BrettYoung Seeds Limited Partnership v. Dyck, 2013 ABQB 319

Court of Queen’s Bench of Alberta Citation: BrettYoung Seeds Limited Partnership v. Dyck, 2013 ABQB 319 Date: 20130528 Docket: 1203 15159 Registry: Edmonton Between: BrettYoung Seeds Limited Partnership Plaintiff - and - Ken Dyck, Shaun Dyck and Green Patch Environmental Consulting Ltd. Defendants _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice Thomas W.

Wakeling _______________________________________________________ I.Introduction [ 1 ] BrettYoung Seeds Limited Partnership (“BrettYoung Seeds” or the “plaintiff”) seeks an interim and interlocutory injunction [1] enjoining Ken Dyck and his son, Shaun Dyck (collectively the “defendants” or the “Dycks”), along with Green Patch Environmental Consulting Ltd. (“Green Patch”), a company the Dycks control, from competing with and soliciting the customers of the plaintiff for an eighteen month period following September 1, 2012.

The plaintiff also seeks an order requiring the defendants to return confidential material it alleges is unlawfully in their possession.

II.Questions Presented [2] Is the first of the three tests adopted by the Supreme Court of Canada in Manitoba v. Metropolitan Stores (MTS) Ltd., [1987] 1S.C.R. 100, 128 for interlocutory injunctions in constitutional cases - is there a serious issue to be tried - modified when the applicantseeks an order enjoining the respondent, who was either an employee of the applicant or an independent contractor with whom theapplicant had a business relationship at the time the obligation the applicant wishes to enforce was entered into, from competing withthe applicant for a stipulated period of time?

If so, does the applicant have to present sufficient evidence to allow the motions court toconclude that a trial court presented with the same evidence, is more likely than not to grant the applicant the relief it seeks? [3] If so, has BrettYoung Seeds presented the evidence needed to meet this modified first test? [4] To answer this general question, the following five particular questions must be answered. In presenting the questions in thismanner, the Court is not ignoring the Supreme Court of Canada’s admonition in RJR - MacDonald Inc. v.

Canada, (SCC), [1994] 1 S.C.R. 311, 338 to undertake “an extremely limited review of the case on the merits”. [5] Did the agreement each of Ken Dyck and Shaun Dyck entered into with BrettYoung Seeds that had a start date of September 1,2011 (“2011 agreement” or collectively the “2011 agreements”) contain a term which prohibited the Dycks from competing with theplaintiff until March 1, 2014 in this fact pattern? [6] If so, is it enforceable?

Or would a nonsolicitation obligation have adequately protected the commercial interests of BrettYoungSeeds. [7] If it is enforceable, has BrettYoung Seeds presented sufficient evidence to justify this Court concluding that a trial court wouldlikely award injunction relief to BrettYoung Seeds? [8] Are Ken Dyck and Shaun Dyck fiduciaries of BrettYoung Seeds? [9] If so, have they breached any fiduciary duties they owe BrettYoung Seeds? [10] Has BrettYoung Seeds demonstrated that it will suffer irreparable harm if an interlocutory injunction is not granted? [11] Has BrettYoung Seeds established that the harm it will suffer if an interlocutory injunction is not granted exceeds thedetriment Ken Dyck, Shaun Dyck and Green Patch will experience if they are enjoined from competing with BrettYoung Seeds untilMarch 1, 2014? [12] Must the defendants return any proprietary material which belongs to the plaintiff and is in the possession of the defendants?

III.Brief Answers [13] The first test - is there a serious issue to be tried - is modified. An applicant for an interlocutory injunction prohibiting arespondent from engaging in commercial activity it would otherwise be free to undertake must present sufficient evidence to allow amotions court to conclude that it is more likely than not that a trial court reviewing the same evidence would grant the plaintiff therequested relief. A court should not impose such a burden on a respondent at this early stage of the litigation in the absence of acompelling reason to do so.

A compelling reason exists if the applicant will probably prevail at trial.

[ 14 ] BrettYoung Seeds has not met the first test. It does not have a sufficiently strong case. If this Court had to decide this case on its merits based on the material before it, the plaintiff would not succeed. [ 15 ] The noncompetition promises in the 2011 agreements which BrettYoung Seeds seeks to enforce do not apply if the 2011 agreements expire on account of the passage of time, which is what happened here.

The better view is that the noncompetition promises are in force only if the defendants exercised a right to terminate the agreement under the termination clause before the expiry date of August 31, 2012. That did not happen. [ 16 ] If the noncompetition promises did apply to this fact pattern, they are unenforceable. A nonsolicitation promise would adequately protect the interests of Brett Young Seeds. The Dycks were sales persons. They were part of a sales force. Customers could place orders for the products the plaintiff’s sold from others who were members of the plaintiff’s sales team.

If the Dycks were barred from soliciting the plaintiff’s customers for seven months, the plaintiff would have had ample opportunity to reconnect with customers. [ 17 ] If a nonsolicitation promise was an inadequate device to protect the plaintiff’s interests and the plaintiff needed protection from the defendants as competitors to allow the plaintiff the opportunity to reestablish ties with its customers and potential customers, an eighteen month period is excessive.

The trial court would be hard put to support a period greater than seven months. [ 18 ] If the noncompetition promises were enforceable, the plaintiff would have been entitled to injunctive relief. The defendants and Green Patch admit that they competed with the plaintiff, albeit in a small way, after August 31, 2012. [ 19 ] The defendants are not fiduciaries. They were not managers. They were sales representatives who worked with other employees to sell BrettYoung Seeds’ products.

Others in the plaintiff’s organization were responsible for making credit decisions and approving sales at prices below a certain point. The Dycks did not have access to proprietary information other than on one occasion. While they played an important role, they were not key employees who would be in a position to unfairly compete with the plaintiff as a result of the knowledge and contacts they acquired while working for the plaintiff.

BrettYoung Seeds had significant control over the Dycks’ activities. [ 20 ] Even if the Dycks were fiduciaries as the plaintiff alleges, a fiduciary can compete with the person to whom it owed fiduciary duties provided he does not use the former employer’s proprietary information and does not solicit the former employer’s customers until a reasonable period of time has elapsed following the end of his employment. I am not satisfied that the Dycks utilized the plaintiff’s proprietary information.

And the period during which the Dycks could not have solicited BrettYoung Seeds’ customers would have lasted no more than seven months. The nonsolicitation period would have expired on March 31, 2013. [ 21 ] The defendants admitted that they retained proprietary material which belonged to the plaintiff after August 30, 2012. This was a breach of their common law duty not to have in their possession BrettYoung Seeds’ proprietary information. They denied that they ever used it and presented the evidence of a computer expert that this material was no longer on the their system.

If the plaintiff is not satisfied that the defendants no longer have access to their proprietary materials, they may apply for other relief within twenty business days of the date of this decision. IV.Applicable Contractual Provisions [ 22 ] The most important parts of the 2011 agreements are set out below:

PREAMBLE ... · The Company acknowledges that Ken Dyck trades as Green Patch Environmental Consulting Ltd. (“Green Patch”). For clarity,

both Ken Dyck and Green Patch are jointly and severally bound by this agreement with the Company. Both parties acknowledge that the trade name of Green Patch will be totally and absolutely invisible to the customer who will transact with BrettYoung and with Ken Dyck as a representative of the Company. Sales Territory The Company offers the Specialist the sales territory of Alberta ... and grants to the Specialist the first right of sale of all products through the Company’s Professional Turf and Reclamation (“PTR”) division for Reclamation and Landscape customers ... .

The Specialist agrees to sell BrettYoung products exclusively within the defined territory above, in exchange for the compensation as outlined below. ... Supervision • The Company provides no day-to-day supervision. • The Specialist is required to set his own working hours/schedule. • The Specialist is an independent contractor and responsible for filing business and personal income taxes as appropriate. ... EFFECTIVE DATE This contract is to be effective starting September 1, 2011. The contract renews annually upon mutual agreement of the parties.

TERMINATION Either party with 6 months notice may terminate this contract. Commission on uncollected sales from the last day of work will be paid to the Specialist upon collection of the account(s). Upon termination by either party of this contract, the parties agree to work amicably and cooperatively to transfer the territory to a new Product Specialist or Company Employee which may require the specialist to be periodically available to answer questions or provide training beyond the date of termination.

The Specialist agrees to be reasonably available to assist with the transition so long as these commitments do not interfere with his ability to find a new source of income. The Company agrees to compensate the Specialist for his reasonable hourly rate for his time in assisting with this transition. The Specialist acknowledges that the Company granting him exclusive rights to sales in the specified territory represents a significant opportunity.

If the Specialist decided to terminate this arrangement and directly compete in this market with the Company, the Company would be vulnerable to significant loss by virtue of entering into this agreement. Therefore, the Specialist agrees that for a period of 18 months following any termination of this agreement he will not compete with the Company by selling similar products within the existing territory, he will not solicit Company customers, directly or indirectly, whether on behalf of himself or other parties and he will not hire or attempt to hire any Company employees.

V. Statement of Facts A.Description of the Parties [ 23 ] The plaintiff sells seeds, landscape fabrics, erosion blankets and other products. These are called “PTR products” by those in the business. Sod farms, golf courses, landscapers and other businesses are its customers. The plaintiff’s sales revenue for the fiscal year ending August 31, 2012 was close to $100 million. [ 24 ] Ken Dyck is a businessman. He is a director and shareholder of Green Patch. [ 25 ] Shaun Dyck is Ken Dyck’s son. He worked for BrettYoung Seeds as a sales representative for roughly a year.

Like his father, he is a director and shareholder of Green Patch. [ 26 ] Green Patch is a general contractor working on a variety of projects, “including ... complete project management of reclamation, erosion control and containment contracting for ... energy and mining projects, and other large construction projects”. Ken Dyck’s affidavit, ¶ 64. It employs Ken Dyck, Shaun Dyck, four others, and leases an office and warehouse in west Edmonton, forklifts, excavators, trucks and other equipment.

B.History of the Relationship Between the Parties [ 27 ] In 2002 Ken Dyck started work with BrettYoung Seeds Limited at its warehouse in Leduc, Alberta. As a result of a corporate reorganization, effective January 1, 2004 Ken Dyck became an employee of BrettYoung Seeds. [ 28 ] The plaintiff claims that Ken Dyck ceased to be its employee and became an independent contractor effective August 1, 2006. It relies on a letter agreement Ken Dyck signed July 31, 2006 to support this claim.

The letter agreement does not refer to Ken Dyck as an independent contractor. [ 29 ] On July 22, 2010 Ken Dyck signed a product specialist agreement with a September 2010 start date. His sales territory was the part of Alberta north of Red Deer. That agreement did not classify him as an independent contractor or an employee. It contained a termination

section part of which reads as follows: “The Specialist agrees that for a period of 3 years following termination he will not compete with The Company by selling similar products within the existing territory”. [ 30 ] In 2011 negotiations between Tim Dyck, at the time the president and the chief financial officer of BrettYoung Seeds, and Ken Dyck culminated in the 2011 agreements. The commencement date was September 1, 2011.

Unless both parties agreed to renew it for another year, the 2011 agreement expired on August 31, 2012. [ 31 ] BrettYoung Seeds also undertook to arrange for workers’ compensation coverage for the Dycks and deliver to them Revenue Canada T4A documents. [ 32 ] The defendants had pressed for a five year agreement with a larger commission after the first year but the plaintiff was not interested in a five year term. After hearing this, Ken Dyck informed Tim Dyck, that he and his son “would not be prepared to renew it in a year’s time on the basis of only a 9% commission”.

Ken Dyck’s affidavit, ¶ 18. [ 33 ] Ken Dyck asserts that the terms he negotiated with Tim Dyck for himself and his son did not include a noncompetition provision. [ 34 ] While this may have been the case, the 2011 agreements contained a noncompetition and nonsolicitation provision. If the

plaintiff’s version of the events leading up to the execution of the 2011 agreements is accepted, Ken Dyck should have known of the existence of these covenants. On July 29, 2011 the plaintiff’s chief financial officer, Andrew Steiman, forwarded to Ken Dyck draft agreements for his review. Both the defendants signed the signature page of the agreements. Ken Dyck, in an August 3, 2012 email to Mr. Steiman, said he was forwarding signed signature page of the two agreements and asked Mr. Steiman to have a BrettYoung Seed representative sign them and forward to him signed copies.

BrettYoung Seeds’ representatives signed the agreements on August 8, 2011. The same day, Mr. Steiman forwarded signed copies to Ken Dyck. [ 35 ] Mr. Steiman asserts that he “specifically pointed out to Ken Dyck during the negotiation [of the agreement with the September 1, 2011 start date] that the term for those non-competition and non-solicitation provisions has been reduced from 3 years in the 2010 Agreement to 18 months in the 2011-2012 Agreements”. Steiman’s affidavit, _ 9. [ 36 ] Ken Dyck swears that he had “no recollection of any discussions or meetings with Mr.

Steiman respecting the 2011Agreement or the intended terms of my relationship with the plaintiff going forward”.

Ken Dyck’s affidavit, _ 16. [ 37 ] The plaintiff’s account of the events leading up to the defendants’ signing the agreement does not match Ken Dyck’s version, which follows: Subsequently, on or about August 3 or 4, 2011, while my son and I were present at the Plaintiff’s Calmar facility, and several weeks after both Shaun and I had commenced working pursuant to the 2011 agreement, Travis Unger [an employee of BrettYoung Seeds] presented me with a one-page document, which appeared to be the signature page of a document generally similar to previous documents the plaintiff had drafted and requested that I sign from time to time.

I understood it was the signature page of a document consistent with the 2011 Agreement that I had negotiated with Tim Dyck. Without reading the one-page document, I signed it. Ken Dyck’s affidavit, ¶ 20. Given the paper trail which Mr. Steiman laid down, Ken Dyck’s recollection is probably suspect. But nothing turns on this. [ 38 ] Ken Dyck’s 2011 agreement differed from the previous product specialist agreement he had with BrettYoung Seeds. First, Shaun Dyck is named in the agreement for the first time. Second, both Ken Dyck and Shaun Dyck are referred to as independent contractors.

Third, the sales territory assigned to Ken Dyck and Shaun Dyck was Alberta, not just in the northern half of the province. Fourth, the 2011 agreement mentions Green Patch. The plaintiff acknowledges that “Ken Dyck trades as Green Patch”. C.The Plaintiff’s Business Plan [ 39 ] The 2011 agreements under which the defendants worked contained terms which gave BrettYoung Seeds significant control over the Dycks’ activities. For example, BrettYoung Seeds must approve any sales which take place for a price below a certain point, any credit extended to customers and any reimbursable expenses.

For their part, the Dycks had to abide by BrettYoung Seeds’ policies and attend promotional activities when directed to do so by the plaintiff. [ 40 ] The 2011 agreements contemplated that BrettYoung Seeds would have direct contact with the customers. It is the plaintiff who sent invoices, price lists and promotional materials to the customers. And it is the plaintiff who collected accounts and organized promotional activities.

As well, the agreements recognized that on occasion a customer might place an order “in person at the company’s facility”, in which case the “order will accrue to the Specialist for the purposes of commission”. While the agreement granted the Dyck’s “exclusive rights to sell PTR products ... in Alberta”, it expressly recognized that other salespersons service some BrettYoung customers in the territory. [ 41 ] Sandra Hull, the plaintiff’s sales coordinator in the division in which the defendants worked, acknowledges that customers would occasionally call her to place an order.

D.The Defendants’ Access to the Plaintiff’s Confidential Information Is Disputed [ 42 ] Ken Dyck claims that he “had no access to [the plaintiff’s] internal accounting or financial information, other than general

information about the status of customer accounts, no access to the Plaintiff’s Navison system and, other than being provided with copies of the Plaintiff’s annual catalogue, was not ... privy to any marketing strategies or materials of the Plaintiff.” Ken Dyck’s affidavit, ¶23. [ 43 ] The plaintiff alleges that it routinely supplied the defendants with confidential information relating to customers, market conditions and the plaintiff’s business.

Of particular interest to the plaintiff’s is an “extensive and detailed PTR Customer List” which contains “data regarding hundreds of BrettYoung customers in Alberta, elsewhere in Canada and the United States”. Munro’s affidavit, ¶ 11. This was the only concrete example Mr. Munro provided in his affidavit. [ 44 ] The parties agree that the defendants did have access to one source of confidential information before September 1, 2012.

In 2011 Dan Munro, the general manager of the plaintiff’s Calmar facility, delivered by email to Ken Dyck a confidential document containing “customer names, addresses ... contact persons, ‘ship-to-city’, email addresses, credit ratings, credit limits, dates of last sale, dollar amounts of sales, amount owing to Brett Young and customer tax numbers”. Munro’s affidavit, ¶11. [ 45 ] Shaun Dyck acknowledges that on August 31, 2012 he forwarded the document from his fathers’ email account with the plaintiff to his father’s email address at Green Patch.

He “did so with the intended purpose of holding them until such time as they might be needed [by] ... [their] ... lawyers in a lawsuit over unpaid commissions”. Shaun Dyck’s affidavit, ¶21. [ 46 ] The defendants deny that they made any use of the information after August 31, 2012. Ken Dyck’s account follows: Since leaving the Plaintiff, I have never opened, viewed or done anything with the excel spreadsheet attached to the PTR List E-mail, with one exception.

Subsequent to receiving the affidavits filed by the plaintiff in this action, on January 3, 2013 my son and I reviewed my e-mail account at [Green Patch] ..., located this email and forwarded it to my son’s email account so that he could forward it to our lawyers. Again, until this litigation had commenced, I had forgotten about the PTR List E-mail and the attached spreadsheet. Ken Dyck’s affidavit, ¶ 31.

They did not change their position during cross-examination on their affidavits. [ 47 ] The defendants retained Urgentis Digital Crisis Solutions Inc. (“Urgentis”), a computer forensic specialist, to examine desktop computers, a laptop computer, smart phones and tablet computers at Green Patch’s Edmonton office and to opine on the location of the confidential information Dan Munro emailed to Ken Dyck in 2011 and to remove “entirely from [Green Patch’s] I.T. system and all devices of Green Patch [if the email was found].” Philip Fodchuk’s affidavit, exhibit 1.

Urgentis reported that “[t]here is no evidence to suggest that the email attachment was opened from within Outlook”. [ 48 ] At the hearing of this application, counsel for the Dycks and Green Patch stated that this email has been removed from Green Patch’s system. E.The Nature of the Dycks’ work [ 49 ] BrettYoung Seeds compiled a budget that anticipated the father and son team would sell $4.25 million of product for the 2011- 12 fiscal year.

This was approximately one-third of BrettYoung Seeds’ sales budget. [ 50 ] Most of the time Ken and Shaun Dyck met with customers without any other representative of the plaintiff present and took their orders. [ 51 ] Effective August 15, 2011, the plaintiff promoted Sandra Hull. She ceased serving as a sales representative and became the sales coordinator of the professional turf and reclamation division of BrettYoung Seeds. The plaintiff assigned the customers Ms. Hull serviced when she was a sales representative to the Dycks.

This reassignment was troublefree and the Dycks quickly developed satisfactory working relationships within approximately seven months.

[ 52 ] The Dycks had to work hard because the plaintiff has many competitors. Ken Dyck provides this assessment of the nature of the marketplace: There are numerous suppliers in the market. In my experience over many years selling these products, the most important factor to customers is price, and customers typically call more than one ... supplier to obtain pricing prior to placing an order. It is also my experience that customers are not typically loyal to, or exclusively use, one supplier. They prefer to shop around, price product, and place orders periodically with different suppliers.

It is also regularly important to customers how quickly you can provide them with product, and sometimes they will pick a particular supplier because that supplier will provide the product the quickest. Ken Dyck’s affidavit, ¶ 57. Ms. Hull’s evidence differs only slightly on this point. Hull’s questioning 18:1-14. F.The Parties Did Not Renew the 2011 Agreements [ 53 ] The parties did not renew the 2011 agreements. As a result, they expired August 31, 2012.

An undated letter from Green Patch to BrettYoung Seeds emailed August 31, 2012 confirmed this. [ 54 ] The Dycks decided not to continue their relationship with Brett Young Seeds for several reasons. First, they held the view that the plaintiff did not pay their commissions in a timely manner or in the proper amounts. Second, Ken Dyck’s brothers, Tim and Lloyd Dyck, were estranged and Lloyd Dyck bought out Tim Dyck’s interest in the plaintiff. Third, Ken and Shaun Dyck wanted a higher commission rate than the plaintiff was prepared to pay.

Fourth, in a July 19, 2012 telephone conversation, Tim Dyck informed Ken Dyck that the plaintiff would no longer pay a commission on overdue accounts. G.The Litigation [ 55 ] On October 11, 2012 BrettYoung Seeds commenced an action against Ken Dyck, Shaun Dyck and Green Patch (sometimes the “three defendants”). The plaintiffs allege that the three defendants contravened the noncompetition and nonsolicitation provisions of the 2011 agreements and breached their duties as fiduciaries. These are also other claims.

The plaintiff seeks a number of remedies, including interim, interlocutory and permanent injunctive relief. [ 56 ] The three defendants filed a statement of defence on November 1, 2012. They claimed that the 2011 agreements contained terms fundamentally different than had been negotiated with the plaintiff. The three defendants asserted that Green Patch and the plaintiff were parties to an agreement under which Green Patch promised to provide the services of the Dycks. They deny that they were bound by the terms of the 2011 agreements.

If they were bound, they assert that these agreements were never terminated but expired on August 31, 2012. The three defendants denied that they were fiduciaries. [ 57 ] On November 1, 2012 the Dycks and Green Patch filed a counterclaim for unpaid commissions, unpaid annual bonuses and punitive damages. [ 58 ] The plaintiff filed a reply to statement of claim and statement of defence to counterclaim on November 21, 2012.

It set out the facts leading up to each of Ken Dyck and Shaun Dyck signing the 2011 agreements and claimed that the three defendants were bound by the agreements the Dycks signed. [ 59 ] On January 7, 2013 the plaintiff filed an application for an interim and interlocutory injunction returnable April 3, 2013. One of the remedies it seeks is an order requiring the defendants to deliver to the plaintiff its material containing confidential information. [ 60 ] On March 15, 2013 BrettYoung Seeds filed an undertaking as to damages.

H.Evidence the Defendants Competed with BrettYoung Seeds Before September 1, 2012 [ 61 ] The defendants deny that they carried on a business until after August 31, 2012. Ken Dyck swears that “[p]rior to September 1, 2012, [Green Patch] did not conduct any business or activities other than in furtherance of its role as a corporate vehicle through which Shaun and I worked as sales representatives for the Plaintiff”. Ken Dyck’s affidavit, ¶ 62.

See also Ken Dyck’s affidavit, ¶ 63: “[Green Patch] ... did not obtain any inventory of any kind until after August 31, 2012, nor did [Green Patch] ... sell any products on its own behalf as opposed to that of the plaintiff until August 31, 2012”. [ 62 ] The plaintiff claims that the defendants sold mulch products to Heritage Nurseries Ltd. in St. Albert around the end of July, 2012. [ 63 ] There is evidence to support this allegation.

An August 1, 2012 email from Ken Dyck to his wife entitled “First load” has, as an attachment, a picture of a truck loaded with mulch products leaving the warehouse the defendants admit they operated out of after August 31, 2012. This suggests that the defendants’ interest in the warehouse they admittedly did business from after August 31, 2012 predates September 1, 2012. [ 64 ] Ken Dyck’s response to this allegation appears to be less than candid.

While he swears that Green Patch “did not have any business premises as of the date of this photo” and that the suspicious photograph “is not a photo of product leaving ... [Green Patch’s] warehouse” (Ken Dyck’s affidavit ¶ 51), this position may not be consistent with the evidence Daniel Wurban gave when questioned on his affidavit. Mr. Wurban is the operations manager for Green Patch.

He identified the premises from which the August 1, 2012 photograph was taken as Green Patch’s warehouse in Edmonton. [ 65 ] It is also doubtful that Ken Dyck’s affidavit is consistent with his own responses when cross-examined on his affidavit. He admitted that Green Patch’s warehouse, as of the date he was questioned, February 1, 2013, was located at the intersection of 112 Avenue and 161 Street.

The street sign captured in the August 1, 2012 photograph indicates that is the intersection at which the photograph was taken. [ 66 ] It is conceivable that Ken Dyck, by coincidence, took the photograph from a location Green patch subsequently leased to use as its office and warehouse. Stranger things have happened. [ 67 ] Even if Green Patch did lease a warehouse at this location before September 1, 2012, this is not conclusive evidence that it was competing with the plaintiff. It is some evidence.

A business of this nature would need a warehouse. [ 68 ] The plaintiff has not provided any other evidence in support of the claim that the defendants sold mulch to Heritage Nurseries Ltd. before September, 2012. And Ken Dyck provides an innocent explanation, as the following extract from his affidavit reveals: Heritage Nurseries was a company that had previously done business with the Plaintiff. However, by the middle of 2012 they were in arrears with the plaintiff, and the plaintiff was refusing to sell them any products whatsoever, even on a cash basis.

Heritage had been a large customer, and the payment of large amounts of commission to me hinged on Heritage ultimately paying all arrears to the plaintiff. I was concerned that if Heritage could not obtain product, it would go out of business, the plaintiff would never get paid, and so I would lose a large amount of commission. As a result, I made a personal phone call to a contact I had at a mulch vendor in the United States, and asked if he could assist Heritage Nurseries in obtaining mulch product. That contact indicated that he would see what he could do.

Some time later, he called me back and indicated he had been able to find a supplier for Heritage Nurseries, though I can’t recall today who it was. My contact asked if I would simply meet the loads as they arrived in Edmonton, ensure the loads reached Heritage (which is located outside of Edmonton) and I sent him confirmation that the loads made it. I agreed to do this, and therefore I met with a truck driver moving the first of two loads for Heritage at a gas station in Northwest Edmonton, and provided him with clear directions to Heritage.

Neither myself, Shaun or [Green Patch] ... sold these products to Heritage, nor were we paid or compensated in any way for assisting Heritage. Ken Dyck’s affidavit, ¶ 51.

[ 69 ] A representative of Heritage Nurseries Ltd., in a January 29, 2013 letter, corroborates Ken Dyck’s story: In approximately July of 2012, Heritage Nurseries Ltd., had a need for mulch products for Hydroseeding. I attempted to purchase that from BrettYoung [Seeds] whom I had done business with for a number of years previous to that date. A representative from BrettYoung [Seeds] indicated that they would no longer sell me any products. I called Ken Dyck, who was a sales representative of BrettYoung [Seeds] and asked him if he could assist me in obtaining the products that I needed.

Ken told me that he would call a contact that he had at Profile Products. I understand he did so. Profile Products in turn referred me to a third party who agreed to supply the products for me. Ultimately, I was able to purchase two truck loads of product from this third party. I was grateful to Ken for doing me the favor of making the call for me. To the best of my knowledge and belief, I do not believe Ken was paid a commission or any other remuneration for making this phone call on my behalf. I certainly did not pay Ken any sum for this transaction, and I have no reason to believe anyone else did.

Ken Dyck’s affidavit, exhibit G. 1.Green Patch Carries on Business as a General Contractor Working on Reclamation, Erosion Central and Containment Projects [ 70 ] Green Patch is a general contractor working on reclamation, erosion central and containment projects. It “provides customers with comprehensive services, including design, methods, scheduling, pricing, and budgeting, safety, sub-contracting, supply consulting and complete project management of reclamation, erosion control and containment contracting for such things such as energy and mining projects, and other large construction projects”.

Ken Dyck’s affidavit, ¶ 64. Green Patch admits that it has been in business after August 31, 2012. [ 71 ] The three defendants concede that “a small portion of [Green Patch’s] ... business ... involve[s] single, one-off sales of PTR products to customers, with no associated services”. Ken Dyck’s affidavit, ¶ 66. This part of the business accounts for approximately fifteen percent of total revenue. [ 72 ] The plaintiff has not adduced reliable evidence that the Dycks or Green Patch solicited any of Brett Young Seeds’ customers before or after September 1, 2012.

And each of the Dycks denies under oath doing so. [ 73 ] Mr. Steiman alleges that Ken Dyck had contacted AM Sod Farm, a customer of the plaintiff’s, to solicit business for Green Patch. Ken Dyck expressly denies this: [A]fter reviewing ... [Steiman’s affidavit] I personally called Allan Sayler of AM Sod Farm and inquired about the discussion Mr. Steiman alleges in this affidavit. Allan advised that he had not spoken with anyone at the plaintiff’s company in approximately six months, and was clear that he had not told anyone at the Plaintiff that I had been attempting to solicit business from AM Sod Farm.

I deny that I have ever solicited business from AM Sod Farm, except perhaps on occasions prior to September 1, 2012 on behalf of the plaintiff. Ken Dyck’s affidavit, ¶ 56. [ 74 ] Ms. Hull makes several allegations about the conduct of the defendants before September 1, 2012. I will review the evidence on these points. [ 75 ] Ms. Hull claims that two Brett Yong Seeds’ customers informed her that Ken Dyck had told them, prior to September 1, 2012, that the Dycks intended to start their own business after their agreements with the plaintiff expired. The defendants deny that Ms. Hull’s recollection is accurate.

They have provided solid evidence to support their position. Brian McNary of InstaLawn

Hydroseeding Inc., one of the customers Ms. Hull mentioned, in a January 29, 2013 email to Ken Dyck, stated that he did not know“of any business ongoings with ... [Ken and Shaun Dyck] until [he] ... received an email from BrettYoung [Seeds] stating that therehad been some changes and Sandra would be handling my account”. Ken Dyck’s affidavit, exhibit 5. Shaun Dyck addresses thisallegation: [A]t no time prior to leaving the Plaintiff did I tell any customer or supplier of the Plaintiff that I, Ken or ... [Green Patch] had anyplans to start our own business.

For the last 8 or so months leading up to the expiry of the 2011 Agreement I dealt with Ross Boghean[of PLH Erosion, a customer Ms. Hull identified], not my father. I therefore find it hard to believe that Mr. Boghean had any suchdiscussions with my father. Since reviewing Ms. Hull’s affidavit, I personally called Mr. Boghean about this allegation. I recited forhim paragraph 11 of Ms. Hull’s affidavit. He denied that he said to Ms. Hull what she alleges in her affidavit. Shaun Dyck’s affidavit, ¶ 26. [76] Ms.

Hull alleges that Green Patch, on its own account, sold custom blend seeds to Sierra Alta Landscape before September 1,2012. Alana Perry of Sierra Alta Landscape Construction, in a January 30, 2013 email, unequivocally denies this. She wrote that “no business transpired between Sierra Alta Landscape Construction and Green Patch ... before or after September 1st of 2012”. KenDyck’s affidavit, ¶ 6.

VI.Analysis [77] This part of the decision will record the principles governing the resolution of interim and interlocutory injunctions and theapplicable common law engaged by this application and then apply the governing principles to the evidence. A.The Principles Governing the Resolution of Interim and Interlocutory Injunction Applications [78] An application for interlocutory injunction relief brings into play two potentially contradictory principles. The first is thatrelief should be available at a time when it is needed to protect legitimate interests of the applicant.

This principle recognizes that tobe effective a judicial remedy may have to be issued before a trial occurs if it is to have any value to the applicant. The secondrecognizes that a respondent should not be directed to do or refrain from doing a specific act until the judicial process has progressedto a point where the respondent has had an adequate opportunity to present her case. See Aetna Financial Services Ltd. v. Feigelman, (SCC), [1985] 1 S.C.R. 2, 10 (“in our jurisprudence, execution cannot be obtained prior to judgement and judgmentcannot be recovered prior to trial”).

Conflict arises when the point the applicant needs relief precedes the point in the litigation wherethe respondent has had an adequate opportunity to probe the weaknesses of the applicant’s position and marshall the facts and thelaw which demonstrate the merits of the respondent’s case. [79] It is within this context that courts have had to define the criteria the application of which determines whether relief will begranted.

Shifting standards mark the degree to which the competing principles have exerted different degrees of influence on thecourts. [80] Ultimately, the court must ask if justice requires pretrial relief, recognizing that in the ordinary course a remedy of this natureshould be the product of a voyage through the entire litigation spectrum. Potash Corp. of Saskatchewan Inc. v. Mosiac Potash Esterhazy Limited Partnership, 2011 SKCA 120 , 341 D.L.R. 4th 407, 415 (Sask. C.A. 2011). A court which does not losesight of this fundamental objective is less likely to utilize unjustly this extraordinary remedy.

As always, the purpose of the inquirymust not be forgotten. Specific queries are formulated to give adjudicators guidance in implementing the overarching purpose. [81] A superior court hearing an interlocutory injunction must ask three questions. Harper v. Canada, 2000 SCC 57 ,[2000] 2 S.C.R. 764, 768; Quebec v. 143471 Canada Inc., (SCC), [1994] 2 S.C.R. 339, 376; RJR - MacDonald Inc. v.Canada, (SCC), [1994] 1 S.C.R. 311, 334 & Manitoba v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R. 100, 128.Justices Sopinka and Cory, the authors of the Court’s opinion in RJR MacDonald Inc. v.

Canada, [1994] 1 S.C.R. 311, 334, providethis succinct statement of the three queries in the context of a constitutional case:

First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly,it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessmentmust be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision onthe merits. [82] Justice Beetz’s judgment in Manitoba v.

Metropolitan Stores (MTS) Ltd., (SCC), [1987] 1 S.C.R. 110, 127-28provides a useful framework for a consideration of the first question: The first test is a preliminary and tentative assessment of the merits of the case, but there is more than one way to describe this firsttest. The traditional way consists in asking whether the litigant who seeks the interlocutory injunction can make out a prima faciecase. The House of Lords has somewhat relaxed this first test in American Cyanamid Co. v.

Ethicon Ltd. ... where it held that all thatwas necessary to meet this test was to satisfy the Court that there is a serious question to be tried as opposed to a frivolous or vexatiousclaim. ... ... In the case at bar, it is neither necessary nor advisable to choose, for all purposes, between the traditional formulation and theAmerican Cyanamid description of the first test: the British case law illustrates that the formulation of a rigid test for all types ofcases, without considering their nature, is not to be favoured ... .

In my view, however, the American Cyanamid “serious question”formulation is sufficient in a constitutional case ... . But I refrain from expressing any view with respect to the sufficiency oradequacy of this formulation in any other type of case. [83] Justices Sopinka and Cory, in the RJR - MacDonald Inc. case, addressed the issue Justice Beetz declined to pursue. Theiropinion recognized that in some nonconstitutional cases the serious question to be tried standard may be inappropriate.

There aresituations where justice can properly demand the applicant have a strong case before bestowing a pretrial burden on the respondent.This may be so if the determination of the interlocutory injunction is dispositive, in practical terms, of the proceedings. (SCC), [1994] 1 S.C.R. 311, 338. Labour picketing cases fall in this category [1994] 1 S.C.R. 311, 338. Rarely will an employer ora trade union have any reason to press ahead with a divisive proceeding after the controversy which caused the picketing has beenresolved.

International Union United Automobile Aerospace and Agricultural Implement Workers of America v. Pacific WesternAirlines Ltd., 1986 ABCA 38 , 43 Alta L.R. 2d 289, 295 (C.A. 1986) (“The court must be aware that in virtually all cases theinjunction issued in respect of picketing is effectively a final injunction. Rarely do the issues on such ‘interim’ applications ever comebefore the court again since they do not survive the settlement of the labour dispute”). & Potash Corp. of Saskatchewan v. Todd, (SK CA), [1987] 2 W.W.R. 481, 537 (Sask.

C.A.) (the appeal court recognized the “critical and final weight which acourt injunction with respect to picketing can have on the degree of success or failure of a strike”). It would be unfair to grant what isessentially a final order for the benefit of the applicant unless a trial court will probably decide in the applicant’s favour. A moredemanding merit based standard may also be preferable if the dispute turns on a “simple question of law alone”. [1994] 1 S.C.R. 311,339.

There is no valid reason a court should decline to decide an uncomplicated legal issue when it has before it all the informationthe ultimate adjudicator would need to make an informed decision. [84] The Court of Appeal of Alberta has consistently held that an applicant seeking the enforcement of a noncompetition promiseagainst a former employee at a pretrial stage must have a strong case - it is likely to succeed at trial. This standard is far moredemanding than the serious issue to be tried test - the applicant might prevail at trial. Dreco Energy Services Ltd. v.

Wenzel, 2008ABCA 290 , [2008] 10 W.W.R. 445, 454 (Alta. C.A.) (“In the employment context, this Court has definitively said that amotion for an interlocutory injunction representing restrictive covenants warrants the more stringent threshold on the first part of thetripartite test”); Globex Foreign Exchange v. Kelcher, 2005 ABCA 419 , 376 A.R. 133, 137 (C.A. 2005)(“a more stringentexamination on the merits is called for ... because the issue involves a restrictive covenant that may restrict the defendant employee’semployment in a particular field”) & Enerflex Systems Ltd. v.

Lynn, 2005 ABCA 62 , 363 A.R. 136, 138 (C.A. 2005) (inapproving a more demanding standard, the appeal court recognized the benefit an employee who derive from working in a field hewould enjoy). This makes sense. A court should not prohibit a person from doing remunerative work for which he or she has someaptitude unless principle compels it to do so.

The law should be sensitive to the interest of a person whose ability to earn a livelihoodmay be thwarted by an interlocutory injunction. [85] The second test asks if the applicant has established that it will suffer irreparable harm if pretrial injunctive relieve is declined.RJR-MacDonald Inc. v. Canada, (SCC), [1994] 1 S.C.R. 311, 348 (“the applicant must convince the court that itwill suffer irreparable harm if the relief is not granted”). Justices Sopinka and Cory, in their RJR-MacDonald Inc. opinion, suppliedthis gloss: “‘Irreparable’ refers to the nature of the harm suffered rather than its magnitude.

It is harm which cannot be quantified inmonetary terms or which cannot be cured, usually because one party cannot collect damages from the other”. [1994] 1 S.C.R. 311,341. Lord Diplock, in American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396, 408, asked if “damages would not provide anadequate remedy for the plaintiff in the event of his succeeding at trial”. See also Dreco Energy Services Ltd. v. Wenzel, [2004] 8W.W.R. 54, 58 (Alta. C.A.) (“Harm difficult to compute in money is traditionally recognized as a form of irreparable harm”) &

Whitecourt Roman Catholic Separate School District No. 94 v. Alberta, 1995 ABCA 260 , 169 A.R. 195, 201 (C.A. 1995)(“the harm must be serious” to constitute irreparable harm). E.g., Dreco Energy Services Ltd. v. Wenzel, 2004 ABCA 95 ,[2004] 6 W.W.R. 54, 58 (Alta. C.A.) (damage to customer relationships, reputation and goodwill may qualify as irreparable harm);Whitecourt Roman Catholic Separate School District No. 94 v. Alberta, 169 A.R. 195, 201 (C.A. 1995) (“harm that threatens theessence of self government is serious” and qualifies as irreparable harm); Sky Petroleum Ltd. v. V.I.P.

Petroleum Ltd., [1974] 1W.L.R. 576, 978 (Ch.) (“unless the court interferes at this stage the plaintiff will be forced out of business”). Justice Sharpe, writingextrajudicially, has opined that “irreparable harm has not been given a definition of universal application: its meaning takes shape inthe context of each particular case”.

Injunctions and Specific Performance ¶ 2.450 (looseleaf ed. release no. 21 November 2012). [86] The final test requires the court to identify the harm the applicant will suffer if an interlocutory injunction is not granted andthe detriment which will be the lot of the respondent if it is granted. The court then compares the prejudice and determines if theapplicant will be most disadvantaged. Manitoba v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R. 100, 129.

Harm is contextspecific, but may include loss of revenue, additional expenses, diminished return on investment, damage to credit rating,nonproductive period for the workforce, loss of trained and valued members of the workforce, tarnishes reputation, inability to recruitnew employees, loss of control over decision making and opportunity loss. [87] The Supreme Court of Canada has exhorted the initial decision maker to rely on “common sense and an extremely limitedreview of the case on the merits” when making its “preliminary assessment of the merits”. RJR-MacDonald Inc. v. Canada, (SCC), [1994] 1 S.C.R. 311, 338.

It has gone so far as to declare that a “prolonged examination on the merits is generallyneither necessary nor desirable”. RJR-MacDonald Inc. v. Canada, [1994] 1S.C.R. 311, 338. See also Dreco Energy Services Ltd. v.Wenzel, 2004 ABCA 95 , [2004] 6 W.W.R. 54, 57 (Alta. C.A.). [88] At least three reasons counsel a reduced level of judicial scrutiny. First, the trial court has the ultimate burden to adjudge themerits of the case. Harper v. Canada, [2002] 2 S.C.R. 764, 768 & 772.

Judicial restraint on the part of the chambers court ensuresthat the trial court will approach the judging task with an open mind unfettered in any way by the prior intervention of the chambersjudge. Second, a limited review on the merits reduces the risk that the judgments of the chambers and trial courts will be seen to beinconsistent. An informed observer will appreciate that any differences of opinion may be attributable to the different levels ofscrutiny brought to the task. Third, the material available to a chambers court will be less complete, generally speaking, than ispresented to the trial judge.

Disclosure has likely been minimal and neither side has had the opportunity to pursue all helpful lines ofinquiry. A detailed review is simply not warranted. [89] But this cautionary message must not be interpreted as a direction not to carefully digest the factual and legal materialpresented in support of and in opposition to the application, which may be voluminous. E.g. American Cyanamid Co. v. Ethicon Ltd.[1975] A.C. 396, 398 (H.L.) (the motions court heard argument over three days) & Dreco Energy Services Ltd. v. Wenzel, 2004 ABCA95 , [2004] 6 W.W.R. 54, 57 (Alta.

C.A.) (the hearing lasted three days and the parties presented a “shelf of materials”). Acourt must have an excellent grasp of the key facts and the governing legal principles to properly make its preliminary assessment ofthe merits, regardless of the degree of scrutiny it brings to the task.

B.The Principles of the Other Areas of Substantive Law Engaged by This Application. 1.The Common Law Promotes Free Enterprise [90] The common law opposes promises not to participate in commercial activity on the ground that such a promise deprives thecommunity of the productivity of one of its members and lessens the prosperity of the community as a whole. Free and opencompetition is a valued feature of our social structure. The law favours doctrines which promote commercial activity and freeenterprise. Shafron v.

KRG Insurance Brokers (Western) Inc., 2009 SCC 6 , [2009] 1 S.C.R. 157, 166 (“At common law,restraints of trade are contrary to public policy because they interfere with the individual liberty of action and because the exercise oftrade should be encouraged and should be free”); Doerner v. Bliss & Laughlin Industries Inc., (SCC), [1980] 2S.C.R. 865, 872 (“the public has an interest in the continued provision of goods and services resulting from the employment of skillsacquired by employees in the course of their employment and, as well, an interest in the continuation of the trade or business”);Elsley v. J.G.

Collins Insurance Agency Ltd., (SCC), [1978] 2 S.C.R. 916, 923 (“There is an important public interestin discouraging restraints of trade and maintaining free and open competition unencumbered by the fetters of restrictivecovernants”); Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co., [1894] A.C. 535, 565 (H.L.) (“The public have an interestin every person’s carrying on his trade freely: so has the individual); Herbert Morris Ltd. v.

Saxelby, [1916] 1 A.C. 688, 714 (H.L.)(The public interest is not served if the state is “deprived of the work and service of a useful member of society”); Leather Cloth Co. v.Lorsont, L.R. 9 Eq. 345, 354 (Ch. 1869) (“Public policy requires that every man shall be free to work for himself and shall not be atliberty to deprive himself or the state of his labour”) & H.L. Staebler Co. v. Allan, 2008 ONCA 576 , 92 O.R. 3d 107, 114(C.A. 2008) (“Open competition benefits both society and the affected employees.

Society benefits from having greater choice andemployees benefit as they have greater employment opportunities”). See also Howard Smith Paper Mills Ltd. v. The Queen, (SCC), [1957] S.C.R. 403, 411 (“The statute proceeds upon the footing that the preventing of lessening of competition is in

itself an injury to the public”). 2.Noncompetition Agreements with Employees Are Enforceable in Limited Circumstances [91] The common law’s commitment to free enterprise values provides the doctrinal basis for the following propositions: 1.A noncompetition agreement[2] is contrary to the public interest and is invalid and unenforceable unless (a)a nonsolicitation provision would not adequately protect the interests of the promisee[3]; and (b)the noncompetition restraints are under all the circumstances reasonable[4] (I)from the perspective of the promisor and the promisee taking into account the time period the restraints are in force,the geographic limits within which the restraints apply and the activities prohibited by the restraint[5] and are no broader than arenecessary to protect the promissee’s legitimate commercial interests[6]; and (ii)the public interest[7]. [92] A noncompetition agreement which contains an ambiguous or unascertainable term cannot be assessed.

A term is ambiguousif it supports two or more reasonable

interpretations. Senos v. Pacesetter Performance Drilling Co., 2010 ABQB 533 , 497A.R. 1, 11 (Q.B. 2010). Something is unascertainable if it has “no legally defined meaning”. Shafron v. KRG Insurance Brokers(Western) Inc., 2009 SCC 6 , [2009] 1 S.C.R. 157, 161 (“the term ‘Metropolitan City of Vancouver’ ... has no legally definedmeaning and is therefore ambiguous”). [93] Logic compels the conclusion that a noncompetition promise encapsulated in ambiguous or unascertainable terms cannotpossibly be shown to be reasonable.

The defender of a meaningless promise faces the same conundrum as an archer who releasesarrows in a range without a target. Just as the absence of a target means that an archer’s skill can never be evaluated, neither can thelawfulness of a noncompetition promise devoid of meaning be adjudged. Shafron v. KRG Insurance Brokers (Western) Inc., 2009SCC 6 , [2009] 1 S.C.R. 157, 175 (“if the covenant is ambiguous, in the sense of what is prohibited is not clear as to theactivity, time or geography, it is not possible to demonstrate that it is reasonable”) & Evans v.

Sports Corporation, 2013 ABCA 14, [2013] 3 W.W.R. 667, 679 (Alta. C.A.). [94] If the promisee, the person who derives a benefit from the enforcement of a promise, cannot demonstrate that the promise isreasonable from the perspective of the promisor and promisee, the promise cannot be enforced. Globex Foreign Exchange v. Kelcher, 2011 ABCA 240 , 337 D.L.R. 4th 207, 221 (Alta.

C.A. 2011) _ 20 (“If the meaning of a restrictive covenant cannot beascertained, I do not think a court should enforce it”). 3.A Person Who Was a Fiduciary Employee May Compete with a Former Employer After His Employment Ended. [95] A fiduciary employee is an employee who played a key role in his employer’s business and would be in a position, either aloneor as part of an enterprise other than the employer’s business, to unfairly compete with the former employer by exploiting the benefitsderived from his or her key role with the former employer until a reasonable period of time has elapsed after the end of hisemployment.

In most cases, a key employee has the capacity to make important management decisions. [96] Professor Rotman, in Fiduciary Law 244 (2005), states that the “fiduciary concept imposes law’s highest ethical standards ona potentially infinite number of actor’s involved in a variety of circumstances”. It is necessary to bear this basic principle in mindwhen deciding whether an employee is a fiduciary. [97] A person who was a fiduciary employee[8] may compete with a former employer after his

employment has ended if he complies with the obligations which survive the end of the employment relationship.[9] [98] A former fiduciary employee may not, after the end of the employment relationship, (a)use the former employer’s proprietary information[10] in a manner contrary to the former employer’s bestinterests;[11] (b)use the former employer’s corporate opportunity unless the former employer has unequivocally decided not topursue it; (c)solicit customers of his or her former employer until a reasonable period of time has elapsed following the end of hisemployment by the former employer;[12] (d)offer employment to employees of his former employer until a reasonable period of time has elapsed following theend of his employment by the former employer. 4.An Independent Contractor Carries on a Business Unlike an Employee Who Is Part of Another’s Business. [99] In order to characterise a worker whose status as an independent contractor or an employee is contested, an adjudicator mustanswer this fundamental question: Is the worker carrying on a business of her own or is she a part of another’s business?

If she iscarrying on a business of her own, she is an independent contractor. If she is part of another’s business, she is an employee of thebusiness of which she is a part. Alberta Union of Provincial Employees v. Alberta, 11 C.L.R.B.R. 2d 1, 11-13 (Wakeling 1991) &671122 Ontario Ltd. v. Sagaz Industries Ltd. 2001 SCC 59 , [2001] 2 S.C.R. 983, 1005. [100] To answer this question one must compile a list of benchmarks of a business.

Some or all of the following criteria are useful toconsider: interest in the premises where the work is done; interest in the tools used to do the work, independent selection of workersand tools; independent management; capital and time at risk; and ownership of goodwill. Alberta Union of Provincial Employees v.Alberta, 11 C.L.R.B.R. 2d 1, 12 (Wakeling 1991) & 671122 Ontario Ltd. v. Sagaz Industries Ltd. 2001 SCC 59 , [2001] 2S.C.R. 983, 1004. [101] An adjudicator must remember that the “terminology the parties [use] ... to describe their relationship is not binding”. AlbertaUnion of Provincial Employees v.

Alberta, 11 C.L.R.B.R. 2d 1, 13 (Wakeling 1991). It is a factor, but nothing more: Where the other aspects of the relationship are not conclusive such a statement of the parties’ intention may be significant. This ... isbecause it is a fact which demonstrates how the parties, at the time the agreement was signed, intended to divide project decisionmaking responsibility. ... Its impact will be diminished if the parties by their subsequent conduct effectively modify this aspect of theirinitial agreement. Alberta Union of Provincial Employees v.

Alberta, 11 C.L.R.B.R. 2d 1, 13-14 (Wakeling 1991). 5.Promises Contained in an Agreement a Person Signs Without Reading Are Generally Enforceable. [102] A person who signs an agreement without reading it must discharge the promises he makes in the agreement, even if he neverintended to make them, in the absence of exceptional circumstances. Marvco Color Research Ltd. v. Harris, (SCC),[1982] 2 S.C.R. 774, 785; Prudential Trust Co. v. Cugnet, (SCC), [1956] S.C.R. 914, 932 & Saunders v.

AngliaBuilding Society, [1971] A.C. 1004, 1016 (H.L. 1970) (it is not enough to assert that a person was too busy or relied on someonetrustworthy). [103] Justice Musmanno of the Pennsylvania Supreme Court, in General Refrigerator and Store Fixtures Co. v. Fry, 141 A. 2d 836,

838 (1958), provided a cogent rationale for this proposition: The whole business structure of America would become a shambles if signers in serious transactions were to be allowed to repudiatetheir obligations on the basis that they did not know what they were signing. The ever-constant possibility of such a disavowal wouldturn into water the adhesive mortar of legal reasonability holding together bricks of every contractual wall; such an acceptedpossibility would wreck every business dealing at the slightest touch of the repudiator.

C.BrettYoung Seeds Is Not Entitled to Interlocutory Injunction Relief [104] The defendants must discharge the obligations imposed on them by the 2011 agreements. A person cannot escape the liabilityby establishing that he was too busy to read the document he signed or trusted the drafter and did not think it necessary to read whathe signed. [105] In any event, it is more likely than not that Ken Dyck read the 2011 agreement before he signed it. He had every opportunity todo so.

The email trail leading up to the exchange of signed signature pages indicates the Ken Dyck received a draft on July 29, 2011,which is several days before he signed the 2011agreement on August 3, 2011. [106] But the defendants are fortunate. They have not contravened any provision in the 2011 agreements.

This is one of the reasonswhy the plaintiff does not have a strong enough case to clear the first hurdle set in the path of an applicant seeking pretrial injunctiverelief. [107] I now provide my “preliminary assessment on the merits”, a degree of scrutiny favoured by the Supreme Court if Canada inRJR - MacDonald Inc. v. Canada, (SCC), [1994] 1 S.C.R. 311, 338. This part of the decision is not detailed, bearingin mind the Supreme Court’s admonition that a “prolonged examination on the merits is generally neither necessary nor desirable”.RJR - MacDonald Inc. v.

Canada, [1994] 1 S.C.R. 311, 338. [108] The likelihood a trial court, presented with the same evidence as was before this Court, would grant injunctive relief to theplaintiff is very low. In my opinion, the trial court is twice as likely to deny injunctive relief as it is to grant it. [109] My reasons follow. [110] First, the defendants have not promised to refrain from competing with the plaintiff or soliciting its customers in this factpattern.

The noncompetition and nonsolicitation provisions in the product specialist agreements do not apply unless the defendantsgave notice of an intention to terminate the agreement before August 31, 2012, the end date of the agreement. This did not happen.The 2011 agreements, objectively assessed, contemplate that they may come to an end in two different circumstances. One way is bythe passage of time: “This contract is to be effective starting September 1, 2011. The contract renews annually upon the mutualagreement of the parties”. Unless the parties agree to renew the 2011 agreements it expires on August 31, 2012.

The second scenariofeatures a decision by one of the parties to terminate the agreement. [111] There is a specific part of the 2011 agreements devoted to this topic. It is entitled “Termination” and contains these terms: Either party with 6 months notice may terminate this contract. ... ... ... If the Specialist decided to terminate this arrangement and directly compete in this market with the Company, the Company wouldbe vulnerable to significant loss by virtue of entering into this agreement.

Therefore, the Specialist agrees that for a period of 18months following any termination of this agreement he will not compete with the Company by selling similar products within theexisting territory, he will not solicit Company customers, directly or indirectly, whether on behalf of himself or other parties and hewill not hire or attempt to hire any Company employees.

[112] This provision clearly conveys three messages. [113] First, either party may terminate this agreement before August 31, 2012. To do this, it must give six months notice. Second, ifthe Dycks decided “to terminate this arrangement and directly compete in this market”, they must wait eighteen months following thetermination date to do so. Third, if BrettYoung Seeds decided to terminate this agreement, the Dycks could start a competitivebusiness as soon as the termination date expired.

This third proposition is sound even though the sentence under the heading“Termination” starting with “therefore” contains the words “any termination”. In this context, “any” means “one, no matter whatone”. Webster’s Third New International Dictionary of the English Language Unabridged (1971).

The use of “therefore”, whichmeans “for that reason: because of that: on that ground” (Webster’s Third New International Dictionary of the English LanguageUnabridged (1971), links the sentence it commences and the preceding one. “Any termination of this agreement” means atermination initiated by one of the Dycks. [114] There is no ambiguity or unascertainability problem here of the kind discussed in Senos v. Pacesetter Performance DrillingCo., 2010 ABQB 533 , 497 A.R. 1, 11 (Q.B. 2010) or Shafron v.

KRG Insurance Brokers (Western) Inc., 2009 SCC 6, [2009] 1 S.C.R. 157, 161. [115] Why BrettYoung Seeds would draft an agreement so as to impose a promise on the Dycks not to compete only if the Dycksdecided to terminate the agreement before August 31, 2012 is not obvious. A sound business reason for this choice may not exist. Itmay be nothing more than the product of oversight or failure to devote sufficient attention to the drafting process. The 2011agreements may not have been prepared by a lawyer. They certainly do not look like any agreements prepared by lawyers which Ihave seen before.

But whatever the explanation is, it is not the court’s role to ignore unambiguous contract provisions because theyfail to implement sensible business practices and to make the modifications necessary to eliminate this perceived shortcoming. [116] Justice Scalia and Professor Garner cover similar ground in their text, Reading Law: The

Interpretation of Legal Text 57-58(2012): [P]urpose ... cannot be used to contradict text or supplement it. Purpose sheds light only on deciding which of various textualpermissible meanings should be adopted. No text pursues its purpose at all costs. Drafters make exceptions, or leave some mattersuncovered ... . These exceptions or limitations must be respected, and the only way to accord them their due is to reject thereplacement or supplementation of text with purpose. [117] This is the case even though courts are predisposed to give effect to sound business considerations.

But the text must supportmore than one possible meaning. Eli Lilly & Co. v. Novapharm Ltd., (SCC), [1998] 2 S.C.R. 129, 166 (“When thereis no ambiguity in the wording of a document, the notion ... that the

interpretation which produces ... a ‘sensible commercial result’should be adopted is not determinative”) & Co. Operative Wholesale Society Ltd. v.

National Westminister Bank plc, [1995] 1E.G.L.R. 97 (C.A. 1994) )(“one can [not] rewrite the language which the parties have used in order to make the contract conform tobusiness common sense”). [118] A determination that the noncompetition and nonsolicitation provisions do not have effect unless the defendants terminatedthe 2011 agreements does not make them ineffective, There is obviously value to BrettYoung Seeds in denying the Dycks right tocompete if they terminate the agreement before August 31, 2012. [119] The British Columbia Supreme Court, in Jostens Canada Ltd. v. Gibson Studios Ltd., [1996] B.C.J.

No. 281, came to a similarconclusion on the effect of a noncompetition provision placed in a termination provision. At issue was whether a noncompetitionpromise was in effect if the three-year agreement expired on account of the passage of time.

The following passage captures theessence of the trial judge’s reasons: Josten said it would be an absurd result if the language employed were not interpreted to include the expiration of all the contractsthrough lapse of time because it is obvious the parties intended that Josten’s business would be protected after the contracts came toan end whether that occurred prematurely or when the three year term had elapsed. ...

I do not consider there is any ambiguity with respect to the wording employed in clause 11 of the sales representatives’ contracts andit is trite law that in the absence of such it must be given its plain and ordinary meaning. I do not see how the words “after thiscontract is breached or terminated be either party” could be read to mean the non-competition provisions would apply if the contractexpired or came to an end with the lapse of time. To suggest otherwise is to strain the words the parties employed. [1996] B.C.J. No. 281, __ 38 & 40. Although the plaintiff appealed with some success, the Court of Appeal did not address thecontract

interpretation issue. (BC CA), [1998] 5 W.W.R. 403, 408 (1997). [120] Second, even if the plaintiff could rely on the noncompetition and nonsolicitation terms in the 2011 agreements, they would beunenforceable. [121] Ken Dyck and his son are much more likely to be employees of the plaintiff than independent contractors. Their job is to sellproducts the plaintiff distributes. They are part of an organization the plaintiff has put in place to get their goods to the market. Thedefendants are not in business on their own.

They are part of the plaintiff’s business. [122] I approach this issue on the assumption that the Dycks are employees of the plaintiff. [123] Most employers are unable to enforce a noncompetition agreement which is not inextricably tied to a sale of businessagreement in the absence of extraordinary circumstances. There is nothing extraordinary about the defendants. They are not the“face” of the plaintiff’s business. Customers have contact with BrettYoung Seeds in a number of ways. They can contact the salesdesk or a sales coordinator. BrettYoung Seeds sends them invoices and promotional material.

And the customers shop around beforebuying. And there is nothing extraordinary about the business of the plaintiff. It sells products. It does not provide a service whichrequires special skills on the part of the service provider, as was the case in Evans v. Sports Corps., 2013 ABCA 14 , [2013] 3W.W.R. 667 (Alta C.A.), and Dreco Energy Services Ltd. v. Wenzel, 2004 ABCA 95 , [2004] 6 W.W.R. 54, 56 (Alta. C.A.).The defendant in the former case was a lawyer adept at protecting the financial interests of European hockey players.

The defendantin the latter case was an inventor of downhole tools with few, if any peers in the world, around whom the company built a segment ofits business. See generally Elsley v. J.G. Collins Insurance Agencies Ltd., (SCC), [1978] 2 S.C.R. 916, 926 (anoncompetition promise was enforced because the defendant was the person the plaintiff’s customers dealt with and the courtconcluded a “simple non-solicitation clause would not suffice”); Globex Foreign Exchange Corp. v.

Kelcher, 262 D.L.R. 3d 752, 763(Alta C.A. 2005) (“A non-competition clause will be reasonably necessary where the employee obtains such personal knowledge ofand influence over the employer’s customers as would enable him, if competition were allowed, to take advantage of the employer’s trade connection to undermine the business of the employer”) & Friesen v. McKague, (MB CA), 96 D.L.R. 4th 341,346 (Man.

C.A. 1992) (will the nature of the employment “likely cause customers to perceive an individual as the personification ofthe company”). [124] A nonsolicitation agreement in force for seven months would adequately protect the legitimate business interests of theplaintiff. This is the period of time within which the Dycks established a good working relationship with the customers Ms. Hullserved before she was promoted on August 15, 2011. [125] To be enforceable a nonsolicitation provision must have the least impact on trade restraint consistent with the interests of the employer. Globex Foreign Exchange Corp. v.

Kelcher, 2011 ABCA 240 , 337 D.L.R. 4th 207, 221-22 (Alta C.A. 2011) (anonsolicitation provision is unenforceable if it covers more than the legitimate business interests of the employer) & Mason v.Provident Clothing and Supply Co., [1913] A.C. 724, 733 (H.L.) (“respondents have to show that the restrictions they sought toimpose goes no further than was). [126] As there is no sophisticated severance clause in the 2011 agreements, severance is not available here. Shafron v.

KRGInsurance Brokers (Western) Inc., 2009 SCC 6 , [2009] 1 S.C.R. 157, 173 (“the general rule must be that a restrictivecovenant in an employment contract found to be ... unreasonable in its terms will be void and unenforceable”) & Dreco EnergyServices Ltd. v. Wenzel, 2004 ABCA 95 , [2004] 6 W.W.R. 54, 57 (Alta. C.A.) [127] Third, if one concluded that a nonsolicitation promise would not be satisfactory device to protect the interests of the promiseeplaintiff and that noncompetition was necessary, the eighteen month period is far too long. A period in excess of seven months wouldbe hard to justify.

The seven month measure expired effective March 31, 2013. The likelihood a court would adjust the end date totake account of the fact that the defendants may have been wrongfully competing during the noncompetition period is not great.Dreco Energy Services Ltd. v. Wenzel Downhole Tools Ltd., 2008 ABCA 290 , [2008] 10 W.W.R. 445, 455 (Alta. C.A.) &Ensign Drilling Inc. v. Lundle, 2007 ABQB 357 , [2007] 9 W.W.R. 149, 175 (Alta. Q.B.).

[128] Fourth, the defendants are not fiduciaries. They were sales representatives who were part of an integrated sales force. Whilethey played an important role, so did others in the plaintiff’s organization. Customers could place orders through Ms. Hull, the salescoordinator, or other avenues. The evidence made it clear that customers shopped around and that there were many factors whichinfluenced the customer’s final decision. The defendants were not managers. They were not the “face” of BrettYoung Seeds inAlberta. Evans v. Sports Corps., 2013 ABCA 14 , [2013] 3 W.W.R. 667, 680-81 (Alta C.A.).

Others in BrettYoung Seedsdescribed which potential customers were credit worthy and approved sales at prices below a certain point. The Dycks did not haveaccess to the plaintiff’s proprietary information, with one exception. And they did not need it to do their jobs. The Dycks did not playa key role in the plaintiff’s business. They had the authority to sell products within a stipulated price range and nothing more.Anderson, Smyth & Kelly Customs Brokers v.

World Wide Customs Brokers, 1996 ABCA 169 , 184 A.R. 81, 86 (C.A. 1996). [129] Fifth, if the defendants were fiduciaries, they were free to compete with the plaintiff provided they discharged obligationswhich survived the end of the employment relationship. One obligation is not to use the plaintiff’s proprietary information to thedetriment of the former employer. The plaintiff, with good reason, was fearful that the defendants had misappropriated theconfidential information the plaintiff forwarded to Ken Dyck in 2011.

While I am not without doubt on this issue, I am reluctant todismiss the sworn evidence of Ken Dyck and Shaun Dyck that the defendants made no use of this information after August 31, 2013.I accept that the plaintiff may be able through the discovery phase of the litigation to collect evidence which is inconsistent with theDycks’ exculpatory claims. But no such evidence is available now. [130] A fiduciary employee may not solicit customers of his former employer until a reasonable period of time has passed since theend of the employment relationship.

I am satisfied it would have taken BrettYoung Seeds no more than seven months to contactexisting customers with whom the Dycks did business on their behalf, introduce them to the new sales representatives the plaintiffselected and establish new viable relationships. When the plaintiff promoted Ms. Hull to her sales coordinator position and reassignedher customers to the Dycks, BrettYoung Seeds appears to be satisfied that the transition was successfully completed within this timeframe.

The plaintiff’s brief makes this point at paragraph 12(d). [131] The seven month period expired on March 31, 2013. [132] As the applicant has not passed the first test, there is no need to consider the second and third tests. RJR-MacDonald Inc. v.Canada, (SCC), [1994] 1 S.C.R. 311, 337 & 348 & 101109718 Saskatchewan Ltd. v. Agrikalium Potash Corp., 2011SKCA 82 , [2011] 9 W.W.R. 757, 770 (Sask.

C.A.). [133] In the event that I have erred in resolving the first issue, I will address the last two questions. [134] The plaintiff’s decision not to seek interlocutory relief until three months passed after it commenced the action undermines itsclaim that it will suffer irreparable harm if interlocutory injunctive relief is not granted. R. Sharpe, Injunctions and SpecificPerformance ¶ 1.990 (looseleaf ed. release no. 21 November 2012) (“The very fact of delay by the plaintiff ... may often serve asevidence that the risk is not significant enough to warrant interlocutory relief”).

While the plaintiff commenced its action relativelyquickly - it filed its statement of claim on October 11, 2012, roughly six weeks after the defendants no longer worked for the plaintiff,the plaintiff waited three months to file an application for interlocutory relief. The necessary foundation for the interlocutory relief application is clearly visible in the statement of claim. [135] My review of the material filed in support of the interlocutory injunction application does not disclose any reason which wouldaccount for the three month hiatus. Mr.

Steiman’s affidavit reveals that he examined the email records of the defendants onSeptember 5, 2012. The plaintiff obviously suspected that Ken Dyck and his son may have acted improperly almost as soon as theyceased working for BrettYoung Seeds. [136] A plaintiff who fails to expeditiously seek the assistance of the court can hardly complain if the court interprets the delay as asign the applicant itself does not believe pretrial relief is necessary to protect its vital interests. North West Co. v. Delcon Property Co.,2008 ABQB 342 , 456 A.R. 20, 38 (Q.B. 2008).

A litigant who files a statement of claim and an application for interlocutoryrelief simultaneously sends an unmistakable message to the court that its interests merit immediate protection. E.g., Dreco EnergyServices Ltd. v. Wenzel, 2004 ABCA 95 , [2004] 6 W.W.R. 54, 56 (Alta. C.A.) (“The plaintiffs sued the defendants ... in earlyJuly 2002. The next day they filed a notice of motion for an interlocutory injunction”). [137] The last leg of the tripartite test compels the court to identify the adverse effects which will befall the applicant if pretrial relief

is not granted and the respondent if pretrial relief is granted. For the applicant to clear this hurdle, it must satisfy the court that its interests will suffer more harm than the respondent. The plaintiff will undoubtedly lose some business. So will the defendants. Green Patch estimated that its revenue attributed to the sale of products the Dycks used to sell for the plaintiff at fifteen percent of its total revenue. Mr.

Munro, the general manager of the plaintiff’s Calmar facility, asserts that BrettYoung Seeds “has conducted a sales analysis for its PTR division for 2013 and has estimated a loss of sales of approximately $2 million directly related to the termination of the [2011 agreements]”. Munro’s affidavit, _ 25. The plaintiff has not satisfied me that the prejudice it will suffer exceeds the detriment which will befall the respondents. The plaintiff does not clear the final hurdle either.

D.BrettYoung Seeds Is Entitled to the Return of Its Confidential Information in the Possession of the Defendants [ 138 ] The plaintiff seeks an order requiring the defendants to deliver to the plaintiff the material containing the confidential information Mr. Munro sent to Ken Dyck on October 14, 2011. The defendants acknowledged possession of this material. But they claim that they no longer have it in their possession, as they had instructed an expert to remove it from Green Patch’s information systems.

If the plaintiff is not satisfied that the defendants no longer have access to this material, they may apply for other relief within twenty business days of the date of this decision. VII.Conclusion [ 139 ] The plaintiff application for an interim and interlocutory injunction is dismissed. [ 140 ] If the plaintiff is not satisfied that the three defendants have effectively destroyed the customer list Mr.

Munro provided to Ken Dyck on October 14, 2011, it may apply for additional relief within twenty business days of this decision. [ 141 ] The defendants are entitled to their costs. [ 142 ] I commend counsel for the high quality of their briefs and oral presentations. Heard on April 3 rd , 2013. Dated at Edmonton, Alberta on M

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