Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns CHEP’s continuing ownership of its blue pallets and alleged intentional interference with that property right by Palettes Pal Bois.
• Scope of pre-trial discovery is contested, particularly whether broad client lists and commercial information can be compelled or are protected as trade secrets.
• Court rejects “fishing expedition” style requests for complete supplier and purchaser lists, finding them insufficiently linked to the pleaded issues.
• A narrower list of Palettes Pal Bois’s clients operating in the food industry is ordered disclosed, as it is directly relevant to the alleged intentional use and circulation of CHEP pallets.
• CHEP successfully shields details of penalties, indemnities, and handling costs charged to its own customers, which the court deems irrelevant to the present claim.
• Both parties are ordered to disclose limited information under confidentiality safeguards, with no monetary award or costs determined at this procedural stage.

Factual background and business model

CHEP Canada Inc. operates a pallet rental business, specializing in wooden pallets used to transport merchandise through the Canadian supply chain. Its pallets have very specific identifying features: the exterior surfaces are painted blue, the “CHEP” logo appears clearly in white, and the words “Property of CHEP” are marked on each pallet. CHEP rents these pallets to large manufacturing and transportation companies that ship their products to wholesalers and retailers across Canada. In day-to-day operations, CHEP’s customers may transfer possession of CHEP pallets to their own customers. This creates a circulation of CHEP pallets in the market, but CHEP maintains—and the industry generally recognizes—that ownership always remains with CHEP and that the pallets cannot be validly transferred as property to third parties. A prior judgment by the Superior Court (Chep Canada inc. c. Les industries Palbec inc., 2010 QCCS 6034) described this model and noted that CHEP remains owner of its pallets at all times, a point characterized as clear, notorious and undeniable.
The defendant, 9247-8387 Québec inc., does business under the name Palettes Pal Bois. Its operations focus on recovering, manufacturing, and delivering wooden pallets. In practice, Palettes Pal Bois has arrangements with its clients to collect pallets they wish to dispose of, it sells pallets on to certain manufacturers, conducts exchanges involving CHEP pallets with clients, and shreds some pallets that are considered irrecoverable, including blue CHEP pallets, for use as biomass to heat its facilities.

Events leading to litigation

On 18 October 2023, CHEP obtained and executed a seizure before judgment on the defendant’s premises. During this seizure, 620 pallets and 5 half-pallets belonging to CHEP were recovered from Palettes Pal Bois’s property. Ownership of these pallets by CHEP is not contested in the record.
In the days that followed, CHEP filed an originating application seeking a permanent injunction. It asks the court to order Palettes Pal Bois to cease directly or indirectly acquiring pallets that belong to CHEP. In addition to injunctive relief, CHEP claims compensatory and punitive damages totaling $70,460. The compensatory portion is based in part on a unit acquisition cost of $33 per pallet (for 620 pallets) from a New Brunswick supplier, which is put forward as the purchase price used to value the seized pallets.
Palettes Pal Bois contests the claim. It asserts that it never intended to interfere with CHEP’s operations and instead argues that its activities actually help CHEP by reintegrating CHEP pallets into CHEP’s distribution network. In the alternative, the defendant seeks to be compensated for its work in recovering, transporting, and storing the pallets currently in issue and for its future operations if it continues to handle such pallets. The substantive law questions, therefore, involve ownership of movable property, alleged intentional infringement of that property right, the appropriateness of permanent injunctive relief, and potential liability for damages.

Procedural nature of the decision

The judgment at issue is not a final decision on liability, injunction, or damages. It is a case management ruling of the Superior Court of Québec (Boillat J.) addressing objections raised during pre-trial examinations. Two main examinations are in focus: that of Harold Boissonneault, representing the defendant, and that of Matthew John Ellison, representing CHEP. The parties jointly asked the court to determine various objections and refusals to answer, many of which were based on claims of commercial secrecy, lack of relevance, or accusations of “fishing expeditions.”
In this context, the court’s role is to delineate the permissible scope of discovery: which questions may be pursued, what documents or lists must be disclosed, and when confidentiality protections should be imposed to balance the needs of truth-seeking against the protection of sensitive business information.

Discovery relating to the defendant’s client lists

During the examination of Harold Boissonneault, CHEP sought several categories of information about Palettes Pal Bois’s clients. Three objections in particular were addressed.
First, CHEP requested a list of the clients who supply pallets to Palettes Pal Bois. The defendant objected, arguing that this list was confidential and protected by trade-secret privilege and that disclosure would amount to a fishing expedition unrelated to the real issues in dispute. The court accepted this objection, noting that CHEP’s claim seeks to stop a pattern of conduct by Palettes Pal Bois but does not target specific clients. The damages claimed are general in nature, and no sufficient link was shown between CHEP’s theory of the case and the identity of all the suppliers who provide pallets to Palettes Pal Bois. The judge also emphasized that Mr. Boissonneault had no inventory system that could tie specific CHEP pallets to particular clients or sources, so demanding a broad supplier list would lead to a generalized investigation based on speculation rather than concrete issues.
Second, CHEP sought a list of manufacturers who purchase pallets from Palettes Pal Bois. The defendant again invoked commercial secrecy and irrelevance. The court applied the same reasoning and upheld this objection as well. The judge concluded that this client list also lacked a demonstrated connection to the specific questions raised by the pleadings and would not advance the litigation. Allowing such questioning would effectively authorize CHEP to conduct a general inquiry into what it describes as an illegal diversion of CHEP pallets, beyond what the present case requires.
Third, CHEP asked for a list of Palettes Pal Bois’s clients that operate in the food industry. Initially, the defendant again objected on the basis of commercial secrecy and alleged fishing. However, this request was treated differently. In his testimony, Mr. Boissonneault explained that while his own manufacturing clients are not in the food sector, there are manufacturers who seek CHEP pallets and that CHEP pallets are known to be used in the food domain. He confirmed that there are clients specifically interested in acquiring blue CHEP pallets and that a list of food-industry clients exists.
Here, the judge considered the narrower scope and the direct link to the core issues. The litigation centers on intentional interference with CHEP’s property rights in its pallets. Identifying clients in the food sector who are actively seeking CHEP pallets is directly relevant to assessing whether Palettes Pal Bois knowingly participates in the circulation and possible misappropriation of CHEP’s property. The court held that this information could assist both parties in proving or contesting intentional conduct and knowledge, making it necessary to the truth-seeking process. Moreover, there was no evidence that disclosure would truly harm a trade secret: the parties are not competitors, and sharing this limited list would not upset the commercial balance or market power.
The objection concerning the food-industry client list was therefore rejected. The court ordered Palettes Pal Bois to disclose to CHEP, by a specified date, the list of its clients operating in the food sector. This disclosure, however, is subject to confidentiality conditions: the information must remain confidential unless the trial judge decides otherwise; CHEP may use it only to prepare the trial and protect its interests, including in relation to the defendant’s counterclaim; and CHEP is prohibited from sharing the list or derived information with third parties without court authorization.

Discovery relating to CHEP’s penalties, indemnities and handling costs

The second block of objections concerns questions put to CHEP’s representative, Matthew John Ellison, by the defendant. Palettes Pal Bois sought detailed information and documents regarding (1) penalties and indemnities that CHEP may charge its own clients, and (2) handling and other operational costs associated with CHEP’s pallet activities. CHEP objected to nine such questions or undertakings, grouping them as issues of commercial secrecy, fishing expedition, and irrelevance to the matters in dispute.
The court first examined four objections tied to penalties and indemnities. In its originating application, CHEP quantifies part of its compensatory damages by multiplying a unit acquisition cost of $33 per pallet by the 620 pallets seized on the defendant’s premises. CHEP is therefore claiming the value of those pallets, not the penalties it might impose on its own clients. Evidence from Mr. Ellison indicated that any penalties charged to customers are assessed on a case-by-case basis, depending on whether pallets are returned and how inventory is balanced.
In this light, the judge concluded that questions about penalties and indemnities payable by CHEP’s customers do not bear a sufficient link to the specific recourse pursued in this lawsuit. The central issues relate to CHEP’s ownership of the pallets found at the defendant’s premises and the alleged intentional interference by Palettes Pal Bois, not to the internal contractual regime between CHEP and its customers. As such, the court upheld CHEP’s objections numbered 1 to 4, finding that the answers would not advance the debate and would instead open an unnecessary and speculative investigation into CHEP’s contractual penalties.
The remaining objections dealt with questions concerning handling and related operational costs. Again, the court sided with CHEP. It found that Palettes Pal Bois appeared less interested in preparing legitimate defences than in obtaining confidential and commercially sensitive information that falls within trade-secret protection. Those questions were not shown to be relevant to the core issues of property, intentional conduct, and the specific damages claimed, and consequently would not help resolve the dispute. The court therefore upheld objections 5 to 9 as well.
One specific undertaking, identified as EMJA-2, required separate treatment. For that item, CHEP indicated its willingness to provide information, subject to an agreement on confidentiality or other protective measures. The judge regarded this offer as legitimate and, on that limited point, rejected CHEP’s objection. The court ordered CHEP to disclose the number of pallets it purchased between 2020 and 2023 inclusive, again under conditions designed to preserve confidentiality.

Legal characterization and practice areas

The dispute and the procedural decision engage several overlapping legal practice areas. At its core, the matter is one of commercial and civil litigation: a conflict between two businesses regarding the use, circulation, and handling of specialized pallets in the supply chain. There is a significant property law component, as CHEP insists on its ongoing ownership of the pallets, regardless of their movement between users, and alleges intentional infringement of that proprietary right. The claim for a permanent injunction adds an injunctions and equitable relief dimension, as the court is asked to restrain Palettes Pal Bois from acquiring CHEP pallets, directly or indirectly, in the future.
This judgment also lies squarely within civil procedure and evidence. It defines the bounds of pre-trial examinations, determining which questions are permissible, which documents must be produced, and how courts should respond to accusations of fishing expeditions. The court balances the relevance and necessity of requested information against legitimate interests in protecting business confidentiality. As both parties invoke commercial secrecy over client lists, penalty structures, and cost data, the decision also implicates trade secrets and confidential information law, leading to protective orders that limit how disclosed information can be used and shared.

Outcome of the decision and monetary consequences

This ruling is a procedural, case-management decision dealing exclusively with discovery objections. It does not resolve the underlying merits of the lawsuit, does not decide whether CHEP is entitled to a permanent injunction, and does not adjudicate the claimed damages. In terms of success, the outcome is mixed. Palettes Pal Bois succeeds in having its first two objections (regarding broad client-supplier and client-purchaser lists) upheld, thereby preventing CHEP from obtaining those lists. CHEP, on the other hand, prevails on objections 1 through 8 concerning questions on penalties, indemnities, and handling costs, successfully protecting that information from disclosure. Each side also faces an adverse ruling: the defendant must provide a confidential list of its food-industry clients, and CHEP must disclose, subject to confidentiality, the number of pallets it purchased between 2020 and 2023.
Because the decision is interlocutory, no party is declared the overall successful party in the litigation, and the judgment explicitly leaves costs to be determined at a later stage (“frais de justice à suivre”). The court does not award or order any damages, indemnities, or other sums of money in this ruling. Although CHEP claims a total of $70,460 in compensatory and punitive damages, that amount remains only a claimed figure and has not been granted or confirmed by the court. As a result, there is presently no ascertainable total monetary award, whether for damages, costs, or any other financial relief, ordered in favor of either party in this decision.