Ottawa, Ontario, January 29, 2007
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
FAIRMONT HOTELS & RESORTS INC.
and
DIRECTOR CORPORATIONS CANADA and
FAIRMONT RESORT PROPERTIES LTD.
REASONS FOR JUDGMENT AND JUDGMENT
[1] The respondent Fairmont Resort Properties Inc. (FRP) brought an application under s. 12 of the Canadian Business Corporations Act, R.S.C. 1985, c. C-44 (relevant enactments are set out in an Annex) requesting the Director of Corporations Canada to order the applicants, Fairmont Hotels Inc. and Fairmont Hotels and Resorts Inc. (collectively, FH) to change their corporate names because of the risk of confusion. Given that there are ongoing trade-mark disputes between the parties, both in Federal Court and before the Trade-marks Opposition Board, FH asked the Director to stay FRP’s application pending the outcome of those other proceedings. The Director refused.
[2] FH seeks judicial review of the Director’s decision refusing a stay. It asks the Court to overturn the Director’s decision and order the Director not to take further action until the parties’ trade-mark disputes have been decided. The respondent Director of Corporations Canada chose not to appear or make submissions.
[3]
In my view, FH is seeking judicial review of an interlocutory decision and
there are no special circumstances that would justify the Court’s intervention.
Therefore, I must dismiss this application for judicial review.
I. Issues
1. Is the
Director’s decision refusing a stay of proceedings subject to judicial review?
2. If so, what standard of review applies?
[4] Given my conclusion that the Director’s decision is not reviewable, I need not consider the second issue.
II. Analysis
(a) Factual
background
[5] The parties are completely separate entities, with different histories operating in different spheres (the applicants own and manage a chain of hotels, while the respondent runs a time-share business). Yet, they have common ties to Fairmont Hot Springs, British Columbia, specifically to the Fairmont Hot Springs Resort (FHSR). In addition to its trade-marks for “Fairmont”, FH acquired FHSR’s trade-marks in 2000 and then licensed them back to FHSR. FRP used to operate FHSR’s time share operations, but is no longer affiliated with it. However, FRP obtained FHSR’s permission to use the word “Fairmont” in its corporate name in 1985.
[6] FRP has begun three different trade-mark proceedings against FH. In 2000 and 2001, FRP challenged two of the marks FH had acquired from FHSR (before the Trade-marks Opposition Board). In June 2005, it commenced a challenge to FH’s word and design marks for “Fairmont” in the Federal Court (under s. 57 of the Trade-marks Act, R.S.C. 1985, c. T-13). All of these proceedings are currently ongoing.
[7] In July 2005, FRP began the proceedings in issue here – under s. 12 of the CBCA. It asked the Director of Corporations Canada to order FH to change its corporate name on grounds of confusion. In turn, in September 2005, the Director asked FH to respond, explained that FH should address particular issues relating to its operations and corporate history, and specified that its evidence should be presented in the form of an affidavit or statutory declaration.
[8] In November 2005, FH asked the Director to stay the CBCA proceedings. It suggested that a stay was appropriate given that it was the registered owner of the trade-mark “Fairmont”- the alleged source of confusion – and its entitlement to that mark was under challenge in the trade-mark proceedings. In addition, it submitted that the parallel processes could result in conflicting decisions or absurd consequences, from which FH would suffer irreparable harm. In March 2006, FH’s request for a stay was denied and it now seeks judicial review.
(b) Judicial review of interlocutory decisions
[9]
Generally speaking, interlocutory rulings by decision-makers are not
subject to appeal or judicial review. Courts are concerned not to permit
parties to unduly delay or segment proceedings, or drive up the costs of
litigation unnecessarily. Further, they are naturally reluctant to rule on
procedural or administrative matters that may turn out to be superfluous or
insignificant when the dispute is decided on the merits, or where an adequate alternative
remedy is available at that point: Szczecka v. Canada (Minister of
Employment and Immigration), [1993] F.C.J. No. 934 (C.A.) (QL); Zundel
v. Citron, [2000] F.C.J. No. 678 (F.C.A.) (QL); Prince Rupert Grain Ltd v. Grain Workers’ Union,
Local 333, 2005 FCA 401, [2005] F.C.J. No. 2055 (C.A.) (QL) Sherman
v. Canada (Customs and Revenue Agency), 2006 FC 715, [2006] F.C.J. No.
912 (F.C.) (QL).
[10] On the other hand, courts have also recognized that there are special circumstances where early intervention by an appellate or reviewing court is appropriate. It would be unfair, for example, to refuse to intervene when the underlying decision denies a party the benefit of a fair hearing, discloses grounds for an apprehension of bias, or curtails a party’s substantive rights: Canada (Canadian Human Rights Commission) v. Canada 3000 Airlines Ltd. (re Nijjar), [1999] F.C.J. No. 725 (T.D.) (QL), at para.15; Zundel, above, at para. 15. Similarly, where the tribunal wrongly exceeded or circumscribed its jurisdiction, or declined to exercise it, early judicial intervention may be appropriate although, even in this area, courts should be cautious: Prince Rupert Grain Ltd., above.
(c) Are there
special circumstances here?
[11] FH argues that special circumstances exist in this case that merit the Court’s early intervention. In particular, FH argues that the Director’s decision not to grant a stay has the following implications:
· The Director’s
decision to deal with FRP’s application while the trade-mark proceedings are
ongoing indicates that the Director plans to arrive at a decision without
taking account of FH’s ownership of the “Fairmont” trade-marks.
· In the absence of
consideration of FH’s trade-marks, the only other factor that the Director
could evaluate would be the respective dates of incorporation of the parties.
FRP was incorporated before the applicants, so the Director will undoubtedly allow
FRP’s application.
· In any case, the issue
of confusion cannot be resolved within FRP’s application because the alleged confusion
arises primarily from use of the word “Fairmont” for which FH has a registered
trade-mark. FH’s entitlement to use that mark can only be resolved in the
trade-mark proceedings, not in FRP’s application under the CBCA. Therefore, the
Director is simply not in a position to decide FRP’s application.
· If the Director grants FRP’s application, FH will be in the strange position of having to remove the word “Fairmont” from its corporate name while still being entitled to use the “Fairmont” trade-mark. This will cause FH irreparable harm and actually cause greater confusion among members of the public.
[12] In my view, FH’s position is speculative. Under the CBCA, the Director may order a company to change its corporate name if that name is prohibited. Under the Canada Business Corporations Regulations 2001, SOR/2001-512, s. 25, a corporate name is prohibited if it is confusing, having regard to all of the circumstances, including the distinctiveness of a trade-mark, the length of time it has been used, the nature of the business associated with the mark, the resemblance between the corporate name and the trade-mark, and the territorial area in which the corporate name and trade-mark are used.
[13]
It
appears to me that the Director must take account of all of the relevant
circumstances, including FH’s trade-marks and its exclusive rights to use those
marks in association with its business (according to s. 19 of the Trade-marks
Act). In addition, the Director may consider all of the other factors and potential
consequences about which FH is concerned, as well as the corporate history and
operations of both parties. I cannot conclude from the Director’s decision not
to stay FRP’s application that the result is a foregone conclusion to FH’s
detriment. Accordingly, I am not satisfied that there exist special
circumstances that would justify the Court’s reviewing the Director’s
interlocutory decision. I agree with the approach taken by Justice Walsh in
similar circumstances: Brick Warehouse Corp. v. Brick Fine Furniture
Ltd., [1992] F.C.J. No. 272 (T.D.) (QL).
III. Disposition
[14] The application for judicial review is dismissed with costs.
JUDGMENT
THIS COURT’S JUDGMENT IS
THAT:
- The application for judicial review is dismissed with costs.
Annex
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Canadian Business Corporations Act, R.S.C. 1985, c. C-44
Prohibited names 12. (1) A corporation shall not be incorporated or continued as a corporation under this Act with, have, carry on business under or identify itself by a name (a) that is, as prescribed, prohibited or deceptively misdescriptive; or (b) that is reserved for another corporation or intended corporation under section 11.
Trade-marks Act, R.S.C. 1985, c. T-13
Rights conferred by registration 19. Subject to sections 21, 32 and 67, the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services. Exclusive jurisdiction of Federal Court 57. (1) The Federal Court has exclusive original jurisdiction, on the application of the Registrar or of any person interested, to order that any entry in the register be struck out or amended on the ground that at the date of the application the entry as it appears on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark. Restriction (2) No person is entitled to institute under this section any proceeding calling into question any decision given by the Registrar of which that person had express notice and from which he had a right to appeal.
Canada Business Corporations Regulations 2001, SOR/2001-512 25. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it is confusing, having regard to all the circumstances, including (a) the inherent distinctiveness of the whole or any elements of any trade-mark, official mark or trade-name and the extent to which it has become known; (b) the length of time the trade-mark, official mark or trade-name has been in use; (c) the nature of the goods or services associated with a trade-mark or an official mark, or the nature of the business carried on under or associated with a trade-name, including the likelihood of any competition among businesses using such a trade-mark, official mark or trade-name; (d) the nature of the trade with which a trade-mark, an official mark or a trade-name is associated, including the nature of the products or services and the means by which they are offered or distributed; (e) the degree of resemblance between the proposed corporate name and a trade-mark, an official mark or a trade-name in appearance or sound or in the ideas suggested by them; and (f) the territorial area in Canada in which the proposed corporate name or an existing trade-name is likely to be used.
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Loi canadienne sur les sociétés par actions, L.R., 1985, ch. C-44
Dénominations sociales prohibées 12. (1) La société ne peut être constituée, être prorogée, exercer une activité commerciale ni s’identifier sous une dénomination sociale : a) soit prohibée ou trompeuse au sens des règlements; b) soit réservée conformément à l’article 11.
Loi sur les marques de commerce, L.R. 1985, c. T-13
Droits conférés par l’enregistrement
19. Sous réserve des articles 21, 32 et 67, l’enregistrement d’une marque de commerce à l’égard de marchandises ou services, sauf si son invalidité est démontrée, donne au propriétaire le droit exclusif à l’emploi de celle-ci, dans tout le Canada, en ce qui concerne ces marchandises ou services.
Juridiction exclusive de la Cour fédérale
57.(1) La Cour fédérale a une compétence initiale exclusive, sur demande du registraire ou de toute personne intéressée, pour ordonner qu’une inscription dans le registre soit biffée ou modifiée, parce que, à la date de cette demande, l’inscription figurant au registre n’exprime ou ne définit pas exactement les droits existants de la personne paraissant être le propriétaire inscrit de la marque.
Restriction
(2) Personne n’a le droit d’intenter, en vertu du présent article, des procédures mettant en question une décision rendue par le registraire, de laquelle cette personne avait reçu un avis formel et dont elle avait le droit d’interjeter appel.
Règlements sur les sociétés par actions de régime fédéral 2001, DORS/2001-512
25. Pour l’application de l’alinéa 12(1)a) de la Loi, une dénomination sociale est prohibée si elle prête à confusion, compte tenu de toutes les circonstances, notamment les suivantes : a) le caractère distinctif inhérent à tout ou partie des éléments d’une marque de commerce, d’une marque officielle ou d’une dénomination commerciale et la mesure dans laquelle la marque ou la dénomination est connue; b) la durée d’emploi de la marque de commerce, de la marque officielle ou de la dénomination commerciale; c) la nature des biens ou des services à l’égard desquels une marque de commerce ou une marque officielle est employée ou encore, le genre d’activités commerciales exercées sous une dénomination commerciale ou relativement à cette dénomination, y compris la probabilité d’une concurrence entre des entreprises utilisant une telle marque de commerce, marque officielle ou dénomination commerciale; d) la nature du commerce à l’égard duquel est employée une marque de commerce, une marque officielle ou une dénomination commerciale, y compris la nature des biens ou services et les moyens grâce auxquels ils sont distribués ou offerts; e) le degré de ressemblance visuelle ou phonétique entre la dénomination sociale proposée et toute marque de commerce, marque officielle ou dénomination commerciale, ou le degré de ressemblance des idées qu’elles suggèrent; f) la région du Canada dans laquelle la dénomination sociale proposée ou une dénomination commerciale existante est susceptible d’être employée.
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FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-587-06
STYLE OF CAUSE: FAIRMONT HOTELS INC, ET AL v. DIRECTOR CORPORATIONS CANADA, ET AL
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: January 22, 2007
APPEARANCES:
|
John T. Porter Patrick E. Kierans |
|
|
Michel Bourque
|
FOR THE RESPONDENTS |
SOLICITORS OF RECORD:
|
OGILVY RENAULT LLP Toronto, ON |
|
|
BURNET, DUCKWORTH & PALMER LLP Calgary, AB |