Essien Udokang

Appeal from a summary judgment decision enforcing settlement agreements between Mars Canada Inc. and the appellants regarding the sale of grey market Mars products in Canada.

The appellants challenged the enforceability of the settlement agreements as being in restraint of trade, the motion judge's jurisdiction to order a reference on damages, and the award of substantial indemnity costs.

The Court of Appeal upheld the motion judge's decision, finding the settlement agreements reasonable under the Tank Lining test, confirming the court's jurisdiction to order a reference under Rule 20.04(3) on summary judgment, and affirming the substantial indemnity costs award based on the appellants' reprehensible conduct.

The appellants appealed a summary judgment order that found they breached a settlement agreement regarding trademark infringement and directed a reference to fix damages.

The Divisional Court raised the issue of its jurisdiction to hear the appeal.

The court held that under s. 19(1.2) of the Courts of Justice Act, an order directing a reference for damages where the claim exceeds $50,000 does not fall within the Divisional Court's monetary jurisdiction.

The appeal was quashed for lack of jurisdiction and transferred to the Court of Appeal.

Following a summary judgment finding the defendants liable for breaching two settlement agreements by importing and selling goods bearing the plaintiff's trademarks, the plaintiff sought costs on a substantial indemnity basis.

The court found that the defendants brazenly breached their agreements and engaged in reprehensible litigation tactics that maximized costs and delay.

The court awarded the plaintiff costs of $225,000 on a substantial indemnity basis.

The plaintiff brought a summary judgment motion arising from alleged breaches of two settlement agreements prohibiting grey marketing of branded products in Canada.

The court rectified a misnamed party in the first settlement, held that the corporate defendants and the individual defendant were bound by and in breach of their respective settlement agreements, and rejected the defence that the agreements were void restraints of trade.

In applying the restraint of trade analysis, the court emphasized the settlement context, the plaintiff’s statutory rights as registered trade-mark owner, and the illegality of the imported products under federal labelling and packaging law.

Declaratory relief was granted, damages were referred to a Master for quantification, punitive damages were refused, and only a limited counterclaim remained.