1400467 Alberta Ltd. et al. v. Adderley et al., (2012) 534 A.R. 226 (QB)

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 16, 2012
• Citations: (2012), 534 A.R. 226 (QB);2012 ABQB 155

1400467 Alta. Ltd. v. Adderley (2012), 534 A.R. 226 (QB)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. MR.097

1400467 Alberta Ltd., Adderley Holdings Ltd., Herlick's Welding Ltd., MacPherson Pipeline & Oilfield Consulting Inc., Lynco Construction Ltd. (respondents/plaintiffs) v. John Adderley, Colin MacPherson, Ivan Herlick, Jico Holdings Ltd., Ulster Cattle Corp., CJM Consulting Services Inc. and Clouded Moon Consulting Ltd. and Pro Canada West Energy Inc. (applicants/defendants)

(1103 12774; 2012 ABQB 155)

Indexed As: 1400467 Alberta Ltd. et al. v. Adderley et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

March 2, 2012.

Summary:

The plaintiffs obtained an ex parte interlocutory injunction prohibiting and restraining the defendants from, inter alia, competing with the plaintiffs' business Lynco Construction Ltd. (Lynco). Lynco had been purchased from some of the defendants and the defendants had executed a non-competition agreement. The defendants applied to set aside the injunction.

The Alberta Court of Queen's Bench dismissed the application and confirmed the granting of the interlocutory injunction.

Injunctions - Topic 1617

Interlocutory or interim injunctions - General principles - Breach of negative covenants - The plaintiffs obtained an ex parte interlocutory injunction prohibiting and restraining the defendants from, inter alia, competing with the plaintiffs' business Lynco Construction Ltd. (Lynco) - Lynco had been purchased from some of the defendants and the defendants had executed a non-competition agreement - The defendants applied to set aside the injunction - They argued that the plaintiffs breached its duty of full and frank disclosure and failed to establish the kind of breach of the non-compete covenants that would trigger the imposition of an interlocutory injunction - Further, they argued that the form of interlocutory injunction granted was defective as it was for too long a period of time and was an expansion of the negative covenants - The Alberta Court of Queen's Bench dismissed the application and confirmed the granting of the interlocutory injunction - The plaintiffs did not act improperly in proceeding without notice - Non-compete agreements, in the context of the sale and purchase of a business, were entitled to enforcement by the courts - The only real issue was whether the defendants committed a prima facie breach of their covenant not to compete - The plaintiffs established that Lynco's business prior to the acquisition by the plaintiffs of the majority interest in the company in 2008 was the same business in which the individual defendants and the corporate defendant Pro Canada were currently engaging - It was appropriate that the injunction should last no longer than the period covered by the negative covenants.

Injunctions - Topic 5971

Particular matters - Restrictive covenants - Covenant not to compete - [See Injunctions - Topic 1617 ].

Cases Noticed:

K.J.A. v. O.K.C. (2007), 412 A.R. 42; 404 W.A.C. 42; 2007 ABCA 128, refd to. [para. 10].

Porter v. Anytime Custom Mechanical Ltd. et al. (2007), 412 A.R. 50; 404 W.A.C. 50; 2007 ABCA 208, refd to. [para. 10].

Duke Energy Corp. et al. v. Duke/Louis Dreyfus Canada Corp. et al. (1998), 219 A.R. 38; 179 W.A.C. 38; 1998 Carswell Alta. 543 (C.A.), refd to. [para. 10].

Retail, Wholesale and Department Store Union, Local 580 v. Western Wholesale Drug Ltd., 1969 CarswellBC 49 (C.A.), refd to. [para. 10].

Maligne Building Ltd., Totem Tog Shops Jasper Ltd. and Quarks & Fribbles Ltd. v. Minister of the Environment of Canada (1980), 37 N.R. 562; 1980 CarswellNat 223 (F.C.A.), refd to. [para. 10].

Tele-Direct (Publications) Inc. v. Intra Canada Telecommunications Ltd., 1986 CarswellQue 88 (S.C.), refd to. [para. 10].

Mercator Enterprises Ltd. v. Harris et al. (1978), 29 N.S.R.(2d) 691; 45 A.P.R. 691; 1978 CarswellNS 167 (C.A.), refd to. [para. 10].

Hart v. Brown, 1913 CarswellAlta 117 (T.D.), refd to. [para. 10].

Easyhome Ltd. v. Casey, [2010] A.R. Uned. 835; 2009 CarswellAlta 2185; 2009 ABQB 735, refd to. [para. 10].

Belron v. TCG International Inc. et al., [2009] B.C.T.C. Uned. 596; 2009 CarswellBC 1139; 2009 BCSC 596, refd to. [para. 10].

Genesis Canada Inc. v. Hill, 1994 CarswellOnt 172 (Gen. Div.), refd to. [para. 10].

364661 Alberta Ltd. v. 735608 Alberta Ltd. (2010), 474 A.R. 151; 479 W.A.C. 151; 2010 CarswellAlta 10; 2010 ABCA 6, refd to. [para. 10].

KRG Insurance Brokers (Western) Inc. v. Shafron et al., [2009] 1 S.C.R. 157; 383 N.R. 217; 265 B.C.A.C. 1; 446 W.A.C. 1; 2009 CarswellBC 79; 2009 SCC 6, refd to. [para. 10].

R.J.V. Gas Field Services Ltd. v. Baxandall et al. (2003), 330 A.R. 115; 299 W.A.C. 115; 203 CarswellAlta. 819; 2003 ABCA 170, refd to. [para. 10].

Foundation Capital Corp. et al. v. Saxon et al., [2011] A.R. Uned. 179; 2011 ABQB 102, refd to. [para. 10].

3058354 Nova Scotia Co. v. On*Site Equipment Ltd. et al., [2007] A.R. Uned. 659; 2007 ABQB 695, refd to. [para. 11].

Echostar Satellite LLC et al. v. Pellettier et al., [2010] O.T.C. Uned. 2282; 2010 ONSC 2282, refd to. [para. 11].

Ruby v. Royal Canadian Mounted Police et al., [2002] 4 S.C.R. 3; 295 N.R. 353; 2002 SCC 75, refd to. [para. 11].

Advance Rumely Thresher Co. v. Laclair (1916), 10 Alta. L.R. 446; 1916 CarswellAlta 32 (C.A.), refd to. [para. 11].

Alberta (Treasury Branches) v. Leahy et al. (1999), 234 A.R. 201; 1999 CarswellAlta 212 (Q.B.), refd to. [para. 11].

Bell Express Vu Ltd. v. Rodgers, [2007] O.T.C. Uned. N85; 52 C.P.C.(6th) 312 (Sup. Ct.), refd to. [para. 12].

Provincial Rental Housing Corp. v. Hall et al. (2005), 208 B.C.A.C. 83; 344 W.A.C. 83; 2005 BCCA 36, refd to. [para. 12].

Authors and Works Noticed:

Sharpe, Robert J., Injunctions and Specific Performance (2009), generally [para. 10].

Counsel:

Jeremy H. Hockin and David P. Wedge (Parlee McLaws LLP), for John Adderley and the other defendants;

Carmen L. Plante and Nigel J. Forster (Bishop & McKenzie LLP), for the plaintiffs.

This application was heard on February 16, 2012, before Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on March 2, 2012.