Federal Court of Appeal Decisions

     A-288-96

CORAM:      STONE J.A.

         LINDEN J.A.

         ROBERTSON J.A.

B E T W E E N :

INDIAN MANUFACTURING LIMITED and 951268 ONTARIO LIMITED

     Appellants

     (Plaintiffs)

     - and -

KIN MING LO, PHILLIP BANNON and JANE DOE AND JOHN DOE and OTHER PERSONS, NAMES UNKNOWN, WHO OFFER FOR SALE, SELL, IMPORT, MANUFACTURE, PRINT, DISTRIBUTE, ADVERTISE, PROMOTE, SHIP, STORE, DISPLAY OR OTHERWISE DEAL IN UNAUTHORIZED MERCHANDISE BEARING THE TRADEMARK INDIAN MOTORCYCLE OR INDIAN MOTOCYCLE IN CANADA

     Respondents

     (Defendants)

HEARD at Toronto, Ontario, Tuesday, June 24, 1997.

JUDGMENT delivered from the Bench at Toronto, Ontario, on Tuesday, June 24, 1997.

REASONS FOR JUDGMENT OF THE COURT BY:      STONE J.A.

     A-288-96

CORAM:      STONE J.A.

         LINDEN J.A.

         ROBERTSON J.A.

B E T W E E N :

INDIAN MANUFACTURING LIMITED and 951268 ONTARIO LIMITED

     Appellants

     (Plaintiffs)

     - and -

KIN MING LO, PHIlLIP BANNON and JANE DOE AND JOHN DOE and OTHER PERSONS NAMES UNKNOWN, WHO OFFER FOR SALE, SELL, IMPORT, MANUFACTURE, PRINT, DISTRIBUTE, ADVERTISE, PROMOTE, SHIP, STORE, DISPLAY OR OTHERWISE DEAL IN UNAUTHORIZED MERCHANDISE BEARING THE TRADEMARK INDIAN MOTORCYCLE OR INDIAN MOTOCYCLE IN CANADA

     Respondents

     (Defendants)

     REASONS FOR JUDGMENT

     (Delivered from the Bench at Toronto, Ontario, Tuesday, June 24 , 1997)

STONE J.A.

         This is an appeal from an order of the Trial Division of March 25, 1996,¹ setting aside an order granted to the appellants by the Associate Chief Justice on June 5, 1995 which included an Anton Piller order.

         On June 5, 1995, the appellant commenced the action against the two named defendants and against the defendants Jane Doe, John Doe and other persons whose names were then unknown in respect of activities alleged to have been in violation of sections 7(a), 7(b), 7(c), 19, 20, subsection 22(1) and sections 53 and 53.1 of the Trade-Marks Act, R.S.C. 1985, c. T-14. The appellants launched an ex parte motion on the same day for an interim injunction, a mandatory order to require delivery up by the appellants of merchandise or other property carrying the trade mark "Indian Motorcycle" or a variation and for disclosure of information with regard to the whereabouts of any such merchandise or other property and the names and addresses of the individuals involved. The order of June 5, 1995 provides for effective review before June 3, 1996 upon any persons against whom it was to be enforced. We understand that the order is in the usual form in a matter of this kind. Reference need be made to but a few of its provisions. It includes an undertaking by the appellants to be bound by any order of the Court "as to damages arising out of the execution of this Order, should this Order be set aside at a late date". Paragraphs 4 and 14 of the order are particularly germane. They read:

4.      The terms of this Order shall have effect until June 3, 1996, unless set aside, renewed or otherwise varied by Order of this Honourable Court.

...

14.      The persons served with this Order may move the Court, at any sittings of the Court to:

(a)      vary or discharge this Order; or

(b)      require that security be posted;

on 72 hours notice to the Plaintiffs' counsel, together with service upon them of any supporting material to be relied upon in connection with such motion and, in any event, all aspects of this matter shall be subject to review of this Court on Monday, June 3, 1996, in Toronto at 330 University Avenue, 9th Floor, 10:00 a.m. or soon thereafter as this matter may be heard.

         By notice of motion of February 14, 1996 in the Trial Division, the appellants sought a "review" of the order of June 5, 1995 "as required therein", that two individuals and a business entity referred to as "The Key Place" be included in the action as named defendants and that the interim injunction be made an interlocutory order as against these three newly named defendants. None of these parties appeared or were represented by counsel on the motion. Neither did they appear on this appeal. The learned Motions Judge denied the relief sought and instead set aside the order of June 5, 1995 and ordered the return of goods seized from the three defendants and the return of all property seized under authority of the order. That order was in large measure stayed by further order of the Trial Division of March 29, 1996, pending the disposition of the present appeal: Indian Manufacturing Ltd. v. Lo (1996), 67 C.P.R. (3d) 139 F.C.T.D.).

         At the outset of the hearing of the appeal, counsel for the appellants agreed to confine his oral submissions in limine to that of whether the Motions Judge had jurisdiction to set aside the order of June 5, 1995, in the context of the appellants' motion of February 14, 1996, almost four months before the "review" required by that order was to be made. Success on that issue would obviate the need for presenting oral argument on the remaining issues raised in the written argument.

         An Anton Piller order takes its name from that of the plaintiff in Anton Piller K.G. v. Manufacturing Processes Ltd., [1976] Ch. 55, a decision of the English Court of Appeal. The purpose of such an order is to preserve property as to which there is strong prima facie evidence that it consists of articles infringing the plaintiff's copyright, trade-mark or other rights. The order is obtained ex parte because the essence of the exercise of judicial power "is surprise, so that the defendant should not have advance knowledge of the application or the order and so have the opportunity of destroying or disposing of relevant materials or documents".²

         We are satisfied that the order under appeal must be set aside for want of jurisdiction. By its own terms, the order of June 5, 1996 was to have effect until June 3, 1996 "unless set aside...by order of this Honourable Court". The language of paragraph 4 and that contained in paragraph 14 entitled a party to seek by motion to have the order set aside. No such motion was before the Motions Judge. While no discrete motion for the review contemplated by paragraph 14 thereof appears to be required, nevertheless such review was not to be undertaken until June 3, 1996. It is obvious that it was not this "review" that the appellants sought in their motion. Indeed, it would seem strange that the appellants, who obtained the June 5, 1995 order and were its only beneficiaries, should wish to have it set aside or even reviewed before the date appointed by its terms. In point of fact that order was reviewed by the Associate Chief Justice on June 3, 1996 as required by its terms and was renewed accordingly.

         A court making an ex parte order possesses the inherent jurisdiction to set it aside: May & Baker (Canada) Ltd. v. The Motor Tanker Oak et al., [1979] 1 F.C. 401 (C.A.). See also Becker v. Noel and another, [1971] 2 All E.R. 1248 (C.A.). However, it is axiomatic that the Court's jurisdiction, whether inherent, conferred by the Rules³ or by the terms of the order itself be properly invoked if it is to be exercised by the Court. In our view, as the jurisdiction to set aside the order of June 5, 1995 was not invoked, the Motions Judge was without jurisdiction to do so.

         That apart, the authorities are clear that, save in exceptional circumstances, an ex parte order is to be reviewed, varied or rescinded by the judge who makes it: Wilson v. The Queen, [1983] 2 S.C.R. 594, at pages 607-08. See also Gulf Islands Navigation Ltd. v. Seafarers' International Union (1959), 18 D.L.R. (2d) 625 (B.C.C.A.), Canada (Director of Investigation and Research) v. Softkey Software Products Inc. (1994), 57 C.P.R. (3d) 480 (F.C.T.D.). Indeed, the practice in England suggests that an ex parte Anton Piller order is not to be pursued on appeal until after the judge who made it has rendered a decision on a matter falling within its scope: WEA Records Ltd. v. Visions Channel 4 Ltd., [1983] 2 All E.R. 589 (C.A.).⁴

         The appeal will be allowed and the order of March 25, 1996 will be set aside.

     "A.J. STONE"

     J.A.

                         FEDERAL COURT OF CANADA

                         Court No. A-288-96

BETWEEN:

INDIAN MANUFACTURING LIMITED and 951268 ONTARIO LIMITED

     - and -

KIN MING LO, PHILLIP BANNON and JANE DOE AND JOHN DOE and OTHER PERSONS, NAMES UNKNOWN, WHO OFFER FOR SALE, SELL, IMPORT, MANUFACTURE, PRINT, DISTRIBUTE, ADVERTISE, PROMOTE, SHIP, STORE, DISPLAY OR OTHERWISE DEAL IN UNAUTHORIZED MERCHANDISE BEARING THE TRADEMARK INDIAN MOTORCYCLE OR INDIAN MOTOCYCLE IN CANADA

             ________________________________________

                     REASONS FOR JUDGMENT

     ________________________________________

__________________

¹      This decision is fully reported as Indian Manufacturing Ltd. v. Lo (1996), 67 C.P.R. (3d) 132 (F.C.T.D.).

²      Halsbury's Laws of England (4th ed.), Vol. 37, paragraph 372 (at p. 271). Not surprisingly, the courts in England have developed the practice to be followed in that country in a matter of this kind. See the Supreme Court Practice, 1997 (London: Sweet & Maxwell), 1996, Vol. 1, at pp. 534-39.

³      See Rule 330 of the Federal Court Rules .

⁴      At page 593 of that decision, Sir John Donaldson M.R. stated:
             As I have said, ex parte orders are essentially provisional in nature. They are made by the judge on the basis of evidence and submissions emanating from one side only. Despite the fact that the applicant is under a duty to make full disclosure of all relevant information in his possession, whether or not it assists his application, this is no basis for making a definitive order and every judge knows this. He expects at a later stage to be given an opportunity to review his provisional order in the light of evidence and argument adduced by the other side, and, in so doing, he is not hearing an appeal from himself and in no way feels inhibited from discharging or varying his original order.              This being the case it is difficult, if not impossible, to think of circumstances in which it would be proper to appeal to this court against an ex parte order without first giving the judge who made it or, if he was not available, another High Court judge an opportunity of reviewing it in the light of argument from the defendant and reaching a decision.
     See also Konami Industry Inc. et al. v. Colour Wheel's Electronics Ltd. et al. (1985), 4 C.P.R. (3d) 231 (F.C.T.D.).