Date: 20000201
Docket: T-1604-95
BETWEEN:
ILLVA SARONNO S.p.A.
Plaintiff
- and -
PRIVILEGIATA FABBRICA MARASCHINO
"EXCELSIOR" GIROLAMO LUXARDO S.p.A.,
GIROLAMO LUXARDO MARASCHINO CANADA
LTD., SAVERIO SCHIRALLI AGENCIES LIMITED
and VANRICK CORPORATION LIMITED
Defendants
REASONS FOR ORDER
O"KEEFE J.:
[1] This is an appeal under s. 51 of the Federal Court Rules, 1998, by the Defendants from the order of the Prothonotary, Mr. Roger R. Lafrenière, dated December 14, 1999. The Prothonotary ordered that:
| 1. Pursuant to Rule 107(1), any question as to the extent of the infringement of any right, any question as to the damages flowing from the infringement of any right, any question as to the profits arising from the infringement of any right and any question as to apportionment (collectively the "deferred issues"), except with respect to the issue of goodwill, shall be the subject of a separate determination to be conducted after the trial of the remaining issues in this action, if it then appears that the deferred issues need to be decided. |
| 2. Pursuant to Rules 107(2) and 247(b), there shall be no further oral or documentary discovery on the deferred issues until after conclusion of the trial on the remaining issues; such discovery will resume after said trial, if it then appears that the deferred issues need to be decided. |
| 3. In the event that a separate determination of the deferred issues is to proceed following the trial of the remaining issues, the Plaintiff shall have the right to all documentary and oral examination for discovery in respect of the matters at issue in the separate determination, prior to having to make any election as to whether it will be seeking damages or an accounting of profits; provided that any discovery done prior to the date of this Order shall form part of the record in said further discovery and the further discovery will proceed from where the previous discovery left off. |
| 4. Without limiting the generality of any party"s discovery obligations, each party shall secure and preserve for production herein any of the following documents that are currently in, or that in the future come within, its possession, power or control: |
| (a) annual financial statements; |
| (c) income tax returns, including all schedules thereto; |
| (d) purchase orders received from Canadian customers for the party"s amaretto at issue in this action; |
| (e) credit notes and commission calculation documents reflecting commissions paid to Canadian representatives referable to the party"s amaretto at issue in this action; |
| (f) situaziones and mastrinos relating to dealings with the party"s Canadian customers for the amarettos in issue and the party"s Canadian representatives; |
| (g) documents evidencing the nature, amount and date of expenditures by each Defendant which it seeks to have deducted in the accounting; and |
| (h) the entire ACCPAC records and data base maintained by the Defendants Saverio Schiralli Agencies Limited ("SSAL") and Vanrick Corporation Limited ("Vanrick"); |
| and this obligation shall last until the final conclusion of all aspects of this action, or the conclusion of the trial or other separate determination of the deferred issues, whichever is earliest. |
| 5. The costs of this motion are to the Plaintiff in the event of the cause. |
| 6. The case management conference is adjourned to a date to be fixed by the Judicial Administrator. |
[2] The statement of claim alleges that the Plaintiff is incorporated under the laws of the Republic of Italy and it carries on the business of manufacturing, packaging, marketing and selling alcoholic beverages.
[3] In its statement of claim the Plaintiff alleges that the Defendants have infringed its rights under the Trade-Marks Act, R.S.C. 1985, c. T-13 by the manufacture, importation, marketing and distribution in Canada of a liqueur with a name and Get-up that is confusingly similar to that of the Plaintiff"s product.
[4] The Defendants have been extensively discovered but these discoveries are not yet complete.
[5] The Plaintiff has not yet been discovered.
[6] Both parties appear to have documents that have not yet been produced.
Law
[7] The application before the Prothonotary was made pursuant to Rule 107 of the Federal Court Rules, 1998 which states:
| 107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately.
|
107. (1) La Cour peut, à tout moment, ordonner l'instruction d'une question soulevée ou ordonner que les questions en litige dans une instance soient jugées séparément.
|
| (2) In an order under subsection (1), the Court may give directions regarding the procedures to be followed, including those applicable to examinations for discovery and the discovery of documents.
|
(2) La Cour peut assortir l'ordonnance visée au paragraphe (1) de directives concernant les procédures à suivre, notamment pour la tenue d'un interrogatoire préalable et la communication de documents.
|
| [8] It is generally accepted that to obtain an order under s. 107 the standard stated by Evans J. in Oleva Saronno v. Privilegiata Fabbrica Maraschino "Excelsior"1 at p. 6 needs to be met: |
| [14] Accordingly, on the basis of previous authority and in light of the changes introduced by the 1998 Rules, I would formulate the test to be applied under Rule 107 as follows. On a motion under Rule 107, the Court may order the postponement of discovery and the determination of remedial issues until after discovery and trial of the question of liability, if the Court is satisfied on the balance of probabilities that in the light of the evidence and all the circumstances of the case (including the nature of the claim, the conduct of the litigation, the issues and the remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits. |
| [9] The jurisprudence in relation to appeals of a prothonotary"s discretionary decision has been stated by the Federal Court of Appeal in Canada v. Aqua-Gem Investments Ltd.2 at p. 454: |
| I am in agreement with counsel for the appellant that the proper standard of review of discretionary orders of prothonotaries in this Court should be the same as that which was laid down in Stoicevski for masters in Ontario. I am of the opinion that such orders ought to be disturbed on appeal only where it has been made to appear that |
| (a) 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, or |
| (b) in making them, the prothonotary improperly exercised his discretion on a question vital to the final issue of the case. |
| [10] I have reviewed the decision of the prothonotary and find that he applied the correct standard for a decision to bifurcate under Rule 107. He stated at page 2 of his order: |
| The Plaintiff has established on a balance of probabilities that savings of expense and time are sufficiently likely as to justify departing from the general principle that all issues in a proceeding should be dealt with together. |
| I am satisfied that, based on evidence before me and all of the circumstances of this case, severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits. |
| [11] The Defendants argued that no bifurcation of liabilities and remedies should take place as their own application for bifurcation of an earlier dated was dismissed. A review of the decisions of Justice Evans in the appeal of that order of the prothonotary shows that the appeal was dismissed due to a lack of evidence to meet the test stated by Evans J. for that case. |
| [12] The Defendants also argued that the prothonotary erred in law in determining that goodwill and damages are necessary elements of the tort of passing off. Reference to paragraph 1 of the prothonotary"s order shows that he exempted Goodwill and allowed questions to be asked about goodwill. With respect to damages being a necessary element of the tort of passing off, I would adopt the position stated in Hughes on Trade Marks3 at paragraph 76: |
| The Supreme Court of Canada has reduced these elements to three, namely: |
| 1. a goodwill or reputation attached to the plaintiff"s goods or services in the mind of the public with the name in question such that the name is identified with the plaintiff"s goods or services; |
| 2. A misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that the goods or services are those of or authorized by the plaintiff; |
| 3. The plaintiff has or is likely to have suffered damage. |
| Once elements (1) and (2) above are shown, damage is presumed; the intention of the defendant is immaterial, although intention may have some effect as to damages. |
| Thus the Plaintiff is not required to prove damages in order to succeed in an action for passing off as damages are presumed if the first two elements are met. |
| [13] I am satisfied that the prothonotary considered the proper factors in order to grant an order pursuant to s. 107(1) of the Federal Court Rules, 1998 and that he had the authority under s. 107 to make the other directions contained in his order. |
| [14] Having made the above findings, I am of the opinion that the appeal from the order of the prothonotary should not be allowed. Therefore, the order of the prothonotary shall not be set aside. |
| [15] I reach this conclusion as the prothonotary"s order is not clearly wrong in the sense that his exercise of discretion was not based on any wrong principle or upon a misapprehension of the facts. Nor did he, when making his order, improperly exercise his discretion on a question vital to the final issue of the case. |
| [16] It follows that the Defendants request for an order that the Parties proceed to trial adducing evidence on all issues is not granted. |
| [17] The Plaintiffs shall have its costs of this motion in an amount to be agreed upon between the Parties and failing agreement the costs may be taxed. |
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: ILLVA SARONNO S.p.A. |
- and -
| PRIVILEGIATA FABBRICA MARASCHINO "EXCELSIOR" GIROLAMO LUXARDO S.p.A., GIROLAMO LUXARDO MARASCHINO CANADA LTD., SAVERIO SCHIRALLI AGENCIES LIMITED and VANRICK CORPORATION LIMITED |
| DATE OF HEARING: MONDAY, JANUARY 31, 2000 |
| PLACE OF HEARING: TORONTO, ONTARIO |
| REASONS FOR ORDER BY: O"KEEFE J. |
DATED: WEDNESDAY, FEBRUARY 2, 2000
| APPEARANCES: Mr. Steven G. Mason |
| SOLICITORS OF RECORD: McCarthy Tétrault |
| Toronto Dominion Bank Tower |
FEDERAL COURT OF CANADA
Date: 20000202
Docket: T-1604-95
Between:
Plaintiff
- and -
| PRIVILEGIATA FABBRICA MARASCHINO "EXCELSIOR" GIROLAMO LUXARDO S.p.A., GIROLAMO LUXARDO MARASCHINO CANADA LTD., SAVERIO SCHIRALLI AGENCIES LIMITED and VANRICK CORPORATION LIMITED |
Defendants
__________________
1 (1998) 84 C.P.R. (3d) 1 (F.C.T.D.).
2 [1993] 2 F.C. 425 (F.C.A.).
3 Roger T. Hughes, Q.C. Hughes on Trade Marks , Markham, Ontario, Butterworths Canada Ltd., 1984.