Court Rules in Favor of TCG in Windshields.com Suit Filed by Belron;
Trial to be Held in Coming Months
June 9, 2009
The Supreme Court of British Columbia recently ruled in favor of
TCG International in a suit filed by Belron Canada involving TCG's
In the case, in which a yet-to-be-scheduled trial will be held,
Belron Canada was seeking an interlocutory injunction restraining
TCG from operating the website in Canada until a trial court makes
a ruling as to whether the site violates non-competition, non-solicitation
and non-interference agreements made between the two companies in
2005 when Belron Canada purchased Autostock Inc. from TCG for $53
million. At press time, no trial date had been set, but the judge
notes in the recent decision that it would be practical to hold
it as soon as possible, as the non-compete agreements expire on
November 4, 2012.
According to the opinion, through the agreement, Belron acquired
TCG's remaining glass shops in all Canadian provinces other than
Quebec; TCG's Novus master franchise business in Canada; TCG's insurance
claims administration service nationwide, including Quebec; and
the Canadian domain, www.speedyautoglass.ca.
The judgment cites a non-compete agreement that was also signed,
which says that TCG shall not "directly or indirectly, advise,
manage, promote, operate, carry on, establish, acquire control of,
or be engaged in a business that is substantially the same as or
competes, in whole or in part, with the business anywhere within
Canada or invest in or lend money to or guarantee the debts or obligations
or [sic] any person that advises, manages, promotes, operates, carries
on, establishes, acquires control of or is engaged in any business
that is substantially the same as or competes in whole or in part
with the Business anywhere within Canada."
The agreement also restricts TCG from "canvass[ing] or solicit[ing]
the business of
any customer or retail influencer
in connection with activities which are substantially the same as
or are, in whole or in part, in competition with the business or
the buyer's Canadian business."
According to documents filed in the case, a TCG employee registered
the domain www.windshields.com
in November 1997, and it was transferred to TCG on January 11, 2002.
Up until August 9, 2006, all hits were re-routed to www.tcgi.com,
and after that, they were re-routed to www.speedyglass.com.
In March 2007, the company began constructing the website, and in
a summary of the case included in the judge's opinion, Belron Canada
claims that TCG "repeatedly characterize[d] the website as
a vehicle that provides 'communication services' to members of the
public." Belron, however, alleges that the website is a "fee-based
automotive glass repair and replacement referral enterprise."
In December 2007, TCG began promoting the website, and on December
7 David Meller of Belron sent an e-mail to Allan Skidmore of TCG
"informing [him] that running the website in Canada constituted
a breach of the Non-Competition Agreements," according to the
recent opinion filed in the case. Court documents cite a reply from
Skidmore sent the same day, noting that TCG intended for the website
to provide information about Belron's auto glass businesses only.
The website became operational in Quebec on March 5, 2009, at which
point Serge Laporte, vice president of sales and marketing for Belron
Canada, visited the site and noted that it would accept Canadian
postal codes, according to documents filed in the case. When he
entered a Canadian postal code, he claims to have received the following
message: "We are expanding into your area. Please complete
the form and we will work to find you a local glass shop."
While Skidmore alleges that this is a generic message, Belron claims
that the website is intended to be phased into operation across
The suit was filed on March 24, following further correspondence
from Meller asking that TCG cease operating the site in Canada and
assurance that the company would not utilize the site in Canada
until the seven years deadline cited in the non-compete agreements
The court notes that "the prevention of irreparable harm is
the driving rationale behind the court employing the extraordinary
measure of enjoining a party before there has been an adjudication
of that party's rights at trial." The judge also says that
Belron alleges that it will suffer a financial loss from business
being diverted away from its various operations due to the website.
"[Belron] also argues that there will be a depreciation of
its goodwill if a customer is introduced to a local competitor through
the website," reads the document. "It claims that once
that happens, barring poor service from that competitor, the customer
will likely return to the competitor for any future automotive glass
The court claims that this is a contradiction of sorts, as if current
customers are unlikely to go elsewhere once they've used a particular
auto glass company, then "there would be minimal risk of Belron
losing its current customer base" due to the website.
The court also notes that Belron "has not demonstrated how
such losses, were they to be incurred, would not be assessable as
It is also noted that the injunctionpreventing TCG from operating
the website until a trial is heldcould give others, who run
similar sites in the United States, the opportunity "to establish
a market presence ahead of TCG."
In closing, the judge writes, "In weighing the relevant factors,
which include the merits of Belron's claim, the sufficiency of damages,
the absence of irreparable harm, as well as others, I conclude that
the balance of convenience favors withholding the injunctive relief."
She adds that because the non-compete agreements expire on November
4, 2012, the trial should be heard "as well in advance of that
date as is practicable."
The trial should be scheduled at an upcoming case management hearing,
according to TCG in-house counsel Erica Seay. She advised glassBYTEs.com/AGRR
magazine that at this point, the company is optimistic.
"We certainly hope and believe that we will prevail, and will
certainly do our best, but we're pleased with the outcome of this
decision at the injunction stage," says Seay.
Claude Lalonde, president of Belron Canada Inc., declined to comment
on specifics of the case.
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