No Limits Sportswear Inc. v. 0912139 B.C. Ltd. et al., 2015 BCCA 193

• Judge: Donald, Saunders and Garson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: March 12, 2015
• Jurisdiction: British Columbia
• Citations: 2015 BCCA 193;(2015), 372 B.C.A.C. 54 (CA)

No Limits Sportswear v. 0912139 B.C. (2015), 372 B.C.A.C. 54 (CA);

    640 W.A.C. 54

MLB headnote and full text

Temp. Cite: [2015] B.C.A.C. TBEd. MY.021

No Limits Sportswear Inc. (appellant/plaintiff) v. 0912139 B.C. Ltd., Pakage Holdings Inc., Keyhole Technologies Inc., KE Imports Ltd., Dustin Bigney, Desmond Price, Shawn Ellis, Scott Hannan, Glen Kirk, Pakage Apparel Inc. and Gregg Alfonso (respondents/defendants)

(CA041954; 2015 BCCA 193)

Indexed As: No Limits Sportswear Inc. v. 0912139 B.C. Ltd. et al.

British Columbia Court of Appeal

Donald, Saunders and Garson, JJ.A.

May 4, 2015.

Summary:

No Limits Sportswear Inc. sued the defendants, asserting that in the course of unsuccessful negotiations respecting a potential joint investment, and while protected by a non-disclosure agreement, it revealed confidential information about the design and the marketing of their unique product, and that the defendants essentially copied it to market in direct competition with No Limits. No Limits sought damages for the loss of business opportunity, loss of market share and loss of market position, as well as payment for the profits wrongfully earned by the defendants (the No Limits action). After the failure of the proposed joint investment, the defendants moved ahead with their own business. A dispute arose between the defendants and they broke into two splinter groups (the Pakage parties and the KE parties). The KE parties entered into an agreement with No Limits to cooperate in the No Limits action. The individual KE parties accessed historical e-mail accounts belonging to the Pakage companies and gave the documents obtained from those accounts to No Limits. The Pakage parties sued the KE parties, asserting that the KE parties breached a settlement agreement and misappropriated confidential information, e-mail accounts, domain names and intellectual property from them (the Pakage action). The KE parties denied the settlement or at least claimed that the settlement was only a partial settlement. The Pakage parties obtained an injunction in the Pakage action, restraining the KE parties from further accessing the Pakage e-mail accounts or using documents already wrongfully obtained from them (see [2014] B.C.T.C. Uned. 884). The Pakage parties applied in the No Limits action for relief from the implied undertaking associated with discovery in the No Limits action in order to use certain documents produced by No Limits, as well as No Limits' list of documents in the Pakage action. No Limits sought a declaration that the Pakage parties had breached the implied undertaking.

The British Columbia Supreme Court, in a decision reported at [2014] B.C.T.C. Uned. 999, granted the Pakage parties relief from the implied undertaking rule. The court, without providing reasons, refused to grant a declaration that the Pakage parties were in breach of the implied undertaking. The court ordered No Limits to produce, inter alia, all correspondence and records of correspondence with the KE parties relating to the No Limits litigation in its possession, and all documents, including unlisted documents provided to No Limits by the KE parties. The court made no reference to No Limits having amended its pleadings in the No Limits action and discontinued the claim against the KE Parties. No Limits appealed. At issue was whether the communications between former parties who had entered into a standstill agreement for the purposes of pursuing a settlement or other cooperation agreements were privileged from disclosure to another co-defendant in a continuing action.

The British Columbia Court of Appeal allowed the appeal, holding that the court below erred in finding that litigation privilege could not apply between nominally adverse parties. The court ordered No Limits to list its privileged documents with appropriate descriptors provided such information would not render the claimed privilege nugatory.

Editor's note: for a related decision involving these parties see 359 B.C.A.C. 12; 615 W.A.C. 12.

Practice - Topic 4578

Discovery - Documents - What documents must be produced - Privileged documents - Documents prepared in contemplation of litigation (litigation privilege or work product privilege) - See paragraphs 39 to 70.

Practice - Topic 4580

Discovery - Documents - What documents must be produced - Privileged documents - Documents prepared for purpose of settlement - See paragraphs 50 to 54 and 71 to 74.

Practice - Topic 9031

Appeals - Evidence on appeal - Admission of "new evidence" or "fresh evidence" - See paragraphs 21 to 30.

Cases Noticed:

Flack v. Pacific Press Ltd. (1970), 74 W.W.R.(N.S.) 275; 14 D.L.R.(3d) 334 (B.C.C.A.), dist. [para. 35].

Cliff v. Dahl et al., [2012] B.C.T.C. Uned. 364; 2012 BCSC 364, dist. [para. 35].

British Columbia Children's Hospital et al. v. Air Products Canada Ltd. et al. (2003), 180 B.C.A.C. 129; 297 W.A.C. 129; 2003 BCCA 177, refd to. [para. 36].

Middelkamp et al. v. Fraser Valley Real Estate Board et al. (1992), 17 B.C.A.C. 134; 29 W.A.C. 134; 71 B.C.L.R.(2d) 276 (C.A.), refd to. [para. 36].

Bilfinger Berger (Canada) Inc. et al. v. Greater Vancouver Water District et al., [2014] B.C.T.C. Uned. 1560; 2014 BCSC 1560, refd to. [para. 36].

Hodgkinson v. Simms (1988), 33 B.C.L.R.(2d) 129 (C.A.), refd to. [para. 40].

Gichuru v. Information and Privacy Commissioner (B.C.) et al. (2014), 357 B.C.A.C. 260; 611 W.A.C. 260; 2014 BCCA 259, refd to. [para. 56].

Keefer Laundry Ltd. v. Pellerin Milnor Corp. et al., [2006] B.C.T.C. Uned. B56; 2006 BCSC 1180, refd to. [para. 56].

Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319; 352 N.R. 201; 2006 SCC 39, refd to. [para. 57].

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al. (2015), 354 N.S.R.(2d) 333; 1120 A.P.R. 333; 2015 NSCA 8, refd to. [para. 71].

Dos Santos Estate v. Sun Life Assurance Co. of Canada (2005), 207 B.C.A.C. 54; 341 W.A.C. 54; 2005 BCCA 4, refd to. [para. 72].

Authors and Works Noticed:

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (3rd Ed. 2009), generally [para. 71].

Counsel:

P. Smith, for the appellant;

C. DiPuma and W.B. McEwan, for the respondents, 0912139 B.C. Ltd., Pakage Holdings Inc., Keyhole Technologies Inc., Dustin Bigney, Desmond Price and Pakage Apparel Inc.;

R. Cooper and J. Walker, for the respondent, Gregg Alfonso;

K. Ducey, for the respondents, K.E. Imports Ltd., Shawn Ellis and Glen Kirk.

This appeal was heard at Vancouver, British Columbia, on March 12, 2015, by Donald, Saunders and Garson, JJ.A., of the British Columbia Court of Appeal. Garson, J.A., delivered the following reasons for judgment for the court on May 4, 2015.