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. O’Neill 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 judge’s 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 judge’s 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 appellant’s 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 Energy’s 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. Diplock’s 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.