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Court of Appeal Upholds Award of Substantial Indemnity Costs

Mars Canada Inc. v. Bemco Cash & Carry Inc. 2018 Ont CA

By way of minutes of settlement entered into before the plaintiff was to commence a threatened action for breach of its trademark, the defendant agreed that it would desist in further breaches of the trademark. The defendant resiled from that agreement and the plaintiff brought an action to enforce the settlement agreement. The defendant argued that enforcement of the agreement would be improper because the settlement was in restraint of trade. The court noted that the plaintiff had legitimate interests tied to its trademark rights. Further, the settlement of possible litigation was reasonable. It was in the interests of the parties, because it resolved their dispute and defined the scope of their trading rights, and in the public interest because it prevented confusion. The court agreed with the motions judge that the defendant’s duplicitous breach of the agreement, litigating a technical slip, altering a document, and engaging in tactics that increased costs were worthy of an award of substantial indemnity costs.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.