Date: 20080307
Docket: T-2261-05
Citation:
2008 FC 328
Ottawa,
Ontario, March 7,
2008
PRESENT: The Honourable Mr. Justice Lagacé
BETWEEN:
MÖVENPICK-HOLDING
Plaintiff
(Defendant by Counterclaim)
and
INTER
MANAGEMENT SERVICES LIMITED
and
HANS JÖRG REICHERT
and
MARIANNE
REICHERT
and
GASTRO
INTERNATIONAL INC.
Defendants
(Plaintiffs by Counterclaim)
REASONS FOR ORDER AND ORDER
[1]
The
plaintiff appeals from the Prothonotary’s Order of December 20, 2006,
dismissing its motion for particulars or to strike certain paragraphs of the
defendants’ pleadings.
[2]
The
plaintiff submits that the Prothonotary committed two reviewable errors of law.
First, she failed to realize that the subject matter and remedy requested by
the defendants under ss. 18 and 57 of the Trade-marks Act, R.S.C.
1985, c. T-13 are
beyond the jurisdiction of this Court. Second, she misunderstood the
significance and the legal consequences of the defendants failing to plead
factually each of the constituent elements of fraud and abandonment.
Background
[3]
This is an
action under the Trade-marks Act in which the plaintiff alleges
violation of its “MARCHÉ” trade-marks covering restaurant services.
[4]
The
defendant Inter Management Services Limited (“IMSL”) operated a
restaurant and shop in Innisfil,
Ontario under the name and trade-mark
“INNISFIL HEIGHTS MARCHE”.
[5]
The two
individuals were made defendants because of their involvement either as
directors of IMSL or in the day-to-day management of the activities of IMSL.
[6]
The
defendant IMSL filed an assignment in bankruptcy on December 19, 2008
and, as a result, there was a lengthy delay in bringing this motion against the
Prothonotary’s decision.
[7]
The plaintiff
finally obtained an order authorizing it to pursue its case against IMSL.
The demand alleges that use of the “INNISFIL HEIGHTS MARCHE” trade-mark
causes confusion with its registered “MARCHÉ” trade-marks in violation
of its trade-marks rights.
[8]
Among
other defences, the defendants allege in paragraphs 10, 11, 12, 16, 17, 19, 22,
24, 25, 28 and 45(a) of their amended statement of defence and counterclaim, as
amended, June 8 and further amended July 24, 2006, that the plaintiff’s “MARCHÉ”
trade-marks and trade-mark registration are invalid because:
·
IMSL has
operated since September 2005 a free-flow market-style restaurant and shop
under the name of “INNISFIL HEIGHTS MARCHE”, and applied since to
register the following trade-marks in Canada for use in association with the
operation of its market-style restaurant namely: “INNISFIL HEIGHTS MARCHE”,
“INNISFIL HEIGHTS MARCHÉ and Design”, “INNISFIL HEIGHTS MARCHÉ
RESTAURANT MARKET SHOP and Design”, and “LETS MARCHE” and has
since commenced use of these trade-marks in association with its market-style
restaurant;
·
IMSL has
never used the word “MARCHÉ” alone in association with the operation of its
market-style restaurant and the trade-marks it uses are not confusing with any
of the trade-marks relied upon by the plaintiff;
·
In July
2005, the domain name <letsmarche.net> was registered for IMSL and has
been used since then in association with a webpage advertising its market-style
restaurant;
·
At the
date of registration, the French word “Marché” (meaning “market” in English)
was unregistrable under ss. 12(1)(b) and 18(1)(a) of the Trade-Marks Act
because it was clearly descriptive when associated with restaurant services;
·
The mark
in question is not distinctive of the plaintiff’s restaurant services due to
the wide-spread adoption of various “MARCHÉ’ names and marks by
third-parties for restaurant services;
·
In fact,
the plaintiff’s predecessor had not used the “RESTAURANT MÖVENPICK
MARCHÉ”
& Design trade-mark;
·
The
word “marché” is commonly used by different traders in Canada in association
with markets or market-style business and has been used or registered or applied
to register trade-marks containing this word in association with restaurant
services, as appears in a series of registrations and applications identified
by the plaintiff;
·
That
plaintiff trade-mark registrations are invalid and should be each expunged as
such from the Trade-marks Register [namely “MARCHÉ” (TMA460,114), “RESTAURANT MÖVENPICK
MARCHÉ”
& Design (TMA416,921), “MARCHÉLINO” (TMA459,991), “RISTORANTE
MARCHÉLINO MÖVENPICK MARCHÉ & Design” TMA416,591) and “RESTAURANT
MARCÉLINO & Design” (TMA540,161)].
[9]
The
preceding points represent the substance of the allegations contained in the
paragraphs that the plaintiff seeks to have struck and which remained
unaffected by the Protonotary’s decision.
The reasons of the Prothonotary’s
Order
[10]
After
reviewing the statement of defence as a whole and the paragraphs upon which the
Plaintiff seeks particulars, the Prothonotary was not satisfied of the need for
particulars and explained why. Having so concluded, the Prothonotary addressed
the alternative remedy requesting to strike paragraphs 10, 11, 12, 16, 17, 19,
22, 24, 25, 28 and 45(a) of the amended statement of defence and counterclaim
and dismissed the request after reasoning that she was “not satisfied that
the legal propositions contained or implied in the impugned paragraphs are
plainly and obviously bereft of any merit”.
Test on Appeal of Prothonotary’s
Decisions and on Motion to Strike
[11]
The Appeal
is made under rule 51(1) of the Federal Courts Rules. This rule does not
prescribe a standard of review. However, an appellant still faces a high
threshold test. That test was established by the Federal Court of Appeal in Canada
v. Aqua-Gem, [1993] 2
F.C. 425, and provides
that discretionary Order of Prothonotaries ought not to be disturbed on appeal
to a judge unless they are clearly wrong in the sense that the exercise of
discretion by the Prothonotary was based upon a wrong principle or upon a
misapprehension of the facts.
Rule 221(1) of the Federal Court Rules
[12]
The
plaintiff’s motion for an Order reversing the Order of the Prothonotary is made
pursuant to Rule 51, and the demand for striking out without leave to amend the
pleadings contained in the above mentioned paragraphs is made under Rule
221(1)(a) and (b) of the Federal Courts Rules. Rule 221(1) reads as
follows:
|
221.
(1) On motion, the Court may, at any time, order that a pleading, or anything
contained therein, be struck out, with or without leave to amend, on the
ground that it
(a)
discloses no reasonable cause of action or defence, as the case may be,
(b)
is immaterial or redundant,
(c)
is scandalous, frivolous or vexatious,
(d)
may prejudice or delay the fair trial of the action,
(e)
constitutes a departure from a previous pleading, or
(f)
is otherwise an abuse of the process of the Court,
and
may order the action be dismissed or judgment entered accordingly.
|
221.
(1) À tout moment, la Cour peut, sur requête, ordonner la radiation de tout
ou partie d’un acte de procédure, avec ou sans autorisation de le modifier,
au motif, selon le cas :
a)
qu’il ne révèle aucune cause d’action ou de défense valable;
b)
qu’il n’est pas pertinent ou qu’il est redondant;
c)
qu’il est scandaleux, frivole ou vexatoire;
d)
qu’il risque de nuire à l’instruction équitable de l’action ou de la
retarder;
e)
qu’il diverge d’un acte de procédure antérieur;
f)
qu’il constitue autrement un abus de procédure.
Elle
peut aussi ordonner que l’action soit rejetée ou qu’un jugement soit
enregistré en conséquence.
|
Analysis
[13]
The
statement of defence and the counterclaim is well detailed. I therefore have
no hesitation to accept the Prothonotary’s conclusion “that on its
face, nothing indicates that the Plaintiff would have difficulty understanding
the case it has to meet or to intelligently plead thereto. Absent such prima
facie vagueness or insufficiency, the Plaintiff had the onus of establishing
that, in the circumstances, the particulars were indeed necessary for it to
understand the defence or plead to it.”
[14]
The order
dismissing the request for particulars is therefore well founded.
[15]
Now
turning to the alternative remedy, the Court cannot ignore that the standard
applicable to a motion to strike as disclosing a reasonable cause of action is
a very high one. The moving party must satisfy the Court that the allegations
of fact, if proven, can support reasonable defence.
[16]
The Court
also agrees with the additional reasons given by the Prothonotary that, “when the attack is
directed, as is the case here, only to certain specific paragraphs of
the pleadings rather than the entire pleading, it is appropriate for the
Court to consider if the facts alleged – divorce from the propositions of
law of which they are alleged – are otherwise relevant to the issues in the
action. While points of law may be raised in pleadings, they are not essential
to pleadings – only allegations of facts are necessary. Motions to strike
should accordingly address only the propriety of the factual allegations, not
the points of law otherwise included in the pleadings.”
[17]
In her decision the
Prothonotary finds « …that, with the exception of the intentional or
reckless aspect of the allegations of fraudulent misrepresentation in
paragraphs 16 and 17 and the intention to abandon in paragraph 19, all facts alleged
in the impugned paragraphs are relevant to and reiterated in other,
unobjectionable part of the statement of defence and counterclaim, in
particular, the defence to the claims of confusion, passing off and
depreciation of good will».
[18]
The plaintiff insists
that it is well-settled law that a proper allegation of fraud requires a higher
level of material fact disclosure than other allegations of facts and that here
the defendants have laid no factual ground for alleging fraud in their
pleadings.
[19]
True in paragraph 17
of the Amended Statement of defence the defendant is alleging that « a
false declaration of use containing a fraudulent misrepresentation » was
filed in the course of obtaining the registration.
[20]
But as explained in
the decision rendered in WCC Containers Sales Ltd. v. Haul-All Equipment Ltd.
(2003), 28 C.P.R. (4th) 175, 2003 FC 962, at para. 25 [WCC], there are
two situations where a registration based on an application containing a false
statement of use will be held to be invalid and void ab initio: (a)
where the application contains a fraudulent misrepresentation; and, (b) where
the application contains a material false statement of use that is fundamental
to the registration. In the latter case, neither fraud nor an intent to deceive
is a necessary element. Therefore, the defendants’ allegation in paragraph 17
clearly falls under the first situation described in the WCC case cited
above.
[21]
Moreover, in their
Respondents’ Motion Record, the defendants announced that they do not intend to
prove fraud against the plaintiff but only that the application contained a
fraudulent misrepresentation. This should serve to reassure the plaintiff as to
the proof it has to overcome.
[22]
The Court agrees with
the defendants that since their allegations set out all the material facts
necessary to meet the test for invalidity set out in the WCC case, no
further particulars are necessary, and more so after the defendants’ recent
confirmation that they do not intend to prove fraud against the plaintiff.
[23]
This Court certainly
has jurisdiction to decide the issues raised by the parties. But it is only
upon hearing the merits of the various issues raised in the pleadings that the
Court will be in a position to value their merit. This should not be done prematurely
at this stage of the procedure but should instead be done at the hearing stage.
[24]
The plaintiff has not
convinced the Court that there is ground to intervene, annul the Prothonotary’s Order and
strike paragraphs 10, 11, 12, 16, 17, 19, 22, 24, 25, 28 and 45(a) of the Amended
Statement of Defence and Counterclaim.
[25]
Counsel for the
defendants did not appear at the hearing but did, however, notify the Court of
his absence and filed a Responding Record completed by a Book of Authorities. It
is therefore appropriate in these circumstances to fix costs of the motion
against the plaintiff at $500.00.
ORDER
FOR THESE REASONS THIS COURT
ORDERS that:
The motion is dismissed with
costs fixed at $500.00 against the plaintiff.
“Maurice E. Lagacé”
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