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SCANWELL INTERNATIONAL INC. |
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SCANWELL FREIGHT EXPRESS (HK) LIMITED |
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SCANWELL CONTAINER LINES (HK) LIMITED AND |
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SCANWELL FREIGHT EXPRESS CANADA INC. |
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SCANWELL CONTAINER LINES CANADA INC. AND |
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BUYERS CONSOLIDATORS EXPRESS |
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REASONS FOR ORDER AND ORDER |
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[1] This order concerns a motion by the plaintiffs to set aside an order of Mr. Morneau, prothonotary, striking out the statement of claim herein and cancelling the interlocutory injunction scheduled for September 23 and 24, 1998.
[2] Mr. Morneau, prothonotary, decided to strike out the statement of claim of the plaintiffs based on the absence of jurisdiction of this Court.
[3] I have reviewed all the documents that were filed with the motion, I have also reviewed the within representations of the two parties and the authorities submitted by the parties.
[4] First of all, I refer to the case Canada v. Aqua-Gem Investments Limited, because this appeal raises a question of law and also because the decision of the prothonotary raises a question that is vital to the final determination of the case, this appeal must be heard de novo.
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Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo. |
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[5] The statement of claim, that has been struck out by the prothonotary, involves unregistered trade-marks. It is clear that the Federal Court has jurisdiction over passing-off action involving unregistered trade-marks as referred by the plaintiffs' counsel in Asbjorn Horgard A/S v. Gobbs/Nortac Industries Ltd. et al., MacGuigan J. stated:
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There was no need for the business to register its mark in order to protect its right to use the trade mark and prevent the misuse of its trade mark by other businesses. The passing-off action was the enforcement mechanism available for the protection of trade mark rights. Without the passing-off action, common law trade mark rights would have little value. |
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[6] I also carefully read the decision by Justice Addy in the case Fruit of the Loom, Inc. v. Chateau Lingerie Mfg. Co., particularly on page 53 where he states:
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In the first place, in the case at bar, the contract specifically provides for a method of terminating it upon notice of default followed by notice of termination. This, indeed, forms an integral part of the contract. In other words, the parties have previously agreed, in writing, as to the method of termination. The question is, therefore, not one of rescission by judgment of the court but termination by notice upon default as contractually provided for. In the second place, it would be nothing short of ludicrous if, wherever a licence is to be terminated, since the licence is always granted contractually, that the owner of the mark would first have to have the contract declared at end or rescinded by a provincial court before applying to the Federal Court of Canada for relief regarding the mark. It has been stated on many an occasion that the mere fact that an issue concerns property and civil rights in some way, does not automatically remove it from federal jurisdiction or from the jurisdiction of the Federal Court of Canada, as it is difficult to conceive of any court judgment which does not in some way affect property in civil rights. In any event, I am of the view that the case of Cheerio Toys & Games v. Dubiner (1965), 48 C.P.R. 226, 32 Fox Pat. C. 37 [1996] S.C.R. 206 clearly establishes this court's jurisdiction in the present action. |
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[7] This case was affirmed on appeal.
[8] The plaintiffs' counsel refers as well to another case, Singer et al. Enterprise Car and Truck Rentals Ltd. v. Enterprise Rent-a-car Co. et al. , where Pratte J.A. stated:
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Counsel for the appellants concedes that, under the common law, a plaintiff in a passing off action need not prove that he has used his mark in Canada or that he has made it well known in Canada. He says, however, that the situation is different when the action is brought in the Federal Court which has no jurisdiction to hear and decide an action for passing off based on the common law. It is now established that paragraph 7(b) is constitutionally valid only insofar as it protects trade-marks. In spite of the generality of its terms, that provision must, therefore, be read as referring only to the protection of trade-marks, registered or unregistered. |
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[9] It is clear in my view that there is also a litigation relating to licensing agreement between the two parties, this is an issue that a judge will have to decide on the merits of the claim, not at this stage.
[10] The Court is also aware, as a matter of fact, that the defendant Scanwell Canada has filed a provisional, interlocutory and final injunction and declaration and detailed affidavit and exhibits in the Quebec Superior Court.
[11] This Court is also aware that the plaintiff has also filed an application for registration of a trade-mark with the Registrar of Trade-marks of Canada on March 27, 1998 and same as yet to be published for opposition here in Canada.
[12] The statement of claim by the plaintiffs was filed in the Federal Court of Canada on June 19, 1998.
[13] It is clear that the two cases are in parallel in the Federal Court of Canada and in the Superior Court of Quebec and have been filed almost at the same time.
[14] As it has been mentioned by the defendants' counsel in paragraphs 16 and following of his written representations and confirmed by Sgayias:
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...suffice it to say that an action under section 20 must be truly founded on applicable federal law and must not be an action in contract or tort arising incidentally to a trade mark, patent or copyright action...In every case, it will be a question of whether the matter is founded or rooted in the federal legislation as opposed to being principally a claim between subjects in contract or tort. |
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[15] I disagree with the defendants' counsel and I believe that the remedies which are sought by the plaintiffs in their statement of claim are rooted in the breach of a disposition of the Trade-marks Act and that the breach of contract is incidental.
[16] On the request by the defendants asking for particulars, I think the request is well-founded and that the plaintiffs should provide detailed particulars with respect to paragraph 7 of their statement of claim.
[17] For these reasons, THIS COURT ORDERS THAT:
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- The decision of Mr. Morneau, prothonotary, striking out the statement of claim be set aside; |
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- The motion of the defendants to stay all proceedings in the present instance be dismissed; |
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- The schedule be set so that the hearing of the interlocutory injunction will take place on March 17 and 18, 1999 at 9:30 in Montreal, Quebec; |
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- The motion of the defendants to order plaintiffs to provide detailed particulars be granted; |
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- The plaintiffs provide detailed particulars with respect to paragraph 7 of their statement of claim as to how, where, when and under what circumstances they would have used the name "Scanwell" in Canada since 1981, and as to how and when they would have made their use of the said name known in Canada since 1981; |
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- The plaintiffs have a delay of 15 days from the date of this order to provide the particulars; |
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- The defendants are allowed an extension of time to file their statement of defence and counterclaims. The delay shall be of 15 days commencing on the day the particulars are provided to the Court. |
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1 [1993] 2 F.C. 425 (F.C.A.), at p. 463.
2 (1987), 14 C.P.R. (3d) 314 (F.C.A.), at p. 328.
3 (1982), 63 C.P.R. (2d) 51 (F.C.T.D.); aff'd (1983), 78 C.P.R. (2d) 194 (F.C.A.).
4 66 (1998), 79 C.P.R. (3d) 45 (F.C.A.) at p. 48.
5 Sgayias, David, Federal Court Practice, Carswell 1998, pp. 127-128.