LOSING TRACTION: Truck Accessory Company’s Bid for Confidential Information Interlocutory Injunctions Rejected

In a decision dated March 13, 2026, Justice Latimer of the Supreme Court of British Columbia in Quality Chain Canada Ltd. v Xu, 2026 BCSC 424 denied a plaintiff’s application for interlocutory injunctions that would both prohibit the defendants from using the plaintiff’s confidential information, as well as require the defendants to destroy all materials containing the plaintiff’s confidential information.

The plaintiff, Quality Chain Canada Ltd., is a wholesale retailer for various truck accessories, whereas the defendants were former employees of the plaintiff. It was alleged that during the course of their employment, the defendants were involved in unsuccessful negotiations to purchase the company, during which they had access to the plaintiff’s confidential information (to the extent they did not already have access in their ordinary course of employment). After negotiations failed, the defendants resigned from their positions and began their own business as wholesale retailers for truck accessories.

Forensic investigation of the defendants’ work computers revealed that one of the defendants had mirrored the contents of the plaintiff’s server on an unauthorized separate drive, which was thereafter deleted from their computer. Additionally, a supplier had reached out to the plaintiff, stating that they had been contacted by an unnamed third party who had provided them with a spreadsheet of information that the plaintiff alleges contains the company’s confidential information. For their part, the defendants deny that they retained or used the plaintiff’s confidential information following their resignation. Prior to the application, the plaintiff filed a civil action against the defendants for, amongst other allegations, breach of contract, breach of fiduciary duty, and breach of confidence.

In assessing whether to grant the injunctions, Justice Latimer acknowledged that while the first stage of the injunctive relief test (i.e., whether there is a serious question to be tried) is generally a low threshold, the threshold can be heightened when the order sought is a mandatory injunction requiring a party to take positive action. She then determined that a strong prima facie case standard applied to the application at hand because the injunctions sought required positive action (i.e., the destruction of confidential information) and were broad in scope, particularly with respect to what exactly was alleged to be “confidential information”.

Justice Latimer’s decision to ultimately deny the injunctions was rooted in the plaintiff’s lack of a “reasonable level of precision” in identifying the sort of information alleged to be confidential. The plaintiff pleaded that their confidential information included “without limitation, information about the company’s business operations, finances, customers, employees, suppliers (including their identity), IT, and other trade secrets”, and had also referenced one defendant’s employment contract, which had identified confidential information as “information relating to customers, customer lists or principals, sales, costs, sales costs, product suppliers, product design and development, quality control measures, services, business systems, research, strategies, markets, business plans, marketing plans, programs, software, training manuals, and product follow-up services.”

Referencing another decision of the Supreme Court of British Columbia that she found analogous, JTT Electronics Ltd., 2014 BCSC 2413, Justice Latimer explained that the requirement for specificity serves three functions: it enables a defendant to properly respond to an application, including the question of whether the information is actually confidential, it properly allows the defendant subject to an injunction to be put on notice as to what they can and cannot do , and it allows the court to be in a proper position to address alleged breaches of injunction. Here, Justice Latimer found that none of the three purposes could be met, as the information alleged to be confidential was so generic that it could apply to virtually any information. The application was thus denied.