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T-831-82
Algonquin Mercantile Corporation (Plaintiff)
v.
Dart Industries Canada Limited (Defendant)
Trial Division, Reed J.—Toronto, January 23; Ottawa, February 2, 1984.
Practice — Stay of execution -- Application to stay execu tion of judgment ordering industrial design expunged from register — Judgment appealed, but no motion for stay of execution — Design expunged — Application allowed — Delay in seeking stay due to mistaken belief appeal triggering stay — Plaintiff acting expeditiously since notice of expunge - ment — Delay not sufficient to deny relief — More likely to mislead public by allowing expungement to stand should appeal be successful — "Or other relief' in R. 1909 encom passing stay of execution pending appeal, notwithstanding judgment executed — Plaintiff meeting burden of proof Omark Industries, Inc. v. Sabre Saw Chain (1963) Limited, [1977] 2 F.C. 550; 32 C.P.R. (2d) 145 (T.D.) considered — Respective damages to parties considered — Defendant's product not infringing plaintiff's registered design so can continue to manufacture and sell — No substantial argument addressed to R. 341A — Federal Court Rules, C.R.C., c. 663, RR. 341A, 1909.
Jurisdiction — Federal Court — Trial Division — Applica tion to stay execution of judgment after design expunged from register — Wilkinson Sword (Canada) Limited v. Juda, Arthur (Continental Watch Import Co.), 119671 1 Ex.C.R. 421; 34 Fox Pat. C. 169 and The King v. Consolidated Distilleries Ltd., 11931] Ex.C.R. 125 distinguished — Cases relating to situation before creation of Federal Court of Appeal — Deal ing with applications for stay of execution of Exchequer Court decisions appealed to Supreme Court of Canada, and different legislation — Industrial Design Act, R.S.C. 1970, c. 1-8, s. 22 — Trade Marks Act, S.C. 1952-53, c. 49, s. 56(1).
Industrial design — Application to stay execution of judg ment after design expunged from register — Application allowed — Plaintiff acting expeditiously since notice of expungement — Plaintiff satisfying burden of proof — Respective damages to parties considered — Industrial Design Act, R.S.C. 1970, c. I-8, s. 22.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Wilkinson Sword (Canada) Limited v. Juda, Arthur (Continental Watch Import Co.), [1967] I Ex.C.R. 421; 34 Fox Pat. C. 169; The King v. Consolidated Distilleries Ltd., [1931] Ex.C.R. 125.
CONSIDERED:
Re Occhipinti et al. and Discipline Committee of the College of Pharmacy, [1970] 1 O.R. 741 (C.A.); Omark Industries, Inc. v. Sabre Saw Chain (1963) Limited, [1977] 2 F.C. 550; 32 C.P.R. (2d) 145 (T.D.); Marketing International Ltd. v. S. C. Johnson and Son, Limited, [1977] 2 F.C. 618; 35 C.P.R. (2d) 226 (C.A.).
REFERRED TO:
Re Great Northern Capital Corporation Ltd. et al. and City of Toronto et al. (1973), 1 O.R. (2d) 160 (H.C.).
COUNSEL:
Ronald E. Dimock for plaintiff.
G. A. Macklin, Q.C. for defendant.
SOLICITORS:
Sim, Hughes, Toronto, for plaintiff.
Gowling & Henderson, Ottawa, for defend
ant.
The following are -the reasons for order ren dered in English by
REED J.: This is an application for the suspen sion of part of a judgment of Mr. Justice Mahoney rendered on June 2, 1983 [1984] 1 F.C. 246 (T.D.). It is the part of that judgment which ordered the plaintiff's [hereinafter sometimes referred to as the applicant] registered design expunged from the register which underlies this application.
An appeal from that part of Mr. Justice Mahoney's judgment was filed by the plaintiff on August 17, 1983 but no motion was brought at that time for a stay of execution. The plaintiff appears to have thought that the taking of the appeal was sufficient to trigger a stay. The plain tiff subsequently received a letter from the Depart ment of Consumer and Corporate Affairs, dated December 23, 1983, stating that its registered design had been expunged pursuant to the June 2, 1983 judgment.
Counsel for the respondent [hereinafter some times referred to as the defendant] argued that a stay of execution or suspension should not now be
granted because: (1) this Court did not have juris diction to grant such a motion; alternatively (2) the applicant could not now seek a stay of execu tion when he had not done so during the past six months and before the Registrar had acted to expunge the design; and (3) in any event, the applicant had not satisfied the burden of proof required of it.
In support of his first argument counsel cited the decision of Thurlow J. (as he then was) in Wilkinson Sword (Canada) Limited v. Juda, Arthur (Continental Watch Import Co.), [1967] 1 Ex.C.R. 421; 34 Fox Pat. C. 169 where an order for a stay of execution of the expungement of a trade mark registration was refused.
It was argued that the Wilkinson decision stood for the proposition that, in the case of an expunge - ment order, unless a party applied for a stay of judgment before judgment was rendered there was no authority in the Court under Rule 1909 [Fed- eral Court Rules, C.R.C., c. 663] to stay execu tion. The Court's jurisdiction in this regard, it was argued, was different from its jurisdiction with respect to equitable remedies or money awards.
After a careful reading of the Wilkinson case (supra) and the decision in The King v. Con solidated Distilleries Ltd., [1931] Ex.C.R. 125 to which it refers, I am of the view that these cases do not lay down so wide a rule. They relate to the situation existing before the Appeal Division of the Federal Court was created and deal with applica tions for a stay of execution for Exchequer Court decisions which had been appealed to the Supreme Court of Canada. In addition, the Wilkinson case dealt with subsection 56(1) of the Trade Marks Act [S.C. 1952-53, c. 49] which accorded the Court authority to strike out or amend entries in the register which do not "accurately express or define the existing rights of the person appearing to be the registered owner of the mark." (Under- lining added.) In the present case the application is made under section 22 of the Industrial Design Act [R.S.C. 1970, c. I-8]. That section is some what more broadly framed and authorizes the Court to "make such order for making, expunging or varying any entry in any such register as the Court thinks fit...." (Underlining added.)
Accordingly, I am of the view that the Wilkinson case does not preclude the granting of the relief sought.
With respect to the argument that the applicant had many months and several opportunities during that time to bring a motion for stay of execution, I do not think that the delay in this case is sufficient to deny the relief claimed. The plaintiff appeared to be operating on the mistaken assumption that no action was necessary by it to preserve the status quo pending appeal. The first notice it had that this was not the case was the letter of December 23, 1983 from the Department of Consumer and Corporate Affairs. Since that time the applicant has acted expeditiously to have the issue resolved.
Equally, I am not persuaded that significant harm to the public would now occur should the plaintiff's registration be reinstated. It was argued that members of the public would be misled and would be operating on false assumptions if they had searched the register subsequent to the expungement signalled by the December 23 letter and before any order staying the June 2, 1983 judgment might be given. It seems to me there would be even greater opportunity for public mis apprehension if the plaintiff's design remains expunged and the decision of Mr. Justice Mahoney were eventually to be overturned by the Federal Court of Appeal.
It was also argued that while the Court might have had jurisdiction to stay or suspend judgment before the Registrar had acted to expunge the design registration this was no longer the case. The judgment having been executed it was argued an order under Rule 1909 would now be an amend ment or alteration to the judgment and not a stay or suspension. In this regard I would note that while counsel for the defendant called attention to the existence of Rule 341A, counsel for the plain tiff did not address any substantial argument to that Rule.
Rule 1909 provides:
Rule 1909. A party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief against such judgment
or order, and the Court may by order grant such relief, and on such terms, as it thinks just. [Underlining added.]
I could find no authority directly on point but
the words "or other relief ' would seem broad enough to encompass the relief claimed in this case: a stay of judgment pending appeal and an order rectifying the register of industrial designs nunc pro tunc. Of some interest is the decision of Mr. Justice Jessup of the Ontario Court of Appeal in Re Occhipinti et al. and Discipline Committee of the College of Pharmacy, [1970] 1 O.R. 741. The learned Justice stayed the execution of an order expunging the registration of pharmaceutical chemists pending appeal of the original judgment. This appears to have been done at a time after the expungement was made since that order was dated November 1, 1969 and the judgment carries the date November 3, 1969. That decision of course was made in reference to the Ontario Rule 506 [Rules of Pratice, R.R.O. 1960, Reg. 396] which does not have the benefit of the words "or other relief' which occur in Rule 1909. I note with respect to the decision of Mr. Justice Jessup that his order was given out of an abundance of caution since in Ontario a stay of execution (subject to conditions and exceptions) occurs automatically with the bringing of an appeal. Such automatic stay of execution pending appeals is the rule in several jurisdictions.
I would not want to conclude without making reference to counsel's argument on the burden of proof. Three cases were cited: Omark Industries, Inc. v. Sabre Saw Chain (1963) Limited, [1977] 2 F.C. 550; 32 C.P.R. (2d) 145 (T.D.); Re Great Northern Capital Corporation Ltd. et al. and City of Toronto et al. (1973), 1 O.R. (2d) 160 (H.C.); Marketing International Ltd. v. S. C. Johnson and Son, Limited, [1977] 2 F.C. 618; 35 C.P.R. (2d) 226 (C.A.). Particular reference was made to com ments in the Omark case, at page 554 [F.C.]; at page 147 [C.P.R.]:
On an application of this kind, the burden on the applicant is greater than that of a party seeking an interlocutory injunction ....
In the case of an interlocutory injunction, how ever, the respective damage to the two parties is an important consideration. This factor was con sidered in the Omark case and in both the Great Northern Capital case (supra) and the Marketing International case (supra). In the latter Chief Justice Jackett speaking for the Federal Court of Appeal said at page 621 F.C.; at pages 230-231 C.P.R.:
In our view, where an injunction has been granted by a final judgment, prima facie, it should remain in force until that judgment has been found, on appeal, to be wrong.
However, there are cases where the "interests of justice" require interference.... Where the preponderance of irrepa rable detriment to the defendant flowing from maintaining the injunction in force pending appeal (if the judgment should turn out on appeal to be wrong) in relation to the irreparable detriment to the plaintiff, if any, flowing from suspending the injunction pending appeal (if the judgment should turn out to be correct) is such that the interests of justice require that the injunction should be suspended pending appeal, then the Court should exercise its discretion to do so.
In the present case virtually no harm would occur to the defendant as a result of a stay of judgment. The disputed industrial design was reg istered in February, 1980. The plaintiff subse quently commenced manufacture and sale of the cooking appliance to which the design related. On February 9, 1983 the plaintiff brought an action against the defendant alleging that it was produc ing a product that infringed the registered design. Mr. Justice Mahoney's decision of June 2, 1983 found that the defendant's product did not infringe the plaintiffs registered design, that the two appli ances did not look very much alike at all, in addition, that the plaintiffs design was not regis- trable because it had been published in Canada more than one year prior to its registration. Thus the defendant can manufacture and sell its non- infringing product regardless of whether the plain tiffs registered design is reinstated pending appeal or not. In addition, as noted above the position of the public at large is more consistently maintained if the design is reinstated. In the circumstances I think the plaintiff has met the burden of proof.
Accordingly I would allow the plaintiffs application.
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