CITATION: Titanium Logistics Inc. v. B.S.D. Linehaul Inc., 2017 ONSC 7526

COURT FILE NO.: CV -17- 3725

DATE: 20171215

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TITANIUM LOGISTICS INC., Plaintiff

AND:

B.S.D. LINEHAUL INC., B.S.D. LOGISTICS INC., ANDREW SHIM and DAVID DAL BELLO, Defendants

BEFORE: Shaw J.

COUNSEL: P. W.G. Carey and P. Holdsworth, counsel for the Plaintiff

J. S. Winny, counsel for B.S.D. Linehaul Inc.

S. Rosen, counsel for B.S.D. Logistics Inc. and Andrew Shim

A. Zeilikman, counsel for David Dal Bello

HEARD: September 22, 2017

ENDORSEMENT

Issue

[1] The plaintiff, Titanium Logistics Inc. (“Titanium”) seeks an interim injunction against the defendants based on an alleged breach of a confidentiality and non-solicitation agreement.

[2] Titanium also alleges that the defendants, Andrew Shim (“Shim”) and David Dal Bello (“Dal Bello”) were key employees who breached their fiduciary duties to it when they left their employment with Titanium and established a competing business and solicited other employees and customers.

[3] The defendants’ position is that the non-solicitation agreement is not enforceable as it is too broad and ambiguous. Shim and Dal Bello also allege they were not key employees who owed any fiduciary duty to Titanium. Lastly, they deny that the corporation, B.S.D. Logistics Inc. (“Logistics”) is in competition with Titanium.

[4] The defendant, B.S.D. Linehaul Inc. (“Linehaul”) submits that it is a separate corporate entity from Logistics and that it has no connection with Shim. Linehaul denies that it worked with Shim to solicit customers from Titanium and that it violated any agreement with Titanium not to solicit any shipper directly to the exclusion of the broker who arranged the shipment.

Background

[5] Shim and Dal Bello are former employees of Titanium. At the commencement of this motion, Dal Bello advised that he would not be objecting to the relief sought by Titanium. No submissions were made on his behalf.

[6] Shim commenced his employment with Titanium in July 2013. He resigned four years later on July 31, 2017. Dal Bello was hired in June 2015 and also resigned on July 31, 2017.

[7] Logistics is a company incorporated on March 27, 2017. Shim was a founding director. He was still an employee of Titanium when Logistics was incorporated. Dal Bello worked as an employee of Logistics after he left Titanium. Linehaul is a trucking company that has no legal relationship to Logistics, Shim or Dal Bello.

[8] Titanium has carried on business of logistics brokering and freight- forwarding to commercial customers in Canada and the United States since 2002. Doug Billau, who is the vice president of Titanium, explained that a freight lane in the trucking and logistics industry refers to the specific corridors between shipper and consignee through which brokers will arrange the delivery of loads and the movement of vehicles to maximize the efficiency of resources between receipt and delivery of consecutive loads.

[9] The Notice of Motion sets out various relief being sought by Titanium. For the purposes of this motion, however, the only relief requested is a continuation of an interim injunction granted by Justice Bloom on September 14, 2017. That Order restrained the defendants from soliciting new business with any of Titanium’s 93 customers listed in Schedule C of its factum. The Endorsement also stated that any existing contracts involving the defendants were not affected by the Order. For this motion, Titanium is also requesting that the defendants not be allowed to deal with one of its customers, namely KP Building Products Inc. (“KP”) after completion of the current loads.

Shim’s Employment with Titanium

[10] Pursuant to terms of an employment agreement dated July 2, 2013, (“the agreement”) Shim was hired as an employee of Titanium to work as an account executive. According to the affidavit of Doug Billau sworn August 28, 2017, Shim was responsible for quoting and maintaining customer accounts and the freight lanes they serviced. In paragraph 15 of his affidavit he described Shim’s functions to be as follows:

Shim and Dal Bello’s primary functions as Account Executives were to:

a. receive requests for quotes (“RFQs”) from customers and prospective customers for shipping services;

b. source out vendor carriers to provide shipping services to customers for specific freight lanes and with the necessary equipment (e.g. 53’ enclosed dry vans or flatbed freight trucks);

c. receive quotes for identified freight lanes and equipment from a vendor carrier;

d. calculate applicable markup profit margin based on specific formulas and quote the price to the customer or prospective customer; and,

e. with Titanium dispatchers, coordinate the logistics of moving customer’s freight through specific freight lanes with the required equipment. This process includes knowledge of the specific pricing and pricing formulas used by the account owner.

[11] Shim does not dispute this description of his duties although his evidence is that his work title was more appropriately as a salesperson and not an account executive. His evidence is that his job initially involved making cold calls to potential customers to develop a customer base for logistics and transport services. His evidence is that as a result of his work, he secured KP as a new customer for Titanium.

[12] According to Mr. Billau, between August 2017 and July 2017, Shim was responsible for approximately 43 customer accounts and coordinated the logistics for approximately 1207 loads through over 800 lanes. Shim does not deny this. Dal Bello was responsible for approximately 45 customer accounts and coordinating the logistics for approximately 425 loads through 350 lanes.

Non-Solicitation Covenant

[13] Shim’s employment agreement contained a confidentiality and non-solicitation clause at paragraph 9 which stated as follows:

[Shim] shall well and faithfully service [Titanium] and use his … best efforts to promote the interest thereof, and shall not, during his … employment and for a period of 12 months following termination of his … employment for any reason … disclose the private affairs of [Titanium], or any trade secret, confidential or proprietary information of [Titanium] to any person other than the President, and shall not solicit any of the customers of the company, whether former current at the time of termination or in the previous two years, or otherwise directly or indirectly attempt in any way to obtain from those customers or former customers business to the detriment of [Titanium] for any competitive endeavour, whether [Shim] participates is [sic] such endeavors as an employee a partner, a shareholder, an agent, a consultant or otherwise.

[14] The agreement with Dal Bello contained essentially the same clause.

[15] Shim’s evidence is that he has no recollection of ever seeing the agreement or signing it. He specifically denies that his initials are beside paragraph 9 which is the non-solicitation clause. He acknowledges that the initials on the last page of the agreement look similar to his signature. In his submissions, counsel for Shim indicated that Shim was not denying that he signed the agreement but he simply could not recall.

Confidential Information

[16] Titanium alleges that as an account executive, Shim had access to confidential information critical to Titanium competitiveness in the freight- forwarding and logistics brokerage market including the following:

g. carrier costs;

h. freight lane details;

i. bill rates; and,

j. profit margins

[17] Titanium’s evidence is that a Rate and Load Confirmation form from Logistics, which Titanium inadvertently received on August 4, 2017, confirms that Logistics is using the same freight lanes that Titanium was previously servicing for KP and that Logistics matched Titanium’s pricing exactly. Titanium alleges that the pricing formula is confidential and that based on this one occurrence, this is evidence that Logistics is using Titanium’s confidential pricing and freight lane information.

[18] Shim denies that he has any confidential information of Titanium. He denies taking any customer lists, documents or other information on paper or electronic format from Titanium. His evidence is that the rates and prices used by Titanium are not trade secrets and are well known in the industry.

Is Logistics in Competition with Titanium?

[19] Shim denies that Logistics is in competition with Titanium in any material way. His evidence is that Logistics is mainly a freight-forwarding business. No explanation was given with respect to how that differs from the work performed by Titanium which is also in the freight-forwarding business. Furthermore, one of Titanium’s customers, KP, is no longer using Titanium’s services but has moved its business to Logistics. That seems to fly in the face of Shim’s bald allegation that Logistics is not in competition with Titanium in any material way. For the purposes of this interim motion, I find that Logistics is in competition with Titanium.

Solicitation of Customers

[20] Titanium alleges that Logistics solicited its customers and relies on an email dated August 1, 2017, from Shim, the day after Shim resigned, that was received by one of Titanium’s customers who forwarded it to Titanium. That email, received by National Wash, a Titanium customer, refers to “Flatbed/Dry Van Trucking and Logistics Services, Canada/ U.S.!” The email reads as follows:

If you have any shipments this week please do not hesitate to reach out to me or our team and we can provide rates and availability.

B.S.D. Linehaul Inc. is a Canadian carrier located in Toronto and Windsor, ON, Canada. We provide both TL, LTL, expedite services. Our fleet consists of 150 tower units and 300 trailers both dry van and flatbeds. We service both Canada and cross border U.S. and provide 24 hour operation support and shipment tracking.

Our Clients include:

• Manufacturing

• Food and Beverage (Fresh and Frozen)

• Produce

• Mining Companies

• Auto Parts

• Raw Materials

If you need rates and availability please contact me and we will gladly assist.

[21] The email identified Shim as being a Senior Account Executive at Linehaul and not Logistics. Shim’s evidence is that when he left Titanium, he operated Logistics from Linehaul’s office. Linehaul is a trucking company that provides carrier services. According to its corporate profile, it was incorporated in 2000. There is no legal connection between Linehaul and Logistics. Linehaul does provide trucking services to Logistics. It had also provided such services to Titanium. There was a five week period when Logistics operated out of the same office space as Linehaul. According to Shim, it was through inadvertence that the initial email was set up using the Linehaul name rather than Logistics. While this explanation appears questionable, for the purposes of this motion, there is insufficient evidence to establish that Linehaul in some fashion colluded with Logistics to solicit customers from Titanium.

[22] Shim’s evidence is that he obtained a publically available contact list of approximately 2000 companies in Ontario that use freight-forwarding services and sent out the above “email blast” to these companies. He does not dispute that some of Titanium’s customers may have been recipients but he was not aware of the identity of all of Titanium’s current or former customers. He denies that this email was an attempt to solicit Titanium’s customers.

[23] Titanium had been providing freight-forwarding services for KP since March 2015. In 2016, Titanium billed KP just over $1 million and was on track to bill a similar amount in 2017. Shim was the account executive for KP. On or immediately after the day Shim and Dal Bello resigned, KP informed Titanium that it would no longer be using Titanium to provide freight-forwarding services.

[24] By way of email exchanges dated August 4, 2017, inadvertently copied to Shim’s Titanium email address, it was confirmed that Logistics was providing freight-forwarding services to KP.

[25] Shim does not dispute that Logistics is currently providing freight-forwarding services to KP but submits that Titanium lost KP’s business as it did not have the correct type of truck to move KP’s products. Shim refers to discussions he had with Mike Nicholls from KP who he says told him that he was very displeased with his dealings with Titanium. There is, however, no direct evidence from Mr. Nicholls other than an email dated August 8, 2017 from Mr. Nicholls to Blair Downey, the Vice President of Sales at Titanium. In that email Mr. Nicholls said that KP was using four carriers and did not need another. In that same email, Mr. Nicholls said that KP had been pleased with its prior relationship with Titanium. This conflicts with Shim’s evidence that KP was not pleased with its dealings with Titanium.

[26] Titanium also alleges that prior to July 31, 2017, Shim had diverted KP loads away from Titanium. There is evidence of two shipments, one that was picked up on July 24, 2017 and one on July 31, 2017, that were not in Titanium’s tracking system. Shim denies this occurred.

Solicitation of Employees

[27] Titanium alleges that one of its employees, Brian Rupnarain, was approached by Shim in January 2017 to “start up our own trucking brokerage and for all of us to leave Titanium”. Mr. Rupnarain informed Titanium about this by way of email dated August 9, 2017. Shim denies this.

The Law

[28] In RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), 1994 117 (SCC), [1994 1 SCR 311], 1994 S.C.J. No. 17, the court established the three part test that must be met in order for the court to grant an interlocutory judgment. The test is as follows:

(i) There is a serious issue to be tried;

(ii) Irreparable harm will be suffered by the applicant if the injunction is not granted; and

(iii) The balance of convenience favours granting the injunction.

[29] The defendants’ position is that the serious issue to be tried test should be replaced by the more stringent test of a strong prima facie case. In support of that position, the defendants rely on. In Altus Group Limited. v. Yeoman, 2012 ONSC 4406. At para. 25, Stevenson J. held as follows:

[25] Some courts in Ontario have held that the higher standard of a strong prima facie case should apply where parties are seeking to enforce restrictive covenants, both in the context of an employment agreement and the sale of a business. If the higher standard is met, less emphasis is placed on the second and third parts of the injunction test. See: Boehmer Box L.P. v. Ellis Packaging Ltd., [2007] O.J. No. 1694 (S.C.J.) and Quizno’s Canada Restaurant Corp. v. 1450987 Ontario Corp., 2009 20708 (ON SC), [2009] O.J. No. 1743 (S.C.J.).

[26] In other decisions, the courts have not insisted that the parties seeking to enforce a restrictive covenant make out a strong prima facie case. They have found that where a strong prima facie case can be made out, there is no need to examine the second and third parts of the injunction test. Where only a serious issue to be tried can be established, there is more emphasis on the second and third parts of the injunction test.

[27] Pattillo J., in the decision of Van Wagner Communications Co., Canada v. Penex Metropolis Ltd., [2008] O.J. No. 190 (S.C.J.), leave to appeal refused, [2008] O.J. No. 1707 (Div. Ct.), applied this approach. At para. 35, he referred to statements from Canada (Attorney General) v. Saskatchewan Water Corp., 1991 3951 (SK CA), [1991] S.J. No. 403 (C.A.) that were adopted in C.BJ International Inc. v. Lubinski, [2002] O.J. No. 3065 (S.C.J.), at para. 16:

In summary, we find that to apply the appropriate test where an interlocutory injunction is sought on the basis of breach of a negative covenant the judge should use the following approach. To satisfy the first test he must undertake a preliminary and tentative analysis of the strength of the case put forward by the plaintiff. Is it overwhelming? Is a strong prima facie case? Is it a prima facie case? Is it less than a prima facie the case? Similarly he must make a tentative and preliminary assessment of the possible defences which may be offered, all with a view to a [sic] estimating the extent to which those defences reduce the strength of the case initially shown by the plaintiff. At the end of that process the judge must answer the question: Is the plaintiff left with a[t] least a prima facie case? If the answer is yes, the first test has been satisfied. As for the second and third tests, the strength of the case that the plaintiff is left with will determine how heavily the balance of convenience and irreparable harm must be weighed in the context of negative covenants. If the plaintiff is left with a strong prima facie case approaching a plain and uncontested breach of a clear covenant, then an injunction ought to be granted without much regard to the balance of convenience and irreparable harm. If the plaintiff is left only with a prima facie case then more regard needs to be had to the balance of convenience and irreparable harm.

[30] In Mi5 Print and Digital Communications Inc. v. Larmer, 2017 ONSC 3112, at para. 23, Lederman J. stated as follows:

[23] Since Mi5 is seeking an interlocutory injunction that will interfere with Larmer and his ability to earn a living, the higher standard of a strong prima facie case is applicable with respect to him. As stated by Nordheimer, J. in Jet Print Inc. v. Kohen, [1999] O.J. No. 286 at para. 11:

In my view, when the injunction sought is intended to place restrictions on a person’s ability to engage in their chosen location and to earn a livelihood, the higher threshold of a strong prima facie case is the more appropriate test to be applied.

[31] As set out in Altus Group, the court must undertake a preliminary analysis to assess the strength of the plaintiff’s case and the defences which are offered in order to determine if an injunction should be granted. The test is one of a prima facie case as Titanium is seeking to enforce the non-solicitation agreement which would place a restriction on Shim’s ability to earn a livelihood. The second and third parts of the test, being irreparable harm and balance of convenience, must then be considered in light of the strength of the preliminary assessment.

Analysis

Is there a strong prima facie case to be tried?

[32] Titanium submits that the issue to be tried is whether Shim breached the non-solicitation covenant set out in the agreement. It is also Titanium’s position that Shim was a key employee who had a fiduciary duty to Titanium not to solicit employees or customers prior to and following his resignation. Shim submits that the employment contract is unenforceable and void as it is too broad. It is also Shim’s position that he was not a key employee.

[33] There is no dispute that the Shim incorporated Logistics while he was still employed at Titanium. This is confirmed in the Corporation Profile Report which notes that Shim was a director when the company was incorporated on March 27, 2017. Furthermore, as I found above, Logistics is in competition with Titanium.

[34] In Mason v. Chem-Trend Limited Partnership 2011 ONCA 344, 106 O.R. (3d) 72; [2011] ONCA 344, at para. 16, Feldman J.A. reviewed the governing principles that are applicable when considering whether a restrictive covenant in an employment contract is unreasonable and therefore unenforceable as follows:

• To be enforceable, the covenant must be "reasonable between the parties and with reference to the public interest";

• The balance is between the public interest in maintaining open competition and discouraging restraints on trade on the one hand, and on the other hand, the right of an employer to the protection of its trade secrets, confidential information and trade connections;

• The validity, or otherwise, of a restrictive covenant can be determined only upon an overall assessment of the clause, the agreement within which it is found and all of the surrounding circumstances;

• In that context, the three factors to be considered are (1) did the employer have a proprietary interest entitled to protection; (2) are the temporal or spatial limits too broad; and (3) is the covenant overly broad in the activity it proscribes because it prohibits competition generally and not just solicitation of the employer's customers?

[35] In Benson Kearley & Associates Insurance Brokers Ltd. v. Jeffrey Valerio, 2016 ONSC 4290 Charney J. discussed the general principles applicable to restrictive covenants at para. 39:

[39] The Court of Appeal in Staebler stated two general principles applicable to restrictive covenants (paras. 42 and 43):

[A] non-solicitation clause -- suitably restrained in temporal and spatial terms -- is more likely to represent a reasonable balance of the competing interests than is a non-competition clause. An appropriately limited non-solicitation clause offers protection for an employer without unduly compromising a person's ability to work in his or her chosen field. A non-competition clause, on the other hand, is enforceable only in exceptional circumstances.

[T]he fact that a clause might have been enforceable had it been drafted in narrower terms will not save it. The question is not whether a valid agreement might have been made but whether the agreement that was made is valid.

[36] In Benson, the court found the non-solicitation clause was unreasonable as it was of unlimited duration. On that basis, the court found the plaintiff had not met the strong prima facie test. In this instance, the non-solicitation clause has only a 12 month duration during which time Shim shall not solicit Titanium’s customers. On that basis, it is not unreasonable.

[37] In Benson, the court was also concerned as the non-solicitation clause dealt with all of the plaintiff’s clients and not just those whom the defendant knew or had access to. The court was concerned that the defendant would therefore have no way of knowing whether any particular potential clients was one of the plaintiff’s current clients.

[38] The same issue was raised in Mason where the non-solicitation clause stated that the former employee could not deal with any customer of the company during the period in which he was an employee. In that case, the former employee had worked for the employer for 17 years and the company had worldwide operations. The restriction was not limited just to the customers the former employee had dealt with but all customers. The Court of Appeal found that the former employee did not know and would not have access to a list of all the company’s customers and therefore found that the restriction was overly broad and unworkable and therefore unreasonable and unenforceable.

[39] The non-solicitation in the agreement includes a provision that Shim not solicit any of Titanium’s current customers or those that existed in the prior two years. Shim asserts that he is not aware of all of Titanium’s customers. Shim submits that based on Benson, if the covenant would have been enforceable had it been drafted in more narrow terms, such as limiting it to the customers whom Shim dealt with, would not make it enforceable.

[40] Titanium has provided a list of its 93 customers which would be governed by the non-solicitation covenant and asserts, therefore, that the restriction is not overly broad and therefore enforceable.

[41] Despite Shim’s assertion that the non-solicitation clause should not be enforced as it is overly broad, for the purpose of this interim motion, I am satisfied that Titanium has established a prima facie case that there has been a breach of the non-solicitation agreement. There is evidence that Shim incorporated a competitive business while he was still employed with Titanium. There is some evidence that he may have diverted work from an existing customer, KP, while still employed with Titanium. There is no dispute that KP left Titanium shortly after Shim resigned and that Logistics is currently servicing KP.

[42] The plaintiff also relies on Shim’s common-law fiduciary duty to it as a key employee. As noted in Benson, all employees have certain basic duties to their employer. At para. 48 the court found:

[48] All employees have certain basic duties to their employers of loyalty and confidence during the course of their employment. In the absence of a valid restrictive covenant, however, ordinary or “mere” employees are free to compete with their former employers once their employment is terminated subject to the caveat that he or she may not make use of the employer’s confidential information, such as customer lists or trade secrets. A higher duty applies to a former employee who may be characterized as “top management”, “senior management” or a “key employee” on the basis of the functions and duties performed. Such a “key employee” may have a post-employment fiduciary duty that precludes him or her from soliciting a former employer’s clients or customers. See: Alberts v. Mountjoy (1977), 1977 1026 (ON SC), 16 O.R. (2d) 682; Barton Insurance Brokers Ltd. v. Irwin (1999), 63 B.C.L.R. (3d) 215, 1999 BCCA 73; Guzzo v. Randazzo, 2015 ONSC 6936, at para. 167; Valley First Financial Services Ltd. v. Trach, [2004] B.C.J. No. 1127, 2004 BCCA 312; Computer Enhancement v J.C. Options, et al, 2016 ONSC 452 at paras. 65-75.

[43] A determination of whether or not Shim was a key employee is not based on his job title. An important factor is whether the beneficiary, Titanium, would be unusually vulnerable to the fiduciary.

[44] I am not satisfied in this case that Shim was a key employee. There is no evidence he was a manager or director of Titanium. The evidence is that he was a commissioned salesperson who worked for Titanium for four years. He was not a long-term employee. No evidence was provided with respect to how many other commissioned sales employees were employed by Titanium or what revenue was generated by Shim for Titanium.

[45] As there will be issues with respect to the reasonableness of the non-solicitation clause when the interlocutory injunction is argued, I must still consider the second and third part of the test for granting an injunction.

Will the plaintiff suffer irreparable harm if the injunction is not granted?

[46] Titanium has presented evidence that it has lost the business of one of its customers, KP, since Shim resigned and set up Logistics. Titanium submits that it will also suffer a loss of market share as a result of losing KP as a customer, and possibly others. It also points to the fact that KP had generated over $1 million in revenue for KP in 2016. Titanium submits that there has been a loss to its reputation as a result of allegations that KP left as it was not pleased with the services provided by Titanium.

[47] In RJR-Macdonald Inc. v. Canada (Attorney General), at para. 64 the court discussed the concept of irreparable harm. The court stated as follows:

[36] "Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision (R.L. Crain Inc. v. Hendry (1988), 1988 5042 (SK QB), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, 1985 154 (BC CA), [1985] 3 W.W.R. 577 (B.C.C.A.)). The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration (Hubbard v. Pitt, [1976] Q.B. 142 (C.A.)).

[48] Shim relies on financial results from Titanium Transportation Group for the second quarter of 2017 which indicates earnings of $33 million in 3 months. Titanium’s position is that those financial results are not for Titanium Logistics Inc. itself. Titanium did not present any evidence regarding its earnings.

[49] In Altus, when considering the issue of irreparable harm, the court referred to the decision of Barton-Reid Canada Ltd. v. Alfresh Beverages Canada Corp., 2002 34862 (ON SC), [2002] O.J. No. 4116. At para. 36, Stevenson J. held:

I do not find that Altus will suffer irreparable harm if the interim injunction is not granted. As stated by Lauwers J. in Paradigm Shift Technologies Inc. v. Oudovikine, 2012 ONSC 148, [2012] O.J. No. 190 (S.C.J.), even where the subject matter of the litigation is the alleged breach of a restrictive covenant, the moving party must show evidence of irreparable harm that is clear and not speculative. At para. 54 of that decision, Lauwers J. quoted from the decision in Barton-Reid Canada Ltd. v. Alfresh Beverages Canada Corp., 2002 34862 (ON SC), [2002] O.J. No. 4116, at para. 18:

[E]vidence of irreparable harm must be clear and not speculative. Barton-Reid has provided no real evidence, other than its bald statement, that it will either lose market share, or be put out of business. Lost sales and market share can be compensated in damages, and can generally be calculated on the basis of sales histories, and sales projections. Although perhaps difficult, the damages can be calculated. If the nature of the damage can be calculated in money, then no matter how hard it may be to quantify the damages, the court should decline to grant an injunction.

[50] I agree that Titanium has not produced sufficient evidence that it will suffer irreparable harm if the interim injunction is not granted. It is able to quantify the loss associated with KP. Presumably, if other customers are lost, the issue of damages can be quantified as Titanium would have information regarding any lost revenue, as it did with KP.

[51] Titanium’s claim for loss of market share and damage to its reputation is too speculative at this time. No evidence is before the court at this time to support a claim other than one for damages.

[52] As Titanium can only point to one customer who is no longer using its services and without any evidence of lost market share, there is insufficient evidence before the court that Titanium will suffer irreparable harm if the interim injunction is not granted.

Balance of Convenience

[53] Given my determination of the lack of evidence supporting a claim for irreparable harm, I do not have to consider the balance of convenience test. For thoroughness, however, I will complete the analysis.

[54] Titanium must establish that the balance of convenience favours it to satisfy the third part of the RJR test.

[55] Shim’s evidence is that if an injunction is granted preventing Logistics from soliciting current or former customers it would mean Logistics could not operate and he could not earn a living.

[56] Shim’s evidence is that Logistics obtained a publicly available contact list of 2000 companies in Ontario which use freight-forwarding services. His evidence was that an “email blast” was sent to these companies. As Titanium is requesting that the non-solicitation agreement be enforced only with respect to 93 customers, that would leave 1,907 potential other customers for Logistics to solicit. I find, therefore, that if the non-solicitation covenant was enforced, it would not prevent Shim from working in his field given the number of other potential customers Logistics could solicit.

[57] I find that the balance of convenience favours Titanium.

Conclusion

[58] Given my finding regarding a lack of evidence of irreparable harm, I find that Titanium has not met the test for the court to order an interim injunction. This is without prejudice to Titanium’s right to seek an interlocutory injunction and other relief set out in its Notice of Motion.

[59] The defendants are entitled to their costs. If the parties cannot reach an agreement on costs, the defendants may file written submission of no more than 2 pages, with their Bill of Costs, by January 15, 2018. Titanium shall file its response, of the same length, by January 30, 2018.

Shaw J.

Date: December 15, 2017

CITATION: Titanium Logistics Inc. v. B.S.D. Linehaul Inc., 2017 ONSC 7526

COURT FILE NO.: CV-17-3725

DATE: 20171215

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

TITANIUM LOGISTICS INC., Plaintiff

AND:

B.S.D. LINEHAUL INC., B.S.D. LOGISTICS INC., ANDREW SHIM and DAVID DAL BELLO, Defendants

COUNSEL:

P. W.G. Carey and P. Holdsworth, counsel for the Plaintiff

J. S. Winny, counsel for B.S.D. Linehaul Inc.

S. Rosen, counsel for B.S.D. Logistics Inc. and Andrew Shim

A. Zeilikman, counsel for David Dal Bello

ENDORSEMENT

Shaw J.

Released: December 15, 2017