Docket: T-791-13
Citation: 2014 FC 26
Ottawa, Ontario, January 9, 2014
PRESENT: The Honourable Mr. Justice Zinn
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BETWEEN:
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299614 ALBERTA LTD.
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Applicant
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and
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FRESH HEMP FOODS LTD.
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Respondent
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REASONS FOR ORDER AND ORDER
(WITH RESPECT TO COSTS)
[1]
The Applicant’s appeal under section 56(1) of
the Trade-marks Act, RSC 1985, c T-13 [Act], of a decision by the
Registrar of Trade-marks to allow the Respondent’s trade-mark application and
to register the trade-mark, was dismissed by Judgment dated December 11, 2013.
Costs were awarded to the Respondent, in an amount to be determined following
receipt of the parties’ submissions.
[2]
It was held that the appeal was improperly brought under section 56 of
the Act and that the only way to remove a trade-mark from the register
is to initiate expungement proceedings under section 57. Specifically, it was
found, as was submitted by the Respondent, that once a trade-mark is
registered, it can only be expunged under section 57: Sadhu Singh Hamdard
Trust v Canada (Registrar of Trade-Marks), 2007 FCA 355, 286 DLR (4th) 472
at para 23 [Sadhu]. Expunging a registered trade-mark is not a remedy
that is available under section 56.
[3]
This application was filed on May 8, 2013. In
its submissions, the Respondent informs the Court of two relevant factors that
it says should lead to an increased award of costs.
[4]
First, it advises that it served the Applicant
with a formal offer to settle by letter dated July 10, 2013, on terms that were
more advantageous to the Applicant than the Judgment rendered. Accordingly,
pursuant to Rule 420 of the Federal Courts Rules [Rules], it
submits that it is entitled to its party and party costs to the date of the
offer and thereafter at double that rate (excluding disbursements).
[5]
Second, it advises that the Attorney General for
Canada, who had initially and improperly been named as a party, informed the
Applicant by letter dated May 24, 2013, that Sadhu “confirms that once a
mark is registered, the proper remedy to have it expunged is under s. 57 of the
Trade-Marks Act.” Although the application was discontinued as against
the Attorney General for Canada on August 7, 2013, it was maintained as against
the Respondent. The Respondent says that as Judgment accorded with the position
the Attorney General for Canada and the Respondent took as to the applicability
of Sadhu, the application was “improper, vexatious and unnecessary” and
it ought to be awarded double its party and party costs throughout.
[6]
The Applicant resists both submissions and takes
particular exception to the Respondent’s assertion that the application was
“improper, vexatious and unnecessary” and submits that it “would not have been
prudent” for it to have accepted the Respondent’s offer.
[7]
As to the offer, the fact that it may have been
imprudent for the Applicant to have accepted it, is irrelevant. The only
condition under the Rules is whether the successful party obtained
greater relief than the offer proposed, and it did in this case. Accordingly,
the Respondent would be entitled to its costs on a party and party basis to the
date of the offer and at double that rate (with respect to fees) thereafter.
[8]
As to whether the application was “improper,
vexations and unnecessary,” it cannot be said that the application was either
improper or vexatious. It appears to have been a “hail Mary pass” in an
attempt to find an expeditious way to void the Registrar’s decision. Had it
succeeded (as unlikely as that was), it would have resulted in a saving of time
and money for the Applicant. However, in the Court’s view, as reflected in the
Reasons for Judgment, it was evident that Sadhu was binding authority
that applied to the facts in this application, making the result self-evident.
As such, I agree with the Respondent that the application was unnecessary.
[9]
Therefore, in the exercise of my discretion, and
in light of the finding that the litigation was unnecessary and there was a
valid outstanding offer of settlement, I award double party and party costs
throughout.
[10]
The Respondent seeks costs of two counsel at the
hearing. This was not a complex matter and given the binding authority of Sadhu,
the Respondent was not required to engage two counsel and the Applicant should
not be penalized in costs by having to pay for both. Accordingly fees and disbursements
for only one counsel are allowed.
[11]
The Respondent incurred costs for travel and
accommodation in Vancouver overnight. The Applicant submits that Respondent’s
counsel could have travelled to Vancouver from Winnipeg the morning of the
hearing or appeared by video link and thus these expenses were unnecessarily
incurred. The Applicant selected the place of hearing - Vancouver - and did
not suggest that it be heard other than in person. In the Court’s view, it was
reasonable for counsel to travel the day before the next morning’s hearing,
particularly given weather issues prevalent in Canada in December.
[12]
The Applicant further notes that the Respondent
has failed to provide any receipts for the disbursements and it urges the Court
to disallow them as a result. I shall not do that; however, the Respondent is
required to support disbursements incurred by receipts.
[13]
I find that the final assessment of costs should
be reserved to the taxing officer, if the parties, given the directions herein,
are unable to agree on an amount.
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