MLB-Slaw Selected Case Summaries

Here you'll find weekly summaries of selected cases provided to Slaw by Maritime Law Book's National Reporter System.

Mar 13

GasTOPS Ltd. v. Forsyth et al. 2012 ONCA 134 

Equity - Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship

GasTOPS Ltd. was incorporated in 1979 and engaged in the design, development and application of computer software products that assessed machinery conditions for maintenance purposes for operators of gas turbine engines. Up until October 1996, the personal defendants were all employees of GasTOPS. These four were considered the designers of the core programs within the family of GasTOPS’ technology products. The personal defendants resigned from GasTOPS and incorporated the corporate defendant (MxI Technologies Ltd.). GasTOPS sued.

The Ontario Superior Court, in a decision reported at [2009] O.T.C. Uned. M66, allowed the action. The court found the personal defendants liable to GasTOPS for breach of fiduciary duty, breach of confidence and breach of their contract of employment. The court found MxI liable for breach of confidence. The court awarded damages against the personal defendants equivalent to the profits earned by MxI from military contracts in its first 10 years of operation, and ordered MxI to disgorge those profits. All defendants were ordered to pay this amount jointly and severally quantified at $12,306,495. The court also awarded pre-judgment interest of $3,039,944 together with costs on a full indemnity basis of $4,252,920.24. The defendants appealed, raising a narrow set of issues. The only issue of liability they contested was the finding that the defendants Cass and Vandenberg owed a fiduciary duty to GasTOPS. The principal issue argued by the defendants was the trial judge’s use of 10 years as the timeframe for the assessment of damages and for the disgorgement of MxI’s profits. They also contested the inclusion of certain amounts in calculating the quantum and the finding of joint and several liability. Finally, they appealed the scale on which costs were awarded. GasTOPS cross-appealed the use of 10 years to limit its relief. It argued that MxI should be permanently enjoined from using the information taken in breach of confidence or should be required to disgorge its profits in perpetuity.

The Ontario Court of Appeal dismissed the appeal and the cross-appeal.

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