Date: 19980616
Docket: A-172-97
CORAM: STRAYER, J.A.
McDONALD, J.A.
HENRY, D. J.
IN THE MATTER OF the Trade-marks Act (R.S.C. 1985, c. T-13)
- and -
IN THE MATTER OF Trade-mark Registration No.
TMA 249,436 for the trade-mark SHILING OIL
BETWEEN:
LING CHI MEDICINE CO. (H.K.) LTD.
Appellant
(Applicant)
- and -
MOHAN PERSAUD, LATCHANDAI PERSAUD and
1013579 ONTARIO INC. dba
UNIVERSAL FOODS AND MERCHANDISE CO.
Respondents
(Respondents)
HEARD at Toronto, Ontario, Monday, June 15, 1998
JUDGMENT delivered from the Bench at Toronto, Ontario, Monday, June 15, 1998
REASONS FOR JUDGMENT BY: STRAYER, J.A.
Date: 19980616
Docket: A-172-97
CORAM: STRAYER, J.A.
McDONALD, J.A.
HENRY, D. J.
IN THE MATTER OF the Trade-marks Act (R.S.C. 1985, c. T-13)
- and -
IN THE MATTER OF Trade-mark Registration No.
TMA 249,436 for the trade-mark SHILING OIL
BETWEEN:
LING CHI MEDICINE CO. (H.K.) LTD.
Appellant
(Applicant)
- and -
MOHAN PERSAUD, LATCHANDAI PERSAUD and
1013579 ONTARIO INC. dba
UNIVERSAL FOODS AND MERCHANDISE CO.
Respondents
(Respondents)
REASONS FOR JUDGMENT
(Delivered from the Bench at Toronto, Ontario
on Monday, June 15, 1998)
STRAYER, J.A.:
1� We are all of the view that this appeal must be allowed.
2� For the purposes of this appeal we assume, without deciding, that laches could be a complete defence to an application for expungement. It is open to further consideration in an appropriate case, however, whether this equitable defence should preclude the enforcement of the statutory requirement in subsection 18(1) of the Trade Marks Act that the person registered as owner of a trade-mark be entitled to the registration. The learned trial judge found here that the respondents were not entitled to secure registration of this trade-mark. It is far from apparent that a proceeding to seek expungement on this ground is solely one of equity to which the equitable defence of laches would be a complete defence.
3� Be that as it may, and confining our decision to the availability of the laches defence in these circumstances, we believe the learned trial judge erred in law in not applying the equitable doctrine of "clean hands" in this case. She held that there had been a fiduciary duty of the respondents as agents to make full disclosure to the appellant as principal before the respondents registered the appellant's trade-mark in Canada. She correctly identified this as being required so that the appellant could give an informed consent. She further held that no such disclosure had been made prior to the registration. While she also found that the letter of September 6, 1984 was "clear and unambiguous" and therefore put the appellant on notice after the fact of wrongful registration, we respectfully disagree that in equity this somehow relieved the respondents from the consequences of their original and continuing abuse of the fiduciary relationship. Notwithstanding the "disclosure" which the trial judge found to have occurred in 1984, the respondents had clearly acted in bad faith and continued to assert a trade-mark to which they were not entitled. Having done so as a matter of equity they could not rely on the defence of laches because he who invokes an equitable defence must have done equity in respect of the same matter.
4� Further, we are not satisfied that there was any evidence to support the finding by the learned trial judge that the respondents had been prejudiced by the appellant's failure to challenge, sooner, the trade-mark of the respondents. The respondents do not deny that the costs they incurred were required to be incurred by them under the terms of the contract with the appellant. If they continued to incur costs after the appellant learned of the respondents' registration of the trade-mark in Canada, those were costs which they were in any event contractually obliged to incur as long as they had the exclusive right to distributorship in Canada. Any injustice that may have flowed from the cancellation of the contract by the appellant in 1993 would have to be remedied within the context of a contractual claim and has nothing to do with the appellant's failure to move sooner to expunge the trade-mark.
5� The appeal will therefore be allowed. As the trial judge found that the respondents were not entitled to secure registration of the trade-mark SHILING OIL, and as we find that there was no lawful defence to the appellant's application for expungement, we will order the trade-mark to be expunged. Costs will be awarded to the appellant here and below.
"B.L. Strayer"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-172-97
STYLE OF CAUSE: LING CHI MEDICINE CO (H.K.) LTD.
- and -
MOHAN PERSAUD ET AL.
DATE OF HEARING: JUNE 15, 1998
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: STRAYER, J.A.
Delivered from the Bench at Toronto, Ontario
on Monday, June 15, 1998
APPEARANCES:
Mr. Kelly Gill
For the Appellant
Mr. Edmund A. Clarke
For the Respondents
SOLICITORS OF RECORD:
Gowling, Strathy & Henderson
4900 Commerce Court West
P.O Box 438, Station C
Toronto, Ontario
M2H 6M2
For the Appellant
Fox, Clarke, Dollack & Souza
2000 - 145 King Street West
Toronto, Ontario
M5H 2B6
For the Respondent
FEDERAL COURT OF APPEAL
Date: 19980616
Docket: A-172-97
BETWEEN:
LING CHI MEDICINE CO (H.K.) LTD.
Appellant
-and-
MOHAN PERSAUD ET AL.
Respondents
REASONS FOR JUDGMENT