Judgments

Decision Information

Decision Content

John A. MacDonald, Railquip Enterprises Ltd. (Appellants)
v.
Vapor Canada Limited (Respondent)
and
Attorney General of Canada, Attorney General of the Province of Quebec (Intervenants)
Court of Appeal, Jackett C.J., Thurlow J. and Choquette D.J.—Montreal, September 19, 20,
21 and 22, 1972.
Constitutional law—Trade and Commerce—Jurisdiction— Trade Marks Act, R.S.C. 1970, c. T-10—Whether intra vires—Practice contrary to honest industrial or commercial usage—Trade Marks Act, s. 7—Whether cause of action— Jurisdiction of Federal Court.
M signed an agreement on entering the employ of Vapor Canada Ltd. that he would not divulge any information he acquired by reason of his employment. He was in the company's employ for almost ten years, ending up as a vice-president. Near the end of his employment he par ticipated in the preparation of a bid by the company to supply 500 box car heater assemblies to the C.N.R. In May 1971, two weeks after he ceased work for the company, he submitted a tender through appellant company, whose incorporation he had caused and which he controlled, to supply box heaters to the C.N.R., and an order for 150 heater assemblies was obtained. In preparing the tender M made use of knowledge acquired as an employee of Vapor Canada Ltd. of the figures on which its tender was based, and made use of other confidential information obtained during his employment with Vapor Canada Ltd., and in addition took from that company's possession a number of its documents bearing on the matter. Vapor Canada Ltd. sued for damages and an injunction, and obtained an inter locutory injunction pending trial of the action.
Held, an appeal by M and appellant company must be dismissed.
1. Appellants contravened section 7(e) of the Trade Marks Act, R.S.C. 1970, c. T-10, which prohibits any act or business practice contrary to honest industrial or commer cial usage in Canada: appellant company by using business information obtained for it from a former employee of a competitor in breach of his confidential relationship with the competitor, and M when, as that company's directing mind, he caused it to contravene section 7(e). Breeze Corp. v. Hamilton Clamp & Stampings Ltd. (1962) 37 C.P.R. 153; Clairol International Corp. v. Thomas Supply and Equip ment Co. [1968] 2 Ex.C.R. 552, referred to. By virtue of
section 55 of the Trade Marks Act the Trial Division has jurisdiction to entertain an action for breach of section 7.
2. The Trade Marks Act as a law of general application regulating standards of business conduct in Canada is a valid exercise of Parliament's legislative jurisdiction under section 91(2) of the British North America Act to make laws regulating trade and commerce. Citizens Insurance Co. v. -.Parsons (1881) 7 App. Cas. 96; Dominion Trade and Industry Commission [1937] A.C. 405; Reference re Alberta Statutes [1938] S.C.R. 100; Board of Commerce Reference [1922] 1 A.C. 191; Reference re The Natural Products Marketing Act, 1934 [1936] S.C.R. 398.
APPEAL from Walsh J. (unreported) granting interlocutory injunction.
J. Nelson Landry and Malcolm E. McLeod for appellants.
Redmond Quain, Q.C., and H. C. Salman for respondent.
G. W. Ainslie, Q.C., and A. P. Gauthier for Attorney General of Canada.
A. Geoffrion, Q.C., for Attorney General of the Province of Quebec.
JACKETT C.J.—This is an appeal from a judgment' of the Trial Division dated April 19, 1972, whereby the appellants were restrained, inter alia, from .. .
(2) using for their own personal benefit or divulging to any unauthorized person any confidential information or knowledge acquired by reason of the employment with [the respondent] of [the appellant] MacDonald, or making any tenders for the manufacture or sale of products in respect of which such confidential information acquired by MacDonald is used or useful;
(3) using any plans, specifications, reports, letters or other documents belonging to [the respondent] for their own purposes or conniving with any employee of [the respondent] to obtain any such plans, specifications, let ters or other documents; ...
and were required to deliver up forthwith to the respondent any plans, specifications, reports, letters or other documents belonging to the respondent, including all copies or reproduc tions made from such documents belonging to the respondent, as may be in their possession.
After the appeal was launched, the appel lants, as the basis for an order dispensing with the printing of the evidence on which the judg ment appealed against was founded, undertook to this Court that they would not base their appeal on anything other than the following grounds:
1. that all or part of the judgment appealed from should be quashed because there is no statute giving or purport ing to give, the Federal Court of Canada the jurisdiction to make it; and
2. as to all or some part of the judgment appealed from, if there is a statute that gives or purports to give, the Federal Court of Canada jurisdiction to make it, that statute is, to that extent, beyond the powers of the Parliament of Canada;
By their Memorandum of Fact and Law, the appellants attack the portion of the judgment appealed against that is referred to above on the following grounds:
1) that the said parts of the judgment appealed from should be quashed because there is no statute giving or purporting to give the Federal Court of Canada the juris diction to make it; and
2) that as to the said parts of the judgment appealed from, if there is a statute that gives or purports to give the Federal Court of Canada jurisdiction to make it, that statute is, to that extent, beyond the powers of the Parliament of Canada.
The facts, as they must be accepted for the purposes of this appeal, may be stated quite simply?
The respondent has been in the heating equip ment business for several years and the appel lant MacDonald worked for the respondent and a predecessor company for almost 10 years ending up as a vice-president of the respondent. When he entered into the employ of the pre decessor company, - MacDonald signed an agree ment, the preamble of which reads in part as follows:
... realizing that, by virtue of my said employment, I will be in a position to acquire, by observation and communica tion, vital and confidential information regarding the con structions and principles embodied in—and the problems dealt with in the production of—the devices and structures made, sold, developed or used by this company in connec tion with its business during the term of my employment;
and paragraph 5 of which reads:
I will not divulge to any unauthorized person any infor mation or knowledge acquired by reason of my employment by the company.
While still in the respondent's employ, Mac- Donald caused the appellant Railquip Enter prises Ltd. to be incorporated and he has con trolled Railquip at all relevant times.
During the last part of his period of employ ment with the respondent, MacDonald par ticipated in the preparation of a bid made by the respondent to supply 500 box car heater assem blies to the Canadian National Railway Compa ny. MacDonald ceased to work for the respond ent on April 15, 1971, and, on May 1, 1971, he submitted a tender, presumably in Railquip's name, to supply box car heaters to Canadian National, and as a result of that tender, Railquip obtained an order for 150 heater assemblies. In preparing the tender in question MacDonald made use of knowledge, which he acquired as an employee of the respondent, of the figures on which the respondent's tender was based. To prepare those figures had taken considerable work on the part of the respondent's employees. In connection with this bid by the corporation that he controlled, MacDonald also made use of and disclosed other confidential information acquired during the course of his employment with the respondent. In addition, he took from the respondent's possession a number of documents belonging to the respond ent that bore on the matter.
On the above facts, which are not in dispute on this appeal, the trial judge found that there had been a breach by the appellants of section 7(e) of the Trade Marks Act, which reads:
7. No person shall
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada.
and decided that it was a case for the part of the relief granted by the judgment appealed against that has already been summarized under section 53 of the Trade Marks Act, which reads as follows:
53. Where it is made to appear to a court of competent jurisdiction that any act has been done contrary to this Act, the court may make any such order as the circumstances require including provision for relief by way of injunction and the recovery of damages or profits, and may give directions with respect to the disposition of any offending wares, packages, labels and advertising material and of any dies used in connection therewith.
The Trial Division has jurisdiction to enter tain an action for breach of section 7 by virtue of section 55 of the Trade Marks Act as amend ed by section 64(2) of the Federal Court Act, read with section 26(1) of the latter Act. Those provisions read as follows:
55. The Federal Court of Canada has jurisdiction to entertain any action or proceeding for the enforcement of any of the provisions of this Act or of any right or remedy conferred or defined thereby.
26. (1) The Trial Division has original jurisdiction in respect of any matter, not allocated specifically to the Court of Appeal, in respect of which jurisdiction has been con ferred by any Act of the Parliament of Canada on the Federal Court, whether referred to by its new name or its former name.
In effect, as I understand it, the appellants' position on this appeal is that the Trial Division had no jurisdiction to deliver the judgment appealed from because
(a) section 7(e) does not apply to the facts as found by the Trial Division, and
(b) alternatively, if section 7(e) does apply to those facts, it is ultra vires the Parliament of Canada. 3
I shall consider first whether, on the facts as found by the Trial Division, the appellants have contravened section 7(e). 3 A
Section 7 is found in a statute the long title of which is An Act Relating to Trade Marks and Unfair Competition, and is found in a part of that statute headed Unfair Competition and
Prohibited Marks. In this context, section 7, after prohibiting certain classes of act, all of which are obviously prohibited as constituting "unfair competition", prohibits "any other act ... contrary to honest industrial or commer cial usage in Canada". It has been common ground on this appeal that a business man, in Quebec as well as in the common law prov inces, is, quite apart from statute, liable to dam ages and an injunction if he embarks on a course of using in his business information that has been obtained for him from a competitor by an employee of that competitor in contraven tion of the employee's contract of employment with that competitor . 4 That being so, in my view it must be "contrary to honest industrial or commercial usage in Canada", in the absence of evidence to the contrary, to use information so obtained in that way and it is, therefore, con trary to section 7(e) of the Trade Marks Act to do so. 5
This is not a novel view of section 7(e). Not only did Donnelly J., in Breeze Corp. v. Hamil- ton Clamp & Stampings Ltd. (1962) 37 C.P.R. 153, hold that the use of confidential and tech nical information for purposes other than that for which it was disclosed constituted an act contrary to honest industrial or commercial usage in Canada as those words are used in section 7(e), but my brother Thurlow, while discussing the ambit of section 7(e) in Clairol International Corp. v. Thomas Supply and Equipment Co. [1968] 2 Ex.C.R. 552 said, "Acts or conduct involving some breach of trust or confidence may well be considered to fall within that purview" and, in the 3rd edition of Fox on The Canadian Law of Trade Marks and Unfair Competition 1972, at page 652, after section 7(e) is quoted, the following statement appears:
Obviously the improper communication of confidential information and trade secrets will fall within that prohibition... .
In the absence of some convincing reasoning or authoritative or persuasive authority to the contrary, I am of opinion that the corporate appellant contravened section 7(e) when it used in its business information obtained for it from a former employee of a competitor in breach of the former employee's confidential relationship with that competitor6 I am further of opinion that the appellant MacDonald contravened sec tion 7(e) when, as the directing mind of the corporate appellant, he caused the corporate appellant to be in contravention of that provision?
There remains on this branch of the case to deal with the question of documents. In my view, section 7(e) applies to the obtaining and use of documents that have been wrongfully purloined from a competitor in exactly the same way as it applies to the obtaining and use of confidential information. The wording and spirit of section 7(e) apply equally to the one as to the other.
My conclusion is, therefore, that the Trial Division was correct in holding that the appel lants were in contravention of section 7(e) in connection with both the confidential informa tion and the documents.
I turn now to the question whether section 7(e) is a valid exercise of Parliament's legisla tive powers.
The primary question is whether the Trade Marks Act, as a whole, is a valid exercise of Parliament's legislative powers. If the answer to that question were in the negative, the further question that would arise is whether section 7, or section 7(e), is severable from the rest of the statute and, taken by itself, is a valid exercise of Parliament's legislative powers.
In my view, while other questions have been raised, the real question to be decided in this case is whether the Trade Marks Act is a "law" in relation to a "matter" coming within the class of subjects set out in section 91(2) of the Brit- ish North America Act, 1867, "The Regulation of Trade and Commerce", in which event it is a valid exercise of Parliament's powers, or wheth er it is a "law" in relation to a "matter" that
does not come within that class of subjects, in which event it is a law in relation to a "matter" coming within the class of subjects set out in section 92(13) of the Act, "Property and Civil Rights in the Province", or is a law in relation to a matter coming within the class of subjects set out in section 92(16), "... Matters of a merely local or private nature in the Province". Those provisions read, in so far as relevant, as follows:
91. It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next herein-after enumerat ed; that is to say,-
2. The Regulation of Trade and Commerce.
And any Matter coming within any of the Classes of Sub jects enumerated in this Section shall not be deemed to come within the Class of Matters of a local or private Nature comprised in the Enumeration of the Classes of Subjects by this Act assigned exclusively to the Legisla tures of the Provinces.
92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next herein-after enumerated; that is to say,-
13. Property and Civil Rights in the Province.
16. Generally all Matters of a merely local or private Nature in the Province.
Applying well established principles concern ing the interpretation of sections 91 and 92, even though the Trade Marks Act is, otherwise, a "law" in relation to a "matter" falling within section 92(13) or section 92(16), if it is a "law" in relation to a "matter" falling within section 91(2), that "matter" is to be regarded as not falling within either section 92(13) or section 92(16). (See Reference re Alberta Statutes [1938] S.C.R. 100, per Duff C.J.C. at page 115.)
To decide whether the "matter" of a "law" is in "pith and substance" a matter falling within section 91(2) requires a chronological review of the more important decisions even though, in the result, few of them will bear on the problem in hand. I have attempted such a review as a background for my consideration of the ques tion whether the Trade Marks Act is in relation to a "matter" falling within section 91(2), and I propose to attach a copy of it to these reasons, before I deposit them in the Registry, for such use as it may be in understanding my reasoning on this branch of the appeal.
Before examining the Trade Marks Act to form a judgment as to its "pith and substance", it is, in my view, important to have in mind that, at common law, apart from statute, trade marks have their origin in the tort of passing off. The fundamental rule was that no man has the right to put up his goods for sale as the goods of a rival trader. Using the trade marks with which the rival trader marked his wares to enable the purchasing public to distinguish them from those of others was one way of committing the tort of passing off. Gradually this protection afforded to the user of a trade mark by way of the tort of passing off crystallized into the recognition of the trade mark as a property belonging to the trader who had so used it that, in the minds of the purchasing public, it distin guished the wares to which he attached it from the wares to which it was not attached. (The Leather Cloth Co. v. American Leather Cloth Co. (1863) 4 DeG.J. & S. 136, per Lord West- bury L.C., and (1865) 11 H.L.C. 523 (H.L.); Singer Manufacturing Co. v. Loog (1882) 8 App. Cas. 15, per Lord Blackburn at pages 29 et seq.; Somerville v. Schembri (1887) 12 App. Cas. 453.) The general rule against "passing off" gave rise to problems that resulted in regis tration schemes created by statute as well as
statutory modifications in the substantive rights arising therefrom.
Examining the Trade Marks Act in the light of this background, it will be seen that, when the "Interpretation" provisions (sections 1 to 6) are put to one side, it consists of
(a) certain general rules under the heading "Unfair Competition and Prohibited Marks" (sections 7 to 11);
(b) a registration system for trade marks (sections 12 to 46) and a related scheme of registered users (section 49);
(c) certain modifications in the general law of trade mark (sections 47, 48, 50 and 51);
(d) ancillary provisions (legal proceedings, etc.).
The statute is therefore a law that, "in pith and substance", creates
(a) a set of general rules applicable to all trade and commerce in Canada, including a statutory version of the common law rule against passing off, and
(b) a registration system for trade marks.
The other provisions of the statute are all inci dental to those principal parts of the law.
What has to be determined on this branch of this case is whether Parliament had power to create those general rules for the regulation of trade and commerce in Canada. Those rules are contained in the following portion of the statute:
UNFAIR COMPETITION AND PROHIBITED MARKS
7. No person shall
(a) make a false or misleading statement tending to dis credit the business, wares or services of a competitor;
(b) direct public attention to his wares, services or busi ness in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to
direct attention to them, between his wares, services or business and the wares, services or business of another;
(c) pass off other wares or services as and for those ordered or requested;
(d) make use, in association with wares or services, of any description that is false in a material respect and likely to mislead the public as to
(i) the character, quality, quantity or composition,
(ii) the geographical origin, or
(iii) the mode of the manufacture, production or
performance
of such wares or services; or
(e) do any other act or adopt any other business practice contrary to honest industrial or commercial usage in Canada.
8. Every person who in the course of trade transfers the property in or the possession of any wares bearing, or in packages bearing, any trade mark or trade name, shall, unless before the transfer he otherwise expressly states in writing, be deemed to warrant, to the person to whom the property or possession is transferred, that such trade mark or trade name has been and may be lawfully used in connection with such wares.
9. (1) No person shall adopt in connection with a busi ness, as a trade mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for
(a) the Royal Arms, Crest or Standard;
(b) the arms or crest of any member of the Royal Family;
(c) the standard, arms or crest of His Excellency the Governor General;
(d) any word or symbol likely to lead to the belief that the wares or services in association with which it is used have received or are produced, sold or performed under royal, vice-regal or governmental patronage, approval or authority;
(e) the arms, crest or flag adopted and used at any time by Canada or by any province or municipal corporation in Canada in respect of which the Registrar has at the request of the Government of Canada or of the province or municipal corporation concerned, given public notice of its adoption and use;
(f) the heraldic emblem of the Red Cross on a white ground, formed by reversing the federal colours of Switz- erland and retained by the Geneva Convention for the Protection of War Victims of 1949, as the emblem and distinctive sign of the Medical Service of armed forces and used by the Canadian Red Cross Society; or the expression "Red Cross" or "Geneva Cross";
(g) the heraldic emblem of the Red Crescent on a white ground adopted for the same purpose as specified in paragraph (f) by a number of Moslem countries;
(h) the equivalent sign of the Red Lion and Sun used by Iran for the same purpose as specified in paragraph (f);
(i) any national, territorial or civic flag, arms, crest or emblem, or official control and guarantee sign or stamp, notice of the objection to the use of which as a commer cial device has been received pursuant to the provisions of the Convention and publicly given by the Registrar;
(j) any scandalous, obscene or immoral word or device;
(k) any matter that may falsely suggest a connection with any living individual;
(1) the portrait or signature of any individual who is living or has died within the preceding thirty years;
(m) the words "United Nations" or the official seal or emblem of the United Nations;
(n) any badge, crest, emblem or mark
(i) adopted or used by any of Her Majesty's Forces as defined in the National Defence Act,
(ii) of any university, or
(iii) adopted and used by any public authority in Canada as an official mark for wares or services,
in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority as the case may be, given public notice of its adoption and use; or
(o) the name "Royal Canadian Mounted Police" or "R.C.M.P." or any other combination of letters relating to the Royal Canadian Mounted Police, or any pictorial representation of a uniformed member thereof.
(2) Nothing in this section prevents the use as a trade mark or otherwise, in connection with a business, of any mark described in subsection (1) with the consent of Her Majesty or such other person, society, authority or organi zation as may be considered to have been intended to be protected by this section.
10. Where any mark has by ordinary and bona fide com mercial usage become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin or date of production of any wares or services, no person shall adopt it as a trade mark in association with such wares or services or others of the same general class or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling such mark as to be likely to be mistaken therefor.
11. No person shall use in connection with a business, as a trade mark or otherwise, any mark adopted contrary to section 9 or 10 of this Act or contrary to section 13 or 14 of the Unfair Competition Act, chapter 274 of the Revised Statutes of Canada, 1952.
This portion of the Trade Marks Act is cer tainly a law regulating trade and is therefore a law in relation to a matter coming within the
words of section 91(2) of the British North America Act—"The Regulation of Trade and Commerce"—if those words are taken in their unlimited sense uncontrolled by the context and other parts of the British North America Act. (Cf. Citizens Insurance Co. v. Parsons (1881) 7 App. Cas. 96, per Sir Montague Smith at page 112.) It has, however, been determined that the words "Regulation of Trade and Commerce" were not used in such an unlimited sense, because, so it has been reasoned,
(a) the collocation of section 91(2) with classes of subjects of national and general concern affords an indication that regulations relating to general trade and commerce were intended, and
(b) if the words had been intended to have full scope, the specific mention of such heads as banking, weights and measures, bills of exchange and promissory notes, interest and bankruptcy, and insolvency would have been unnecessary.
This was laid down in Citizens Insurance Com pany of Canada v. Parsons (1881) 7 App. Cas. 96 at pages 112 et seq. and has been acted upon ever since. There has never been any doubt that section 91(2) includes the regulation of interna tional trade and interprovincial trade. (See Murphy v. C.P.R. [1958] S.C.R. 626, Caloil Inc. v. Attorney General of Canada [1971] S.C.R. 543, and Attorney General of Manitoba v. Manitoba Egg and Poultry Association [1971] S.C.R. 689.) On the other hand, it has been established that it does not extend to the regula tion of the contracts of a particular trade in a province, to the regulation, by a licensing system or otherwise, of the operations of a particular trade in a province, or to the regula tion of the relations of masters and servants. (See review of authorities by Duff C.J.C. in Reference re Alberta Statutes [1938] S.C.R. 100 at pages 118-119; and Reference as to the Valid ity of section 5(a) of The Dairy Industry Act [1949] S.C.R. 1; [1951] A.C. 179.) In addition, it may be said that, whenever the ambit of section 91(2) has been discussed in a general way, it has been recognized that it did, or might, authorize Parliament to make laws for the gen-
eral regulation of trade affecting the whole country . 8
It is this latter aspect of section 91(2) that has to be considered in connection with the Trade Marks Act. This appeal makes it necessary to attempt to reach some conclusion as to the ambit of Parliament's powers to make laws for the general regulation of trade affecting the whole country.
In the first place, there is little help to be obtained from actual decisions . 9 The ambit of Parliament's power to make laws under section 91(2) for the general regulation of trade affect ing the whole country has not been the subject of decisions of which I am aware except for the decision of the Privy Council on the Dominion Trade and Industry Commission Reference (Attorney-General for Ontario v. Attorney-Gen eral for Canada) [1937] A.C. 405, where it was held that it was competent to Parliament under section 91(2) to create a national trade mark known as the "Canada Standard", and the deci sion of the Supreme Court of Canada on the same reference ([1936] S.C.R. 379) where the trade and commerce power was linked with the criminal law power as authority for Parliament to enact provisions concerning the investigation of matters relating to commodity standards. On the other hand, as far as I am aware, there are no decisions holding that attempts by Parlia ment to make trade and commerce laws were bad except where such laws purported to regu late local forms of trade in a province or the employer-employee relationship.
In so far as judicial expression of opinion is concerned, there is no definitive statement of which I am aware that can be used to solve the problem raised by this appeal. There are, how ever, two very significant opinions expressed in the relevant authorities. The first of these two opinions occurs in the Reference re Alberta Statutes [1938] S.C.R. 100, where Duff C.J.C. and Davis J. expressed the view that legislation
creating a new system of "credit" to be used as a means of exchange, in lieu of bank credit, was trade and commerce legislation. The second opinion to which I refer occurs in the Dominion Trade and Industry Commission Reference [1937] A.C. 405 where Lord Atkin, delivering the opinion of the Privy Council, expressed the opinion that section 91(2) was an obvious source of authority for Parliament to enact the Trade Marks and Designs Act, R.S.C. 1927, chapter 201. This latter expression of opinion is sufficiently important for present purposes to warrant quoting the passage in question, viz.:
There exists in Canada a well established code relating to trade marks created by Dominion statutes, to be found now in the Trade Marks and Designs Act, R.S.C., 1927, c. 201, amended by S.C., 1928, c. 10. It gives to the proprietor of a registered trade mark the exclusive right to use the trade mark to designate articles manufactured or sold by him. It creates, therefore, a form of property in each Province and the rights that flow therefrom. No one has challenged the competence of the Dominion to pass such legislation. If challenged one obvious source of authority would appear to be the class of subjects enumerated in s. 91(2), the Regula tion of trade and commerce, referred to by the Chief Justice. There could hardly be a more appropriate form of the exercise of this power than the creation and regulation of a uniform law of trade marks. [Page 417]
There is, in addition, a suggestion in the Board of Commerce case ([1922] 1 A.C. 191 at pages 200-01) that Parliament may make laws for the gathering of statistics.
I find some further help of a more general character in the judgment of Duff C.J.C. in the Reference re The Natural Products Marketing Act, 1934, [1936] S.C.R. 398 where, at page 412, after indicating that the enactments there in question were bad because they extended to "the regulation of trade which is exclusively local and of traders and producers engaged in trade which is exclusively local", he said:
It should also be observed that these enactments operate by way of the regulation of dealings in particular commodi ties and classes of commodities. The regulations contem plated are not general regulations of trade as a whole or
regulations of general trade and commerce within the sense of the judgment in Parson's case.
To summarize the result of the authorities as I understand them, there has been removed from the prima facie ambit of the "Regulation of Trade and Commerce" entrusted to Parlia ment by section 91(2)
(a) the regulation of dealings in particular commodities or classes of commodities in local trade in a province,
(b) the regulation of the contracts of a local trade in a province, and
(c) the regulation of the employer-employee relationships in local trade in a province;
while, on the other hand, it would appear that what is left to Parliament to regulate (in addi tion to international trade and interprovincial trade), as being general regulations of trade as a whole or regulations of general trade and com merce, includes
(a) the creation of a national mark to be used in trade to indicate standards, and the control of the use thereof,
(b) a system of trade marks,
(c) a system of credits to be used in lieu of bank credit,
(d) commodity standards, and
(e) statistics.
Against the background of these authorities, my conclusion is that a law laying down a set of general rules as to the conduct of business men in their competitive activities in Canada is a law enacting "regulations of trade as a whole or regulations of general trade and commerce within the sense of the judgment in Parsons case". From this point of view, I can see no difference between the regulation of commodity standards and a law regulating standards of business conduct; and, in my view, if there is anything that can be general regulation of trade as a whole it must include a law of general application that regulates either commodity standards or standards of business conduct.
In my opinion the Trade Marks Act, as a whole, is a law of general application regulating standards of business conduct in Canada and is, therefore, within the powers conferred on Par liament by section 91(2) of the British North America Act, 1867. It is therefore unnecessary for me to consider the other grounds advanced for supporting the validity of section 7(e).
I am therefore of opinion that the Trial Divi sion had jurisdiction to give the relief which, as I read the reasons for judgment delivered by Walsh J., it was intended to give. However, having regard to the further light thrown on the ambit of section 7(e) as a result of the attack that has been made somewhat belatedly on its validity, I am of opinion that certain changes should be made in the wording of the judgment appealed from to ensure that it does not go further than section 7(e) authorizes. In my opin ion, therefore, the appeal should be allowed and the judgment appealed from should be amended
(1) by deleting the paragraph numbered 2 therein and substituting therefor the following paragraph:
2. Using in the business of Railquip Enterprises Ltd., or in any other business in which either of them may be in any way associated or concerned, either by communica tion to third persons or otherwise, any confidential infor mation or knowledge acquired by reason of the employ ment with plaintiff of defendant MacDonald, or making any tenders for the manufacture or sale of products in respect of which such confidential information acquired by MacDonald is used or useful;
(2) by deleting the paragraph numbered 3 therein and substituting therefor the following paragraph:
3. Using in the business of Railquip Enterprises Ltd., or in any other business in which either of them may be in any way associated or concerned, any plans, specifica tions, reports, letters or other documents belonging to plaintiff acquired by reason of the employment with the plaintiff of defendant MacDonald or conniving with any employee of plaintiff to obtain any such plans, specifica tions. letters or other documents;
and
(3) by deleting the unnumbered paragraph immediately following the paragraph numbered 4, and by substituting therefor the following paragraph:
Defendants John A. MacDonald and Railquip Enter prises Ltd. are required to deliver up forthwith to the plaintiff all plans, specifications, reports, letters and other documents belonging to the plaintiff that are in his or its possession as a result of having been acquired for use in the business of Railquip Enterprises Ltd. by reason of the employment with the plaintiff of the defendant Mac- Donald and all copies or reproductions of any such docu ments that are in his or its possession.
Having regard to all the circumstances, I am of opinion that the costs of this appeal should follow the event of the cause.
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THURLOW J.—I concur.
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CHOQUETTE D.J.—I concur.
This judgment was called an "order" but, under the Federal Court Act, the more appropriate term is "judg- ment". See, for example, section 27 of that Act.
2 While I state the facts categorically, it must be recog nized that it is only for the purposes of this appeal. There is no attack at this stage on the Trial Division's findings of fact. When the matter comes to trial, if it does, the facts will be determined on whatever evidence is then available.
3 No question is raised on this appeal as to whether, assuming the Court's jurisdiction in the matter, the relief granted was authorized by section 53. I express no opinion on that question.
3A On my view of the matter, it is not necessary to consider the rule that requires an ambiguous statute to be interpreted so as to fall within Parliament's powers, if such an interpretation is open on the wording of the statute.
4 See authorities cited in chapter XIII of Fox, The Canadian Law of Trade Marks and Unfair Competition, 3rd edition, at pages 652 et seq.
5 While I have no doubt about its application in this case, I find the language of section 7(e) difficult to analyze. What follows in this footnote is a tentative view that I have formed and that I express in the full realization that more mature consideration may result in a different appreciation of it.
When one looks at the language of the prohibition con tained in section 7(e), one finds that it reads:
No person shall ... do any ... act or adopt any .. . business practice contrary to honest industrial or com mercial usage in Canada.
Taking the latter part of the clause first, it would seem that the words "honest industrial or commercial usage in Cana- da" must mean that which it is usual for honest business men in Canada to do in carrying on their industrial or commercial operations. If that is the correct view as to the meaning of that part of the clause, then the clause as a whole must mean that no person shall do any act or adopt any business practice in carrying on his industrial or com mercial operation if such act or practice is "contrary to" that which honest business men in Canada usually do, or, to put it another way, an act or practice in the carrying on of an industrial or commercial operation is prohibited if it would be unacceptable to an honest business man in Canada. Put that way, section 7(e) prohibits, apart from very exceptional circumstances, any act or business prac tice, in the course of an industrial or commercial operation, that involves a breach of the law either civil or criminal because any such act or practice would, I should have thought, be unacceptable to an honest business man in Canada. (This is the category of matter that is involved in the present appeal.) Section 7(e) would also, on this view, extend to acts or practices that do not otherwise involve illegality provided that they would be unacceptable to honest business men in Candid. (An example of such a case is the dishonest conduct dea't with by Noël J., as he then was, in Therapeutic Research v. Life Aid (1969) 56 C.P.R. 149.)
Looking at section 7 from the point of view of the ejusdem generis rule, it seems to me that Parliament has so worded section 7(e) as to define explicitly the common class into which all the paragraphs of section 7 fall. All the acts or practices prohibited by section 7 are acts or practices that are "contrary to honest industrial or commercial usage in Canada". It does not seem to me that, having regard to the express statement of this common class, section 7 is open to an interpretation that would imply an additional class of a more limited nature as a limitation on the ambit of section 7(e). Moreover, I do not think that this view differs in substance from that adopted by Schroeder J.A. in Eldon Industries Inc. v. Reliable Toy Co. (1967) 48 C.P.R. 109. In any event, I should have thought that it would have resulted in the same decision in that case for, in the absence of evidence of some "usage" to the contrary, there would seem to be no reason why an honest business man would not take advantage of a design or an invention open to public view when, having regard to the conditions estab lished by Parliament for the existence of monopoly rights, such design or invention is in the public domain. As far as I know, our law still favours competition.
It has been established by S. & S. Industries Inc. v. Rowell [1966] S.C.R. 419, that section 7 is not restricted to a prohibition of things that are otherwise illegal.
It seems to me that the appropriate sense of "usage" as found in section 7(e) is sense numbered one in the Shorter Oxford English Dictionary: "Habitual use, established prac tice, customary mode of action, on the part of a number of persons".
e Experience will probably establish the limits of the prohibition contained in section 7(e). For example, it will probably be interpreted as a regulation of "business" as "business" and not as a "regulation of contracts". (Com- pare Reference re Ontario Farm Products Marketing Act [1957] S.C.R. 198, per Kerwin C.J.C., at pages 204-05.)
7 It is important to make a distinction here between this rule of unfair competition, which relates to acts committed by the business man in the course of his business, and the contractual relation between the competitor and the disloyal employee. In my view, section 7(e) applies to the unfair competition and operates against the corporate business man who is guilty of it as well as to the directing mind (officer or shareholder) who causes the corporation to do the forbidden act. On the other hand, in my view, section 7(e) has no application to the conduct of the disloyal employee as employee. If, therefore, an employee divulged confidential information to a competitor of his employer but took no part in the competitor's business operations, section 7(e) could not, as I see it, be invoked by the employer against such employee. Section 7(e), like the rest of section 7, is restricted to acts of unfair competition and does not govern employer-employee relations.
s This statement should be qualified by recalling the deci sions that threw doubt on the efficacy of section 91(2) to authorize, by itself, laws that might otherwise fall within section 92(13) or (16). This doubt seems to have been put to rest by subsequent decisions. See Proprietary Articles Trade Association v. Attorney General for Canada [1931] A.C. 310, per Lord Atkin at page 326, Reference re Alberta Statutes [1938] S.C.R. 100, per Duff C.J.C. at pages 120-21, and Reference re Ontario Farm Products Marketing Act [1957] S.C.R. 198, per Kerwin C.J.C. at pages 204-05.
9 I use the word "decisions" to include advisory opinions expressed by a court pursuant to statutory references.
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.