Executive Summary: Key Legal and Evidentiary Issues

• The dispute involves alleged breach of a licensing agreement for the manufacture and sale of retractable screens and rollshutters.

• Plaintiff sought to amend pleadings to add claims for inducing breach of contract and piercing the corporate veil.

• Defendants applied to strike portions of the pleadings, arguing the amendments failed to plead sufficient material facts.

• The court considered whether the amended pleadings disclosed reasonable causes of action for the additional claims.

• Claims against Seaton Sunrooms and the individual defendants were struck for lack of material facts supporting inducement or veil-piercing.

• Defendants were awarded ordinary costs at Scale B for the successful applications.

Facts and outcome of the case

Background and parties

Talius Group Inc., a British Columbia company headquartered in Salmon Arm, manufactures retractable screens and rollshutters. It acquired the assets of Top Rollshutters Inc., which had previously entered into a licensing agreement with Portlan Inc. granting exclusive rights to manufacture, distribute, and sell Habitat Screens in certain territories. The licensing agreement included non-compete and non-solicitation clauses effective for one year after termination. The defendants are Portlan Inc., Lilyway Enterprises Incorporated (doing business as Seaton Sunrooms), Jason Watorek, and Brooke Watorek.

Procedural history and claims

The notice of civil claim was filed on September 12, 2024, and amended on October 31, 2024. The plaintiff alleged that Portlan Inc. breached the licensing agreement after its termination on December 31, 2023, and sought damages for this breach. Talius also claimed that Seaton Sunrooms, Jason Watorek, and Brooke Watorek induced the breach of contract and sought to pierce the corporate veil to hold the individual defendants personally liable. The plaintiff attempted to amend its pleadings to include these claims. The defendants filed applications to strike the new claims, arguing that the pleadings did not set out sufficient material facts.

Legal analysis

The court examined whether the proposed amendments to the pleadings disclosed reasonable causes of action. For the claim of inducing breach of contract, the court found that the plaintiff did not plead material facts showing that Seaton Sunrooms, Jason Watorek, or Brooke Watorek intended to cause Portlan to breach the licensing agreement or that they prevailed upon Portlan to do so. Regarding piercing the corporate veil, the court determined that the pleadings did not allege facts sufficient to support a finding that the corporate structure was a sham or used for an illegitimate purpose. The court noted that there were no independent causes of action pleaded against the individual defendants in their personal capacity.

Outcome and costs

The court allowed the defendants’ application dated March 26, 2025, to strike the portions of the pleadings related to inducing breach of contract and piercing the corporate veil. The claims against Seaton Sunrooms, Jason Watorek, and Brooke Watorek were dismissed. The defendants were awarded ordinary costs at Scale B for these two applications. No damages were awarded, as the decision addressed only the sufficiency of the pleadings and not the merits of the underlying contract dispute. The matter is set for trial commencing January 6, 2026, for 15 days.