Lubrizol Corp. et al. v. Imperial Oil Ltd. et al., (1996) 197 N.R. 241 (FCA)

• Judge: Stone, Linden and McDonald, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: April 03, 1996
• Jurisdiction: Canada (Federal)
• Citations: (1996), 197 N.R. 241 (FCA)

Lubrizol Corp. v. Imperial Oil (1996), 197 N.R. 241 (FCA)

MLB headnote and full text

Imperial Oil Limited and its subdivision Paramins (appellant/respondent) v. The Lubrizol Corporation and Lubrizol Canada Limited (respondents/plaintiffs)

(A-535-94)

Indexed As: Lubrizol Corp. et al. v. Imperial Oil Ltd. et al.

Federal Court of Appeal

Stone, Linden and McDonald, JJ.A.

April 3, 1996.

Summary:

Lubrizol owned a patent relating to addi­tives for lubricating compositions. Lubrizol sued Imperial for patent infringement. Imperial denied infringing the patent and challenged the validity of the patent. Lub­rizol applied for an interlocutory injunction preventing Imperial from manufacturing, selling, etc., the alleged infringing products pending trial.

The Federal Court of Canada, Trial Divi­sion, per Reed, J., in a decision reported 25 F.T.R. 33, allowed the application and granted the injunction.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 39 F.T.R. 161, allowed Lubrizol's action. The court held that the patent was valid and infringed by Imperial. The court directed an accounting of profits and ordered Imperial to deliver all infringing substances to Lubrizol. Imperial appealed. Lubrizol cross-appealed the refusal of the trial judge to award exemplary damages.

The Federal Court of Appeal, in a decision reported 150 N.R. 207, allowed Imperial's appeal in part (re date of infringement and prejudgment interest). The court allowed Lubrizol's cross-appeal and ordered a con­tinuance of the trial on the issue of exem­plary damages for Imperial's alleged vio­lation of the interlocutory injunction granted by Reed, J. Prior to the continuance of the trial, Imperial applied for an order allowing it to adduce further evidence with respect to the claim exemplary damages.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 79 F.T.R. 14, dismissed Imperial's application to adduce further evidence.

The Federal Court of Canada, Trial Divi­sion, following the continuance of the trial, in a decision reported 84 F.T.R. 197, awarded Lubrizol exemplary damages of $15,000,000, plus costs on a solicitor and client basis. Imperial appealed both the awarding of the $15,000,000 in exemplary damages and the refusal to allow it to adduce further evidence on the contin­uance of trial.

The Federal Court of Appeal allowed the appeal and set aside the decisions of the Trial Division reported at 79 F.T.R. 14 and 84 F.T.R. 197. The court ordered a further continuance of the trial to deal with the exemplary damages claim and whether the injunction was callously disregarded by Imperial.

Damage Awards - Topic 2030.7

Exemplary or punitive damages - Vio­lation of injunction - Lubrizol sued Imperial for patent in­fringement and obtained an inter­locutory injunction pend­ing trial restraining Imperial's activities - The trial judge held that Imperial disre­garded the injunction by continuing to sell its product for eight months and awarded $15,000,000 exemplary damages - Imperial appealed, arguing that the trial judge erred in assessing exemplary dam­ages before the assessment of general damages was complete - The Federal Court of Appeal agreed that general dam­ages had to be determined before it could be concluded that an award of exemplary damages should be made - The court ordered that the matter of exemplary dam­ages be dealt with by the trial judge on a continuance of the trial after damages were determined - See paragraphs 28 to 41.

Damages - Topic 1296.2

Exemplary or punitive damages - Time for determining entitlement - [See Damage Awards - Topic 2030.7 ].

Practice - Topic 9244

Appeals - Continuance of trial - Evidence - The Federal Court of Appeal ordered the continuance of a patent infringement trial on the issue of exemplary damages arising from the defendant's (Imperial's) disregard of an injunction - On the continuance, the trial judge refused to allow Imperial to adduce further evi­dence respecting exem­plary damages - The Federal Court of Appeal held that in rejecting Imperial's application the trial judge failed to give sufficient weight to all relevant consider­ations - A further contin­uance was ordered to allow Imperial to show that it did not callously disregard the interlocutory in­junction - See paragraphs 8 to 27.

Cases Noticed:

Green v. Weatherill, [1929] 2 Ch. 213, refd to. [para. 16, footnote 2].

Henderson v. Henderson (1843), 3 Hare 100, refd to. [para. 16].

Maynard v. Maynard, [1951] S.C.R. 346, refd to. [para. 16, footnote 3].

Fidelitas Shipping Co. v. V/O Exportchleb, [1966] 1 Q.B. 630 (C.A.), refd to. [para. 16, footnote 3].

TRW Inc. v. Walbar of Canada Inc. (1991), 132 N.R. 161; 39 C.P.R.(3d) 176 (F.C.A.), refd to. [para. 17, footnote 4].

Esso Petroleum Co. v. Southport Corp., [1956] A.C. 218 (H.L.), refd to. [para. 17, footnote 5].

Gulf Canada Ltd. v. Tug Mary Mackin and Seawest Holdings Ltd., [1984] 1 F.C. 884; 52 N.R. 282 (F.C.A.), refd to. [para. 17, footnote 6].

Glisic v. Canada, [1988] 1 F.C. 731; 80 N.R. 39 (F.C.A.), refd to. [para. 17, footnote 7].

Cassell & Co. v. Broome, [1971] 2 Q.B. 354 (C.A.), refd to. [para. 19, footnote 8].

Cassell & Co. v. Broome, [1972] A.C. 1027 (H.L.), refd to. [paras. 19, 36, footnote 40].

Drane v. Evangelou, [1978] 2 All E.R. 437 (C.A.), refd to. [para. 19, footnote 10].

Grenn v. Brampton Poultry Co. (1959), 18 D.L.R.(2d) 9 (Ont. C.A.), refd to. [para. 19, footnote 11].

Starkman v. Delhi Court Ltd., [1961] O.R. 467 (C.A.), refd to. [para. 19, footnote 11].

Sturrock et al. v. Ancona Petroleums Ltd. et al. (1990), 111 A.R. 86 (Q.B.), refd to. [para. 19, footnote 11].

United Nurses of Alberta v. Alberta (At­torney General), [1992] 1 S.C.R. 901; 135 N.R. 321; 125 A.R. 241; 14 W.A.C. 241; 1 Alta. L.R.(2d) 129; [1992] 3 W.W.R. 481, refd to. [para. 20, footnote 13].

Vidéotron Ltée et Premier Choix: TVEC Inc. v. Industries Microlec produits élec­troniques Inc. et autres, [1992] 2 S.C.R. 1065; 141 N.R. 281; 50 Q.A.C. 161; 76 C.C.C.(3d) 289, refd to. [para. 20, foot­notes 13, 14].

Reza v. Minister of Employment and Im­migration, [1994] 2 S.C.R. 394; 167 N.R. 282; 72 O.A.C. 348; 21 C.R.R.(2d) 236; 24 Imm. L.R.(2d) 117, refd to. [para. 21, footnote 15].

Becker Milk Co. v. Consumers' Gas Co. (1974), 2 O.R.(2d) 554 (C.A.), refd to. [para. 22, footnote 16].

International Corona Resources Ltd. v. LAC Minerals Ltd. (1988), 54 D.L.R.(4th) 647; 66 O.R.(2d) 610 (H.C.), refd to. [para. 22, footnote 17].

Cropper v. Smith (1884), 26 Ch. D. 700 (C.A.), refd to. [para. 23, footnote 18].

Shoe Machinery Co. v. Cutlan, [1896] 1 Ch. 108 (C.A.), refd to. [para. 23, foot­note 19].

Wood v. British Columbia Electric Rail­way Co. (1925), 34 B.C.R. 527 (S.C.), refd to. [para. 23, footnote 20].

Celestino v. Celestino (1990), Fed. No. 449 (F.C. Aust.), refd to. [para. 23, foot­note 21].

Bird v. Northern Territory of Australia (1992), 108 F.L.R. 270 (S.C.N.T. Aust. Master), refd to. [para. 23, footnote 21].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1; 126 D.L.R.(4th) 129, folld. [paras. 28, 39, footnote 22].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1; 92 D.L.R.(4th) 449; [1992] 4 W.W.R. 577, refd to. [para. 29, footnote 25].

Rookes v. Barnard, [1964] A.C. 1129 (H.L.), refd to. [para. 29, footnote 26].

Vorvis v. Insurance Corp. of British Co­lumbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R.(2d) 273; 90 C.L.L.C. 14,035; 25 C.C.E.L. 81, refd to. [para. 30, footnote 27].

MacDonald Estate, Re (1993), 89 Man.R.(2d) 161 (Q.B.), refd to. [para. 32, footnote 34].

MacDonald Estate, Re (1994), 95 Man.R.(2d) 123; 70 W.A.C. 123 (C.A.), refd to. [para. 32, footnotes 34, 37].

Robitaille v. Vancouver Hockey Club Ltd. (1979), 19 B.C.L.R. 158 (S.C.), affd. (1981), 30 B.C.L.R. 286 (C.A.), refd to. [para. 33, footnote 36].

Couglin v. Kuntz (1989), 2 C.C.L.T.(2d) 42 (B.C.C.A.), refd to. [para. 33, foot­note 36].

Huff v. Price (1990), 51 B.C.L.R.(2d) 282 (C.A.), refd to. [paras. 33, 36, footnotes 37, 40].

Pro Arts Inc. v. Campus Crafts Holdings Ltd. (1980), 50 C.P.R.(2d) 230 (Ont. H.C.), refd to. [para. 33, footnote 38].

Fenwick v. Staples (1977), 18 O.R.(2d) 128 (Co. Ct.), refd to. [para. 34, footnote 39].

Canada Metal Co. v. Canadian Broadcast­ing Corp. (No. 2) (1974), 4 O.R.(2d) 585 (H.C.), affd. (1975), 11 O.R.(2d) 167 (C.A.), refd to. [para. 38, footnote 43].

Dictionnaires Robert Canada S.C.C. and Editions France-Amérique (1984) Ltée v. Librairie du Nomande Inc. and Suss­man (1987), 11 F.T.R. 44; 16 C.P.R.(3d) 319 (T.D.), refd to. [para. 40, footnote 44].

Reading & Bates Construction Co. v. Baker Energy Resources Co. et al., [1995] 1 F.C. 483; 175 N.R. 225 (F.C.A.), refd to. [para. 41, footnote 45].

General Tire and Rubber Co. v. Firestone Tyre and Rubber Co., [1976] R.P.C. 197 (H.L.), refd to. [para. 41, footnote 45].

Gustar v. Wadden et al. (1994), 45 B.C.A.C. 55; 72 W.A.C. 55; 91 B.C.L.R.(2d) 86 (C.A.), refd to. [para. 41, footnote 46].

Claiborne Industries Ltd. et al. v. National Bank of Canada et al. (1989), 34 O.A.C. 241; 69 O.R.(2d) 65 (C.A.), refd to. [para. 41, footnote 46].

Paper Machinery Ltd. et al. v. Ross (J.O.) Engineering Corp., [1934] S.C.R. 186, refd to. [para. 43].

Chandler v. Alberta Association of Archi­tects, [1989] 2 S.C.R. 848; 99 N.R. 277; 101 A.R. 321; 70 Alta. L.R.(2d) 193; 62 D.L.R.(4th) 577, refd to. [para. 43].

Statutes Noticed:

Federal Court Rules, rule 337(5), rule 337(6) [para. 43]; rule 408(1) [para. 17]; rule 409(b), rule 415(1)(a) [paras. 8, 17]; rule 494 [para. 13].

Rules of Supreme Court (Eng.), Order 18, rule 8(1)(a), rule 8(3) [para. 19, footnote 9].

Authors and Works Noticed:

Annual Practice (1993), vol. 1, Part 1, pp. 371, 372 [para. 23].

Bullen, Leake and Jacobs, Precedents of Pleadings (10th Ed. 1950), p. 1 [para. 19, footnote 9].

Ontario Law Reform Commission, Report on Exemplary Damages (1991), generally [para. 31, footnote 31].

Roy, Pauline, Les dommages exemplaires en droit québécois, 1996, generally [para. 31, footnote 32].

Supreme Court Practice - see Annual Practice.

Williston, W.B., and Rolls, R.J., The Law of Civil Procedure (1970), vol. 2, p. 1059 [para. 43].

Counsel:

W. Ian C. Binnie, Q.C., and Jenny P. Stephenson, for the appellant;

Donald J. Wright, Q.C., Donald H. Mac­Odrum and Peter E.J. Wells, for the respondents.

Solicitors of Record:

McCarthy Tétrault, Toronto, Ontario, for the appellant;

Ridout & Maybee, Toronto, Ontario, for the respondents.

This appeal was heard in Toronto, Ontario, on February 12 and 13, 1996, before Stone, Linden and McDonald, JJ.A., of the Federal Court of Appeal. On April 3, 1996, Stone and Linden, JJ.A., delivered the following judgment for the court with McDonald, J.A., concurring.