Enviro Trace Ltd. v. Sheichuk et al., 2014 ABQB 381

The Plaintiff asked the Court to confirm an interlocutory injunction, and related relief, previously granted on notice against the Defendants. The Court granted the application, and the interim, interim injunction was confirmed as an interlocutory injunction.

The Plaintiff (Applicant) asked only for an order preventing the Defendants (Respondents) from using the Applicant’s trade secrets and confidential information, rather than one which prevents them from doing business. The Court noted that the proposed order would “merely be a truism, articulating existing law”, which is known as a quia timet injunction.

The Applicant established that it was not premature for the Court to grant the injunction requested. In the Court’s view, the harm – or disclosure of its trade secret – is great. As to the applicable standard, the Court stated that because the underlying facts are still very much in dispute, the higher standard (i.e. requiring the Applicant to establish a strong prima facie case) does not come into play. Rather, the Court said it should examine (in the context of the balance of convenience part of the three-prong test) the strength of the Applicant’s case. Therefore, the Court held that the appropriate standard to be applied in this case was the “serious issue to be tried” standard – a relatively low standard, and one that the Court found the Applicant had met. 

The Court noted that a trade secret has a proprietary component, and that it would be illogical for a court to require proof of irreparable harm when something is stolen from another (i.e. “the theft speaks for itself”). Nevertheless, the Court held it is necessary to prove irreparable harm as a prerequisite to the granting of the injunction requested here. In that regard, the Court concluded that the Applicant proved that it would suffer irreparable harm since the loss of a trade secret is harm which cannot be cured by money. The Court further found that the Plaintiff would suffer the greater harm from the refusal of an interlocutory injunction, particularly since the Plaintiff had not asked the Defendants to cease business; it merely asked the Defendants not to use any of the Plaintiff’s trade secrets. Lastly, the Court held that, overall, the Applicant has established that it is fair and equitable, or just, to issue the requested interlocutory injunction. It was found that the trade secret in question is more than a “nothing very special” kind of trade secret, and that the Applicant has not delayed in asserting its rights.

In terms of collateral relief, the Court stated that it is “self-evident that the respondents should return to the applicant any trade secrets and confidential information” which belong to the Applicant. Further, the Court found it appropriate to require the Respondents to provide an accounting for all work done by the Respondents for the clients of the Applicant, where there is evidence that, even before leaving the employ of the Plaintiff, some of the Defendants were making overtures to the Plaintiff’s clients.

Therefore, the application was granted, and the interim, interim injunction was confirmed as an interlocutory injunction.