Date:
20080123
Docket:
T-1758-06
Citation:
2008 FC 87
[ENGLISH TRANSLATION]
Montréal, Quebec, January 23, 2008
PRESENT:
The Honourable Mr. Justice Martineau
BETWEEN:
CHANEL S. DE R.L., and
CHANEL INC.
Plaintiffs
and
GENÈVE ACCESSOIRES
INC.
BIJOUTERIE GENÈVE INC.,
HENRI SEBAG AND/OR THE INDIVIDUAL
OR COMPANY OPERATING
UNDER THE TRADE NAME GENÈVE
AND/OR
GENÈVE ACCESSOIRE AT PLACE ALEXIS
NIHON,
1500 ATWATER, MONTRÉAL, QUEBEC
AND
AT CENTRE LAVAL, 1600 CORBUSIER,
CHOMEDEY, LAVAL
Defendants
REASONS FOR ORDER AND ORDER
[1]
By
motion filed in Court on April 5, 2007 (motion to set aside), the Defendants
are seeking an order under Rule 399 of the Federal Courts Rules,
SOR/98-106, as amended (the Rules), to set aside the default judgment rendered
against them on March 22, 2007. The Defendants are also seeking to have
set aside the Plaintiffs’ amended statement of claim dated December 1,
2006, in addition to exemplary damages of $150,000 for Mr. Sebag [translation] “for damage to his
reputation and . . . to deter multinational companies . . . from taking legal
action in a cavalier manner and from using the Canadian justice system in an
abusive manner.”
[2]
The
Plaintiffs, Chanel S. de R.L. and Chanel Inc. (together, Chanel), are the
registered owners of trade-mark Nos. 143,648; 345,284; 339,904 and UCA 18537 on
the Canadian Trade-marks Registry. On October 5, 2006, Chanel filed a
statement of claim against the Defendants, in which it claimed that the
Defendants were violating its rights in the trade-marks that are the subject of
registration numbers 345, 284 and UCA18537 (the CHANEL trade-marks). On
November 7 and December 1, 2006, Chanel filed amended statements of
claim. The Defendants filed no statement of defence. The 30 days set out in
Rule 204 of the Rules expired when Chanel filed an ex parte application
to obtain a default judgment from the Court.
[3]
On
March 22, 2007, the Court rendered the default judgment against the
Defendants and thereby declared that the Defendants:
(a) infringed,
or are deemed to have infringed, the CHANEL trade-marks;
(b) caused the
depreciation of the market value associated with the CHANEL trade-marks; and,
(c) attracted
public attention to their merchandise by creating confusion in Canada between
their merchandise, services and activities and the complainants’ merchandise,
services and activities.
[4]
Among
other things, the Court issued a permanent injunction prohibiting the
Defendants (and their agents, clerks, employees, representatives and
successors) from offering for sale, selling, importing, manufacturing,
printing, distributing, advertising, promoting, shipping, storing and
displaying articles associated with the CHANEL trade-marks. The Court also
ordered the Defendants, jointly and severally, to pay immediately the sum of $12,000
in conventional compensatory damages and the sum of $4,952.65 in costs and
disbursements.
[5]
On
April 5, 2007, the Defendants filed this motion to set aside, which was
scheduled for hearing on November 21, 2007. At the hearing, I authorized
Mr. Sebag, who was representing himself, to also represent the Defendants
Genève Accessoires and Bijouterie Genève Inc. I also allowed the motion to set
aside to be decided on the basis of additional written submissions that I
considered before issuing the following order dismissing the motion to set
aside with costs.
[6]
According
to the Defendants’ submissions, Mr. Sebag, the primary Defendant, had to change
[translation] “law firms twice
with no results [sic].” The Defendants claim that they did not have the
means to pay for the services of a major law firm: Bijouterie Genève Inc. and
Accessoires Genève Inc. do not have the financial resources to cover the costs
of a lawyer without jeopardizing their survival.
[7]
The
Plaintiffs’ statements were written and served in English. Consequently, the
Defendants claim that a default judgment cannot be obtained pursuant to Rule
68(1) of the Rules. The Defendants state that they asked the Plaintiffs’ law
firm numerous times to send all correspondence and Court orders in French. This
was not done: Mr. Sebag did not receive copies of the affidavits in French
signed by Sylvain Gagnon, Nanette Minichiello, Hélène Doré, Sylvie Caron, Luc
Léonard and Mario Boyerand. Rule 74 of the Rules entitles the Court to order
that a document that is not filed in accordance with the Rules be removed from
the Court file. Moreover, the Defendants claim that the default judgment was
written in English and therefore is an illegal document within the meaning of
section 20 of the Official Languages Act, R.S.C., 1985, c. 31 (4th
Supp.).
[8]
Lastly,
the Defendants argue that Chanel has demonstrated a lack of credibility, and
that its counsel has demonstrated poor ethics. Thus, the Defendants dispute the
legality of the affidavit signed by Nanette Minichiello, sales director at
Chanel Inc. Given that this affidavit confirms under oath the facts reported by
her daughter, Vanessa Willberg, this evidence is inadmissible and must be
rejected by the Court. Furthermore, the Defendants claim that the amended
statement of claim dated December 1, 2006, is an abuse of procedure since
it is based on false allegations. The allegation that the Defendants continued
to sell counterfeit Chanel jewellery at the Genève jewellery store in Laval is
false and erroneous. Since that jewellery store was sold to 9156-5793 Québec
Inc., Mr. Sebag no longer has any personal interest. Moreover, the photo of a
piece of Chanel jewellery (according to the amended statement of claim dated
December 1, 2006, this piece was sold at the Genève jewellery store in
Laval) includes no affidavit, no alleged fact and no specific date. This photo
is therefore a gratuitous statement. Lastly, Mr. Sebag has very limited
education and great difficulty in reading and writing.
[9]
Under
Rule 399(1) of the Rules, the Court may set aside an order that was made ex
parte if the party against whom the order is made discloses a prima
facie case why the order should not have been made. The test for setting
aside a default judgment is well-established. In short, the purpose of this
judgment is to answer the following questions:
a)
Do
the Defendants have a reasonable explanation for their failure to file a
statement of defence?
b)
Do
the Defendants have a prima facie defence on the merits to Chanel’s
claim?
c)
Have
the Defendants brought this motion within a reasonable time?
(See in particular Taylor Made Golf Co. Inc. et
al. v. 1110314 Ontario Inc. (1998), 148 F.T.R. 212; SEI Industries Ltd.
v. Terratank Environmental Group, [2006] F.C.J. No. 271 (QL), 2006 FC 218
(SEI)).
[10]
Firstly,
note that the Defendants filed their motion to set aside promptly. Therefore,
the third criterion is met. But what about the other two criteria?
[11]
With
regard to the first criterion, having considered the parties’ written
submissions and the evidence on file, I am of the opinion that the Defendants
did not provide a “reasonable explanation” or “satisfactory
excuse” for their failure to file a statement of defence. The fact that a solicitor has only recently come on a file
or changing one’s lawyer will rarely, if ever, justify delaying the progress of
a lawsuit (General Motors Corp. v. Diabco International Inc., [2007] F.C.J. No. 554 (QL), 2007 FC 399). Regardless, there are no
particular or special circumstances in this case.
[12]
Contrary to the Defendants’ claim, Chanel is entitled to choose to
use French or English before this Court. In Lavigne v. Canada (Human
Resources Development), [1995] F.C.J. No. 737 (QL), Justice Noël states the
following at paragraph 15:
I am also unable to identify any legal basis for the
contention that the Crown or a federal institution has an obligation to provide
a party with a translation of the affidavits sworn to by its witnesses, when it
is written in the official language other than that chosen by the other party.
Such an obligation, insofar as it is said to arise under either the
Constitution, the Charter, or the Official Languages Act, would have to
result from a constitutionally enshrined guarantee, or from the wording of the
Act. As noted earlier, the constitutional guarantee pertaining to the use of
either official languages in court proceedings are those of the writers or
issuers of written pleadings and not those of the readers thereof. There is
therefore no constitutional right entitling a party to read affidavit evidence
in the official language which he or she has chosen, and hence no corresponding
obligation on the part of the governmental party to provide a translation.
[13]
Moreover,
in the same case, Lavigne v. Canada (Human Resources Development),
[1995] F.C.J. No. 1629 (QL), Justice Richard noted that the Official
Languages Act and the Rules do not obligate the Court to provide a
translation in either official language of documents (such as affidavits) used
in Court. The Defendants therefore are not entitled
to receive
copies of the Plaintiffs’ affidavits in French. I also reject the Defendants’
claim that the original judgment is an illegal document within the meaning of
section 20 of the Official Languages Act. Moreover, I note that the
default judgment has since been translated into French. There does not seem to
have been any breach of the rules of natural justice. In fact, I note that some
of Mr. Sebag’s letters to Chanel and to this Court are written in English. In
addition, the invoices issued by Sun Jewelry & Art Inc. in Miami, Florida,
for CHANEL-brand jewellery are in English. I also note that while Mr. Sebag has
very limited education, he is able to understand the nature of proceedings in
this case. Therefore, Mr. Sebag is not an ill-informed
party. He is acting on behalf of companies in which he is the president and primary
shareholder. He was able to read the correspondence from Chanel and to write
to this Court.
[14]
In
short, the Defendants did not give “convincing reasons” for their failure to
file a statement of defence at the appropriate time. Regardless, I do not find
that the Defendants have a prima facie defence on the merits to Chanel’s
claim.
[15]
Recall
that Chanel’s right to the exclusive use of the CHANEL trade-mark is deemed to
have been infringed by a person not entitled to its use and who sells,
distributes or advertises goods or services in association with a confusing
trade-mark or trade-name (Trade-marks Act, R.S.C., 1985, c. T-13,
section 20). To determine whether there is confusion, all circumstances in the
case must be considered, including:
(a) the
inherent distinctiveness of the trade-marks or trade-names and the extent to
which they have become known;
(b) the length
of time the trade-marks or trade-names have been in use;
(c) the nature
of the goods, services or business;
(d) the nature
of the trade; and
(e) the degree
of resemblance (SEI, supra, at paragraph 17).
[16]
Rule
81(1) of the Rules provides that affidavits shall be confined to facts within
the deponent’s personal knowledge except on motions, in which statements as to
the deponent’s belief, with the grounds for it, may be included. According to
Rule 81(2), where an affidavit is made on belief, an adverse inference may be
drawn from the failure of a party to provide evidence of persons having
personal knowledge of material facts. Nanette Minichiello’s affidavit was made
in support of a motion. Therefore, even though she confirms facts reported by
another person, this does not in itself make it an “illegal” document. In
addition, the fact that she is a Chanel employee is not sufficient reason to
remove this evidence from the Court file. In this case, Chanel submitted
several pieces of evidence (affidavits signed by Sylvain Gagnon, Nanette
Minichiello, Hélène Doré, Sylvie Caron, Luc Leonard and Mario Boyerand to
support its motion in writing, which was compliant with Rule 210). The evidence
submitted by Chanel constituted a solid and convincing basis on which to
conclude that the Defendants had violated Chanel’s rights to the CHANEL trade-marks,
hence, the order issued by Justice Harrington.
[17]
Since
the default judgment was rendered, the Defendants have not provided any serious
evidence or arguments against the conclusions of infringement. Today, the
Defendants are basing their argument on an invoice issued by Sun Jewelry &
Art Inc. in Miami, Florida, which they allege demonstrates that CHANEL-brand
jewellery was purchased legally. The Defendants also submitted an affidavit
signed by Mr. Sebag stating that he purchased this jewellery in good faith,
thinking that the store in Miami had the required authorizations to sell CHANEL
products. The Defendants [translation]
“question the professional ethics and motives of the Plaintiffs and their
counsel,” claiming that it is the Royal Canadian Mounted Police’s
responsibility to seize counterfeit products bearing a trade-mark and to issue
fines. It is also alleged that Chanel and Bijouterie Almar Inc. reached an
out-of-court settlement for $2,000 in a similar lawsuit.
[18]
I
note that even if the Defendants purchased the CHANEL-brand products in good
faith, this is not a valid defence to infringing on a trade-mark (Parfums
Christian Dior, S.A. v. Di Iorio, [1980] F.C.J. No. 1001 (QL), (1980), 53
C.P.R. (2e) 145; Henkel Kommanditgesellschaft Auf Aktien v. Super Dragon
Import Export Inc., [1984] F.C.J. No. 1020 (QL), (1984), 2 C.P.R. (3d) 361; affirmed
[1986] F.C.J. No. 313 (F.C.A.) (QL); 69 N.R. 234). Moreover, Mr. Sebag has
over 30 years of experience in the jewellery industry. The prices the
Defendants paid for the items purchased were extremely low, which should have
raised suspicions (Microsoft Corp. v. 9038-3746 Québec Inc., [2006]
F.C.J. No. 1965 (QL), 2006 FC 1509). I am also of the opinion that the
out-of-court settlement in another infringement case between Chanel and
Bijouterie Almar Inc. has absolutely no connection with the questions at issue.
Lastly, Chanel could pursue its action before this Court, regardless of the
fact that the RCMP could conduct a criminal investigation.
[19]
Consequently,
I am not satisfied that the Defendants have a prima facie defence
demonstrating why the impugned order should not have been issued in this case.
[20]
Therefore,
this motion must be dismissed, and the Plaintiffs will be entitled to costs.
ORDER
THE COURT ORDERS that the present motion to
set aside the order for default judgment dated March 22, 2007, be
dismissed with costs in favour of the Plaintiffs.
“Luc
Martineau”
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