COURT FILE NO.: 675/02

DATE: 20050322

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, MATLOW AND GROUND JJ.

B E T W E E N:

UNITY INSURANCE BROKERS (WINDSOR) LTD.

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UNITY INSURANCE & FINANCIAL GROUP INC.

Appellants

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UNITY REALTY & INSURANCE INC. AND THE DIRECTOR APPOINTED PURSUANT TO THE BUSINESS CORPORATIONS ACT

Respondents

Robert J. Reynolds

for the Appellants

Tamara Farber

for the Respondent Unity Realty & Insurance Inc.

HEARD: November 29 and 30, 2004

(CORRECTED) REASONS FOR JUDGMENT

(These reasons for judgment have been corrected only by the insertion of the word “not” in the first line of paragraph 52.)

GROUND J.:

[1] This is an appeal by the appellants, Unity Insurance Brokers (Windsor) Ltd. and Unity Insurance & Financial Group Inc. (collectively “Unity Insurance Windsor”) from the decision of the Director appointed pursuant to the Ontario Business Corporations Act, R.S.O. (1990) c. B.16, as amended, (“OBCA”) dated October 16, 2002 wherein the Director, following a hearing pursuant to subsection 12(1) of the OBCA of an objection filed by the respondent Unity Realty & Insurance Inc. (“Unity Insurance Toronto”), directed the appellants to file Articles of Amendment changing their names to names that are distinguishable from “Unity Insurance”.

Background

[2] Unity Insurance Toronto has been providing insurance brokerage services in the Toronto area since 1974. For many years, it has been commonly referred to by insurance industry personnel as “Unity Insurance” although it did not take the formal step of registering the trade name “Unity Insurance” under the Business Names Act R.S.O. (1990) c. B.17 (“BNA”) until February, 2002. The appellants, who are also in the insurance brokerage business, were formerly called Clydesdale Paterson Insurance Brokerage Ltd. and Clydesdale Paterson Insurance & Group Inc., respectively, and changed their corporate names to their present names in the spring of 2000. They carry on their insurance brokerage business in the Windsor area. The evidence before the Director and before this court is that they are also commonly referred to by the business name “Unity Insurance” although neither of the appellants has registered such name under the BNA. In her reasons, the Director found “when identifying themselves to the public, all of the parties use ‘Unity Insurance’ as an abbreviated version of their names”.

[3] On the hearing of this appeal, leave was granted to both parties to file fresh evidence as to the use of the name “Unity Insurance” by both the appellants and the respondent Unity Insurance Toronto and as to confusion with respect to the use of such name by persons with whom both parties have business relations. I am satisfied, on the evidence before this court, that there is a great degree of confusion between the parties in the minds of insurers, reinsurers and insurance brokers with whom the parties deal although it is conceded that there was only one example of confusion on the part of a customer of either party. The confusion does not consist simply of mailing errors or address errors. Clearly, there were many examples where insurance binders, insurance information, accounts for insurance premiums and personal information regarding clients were sent to the wrong “Unity Insurance”.

[4] This appeal is brought pursuant to subsection 252 of the OBCA which provides that a person aggrieved by a decision of the Director may appeal to the Divisional Court.

[5] This court may, on the basis of the evidence before the Director and the fresh evidence before this court, make such decision and issue any order which the Director is authorized and empowered to make under the OBCA. It is conceded by counsel that the appeal before this court is in the nature of a rehearing of the hearing before the Director which was on the basis of written submissions and documentary evidence.

Legislation

[6] Subsection 9(1) of the OBCA provides as follows:

9. (1) Name prohibition – Subject to subsection (2), a corporation shall not have a name,

(a) that contains a word or expression prohibited by the regulations;

(b) that is the same as or, except where a number name is proposed, similar to,

(i) the name of a known,

(A) body corporate,

(B) trust,

(C) association,

(D) partnership

(E) sole proprietorship, or

(F) individual,

whether in existence or not, or

(ii) the known name under which any body corporate, trust, association, partnership, sole proprietorship, or individual, carries on business or identifies himself, herself or itself

if the use of that name would be likely to deceive; or

(c) that does not meet the requirements prescribed by the regulations.

Subsection 12(1) of the OBCA provides as follows:

12. (1) Change of name if objectionable – If a corporation, through inadvertence or otherwise, has acquired a name contrary to section 9, the Director may, after giving the corporation an opportunity to be heard, issue a certificate of amendment to the articles changing the name of the corporation to a name specified in the certificate and, upon the issuance of the certificate of amendment, the articles are amended accordingly.

Subsection 252(5) of the OBCA provides as follows:

252. (5) Where an appeal is taken under this section, the court may by its Order direct the Director to make such decision or to do such other act as the Director is authorized and empowered to do under this Act and as the court thinks proper, having regard to the material and submissions before it and to this Act, and the Director shall make such decision or do such Act accordingly.

[7] Section 2 of Ontario Regulation 62 made under the OBCA (the “Regulation”) provides as

follows:

2. (1) “Name” when used in the expression “if the use of that name would be likely to deceive” used in clause 9(1)(b) of the Act includes,

(a) a name that would lead to the inference that the business or activities carried on or intended to be carried on by the corporation under the proposed name and the business or activities carried on by any other person are one business or one activity, whether or not the nature of the business or activity of each is generally the same;

(b) a name that could lead to the inference that the corporation bearing the name or proposed name is or would be associated or affiliated with a person if the corporation and such person are not or will not be associated or affiliated; or

(c) a name whose similarity to the name of a person would lead someone who has an interest in dealing with that person, to deal with the corporation bearing the name in the mistaken belief that they are dealing with the person.

Issues

[8] The principal issue on this appeal is the interpretation of the phrase in the above Regulation “a name whose similarity to the name of a person would lead someone who has an interest in dealing with that person, to deal with the corporation bearing the name in the mistaken belief that they are dealing with the person”.

[9] There is a subsidiary issue as to the extent to which an order made by the Director, or an order made by this court on appeal from the Director, may impact upon the use of business names by a corporation. The “name” with which we are concerned in interpreting the Regulation is the name “Unity Insurance” which forms part of the corporate names of all of the parties and, in addition, is a business name under which all of the parties carry on the insurance brokerage business and by which all of the parties are referred to by insurance industry personnel.

Analysis

[10] It is clear from the authorities that the focus of the hearing before the Director and of this appeal is not on damage to the parties but rather the protection of the public who are likely to be deceived by the similarity of corporate names. In Re Cole’s Sporting Goods Ltd. and C. Cole & Co. Ltd and Coles Book Stores Ltd. 1964 270 (ON SC), [1965] 1 O.R. 331, Schatz, J. stated at page 337:

I am not primarily concerned with the effect on the parties to the dispute, as I consider the relevant section of the Act to be designed solely for the protection of the public. Of course, there will be resulting advantage or disadvantage to one or the other of the two companies with conflicting names if an order is or is not made changing the name of either, but this result in itself should not be the determining factor or indeed any factor in the question of changing the name under the procedure set out in the Act by reason of the existence of the prior incorporation of C. Cole & Co., and the later incorporation of Coles Book Stores Ltd. …it is not the duty of the Court to make any order for the sole purpose of removing a grievance in so far as it affects the person complaining, but the Court must act for the benefit of the public who are likely to be deceived, the grievance of a party being an entirely secondary result. Under the Act this is a matter respecting the public primarily, i.e., if the public likely to be deceived, and therefore in my opinion the principles of a passing-off action are not applicable…

[11] In Re CC Chemicals (1967) 1967 175 (ON CA), 2 O.R. 248 (Ont. C.A.) Kelly, J.A. at page 255 adopted these remarks, adding:

This statement I consider to be fundamental: what the statute aims at is the prevention, in the public interest, of the use of letters patent to further deception likely to arise from similarity of names. Save as to the provision of a review by the Court, what it sets up is an administrative procedure to prevent the giving of a name similar to an existing one and to change a name, the giving of which contravened the prohibition of s. 12(1).

It was never intended that s. 12 should provide an alternative method of determining the rights of two parties where one of them, by the manner in which he is conducting his business, is seeking to draw custom away from his competitor. Adequate remedies have always been available to deal with such a situation – any attempt to broaden the scope of the administrative procedure under s. 12 to encompass what is ‘passing-off’ are unwarranted and should be resisted.

Persons Likely to be Deceived

[12] As stated above, the evidence establishes that there is a great deal of confusion in the minds of insurers, reinsurers and insurance brokers with whom the parties have business dealings as between Unity Insurance Toronto and Unity Insurance Windsor. The evidence also establishes that there has been only one recorded instance of confusion in the minds of customers of either Unity Insurance Toronto or Unity Insurance Windsor. There is a paucity of jurisprudence on the meaning of the term “someone who has an interest in dealing with that person” as now used in subsection 2(1) of the Regulation. The two seminal authorities dealing with the class of persons likely to be deceived or confused by the similarity in corporate names are CC Chemicals Ltd., supra, and Canadian Motorways Ltd. et al v. Laidlaw Motorways Ltd. (1973) 1973 26 (SCC), 11 C.P.R. (2nd) 1 (S.C.C.). They were decided, respectively, under the 1960 Act and Regulations and the 1970 Act and Regulations, neither of which contained the present definition.

[13] In CC Chemicals, supra, Kelly J.A. stated at page 258:

Further, in considering the likelihood of deception he must give due regard to the persons or class of person likely to be deceived if dealing with the proponent. I do not consider that anyone can be deceived by the similarity of one name to another within the meaning of s. 12 unless he is induced to deal with someone other than the person with whom it was his intention to deal – so, unless a person is likely to deal with the corporation to be incorporated in the mistaken belief that he is dealing with another corporation, it cannot be said that, within the meaning of the Corporations Act, the similarity of names is likely to deceive him. Accepting this, I infer from the expression “likely to deceive” that the similarity must be such as to cause a person, who had an interest in dealing, or reason to deal, with “A” to deal with “B” in the belief that he was dealing with “A”. If this be the test, as I conceive it to be, the likelihood to deceive must be assessed by reference to the impact of the words in the name on the persons or class of persons with whom the objector seeks to have business dealings, that is, his customers or prospective customers. In other words, the only person who is deceived is one whose action or decision is likely to be so affected. [emphasis added]

[14] The statute in effect at the time of the CC Chemicals’ decision was the Corporations Act R.S.O. (1960) c. 71 which provided as follows in subsection 12(1):

12. (1) A corporation shall not be given a name,

(a) that is the same as or similar to the name of a known corporation,

association, partnership, individual or business if its use would be likely to deceive, except where the corporation, association, partnership, individual or person signifies its or his consent in writing that its or his name in whole or in part be granted…[emphasis added]

[15] The Regulation in effect at the time provided in section 5 as follows:

Where the name of a corporation to be incorporated is the same as or similar to the name of any known corporation so as to be, in the opinion of the Provincial Secretary, likely to deceive, the name of the corporation to be incorporated shall contain such variations from that of the known corporation as the Provincial Secretary determines.

[16] It should be noted that there was nothing in the legislation in effect at the time of the CC Chemicals’ decision which limited the persons likely to be deceived to customers of the corporation. Kelly J.A. in dealing with the concept of persons likely to be deceived refers generally to persons dealing with the corporation although he does at one point add the qualifier that persons with whom the corporation seeks to have business dealings are “his customers or prospective customers”.

[17] In Canadian Motorways, supra, in dealing with the issue of the scope of “a review of a decision of the Director” which was the phrase used in the applicable legislation at that time, Laskin J. stated at pages 10 and 11:

The history of s. 12 of the Ontario Corporations Act was reviewed by Kelly, J.A. in Re CC Chemicals, supra. Two matters of substance emerge from that review; first, that the Ontario provision, unlike that of its prototype in the United Kingdom, reposes statutory authority in the Court to “review the matter”; and secondly that there are no express limitations upon the scope of the review by the Court. In the exercise of the power to review in the CC Chemicals case, Kelly J.A., addressed himself to the meaning of the key phrase in s. 12(1) prohibiting the giving of a name that is “the same as or similar to the name of a known corporation … if its use would be like to deceive”. He regarded it as a prohibition to prevent the likelihood of deception in the public interest, but that interest was to be measured according to whether [at p. 108 C.P.R., p. 213 D.L.R.] “…the similarity [was] such as to cause a person who had an interest in dealing, or reason to deal, with ‘A’ to deal with ‘B’ in the belief that he was dealing with ‘A’”. He expanded on this as follows:

If this be the test, as I conceive it to be, the likelihood to deceive must be assessed by reference to the impact of the words in the name on the persons or class of persons with whom the objector seeks to have business dealings, that is his customers or prospective customers.

The Court, in the exercise of the power of review conferred by s.12(3), is undoubtedly authorized to consider the meaning and application of the statutory standard fixed under s.12(1).

[18] The legislation in effect at the time of the decision in Canadian Motorways, being the 1970 version of the Ontario Corporations Act and the Regulation thereunder, contained provisions identical to the 1960 Corporations Act and Regulation thereunder.

[19] The concept of defining the class of persons likely to be confused or deceived by the similarity in corporate names was first introduced in the 1980 Regulation under the Ontario Corporations Act, being R.R.O. (1980) Regulation 88, which provided in section 2 in part as follows:

2 (1) For the purpose of clause 7(1)(b) of the Act and the regulations, the meaning of the expression “if the use of that name would be likely to deceive” shall include,

(b) a name whose similarity to the name of a person would lead to the inference that the name would cause someone who had an interest in dealing, or reason to deal, with the person, to deal with the corporation bearing the name in the belief that he was dealing with the person. [emphasis added]

[20] In my view, to the extent that the decision in CC Chemicals, supra, appears to limit a consideration of persons likely to be confused or deceived to customers of the corporation and to the extent that that limitation is, by implication, approved in Canadian Motorways, supra, such limitation cannot be applicable under the Regulation in effect since 1980 which defines the class of persons likely to be confused or deceived as all persons having an interest in dealing with the corporation. This class of persons would clearly include lenders, suppliers, contractors and other business associates in addition to customers. In the case at bar, the evidence is clear that insurers from whom the parties obtained the products to be provided to their customers and reinsurers and other insurance brokers with whom the parties had business dealings were in many instances led by their confusion to think they were dealing with Unity Insurance Toronto when they were dealing with Unity Insurance Windsor and vice versa.

[21] More recent authorities have not limited the class of persons to be considered in determining whether the corporate names are likely to be deceived to customers of the corporations. In the Matter of Cap-Co Inc., 1987 9838 (ON SC), 17 C.P.R. (3rd) 498, the Hearing Officer relied on part on confusion in the mind of the accounts officer with responsibility for the objector’s bank account in determining that the proponent’s name was so similar as to be likely to cause deception within the meaning of section 9 of the OBCA. The Hearing Officer stated at page 505:

The objector is a project manager. Project management is a field of activity within the real estate development industry. The proponent is a mortgage broker. The functions of the proponent and the objector are therefore different in nature.

The objector operates within the Municipality of Metropolitan Toronto and environs. The proponent operates within the same geographic area.

The objector, as a project manager, deals with the real estate development industry which includes investors, developers, contractors, construction and financial institutions.

The proponent, as a mortgage broker, in soliciting for its mortgage broking services, would also contact developers and investors since these are an important source of business for the mortgage industry, as well as financial institutions.

I therefore conclude that, although there is not a similarity between the activities of the objector and the proponent, there is a similarity in the persons or class of persons with which both the objector and the proponent are likely to deal in carrying on their respective activities.

[22] In Brydon Marine Products v. ITT Industries of Canada (1986) 1986 7624 (ON SC), 10 C.P.R. (3rd) 361, while the Hearing Officer found that the use of the names would not be likely to deceive, he did accept evidence of confusion on the part of a supplier where on two occasions shipments of material were forwarded to the wrong party. Similarly, In the Matter of Artlab Communications Ltd. (1987) 1987 9855 (ON SC), 16 C.P.R. (3rd) 356, the Hearing Officer considered several examples of confusion by different suppliers to the proponent and the objector and determined that such “erroneous invoices and telephone calls to the objector constitute indications of confusion in the public mind”.

[23] Accordingly, I am of the view that, on the basis of the evidence before her, the Director made no error in concluding that the use of the name “Unity Insurance” by the appellants would be likely to deceive in the sense of leading someone who has an interest in dealing with Unity Insurance Toronto to deal with Unity Insurance Windsor in the mistaken belief that they are dealing with Unity Insurance Toronto and vice versa and in ordering the appellants to file Articles of Amendment changing their corporate names to names that are distinguishable from “Unity Insurance”. The fresh evidence before this court on this appeal further strengthens the conclusion that the Director made no error.

Use of Business Name

[24] Section 9 of the OBCA provides that a corporation shall not have a corporate name which is similar to “the known name under which any body corporate, trust, association, partnership, sole proprietorship or individual, carries on business or identifies himself, herself or itself if the use of that name would be likely to deceive”. The legislation therefore clearly specifies that, in determining whether a corporate name is likely to deceive, reference may be made to business names of other persons.

[25] Section 12 of the OBCA provides that, if a corporation, through inadvertence or otherwise, has acquired a name contrary to section 9, the Director may, after giving the corporation an opportunity to be heard, issue a certificate of amendment to the articles changing the name of the corporation to a name specified in the certificate. The authority of the Director, upon determining that a corporate name is likely to deceive, is therefore limited to issuing a certificate of amendment of articles changing the corporate name which the Director has found is likely to deceive. There appears to be no authority in the OBCA or in the Regulation for the Director to order a change of a business name under which the corporation is carrying on business or to order that the corporation cease to carry on business under a particular business name.

[26] Subsection 252(5) of the OBCA provides that, on an appeal from the decision of the Director, the court may order the Director to make such decision or to do such other act as the Director is authorized and empowered to do under the OBCA. As the OBCA and the Regulation do not appear to give the Director any authority or power to direct a corporation to change a business name or to cease using a business name, it would appear that this court is similarly restricted under subsection 252(5) of the OBCA.

[27] The BNA provides in subsection 2(1) “no corporation shall carry on business or identify itself to the public under a name other than its corporate name unless the name is registered by that corporation”. Subsection 4(2) provides “the Registrar shall not accept for registration a name that does not comply with the prescribed requirements” and subsection 4(7) provides “the Registrar shall cancel a registration …. (a) if a name was accepted for a registration that does not comply with the prescribed requirements”. Section 6 of the BNA provides “a person who suffers damages by reason of the registration of a name that is the same as or deceptively similar to another person’s registered name is entitled to recover compensation from the Registrant for damages suffered because of the registration” and section 10 of the BNA provides for the imposition of fines in the event of a contravention of section 2 of the Act. These provisions do not appear to give the Registrar, who it would appear is a different person from the Director appointed pursuant to the OBCA, any authority to direct a person to change or to cease using a business name which is deceptively similar to the corporate name or business name of another person.

[28] The Regulations under the BNA, being Regulation O. Reg. 121/91 and O. Reg. 122/91, do not expressly restrict the use of a business name because of similarity to another business name or corporate name. Section 5 of O. Reg. 122/91 does however state that “a name shown in a registration must not include a word, an expression or an abbreviation the use of which is prohibited under a Federal Act or an Ontario Act” and would therefore, in my view, as a result of the cross-reference to the OBCA and the Regulation thereunder, preclude the registration of a business name which is deceptively similar to a corporate name and the Registrar could, presumably, cancel the registration of such business name pursuant to subsection 4(7) of the BNA. The BNA and the Regulations thereunder, however, do not grant any authority to the Registrar to order that a person cease using a business name, whether registered or not, which is deceptively similar to another business name or corporate name.

[29] Subsection 4(1) of the BNA provides that a person whose application to register a name is refused may appeal to this court. Such provision does not, in my view, confer jurisdiction on this court to order a person to change or to cease using a business name which is deceptively similar to the corporate name or business name of another person.

[30] The statutory jurisdiction of this court is, accordingly, limited by subsection 252(5) of the OBCA, to directing the Director to make such decision or do such other act as the Director is authorized and empowered to do under the OBCA and is limited by subsection 4(11) of the BNA to appeals from a refusal by the Registrar to register a business name.

Inherent Jurisdiction

[31] It was submitted that the court may rely on its inherent jurisdiction to make an order directing any of the parties to change or cease using the business name “Unity Insurance”.

[32] In Glover v. Glover et al (1981), 1980 63 (ON CA), 29 O.R. (2d) 392 (C.A.), the court refused to read in to the taxpayer privacy provisions of the Income Tax Act an exception permitting disclosure of a missing husband’s address to the wife for use in Divorce Act proceedings. The inherent jurisdiction of the court did not extend so far as to over-ride a statutory provision. MacKinnon A.C.J.O., at page 399, referring to the article “Inherent Jurisdiction of the Court” (1970), 23 Curr. L. Prob. 23, described inherent jurisdiction as follows:

…inherent jurisdiction is the reserve or fund of powers which the Court may draw upon as necessary whenever it is just or equitable to do so. …this is not an unlimited jurisdiction and … it cannot be exercised in contravention of any statutory provision.

[33] In Montreal Trust Co. et al v. Churchill Forest Industries (Manitoba) Ltd. (1971), 1971 960 (MB CA), 21 D.L.R. (3d) 75 (Man. C.A.), Freedman, C.J.M., in referring to the article by Master Jacob, supra, observed:

Inherent jurisdiction is derived not from any statute or rule but from the very nature of the Court as a superior Court of law: “The jurisdiction which is inherent in a superior court of law is that which enables it to fulfil itself as a court of law”. (p.27). Inherent jurisdiction cannot, of course, be exercised so as to conflict with a statute or rule. Moreover, because it is a special and extraordinary power, it should be exercised only sparingly and in a clear case.

Master Jacob concludes his very helpful analysis with the following definition at p. 51:

In this light, the inherent jurisdiction of the court may be defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, and in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.

[34] Freedman, C.J.M. also referred to Connelly v. D.P.P. [1964] 2 All E.R. 401 at 409, where Lord Morris said:

There can be no doubt that a court which is endowed with a particular jurisdiction has powers which are necessary to enable it to act effectively within such jurisdiction. I would regard them as powers which are inherent in its jurisdiction.

[35] Brooke J.A. elaborated on the inherent jurisdiction of the court in 80 Wellesley Street East Limited v. Fundy Bay Builders Limited et al. 1972 535 (ON CA), [1972] 2 O.R. 280, at p. 282:

As a superior court of general jurisdiction, the Supreme Court of Ontario has all of the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the court’s jurisdiction is unlimited and unrestricted in substantive law in civil matters.

[36] More recently, in Re Royal Oak Mines Inc., 1999 14843 (ON SC), [1999] O.J. 864, Farley J. further emphasized the required compatibility between statutory authority and the exercise of inherent jurisdiction, at para. 4: “inherent jurisdiction is not limitless; if the legislative body has not left a functional gap or vacuum, then inherent jurisdiction should not be brought into play.”

[37] As stated above, the statutory jurisdiction of the court pursuant to the OBCA, the BNA and Regulations thereunder is limited and does not include the power to direct a corporation to change or cease using a business name. One must consider therefore whether the failure of the legislature to grant authority to order a change of business name or to cease using a business name is “a functional gap or vacuum” created by the legislature. To so find, one would have to determine, from a consideration of the legislation as a whole, that the legislature has not put its mind to the question of the continued use of a business name not registerable under the BNA.

[38] An examination of the relevant legislation in the case at bar does not lead to such a conclusion. The OBCA and Regulations thereunder do not purport to deal with the right to use a business name. The BNA is the specific legislation enacted to regulate the use of business names. As stated above, the BNA and the Regulation thereunder may be interpreted as prohibiting the registration of a business name which is deceptively similar to a corporate name of another entity. The Registrar under the BNA has clear authority to refuse to register such a name, to cancel the registration of such a name and to impose a fine on a registrant registering such a name. Section 6 of the BNA creates a right of action for a person who suffers damages by reason of the registration of a name that is deceptively similar to that person’s registered name. The damages to be awarded in such an action are limited to the greater of $500 and the actual amount of the damages incurred by the Plaintiff. The statute further provides that, in any such action, the court shall order the Registrar to cancel the registration of the offending name. Presumably, in any such action, the Plaintiff would also seek an injunction enjoining the Defendant from continuing to use the offending name.

[39] An analysis of the relevant legislation therefore leads to the conclusion that the legislature did put its mind to the question of prohibiting the continued use of a deceptively similar business name by a person intent on flouting the will of the legislature as evidenced by section 2 of the BNA but has determined that the matter will be dealt with on an application to the Registrar to cancel the registration of such a name and, where damages have been incurred, through the private cause of action created by section 6 of the BNA in favour of a person who has suffered damages as a result of the use of an offending name.

[40] There is not, therefore, in my view, any functional gap or vacuum left by the legislature and the court may not rely on its inherent jurisdiction to order Unity Insurance Windsor to cease using the business name “Unity Insurance”. While it would be completely contrary to the intent and spirit of the OBCA, the BNA and the Regulations thereunder for Unity Insurance Windsor, having been ordered to change their corporate names to names distinguishable from “Unity Insurance”, to continue to use the business name “Unity Insurance”, that appears to be a question for another day.

[41] I would dismiss the appeal.

[42] Counsel may make brief written submissions on the costs of this appeal on or before April 1, 2005.

_________________________

Ground J.

I agree:

________________________

Lane, J.

MATLOW, J. (Dissenting)

[43] I respectfully disagree with the disposition of this appeal by the majority. I would allow the appeal, set aside the order of the Director and dismiss the application that was brought before her. I would invite both counsel to make submissions in writing with respect to costs to be exchanged by counsel and sent to the attention of the president of this panel within 30 days.

[44] The Director’s order requires the appellants to change their respective corporate names, Unity Insurance Brokers (Windsor) Ltd. and Unity Insurance & Financial Group Inc. to names that are distinguishable from “Unity Insurance”. Although the Director’s reasons are not explicit on this issue, it appears that the intent of the order was to eliminate the words, “Unity Insurance”, from the corporate names.

[45] The unsworn evidence upon which the Director based her order indicated that there had been confusion between Unity Insurance Windsor and Unity Insurance Toronto because each of them used “Unity Insurance” as its business name and had become known by that name. She therefore relied on section 9 (1)(b)(ii) of the OBCA to support the granting of her order. There was, not surprisingly, no evidence of any confusion resulting from the use of the respective corporate names alone as there are clear and obvious differences in the names despite the inclusion of the words, “Unity” and “Insurance”. Accordingly, even if Unity Insurance Windsor were now to change its corporate names but continue carrying on business as “Unity Insurance”, the perceived confusion of the kind disclosed by the evidence would likely continue as before.

[46] The Director’s order was made pursuant to the Director’s statutory authority as set out in section 12 (1) of the OBCA and must be authorized by that authority. The Director has no jurisdiction to extend that authority even if common sense dictates that it should be extended to address what appears to be a legislative oversight.

[47] Section 12 (1) of the OBCA, which refers to section 9, confers jurisdiction on the Director to order that a corporate name be changed if the continued use of the name sought to be changed “would be likely to deceive”. It is noteworthy that the jurisdiction cannot properly be exercised to order the change if a corporate name “would be likely to confuse”.

[48] It follows that the test which the Director ought to have applied was; ‘Is it likely that the continued use of Unity Insurance Windsor’s corporate names would be likely to deceive?” This formulation of the test was not altered by the Regulation set out in paragraph 7 of the reasons of the majority.

[49] The evidence before the Director did not include a single instance of a prospective customer contacting Unity Insurance Windsor in the mistaken belief, however caused, that it was thereby effectively dealing with Unity Insurance Toronto. Nor did it include a single instance of loss by Unity Insurance Toronto as a result of any of the contacts made in error. Viewed in their totality, the evidence of the errors revealed a picture of carelessness by various corporations who were suppliers rather than prospective customers who knew which “Unity Insurance” they were seeking to contact but failed to exercise even minimal care in accessing their own records or widely available directories to ensure that their communications would be properly addressed to reach their intended destinations.

[50] In my respectful view, the statutory authority exercised by the Director was not sufficiently wide to entitle her to intervene in these circumstances.

[51] Paragraph 12 of the reasons of the majority reveals that their disposition of this appeal rests on their finding that “the evidence establishes that there is a great deal of confusion in the minds of insurers, reinsurers and insurance brokers with whom the parties have business dealings…” and that the “evidence also establishes that there has been only one recorded instance of confusion in the minds of customers of either Unity Insurance Toronto or Unity Insurance Windsor”. It is my respectful view that it is wrong in law to uphold the Director’s decision solely on such findings.

[52] I would be remiss in my duty if I did not include in these reasons my personal view that the statutory provisions considered on this appeal are, to a large extent, badly worded and difficult to apply and require revision if they are to be readily understood and effectively promote the objectives of the statute.

_________________________

Matlow, J.

Released:

COURT FILE NO.: 675/02

DATE: 200503

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, MATLOW AND GROUND JJ.

BETWEEN:

UNITY INSURANCE BROKERS (WINDSOR) LTD.

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UNITY INSURANCE & FINANCIAL GROUP INC.

Appellants

- and -

UNITY REALTY & INSURANCE INC. AND THE DIRECTOR APPOINTED PURSUANT TO THE BUSINESS CORPORATIONS ACT

Respondents

REASONS FOR JUDGMENT

Ground J.

Released: