Federal Court Decisions

     T-565-96

BETWEEN:

     MAX RITTENBAUM INC., d/b/a CLEAN-RITE PRODUCTS CO.

     Applicant

AND:

     CANADIAN TIRE CORPORATION, LIMITED

     Respondent

     REASONS FOR ORDER

JOYAL, J.:

     This is an appeal by the Respondent, Canadian Tire Corporation Limited, against an order of the Associate Senior Prothonotary Giles which dismissed the Respondent's motion seeking an order (a) directing the trial of the issue of whether the Respondent's trade-mark registration for DETAILER'S CHOICE should be expunged, or (b) in the alternative, granting leave to the Respondent to cross-examine the affiants of the two affidavits filed by the Applicant, Max Rittenbaum Inc., in connection with its expunged application.

     The nub of the problem is quite simple: the Applicant and the Respondent re fighting over the use in Canada of the trade-mark DETAILER'S CHOICE. However, the manoeuvres by the parties to attain their objectives are quite intricate. Therefore, to better understand the facts, it might be useful to recount the procedural history of the case.

     Before doing so, it is important to indicate that the case encompasses two parallel proceedings. First, there is the expungement proceeding initiated by the Applicant pursuant to section 57 of the Trade-mark Act, R.S.C. 1985, c. T-13 (hereinafter "the Act") in order to expunge the Respondent's trade-mark for DETAILER'S CHOICE from the trade-mark registry. Secondly, there is the opposition proceeding instituted in the Trade-Marks Office by the Respondent against the Applicant's application for registration of its trade-mark DETAILER'S CHOICE. The appeal herein arises within the latter proceeding.

Procedural History:

A.      Expungement proceeding:

1.      August 24, 1992:      the Respondent applies for registration of the trade-mark DETAILER'S CHOICE in connection with its new line of automotive accessories.

The searches initiated by the Respondent in the Trade-Mark Office revealed no registrations or applications for the trade-mark DETAILER'S CHOICE. The Respondent claims it had no knowledge of automotive cleaning accessories bearing the trade-mark DETAILER'S CHOICE being offered for sale in Canada.

2.      Dec. 23, 1993:      The Applicant applies for registration of the trade-mark DETAILER'S CHOICE. In its application, the Applicant claims to have used the trade-mark in association with automotive cleaning accessories (towels, brushes, chamois, chamois replacements, washing mitts and polishing cloths) since as early as April 1992.

3.      Dec. 2, 1994:      The Respondent's trade-mark was registered for use in association with "automotive accessories, namely sponges, shop towels, chamois and washmitts".

4.      March 7, 1996:      The Applicant applies to expunge the Respondent's trade-mark registration No. TMA 436,546 for the trade-mark DETAILER'S CHOICE.

The Applicant alleges that the Respondent is not entitled to registration because its trade-mark is confusing with the Applicant's trade-mark which has purportedly been used in the past in Canada.

In support of its application, the Applicant files the affidavits of Jeffrey A. Rittenbaum and Ken Orser.

5.      May 17, 1996:      The Respondent files its reply to the Applicant's motion, as well as the accompanying affidavits of Katherine M. Dimock and Laurie Finlay.

The Respondent maintains that the Applicant has not provided adequate and credible evidence to show that the trade-mark DETAILER'S CHOICE was used by the Applicant prior to August 24, 1992; and in the alternative, the evidence provided by the Applicant with respect to use of the trade-mark in Canada prior to August 24, 1992, does not show use in the ordinary course of trade.

6.      March 25, 1997:      The Respondent brought a motion seeking an order directing trial of an issue of whether its trade-mark registration TMA 436,456 for DETAILER'S CHOICE should be expunged or, in the alternative, leave to cross-examine the applicant's affiants (Rittenbaum and Orser) on their affidavits.

7.      April 18, 1997:      Associate Prothonotary Giles dismissed the aforementioned motion. No written reasons were given. It appears from the submissions of the parties that the Prothonotary might have stated his reasons orally.

8.      May 9, 1997:      The Respondent seeks an order setting aside the order of the Prothonotary.

B.      Opposition Proceeding:

1.      Dec. 5, 1994:      The Respondent institutes opposition proceedings against the Applicant's trade-mark application for DETAILER'S CHOICE.

2.      July 25, 1996:      The Applicant moves to stay the opposition proceedings made against its application by the Respondent.

3.      August 6, 1996:      By way of order, Madame Justice McGillis stays the opposition proceedings pending the determination of the expungement proceedings.

Issues:

     The Respondent raises two issues in its brief:

1.      The Prothonotary erred in law in failing to consider whether the trial of an issue or, in the alternative, cross-examination on the affidavits, were necessary to determine the issues in controversy between the parties and, in particular, whether the evidence filed by the applicant in support of the expungement proceedings is credible.

2.      Alternatively, it is submitted that the Prothonotary erred in finding that this was not an appropriate case in which to grant leave to cross-examine the affiants on the basis that it is preferable for the Respondent to file affidavit evidence in reply.

Arguments of the Parties:

     Expungement procedures are instituted pursuant to section 57 of the Act. Usually, such procedures are determined summarily on evidence adduced by affidavit. However, section 59(3) of the Act also provides that the Court "may order that any procedure permitted by its rules and practice be made available to the parties". It is Rule 327 of the Federal Court Rules which enables the Court, upon any motion, to direct the trial of any issue arising out of the motion and to give any directions with regard to pre-trial procedure, the conduct of the trial and the disposition of the motion as may seem expedient.

     It is the Respondent's claim that the credibility of the affiants is a key issue in this matter and can only be tested if a trial of the issue is directed to determine whether the Respondent's trade-mark registration No. TMA 435,456 for DETAILER'S CHOICE should be expunged. It also argues that the Prothonotary did not recognize the importance of the property rights at issue which cannot be dealt with summarily. Specifically, the Respondent refers here to decisions of the Court rendered pursuant to Rule 704, which have held that where there are issues of credibility and complex fact situations, affidavit evidence is not sufficient and such matters should not be determined in the absence of viva voce evidence and cross-examination¹.

     In the alternative, the Respondent maintains that all of the relevant facts will not be before the Court without cross-examination on the affidavits, as the matters at issue will not be within the knowledge of the Applicant. The Respondent identifies eight statements made in the affidavits of Mr. Rittenbaum and Mr. Orser which are allegedly ambiguous, confusing and require clarification².

     On the other hand, the Applicant argues that the Prothonotary's decision is not reviewable because the order did not deal with a question vital to the final issue of the case, since regardless of the outcome of the motion, the case would proceed to consider the application for expungement. Further, the Applicant argues that the Prothonotary committed no error of law in issuing the discretionary order.

Conclusion:

     As in all matters relating to procedural conflicts, the strategies of opposing parties must perforce give way to the higher cause of the proper administration of the case so as to ensure, in a measure reasonably possible, that the ends of justice may be met. On the facts before me, it is my respectful view that whatever may be the knowledge of the Applicant herein, it cannot be said to be reasonably countered by reply affidavit on the part of the Respondent, the related fields of enquiry being within the exclusive knowledge of the Applicant.

     In consequence, the appeal is allowed in part and the Respondent is hereby given leave to cross-examine the Applicant's affiants. A formal Order was issued herein on September 16, 1997.

     Costs to the Respondent.

     L-Marcel Joyal

     _________________________

     J U D G E

O T T A W A, Ontario

October 8, 1997.

__________________

¹      The Respondent refers in particular to Hayden Manufacturing v. Canplas Industries Ltd. (1996), 68 C.P.R. (3d) 186 (F.C.T.D.).

²      See Affidavit of Stevan Novoselac, Respondent's Motion Record, Tab 4 at pages 3-4.