DIVISIONAL COURT FILE NO.: 495/03

SCJ FILE NO.: 03-CV-249314CM1

DATE: 20030916

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

TORONTO CRICKET SKATING & CURLING CLUB

Plaintiff (Respondent)

• and -

CRICKET CLUB TOWNHOUSES INC.

Defendant (Appellant)

Allan Sternberg for the defendant (appellant)

Timothy J. Law for the plaintiff (respondent)

Heard: September 2, 2003

FERRIER J.

1The appellant seeks a stay of the order of Blair RSJ, dated August 12, 2003, “pending disposition of the Appellant’s motion for leave to appeal the said Order and, if leave is granted, until the disposition of the appeal”.

2The appellant’s motion for a stay was dismissed by me, with reasons to follow, which I now deliver.

3The appellant claims that it is now necessary only to have a partial stay, because it has now complied in a number of ways with Blair RSJ’s order. The steps taken by the appellant are as follows:

(a) discontinuing all newspaper advertisements;

(b) covering up of all street signage;

(c) commissioning new street signage which says “The Cricket Club Area Townhouses” in the place of the existing “The Cricket Club Townhouses”.

(d) changing the phone message greeting from: “You have reached The Cricket Club Townhouses. Please leave a message.” to: “You have reached The Cricket Club Area Townhouses. Please leave a message.”;

(e) changing the Receptionist’s greeting from: “Welcome to The Cricket Club Townhouses.” to: “Welcome to The Cricket Club Area Townhouses.”;

(f) discontinuing all direct mailing; and

(g) shutting down the website.

4The appellant thus seeks a stay only in reference to the use of its brochure (a substantial and “high end” type of brochure consisting of several pages) and in reference to agreements of purchase and sale.

5Inherent in this position is the question whether the use of the phrase “Cricket Club Area Townhouses” is permissible in the face of Blair RSJ’s order. If the phrase is permissible, the scope of the claimed stay is as suggested by the appellant. If not so permissible, the scope of the stay sought is much broader. In my view the phrase “Cricket Club Area Townhouses” is not so permitted. The order of Blair RSJ, paraphrased, is that the appellant is “restrained from using … the words Cricket Club …”. The order is clear on its face. I am not dissuaded from this view by the argument that para.21 of Blair RSJ’s reasons implies permission. My reading of Blair RSJ’s reasons draws me to the conclusion that he made the point in para.21 in response to the arguments referred to in para.19 of his reasons. Furthermore, counsel’s apparent lack of opposition to the phrase cannot impair the strength of the words of the order as issued.

6This determination is relevant only to the scope of the stay. The question of contempt is not before me.

7I now turn to the question of a stay of Blair RSJ’s order. In this context I am obliged to review the matter with the same considerations as in the initial determination of the entitlement to an interlocutory injunction: RJR MacDonald Inc. I am able to do so briefly in view of the thoroughness and precision of the reasons of Blair RSJ.

8With respect, Blair RSJ correctly directed his attention to the three necessary components of a passing off action:

(a) the existence of goodwill or reputation in association with a trademark and trade name;

(b) deception of the public due to a misrepresentation;

(c) actual or potential damage to the plaintiff.

9There is ample evidence, reviewed by Blair RSJ, of the first two components. Concerning the third component, I agree with the conclusions of Blair RSJ that, absent restraint, the respondent will lose control over its trade name or mark, and the distinctiveness of that trade indicia will be lost. Such loss of control “is recognized in law as an element of actual or potential damage even where the services provided by a defendant are not in competition with those of the plaintiff”: reasons of Blair RSJ, para.36.

… If another uses it, he borrows the owner’s reputation, whose quality no longer lies within his own control. This is an injury even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognized that, unless the borrower’s use is so foreign to the owner’s as to insure against any identification of the two, it is unlawful.

Yale Electric Corp. v. Robertson (1928), 26 F. 2nd 972 (2nd Cir., C.A.).

10In paras.40 to 43, inclusive, of his reasons, Blair RSJ specifically notes that the parties are not in direct competition for goods or services. Nonetheless, in a sound analysis with which I respectfully agree, Blair RSJ comes to the conclusion that the loss of control over the name “Cricket Club”, and its consequent loss of control over the reputation, image and goodwill associated with the name, constitutes harm to the plaintiff which is irreparable in nature because it cannot be quantified in monetary terms or cured.

11Accordingly, the respondent met the tests of establishing a serious case to be tried on the merits and that it will suffer irreparable harm if an interlocutory injunction were not granted.

12Turning to the balance of convenience, I agree with Blair RSJ’s reasoning and findings on this issue. Furthermore, it is my view that the respondent plaintiff has a strong case, a very strong case, on the merits. This is directly relevant on the question of a stay.

13The appellant however argues in particular reference to the stay, the question of delay in instituting the claim by the plaintiff, and the fact that there are only some six weeks between the day the motion was argued and the leave application which is scheduled for October 14, 2003.

14On the question of delay in instituting the proceedings, I have reviewed the facts referred to by Blair RSJ and the additional facts referred to in both parties’ factums. I, too, would not bar the interlocutory injunction, nor would I stay its execution, on the ground of delay.

15In reference to the short period of time between now and October 14, I note that the motion requests the stay until the appeal is argued if leave is granted – which would be a period of some months, not only weeks.

16Furthermore, even though the argument is at first blush appealing, I am not persuaded that even a further six-week period can be considered insignificant in the circumstances of the use of the plaintiff’s name. The appellant was wrongfully using the respondent’s name for many months in the face of direct objection from the respondent – and appears to be continuing to do so.

17The respondent is entitled to the protection it seeks, with considerable strength to its case. If the respondent ultimately fails, the appellant can readily be compensated in damages, whereas the respondent will suffer irreparable harm if the stay is ordered.

18Accordingly, the motion was dismissed with costs fixed at $3,000, plus GST, payable forthwith.

Ferrier J.

Released: September 16, 2003

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DIVISIONAL COURT FILE NO.: 495/03

SCJ FILE NO.: 03-CV-249314CM1

DATE: 20030916

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

TORONTO CRICKET SKATING & CURLING CLUB

Plaintiff (Respondent)

• and -

CRICKET CLUB TOWNHOUSES INC.

Defendant (Appellant)

REASONS FOR JUDGMENT

FERRIER J.

Released: September 16, 2003

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