ONTARIO
SUPERIOR COURT OF JUSTICE
DATE: 20150630
BETWEEN:
ACT GREENWOOD INC. AND DR. CLEMENT SUN
Plaintiff/Moving Parties
– and –
HAMILTON 810-ENTERPRISES INC., 14 JOHN STREET NORTH PHARMACY INC.,1621991 ONTARIO INC., 2169930 ONTARIO INC., TOWARDS RECOVERY CLINICS INC., TORONTO
810-ENTERPRISES INC., TRC PHARMACY (CAMBRIDGE) INC.
and TRC PHARMACY (LONDON) INC.
Defendants/Responding Parties
Gideon Forrest and Jesse Harper, for the Plaintiff
Erik Savas and Bart Sarsh, for the Defendants
HEARD: June 29, 2015
G. Dow, j
reasons FOR DECISION
[1] The plaintiffs seek an interim injunction enjoining the defendants from excluding Dr. Sun, ACT personnel, and ACT physicians from jointly running medical clinics in Brantford, St. Catherines, Guelph, and at 14 John Street North, Hamilton. Further, they seek restrictions on how patients attending these clinics are advised about the disengagement of the businesses of the plaintiffs and defendants to ensure the patients’ freedom of choice and transfer of their medical files. Finally, the plaintiffs seek the Court’s direction on how software, intellectual property and furniture including equipment is to be divided.
[2] The defendants oppose the plaintiffs’ motion.
[3] In brief, the parties began working together in or about March, 2014. Both businesses operated pharmacies and medical clinics. Dr. Sun operates pharmacies and medical clinics in Scarborough, Peterborough, Hamilton (Barton Street) and Kingston while the defendants, through Paul Jaggard and TRC Pharmacy (London) Inc., operated pharmacies and medical clinics in Hamilton (14 John Street North), Brantford, Kitchener and St. Catherines.
[4] The medical clinics largely service individuals seeking treatment from opiate addiction and require methadone with regular, frequent (weekly) urine testing.
[5] By October, 2014, the working relationship had been reduced to a Memorandum of Understanding (Exhibit 9 of the affidavit of Paul Jaggard sworn June 18, 2015) but was never formalized beyond that. The plan was to integrate the two businesses for potential sale to a competitor. The relationship does not work out and by the beginning of June, 2015, the lawyers for Dr. Sun advised the lawyers for Mr. Jaggard that instead of working on the sale of the combined business to a competitor, “disengagement” is to occur with suspicion, mistrust and animosity resulting between the individuals at the clinics. This is no doubt due to allegiances to one side or the other.
[6] In particular, on Saturday, June 13, 2015, the defendants are attempting to operate the 14 John Street North clinic while excluding Dr. Sun personnel and Dr. Sun has individuals outside that clinic with a pamphlet (Exhibit L to the affidavit of Dr. Sun sworn June 15, 2015) and available transportation directing patients to attend at a new temporary location, 225 John Street South, Hamilton. Efforts to control the clinics and patients’ loyalty have continued while the material in support of this motion has been prepared and exchanged.
[7] The Court was advised the Statement of Claim attached as Exhibit A to Dr. Sun’s affidavit sworn June 15, 2015, has been issued.
[8] The parties, through their lawyers, have exchanged letters, June 16, 2015, from Mr. Savas for the defendants (Exhibit B to Dr. Sun’s June 21, 2015 affidavit) and June 17 from Mr. Forrest (Exhibit C of Dr. Sun’s June 21, 2015 affidavit) detailing what should occur while the litigation proceeds.
[9] The dispute requires a review of the law for interlocutory injunctive relief. The time required for decision does not permit as full a set of reasons as the Court would prefer. Briefly, the test involves an overall assessment of:
Whether there is a serious issue to be tried;
The moving party will suffer irreparable harm if an injunction is not granted;
The balance of convenience favours the granting of the relief sought.
[10] This test is set out in R.J.R.-MacDonald Inc. v. Canada (Attorney General)¸1994 117 (SCC), [1994] 1 S.C.R. 311, and followed subsequently in a number of decisions.
[11] In the Court’s view, the plaintiffs’ right to access the clinic in question does not meet the test for the following reasons and subject to the following restrictions principally, the Court has concluded the plaintiffs have failed to show it will suffer the “irreprepable harm” part of the test required in all of the circumstances.
[12] As of June 12, 2015, the plaintiffs gave notice of their intention to “disengage” from the ongoing business relationship. This was accepted in Mr. Savas’ letter of June 16. With that proposed disengagement, certain results must follow. The fact Dr. Sun has admitted he has set up a temporary alternate location on John Street South in Hamilton and rented space in Kitchener and Brantford demonstrates his intention to compete with the defendant for the patients available. While the Court accepts his right to do so, it is not prepared to mandate or facilitate ongoing entry into his (now) competitor’s place of business to compete for the patients available. In the Court’s view, the “alternate day” approach the plaintiffs proposed would cause more discord than provide a smooth transition.
[13] Rather, the Court is prepared to order and accepts the right of patients to choose where and by whom they wish to be treated. To that end, the Court orders the disengagement plans set out in Mr. Savas’ letter of June 16 proceed with dates (such as June 19 in paragraph 8) altered to a date to be agreed upon between the parties or July 17 if they cannot. This does not include the word “physician” in paragraph 9 or paragraph 11 in its entirety.
[14] The signage in the clinics will incorporate the contents set out in paragraph 3 of Mr. Forrest’s June 17, 2015, letter except for the August 15 date in paragraph 3(a) which shall be changed to July 31 and excluding the last two sentences of that paragraph.
[15] Regarding the Nightingale database, the Court understands the parties consent to an order that both shall have access to same and TRC will immediately purchase the licence necessary for the purpose of it maintaining and storing the required patient information. Regarding the Freddy software developed by Dr. Sun, the defendants shall turn over to the plaintiffs a copy of the latest available data and all copies of the software forthwith.
[16] Given the result above, there is no basis for any undertaking or payment with regard to damages and the allegation by the defendants that the plaintiffs owe them $727,724.
[17] Regarding costs, the defendants appear to have had greater success than the plaintiffs. The defendants submitted a costs outline of $91,337.38 for partial indemnity which the plaintiffs dispute. This is in part because the plaintiffs’ costs outline set out a claim for only $54,545.94 for partial indemnity costs. Given a portion of the plaintiffs’ disengagement plan was incorporated into the Court’s decision and concerns the defendants’ claim for costs is excessive, the costs of the motion shall be in the amount of $54,545.94 payable by the plaintiffs to the defendants forthwith.
[18] The parties have agreed to a disposition of the Guelph Clinic and the content of my Order is attached to these reasons and the Motion Record.
Mr. Justice G. Dow
Released: June 30, 2015
DATE: 20150630
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ACT GREENWOOD INC. AND DR. CLEMENT SUN
Plaintiff/Moving Parties
– and –
HAMILTON 810-ENTERPRISES INC., 14 JOHN STREET NORTH PHARMACY INC.,1621991 ONTARIO INC., 2169930 ONTARIO INC., TOWARDS RECOVERY CLINICS INC., TORONTO
810-ENTERPRISES INC., TRC PHARMACY (CAMBRIDGE) INC.
and TRC PHARMACY (LONDON) INC.
Defendants/Responding Parties
REASONS FOR JUDGMENT
Mr. Justice G. Dow
Released: June 30, 2015