Canada Trustco Mortgage Co. v. Huron Shores Real Estate Inc.
T-1909-94
McKeown J.
6/10/94
7 pp.
Plaintiffs seek interlocutory injunction to restrain defendant from trade mark infringement, unfairly trading on goodwill, false representation -- Plaintiff, CTMC, granted defendant exclusive right to use CT Home Realty Franchise System in Sarnia/Lambton area for 5 years with renewal option -- Two years later, Canada Trustco entered partnership with Coldwell Banker for residential real estate franchising business -- CT Home Realty franchisees invited to join new Coldwell Banker -- Defendant refused -- Defendant says services to which entitled deteriorated after new Coldwell Banker created -- Defendant alleged breach of licence agreement, ceased paying service fee -- CT terminating agreement for defendant's default -- Defendant told to discontinue use of "Canada Trust" trade mark -- Plaintiffs say defendant continuing to represent itself as affiliated with CTMC -- Whether CTMC justified in commencing action having established new franchise system with Coldwell Banker -- Usual tests for granting interlocutory injunction -- Plaintiffs rely on Fruit of the Loom, Inc. v. Chateau Lingerie Mfg. Co. Ltd. (1982), 63 C.P.R. (2d) 51 (F.C.T.D.) -- In seeking injunctive relief, plaintiff must come to court with clean hands -- Defendant having sued plaintiffs in Ontario Court (General Division) for specific performance of franchise agreement and other relief -- Question whether franchise agreement still in effect is determinative of plaintiffs' right to injunction -- Serious issue is whether specific performance action will succeed -- Renewal issue will come into play if action succeeds -- Plaintiffs' position that renewals unavailable -- Defendant submits plaintiffs want out of real estate business and if interlocutory injunction granted, plaintiffs benefitting from breach of contract -- Status quo should be maintained -- Application denied if defendant pays into trust account share of income provided for in franchise agreement.