A-1256-87
Tye -Sil Corporation Limited (Appellant)
(Defendant)
v.
Diversified Products Corporation and Brown Fitz-
patrick Lloyd Patent Limited (Respondents)
(Plaintiffs)
INDEXED AS: DIVERSIFIED PRODUCTS CORP. V. TYE-SIL CORP.
Court of Appeal, Thurlow C.J., Hugessen and
Lacombe JJ.—Ottawa, January 14, 1988.
Practice — Judgments and orders — Stay of execution —
Appeal from refusal to stay judgment, pending appeal, order
ing appellant to destroy infringing models of patented device
— Trial Judge erred in stating economic harm alone insuffi
cient reason to stay execution — Appeal allowed — Order for
destruction of $1 million worth of property potentially causing
irreparable harm if order wrongly made — Doubtful benefits
to respondents if order carried out immediately — Destruction
of inventory of infringing devices removing subject-matter of
appeal on merits — Corning Glass Works v. Canada Wire &
Cable Ltd. (1984), 1 C.P.R. (3d) 374 (F.C.T.D.) approved as
proper approach to orders for destruction and delivery of
property in patent cases.
CASES JUDICIALLY CONSIDERED
APPLIED:
Corning Glass Works v. Canada Wire & Cable Ltd.,
doing business as Canstar Communications (1984), 1
C.P.R. (3d) 374 (F.C.T.D.).
REFERRED TO:
Marketing International Ltd. v. S.C. Johnson and Son,
Inc., [1977] 2 F.C. 618 (C.A.); Procter & Gamble Co. v.
Bristol-Myers Canada Ltd. (1978), 39 C.P.R. (2d) 171
(F.C.A.).
COUNSEL:
Richard Uditsky for appellant.
R. Scott Jolliffe for respondents.
SOLICITORS:
Mendelsohn, Rosentzveig, Shacter, Montréal,
for appellant.
Gowling & Henderson, Toronto, for respon
dents.
The following are the reasons for judgment of
the Court delivered orally in English by
HUGESSEN J.: This is an appeal from a decision
of Cullen J. [T-1565-85, order dated 30/11/87, not
yet reported] by which he refused to stay, pending
appeal, that part of an earlier judgment by which
he had ordered the appellant to "deliver and
destroy all infringing models" of the patented
device in suit.
In refusing to give the requested stay, Cullen J.
said:
The operation of a judgment following trial should not be
suspended unless the aggrieved party is able to establish a
preponderance of a very severe irreparable harm. Certainly
with some 8,596 units in the defendant's inventory with a "sales
value of $1,000,000", the defendant will suffer economic harm.
It is clear from the jurisprudence that suffering economic harm
alone is not sufficient reason for staying the operation of a
judgment. (Appeal Book, at page 172).
We are all of the view that the first-quoted
sentence properly states the applicable test of what
the interests of justice require. See Marketing
International Ltd. v. S.C. Johnson and Son, Inc.,
[1977] 2 F.C. 618 (C.A.); Procter & Gamble Co.
v. Bristol-Myers Canada Ltd. (1978), 39 C.P.R.
(2d) 171 (F.C.A.). We are also of the view, how
ever, that the last sentence of the quoted passage is
clearly wrong. Indeed in almost every case in this
Court the interests of the parties, and the resulting
harm which might flow from injury to those inter
ests, are wholly of an economic nature. What
justice requires is not governed by whether harm is
economic or not.
An order for the destruction of property, if
complied with, will clearly have caused irreparable
harm if it should subsequently turn out that the
order should not have been given. The property,
once destroyed, cannot be recreated, and there is
no recourse at law. The Trial Judge appears to
have accepted that such harm would be of the
order of $1,000,000 "sales value" in this case. On
the other hand, it is difficult to know what benefit
would flow to the respondents from the immediate
carrying out of the order. Counsel was unable to
suggest any. In those circumstances, the prepon
derance of irreparable harm clearly favours the
appellant; the Trial Judge should have granted the
stay.
There is another aspect to the interests of justice
which militates in favour of staying an order such
as was given here. To an extent at least, the very
subject-matter of the appeal on the merits is the
appellant's existing inventory of infringing devices;
if that inventory is destroyed, that subject-matter
will have disappeared before the appeal is heard.
We note and commend the decision of Strayer J.
in Corning Glass Works v. Canada Wire & Cable
Ltd., doing business as Canstar Communications
(1984), 1 C.P.R. (3d) 374 (F.C.T.D.), as being the
proper approach to orders for destruction and
delivery of property in patent cases.
The appeal will be allowed; that part of para
graph 3 of the judgment of the Trial Division on
the merits herein which orders the delivery and
destruction of all infringing models shall be stayed
until judgment on the appeal on the merits. As a
condition of such stay, defendant shall give an
undertaking to preserve all presently existing
infringing models in their current state.
The appellant is entitled to its costs on the
present appeal; the costs on the motion to stay in
the Trial Division shall be costs in the cause.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.