Anderson, Smyth & Kelly Customs Brokers Ltd. v. World Wide Customs Brokers Ltd. et al., (1996) 184 A.R. 81 (CA)

• Judge: Harradence, Bracco and O'Leary, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: May 17, 1996
• Citations: (1996), 184 A.R. 81 (CA);1996 ABCA 169;13 DLR (4th) 385;[1996] 7 WWR 736;184 AR 81;39 Alta LR (3d) 411;68 CPR (3d) 45;[1996] AJ No 475 (QL);122 WAC 81;20 CCEL (2d) 1

Anderson v. World Wide Customs (1996), 184 A.R. 81 (CA);

    122 W.A.C. 81

MLB headnote and full text

Anderson, Smyth & Kelly Customs Brokers Ltd. (appellant/plaintiff) v. World Wide Customs Brokers Ltd. and Peter Kelly (respondents/defendants)

(Appeal No. 14687)

Indexed As: Anderson, Smyth & Kelly Customs Brokers Ltd. v. World Wide Customs Brokers Ltd. et al.

Alberta Court of Appeal

Harradence, Bracco and

O'Leary, JJ.A.

May 17, 1996.

Summary:

The plaintiff (former employer) sued the defendants (former employee and new employer) for damages for breach of fiduciary duties.

The Alberta Court of Queen's Bench, in a judgment reported 143 A.R. 215, dismissed the plaintiff's action. The plaintiff appealed.

The Alberta Court of Appeal allowed the appeal and entered judgment against the defendants jointly and severally for $25,300.

Equity - Topic 3646

Fiduciary relationships - Breach of - By director of company - Kelly was a share­holder, director and key employee of the plaintiff - Kelly sold his shares and left his job, going to work for the defendant competitor - There was no non-solicita­tion clause - Kelly immediately solicited former clients - Some clients followed him - The trial judge held that there was no breach of fiduciary duty by Kelly - Kelly made no solicitations of clients before he left the plaintiff, did not take customer lists and many clients would have followed him in any event - The Alberta Court of Appeal held that Kelly breached his fiduciary duty - Unlike a nonfiduciary employee, a fiduciary could not solicit clients of his former employer for what was a reasonable time to permit the former employer to contact clients and attempt to retain their loyalty - The length of time depended on the level of trust and confidence reposed in the employee - The greater the employer's vulnerability, the longer the period of time - Kelly should not have solicited former clients for one year - Damages equalled lost profits for that period ($25,300) - The new employer was jointly and severally liable for knowingly assisting and participating in the breach - See paragraphs 1 to 44.

Equity - Topic 3648

Fiduciary relationships - Breach of - By employee - Solicitation of business - [See Equity - Topic 3646 ].

Equity - Topic 3655

Fiduciary relationships - Breach of - Damages - [See Equity - Topic 3646 ].

Equity - Topic 3726

Fiduciary relationships - Employer-em­ployee relationship - Duty of employee after termination - [See Equity - Topic 3646 ].

Cases Noticed:

Regal Hastings Ltd. v. Gulliver, [1942] 1 All E.R. 378 (H.L.), refd to. [para. 14].

Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592; 40 D.L.R.(3d) 371, refd to. [para. 14.].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; 13 D.L.R.(4th) 321, refd to. [para. 17].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84; 42 D.L.R.(4th) 81, refd to. [para. 18].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14; 69 O.R.(2d) 287; 35 E.T.R. 1, refd to. [para. 19].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. l; 117 D.L.R.(4th) 161, refd to. [para. 19].

Christie (W.J.) & Co. v. Greer and Sussex Realty & Insurance Agency Ltd. (1981), 9 Man.R.(2d) 269; 121 D.L.R.(3d) 472 (C.A.), refd to. [para. 22].

Metropolitan Commercial Carpet Centre Ltd. v. Donovan and Donovan (B.) Interiors Ltd. (1989), 91 N.S.R.(2d) 99; 233 A.P.R. 99 (T.D.), refd to. [para. 23].

Reed Stenhouse Ltd. v. Foster et al. (1989), 98 A.R. 49 (Q.B.), refd to. [para. 28].

Faccenda Chicken Ltd. v. Fowler, [1986] 1 All E.R. 617 (C.A.), refd to. [para. 28].

Bendix Home Systems Ltd. v. Clayton, [1977] 5 W.W.R. 10 (B.C.S.C.), refd to. [para. 28].

Bonar v. Smith, [1991] B.C.J. No. 57 (S.C.), refd to. [para. 28].

AJD Input Data Services Inc. v. Uptown Data Services Inc. (1991), 35 C.P.R.(3d) 395 (Ont. Gen. Div.), refd to. [para. 28].

Mercury Marine Ltd. v. Dillon (1986), 30 D.L.R.(4th) 627 (Ont. H.C.), refd to. [para. 28].

Tree Savers International Ltd. v. Savoy (1991), 81 Alta. L.R.(2d) 325 (Q.B.), affd. (1992), 120 A.R. 368; 8 W.A.C. 368; 84 Alta. L.R.(2d) 384 (C.A.), refd to. [para. 29].

MacMillan Bloedel Ltd. v. Binstead (1983), 22 B.L.R. 255 (B.C.S.C.), refd to. [para. 38].

Statutes Noticed:

Business Corporations Act, S.A. 1981, c. B-15, sect. 117(1)(a) [para. 13].

Counsel:

D. Venturo and P. Anic, for the appellant;

S.D. Saville, for the respondents.

This appeal was heard before Harradence, Bracco and O'Leary, JJ.A., of the Alberta Court of Appeal.

On May 17, 1996, O'Leary, J.A., delivered the following judgment for the Court of Appeal.