The applicants sought a final injunction enforcing a non-competition covenant in a shareholders agreement after a former business participant returned to a competing enterprise and contacted prospective clients previously approached through the joint venture.
The court held the agreement unambiguously provided that the restrictive covenant survived the cessation of share ownership for five years, and rejected the argument that the termination clause nullified the restraint.
Applying the more generous approach to restrictive covenants in commercial agreements, the court found the five-year term and GTA geographic scope reasonable and enforceable.
The court further held that damages would rarely be an adequate remedy for breach of an enforceable negative covenant and granted injunctive relief against the respondents.
