Background:
Rhema Health Products Ltd. sued Martin & Pleasance North America Inc., formerly known as Pauling Labs Inc., in the Supreme Court of British Columbia over a business dispute. The parties entered into a memorandum of understanding (MOU) in April 2021 and a subsequent supply to forecast agreement (STFA) in November 2021. The dispute focused on the "Stranded Inventory Clause," where Rhema sought payment of $787,023.75 for unused inventory after the termination of the agreement.

Legal Issues:
The case revolved around Rhema's claim for liquidated debt under the Stranded Inventory Clause and an alternative claim for breach of contract. Martin & Pleasance counterclaimed, alleging breach of contract by Rhema, specifically failures to meet delivery timelines, which caused lost sales. They argued that the STFA superseded the MOU, invalidating the Stranded Inventory Clause, and sought the right to set off any amounts owed.

Rulings:
The court dismissed Rhema’s application to strike portions of the defendant's response and the request to sever the main claim from the counterclaim. It found that Martin & Pleasance's defenses, including equitable setoff, were sufficiently pled and that both claims should be heard together due to their interrelated nature.

Costs:
The court awarded costs to Martin & Pleasance as the successful party, though it did not specify the amount, stating that costs were "in the cause," meaning they would be determined based on the final outcome of the trial.