North West Co. Inc. et al. v. Delcon Property Co. et al., (2008) 456 A.R. 20 (QB)

• Judge: Moreau, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 06, 2008
• Citations: (2008), 456 A.R. 20 (QB);2008 ABQB 342

North West Co. Inc. v. Delcon Prop. Co. (2008), 456 A.R. 20 (QB)

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. AU.109

The North West Company Inc. and NWC GP Inc., as general partner and on behalf of the North West Company LP (plaintiffs) v. Delcon Property Company Ltd. and Shoppers Realty Inc. (defendants)

(0803 03933; 2008 ABQB 342)

Indexed As: North West Co. Inc. et al. v. Delcon Property Co. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Moreau, J.

June 9, 2008.

Summary:

The plaintiffs operated a retail store within the Jasper Gates shopping centre in Edmonton, selling a variety of items including groceries. The defendant Shoppers Realty Inc. opened a store in the same shopping centre from which it was selling food for off-site consumption. The plaintiffs applied for an interim injunction restraining the defendant Delcon Property Co., the owner of the shopping centre, from breaching a negative covenant of its lease with the plaintiffs relating to the sale by other tenants in the shopping centre of food for off-site consumption. The plaintiffs also sought an interim injunction restraining Shoppers from selling food for off-site consumption at its new location.

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

Injunctions - Topic 1606

Interlocutory or interim injunctions - General principles - Balance of convenience - The plaintiffs operated a retail store within the Jasper Gates shopping centre in Edmonton, selling a variety of items including groceries - The defendant Shoppers Realty Inc. opened a store in the same shopping centre from which it was selling food for off-site consumption - The plaintiffs applied for an interim injunction restraining the defendant Delcon Property Co., the owner of the shopping centre, from breaching a negative covenant of its lease with the plaintiffs relating to the sale by other tenants in the shopping centre of food for off-site consumption - The plaintiffs also sought an interim injunction restraining Shoppers from selling food for off-site consumption at its new location - The Alberta Court of Queen's Bench dismissed the application - The balance of convenience favoured the defendants - The plaintiffs provided no explanation for their delay in commencing proceedings, no action having been commenced for close to four months after Delcon clearly communicated that it was proceeding with the Shoppers deal - See paragraphs 57 to 74.

Injunctions - Topic 1610

Interlocutory or interim injunctions - General principles - Circumstances when injunction will not be granted - [See Injunctions - Topic 1606 and Injunctions - Topic 1802 ].

Injunctions - Topic 1615

Interlocutory or interim injunctions - General principles - Delay - [See Injunctions - Topic 1606 ].

Injunctions - Topic 1616

Interlocutory or interim injunctions - General principles - Arguable issues of law involved or serious question to be tried - The plaintiffs operated a retail store within the Jasper Gates shopping centre in Edmonton, selling a variety of items including groceries - The defendant Shoppers Realty Inc. opened a store in the same shopping centre from which it was selling food for off-site consumption - The plaintiffs applied for an interim injunction restraining the defendant Delcon Property Co., the owner of the shopping centre, from breaching a negative covenant of its lease with the plaintiffs relating to the sale by other tenants in the shopping centre of food for off-site consumption - The plaintiffs also sought an interim injunction restraining Shoppers from selling food for off-site consumption at its new location - The Alberta Court of Queen's Bench agreed that there were serious questions to be tried as to "(i) the interpretation and effect of Articles 12.01 and 19.01 of the plaintiffs' lease as it relates to the cause of action against Delcon; (ii) whether the wording of the first caveat provided notice to Shoppers of the restriction on sales of food for off-site consumption; (iii) whether the Plaintiffs can maintain an action in tort against Shoppers in the circumstances of this case; (iv) whether the actions of Shoppers in continuing with construction after being notified of the second caveat prevent it from arguing that it will be harmed if injunctive relief is granted against Delcon; and (v) whether the two caveats having been filed by an entity that no longer had an interest in the underlying lease as a result of an asset rollover is indeed fatal to the Plaintiffs' claim against Shoppers" - See paragraphs 33 to 41.

Injunctions - Topic 1617

Interlocutory or interim injunctions - General principles - Breach of negative covenant - The plaintiffs operated a retail store within the Jasper Gates shopping centre in Edmonton, selling a variety of items including groceries - The defendant Shoppers Realty Inc. opened a store in the same shopping centre from which it was selling food for off-site consumption - The plaintiffs applied for an interim injunction restraining the defendant Delcon Property Co., the owner of the shopping centre, from breaching a negative covenant of its lease with the plaintiffs relating to the sale by other tenants in the shopping centre of food for off-site consumption - The plaintiffs also sought an interim injunction restraining Shoppers from selling food for off-site consumption at its new location - The Alberta Court of Queen's Bench dismissed the application - The plaintiffs had to establish a "clear breach" of the negative covenant - The "clear breach" standard was very high, particularly at the interlocutory stage - The evidence in this case did not meet the standard - There were issues as to whether the negative covenant with respect to the sale of food for off-site consumption was to be interpreted as confined to businesses that were "the same or similar to" that of the plaintiffs and whether the reference to the permitted use within the shopping centre of a pharmacy in art. 12.01, which art. 19.01 was expressly subjected to, resulted in Shoppers being exempted from the negative restriction in the plaintiffs' lease - See paragraphs 25 to 31.

Injunctions - Topic 1802

Interlocutory or interim injunctions - Requirement of irreparable injury - What constitutes - The plaintiffs operated a retail store within the Jasper Gates shopping centre in Edmonton, selling a variety of items including groceries - The defendant Shoppers Realty Inc. opened a store in the same shopping centre from which it was selling food for off-site consumption - The plaintiffs applied for an interim injunction restraining the defendant Delcon Property Co., the owner of the shopping centre, from breaching a negative covenant of its lease with the plaintiffs relating to the sale by other tenants in the shopping centre of food for off-site consumption - The plaintiffs also sought an interim injunction restraining Shoppers from selling food for off-site consumption at its new location - The Alberta Court of Queen's Bench dismissed the application - The evidence of harm relied on by the plaintiffs did not meet the stringent test for a quia timet injunction, having regard to: (i) evidence regarding the prospect of increased traffic to the plaintiffs' retail store due to Shoppers' presence within the shopping centre; (ii) the plaintiffs' ability to track customer counts and sales by product category and to compare them with their first year's operations at the Jasper Gates location along with the annual increases in sales experienced by the plaintiffs' other retail stores; and (iii) the lack of any statistical evidence relating to customer loss that might have been experienced in other regions where retail stores and Shoppers newer multi-service stores were located within close proximity to each other - See paragraphs 42 to 56.

Injunctions - Topic 1805

Interlocutory or interim injunctions - Requirement of irreparable injury - Covenants not to compete - [See Injunctions - Topic 1802 ].

Cases Noticed:

Matthew v. Guardian Assurance Co., [1919] 1 W.W.R. 67 (S.C.C.), refd to. [para. 4].

Bank of Montreal v. Calbax Properties Ltd. and Baxter Estates Ltd. (1977), 4 A.R. 483 (T.D.), refd to. [para. 4].

McDonald's Restaurants of Canada Ltd. v. West Edmonton Mall Ltd., [1994] 10 W.W.R. 662; 159 A.R. 120 (Q.B.), dist. [para. 5].

Petro-Canada Inc. v. Shaganappi Village Shopping Centre Ltd. (1990), 108 A.R. 289; 1990 CarswellAlta 454 (Q.B.), refd to. [para. 25].

Debra's Hotels Inc. v. Lee et al. (1994), 159 A.R. 268; 1994 CarswellAlta 244 (Q.B.), refd to. [para. 25].

Enersul Limited Partnership v. Milford et al., [2003] A.R. Uned. 719; 2003 CarswellAlta 1711 (Q.B.), refd to. [para. 28].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241, appld. [para. 32].

369413 Alberta Ltd. v. Pocklington - see Gainers Inc. v. Pocklington Holdings Inc.

Gainers Inc. v. Pocklington Holdings Inc. (2000), 271 A.R. 280; 234 W.A.C. 280; 2000 ABCA 307, refd to. [para. 35].

Miller (Ed) Sales and Rentals Ltd. v. Caterpillar Tractor Co. et al. (1996), 187 A.R. 81; 127 W.A.C. 81 (C.A.), refd to. [para. 35].

Ruptash v. Zawick, [1956] S.C.R. 347, refd to. [para. 36].

Soroka v. Skjoth et al. (1997), 207 A.R. 1 (Q.B. Master), refd to. [para. 37].

Strange v. Binq Industries Inc. (2001), 292 A.R. 375 (Q.B. Master), refd to. [para. 37].

Demers (Maurice) Transport Ltd. et al. v. Fountain Tire Distributors (Edmonton) Ltd., [1974] 1 W.W.R. 348 (Alta. C.A.), refd to. [para. 41].

Operation Dismantle Inc. et al. v. Canada et al., [1985] 1 S.C.R. 441; 59 N.R. 1, refd to. [para. 48].

Lubicon Lake Indian Band v. Norcen Energy Resources Ltd. - see Ominayak et al. v. Norcen Energy Resources Ltd. et al.

Ominayak et al. v. Norcen Energy Resources Ltd. et al. (1985), 58 A.R. 161 (Q.B.), refd to. [para. 50].

W-K Trucking Inc. v. Bidulock Oilfield Service Ltd. (1998), 234 A.R. 363; 1998 CarswellAlta 1058 (Q.B.), refd to. [para. 51].

Effem Foods Ltd. v. Heinz (H.J.) Co. of Canada Ltd., [1997] F.T.R. Uned. 370 (T.D.), refd to. [para. 52].

UL Canada Inc. v. Proctor & Gamble Inc. (1996), 65 C.P.R.(3d) 534 (Ont. Gen. Div.), refd to. [para. 52].

West Edmonton Mall Ltd. v. McDonald's Restaurants of Canada Ltd. (1993), 141 A.R. 266; 46 W.A.C. 266 (C.A.), refd to. [para. 60].

Liquor Depot at Riverbend Square Ltd. et al. v. Time for Wine Ltd. (1997), 203 A.R. 382 (Q.B.), refd to. [para. 62].

Norsyd Investments Inc. (Receiver of) v. Sobeys Group Inc. - see Goodman Rosen Inc. v. Sobeys Group Inc.

Goodman Rosen Inc. v. Sobeys Group Inc. (2003), 213 N.S.R.(2d) 273; 667 A.P.R. 273; 2003 NSSC 62, refd to. [para. 63].

K.M. v. H.M., [1992] 3 S.C.R. 6; 142 N.R. 321; 57 O.A.C. 321, refd to. [para. 63].

London Drugs v. Truscan Realty Ltd. et al. (1988), 3 R.P.R.(2d) 60 (B.C.S.C.), refd to. [para. 64].

Mr. Submarine Ltd. v. Davidson et al. (2001), 288 A.R. 308 (Q.B.), refd to. [para. 65].

Domo Gasoline Corp. v. St. Albert Trail Properties Inc. et al. (2003), 336 A.R. 57 (Q.B.), refd to. [para. 65].

Matheson v. Truro (Town) - see Matheson et al. v. Nelson et al.

Matheson et al. v. Nelson et al. (1999), 178 N.S.R.(2d) 18; 549 A.P.R. 18 (S.C.), refd to. [para. 66].

University of Regina Faculty Association et al. v. University of Regina et al. (1999), 182 Sask.R. 85 (Q.B.), refd to. [para. 68].

Morash v. Morash (1988), 85 N.S.R.(2d) 1; 216 A.P.R. 1 (T.D.), refd to. [para. 70].

Authors and Works Noticed:

Sharpe, Robert J., Injunctions and Specific Performance (1st Ed. 1983), pp. 30, 31 [para. 48].

Spry, Ian C.F., The Principles of Equitable Remedies (2nd Ed. 1980), p. 496 [para. 70].

Counsel:

Jack Agrios, Q.C., and Janice Agrios, Q.C., for the plaintiffs;

Norman J. Pollock, Q.C., and Michael A. Kirk, for the defendant, Delcon Property Co. Ltd.;

Louis M.H. Belzil, for the defendant, Shoppers Realty Inc.

This application was heard on May 15 and June 6, 2008, by Moreau, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on June 9, 2008.