Date: 20000114
Docket: T-1372-98
BETWEEN:
| THE REGISTERED PUBLIC ACCOUNTANTS |
| ASSOCIATION OF ALBERTA |
Plaintiff
| - and - |
| THE SOCIETY OF PROFESSIONAL ACCOUNTANTS |
| OF CANADA AND THE SOCIETY OF PROFESSIONAL |
| ACCOUNTANTS OF ALBERTA |
Defendants
REASONS FOR ORDER
MACKAY, J.:
[1] The plaintiff ("RPAAA") seeks an order extending the time for service of the Statement of Claim in this matter, issued on July 2, 1998, upon the defendant The Society of Public Accountants of Canada ("SPAC"), or in the alternative, an order granting the plaintiff leave to serve forthwith the Statement of Claim upon SPAC, notwithstanding that the prescribed time for service has lapsed. When the application was heard in Edmonton, the plaintiff also urged the Court to conclude that service upon SPAC should be deemed to have been effected in July1998, in which event the request for an extension of time is unnecessary.
[2] The motion arises, and was heard, in a context in which orders of the Court had issued (in the course) of the process of status review of outstanding actions, and this appears to have given rise to some confusion and to different perspectives of matters before the Court when the matter was heard. In the circumstances, it is appropriate to trace the procedural and some substantive background summarily, to provide understanding of the issues.
[3] In the action commenced by the plaintiff, RPAAA claims that its common law trade mark rights in the mark "R.P.A.", based upon use claimed since 1985, have been infringed by the defendants. SPAC is the owner of Canadian trade-mark registration no. TMA 406,988 for the trade-mark "R.P.A." in association with accounting services. Its application for registration was based on use in Canada since at least as early as 1989 with the associated services, and its trade-mark was registered on January 15, 1993.
[4] The statement of claim issued by the plaintiff on June 3, 1998 named as defendants SPAC, the defendant Society of Professional Accountants of Alberta ("SPAA"), which is said to be "an affiliate" of SPAC, and three named individuals who were the acting President, Vice President and Secretary Treasurer of SPAA. It is alleged that, without authority or consent of the plaintiff the defendants have appropriated and used the plaintiff's trade-mark notwithstanding that they knew or ought to have known of the plaintiff's continuous use of its mark. The plaintiff's claims for relief include a permanent injunction restraining each of the defendants from infringing the plaintiff's exclusive right to its trade-mark or from using the trade-mark in connection with accounting services, an order declaring the registered trade- mark of SPAC to be invalid, and directing its expungement from the Register, and an order that the Registrar register the plaintiff RPAAA as the owner of the trade-mark in the Register upon receipt of an appropriate application for registration.
[5] The statement of claim was served upon the three named individual defendants, then officers of SPAA, in July, 1998. It was not then sought to be served upon SPAC. It is said by the plaintiff that there were ongoing discussions about possible integration or co-operation between RPAAA and SPAA since July 1998, as there had earlier been with representatives of SPAC. Only in February 1999, after SPAA had served a notice of motion for summary judgment dismissing the plaintiff's action and for other relief, did the plaintiff seek to serve the statement of claim upon SPAC, by service on February 4, 1999 on a director of SPAC. Counsel for SPAC promptly advised RPAAA that the purported service was considered a nullity in view of Rule 203 of the Federal Court Rules, which provides:
| 203(1) A statement of claim shall be served within 60 days after it is issued. |
[6] By virtue of Rules 7(3) and 8(1) and (2) an extension of the time for service under Rule 203(1) requires approval of the Court on a motion to extend the time, which may be brought before or after the end of the period sought to be extended.
[7] No step was taken by the plaintiff after February 1999, until this motion in December, to seek an extension of time to serve the statement of claim upon SPAC, even though it was the party whose interests, as registered owner of the registered trade-mark, would be primarily affected if the plaintiff's action were successful. However, through the spring and early summer of 1999, SPAA's motion for summary judgment and other relief was dealt with by the Court, and after some adjournments, and withdrawal of the application for summary judgment, the Court struck the three named defendants from the action without prejudice to an application by the plaintiff that they again be added if there be evidence that their personal actions, apart from their actions on behalf of SPAA, were considered to infringe the rights claimed by the plaintiff.
[8] Thereafter, by Order dated August 25, 1999, RPAAA was directed to respond to notice of status review of its action, in accord with the Court's Rules. Counsel for RPAAA responded in writing on October 1, 1999. The written submissions do not directly deal with the issue of the lack of service of the statement of claim upon SPAC. On December 1, 1999 Mr. Justice Evans ordered that the action should continue as a specially managed proceeding, and that a schedule for discoveries be agreed within 14 days. Upon notice of that Order reaching SPAC, its counsel advised the Court registry, by letter dated December 7, 1999, that SPAC had not been served with the statement of claim. At that stage no judge or prothonotary had been designated as case manager of these proceedings and the letter from counsel for SPAC was put before the Court's duty judge, Mr. Justice Dubé, who, by Order dated December 15, 1999, directed:
| Ask the plaintiff's solicitor to file proof of service of the Statement of Claim on the defendant within sixty (60) days after issue under Rule 203, failing which the action will be dismissed. |
[9] Meanwhile, in Edmonton on December 14, 1999 RPAA filed the notice of motion and its motion record, to be returnable the following day in Edmonton, for an order for an extension of time to serve the statement of claim upon SPAC, the motion then adjourned on December 14 to be heard, and now heard, on January 10, 2000, that is, the motion now before this Court.
[10] The only other matters of some significance in the background are that there were discussions between some members of SPAC and RPAAA from at least 1993 until 1997 about possible cooperative or integrating arrangements for the two organizations but no such discussions had taken place since well before this action was initiated, aside from discussions said to have taken place between RPAAA and representatives of SPAA. Secondly, while SPAA may well have been a provincial affiliate of SPAC at an earlier date, by 1977, before the action was commenced, SPAA was separately incorporated and registered under the Societies Act of Alberta, a matter known to RPAAA as set out in its statement of claim.
The Issues
[11] Three issues are raised, two by the plaintiff and one by the defendant. The plaintiff argues that:
| 1. service of the statement of claim upon SPAC was effective in July 1998 by service upon SPAA; and |
| 2. in the alternative, the basis for an extension of time to serve the statement of claim is here met and the Court should now permit an extension, or it should authorize service upon SPAC notwithstanding that the time limited by the Rules has elapsed. |
The respondent argues:
| 3. that since the direction of Mr. Justice Dubé's order of December 15, 1999 has not been met, and the plaintiff acknowledges it did not serve SPAC in accord with Rule 203, the plaintiff's motion should be dismissed and its action as against SPAC should be dismissed in accord with the order of December 15. It is argued the plaintiff has not met the requirements, for status review under the Rules, and of the Court's order, and so its action, at least as against SPAC, should be dismissed. |
[12] I turn to the last of these issues first, to clarify the nature of the proceeding here underway.
The Nature of this Proceeding
[13] The Court is here concerned to dispose of the motion brought on notice and set down for hearing on January 10, 2000, after it was first set for hearing and then adjourned from December 15, 1999. That motion may have arisen in part from the impetus of the process of status review, but it is not raised directly in the course of status review. I acknowledge there is merit to SPAC's position, that is, that the plaintiff did not discharge its full obligation in its response to the notice of status review in this action involving more than one defendant, by failing to directly deal with the lack of service of the statement of claim upon the key defendant, SPAC, as owner of the registered trade-mark "R.P.A." However, that shortcoming is a matter I leave to be considered by the case management judge or prothonotary if it needs to be considered. These reasons do not deal with status review or with case management for the Court is here concerned to deal with the application brought on notice, for an extension of time.
[14] If the Court were to dispose of the plaintiff's motion on the basis of its review of requirements for status review, or the plaintiff's response to the Order of December 15, 1999, it would be usurping the role of the case management judge or the duty judge. It would not be dealing with the plaintiff's application on its merits, and it would foreclose the possible compliance of the plaintiff with the Order of December 15 by service of the statement of claim, with the Court's leave of that be granted, within an extended time as the Rules would permit.
Claimed Service upon SPAC
[15] As noted, the plaintiff claimed at the hearing that service upon SPAA and its officers ought to be deemed service upon SPAC. It is argued that the members of SPAA are, or were, members, of SPAC, that SPAA was a provincial affiliate of SPAC and that one of the directors of SPAA is also a director of SPAC.
[16] The argument, in my opinion, seeks to make whole cloth from a few threads. It ignores Rule 130(1), for service upon a corporation by serving an officer or director of the corporation. Here that was not attempted until February 1999, it was not done in July 1998 and service upon individuals or officers of SPAA in July 1998 did not constitute service on SPAC. Moreover, knowledge of one, or more, directors of SPAA of the action commenced against it could not constitute service upon SPAC merely because that director was a member of SPAC at the time or merely because at that time one other director of SPAA, who was not served, was also at the time a director of SPAC, if that was the case.
The Plaintiff's Motion for an Extension of Time
[17] The grounds to support an application for an extension of time for service of a statement of claim are well established. The applicant must demonstrate a continuing intention to pursue the claim, that there is an arguable case, and that there is no prejudice to the proposed defendant by granting the extension (see Gross v. Minister of National Revenue (Customs and Excise) (1998) 155 F.T.R. 91 at 95. The general principle to be considered is whether an extension of time is essential to ensure justice is done between the parties (see: Alcorn v. Canada (Commissioner of Corrections), Court File T-1945-97, 3 June 1998 (T.D.) Aircraft Technical Publishers v. ATP Aero Training Products Inc., Court file T-1458-95, 15 July 1998 (T.D.).
[18] Here the plaintiff urges that its service of the statement of claim upon other defendants, that is upon the SPAA and the three individuals originally named as defendants, and the continuing processing of the action against them, including preliminary steps ensuring ultimately the filing of a defence, the production of affidavits of documents and the dealing with those defendant's motions for summary judgment, all these are said to demonstrate the plaintiff's continuing commitment to pursue the action. These do so demonstrate, but with no reference to SPAC as a defendant.
[19] In written submissions for the plaintiff it is argued:
| The RPAAA has justifiable reasons for failing to serve the within Statement of Claim upon the SPAC within the time allotted by the Federal Court Rules, which include the SPAC, from the date of issue of the within Statement of Claim, inducing the RPAAA to attempt to resolve the within action without further litigation. |
No other reasons are suggested and I find no evidence by affidavit that SPAC, as an entity independent of SPAA and the latter's officers, took any action to induce RPAAA to try to resolve matters without further litigation. By affidavit of the President of SPAC, sworn January 7, 2000, it is acknowledged that there were informal discussions between certain officers of SPAC and RPAAA between 1993 and 1997, but those discussions were discontinued after 1997. Further, the President avers that he is not aware of any ongoing discussions between the two organizations since commencement of the plaintiff's action in July 1998.
[20] Weighed in the balance must be the plaintiff's failure to attempt to serve the statement of claim upon SPAC in accordance with the Rules until February 1989, and its failure thereafter, when that effort was rejected as not constituting valid service, to seek leave of the Court for an extension of time until a further ten months had elapsed. In my opinion that does not demonstrate a continuing intent to pursue SPAC as a defendant in this action even though it is acknowledged in written submissions in support of the motion for an extension of time that SPAC is a necessary party to the action and if it is not included the plaintiff would be unable to obtain the relief it seeks in the action. In my opinion the record does not demonstrate a continuing intention to include SPAC as a defendant in this action.
[21] As for the second requirement that the applicant for an extension of time show that there is an arguable case, I am not persuaded that, on the evidence before me, an arguable case is made out. It is urged that this issue has already been resolved by the determination in status review that the case should continue, but, whatever the implications of that decision may be for the plaintiff and SPAA, I am not persuaded that decision was made with reference to the fact that one defendant in the action, SPAC, had not yet been served with the statement of claim and thus had not been made a party.
[22] In this application the plaintiff must show an arguable case with the added burden of of meeting the requirements at trial set by s. 17(2) of the Trade-Marks Act, R.S.C.-1985, c. T-13, which provides:
| 17.(2) In proceedings commenced after the expiration of five years from the date of registration of a trade-mark or from July 1, 1954, whichever is the later, no registration shall be expunged or amended or held invalid on the ground of the previous use or making known referred to in subsection (1), unless it is established that the person who adopted the registered trade-mark in Canada did so with knowledge of that previous use or making known. |
[23] Further, under the Act, s. 3 provides:
| 3. A trade-mark is deemed to have been adopted by a person when that person or his predecessor in title commenced to use it in Canada or to make it known in Canada or, if that person or his predecessor had not previously so used it or made it known, when that person or his predecessor filed an application for its registration in Canada. |
[24] In the circumstances of this case, those statutory provisions require that to be successful at trial the plaintiff will be required, in order to establish invalidity of the registered mark of SPAC, that the organization or its named predecessors in title, with knowledge at that time of the plaintiff's use of its trade-mark, commenced to use the trade-mark "R.P.A.", now registered, here set out in the Certification of Authenticity issued by the Canadian Intellectual Property Office as "Used in Canada since at least as early as 1989 on services" (i.e., accounting services). While there is some correspondence with dates as early as 1991 exhibited with the plaintiff's affidavits, in my opinion there is no evidence in the record before me of knowledge of the use of the plaintiff's trade-mark in Canada that could be attributed to SPAC or its predecessors as early as 1989.
[25] Thus, in my opinion the plaintiff has not demonstrated by the evidence that there is an arguable case.
[26] I am prepared to accept that at least some officers of SPAC and thus the organization itself must have had knowledge of RPAAA's action and that in the circumstances of this case, particularly since it has barely begun to be prepared for trial there would be no real prejudice to SPAC in terms other than the loss of its opportunity to rely upon the Court's rules, to consider that it was not a party to this action because the plaintiff had, until now, failed to serve the statement of claim upon it. That opportunity is not one to be overturned lightly but if the plaintiff here showed an arguable case and a continuing intent to include SPAC as a defendant, justice between the parties would warrant the grant of an extension of time. Here I am not persuaded that the interests of justice do warrant an extension.
[27] For these reasons the plaintiff's application is dismissed.
[28] For the respondent it is urged that this result should carry solicitor/client costs. I am not persuaded that should be the case. The plaintiff sought, as it was entitled to do, leave of the Court to extend time for service. The application was not frivilous in the context of its action, even in the context of the process of status review that was initiated in August 1999.
[29] The defendant, respondent on the motion, is entitled to costs on the usual party and party basis, and the order now issued so provides.
"W. Andrew MacKay"
Judge
EDMONTON, Alberta
January 14, 2000.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO.: T-1372-98
STYLE OF CAUSE: The Registered Public Accountants
Association of Alberta v. The
Society of Professional Accountants
of Canada and The Society of Professional Accountants of
Alberta
REASONS FOR ORDER: MacKay, J.
DATE: January 14th, 2000
APPEARANCES:
Dale A. Strebchuk for the Plaintiff
Stephane E. Caron for the Defendants
SOLICITORS OF RECORD:
Peterson Krochak
Edmonton, Alberta for the Plaintiff
Gowling, Strathy & Henderson
Ottawa, Ontario for the Defendants