101109718 Saskatchewan Ltd. et al. v. Agrikalium Potash Corp. et al., (2011) 375 Sask.R. 136 (CA)

• Judge: Richards, Caldwell and Herauf, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: June 16, 2011
• Jurisdiction: Saskatchewan
• Citations: (2011), 375 Sask.R. 136 (CA);2011 SKCA 82

101109718 Sask. v. Agrikalium Potash (2011), 375 Sask.R. 136 (CA);

    525 W.A.C. 136

MLB headnote and full text

Temp. Cite: [2011] Sask.R. TBEd. JL.027

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

(CACV 2062; 2011 SKCA 82)

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

Saskatchewan Court of Appeal

Richards, Caldwell and Herauf, JJ.A.

June 30, 2011.

Summary:

The appellants appealed from a Queen's Bench fiat which dismissed their application for an interlocutory injunction to restrain the respondents from directly or indirectly disposing of certain potash dispositions.

The Saskatchewan Court of Appeal dismissed the appeal.

Injunctions - Topic 1616

Interlocutory or interim injunctions - General principles - Arguable issues of law involved or serious question to be tried - The appellants claimed that Medge and Mann had breached the fiduciary duties they owed as directors of the appellants by failing to disclose corporate opportunities and by acting in conflicts of interest - The respondents claimed that the appellants and others had wrongfully and intentionally interfered with the respondents' economic interests, commenced a false and vexatious claim, made false allegations and statements, committed the tort of injurious falsehood and slandered the corporate respondents' title to certain potash dispositions - The appellants applied for an interlocutory injunction to restrain the respondents from directly or indirectly disposing of certain potash dispositions - The chambers judge dismissed the application - The Saskatchewan Court of Appeal held that the chambers judge erred in finding that there was no serious issue to be tried - He erred in law by concluding that no serious question to be tried arose in relation to the fiduciary duties owed by Medge and Mann, as directors of the appellants - As directors, Medge and Mann owed a fiduciary duty to the appellants - As part of a director's fiduciary duty, the director had to avoid conflicts of interest with the corporation and otherwise serve the corporation selflessly, honestly and loyally - Medge and Mann were directors of the corporate respondents - The corporate respondents appeared to have been competing with the appellants - The chambers judge need not have gone further than that limited review of the facts and the law to conclude this matter demonstrated a serious question to be tried - In the end result, the court dismissed the appeal - See paragraphs 11 to 18.

Injunctions - Topic 1802

Interlocutory or interim injunctions - Requirement of irreparable injury - What constitutes - The appellants claimed that Medge and Mann had breached the fiduciary duties they owed as directors of the appellants by failing to disclose corporate opportunities and by acting in conflicts of interest - The respondents claimed that the appellants and others had wrongfully and intentionally interfered with the respondents' economic interests, commenced a false and vexatious claim, made false allegations and statements, committed the tort of injurious falsehood and slandered the corporate respondents' title to certain potash dispositions - The appellants applied for an interlocutory injunction to restrain the respondents from directly or indirectly disposing of certain potash dispositions - The chambers judge dismissed the application - The appellants appealed, asserting that the chambers judge erred in his conclusion that there was no irreparable harm in two ways - First, he erred in law by holding the appellants to a higher standard of proof than that required and, second, he erred in fact by disregarding evidence that supported the establishment of irreparable harm - The Saskatchewan Court of Appeal dismissed the appeal - The chambers judge did not err in law by concluding the appellants had to establish something more than the mere possibility of irreparable harm - Given the standard of proof, the chambers judge concluded the evidence before him was insufficient to convince him that irreparable harm would result from a denial of the appellants' application for injunctive relief - The chambers judge obviously preferred the evidence of Medge and Mann to that proffered by the appellants' - The chambers judge's reasons indicated he had regard to the appellants' evidence on the issue of irreparable harm, but he found it insufficient - The chambers judge did not commit a reviewable error in concluding, on the evidence before him, the appellants had failed to establish that they would suffer irreparable harm if their application for injunctive relief was denied - See paragraphs 19 to 25.

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. 2].

Maitland v. Drozda, [1983] 3 W.W.R. 193; 22 Sask.R. 1 (C.A.), refd to. [para. 8].

R. v. Palmer, [1980] 1 S.C.R. 759; 30 N.R. 181; 50 C.C.C.(2d) 193, refd to. [para. 8].

Peoples Department Stores Inc. (Bankrupt) v. Wise, [2004] 3 S.C.R. 461; 326 N.R. 267; 2004 SCC 68, refd to. [para. 14].

Farm Credit Corp. v. Valley Beef Producers Co-operative Ltd. et al. (2002), 223 Sask.R. 236; 277 W.A.C. 236; 218 D.L.R.(4th) 86; 2002 SKCA 100, refd to. [para. 24].

Ethier v. Skrudland, [2011] 4 W.W.R. 608; 366 Sask.R. 203; 506 W.A.C. 203; 2011 SKCA 17, refd to. [para. 24].

Counsel:

Joel A. Hesje, Q.C., and Tim W. Froese, for the appellants;

Peter T. Bergbusch, for the respondents.

This appeal was heard on June 16, 2011, by Richards, Caldwell and Herauf, JJ.A., of the Saskatchewan Court of Appeal. The following judgment of the Court of Appeal was delivered by Caldwell, J.A., on June 30, 2011.