1483860 Ontario Inc. (Plan IT Search) v. Beaudoin, 2015 ONSC 641
COURT FILE NO.: CV-10-405615
DATE: 20150128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1483860 ONTARIO INC., o/a Plan IT Search and 6573908 CANADA INC., o/a Plan IT Search Inc.
Plaintiffs
– and –
JAMES BEAUDOIN, 2103235 ONTARIO INC., WORLDHIRE INC., MASON STUBEL and PATRICIA BEAUDOIN
Defendants
Michael Gayed for the Plaintiffs
John H. Yach and Tom Finlay for the Defendants
HEARD: January 19 and 20, 2015
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION AND OVERVIEW
[1] The Plaintiffs, 1483860 Ontario Inc. and 6573908 Canada Inc. (collectively “Plan IT”) are in the business of recruiting computer-skilled employees for employers. Approximately five-and-half years ago, in August 2009, the Defendants James Beaudoin and 2103235 Ontario Inc. (“Beaudoin’s Corporation”) resigned as consultants for Plan IT.
[2] A few months earlier, in March 2009, Mr. Beaudoin, along with the Defendant Mason Stubel, who had been a contractor for Plan IT in 2006 and 2007, had incorporated the Defendant Worldhire Inc., to compete with Plan IT.
[3] Between March and August 2009, Mr. Beaudoin continued to work for Plan IT, while he was setting up the rival business. Then he left to join the new business.
[4] After Mr. Beaudoin’s departure, almost a year passed, during which Joseph Zitek, the principal of Plan IT, discovered Mr. Beaudoin’s involvement with Worldhire Inc. Mr. Zitek set out to stop what he regarded as the Defendants’ illegal conduct, and so, four-and-a-half years ago, on July 16, 2010, on a motion without notice, Plan IT obtained an Anton Piller Order.
[5] The Anton Pillar Order was executed at Mr. Beaudoin’s home in July 2010.
[6] The Defendants immediately moved to have the Anton Piller Order dissolved, but on November 24, 2010, on consent, they agreed to a narrow restrictive interlocutory injunction pending the return of Plan IT’s motion that sought more – much more – extensive interlocutory relief. It seems that the Defendants thought they could live with a narrow injunctive order pending the return of a motion for more extensive relief, which they vigorously planned to resist.
[7] However, three years passed, and in the fall of 2013, possibly prompted by the delivery of a status hearing notice from the Court, the parties rescheduled the hearing of the dormant motions, and argument was scheduled for August 2014.
[8] In the interim pending the summer motion, in January, 2014, Plan IT brought a motion to extend and make final and permanent the interim interlocutory injunction. Further, Plan IT sought an order sealing part of its motion record, which is said to contain confidential information. And Plan IT asked that the Court set a schedule for a contempt hearing for Mr. Beaudoin’s alleged interference with the execution of the Anton Piller Order. In response to Plan IT’s motion, the Defendants brought a cross-motion and sought Orders: (1) setting aside the Anton Piller Order; and (2) requiring the Independent Supervising Solicitor to return the seized documents and property, some of which was the personal and private property of Mrs. Beaudoin, who had nothing to do with her husband’s business activities.
[9] The motions that had been scheduled for August 2014, however, did not proceed, and they were adjourned for a two-day hearing that took place on January 19 and 20, 2015.
[10] More affidavit materials were filed for the hearing (there were four banker boxes of motion materials), and at the last moment, notwithstanding, that it still wished to have Mr. Beaudoin found in contempt for interfering with the execution of the Anton Piller Order, Plan IT agreed that the Anton Piller Order should be dissolved. Plan IT submitted that the motion to set aside the Anton Piller Order was moot.
[11] At the hearing of the motions, Plan IT abandoned its request for an expansive interlocutory injunction. Instead, it asked for a much reduced ambit of interlocutory relief. It did press forward on its request for a contempt hearing to be scheduled. (Plan IT made no argument about a contempt hearing for anybody other than Mr. Beaudoin.)
[12] I heard two days of argument and reserved judgment.
[13] Having reviewed the motion record, in my opinion, but for the fact that the Anton Piller Order and the Interim Injunction Order were obtained as a result of an ex parte hearing, they should never have been granted.
[14] Plan IT did not make out a case for sealing any of its motion material, which might be proprietary but was not confidential, and it did not make out a case that Mr. Beaudoin’s conduct in relation to the Anton Piller Order was contemptuous.
[15] As for the injunctive relief, there may have been a serious issue to be tried that Mr. Beaudoin had breached his duties as an employee or breached the restrictive covenants in his employment contract; however, Plan IT could not in 2010, and it did not now in 2015, establish any irreparable harm. The balance of convenience never favoured the granting of an interlocutory injunction. The interlocutory injunction should be dissolved and not extended.
[16] Further, I find that Plan IT did not make adequate disclosure to the Court, and that circumstance provides another reason for terminating the injunctive orders.
[17] The extraordinary tardiness of moving the action forward is yet another reason to end the injunctive orders.
[18] Therefore, for the reasons that follow, I set aside the Anton Piller Order and the interim interlocutory order that was granted in November 2010.
[19] I dismiss Plan IT’s motion. I grant the Defendants’ cross-motion.
B. DISCUSSION AND ANALYSIS
[20] In 1986, Mr. Zitek began work in the human resources industry, and 1999, he incorporated IT Providers, the predecessor of Plan IT. In July 2001, Plan IT was incorporated to recruit candidates with specialized computer skills (i.e. expertise with Enterprise Resource Planning, “ERP”) for employers needing these specialized skills for their businesses.
[21] In July 2002, Mr. Beaudoin joined Plan IT as a recruiter. And, in the course of the next few years, his income increased to approximately $150,000 per year. He worked mainly outside the office and used computers to remotely access the Plan IT server and database that contained client and candidate information. He had access to Plan IT’s licence to use “Maxhire,” an applicant tracking software that is used in the human resources industry as a tool for collecting and organizing client and candidate information.
[22] As I shall explain below, there is a dispute between the parties about the confidentiality, if any, and the proprietary nature, if any, and the value, if any, over time, of the client and candidate information on Plan IT’s database that was accessed by Mr. Beaudoin.
[23] Mr. Stubel was a recruiter for Plan IT between May, 2006 and April, 2007 (11 months), when he resigned because he was not prepared to execute a consulting agreement that contained confidentiality and non-solicitation provisions.
[24] In 2006, before Mr. Stubel departed, there was an incident between Plan IT and Mr. Beaudoin that I will describe as the “Recruitworld Incident.” This incident led to Mr. Beaudoin signing a Consulting Services Agreement that included a non-solicitation clause and a confidentiality clause. The parties have very different accounts of the Recruitworld Incident.
[25] Plan IT’s version of the Recruitworld Incident is that on September 25, 2006, Shaz Syed, a representative of CP Lodging, a Plan IT client, forwarded to Mr. Zitek, an e-mail message from William Perisa, using a “Recruitworld” e-mail address, which was a domain name that had been registered to Mr. Beaudoin’s home address in Toronto. In the e-mail message to Mr. Syed, Mr. Perisa offered to present some candidates for recruitment. His message indicated that Mr. Beaudoin had directed the contact, and that Mr. Beaudoin had asked that the connection not be mentioned to Plan IT. Mr. Zitek reported the matter to the police and confronted Mr. Beaudoin who agreed to sign a letter acknowledging a breach of his engagement with Plan IT. He agreed to sign a Consulting Services Agreement to govern their future relationship.
[26] Mr. Beaudoin’s version is that he simply sold the domain name to Mr. Perisa, who was another person in the recruitment business, but never suggested to Mr. Perisa that he should contact Mr. Syed without mentioning his involvement. Mr. Beaudoin says that he only signed the letter and the Consulting Services Agreement under duress. He says that he signed as a way to ensure that he would not lose unpaid commissions from Plan IT and in order to avoid having to deal with threatened civil and criminal proceedings.
[27] There is evidence that Mr. Zitek threatened Mr. Beaudoin, as revealed by a vulgar e-mail exchange sent by Mr. Zitek to Mr. Beaudoin on October 3-4, 2010, in which, Mr. Zitek stated, in part:
There are some things that I had to do as a result of your actions over the past several months. We had to bring the Police into the picture; an occurrence report had to be filed. No charges are being laid at this time, but a formal report and occurrence report was something I needed to do. Secondly, a formal legal document is being prepared for your return that effectively terminates our former agreement and arrangement dated to the date of the Breech (sic) of contract. This now opens the door for moving forward. If you accept the decisions that I have made (above) and are willing to enter into a new agreement that consists of strict procedural guidelines and rules of non-compete and of conducting other non-Plan IT related business … The alternatives are obvious. You could say "fuck you not interested", in which case you could sue me and I would sue you and we would go our separate ways… The (police) occurrence report that was done indicated that there was enough cause to treat this as a criminal matter as well as a civil matter. I have not commenced either proceeding until you and I either agree or disagree.
[28] For present purposes, I need not decide which version of the Recruitworld Incident is true beyond saying that neither Mr. Zitek nor Mr. Beaudoin acquitted themselves honourably, and they should be ashamed of their disloyalty, greed, bullying and cowardice. In any event, on October 24, 2006, Mr. Beaudoin and Beaudoin’s Corporation signed a Letter Agreement and a Consulting Services Agreement.
[29] The Consulting Services Agreement contained a non-solicitation clause, a confidentiality clause and a full time effort provision as set out in Schedule “A” to this decision.
[30] Following the execution of the Consulting Services Agreement, Mr. Beaudoin continued to earn significant amounts for placements and performance bonuses. For the years 2007 and 2008, he earned more than $180,000 each year.
[31] On March 10, 2009, Mr. Beaudoin and Mr. Stubel incorporated Worldhire Inc., and it began a competing business with Plan IT.
[32] There is evidence that while still at Plan IT, on behalf of Worldhire Inc., Mr. Beaudoin contacted Danny Jose, a director of Globalstar, one of Plan IT’s contacts about recruitment needs and that he also contacted Stephen Drew of Globalstar about recruitment for Worldhire Inc.’s account. There is evidence that while still at Plan IT, on behalf of Worldhire Inc., Mr. Beaudoin contacted Tom Catcher, a project manager at Black & MacDonald, an important client of Plan IT, to ascertain its recruitment needs. There is evidence that from this contact, Worldhire Inc. placed a candidate (Laurel Campbell), who had been on Plan IT’s database. Worldhire Inc. earned a commission of $27,000. There is circumstantial evidence that before his departure, Mr. Beaudoin was allowing Worldhire Inc. to use his access to Plan IT’s Maxhire software and data.
[33] Mr. Beaudoin did not tell Mr. Zitek about Worldhire Inc. and continued to work for Plan IT until August 2009 when he went to work for Worldhire Inc. Mr. Beaudoin resigned without advance notice, and he did not disclose his involvement with Worldhire Inc. and rather indicated that he was pursuing opportunities with Precision ERP, Westminster Consulting or the Federal Government.
[34] Concerned about the non-solicitation and confidentiality provisions in the Consulting Services Agreement, Mr. Beaudoin attempted to keep a low profile at Worldhire Inc., but there is evidence that he placed or attempted to place a few candidates that he had learned about while at Plan IT with clients who had done business with Plan IT.
[35] It is Mr. Zitek’s evidence that on August 28, 2009, he sent an e-mail message putting Mr. Beaudoin on notice that Plan IT would sue for breach of the Consulting Services Agreement and demanding return of Plan IT’s property. The e-mail message stated:
I would have appreciated a personal discussion with you rather than sending me an informal resignation letter.
You are putting me in the only position available and that is to strictly enforce the covenants in your Service Contract.
You should expect to get Cease and Desist and injunction papers and possibly a CRT order to show up in a Toronto courtroom.
I fully expect you to return all company property including computers (2 laptops and 1 desktop), contract templates, client contacts, candidate resumes, etc. We expect this back ASAP.
[36] There was a very aggressive dispute between the parties about whether Mr. Zitek sent this e-mail message or whether after-the-fact, he refabricated it to include the demand for the return of Plan IT’s property. Both parties retained forensic experts to analyze the computer evidence.
[37] In my opinion, apart from some possible relevance to the credibility of Mr. Zitek as a witness, this dispute over the e-mail message was an enormous waste of time and energy because nothing could possibly turn on whether Mr. Zitek sent or did not sent this email message, which would not change what Mr. Beaudoin did or did not do or what legal obligations he may have had to Plan IT. Whether the e-mail message was sent or not sent would not change Plan IT’s rights, whatever they were, in seeking injunctive relief and an Anton Piller Order.
[38] Pausing here and foreshadowing the discussion later, I am satisfied that there is a prima facie case or at least a serious issue to be tried that Mr. Beaudoin breached the Consulting Services Agreement and his common law obligations as an employee during his tenure of employment at Plan IT. See Boehmer Box L.P. v. Ellis Packaging Ltd., [2007] O.J. No. 1694 (S.C.J.). Plan IT also has shown a serious issue to be tried that Mr. Stubel and Worldhire Inc. were complicit in Mr. Beaudoin’s and Beaudoin’s Corporation’s wrongdoing. There is, however, zero evidence of a case against Mrs. Beaudoin. She was never employed by, engaged by, or involved in any of the business activities associated with Plan IT or Worldhire Inc. She has never worked at a personnel recruitment agency or acted as a recruiter.
[39] Returning to the narrative, about 10 months passed after Mr. Beaudoin’s departure until June 23, 2010, when Mr. Zitek swore an affidavit in support of a motion for an Anton Piller Order, and the next day by Notice of Action, the action now before the Court was commenced.
[40] On July 16, 2010, on an ex parte motion, Plan IT sought an Anton Piller Order.
[41] The requirements for an Anton Piller Order are: (1) there must be an extremely strong prima facie case; (2) the damage, potential or actual, must be very serious for the plaintiff; (3) there must be convincing evidence that the defendant has in his or her possession incriminating documents or objects; and (4) there is a real possibility that the material may be destroyed or secreted before the parties may put their respective rights before the court. See Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189; British Columbia (Attorney General) v. Malik, 2011 SCC 18; Anton Piller KG v. Manufacturing Processes Ltd., [1976] 1 Ch. 55 (C.A.).
[42] The court may infer a risk of destruction when it is shown that the defendant has been acting dishonestly or where the defendant can be shown to have knowingly violated the plaintiff’s rights: British Columbia (Attorney General) v. Malik, supra at paras. 59-60.
[43] An Anton Piller Order is an exceptional remedy and should only be granted on clear and convincing evidence: British Columbia (Attorney General) v. Malik, supra at para. 5.
[44] On July 16, 2010, Justice Ellen Macdonald granted an Anton Piller Order.
[45] In his supporting affidavit for the Anton Piller Order, Mr. Zitek relied on Mr. Beaudoin having acknowledged prior wrongdoing, and Mr. Zitek alleged breaches of the Consulting Services Agreement. Mr. Zitek did not disclose the circumstances of the signing of the Acknowledgement Letter or the Consulting Services Agreement. He did not point out that the non-solicitation clause of the Consulting Services Agreement applied only to candidates under contract with Plan IT, of which there was only one person not the twelve alleged by Mr. Zitek.
[46] In his supporting affidavit, Mr. Zitek deposed that he first learned about Worldhire Inc. placing candidates that had been on Plan IT’s candidate listings in July 2009. He deposed that over the next ten or eleven months, he learned about more placements. In his affidavit, under the heading “Full and Frank Disclosure and Undertaking as to Damages,” he says that: “the Plaintiffs did not request the Anton Piller Order at an earlier date given that Plan IT only recently learned of the linkage between Beaudoin and Worldhire, the incorporation of Worldhire prior to Beaudoin’s resignation and Beaudoin’s role at Worldhire in Worldhire in or about January or February 2010.”
[47] Mr. Zitek’s supporting affidavit gives the impression or makes the inference that the various placements of candidates on Plan IT’s candidate list with clients on Plan IT’s client lists could only be achieved by Mr. Beaudoin wrongfully providing Worldhire Inc. with Plan IT’s confidential candidate and confidential client lists. However, this impression or inference is misleading, and it is not frank or fair disclosure.
[48] In truth, Plan IT’s lists of candidates and clients are fashioned from information that is largely in the public domain, and the information does not have a quality of confidence about it. It seems that only a small part of Plan IT’s information comes from exclusive candidates or exclusive clients. The candidate and client information is often put into circulation on websites or through social media where candidates and clients disseminate information about their employment needs, opportunities, and offerings. Most of the candidates and clients in the databases have never been involved in any business arrangement with Plan IT and are at best potential candidates or potential clients in a competitive marketplace.
[49] It is, at least, contestable that the Consulting Services Agreement was signed under duress and it is contestable that the anti-competition provisions in the agreement are illegal as a restraint on trade. See Planit Search Inc. v. Mann, 2013 ONSC 6847.
[50] In his supporting affidavit, Mr. Zitek stated that various persons, whom he identified, confirmed to him that Worldhire Inc. had recruited employees for them that were taken from Plan IT’s candidates. However, many of these persons were examined as witnesses or contacted in the run up to the motions now before the Court, and they denied Worldhire Inc.’s involvement in the hiring of their employees. Thus, it turns out that Mr. Zitek was wrong in almost every instance of suspecting that Worldhire Inc. was involved in using confidential information taken by Mr. Beaudoin in placing these candidates.
[51] This is not to say that Plan IT’s lists are not proprietary and not part of its goodwill, if for no other reason than the lists would provide a springboard or jumpstart to others in the recruitment industry, but it is to say that the confidentiality of the lists is very much overstated in Mr. Zitek’s affidavit.
[52] The genuine value and utility of Plan IT’s lists are also overstated because the information may be out-of-date and there is no scarcity of current information about potential clients or potential candidates. In the case at bar, much of the information that Mr. Beaudoin is alleged to have purloined away was out-of-date and it turns out that the recruiting attributed to Worldhire Inc. was done by others.
[53] Given that the Recruitworld Incident was two-and-half years old, that Mr. Beaudoin had departed 11 months before, that there was only one month left for the non-solicitation provisions in the Consulting Services Agreement, and that there is a serious issue about the value of the client and candidate information, which was far from current or active, Mr. Zitek’s supporting affidavit did not show the prospects of very serious damage or much in the way of convincing evidence that Mr. Beaudoin had incriminating documents or that he would destroy the evidence.
[54] Based on the information that was presented in July 2010, it is, nevertheless, understandable that an Anton Piller Order would be granted, but in 2015, with the wisdom of hindsight, in my opinion, the Order ought never to have been made.
[55] Returning to the narrative, in any event, on July 20, 2010, the Anton Piller Order was executed at the private residence of Mr. and Mrs. Beaudoin. Documents and computers were seized and removed, including Mrs. Beaudoin’s private correspondence, photos, and medical records.
[56] Included in the seized material was a USB key that did contain candidate and client information that Mr. Beaudoin had gathered during his time with Plan IT.
[57] Plan IT submitted that Mr. Beaudoin interfered with the execution of the Anton Piller Order by refusing entry for two hours, by misleading the Independent Instructing Solicitor about: (a) his involvement at Worldhire Inc., (b) the information that might be found on his Worldhire Inc. e-mail account; (c) his use of a Maxhire software account licensed to Worldhire Inc.; and by (d) refusing to attend the cross-examination permitted by paragraph 29 of the Anton Piller Order pending the return of the Defendants’ motion to set aside the Anton Piller Order; and (e) requesting that the Independent Supervising Solicitor not release information to Plan IT (pending the Defendants’ motion to set aside the Anton Piller Order).
[58] I pause here to say that none of these objections to Mr. Beaudoin’s response to the Anton Piller Order is made out. The Independent Suprevising Solicitor’s ability to seize and secure information was not obstructed, and it appears that he obtained the evidence regardless of what Mr. Beaudoin may have said about what was available.
[59] If Mr. Beaudoin’s answers to the Independent Supervising Solicitor were misleading, the answers were either misunderstood or in response to inapt, unnecessary, or unclear questions, some of which went beyond the mandate of the Independent Supervising Solicitor. There is no evidence that Mr. Beaudoin was obstructionist, contemptuous, or other than adequately co-operative in the intrusion on his home. There is no reason to schedule a contempt motion.
[60] Returning again to the narrative, on August 4, 2010, the Defendants brought a motion to set aside the Anton Piller Order on the grounds that: (a) Plan IT had made false disclosure; (b) Plan IT had not satisfied the test for the Order; and (c) the terms of the Order were improper. In response, Plan IT brought a cross-motion alleging that the Defendants had breached the Anton Piller Order.
[61] On November 17, 2010, Mr. Beaudoin swore an affidavit for the Defendants’ motion, and on November 24, 2010, the matter returned to Court. However, on consent, Justice Chapnik stayed the Anton Piller Order and granted an interim interlocutory motion restraining the Defendants from using Plan IT’s confidential information pending the return of the motions.
[62] The Interim Injunction Order provided as follows:
THIS COURT ORDERS THAT the Defendants be and are hereby restrained from utilizing the Plaintiffs’ confidential information pending the return of the special appointment whereat the Plaintiffs’ and the Defendants’ motions will be heard.
THIS COURT FURTHER ORDERS THAT THE MOTIONS by the Plaintiffs and the Defendants returnable today as well as the motions returnable on January 13 and 14, 2011, be and the same are hereby adjourned to a special appointment returnable on July 13 and 14, 2011.
[63] As appears, in November 2010, the Court envisioned that there would be a special appointment in July 2011 where Plan IT’s entitlement to a continuation or an expansion of the interim injunction would be tested.
[64] It is not entirely clear to me why the motions were not argued in July 2011. I was told that there was some sort of interlocutory ruling by Master Short, which favoured the Defendants, but the order was reversed by Justice Roberts, and then the Defendants filed a leave to appeal motion, but they did not pursue it. I am told that the parties ultimately agreed that the Independent Supervising Solicitor could release the information and property seized during the execution of the Anton Piller Order for analysis by Plan IT.
[65] The action then seems to have slumbered for two years. The action then stirred itself to activity, possibly revived because the Court issued a status notice in the autumn of 2013. It then lumbered and lurched forward with a hearing scheduled for the summer of 2014, which was adjourned for a two-day hearing in mid-winter 2015.
[66] Both sides delivered more affidavits and there were cross-examinations and examinations of witnesses in aid of the interlocutory motions of both parties. There was a great deal of hearsay evidence by both parties.
[67] As noted at the outset of these Reasons for Decision, Plan IT did not oppose the motion to dissolve the Anton Piller Order, which, practically speaking, was all of executed, stayed, and spent. I, therefore, grant the motion to dissolve the Anton Piller Order. As also noted above, with the benefit of hindsight, this Order should not have been granted.
[68] The seized material should be returned, but Plan IT may keep copies of the documents relevant to the action.
[69] This brings me to Plan IT’s various requests for relief. The first matter is its request for a sealing order of its alleged to be confidential candidate and client information. For the reasons set out above, while, in my opinion, the information seized by the Independent Supervising Solicitor may be proprietary, it is not confidential or secret, and it is outdated. The information is largely what was on a USB key found in the summer of 2010 and some of the information is older still. No purpose would be served by disturbing the open court principle and sealing this largely publically available information.
[70] The next matter is Plan IT’s request for the continuation and expansion of the interim interlocutory injunction. I have numerous reasons for dismissing this motion.
[71] The applicable test is set out in RJR Macdonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311. The moving party must show: (1) a serious issue to be tried; (2) it will suffer irreparable harm if the injunction is not granted; and (3) the balance of convenience favours granting the injunction.
[72] I have already concluded that there are serious issues to be tried but, in my opinion, Plan IT has not satisfied the other two branches of the test for an interlocutory injunction. Apart from the provision in the Consulting Services Agreement which deems damages inadequate, there is no proof that Plan IT will actually suffer irreparable harm if the interlocutory injunction is refused.
[73] With one or two possible exceptions, the placements allegedly lost to Worldhire Inc. turn out to have been lost to other placement businesses or due to employers recruiting without the assistance of a business like Plan IT. If the action proceeds, in those instances where Worldhire Inc. is shown to have taken an opportunity that belonged to Plan IT, then the damages are calculable and there is no irreparable harm. There is no evidence of loss of market share in what appears to be an inherently competitive business.
[74] The balance of convenience favours not granting an injunction and leaving the parties to continue to compete with one another with a trial to determine whether any of that competition was unfair and in contravention of Plan IT’s legal rights.
[75] The consent interim injunction that has been placed in this case is the progeny of the Anton Piller Order. I have found above that Plan IT did not provide full and fair disclosure of all material facts and that with hindsight, the Anton Piller Order ought not to have been granted. In my opinion, this failure to provide full and fair disclosure is another reason not to grant Plan IT’s request for a continuation or expansion of the interim interlocutory order.
[76] Finally, the interlocutory injunction should be discharged because of Plan IT’s failure to move these proceedings forward.
[77] A plaintiff who obtains an interlocutory injunction is required to proceed expeditiously to trial, and if he or she fails to do so or fails to provide a justification for the delay, the injunction may be dissolved: 1516089 Ontario Inc. (c.o.b. Yeung and Associates) v. Jacobs, 2011 ONSC 2077; Hutchens v. Scam.com, 2011 ONSC 56 at paras. 170 -173; Levert Personnel Resources Inc. v. LeClair, [2007] O.J. No. 5013 (S.C.J.); Ciba-Geigy Ltd. v. Novopharm Ltd., 1997 CanLII 6388 (FC), [1997] F.C.J. No. 1836; Bourganis v. Glarentzos (1978), 1978 CanLII 1651 (ON SC), 19 O.R. (2d) 327 (H.C.J.). To have an interlocutory injunction dissolved, the defendant does not have to demonstrate more than that the plaintiff has failed to advance the action to a hearing on its merits: Ciba-Geigy Ltd. v. Novopharm Ltd., supra at paras. 28-30.
C. CONCLUSION
[78] For the above reason, I dismiss Plan IT’s motions and I grant the Defendants’ cross-motion.
[79] If the parties cannot agree about the matter of costs, they may make submissions in writing, beginning with the Defendants’ submissions within 20 days of the release of these Reasons for Decision followed by Plan IT’s submissions within a further 20 days.
[80] Orders accordingly.
Perell, J.
Released: January 28, 2015
Schedule “A” - Consulting Services Agreement Excerpts
- SERVICES TO BE PROVIDED BY CONTRACTOR
Full-Time Effort Required.
(f) The Contractor's full-time attention and energy shall be devoted to the Company's business. During the Term of Service defined in Section 2, the Contractor may not enter into any business activity that interferes with the Contractor's duties and responsibilities to the Company hereunder.
- NON-SOLICITATION
Non-Solicitation by Contractor. The Contractor agrees that for a period of one (1) year following the termination of the Term of Service, however caused, the Contractor or any current or future agent of the Authorized Signatory representing the Contractor will not: …
(ii) approach, contact, solicit, divert or accept any candidate, which prior to the termination of the Term of Service was a candidate currently engaged in a contract with the Company, to provide services on a temporary or permanent basis to any individual, corporation or other entity; or
(iii) directly or indirectly, solicit or accept IT staffing business from any individual, corporation or other entity which prior to the termination of the Term of Service, was a client of the Company. A "client of the Company" for the purposes of this Agreement means individuals and companies: (A) to whom the Company invoiced for services; or (B) from whom the Company had aggressively attempted to solicit business, in the year preceding the termination of the Term of Service.
- CONFIDENTIALITY
(a) Contractor recognizes and acknowledges that the Company possesses certain confidential information (hereinafter referred to as the "Confidential Information") that constitutes a valuable, special, and unique asset. The Contractor acknowledges that as an independent contractor, the Contractor will acquire Confidential Information about certain matters and confidential or proprietary, and which is the exclusive property of the Company. Contractor agrees that all of the Confidential Information is and shall continue to be the exclusive property of the Company, whether or not prepared or developed in whole or in part by Contractor and whether or not disclosed to or entrusted to Contractor's custody.
(b) Contractor covenants and agrees that the Contractor will not use, disclose or divulge any Confidential Information, except as maybe necessary in the proper provision of the Services under which circumstance the Contractor will obtain the written permission of the Company.
(c) For purposes of this Agreement, "Confidential Information" means information not generally known by competitors of the Company or the general public, and includes (whether originals or copies, in electronic or paper form) but is not limited to:
(i) financial information of the Company;
(ii) technology used by the Company;
(iii) sales and marketing strategies of the Company;
(iv) contracts of the Company;
(v) acquisition and expansion plans of the Company;
(vi) price lists and pricing methodologies of the Company;
(vii) candidate or client information, including all records such as resumes, job orders, reference checks, candidate profiles, send out forms and data bases;
(viii) client's technical requirements and staffing requirements; and
(ix) management practices, procedures, processes, sales techniques, recruiting techniques and financial controls of the Company.
(d) The Contractor agrees that any information or records created or generated by the Contractor pursuant to the provision of the Services, and all equipment, tools, diskettes, facsimile machines, books, records, reports, files, notes, data, tapes, and other materials in any way relating to any of the Confidential Information or to the Company’s business shall belong exclusively to the Company. The Contractor agrees to turn over to the Company all such materials and copies thereof in the Contractor’s possession or under the Contractor’s control, forthwith at the request of the Company or, in the absence of a request, upon the termination of the Term of Service.
- DAMAGES AND RELIEF
(a) Contractor covenants and agrees that irreparable damage will result to the Company in the event of the violation by Contractor or any covenant contained in this Agreement. Contractor further covenants and agrees that in the event of such violation, Company shall be entitled to injunctions or other equitable relief that may be awarded by a court of competent jurisdiction.
(b) Contractor covenants and agrees that it would be difficult to ascertain the damages to Company arising from any violation by Contractor of the covenants contained in this Agreement. In the event of such a violation, in addition to penalties and claims as may be awarded by a court of competent jurisdiction, Contractor covenants and agrees to forfeit all existing and future rights to outstanding commissions, monies and any other contractual benefits.
COURT FILE NO.: CV-10-405615
DATE: 20150128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1483860 ONTARIO INC., o/a Plan IT Search and 6573908 CANADA INC., o/a Plan IT Search Inc.
Plaintiffs
– and –
JAMES BEAUDOIN, 2103235 ONTARIO INC., WORLDHIRE INC., MASON STUBEL and PATRICIA BEAUDOIN
Defendants
REASONS FOR DECISION
PERELL J.
Released: January 28, 2015