T-1433-87
Montres Rolex S.A. and Rolex Watch Company
of Canada Limited (Applicants)
v.
Minister of National Revenue (Respondent)
INDEXED AS: MONTRES ROLEX S.A. v. M.N.R.
Trial Division, McNair J.—Toronto, July 15;
Ottawa, September 30, 1987.
Trade marks — Infringement — Order under s. 52(4)
prohibiting importation of offending wares — Final determi
nation as to legality of importation and distribution of wares
condition precedent to valid order — Prothonotary's judgment
upon consent and by default — Not conclusive in rem as
against non-consenting parties — Not valid s. 52(4) order as
not final determination as to legality of subject-matter com
plained of
Judicial review — Prerogative writs — Mandamus — To
compel M.N.R. to include in Customs Tariff by virtue of s.
52(4) Trade Marks Act, wares banned from importation pur
suant to Prothonotary's judgment — Final determination as to
legality of importation condition precedent to valid s. 52(4)
order — Prothonotary's judgment upon consent and by default
not final determination — No valid s. 52(4) order, therefore no
duty on M.N.R. to include among prohibited goods of Cus
toms Tariff wares subject-matter of Prothonotary's judgment.
Customs and excise — Customs tariff — Inclusion in
Schedule C, tariff item 99209-1(6) of goods prohibited from
importation pursuant to s. 52(4) Trade Marks Act — Validity
of s. 52(4) order dependent upon final determination as to
legality of importation — Where order not constituting final
determination, M.N.R. cannot be compelled to include in
Schedule C imported counterfeit wares.
Practice — Judgments and orders — Consent judgment —
Prothonotary's judgment upon consent prohibiting importation
of counterfeit wares not s. 52(4) order under Trade Marks Act
— Final determination as to legality of importation condition
precedent to valid s. 52(4) order — Consent judgment not final
and conclusive as against non-consenting parties.
Practice — Judgments and orders — Default judgment —
Order under s. 52(4) Trade Marks Act, banning importation of
offending wares, requiring final determination as to legality of
importation — Prothonotary's judgment upon default, prohib
iting importation of counterfeit wares, not valid s. 52(4) order
— Default judgment lacking finality and conclusiveness of
judgment on subject-matter complained of.
Practice — Parties — Joinder — Order under s. 52(4)
Trade Marks Act prohibiting importation of counterfeit wares
— Unnecessary for M.N.R. to be joined as party in trade mark
infringement and passing off action to obtain prohibitory relief
under s. 52(4).
The plaintiffs' action for infringement was framed as a class
action against specified defendants in their own behalf and as
representatives of "all others selling wares bearing the plain
tiffs' trade mark `Rolex' ". In their statement of claim, the
plaintiffs sought, inter alia, an order under subsection 52(4) of
the Trade Marks Act prohibiting the future importation into
Canada of the allegedly offending wares. Judgment was ren
dered by the Prothonotary under Rule 437 prohibiting named
defendants and all those dealing in the counterfeit wares from
importing the said wares. Three of the defendants consented to
judgment; judgment went by default against two while two
others filed a defence. The plaintiffs sought to have the judg
ment enforced against all importers, without success. They
move for mandamus to compel the Minister of National Reve
nue to include among the prohibited goods of Schedule C of the
Customs Tariff by virtue of subsection 52(4) of the Act, the
wares which are the subject-matter of the Prothonotary's judg
ment. The case raises two issues: whether the Minister can be
so compelled and whether the Prothonotary's judgment consti
tutes a valid order under subsection 52(4).
Held, the motion should be dismissed.
It is well established that an order validly made under
subsection 52(4) of the Trade Marks Act compels the inclusion
of prohibited goods in Schedule C of the Customs Tariff It
follows that if the Minister refuses to comply with such an
order, mandamus will lie against him to compel the imposition
of what is in effect a ban on importation. In the case at bar,
however, the Prothonotary's judgment fails to qualify as a valid
order under subsection 52(4). Subsection 52(4) confers on the
Court the power to make an order prohibiting the future
importation of offending wares only if it is finally determined in
the action that their importation and distribution are contrary
to the Act. This determination of illegality is a condition
precedent to a discretionary order under subsection 52(4) and
such determination can only mean an adjudication on the
merits of the issue at trial. Neither the consent judgment nor
the judgment in default of defence constitute such adjudica-
tions. Under Rule 336(1)(c), a prothonotary may give a con
sent judgment disposing of an action "if he is satisfied that all
parties affected have consented thereto". The scope of a con
sent judgment is limited by its bounds; such a judgment cannot
be taken to be final and conclusive in rem as against non-con
senting parties. Moreover, the consent judgment does not oper
ate as a substitute for the judicial determination of a statutory
liability. Neither can a judgment for default be accorded the
finality and conclusiveness of a judgment on the merits of the
issue. This is particularly true where statutory provisions, such
as subsection 52(4), expressly require a final determination of
the legality of the subject-matter complained of.
The argument respecting the necessity for the Minister to be
made a party to the action in order to obtain prohibitory relief
under subsection 52(4), should be rejected. Were it otherwise,
the Minister would have to be a party defendant in any suit for
trade mark infringement and passing off where it was even
remotely contemplated that resort might be had to section 52 of
the Act.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Customs Tariff, R.S.C. 1970, c. C-41, s. 14 (as am. by
S.C. 1986, c. 1, s. 175), Schedule C, tariff item
99209-1(b).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss.
18, 57(3).
Federal Court Rules, C.R.C., c. 663, RR. 336, 437,
1711(4).
Trade Marks Act, R.S.C. 1970, c. T-10, ss. 52, 53.
CASES JUDICIALLY CONSIDERED
APPLIED:
Adidas Sportschuhfabriken Adi Dossier K. G. et al. v.
Kinney Shoes of Canada Ltd.; E'Mar Imports Ltd.,
Third Party (1971), 19 D.L.R. (3d) 680; 2 C.P.R. (2d)
227 (Ex. Ct.); Northrop Corp. v. The Queen and Canadi-
an Commercial Corp., [1977] 1 F.C. 289; (1976), 68
D.L.R. (3d) 182 (T.D.); Oppenheim & Co. v. Mahomed
Haneef, [1922] 1 A.C. 482 (P.C.).
REFERRED TO:
Karavos v. The City of Toronto and Gillies, [1948]
O.W.N. 17 (C.A.); O'Grady v. Whyte, [1983] 1 F.C. 719
(C.A.); General Motors of Canada Ltd. v. Naken et al.,
[1983] 1 S.C.R. 72; 32 C.P.C. 138; Perry v. R., [1982] 1
F.C. 624; (1982), 41 N.R. 91 (C.A.); Rees v. Richmond
(1890), 62 L.T. 427 (Ch.D.); Toronto Harbour Commis
sioners v. The "Toryoung II", [1976] 1 F.C. 191 (T.D.);
The King v. Hooper, Rowley S., [1942] Ex.C.R. 193;
[1943] 1 D.L.R. 279.
AUTHORS CITED
Halsbury's Laws of England, vol. 26, 4th ed. London:
Butterworths, 1979.
COUNSEL:
Simon Schneiderman for applicants.
Debra McAllister for respondent.
SOLICITORS:
Miller, Mills & Associates, Toronto, for
applicants.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for order ren
dered in English by
MCNAIR J.: This is an originating motion under
section 18 of the Federal Court Act [R.S.C. 1970
(2nd Supp.), c. 10] for an order of mandamus to
compel the Minister of National Revenue to deem
to be included in Schedule C of the Customs
Tariff [R.S.C. 1970, c. C-41] the judgment of the
Court entered on January 13, 1987 prohibiting,
inter alia, the importation of wares into Canada
bearing the plaintiffs' trade mark or any colou-
rable imitation thereof by virtue of section 52 of
the Trade Marks Act [R.S.C. 1970, c. T-10] and
to further compel the Minister of National Reve
nue to direct customs officers to prohibit the
importation into Canada of any such offending
wares.
The applicants are the plaintiffs in an action
instituted by statement of claim filed on October
28, 1986. The action was framed as a class action,
naming seven individual defendants in their own
behalf and as representative of "all others selling,
offering for sale, importing, advertising, manufac
turing, or distributing any wares in association
with the name Rolex or the Crown Design being
registered Trademarks No. 278,348, No. 208,437,
No. 130/33476 and No. 78/19056 under the Trade
Marks Act R.S.C. 1970, as amended, when the
same are not of the Plaintiffs' manufacture or
merchandise".
The motion originates from a judgment of the
Associate Senior Prothonotary, Peter A. K. Giles,
dated January 13, 1987 and made pursuant to a
motion for judgment under Rule 437 [Federal
Court Rules, C.R.C., c. 663]. Three of the defen
dants consented to judgment, namely, Brad
Balshin, Hilda Balshin and Shelly Michaels and
judgment went by default against the defendants
Arthur Christodoulou and Martin Herson. The
judgment was without prejudice to the two re
maining named defendants, David C. Redman and
David Pahmer, who had filed defences to the
action. Presumably, the action against them will
ultimately proceed to trial.
The provisions of the judgment apropos of the
issue herein are the following:
... it is hereby ordered and adjudged that:
1. The Defendants Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson and all others sell
ing, offering for sale, importing, advertising, manufacturing, or
distributing any wares in association with the name Rolex or
the Crown Design being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056 under the
Trade Marks Act R.S.C. 1970, as amended, when the same are
not of the Plaintiffs' manufacture or merchandise, be and the
same are herein enjoined from:
(i) infringing the registered Trademarks No. 278,348, No.
208,437, No. 130/33476 and No. 78/19056;
(ii) directly or indirectly using the name Rolex or the Crown
Design on or in connection with watches or other wares not of
the Plaintiffs' manufacture or merchandise;
(iii) directly or indirectly in any way representing that the
business of the Defendants is connected with the business of the
Plaintiffs:
(iv) directly or indirectly selling, offering, exposing or advertis
ing for sale or procuring to be sold or manufacturing or
distributing any wares under the name Rolex or the Crown
Design if the same are not of the Plaintiffs' manufacture or
merchandise, or under any other name which by reason of
colourable imitation of the word Rolex or the Crown Design or
otherwise is calculated to represent or lead to the belief that
such wares are the wares of the Plaintiffs if the same are not of
the Plaintiffs' manufacture or merchandise;
2. The Defendants Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson and all others sell
ing, offering for sale, importing, advertising, manufacturing, or
distributing any wares in association with the name Rolex or
the Crown Design, being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056 under the
Trade Marks Act, R.S.C. 1970, as amended, when the same
are not of Plaintiffs' manufacture or merchandise, be and the
same are hereby prohibited from importing into Canada any
watches or other wares bearing the registered Trademarks No.
278,348, No. 208,437, No. 130/33476 and No. 78/19056, to wit
the name Rolex and the Crown Design, or any colourable
imitation of the same which is calculated to represent or lead to
the belief that such wares are the wares of the Plaintiffs, if the
said trademarks or the said colourable imitation have been
applied to watches or other wares that are not of the Plaintiffs'
manufacture or merchandise.
3. The Defendants Brad Balshin, Hilda Balshin, Arthur Chris-
todoulou, Shelly Michaels, Martin Herson and all others sell
ing, offering for sale, importing, advertising, manufacturing, or
distributing any wares in association with the name Rolex or
the Crown Design, being registered Trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056 under the
Trade Marks Act, R.S.C. 1970, as amended, when the same
are not of the Plaintiffs' manufacture or merchandise, do
forthwith deliver up into the custody of the Plaintiffs' solicitors
the following:
any documents, articles, watches and other wares relating to
the design, manufacture, sale, advertisement, operation,
maintenance, supply, acquisition, assembly, importation or
disposal of watches and other wares bearing the name Rolex
or the Crown Design.
Paragraph 14 of the plaintiffs' statement of
claim alleges as follows:
14. In addition to the named Defendants there are many others
in Canada who sell, offer for sale or cause others to sell wares
in association with the name Rolex or the Rolex Crown know
ing that the same are not of the Plaintiff's merchandise or
manufacture. Typically these individuals will conduct their
activities from street corners and frequently relocate, making
their identities and whereabouts extremely difficult to
determine.
Paragraph 21(g) of the statement of claim sets
out the following claim for relief:
(g) an Order under Section 52(4) of the Trademarks Act
prohibiting the future importation into Canada by the Defen
dants, their agents, employees, servants and any other person
having knowledge or notice of this Order of any watches or
other wares bearing the registered trademarks No. 278,348,
No. 208,437, No. 130/33476 and No. 78/19056, to wit the
name Rolex and the Crown Design, or any colourable imitation
of the same which is calculated to represent or lead to the belief
that such wares are the wares of the Plaintiffs, if the said
trademarks or the said colourable imitation have been applied
to watches or other wares that are not of the Plaintiffs'
manufacture or merchandise;
Following the obtaining of the Prothonotary's
judgment, there was a series of correspondence
between the plaintiffs' solicitors and officials of
Customs and Excise whereby the former sought to
have the judgment enforced against all importers
and distributors of counterfeit Rolex watches in
Canada by virtue of subsection 52(4) of the Trade
Marks Act and tariff item 99209-1(b) of Schedule
C under the Customs Tariff R.S.C. 1970, c. C-41.
Customs and Excise declined to accede to the
plaintiffs' request, relying on the decision of the
Exchequer Court in Adidas Sportschuhfabriken
Adi Dassler K. G. et al. v. Kinney Shoes of
Canada Ltd.; E'Mar Imports Ltd., Third Party
(1971), 19 D.L.R. (3d) 680; 2 C.P.R. (2d) 227.
Subsections 52(1) and 52(4) of the Trade
Marks Act provide as follows:
52. (1) Where it is made to appear to a court of competent
jurisdiction that any registered trade mark or any trade name
has been applied to any wares that have been imported into
Canada or are about to be distributed in Canada in such a
manner that the distribution of such wares would be contrary to
this Act, or that any indication of a place of origin has been
unlawfully applied to any wares, the court may make an order
for the interim custody of the wares, pending a final determina
tion of the legality of their importation or distribution in an
action commenced within such time as is prescribed by the
order.
(4) Where in such action the court finds that such importa
tion is or such distribution would be contrary to this Act, it may
make an order prohibiting the future importation of wares to
which such trade mark, trade name or indication of origin has
been so applied.
Section 14 of the Customs Tariff, R.S.C. 1970,
c. C-41, as amended [by S.C. 1986, c.1, s. 175], is
also relevant, and reads:
14. The importation into Canada of any goods enumerated,
described or referred to in Schedule C is prohibited.
Tariff item 99209-1(b) of Schedule C of the
Customs Tariff lists among the specified prohib
ited goods the following class thereof, namely:
99209-1 Any goods
(b) the importation of which is prohibited by an
order under section 52 of the Trade Marks Act.
The crux of the case is whether the applicants
have put themselves in a position to compel the
respondent as a matter of duty to include among
the prohibited goods of Schedule C the imported
counterfeit wares bearing the plaintiffs' trade
marks or colourable imitations thereof by virtue of
the judgment of the Prothonotary and section 52
of the Trade Marks Act.
Mandamus lies to compel the performance of a
public duty of which the applicant has demonstrat
ed a clear and specific legal right to the perform
ance thereof. Mandamus will not lie to compel the
doing of an act which the person sought to be
coerced is not yet under an obligation to perform:
Karavos v. The City of Toronto and Gillies,
[1948] O.W.N. 17 (C.A.); and O'Grady v. Whyte,
[1983] 1 F.C. 719 (C.A.).
Counsel for the respondent concedes that the
Minister would have a duty under the appropriate
circumstances to enforce the Customs Tariff and
Schedule C thereof with respect to prohibited
goods deemed to be included in Schedule C by
virtue of a judgment or order of the court under
subsection 52(4) of the Trade Marks Act.
The principal submission of the respondent is
that the judgment of the Prothonotary was not a
valid judgment under section 52 of the Trade
Marks Act, whereby the remedy of mandamus is
not appropriate in the circumstances. In other
words, the Prothonotary's decision was not a true
finding as to the legality of the merits. It was
simply a judgment entered by consent against
three defendants and by default against two others
of the whole group of seven named defendants and
the Prothonotary had no jurisdiction under Rule
336 and Rule 437 to go beyond that. Counsel for
the respondent also contends that the Minister
should have been made a party to the action so as
to afford him the opportunity of making submis
sions as to the practicalities of enforcing the sec
tion 52 order, citing Rule 1711(4). In support of
these submissions, counsel relies heavily on the
Adidas case.
I will deal with the last submission first. I
cannot agree that where a court of competent
jurisdiction makes a determination that the impor
tation and distribution of wares is unlawful and
illegal and constitutes an infringement of trade
mark and proceeds to make an order under subsec
tion 52(4) prohibiting the future importation of
such wares, it must necessarily follow that the
Minister be made a party to the action in order for
such prohibitory relief to avail under the said
subsection. If it were otherwise, the Minister
would have to be a party defendant in any suit for
trade mark infringement and passing off where it
was even remotely contemplated that resort might
be had to section 52 of the Trade Marks Act. I
cannot reasonably accept that if a court of com
petent jurisdiction makes a final determination
that the importation and distribution of wares is
contrary to the Trade Marks Act that the plaintiff
would have to join the Minister in the proceeding
in order to obtain an order prohibiting the future
importation of such wares under subsection 52(4)
of the Trade Marks Act.
Counsel for the applicants argues that the
Adidas case is distinguishable from the case at bar
because the judgment or order obtained under
subsection 52(4) of the Trade Marks Act was not
one obtained against all the world but only against
those unnamed defendants falling within the cate
gory of the represented class, that is, those
individuals dealing in counterfeit Rolex watches.
Apart from them, the rest of the world was unaf
fected by the judgment. Naturally, he places much
reliance on Rule 1711 of the Federal Court Rules
in respect of class actions. He submits that his case
involving individuals trading in counterfeit Rolex
watches and an order prohibiting their future
importation represents the converse of plaintiffs
having a common interest and a common griev
ance as elucidated in General Motors of Canada
Ltd. v. Naken et al., [1983] 1 S.C.R. 72; 32
C.P.C. 138, so that if one defendant loses, all lose.
He also relies on Perry v. R., [1982] 1 F.C. 624;
(1982), 41 N.R. 91 (C.A.) to support his submis
sion that Rule 1711 should not be construed in a
strict and rigorous sense. In response to the
respondent's argument that the condition prece
dent of an express finding that the importation and
distribution of counterfeit Rolex watches was con
trary to the Trade Marks Act had not been satis
fied, counsel for the applicants contends that this
was implicit in the Prothonotary's judgment by
reason that paragraph 21(g) of the plaintiffs'
statement of claim must be deemed to have been
admitted on the motion for judgment under Rule
437 and that the very judgment granted under that
Rule was in strict accordance with the said plead
ed paragraph of the statement of claim.
Adidas Sportschuhfabriken Adi Dassler K. G.
v. Kinney Shoes, supra, held that the Court had
jurisdiction of its own motion to correct a judg
ment that contained a clerical error or that did not
correctly reflect the judgment pronounced or the
intention of the Court. The plaintiff obtained a
consent judgment against the defendant, Kinney
Shoes, enjoining the latter from selling and dis
tributing in Canada footwear bearing three stripes
the same as that depicted in the plaintiff's regis
tered trade mark. Yet the judgment as finally
entered contained an in rem prohibition to the
following effect:
2. The importation into Canada of footwear bearing three
stripes the same as the Plaintiffs' trade mark registration
number 161,856, not being the wares of or sold by the Plain
tiffs, be and the same is hereby prohibited;
Counsel for the plaintiff had inserted this in the
draft of the consent judgment as a means of
invoking subsection 51(4) of the Trade Marks Act
(now subsection 52(4) to require customs authori
ties to prevent the future importation of wares to
which the plaintiff's trade mark had been applied
in contravention of the Act. The Court afterwards
became concerned that this paragraph made the
consent judgment one against the world.
Jackett P., in dealing with the section of the
Trade Marks Act comparable to the present sec
tion 52, expressed the following comment at pages
688 D.L.R.; 235 C.P.R.:
... my assumption would have been that none of the relief
authorized by these provisions could be granted except as
against a person who was a party to the proceedings in which
the relief was sought and who had, as such, had an opportunity
of meeting the case put to the Court in support of the claim for
a judgment against him.
The learned President went on to make the
following pertinent statement at pages 690-691
D.L.R.; 237-238 C.P.R.:
In my view, no Court would grant an application for a
judgment based on the consent of one person and effective as
against the world without being persuaded that there was some
extraordinary power and duty, to grant such a judgment, and,
in that unlikely event the situation would be spelled out in
detail on the face of the judgment. To use Lord Macnaghten's
language, it is hardly "decent" to attribute to the Court any
other manner of dealing with such an extraordinary
application.
Thus, as far as this particular matter is concerned, it is quite
clear in my mind that if, when the application was made for
this consent judgment, I had been asked to make an order
under s. 51(4) effective as against all the world, I should have
indicated that the applicant would have to convince me that the
Court had, under s. 51(4), power to make an order against any
person who had not been made a party to the proceeding and,
thus, given an opportunity to defend himself. On at least one
earlier occasion, I was told that such an application was
contemplated and that was my immediate reaction. In addition,
had the matter been pursued, I have no doubt that I would have
required to be shown,
(a) that the action falls within the words "such action" in
s. 51(4), and
(b) that the condition precedent to an order under s. 51(4)
that the Court has found "that such importation is or such
distribution would be contrary to this Act" had been
satisfied.
None of these questions arose, of course, on the application for
this consent judgment, because the Court was not asked to give
a judgment against the world under s. 51(4) but was only asked
to give a judgment against a consenting defendant.
I am wholly in agreement with the opinion
stated by the learned President of the Exchequer
Court in Adidas to the effect that it is a necessary
condition precedent to any discretionary order
under subsection 52(4) that the Court find that
the importation and distribution of the offending
wares was contrary to the Trade Marks Act.
There must be a final determination of the legality
of the subject-matter complained of before there
can be any subsection 52(4) order. As I see it, I
am obliged in the circumstances of this case to
take the matter one step further than Adidas and
decide how and in what manner the Court must
make such final determination.
In my view, section 52 of the Trade Marks Act
creates a somewhat special and extraordinary code
of statutory relief in respect of any wares which
have been imported into Canada or are about to be
distributed in Canada to which any registered
trade mark or trade name has been applied in a
manner contrary to the Act, or to which any
indication of a place of origin has been unlawfully
applied. In such event, a person interested may
apply under subsection 52(1) in an action or other
wise and even ex parte for an interim custody
order, pending a final determination of the legality
of the importation and distribution of such wares
in the action or one commenced within such time
as is prescribed by the order in the case of an
application on notice. The party applying is
required by subsection 52(2) to furnish security in
an amount fixed by the court to meet any damages
or charges that may be sustained by reason of the
order. Interestingly enough, subsection 52(3)
speaks of "the judgment in any such action finally
determining the legality of the importation or dis
tribution of the wares" in reference to any prior
lien for charges and its effect on the due execution
of such judgment. By virtue of subsection 52(4),
the court may make an order prohibiting the
future importation of offending wares only if it is
finally determined in the action that their importa
tion and distribution is illegal and contrary to the
Act.
Section 53 goes on to deal with the power of the
court to grant relief, stating as follows:
53. Where it is made to appear to a court of competent
jurisdiction that any act has been done contrary to this Act, the
court may make any such order as the circumstances require
including provision for relief by way of injunction and the
recovery of damages or profits, and may give directions with
respect to the disposition of any offending wares, packages,
labels and advertising material and of any dies used in connec
tion therewith.
Mandamus can only issue against the Minister
to compel the imposition of what is in effect an
import ban in the event of his refusal to comply
with an order properly made under subsection
52(4) of the Act. It is common ground that an
order validly made under that subsection has the
triggering effect of compelling the listing of the
prohibited goods under the appropriate tariff item
of Schedule C of the Customs Tariff.
In final analysis, the case turns on the issue of
whether the Prothonotary's judgment constitutes a
valid subsection 52(4) order.
By virtue of Rule 336(1)(c), a prothonotary may
give a consent judgment disposing of an action "if
he is satisfied that all parties affected have con
sented thereto". I take the view that the Rule
means what it says and that a consent judgment
against three defendants cannot be deemed to bind
the indeterminate class of reprentative defendants
without their consent, irrespective of the adequacy
of the class representation in the absence of a
court order appointing one or more of the named
defendants or some other person to represent such
class. I seem to be supported in this view by the
following statement from Halsbury's Laws of
England, vol. 26, 4th ed. London: Butterworths,
1979, para. 527:
Persons authorised by the court to defend an action on behalf
of others having the same interest may not consent to judgment
against them.
See also Rees v. Richmond (1890), 62 L.T. 427
(Ch.D.).
While a consent judgment may have all the
efficacy and finality of a judgment pronounced
after trial as between the consenting parties, its
scope is limited by the bounds of consent and it
cannot be taken to be final and conclusive in rem
as against non-consenting parties: Toronto Har
bour Commissioners v. The "Toryoung II",
[1976] 1 F.C. 191 (T.D.). Moreover, the device of
a consent judgment cannot be permitted to operate
as a substitute for an adjudication on proper ma
terial of a statutory liability required to be deter
mined by the court. Such an adjudication would be
no adjudication at all: see The King v. Hooper,
Rowley S., [1942] Ex.C.R. 193; [1943] 1 D.L.R.
279; and Northrop Corp. v. The Queen and
Canadian Commercial Corp., [1977] 1 F.C. 289;
(1976), 68 D.L.R. (3d) 182 (T.D.).
In Northrop Corp. v. The Queen, supra, the
issue was whether a consent judgment for damages
for breach of contract against the Crown justified
payment out of the Consolidated Revenue Fund of
the damages so awarded, pursuant to subsection
57(3) of the Federal Court Act, without an adjudi
cation on the merits of the Crown's liability to pay.
Thurlow A.C.J., applied the above mentioned
principle in dismissing the motion, and concluded
at pages 295 F.C.; 187 D.L.R.:
In my opinion in these circumstances on the principle of the
decision in The King v. Hooper the Court should not grant the
judgment sought but should leave it to the parties either to
obtain the implementation of the settlement reached through
an appropriate Parliamentary vote or to take steps to establish
the actual liability of the Crown for damages by bringing the
issue to trial. [Emphasis added.]
It remains to consider briefly the judgment in
default of defence against the defendants Arthur
Christodoulou and Martin Herson. On a motion
for judgment in default of defence under Rule 437,
the plaintiff may apply for the judgment "to which
he is entitled on his statement of claim or declara
tion", but judgment cannot be entered for more
than that which is specifically claimed and legally
sustainable. Generally speaking, orders in the
nature of summary procedural judgments where
there has been no trial of the issues are interlocu
tory at best, and should not be accorded the final
ity and conclusiveness of a judgment on the merits
of such issues: Halsbury's op. cit., para. 504. This
is particularly so where a statutory provision
expressly requires a final determination of the
legality of the subject-matter complained of.
Oppenheim & Co. v. Mahomed Haneef, [1922]
1 A.C. 482 (P.C.) held that a judgment in default
of appearance was not a judgment on the merits in
a subsequent action brought on the judgment in
respect of a contractual claim that was statute
barred. In my view, the same principle applies to
the default judgment here.
As a matter of fact, the statement of claim in
the present case contained a claim for a declara-
tion that the plaintiff was the sole authorized user
of the registered trade marks and the names Rolex
and Crown Design. The default judgment made no
specific finding on that issue, perhaps because the
Prothonotary wisely concluded that he lacked the
authority and discretion to grant such declaratory
relief in the circumstances. However, the point is
somewhat academic because I am of the view that
there is a broader ground on which the issue of the
in rem finality of the default judgment can be
disposed of.
I can see little factual difference between a
statutory provision requiring an adjudication on
the merits of the Crown's liability to pay compen
sation money or damages and one calling for a
final determination of the legality of the importa
tion and distribution of alleged counterfeit wares
in a trade mark infringement and passing off
action.
I consider that the Northrop principle applies
with equal vigour to the default judgment entered
against the defendants Arthur Christodoulou and
Martin Herson so far as the claim for section 52
relief is concerned. Moreover, it is my view that
the mere inclusion of a claim for such relief in the
statement of claim does not automatically confer
entitlement thereto in the circumstances of the
present case.
In the result, I am of the opinion that the plain
and natural meaning of the words employed in
section 52 of the Trade Marks Act in context of its
statutory scheme clearly import the mandatory
requirement of a final determination of the legality
of the importation and distribution of the offend
ing wares as a necessary precondition for any
discretionary order under subsection 52(4) prohib
iting their future importation. In my judgment,
such determination can only mean an adjudication
of the issue on the merits at trial. I find therefore
that neither the consent judgment nor the judg
ment obtained in default of defence have the
necessary sanction to mandate a subsection 52(4)
order. That being so, the issue of the class action
representation and its validity or not is irrelevant.
The failure of the judgment to quality as a
subsection 52(4) order under the Trade Marks
Act puts an end to the application for mandamus.
Clearly, the Minister is under no statutory duty to
cause the offending wares to be listed in Schedule
C of the Customs Tariff For these reasons, the
applicants' motion is dismissed. In view of the
somewhat special and unique features of the case,
I make no order as to costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.