Samuel Michaels

The moving parties sought an interlocutory injunction to prevent the responding parties from opening a competing Caribbean fusion restaurant in close proximity to their existing restaurant.

The responding party, a former director of the moving party's corporation, had signed a unanimous shareholder agreement containing a non-competition clause.

The court applied the RJR-MacDonald test and found a serious issue to be tried regarding the enforceability of the non-competition clause and breach of fiduciary duty.

The court concluded that opening a competing business nearby would cause irreparable harm not compensable in damages, and the balance of convenience favoured granting the injunction.

The applicants, who are shareholders of a software company, brought an application under the Business Corporations Act to compel the respondent shareholder to comply with a unanimous shareholder agreement.

They sought an order requiring the respondent to sell his shares and to return proprietary source code.

The court found that an unexecuted second shareholder agreement was unenforceable, and therefore there was no basis to force the respondent to sell his shares.

However, interpreting the original executed shareholder agreement, the court held that the source code developed by the respondent was the exclusive property of the corporation.

The application was granted in part, and the respondent was ordered to return the source code.