101109718 Saskatchewan Ltd. et al. v. Agrikalium Potash Corp. et al., (2011) 390 Sask.R. 1 (QB)

• Judge: Acton, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: February 07, 2011
• Jurisdiction: Saskatchewan
• Citations: (2011), 390 Sask.R. 1 (QB);2011 SKQB 66

101109718 Sask. v. Agrikalium Potash (2011), 390 Sask.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2011] Sask.R. TBEd. DE.106

101109718 Saskatchewan Ltd., 101109711 Saskatchewan Ltd. and Devonian Potash Inc. (plaintiffs) v. Agrikalium Potash Corporation, 101119529 Saskatchewan Ltd., Igor Medge and Jason Mann (defendants)

(2010 Q.B.G. No. 1802)

Agrikalium Mining Corporation and 101119529 Saskatchewan Ltd. (plaintiffs) v. Kantor, Viatcheslav Moshe, a.k.a. Vyatcheslav Kantor, Joint Stock Company Acron, Subero Associates Inc., Viasat Services Limited, Trustservice Limited Liability Company, Devonian Potash Inc., 101109711 Saskatchewan Ltd. and 101109718 Saskatchewan Ltd. (defendants)

(2011 Q.B.G. No. 54; 2011 SKQB 66)

Indexed As: 101109718 Saskatchewan Ltd. et al. v. Agrikalium Potash Corp. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Acton, J.

February 7, 2011.

Summary:

Plaintiffs in two actions applied for injunctions to restrain the disposition of potash permits or the shares of the corporation which owned the potash permits.

The Saskatchewan Court of Queen's Bench dismissed the applications.

Editor's note: the Saskatchewan Court of Appeal affirmed the decision in a decision reported at 375 Sask.R. 136; 525 W.A.C. 136.

Injunctions - Topic 1616

Interlocutory or interim injunctions - General principles - Arguable issues of law involved or serious question to be tried - The plaintiffs claimed that Medge and Mann had breached the fiduciary duties they owed as directors of the plaintiffs by failing to disclose corporate opportunities and by acting in conflicts of interest - The defendants claimed that the plaintiffs and others had wrongfully and intentionally interfered with the defendants' economic interests, commenced a false and vexatious claim, made false allegations and statements, committed the tort of injurious falsehood and slandered the corporate defendants' title to certain potash dispositions - Plaintiffs in two actions applied for injunctions to restrain the disposition of potash permits or the shares of the corporation which owned the potash permits - The Saskatchewan Court of Queen's Bench dismissed the applications - The potash permits were personal assets of Mann and Medge, which in no way were related to, belonged to or had any fiduciary connection to the plaintiffs - Any fiduciary duty owed by either Mann or Medge as directors of the shelf company after the initial purchases related only to such minuscule duties as ensuring the maintenance of a registered office and the filing of appropriate annual returns - Accordingly, there was no serious issue to be tried - See paragraphs 20 to 31.

Injunctions - Topic 1802

Interlocutory or interim injunctions - Requirement of irreparable injury - What constitutes - The plaintiffs claimed that Medge and Mann had breached the fiduciary duties they owed as directors of the plaintiffs by failing to disclose corporate opportunities and by acting in conflicts of interest - The defendants claimed that the plaintiffs and others had wrongfully and intentionally interfered with the defendants' economic interests, commenced a false and vexatious claim, made false allegations and statements, committed the tort of injurious falsehood and slandered the corporate defendants' title to certain potash dispositions - Plaintiffs in two actions applied for injunctions to restrain the disposition of potash permits or the shares of the corporation which owned the potash permits - The Saskatchewan Court of Queen's Bench dismissed the applications - There was no proof of irreparable injury - "The claims by the applicants that harm may result is not sufficient. They have not convinced the Court that harm will result." - Both parties obviously felt that the current market was a good market in which to be selling potash permits - The affidavit evidence of Mann and Medge established a concern about a current bubble effect and possible decreasing values of potash permits in Saskatchewan - It was apparent to the court that the irreparable harm had been established in favour of the defendants - See paragraphs 32 to 38.

Cases Noticed:

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241, refd to. [para. 16].

Buchberger v. Carter (2008), 339 Sask.R. 154; 2008 SKQB 377, refd to. [para. 17].

Feigelman et al. v. Aetna Financial Services Ltd., Lax and Burke, [1985] 1 S.C.R. 2; 56 N.R. 241; 32 Man.R.(2d) 241, refd to. [para. 18].

Canadian Aero Service Ltd. v. O'Malley et al., [1974] S.C.R. 592, refd to. [para. 23].

Trieger v. Canadian Broadcasting Corp. (1988), 54 D.L.R.(4th) 143 (Ont. H.C.), refd to. [para. 30].

Airport Limousine Drivers Association et al. v. Greater Toronto Airports Authority, [2005] O.T.C. 730 (S.C.), refd to. [para. 33].

First Choice Capital Fund Ltd. v. First Canadian Capital Corp. - see Aquino et al. v. First Choice Capital Fund Ltd. et al.

Aquino et al. v. First Choice Capital Fund Ltd. et al., [1997] 9 W.W.R. 177; 157 Sask.R. 253 (Q.B.), refd to. [para. 47].

Fonagy v. Oasis Trucking Ltd. et al. (2006), 280 Sask.R. 21; 2006 SKQB 233, refd to. [para. 48].

Authors and Works Noticed:

Sharpe, J.A., Injunctions and Specific Performance (2nd Ed. 2010), para. 2.530 [para. 40].

Counsel:

Joel A. Hesje, Q.C., for Devonian Potash Inc., 101109711 Saskatchewan Ltd. and 101109718 Saskatchewan Ltd.;

Brian J. Scherman, Q.C., for Agrikalium Mining Corporation, Agrikalium Potash Corporation, 101119529 Saskatchewan Ltd., Igor Medge and Jason Mann.

These applications were heard by Acton, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following fiat on February 7, 2011.