Canwest Propane Inc. v. Steele et al., (1990) 110 A.R. 81 (QB)

• Judge: Prowse, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 01, 1990
• Citations: (1990), 110 A.R. 81 (QB)

Canwest Propane Inc. v. Steele (1990), 110 A.R. 81 (QB)

MLB headnote and full text

Canwest Propane Inc. (plaintiff) v. Allan Steele, Cindy Steele, A.C. Enterprises (1987) Inc. and Superior Propane Inc. (defendants)

(Action No. 8901-08723)

Indexed As: Canwest Propane Inc. v. Steele et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Prowse, J.

October 1, 1990.

Summary:

The Steeles operated Canwest's propane business as exclusive deliverer. The Steeles solicited business on Canwest's behalf. The Steeles covenanted not to compete with Canwest for two years following termination of their contract. The Steeles went to work for a competitor (Superior) and breached the covenant by soliciting Canwest customers. The breach continued for nine days until Canwest notified Superior of the covenant. Canwest brought an action for damages against the Steeles and Superior. Canwest sought judgment solely against Superior on the ground of vicarious liability.

The Alberta Court of Queen's Bench allowed the action. The court held that the covenant was reasonable and enforceable. Superior benefited from the Steeles' acts and was, accordingly, vicariously liable for Canwest's losses. The court assessed damages accordingly.

Master and Servant - Topic 1323

Employment contract - Covenants in restraint of trade - Restrictive covenants - Whether reasonable - The Steeles operated Canwest's propane business as exclusive deliverer - To all customers the Steeles were the business - The Steeles covenanted not to compete with Canwest for two years, in a specified area, following termination of their contract - The Alberta Court of Queen's Bench held that the covenant was enforceable - It was not contrary to public policy - The covenant was reasonable with regard to both time and area - See paragraphs 11 to 16.

Master and Servant - Topic 3653

Liability of master for acts of servant - Contracts - Breach of noncompetition covenant - Superior hired employees of a competitor - The employees had covenanted not to compete with the competitor for two years - The employees solicited the competitor's customers for nine days until Superior was notified by the competitor of the covenant -Superior had no prior knowledge of the covenant, but did benefit from the employees' breach - The Alberta Court of Queen's Bench held that Superior was vicariously liable for the employees' breach of the covenant and liable in damages for the competitor's losses - See paragraphs 20 to 26.

Cases Noticed:

Herbert Morris Limited v. Saxelby, [1916] A.C. 688, refd to. [para. 11].

Western Inventory Service Ltd. v. Sager et al. (1983), 24 B.L.R. 80, refd to. [para. 12].

Canadian American Financial Corp. (Canada) Ltd. v. King and Douglas W. King Marketing Corp. (1989), 36 B.C.L.R.(2d) 257, refd to. [para. 12].

Reed Stenhouse Ltd. v. Foster et al. (1989), 98 A.R. 49; 69 Alta. L.R.(2d) 80, refd to. [para. 12].

R.C. Young Insurance Ltd. v. Bricknell, [1955] 5 D.L.R. 487, refd to. [para. 12].

J.G. Collins Insurance Agencies Limited v. Elsley's Estate, [1978] 2 S.C.R. 916; 20 N.R. 1, refd to. [para. 12].

D.C. Thomson & Co. Ltd. v. Deakin, [1952] 1 Ch. 646, refd to. [para. 19].

57134 Manitoba Ltd. v. Smith Paper Limited, Palmer & Classic Packaging Corp. (1989), 37 B.C.L.R.(2d) 50, refd to. [para. 25].

Statutes Noticed:

Judgment Interest Act, S.A. 1984, c. J-0.5, generally [para. 36].

Counsel:

James C. Crawford, Q.C., for the plaintiff;

Peter T. Linder, for the defendant, Superior Propane Inc.

This action was heard before Prowse, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on October 1, 1990.