Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff failed to meet the strong prima facie case threshold required for injunctive relief in employment-related matters.

• Ambiguous and conflicting non-solicitation and confidentiality clauses rendered the restrictive covenants unenforceable.

• Talal Al-Kazimi’s role and authority at Matix did not support a finding of fiduciary duty based on the evidence.

• No irreparable harm was proven; losses claimed by Matix were compensable through damages.

• Allegations against Hura and AKI lacked evidentiary support and did not establish conspiracy or fraud.

• The balance of convenience did not favour an injunction due to weak evidence and potential harm to defendants’ ongoing business activities.

Facts of the case

Matix Lumber Inc. sought interlocutory injunctive relief against Talal Al-Kazimi, Hura Development Inc., and AKI Development. Talal, a former employee of Matix, served as Chief – Northern Sales & Operations Officer under an Employment Agreement dated February 5, 2024. Matix alleged Talal breached that agreement, as well as incorporated terms from the Matix Employee Handbook, by diverting business and confidential information to Hura and AKI after his termination.

Matix claimed Talal falsely told the company that federal Rapid Housing Initiative (RHI) funding applications for White Dog First Nation (WDFN) and Whitefish Bay First Nation were unsuccessful. In truth, the applications succeeded, and Matix alleged Talal secretly redirected the projects to Hura, controlled by his brother, Bassel Al-Kazimi. Matix stated that a $5.7 million cheque from WDFN payable to Hura was delivered to Talal. It also alleged Talal misled WDFN into believing he was still acting on behalf of Matix when requesting an additional $2.5 to $2.7 million.

Matix further alleged Talal diverted a March 2025 RHI project from Whitefish Bay and a separate December 2023 contract from Ochiichagwe’Babigo’Ining Ojibway Nation (OPCN) to Hura and AKI. In the OPCN matter, Matix stated Talal entered into an agreement for the design and build of ready-to-move (RTM) houses and received payment while falsely presenting himself as acting for Matix.

Talal denied the allegations, claiming he had permission from Matix’s former principal to pursue outside work. He said the communities independently chose not to engage Matix and denied being involved with AKI. Bassel contended he independently secured contracts through his own networking. AKI maintained it had no ties to Talal or obligations to Matix.

Discussion of policy terms and clauses at issue

The Employment Agreement and Employee Handbook included various restrictive covenants and confidentiality provisions. These covered obligations not to disclose confidential information, engage in outside business without consent, or solicit clients and employees post-employment.

However, the court found significant inconsistencies:

• Non-solicitation provisions in section 6.7.1 of the Employment Agreement and section 10.1 of the Handbook materially differed in scope, geography (none vs. “within Manitoba”), duration (unspecified vs. one year), and who constituted a “customer.”

• Confidentiality provisions (sections 6.3, 6.4 of the Employment Agreement and 10.3 of the Handbook) were so broadly and vaguely worded that the court deemed them “incomprehensible” and unenforceable.

• These ambiguities rendered the restrictive covenants invalid under Canadian employment law standards, which require clarity due to the power imbalance in employment contracts.

Outcome of the motion

Justice Toews denied Matix’s motion, concluding that it failed to satisfy all three elements of the RJR MacDonald test for injunctive relief:

1. No strong prima facie case was established. The court found the evidence speculative and insufficient, particularly in tying the co-defendants to any wrongdoing or proving that Talal’s actions violated enforceable legal obligations. The alleged employment restrictions were ambiguous and overbroad. The judge also found Talal was not in a fiduciary relationship with Matix, as he lacked sufficient control or influence.

2. No irreparable harm was shown. Matix’s claims of $4 million in lost profits were speculative and lacked evidentiary support. The court concluded that monetary damages were an adequate remedy.

3. Balance of convenience weighed against granting the injunction. The risk of unjustly restricting the defendants’ businesses outweighed any unproven harm to Matix.

The Court further dismissed Matix’s requests for a Mareva injunction, asset freezing orders, and attachment orders due to insufficient evidence. Justice Toews remarked that while the relationships and timelines raised “suspicions,” they did not meet the required legal standard. The motion was dismissed with costs in the cause.

No specific amount was awarded at this stage.