Executive Summary: Key Legal and Evidentiary Issues

• Repeated noncompliance with discovery obligations, including failures to provide documents, answers to undertakings, interrogatories, and expert evidence, was central to the motion.

• Precision Weather Solutions’ counterclaim alleged breach of contract for unpaid accounts and significant infringement of intellectual property by Farmers Edge.

• The litigation involved related proceedings in other jurisdictions, including Virginia, Ontario, and Kansas, causing delays and procedural complexity.

• Precision’s inability to fund litigation and organizational issues, including bankruptcy of its parent company, led to missed court-ordered deadlines and inadequate trial preparation.

• The court weighed whether to strike the infringement claim, bar evidence, or adjourn the trial, focusing on prejudice to Farmers Edge due to Precision’s noncompliance.

• The infringement claim was struck, leaving only the breach of contract claim for trial, and costs on the motion were awarded to Farmers Edge.

Facts of the case

Farmers Edge Inc. and Precision Weather Solutions Inc., both Manitoba corporations, have been involved in litigation since 2015 following a failed contractual arrangement in July 2014. The individual defendants by counterclaim are former employees of Farmers Edge. The litigation included a counterclaim by Precision Weather Solutions, alleging breach of contract for unpaid accounts of approximately $1.2 million, and a more significant claim for infringement of Precision’s intellectual property, specifically confidential information and trade secrets, related to Farmers Edge’s creation in 2019 of a digital platform product called FarmCommand. Precision sought damages, declarations, an accounting, and disgorgement of profits. Related proceedings were initiated by Precision in Virginia (USA), Ontario, and Kansas, with the Manitoba counterclaim underpinning these actions. The Ontario claim quantified damages at $450 million. Both parties’ business prospects and corporate values declined during the litigation, and Precision’s parent company, Galton Corporation, was declared bankrupt in January 2025.

Procedural background and litigation conduct

The Manitoba action was stayed from October 2021 to September 2023 while Precision pursued related litigation in Virginia, which failed for jurisdictional reasons. After the stay was lifted, a five-week trial was scheduled to begin on October 20, 2025. Both parties changed counsel during the proceedings. Precision faced significant funding issues, leading to the withdrawal of its counsel (MLTA) in February 2025 due to nonpayment, and only obtained a new litigation funder in May 2025. Precision’s trial preparation and responsiveness were hampered by these issues. Farmers Edge launched a second Manitoba action in 2019 for unpaid accounts, but both parties later abandoned that action, with some evidentiary overlap remaining. In early 2025, Farmers Edge advised it would no longer pursue its original claim, leaving only Precision’s counterclaim for trial.

Key legal issues and court’s analysis

The court addressed Farmers Edge’s motion to strike Precision’s counterclaim or, alternatively, to bar Precision from adducing certain evidence and expert evidence not yet produced. Precision acknowledged its failure to comply with discovery obligations and agreed to abandon peripheral passing off and Competition Act claims, leaving only the breach of contract and infringement claims. The court applied Manitoba’s civil procedure rules and relevant jurisprudence, noting that striking a pleading is an exceptional remedy reserved for extreme cases of noncompliance. The court found that Precision’s noncompliance was repetitive, extensive, and material, particularly regarding key evidence for the infringement claim. Precision’s explanations for noncompliance, including loss of litigation funding and medical issues affecting its principal, were not accepted as reasonable excuses. The court found that Farmers Edge would suffer actual prejudice if required to proceed to trial without adequate disclosure and expert evidence from Precision.

Outcome and final orders

The court struck out Precision Weather Solutions’ infringement counterclaim against all defendants, as set out in specific paragraphs of its re-amended statement of defence and counterclaim. The only remaining issue for trial is the breach of contract claim for failing to pay accounts. Costs on the motion were awarded to Farmers Edge, with the amount to be determined if not agreed. The decision is final as to the infringement claim and the relief sought in this motion, but the breach of contract claim remains to be adjudicated. No exact amount was ordered or granted in this decision.