Executive Summary: Key Legal and Evidentiary Issues

• Talius Group Inc. sued Portlan Inc., Seaton Sunrooms, and the Watoreks over alleged breaches of a licensing agreement governing the manufacture and sale of Habitat Screens in Ontario.
   
• A 2025 chambers ruling struck the plaintiff's proposed claims for inducing breach of contract and piercing the corporate veil against the personal defendants and Seaton Sunrooms.
   
• Justice Blake found the pleadings failed to disclose material facts supporting either cause of action, though leave was granted to re-plead inducement of breach of contract.
   
• At trial in 2026, the court held that "termination" under the Licensing Agreement meant termination for cause rather than expiry by passage of time, so the return-of-materials and non-competition clauses did not survive the Agreement's natural conclusion.
   
• Evidentiary findings turned on witness credibility, with the court declining to draw adverse inferences against Portlan from gaps in its documentary record.
   
• Portlan was ultimately held liable for $199,081.52 in unpaid invoices, while the claims for breach of contract, non-competition damages, and unjust enrichment were dismissed.
   

Facts of the case

Talius Group Inc. manufactures and distributes retractable screens and rollshutters, including the Habitat Screen product, having acquired the business of its predecessor, Top Rollshutters Inc. [The two decisions differ on the precise mechanics and timing of this acquisition: the 2025 decision states that "Talius" took over the Receivership Assets on April 13, 2024, while the 2026 decision describes a numbered company taking assignment of a sales agreement on April 13, 2024, which only became "Talius Group" on April 29, 2024.] Portlan Inc., owned and directed by the married couple Brooke and Jason Watorek, held an exclusive licence from Top Rollshutters under an October 26, 2016 Licensing Agreement to manufacture, distribute, and sell Habitat Screens in Ontario, Quebec, Prince Edward Island, Nova Scotia, Newfoundland, and Michigan [the 2025 decision also includes Ohio in its description of the Territory, while the Agreement's definitions clause, as reproduced in the 2026 decision's appendix, does not list Ohio]. The Agreement was amended three times: in March 2018 to remove royalty obligations on two dealers, in September 2018 to extend its term to December 31, 2023, and in May 2023 to eliminate royalties altogether. The Watoreks are also principals of Lilyway Enterprises Incorporated, doing business as Seaton Sunrooms, an Ontario company that shared manufacturing premises with Portlan and had sold Talius-brand products since around 2006.

After the Agreement concluded on December 31, 2023, Talius alleged that Portlan continued selling Habitat Screens, failed to return components and materials, breached the non-competition clause, and left invoices for tariffs, components, currency fluctuations, shipping, and royalties unpaid. Talius initially sought approximately $1.1 million in damages and unpaid accounts, and separately alleged that the Watoreks and Seaton Sunrooms induced Portlan's breach of the Agreement and that the corporate veils of Portlan and Seaton Sunrooms should be pierced to impose personal liability on the Watoreks. These latter claims were the subject of a 2025 chambers application, while the contractual and invoice claims proceeded to a twelve-day trial held in January and March 2026.

Policy and legislative provisions at issue

Article 4.3 of the Licensing Agreement permitted termination for cause only, by either party, on 60 days' written notice, with an opportunity for the defaulting party to cure. Article 4.4 required Portlan to return all components, materials, and products "upon termination by either party," with Talius refunding the wholesale price of any components returned. Article 4.5 required Portlan to immediately cease using the trademarks, intellectual property, materials, components, and products "upon termination by either party." Article 4.6 provided that termination would not affect liability for amounts already owed and that such obligations would survive termination. Article 5.1 prohibited Portlan, and its directors or shareholders, from competing with Talius, soliciting its customers, or engaging in conduct detrimental to its business for one year "after the termination" of the Agreement. Article 3.1 required Portlan to purchase components at no more than the "Wholesale Price," defined as the price at which the manufacturer sold the item. The Agreement also contained an entire agreement clause, a written amendment clause, and a no-waiver clause, none of which expressly addressed interest on overdue invoices.

Reasoning and analysis

In the 2025 decision, Justice Blake applied the test under Rule 9-5(1)(a) of the Supreme Court Civil Rules for striking pleadings, asking whether it was plain and obvious the claims disclosed no reasonable cause of action, following R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42. She found no material facts pleaded showing that Seaton Sunrooms or the Watoreks intended to induce Portlan's breach, or that either Watorek acted outside their capacity as directors, and concluded that the "Rule in Said v. Butt" shielded them from personal liability for inducing breach of contract. On the corporate veil claim, she held that no material facts supported a finding that the corporate structures of Portlan or Seaton Sunrooms were used as a sham or an afterthought to a deal gone sour, and concluded that claim was bound to fail. She struck the corporate veil claim without leave to amend, while striking the inducement claim with leave to re-plead it if the plaintiff chose to do so.

At trial, Justice Sigurdson interpreted "termination" in the Agreement by reference to Article 4.3, concluding that its placement, its requirement of cause and notice, and its curative mechanism defined termination as distinct from expiry by passage of time, applying the interpretive framework in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. On that basis, she held that Articles 4.4, 4.5, and 5.1 did not apply, because the Agreement ended through expiry rather than termination for cause. In the alternative, she found the non-competition clause would in any event fail the test set out in IRIS The Visual Group Western Canada Inc. v. Park, 2017 BCCA 301, because Talius's proprietary interest in goodwill, client lists, and manufacturing guides was limited and could have been protected by narrower means such as a non-solicitation clause, and the clause's scope and one-year duration were broader than necessary. On the factual dispute over continued sales, Justice Sigurdson accepted Ms. Watorek's evidence that Portlan transitioned to a different product line, Heroal, after the Agreement ended, and declined to draw adverse inferences from gaps in Portlan's documentation, finding that Talius had not proven its breach of contract or unjust enrichment claims on a balance of probabilities. On the unpaid invoices, she held that tariffs and currency-related charges formed part of the "Wholesale Price" under Article 3.1 because they reflected costs Portlan would have incurred obtaining components directly from the supplier, while interest charges could not be read into the Agreement absent an express term or a proven subsequent agreement, applying Hardwoods Specialty Products LP v. Rite Style Manufacturing Ltd., 2006 BCCA 139.

Ruling and overall outcome

The 2025 chambers decision favoured the defendants: it struck the plaintiff's claims for inducing breach of contract and piercing the corporate veil, dismissed the claim against Ms. Watorek and Mr. Watorek personally, and awarded the defendants ordinary costs at Scale B for the two applications. The 2026 trial decision produced a mixed result. Justice Sigurdson dismissed Talius's claims for breach of the return-of-materials, intellectual property, and non-competition provisions, along with its alternative claim in unjust enrichment, finding in Portlan's favour on those issues. At the same time, she ordered Portlan to pay Talius $199,081.52 for unpaid invoices covering tariffs, components, currency fluctuations, shipping, and royalties, while disallowing the interest claimed on those amounts. Given this mixed success, Justice Sigurdson made no order as to costs for the trial, leaving open the possibility of further submissions on that issue.