Parrish & Heimbecker Ltd. v. Delmar Commodities Ltd. et al., (2012) 276 Man.R.(2d) 53 (QB)

• Judge: Simonsen, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: February 07, 2012
• Jurisdiction: Manitoba
• Citations: (2012), 276 Man.R.(2d) 53 (QB);2012 MBQB 48

Parrish & Heimbecker v. Delmar (2012), 276 Man.R.(2d) 53 (QB)

MLB headnote and full text

Temp. Cite: [2012] Man.R.(2d) TBEd. MR.034

Parrish & Heimbecker Limited (plaintiff) v. Delmar Commodities Ltd. and Don Hodgson (defendants)

(CI 11-01-74939; 2012 MBQB 48)

Indexed As: Parrish & Heimbecker Ltd. v. Delmar Commodities Ltd. et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Simonsen, J.

February 7, 2012.

Summary:

Delmar was an exclusive distributor of "Legend Seed", a brand of soybean seeds. The plaintiff sold Legend Seed to farmers in the "northeast" and "south" territories. Delmar sold Legend Seed on a retail basis in the south area only. Hodgson was employed by the plaintiff, first as a general manager and, then, as a customer service manager in the northeast territory. Hodgson resigned and was hired by Delmar. Delmar began selling Legend Seed as a retailer in the northeast territory. The plaintiff's share of the soybean seed market in the northeast territory fell 10% to 15% after Hodgson left its employ. The plaintiff applied for interlocutory injunctions to restrain (1) Hodgson and Delmar from using its confidential information or soliciting its customers, from completing construction of a seed treatment plant and from selling Legend Seed in the northeast territory and (2) Delmar from completing construction of a seed treatment plant and from selling Legend Seed in the northeast territory.

The Manitoba Court of Queen's Bench dismissed the applications.

Injunctions - Topic 1606

Interlocutory or interim injunctions - General principles - Balance of convenience - Delmar was an exclusive distributor of "Legend Seed", a brand of soybean seeds - The plaintiff sold Legend Seed to farmers in the "northeast" and "south" territories - Delmar sold Legend Seed on a retail basis in the south area only - Hodgson was employed by the plaintiff, first as a general manager and, then, as a customer service manager in the northeast territory - Hodgson resigned and was hired by Delmar - Delmar began selling Legend Seed as a retailer in the northeast territory - The plaintiff's share of the soybean seed market in the northeast territory fell 10% to 15% after Hodgson left its employ - The plaintiff alleged that Delmar had committed the tort of unlawful interference with economic interests and applied for an interlocutory injunction to restrain Delmar from completing construction of a seed treatment plant and from selling Legend Seed in the northeast territory - The Manitoba Court of Queen's Bench dismissed the application - The case against Delmar was weak - While there might be harm resulting from Delmar's actions, the balance of convenience weighed in favour of denying the application - Delmar had already incurred considerable construction costs - Farmers were expecting deliveries from its facility for the upcoming growing season - See paragraphs 61 to 68.

Injunctions - Topic 1606

Interlocutory or interim injunctions - General principles - Balance of convenience - [See Injunctions - Topic 1616 ].

Injunctions - Topic 1610

Interlocutory or interim injunctions - General principles - Circumstances when injunction will not be granted - [See first Injunctions - Topic 1606 and Injunctions - Topic 1616 ].

Injunctions - Topic 1616

Interlocutory or interim injunctions - General principles - Arguable issues of law involved or serious question to be tried - Delmar was an exclusive distributor of "Legend Seed", a brand of soybean seeds - The plaintiff sold Legend Seed to farmers in the "northeast" and "south" territories - Delmar sold Legend Seed on a retail basis in the south area only - Hodgson was employed by the plaintiff, first as a general manager and, then, as a customer service manager in the northeast territory - Hodgson resigned and was hired by Delmar - Delmar began selling Legend Seed as a retailer in the northeast territory - The plaintiff's share of the soybean seed market in the northeast territory fell 10% to 15% after Hodgson left its employ - The plaintiff applied for an interlocutory injunction to restrain Hodgson and Delmar from using its confidential information or soliciting its customers, from completing construction of a seed treatment plant and from selling Legend Seed in the northeast territory - The Manitoba Court of Queen's Bench dismissed the application - There was a serious issue to be tried - If Hodgson was found to have been a key employee of the plaintiff's (which was likely), there was reasonably strong evidence of a breach of his fiduciary duty - However, the plaintiff would not suffer irreparable harm if the injunction was denied - While permanent market share loss could constitute irreparable harm, where, as here, the loss was readily discernible and calculable, the harm was not irreparable - Nor was the loss necessarily permanent - Further, the alleged loss was compensable in damages - Finally, the balance of convenience weighed against granting an injunction - This was a highly competitive business - To impose an injunction prohibiting specific marketing activities in the absence of convincing evidence of harm to the plaintiff would be punitive to the defendants - See paragraphs 26 to 60.

Injunctions - Topic 1743

Interlocutory or interim injunctions - Sufficiency of damages in lieu of injunction - What constitutes adequacy or sufficiency of damages - [See Injunctions - Topic 1616 ].

Injunctions - Topic 1802

Interlocutory or interim injunctions - Requirement of irreparable injury - What constitutes - [See Injunctions - Topic 1616 ].

Injunctions - Topic 1807

Interlocutory or interim injunctions - Requirement of irreparable injury - Fiduciary duty - [See Injunctions - Topic 1616 ].

Injunctions - Topic 6212

Particular matters - Torts - Interference with economic relations - [See first Injunctions - Topic 1606 ].

Injunctions - Topic 6314

Particular matters - Injury to trade - Marketing of agricultural products - [See Injunctions - Topic 1616 ].

Cases Noticed:

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, refd to. [para. 26].

Apotex Fermentation Inc. et al. v. Novopharm Ltd. et al. (1994), 95 Man.R.(2d) 241; 70 W.A.C. 241 (C.A.), refd to. [para. 27].

Polar Bear Rubber Ltd. v. Brothers Industrial Supply Ltd. et al. (1998), 128 Man.R.(2d) 105 (Q.B.), affd. (1998), 131 Man.R.(2d) 292; 187 W.A.C. 292 (C.A.), refd to. [para. 28].

Christie (W.J.) & Co. v. Greer and Sussex Realty & Insurance Agency Ltd. (1981), 9 Man.R.(2d) 269 (C.A.), refd to. [para. 30].

Carson International Inc. v. Biggar et al. (2010), 257 Man.R.(2d) 15; 2010 MBQB 198, refd to. [para. 31].

Sanford Evans Communications Ltd. v. Trauzzi et al., [2000] O.T.C. 280; 50 C.C.E.L.(2d) 105 (Sup. Ct.), refd to. [para. 31].

Sanford Evans List Brokerage v. Trauzzi et al. - see Sanford Evans Communications Ltd. v. Trauzzi et al.

Cubex Ltd. v. Hannah et al. (2006), 206 Man.R.(2d) 71; 2006 MBQB 141, refd to. [para. 32].

Imperial Sheet Metal Ltd. et al. v. Landry et al. (2007), 315 N.B.R.(2d) 328; 815 A.P.R. 328; 2007 NBCA 51, refd to. [para. 33].

M.E.P. Environmental Products Ltd. v. Hi Performance Coatings Co. et al. (2006), 204 Man.R.(2d) 40; 2006 MBQB 119, affd. (2007), 214 Man.R.(2d) 212; 395 W.A.C. 212; 2007 MBCA 71, refd to. [para. 35].

Hudson's Bay Co. v. McClocklin (1986), 42 Man.R.(2d) 283 (Q.B.), refd to. [para. 41].

Crossdock International Inc. v. Turner-Lander et al., [2001] Man.R.(2d) Uned. 16; 2001 MBQB 13, refd to. [para. 41].

Natco Manufacturers and Distributors Ltd. v. Topolnitsky et al. (2011), 269 Man.R.(2d) 12; 2011 MBQB 197, refd to. [para. 41].

Bank of Montreal v. Superior Management Ltd. et al. (2010), 259 Man.R.(2d) 169; 2010 MBQB 244, refd to. [para. 48].

J-Sons Inc. v. Paterson (N.M.) & Sons Ltd., [1999] Man.R.(2d) Uned. 44 (Q.B.), affd. [1999] Man.R.(2d) Uned. 53 (C.A.), refd to. [para. 48].

Gerrard-Ovalstrapping v. Dutko et al. (1997), 119 Man.R.(2d) 178 (Q.B.), refd to. [para. 52].

EII Ltd. (c.o.b. Gerrard-Ovalstrapping) v. Dutko - see Gerrard-Ovalstrapping v. Dutko et al.

Prodigy Wealth Management Corp. v. James (Raymond) Ltd. et al., [2005] B.C.T.C. Uned. 869; 2005 BCSC 1863, refd to. [para. 53].

Authors and Works Noticed:

Klar, Lewis N., Remedies in Tort (1987 Looseleaf), pp. 24-60.9 [para. 61]; 24-60.10 [para. 62]; 24-60.12 [para. 64].

Counsel:

Richard Buchwald and Nicole D.M. Hamilton, for the plaintiff;

Arthur J. Stacey and Lynda K. Troup, for the defendants.

These applications were heard by Simonsen, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on February 7, 2012.