Docket: T-1005-05
Ottawa, Ontario, this 14th day of September, 2005
Present: THE HONOURABLE MR. JUSTICE von FINCKENSTEIN
BETWEEN:
Cross-Canada Auto Body Supply (Windsor) Limited,
Cross-Canada Auto Body Supply (West) Limited and
At Pac West Auto Parts Enterprise Ltd.
(Applicants)
and
Hyundai Auto Canada,
A Division of Hyundai Motor America
(Respondent)
REASONS FOR ORDER AND ORDER
[1] This is an appeal from the order of Prothonotary Lafreniere dated August 10, 2005, wherein he granted the Respondent an extension to file a Notice of Appearance, and failed to award costs to the Applicants.
[2] Both sides agree that the relevant law for appeals of a Prothonotary is laid down in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 as reformulated in Merck & Co., Inc. v. Apotex Inc., [2004] 2 F.C.R. 459, namely:
discretionary orders of prothonotaries ought not be disturbed unless
(a) the questions raised are vital to the final issue of the case, or
(b) the orders are clearly wrong as based upon wrong principle or misapprehension of facts.
Where either of those factors exist, the reviewing court will exercise its discretion de novo.
[3] In this case, the Applicants rely on the second leg of Agua-Gem, supra and argue that the Prothonotary failed to properly apply the test of Canada (Attorney General) v. Hennelly, [1999] F.C.J. No. 846 which provides the following at paragraphs 3 and 4:
The proper test is whether the applicant has demonstrated
1) a continuing intention to pursue his or her application;
2) that the application has some merit;
3) that no prejudice to the respondent arises from the delay; and
4) that a reasonable explanation for the delay exists.
Any determination of whether or not the applicant's explanation justifies the granting of the necessary extension of time will turn on the facts of each particular case.
[4] The Applicants argue that the Prothonotary failed to establish points 2) and 4) of the four points of Hennelly, supra set out above.
[5] With respect to point 2), the Applicants point out that Prothonotary Lafreniere merely referred to the affidavit of Mr. Bode, the general counsel of the Respondent. He makes assertions, but did not "demonstrate" in any way the merit of any defence.
[6] I cannot agree with this submission. The Bode affidavit points out that there had been a mix-up regarding the assignment and transfer between Hyundai Auto Canada Inc. and its successor Hyundai Canada Auto. According to his affidavit, it was simply a "matter of internal housekeeping" that needs to be addressed. Whether this is a valid defence remains to be seen, but it is certainly sufficient to meet the "merit" test of Hennelly, supra.
[7] As to point 4) of Hennelly, supra, the Applicants argue that mere inadvertence is not enough as a reasonable explanation for delay. The Applicants point to paragraph 6 of Hennelly, supra which states:
In this case the Motions Judge found that inadvertence was an insufficient explanation for the appellant's delay.
[8] Similarly in Chin v. Canada (Minister of Employment and Immigration), [1993] F.C.J. No. 1033 Reed J. stated at paragraphs 8 and 9:
On what grounds then do I grant an extension of time. I have already indicated that, in general, I am not receptive to requests which are based solely on the work load counsel has undertaken. When an application for an extension of time comes before me, I look for some reason for the delay which is beyond the control of counsel or the applicant, for example, illness or some other unexpected or unanticipated event.
There was no such unanticipated cause for the delay in the present case. At the time the leave application was filed, it was known that the time limit for the filing of the application was thirty days, counsel knew her client lived in Campbell River and that she would be attending the Bar Convention towards the end of August. The scheduling was under her personal control. Thus, it was hard for me to justify, in such circumstances, the granting of an extension of time.
[9] I have no problem with the proposition that mere inadvertence is not enough, as stated by the Applicants. However, it does not apply in this case. Here, there were two competing matters: an infringement action launched by the Respondent against the Applicants, and an application to expunge trade-marks brought by the Applicants. There was a mix-up by the general counsel of the Respondent between the two actions. Furthermore, a courtesy copy of the application regarding the expungement had been served on the solicitors of the Respondent, and there was correspondence between the solicitors as to the significance of the courtesy copy. All of this is more than a mere inadvertence.
[10] In this case, counsel for the Applicants was fully aware that there had been a mix-up at Hyundai's and tried to take advantage of it. Less than a month passed between the day when the appearance should have been filed, and the day when the application for leave to file the appearance was filed. Thus, a case for prejudice has not been made out.
[11] The Prothonotary, when applying the test in Hennelly, supra, quite rightly looked at all four factors and weighted them together rather than considering mechanically whether each factor had been fully and completely met. I can find no error in the way the Prothonotary proceeded.
[12] Accordingly, the Applicants have not met the test in Aqua-Gem, supra and this appeal cannot succeed.
[13] In respect of costs, however, I do not see why the Prothonotary deviated from Rule 410(2). The party applying for an extension of time should normally bear the costs of the motion. The fact that the Applicants brought a motion for default judgment does not disentitle them from costs.
ORDER
THIS COURT ORDERS that this appeal be dismissed, except in so far as it relates to costs. The Applicants shall have their costs in this matter both in respect of the motion heard by Prothonotary Lafreniere and in respect of this appeal.
A Konrad W. von Finckenstein @
Judge
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1005-05
STYLE OF CAUSE: Cross-Canada Auto Body Supply (Windsor) Limited,
Cross-Canada Auto Body Supply (West) Limited and
At Pac West Auto Parts Enterprise Ltd.
(Applicants)
and
Hyundai Auto Canada,
A Division of Hyundai Motor America
(Respondent)
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: September 12, 2005
REASONS FOR ORDER
AND ORDER: The Honourable Justice von Finckenstein
APPEARANCES:
| Kenneth D. McKay
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FOR THE APPLICANTS
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| Jeffrey Brown Scott Fairley |
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
| Kenneth D. McKay Sim, Lowman, Ashton & McKay LLP Toronto, ON |
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FOR THE APPLICANTS
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| Scott R. Fairley Purser, Dooley LLP Barrie, ON
Jeffrey A. Brown Theall & Associates Toronto, ON |
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FOR THE RESPONDENT |
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