COURT FILE NO.: CV-65-18

DATE: 2019/08/01

ONTARIO

SUPERIOR COURT OF JUSTICE

APPLICATION UNDER THE TRADE-MARKS ACT (R.S.C., 1985, c. T-13)

B E T W E E N:

Bryan James Kaastra, operating as Arbor-Aide

Applicant

• and -

Arbor Aid Ltd.

Respondent

M. Chapman for the applicant

M. Odumodu for the respondent

HEARD: April 10, 2019

MITCHELL J.:

REASONS FOR JUDGMENT

Overview

[1] The applicant seeks a declaration that the respondent corporation passed off its business, services and goods for the business, services and goods of the applicant, contrary to sections 7(b) and (c) of the Trade-Marks Act[^1] and the common law. The applicant asks for an order that the respondent corporation be directed to change its name and surrender its domain name to the applicant.

[2] The applicant, Bryan James Kaastra, operating as "Arbor-Aide" ("Kaastra") brings this application pursuant to s. 7 of the Act. He alleges he has suffered business losses and reputational harm as a result of the respondent corporation having the name "Arbor Aid Ltd." operating a similar business.

[3] The respondent, Arbor Aid Ltd., opposes the relief sought on the following grounds:

(i) Kaastra has not established the requisite goodwill in any trade name in the area in which the respondent corporation operates;

(ii) there is no actual or likelihood of confusion between the businesses constituting deception of the public due to misrepresentation; and

(iii) there is no evidence of damage or potential damage caused by the alleged confusion.

Background and Factual Matrix

[4] Kaastra resides in Clinton, Ontario. He operates a tree-service business as a sole proprietor using the business name "Arbor-Aide".

[5] The respondent is a corporation incorporated pursuant to the laws of the Province of Ontario that advertises as a tree-service business and as its primary business provides referrals to arborists. The respondent corporation is owned and operated by Whitney Johnson ("Johnson") who resides in Woodstock, Ontario.

[6] On August 15, 2006, Kaastra commenced his business, registered the business name "Arbor-Aide" and obtained a business license. At that time, Kaastra carried on business out of Fonthill, Ontario (located in the Niagara region) and Goderich, Ontario. Kaastra moved to Clinton, Ontario in May 2013 and the business has been operated out of the Municipality of Central Huron since that time. Kaastra performs the majority of his work in the Municipality of Central Huron; however, he has also undertaken work in Perth, Bruce, Lambton and Middlesex Counties.

[7] Kaastra is a certified arborist and received his certification by the International Society of Arboriculture on October 13, 2006. A Business Names Report identifies the activities being carried on by the applicant as "tree surgery and removal" and identifies the address of its principal place of business as 251 Mary Street, Clinton, Ontario.

[8] Registration of the business name "Arbor-Aide" was not renewed upon its expiry on August 14, 2011; however, Kaastra re-registered the business name on December 19, 2013 and the registration has been maintained without interruption since that time.

[9] The applicant has operated a Facebook account for Arbor-Aide since February 2014.

[10] The respondent corporation was incorporated on July 12, 2017. The Corporation Profile Report identifies the address of the respondent's registered office as 22 Bay Street, Woodstock, Ontario. Ms. Johnson is the sole officer, director and shareholder of the respondent.

[11] At the time of incorporation, an Internet search of the words "Arbor Aid" returned two "hits" – a company in New Zealand and a company in Pennsylvania. A NUANS search indicated a registration of the business name "Arbor-aide" but indicated that "Arbor Aid Ltd." was available.

[12] The respondent corporation maintains a Facebook page and a website having the domain name "arboraid.ca".

[13] Through the respondent corporation, Ms. Johnson provides ground support services and subcontracts out arborist services. Ms. Johnson is not a certified arborist.

[14] In the summer of 2017, Kaastra received a telephone call from a prospective customer residing in Woodstock, Ontario. This prospective customer mentioned that "Arbor-Aide" had recently done work for their neighbor.

[15] In January 2018 Kaastra conducted a Facebook search of "Arbor-Aide" and discovered the existence of the respondent corporation.

[16] On March 3, 2018, Kaastra applied to register the trademark "Arbor-Aide." On September 13, 2018, the respondent applied to register the trademark "Arbor Aid Ltd.". At the time this application was argued, both applications were pending and the results of those applications unknown.

The Law

[17] Sections 7(b) and (c) of the Act codify the common-law tort of "passing off". These sections read as follow:

7. No person shall [...]

(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another,

(c) pass off other goods or services as and for those ordered or requested...

[18] The test for the tort of passing off at common law and passing off pursuant to sections 7(b) and (c) of the Act are the same. The three-part test required to be met to establish a claim of "passing off" is as follows:

(a) the existence of goodwill regarding the applicant's name or product;

(b) the deception of the public due to a misrepresentation on the part of the respondent; and

(c) that the applicant has suffered, or has the potential, to suffer damages as a result of the misrepresentation.[^2]

Analysis

[19] I find that the evidence is insufficient to prove, on a balance of probabilities, the applicant's claim for "passing off".

(i) The Existence of Goodwill

[20] Goodwill and reputation must exist and be associated with a business name before one can be accused of misrepresenting its own services as those of another, intentionally or otherwise.

[21] Actual goodwill must be proven. Neither the length of time the name has been used nor the existence of potential confusion will establish goodwill. In the absence of evidence establishing goodwill, the court will not step in to protect the public.[^3]

[22] At the time of the alleged passing off by the respondent, no application had been made for registration of the applicant's business name with the Trade-Marks office. At the date of incorporation of the respondent, the applicant had registered his business name and was carrying on business in the Municipality of Central Huron as an arborist.

[23] The evidence must establish that any goodwill or reputation associated with the applicant's business and name extends beyond the Municipality of Central Huron and, in this case, extends to Oxford County. The applicant must prove that his services were traded in the area where the confusion is or is likely to be caused before the respondent commenced providing the same services.[^4]

[24] Kaastra claims to have invested substantial time and energy into developing goodwill for the business and says he has invested in advertising including placing print-ads in newsprint and auction booklet advertising, in the Yellow Pages, in brochures, on lawn signs, and vehicle lettering. However, supporting financial information and, in particular, evidence of the amount of money expended by Kaastra on advertising and marketing did not form part of the evidentiary record. Kaastra's statement that he has developed goodwill in his business name, without more, does not meet the burden of proof.

(ii) Deception or Confusion of the Public

[25] There is no evidence of actual confusion; although, the possibility for confusion is sufficient to satisfy the second prong of the test. I find there is no likelihood of confusion having regard to the following:

(i) The name itself is not distinctive. The words "arbor" and "aide" carry their dictionary definitions and accurately denote the nature of the business carried on by the applicant;

(ii) The names are sufficiently dissimilar:

a. the applicant's name consists of one word (two words hyphenated) and the respondent corporation's name consists of three words;

b. the word "aid" is spelled differently and is both a noun and a verb. The word "aid" is defined as "to give assistance" (verb) and "the act of helping someone or help given" (noun)[^5]. "Aide" is a noun and is defined as "a person who acts as an assistant"^6; and

(iii) the applicant is a sole proprietorship and the respondent is a corporation.

[26] The two names are similar phonetically, not visually. To date, Kaastra's advertising has been visual. He has never done any radio advertising, produced any jingles or invested or given any direction to the public on the pronunciation or sound of his business name. In fact, it is Kaastra's evidence that at least half of his business comes from repeat customers who know exactly who he is and therefore would not be confused by the similarly-pronounced respondent corporation.

[27] The possibility for confusion is further diminished by the fact the respective services provided by the parties are sufficiently different. The applicant is a certified arborist and performs the work and provides the services himself. Whereas, the respondent corporation is primarily a referral service for arborists.

[28] Evidence of the locations in which the applicant has advertised did not form part of the record. Without this evidence the applicant cannot establish the potential effect on the public in any specific area in which the applicant carries on business or proposes to carry on business in the future.

[29] Kaastra provided no evidence of the use of the trade-name "Arbor-Aide" in any area other than the Municipality of Central Huron and the Niagara Region. In particular, Kaastra provided no evidence of the use of his business name in Oxford County and, specifically, the City of Woodstock in which the respondent corporation is located. It is insufficient that both names could be used in the same area thereby creating the possibility that a prospective customer could be confused. Something more is needed. The applicant's stated intention to expand his business beyond the Municipality of Central Huron requires evidence to support that intention. Without evidence, this statement is without foundation and is not an inference I am able to draw from the record before me.

[30] I note that in his 11 years of carrying on business prior to the respondent's incorporation, the applicant had not marketed nor provided any services in the County of Oxford. His evidence is that his primary source of new work is from existing customers referring his services to others. This is borne out by the applicant's limited website presence. I suspect that Kaastra has had little incentive to engage or invest significantly in marketing when his primary source of business over the years has been through word-of-mouth. Presumably, this referral work is generated within the same geographic area or in close proximity to the areas in which he has historically provided his services.

[31] Aside from the unidentified prospective customer who contacted the applicant in the summer of 2017, there is no evidence that the public, generally, has been or could be confused by the similarity in names of the parties. Kaastra believes that it was the respondent corporation who had done work in Woodstock for the neighbour of the prospective customer who contacted him in the summer of 2017. Kaastra further believes that the prospective customer's confusion arose due to the similarity in the parties' respective names. This evidence falls short of the required mark. Statements made by the unidentified prospective customer from Woodstock are hearsay and, therefore, inadmissible. Furthermore, I note that the applicant, not the respondent, was the beneficiary of any confusion caused by the similarity in names.

(iii) Damage or Potential Damage

[32] Given my findings on the first and second prongs of the test, it is unnecessary to address the third and final prong of the test. However, I note that where the first and second prongs of the test are established, the third step will most likely follow suit. The reverse is also true. The applicant has not established damage or potential for damage.

[33] Kaastra has not provided any evidence that his revenue and/or profits have decreased since the respondent corporation commenced business in 2017. Aside from the applicant's conclusory statements to the effect he has suffered damages and is likely to suffer future damages, there is simply no evidence that the applicant's revenues have suffered or that the applicant will likely suffer a loss of business to the respondent corporation as a result of the respondent's continued use of the name "Arbor Aid Ltd.".

[34] There is no evidence that the respondent corporation operates its business in the Municipality of Central Huron. Conversely, there is no evidence that the applicant operates his business in Oxford County. Kaastra did not provide any evidence of the amount of business or work previously undertaken in the Counties of Perth, Bruce, Lambton and Middlesex. Potential for damage is purely speculative at this point and cannot rise to the level of probable, or even possible, on this evidentiary record.

Disposition

[35] For the foregoing reasons, this application is dismissed. If the parties cannot agree on entitlement to and/or quantum of costs, I will entertain costs submissions as follows:

(a) the respondent shall serve and file submissions not to exceed five pages in length (exclusive of any Costs Outline and time dockets) within 14 days;

(b) the applicant shall serve and file responding submissions not to exceed five pages in length (exclusive of any Costs Outline and time dockets) within seven days thereafter; and

(c) reply submissions within 7 days thereafter.

"Justice A.K. Mitchell"

Justice A.K. Mitchell

Released: August 1, 2019

[^1]: R.S.C., 1985 c. T-13 (the "Act").

[^2]: Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC), [1992] 3 S.C.R. 120 at paras. 32-33, quoting Lord Oliver in Reckitt & Colman Products Limited v. Borden Inc. & Ors, [1990] R.P.C. 273 (H.L.); and Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 at paras. 66-68.

[^3]: Canadian Business School Inc. v. Sunrise Academy Inc. 2002 FCT 1294 at paras. 24 and 46; and Alticor v. Nutravite Pharmaceuticals Inc., 2004 FC 235 at para. 26.2.

[^4]: Westfair Foods Ltd. v. Jim Pattison Industries Ltd., 1989 CanLII 2914 (BCSC) at paras. 29 and 31.

[^5]: Merriam-Webster Dictionary.