Date: 20090904
Docket: T-2084-07
Citation: 2009 FC 872
Ottawa, Ontario, September 4,
2009
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
2045978
ONTARIO INC. c.o.b. CHAPS THE ORIGINAL
Plaintiff
and
CHAPS ALDERSHOT INC. c.o.b.
LEZLEY'S CHAPS
and KEVIN SAUNDERS
Defendants
and
2022472 ONTARIO INC. and
JAMES GILLBERRY and ROBERT WILKINSON
Third Parties
REASONS FOR ORDER AND ORDER
[1]
The
Plaintiff brought a motion for summary judgment seeking a declaration that the
Defendants have infringed Canadian trade-mark registration number TMA636,343
contrary to sections 19 and 20 of the Trade-marks Act, R.S.C. 1985, c.
T-13; a declaration that the Defendants have directed public attention to their
services and business in such a way as to cause or be likely to cause confusion
in Canada between their services and business and the services and business of
the Plaintiff, contrary to subsection 7(b) of the Act; a permanent injunction
restraining the Defendants; that the Defendants deliver up the offending wares
and signage; an order that any questions as to damages and profits be
determined by reference under the Federal Courts Rules; and an order for
costs.
[2]
On March
30, 2005, the Plaintiff became the registered owner of Canadian trade-mark
registration number TMA636,343 “CHAPS” in association with restaurant
services. The Plaintiff carries on business as Chaps The Original a restaurant
located at 3419
Fairview Street, Burlington, Ontario. The Certificate of
Registration indicates a claim that the trade-mark has been used in Canada since at least November 21,
1981 on services and the Plaintiff provided affidavit evidence that its
restaurant is well-known and has a history dating to 1981.
[3]
In 2006
the corporate Defendant entered into an agreement with the Third Party numbered
company for the purchase of a restaurant business. The purchase price included
$100,000 for the goodwill and trade name associated with that business.
Thereafter the Defendants carried on the business under the trade name Lezley’s
Chaps. This business is located on the same street as the Plaintiff’s
restaurant, but 6 kilometres away. This business is also a restaurant although
it also offers in-house musical entertainment from live rock and pop musicians.
[4]
In support
of its motion for summary judgment the Plaintiff filed the affidavit of Owen
Carr, President, Secretary and Treasurer of the Plaintiff. The Plaintiff also
filed and relies on the transcript of the Examination for Discovery of the Defendant
Kevin Saunders dated March 9, 2009.
[5]
The Plaintiff’s
action is a specially managed proceeding. Prothonotary Aalto was appointed as
the Case Management Judge. In a letter dated June 19, 2009, the Plaintiff
requested a case management teleconference with Prothonotary Aalto with respect
to a summary judgment motion and a proposed timetable for the taking of the steps
necessary leading to the motion. The conference, with counsel for both the Plaintiff
and the Defendants present, was held in Toronto by conference call on July 14, 2009.
The following timetable, as set out in a letter dated July 17, 2009, was
directed for completion of the steps leading to this summary judgment motion:
1. The Plaintiff shall serve and
file their Motion Record by July 27, 2009.
2. The Defendants shall serve and
file their responding Motion Record by August 7, 2009.
3. Completion of all
cross-examinations of affidavits by August 17, 2009.
4. Parties shall serve and file
the Memoranda of Fact and Law by August 24, 2009.
5. Summary Judgement motion to be
set down at the Toronto General Motions list on Monday, August, 31, 2009.
[6]
The Plaintiff
complied with the schedule; the Defendants did not. No Motion Record was filed
by the Defendants. On August 24, 2009, they filed an Affidavit of Kevin
Saunders and their Memorandum of Fact and Law. The affidavit indicates that it
was sworn on August 12, 2009 and counsel advises the Court that it was served
on the Plaintiff on August 13, 2009.
[7]
The Plaintiff
objects to this affidavit being part of the record on this motion in light of
the Defendants’ failure to comply with the established timetable and their
failure to seek leave of the Court or the consent of the Plaintiff to file the
affidavit late.
[8]
The only
explanation offered by counsel for the late affidavit was that Mr. Saunders had
been ill and had not been able to come to his counsel’s office to swear the
affidavit until August 12, 2009. No affidavit from Mr. Saunders attesting to
his inability to swear the affidavit, which was due on August 7, 2009 was presented,
neither was any explanation offered as to why a commissioner for oaths could
not attend on Mr. Saunders to have him swear the affidavit.
[9]
The only
explanation offered by the Defendants for failing to seek leave of the Court to
permit the late filing was that it was thought that it would not be a problem.
As counsel is no doubt well aware, failure to comply with a direction of the
Court is always a problem and, moreover, is one that ought to be immediately
addressed. In my view, there has been no adequate or acceptable explanation
for the Defendants’ failure to file their Motion Record on time, nor has there
been any adequate or acceptable explanation for the failure to either contact
the Court or opposing counsel to seek an extension. Accordingly, the Court
will not accept the affidavit as forming any part of the evidence on this
motion.
[10]
In any
event, had I been inclined to accept that affidavit, I would have given it very
little if any weight as Mr. Saunders attempts in that affidavit to resile from
admissions he previously made under oath on his examination for discovery.
[11]
It is well
settled that a response to a motion for summary judgment must set out specific
facts showing that there is a genuine issue for trial. The responding party
cannot simply rely on the statements and denials in its pleadings but must put
its “best foot forward” by leading evidence and submitting argument that there
is a genuine issue requiring a trial. In this case, the Defendants have put no
evidence forward. On that basis alone the motion ought to be granted.
However, the Plaintiff, at paragraphs 66 to 115 of its Memorandum, has put
forward a summary of admissions from the examination for discovery of Kevin
Saunders that establishes on a balance of probabilities that all of the material
claims alleged in the Statement of Claim have been proved.
[12]
From my
review of the material before the Court the following have been proved:
a. That the Plaintiffs are the
registered owners of the CHAPS trade-mark used in association with restaurant
services;
b. That the trade-mark is valid;
c. That the Defendants admit that
they provide restaurant services to the public at Lezley’s Chaps;
d. That the two restaurants are
of the same style and category and are located on the same road within 6 kilometres
of each other;
e. That the name Lezley’s Chaps
is intended to convey to the public that it is a Chaps restaurant, owned and
operated by Lezley;
f.
That the
most prominent word in the Lezley’s Chaps signage and advertizing is the word Chaps;
g. That there have been instances
were the public have confused Lezley’s Chaps restaurant with the Plaintiff’s
restaurant; and most importantly
h. That they admit that their use
of “Chaps” with respect to the services and wares of Lezley’s Chaps infringes
the Plaintiff’s trade-mark.
[13]
I find
that there is evidence that there is passing off pursuant to subsection 7(b) of
the Act. The Defendants have directed public attention to their restaurant
Lezley’s Chaps in such a way as to cause or be likely to cause confusion in Canada at the time commenced so to direct
attention to them. The signage, advertising and other materials from the Defendants
that display the CHAPS trade-mark is intended to draw customers to their
restaurant. Further, the Defendants have admitted that this was intended to
convey to the public that their restaurant was a Chaps restaurant owned by
Lezley.
[14]
I am further
satisfied that the personal Defendant has no valid defence to the Statement of
Claim in light of these admissions and in light of the fact that he is the
directing mind of the corporate Defendant. He is the sole officer of the Defendant
corporation, holding the positions of president, secretary and treasurer, as
well as being the sole director. He and his wife are the sole shareholders.
He does consult with a friend, a Mr. Baird with respect to the business
decisions but ultimately he makes and implements those decisions.
[15]
The
evidence before the Court on this motion can lead only to the conclusion that Kevin
Saunders engaged in a deliberate, wilful and knowing pursuit of a course of
conduct that he knew constituted infringement of the Plaintiff’s trade-mark.
His involvement with the corporate Defendant was much more than simply managing
the operations of the restaurant. In such circumstances he is personally
liable for the infringement: See Mentmore Manufacturing Co. v. National
Merchandise Manufacturing Co. (1978), 40 C.P.R. (2d) 164 (F.C.A.).
[16]
Accordingly,
this motion for summary judgment is allowed.
ORDER
THIS COURT:
1.
DECLARES that the
Defendants, Chaps Aldershot Inc. and Kevin Saunders, have infringed Canadian
trade-mark registration number TMA636,343 contrary to sections 19 and 20 of the
Trade-marks Act;
2.
DECLARES that the
Defendants, Chaps Aldershot Inc. and Kevin Saunders, have directed public
attention to their services and business in such a way as to cause or be likely
to cause confusion in Canada, at the time they commenced so to direct public
attention to them, between their services and business and the services and
business of the Plaintiff, contrary to section 7 (b) of the Trade-marks Act;
3.
ISSUES a
permanent injunction restraining the Defendant, Chaps Aldershot Inc. and its
officers and directors, and the Defendant Kevin Saunders, as well as their
respective employees, agents, licensees, successors, assigns and all others
over whom any of the foregoing exercise authority from:
(a)
infringing the Plaintiff’s CHAPS Trade-mark
contrary to s. 19 of the
Trade-marks Act;
(b)
using the trade-mark Lezley’s CHAPS or any
trade-mark or trade-name that is confusing with the Plaintiff’s CHAPS
Trade-mark, contrary to section 20 of the Trade-marks Act; and
(c)
directing public attention to their services or
business in such a way as to cause or be likely to cause confusion in Canada,
at the time they commence so to direct public attention to them, between their
services or business and the services or business of the Plaintiff, contrary to
s. 7(b) of the Trade-marks Act;
4.
ORDERS the
Defendants, Chaps Aldershot Inc. and Kevin Saunders, and their employees,
representatives, agents or any person under their direct or indirect control,
not sell, transfer, dispose of, pledge or otherwise encumber of deal with the
domain name www.lezleychaps.ca to anyone or any entity other than the
Plaintiff;
5.
ORDERS the
Defendants, Chaps Aldershot Inc. and Kevin Saunders, to forthwith deliver-up to
the Plaintiff, or destroy under oath, all wares, advertising, promotional
and/or labelling material and signage, including exterior signage at Lezley’s
Chaps, in any form whatsoever, the use of which would violate the rights of the
Plaintiff, which are in the possession, power or control of the Defendants;
6.
ORDERS that all
issues concerned solely with any question as to the damages flowing from the
Defendants’ infringement and the profits arising form the Defendants’
infringement shall be determined by reference under Rule 153 et seq.;
and
7.
RESERVES the
right to make an Order as to costs of this motion and the action to date after
receiving submissions from the parties. The Plaintiff is to serve and file its
submissions within 7 days hereof, the Defendants shall then have 7 days to
serve and file its submissions and the Plaintiff shall have 3 days to file any
Reply. Submissions are to be limited to a maximum of 5 pages and any Reply is
limited to 2 pages.
“Russel W.
Zinn”
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