The plaintiff sought an interlocutory injunction enforcing restrictive covenants in a license agreement with a former licensee operating a mobile sign business.
After the agreement expired, the former licensee allegedly solicited customers and attempted to continue operating under a competing company within the restricted geographic area.
Applying the test from RJR‑MacDonald Inc. v. Canada, the court found a strong prima facie case that the restrictive covenant was enforceable and had been breached.
The court also found that the diversion of customers and misuse of the plaintiff’s trade name would cause irreparable harm to goodwill and business relations, and that the balance of convenience favoured protection of the plaintiff’s business.
An interim injunction was granted restraining the defendant from operating a competing mobile sign business within the restricted area and from soliciting the plaintiff’s customers pending further review.