SUPERIOR COURT OF JUSTICE – ONTARIO
Court File No.: CV-14-0270-00
Date: 2014 12 11
RE: Jones Deslauriers Insurance Management Inc., Plaintiffs
AND: John Enright, Nicholas Enright and McDougall Insurance Limited,
Defendants
BEFORE: The Honourable Mr. Justice R. F. Scott
COUNSEL:
Barry H. Bresner and Nicolas Businger, for the Plaintiffs
Robert J. Reynolds, for the Defendant John Enright
John D. Bonn, for the Defendant Nicholas Enright
Christopher J. Edwards, for the Defendant McDougall Insurance Brokers Limited
HEARD: November 25, 2014
E N D O R S E M E N T
[1] This is an interim motion by the plaintiff for an interlocutory injunction restraining the defendants from dealing directly or indirectly with a listed number of the plaintiff’s customers until 6 February, 2015 when its complete motion may be heard. Jones states that it has a strong prima facie case and has suffered irreparable harm and that the relief sought favors Jones’ position.
[2] Rule 37.13 of the Rules of Civil Procedure allows a motions judge to order the relief sought given that the motion proper could not be fully heard until February, however, there are considerable damages associated with imposing injunction relief even though it is for only a few months.-Smith.
[3] This remedy short term or not must be considered by this Court in accordance with settled principles. ¹.
[4] The corporate plaintiff (Jones), and the corporate defendant, McDougall (McDougall) are insurance brokers who sell various types of insurance to the public and were at various and separate times the employers of the defendants, the Enrights, who actually dealt with the public and sold to the public, insurance. John Enright (John) is the father of Nicholas Enright (Nicholas).
[5] The individual defendants are known in the business as “producers”. The defendant, John Enright, (John) had been an employee of Jones until August 21, 2013 when he was dismissed without cause and a short time later commenced employment with McDougall. Nicholas Enright (Nick) was also an employee of Jones and was dismissed without cause, on May 27, 2014 and who then also commenced employment with McDougall.
[6] The allegation is that John and Nick did after August 21, 2013, conspire to have the customers of Jones transfer their insurance business to McDougall even though both John and Nick were contractually bound not to do so for a period of one year following termination from Jones. Also it is alleged that Nick induced Jones’ customers to do so while he was an employee of Jones, with the full assistance of John.
[7] The Supreme Court in RJR – MacDonald v. Canada (A.G)[1994] S.C.R. 311 set out those basic principles and the three steps necessary to be considered in ruling in such situations even where the relief sought is for interlocutory or interim timeframe. These three steps or questions to be considered are;
Is there any arguable issue to be tried?
Has the plaintiff demonstrated that it would suffer a substantial risk of irreparable harm in the period leading to trial? and,
Which party does the balance of convenience favor?
ARGUABLE ISSUE:
[8] Jones appears to have a strong prima facie case against Nick, however it would also seem that it has little more than speculation against John and McDougall, at least on the face of the limited evidence before me.
SUBSTANTIAL RISK OF IRREPARABLE HARM
[9] I find in this matter that damages could be calculable, given the nature and record keeping of the insurance brokerage business and the larger size of the Jones’ business compared to McDougall business.
BALANCE OF CONVENIENCE
[10] Given my earlier findings, the balance of convenience does not assist Jones.
[11] As well, the acknowledgement by Jones in August of 2014 that John was now released from the non-competition agreement and was free to conduct his own business on behalf of McDougall, does not lend itself to the interim relief sought by Jones.
[12] Further, there has been a delay of months since Jones first threatened action for the alleged business infringement by the defendants.
[13] As recent as 5 November, 2014, McDougall proposed terms to carry the parties to the final hearing in February, 2015. This draft undertaking makes a great deal of sense given the particulars of this matter and as such: ².
Nick shall forthwith undertake not to solicit contrary to the restrictive covenant with Jones, pending the return of the motion;
Both McDougall and John shall forthwith undertake to assist in any way any breach of the said undertaking by Nick to Jones.
Such undertakings are not limited to the list of thirty-four customers set out in Exhibit ‘D’ of Mark Watson’s Affidavit, sworn 7 November 2014.
[14] On the condition that such undertakings shall be entered into within seven days of the release date of my endorsement. Otherwise, the order shall be amended to the extent necessary to give effect to an interlocutory injunction with the same terms.
[15] Costs are to the defendants on a partial indemnity basis.
Scott, J.
DATE: December 11, 2014