Date: 20070828
Docket: T-894-06
Citation: 2007 FC 861
Toronto,
Ontario, August 28,
2007
PRESENT: The Honourable Mr. Justice Harrington
BETWEEN:
SUN
WORLD INTERNATIONAL INC.
Applicant
and
PARMALAT
DAIRY AND BAKERY INC.
Respondent
REASONS FOR ORDER AND ORDER
[1]
This
motion raises a novel point of procedure. May this Court, on appeal, permit an
amendment to the Statement filed with the Registrar in opposition to the
registration of a trade-mark, after the Registrar has decided on the merits of
the registration application? Prothonotary Aronovitch held (2007 FC 641, [2007]
F.C.J. No. 890) that the Court could not. These reasons are given in the appeal
from her decision.
BACKGROUND
[2]
Sun
World applied to register the words “Black Diamond” as a trade-mark in association
with fresh fruits and vegetables, later confined to plums. It claimed it had
used the trade-mark in Canada since 1990. Parmalat filed a Statement of
Opposition. It submitted that Sun World had not established use of the trade-mark
from that time, and also argued that the trade-mark was not registerable as it
was confusing with several of its own trade-marks which had been registered for
use in association with cheese and other dairy products.
[3]
The
opposition was successful. The Registrar, in the form of the Trade-mark
Opposition Board, held that Sun World had not established its use of the mark as
of 1990, nor had it demonstrated that there would be no reasonable likelihood
of confusion between the applied-for mark for plums and Parmalat’s registered trade-marks
for cheese.
[4]
Sun
World appealed to this Court as permitted by section 56 of the Trade-marks
Act. The Act does not enumerate the powers of the Court in appeal save that
subsection 56(5) thereof states:
|
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.
|
Lors
de l’appel, il peut être apporté une preuve en plus de celle qui a été
fournie devant le registraire, et le tribunal peut exercer toute discrétion
dont le registraire est investi.
|
[5]
Sun
World has now adduced evidence of use of the words “Black Diamond” as a mark in
Canada in
association with plums. Parmalat candidly concedes that Sun World’s appeal on
this point is likely to succeed. It has also filed new evidence on the
confusion issue. The relevance and weight of that evidence are matters to be
considered when the appeal is heard on its merits.
[6]
Now,
Parmalat, in addition to its second successful ground of opposition with
respect to the likelihood of confusion, wishes to assert a third reason for opposition,
supported by evidence, a reason not set out in the Statement of Opposition
filed with the Registrar under section 38 of the Trade-marks Act. That reason
derives from section 22 of the Trade-marks Act which prohibits a person
from using another person’s registered mark in a manner “that is likely to have
the effect of depreciating the value of the goodwill attaching thereto”.
Although that section of the Act has been on the books for years, it is alleged
that the Supreme Court significantly expanded upon and clarified the law in Veuve
Clicquot Ponsardin v. Boutique Clicquot Ltée, 2006 SCC 23, [2006] 1 S.C.R. 824,
a decision handed down some two months after the Trade-mark Opposition Board
handed down its own decision in favour of Parmalat. It is now clear that a mark
may not be confusing with but nevertheless still have an adverse effect on the goodwill
associated with a registered mark.
[7]
Parmalat
accepts as a general proposition that courts frown upon new issues being raised
in appeal. The novelty of the motion before Prothonotary Aronovitch, according
to it, was that if an amendment to its original pleading (the Statement of
Opposition) is allowed, then section 22 of the Trade-marks Act will not be
a new issue. The argument is twofold.
[8]
The
first is that section 40 of the Trade-marks Regulations, 1996 gives the
Registrar discretion to allow an amendment to a Statement of Opposition. Since
section 56(5) of the Act allows this Court to exercise “any discretion vested
with the Registrar” it follows that this Court may in its discretion likewise give
leave to file an amendment.
[9]
The
second is that this Court, acting as a Court of Appeal, has the jurisdiction to
permit an amendment to the pleadings which were before the tribunal below. Rule
75 of the Federal Courts Rules was invoked. It permits an amendment to a
“document” at any time.
THE PROTHONOTARY’S
DECISION
[10]
The
Prothonotary, relying upon extensive case law, was of the view that section 56
of the Trade-marks Act allows the Court to entertain new evidence, but
normally not new issues. She added that new grounds on a pure question of law
may be added but only in reference to evidence already before the Registrar. She
read subsection 56(5) of the Trade-marks Act together with section 40 of
the Regulations as relating to the Court’s discretion with respect to additional
evidence, but did not extend to empowering the Court to grant leave to a party to
raise new issues.
[11]
She
interpreted rule 75 of the Federal Courts Rules, in the context before
her, as limiting the meaning of “document” to pleadings, an originating document,
or document required to be filed pursuant to the Federal Courts Rules.
The Statement of Opposition did not fall within that meaning as it was an
originating document filed with the Registrar. She relied upon the decision of
Madam Justice Sharlow in Halford v. Seed Hawk Inc., 2005 FCA 12, [2005] F.C.J.
No. 26.
ISSUES
[12]
In
my view there are three issues raised by this appeal from Prothonotary
Aronovitch’s decision.
[13]
The
first is the deference owed to the Prothonotary. She quite properly considered
the issues before her as jurisdictional in nature. These are matters of law on
which I must agree or disagree. The standard is correctness. The law does not
permit me to defer on the grounds that her analysis of the law may have been
reasonable (Magic Sportswear Corp. v. OT Africa Line Ltd., 2006 FCA 284,
[2006] F.C.J. No. 1292, per Mr. Justice Evans at paragraphs 20-22).
[14]
The
second issue is whether section 56 of the Trade-marks Act, coupled with
section 40 of the Regulations, gives this Court discretion to permit an
amendment to a Statement of Opposition, after the Registrar has handed down his
decision on the merits.
[15]
The
third issue is whether this Court has discretion, under rule 75 of the Federal
Courts Rules or otherwise, to grant leave to amend in these circumstances. If
the Court has that discretion it was not exercised by the Prothonotary, and so I
must do so de novo. (Z.I. Pompey Industrie v. Ecu-line N.V., 2003
SCC 27, [2003] 1 S.C.R. 450; R. v. Aqua-Gem Investments Ltd. (C.A.), [1993] 2
F.C. 425, [1993] F.C.J. No. 103; Merck & Co. v. Apotex Inc., 2003
FCA 488, [2004] 2 F.C.R. 459).
DECISION
[16]
Although
I agree with the Prothonotary in the result, I have reached the same conclusion
on somewhat different issues of law. As I read it, she compressed two questions
into one. She asked whether the jurisprudence supported the application. I
agree with her that on the facts of this case, the jurisprudence does not. However,
I would rather have asked two questions. The first is whether it is ever possible
to give leave to amend, and the second is, if so, should the Court in its
discretion grant that leave.
[17]
In
my opinion the Trade-Marks Act does not give this Court the jurisdiction
to grant Parmalat leave to file an amendment to its Statement of Opposition at
this stage in the proceedings. I base myself on the important principle of
finality of judgments, partly expressed by the Latin maxim functus officio.
However, I conclude that the Federal Court, as a Court of Appeal, has
jurisdiction to grant leave to amend. Nevertheless, in the exercise of my
discretion de novo, I do not think leave should be given, and so would
dismiss Parmalat’s appeal from Prothonotary Aronovitch’s order.
DISCUSSION
The Trade-Marks Act
[18]
Section
40 of the Trade-Marks Regulations provides:
|
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.
|
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.
|
[19]
The
regulation does not specifically state that an amendment may be permitted after
a decision on the merits has been made. There is nothing in the Regulations to
imply a departure from the principle of functus officio, which I shall
discuss as part of the Federal Court’s jurisdiction as a court of appeal. Section
56(5) of the Act allows this Court to exercise “any discretion vested with the
Registrar”. Since the Registrar did not have discretion, neither does this
Court standing in his shoes.
Jurisdiction of a Court
of Appeal
[20]
The
vast majority of decisions of federal boards, commissions or other tribunals
are considered by this Court by way of judicial review pursuant to sections 18
and 18.1 of the Federal Courts Act. However, section 18.5 states that
when Parliament expressly provides for an appeal to the Federal Court, to the
extent a decision may be so appealed, it is not subject to judicial review. The
Trade-Marks Act is one of those acts which provides for an “appeal” to
this Court, as opposed to the Federal Court of Appeal. That Act has nothing
substantial to say about what the Federal Court, as an appeal court, can or
cannot do other than receive new evidence and exercise any discretion that was
vested in the Registrar.
[21]
The
Federal Courts Act, which establishes both the Federal Court and the
Federal Court of Appeal, enumerates powers of the Federal Court of Appeal at
section 52, but does not specifically state that the Federal Court has similar
powers when sitting in appeal under the Trade-Marks Act. Rules 335 and
following of the Federal Courts Rules apply to “appeals to the Court
under an Act of Parliament, unless otherwise indicated in that Act or these
Rules. “Court” is defined as including the Federal Court as the circumstances
require. However, there is nothing in that part of the Rules, Part 6, which
deals with an amendment to the pleadings in first instance.
[22]
I
agree with the learned Prothonotary that Parmalat cannot invoke rule 75 in
support of its proposition that leave may be given by the Federal Court, as a
court of appeal, to amend the pleadings in first instance, after a decision is rendered
on the merits. Such an order, if granted, would necessarily reopen the hearing.
Rules 397 through 399 set out the circumstances in which the Court, as a court
of first instance, may reconsider, set aside or vary its earlier order.
[23]
The
only provisions of any possible relevance are those set out in rule 399(2),
which allows the Court to set aside or vary an order which was obtained by
fraud (not the case here), or by reason of a matter that arose or was
discovered subsequent to the making of the order.
[24]
Section
22 of the Trade-Marks Act was not “discovered” after the decision under
appeal. It has been in place for more than sixty years. Madam Justice Sharlow’s
decision in Halford, supra, is squarely on point. In that case,
after judgment was rendered, Seed Hawk moved the trial judge for leave to amend
its pleadings pursuant to rule 75. Mr. Justice Pelletier, then in first
instance, refused to grant leave. He said the logic of functus officio
applied to rule 75. “At any time” could not be interpreted so as to allow a
party to circumvent the doctrine by moving to amend after judgment. Although a
trial judge has broad discretion to allow amendments to the pleadings at any
time prior to judgment, that right is extinguished after judgment has been
signed.
[25]
Seed
Hawk did not appeal that refusal. Rather, it moved the Court of Appeal for
leave to amend the trial pleadings. Madam Justice Sharlow held that rule 75 did
not serve to give the Federal Court of Appeal jurisdiction to grant a motion
for leave to amend the pleadings upon which the trial was heard by the Federal
Court. She went on to say the Federal Court of Appeal may consider an appeal
from an order of the Federal Court granting or refusing such a motion, and
might also order an amendment to trial pleadings as one of the remedies on
appeal. However the Court’s jurisdiction in that regard did not flow from rule
75 but rather from subsection 52(b)(i) of the Federal Courts Act which provides
that:
|
52. The Federal Court of Appeal may
[…]
(b) in the case of an appeal from the
Federal Court,
(i) dismiss the appeal or give the judgment and award the
process or other proceedings that the Federal Court should have given or
awarded.
|
52.
La Cour
d'appel fédérale peut :
[…]
b) dans le cas d'un appel d'une décision de la Cour fédérale :
(i) soit rejeter l'appel ou rendre le
jugement que la Cour fédérale aurait dû rendre et prendre toutes mesures
d'exécution ou autres que celle-ci aurait dû prendre,
|
[26]
Thus
Prothonotary Aronovitch was correct in her interpretation of rule 75. However,
the Halford decision begs this question: is there another rule or
provision of law which would permit the Federal Court, sitting as a court of
appeal, to grant leave to amend a pleading in the tribunal below, after that
tribunal had rendered its decision?
[27]
What
then is the point of an “appeal”? The party bringing the appeal wishes to have
the decision reconsidered. The Court, sitting in appeal, may grant the appeal,
or dismiss it. Common sense and experience dictates that if an appeal is
granted, the Court will deliver the decision it considers should have been given
in the first place. It may also send the matter back for a new hearing or a new
trial, on such terms and conditions it sees fit. But, may it grant leave to
amend the pleadings below? The jurisdiction of a court of appeal is statutory (R.
v. W. (G), [1999] 3 S.C.R. 597, [1999] S.C.J. No. 37). Parliament empowered
the Federal Court of Appeal to grant leave after judgment in first instance to
amend the pleadings below by virtue of section 52 of the Federal Courts Act,
as noted by Madam Justice Sharlow in Halford, above. It is not necessary,
however, to determine whether section 52 applies, mutatis mutandis, to
the Federal Court when sitting in appeal from decisions of federal boards and
tribunals (as opposed to in judicial review). Courts have the innate power to
control their own process.
[28]
Parmalat also bases its
arguments on the Canadian Council of Professional Engineers v. Lubrification
Engineers Inc. [1990] 2 F.C. 525, 32 C.P.R. (3d) 327 (F.C.A). Most of the
cases cited therein are not fully on point because they relate to new issues
advanced in appeal, or new spins on old facts not supported by an amendment to
the pleadings (The Tasmania 15 App. Cas. 223 and The SS “Tordenskjold”
v. The SS “Euphemia” (1908), 41 S.C.R. 154) or in appeal on a refusal by
the Court of first instance to grant an amendment (C.N.R. v. Muller, [1934] 1 D.L.R. 768, (1933) 41 C.R.C. 329 (S.C.C.)).
[29]
However
there is one decision squarely on point; the decision of the House of Lords in Ley
v. Hamilton (1935), 153 LT 384 (H.L.), cited by this Court in Northwest
Airporter Bus Service Ltd. v. Canada (1978), 23 N.R. 49, [1978] F.C.J. No.
804. The appellants in that case raised new points and like Parmalat moved the
House of Lords to amend the pleadings below. Lord Atkin said at page 385:
I do not propose to discuss these
propositions, for they are founded on a view of the pleadings which, as I have
said, appears to me unwarranted. They could only, therefore, be supported if
the pleadings were amended, and I believe your Lordships were agreed that any
amendment to support such a plea should not at this stage be admitted. It is obvious
that if either point had been raised at the trial the examination of the
plaintiff and the cross-examination of the defendant and Wakeling might have
taken a very different form. Moreover, even if the questions had not involved
further evidence as to facts, I am of opinion that an Appellate Court should be
very chary of permitting amendments where counsel have had ample opportunity of
raising alternative pleas at the trial and have not thought fit to do so.
Nothing would be more unfortunate than to encourage the idea that counsel may
present one point to the jury and keep an alternative for the Court of Appeal
[30]
I conclude that, unless taken away, an appellate court has
the jurisdiction to grant leave to amend the pleadings in the court or tribunal
below, notwithstanding that that court or tribunal has already rendered the
decision on the merits. No statute or regulation has impinged upon that
jurisdiction.
[31]
I
read this passage from Ley v. Hamilton with another from Lord Atkin two
years later in Evans v. Bartlam, [1937] A.C. 473 (H.L.), which dealt
with the power of an appellate court to interfere with the exercise of
discretion by a trial judge. Lord Atkin said at pages 480 and 481:
Appellate jurisdiction is always
statutory: there is in the statute no restriction upon the jurisdiction of the
Court of Appeal: and while the appellate Court in the exercise of its appellate
power is no doubt entirely justified in saying that normally it will not
interfere with the exercise of the judge’s discretion except on the grounds of
law, yet if it sees that on other grounds the decision will result in injustice
being done it has both the power and the duty to remedy it.
[32]
This is consistent with the reasons of Justice Iacobucci in
Pezim v. British Columbia (Superintendent of
Brokers), [1994] 2 S.C.R. 557, [1994] S.C.J. No. 58 regarding the
statutory right of appeal from a highly specialized tribunal on an issue which
arguably goes to the core of that tribunal’s regulatory mandate and expertise. In Pezim, the Supreme Court relied on its earlier decision Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722, [1989] S.C.J. No. 68 in which Justice Gonthier said at
pages 1745 and 1746:
It is trite
to say that the jurisdiction of a court on appeal is much broader than the
jurisdiction of a court on judicial review. In principle, a court is entitled,
on appeal, to disagree with the reasoning of the lower tribunal.
However,
within the context of a statutory appeal from an administrative tribunal,
additional consideration must be given to the principle of specialization of
duties. Although an appeal tribunal has the right to disagree with the lower
tribunal on issues which fall within the scope of the statutory appeal, curial
deference should be given to the opinion of the lower tribunal on issues which
fall squarely within its area of expertise.
Discretion de novo
[33]
Since,
unlike the Prothonotary, I have come to the conclusion that the Federal Court,
sitting in appeal under the Trade-Marks Act, has the jurisdiction to
grant leave to amend the Statement of Opposition, it falls upon me to exercise my
discretion de novo.
[34]
Leave,
in my opinion, should not be granted.
[35]
One
of the early cases on point is Tildesley v. Harper (1878), 10 Ch. D.393, a
decision of the English Court of Appeal. The trial judge had refused to give
the defendant leave to amend his statement of defence. The Court of Appeal held
that leave should have been given. Lord Justice Bramwell said at pages 396 and
397:
My practice has always been to give leave
to amend unless I have been satisfied that the party applying was noting malâ
ide, or that, by his blunder, he had done some injury to his opponent which
could not be compensated for by costs or otherwise.
[36]
The
law has not changed (Steward v. North Metropolitan Tramways Company, (1886)
16 Q.B.D. 556 (C.A.); Clarapede v. Commercial Union Association,
32 W.R. 262 and Canadian
Council of Professional Engineers, supra.)
[37]
Parmalat
argues that Sun World has suffered no prejudice since the appeal is de novo
and it has the right to file evidence on the issue.
[38]
Although
I cannot agree with the Prothonotary that the many cases she cited barred her
in law from exercising her discretion, they do serve as guideposts as to the
circumstances which ought to be taken into account in the exercise of judicial
discretion. Turning to subsection 56(5), she stated at paragraph 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:
[2][…..]
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. …
[39]
In
this case, Parmalat wants a new record. Although there may possibly be
circumstances in which a new issue may be introduced in a section 56 appeal,
supported by an amendment to the original pleadings, this is not one of them. Like
Lord Atkin in Ley v. Hamilton, I look askance at the proposition that
one could save up new issues for appeal. Although a case in judicial review, Nova
Scotia (Workers’ Compensation Board) v. Martin, 2003 SCC 54, [2003] 2
S.C.R. 504 stands for the proposition that factual findings and the record
compiled by the administrative tribunal as well as its informed and expert analysis
will often be invaluable to a reviewing court.
[40]
I
do not consider it appropriate that the many decisions of this Court, which
deal with section 56 of the Trade-Marks Act, may be avoided simply by
moving to amend the original pleadings.
[41]
Like the Prothonotary, I need not consider whether section
22 of the Trade-Marks Act is an admissible ground of opposition under
subsection 38(2) thereof.
[42]
Nothing in these reasons is intended to restrict such
rights as Parmalat has, or may have, to take action against Sun World based on
the allegation that it uses a trade-mark in a manner likely to have the effect
of depreciating the goodwill attaching to its own registered trade-marks, the
whole as contemplated by section 22 of the Act.
ORDER
THIS COURT
ORDERS that the motion to appeal the order of Prothonotary Aronovitch
dated June 20, 2007 is dismissed with costs.
“Sean Harrington”
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