Date: 19980522
Docket: T-2636-96
BETWEEN:
TAYLOR MADE GOLF COMPANY INC. and
SALOMON CANADA SPORTS LTD.
Plaintiffs
- and -
1110314 ONTARIO INC. (doing business as SELECTION SALES)
Defendant
REASONS FOR ORDER
LUTFY J.:
[1] The defendant seeks to set aside the default judgment signed in favour of the plaintiffs on September 30, 1997 in an action alleging trademark and copyright infringement.
[2] The defendant must first establish either "substantial reasons",1 "a satisfactory excuse"2 or "a reasonable explanation"3 for the failure to file its statement of defence. In this case, the default judgment issued almost five months after the second service of the statement of claim. It was unreasonable for the defendant's representative to assume that the document delivered by the process server was "another letter similar to the [cease and desist] letter". He states that he noted the name of plaintiffs' counsel on the document without realizing that it was a statement of claim. However, the counsel's firm name is on page 7 of the pleading and, after 33 pages of Schedule material, on the Indorsement or back of the document where it is identified as being a statement of claim. It is difficult to imagine how the defendant's representative would have read the name of the plaintiffs' counsel without noting that he had in his possession a legal document which was a statement of claim. In the words of one of my colleagues, "[p]eople in business in Canada should give legal documents significantly more attention"4 than the defendant did in this case. The defendant has not satisfactorily explained its failure to file its statement of defence.
[3] In some cases, counsel for the plaintiff may communicate directly with the defendant with a warning concerning the failure to file a statement of defence.5 Counsel for the plaintiffs in this case did not do so after the second service of the statement of claim. In the circumstances of the conduct of its representatives upon the service of the statement of claim, the defendant is not in a position to invoke the absence of any subsequent oral or written communication prior to the issuance of the default judgment.
[4] Secondly, some case law suggests that the motion to set aside the default judgment should be brought "in a reasonable time"6 or "promptly".7 On November 4, 1997, counsel for the defendant advised counsel for the plaintiffs that he had received instructions to set aside the default judgment. Draft affidavits which would support the motion were delivered in early December. However, despite repeated correspondence among counsel and court officials who had been keeping the taxation of the plaintiffs' bill of costs in abeyance, the motion was not filed until March 24, 1998. The record discloses no reason for this delay. The unexplained delay of over five months between the date of knowledge of the default judgment and the filing of the motion to set aside only exacerbates the defendant's conduct in not attending to the statement of claim after its service.
[5] Finally, the defendant has not disclosed a prima facie case why the default order should not have been made. This is the test in Rule 399(1) of the Federal Court Rules, 1998. The statement of claim alleges that the defendant infringed the plaintiffs' trademarks and copyright through its sale of certain products. The affidavits of the defendant's representative are limited to very brief, general statements concerning the merits of its defence. The deponent expresses his belief that the marks of the competing products, without identifying them, are not confusing and are different in colour and design. Reference is made to unidentified third parties who apparently do not consider "the marks" confusing, again without specifically identifying them. No assertion or denial is made by the deponent concerning the likelihood of confusion regardless of actual confusion or subjective anecdotal evidence. The two relevant paragraphs in the defendant's affidavits fall far short of disclosing allegations which, if believed, would constitute prima facie a good defence on the merits. This is particularly so in view of the plaintiffs' extensive material. The vagueness of the deponent's statements might have been clarified by a competent draft statement of defence in support of the motion to set aside. None was filed.
[6] For these reasons, the defendant's motion to set aside the default judgment is dismissed. The defendant will pay forthwith to the plaintiffs costs on this motion in the amount of $1,000.
Judge
Ottawa, Ontario
May 22, 1998
__________________1 Television Broadcasts Ltd. v. Trinh (1991), 37 C.P.R. (3d) 191 (F.C.T.D.).
2 UMACS of Canada Inc. v. S.G.B. 2000 Inc. (1990), 34 C.P.R. (3d) 305 (F.C.T.D.) at 308.
3 Cooper v. Tsartlip Indian Band (Council) et al. (1994), 88 F.T.R. 21 at 22, rev'd on other grounds (1996), 199 N.R. 126; and Reano v. Jennie W (The), [1997] F.C.J. no. 595 (F.C.T.D.) at paragraph 8.
4 UMACS of Canada Inc., supra,note 2 at 309.
5 For example, see Reano, supra, note 3 at paragraph 3.
6 Chitel v. Rothbart (1988), 29 C.P.C. (2d) 136 (Ont. C.A.) at 137.
7 Allfur Trading Ltd. v. Polizos (1991), 7 C.P.C. (3d) 39 (Ont. Ct. (Gen. Div.)) at 40 where the unsuccessful motion set aside was filed some four months after knowledge of the default judgment. See also STM Investments Ltd. v. Crown Trust Co. (1983), 37 C.P.C. 65 (Ont. H.C.) at 70 where the motion was served the day after the defendant became aware of the judgment.