Executive Summary: Key Legal and Evidentiary Issues

• Aspen Custom Trailers Inc. sought a declaration that a binding settlement agreement was reached with Semple Global Corporation and the Brandt entities regarding trademark infringement of "HAUL MORE."

• Admissibility of the Defendants' Flavel Affidavit was challenged, as it contained impermissible hearsay regarding subjective intentions rather than objective evidence confined to relevant documents.

• Whether the five-part Allergan test was satisfied — including mutual intention to create legal relations, consideration, certainty of terms, matching offer and acceptance, and counsel's authority to bind — was the central legal question.

• Defendants argued the communications were merely an "invitation to treat" and that no identifiable offer and acceptance existed, submitting that the court should not enforce what is effectively an "agreement to agree."

• Post-agreement conduct on April 24, 2025, where Defendants sought to remove the "United States" reference from the settlement, was found to stem from the Defendants' apparent change of heart rather than uncertainty as to the term itself.

• The Court applied an objective test to assess the parties' intentions, rejecting the Defendants' reliance on subjective reservations as irrelevant to the formation of a binding agreement.

The trademark infringement dispute

Aspen Custom Trailers Inc., the Plaintiff, is the registered owner of Canadian Trademark Registration No. TMA1,O33,559 for the trademark "HAUL MORE," issued on June 28, 2019, in association with heavy-haul trailers, trailer accessories, the manufacture of heavy-haul trailers to the order and specification of others, and the design of heavy-haul trailers to the order and specification of others. On February 18, 2025, Aspen commenced an action for trademark infringement against Semple Global Corporation, Brandt Group of Companies, and Brandt Tractor Ltd. in the Federal Court of Canada. The Statement of Claim alleged that, beginning at least as early as January 2025, the Defendants had been making, offering for sale, and selling heavy-haul trailers and accessory vehicles, and had offered and provided the services of designing and manufacturing trailers to the specification of customers in association with the trademark "HAUL MORE."

Settlement negotiations between the parties

Shortly after service of the Claim on the Defendants on March 11, 2025, Chris Semple, as Director of the Defendant Semple Global Corporation and as representative of all of the Defendants, reached out to John Zork, a representative of the Plaintiff, to discuss the Claim. Mr. Semple and Mr. Zork agreed that their respective legal counsel would work to develop a settlement agreement with respect to the Claim. On April 2, 2025, counsel for the Plaintiff sent an email to the Chief Legal Officer of the Defendants, enclosing a draft settlement agreement for the Defendants' consideration. That same day, the Chief Legal Officer forwarded the draft agreement to Defendants' counsel, MLT Aikans LLP. The first paragraph of the draft proposed that the Defendants cease and not resume use of the expression "HAUL MORE" as a slogan, tagline, motto, strapline, or brand name, in any medium used to market or to deliver their products and services in Canada or the United States. On April 4, 2025, counsel for the Defendants responded with proposed amendments, stating that the Defendants were "quite prepared and amendable (sic) to discontinue the use of HAUL MORE from their marketing," and enclosed a revised draft that tightened the language in paragraph 1 to specifically reference heavy-haul trailer and trailer accessory vehicles, such as dollies, jeeps, and boosters.

Continued revisions and the critical April 16 and 22 exchanges

On April 11, 2025, Plaintiff's counsel sent further revisions to paragraphs 3 and 5 of the draft agreement, with no changes proposed to paragraph 1. On April 14, 2025, Defendants' counsel responded, stating: "We have reviewed your proposed changes and have no further comments on our end; everything looks agreeable. Please proceed with next steps so that we may finalize the agreement." Later that day, counsel for the parties had a conversation which prompted counsel for the Defendants to send further correspondence on April 15, 2025, enclosing a further revised draft modifying paragraphs 4 and 5 to provide "clear guidance regarding timelines and obligations to achieve the Agreement's purpose." On April 16, 2025, Plaintiff's counsel emailed Defendants' counsel enclosing a further revised draft settlement agreement with minor grammatical changes to paragraphs 2 and 4, and some wording changes to paragraph 5, noting that "[w]e will be running it by our client shortly." Later that same day, counsel for the Defendants responded that "your revisions look fine to us. Please proceed with finalizing the draft and circulating for signatures, subject to your client's approval, of course." On April 22, 2025, counsel for the Plaintiff emailed counsel for the Defendants enclosing a copy of the settlement agreement "executed by [their] client" and requesting Defendants' counsel to arrange to have it executed by their clients.

The Defendants' attempt to renegotiate and the breakdown

Two days later, on April 24, 2025, counsel for the Defendants emailed counsel for the Plaintiff requesting further amendments to paragraph 1 of the settlement agreement. The email stated that, prior to executing the agreement, their client had noticed that paragraph 1 mentions the United States, and that their search of the USPTO's database showed Aspen's "Haul More" trademark status as abandoned in the United States, requesting that the language "or the United States" be removed. On April 29, 2025, Plaintiff's counsel responded that the Defendants' revision request was not in line with the approach initially proposed by the Defendants' representative, Mr. Semple, and stated that he was agreeable to providing a signed consent for the Rule 7 extension request, "but we do not want to say that we are still negotiating a settlement, since it seems to us that settlement was reached and agreed." On May 7, 2025, the Defendants filed their Statement of Defence and Counterclaim, and on May 16, 2025, the Plaintiff filed its Reply and Defence to Counterclaim. On June 10, 2025, the Plaintiff filed the present motion.

Admissibility of the Flavel Affidavit

A threshold issue concerned the admissibility of the affidavit of Tania Flavel, a senior paralegal employed by the Defendant Brandt Group of Companies, sworn on June 13, 2025. The Court found the Flavel Affidavit only partially admissible. Weight was given to the documents attached to the affidavit and to evidence in the body of the affidavit insofar as it contained uncontroversial context surrounding the exhibited documents and uncontroversial objective information about the circumstances surrounding the negotiations. However, consistent with the principles set out by the Federal Court of Appeal in Apotex Inc. v Allergan, Inc., 2016 FCA 155, the Court gave no weight to the affiant's statements as to the Defendants' subjective intentions, nor to controversial hearsay evidence that failed to state the source of the information and/or constituted opinion evidence or disguised legal argument.

Application of the Allergan five-part test

The Court applied the five-part test from Allergan to determine whether a binding settlement existed. On the first element — mutual intention to create legal relations — the Court found that the facts demonstrated the parties had a mutual intention to settle their dispute, noting this was not a case in which the parties had some impromptu, informal communications in a relaxed, non-business setting, but rather that the whole purpose of the communications between the parties and their counsel was to settle the dispute that gave rise to the litigation. The Court accepted, on a balance of probabilities, that a reasonable bystander would understand there was an intention to create legal relations in the form of a binding settlement agreement as of April 22, 2025. On the second element, the requirement of consideration was satisfied, as all versions of the draft settlement agreement contained an undertaking by the Defendants to discontinue use of the expression "HAUL MORE" in exchange for the Plaintiff filing a Notice of Discontinuance of the Action on a without costs basis, as well as a release by the Plaintiff from all claims and causes of action against the Defendants arising from the allegations in the pleadings. On the third element — certainty of terms — the Court found the essential terms of the draft agreement were sufficiently certain and that the parties were objectively of a common mind as of April 22, 2025, noting that the disagreement that arose on April 24, 2025, regarding the geographic scope did not arise from uncertainty as to the term itself but rather stemmed from the Defendants' apparent change of heart. Regarding the fourth element — matching offer and acceptance — the Court concluded that the Plaintiff's revised draft of April 16, 2025, constituted an identifiable offer capable of acceptance, subject only to the approval of the instructing authority for the Plaintiff, and that the Defendants' responding email that same day constituted acceptance of that offer, with the Plaintiff's execution of the agreement on April 22, 2025, satisfying the only outstanding condition. Finally, on the fifth element — authority to bind — the Court found that counsel for the Plaintiff did qualify the Plaintiff's offer on April 16, 2025, by stating they would be running it by their client; however, the Plaintiff itself signified its approval on April 22, 2025, when the President of Aspen Custom Trailors Inc., Phil Johnston, signed the revised draft settlement agreement. As for the Defendants, their counsel neither qualified his authority at the outset of the negotiations, nor qualified the Defendants' acceptance by saying it was "subject to his client's approval" or words to that effect, and thus possessed the apparent authority to bind the Defendants.

The ruling and outcome

Associate Judge Kathleen Ring granted the Plaintiff's motion. The Court declared that the parties concluded a legally binding settlement agreement on April 22, 2025, in accordance with the terms set out in the Settlement Agreement attached as Schedule "A" to the Plaintiff's Notice of Motion. In awarding costs, the Court saw no reason to deviate from the general rule that the successful party is entitled to an award of costs. Costs were fixed in favour of the Plaintiff, Aspen Custom Trailers Inc., in the amount of $1,500.00, inclusive of disbursements and taxes, payable by the Defendants.