A-163-8E
Turbo Resources Limited (Appellant)
v.
Petro Canada Inc. (Respondent)
INDEXED AS: TURBO RESOURCES LTD. V. PETRO CANADA INC
(CA.)
Court of Appeal, Heald, Stone and Desjardins
JJ.A.—Toronto, November 28, 1988; Ottawa,
January 18, 1989.
Injunctions — Appeal against denial of interlocutory
injunction — Trade mark infringement case — Test to be met
for interlocutory injunctions — Motions Judge erred ie
requiring prima facie case — American Cyanamid (serious
question to be tried) appropriate threshold test — Determina
tion whether test satisfied requiring consideration of several
factors and determining balance of convenience — Appeal
dismissed as balance of convenience favouring respondent.
Trade marks — Infringement — Appeal against denial of
interlocutory injunction — Appellant selling "Turbo"
automotive lubricants and petroleum products — Respondent
selling "Premium Turbo Tested" oil — American Cyanamid
(serious question to be tried) appropriate threshold test for
interlocutory injunctions — Appellant meeting serious ques
tion to be tried test as to alleged Trade Marks Act ss. 7, 10
and 20 violations — Violation of common law trade mark
rights could not be raised at hearing as not pleaded — Balance
of convenience favouring respondent — Appeal dismissed.
This was an appeal against the Trial Division's decision
dismissing the appellant's application for an interlocutory
injunction. The appellant is engaged in the petroleum industry
and markets packaged automotive lubricants under the mark
"Turbo". The respondent, Petro Canada, markets a one litre
container of motor oil displaying its own name, logo and the
words "Super Turbo Tested". The Motions Judge ruled that
the appellant had not established a prima facie case which he
ruled was the appropriate test to be used in an application for
interlocutory injunction, thereby rejecting the use of the "seri-
ous question to be tried" test of American Cyanamid.
Held, the appeal should be dismissed.
The Motions Judge erred in applying the more stringent
prima facie case test. The remedy of interlocutory injunction is
one that should be kept flexible and discretionary. Accordingly,
the "serious question to be tried" is the appropriate threshold
test to be used in the granting of this remedy. The applicant
must, however, demonstrate that the balance of convenience
lies in his favour for an injunction to be issued. Furthermore,
the Court must assure itself that the case is not such that the
granting of an injunction would finally dispose of the matter.
Although the appellant has established that there is a serious
question to be tried with respect to the alleged violations under
the statute, a consideration of the additional factors mentioned
by Lord Diplock in American Cyanamid reveal that the bal
ance of convenience lies in favour of the respondent.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11, (U.K.).
Trade Marks Act, R.S.C. 1970, c. T-10, ss. 7(b),(c),(e),
10, 20, 22(1), 53.
CASES JUDICIALLY CONSIDERED
APPLIED:
American Cyanamid Co. v. Ethicon Ltd., [ 1975] A.C.
396 (H.L.); N.W.L. Ltd. v. Woods, [1979] 1 W.L.R.
1294 (H.L.); Hubbard v. Vosper, [1972] 2 Q.B. 84
(C.A.); Eng Mee Yong v. Letchumanan s/o Velayutham,
[1980] A.C. 331 (P.C.); Interlego AG et al. v. Irwin Toy
Ltd. et al. (1985), 3 C.P.R. (3d) 476 (F.C.T.D.); Mac-
Donald et al. v. Vapor Canada Ltd., [ 1977] 2 S.C.R. 134;
Asbjorn Horgard AIS v. Gibbs/Nortac Industries Ltd.,
[1987] 3 F.C. 544 (C.A.).
CONSIDERED:
Manitoba (Attorney General) v. Metropolitan Stores
Ltd., [1987] 1 S.C.R. 110; Toth v. Canada (Minister of
Employment and Immigration) (A-870-88, Mahoney J.,
judgment dated 28/10/88 (C.A.), not yet reported); Teal
Cedar Products (1977) Ltd. v. Canada (A-613-88, Pratte
J., judgment dated 6/12/88 (C.A.), not yet reported);
Syntex Inc. v. Apotex Inc., [ 1984] 2 F.C. 1012 (C.A.);
Telecommunications Workers' Union v. Canada
(Canadian Radio-Television Commission) (A-498-88,
Marceau J., judgment dated 13/10/88 (C.A.), not yet
reported).
REFERRED TO:
Stratford (J. T.) & Son Ltd. v. Lindley, [1965] A.C. 269
(H.L.); Fellowes & Son v. Fisher, [1976] Q.B. 122
(C.A.); Hubbard v. Pitt, [1976] Q.B. 142 (C.A.); Firth
Industries Ltd v Polyglas Engineering Pty Ltd (1975), 6
ALR 212 (H.C.Aust.); Australian Coarse Grain Pool
Pty Ltd v Barley Marketing Board of Queensland
(1982), 46 ALR 398 (H.C.Aust.); Tableland Peanuts
Pty Ltd v Peanut Marketing Board (1984), 52 ALR 651
(H.C.Aust.); A y Hayden (No 1) (1984), 56 ALR 73
(H.C.Aust.); Epitoma Pty Ltd y Australasian Meat
Industry Employees' Union (1984), 54 ALR 730
(F.C.Aust.); Telmak Teleproducts Australia Pty Ltd y
Bond International Pty Ltd (1985), 66 ALR 118
(F.C.Aust.); B.C. (A.G.) v. Wale (1986), 9 B.C.L.R. (2d)
333 (C.A.); Law Soc. of Alta v. Black (1983), 29 Alta
L.R. (2d) 326 (C.A.); Van Wart v. La -Ko Enterprises
Ltd. and Labrie (1981), 35 N.B.R. (2d) 256 (C.A.); Re
Island Telephone Company Limited (1987), 206 A.P.R.
158 (P.E.I.C.A.); United Steel Workers of America,
Local 5795 v. Iron Ore Company of Canada (1984), 132
A.P.R. 150 (Nfld.C.A.); Nelson Burns & Co. v. Gratham
Industries Ltd. (1987), 19 C.P.R. (3d) 71 (Ont. C.A.);
Lo-Cost Drug Mart Ltd. v. Canada Safeway Limited et
al. (1986), 40 Man.R. (2d) 211 (C.A.); Potash Corpora
tion of Saskatchewan Mining Limited v. Todd, Heinrich
and Energy and Chemical Workers Union, Local 922
(1987), 53 Sask. R. 165 (C.A.); Mercator Enterprises
Ltd. v. Harris et al. (1978), 29 N.S.R. (2d) 691 (C.A.);
Chitel et al. v. Rothbart et al. (1982), 69 C.P.R. (2d) 62
(Ont. C.A.); Consolidated Traders Ltd y Downes, [1981]
2 NZLR 255 (C.A.); Newsweek Inc. v. The British
Broadcasting Corporation, [ 1979] R.P.C. 441 (C.A.).
AUTHORS CITED
Sharpe, Robert J., Injunctions and Specific Performance,
Toronto: Canada Law Book Limited, 1983.
Rogers, Brian MacLeod and Hately, George W. "Getting
the Pre-Trial Injunction" (1982), 60 Can. Bar. Rev. 1.
COUNSEL:
Patrick J. McGovern for appellant.
J.D.B. McDonald for respondent.
SOLICITORS:
Parlee McLaws, Calgary, for appellant.
Bennett Jones, Calgary, for respondent.
The following are the reasons for judgment
rendered in English by
STONE J.: This is an appeal from a judgment of
Addy J. in the Trial Division, [[1988] 3 F.C. 235]
whereby he dismissed an application brought on
July 27, 1987 for an interlocutory and interim
injunction. It raises directly the factors to be con
sidered by a trial judge in dealing with that kind of
application in an action for trade mark infringe
ment and related relief made pursuant to the
provisions of the Trade Marks Act, R.S.C. 1970,
c. T-10. As the effect of the injunction would be to
preserve the status quo between the parties until
after the trial of the action, I will henceforth refer
to the relief sought on the application as an inter
locutory injunction.
The evidence
The appellant supported its application by a
considerable amount of sworn evidence chiefly in
the form of two affidavits of one of its officers,
Mr. Bruce Millar, and an affidavit of a market
researcher, Mr. Claude Gauthier, with the results
of a survey carried out by him with a view to
establishing, inter alia, that the name "TURBO" is
identified in the public mind as designating a
source for gasoline and engine oils. The affidavit of
Mr. Derrick Warburton to the effect that some
confusion arose upon his ordering "Turbo brand
motor oil" at certain of the respondent's service
stations, was also filed. Against the application
were filed two affidavits of Mr. David Archbold,
an officer of the respondent, and three sundry
affidavits. Messrs. Millar, Archbold and Gauthier
were cross-examined on their respective affidavits
in advance of the injunction hearing which took
place in January, 1988.
The facts
The appellant, an Alberta corporation, is
engaged in the business of refining and marketing
petroleum products in Canada including the mar
keting of packaged automotive engine lubricants
which it or its predecessor commenced selling to
the public under the mark "Turbo" in 1967. The
appellant's business has expanded over the years
from Alberta into British Columbia, Saskatche-
wan, Manitoba, the Northwest Territories, and
now includes the operation of an oil refinery in
Calgary and several service stations in Ontario.
On April 11, 1974, the appellant became the
registered owner of the design trade marks "Tur-
bo" (Certificate No. 198,729) and "Go Turbo"
(Certificate No. 198,731) for wares including
"motor and engine oil". On the same date, it also
became the registered owner of the trade mark
"Go Turbo" (Certificate No. 198,730) for wares
which include automotive lubricants. Subsequent
ly, on August 10, 1979, the appellant became the
registered owner of the design mark "Turbo"
(Certificate No. 234,967) for wares which also
includes automotive lubricants. This latter design
mark registration is in a form different from that
depicted in Certificate No. 198,729. Each of these
registered trade marks are specifically identified
and relied upon in paragraphs 4, 5 and 6 of the
statement of claim and are made schedules there
to. No other mark, either registered or unregis
tered, is specifically pleaded in support of the
causes of action therein asserted. Since 1969, the
Turbo mark has been displayed by the appellant in
the form appearing in Certificate No. 198,729
and, in particular, on a one litre white plastic
container of "Super duty 1" 10W30 motor oil that
it markets in Canada. That container also carries
the appellant's full corporate name in large white
print on red background. Also prominently dis
played thereon is: "For API Service SE-SF-CC".
In the late fall of 1986, the respondent circulat
ed a brochure in which the following statement
appears:
Petro-Canada is pleased to announced a brand new, top-of-the-
line product-Premium Turbo Tested Motor Oil. It's the result
of over 18 months of research, development and testing, and
sets a new standard in motor oil performance. Packaged in a
new black plastic one litre bottle, and striking high tech foil
label, Premium Turbo Tested will be available to all dealers
effective November 15, 1986.
The existence of this brochure came to the Appel
lant's attention in January, 1987, and by letter of
June 23, 1987 its solicitors wrote to the respondent
in following terms:
Our client is the registered owner of the trademark TURBO
relating to automotive lubricants. This mark has been used
extensively by our client since 1967, and has become well
known in our client's market area in Canada, where it enjoys a
high order of inherent and acquired distinctiveness.
It has been brought to our attention that you are marketing in
Canada an automotive lubricant under the name TURBO.
The close similarity between the name so used by you and our
client's registered mark TURBO constitutes a deemed infringe
ment. Your use of this name has caused and is likely to
continue to cause, confusion in Canada between your products
and business and that of our client.
We request your written undertaking that you will forthwith
discontinue all use of the name TURBO in association with
automotive lubricants.
The respondent does in fact market a one litre
black plastic container of 10W30 motor oil bearing
a foil label that prominently displays the respond
ent's logo in the form of a white bordered upper
portion of a stylized maple leaf (in white) on a red
background, carrying the words "PETRO-CANADA"
in bold black letters on its face. Below this logo
appears the words "SUPER TURBO TESTED", the
word TURBO (in red) being displayed more promi
nently than any other, and the word "HYDROTEST-
ED" in smaller print set off to the left. On the back
and sides of the container again appears the
respondent's logo, with its full corporate name
clearly appearing on one of the sides. Among the
other writings on the label are: "API:SF./CC,CD".
Injunctive relief sought
The notice of motion of July 27 states explicitly
that it was being "made pursuant to the Trade
Marks Act". The injunctive relief it seeks is to
restrain the respondent from doing the following:
(i) infringing the rights conferred by Canadian Registered
Trade Mark Nos. 198,729; 234,967; 198,730 and 198,731;
(ii) being deemed to infringe Canadian Registered Trade
Mark Nos. 198,729; 234,967; 198,730 and 198,731;
(iii) using in Canada as a trade mark, trade name or otherwise
the word TURBO or any other words or "get-up" or
design confusingly similar therewith or any colourable
imitation thereof in association with fuels and petroleum
products for automotive and other self-propelled vehicles,
namely specialty lubricants, automotive chemicals and
greases, gasoline, diesel fuel, motor and engine oil, anti
freeze and similar products;
(iv) using in Canada the trade mark TURBO or any colour-
able imitation thereof in any manner likely to have the
effect of depreciating the value of the goodwill attached
thereto or endeavoring to obtain such goodwill for
themselves;
(v) distributing, marketing, offering for sale or selling in
Canada one litre containers of automotive lubricants bear
ing labels which display the words TURBO TESTED or
any other material, containers, brochures or advertising
material of whatsoever nature bearing the trade mark
TURBO.
These paragraphs correspond exactly with the
injunctive relief prayed for in paragraph (b) of the
prayer for relief in the statement of claim.
The pleading and statutory provisions
The causes of action relied upon appear in para
graphs 7-13 of the statement of claim, which read:
7. The Defendant now has on sale in the Canadian market, at
retail level, a one litre container of automotive engine oil which
bears a label which displays prominently the words TURBO
TESTED a copy of which is annexed hereto as Schedule "E".
8. The Plaintiff states that the use of the word TURBO in the
advertising, sales and promotion of the Defendant's brand of
automotive oil is an infringement of the Plaintiffs said trade
marks 198,729, 234,967, 198,730 and 198,731 contrary to
Section 10 of the Trade Marks Act, R.S.C. 1970, c. T-10 or, in
the alternative, that such use is deemed to infringe the said
registered trade marks contrary to Section 20 of the Trade
Marks Act (supra).
9. The marketing, promotion and sale by the Defendant of
such products as described in paragraph 7 of this Statement of
Claim is likely to lead to the inference that such items, wares or
services are manufactured, sold or performed by the Plaintiff,
thus causing members of the public to be deceived or confused,
which results in an irreparable injury to the Plaintiff and
depreciates the value of the goodwill attaching to the Plaintiffs
registered trade marks.
10. The Plaintiff states that the utilization of the words
TURBO TESTED is calculated to create confusion and to
deceive the public into thinking that the said product is that of
the Plaintiff and, as such, the Defendant is passing off the
packaged automotive oil as being that of the Plaintiff.
11. The acts and conduct of the Defendant as previously
referred to in this Statement of Claim constitute business
practice contrary to honest industrial commercial usage in
Canada. The Plaintiff will rely on the provisions of the Trade
Marks Act, R.S.C. 1970, Chapter T-10 and specifically Sec
tions 7 and 53 thereof.
12. By reason of the aforesaid wrongful acts of the Defendant,
the Plaintiff has suffered serious loss and damage and the
Defendant has profited.
13. The activities of the Defendants were wilful and done with
full knowledge or, in the alternative, were done when there was
a reasonable basis for the Defendant to suspect the rights of the
Plaintiff in the trade marks herein.
Sections 7, 10, 20 and 53 of the Trade Marks
Act provide as follows:
7. No person shall
(a) make a false or misleading statement tending to discredit
the business, wares or services of a competitor;
(b) direct public attention to his wares, services or business
in such a way as to cause or be likely to cause confusion in
Canada, at the time he commenced so to direct attention to
them, between his wares, services or business and the wares,
services or business of another;
(c) pass off other wares or services as and for those ordered
or requested;
(d) make use, in association with wares or services, of any
description that is false in a material respect and likely to
mislead the public as to
(i) the character, quality, quantity or composition,
(ii) the geographical origin, or
(iii) the mode of the manufacture, production or
performance
of such wares or services; or
(e) do any other act or adopt any other business practice
contrary to honest industrial or commercial usage in Canada.
10. Where any mark has by ordinary and bona fide commer
cial usage become recognized in Canada as designating the
kind, quality, quantity, destination, value, place of origin or
date of production of any wares or services, no person shall
adopt it as a trade mark in association with such wares or
services or others of the same general class or use it in a way
likely to mislead, nor shall any person so adopt or so use any
mark so nearly resembling such mark as to be likely to be
mistaken therefor.
20. The right of the owner of a registered trade mark to its
exclusive use shall be deemed to be infringed by a person not
entitled to its use under this Act who sells, distributes or
advertises wares or services in association with a confusing
trade mark or trade name, but no registration of a trade mark
prevents a person from making
(a) any bona fide use of his personal name as a trade name,
or
(b) any bona fide use, other than as a trade mark,
(i) of the geographical name of his place of business, or
(ii) of any accurate description of the character or quality
of his wares or services,
in such a manner as is not likely to have the effect of depreciat
ing the value of the goodwill attaching to the trade mark.
53. Where it is made to appear to a court of competent
jurisdiction that any act has been done contrary to this Act, the
court may make any such order as the circumstances require
including provision for relief by way of injunction and the
recovery of damages or profits, and may give directions with
respect to the disposition of any offending wares, packages,
labels and advertising material and of any dies used in connec
tion therewith.
When the statement of claim is read in conjunc
tion with the provisions of the Trade Marks Act
relied upon, it becomes possible (with one excep
tion) to group the causes of action asserted into the
following categories, by reference to the corre
sponding statutory provisions:
(a) infringement of the four trade marks specifi
cally identified in the pleading (section 10);
(b) deemed infringement of those marks (section
20);
(c) causing members of the public to be deceived
or confused, thereby resulting in irreparable
damage to the appellant (paragraph 7(b));
(d) causing members of the public to be deceived
or confused, thereby depreciating the value of
the goodwill attaching to the appellant's trade
marks;
(e) creating confusion and consequently deceiving
the public into thinking that the respondent's
product is the appellant's, thereby passing off
its product as that of the appellant (paragraph
7 (c));
(f) engaging in a business practice contrary to
honest industrial or commercial usage in
Canada (paragraph 7(e)).
The exception is the cause of action summarized in
(d) above. As to this, counsel for the appellant
conceded before us that this cause of action relies
for its legal vitality on the provisions of subsection
22(1)' of the statute and that it is not specifically
pleaded.
At the hearing, the appellant contended that the
injunctive relief sought would serve also to protect
common law trade marks rights in addition to, or
in lieu of, any rights that may flow from the
statute. However, the respondent suggests, and I
agree, that no common law rights of trade mark
are actually asserted and relied upon as such in the
statement of claim.
The judgment below
The learned and very experienced Motions
Judge offers some general views as to the princi
ples that ought to guide the courts in an applica
tion of this kind notwithstanding the test formu
lated by Lord Diplock in American Cyanamid Co.
v. Ethicon Ltd., [1975] A.C. 396 (H.L.). He pro
ceeds to determine at the outset whether there was
an obligation on the appellant to establish "a
strong prima facie case" or whether the Court had
merely to be satisfied that there was "a serious
question to be tried, in the sense that the action is
neither frivolous nor vexatious". He explains at
some considerable length why he preferred to
apply the prima facie case test in the circum
stances of this case rather than the "serious ques
tion to be tried" test of American Cyanamid. His
misgivings with accepting the latter test are vari
ously expressed, and most strikingly so in the
following passage from his reasons for judgment,
at pages 241-242:
... It should not apply in cases where the granting of the
injunction would not merely preserve the status quo but would
cause actual substantive damage to the defendant. It simply
does not seem acceptable or just to me, that, where the
defendant appears on the evidence adduced on the motion for
interlocutory relief to have a greater chance of success than the
plaintiff, I should proceed to enjoin the defendant merely
because the balance of convenience weighs in favour of the
plaintiff. Where there would be a serious question to be tried,
in the sense that the action is neither frivolous nor vexatious,
yet where, on the one hand, the defendant would apparently
have a greater chance of succeeding, and where, on the other
hand, the potential harm caused to the plaintiff would exceed
' 22. (1) No person shall use a trade mark registered by
another person in a manner likely to have the effect of
depreciating the value of the goodwill attaching thereto.
that caused the defendant, I would not conclude that the
motion should then be decided in favour of the plaintiff.
After trial of an action, the claim for an injunction must
necessarily fail should the plaintiff fail to establish a right to it
on a balance of probabilities. Since an interlocutory injunction
must be considered an exceptional remedy, as must any other
interim relief previous to a full trial on the merits, it is difficult
for me to conceive why, generally speaking, either at law or in
accordance with the equitable principles which govern injunc-
tive proceedings, a plaintiff should be granted interlocutory
injunctive relief unless a strong prima facie case or at the very
least a prima facie case has first been established. Put in
another way, where the defendant would be suffering actual
damage pending trial, then unless the person relying on the
monopoly is able to satisfy the judge at the hearing that there is
a probability of eventual success, the application should fail.
He acknowledges some scope for granting an inter
locutory injunction "in certain rare occurrences"
even though a prima facie case might not be fully
established, but would otherwise require the dis
cretion to be exercised in the traditional manner
that prevailed prior to 1975. He aslo indicates that
his comments were addressed primarily to cases
that involve alleged industrial property rights vio
lation. It will be sufficient for present purposes if I
confine myself to the considerations that should
apply in the circumstances of the particular kind
of case that is before us on this appeal.
The learned Motions Judge's review of the case
law as to the proper threshold test to be applied
took him through a series of decisions, chiefly
Canadian, rendered subsequent to American
Cyanamid. The threshold test laid down in that
case was applied in some of the cases he reviewed,
while in others it was rejected. He then concludes,
at page 250 of his reasons for judgment:
On the affidavit evidence presented on the motion and the
cross-examinations thereon, I must conclude therefore that
there has been no prima facie case established by the plaintiff
Turbo Resources that Petro Canada might be infringing its
monopoly. There remains of course a possibility that this might
be established by further evidence adduced in trial.
The motion will therefore be dismissed. I specifically refrain
however from dealing with the question of balance of conve
nience. Regarding the nature of the damages, I also refrain
from making any finding except one to the effect that the harm
done to Petro Canada, had injunction been granted, could have
been compensated for by a monetary award. The cost of
removal and the replacement of the labels on their Turbo tested
oil containers would in fact be the only damage caused and this
could fairly easily be determined.
The American Cyanamid threshold test
Until 1975, it was generally held in England
that an interlocutory injunction should be refused
unless the plaintiff showed as a minimum "a
prima facie case of some breach of duty" on the
part of the defendant: see Stratford (J. T.) & Son
Ltd. v. Lindley, [1965] A.C. 269 (H.L.) per Lord
Upjohn, at page 338. But when American Cyana-
mid, a patent case, reached the House of Lords,
Lord Diplock (without referring to J. T. Strat-
ford) expressly rejected this notion, laying down
instead, at pages 407-408, the following threshold
test to be applied:
Your Lordships should in my view take this opportunity of
declaring that there is no such rule. The use of such expressions
as "a probability," "a prima facie case," or "a strong prima
fade case" in the context of the exercise of a discretionary
power to grant an interlocutory injunction leads to confusion as
to the object sought to be achieved by this form of temporary
relief. The court no doubt must be satisfied that the claim is not
frivolous or vexatious; in other words, that there is a serious
question to be tried.
It is no part of the court's function at this stage of the
litigation to try to resolve conflicts of evidence on affidavit as to
facts on which the claims of either party may ultimately depend
nor to decide difficult questions of law which call for detailed
argument and mature considerations. These are matters to be
dealt with at the trial. One of the reasons for the introduction
of the practice of requiring an undertaking as to damages upon
the grant of an interlocutory injunction was that "it aided the
court in doing that which was its great object, viz. abstaining
from expressing any opinion upon the merits of the case until
the hearing": Wakefield v. Duke of Buccleugh (1865) 12 L.T.
628, 629. So unless the material available to the court at the
hearing of the application for an interlocutory injunction fails
to disclose that the plaintiff has any real prospect of succeeding
in his claim for a permanent injunction at the trial, the court
should go on to consider whether the balance of convenience
lies in favour of granting or refusing the interlocutory relief
that is sought.
Subject to one qualification, this expression of
principle continues to reflect the current state of
English law. The qualification was engrafted upon
it by Lord Diplock himself in N.W.L. Ltd. v.
Woods, [1979] 1 W.L.R. 1294 (H.L.), where he
points out at page 1306 that nothing in his earlier
decision was meant to suggest that a judge dealing
with an interlocutory injunction application
"ought not to give full weight to all the practical
realities of the situation" and, specifically, that
American Cyanamid was not "a case in which the
grant or refusal of an injunction at that stage
would, in effect, dispose of the action finally in
favour of whichever party was successful in the
application, because there would be nothing left on
which it was in the unsuccessful party's interest to
proceed to trial." This apart, (after some initial
criticism by Lord Denning M.R. in Fellowes &
Son v. Fisher, [ 1976] Q.B. 122 (C.A.), at pages
130-134 and in Hubbard v. Pitt, [1976] Q.B. 142
(C.A.), at pages 177-178), the threshold test as
formulated by Lord Diplock appears now to be
firmly rooted in the common law of England.
Some Canadian jurisprudence
It is not necessary to attempt a review of the
many reported cases in this country which have
either applied or rejected the "serious question to
be tried" test as laid down by Lord Diplock. The
learned Motions Judge had regard to many of
them including several decided in the Trial Divi
sion which had gone off in opposite directions. In
the meantime, there have been some further de
velopments in the decided cases. While the
Supreme Court of Canada has yet to deal with the
precise point, in Manitoba (Attorney General) v.
Metropolitan Stores Ltd., [1987] 1 S.C.R. 110 it
did comment upon that test. The case involved an
application to stay a decision of the Manitoba
Labour Board made pursuant to a provincial stat
ute pending the outcome of proceedings to have
the statutory power of decision declared invalid as
contravening the Canadian Charter of Rights and
Freedoms [being Part I of the Constitution Act,
1982, Schedule B, Canada Act, 1982, 1982, c. 11
(U.K.)]. At pages 127-128, Mr. Justice Beetz
writes:
The first test is a preliminary and tentative assessment of the
merits of the case, but there is more than one way to describe
this first test. The traditional way consists in asking whether
the litigant who seeks the interlocutory injunction can make out
a prima facie case. The injunction will be refused unless he can:
Chesapeake and Ohio Railway Co. v. Ball, [1953] O.R. 843,
per McRuer C.J.H.C., at pp. 854-55. The House of Lords has
somewhat relaxed this first test in American Cyanamid Co. v.
Ethicon Ltd., [1975] 1 All E.R. 504, where it held that all that
was necessary to meet this test was to satisfy the Court that
there was a serious question to be tried as opposed to a frivolous
or vexatious claim. Estey J. speaking for himself and five other
members of the Court in a unanimous judgment referred to but
did not comment upon the difference in Aetna Financial Ser
vices Ltd. v. Feigelman, [1985] 1 S.C.R. 2, at pp. 9-10.
American Cyanamid has been followed on this point in many
Canadian and English cases, but it has also been rejected in
several other instances and it does not appear to be followed in
Australia: see the commentaries and cases referred to in P.
Carlson, "Granting and Interlocutory Injunction: What is the
Test?" (1982), 12 Man. L.J. 109; B. M. Rogers and G. W.
Hately, "Getting the Pre-Trial Injunction" (1982), 60 Can. Bar
Rev. 1, at pp. 9-19; R. J. Sharpe, Injunctions and Specific
Performance (Toronto 1983), at pp. 66-77.
In the case at bar, it is neither necessary nor advisable to
choose, for all purposes, between the traditional formulation
and the American Cyanamid description of the first test: the
British case law illustrates that the formulation of a rigid test
for all types of cases, without considering their nature, is not to
be favoured (see Hanbury and Maudsley, Modern Equity (12th
ed. 1960), pp. 736-43). In my view, however, the American
Cyanamid "serious question formulation is sufficient in a con
stitutional case where, as indicated below in these reasons, the
public interest is taken into consideration in the balance of
convenience. But I refrain from expressing any view with
respect to the sufficiency or adequacy of this formulation in any
other type of cases. 2
His Lordship also makes clear at page 127, that
the principles governing the granting of an inter
locutory injunction would normally apply to the
granting of an interlocutory stay.
2 It is noted that the law in the High Court of Australia in
Firth Industries Ltd v Polyglas Engineering Pty Ltd (1975), 6
ALR 212 cited by the learned authors referred to by Mr.
Justice Beetz, has since turned in favour of American Cyana-
mid test, although the Full High Court has yet to pronounce
itself on the point: see e.g. Australian Coarse Grain Pool Pty
Ltd v Barley Marketing Board of Queensland (1982), 46 ALR
398 (H.C.Aust.); Tableland Peanuts Pty Ltd v Peanut Mar
keting Board (1984), 52 ALR 651 (H.C.Aust.); A v Hayden
(No 1) (1984), 56 ALR 73 (H.C.Aust.). That position appears
as well to be favoured by the Federal Court of Australia: see
Epitoma Pty Ltd v Australasian Meat Industry Employees'
Union (1984), 54 ALR 730 (F.C.Aust.); Telmak Teleproducts
Australia Pty Ltd v Bond International Pty Ltd (1985), 66
ALR 118 (F.C.Aust.).
This Court applied the American Cyanamid
threshold test in Toth v. Canada (Minister of
Employment and Immigration) (A-870-88,
Mahoney J., judgment dated 28/10/88, (C.A.), not
yet reported). It concerned an application to stay
the execution' of a deportation order pending the
hearing and disposition of an application for leave
to appeal against that order. The same test was
again applied by this Court even more recently in
Teal Cedar Products (1977) Ltd. v. Canada
(A-613-88, Pratte J., judgment dated 6/12/88
(C.A.), not yet reported), a case that involved the
granting of an interlocutory injunction for the
purpose of temporarily suspending the application
of a statutory provision until the Court could rule
upon its validity. In an earlier case, Syntex Inc. v.
Apotex Inc., [1984] 2 F.C. 1012, this Court found
it unnecessary to chose the one test over the other,
being satisfied that the case, at all events, was
caught by the Woods exception i.e. effect of the
interlocutory injunction was to dispose of the
action finally.
Many other intermediate appellate courts of our
common law provinces have either adopted the
American Cyanamid threshold test for virtually all
situations, or have done so in more limited circum
stances. This would appear to be so in British
Columbia, 4 Alberta,' New Brunswick, 6 Prince
3 i Telecommunications Workers' Union v. Canada
(Canadian Radio-Television Commission) (A-498-88,
Marceau J., judgment dated 13/10/88, (C.A.), not yet report
ed) again involving the stay of an order of a statutory tribunal,
this Court found it unnecessary to chose between the prima
facie case test and the serious question to be tried test adopted
in the Metropolitan Stores case, though the granting of leave to
appeal, in its view, had established that a prima facie case
could be made out.
4 B.C. (A.G.) v. Wale (1986), 9 B.C.L.R. (2d) 333 (C.A.).
5 Law Soc. of Alta. v. Black (1983), 29 Alta. L.R. (2d) 326
(C.A.)
6 Van Wart v. La -Ko Enterprises Ltd. and Labrie (1981), 35
N.B.R. (2d) 256 (C.A.).
Edward Island' and Newfoundland,' and perhaps
also in Ontario.' The reverse appears to obtain in
Manitoba, 10 while the situation in Saskatchewan"
and Nova Scotia 12 remains somewhat unclear.
The appropriate threshold test
In determining the appropriate threshold test to
be applied here, I think the objects of an interlocu
tory injunction should be borne in mind. Lord
Diplock described those objects in American
Cyanamid when, at page 406, he says:
The object of the interlocutory injunciton is to protect the
plaintiff against injury by violation of his right for which he
could not be adequately compensated in damages recoverable
in the action if the uncertainty were resolved in his favour at
the trial; but the plaintiff's need for such protection must be
weighed against the corresponding need of the defendant to be
protected against injury resulting from his having been prevent
ed from exercising his own legal rights for which he could not
be adequately compensated under the plaintiff's undertaking in
damages if the uncertainty were resolved in the defendant's
favour at the trial. The court must weigh one need against
another and determine where "the balance of convenience" lies.
And later, at page 407, he returns to the subject by
noting that the lower Courts in that case had
neglected the advice of the Court of Appeal in
Hubbard v. Vosper, [1972] 2 Q.B. 84 which had,
in his words, "deprecated any attempt to fetter the
discretion of the court by laying down any rules
which would have the effect of limiting the flexi-
7 Re Island Telephone Company Limited (1987), 206 A.P.R.
158 (P.E.I.C.A.).
8 United Steel Workers of America, Local 5795 v. Iron Ore
Company of Canada (1984), 132 A.P.R. 150 (Nfld. C.A.).
9 Nelson Burns & Co. v. Cratham Industries Ltd. (1987), 19
C.P.R. (3d) 71 (Ont. C.A.).
10 Lo-Cost Drug Mart Ltd. v. Canada Safeway Limited et
al. (1986), 40 Man.R. (2d) 211 (C.A.).
"Potash Corporation of Saskatchewan Mining Limited v.
Todd, Heinrich and Energy and Chemical Workers Union,
Local 922 (1987), 53 Sask. R. 165 (C.A.).
12 Mercator Enterprises Ltd. v. Harris et al. (1978), 29
N.S.R. (2d) 691 (C.A.).
bility of the remedy as a means of achieving the
objects that I have indicated above." In Vosper,
Lord Denning had pointed out at page 96, that the
"remedy by interlocutory injunction is so useful
that it should be kept flexible and discretionary"
and that it "must not be made the subject of strict
rules." At page 98, Lord Justice Megaw added the
view that each case "must be decided on a basis of
fairness, justice and common sense in relation to
the whole issues of fact and law which are relevant
to the particular case." In Canada, the need to
maintain flexibility in the granting of interlocutory
injunctions has been recognized by our courts,
notably by the Court of Appeal for Ontario in
Chitel et al. v. Rothbart et al. (1982), 69 C.P.R.
(2d) 62, at page 72, the British Columbia Court of
Appeal in B.C. (A.G.) v. Wale, supra, at pages
346-347, and the Supreme Court of Canada in
Metropolitan Stores, supra, at page 128.
As I understand it, this flexibility is to be
achieved in the end under the full American
Cyanamid formulation by having regard for the
balance of convenience as between the parties,
which thus becomes decisive in the exercise of the
trial judge's discretion. Satisfying the threshold
test of "a serious question to be tried" does no
more, so to speak, than unlatch the door to a
plaintiff; it neither opens it nor, less still, permits
him to pass on through. That he may do only if the
balance of convenience is found to lie in his favour.
This I think is made clear by Lord Diplock in
American Cyanamid and is reiterated by him in
Woods. It is restated one more time by the same
learned Law Lord sitting as a member of the Privy
Council in Eng Mee Yong v. Letchumanan s/o
Velayutham, [1980] A.C. 331, where he points
out, at page 337:
The guiding principle in granting an interlocutory injunction is
the balance of convenience; there is no requirement that before
an interlocutory injunction is granted the plaintiff should satis
fy the court that there is a "probability," a "prima facie case"
or a "strong prima facie case" that if the action goes to trial he
will succeed; but before any question of balance of convenience
can arise the party seeking the injunction must satisfy the court
that his claim is neither frivolous nor vexatious; in other words
that the evidence before the court discloses that there is a
serious question to be tried: American Cyanamid Co. v. Ethicon
Ltd., [1975] A.C. 396.
In my view, the present appeal should be
approached at the outset on the basis of the
American Cyanamid threshold test. As we shall
see, Lord Diplock's formulation in that case
embraces both that test as well as other factors to
be considered once that test is satisfied. When the
entire formulation is fully appreciated it retains, in
my view, the essential quality of flexibility which
must always attend the exercise of the broad but
disciplined discretion that is vested in a judge
hearing an interlocutory injunction application
after being satisfied that there exists a serious
question to be tried. This flexibility is further
enhanced by the Woods exception for application
in appropriate cases. True enough, this threshold
test represents a considerable lowering of the ini
tial hurdle to be surmounted by a plaintiff, but
that does not mean that the discretion, when prop
erly exercised in the light of all relevant consider
ations, will redound inexorably to the disadvantage
of a defendant. Whether the application is decided
for or against one party or the other will depend on
where the balance of convenience is found to lie as
determined by a consideration of the factors
referred to below. This threshold test, as I have
said, has gained a wide measure of acceptance in
common law jurisdictions such as Australia, ' 3 as
well as New Zealand,'" and in most intermediate
appellate courts of the common law provinces of
Canada. It commends itself to me for application
in the circumstances of the present case.
Is the threshold test satisfied?
To determine whether a serious question to be
tried has been made out in the present case, it
becomes necessary once more to look at the plead
ing in light of the evidence presented. As I read the
13 Supra, footnote 2.
'^ Consolidated Traders Ltd y Downes, [1981] 2 NZLR 225
(C.A.).
statement of claim, the causes of action asserted
are based upon alleged violations of rights said to
be protected by sections 7, 10 and 20 of the Trade
Marks Act. For the most part, these issues, to
adopt the language of Lord Diplock's in American
Cyanamid, raise "difficult questions of law which
call for detailed argument and mature considera
tion." The Trial Division, in an interlocutory
injunction application where the action sounded
both in copyright and trade mark (Interlego AG et
al. v. Irwin Toy Ltd. et al. (1985), 3 C.P.R. (3d)
476), properly noted (per Strayer J.) at page 483,
that "in a case involving complex issues of law and
fact it is extremely difficult, and perhaps danger
ous, to try to assess the merits of the claim" at the
application stage. The respective causes of action
asserted in the pleading should be viewed with this
in mind in assessing the extent to which any of
them meet the "serious question to be tried"
threshold test.
In determining that question, I have not neglect
ed the respondent's submission that upon the evi
dence no such question has been shown to exist. It
is true that the two containers, labelled in the
above described manner, are not perhaps sugges
tive of automatic confusion in the mind of a poten
tial purchaser intending to purchase one brand of
oil rather than the other and seeing them placed
side by side. Reliance would thus be upon visual
observation exclusively. The appellant's evidence
does seem to suggest the possibility at least that
some confusion may occur when reliance is upon
oral communication, and combines this with other
evidence suggesting that the respondent's dealers
may keep a supply of competitors' products on
hand for those who may specify them as products
of choice. 15 It would, of course, be for the trial
15 See cross-examination of Mr. Archbold, Appeal Book,
Volume 4, at pp. 527-528.
judge to finally resolve the question of whether any
confusion occurs in light of the totality of evidence
advanced at that stage.
Returning then to the pleading, I consider first
whether the appellant has met this test in respect
of its alleged section 7 violations, relying as it does
upon paragraphs (b), (c) and (e) thereof. As this
latter paragraph appears to have been declared
unconstitutional, ' 6 it can furnish no foundation for
a good cause of action. The remaining rights do
not appear to depend upon a plaintiff holding a
registered trade mark although, in this case, marks
of that kind are held. The word "TURBO"
appears in a certain context on the respondent's
one litre containers of motor oil and the appellant's
"TURBO" design trade mark appears on its own
one litre container of motor oil. Both products are
sold in common areas of the country, chiefly in
western Canada. As I see it, the trial judge will be
faced with difficult questions of statutory con
struction viz: (a) Has the respondent by its alleged
actions at the relevant time directed "public atten
tion to his wares ... in such a way as to cause or
be likely to cause confusion in Canada ... between
his wares ... and the wares ... of another"? (b)
Has the respondent passed off "other wares ... for
those ordered or requested"? I do not regard the
case under paragraphs 7(b) and (c) as frivolous or
vexatious. It satisfies the serious question test. The
answers to these questions will depend as well
upon the evidence adduced at the trial itself.
A consideration of the section 10 allegations
produces mixed results. I am doubtful a serious
question to be tried has been raised so far as
concerns the allegation, founded upon its first two
features, that the word "TURBO" as it appears on
the respondent's product container infringes any of
the plaintiff's registered trade marks in the sense
that the respondent is thereby using any of them.
The evidence before us does not appear to bear this
16 MacDonald et al. v. Vapor Canada Ltd., [1977] 2 S.C.R.
134. See also Asbjorn Horgard AIS v. Gibbs/Nortac Industries
Ltd., [1987] 3 F.C. 544 (C.A.).
out, evidence that, presumably, would be advanced
at trial. It demonstrates the use of a particular
mark by the respondent, and the ownership of four
registered trade marks by the appellant and use of
one of them. On the other hand, I have concluded
that such a serious question has been raised so far
as concerns the remaining feature of section 10. Its
essence is that the word "TURBO" on its product
containers constitutes a use by the respondent of a
mark "so nearly resembling" the appellant's regis-
terd trade marks "as to be likely to be mistaken
therefor". The meaning of these words is again a
question of some difficulty, to be answered by the
trial judge in light of the evidence tendered before
him. The evidence before us is not such as allows
us to conclude that this allegation is either frivol
ous or vexatious.
I am similarly satisfied that a serious question to
be tried emerges from the alleged violations of
section 20 of the Act. Again, the ultimate disposi
tion of these assertions will depend upon the inter
pretation that the trial judge may give to the
words "in association with a confusing trade
mark" in the light of the evidence presented at
that stage. No attempt to conclusively answer that
difficult question should be made here. I do not
think we can say that this assertion is either
frivolous or vexatious.
Two other bases for granting injunctive relief
were advanced before us. First, it was said, that
the activities complained of are prohibited by sub
section 22(1) of the Act in that they are "likely to
have the effect of depreciating the value of the
goodwill attaching" to the appellant's registered
trade marks. The argument, however, cannot dis
guise the fact that this subsection was not pleaded
and, accordingly, cannot at this stage form a basis
for granting the relief sought. Secondly, the appel
lant cannot, as it attempted to do at the hearing,
rely upon alleged violation of common law trade
mark rights said to exist in the word "TURBO"
apart from its appearance in the registered trade
marks. As I have already explained, the only rights
relied upon are said to flow from the statute and
go to protect rights of a registered trade mark
holder. As no common law trade mark rights are
pleaded, none may be raised at this stage in fur
therance of the sought after relief.
Other factors to be considered
Up to this point I have confined myself to
selecting the appropriate threshold (or strength of
case) test to be applied, and in seeing the extent to
which that test has been satisfied in this case. In
his American Cyanamid formulation, Lord
Diplock pointed out that other considerations are
also to be weighed in the event a trial judge
concludes that there exists a serious question to be
tried in the sense that it was neither frivolous nor
vexatious. After discussing the appropriate thresh
old test, he proceeded to spell out these additional
considerations when he says, at pages 408-409:
As to that, the governing principle is that the court should
first consider whether, if the plaintiff were to succeed at the
trial in establishing his right to a permanent injunction, he
would be adequately compensated by an award of damages for
the loss he would have sustained as a result of the defendant's
continuing to do what was sought to be enjoined between the
time of the application and the time of the trial. If damagès in
the measure recoverable at common law would be adequate
remedy and the defendant would be in a financial position to
pay them, no interlocutory injunction should normally be grant
ed, however strong the plaintiffs claim appeared to be at that
stage. If, on the other hand, damages would not provide an
adequate remedy for the plaintiff in the event of his succeeding
at the trial, the court should then consider whether, on the
contrary hypothesis that the defendant were to succeed at the
trial in establishing his right to do that which was sought to be
enjoined, he would be adequately compensated under the plain
tiffs undertaking as to damages for the loss he would have
sustained by being prevented from doing so between the time of
the application and the time of the trial. If damages in the
measure recoverable under such an undertaking would be an
adequate remedy and the plaintiff would be in a financial
position to pay them, there would be no reason upon this
ground to refuse an interlocutory injunction.
It is where there is doubt as to the adequacy of the respective
remedies in damages available to either party or to both, that
the question of balance of convenience arises. It would be
unwise to attempt even to list all the various matters which may
need to be taken into consideration in deciding whether the
balance lies, let alone to suggest the relative weight to be
attached to them. These will vary from case to case.
Where other factors appear to be evenly balanced it is a
counsel of prudence to take such measures as are calculated to
preserve the status quo. If the defendant is enjoined temporari
ly from doing something that he has not done before, the only
effect of the interlocutory injunction in the event of his succeed
ing at the trial is to postpone the date at which he is able to
embark upon a course of action which he has not previously
found it ncessary to undertake; whereas to interrupt him in the
conduct of an established enterprise would cause much greater
inconvenience to him since he would have to start again to
establish it in the event of his succeeding at the trial.
Save in the simplest cases, the decision to grant or to refuse
an interlocutory injunction will cause to whichever party is
unsuccessful on the application some disadvantages which his
ultimate success at the trial may show he ought to have been
spared and the disadvantages may be such that the recovery of
damages to which he would then be entitled either in the action
or under the plaintiffs undertaking would not be sufficient to
compensate him fully for all of them. The extent to which the
disadvantages to each party would be incapable of being com
pensated in damages in the event of his succeeding at the trial
is always a significant factor in assessing where the balance of
convenience lies; and if the extent of the uncompensatable
disadvantage to each party would not differ widely, it may not
be improper to take into account in tipping the balance the
relative strength of each party's case as revealed by the affida
vit evidence adduced on the hearing of the application. This,
however, should be done only where it is apparent upon the
facts disclosed by evidence as to which there is no credible
dispute that the strength of one party's case is disproportionate
to that of the other party. The court is not justified in embark
ing upon anything resembling a trial of the action upon con
flicting affidavits in order to evaluate the strength of either
party's case.
I would reiterate that, in addition to those to which I have
referred, there may be many other special factors to be taken
into consideration in the particular circumstances of individual
cases. The instant appeal affords one example of this.
Risking the obvious dangers inherent in
attempting to reduce a not uncomplicated formula
to skeletal form, it appears nonetheless that the
main features of each of these factors are as
follows:
(a) where a plaintiff's recoverable damages result
ing in the continuance of the defendant's
activities pending trial would be an adequate
remedy that the defendant would be financial
ly able to pay, an interlocutory injunction
should not normally be granted;
(b) where such damages would not provide the
plaintiff an adequate remedy but damages
(recoverable under the plaintiff's undertaking)
would provide the defendant with such a
remedy for the restriction on his activities,
there would be no ground for refusing an
interlocutory injunction;
(c) where doubt exists as to the adequacy of these
remedies in damages available to either party,
regard should be had to where the balance of
convenience lies;
(d) where other factors appear to be evenly
balanced, it is prudent to take such measures
as will preserve the status quo;
(e) where the evidence on the application is such
as to show one party's case to be dispropor
tionately stronger than the other's, this factor
may be permitted to tip the balance of conve
nience in that party's favour provided the
uncompensatable disadvantage to each party
would not differ widely;
(g) other unspecified special factors may possibly
be considered in the particular circumstances
of individual cases.
I should say here that I favour the view that
these factors do not constitute a series of mechani
cal steps that are to be followed in some sort of
drilled progression. Professor Robert J. Sharpe
cautions against such rigidity of approach in
Injunctions and Specific Performance (Toronto,
1983), when he notes that each of the factors
should be "seen as guides which take colour and
definition in the circumstances of each case." He
further observes that they are not to be seen "as
separate, water-tight categories," and also that
they "relate to each other, and strength on one
part of the test ought to be permitted to compen-
sate for weakness in another". " In other words,
considerable flexibility is called for, bearing in
mind that the balance of convenience is of para
mount importance. If, of course, it is found that
damages in the measure recoverable by a plaintiff
will be an adequate remedy, it might normally be
concluded that the case was not one for an inter
locutory injunction. The learned Motions Judge
found it unnecessary to deal with these factors,
being of the opinion that the appellant had failed
to satisfy the higher "prima facie case" threshold
test. As I am of the respectful view that he ought
to have applied the lower "serious question to be
tried" threshold test, and that this test has been
met, it becomes necessary for me to weigh these
additional factors.
Would the action be finally disposed of?
A consideration of these factors would, of
course, be unnecessary for me as well were I
satisfied that this is a case to which the Woods
exception applies. I am not so satisfield. I say so
even though the action is brought partly in passing
off. 18 It is also brought for infringement, deemed
infringement, and for confusion or the likelihood
of confusion within the meaning of the statute.
The dispute concerns the sale of only one out of
several products and services offered to the public
1 ' These views of Dr. Sharpe, found at page 88 of his work,
appear to have been accepted by the British Columbia Court of
Appeal in B.C. (.4 G.) v. Wale, supra, footnote 4, at pp. 345 and
347.
18 If the action were solely for passing off, we would have had
to consider the views of the English Court of Appeal which has
applied the traditional threshold test, by treating that class of
case as one that is usually decided finally on the application for
the interlocutory injunction: see Newsweek Inc. v. The British
Broadcasting Corporation, [1979] R.P.C. 441 (C.A.). Lord
Diplock made it plain in Woods that the judge hearing the
application should give "full weight to all the practical realities
of the situation". In view of the manner in which I would deal
with the application, the point does not become material in any
event.
by either party. The granting of an injunction
would no doubt disrupt the respondent's trade in
motor oil under its present label, but I do not
consider that the practical effect would be such as
to dispose of the action finally against that party.
The appellant would also be disadvantaged were
the injunction refused. It, like the respondent, is a
large and successful business enterprise. Sale of
motor oil under its registered trade mark is only
one of the appellant's several activities. It may
continue to sell and advertise this product, albeit,
in competition with the respondent's product.
Strayer J. had to deal with the same kind of
question in Interlego concerning the marketing of
toy blocks in Canada. In ruling that the case did
not fall within this exception, he says this at page
484:
I do not think the present case comes within that category. The
subject-matter of this action is the marketing of a toy, one of
whose main virtues is its non-obsolescence. Its market is not a
fleeting or transitory one which must be seized now or never.
The evidence introduced by the plaintiffs shows that this block
has been marketed in Canada for about 25 years and that the
demand for it has almost continuously increased. As will be
noted later, the facts do not suggest that failure by either
applicant will put them out of business or preclude them on a
permanent basis from selling in this market if they can estab
lish a legal basis for doing so. Therefore, my decision with
respect to the interlocutory injunction will not as a practical
matter determine the claim set out in the statement of claim in
this action.
Making due allowance for the factual differences,
I likewise am not persuaded that the Woods excep
tion is applicable in the circumstances of this case.
In short, this is not a case (as Lord Diplock puts it
at page 1306 of Woods) in which the grant or
refusal of an injunction at this stage "would, in
effect, dispose of the action finally in favour of
whichever party was successful in the application,
because there would be nothing left on which it
was in the unsuccessful party's interest to proceed
to trial." It is, of course, a matter for an unsuccess
ful plaintiff to decide whether, in a given case, he
would wish to see this action through to trial.
Here, at least, I am quite satisfied that the appel-
lant would stand to gain considerable relief in the
event of ultimate success.
Disposing of the interlocutory application
Having thought the matter through in the
manner required by American Cyanamid, I am
persuaded that the learned Motions Judge was
right in refusing the interlocutory injunction.
Though we follow different paths, we arrive at the
same conclusion. But, because the path I have
chosen to follow is the one marked out in that case,
I should now explain how it is that I have so
decided.
The other considerations identified by Lord
Diplock in that case are, as I have indicated, to be
weighed together rather than in consecutive order.
That appears to have been done by the learned
Law Lord himself in arriving at his conclusion that
the balance of convenience lay with the plaintiff.
Relating this to the summary of factors outlined
above, the balance of convenience should accord
ingly be sought for throughout. Here, refusal of
the interlocutory injunction will expose the appel
lant to disadvantages which, though no doubt
severe, can be adequately remedied in damages for
any losses suffered by reason of the respondent
continuing to sell its motor oil under the alleged
offending mark. It may, if so advised, request an
accounting to assist in determining the extent of
any such losses. Loss of goodwill that may be
recoverable at common law would not be easily
measureable. The respondent, on the other hand,
would also incur lost profits and out-of-pocket
expenses if the injunction were to issue, since it
could not then continue to use its mark. The
product would have to be sold under a different
label or not at all. These too are substantial disad
vantages. Damages recoverable by the respondent
would be the subject of the usual undertaking from
the appellant. There is no suggestion that either
party would not be in a financial position to pay
whatever damages might be awarded at trial.
The respondent also submits that we should take
account of equitable considerations 19 that might
weigh against granting an interlocutory injunction,
in that the appellant invokes the equitable jurisdic
tion of the Court in seeking what is, after all, an
extraordinary remedy. I agree that these are fac
tors to be weighed. Counsel, in my view, quite
properly points to the significant delay on the part
of the appellant in seeking an interlocutory injunc
tion some six months after first becoming aware of
the respondent's plan to introduce its grade of
motor oil to the Canadian market under the mark
that is now being challenged. In the meantime the
product, introduced as planned, remains in circula
tion. Expense has doubtless been incurred. Then
again, there is in the record uncontradicted evi
dence that other persons appear to be using the
word "TURBO" in association with the sale of
certain kinds of motor oil in Canada though the
appellant, apparently, has not seen fit to seek any
injunctive relief against such uses. Neither ofithese
considerations went unnoticed by the learned
Motions Judge. Together they may perhaps sug
gest an overall attitude of some considerable indif
ference on the part of the appellant towards the
rights it now asserts. Moreover, they make the
argument that irreparable harm will be suffered
by the appellant unless the respondent is enjoined
until trial, somewhat more difficult to sustain.
After weighing the various factors all in all, I
am satisfied that the balance of convenience lies in
favour of the respondent. The interlocutory injunc
tion was rightly refused, in my opinion.
19 See e.g. B. M. Rogers and G. W. Hately, "Getting the
Pre-Trial Injunction" (1982) 60 Can. Bar Rev. 1, at pp. 19-20.
Disposition of the Appeal
For the reasons I have already given, I would
dismiss this appeal with costs.
HEALD J.: I agree.
DESJARDINS J.: I agree.
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.