Date: 20070620
Docket: T-894-06
Citation: 2007 FC 641
Ottawa, Ontario, June 20,
2007
PRESENT : Madam Prothonotary Roza
Aronovitch
BETWEEN:
SUN WORLD INTERNATIONAL INC.
Appellant
and
PARMALAT
DAIRY & BAKERY INC.
Respondent
REASONS FOR
ORDER AND ORDER
ARONOVITCH P.
[1] In the context of the
underlying appeal of a decision of the Registrar of Trade-marks, the respondent
brings the novel application to amend its Statement of Opposition to add
Section 22 of the Trade-marks Act (the “Act”) as a ground of
opposition, and to adduce the affidavit of Michael S. Mulvey in support of the
new ground.
[2] The
background facts giving rise to the underlying appeal are as follows.
[3] Sun
World International, Inc. (“Sun World”) filed an application to register the
trade-mark BLACK DIAMOND in association with fresh fruits and vegetables, later
narrowed to “plums”. The mark was advertised for opposition purposes in the
Trade-marks Journal and opposed by the respondent Parmalat Dairy and Bakery
Inc. (“Parmalat”) by Statement of Opposition dated January 9, 2002.
[4] Parmalat was successful in its opposition. Sun World’s
application was denied on the basis that the appellant had not established its
use of the mark at the relevant date, and had also not demonstrated that that
there would be no reasonable likelihood of confusion, within the meaning of
subsection 6(2) of the Act, between the mark, as applied for, for plums,
and that of the respondent for cheese. The underlying appeal is from that
decision of the Registrar.
[5] Section 56 of the Trade-marks Act governs appeals to the
Federal Court from decisions of the Registrar of Trade-marks. As discussed
more fully below, subsection 56(5) of the Act allows for new evidence to
be filed on the appeal, as follows:
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56. (5) On an appeal under
subsection (1), evidence in addition to that adduced before the Registrar may
be adduced and the Federal Court may exercise any discretion vested in the
Registrar.
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56.
(5) Lors de l’appel, il peut être apporté une preuve en plus de celle qui
a éte fournie devant le registraire, et le tribunal peut exercer toute
discrétion dont le registraire est investi.
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[6] Sun World has taken
the step of filing new evidence in this appeal by way of three affidavits,
going to use and confusion.
[7] Parmalat says that it
was prompted to bring this application following Supreme Court of Canada’s decision
in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, [2006] 1 S.C.R.
824 (“Veuve Clicquot”) that issued some few months following the
decision of the Registrar. Parmalat explains that the Supreme Court has
expanded upon and clarified the law with respect to the depreciation of
goodwill attaching to a registered trade-mark under subsection 22(1) of the Act,
with particular relevance to the facts of this case, such that Parmalat now has
a stronger footing to advance a new ground of opposition to the registration of
the appellant’s mark, and basis on which to defend the decision of the Registrar.
[8] The respondent therefore seeks to amend Parmalat’s Statement of
Opposition to add a new ground of opposition based on subsection 22(1) of the Trade-marks
Act, in conjunction with section 30(i) of the Act. The new
ground of opposition alleges that pursuant to section 38(2)(a) and section 30
of the Act, the application does not conform with the requirements of
section 30(i) in that, at the date of filing the application the appellant
could not have been satisfied that it was entitled to use the trade-mark, in
association with the wares described because such use would be unlawful as
depreciating the value of the goodwill attaching to the registered trade-mark,
contrary to section 22(1) of the Act.
Sun
World Objections to the Motion
[9] The objections to the
motion are two fold. Sun World maintains that on an appeal from the decision
of a Registrar, the Court lacks jurisdiction to amend the Statement of Opposition,
which it says is an originating document in the opposition proceeding. The
second point of objection is that section 22 of the Act is not a proper
ground of opposition under section 38(2) of the Act.
Nature
of a Section 56 Appeal
[10] Section
56 is not a customary appeal provision, in that an appeal brought there under does
not necessarily proceed on the basis of the record as it stood before the
decision-maker. As I have said, in a section 56 appeal, the record that was before
the Registrar can be supplemented, and has been supplemented in this case.
[11] As new
evidence can materially affect the Registrar’s findings of fact, the Federal
Court judge seized of the appeal is entitled to substitute his or her
discretion for that of the Registrar, if the Registrar has erred. The ensuing
appeal is in the nature of a hearing de novo.
[12] Justice Binnie, in Mattel
U.S.A. Inc. v. 3894207 Canada Inc. [2006] SCC 22, at para. 35, describes
the nature of the exercise as follows:
[…..] Where fresh evidence is admitted, if may, depending on its nature,
put quite a different light on the record that was before the Board, and thus require
the applications judge to proceed more by way of fresh hearing on an extended
record than a simple appeal. …
[13] Sun World argues that while parties may adduce new evidence on appeal,
they may not introduce new issues, even less, as proposed by Parmalat on this
motion, introduce both a new ground, and file new evidence on the new issue.
[14] Indeed,
the jurisprudence of this Court is entirely to that effect. Notwithstanding
that fresh evidence may be adduced, and that the appeal does not proceed on the
basis of the record as it stood before the Registrar, the new evidence can only
go to issues raised before the Registrar. Moreover, the issues on appeal are
framed by and remain limited to those raised before the Registrar. McDonald’s
Corp. v. Coffee Hut Stores Ltd., (1994) 55 C.P.R. (3d) 463 at 469
(F.C.T.D.) (“McDonald’s Corp.”); Carling Breweries Ltd. v. Molson
Companies Ltd. et al. (1984), 1 C.P.R. (3d) 191 at 193-194 (F.C.T.D.) (“Carling
Breweries”); Pernod Richard v. Molson Breweries, 1992 CarswellNat 1025
(F.C.T.D.) (“Pernod”); Benedictine
Distillaire de la Liqueur de l’Ancienne Annaye de Fecamp v. John Labatt Ltee (1990),
28 C.P.R. (3d) 487 (F.C.T.D.) (“Benedictine”); S. C. Johnson &
Son Inc. v. Esprit de Corp. (1986), 13 C.P.R. (3d) 235 (F.C.T.D.)
(“S. C. Johnson”).
[15] In other words, and with the following exception,
the Court can entertain new evidence but not new issues. The exception is that
new grounds on a pure question of law may be added, but
only in reference to evidence already present before the Registrar. Labatt
Brewing Co. v. Benson & Hedges (Canada) Ltd. (1996), 67 C.P.R. (3d) 258 at paras. 7-8
(F.C.T.D.) (“Labatt”).
[16] According to Parmalat, the above-noted jurisprudence does not apply
to this case, as the opponents in those cases never took the formal step, on
appeal, to amend their Statement of Opposition. Instead, the opponents tried
to add the new ground of opposition to either their Notice of Appeal (see Carling
Breweries at 194), their Reply to Notice of Appeal (see Pernod at
para. 40), or simply by way of raising the new argument orally at a hearing, to
the prejudice of the party opposite.
[17] The formal step of
bringing a motion to amend the Statement of Opposition is relied on a
significant point of distinction from the cases cited. Parmalat asserts the
decision of the Federal Court of Appeal in Canadian Council of Professional
Engineers v. Lubrication Engineers Inc. (1990), 32 C.P.R. (3d) 327 (F.C.A.)
(“CCPE”), as authority for the proposition that new grounds of opposition
raised on appeal under subsection 56 of the Act may be allowed if the opponent moves to amend its Statement of Opposition,
and the amendment will not give rise to prejudice.
[18] In the CCPE case,
the respondent on appeal brought a motion under former Rule 1102 (the precursor
of Rule 351 of the Federal Courts Rules) to be permitted it to adduce
additional evidence in the appeal. In addition, it sought an order under
former Rule 1104 for leave to amend its Statement of Opposition to include a
further ground of opposition to the registration of the appellant’s trade-mark.
In rejecting the motion to adduce fresh evidence, the Federal Court of Appeal
applied a test that Parmalat says is consistent with the test set out under the
current Rule 75, namely, that an amendment will be allowed unless it will give
rise to prejudice that is not compensable by an order of costs.
Jurisdiction
of the Court to Amend a Statement of Opposition
[19] Parmalat submits that its application is nothing more than a motion to
amend pursuant to Rule 75, which the Court has jurisdiction to grant, and
points out that there will be no prejudice if the Statement of Opposition is
amended as both parties will be able to adduce evidence going to the new ground
and cross-examine thereon. I note in that regard that Rules 75 and 54 of the Federal
Courts Rules are, in fact, the sole enumerated grounds for this motion.
[20] A second ground of jurisdiction is also suggested by Parmalat, one based
on its reading of the combination of Rule 40 of the Trade-marks Regulations
(1996), (S.O.R./96-195), and section 56(5) of the Act. Rule 40 of the Trade-marks
Regulations reads as follows:
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40. No amendment to a statement of
opposition or counter statement shall be allowed except with leave of the
Registrar and on such terms as the Registrar determines to be appropriate.
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40. La modification d'une déclaration
d'opposition ou d'une contre-déclaration n'est admise qu'avec la permission
du registraire aux conditions qu'il estime indiquées.
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[21] The argument, as I
understand it, is that since the appeal is de novo, the provision of
section 56.(5) of the Trade-marks Act that allows for additional
evidence to be adduced on the appeal to the Federal Court, and gives the
Federal Court jurisdiction to exercise any discretion vested in the Registrar,
should be read to apply equally to the jurisdiction of the Registrar pursuant
to Rule 40 to amend the Statement of Opposition, thereby authorizing the
Federal Court to exercise the discretion vested in the Registrar to amend the
Statement of Opposition.
[22] I will deal first with
the jurisdiction of the Court to amend the Statement of Opposition under Rule
75(1). The Rule provides that the Court may, at any time, allow a party to
amend “a document”, on such terms as will protect the rights of all parties.
[23] According to Parmalat, the Statement of Opposition is such a
document. It forms part of the opposition file which, in this case, Sun World,
has called up pursuant to subsection 60.(1) of the Trade-marks Act, to
be placed on file with the Federal Court and is therefore a “document” within
the meaning of Rule 75.
[24] I cannot agree that that is the effect to be given to the
transmittal of a document to this Court under subsection 60.(1) which is
reproduced below and which provides a mechanism similar to that set out in
Rules 317 and 318 of the Federal Courts Rules, for conveying a certified
copy of a tribunal record to the Court for the purposes of a judicial review:
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60. (1) Subject to subsection (2), when any
appeal or application has been made to the Federal Court under any of the
provisions of this Act, the Registrar shall, at the request of any of
the parties to the proceedings and on the payment of the prescribed fee,
transmit to the Court all documents on file in the Registrar’s office relating
to the matters in question in those proceedings, or copies of those documents
certified by the Registrar.
(emphasis
added)
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60. (1) Sous
réserve du paragraphe (2), lorsqu’un appel ou une demande a été présenté à la
Cour fédérale en vertu de l’une des dispositions de la présente loi, le
registraire transmet à ce tribunal, à la requête de toute partie à ces
procédures et sur paiement du droit prescrit, tous les documents versés aux
archives de son bureau quant aux questions en jeu dans ces procédures ou des
copies de ces documents par lui certifies.
( . . . .)
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[25] Both
sets of provisions are cast in similar terms, and speak of “transmitting” what
is essentially the record before the decision-maker whose decision is being
appealed or reviewed. The documents, including the Statement of Opposition, transmitted
pursuant to subsection 60.(1) of the Act, in my
view, are not “documents” within the meaning of Rule 75. They are on file in
the Registrar’s office and form part of the record of the opposition
proceeding.
[26] It is clear from a
fair reading of Rules 71 – 79 that a “document” within the meaning of Rule 75
is a pleading, an originating document, or a document required to be filed pursuant
to the Federal Courts Rules, in a Federal Court proceeding. It does not
include the Statement of Opposition, which is an originating document that is
required to be filed and, indeed, can only be filed in the Canadian Trade-Mark
Office for the purposes of an opposition proceeding. Accordingly, the Federal
Court, in my view, has no jurisdiction under Rule 75 to amend the Statement of
Opposition, a document that is not filed in this Court, and forms part of the
record on which the decision under appeal is based.
[27] On point is the decision of the Federal Court of Appeal in Halford
v. Seed Hawk Inc. [2005] F.C.J. No. 26. In that case, on an interlocutory
motion brought in the course of an appeal to this Court, Justice Sharlow
dismissed a motion to amend a pleading following judgment, and held at
paragraph 10 of her decision:
[…] 10 In my view, Rule 75 does not give
this Court the jurisdiction to grant a motion, before the hearing of an appeal
of a judgment of the Federal Court, for leave to amend the pleadings upon which
the trial was heard [...]
[28] Indeed, no jurisprudence
has been cited to me where a Statement of Opposition has been amended on an appeal
to this Court. The CCPE case does not assist as the motion in that case
was dismissed without the Court dealing with the amendment to the Statement of
Opposition, or considering the jurisdiction of the Court to do so on appeal.
[29] Parmalat has also not
cited any precedent for the proposition that a new issue not raised before the
Registrar, and not arising out of the evidence before the Registrar, may be
added on the appeal to this Court. The reason being that the addition of new
evidence and the de novo nature of the ensuing hearing, does not mean,
as Parmalat suggests, that the appeal is a whole new ballgame. It remains an
appeal. McDonald’s Corp., supra, at para.469.
[30] The de novo exercise
of discretion under section 56(5) is not given for all purposes. It is based
on, and follows from the ability of the parties to adduce new evidence.
Justice MacNair in Borden, supra, makes the point as follows, at
page 50:
[…] In my view, the provision for adducing additional evidence on an
appeal would be meaningless unless the court could make a judicial
determination of the issues before the registrar with due regard to the
circumstances of the case and in light of this additional evidence. Clearly,
the court is entitled to substitute its conclusion for that of the registrar,
if satisfied that the latter “has gone wrong”. To a limited extent, the appeal
takes on something of the appearance of a hearing de novo, but with this
qualification. While the court is not limited in its right to hear new
evidence, it is my opinion that such new evidence must be in relation only to
facts material to the same issues that were before the registrar.
…
[31] In light of the
jurisprudence and the clear language of Rule 40 of the Trade-marks
Regulations and section 56(5) of the Act, there is no basis whatever
to find that the authority of the Court to substitute its discretion for that
of the Registrar pursuant to section 56.(5) may be extended to encompass the discretion
given exclusively to the Registrar to amend the Statement of Opposition. The
amendment to the Statement of Opposition, in my view, had to be presented to
and ruled upon by the Registrar.
[32] As these findings are
dispositive of the motion, I need not go on to consider whether section 22(i)
is a proper ground of opposition pursuant to section 38(2) of the Act.
An order will go accordingly.
“R. Aronovitch”
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