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.

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.