Andrejs Management Inc. v. Bourdignon et al, 2015 ONSC 3988

Andrejs Management Inc. v. Bourdignon et al, 2015 ONSC 3988

CITATION: Andrejs Management Inc. v. Bourdignon et al, 2015 ONSC 3988

COURT FILE NO.: CV-14-512272

DATE: 20150619

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ANDREJS MANAGEMENT INC.

Plaintiff

– and –

TIM BOURDIGNON, CT QUALITY PROPERTY MANAGEMENT INC., MICHELLE McVICAR and COSTA KALAMARIS

Defendants

Jerry Herszkopf, for the Plaintiff

Patrick Copeland, for the Defendant

HEARD: June 11, 2015

S.A.Q. Akhtar J.

1The plaintiff, Andresj Management Inc. (“AMI”), brings a motion seeking an interlocutory injunction to restrain the defendants from soliciting its clients, employees or the employees of any of its clients.

2AMI is a condominium property management company. The defendant at the centre of the factual matrix in this case is Tim Bourdignon. Bourdignon and his associate Michelle McVicar were employed by the plaintiff until early 2014. Bourdignon started with AMI as a Property Manager and was promoted, initially to the position of Regional Manager, and finally to Vice President.

3In January 2014, Bourdignon resigned from AMI. He was followed by McVicar in April. Bourdignon and McVicar incorporated a new company called CT Quality Property Management Inc. (“CT Quality”) along with Costa Kalamaris, also joined as a defendant in this motion.

4In April 2014, two clients, Metropolitan Toronto Condominium Corporation No. 755 (“MTCC”) and York Region Standard Condominium Corporation No. 1014 (“York Region”) ceased their business with AMI and joined the defendants’ company. The plaintiff alleges that Bourdignon solicited both, in breach of his employment contract. A third AMI client, Peel Condominium Corporation No. 327 (“PCC”), also left AMI and met with CT Quality, but ultimately declined their services.

5According to the plaintiff, Bourdignon’s and McVicar’s employment contracts with AMI contained a number of non-solicitation conditions. The first condition provides that:

[U]pon termination of your employment with Andrejs Management Inc. and for a period of two (2) years thereafter or some other period deemed appropriate by a Court of Competent Jurisdiction, you covenant and agree that, you personally or by others, will not solicit or attempt to solicit any client or current prospective client being tendered that and Andrejs Management Inc., is or may be providing Property Management or Administrative Services

6A second condition stipulated the following:

[U]pon termination of your employment with Andrejs Management Inc., and for a period of two (2) years thereafter or some other period deemed appropriate by a Court of Competent Jurisdiction, you covenant and agree that, you personally or by others, will not solicit any person who is a current employee of Andrejs Management Inc., or any employee employed by any managed clients of Andrejs Management Inc.

7The plaintiff alleges Bourdignon breached these conditions by soliciting MTCC, York Region, and PCC after leaving AMI. In response, the defendant submits that he never signed or agreed to any conditions preventing him from soliciting clients in the event of his departure. Further, he maintains that he did not solicit any of MTCC, York Region, or PCC in any event.

8Although Kalamaris and CT Quality were not subject to the same restrictions as Bourdignon and McVicar, the plaintiff submits that an injunction would be ineffective if Bourdignon’s associates were not subject to the same conditions. I agree with that proposition.

The Legal Principles

9There is no dispute about the test for granting an interlocutory injunction. In RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385, the Supreme Court of Canada, at para. 43, outlined three criteria to be met before granting an interlocutory injunction:

1. Is there a serious question to be tried on the merits of the case?

2. Would the applicant suffer irreparable harm that cannot be compensated by damages if the application is refused?

3. Which party will suffer the greater harm from the granting or refusal of the remedy pending a decision on the merits?

Is There a Serious Question to be Tried?

10The threshold for the first criterion is low. There is no requirement that the plaintiff demonstrate a strong case: RJR, at paras. 44, 49; Abuzour v. Heydary¸ 2015 ONCA 249. The threshold will be met if, after a preliminary examination of the merits of the case, I am satisfied that the application is neither vexatious nor frivolous: RJR, at para. 50. The principles thus indicate that there must be at least some evidence of the wrongdoing alleged by the party seeking the injunction. In the circumstances of this case, the “serious question” inquiry has two components:

(a) Whether there is a serious question raised that the defendant signed an agreement which contained a non-solicitation clause; and,

(b) If so, whether there is a serious question that the defendants solicited any of the plaintiff’s clients in breach of that agreement?

11AMI, who has the burden of establishing the RJR criteria, draws this court’s attention to various circumstantial pieces of evidence that it says proves Bourdignon and McVicar signed and were aware of the non-solicitation clauses in their employment contracts.

12I have been provided with an unsigned employment agreement addressed to Bourdignon. That agreement contains the aforementioned non-solicitation clauses. The plaintiff is unable to provide a signed copy of the agreement and in response, Bourdignon rejects the plaintiff’s claim that he signed the contract. To support its allegation, the plaintiff relies upon three alternative pieces of evidence that it says corroborates its position.

13Firstly, a letter of employment sent by Bourdignon, then Vice President of AMI, on September 5, 2012, to John Putnam, offering him the role of Property Manager. That letter contains the very same non-solicitation clause that Bourdignon now claims to be ignorant of. Secondly, AMI points to the fact that Bourdignon actively sought and obtained acknowledgement letters from MTCC and York Region, declaring they were not solicited in any way by the defendants. Finally, the plaintiff argues that testimonial evidence provides inferential support for the fact that Bourdignon reached out to the clients in question. For example, in cross-examination of one client—Jeff Horvath, president of York Region—the plaintiff suggested that Horvath could only have known of the defendant leaving the plaintiff’s company because the defendant had actually contacted him. Although Horvath explicitly rejected that contention, AMI suggests this to be a wholly illogical response.

14Contrary to the plaintiff’s argument, I do not find that there is “convincing” circumstantial evidence demonstrating Bourdignon agreed to the non-solicitation clause in question. However, given the low threshold required by RJR, I am satisfied that evidence establishes the existence of a serious issue as to whether Bourdignon knew he was bound by the non-solicitation clauses. I take this view for the following reasons.

15Bourdignon worked for the employer and dealt with contracts for new employees. One such contract, delivered by Bourdignon to John Putman, contains the same non-solicitation terms that the plaintiff alleges were agreed to by Bourdignon. It is also clear, that Bourdignon took preventative measures when he agreed to act for MTCC and York Region. Those measures are evidence that he knew of the risk of being liable for breach of his previous employment contract. Whilst not determinative of any wrong doing, and explainable by Bourdignon as an act of caution by a party fully aware of his former employers zeal in protecting his client list, the actions could constitute circumstantial evidence that Bourdignon had agreed to the non-solicitation terms and was trying to protect himself. On this point, there is a serious question to be tried.

16In this regard, I also note that McVicar had the same type of employment contract. Although the specific allegation is that Bourdignon actually solicited the clients in question, an inference may be drawn that this was done on behalf of the company of which McVicar was one of the founding members. It would be some co-incidence that two of AMI’s former employees were unaware of the non-solicitation agreements.

17The plaintiff’s argument falters, however, when dealing with the actual fact of solicitation. There is simply no evidence of actual solicitation by Bourdignon. Two of the allegedly solicited clients have explicitly acknowledged that they contacted Bourdignon in order to do business with him. Email correspondence demonstrates queries made by each of the clients as to Bourdignon’s start-up of a new company. The fact that these clients chose Bourdignon over the plaintiff does not, of course, constitute solicitation. Against this direct evidence, the plaintiff offers nothing beyond speculative theories. Regrettably, for the plaintiff, it is his burden to persuade this court that there is at least some merit to his allegations. I find no evidence on this point to assist the plaintiff and thus conclude that there is no serious question to be tried on the solicitation issue. Accordingly, the first branch of the RJR test has not been met.

18As a result of this finding, it is unnecessary to proceed with the remainder of the RJR test, nevertheless I will do so for the sake of completeness.

Irreparable Harm

19I also find that the irreparable harm criterion has not been satisfied. If a party can recover financial loss through damages, that party will not suffer irreparable harm. It would be very simple for the plaintiff to quantify any lost revenue in a future action against the defendant. Indeed, the defendant has provided a list of potential financial losses to demonstrate that this is possible. Although the plaintiff suggests that damages may not be forthcoming because of the defendants’ impecuniosity, I find that there is no evidence that the defendants’ current financial position forecloses the payment of damages accruing to the plaintiff if it is successful in future litigation.

Who Suffers the Greater Harm?

20Finally, I agree that the third limb of the RJR test favours the plaintiff, since the defendants are currently contractually bound not to solicit AMI clients. An injunction, therefore, would simply preserve the status quo. However, the third limb of RJR does not overwhelm the other two limbs which have not been satisfied. I also note that Bourdignon’s non-solicitation agreement, if upheld, would expire on January 2, 2016, tempering any rationale for granting an injunction until trial.

Conclusion

21In conclusion, looking at the three criteria as a whole, I find that the plaintiff has not met its onus and, accordingly, I dismiss the plaintiff’s application for an injunction.

22If the parties are unable to agree on costs, the defendant shall make written submissions, limited to 5 pages, together with a costs outline, to be delivered by July 17, 2015. The plaintiff may respond by delivering brief written submissions by August 14, 2015.

S.A.Q. Akhtar J.