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Federal Court
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Cour fédérale
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Ottawa, Ontario, this 10th day of September 2010
Present: The Honourable Mr. Justice Pinard
BETWEEN:
and
SHOPPERS DRUG MART CORPORATION/
CORPORATION SHOPPERS DRUG MART,
JOHN DOE c.o.b. as SHOPPERS DRUG MART #904,
JOHN DOE c.o.b. as SHOPPERS DRUG MART #943,
JOHN DOE c.o.b. as SHOPPERS DRUG MART #966,
JOHN DOE c.o.b. as SHOPPERS DRUG MART #2205 and
JOHN DOE c.o.b. as SHOPPERS DRUG MART or
PHARMAPRIX
REASONS FOR ORDER AND ORDER
[1] This is an appeal by the defendants from a discretionary decision made by Prothonotary Aronovitch on July 28, 2010, dismissing their motion for security for costs.
[2] It is trite law that such a discretionary order of a Prothonotary ought not to be disturbed on appeal to a Judge unless:
a) the questions in the motion are vital to the final issue of the case, or
b) the order is clearly wrong, in the sense that the exercise of discretion by the Prothonotary was based upon a wrong principle or upon a misapprehension of facts.
See
[3] In the present case, the parties agree that the question of security for costs is not one that is vital to the final issue of the case. However, the defendants submit that the impugned decision was based upon both the application of a wrong legal principle and a misapprehension of the facts.
[4] The present action for trade-mark infringement was commenced by the plaintiff by way of a Statement of Claim filed on April 9, 2010. As found by the Prothonotary, the plaintiff is “ordinarily resident outside
[5] The following relevant facts, as stated by the plaintiff in its Memorandum of Fact and Law, are well established by the evidence:
- the plaintiff Moroccanoil Israel Ltd. is the owner in Canada of Canadian registered trade-mark TMA 734,460, which is registered for use in association with hair care products, among other wares, as follows: MOROCCANOIL;
- with respect to the distribution and sale of Moroccanoil merchandise in
- in addition to Moroccanoil Oil Treatment, Moroccanoil Canada Inc. buys Moroccanoil merchandise from the plaintiff on a regular monthly basis;
- Moroccanoil Canada Inc., through its distribution network in
- by virtue of its distribution of Moroccanoil merchandise in Canada, Moroccanoil Canada Inc. owes the plaintiff several hundreds of thousands of dollars on a regular basis, in the ordinary course of business;
- separately, the plaintiff has a 50% interest in lands and premises municipally known as
- the plaintiff’s equity in this property is worth several hundreds of thousands of dollars.
[6] In her decision, the Prothonotary stated the following:
While security for costs will generally be required if one of the conditions listed under Rule 416(1) is met, the Court retains a discretion to deny a request for the posting of security where it is satisfied that the defendants are in no real jeopardy of recovering its costs once judgment has issued in its favour, or if requiring security would have the effect of preventing the prosecution of an otherwise meritorious claim: Pembina (County) Water Resources District v. Manitoba, 2005 F.C. 1226.
The defendants have established one of the criteria under Rule 416(1). It is not disputed that the plaintiff is a corporation incorporated pursuant to the laws of
The uncontroverted evidence of the plaintiff is that it has substantial assets in
The plaintiff also separately, has a 50% undivided, and unencumbered, title and interest in lands and premises situated in
Given the value of the plaintiff’s exigible assets and property in Canada, the Court is satisfied that the plaintiff has sufficient assets to pay the defendants’ costs, that the defendants are not in jeopardy of recovering these, and accordingly, that the plaintiff should not be required to deposit security for costs.
[7] Upon hearing counsel for the parties and reviewing the material filed, I am not prepared to conduct a de novo review of the merits of the impugned decision and to exercise my own discretion differently, for the following reasons.
[8] There is no prima facie right to security for costs. The Court retains the discretion to deny a request for security in circumstances where the defendant is in no real jeopardy of not recovering its costs once judgment has issued in its favour (Pembina County Water Resources District v. Manitoba, 2005 FC 1226, at paragraph 13; K-Tel International Ltd. et al. v. Benoit (1995), 59 C.P.R. (3d) 370 (F.C.T.D.), at paragraph 15).
[9] No evidence was adduced indicating that the monies owing by Moroccanoil Canada Inc. to the plaintiff are not exigible pursuant to the Federal Courts Rules respecting garnishment, nor that the plaintiff’s interest in real property located in Canada is not an exigible asset against which the defendants could seek to recover any unsatisfied cost award. Finally, it is not disputed that the plaintiff owns Canadian-registered intellectual property rights.
[10] In the circumstances, I fail to see how the Prothonotary did not apply the proper legal test, or made any palpable and overriding error in her conclusion drawn from uncontroverted facts. The quality of the plaintiff’s assets has not been challenged in any way, either by distinct evidence or cross-examination of the affiant Haim Lampert, the General Manager and Chief Executive Officer for the plaintiff. Furthermore, it cannot be said that the plaintiff’s assets in
[11] For all of the above reasons, the defendants’ motion is dismissed, with costs payable to the plaintiff upon taxation, in any event of the cause.
ORDER
The defendants’ motion is dismissed, with costs payable to the plaintiff upon taxation, in any event of the cause.
The defendants have leave to serve and file their Statement of Defence within ten (10) days of the date of this Order.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-549-10
STYLE OF CAUSE: MOROCCANOIL ISRAEL LTD. v. SHOPPERS DRUG MART CORPORATION/ CORPORATION SHOPPERS DRUG MART, JOHN DOE c.o.b. as SHOPPERS DRUG MART #904, JOHN DOE c.o.b. as SHOPPERS DRUG MART #943, JOHN DOE c.o.b. as SHOPPERS DRUG MART #966, JOHN DOE c.o.b. as SHOPPERS DRUG MART #2205 and JOHN DOE c.o.b. as SHOPPERS DRUG MART or PHARMAPRIX
PLACE OF HEARING:
DATE OF HEARING: September 9, 2010
REASONS FOR ORDER
AND ORDER: Pinard J.
DATED: September 10, 2010
APPEARANCES:
Mr. Thomas Slahta FOR THE PLAINTIFF
Mr. Steven Garland FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Kestenberg Siegal Lipkus LLP FOR THE PLAINTIFF
Smart & Biggar FOR THE DEFENDANTS