Federal Court Decisions

Date: 20050617

Docket: T-1473-91

Citation: 2005 FC 870

Ottawa, Ontario, June 17, 2005

PRESENT:    THE HONOURABLE MR. JUSTICE SHORE

BETWEEN:

REMO IMPORTS LTD.

Plaintiff/

Defendant by Counterclaim

and

JAGUAR CARS LIMITED and FORD MOTOR COMPANY OF CANADA, LIMITED/FORD DU CANADA LIMITEE carrying on business as JAGUAR CANADA

Defendants/

Plaintiffs by Counterclaim

REASONS FOR ORDER AND ORDER

INTRODUCTION

[1]     A tree's fall in the forest is not heard, if no one is present. If cast in time, rights cannot be ascertained if not made known, or claimed therein.

For everything there is a season. Its existence is finite, otherwise, a new situation is set into motion¼

"¼the general rule is that an amendment should be allowed at any stage of an action for the purposes of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice.^[1]"

"¼ the Courts and the parties have a legitimate expectation in the litigation coming to an end and delays and consequent strain and anxiety imposed on all concerned by a late amendment raising a new issue may well be seen as frustrating the course of justice.^[2]

"There is a clear difference between allowing amendments to clarify the issues in dispute and those that permit a distinct defence to be raised for the first time.^[3]"

[2]    This is a motion dated November 4, 2004, on behalf of the Plaintiff, Remo Imports Ltd.

(Remo), for an order pursuant to section 75^[4] of the Federal Court Rules, 1998^[5] (Rules) authorizing

Remo to amend paragraph 21 of its Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim, by adding paragraphs 21 e), f) and g) thereto to allege the defence of estoppel by acquiescence and laches, as indicated in Remo's proposed Amended Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim, attached hereto as Schedule A.

BACKGROUND

[3]    Mr. Moise Bassal, Remo's President, testified at trial that he only became aware of the existence of the Jaguar Cars accessories through an advertisement in the June 1990 issue of the Montreal Magazine (an insert in the Globe and Mail newspaper) and that he consequently sent a demand letter to the authorized Jaguar dealer on May 29, 1990.

[4]    On August 24, 1990, Jaguar Cars counsel responded to the demand letter. It attempted to settle the demand by Remo and explained that if Remo was not prepared to co-exist with Jaguar Cars, it would take steps to expunge Remo's registration.

[5]    On December 22, 1993, Remo filed its Affidavit of Documents. Included among Remo's productions were the file wrapper concerning application no. 581,257 (registration no. 378,643) by Jaguar Cars and the file wrapper concerning application no. 581,258 (registration no. 378,644) by Jaguar Cars.

[6]    On April 29 and 30, May 1, August 26 and 27, 1996, and February 27 and 28, 2001, examinations for discovery of Vivien Shortt on behalf of Jaguar Cars took place. She was examined as to when Jaguar Cars first became aware of the existence of Remo's trade-mark registration for the trade-mark JAGUAR and she was examined about the contents of the file wrappers of Jaguar Cars' trade-mark applications, including correspondence with the Trade-marks Office in 1987.

[7]    On September 10, 2002, Prothonotary Lafrenière issued a direction requiring the parties, among other things, to serve and file their motion to amend pleadings, if any, no later than October 1, 2002.

[8]    By motion dated October 1, 2002, Jaguar Cars sought to amend its Statement of Defence and Counterclaim including the addition of an allegation of estoppel relating to Remo's use of the JAGUAR mark on specified wares and an allegation of estoppel relating to the distinctiveness issue resulting from the massive billboard advertising campaign commenced by Remo in 1999.

[9]    On November 13, 2002, Remo objected to most of the amendments sought, including the two estoppel allegations.

[10]                        By order dated December 9, 2002, Prothonotary Lafrenière refused the addition of the estoppel allegations. The addition of the estoppel allegation relating to Remo's use of the JAGUAR mark on specified wares was refused "as the Defendants were aware since 1999 of the facts alleged in [the proposed] paragraph, and their delay to seek leave to add this new issue of estoppel would necessarily open the door to further discovery and delay the trial of this matter."

[11]                        On September 29, 2004, the proposed amendment which is the subject of this motion was first referred to in a telephone conference with the Court.

[12]                        On October 18, 2004, the trial commenced and was adjourned on October 27, 2004. The trial is scheduled to resume on June 20, 2005 and continue until July 22, 2005.

ISSUES

Procedural issues

[13]            1. Should the motion be dismissed since it was brought under sections 200 and 201 of the Federal Court Rules, 1998, which do not apply to the relief sought?

2. Are certain portions of the Plaintiff's motion materials privileged settlement communications that should therefore be struck?

3. Should the Plaintiff be directed to file all of its case law materials in English when available?

Substantive issues

4. Should the Plaintiff's request to amend its pleadings be granted considering factors such as the prejudice to the Defendants and the interests of justice?

5. Alternatively, should the Plaintiff's request to amend its pleadings be refused since no cause of action for laches or acquiescence could possibly be made out in law?

ANALYSIS

1. Should the motion be dismissed since it was brought under sections 200 and 201 of the Federal Court Rules, 1998, which do not apply to the relief sought?

[14]                        Remo initially brought the present motion under sections 200 and 201 of the Rules, but later rectified this mistake in its Response to Defendant's Motion Record by asking to bring the motion under section 75 of the Rules.

[15]                        Following the close of pleadings, there is no longer a right to amend a pleading without leave of the Court or consent of the other parties pursuant to section 200 of the Rules. Section 201 of the Rules pertains to amendments made under section 76 of the Rules, which deals with amendments to correct the name of a party or to alter the capacity in which a party is bringing a proceeding. The amendment Remo is seeking is not related to such matters. Section 201 of the Rules is therefore not applicable to the present motion.

[16]                        In this case, Remo needed to seek leave of the Court to amend its Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim pursuant to section 75 of the Rules.

[17]                        The Court agrees that Remo initially brought its motion under the incorrect section of the Rules but since this procedural mistake was later corrected, the Court is prepared to deal with the substance of the motion.

2. Are certain portions of the Plaintiff's motion materials privileged settlement communications that should therefore be struck?

[18]                        Jaguar argues that the e-mails between its counsel and counsel for Remo dated October 13, 2004 and marked as Exhibits 6 and 7 of the affidavit of Richard Uditsky were exchanged settlement negotiations regarding the very amendments in issue on this motion and thus are not properly before this Court, and should be struck. Jaguar also argues that the letter from Remo's counsel dated October 14, 2004 marked as Exhibit 10 to the Uditsky affidavit contains references to those without prejudice discussions at page 3 and are therefore also not properly before this Court and these two paragraphs at page 3 should be struck.

[19]                        The Court agrees that Exhibits 6 and 7, as well as the two above-mentioned paragraphs at page 3 of Exhibit 10 are communications in furtherance of settlement of the present motion and should therefore be struck (Pirie v. Wyld^[6], Caribbean Ispat Ltd. v. Companhia de Navegacao Lloyd Brasilairo^[7]).

3. Should the Plaintiff be directed to file all of its case law materials in English when available?

[20]                        Pursuant to the order of Prothonotary Lafrenière dated December 9, 2003 providing that the trial would take place in the English language, all parties are asked to submit their case law materials in English when available.

4. Should the Plaintiff's request to amend its pleadings be granted considering factors such as the prejudice to the Defendants and the interests of justice?

The Law

[21]                        The law with respect to amendment of pleadings was summarized by the Federal Court of Appeal in Canderel Ltd. v. Canada (C.A.)^[8] in the following terms:

¼ while it is impossible to enumerate all the factors that a judge must take into consideration in determining whether it is just, in a given case, to authorize an amendment, the general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice. (Emphasis added)

[22]                        In the Canderel decision, when dealing with the factors which should be taken into account in deciding whether a motion to amend proceedings should be granted, Justice Decary quoted as follows from Continental Bank Leasing Corporation et al. v. The Queen^[9]:

. . . I prefer to put the matter on a broader basis:

whether it is more consonant with the interests of justice that the withdrawal or amendment be permitted or that it be denied. The tests mentioned in cases in other courts are of course helpful but other factors should also be emphasized, including the timeliness of the motion to amend or withdraw, the extent to which the proposed amendments would delay the expeditious trial of the matter, the extent to which a position taken originally by one party has led another party to follow a course of action in the litigation which it would be difficult or impossible to alter and whether the amendments

sought will facilitate the court's consideration of the true substance of the dispute on its merits. No single factor predominates nor is its presence or absence necessarily determinative. All must be assigned their proper weight in the context of the particular case. Ultimately it boils down to a consideration of simple fairness, common sense and the interest that the courts have that justice be done. (Emphasis added)

[23]                        Still in the Canderel^[10] decision, dealing with the issue of the interests of justice, Justice Decary held as follows:

As regards interests of justice, it may be said that the courts and the parties have a legitimate expectation in the litigation coming to an end and delays and consequent strain and anxiety imposed on all concerned by a late amendment raising a new issue may well be seen as frustrating the course of justice. (Emphasis added)

[24]                        In the case of Levi Strauss & Co. v. Lois Canada Inc.^[11], the Federal Court, Trial Division, refused the plaintiffs' request to amend their Statement of Claim to include additional parties as defendants for the following reasons:

I denied the application for the following reasons. First, the plaintiffs became aware of both of these parties in 1995 but took no action to re-open their pleadings to add them as defendants and raise new issues. The issues in reply that the amendments would precipitate and the need for full oral and documentary discovery would make it impossible for the defendant and the prospective defendants to be prepared for trial by November 4, 1996. It is simply too late at this stage for the filing of an Amended Statement of Claim of this nature.

Second, I am not persuaded that either of the parties which the plaintiffs are seeking to add as defendants are necessary parties in respect to the matters in dispute in the action. (Emphasis added)

[25]                        In A. Lassonde Inc. v. Sun Pac Foods Ltd.^[12], Prothonotary Morneau refused in part the plaintiff's application to an amended Statement of Claim for the following reasons:

¼ this motion ought to be dismissed since it seems to me imperative and of primary importance that the written pleadings be considered as closed from now on. The addition of the amendments sought by the plaintiff would surely serve only to encourage the defendant to want to amend its statement of defence at this point and continue with the examinations for discovery on these new aspects. These measures would surely produce a shower of motions in response. In that sense, I am of the opinion that irreparable damage would be done in terms of costs to both the defendant and the administration of justice if the plaintiff's motion to amend were allowed. (Emphasis added)

[26]                        In Value Village Market (1990) Ltd. v. Value Village Stores Co.^[13], the Federal Court, Trial Division, refused the defendant's application to amend its Statement of Defence and Counterclaim and stated as follows:

When an action has been allowed to proceed on the basis of a timetable that sets out a date for the completion of the filing of motions respecting pleadings, I do not think an amendment that rests on facts reasonably knowable by a party before the 'cutoff date' should be allowed after that date.

¼

Accordingly, I have reached the conclusion that allowing the 7(a) amendment would prejudice the plaintiff and lengthen the timetable that has been imposed, and therefore should not be allowed. (Emphasis added)

[27]                        In Scannar Industries Inc. (Receiver of) v. Canada^[14], in denying the plaintiff's application to amend its Statement of Claim, the Federal Court, Trial Division, concluded that since counsel for the plaintiff had plenty of previous opportunities for raising the issue of the validity of the designations, the plaintiff's motion was by no means "timely". In the result, the proposed amendments to the Statement of Claim would cause irremediable injustice that could not be compensated by an award of costs. This decision was maintained by the Federal Court of Appeal^[15].

[28]                        In Belsat Video Marketing Inc. v. Astral Communications Inc. et al^[16], the Ontario Court of Appeal upheld the decision of the trial judge who had refused the plaintiff's motion to amend its Statement of Claim and held as follows:

The amendments to the claim were sought on the eve of a peremptory date for argument of the summary judgment motion. This came at the end of a long process of case management of a significant commercial dispute. The amendments sought were significant. No affidavit explanation was offered for the need for or for the delay in seeking the proposed amendments. Rosenberg J. refused the motion to amend because, in the exercise of his discretion, he found the amendments sought to be, in the circumstances, an abuse of process.

We see no basis for interfering with this exercise of discretion. While the case management system does not demand slavish adherence, in the circumstances presented here it was quite proper, indeed perhaps essential, for the motions judge to be shown a very good reason for departing at such a late date from the course which had been set on a peremptory basis. Otherwise, the efficiency of the case management system risks serious compromise. (Emphasis added)

Application to the facts

(i) Prejudice to Jaguar Cars

(a) Delay in presenting the motion

1. Remo's motion is based on facts known by it since at least 1996

[29]                        Remo's objective in trying to bring forward its estoppel argument is to prove that Jaguar Cars knew of Remo's registered trade-mark JAGUAR since 1987 and did not do anything about it until 1990, resulting in Jaguar Cars' loss of right, if any, to oppose its trade-mark JAGUAR to Remo. The evidence from Jaguar Cars is that it did not know of Remo's trade-mark registration until Remo's demand letter was received in May 1990. On August 24, 1990, Jaguar Cars responded stating that if there was no settlement, it would take steps to expunge Remo's registration. The evidence on which Remo states its argument to prove Jaguar Cars' knowledge since 1987 can be divided in three categories:

1. file wrappers dating from 1987 in relation to Jaguar Cars' applications nos. 581,258 and 581,257 for the trade-marks JAGUAR and JAGUAR & design;

2. questions asked of Vivien Shortt, Jaguar Cars' representative, in her examination on discovery held in 1996; and

3. written and oral evidence given at trial by Alice-Ann Morlock, the lawyer who prosecuted Jaguar Cars' trade-marks applications in 1987.

[30]                        The Court will first treat Ms. Morlock's evidence which is addressed in a separate Order issued on the same date as these hereby Reasons for Order and Order. The Court finds that the four documents and the oral evidence given by Ms. Morlock with respect to her communications with her client are solicitor-client privileged and therefore inadmissible. Consequently, this evidence cannot be given any consideration with respect to the determination of the present motion.

[31]                        As for the 1987 file wrappers in relation to Jaguar Cars' applications for the trade-marks JAGUAR and JAGUAR and its design, they include a letter of the Trade-marks Office to Jaguar Cars' McMillan Binch law firm dated July 10, 1987 which states that Jaguar Cars' applications are considered confusing with three registered trade-marks, one of which is Remo's trade-mark JAGUAR. The file wrappers also include a letter dated December 15, 1987 from Ms. Morlock to the Trade-marks Office to amend Jaguar Cars' applications for the trade-marks JAGUAR and JAGUAR and its design by deleting certain wares from the applications. These file wrappers were filed by Remo in 1993 for the purposes of this trial. Therefore, the information upon which Remo's estoppel argument is based was in its possession since 1993. Since Remo's motion to amend its pleadings to add the estoppel argument was brought in 2004, this means Remo took eleven years to bring its motion. Such a delay is unreasonable.

[32]                        Remo also argues that the questions asked of Vivien Shortt, Jaguar Cars' representative, in her examination on discovery held in 1996 are relevant to its estoppel argument. The most relevant questions are as follows:

Q. 1412 - When did either of the Defendants first became aware of the existence of registration number 263,924?

A. (given November 2, 1998) - When demand letter received leading to action [in 1990].

Q. 1475 - Whether in response to the office action an amended application was filed on December 15, 1987?

A. (given on discovery) - Yes.

Q. 1494 - When the Defendants first became aware of such sales by Remo, did they at that time become aware of the existence of Remo's registration?

A. (given November 2, 1998) - See answer at Q. 1412.

Though the Court is not convinced that these questions and answers add anything to the estoppel argument - Remo's argument being that Jaguar Cars knew of Remo's JAGUAR trade-mark since 1987 - the Court will still analyze the delay from 1996 to 2004. Even taking this more lenient approach towards the years involved, the Court finds that a delay of 8 years in bringing a motion to amend pleadings is unreasonable.

[33]                        In summary, Remo's 2004 motion to amend its pleadings is based on information it possessed as early as 1993 or, taking a more generous approach, at least in 1996. Granting the motion would, in light of such long delay in bringing the motion, be unjust for Jaguar Cars.

2. Jaguar Cars' request to amend its pleadings to add two estoppel arguments on October 1, 2002 was rejected, which was two years before the trial started

[34]                        Jaguar Cars brought a motion on October 1, 2002 to amend its Statement of Defence and Counterclaim on several grounds including the addition of two estoppel allegations. Remo opposed Jaguar Cars' motion, arguing that the amendment regarding the allegations of estoppel should not be allowed due to the delay in seeking the amendment. Prothonotary Lafrenière denied leave to amend Remo's pleadings to add the estoppel allegations on the basis that doing so would open the door to further discovery and delay the trial of this matter, resulting in an injustice to Remo.

[35]                        Jaguar Cars brought its motion six years after the examination for discovery of a representative of Remo giving rise to the facts on which Jaguar Cars' motion was based. If, according to Remo, six years after discovery in 1996 was too long a delay to accept Jaguar Car's amendments regarding estoppel allegations, the Court finds that equal justice and fairness dictates that a further five years (if calculated from Remo's filing of the file wrappers in 1993) or even the same number of years (if calculated from Remo's examination for discovery of Vivien Shortt in 1996), is too long a delay for Remo's amendments regarding estoppel allegations to be allowed in the same action.

3. Prothonothary Lafrenière had directed that all motions to amend pleadings be filed by October 1, 2002

[36]                        On September 10, 2002, Prothonotary Lafrenière issued a direction requiring any motion to amend pleadings be brought no later than October 1, 2002. Remo's motion to amend its Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim dated November 4, 2004 was therefore brought two years after the deadline set by Prothonotary Lafrenière with no explanation for the delay.

[37]                        The Court endorses the reasoning of Justice Reed in Value Village^[17] to the effect that when an action has been allowed to proceed on the basis of a timetable that sets out a date for the completion of the filing of motions respecting pleadings, an amendment that rests on facts reasonably knowable by a party before the 'cutoff date' should not be allowed after that date.

[38]                        The Court concludes, on the overall issue of Remo's delay in presenting its motion to amend its pleadings, that for the three reasons explained above such a delay is unreasonable and would weight in the direction of an injustice being created towards Jaguar Cars was the motion to amend be granted.

(b) New cause of action

[39]                        Remo's proposed amendments to its Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim to add the defence of estoppel by acquiescence and laches raise an entirely new issue not alleged before. On this matter, the Federal Court of Appeal in Canderel^[18] quoted from Ketteman v. Hansel Properties^[19]:

There is a clear difference between allowing amendments to clarify the issues in dispute and those that permit a distinct defence to be raised for the first time.

[40]                        In refusing leave on December 9, 2002 to amend Jaguar Cars' pleadings to add an estoppel argument, Prothonoraty Lafrenière wrote about the addition of a new issue at paragraph 3 of the Order:

Leave to amend paragraph 4 in the Amended Statement of Defence and Counterclaim attached to the notice of motion is refused, as the Defendants were aware since 1999 of the facts alleged in this paragraph, and their delay to seek leave to add this new issue of estoppel would necessarily open the door to further discovery and delay the trial of this matter.

[41]                        The same comments can be made about Remo's request to add an estoppel argument to its pleadings. Remo itself admits, at paragraph 46 of its Response to Defendants' Motion Record, that "[t[he amendments ¼ add an additional defence to such Counterclaim". This factor also tends to show that an injustice would be borne by Jaguar Cars was the motion be granted.

(c) Additional measures Jaguar Cars would need to be entitled to take, which would further delay the trial

[42]                        To avoid a prejudice against Jaguar Cars, it would need to be given an opportunity to reply to the Amended Defence to Counterclaim. Second, Jaguar Cars would need to be given the opportunity to engage into an examination for discovery of Remo, including on the issue of Remo's reliance on Jaguar Cars' alleged encouragement to use the JAGUAR trade-mark. But, if like Remo states at paragraphs 14 and 45 of its Response to Defendants' Motion Record, it admits that it did not rely on Jaguar Cars' encouragement to use the JAGUAR trade-mark, then no examination for discovery on this issue is required. In that case, Remo would certainly not be granted leave to amend its pleadings because of his inability to prove one of the elements of acquiescence (reliance by the other party upon the encouragement by the rights holder), which will be discussed under the second issue.

[43]                        Allowing Jaguar Cars to reply to Remo's amended pleadings and to conduct further examination for discovery would be necessary to avoid a prejudice against Jaguar Cars, which would further delay the trial of this matter. Remo argues that Jaguar Cars could have responded earlier to the present motion, which would have given enough time to proceed with the supplementary examination for discovery before resumption of the trial. According to the timeline set by the Court, the last document concerning this motion had to be submitted by June 3, 2005. Accordingly, Jaguar Cars cannot be said to have caused delays in this matter.

[44]                        In summary, Jaguar Cars would suffer an injustice were Remo's motion to amend its pleadings be granted and this injustice could not be compensated by an award of costs.

(ii) Interests of justice

[45]                        The Court's comments about Remo unreasonably delaying to request amendments to its pleadings equally apply to the analysis of the interests of justice factor. The Court reiterates the Federal Court of Appeal's observation in Canderel^[20]:

As regards interests of justice, it may be said that the courts and the parties have a legitimate expectation in the litigation coming to an end and delays and consequent strain and anxiety imposed on all concerned by a late amendment raising a new issue may well be seen as frustrating the course of justice. (Emphasis added)

[46]                        In the present case, the motion was brought only after the beginning of trial while the information on which it is based was known by Remo since at the very latest 1996. In addition, time for examination for discovery would need to be given to Jaguar Cars, which would further delay the trial of a 14 year-old file. Accordingly, the Court is satisfied that granting the motion would indeed frustrate the course of justice.

[47]                        For these reasons, the Court finds that Remo's request for leave to amend its Reply to the Defendants' Amended Statement of Defence and the Statement of Defence to the Counterclaim should be denied.

5. Alternatively, should the Plaintiff's request to amend its pleadings be refused since no cause of action for laches or acquiescence could possibly be made out in law?

[48]                        If the Court accepts Remo's admission in its motion that it did not rely on Jaguar Cars' encouragement to use the JAGUAR trade-mark, then as will be shown below, Remo will ultimately be unable to prove acquiescence and should therefore be precluded from even amending its pleadings to allege such argument. As will be seen below, Remo's laches argument will also ultimately be unprovable, which means an amendment to plead this argument should not be allowed.

The Law

[49]                        Where it is plain and obvious that a proposed amendment to pleadings will have no chance of success, the amendment should not be allowed. In such a case, it is not necessary to consider the test in Canderel, supra, to determine if an amendment should be allowed, for none of the factors to be considered under that test could cure the lack of substance of the proposed amendment. In Faurecia Lear Automotive Seating Canada Ltd. v. Lear Corporation Canada Ltd.^[21], Justice O'Keefe held:

I would also deny leave to permit Faurecia to allege that Lear Canada "contributes to" infringement by a third party, on the basis that it is plainly and obviously an untenable pleading that is bound to fail (for the standard to strike pleadings, see for e.g. Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959). As held in Visx Inc. v. Nidek Co. (1996), 209 N.R. 342, [1996] F.C.J. No. 1721 (C.A.)(QL) at paragraph 16 and the cases that follow it under the amended Federal Court Rules, 1998, supra, amendments to pleadings that would be vulnerable to being struck out should not be permitted by the Court. (Emphasis added)

[50]                        In Merck & Co., Inc. v. Apotex Inc. (F.C.A.)^[22], the Federal Court of Appeal explained the following:

In Nidek, Isaac C.J. said, in an aside, that "[i]n determining whether an amendment to a defence should be allowed, it is often helpful for the Court to ask itself whether the amendment, if it was already part of the proposed pleadings, would be a plea capable of being struck out under Rule 419. If yes, the amendment should not be allowed" (at page 24) (my emphasis). Clearly, if an amendment could be struck out for showing no reasonable cause of action, it should not be allowed in whatever circumstances. But the Court does not say that if an amendment is not struck out under Rule 419 [Federal Court Rules, C.R.C., c. 663], which is now rule 221 [Federal Court Rules 1998, SOR/98-106], it should be favourably considered by the Court.

Application to the facts

(i) Laches

[51]                        The doctrine of laches, which is based on the notion of unreasonable delay, does not apply when there is a statutory limitation period and a person asserts his or her right within that timeframe (Prince Edward Island Mutual Insurance v. Insurance Co. of Prince Edward Island^[23], 392278 Ontario Ltd. (c.o.b. Group Three) v. Interopeka S.A.^[24]).

[52]                        Arguing laches therefore cannot succeed in this case because the limitation period under subsection 39(2) of the Federal Courts Act^[25] is 6 years (since Remo's sales are Canada-wide), and the maximum time delay by Jaguar Cars to assert its right was only 5 years (from 1987 when Jaguar Cars learned of Remo's JAGUAR trade-mark to March 1992 when Jaguar Cars commenced its counterclaim against Remo). Consequently, the Court cannot allow Remo to amend its pleadings to argue laches.

(ii) Acquiescence

[53]                        The criteria needed to establish acquiescence are the following. 1. Something more than mere delay is required. Silence alone is not sufficient to bar a proceeding (Canadian Memorial Services v. Personal Alternative^[26], Institut National des Appellations d'Origine des Vins et Eaux-de-Vie et al. v. Andres Wines Ltd. et al.^[27]); 2. the rights holder must know of its right and must know of the other party's breach of that right (Omark Industries v. Sabre Saw Chain (1963) Ltd.^[28], Electrolux v. Electrix^[29]); 3. the rights holder must encourage the other party to continue the breach (Omark^[30], Institut National^[31], Electrolux^[32]); and 4. the other party must act to its detriment in reliance upon the encouragement by the rights holder (Institut National^[33], White Consolidated Industries, Inc. v. Beam of Canada Inc.^[34], Canadian Memorial^[35], Kirkbi AG v. Ritvik Holdings Inc.^[36], Omark^[37], Electrolux^[38]). In Institut National^[39], for example, the High Court of Ontario clearly stated the requirement that the party encourage the other party to believe they would not enforce their legal rights and that the other party relied on the plaintiff's inaction:

In other words, Goff L.J.'s "test" is essentially the same as the one articulated by the Privy Council in Lindsay Petroleum (p. 136):

... the true test whether equitable relief should be withheld in the case of a continuing legal wrong on the ground of delay by the plaintiff in enforcing his rights is that the facts must be such that the owner of the legal right has done something beyond mere delay to encourage the wrongdoer to believe that he does not intend to rely on his strict rights, and the wrongdoer must have acted to his prejudice in that belief...

The question for the court is, therefore, whether the plaintiffs acted in such a way as to encourage the defendants to believe that they would not enforce their legal rights against them; and, whether the defendants, relying on the plaintiffs' inaction, have acted to their detriment in the intervening period over the last 60 years. These factors, combined with the "inordinate delay" by the plaintiffs in enforcing their rights, will be determinative of the issue of the propriety of injunctive relief in this case. (Emphasis added)

[54]                        Turning to the facts, Mr. Bassal's trial evidence is that he only found out about the existence of Jaguar Cars accessories through a Jaguar Cars' publicity in the June 1990 issue of the Montreal Magazine. In his affidavit in support of the present motion, Mr. Bassal did not give any indication that Jaguar Cars encouraged Remo to use the JAGUAR trade-mark nor did he give any indication that Remo relied on Jaguar Cars' encouragement to act to its detriment at any point in time. Most importantly, in its Response to Defendants' Motion Record at paragraphs 14 and 45, Remo admits that it did not rely on the encouragement of Jaguar Cars to use the JAGUAR trade-mark. Paragraph 14 states:

¼ the undersigned attorneys stipulate that there was no reliance on behalf of Remo based on Jaguar's inactivity in suing Remo prior to the filing of the Defendants' Counterclaim.

[55]                        It is therefore certain that, at the very least, one of the elements of acquiescence (acting to its detriment in reliance upon the encouragement by the rights holder) would be impossible for Remo to prove. The acquiescence argument would surely fail. Accordingly, Remo's request to amend its pleading to argue the acquiescence should not be granted.

CONCLUSION

[56]                        For these reasons, the Court answers the first and the fourth questions in the negative and the second, third and fifth questions in the affirmative. Consequently, this motion is rejected.

[57]                        Costs of the motion are awarded to the Defendants on a solicitor-and-client basis.

ORDER

THIS COURT ORDERS that

1. The motion be denied;

2. Costs of the motion to be awarded to the Defendants on a solicitor-and-client basis.

"Michel M.J. Shore"