Executive Summary: Key Legal and Evidentiary Issues

• AFX alleged its former managing director, Shaune McKinon, secretly negotiated a services agreement with its primary competitor Mixtec while still serving as a director, in breach of his fiduciary duties of loyalty and good faith.

• Evidence revealed that Mr. McKinon departed AFX with copies of confidential business information, including his entire email archive and a company hard drive, and concealed his dealings with Mixtec in affidavits and court-ordered document production.

• Courts are reluctant to extend a fiduciary duty of non-competition beyond approximately 12 months post-departure, which weighed against granting a second injunction pending a trial set for April 2027.

• Two customer affidavits submitted by the defence indicated no solicitation or misuse of AFX confidential information in post-departure dealings, undermining AFX's claim of ongoing irreparable harm.

• AFX's subsequent application to add Mixtec as a defendant was dismissed because the proposed claims for knowing assistance, knowing receipt, and civil conspiracy were found to be insufficiently particularized and failed to plead all necessary elements.

• Despite both applications being dismissed, the court acknowledged a strong initial case of fiduciary breach and concealment, preserving AFX's existing injunction and granting liberty to refile amended pleadings against Mixtec.

The parties and their relationship

AFX Mixing & Pumping Technologies Inc. is a British Columbia company that sells and distributes in North America sophisticated industrial mixing and pumping equipment — specifically agitators and peristaltic pumps — produced by its affiliated South African companies, AFX Holdings (Pty) Ltd. and Afromix Technologies (Pty) Ltd. AFX Holdings owns 80% of AFX, while the remaining 20% is held by Shaune McKinon, the company's former managing director and the only director based in Canada from the time of AFX's incorporation in January 2014 until his departure in early 2025. AFX's competitive advantage rests on proprietary software owned by AFX Holdings and operated by an affiliated company, which generates custom product specifications and technical drawings for client projects. Mr. McKinon's wife, Vanessa McKinon, served as AFX's administration manager from 2015 until March 2025, while their daughter Kirsty McKinon worked in marketing and administrative support from 2019 to 2024, and their son Kent McKinon served as a project coordinator from around April to November 2020. Macworx Inc. is a BC company incorporated by Shaune and Kirsty on May 31, 2019. The evidence regarding its ownership and management differed between proceedings: in the earlier decision, the court noted the evidence was incomplete but that it appeared Shaune and Kirsty were its shareholders and Kirsty and Kent its directors; in the later proceeding, Shaune and Kirsty were described as both directors, each holding 50% of its shares.

Mr. McKinon's departure and alleged breaches

In January 2025, Mr. McKinon advised AFX founder Eugene Els of his desire to leave AFX, and the parties tried in vain to negotiate a buyout of his shares. He resigned from AFX on March 8, 2025, alleging constructive dismissal. He was removed as a director on April 8, 2025. Following his departure, AFX's new general manager, John Stapelberg, discovered that Mr. McKinon had been participating in Macworx while still at AFX, including sending AFX copyrighted customer equipment designs and drawings to Macworx by email as far back as September 2019. Mr. Stapelberg also concluded that Mr. McKinon had instructed AFX's IT contractor, Jeremy Bartel, to export his entire AFX email account database and a copy of AFX's entire server to him for departure. Mr. Bartel, an independent contractor who provided computer and tech support to AFX starting in late 2021, swore an affidavit confirming these requests and attached supporting text messages from February–March 2025. Mr. McKinon's evidence in response was that his requests for his email account occurred before he left AFX and were for AFX business purposes, that he did not know why Mr. Bartel waited until his departure to provide the archive, and that he had not accessed the link. Regarding the AFX server, he said any such requests were to ensure it was backed up. He admitted taking a hard drive when he left but said it was by mistake and that he returned it to AFX without using it.

The confidential information at issue

Mr. Els alleged that Shaune McKinon and the other defendants had access to confidential and proprietary information, communicated to them in confidence, that was the property of AFX. The categories of confidential information that formed the subject matter of the first injunction included: the outputs of the AFX software; details of AFX's contracts with suppliers, manufacturers and customers; AFX product specifications including those generated by the proprietary software program; information regarding prospective customers; bids, proposals and other cost calculations; financial information including pricing, margins, budgets and revenues; technical, manufacturing and general arrangement drawings; marketing material and strategies; and business document templates. Mr. Els' evidence was that AFX was extremely vulnerable to competition from Mr. McKinon, as for over a decade he had complete control over the day-to-day running of the business and unique knowledge of the client base, pricing strategy, global pricing and expansion strategies, costing practices, and mark-ups. Notably, Mr. McKinon's 2014 employment contract, which he never signed and denies agreeing to, contained no express confidentiality obligations. However, Kirsty McKinon's written employment agreement, effective September 3, 2019, did contain a duty of confidence clause providing that all confidential information pertaining to the business must be kept confidential and may not be disclosed or used for personal purposes, a duty that survived the termination of her employment.

Macworx's competing activities and the Mixtec agreement

AFX alleged that, unbeknownst to its majority shareholder and board of directors, Macworx was being operated out of AFX's premises from 2019 onward, competed with AFX and provided services to AFX's clients, and partnered with AFX's largest global competitor, Mixtec. Mr. Els' evidence was that Macworx engaged in supplying parts such as tanks, valves, and peristaltic pumps to AFX clients as part of AFX projects; supplying and installing pumps from AFX competitors to AFX clients while AFX was not aware of this; and supplying sourcing, project management and coordination, installation and design services to AFX clients. The defendants acknowledged that in 2025, Macworx entered into an agreement to promote and distribute in Canada the products of Mixtec North America, Inc., a Utah-based manufacturer of industrial mixing equipment that is a global competitor of AFX and its related companies. While Mr. McKinon initially claimed in his evidence for the first injunction that Mixtec contacted him approximately one month after he left AFX and that they negotiated their agreement in May 2025, documents produced by Mixtec on December 3, 2025 revealed a different timeline. Negotiations began as early as mid-December 2024 and included two trips by Mr. McKinon to Salt Lake City for meetings in January and March 2025. The agreement was effective March 18, 2025, and was in fact signed by Mr. McKinon on March 20, 2025 — not in May 2025 as he had deposed — while he was still a director of AFX. Mr. McKinon's Mixtec email account was activated on March 26, 2025, and Macworx received its initial retainer payment on April 3, 2025. On April 11, 2025, Mr. McKinon introduced Vanessa and Kent as part of the Macworx administration and sales and marketing team. Emails dated February 16, 2025 between Mr. McKinon and AFX executives, regarding his intention to leave AFX and work with Mixtec, included his statement that he would take on the responsibility to call on all engineering houses across Canada, of which many he currently had relationships with, in order to ensure Mixtec's product was included in current and upcoming RFQs for mixing equipment. On March 23, 2025, Mr. McKinon emailed Mixtec attaching AFX copyrighted technical plans for an AFX client, Cru Brewing Systems, for which he ordered a replacement part from Mixtec. On April 3, 2025, he ordered an impeller part from Mixtec, similar to those of AFX clients. The Macworx-Mixtec agreement contemplated Macworx providing Mixtec with the same services, for the same products, in the same territory as Mr. McKinon's role with AFX, for which Macworx was to be paid a monthly retainer of US$6,000 plus commissions.

The first injunction and the second injunction application (2025 BCSC 2573)

On August 28, 2025, Justice Coval granted AFX a first temporary injunction, pending trial, restraining the defendants from possessing, using, selling, or distributing ten specific categories of AFX data and documents, and requiring them to return all copies of such information within ten days. AFX then applied for a broader second injunction seeking to restrain the defendants — primarily Mr. McKinon and Macworx — from directly or indirectly competing with AFX in North America until a final order was made in the action, including restraining them from contacting AFX clients, promoting or selling agitators or peristaltic pumps to AFX clients, and promoting or selling ancillary services to AFX clients. Justice Coval found that AFX had demonstrated a strong initial case of Mr. McKinon's breaches of fiduciary duty by acting against its interests in service of his own, and a pattern of ongoing concealment, including that his initial affidavits were not forthright about his dealings with Mixtec, the Mixtec Agreement was not disclosed until November 10, 2025, his negotiations and disclosure of client information to Mixtec were not disclosed until Mixtec's production on December 3, 2025, and the sales ledgers ordered to be produced on October 14 were redacted so as not to reveal that many of the sales were to AFX clients. Macworx's unredacted sales ledger showed approximately $814,000 of gross sales revenue from January 2023 to October 2025, with sales to current and former AFX clients occurring multiple times during that period. AFX's evidence was that its revenue had steeply declined since Mr. McKinon's departure, from $2,198,575 (March 1, 2023–February 28, 2024) to $1,032,622 (March 1, 2024–February 28, 2025), and its records showed 277 customer quotes in the former year and only 85 in the latter. However, the court found that Mr. McKinon's fiduciary duty of non-competition was unlikely to extend until the April 2027 trial date, noting that courts are generally reluctant to extend such a duty for more than 12 months after departure, even for a key executive. Nine months had already passed since Mr. McKinon ceased being a director. Two affidavits from senior representatives of AFX customers, submitted by the defendants, indicated that Mr. McKinon did not reach out to them after leaving AFX; rather, they contacted him after hearing of his departure to see if he could provide quotes for products they wished to purchase, and he did so without criticism of AFX or solicitation of further business. The court also noted that AFX's new senior representative had been in place for a year and had reasonable opportunity to solidify its client and market relationships. Weighing the balance of harm — including that the injunction would bar the defendants from doing business with AFX's clients until April 2027 and would constrain their ability to work in the niche industry they had been in since arriving in Canada in 2010, with Shaune and Vanessa both around 60 years old — the court dismissed AFX's application for the second injunction. The court did order production of all correspondence between the defendants and two specific AFX clients, Ph7 and Cru Brewing Systems, from January 1, 2025 to the present. Costs of the applications were left in the cause, subject to further submissions, because although the defendants had been successful, the evidence of Mr. McKinon's breaches of fiduciary duty and concealment justified the application.

The application to add Mixtec as a defendant (2026 BCSC 522)

On January 12, 2026, AFX applied to add Mixtec North America Inc., a Utah-based company with no facilities, assets, employees, or property in Canada, as a defendant, and for leave to file an amended notice of civil claim. The proposed amendments included claims for knowing assistance in breach of fiduciary duty and breach of trust, knowing receipt of AFX Confidential Information, and — by virtue of framing existing conspiracy claims against "all defendants" — implicitly civil conspiracy. Mixtec opposed, arguing that AFX sought to add it as a defendant only to obtain information and documents through discovery processes that it could use against the existing defendants, rather than pursuing a letters rogatory process. Mixtec said it entered into a Manufacturer's Representative Agreement with Macworx, that it was not aware Shaune was a director of AFX at the time, and that its contractual relationship with Macworx was not characterized by the exchange of confidential information. Mixtec asserted it never sought nor received AFX's design program or trade secrets from Shaune, and that it had its own design program and pricing structure with well-defined procurement and fabrication processes. Associate Judge Bilawich applied the test from Rule 6-2(7)(c) of the Supreme Court Civil Rules as interpreted in Madadi v. Nichols, 2021 BCCA 10, requiring AFX to establish a real, non-frivolous issue and demonstrate it would be just and convenient to determine that issue in the existing proceeding. The court found that AFX's proposed knowing assistance pleading alleged only that Mixtec "knew, ought to have known or was deemed to know" that Shaune was a director of AFX, which went to his being in a position of trust but did not extend to knowledge about him allegedly committing a dishonest or fraudulent breach of trust — actual knowledge being the required threshold for knowing assistance liability. The proposed pleading also failed to particularize that it was AFX pricing information that Mixtec requested, as opposed to Macworx pricing information, and did not sufficiently specify what AFX Confidential Information Mixtec allegedly agreed to trade on. The proposed knowing receipt claim similarly failed to particularize what specific trust property Mixtec received and did not allege that Mixtec applied AFX Confidential Information to its own use and benefit. As for civil conspiracy, the court found that Mixtec's inclusion appeared to be accidental, arising from conspiracy claims framed against "all defendants," with no specific overt acts in furtherance of the conspiracy alleged on Mixtec's part and no new civil conspiracy specific allegations proposed. The court dismissed AFX's application, finding the proposed claims did not set out a viable claim in their current form, but granted liberty to reapply based on a modified draft pleading addressing the identified deficiencies.

Outcome and costs

Across both decisions, AFX's applications were unsuccessful. The second injunction application in 2025 BCSC 2573 was dismissed by Justice Coval, with costs of the applications in the cause, subject to further submissions. The 2026 BCSC 522 application to add Mixtec as a defendant was dismissed by Associate Judge Bilawich, with Mixtec — as a non-party — entitled to costs of the application from AFX assessable forthwith, though assessment of costs was suspended for 60 to 90 days to allow AFX time to make a new application to add Mixtec as a defendant. The defendants in the second injunction hearing, principally Mr. McKinon and Macworx, were the successful parties in resisting the broader restraining order, while Mixtec was the successful party in opposing its joinder. No specific monetary damages or awards were determined in either decision, as both matters remain interlocutory in nature, with the underlying trial scheduled for April 2027.