Delay in Filing Statement of Claim Allowed
Princess Group Inc. and Princess Auto Ltd. v. Canadian Standards Association 2009 FC 926 (Harrington, J.)

September 17, 2009

Joseph Etigson and Michael Carey for the Applicants, Princess Group Inc. and Princess Auto Ltd.
Peter Wells for the Respondent, Canadian Standards Association

The Applicants, Princess Group Inc. and Princess Auto Ltd. (hereinafter, “Princess”), brought a motion for an extension of time to apply for judicial review of a decision of the Registrar of Trade-marks issued 27 years ago.

The Registrar’s decision of interest related to a 1982 decision giving public notice under Section 9(1)(n)(iii) of the Trade-marks Act of the adoption and use by the Canadian Standards Association (“CSA”) of the mark CSA as an official mark for services. The decision only became relevant to Princess when it was served with a Statement of Claim by the CSA on April 23, 2009 filed under docket number T-648-09. In the Statement of Claim, the CSA alleged, among other things, that Princess had used its design mark (a large “C” enclosing smaller letters “s” and “a”) and its official mark (CSA) without authorization.

Princess has since filed a Statement of Defence in which it alleged, among other things, that the CSA’s registered design mark is invalid and that the official mark should not have been accepted or published by the Registrar.

While the invalidity of a registered trade-mark is clearly something that can be raised by way of defence, there has been significant uncertainty as to how to similarly deal with an official mark. The prevailing view is that an official mark is best quashed by an application for judicial review (pursuant to Sections 18.1(1) and (2) of the Federal Courts Act). It was for this reason that Princess chose to bring an application for judicial review on June 1, 2009, 38 days after being served with the Statement of Claim.

The Prothonotary’s Decision

The extension of time to apply for judicial review was granted on the basis that Princess had only become “directly affected” (defined in Sections 18.1(1) and (2) of the Federal Courts Act), and thus only had standing to challenge the CSA’s official mark, when infringement of the mark was alleged at the time the Statement of Claim was served (April 23, 2009). Princess’ application was thus only eight days out of time. It was also held that the CSA would not suffer any prejudice and that Princess had a legitimate case to advance regarding the validity of the official mark.

The decision was based on a four-part test set out in Canada (AG) v. Hennelly (1999), 244 N.R. 399 (FCA) which set out factors to be considered in deciding whether or not to grant an extension of time: “(i) whether the party seeking the extension has shown a continuing intention to pursue the application; (ii) whether the party seeking the extension of time has an arguable case; (iii) whether a reasonable explanation has been provided for the delay; and (iv) whether there is evidence of prejudice arising that will affect the opposing party”.

Justice Harrington’s Decision

Justice Harrington was required to exercise his discretion de novo as the questions raised in the motion were vital to a final issue of the case. If the extension request were refused, the judicial review application would be terminated and Princess would be unable to mount a full defence to the action. Thus, the issue was clearly vital.

When the CSA became aware of Princess’ alleged use of its trade-mark and official mark it put Princess on notice of its registered design mark, but not of its official mark. In early 2009, the CSA sent a draft Statement of Claim to Princess but again did not refer to the official mark. Princess was only put on notice of the CSA’s official mark with the issuance and service of the Statement of Claim on April 23, 2009.

The CSA’s main argument was that with its original correspondence in 2007, Princess had been put on sufficient notice to become “directly affected” by the Registrar’s 1982 official mark decision. Essentially, the CSA was of the view that Princess could, and should, have made inquiries at that time.

Justice Harrington refused this argument on the basis that the 1982 Registrar’s decision was never communicated to Princess by the Registrar and thus Princess was not aware of it until April 2009 when it received the Statement of Claim. Justice Harrington was thus satisfied that the 30 day period under Sections 18.1(1) and (2) of the Federal Courts Act had only begun to run on April 23, 2009. Ultimately, Justice Harrington held that the explanation for Princess’ delay was reasonable as attacking the publication of an official mark through judicial review is not an obvious way to proceed. Under the circumstances, it was held that Princess’ solicitors could be forgiven the eight day delay (which would in no way prejudice the CSA) and the appeal was dismissed.

By: Andrea Flewelling, Gowling Lafleur Henderson LLP