Gideon Forrest

The plaintiffs brought a motion for summary judgment against the defendants Elko and its principal for knowing receipt and knowing assistance, alleging they participated in a scheme to divert business from a family company to avoid a prior judgment.

Elko brought a motion to stay the action because the plaintiffs failed to disclose settlement agreements with co-defendants that changed the adversarial landscape.

The court dismissed the plaintiffs' motion and granted summary judgment in favour of Elko, finding no evidence that Elko had actual or constructive knowledge of the breach of fiduciary duty.

In the alternative, the court held it would have permanently stayed the action due to the plaintiffs' failure to immediately disclose the settlement agreements, which prejudiced Elko.

The moving parties sought an interlocutory injunction preventing the responding parties from excluding them from jointly operating several addiction-treatment medical clinics and pharmacies following a breakdown in their business relationship.

The applicants also sought directions regarding patient communications, access to clinics, and division of software and other assets.

Applying the test for interlocutory injunctions from R.J.R.-MacDonald Inc. v. Canada (Attorney General), the court held that the applicants failed to demonstrate irreparable harm if access to the clinics was denied.

The court found that the applicants had already established alternative clinic locations and were intending to compete with the respondents.

Instead of granting the injunction, the court ordered a structured disengagement process, including patient choice protections and limited directions regarding software and patient database access.