Catalyst Canada Services LP et al. v. Catalyst Changers Inc. et al., 2013 ABQB 73

• Judge: Yamauchi, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 24, 2013
• Citations: 2013 ABQB 73;(2013), 560 A.R. 22 (QB)

Catalyst Can. Services LP v. Catalyst Changers (2013), 560 A.R. 22 (QB)

MLB headnote and full text

Temp. Cite: [2013] A.R. TBEd. AP.112

Catalyst Canada Services LP and CEDA Catalyst Canada Services Ltd. (plaintiffs/respondents) v. Catalyst Changers Inc., Young Energyserve Inc., Hunterwood Technologies Ltd., Kenneth E. Chapman, Mike Hatch, Jack Molstad, Darren Nyrose, Kevin Chapman, Robert Chapman, Accurate Screen Ltd., operating as Accurate Screen and Grating, Murray Mcdonald, Todd Bigelow, John Doe and XYZ Corporation (defendants/applicants)

(1201 07168; 2013 ABQB 73)

Indexed As: Catalyst Canada Services LP et al. v. Catalyst Changers Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Yamauchi, J.

February 4, 2013.

Summary:

This action involved a claim by the plaintiffs that their former employees, the defendants Hatch and Chapman, had access to the plaintiffs' confidential and proprietary information in the catalyst removal industry and used that information in the start-up of a new company, the defendant Catalyst Changers Inc. (Changers). The subject matter of the dispute was the cyclone separator, a device that, in conjunction with a vacuum truck, removed catalyst used to de-sulphurize sour gas from the vessel that contained the catalyst. The plaintiffs' claim regarding Changers' separators was that they were copied from two trailer-mounted cyclone separators belonging to the plaintiffs. In June 2012, Jeffrey, J., granted an ex parte interim injunction order as part of a wider seizure of evidence pursuant to an Anton Piller order (collectively, the orders). Pursuant to the injunction order, Changers delivered up their separators to the Independent Supervising Solicitor (ISS) appointed under the terms of the Anton Piller Order. Changers applied to vary the injunction order and for an order that the ISS return the Changers' separators to it.

The Alberta Court of Queen's Bench dismissed the application.

Injunctions - Topic 1701

Interlocutory or interim injunctions - Variation of interim injunction - General - This action involved a claim by the plaintiffs that their former employees, the defendants Hatch and Chapman, had access to the plaintiffs' confidential and proprietary information in the catalyst removal industry and used that information in the start-up of a new company, the defendant Catalyst Changers Inc. (Changers) - The subject matter of the dispute was the cyclone separator, a device that, in conjunction with a vacuum truck, removed catalyst used to de-sulphurize sour gas from the vessel that contained the catalyst - The plaintiffs' claim regarding Changers' separators was that they were copied from two trailer-mounted cyclone separators belonging to the plaintiffs - In June 2012, Jeffrey, J., granted an ex parte interim injunction order as part of a wider seizure of evidence pursuant to an Anton Piller order (collectively, the orders) - Pursuant to the injunction order, Changers delivered up their separators to the Independent Supervising Solicitor (ISS) appointed under the terms of the Anton Piller Order - Changers applied to vary the injunction order and for an order that the ISS return the Changers' separators to it - The plaintiffs argued that the court should dismiss Changers' application because of Changers' delay in bringing this matter forward - Changers did not file the application to vary the injunction order until more than 12 weeks after Jeffrey, J., granted the injunction order - The plaintiffs further argued that Changers' delay in bringing the application also offended rule 9.15(2) of the Alberta Rules of Court - The Alberta Court of Queen's Bench held that it would not deny Changers the right to have the matter heard on the basis of delay - The plaintiffs did not suffer irreparable injury as a result of the delay - Further, Changers had not wilfully delayed its application - See paragraphs 23 to 30.

Injunctions - Topic 1703

Interlocutory or interim injunctions - Variation of interim injunction - Grounds for - This action involved a claim by the plaintiffs that their former employees, the defendants Hatch and Chapman, had access to the plaintiffs' confidential and proprietary information in the catalyst removal industry and used that information in the start-up of a new company, the defendant Catalyst Changers Inc. (Changers) - The subject matter of the dispute was the cyclone separator, a device that, in conjunction with a vacuum truck, removed catalyst used to de-sulphurize sour gas from the vessel that contained the catalyst - The plaintiffs' claim regarding Changers' separators was that they were copied from two trailer-mounted cyclone separators belonging to the plaintiffs - In June 2012, Jeffrey, J., granted an ex parte interim injunction order as part of a wider seizure of evidence pursuant to an Anton Piller order (collectively, the orders) - Pursuant to the injunction order, Changers delivered up their separators to the Independent Supervising Solicitor (ISS) appointed under the terms of the Anton Piller Order - Changers applied to vary the injunction order and for an order that the ISS return the Changers' separators to it - Changers asserted that the injunction should be set aside because of the plaintiffs' failure to make full and frank disclosure of all material facts during the ex parte application - The Alberta Court of Queen's Bench refused to vary the injunction order on this basis alone - The "materiality" of the facts would unfold as the matter proceeded - See paragraphs 33 to 36.

Injunctions - Topic 1703

Interlocutory or interim injunctions - Variation of interim injunction - Grounds for - This action involved a claim by the plaintiffs that their former employees, the defendants Hatch and Chapman, had access to the plaintiffs' confidential and proprietary information in the catalyst removal industry and used that information in the start-up of a new company, the defendant Catalyst Changers Inc. (Changers) - The subject matter of the dispute was the cyclone separator, a device that, in conjunction with a vacuum truck, removed catalyst used to de-sulphurize sour gas from the vessel that contained the catalyst - The plaintiffs' claim regarding Changers' separators was that they were copied from two trailer-mounted cyclone separators belonging to the plaintiffs - In June 2012, Jeffrey, J., granted an ex parte interim injunction order as part of a wider seizure of evidence pursuant to an Anton Piller order (collectively, the orders) - Pursuant to the injunction order, Changers delivered up their separators to the Independent Supervising Solicitor (ISS) appointed under the terms of the Anton Piller Order - Changers applied to vary the injunction order and for an order that the ISS return the Changers' separators to it - The Alberta Court of Queen's Bench dismissed the application - At issue was whether Jeffrey, J., properly granted the injunction order - The court applied the serious issue to be tried test - There were serious issues that required a trial, including whether the plaintiffs' separators were special or unique, whether Changers used the plaintiffs' confidential and proprietary information in having Hunterwood construct its separators, and whether the plaintiffs separators were a "trade secret" - The plaintiffs had satisfied their onus showing that they would suffer irreparable harm if the court were to order the return of the separators to the Changers - Monetary damages would not compensate the plaintiffs for the harm - Finally, the balance of convenience favoured the plaintiffs - See paragraphs 37 to 89.

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Medical Laboratory Consultants Inc. et al. v. Calgary Health Region (2005), 363 A.R. 283; 343 W.A.C. 283; 43 Alta. L.R.(4th) 5; 2005 CarswellAlta 333; 2005 ABCA 97, refd to. [para. 40].

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Authors and Works Noticed:

Coleman, Allison, The Legal Protection of Trade Secrets (1992), p. 7 [para. 63].

Hughes, Roger T., and Clarizio, Dino P., Halsbury's Laws of Canada - Patents, Trade Secrets and Industrial Designs (2012 Reissue), para. HPT-180 [para. 60].

Counsel:

John Batzel and Grant Stapon (Bennett Jones LLP), for the applicants/defendants;

Dalton McGrath Q.C., and Michael O'Brien (Blake, Cassels & Graydon LLP), for the respondents/plaintiffs;

Richard Billington Q.C., and Judd M. Blitt (Billington Barristers), for the Independent Supervising Solicitor.

This application was heard on January 24, 2013, by Yamauchi, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for decision on February 4, 2013.