



COURT OF APPEAL FOR ONTARIO

CITATION: Direct Energy Marketing Limited v. National Energy
    Corporation, 2014 ONCA 105

DATE: 20140205

DOCKET: C57490 & C57568

Doherty, Gillese and Lauwers JJ.A.

BETWEEN

C57490

Direct Energy Marketing Limited

Applicant (Respondent)

and

National Energy Corporation

Respondent (Appellant)

C57568

BETWEEN

Direct Energy Marketing
    Limited

Applicant (Respondent)

and

National Energy
    Corporation

Respondent (Appellant)

Martin Teplitsky and Bradley Teplitsky, for the respondent
    (appellant)

Paul Le Vay and Justin Safayeni, for the applicant
    (respondent)

Heard and released orally:  February 3, 2014

On appeal from the order of Justice J.S. ONeill of the
    Superior Court of Justice, dated July 30, 2013.

ENDORSEMENT

[1]

There are two appeals before this court.  Appeal C57568 was not argued
    and is dismissed as an abandoned appeal.

[2]

On the second appeal, the appellant raises essentially three issues.

[3]

The first addresses the findings under s. 7(a) and s. 22(1) of the
Trade-Marks
    Act
.  We are satisfied that the application judges findings in respect of
    those provisions were warranted on the record before him and fully supported his
    conclusion with respect to the breach of those provisions.

[4]

The second issue relates to the application judges finding that the
    respondent had proved damages flowing from the breach.  The appellant argues
    that the respondent had to prove such damages as an element of the breach and
    that the respondent produced no evidence to support the assertion that the
    misrepresentations in the appellants brochure caused damages.

[5]

We do not accept this submission.  The respondent filed affidavit
    evidence from Leonard Diplock, the Vice-President and General Manager of Direct
    Energys water heater and rental services.  He testified that as a direct
    result of the brochure, Direct Energy had suffered damages to its business
    and reputation.  As well, there was evidence showing that in the relevant time
    period, Direct Energy had experienced an unusually large number of
    cancellations of hot water heater contracts.

[6]

Mr. Diplocks evidence was not challenged in cross-examination.

[7]

The application judge appears to have accepted this evidence, saying
    that it was reasonable to infer that Direct Energy had suffered damages and
    that Direct Energy had demonstrated a 
prima facie
 case of damages. 
    In our view, it was open to the application judge to make this finding.  Having
    found that Direct Energy had proved damages, it was open to the motion judge to
    refer the quantification of those damages to a master.

[8]

The third issue relates to s. 52(1) of the
Competition Act
. 
    The application judge did not specifically address the elements of liability under
    s. 52.  While liability under s. 52 to a large extent corresponds to liability
    under s. 7(a) of the
Trade-Marks Act
, s. 52(1) does require that the
    misrepresentation be made with knowledge of or recklessness as to its falsity,
    whereas s. 7 of the
Trade-Marks Act
does not contain that
    requirement.

[9]

It would have been better had the application judge specifically
    addressed the added mental component of s. 52(1).  We point out, however, that
    on the application, the appellant did not specifically challenge that element
    of s. 52.(1)

[10]

In
    any event, in the course of his findings, the motion judge said, at para.
    22(a):

The brochure is more directed at misleading consumers with respect
    to Direct Energy or discrediting this company than informing fairly and fully
    the consumer with the information he or she require to make an informed
    decision.

[11]

We
    are satisfied that this holding by the application judge and, in particular,
    his finding that the brochure was directed at misleading consumers implicitly
    amounts to a finding that the misrepresentations in the brochure were made
    knowingly or recklessly.  In our view, that finding flows from the other
    findings made by the application judge with respect to the contents of the
    brochure.

[12]

The
    appeal is dismissed.

[13]

Costs
    of the appeal are agreed upon.  Costs to the respondent in the amount of
    $15,000, inclusive of disbursements and relevant taxes.


