filed 7 February 2005, proposing among the alternatives the striking out of the affidavits or the disqualification of the solicitors for the Applicants.

CONSIDERATION

Interlocutory Challenge of Affidavit Evidence

[6]         The bringing of a motion to force an interlocutory motion to challenge affidavits is contrary, for the most part, to the general procedure on judicial review. As President Jackett pointed out in Home Juice Co. v. Orange Maison Ltd. [1968] 1 Ex. C.R. 163, in dealing with an affidavit said to contain irrelevant and inadmissible evidence, at an interlocutory stage, observed that there was a general rule that such matters should be raised and decided at the hearing, subject to two exceptions:

As a practical matter, the most efficient and economical way of deciding such questions is by having them so raised and decided at the hearing and, as a practical exercise of judicial discretion, the parties should not be permitted to raise them before the hearing. The two exceptions to that general rule that I contemplate at the moment are

(a)            where a party has to obtain leave to admit evidence and it is obvious, in the view of the Court, that it is inadmissible, and

(b)           where the Court can be convinced that, as a practical matter, the admissibility of the affidavits filed by one of the parties should be considered some time before the hearing so that the hearing can proceed in an orderly manner.

As I understand Home Juice it is to the effect that to the general rule, that affidavits ought to be assessed by the trial or hearing judge as to weight and admissibility, there is an exception where affidavit evidence is obviously inadmissible or where, as a practical matter, dealing with controversial affidavits might allow the hearing to proceed in a more orderly manner.

[7]         The same issue came before Justice Richard, as he was then, in Unitel Communications Co. v. MCI Communications Corp. (1996) 119 F.T.R. 142. There Mr. Justice Richard considered Home Juice. He felt it appropriate, even in a complex piece of litigation and as a practical matter, that admissibility of affidavits ought not to be considered in the abstract on an interlocutory motion, but rather that the litigation would be more orderly if the parties had the matter of admissibility dealt with by the trial judge. However, to be fair, counsel in Unitel Communications had been working together well and had come up with some agreements to tide matters over.

[8]         Some of the jurisprudence bearing on striking out affidavits is summarized by Prothonotary Aronovitch in Rowat v. Information Commissioner (Canada) (2000)189 F.T.R. 166. At page 173, Madam Prothonotary Aronovitch refers to the comments of and position taken by Mr. Justice Hugessen in Sawridge Indian Band v. Canada, an unreported decision, [2000] F.C.J. 192 at pages 4 and 5:

In my view, in a sane modern procedure, irregularities in proceedings should not be made the subject of motions and should not require the Court to give orders striking out or correcting such irregularities unless the party attacking the irregularity can show that it suffer some sort of prejudice as a result thereof ...

Accordingly, absent any showing of prejudice and notwithstanding that almost all of the affidavit is irregular and should not be before the Court, I have no grounds that would justify me in striking it out.

Here the test is not so much obvious inadmissibility or an interlocutory striking out in order to allow the trial to proceed in an orderly manner, but rather prejudice to the party attacking the affidavit, which is not necessarily the case in the present instance.

[9]         Finally, I will refer to Belgravia Investments Ltd. v. The Queen [2000] 4 C.T.C. 8 in which Mr. Justice Teitelbaum reconciles the views of President Jackett, in Home Juice and of Mr. Justice Hugessen in Sawridge and concluded that:

I take from the above cases that the Court should not strike an affidavit or a part of an affidavit on a preliminary to strike unless, and exceptionally, the applicant asking for same can clearly show a prejudice. [Page 12]

[10]       In the present instance the issue is not the inadmissibility of the affidavit evidence, or the necessity to consider the affidavit evidence before the full hearing, or even that the evidence is particularly prejudicial to the Respondent. Indeed, the real issue is the propriety of the affidavits. But I would first refer to Federal Court Rule 82 and to the case law which has developed about that Rule. The Rule is as follows:

Counsel for the Applicants submits that Rule 82 has no application for the issue is not counsel's own affidavit, but the affidavit of another person in the same firm. To the contrary, Mr. Justice O'Keefe, in Shipdock Amsterdam B.V. v. Cast Group Inc. (2000) 179 F.T.R. 282 observed, in the case of an affidavit of the solicitor in the law firm representing the plaintiff, that no leave had been sought under Rule 82 and in the result struck out the two offending affidavits. Similarly, in Aussante v. Canada (Minister of Health and Welfare) (2002) 226 F.T.R. 25 Mr. Justice Hugessen considered an affidavit of the plaintiff's solicitor: he characterized it as clearly improper, it being not limited to mere matters of form and thus no good reason to grant leave pursuant to Rule 82. Mr. Justice Pelletier, as he then was, referred to Rule 82 in Murugappah v. Canada (Minister of Citizenship and Immigration) (2000) 184 F.T.R. 267 considered the removal of counsel because of the involvement of an associate of counsel who had filed an affidavit. He observed that removal of counsel would create much inconvenience in some instances and then, at page 271, observed that Rule 82 allowed a court to permit a lawyer to act where that lawyer had also deposed an affidavit and therefore "It seems implicit in the Rule that the Court could permit a lawyer to act in a case where a partner or associate has deposed the affidavit." (page 271). Thus, while Rule 82 is aimed directly at a lawyer who both swears an affidavit and presents argument based on that affidavit, the Federal Court has clearly looked to Rule 82 as guidance where, for example in the Shipdock case, Mr. Justice O'Keefe determined that a solicitor's law firm was unable to continue to appear on the matter in which the affidavit was used, on the basis that another member of the firm should not argue matters set out in that affidavit.

[11]       Here it is the Applicants who are looking for a concession: one wonders why this matter is taking two motions, one to force the Respondent, who is not directly involved with the affidavits at all, to bring a motion to challenge the Applicants' affidavits and then the motion on the part of a Respondent who is not particularly prejudiced, but only wants to get on with the case, to have the affidavits dealt with, rather than by means of one motion under Rule 82.

[12]       Leaving aside for the time being the issue of costs, of two motions in place of one, I am not prepared to strike out the affidavits for they are not particularly prejudicial to the Respondent, but rather are an embarrassment in a general sense. I now turn to the issue of whether or not the present lawyers acting for and providing counsel for the Applicants, may continue to act.

Solicitors of Record Providing Both Evidence and Counsel

[13]       In considering the ability of Smart & Biggar to provide witnesses and to carry on both as solicitors of record and providers of counsel, an appropriate starting point is the decision of the trial judge in Heck v. Royal Bank of Canada: Membrey v. Hill (1993) 12 O.R. (3d) 111: both the trial decision and the Court of Appeal decision, overturning the initial decision in Heck, have bearing on two Federal Court decisions.

[14]       In the combined Heck case at the trial level at issue was whether counsel might call as a witness an employee, from the same firm as counsel. In the case of the Royal Bank the court ordered counsel for the Bank to withdraw, with a similar order to apply to counsel for Heck. In the Membrey branch of the case the order was that no members of the firm, from which the solicitor of record came, were to appear as counsel.

[15]       Mr. Justice Ferguson, who had decided Heck, issued supplemental reasons some seven months later, as noted (1993) 15 O.R.(3d) 127, limiting his prohibition so that counsel could not appear on a motion or a trial relying upon counsel's own evidence.

[16]       In International Business Machine v. Printech Ribbons (1993) 52 C.P.R. (3d) 48 (F.C.T.D.) Mr. Justice Nadon, as he then was, considered the trial level decisions in Heck at length. In Printech and particularly at pages 58 and 59 Mr. Justice Nadon balanced the appropriateness of discouraging the use of the affidavits of partners and associates, with the entitlement of parties to choose counsel and thus generally concluded that only in the most serious of cases should there be an order removing counsel. To reduce the decision in Printech to its basics, a law firm may not continue to appear on a motion in the situation in which one of the members of that firm swore an affidavit to be relied upon on that particular motion. However the Court did not have to decide whether the law firm should be disqualified, overall, from acting in the proceedings, for it was premature to make that decision and indeed Mr. Justice Nadon, in view of the authorities, decided the issue should be dealt with by the trial judge.

[17]       Heck came on for appeal as Essa (Township) v. Guergis: Membrey v. Hill (1993) 15 O.R. (3d) 573. There the Ontario Court of Appeal did not completely come to grips with the issue in Membrey, as to whether counsel might be disqualified, for the Court of Appeal felt it was premature to make such an order as many things, which would mitigate against the removal of the law firm, might come to pass before the trial.

[18]       Mr. Justice Nadon had the opportunity to revisit the question, of removal of solicitors of record because of the likelihood that lawyers from that firm would give evidence at trial, in Imperial Oil Ltd. v. Lubrizoil Corporation (1998) 86 C.P.R. (3d) 331. Mr. Justice Nadon referred to and quoted from the appeal decision in Heck, then called Essa (Township) v. Guergis, (supra) at pages 336 and 337 of Imperial Oil. Mr. Justice of Appeal O'Brien, writing for the Court, observed in Essa that:

I believe courts should be reluctant to make what may be premature orders preventing solicitors from continuing to act. In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should do so only in clear cases. [Page 381]

Mr. Justice O'Brien then went on to question the argument that when a lawyer is required to testify against the other side in a proceeding, that lawyer's firm must always be prevented from acting. That led to his view that because such a possible conflict did not require removal of solicitors of record in all instances, he did not believe that a decision to remove a law firm should be made at an interlocutory stage. He then went on to suggest an open ended list of considerations or factors to allow a flexible approach.

[19]       In Imperial Oil Ltd. v. Lubrizoil Corporation (1998) 86 C.P.R. (3d) 331 at 335 and following Mr. Justice Nadon commented upon the Essa case as decided on appeal by the Divisional Court:

I agree entirely with the Divisional Court that a motion to disqualify lawyers should be approached in a flexible way and that each case should be considered on its own merits. I am also of the view that the factors proposed by the Divisional Court are useful in coming to a conclusion on such an application. [Page 338]

Mr. Justice Nadon observed that there was no firm indication that counsel would call lawyers from their own firm to prove the case and thus, for the time being, he did not feel that ongoing participation of counsel for the defendants tended to discredit the administration of justice. However he noted that:

If and when a lawyer of Lang Michener is called upon to testify, and I am not unmindful of the fact that there is a possibility that a lawyer of that firm may be called, I will deal with the matter in such a way as to safeguard the integrity of our system of administering justice. Should the removal of Lang Michener as solicitors for the defendants be the proper safeguard, then I will not hesitate to act accordingly. [Pages 339-340]

Mr. Justice Nadon then went on to comment on his earlier decision in Printech Ribbons (supra). He acknowledged that he had relied upon the decision of the Trial Division in Heck (supra); he went on to say that the application in Printech to remove solicitors of record was well founded, however it was premature. In saying that he was in full agreement with the view of the Divisional Court in Essa, he certainly approved the approach that, on an interlocutory motion, a court ought not to make premature orders preventing solicitors of record from continuing to act. He concluded, at page 341, with the following:

As I have already indicated, there is much to be said for the view taken by the Divisional Court in Heck. It allows courts, in any given case, to deal with the facts as they presented themselves. I recognize that the view I expressed in International Business Machines does not allow for the same flexibility which the Divisional Court suggests should be taken by the Courts.

[20]       I will refer again to Shipdock v. Amsterdam B.V. v. Cast Group Inc. There Mr. Justice O'Keefe, subject to the exception of the situation in which only counsel could depose to certain facts, in all other instances "... should a solicitor in a firm depose to facts in an affidavit and the affidavit is filed for use on the motion, then another member of the firm should not argue the motion." (paragraph 16).

[21]       In the present instance we know that the affidavit evidence at issue will be used at trial. There is also the factor that the Applicants forced the hand of the Respondent: the Respondent was initially perfectly willing to raise the issue of the affidavits at trial, but was forced to raise the issue now in order to avoid accusations from counsel for the Applicants of either waiting too long, or even submissions as to some form of estoppel, should the Respondent's counsel raise the point at trial. As a further factor in dealing with the issue now, counsel for the Respondent had offered to bring in outside counsel for the trial, or to bring in outside counsel to deal with the presentation of and oral argument presented by the six witnesses whose affidavits are at issue.

[22]       Taking all of the circumstances into consideration it is appropriate to deal with the situation now. It is inappropriate to remove Smart & Biggar as solicitors of record by reason of the expense of doing so at this point and the confusion it would cause. Smart & Biggar did not see fit to bring their own motion under Rule 82 in order to allow the use of the affidavits, which might have resolved the problem. In the result it is most appropriate that the Applicants appoint alternate counsel to prepare written argument and to make oral argument at the eventual hearing of the case.

Costs

[23]       I now turn to the matter of costs. Here counsel for the Applicants submits that, for practical purposes, it would have been impossible to leave the situation in a state of uncertainty until the eventual hearing and thus counsel for the Applicants was justified in forcing the matter to a hearing at this point in order to bring about a smooth running eventual hearing. This line of reasoning goes on to suggest that even if the matter should go against the Applicants, they should have costs as they were trying their best to resolve the problem.

[24]       A further factor which must be considered, in awarding costs, is that at an earlier stage the Applicants did offer to retain outside counsel for the purposes of written argument.

[25]       Counsel for the Respondent submits that the whole matter could have been resolved on a Rule 82 application by the Applicants and that the problems of the Applicants were self inflicted.

CONCLUSION

[26]       That Smart & Biggar are to remain solicitors of record may be awkward, however it is a practical solution when coupled with the use of outside counsel for written and oral argument. The Applicants having eschewed the use of Rule 82, a simple and direct approach forcing, as I have said, two motions, it would be unfair to award costs against the Respondent. However the Applicants have also suggested reasonable alternatives. In the result each side will bear its own costs.

(Sgd.) "John A. Hargrave"

    Prothonotary

                                     FEDERAL COURT

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                  T-1466-04

STYLE OF CAUSE: BOJANGLES' INTERNATIONAL, LLC ET AL v.

BOJANGLES CAFÉ LTD.

PLACE OF HEARING:                                 Vancouver, British Columbia

DATE OF HEARING:                                   February 14, 2005

REASONS FOR ORDER:                           Hargrave P.

DATED:                     February 21, 2005

APPEARANCES:

Mr. A. David Morrow                                                   FOR APPLICANTS

Mr. Craig A. Ash                                              FOR RESPONDENT

SOLICITORS OF RECORD:

Smart & Biggar                                                 FOR APPLICANTS

Ottawa, Ontario                                               

Oyen Wiggs Green & Mutala                                         FOR RESPONDENT

Vancouver, British Columbia