Questor Technology Inc. Plaintiff/Applicant - v. -, 2021 ABQB 644

Court of Queen’s Bench of Alberta Citation: Questor Technology Inc v Stagg, 2021 ABQB 644 Date: 20210813 Docket: 1801 11473 Registry: Calgary Between: Questor Technology Inc. Plaintiff/Applicant - and - Richard Stagg, also known as Ritchie Stagg Jeffrey Nelson, also known as Jeff Nelson Justin Bouchard and Emission Rx Ltd. Defendants/Respondents _______________________________________________________ Endorsement of the Honourable Mr. Justice D.B. Nixon _______________________________________________________ I. Introduction

[ 1 ] Questor Technology Inc (" Questor ") is applying for an order under

section 6.25 of the Alberta Rules of Court (the " 2021 Preservation Application ") [1] . The 2021 Preservation Application is against Emission Rx Ltd (" Emission Rx "). [ 2 ] The underlying litigation concerns an intellectual property dispute (the “ Action ”). The four defendants in the underlying litigation are Ritchie Stagg (“ Mr. Stagg ”), Jeff Nelson (“ Mr. Nelson ”), Justin Bouchard (“ Mr.

Bouchard ” and, collectively, the “ Individual Defendants ”) and Emission Rx (collectively, the “ Defendants ”). [ 3 ] The remedy sought by Questor is pre-judgment relief in the form of an order requiring Emission Rx to pay all or a portion of its profits into trust until after trial. The 2021 Preservation Application is actually framed as being a protective order in respect of profits earned and accumulated, although the underlying submissions referred to both profits and revenue. II.

Issue [ 4 ] As framed by Questor, the issue is whether an order should be granted for the protection of Emission Rx profits earned pending trial? III. Background A. Context [ 5 ] Questor is in the waste gas combustion business. It is a publicly-traded company with $23.5 million in profits in 2018: Questor Technology Inc v Stagg , 2020 ABQB 3 at para 115 [ Questor 2020 ]. [ 6 ] Each of Mr. Stagg, Mr. Nelson and Mr. Bouchard are former employees of Questor. While reading about various technologies used elsewhere within the combustion industry in or about June or July 2017, Mr.

Nelson came across an expired United States patent for an interesting combustion air delivery design (the “ Expired Patent ”). [ 7 ] Emission Rx was incorporated on November 14, 2017. The Individual Defendants left the employment of Questor in or about the April-June, 2018 timeframe. They all subsequently commenced employment with Emission Rx. [ 8 ] Emission Rx alleges that it developed a combustor prototype, based in part on the Expired Patent. Emission Rx succeeded in developing a marketable product around September 1, 2018: Questor 2020 at para 70.

It sold its first combustor to a customer approximately five months later. [ 9 ] On August 14, 2018, Questor sued the Defendants. Questor alleged a variety of causes of action, and seeks various forms of relief.

The relief sought by Questor includes a determination that it is the rightful owner of any Emission Rx intellectual property developed while the Individual Defendants were employed at Questor (“ ERx Technology ”) [2] . [ 10 ] In a prior application, Questor sought an injunction against the Defendants to prevent them from participating in the waste gas combustion business (the “ 2019 Injunction Application ”).

This Court denied the 2019 Injunction Application: Questor 2020 at para 117. [ 11 ] In denying the 2019 Injunction Application, this Court remarked that Questor’s evidence of similarity between Questor and Emission Rx’s technology was “speculative”: Questor 2020 at paras 36 and 86. More generally, the Court denied the 2019 Injunction Application because: (

i) Questor failed to lead “clear and not speculative evidence” proving irreparable harm: Questor 2020 at para 112; and (ii) the Defendants likely “would not have the resources to proceed to trial” if the injunction was granted: Questor 2020 at para 116. B. Alleged Improprieties and Credibility Issues 1. Preliminary Steps and Initial Plans [ 12 ] The Individual Defendants have always maintained that they were entitled to make initial plans for Emission Rx while still employed at Questor.

The Court agreed that “[t]aking preliminary steps towards planning for new employment or the establishment of a new business (even one that may eventually compete with a former employer) does not amount to a conflict of interest”: Questor 2020 at para 50. [ 13 ] I am not making any further determination concerning these preliminary steps at this time. That is for the subsequent hearing to consider. 2. Nelson Backup Email [ 14 ] Mr. Nelson disclosed that he possessed a backup copy of his Questor email account (the “ Nelson Backup Email ”). Mr.

Nelson testified that he had retained his emails for reasons of professional liability, in case any regulatory investigation ever arose involving his work at Questor. [ 15 ] Questor did not lead any evidence or argue that the Defendants had made any use of the Nelson Backup Email. Further, Questor did not put any questions to Mr. Nelson in cross- examination concerning the Nelson Backup Email. The Nelson Backup Email

has since been returned to Questor. [ 16 ] I am not making any determination concerning the Nelson Backup Email at this time. That is for the subsequent hearing to consider, if appropriate. 3. Prototype Timeframe [ 17 ] The Individual Defendants explained the timeframe. Based on the Expired Patent, Mr. Bouchard began assembling components to construct a prototype in April 2018. He assembled the prototype in mid-to-late-May 2018, after he left Questor. In early June 2018, Mr. Nelson and Mr.

Bouchard began to consider ways to modify the prototype to make it patentable. [ 18 ] On or about June 15, 2018, AGAT Laboratories tested Mr. Bouchard’s prototype. The results were not favourable. [ 19 ] The Individual Defendants continued to modify the prototype on the shop floor over the summer of 2018. In particular, they tested many different burner elements. [ 20 ] The Individual Defendants resubmitted their combustor to AGAT Laboratories for testing. Much better results were received in August 2018.

This Court found that the ERx Technology was subsequently ready in or about September, 2018: Questor 2020 at para 70. [ 21 ] I am not making any determination concerning the prototype timeframe at this time. That is for the subsequent hearing to consider, if appropriate. 4. Dr. Moore Contact [ 22 ] Dr. Moore’s name first appeared in the records in evidence in an updated version of Mr. Stagg’s Undertaking Response #1. That updated version was served on Questor’s counsel on June 28, 2019. [ 23 ] Dr. Moore was recorded by the Defendants as a contact on a Lloydminster Heavy Oil Show spreadsheet.

Questor alleges that Dr. Moore was not at the Lloydminster Heavy Oil Show, and that the Defendants must have sourced his contract details from the Plaintiff’s records. [ 24 ] Clearly there is conflicting evidence concerning Dr. Moore. However, the evidence of neither Mr. Stagg nor Dr. Moore has been tested in cross-examination. [ 25 ] I am not making any determination concerning Dr. Moore at this time. That is for the subsequent hearing to consider, if appropriate. 5.

Credibility Issues [ 26 ] There is a general duty on counsel to put a matter directly to a witness if counsel is going to later adduce evidence to impeach the witness' credibility or present contradictory evidence.

If counsel fails to satisfy certain procedural steps (such as Browne v Dunn ) , the failure may be used to assess credibility and the contradictory evidence led by the opposing party: see R v Pasqua , 2009 ABCA 247 at para 17 ; see also Browne v Dunn , 1893 CanLII 65 (FOREP). [ 27 ] Generally, a Chambers hearing cannot determine credibility merely by reading affidavits which conflict on primary facts: Charles v Young , 2014 ABCA 200 at para 4-5 .

An exception exists where one of the two affidavits has been “destroyed on cross- examination”: Custom Metal Installations Ltd v Winspia Windows (Canada) Inc , 2019 ABQB 732 at para 39 . [ 28 ] Where credibility determinations need to be made, evidentiary questions must be left for trial. There are a number of credibility issues that are inherent in the evidence that underlies aspects of this litigation. [ 29 ] I am not making any determination concerning credibility issues. That is for the subsequent hearing to consider. IV. Analysis A.

The 2021 Preservation Application [ 30 ] Rule 6.25 allows the Court to issue an order for the “preservation or custody of property that is in dispute”. [ 31 ] As framed, the 2021 Preservation Application asks this Court to compel Emission Rx to put aside “profits earned and accumulated”. I infer that Questor is making this request in order to fund anticipated damages. That is, Questor is seeking a preservation order to protect an anticipated future damage award.

It is common ground that no damages have yet been awarded. [ 32 ] Notwithstanding the manner in which the 2021 Preservation Application is framed, the submissions advanced by Questor speak to a broader set of remedies. Those submissions seek general security for damages, a partial freezing of Emission Rx’s funds, and the right to supervise and limit the manner in which Emission Rx conducts its business. In my view, these submissions go beyond the boundaries of pleadings which underlie the 2021 Preservation Application. B. The Law and Application

1. Preservation Orders [33] A preservation order is a form of prejudgment relief. It should be granted only in rare instances: Athabasca Minerals Inc vSyncrude Canada Ltd, 2017 ABQB 47 at paras 57-62 [Athabasca]. [34] In considering the possible application of a preservation order, the Court should be guided by a judicial abhorrence forprejudgment execution: Giammarco & Co. (Western) Division Ltd v TRL Real Estate Syndicate

(05) Ltd, 2014 ABQB 424 at paras 21and 37. Further, the Court must exercise restraint when: (

i) deciding whether to grant a preservation order; and (ii) determining itsappropriate scope: Athabasca at para 62. [35] A preservation order is a form of proprietary injunction because it requires a respondent to do something: Stevens (Estate) vMorrisroe, 1999 ABQB 643 at para 24; and Gemba Fund One LLC v Tolosa Development Corp, 2016 ABCA 241 at para 20 [Gemba].A preservation order can include a directive that the respondent: (

i) pay a portion of its profit, on an ongoing basis, into trust or intoCourt; and (ii) refrain from using those underlying funds for its own purposes. [36] A preservation order should only be “granted to preserve an asset in the possession of a defendant which the plaintiff saysbelongs to it”: Gemba at para 20.

The purpose of a preservation order is to “preserve the disputed property until trial so that the propertywill be available to be returned to the plaintiff if successful at trial”: Gemba at para 20; Athabasca at para 111. [37] In exercising its discretion, a Court may grant a preservation order if it is satisfied that applicant has met the customarytripartite test for an injunction. The Tripartite Test is whether: (

i) there is a serious issue to be tried; (ii) the applicant will sufferirreparable harm in the absence of relief; and (iii) the balance of convenience favours granting relief (collectively, the “TripartiteTest”): Athabasca at paras 64, 70 and 73; see also RJR-MacDonald Inc v Canada (Attorney General), (SCC), [1994]1 SCR 311. I turn to consider the Tripartite Test in the context of this 2021 Preservation Injunction. 2.

The Tripartite Test [38] In its submissions, Questor describes the 2021 Preservation Application as a “security order” or “security application” onnumerous occasions.[3] As I construe its argument, Questor does not seek to merely preserve Emission Rx property over which it assertsa proprietary interest; it goes further. In particular, it seeks a proprietary interest in Emission Rx’s general revenue stream by order of theCourt. It seeks this interest as a security. [39] Given the nature of the pleadings in respect of the 2021 Preservation Application, any Order in this case must relate to theproperty in evidence.

Based on my review of the facts, the property in evidence concerns a line of combustors, the boundary of which isnot yet defined. While I make no ruling on the issue, the Respondents seem to concede that the “R-Line” is in dispute, whereas theApplicant may ultimately be arguing that the disputed property includes an interest in the E-Series, C-Series and an EF-Series.

Forpurposes of the 2021 Preservation Application, there are a bundle of associated products in dispute (all with an alleged connection to theERx Technology), and that collective pool represents the property in issue (collectively, the “Allegedly Infringing Products”). [40] Notwithstanding the absence of evidence concerning additional products or services, the preservation order sought by Questorwould effectively entitle it to security over any future products and endeavours. At this point, there is no evidence of an ownershipinterest in the fruits of any other endeavours.

As a result, the analysis below focuses only on the Allegedly Infringing Products. [41] I now turn to consider each component of the Tripartite Test. Both parties to this action agree that the Tripartite Test applies tothe 2021 Preservation Application. [42] If Questor establishes that it has satisfied all three elements of the Tripartite Test, then I will need to consider whether apreservation order should be issued. The reason for that second stage of analysis is because additional issues need to be considered.There are boundaries to the application of a preservation order.

For example, a preservation order cannot issue in support of a generalclaim for money damages or for services rendered: Ridge Development Corporation v Crestwood Condominiums Inc, 2008 ABQB 599at paras 19-21; and Athabasca at para 91. On the other hand, if Questor does not satisfy all three elements of the Tripartite Test, thenthere is no need for further analysis because the preservation order will not be justified. a.

Serious Issue to be Tried [43] To meet the first stage of the Tripartite Test, Questor must establish that there is a serious issue to be tried with respect to“property that is in dispute”: Rule 6.25; and Athabasca at para 77. [44] Questor claims ownership of the Allegedly Infringing Products. Its underlying assertion is that these products were developedwhile the Individual Defendants were employed at Questor. [45] The case law suggests that an employer has ownership rights to an employee’s inventions in certain circumstances: Questor2020 at para 76.

Questor thus alleges ownership of the Allegedly Infringing Products.[4] [46] Following this argument to its logical conclusion, Questor effectively asserts ownership over profits derived from theAllegedly Infringing Products. Indeed, that seems to be the basis of the 2021 Preservation Application. [47] This Court has previously considered Questor’s argument for ownership of the Allegedly Infringing Products: Questor 2020at paras 76-89. The Court noted that this “cause of action raises important issues for trial”: Questor 2020 at para 89.

However, this Courtalso described Questor’s evidence in support of this argument as “speculative”: Questor 2020 at para 36. [48] Concerning Questor’s argument that the ownership of the Allegedly Infringing Products equates to a “serious issue for trial”, Ifind that it does, albeit by the narrowest of margins.

[ 49 ] Based on the facts and analysis, I find Questor has proved, on a balance of probabilities, the “serious issue to be tried” element. This addresses first element of the Tripartite Test. b. Irreparable Harm [ 50 ] To succeed in this application, Questor also must demonstrate that it will suffer irreparable harm. [ 51 ] In an earlier application, I determined that Questor would not suffer irreparable harm if the 2019 Injunction Application was not granted: Questor 2020 at paras 90-112. I was considering a different question in that 2019 Injunction Application.

The question at this juncture is whether Questor will suffer irreparable harm if the Defendants are not compelled at this time to set aside a portion of their profits for Questor’s later contingent use. [ 52 ] In considering this question, I acknowledge that “[i]rreparable harm refers to the nature of the harm, rather than its magnitude...Irreparable harm is harm that cannot be quantified in monetary terms or cannot be cured”: Questor 2020 at para 92. [ 53 ] The “evidentiary burden is on Questor to demonstrate, on a balance of probabilities, that it will suffer irreparable harm with clear, and not speculative, evidence”: Questor 2020 at para 93.

The question is what irreparable harm Questor might suffer as a consequence of its assertion that it is the rightful owner of ERx Technology: Questor 2020 at para 100. In the 2019 Injunction Application, I found none. [ 54 ] A simple belief as to various circumstances does not establish “with clear and not speculative evidence” that if the injunction did not issue: (

i) Questor would suffer loss of first mover advantage; (ii) Questor would suffer market loss; or (iii) Questor would suffer reputational damage: Questor 2020 at paras 103-109. There must be a proper evidentiary foundation. [ 55 ] At the hearing of the 2019 Injunction Application, I concluded that the ownership issue could be dealt with through a remedy of an accounting for profits, and the remaining claims could be dealt with through an award of money damages: Questor 2020 at paras 110 and 112.

As a result, the second element of the Tripartite Test was not satisfied in the 2019 Injunction Application. [ 56 ] Questor now advances two new arguments. First, that Questor will be irreparably harmed because Emission Rx may not be able to afford to pay Questor the damages it seeks. Second, that the Court should infer a “legitimate risk” that the Defendants will dissipate their assets to avoid execution. [ 57 ] In considering these two arguments, the evidentiary burden remains on Questor to demonstrate, on a balance of probabilities, that it will suffer this harm, and that such harm will be irreparable.

Further, Questor has the burden of demonstrating this to me “with clear, and not speculative, evidence”: Questor 2020 at para 93. In my view, Questor has not met this standard for the following two reasons. i. Must take the Defendants as Found [ 58 ] Questor asserts that it will be irreparably harmed due to the risk that Emission Rx will default on its debts at some point between now and the time the Court hypothetically issues a judgment against the Defendants.

Based on my review of what is before the Court, the only evidence Questor references in support of its “belief” in this risk is Emission Rx’s balance sheet as of May 31, 2019. [ 59 ] I reiterate: (

i) the evidentiary burden is on Questor; and (ii) the evidence must be “clear and not speculative”. To address this burden, Questor asks the Court to draw unspecified “adverse inferences” concerning the financial affairs of Emission Rx, and to do so based on the May 2019 financial statements of Emission Rx. [ 60 ] To meet this second component of the Tripartite Test, Questor must show that it will suffer irreparable harm unless this Court grants the 2021 Preservation Application.

Contrary to the assertions of Questor, I infer that if the 2021 Preservation Application is granted, the litigation risk to Questor is likely to increase because Emission Rx will be starved of the cash flow that is typically necessary for a start-up business to pursue its entrepreneurial business endeavours. [ 61 ] Questor asserts that Emission Rx appears to be a “high risk and highly leveraged business venture”, which is at risk of default.

Questor’s proposed solution to the risk that Emission Rx will not survive until trial is to deprive Emission Rx either of: (i) 15% of its revenues; or (ii) 33% of its profits. [ 62 ] In my view, starving Emission Rx of either of these flows of funds will harm its financial condition, and will increase the risk to the corporate Defendant.

Further, if Emission Rx continues to be as unprofitable as the evidence suggests to date, then, if the 2021 Preservation Application is granted, the value of any funds set aside for Questor’s benefit will be negligible in comparison to the quantum of damages it seeks. [ 63 ] Questor’s situation will be little improved by obtaining security over the “profits” of an unprofitable business, especially if the form of the preservation order further decreases the prospect of Emission Rx ever being profitable.

Leaving aside the issue of its entitlement to money damages, Questor seeks an accounting of profits accumulated from the intellectual property over which it asserts ownership. If Emission Rx were to cease operations, there likely would be no profits and, therefore, no need for an accounting. [ 64 ] The size of the claim for damages made by Questor is not relevant to my assessment of the merits of the 2021 Preservation Application: Athabasca at para 96 .

Further, I understand the Defendants accept the evidence before the Court which indicates that Emission Rx does not have the $5 million or more that Questor seeks as damages. That said, this cannot mean that a preservation order must issue: see Athabasca at paras 96 and 100 . [ 65 ] Indeed, if I accept Questor’s argument, I would be sanctioning a litigation tactic against defendants with limited means. In these circumstances, I must exercise great care to ensure that an unproven claim does not influence the assessment of the merits of the

application for prejudgment relief. [66] Prejudgment relief must not be allowed to be used improperly, especially when it has the potential to constrain the ability ofEmission Rx to: (

i) carry on its business; and (ii) impede its ability to address this litigation: Athabasca at para 155. This is a classic casewhere a plaintiff must accept the defendant as he finds him, for better or for worse: 1400467 Alberta Ltd v Adderley, 2014 ABQB 439 atpara 13. ii. No Evidence of Asset Dissipation [67] Questor asserts it will suffer irreparable harm because there is a risk of Emission Rx dissipating the intellectual property (i.e.,the ERx Technology), in which it claims ownership, and the resulting profits. A likelihood of asset dissipation can be relevant to adecision to grant a preservation order.

In particular, a preservation order may be available where there is “an evidence-based reason tobelieve that the [defendant] is dissipating assets, or moving assets offshore, or will be defiant of the court process”: Frank v Beaver,2016 ABCA 35 at para 20. [68] In my view, asset dissipation equates to an appropriation of property to, or for the benefit of, others.

While such an action byEmission Rx would not be appropriate, Questor has led no evidence of dissipation. [69] Questor has only asserted its “reasonable belief that Emission Rx profits may be disposed of.” Notwithstanding the lack ofdirect evidence, Questor asks the Court to take two steps. First, to make a negative finding of credibility against the Defendants onaffidavit evidence. Second, to extrapolate a possible future intent by Emission Rx to engage in improper business transactions to renderitself judgment proof. The job of the Court is to make decisions on the basis of the evidence before it.

These points, raised by Questor,are not in the nature of evidence. In my view, these points are better characterized as being in the nature of argument. Further, to theextent that they touch on evidence, they have not been subjected to cross-examination. [70] Based on the facts and analysis, I find there is no evidence that the Defendants have engaged in any attempt to dissipate assetsto evade potential judgement.

Importantly, each of the Defendants is resident in Alberta, and there is no evidence that any one of them isplanning to move out of this jurisdiction. [71] As a final comment concerning irreparable harm, there are many disputed facts in this Action. It continues to be fought with“considerable intensity”. This is its second injunction application, and the litigation has not even reached Questioning. [72] Based on the facts and analysis, I find Questor has not proved, on a balance of probabilities, that it will be irreparably harmedin the circumstances of this case.

As a result, Questor has not met the “irreparable harm” threshold, with the result that the 2021Preservation Order should not be granted. This addresses the second element of the Tripartite Test. c. Balance of Convenience [73] The balance of convenience comprises a “determination of which of the two parties will suffer the greater harm from thegranting or refusal of an interlocutory injunction”: Manitoba (AG) v Metropolitan Stores Ltd, (SCC) at para 36. [74] I weighed the balance of convenience as between Questor and the Defendants in the 2019 Injunction Application.

In thatdecision, I found that the balance of convenience favoured Emission Rx, and the 2019 Injunction Application was denied. [75] In the decision in respect of the 2019 Injunction Application, I mentioned that Questor was a “successful publicly tradedcompany. It had an annual revenue of $23.5 million in 2018”: Questor 2020 at para 115.

In contrast, Emission Rx was funded by theIndividual Defendants’ personal investments. [76] I concluded that if Emission Rx were to cease operations as a result of the 2019 Injunction Application being granted, whichthe Court found to be probable, the Individual Defendants likely would not have the resources to proceed to trial: Questor 2020 at para116. That is always a relevant consideration in these types of proceedings. [77] Based on my review of the aggregate context, the evidence now before me has not changed. Questor continues to besignificantly larger and more established than Emission Rx.

In my view, the marginal benefit that Questor might receive if the 2021Preservation Application was granted is dwarfed by the potential prejudice to the Defendants. [78] In its initial submissions, Emission Rx acknowledged that it was unprofitable, illiquid, highly indebted and asset-light. Giventhese circumstances, the balance of convenience analysis in this case is as follows: a. If the 2021 Preservation Application is granted, Emission Rx will be burdened with additional financial limitations. If Emission Rxwere to cease operations, Questor will have acquired meager security.

Albeit, Questor will have a path to judgment and to seizing theintellectual property over which it asserts ownership. b. If the 2021 Preservation Application is granted to Questor and Emission Rx perseveres, Questor will continue to accumulate pre-judgment security while hobbling the ability of Emission Rx to fund its defence of this Action. c. If the 2021 Preservation Application is not granted, Emission Rx may still cease to operate between now and trial. If that occurs,Questor will be deprived of the meager security it might have otherwise accumulated as Emission Rx ceased operations.

However,Questor will still have a path to judgment and to seizing the intellectual property over which it asserts ownership. In the interim, the

Defendants will still have a fair opportunity to defend themselves. d. If the 2021 Preservation Application is not granted, Emission Rx is more likely to prosper because it will have the ability to reinvest profits and grow. The Defendants will have the resources to properly defend themselves.

If Questor nevertheless wins at trial, there will be a better chance that Emission Rx (and the Individual Defendants) will have adequate funds to pay Questor damages. [ 79 ] A factor leans the balance of convenience in favour of Emission Rx is the failure by Questor to provide an undertaking to pay damages in the event the Defendants are ultimately victorious. Depriving Emission Rx of a portion of its income for a significant length of time will impair its ability to reinvest in its businesses. It also will inevitably erode the income of the Individual Defendants.

Those economic erosions, which may well be irreparable, should rightfully be compensated for by Questor. [ 80 ] Based on the facts and analysis, I find Questor has not proved, on a balance of probabilities, that the balance of convenience favours it. As a result, the 2021 Preservation Order should not be granted. This addresses the third element of the Tripartite Test. V. Conclusion [ 81 ] The 2021 Preservation Application is dismissed. As a result, no order will be granted for the protection of Emission Rx profits earned pending trial.

I make this decision because Questor has only satisfied the first of the three components of the Tripartite Test. It did not meet the threshold test in the latter two components of the Tripartite Test. VI. Costs [ 82 ] The parties may speak to costs, if they cannot otherwise agree. Heard on the 25 th day of January and the 21 st day of June, 2021. Dated at Calgary, Alberta this 13 th day of August, 2021. Justice D. Blair Nixon J.C.Q.B.A.

Appearances: Michael Theroux and Denise Brunsdon Bennett Jones LLP for the Plaintiff/Applicant Frank Tosto, Kamini Dowe and Matthew Schneider Borden Ladner Gervais LLP for the Defendants/Respondents