



COURT OF APPEAL FOR ONTARIO

CITATION: Boaden Catering Limited v. Real Food For Real Kids Inc., 2017 ONCA 248

DATE: 20170327

DOCKET: C62410

MacFarland, van Rensburg and Huscroft
    JJ.A.

BETWEEN

Boaden Catering Limited

Plaintiff (Appellant)

and

Real Food For Real Kids Inc. and David Starbuck
    Farnell

Defendants (Respondents)

and

Real Food For Real Kids Inc.

Plaintiff
    by Counterclaim (Respondent)

and

Boaden Catering Limited

Defendant by Counterclaim (Appellant)

Adam Jarvis, for the appellant

John Simpson, for the respondents

Heard: February 15, 2017

On appeal from the order of
    Justice John R. Sproat of the Superior Court of Justice, dated June 30, 2016,
    with reasons reported at 2016 ONSC 4098, and from the costs order, dated August
    16, 2016.

ENDORSEMENT

[1]

This is an appeal from a summary judgment
    dismissing the appellants action and an order dismissing the appellants motion
    to strike certain paragraphs of the respondents statement of defence. The
    appellant also seeks leave to appeal the costs award.

A.

HISTORY OF THE PROCEEDINGS

[2]

The proceedings arise out of a dispute over
    website domain names. The appellant Boaden Catering Limited (Boaden) and the respondent
    Real Food For Real Kids Inc. (RFRK) are competitors in the market for healthy
    childrens catering in the Greater Toronto Area. In July 2014 and December 2014,
    Boaden registered a .com domain name (realfoodforrealkidss.com) and three .ca
    domain names (realfoodforkids.ca, rfrk.ca and realfoodlunchclub.ca), which were
    identical or similar to names that RFRK claimed to have used in its business continuously
    since 2005. In December 2014, Boaden registered RFRK and RFRK.CA as business
    names under Ontarios
Business Names Act
,
    R.S.O. 1990, c. B.17
.
Boaden also embedded RFRK,
    Real Food for Real Kids and other similar keywords as meta-tags on its
    website at organickidscatering.ca, which ensured that persons searching the
    internet using such keywords would be directed to Boadens website.

[3]

In March 2015, RFRK submitted a complaint under
    the Internet Corporation for Assigned Names and Numbers (ICANN) Uniform Domain
    Name Dispute Resolution Policy (UDRP) concerning Boadens registration of the
    domain name realfoodforrealkidss.com. On May 5, 2015, an arbitrator found
    that Boaden had no legitimate interest in this domain name, which it had
    registered in bad faith.

[4]

On May 7, 2015, RFRK submitted a complaint under
    the Canadian Internet Registration Authority (CIRA) Domain Name Dispute
    Resolution Policy concerning Boadens registration of the three .ca domain
    names. On July 8, 2015, the CIRA arbitrator found that Boaden had no legitimate
    interest in the disputed .ca domain names, and that the domain names had been
    registered in bad faith. The arbitrator ordered that the registration of the .ca
    domain names be transferred from Boaden to RFRK.

[5]

On June 2, 2015, Boaden commenced an action in
    the Superior Court against RFRK and its principal David Farnell for a variety
    of relief, including a declaration that Boaden is the lawful owner of the disputed
    domain names, and damages for passing off, defamation and theft of trade
    secrets. In accordance with CIRA policy, the order to transfer the registration
    of the .ca domain names to RFRK is suspended while court proceedings are
    pending.

[6]

RFRK and Farnell defended the action and RFRK counterclaimed
    for injunctive and declaratory relief as well as compensatory and punitive
    damages for Boadens conduct in registering and using the domain names, and for
    other conduct in relation to Boadens business.

[7]

On January 4, 2016, RFRK served a motion for
    summary dismissal of Boadens action. The motion was originally returnable at
    the same time as an interlocutory injunction motion brought by Boaden, which had
    been adjourned on July 17, 2015 to the week of February 29, 2016. In the
    interim, Boaden had served a motion to strike certain paragraphs of the
    statement of defence, also returnable on February 29, 2016.

[8]

During the week of February 29, 2016, Boadens
    counsel was ill. As a result, on March 1, 2016, the parties appeared before
    Sproat J. and all three motions were adjourned to the week of April 11, 2016. Sproat
    J. made it clear that Boadens pleadings motion would not be heard and
    determined in advance of the summary judgment motion.

B.

DECISION OF THE MOTIONS JUDGE

[9]

Accordingly three motions were before the court on
    April 13, 2016: the motion for summary dismissal of the action, the motion to
    strike paragraphs of the statement of defence, and the motion for an
    interlocutory injunction (which Boaden advised it was no longer pursuing).
    Boaden sought an adjournment of the summary judgment motion for the purpose of
    cross-examining RFRKs deponents. The motions judge refused to adjourn the
    motion. As the motions judge explained in his written reasons, having regard to
    the history of the proceedings, Boaden was in breach of the obligation under
    rule 39.02(3) of the
Rules of Civil Procedure,
R.R.O. 1990, Reg. 194
to
    exercise its right to cross-examine with reasonable diligence.

[10]

After hearing argument and reserving his
    decision, the motions judge decided to hear
viva voce
evidence on the summary judgment motion from Louie Tassone, Boadens
    principal, in accordance with his powers under rule 20.04(2.1). The motions
    judge subsequently provided written reasons dismissing Boadens action and the
    pleadings motion.

[11]

The motions judges reasons are comprehensive, clear
    and detailed, and need not be set out in any detail here. It is sufficient to note
    that the motions judge considered the evidence respecting each cause of action
    alleged and dismissed Boadens action, concluding that there was no genuine
    issue requiring a trial. The motions judge found that Boaden registered the
    domain name rfrk.ca in bad faith with a view to denying RFRK the ability to use
    the name. He concluded that Boaden brought the litigation to intimidate a
    smaller business competitor and adopted a number of dubious tactics to gain
    advantage. Boaden had acted in bad faith, attempting to appropriate RFRKs
    goodwill and to exploit the value of its trademarks for illegitimate financial
    gain, and engaged in conduct that was unethical and deceptive.

[12]

As for the pleadings motion, the motions judge
    rejected Boadens assertion that certain paragraphs of the statement of defence
    alleging bad faith acts by Boaden, should have been pleaded as part of the
    counterclaim rather than the defence. He concluded that bad faith conduct was
    relevant to the defence of a number of Boadens claims in the action, in
    particular, to the claims for an interlocutory injunction, the declaration that
    it owned the contested domain names (as registering a name in bad faith is
    clearly relevant to the validity of the registration) and to the claim for
    damages. He dismissed the pleadings motion.

[13]

The motions judge awarded costs in favour of the
    respondents in the sum of $98,959.82. He concluded that there was reprehensible
    conduct by Boaden, which justified a costs award on a higher scale than partial
    indemnity, and that the amount sought by the respondents was both reasonable
    and proportionate.

C.

ISSUES AND ANALYSIS

[14]

The appellant raises several grounds of appeal.

(1)

Denial of an Adjournment

[15]

The first ground, which was the appellants main
    argument on appeal, is that Boaden was denied procedural fairness when the
    motions judge wrongly refused to adjourn the summary judgment motion.

[16]

Boaden says an adjournment was warranted for the
    following reasons: first, Boaden needed time to cross-examine the deponents of RFRKs
    affidavits; second, its pleadings motion ought to have been heard and
    determined in advance of the summary judgment motion; third, the summary
    judgment motion ought to have been adjourned to be heard together with RFRKs intended
    motion for summary judgment on the counterclaim; and fourth, Boaden needed time
    to respond to new evidence and an amended factum RFRK delivered only days
    before the scheduled motion date.

[17]

We reject this ground of appeal. There is
    limited scope for appellate intervention with respect to the denial of an
    adjournment. The decision to grant or refuse an adjournment is discretionary
    and will only be interfered with if the judge has failed to take account of
    relevant factors and has exercised his or her discretion unreasonably, such
    that the decision is contrary to the interests of justice:
Khimji v.
    Dhanani
(2004), 69 O.R. (3d) 790 (C.A.), at para. 14. There
    is no reason in this case to interfere with the exercise of discretion by the
    motions judge in refusing to adjourn the summary judgment motion.

[18]

First, consistent with the pattern of delay by
    Boaden in the litigation, Boaden did not act reasonably to cross-examine RFRKs
    deponents. As early as July 2015 RFRK indicated its intention to move for
    summary judgment and proposed that the parties agree to a schedule for the
    litigation, without co-operation from Boaden. As the motions judge noted,
    Boaden took no steps to cross-examine RFRKs deponents between January 6, 2016,
    when RFRK served its motion record for summary judgment, and March 1, 2016,
    when the motion was adjourned because of the illness of Boadens counsel. Even
    after the adjournment, Boadens first and only request to cross-examine RFRKs
    deponents was on March 30 (before Boaden had delivered any responding material).
    RFRKs counsel responded that the deponents were not available on the date
    Boaden had proposed, April 5, but were available on April 8. Boaden refused the
    offer to examine on April 8, saying it was too close to the motion date. The motions
    judge was justified in concluding that Boaden did not exercise its right to
    cross-examine with reasonable diligence and that an adjournment for
    cross-examination was not warranted.

[19]

Second, the fact the appellants brought a motion
    to strike paragraphs of the statement of defence did not warrant an adjournment
    of the summary judgment motion. At the March 1 attendance, Sproat J. made it
    clear that the pleadings motion would not be heard first and that he was
    prepared to hear the summary judgment motion on the matters return. There was
    no reason for Boaden to expect an adjournment of the summary judgment motion on
    the same basis that had already been canvassed and for reasons that had been
    rejected by the court.

[20]

Third, Boadens assertion that the motion for
    summary dismissal of its claim ought to have been adjourned so it could be
    heard with RFRKs motion for summary judgment on the counterclaim has no merit.
    Although there was some indication that RFRK would bring such a motion in the
    future, there was no such motion pending and no direction from the court that the
    two motions would need to proceed together. In any event, as Boaden had not yet
    delivered a defence to the counterclaim, any motion for judgment on the
    counterclaim would have been premature: rr. 20.01, and 20.09. As such, RFRKs
    intention to move for summary judgment on the counterclaim was irrelevant to
    any request for an adjournment of the motion for summary dismissal of Boadens
    action.

[21]

Finally, we reject the argument that an adjournment
    was warranted because RFRK had put forward new evidence and served an amended
    factum. The alleged new evidence consisted of print-outs from the Canadian
    Intellectual Property Offices public database showing that RFRKs applications
    to register two trademarks had matured to registration. Boaden was aware of the
    applications, pleading the February 25, 2015 trademark registration application
    and its intention to contest same at paras. 22 and 23 of its amended statement
    of claim. In any event, the motions judge determined the action based on common
    law principles, and not based on RFRKs registered trademarks. As for the late
    delivery of an amended factum, this was necessitated by the need to incorporate
    evidence from Boadens affidavits (served only days before the motion) and
    cross-examination, and would not justify an adjournment.

[22]

Accordingly, there is no error in the motions
    judges exercise of discretion in refusing an adjournment, and we do not give
    effect to this ground of appeal.

(2)

Dismissal of Motion to Strike

[23]

Boadens next argument is that the motions judge
    should have granted its motion to strike certain paragraphs of RFRKs statement
    of defence. The assertion is that certain allegations of bad faith conduct were
    not relevant to the respondents defence, and should only have been pleaded in
    the counterclaim. From this Boaden says that, in dismissing the action, the
    motions judge ought not to have taken into consideration matters it says were
    irrelevant to the defence of the claim (as opposed to its counterclaim), such
    as Boadens registration of RFRK as a business name, the use of meta-tags and
    the procedural history of the parties dealings.

[24]

We do not give effect to this argument. There
    was no error in the refusal of the motion to strike paragraphs of the
    respondents defence. The motions judge was entitled to find that the impugned
    paragraphs were relevant to the appellants alleged bad faith, which in turn
    was clearly relevant to the validity of its domain name registrations. The
    motions judge was entitled to consider all of the evidence of Boadens use of
    the disputed marks and Boadens course of conduct in deciding, among other
    things, whether Boaden was entitled to a declaration that it owned the
    contested domain names.

(3)

Denial of Procedural Fairness

[25]

Boaden also asserted in oral argument that the
    denial of its adjournment request had a snowballing effect and that it was
    denied procedural fairness. Although this part of Boadens argument was
    difficult to follow, Boaden seems to say that it was prevented from responding
    properly to the motion for summary judgment and that the motions judge relied
    on the previous arbitration decisions in which Boaden had not participated to grant
    summary judgment dismissing Boadens action.

[26]

There is no merit to this argument. First,
    Boaden was not prevented from responding properly to the motion. Although only delivered
    on the eve of the summary judgment motion, Boadens materials seeking to
    substantiate the claims asserted in the action were before the court, as were the
    materials previously filed in respect of the interlocutory injunction motion.

[27]

Whether or not Boaden had an excuse for not
    participating in the CIRA arbitration proceedings, the motions judge did not
    base his findings on the results of those proceedings, but simply referred to
    them at paras. 24 and 25 of his reasons. Instead, the motions judge noted, at
    para. 27, that Boaden obviously had the opportunity to file evidence in this
    court action to establish the basis for its claim to [the] domain names and he
    went on to determine the issues based on the evidence that was presented to the
    court, including the additional oral evidence of Tassone. The motions judge
    concluded that, on the evidence, the respondent had used three marks, including
    RFRK, and that the respondent operated an internet website at rfrk.com
    featuring such marks. The motions judge did not err in concluding, after giving
    Boadens principal the opportunity to provide
viva voce
evidence, that Boadens registration of the domain names was in bad
    faith with a view to denying RFRK the ability to use the names.

(4)

Failure to Apply the Right Test

[28]

The only alleged error of law pressed in oral argument was that
    the motions judge erred in failing to expressly apply the test in
Black
    v. Molson Canada
(2002), 60 O.R. (3d) 457 (S.C.), which Boaden
    characterizes as the proper
authority relating to domain name
    registrations. Boaden refers to the test, as cited in
Black,
as
    requiring a complainant to establish (i) that the domain name is identical to a
    trademark or service mark in which the complainant has rights; (ii) the
    respondent has no rights or legitimate interests in respect of the domain name;
    and (iii) the domain name has been registered or is being used in bad faith.
    Boaden says that the motions judge did not consider whether the domain names it
    registered were identical with a mark in which RFRK had rights, and did not
    consider evidence demonstrating that Boaden had rights and legitimate interests
    in respect of the domain name.

[29]

Again, there is no merit to this submission. In
Black
, the
    court referred to the criteria for directing the transfer of a .com domain
    name, as articulated in the ICANN policies at the time, which required that a
    domain name be identical to the complainants mark. The current criteria are substantially
    the same under both the ICANN policies and the CIRA Dispute Resolution Policy
    governing disputes over .ca domain names, except that it is sufficient if the disputed
    domain name is confusingly similar to a mark in which the complainant had and
    continues to have rights. The motions judge applied the same test in his
    reasons: see, in particular, para. 37. And, contrary to Boadens assertion, the
    motions judge considered all of the relevant evidence put forward by Boaden
    seeking to explain why it had rights and legitimate interests in respect of the
    domain name. The evidence was proffered by Tassone, who claimed that Boaden had
    registered the domain names as part of a public education initiative it started
    in 2014 called Real Food Real Knowledge, and that it never occurred to him
    that this bore a resemblance to the name of his completion. The motions judge
    explained why he soundly rejected that evidence at paras. 29 to 38 of his
    reasons. We find no merit to this ground of appeal.

(5)

Costs

[30]

Finally, Boaden seeks leave to appeal the costs
    award of $98,959.82. Boaden says that the motions judge erred in failing to
    consider its offer to settle, and in awarding costs in respect of the summary
    judgment motion that included RFRKs costs in its counterclaim.

[31]

There is no merit to this argument. The offer to
    settle would have required RFRK to consent to a dismissal of its counterclaim
    in exchange for a dismissal of the action on a without costs basis, and would
    have no bearing on the respondents costs entitlement for their success on all
    three motions that were before the court. The respondents bill of costs
    properly noted that it did not claim any costs for attendances that were
    exclusively in relation to the counterclaim. The claim and counterclaim arose out
    of the same dispute between the parties. The motions judge was satisfied that
    the attendances set out in the bill of costs were reasonable, and, noting that
    Boaden had not filed its own accounts, he concluded the amount claimed was
    proportionate. There is no basis to interfere with the motions judges
    determination of costs in this matter.

D.

DISPOSITION

[32]

The appeal is therefore dismissed in its entirety. The
    respondents shall have their costs of the appeal fixed at $7,500, inclusive of
    HST and disbursements.

J. MacFarland J.A.

K. van Rensburg J.A.

Grant Huscroft J.A.


