Vapor Canada Ltd. et al. v. MacDonald, (1976) 7 N.R. 477 (SCC)

• Judge: Laskin, C.J.C., Martland, Judson, Spence, Pigeon, Dickson, Beetz and de Grandpré, JJ.
• Court: Supreme Court of Canada
• Case Date: Friday January 30, 1976
• Jurisdiction: Canada (Federal)
• Citations: (1976), 7 N.R. 477 (SCC);22 CPR (2d) 1;66 DLR (3d) 1;1976 CanLII 181 (SCC);[1977] 1 SCR 413;1976 CanLII 158 (SCC);66 DLR (3d) 571;7 NR 477;[1977] 2 SCR 134

Vapor Can. Ltd. v. MacDonald (1976), 7 N.R. 477 (SCC)

MLB headnote and full text

Vapor Canada Ltd. et al. v. MacDonald

Indexed As: Vapor Canada Ltd. et al. v. MacDonald

Supreme Court of Canada

Laskin, C.J.C., Martland, Judson, Spence, Pigeon, Dickson, Beetz and de Grandpré, JJ.

January 30, 1976.

Summary:

This case arose out of an action by an employer for damages and for an injunction against an employee. The action was for breach of an employment contract, for breach of confidence and for misappropriation of confidential information. The action was based on the statutory proscriptions of s. 7(e) of the Federal Trade Marks Act. The trial court allowed the action by the employer and granted the employer an injunction which ordered the employee to deliver to the employer certain documents and also restrained the employee from doing some certain acts.

On appeal to the Federal Court of Appeal the appeal was dismissed and the judgment of the trial court was affirmed - see [1972] F.C. 1156. The Federal Court of Appeal held that s. 7(e) and s. 53 of the Trade Marks Act was valid Federal legislation.

On appeal to the Supreme Court of Canada the appeal was allowed in part. The Supreme Court of Canada directed the striking out of those clauses in the injunction based on s. 7(e) of the Trade Marks Act. The Supreme Court of Canada held that s. 7(e) and s. 53 of the Trade Marks Act was beyond the legislative competence of the federal government. The Supreme Court of Canada stated that such legislation was an invasion of provincial legislative power - see paragraph 64.

The Supreme Court of Canada stated that s. 7(e) and s. 53 of the Trade Marks Act provided a statutory basis for a civil action by an employer against an employee for breach of contract, for breach of confidence and for misappropriation of confidential information. The Supreme Court of Canada held that the enactment of such a statutory civil action was not a valid exercise of the federal trade and commerce power. The Supreme Court of Canada stated that s. 7(e) was not concerned with trade as a whole, or with general trade and commerce, or with an administrative regulatory scheme respecting trade and commerce - see paragraphs 38 to 53.

The Supreme Court of Canada held that the proscriptions of s. 7 of the Trade Marks Act were not criminal law matters - see paragraphs 15 to 17.

The Supreme Court of Canada held that s. 7 of the Trade Marks Act was not legislation implementing a treaty because there was nothing in the Trade Marks Act to indicate that it was enacted in the implementation of a treaty - see paragraphs 54 to 63.

Trade Regulation - Topic 708

Competition - Unfair competition - Constitutional legislative competence - S. 7(e) and s. 53 of the Federal Trade Marks Act provided a statutory basis for a civil action by an employer against an employee for breach of contract, for breach of confidence and for misappropriation of confidential information - The Supreme Court of Canada held that such legislation was beyond the legislative competence of the federal government - The Supreme Court of Canada stated that such legislation was an invasion of provincial legislative power - See paragraph 64.

Constitutional Law - Topic 5660

Enumeration in s. 91 of the British North America Act - Regulation of trade and commerce - S. 7(e) and s. 53 of the Trade Marks Act provided a statutory basis for a civil action by an employer against an employee for breach of contract, for breach of confidence and for misappropriation of confidential information - The Supreme Court of Canada held that such legislation was not a valid exercise of the federal trade and commerce power - The Supreme Court of Canada stated that s. 7(e) was not concerned with trade as a whole, or with general trade and commerce, or with an administrative regulatory scheme respecting trade and commerce - See paragraphs 38 to 53.

Constitutional Law - Topic 6444

Enumeration in s. 91 of the British North America Act - Criminal law - What constitutes criminal law matters - S. 7 of the Federal Trade Marks Act proscribed anti-social or unfair business practices - The Supreme Court of Canada held that the proscriptions of s. 7 were not criminal matters - See paragraphs 15 to 17.

Constitutional Law - Topic 8244

Implementation of treaties - Conditions precedent to valid federal legislation respecting the implementation of treaties - Declaration of the implementation of a treaty - Validity of s. 7 of the Federal Trade Marks Act - The Supreme Court of Canada held that s. 7 was not legislation implementing a treaty because there was nothing in the Trade Marks Act to indicate that it was enacted in the implementation of a treaty - See paragraphs 54 to 63.

Constitutional Law - Topic 5660

Enumeration in s. 91 of the British North America Act - Regulation of trade and commerce - General principles - The Supreme Court of Canada stated that regulation by a public authority pursuant to the federal trade and commerce power must meet a requirement of applying the regulation to the flow of interprovincial or foreign trade - See paragraph 44.

Courts - Topic 4005

Federal Court of Canada - Jurisdiction of the Federal Court of Canada - The Supreme Court of Canada stated that the Federal Court of Canada can only be endowed with such jurisdiction as flows from laws competently enacted by the Parliament of Canada - See paragraph 4.

Cases Noticed:

Rex v. Hume, Consolidated Distilleries Ltd. v. Consolidated Exporters Corp. Ltd., [1930] S.C.R. 531, folld. [para. 4].

Kitchen Overall & Shirt Co. Ltd. v. Elmira Shirt & Overall Co. Ltd., [1937] Ex.C.R. 230, refd to. [para. 9].

Good Humor Corp. of America v. Good Humor Food Products Ltd., [1937] Ex.C.R. 61, refd to. [para. 10].

A.C. Spark Plug Co. v. Canadian Spark Plug Service, [1935] Ex.C.R. 57, refd to. [para. 11].

Booth v. Sokulsky (1953), 13 Fox Pat. Cas. 145, dist. [para. 12].

Kellogg Company v. Helen Kellogg, [1941] S.C.R. 242, dist. [para. 13].

Goodyear Tire and Rubber Co. of Canada Ltd. v. The Queen, [1956] S.C.R. 303, folld. [para. 15].

International News Service v. Associated Press (1918), 248 U.S. 215, refd to. [para. 23].

Corbeil v. Dufresne (1934), 40 R.L. 40, folld. [para. 25].

Giguere Automobile Ltée v. Universal Auto Ltd. (1941), 70 Que. B.R. 166, folld. [para. 25].

Eagle Shoe Co. Ltd. v. Slater Shoe Co. Ltd. (1929), 46 Que. B.R. 121, folld. [para. 25].

Canadian Converters Co. Ltd. v. Eastport Trading Co. Ltd. (1968), 70 D.L.R.(2d) 149, refd to. [para. 27].

Breeze Corp. v. Hamilton Clamp Stampings Ltd. (1961), 37 C.P.R. 153, refd to. [para. 28].

Building Products Ltd. v. B.P. Canada Ltd. (1961), 21 Fox Pat. Cas. 130, refd to. [para. 29].

Greenglass v. Brown (1962), 24 Fox Pat. Cas. 21, refd to. [para. 29].

In The Noshery Ltd. v. Penthouse Motor Inn Ltd. (1969), 61 C.P.R. 207, refd to. [para. 29].

Eldon Industries Inc. v. Reliable Toy Co. Ltd. (1965), 54 D.L.R.(2d) 97, refd to. [para. 30].

Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd., [1968] 2 Ex. C.R. 552, refd to. [para. 30].

S. & S. Industries Ltd. v. Rowell, [1966] S.C.R. 419, refd to. [para. 32].

Citizens Insurance Co. v. Parsons (1881), 7 App. Cas. 96, refd to. [para. 40].

Attorney General of Ontario v. Attorney General of Canada, [1937] A.C. 405, refd to. [paras. 40, 50].

Attorney General of Ontario v. Attorney General of Canada, [1896] A.C. 348, refd to. [para. 42].

Attorney General of Canada v. Attorney General of Alberta, [1916] 1 A.C. 588, refd to. [para. 42].

Hodge v. The Queen (1883), 9 App. Cas. 117, refd to. [para. 42].

Board of Commerce case, [1922] 1 A.C. 191, refd to. [para. 43].

Proprietary Articles Trade Association v. Attorney General of Canada, [1931] A.C. 310, refd to. [para. 43].

R. v. Eastern Terminal Elevator Co., [1925] S.C.R. 434, refd to. [para. 44].

Natural Products Marketing Act reference, [1937] A.C. 377, refd to. [para. 44].

Murphy v. C.P.R., [1958] S.C.R. 626, refd to. [para. 44].

Shannon v. Lower Mainland Dairy Products Board, [1938] A.C. 708, refd to. [para. 44].

Reference re Ontario Farm Products Marketing Act, [1957] S.C.R. 198, refd to. [para. 44].

Natural Products Marketing Act reference, [1936] S.C.R. 398, refd to. [para. 45].

Johnson v. Attorney General of Alberta, [1954] S.C.R. 127, folld. [para. 47].

In re Dominion Trade and Industry Commission Act, 1935, [1936] S.C.R. 379, refd to. [para. 52].

Labour Conventions case, [1937] A.C. 326, refd to. [para. 54].

Francis v. The Queen, [1956] S.C.R. 618, refd to. [para. 55].

Aeronautics case, [1932] A.C. 54, refd to. [para. 55].

Radio case, [1932] A.C. 304, refd to. [para. 55].

References re The Weekly Rest in Industrial Undertakings Act, The Minimum Wages Act and The Limitation of Hours of Work Act, [1936] S.C.R. 461, refd to. [para. 62].

Reference re Legislative Jurisdiction over Hours of Labour, [1925] S.C.R. 505, refd to. [para. 62].

Statutes Noticed:

Trade Marks Act, R.S.C. 1970, c. T-10, sect. 7, sect. 53, sect. 55 [para. 7].

British North America Act 1867, sect. 91(2), sect. 91(27), sect. 92(13), sect. 92(16) [para. 14].

Counsel:

Malcolm E. McLeod and J. Nelson Landry, for the appellants;

G.F. Henderson, Q.C. and E. Binavinci, for the respondent Vapor Canada;

G.W. Ainslie, Q.C. and W. Lefebvre, for the Attorney General for Canada;

J.D. Hilton, Q.C., for the Attorney General for Ontario;

Jean LeFrancois, for the Attorney General for Quebec.

This appeal was heard by the Supreme Court of Canada at Ottawa, Ontario on February 25, 26, and 27, 1975. Judgment was delivered by the Supreme Court of Canada on January 30, 1976 and the following opinions were filed:

LASKIN, C.J.C. - see paragraphs 1 to 65.

de GRANDPRE, J. - see paragraphs 66 to 72.

SPENCE, PIGEON, DICKSON and BEETZ, JJ., concurred with LASKIN, C.J.C.

MARTLAND and JUDSON, JJ., concurred with de GRANDPRE, J.