Date: 20030417
Docket: T-1816-01
Neutral citation: 2003 FCT 451
Montreal, Quebec, April 17, 2003
Present: The Honourable Madam Justice Danièle Tremblay-Lamer
BETWEEN:
BAUER NIKE HOCKEY INC.
Plaintiff
and
TOUR HOCKEY AND
ROLLER DERBY SKATE CORPORATION
Defendants
REASONS FOR ORDER AND ORDER
[1] This is a motion brought by the plaintiff Bauer Nike Hockey Inc., ("Bauer") for summary judgment against the defendants Tour Hockey ("Tour") and Roller Derby Skate Corp. ("Roller Derby").
[2] On or about October 11, 2001, Bauer filed a Statement of Claim against Tour and Roller Derby alleging, inter alia, infringement of Canadian Trade-mark Registration No. TMA 512, 683 for the trade-mark SKATE-BLADES DESIGN.
[3] On or about May 13, 2002, Tour and Roller Derby filed a Statement of Defence and Counterclaim in response to Bauer's Statement of Claim.
[4] On or about August 15, 2002, the solicitors for Tour and Roller Derby sent a letter to the solicitors for Bauer. The letter stated that Tour and Roller Derby were willing to admit to infringement and consent to Judgment and that they were also willing to pay damages fixed in the amount of $2,500 CDN, with each party bearing its own costs. The letter was marked "without prejudice".
[5] In a letter dated September 3, 2002, solicitors for Bauer accepted the settlement offer as detailed in the August 15, 2002 letter of the solicitors for Tour and Roller Derby. The letter stated that the solicitors for Bauer would prepare the Motion Record for Judgment on Consent of the Defendants which they would forward to the solicitors for Tour and Roller Derby for review, and that in the interim, to forward a cheque for $2,500 CDN to the order of "Smart & Biggar in Trust".
[6] On or about October 9, 2002, the solicitors for Bauer sent to the solicitors for Tour and Roller Derby, a Draft Motion Record for Judgment on Consent of the Defendants, and a Draft Notice of Continuance.
[7] In an email dated December 12, 2002, the solicitors for Bauer wrote to the solicitors for Tour and Roller Derby indicating that more than two months had elapsed since the Draft Motion Record for Judgment on Consent of the Defendants and the Draft Notice of Continuance were forwarded. They asked to advise them whether the intentions of their clients had changed.
[8] In a letter dated January 14, 2003, solicitors for Bauer indicated to the solicitors for Tour and Roller Derby that they still had not received a response to the settlement and had not received the promised cheque of $2,500 CDN.
[9] In a January 14, 2003 email, solicitors for Tour and Roller Derby informed the solicitors for Bauer that they would send a letter regarding the proposed settlement by the end of the week.
[10] In a January 15, 2003 email, solicitors for Bauer objected to the use of the phrase "proposed settlement" and stated that they had accepted Tour and Roller Derby's offer of settlement of August 15, 2002 by their letter dated September 3, 2002.
[11] In a letter dated January 16, 2003, solicitors for Bauer informed the solicitors for Tour and Roller Derby that it was their understanding from the recent exchange of emails that Tour and Roller Derby no longer wished to abide by the settlement that had been reached on September 3, 2002.
[12] On January 20, 2003, solicitors for Tour and Roller Derby sent correspondence, marked "without prejudice", to the solicitors for Bauer attaching a motion record with an amended Consent Order. The correspondence explained why Tour and Roller Derby objected to the wording of the draft documents that accompanied the October 9, 2002 letter of the solicitors for Bauer.
[13] In a letter dated January 24, 2003, solicitors for Tour and Roller Derby asked the solicitors for Bauer whether the terms of the Consent Order forwarded on January 20, 2003 were acceptable to Bauer.
[14] On January 24, 2003, the solicitors for Bauer forwarded to the solicitors for Tour and Roller Derby, a letter marked "without prejudice", with a finalized Motion Record for Judgment on Consent of the Defendants.
[15] On February 11, 2003, solicitors for Tour and Roller Derby sent a letter, marked "without prejudice", to the solicitors for Bauer indicating that their clients would only agree to the terms as proposed in the January 20, 2003 correspondence.
[16] Bauer submits that its motion for summary judgment should be granted on the basis that the parties had reached an agreement to settle. In their letter of August 15, 2002, Tour and Roller Derby agreed that they were willing to admit to infringement and consent to judgment and that they were also willing to pay damages fixed in the amount of $2,500 CDN, with each party bearing its own costs. In reply, Bauer accepted this settlement offer in its letter dated September 3, 2002.
[17] Tour and Roller Derby submit that these letters are not admissible as evidence to this Court. According to Tour and Roller Derby, these letters are subject to privilege as they were produced solely in the context of privileged settlement discussions.
[18] Three conditions must be present for a court to recognize that communications in furtherance of a settlement are privileged: (a) a litigious dispute must be in existence of within contemplation; (b) the communication must be made with the express or implied intention that it would not be disclosed to the court in the event negotiations failed; and (c) the purpose of the communication must be to attempt to effect a settlement (Sopinka, Liederman, and Bryant, The Law of Evidence in Canada, 2nd Ed. (1999) at page 810).
[19] Offers of settlement exchanged between parties that meet the above criteria are subject to privilege. The rational behind protecting such communications is so that parties will not be prejudiced in the event that negotiations fail. In this manner, a party's offer to settle would not be capable of being invoked by the opposing party at trial as evidence of admission of liability. If this were the case and such communications were not protected by privilege, then few parties would be willing to engage in offers to settle for fear that such offers could later be used against them.
[20] However, where a dispute arises as to the existence of a settlement, it is necessary for the Court to have access to the documents in order to resolve the conflict. In such circumstances, the documents can be entered as evidence in order to determine whether the parties reached a settlement.
[21] As stated in Sopinka, Lederman and Bryant, The Law of Evidence in Canada, at page 816:
If the negotiations are successful and result in the consensual agreement, then the communications may be tendered in proof of the settlement where the existence or interpretation of the agreement is itself in issue. Such communications form the offer and acceptance of a binding contract, and thus may be given in evidence to establish the existence of a settlement agreement.
[22] I refer to the comments of Fraiberg J. in Ferlatte v. Ventes Rudolph Inc., [1999] Q.J. No. 2735, where he held at para. 13:
The same objective of forestalling needless conflict justifies that communications tending to prove settlement should see the light of day rather than be entombed by privilege. Therefore marking correspondence "Without Prejudice" does not by itself assure the protection. Rather, it is the contents of the correspondence that determine the matter. Offers of settlement and ancillary communications are therefore presumed protected until acceptance, even without the warning. By the same token, the protection vanishes despite the presence of words that announce it, once its purpose has been realized. Put simply, the words "Without Prejudice" or expressions to similar effect are not really necessary on offers of settlement, and once the offers are accepted, they are useless.
[23] Applying these principles to the case at bar, I am of the opinion that the letters of August 15, 2002 and September 3, 2002 are admissible as evidence.
[24] Tour and Roller Derby submit that the correspondence of August 15, 2002 and September 3, 2002 did not create an enforceable contract, but only an agreement to agree. The parties only agreed that Tour and Roller Derby would consent to judgment. The correspondence did not discuss the terms of the consent judgment and specifically did not indicate that Tour and Roller Derby would consent to a judgment incorporating terms from the Statement of Claim. As such, any contractual relationship between the parties would be incomplete until the time that the Court endorsed a Consent judgment with terms agreed upon by the parties.
[25] I cannot accept the position advanced by Tour and Roller Derby. In my opinion, based on the wording of their letter of August 15, 2002, they intended to settle the action and to accept the terms from the Statement of Claim.
[26] In their letter of August 15, 2002, Tour and Roller Derby indicated that they were willing to admit to infringement and consent to judgment and that they were also willing to pay damages in the amount of $2,500 CDN, with each party bearing its own costs. Given that the amount of $2,500 CDN pertains to damages and the parties agreed to bear their own costs, it follows that the consent to judgment would pertain to the non monetary provisions of the Statement of Claim, namely (a), (b) and (c). In other words, Tour and Roller Derby by their letter of August 15, 2002, indicated that they accepted the non-monetary terms relating to trade-mark infringement as set out in the Statement of Claim.
[27] Bauer's letter of September 3, 2002, constitutes an acceptance of this offer to settle.
[28] In my opinion, the offer to settle as detailed in the letter of August 15, 2002 is clear and unambiguous. Tour and Roller Derby did not indicate that they were specifically rejecting certain portions of the Statement of Claim, nor that their offer would be conditional on the parties signing a formal contract.
[29] The consent for judgment to be filed with the Court only recognizes the settlement and does not have the effect of delaying its formation. It is a procedural measure to which the parties have recourse to give effect to the disposition of the
settlement which provides that a judgment will be rendered against the defendants.
[30] This Court dealt with a similar issue in Bandag v. Vulcan Equipment Co. Ltd., [1977] 2 F.C. 397. In this case, the parties exchanged correspondence which included an offer to settle and an acceptance of that offer. Mahoney J. held that he was satisfied that the action had been settled.
[31] For all these reasons, I am satisfied that the parties had reached an agreement to settle the action.
[32] With respect to Bauer's request for costs on a solicitor-client basis, such costs are in general, only awarded where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties (Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817).
[33] Although the solicitors for Tour and Roller Derby prolonged the issue and caused undue costs by deciding not to honour their offer to settle, I cannot characterize their conduct as reprehensible, scandalous or outrageous.
[34] Consequently, costs will not be awarded on a solicitor-client basis.
[35] For all these reasons, the motion for summary judgment is granted with costs in accordance with the tariff.
ORDER
THIS COURT ORDERS as follows:
A) DECLARES the Plaintiff's Statement of Claim, to the extent of what follows:
B) DECLARES that as between the parties to this action, Canadian Trademark Registration No. TMA 512,683 is valid;
C) DECLARES that the Defendants have infringed Canadian Trade-mark Registration No. TMA 512,683 by reason of their manufacture, sale, offer for sale and advertisement of a skate with a skate blade holder displaying a shape and configuration which is identical or confusing with the shape and configuration which is the subject of the said trade-mark registration;
D) ORDERS the Defendants by themselves or by their officers, directors, employees, agents or licensees to immediately cease and desist from:
a) manufacturing, selling, offering for sale or advertising a skate blade holder or a skate having or featuring a skate blade holder bearing the trademark CROW, that was the subject of these proceedings and that is depicted hereinafter:
b) manufacturing, selling, offering for sale or advertising any skate blade holder or any skate with a skate blade holder having a shape and configuration which is the subject of Canadian Trademark Registration No. TMA 512,683 or any shape and configuration confusing therewith.
E) ORDERS the Defendants to pay the Plaintiff the amount of $2,500 in Canadian dollars for damages.
"Danièle Tremblay-Lamer"
J.F.C.C.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1816-01
STYLE OF CAUSE: BAUER NIKE HOCKEY INC.
and
TOUR HOCKEY AND
ROLLER DERBY SKATE CORPORATION
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: April 14, 2003
REASONS FOR ORDER
AND ORDER OF THE HONOURABLE MADAM JUSTICE DANIÈLE TREMBLAY-LAMER
DATED: April 17, 2003
APPEARANCES:
Mr. François Guay FOR PLAINTIFF
Mr. Tim Bourne FOR DEFENDANTS
SOLICITORS OF RECORD:
Smart & Biggar
Montreal, Quebec
FOR PLAINTIFF
Ridout & Maybee LLP
Ottawa, Ontario
FOR DEFENDANTS
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20030417
Docket: T-1816-01
BETWEEN:
BAUER NIKE HOCKEY INC.
Plaintiff
and
TOUR HOCKEY AND
ROLLER DERBY SKATE CORPORATION
Defendants
REASONS FOR ORDER AND ORDER