Court File and Parties

COURT FILE NO.: CV-15-541870 DATE: 20160526 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Henry Lukenge and Nixim Healthcare Consultancy Inc., Applicants – AND – Mustafa Ibn Yacoob and MIY Consultants Inc., Respondents

BEFORE: Justice E.M. Morgan

COUNSEL: Joseph Osuji, for the Applicant Rhyan Ahmed and Preet Pannu, for the Respondent

HEARD: May 26, 2016

Endorsement

[1] The Applicant, Nixim Heathcare Consultancy Inc. (“Nixim”), together with its principal, the Applicant, Henry Lukenge, seek an interlocutory injunction restraining the Respondent, MIY Consultants Inc. (“MIY”), together with its principal, Mustafa Ibn Yacoob, from soliciting Nixim’s customers.

[2] Nixim provides health support services to its customers. Mr. Yacoob was an employee of Nixim’s from November 2010 until his resignation in February 2015. During that time he was Director of Operations and account manager for certain of Nixim’s important customers. In these capacities he had access to Nixim’s confidential information and customer lists.

[3] Mr. Lukenge and Nixim contend that Mr. Yacoob signed a Confidentiality Agreement that contains, among other things, a non-solicitation clause. This clause prohibits Mr. Yacoob from using Nixim’s corporate information and soliciting its customers for a period of one year from the time of his departure from the company. The Motion Record contains an unsigned copy of this Confidentiality Agreement. Mr. Lukenge has deposed that Nixim does not possess the signed original, although he is certain that it was signed by Mr. Yacoob. Another member of the Nixim board of directors, Chujor Chujor, has provided an affidavit stating that he recruited Mr. Yacoob for Nixim and was an eye witness to Mr. Yacoob’s signing of the Confidentiality Agreement.

[4] For his part, Mr. Yacoob deposes that he has never before seen the Confidentiality Agreement now produced by Mr. Lukenge, and that he never signed any such document. He complains that his remuneration by Nixim was not what he thought it would be and that at one point he was demoted to part-time status, which eventually caused him to resign his position.

[5] Mr. Yacoob denies soliciting the customers of Nixim. However, email correspondence produced by Mr. Lukenge demonstrates that Mr. Yacoob is now providing consultancy services to Brampton Caledon Community Living (“BCCL”), one of Nixim’s largest customers. These services are alleged to be identical to the services that Nixim provided to BCCL. Nixim has apparently now lost BCCL as a customer. Mr. Lukenge states that BCCL accounted for about 50% of Nixim’s revenues.

[6] The proceeding against Mr. Yacoob and MIY was commenced as an application rather than as an action. It seeks declaratory relief regarding the parties’ respective rights under the Confidentiality Agreement. In addition, section 1(b) of the request for relief in the Notice of Application seeks “a declaration that the applicants have suffered significant loss of revenue and clientele, as a result of the above mentioned breach.” In my view, this head of relief calls out for the Application to be converted to an action for damages.

[7] In order to issue an interlocutory injunction, the moving party must establish three things: a) a serious issue to be tried; b) irreparable harm to the moving party if the injunction is not granted; and c) a balance of convenience favouring the moving party: RJR MacDonald Inc. v Attorney General of Canada, [1995] 3 SCR 199. Mr. Osuji, for the Applicants, submits that there is a serious issue to be tried in respect of whether the Confidentiality Agreement was ever signed by Mr. Yacoob and binds the parties. He is correct in this; the contract signing issue turns on witness credibility and appears to demand viva voce evidence. The entire case will depend on whether the Confidentiality Agreement is in force.

[8] Mr. Ahmed, for the Respondents, responds that there is no evidence that Nixim will suffer irreparable harm that cannot be compensated in damages. He is correct in this; the evidence of harm is a quantifiable one in that it raises consultancy fees that have been lost by Nixim and are now allegedly being earned by Mr. Yacoob or his company. Although Mr. Osuji submits that the loss of a major customer like BCCL could spell the irreparable demise of Nixim, there is no real evidence in the record of Nixim’s overall financial position to support this. In any case, it is not clear that enjoining Mr. Yacoob from dealing with BCCL on an interlocutory basis will restore that work and the corresponding fees to Nixim.

[9] What Nixim has lost, if its claim is ultimately upheld, is money. If it has been wronged by Mr. Yacoob, that wrongful conduct can be quantified in a damages claim. Accordingly, I hereby dismiss the motion for an interlocutory injunction and instead order that this Application be converted to an action.

[10] The Applicants herein shall issue a Statement of Claim in respect of this matter within 30 days of today’s date. Following that, the balance of the proceeding, including the time for issuing the Statement of Defense, any Reply, affidavits of documents, discoveries, etc. shall be governed by the applicable Rules of Civil Procedure. I am not seized of this matter, and it can from here proceed in the ordinary course of an action for damages.

[11] Mr. Ahmed has submitted a Costs Outline seeking just under $5,000 in respect of this motion. While he was successful in resisting the Applicants’ request for an injunction, Mr. Osuji was successful in demonstrating that there is a serious issue to be tried. It is apparent that Nixim is suffering financially with the departure of a major customer such as BCCL, and it was understandable that it would attempt to seek some relief. Those losses are better adjudicated in an action for damages, which will now ensue as a result of this motion. The evidence compiled by both sides in this motion will no doubt be put to further use in the forthcoming action.

[12] Costs are discretionary under section 131 of the Courts of Justice Act. Given the circumstances of each of the parties, I will exercise my discretion not to order costs of this motion for or against either side.

Morgan J. Date: May 26, 2016