SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-15-531698

DATE: 20151013

RE: Lockwood Fire Protection Ltd., Plaintiff/Moving Party

AND:

Jason Caddick, Caddick Fire Protection Inc. and Ray Dulac, Defendants/Responding Parties

BEFORE: Sean F. Dunphy J.

COUNSEL:
G. Hodder and G. Steinburg, for the Plaintiff/Moving Party

D. G. Bent, for the Defendants/Responding Parties Jason Caddick and Caddick Fire Protection

HEARD: October 6, 2015

ENDORSEMENT

[1] The plaintiff seeks an interlocutory injunction to prevent the defendants – two former employees and a company founded by one of them – from selling or providing services to any past or present customer of the plaintiff. It is alleged that Mr. Jason Caddick (“Jason”) was a fiduciary of the plaintiff, left the plaintiff upon entirely inadequate notice and has breached his fiduciary duties soliciting present and former clients of the plaintiff. The injunction is sought against Jason, the company he founded and another employee who left the plaintiff’s employ to join him.

[2] Jason had been “service manager” of the plaintiff. It is clear that mere titles are not determinative of the existence or non-existence of fiduciary duties. Key employees may, in some circumstances, be found to be vested with such a level of confidence and possess such a level of control over important aspects of the employer’s business as to justify imposing upon them the duties and obligations of a fiduciary.

[3] In my view, the evidence that that Jason’s role made him a fiduciary of the plaintiff is very weak. The principal of the plaintiff profoundly distrusted Jason and reposed little to no confidence in him. There is simply nothing concrete before me to demonstrate that Jason had anything like exclusive contact or control over any material aspects of the business. The plaintiff has failed to establish a strong prima facie case that any of the defendants owned it any fiduciary duties. Even if the evidence tendered by the plaintiff could be read generously enough to rise to the level of establishing a serious issue to be tried, the lack of any material evidence of irreparable harm and the balance of convenience both require me to dismiss this application for an interlocutory injunction. The defendants have had only the most minor of impacts upon the plaintiff’s business. This motion appears to have been motivated primarily by a desire to exact retribution against an employee who picked the wrong side in a struggle between the former owners.

[4] I am dismissing this motion with costs for the more detailed reasons that follow.

Overview of Facts

[5] Until March 31, 2015, the plaintiff Lockwood Fire Protection Ltd. had been owned 50% by each of Mr. Wayne Lockwood (“Wayne”) and his (now former) wife Mrs. Barbara Lockwood (“Barbara”). The couple had attempted to live separate and apart under the same roof while maintaining their increasingly uneasy business partnership from 1998 or 1999 until 2014. The smouldering issues in that relationship finally erupted into flames when, in July 2014, Barbara launched proceedings to wrest control of Lockwood Fire from her husband.

[6] Lockwood Fire had been founded by the couple in 1976. It is in the business of being a fire protection service provider for various large commercial and residential buildings, inspecting, servicing and repairing fire alarm and related systems for its clients. The company had prospered and grown even as the owners’ marriage did not. By 2014, Lockwood Fire serviced more than 300 buildings in the GTA and had annual gross revenues of approximately $2.3 million with almost $800,000 profit. Its work force included 15-17 technicians, including the two individual defendants.

[7] The defendant Jason was originally hired in 1997 as a technician working under the close supervision of Wayne. While he was promoted to the title of Service Manager in 2005, Jason was never either an officer or director of Lockwood Fire.

[8] The litigation for control of Lockwood Fire was clearly hard fought and generated acrimony between the separated couple. The litigation was settled on March 31, 2015 after mediation arbitration. The result was that Barbara purchased Wayne’s shares in the company and the Wayne agreed to retire.

[9] While not a party to the litigation, Jason was clearly a casualty of it to some degree having been identified as a protégé of Wayne. Only days prior to the settlement of March 31, 2015, Jason had permitted Wayne to file an affidavit (on March 27, 2015) in the arbitration proceedings where Jason expressed the view that he would leave Lockwood Fire if Barbara succeeded in forcing out Wayne. As it turned out, she did and he did as well.

[10] In their litigation, Mr. and Mrs. Lockwood painted diametrically opposite portraits of each other and their respective contributions to the business of Lockwood Fire. Such may often be the stuff of litigation but I can simply ignore the positions taken by Barbara in that litigation: truth is not nearly so relative. That case has, thankfully, settled. Barbara‘s characterization of her own role and that of Jason in the business contrasts quite markedly with the portrait she and her children (two of whom work in the family business) paint of Jason’s role in this case. I am inclined to give much greater weight to the admissions she made in the former case.

[11] The plaintiff’s factum in this case describes Barbara’s role in the business prior to settling the litigation on March 31, 2015 as follows: “Jason and Wayne were in charge of the service department and Barbara was in charge of the “front office”, that is dealing with bookkeeping, scheduling. The service department was responsible for all face-to-face contact”.

[12] In her litigation with Wayne, Barbara claimed a somewhat more robust role in the affairs of Lockwood Fire. Her litigation generally described Wayne as an increasingly absent figure at the office. Her statement of claim alleged “all the executive decision-making and work is done by Barbara, including the hiring and firing of staff”. Not “some” but “all”. She denied any agreement to leave the “service” side of the business to Wayne pleading “Barbara shared equal responsibility with Wayne with respect to this, as service is the entire business of Lockwood Fire”. She pleaded that she “has authority and discretion to authorize raises, without prior consultation and/or approval form Wayne”. She pleaded that that there “is no such designation as a service personnel employee” at Lockwood Fire and, to the extent the term refers to technicians, pleaded that both she and her son Mr. Michael Lockwood had hired some of the company’s technicians.

[13] Jason was a technician who also had the title of “service manager”. Reading Barbara’s evidence from her litigation with Wayne, one is left with only the most uncertain and tenuous grasp of what additional duties the title “service manager” carried that “technician” did not. While technicians allegedly “reported” to the service manager, the service manager had little to no authority over them. He could not hire them; he could not fire them nor could he set their wages or give bonuses. Scheduling was not his department either – indeed, he was denied access to the schedule for fear that he might meddle in it. Some customer complaint issues came to his ears and were dealt with, but not in any systematic way and he had little to no authority in the area of billing.

[14] In the first round of litigation, Jason was clearly viewed as Wayne’s ally. The battle lines were not confined to the courtroom but affected relations on the job as well. Barbara’s daughter Ms. Jennifer Lockwood was in charge of scheduling service calls for clients. She wrote to Jason on October 17, 2014 justifying “hiding” the schedule from Jason to prevent him from changing it: “Hiding the schedule is a very childish and juvenile move on our part but based on what is going on at Lockwood Fire, we have no choice. All work has to go through the Scheduler, which is me”.

[15] Barbara’s pleadings specifically denied that Jason had authority to authorize bonuses at Lockwood Fire and castigated the “petty office power plays routinely carried out by Jason Caddick with Wayne’s permission and encouragement”.

[16] When the litigation was moved to the forum of mediation/arbitration, Barbara filed a detailed affidavit which singled Jason out for criticism on a number of occasions. She criticized Jason for failing to consult with Ms. Jennifer Lockwood regarding the scheduling, she mentioned his having “attempted to assume charge of payroll” and his attempt to insist on raises for some employees (both without success). She criticized Jason for beginning to issue quotes “a job that has always been done by Michael”. She concluded “Jason’s behaviour is becoming increasingly disruptive to the business. I believe that this disruption is sanctioned by Wayne” and “I believe that Jason acts as Wayne’s proxy”.

[17] I find it to be highly probable that Wayne would have shared the gist of Barbara’s allegations regarding Jason with him. I also find it highly probable that Barbara would have assumed this to be so given the close relationship she knew them to have. Barbara knew that Wayne had sworn an affidavit on March 27, 2015 on information from Jason that Jason would leave if Wayne were forced out. I find the question of how Jason learned of Wayne’s affidavit to be irrelevant to the matters before me. In light of the evidently strained working relationship that evidently existed between Jason and Barbara, Jason’s expressed intention to leave if Barbara should succeed strikes one as a penetrating glimpse into the obvious.

[18] On Thursday April 2, 2015, Barbara met with Jason to discuss his future in light of the settlement just reached with Wayne. Jason would have only just learned that Wayne had decided to retire. She wrote Jason an email that morning indicating “even though we have had our differences in the past, I am hopeful that you will stay on at Lockwood Fire in your current role as Service Manager”. This was followed up with an off-site meeting where the matter was discussed.

[19] Given the bitter litigation that had just ended and given Barbara’s strongly held and critical views of Jason’s role in the company, I have little doubt that she made only the most perfunctory of efforts to persuade him to stay if indeed either party had any expectation that such was remotely possible. Jason did not agree to stay, but agreed to give the matter some thought.

[20] There is some dispute between the parties as to what happened at this meeting of April 2. Jason’s version of events, which seems the most plausible to me for the reasons just mentioned, was that there was no real expectation that he would be staying. However, he left the question open. His evidence was that he had not yet decided what to do – I have no trouble believing that to be so. Having fully expected his mentor Wayne to be staying on in the company he had founded, Jason had no reason to plan a future elsewhere. He had only just learned that Wayne was retiring instead of pursuing the fight with Barbara.

[21] Jason claims that he warned Barbara in some considerable detail as to the fact that a significant number of clients that were already in the process of leaving Lockwood Fire for other competitors and why. He also warned her that some employees were spreading negative rumours about the company. Both of these appear to me to be highly understandable outcomes of so much turmoil in a small family-run business. Barbara admits that Jason gave her a critique of Lockwood Fire and certain Lockwood Fire employees.

[22] On April 23, 2015, Jason delivered his letter of resignation effective May 8, 2015. Barbara made little or no comment. She did not ask him to give more notice nor did she attempt to change his mind. She thought it would be futile. Indeed, she had already initiated the search for his replacement and received the resume of the successful candidate a few days earlier. She did not attempt to keep him from going out on service calls, did not caution him about his communications with clients. She did not ask him to work on transition. She did not ask for a longer transition period or ask for his help in training a replacement. Her affidavit says that she had “no further communication with Jason” after receiving his resignation letter on April 23. She might have added that she sought none either.

[23] There is more than a little evidence that Mrs. Lockwood was neither surprised nor caught flat-footed by Jason’s news. On the totality of the evidence before me, I formed the very strong impression that Barbara never expected Jason to stay after her husband’s resignation and planned accordingly. The meeting of April 2 has the appearance of a calculated move by her on the chessboard, not a genuine attempt to persuade an allegedly valuable company asset to remain. Wayne’s affidavit mentioning Jason’s intention to leave if Wayne were forced out was only about a week old. If the date of Jason’s departure could be deferred or, better still, if Jason could be prevailed upon to sign a restrictive employment agreement some advantage might yet be had. The fact that Barbara forwarded her April 2 email to Jason to her lawyer a couple of days later and then advertised for his replacement before he even gave his answer to her “offer” speaks volumes about her level of optimism that the differences between them had any likelihood of being patched up.

[24] Lockwood Fire did not hire another Service Manager after Jason’s departure, the title being assumed (at least on an interim basis) by one of Barbara’s children, Mr. Michael Lockwood. Barbara alleges that Lockwood Fire continues to look for a replacement for service manager, but there is no evidence of any active search effort to back up that statement. Mr. Michael Lockwood was in charge of that effort. He said that there was no urgency in getting a replacement service manager “because I can fill in the role of a service manager”. He mentioned considering one candidate from a rival firm, but placed no ads.

[25] There is disputed evidence as to when Lockwood Fire began merger discussions with Quantum Fire Protection Inc. and its owner, Mr. Lui Rosvelti. Mr. Rosvelti is a former technician of Lockwood Fire who had left (on two-week’s notice) to found his own competing company. Barbara says the talks with Mr. Rosvelti began in May soon after Jason’s departure. Mr. Rosvelti inexplicably claims the talks began only a few weeks ago, contradicting Barbara. The defendants have no first-hand knowledge but suggest that I might infer talks were initiated as early as April 9 when Mr. Rosvelti visited Lockwood Fire upon hearing the news of Wayne’s retirement. During the course of that visit, he had a lengthy private meeting with Barbara. There were no witnesses and both claim only family was discussed.

[26] Whether the merger flame was actually kindled in that first meeting cannot be concluded based upon the evidence before me. There was certainly plenty of motive and opportunity. I needn’t go so far as to assume that the subject of merger was specifically discussed with Mr. Rosvelti as early as April 9 to infer that Barbara was actively working on her “plan B” from the moment she assumed undisputed control of Lockwood Fire following the March 31, 2015 settlement.

[27] Jason’s last day of work was May 8, 2015. On or about that day, he had a last service call with a client named Mr. Grecu who worked at the Tip Top Tailor building. Mr. Grecu asked why Jason was leaving and Jason replied that he was unhappy at Lockwood Fire. Jason had been performing most of the emergency service calls for Mr Grecu during his 17 years at Lockwood Fire (other Lockwood Fire technicians usually handled the monthly and annual maintenance visits). Mr. Grecu was cross-examined by the plaintiff. His candid and impartial testimony was that Jason did not bad-mouth his employer nor did he even mention his own future plans (although Caddick Fire had been incorporated two days previously). Mr. Grecu took the initiative of asking Jason to call him when he knew what his plans were and testified that he was very interested in not losing access to Jason whose work ethic and skill he clearly greatly appreciated. Mr. De Souza’s evidence was to similar effect, although he was not contacted until after Jason’s departure.

[28] The action giving rise to this injunction application was commenced on July 3, 2015. With very few exceptions, all or substantially all of the incidents complained of by the plaintiff occurred in the first 2-3 weeks after Jason’s departure. With the (extremely) limited exception of Mr. Grecu (who took the initiative of asking Jason to get in touch with him), there is no basis to suppose that Jason was anything other than professional and correct in the days prior to his departure from Lockwood Fire or afterwards. There is no suggestion that Jason personally denigrated Lockwood Fire before or after his departure nor is there any evidence that he countenanced anyone else doing so.

[29] The plaintiff alleges that the defendants solicited business from some former clients of Lockwood Fire. The volume of business affected by the episodes canvassed by the parties in the materials was only about 3% of Lockwood Fire’s business. The evidence indicates that a similar volume of business had left Lockwood Fire without any input from Jason or the defendants. On cross-examination, Jason indicated that while he does advertise, he has not continued soliciting business from former Lockwood Fire clients.

[30] The plaintiff alleges that certain property went missing from its premises. I did not require responding submissions from the defendants on this allegation. The evidence that anything had been stolen at all, let alone by the defendants, was not persuasive. If anything was taken – and I am not at all sure this is so – the attribution of the deed to the defendants is an exercise in the purest of speculation which I could not possibly consider taking into account for purposes of this injunction. The event is at all events unrelated to the relief requested on this motion and appears to have been inserted for atmospheric purposes only. If the plaintiff can prove damages and causation in fact, the matter can of course be taken up if, as and when the matter ever proceeds to trial.

[31] The plaintiff alleges that the defendant Mr. Ray Dulac told “some” clients that Lockwood Fire was going out of business. This, it is alleged, was an instance of defamation that should be attributed to all of the defendants and should be considered on this motion. I disagreed and expressed this view at the hearing. The only evidence of defamation is attributed to Mr. Dulac alone. The evidence of the statements ever having been made is disputed. There is no evidence that Mr. Caddick or his company had advance knowledge of the statements if they were indeed made or, if made, that they were made with their approval. Given the thoroughly professional descriptions of Jason’s behaviour coming from at least two former clients of Lockwood Fire (Mr. Grecu and Mr. De Souza), it seems quite unlikely that Jason or Caddick would have condoned such statements being made.

[32] I did not take these allegations into account in my deliberations since:

a. There is significant evidence that there were other competitors and existing Lockwood Fire employees making similar allegations or spreading similar rumours in that tumultuous April-May time frame when Lockwood Fire was absorbing the departure of one of its founders, Wayne;

b. There is no evidence of anyone connected with Caddick making such allegations beyond Mr. Dulac (an employee, not an officer);

c. The evidence in relation to Mr. Dulac is both disputed and confined to that same time frame (mid-May, 2015) and a very limited bit of evidence;

d. At this point, the passage of time will have thoroughly discredited the rumour in any event and it is impossible to suppose that any further irreparable harm could be supposed to flow from such a self-evidently wrong insinuation at this late stage; and

e. If the plaintiff can prove the statements, their provenance and damages, they may of course seek damages in their action, but the allegation has no bearing on the requested injunction.

Issues

[33] The following issues are raised by this application:

a. What is the plaintiff’s onus for obtaining an injunction to prevent competition or solicitation?

b. Was Jason a fiduciary?

c. Has the plaintiff demonstrated irreparable harm?

d. Does the balance of convenience favour granting an injunction?

Analysis and Discussion

(a) Plaintiff’s Onus

[34] As moving party seeking an interlocutory injunction, the plaintiff clearly bears the onus of establishing that its application satisfies each of the three parts of the well-known test described by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] S.C.R. 311: the existence of a serious issue to be tried, irreparable harm to the moving party and that the balance of convenience favours the relief sought. The question that arises in this case is whether the “serious issue to be tried” test is to be applied or whether the nature of this injunction (restraining the defendants from competing) calls for the application of the stricter “strong prima facie case” test.

[35] In the present case, Jason was not party to a written employment agreement with the plaintiff. Nevertheless, the plaintiff seeks in this case to prohibit the defendants from contacting or soliciting employees or clients of the plaintiff or indeed from selling or providing services to any present or former clients of the plaintiff. Where an express restrictive covenant is sought to be enforced, our courts have imposed the “strong prima facie case” test: see generally Polar Wireless Corp. v. Roberts, 2012 ONSC 6482 and cases cited by Stevenson J. at paras. 21-25.

[36] If the strong prima facie case test applies to express restrictive covenants, it ought in my view to apply as well to a restrictive covenant which the plaintiff effectively seeks to imply by alleging the existence of fiduciary duties and a breach of them. The plaintiff took no strong exception to this reasoning and in fact argued throughout on the basis of the existence of a strong prima facie case.

[37] I am of the view that the plaintiff’s burden on this motion is thus to establish a strong prima facie case both as to the existence of fiduciary duties and a breach of them by each of the two responding defendants[^1].

(b) Was Jason a fiduciary?

[38] The plaintiff cited eight features of Jason’s employment which it claimed satisfy the strong prima facie test for establishing that Jason was in fact a fiduciary of the plaintiff. I consider each of these in turn.

(i) Jason’s title as Service Manager.

[39] While acknowledging that titles no more make a fiduciary than lack of titles preclude it, the plaintiff suggests that Jason’s managerial role, as suggested by his title, is a factor to be taken into account. I concur that it is a factor. However, it cannot be contended that every manager is, by reason of that title alone, a fiduciary. Managers, particularly low-level managers with only limited amounts of trust and discretionary authority vested in them, are not presumptively fiduciary in the way directors and senior officers are. A case-specific analysis of the actual responsibilities and role of the employee is required to determine the scope of the employee to exercise unilateral authority in a way that could affect the employer’s economic and legal interests: AMD Diagnostics Inc. v. Bozza, 2008 58606 (ONSC) at para. 10.

(ii) Face to face client contact

[40] The plaintiff submitted quite strongly that Jason was the “embodiment of the competitive advantage” of the plaintiff and had acquired intimate knowledge of the requirements of the plaintiff’s customers. In my view, the plaintiff’s argument lands wide of the mark. It is necessary to distinguish Jason’s role as a technician – a role he shared with 15 or more non-fiduciary employees of the company – from his role as “service manager”. All or substantially all of the “face to face” features of Jason’s employment arose from the technician duties he performed along with others, but little could be attributed to his service manager duties.

[41] Mr. De Souza and Mr. Greco both testified to the high regard in which they held Jason’s skills (in the case of Mr. De Souza, skills he attributed to training from Wayne whose skills he also praised). The skill appreciated by both was Jason and Wayne’s ability to repair worn components rather than simply recommending (expensive) replacement as many competitors do. This is not indicative of some proprietary knowledge of confidential business secrets. This simply indicates that Jason (and Wayne) had well learned a degree of technical skill that was not common and was thus valued. Possession of technical skill or competence, even if that skill is portrayed as comparatively rare, does not create a fiduciary relationship. A skilled Porsche mechanic may be a very valuable and hard to find employee, but possessing such a skill does not render that mechanic a fiduciary for that reason alone. An employee is free to offer his or her skills, even those learned from the previous employer, to the highest bidder. There are no proprietary trade secrets the plaintiff has been able to articulate or identify with evidence that Jason. Jason knew how to repair equipment and he was familiar with the equipment clients had – he shared this knowledge with other non-fiduciary technicians who serviced the same clients. There is no trade secret in that, particularly when the equipment is of non-exclusive, third-party manufacture.

[42] The evidence was that Jason had face to face contact with employees only because he was a technician on call. Scheduling of calls – at least of non-emergency matters – was handled by Ms. Jennifer Lockwood. There was no suggestion on the evidence before me that Jason was responsible for any particular client on an exclusive basis. What knowledge he had of a client’s equipment he had in common with many others. The fact that his successor as service manager is not a field technician also suggests that his client contact was primarily in his capacity as technician and not in his capacity as service manager.

[43] The simple fact is that even if Jason got to know and be appreciated by a number of Lockwood Fire’s employees over the course of his employment, he never had anything resembling “control” over the relationship with any of them. When “key employees” have been found to be subject to fiduciary duties, the feature of control over the relationship of the employer with clients has been a very key feature: Metatrade Limited v. Lal, [2002] O.J. No. 3106 at para. 7. The non-exclusive relationship between Jason and some of the clients of Lockwood Fire displays none of the characteristics of “intimate contact and control” of a client mentioned by Molloy J. in that case.

(iii) Responsibility for customer complaints

[44] The plaintiff sought to portray Jason’s occasional role in helping to deal with customer complaints as somehow vaulting him into the rarefied ranks of fiduciary management. The evidence was a long way from establishing that inference. Lockwood Fire is a relatively small business. Jason sometimes helped resolve customer complaints. He did so only occasionally and was neither the “go to” person for receiving, processing or resolving customer complaints. He had little to no authority on the financial side of things which of course would limit his ability to deal with billing complaints. The most the evidence establishes is that sometimes he helped resolve some of them.

(iv) Groomed as successor

[45] The plaintiff suggests that Wayne was grooming Jason as his successor. Perhaps he was. We shall never know since Wayne has been bought out and retired from the business. I fail to see how the fact that Jason might one day have become senior management and a fiduciary implies that I must infer he had already become that which he might one day have aspired to become.

(v) Role in review of business plan

[46] At one point, Mr. Michael Lockwood had drafted a formal business plan for which Barbara had sought Wayne’s. Their relationship was fraying. Wayne indicated that he wouldn’t give his consent until Jason had first reviewed it. Jason neither drafted it nor is there any evidence that his comments were ever even considered. This evidence is highly equivocal and does not move the needle on whether Jason was a fiduciary.

(vi) Access to Confidential Information

[47] I found this allegation to border on the bizarre. Jason had little to no access to confidential information. He was locked out of filing cabinets and locked out of access to the schedule of his own calls and those of the technicians he was supposed to be “managing”. He had virtually no financial authority. While Wayne may have liked and admired him, Barbara certainly did not and, by her own admission, she had most of the executive power in the organization before Wayne left and all of it afterwards. Against this fairly uncontested backdrop a single fact is placed before me: Jason was able to quote from Wayne’s March 27, 2015 affidavit in the supposedly confidential arbitration process. He did no quote from the whole affidavit – merely the passage where Wayne indicated that Jason had told him he would leave if Wayne were forced out. From this, I was asked to infer that Jason not only might have had access to all confidential information that former 50% co-owner Wayne had, but that he actually was given access to all of it. I cannot begin to give credence to that suggestion.

[48] There is not a shred of evidence before me to establish that Wayne had any material access to confidential information regarding the business of Lockwood Fire. That Wayne may have shared details of his litigation fight with Jason – a battle which by all accounts had seen a number of people in the office required to choose sides – is hardly surprising but is irrelevant to the question of whether Jason was a fiduciary of the business.

(vii) Responsibility for Personnel

[49] Although Jason was “service manager” the level of responsibility he actually had over other technicians appears to have been minor. He did not schedule them (Ms. Jennifer Lockwood did). He did not hire them, although he interviewed some and provided recommendations. He could not fire them nor could he give them raises or bonuses. These characteristics suggest low level management and not fiduciary trust.

(viii) Role in Pricing

[50] The plaintiff does not allege that Jason played any regular or routine role in quoting or establishing prices with clients. It was able to point to a very small number of instances, each of which was on its face a “one-off” type of occurrence. Barbara clearly was of the view that Jason did not have authority on pricing and objected to each occasion where she thought he had overstepped his bounds. This is thin gruel.

(ix) Summary re Fiduciary

[51] I have very grave doubts that the evidence I have seen, viewed as a whole, could reasonably support a finding that Jason was a fiduciary of Lockwood Fire. The fact that in her litigation with Wayne Barbara attributed to herself much of the managerial authority the plaintiff now suggests that Jason enjoyed suggests to me that the plaintiff’s allegations in this case are to be taken with a healthy dose of salt.

[52] The evidence before me established that at least two other technicians had left Lockwood Fire on two weeks’ notice or less in the past and had immediately thereafter solicited (with some success) clients of Lockwood Fire. In none of those cases did Lockwood Fire allege a fiduciary relationship or even apparently take umbrage at the competition that ensued. Those technicians on the surface had the same type of client contact and had been trained or developed skills in repair while at Lockwood Fire. The plaintiff was unable to identify with any precision exactly what confidential information Jason possessed or what position of vulnerability Jason’s very limited additional duties as “Service Manager” (as opposed to his technician’s duties) created. If there is evidence that his service manager duties enabled him unilaterally to exercise authority to affect the employer’s legal or economic interests in a manner that other non-fiduciary skilled technicians could not, the plaintiff has failed to lead it.

[53] I have no hesitation in concluding that the plaintiff has failed to establish a strong prima facie case that Jason was a fiduciary. If I am wrong about the test to be applied, I would be prepared to assume that the plaintiffs have established a serious issue to be tried on the matter of the existence of a fiduciary duty. “Serious issue” does not mean “likely to succeed” and is generally considered to be a low bar. The plaintiff’s case cannot fairly be called frivolous at this early stage even if I harbor grave doubts as to its merits.

[54] Even if there is a serious issue to be tried on the existence of a fiduciary duty, I cannot conclude that the same can be said regarding a continuing breach of that alleged fiduciary duty. In my view, the evidence of continuing threat of breach of a fiduciary duty is weak and does not rise to the level of serious issue to be tried.

[55] The fact that the plaintiff replaced Jason before his notice even expired and made no effort to ask him to stay longer or assist in transition is strong evidence in my view that a very short quiet period, if at all, is all that would have been required. I can find no serious case to be made that Jason ought to remain subject to any continuing non-solicit or non-compete obligations of a departing fiduciary more than five months after the fact. The plaintiff has not sought to replace him as service manager and has had more than enough time to make contact with such of its clients as it wishes to in order to satisfy them that it remains worthy of their business and confidence.

[56] In Boehmer Box LP v. Ellis Packaging Ltd., 2007 14619, D. Brown J. (as he then was) reviewed the obligations of a departing employee who is a fiduciary (at para. 42). He noted that the fiduciary duty subsists “for so long after his employment as is reasonable in the circumstances to enable the former employer to himself contact his clients and attempt to retain their loyalty” (Boehmer Box, supra, at para. 42).

[57] Having regard to the nature of Jason’s position, the very limited level of trust he enjoyed and the very limited degree of vulnerability of the employer, the “quiet period” to enable the employer to attempt to retain their loyalty from the competition of a former fiduciary would be measured in weeks and not months.

(c) Irreparable Harm

[58] The plaintiff proceeded from the assumption that if a strong prima facie case could be made out, it would face less scrutiny on the matter of irreparable harm. It has failed to establish a strong prima facie case. Its evidence of irreparable harm is inadequate and would not justify the exercise of my discretion to issue an injunction.

[59] In assessing the matter of irreparable harm, I agree with the approach taken by Perrell J. in Optilinx Systems Inc. v. Fiberco Solutions Inc., 2014 ONSC 6944. Evidence of irreparable harm must be clear and not merely speculative. Loss of market share or goodwill is not necessarily unquantifiable. The only hard evidence of lost business in this case amounts to approximately $32,000 of profit or less than 4% of the plaintiff’s profit.

[60] The plaintiff has also provided rather equivocal evidence that the conduct it seeks to restrain is at all material to its business. The plaintiff seeks to restrain solicitation of what it views as “its” customers. However, the evidence suggests that solicitation of customers alone is seldom a factor. The plaintiff does not have sales people engaged in soliciting business and describes sales as coming primarily from “word of mouth”. The defendants, even if fiduciaries, are entitled to accept business they do not solicit: Optilinx Systems, supra, at para. 34. The defendants are entitled to harvest the fruit that word of mouth delivers to their door especially where the word of mouth amounts to little more than recognition of the personal reputation for skill built up over the years. The defendants are also entitled to – and do – advertise. Mr. De Souza and Mr. Greco both suggested that solicitation by itself is seldom effective and such approaches are usually filed quickly away in the recycle bin. The additional harm to be feared arising from active solicitation targeting former clients of the plaintiff appears speculative at best this many months after the fact when the plaintiff has had plenty of time to make its case to those clients.

[61] In my view, the plaintiff has failed to establish anything that approaches the standard of evidence required to obtain an injunction to prevent irreparable harm from being inflicted.

(d) Balance of Convenience

[62] The plaintiff suggests that since the defendants have indicated that they do not presently intend to solicit business from its customers that the balance of convenience favours granting an injunction. That is not the test. The defendants are running a very small a start-up business that the plaintiff has been exerting no small amount of pressure to impair if not destroy. The balance of convenience does not favour limiting competition for employees or for business simply because one party may – for the time being – have no interest in pursuing the opportunity. There is no doubt in my mind that the plaintiff will be around for the foreseeable future with or without the injunction sought. The defendant may or may not be hobbled by such a step. In the circumstances, the balance of convenience favours permitting more competition rather than less and maintaining the status quo (which permits it).

Disposition

[63] For the foregoing reasons, I would dismiss the plaintiff’s motion for an interlocutory injunction with costs payable by the plaintiff (to the appearing defendants). The parties indicated to me that they had agreed on the amount of costs payable by each depending upon the outcome, and asked only that I indicate the party entitled to costs. I have done so. In the unlikely event of difficulty in implementing that agreement, I may be spoken to.

Sean F. Dunphy J.

Date: October 13, 2015

[^1]: Mr. Dulac has been noted in default and did not defend this motion, although he was ultimately cross-examined by the plaintiff.