Husky v. Athena Automation et al.

On April 22, 2016, after a 22-day hearing that included testimony from 15 fact witnesses and five experts, Justice Frank Newbould of the Ontario Superior Court of Justice (Commercial List) rendered his decision in a case involving the misuse of confidential information brought by Husky Injection Molding Inc. against Husky’s founder, Robert Schad; his new company, Athena Automation Ltd.; Athena’s business partner, SIPA S.p.A; and Steve Mason, a former Husky and Athena employee.

Husky alleged that Schad and Athena had misused Husky’s confidential information and that Schad had breached non-competition and non-solicitation provisions in his employment contract with Husky, as well as having breached fiduciary duties that he owed to his former company.

Husky also alleged that SIPA had misused confidential information that it had acquired through its business relationship with Athena. Husky further alleged that Mason had misused confidential information acquired through his employment at Husky, as well as through his work at Niigon, a charitable injection-molding plant on the Moose Deer Point First Nation reserve that has been supported for years by Schad, Husky and by the federal and provincial governments.

Schad and Athena brought a counterclaim against Husky for abuse of process, unjust enrichment and injurious falsehood.

Justice Newbould dismissed Husky’s claim on several grounds, including that: (a) the claim was barred by the passage of the applicable two-year limitations period; (b) Husky and Athena had previously settled most of the claims brought; and (c) Athena and Schad weren’t liable to Husky for misusing confidential information.

The court similarly dismissed the claim that SIPA had acquired, and misused, Husky’s confidential information through Athena Automation.

The court also dismissed the claims against  Mason, as well as Athena and Schad’s counterclaim against Husky.

In his judgment, Justice Newbould noted the professionalism of all lawyers involved, writing, “I cannot leave this case without expressing my thanks and admiration … in which this case was presented. While there are obviously difficulties between each side in this dispute, the lawyers all acted with reasonableness and courtesy in dealing with each other and with the Court. This was in the highest traditions of the bar and they are to be congratulated.”

The trial featured a number of innovative practices that allowed the parties to bring a highly complex commercial case to trial on an expedited schedule.

These practices involved conducting the entire trial electronically, and included the use of iPads by both counsel and the court, the “chess clock” method of allocating each party’s time at trial, leading evidence-in-chief by using affidavits and calling expert witnesses in a panel.

Husky was represented by Patrick Flaherty, Stuart Svonkin and Brendan Brammall of Chernos Flaherty Svonkin LLP.

Schad and Athena were represented by Kent Thomson, James Bunting, Chantelle Spagnola and Anisah Hassan of Davies Ward Phillips & Vineberg LLP, as well as James Raakman of Bereskin & Parr LLP.

SIPA S.p.A. was represented by Peter Cavanagh and Chloe Snider of Dentons Canada LLP.

Mason was represented by Gordon Capern and Michael Fenrick of Paliare Roland Rosenberg Rothstein LLP.