Trademarks Act – Section 12(1)(b) – Geographical Place Name – Clearly Descriptive – Registrability – Federal Court of Appeal
We acted as appellate counsel for AFOD Ltd., a company which imported various fish and shrimp based products including bagoong from the Philippines. AFOD labeled their products as “Lingayen Style”. The Appellant, MC Imports Inc. sued AFOD for infringement of its registered trademark “Lingayen”. The Lingayen region in the Philippines is well known for producing fish and shrimp based products including bagoong.
AFOD brought a summary trial motion. On hearing the motion, Justice Rennie dismissed MC Imports Inc. claim and struck the trademark on the basis that they were not entitled to improperly monopolize a geographic place name which clearly described the origin of the goods and that was known as a source of such goods.
Justice Rennie, also noted that there was “arguably a jurisprudential divide” about the appropriate test and who made up the class of “ordinary consumer” as that phrase was used in determining whether there had been confusion.
In the Federal Court of Appeal, we successfully argued, on AFOD’s behalf, that there was not such a divide and that the case law could be reconciled on the basis that section 12(1)(b) of the Trademark’s Act was an absolute prohibition on using a geographic place name as a Trade Mark where that name is clearly descriptive of the place of origin of the products being sold.
The decision is now the leading case in Canada on this issue. View Reasons for Judgment
Rule 10-1 Preservation of Property – Legal Test – Requirement for a Specific Fund – Requirement for an “Arguable Case”
The Rule 10-1 Application by the Plaintiff sought to compel our clients to pay funds from a multimillion-dollar settlement into court. We were successful in having the application defeated. We successfully argued that the Plaintiffs did not meet any of the requirements for the Order they sought including establishing that “the claim did not establish a serious question to be tried” and was a “thinly veiled attempt to improperly obtain security before judgment”. We were also successful in obtaining an Order that the Plaintiff pay the costs of the application to our clients in any event of the cause. View Reasons for Judgment
Commercial Contracts – Enforceability – Essential Terms – Enforcement of Penalty Clause – We succeeded at trial in obtaining a $1,000,000.00 judgment for our client based on penalty clauses of $500,000.00 in each of two contracts for the purchase and sale of commercial properties. Under what came to be known as the Swap Agreement, our client was to sell a commercial building in Chilliwack and purchase a hotel in Williams Lake. The other party to the Swap Agreement failed to meet several pre-conditions to the swap of properties and ultimately failed to complete. Our client sued. The other party counterclaimed for damages it alleged it had sustained when our client was in possession of the hotel for approximately 6 months. The defendants alleged the contract, which was admittedly poorly drawn, was not clear and did not properly describe the parties to the contracts. The court accepted our argument that all the parties knew who the contracting parties were and the contract was enforceable. The court found the $500,000 penalty clause in each of the contracts was reasonable and akin to a real estate deposit. The court determined that based on all the facts, even if the clauses were penalties, the defendant was not entitled to equitable relief. The court awarded our client $1 million dollars plus costs. View Reasons for Judgment
Certificates of Pending Litigation (CPLs) – Once a CPL is Discharged By Court Order it is an Abuse of Process to File a New CPL
Sourisseau & Co. won a decision in the B.C. Court of Appeal to have Certificates of Pending Litigation filed against our client’s property discharged for being an abuse of process. We had previously obtained an order that the Plaintiff post security of $150,000.00 to maintain their CPLs against the property. The Plaintiff failed to post the security as required by the order and their CPLs were discharged. The Plaintiff then filed new CPLs in the Land Title Office two days later and subsequently posted the security called for in the order. On an application to have the new CPLs removed, the Plaintiff argued that as it had subsequently posted the security, our clients were in the same position as if the Plaintiff had complied with the original order. The Chambers Judge declined to discharge the new CPLs.
Because of the nature of the Supreme Court order that resulted in the discharge of the CPLs initially, that order did not include an injunction to prevent the Plaintiff from filing further CPLs as is typically the case. Despite the lack of injunction against the Plaintiff, the Court of Appeal accepted our argument that once the CPLs had been discharged pursuant to a court order, the Plaintiff had no right to file further CPLs against the property and that doing so was an abuse of the court’s process and unlawful self-help.
Alleged Contract for Purchase of Property – CPLs – Successful Application to Strike the Plaintiff’s Claim For Abuse of Process
Sourisseau & Co. successfully obtained an order, four weeks prior to a 10 day trial, entirely dismissing the Plaintiff’s claim for over $3M. The Plaintiff alleged a breach of contract to purchase property and filed CPLs against the subject property. We obtained a series of court orders requiring the Plaintiff to provide information and have their representatives attend for examinations for discovery. The Plaintiff breached those orders. We applied to the BC Supreme Court to have the Plaintiff’s claim dismissed and court gave the Plaintiff a further opportunity to comply but ordered that the Plaintiff comply with a set of conditions and pay our client’s special costs.
The Plaintiff continued to fail to comply with the court’s orders and directions regarding document production and examinations for discovery.
We brought a further application to strike the Plaintiff’s claim. The Court found that the Plaintiff had continued to frustrate the process of the court and had violated orders. The Court found that our clients had done all they could do to bring the matter to trial and the Plaintiff’s conduct remained egregious. The Court ordered that the Plaintiff’s claim be struck. We had previously obtained an order from the BC Court of Appeal discharging the CPLs.
Real Estate Litigation – Repudiation of a Contract – Contractual Interpretation
Our client sold development property to the Plaintiff which was being developed into building lots. The Plaintiff buyer sought to get out of the deal prior to closing, first on the basis of a breach of the Real Estate Development and Marketing Act (REDMA) and later claiming a condition precedent had not been fulfilled causing the contract to lapse. Our client accepted the repudiation and kept the deposit of $680,000.00. The Plaintiff sued for return of the deposit and, at a summary trial (view Reasons for Judgment on Summary Trial) we were successful in having the Plaintiff’s claim dismissed. The Plaintiff appealed and we were successful in having the appeal dismissed and confirming our client’s entitlement to keep the deposit with costs throughout (view Reasons for Judgment dismissing the Appeal).
Georges Sourisseau and Russell Robertson recently co-wrote an article published in the May 2012 issue of The Advocate, about the limitation period for “delayed-demand” promissory notes and summarizes the recent B.C. Court of Appeal decision, Ewachniuk Estate v. Ewachniuk. View Article
Real Estate Litigation – Deposits – Conditions Precedent: our client had sold development property. The buyer sought to get out of the deal and made an improper claim for the return of its deposit and then sued. We successfully defended the suit and our client retained the deposit. The court held that the buyer’s improper claim had repudiated the purchase and sale agreement, entitling the seller to terminate the contract, retain the deposit, and counterclaim for any additional damages from the buyer’s failure to close. View Reasons for Judgment
Contract Law – Purchase and Sale of Business – Contract Interpretation – Assessment of Damages: on appeal, we successfully upheld the trial decision in which the court had held that the Defendant had breached a Share Purchase Contract. The Court of Appeal rejected the Defendant’s argument that the trial judge had failed to consider their counterclaim for “liabilities” it claimed the Plaintiff was responsible for. The court also rejected the Defendant’s argument that they trial judge had been wrong to estimate the Plaintiff’s damages. It was proper and necessary to do so because the Defendant had failed to keep proper records, making it difficult or impossible for the Plaintiff to prove its loss. The court also rejected the Defendant’s attempt to submit new accounting evidence on appeal. The court adjusted the award to take into account a shareholders loan which both parties agreed existed, but which had not been dealt with by the trial judge. View Reasons for Judgment
Civil procedure – Civil contempt – Corporations: We successfully defended an application for contempt leveled against our client and a corporate defendant. The plaintiff had previously obtained an order that the corporate defendant retain auditors and produce audited statements for the previous four years. The company had previously ceased all operations and had no liquid or tangible assets. The plaintiff argued that the personal defendant should be held in contempt because he was the president of the company and owed the company money through his own holding company. The court held that contempt must be proven beyond a reasonable doubt, and the Plaintiff had not proven that the company had the means to pay for the audit. There was uncertainty with respect to the alleged debt, and the plaintiffs did not show that the personal defendant, in his capacity as director and officer of the company, or otherwise, committed contempt of the previous order. Personal defendant was awarded costs of the application. View Reasons for Judgment
Contract Law – Purchase and sale of shares – interpretation of agreement – assessment of damages:
We were successful at trial advancing a claim for the balance of the purchase price owing on a share purchase contract and defending a counterclaim of over $2,000,000 based on the defendants proposed interpretation of the agreement. The agreement called for the purchasers to account to the seller for the “profits” earned up to the date of sale. No accounting was done and no monies paid. When our client sued, the defendant claimed that the business had in fact lost money over the relevant period and that the term ‘liabilities’ as used in the contract required a substantial repayment by our client. The Plaintiff’s case relied on the application of the law regarding the consideration of the factual matrix in interpreting a contract and, in this case, the proper interpretation of the terms “profits” and “liabilities” in the context of a handwritten agreement and the subsequent formal contract prepared by the lawyers. The Court also applied the principal of omnia praesumuntur contra spoliatorem (everything is presumed against the spoiler or wrongdoer) in accepting the Plaintiff’s analysis of the proper approach to assessing damages. View Reasons for Judgment
Enforcement of Promissory Note – Appeal: On Appeal, we successfully upheld the trial decision granting the administrator of an estate judgment enforcing a $750,000.00 delayed demand promissory note. The limitation period for a demand promissory note or demand obligation begins to run as soon as the obligation is incurred. The promissory note at issue on this appeal was payable one year after demand. The issue on appeal was whether the trial judge was correct in finding that the limitation period did not begin to run until one year after demand was actually made. The issues raised on appeal required the analysis and review of the development of the law over the past two-hundred years.
View Reasons for Judgment
Enforcement of Promissory Note: We were successful at trial advancing a claim by an Administrator of an Estate to enforce a demand delayed promissory note in the amount of $750,000. The promissory note was given in 1980 by a son to his parents and secured the purchase price of shares in the family business in 1980. The claim was not brought until 2008 after both parents had died. The son claimed that the debt had been forgiven by his late mother and was, in any event, barred by the Limitation Act. The trial court rejected both defences.
View Reasons for Judgment
Wills and Undue Influence – Appeal: On appeal we successfully upheld the trial decision finding an adult son had procured a Will from his elderly mother by undue influence. The appeal considered the issue of whether the trial judge had properly applied the law in his assessment of the evidence. The Court of Appeal found the trial judge did correctly apply the law and properly made the finding of undue influence and upheld the judgment at trial.
View Reasons for Judgment
Wills and Undue Influence: We were successful at trial in overturning a Will, prepared by a disbarred lawyer for his elderly mother, on the basis the Will had been procured by undue influence. The judgment provides a good review of the principles required to prove undue influence, at trial, and the application of those principles in very unique circumstances.
View Reasons for Judgment
Discharge of Certificates of Pending Litigation (CPLs): In this case we represented a number of Corporations and individuals whose land had been encumbered by CPLs in excess of $2.2 million dollars. The Plaintiff had brought the underlying claim on the basis that monies had been misappropriated to acquire or improve lands owned by the Corporate and personal Defendants. The Defendants asserted there was no merit to the underlying claim and the CPLs were improperly brought. We successfully applied to have the CPLs removed, in their entirety, without conditions or security of any kind.
Oppression, Family Business, and Minority Shareholders: We successfully obtained a declaration that two adult sisters, the minority shareholders in a family company, had been oppressed by their older brother who was the majority shareholder who the minority asserted operated the Company and took the benefit of the Company, as if it were his own. The judgment, in making a finding of oppression, reviews the test for making a finding of oppression in the circumstances of a closely held family Company. The issue of the appropriate remedy was dealt with subsequently in Runnalls v. Regent Holdings Ltd., 2010 B.C.S.C. 1106.
View Reasons for Judgment
Oppression, Family Business, Minority Shareholders, and Remedies: This case involved the determination of the appropriate remedy where the two minority shareholders in a family company had been oppressed by the behavior of the majority shareholder.The Court made an Order that their shares be purchased and fixed to the price for the purchase of those shares which included a component for monies the majority shareholder had improperly used for his own benefit in the course of operating the Company.
View Reasons for Judgment
The Ewachniuk trilogy is an example of a complex dispute involving a variety of claims and legal issues that has spanned over 6 years. Mr. Sourisseau represented two sisters whose brother, a former lawyer, drafted a will for their elderly mother; the will sought to compel them to give up their shares in the family company to their brother or lose their inheritance. The sisters’ claim for undue influence was successful in Supreme Court1 and upheld by the Court of Appeal2; the will was set aside and the sisters were awarded their equal share of their mother’s estate.
The sisters also held shares in the family business, but were in a minority position and had never realized any benefit from those shares. Their brother controlled the company. Their petition for oppression was successful and the Supreme Court ordered their shares to be purchased at fair market value including an amount to compensate for money improperly taken from the company by their brother, the majority shareholder, over the years.3,4
Finally, the brother had obtained the shares, which gave him control of the company, from his parents in 1980. Pursuant to the contract for the sale of the shares, he agreed to pay $750,000.00 for the shares and secured that promise by a promissory note payable one year after demand. The administrator of the estate made demand, but payment was refused; the brother alleged both forgiveness of the note and that the limitation period had expired. The administrator of the estate retained Mr. Sourisseau to attempt to enforce the promissory note. The Supreme Court5 granted judgment upholding the promissory note and the obligation to pay the $750,000.00 to the estate. The brother appealed and the Court of Appeal6 upheld the judgment.
This was an example of a case where the parties were entrenched and litigation was the only viable option.
Sale of a Business – Fraudulent Misrepresentation: We represented the plaintiffs in their action to recover $563,001 in damages for losses sustained due to relying on fraudulent representations about the beauty spa business they had purchased from the defendants. The business failed and was closed within six months of the purchase. The Court ruled that the defendants were liable for the $563,001 claimed plus interest and costs. The defendant had fraudulently misrepresented the number and value of pre-paid treatments sold by the corporate defendant, amounting to up to $1 million in retail value. Furthermore, the defendants breached the terms of the written agreement of purchase and sale by failing to provide training and familiarization so as to enable the plaintiffs to operate the business. The court found that the defendant also intentionally misled the plaintiffs about the adequacy of the staff and was reckless and dishonest in representing that the plaintiffs would be charged the same price she paid for supplies. The Court ordered damages for loss of the purchase money and consequential loss. The plaintiff was entitled to the return of the amount it paid, after deducting the proceeds of sale of the equipment, plus business losses in operating the business.
View Reasons for Judgment