Torcana Valve Services Inc. v. Anderson et al., 2007 ABQB 356

• Judge: Graesser, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 25, 2007
• Citations: 2007 ABQB 356;(2007), 421 A.R. 157 (QB)

Torcana Valve Services v. Anderson (2007), 421 A.R. 157 (QB)

MLB headnote and full text

Temp. Cite: [2007] A.R. TBEd. MY.100

Torcana Valve Services Inc. (plaintiff) v. Ward Anderson and Anderson Industries 2002 Inc. (defendants)

(0203 06537; 2007 ABQB 356)

Indexed As: Torcana Valve Services Inc. v. Anderson et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Graesser, J.

May 25, 2007.

Summary:

Anderson left his employment with Torcana Valve Services Inc. without notice and immediately set up a competing business. Anderson also directly solicited many of Torcana's clients. Torcana sued Anderson and his company for damages, alleging breach of fiduciary duty and breach of contractual obligations.

The Alberta Court of Queen's Bench granted Torcana judgment against Anderson and his company in the amount of $103,067, plus prejudgment interest.

Damages - Topic 6786

Contracts - Employment relationship or contract - Breach by employee - Unfair competition (incl. noncompetition clause) - [See Equity - Topic 3648 ].

Equity - Topic 3606

Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship - [See Equity - Topic 3648 ].

Equity - Topic 3648

Fiduciary or confidential relationships - Breach of fiduciary relationship - By employee - Solicitation of business - Anderson had been employed with Torcana Valve Services Inc. for approximately 17 months and he was its only salesperson when he resigned without notice on January 17, 2002 - Anderson immediately set up a competing business with another former Torcana employee (Hildebrand) and he directly solicited many of Torcana's clients - Torcana sued Anderson and his company for damages, alleging breach of fiduciary duty and breach of contractual obligations - The Alberta Court of Queen's Bench held that Anderson was a key employee of Torcana and was in a position of a fiduciary - The court also found that Anderson breached his fiduciary obligations by soliciting business from Torcana's customers and that he breached his common law employment duties by failing to give reasonable notice of termination of his employment to Torcana (he should have given at least one month's notice) - The court held that it would have been reasonable for Torcana to have expected Anderson to adhere to his fiduciary duties for a period of six months after he left his employment and that Anderson should have refrained from directly soliciting Torcana's clients for that period - The court also held that since Anderson failed to give reasonable notice, he should not have been competing at all until late February 2002 - The court calculated Torcana's damages and awarded it judgment for $103,067 plus prejudgment interest - The court had also found that Anderson breached his fiduciary duty by soliciting Hildebrand during the course of their employment with Torcana, that Anderson breached his duty of confidentiality to Torcana by taking customer information, and that Anderson's conduct in telling Torcana customers that Torcana was going out of business was wrongful - However, no separate losses were established as a result of those breaches.

Equity - Topic 3655

Fiduciary or confidential relationships - Breach of fiduciary relationship - Damages - [See Equity - Topic 3648 ].

Equity - Topic 3726

Fiduciary or confidential relationships - The employer-employee relationship - Duty of employee after termination - [See Equity - Topic 3648 ].

Master and Servant - Topic 1227

Contract of hiring (employment contract) - Termination - Notice of termination - By employee (incl. statutory regulation) - [See Equity - Topic 3648 ].

Master and Servant - Topic 4207

Duties of servant - Fiduciary duty - [See Equity - Topic 3648 ].

Master and Servant - Topic 4305

Duties of servant - On termination - Competition in business - General - [See Equity - Topic 3648 ].

Master and Servant - Topic 4307

Duties of servant - On termination - Competition in business - Solicitation of clients of former employer - [See Equity - Topic 3648 ].

Cases Noticed:

Hodgkinson v. Simms et al., [1994] 9 W.W.R. 609; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1 (S.C.C.), refd to. [para. 31].

Physique Health Club Ltd. v. Carlsen et al. (1996), 193 A.R. 196; 135 W.A.C. 196; 141 D.L.R.(4th) 64 (C.A.), refd to. [para. 31].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161, refd to. [para. 35].

Anderson, Smyth & Kelly Customs Brokers Ltd. v. World Wide Customs Brokers Ltd. et al. (1996), 184 A.R. 81; 122 W.A.C. 81; 39 Alta. L.R.(3d) 411 (C.A.), refd to. [para. 35].

Tree Savers International Ltd. et al. v. Savoy et al. (1992), 120 A.R. 368; 8 W.A.C. 368 (C.A.), consd. [para. 41].

CRC-Evans Canada Ltd. v. Pettifer et al. (1997), 197 A.R. 24 (Q.B.), affd. (1998), 216 A.R. 192; 175 W.A.C. 192 (C.A.), consd. [para. 41].

Psenica v. Dee-Zee Construction Ltd. et al. (1999), 187 Sask.R. 115; 1999 SKQB 198, refd to. [para. 44].

WGS Group Associates Inc. v. Tuck-Tallon (2000), 201 Sask.R. 66; 2000 SKQB 559, refd to. [para. 44].

Firemaster Oilfield Services Ltd. v. Safety Boss (Canada) (1993) Ltd., [2000] A.J. No. 1480 (Q.B.), refd to. [para. 44].

Hamilton (R.W.) Ltd. v. Aeroquip Corp. (1988), 22 C.P.R.(3d) 135 (Ont. H.C.), refd to. [para. 44].

RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc. et al. (2007), 235 B.C.A.C. 126; 388 W.A.C. 126 (C.A.), refd to. [para. 45].

Westcan Bulk Transport Ltd. v. Stewart et al. (2005), 373 A.R. 236 (Q.B.), dist. [para. 47].

Process Color Print Ltd. v. Di Franco et al., [2005] A.R. Uned. 720 (Q.B.), dist. [para. 47].

Harris Scientific Products Ltd. v. Araujo (2005), 382 A.R. 332 (Q.B.), dist. [para. 47].

Canadian Aero Services Ltd. v. O'Malley (1973), 40 D.L.R.(3d) 371 (S.C.C.), refd to. [para. 48].

Alberta Care-A-Child Ltd. v. Payne et al. (2005), 383 A.R. 43; 2005 ABQB 561, refd to. [para. 49].

Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), refd to. [para. 69].

Counsel:

Peter F.A. Jasper (Fraser Milner Casgrain LLP), for the plaintiff;

Teri Lynn Bougie (Ahlstrom Wright Oliver & Cooper LLP), for the defendants.

This action was heard on April 11-13, 16, 17 and 20, 2007, before Graesser, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on May 25, 2007.