) ) MARS CANADA INC. Respondent/Plaintiff – v. –, 2017 ONSC 3399

CITATION : Mars Canada Inc. v. Bemco Cash & Carry Inc., 2017 ONSC 3399 DIVISIONAL COURT FILE NO.: 593/16 DATE: 20170531 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT D.L. CORBETT, SPIES and REID JJ. BETWEEN: ) ) MARS CANADA INC. Respondent/Plaintiff – and – BEMCO CASH & CARRY INC., GPAE TRADING CORP. and AIZIC EBERT Appellants/Defendants ) ) ) ) ) ) ) ) ) ) Jim Holloway and Essien Udokang , for the Respondent/Plaintiff Patrick Summers , for the Appellants/Defendants ) HEARD at Toronto: May 31, 2017 D.L.

CORBETT J. (Orally) [ 1 ] The parties were in prior litigation with each other in which Mars Canada Inc. claimed that Bemco Cash & Carry Inc. infringed its Canadian registered trademarks by selling in Canada Mars brand candy products purchased in the USA. [ 2 ] This prior litigation was settled. The settlement agreements provided that the defendants would not in future engage in the impugned conduct. [ 3 ] In this action, Mars sues the defendants for breaching the settlement agreements. Mars moved before Myers J. who granted

summary judgment in the following terms: (

a) An order for rectification to properly identify the parties to the settlement agreements; (

b) A declaration that the settlement agreements are valid and enforceable and not void in restraint of trade; (

c) A declaration that the defendants breached the settlement agreements by selling Mars brand candy products in Canada purchased in the USA after the settlement was in force; (

d) An order for a reference before the Master to fix damages owed by the defendants to Mars; and (

e) Costs of $225,000 payable by the defendants to Mars. [ 4 ] The defendants appeal three aspects of the decisions of Myers J. They do not challenge the order for rectification.

They challenge the finding that the agreements are enforceable: they say that the agreements are in restraint of trade. [ 5 ] Second, they appeal the reference to the Master to fix damages on the basis that they say there is no basis to find that there have been any damages at all. [ 6 ] Third, they appeal the costs order which they say cannot be justified on ordinary costs principles. [ 7 ] Upon review of the appeal materials, we were concerned that this appeal may not be within the jurisdiction of the Divisional Court.

We directed the Registrar of the Divisional Court to alert the parties of our concerns and to advise them that they should be in a position to address the question of jurisdiction at the start of the hearing of the appeal as a preliminary matter. [ 8 ] After having heard the parties on the issue of jurisdiction, we have concluded that this court does not have jurisdiction over this appeal for the following reasons.

[9] This court is a creature of statute. Where jurisdiction is not conferred on this court expressly, it does not exist. [10] Subsection 19(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides “an appeal lies to the Divisional Court from (

a) afinal order of a judge of the Superior Court of Justice as described in subsections (1.1) and (1.2).” [11] Subsection (1.1) applies to appeals where the notice of appeal is filed before October 1, 2007. It does not apply to this case. [12] Subsection (1.2) provides that: If the notice of appeal is filed on or after October 1, 2007 clause (1)(

a) applies in respect of a final order, (

a) for a single payment of not more than $50,000, exclusive of costs; (

b) for periodic payments that amount to not more than $50,000 exclusive of costs, in the 12 months commencing on the date the firstpayment is due under the order; (

c) dismissing a claim for an amount that is not more than the amount set out in clause (

a) or (b); or (

d) dismissing a claim for an amount that is more than the amount set in clause (

a) or (

b) and in respect of which the judge or juryindicates that if the claim had been allowed the amount awarded would have been not more than the amount set out in clause (

a) or (b). [13] This appeal does not fit into any of the subsections of 19(1.2). It is not a judgment for periodic payments, so clause (1.2)(b)does not apply. It is not a judgment dismissing a claim, so clauses (1.2)(

c) and (1.2)(

d) do not apply and in any event, no dismissedclaim is fixed by the trial judge with a value of less than $50,000. [14] The appellants argue that clause (1.2)(

a) applies because the trial judge has not fixed the amount of the damages and theamount could be less than $50,000. Indeed, they argue in the substantive appeal that there are no damages at all. This argument mustfail. Where the damages are indeterminate, that is, remain to be determined, and the claim for damages is for more than $50,000, as isthe case here, then the order is to be treated in the same manner as an order dismissing a claim for more than $50,000.

Counsel for theappellant noted that, as a practical matter, this will mean that judgments where references are directed on damages will almost alwayshave to be appealed to the Court of Appeal. We agree that this is a likely result and we see no inconsistency between that observationand the language of subsection 19(1.2). [15] The one case to which we were referred on jurisdiction where a reference was directed on damages is the decision of Rosenberg J. in Canejo v. Jencik (1991) (ON SCDC), 49 C.P.C. (2nd) 294, 74 DLR 4th 317 (Div. Ct.) in whichRosenberg J. was sitting as a single judge of the Divisional Court.

In that case, Rosenberg J. was able to determine from the reasons forjudgment that the damages were certainly more than the monetary jurisdiction of the Divisional Court. The appellants argue from thisthat we should look at the underlying facts of the case and make our own determination of the damages likely to be awarded on thereference. We do not agree that s.19(1.2) is to be applied in this way. Rosenberg J.’s decision in Canejo does not stand for theproposition that the appeal court will estimate damages where a reference has been ordered in order to determine jurisdiction unders.19(1.2).

Such an approach flies in the face of the principles established in the jurisprudence for determining appellate jurisdiction: onelooks to the order. If the order falls within the jurisdiction of the Divisional Court, then the appeal is to this court. If it does not, eitherbecause it is clearly outside the jurisdiction of this court or because it cannot be determined that it is within the jurisdiction of this court,then the appeal is to the Court of Appeal. [16] The appeal is quashed as being beyond the jurisdiction of this court.

We exercise our discretion to transfer this appeal to theCourt of Appeal pursuant to s.110 of the Courts of Justice Act. No costs of this attendance. Other costs to date to be considered part ofthe costs in the appeal in the Court of Appeal. [17] I have endorsed the back of the Appeal Book and Compendium of the Appellants/Defendants as follows: “For oral reasons ofD.L.

Corbett J., the appeal is transferred to the Court of Appeal pursuant to s.110 of the Courts of Justice Act, with no costs for today’s appearance, and all other costs to date tobe considered costs of the appeal in the Court of Appeal.” ___________________________ D.L. CORBETT J. I agree ___________________________ SPIES J.

I agree ___________________________ REID J. Date of Reasons for Judgment: May 31, 2017 Date of Release: June 2, 2017 CITATION : Mars Canada Inc. v. Bemco Cash & Carry Inc., 2017 ONSC 3399 DIVISIONAL COURT FILE NO.: 593/16 DATE: 20170531 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT D.L. CORBETT, SPIES and REID JJ. BETWEEN: MARS CANADA INC. Respondent/Plaintiff – and – BEMCO CASH & CARRY INC., GPAE TRADING CORP. and AIZIC EBERT Appellants/Defendants ORAL REASONS FOR JUDGMENT D.L. CORBETT Date of Reasons for Judgment: May 31, 2017 Date of Release: June 2, 2017