Casella Wines PTY Limited v. Constellation Brands Canada, Inc., 2015 FC 403 (Harrington, J.)
March 30, 2015
Bob H. Sotiriadis for Casella Wines
Mortimer Freiheit and Bruno Barrette for Constellation Brands
Casella Wines had brought an action for trade-mark infringement against Constellation Brands. Casella owns the registered Canadian trade-mark Yellow Tail & Kangaroo Design, which has been used in Canada in association with the sale of Yellow Tail Wine. It alleged that the Defendant sells wine in Canada in association with a confusing trade-mark and get-up. The allegedly-infringing wine is sold under the brand name Wallaroo Trail, which is also a registered Canadian trade-mark, and the label on the Wallaroo Trail bottles depicts a kangaroo.
The Defendant brought two interlocutory motions. The first motion was an appeal of an order from a Prothonotary that the Defendant’s representative be required to answer certain questions put to him on discovery. These questions concerned profits and expenses, and the provenance of the grapes used in the Defendant’s wines. The second motion was for a bifurcation order pursuant to which the trial would only proceed on the merits, with a subsequent reference on damages or profits, if necessary.
The Court dismissed the appeal of the Prothonotary’s Order. Case law has established that there are only two scenarios in which the Federal Court may interfere with a discretionary order by a Prothonotary: if the order raises questions that are vital to the outcome of the final issue in the case, or if the order was clearly wrong, in that the exercise of discretion was based on a wrong principle or a misapprehension of the facts. In the Court’s view, an order to answer questions to which objections were made on examination for discovery was not vital to the outcome of the case. The Court also determined that the Prothonotary’s discretion had not been exercised on a basis that was clearly wrong. It further noted that in any event, were it to exercise its discretion de novo, it would also order that the questions at issue be answered.
The Court went on to dismiss the motion to bifurcate the proceedings at this point in the case. In rendering this decision, it pointed to the fact that examinations for discovery were nearly complete, and the fact that the Plaintiff had yet to elect for either damages or an accounting of profits. It also noted that determination of damages or accounting of profits, as the Plaintiff might elect, were manageable, as the allegedly-infringing products had only been sold in Ontario, Québec, and the Maritimes. Taking into account all of these factors, together with the fact that bifurcation can cause significant delay in proceedings, the Court concluded that it was not prepared to issue a bifurcation order at this stage in the litigation.
By: Kathryn May