ADT Security Services Canada, Inc. v. Fluent Home Ltd. , 2019 ONSC 2804

COURT FILE NO.: CV-17-576133

DATE: 20190503

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

ADT SECURITY SERVICES CANADA,

John K. Downing and Brian Whitwham,

INC. and ADT CANADA INC.

for the Plaintiffs

Plaintiffs

• and -

FLUENT HOME LTD. and GRAHAM

Duncan Marsden, Caitlin Sainsbury and

WOOD

Lorelle Binnion, for the Defendants

Defendants

DECISION

D.L. Corbett J.:

1The plaintiffs move for an interlocutory injunction pending trial to prohibit certain behaviour in the security alarm market by the defendant Fluent. The relief sought falls into two general categories:

a. Prohibiting solicitation by Fluent of customers of the plaintiff ADT Canada Inc. pursuant to a contractual restrictive covenant (the “Restrictive Covenant”); and

b. Prohibiting certain unlawful conduct, including impersonating ADT and making false statements about ADT.¹

2ADT alleges that the impugned conduct by Fluent is not a few “one-off” events by rogue door-to-door salespeople, but rather is a “top-down” strategy for unlawfully increasing Fluent’s market share at ADT Canada Inc.’s expense.

3Fluent concedes that it has solicited some ADT Canada Inc. customers in breach of the Restrictive Covenant. It also concedes that there have been some isolated examples of improper conduct by Fluent sales personnel. It defends the interlocutory injunction on the following bases:

A. The Contractual Claim

a. The Restrictive Covenant is unenforceable on its face;

b. In the alternative to a., events since the Restrictive Covenant was agreed have rendered it unenforceable;

c. Further and in any event, there is no irreparable harm to ADT Canada Inc. because damages are an adequate remedy; and

d. Further and in any event, the balance of convenience lies with refusing the injunction, since the effect of any injunction would create a benefit to ADT Canada Inc. far greater than the benefit conferred by the Restrictive Covenant.

B. The Wrongful Conduct Claim

a. The wrongful conduct is a small series of isolated events that do not establish “top-down” misconduct;

b. The effect of the requested injunction would paralyse Fluent in the market-place, putting its salespeople and management at risk of incarceration for conduct that should only have civil consequences;

c. Damages are an adequate remedy; and

d. The balance of convenience lies in refusing the injunction.

4This matter first came on before me on a motion for interim relief. At that time, Fluent contested the jurisdiction of the Ontario courts. I ruled against Fluent on this point.² Fluent did not appeal this ruling or pursue the argument on the motion for an interlocutory injunction.

1. Summary and Disposition

1. Summary and Disposition

5I agree with Fluent that the Restrictive Covenant is unenforceable because of subsequent events. The original obligation arose under a “Dealership Agreement” between Fluent and a company called Reliance Protectron (“Protectron”). The terms may have been reasonable in the context of this contract: Fluent sold security services for Protectron, received compensation for its sales, and was required not to compete with Protectron, for Protectron customers, for five years after the dealership contract ended.

6ADT was a competitor of both Protectron and Fluent. It bought Protectron and took an assignment of the Dealership Agreement, and was thereby entitled to the benefit of that agreement. However, the agreement did not preclude Fluent from competing with ADT for non-Protectron customers. ADT and Fluent ended the Dealership Agreement and ADT insisted that Fluent return all information it had about ADT customers to ADT. Thereafter ADT rebranded Protectron as ADT. The net result is that compliance with the Restrictive Covenant now, with no list of customers not to solicit, would be difficult and would seriously compromise Fluent’s ability to compete legitimately in the marketplace.

7ADT’s actions, in acquiring Protectron, refusing Fluent information about the customers for which Fluent was not permitted to compete, and rebranding Protectron as ADT, cumulatively rendered compliance with the Restrictive Covenant far more onerous. Even if it turns out that the Restrictive Covenant is still enforceable, in my view the changed circumstances render it impossible to tailor an injunction to enforce the Restrictive Covenant without unduly impeding Fluent’s legitimate activities. In these circumstances, in my view, it is fair to restrict ADT to a remedy in damages.

8ADT proposed a third-party verification protocol to enable Fluent to check whether a proposed customer was one to which the Restrictive Covenant applies. I reject this as an unreasonable method for securing compliance with the Restrictive Covenant. Alarm security services are sold door-to-door, generally by a seasonal sales force during fair-weather months. Sales are sought at the front door, through friendly conversation, and the goal of a sales person is to make it as easy and fast as possible for a customer to sign up for security services. Adding layers of due diligence to a simple consumer purchase such as this creates an impediment to sales which impacts a competitor’s ability to compete in the marketplace. It is also difficult to explain to customers and creates a form of promotion for ADT (a sales person would not ordinarily talk about one of its main competitors in a sales conversation to a potential customer unless the topic was raised by the customer).

9Fluent’s misconduct in the marketplace is another matter. There are examples of Fluent personnel using ADT identification to pass themselves off as ADT personnel in order to make sales for Fluent. There are also examples of Fluent personnel telling lies to potential customers such as “Protectron has gone out of business” and “Protectron is going out of business”. It is difficult, however, to see how the record establishes more than isolated incidents of this conduct. The passing off conduct is so serious that I conclude an injunction is justified to restrain it. I am not convinced that the other impugned conduct rises to this level on the record before me.

10Accordingly, for the reasons that follow, the motion is dismissed as regards the request for an injunction to enforce the Restrictive Covenant. The motion is granted to restrain Fluent from passing itself off as ADT or as authorized by ADT. The balance of the motion is dismissed, all without prejudice to these issues before the trial judge.

2. Background Facts

(a) The Contractual Claim

i. Fluent Was A Protectron Dealer

2. Background Facts

11Fluent carries on business selling security services in Canada. At the material times its principal focus has been in western Canada.

12Pursuant to a dealer agreement entered into February 10, 2011, Fluent was an authorized dealer for Protectron. Under the dealer agreement, Fluent sold alarm protection services on behalf of Protectron. Fluent was paid a fee for these sales. Protectron thereafter provided the home security services and collected fees for those services from the customers to whom those services had been sold by Fluent.

13The dealer agreement was renewed between Protectron and Fluent on February 13, 2014.

14The dealer agreement provides that, upon termination of the agreement, Fluent may not solicit or enter into security agreements with any customers of Protectron for a five year period. In particular, section 17.2 of the Dealer Agreement states (the “Restrictive Covenant”):

Non-solicitation and non-acceptance. Neither the Dealer nor the Principal(s), nor any officer, director, or employee of the Dealer shall, for a period of five (5) years from the termination of this Agreement or from the termination of their employment with the Dealer, whichever comes first, directly or indirectly solicit the Security Service Business of an existing Customer or past Customer³ nor act in any way that could induce a Customer to cease doing business with Protectron.

“Customer” is defined in the Dealer Agreement as:

… any person, business, corporation or other entity that has entered into a Protectron Monitoring Agreement wherein the Customer will be billed and the Customer’s security alarm system will be monitored by Protectron and wherein the Customer will be serviced by either Protectron or the Dealer.

15Facially, this provision may have been commercially reasonable at the time it was agreed: Fluent was paid an amount for each customer that would require Protectron to retain the customer and receive payment from the customer for services for roughly three years in order to break-even on the cost of providing its services and the payment it made to Fluent for signing up the customer for home security services. Agreements with customers were generally for an initial term of five years.

ii. ADT Acquires Protectron

16Protectron was acquired by the ADT Corporation in July 2014. In July 2015, Protectron’s name was changed to ADT Canada Inc. It continued using the Protectron name in connection with its business after the corporate name change, but then changed the name under which it was dealing with its customers to ADT Canada Inc. It is not clear on the record precisely when the rebranding began, but it seems clear that rebranding in the marketplace took place after Fluent ceased to be a dealer.

17At the time ADT acquired Protectron, ADT Security Services Inc. and Protectron had roughly equal market share in the Canadian alarm security market.

iii. Fluent Solicitation of ADT Security Accounts

18Issues arose after ADT acquired Protectron about solicitation of ADT Security accounts by Fluent. These solicitations were not precluded by the Restrictive Covenant. But obviously ADT did not want to be paying Fluent to recruit customers away from ADT Security for Protectron. In July 2015, by letter from its solicitors, ADT Canada confirmed its position to Fluent:

To avoid any further misunderstanding, we wish to reconfirm our client’s position: Protectron does not take the position that Fluent is prohibited from doing ADT takeovers but rather that, pursuant to the terms of the Agreement, Protectron would no longer purchase those underlying accounts, effective January 1, 2015.

iv. Fluent and ADT Terminate the Dealer Agreement

19Fluent decided that it wished to terminate the Dealer Agreement. Fluent and ADT Canada negotiated a termination agreement, which they executed effective October 20, 2015.

20Pursuant to the Termination Agreement, Fluent was obliged to deliver all Protectron customer files and information relating to Protectron customer accounts to ADT Canada. Fluent was not permitted to retain any information relating to these Protectron customers. In the Termination Agreement, Fluent acknowledged its obligation to observe the Restrictive Covenant.

21Mr Wood attaches to his affidavit a customer contract entered into in October 2015 in the name of Protectron.⁴ From this I take it that the rebranding to ADT, at the level of sales to customers, had not yet been implemented. Thus it seems that it would not have been apparent to Fluent at the time it entered into the Termination Agreement that Protectron would be rebranded ADT for the customers it was bound not to solicit pursuant to the Restrictive Covenant.

v. ADT Canada Suspects Fluent of Breaching the Restrictive Covenant

22ADT Canada tracks the attrition or “churn” rates for its authorized dealers. The “churn rate” is the number of customers that cease to be customers in a given period.

23There is a “natural” churn rate. Customers may move and cancel their services for that reason. Or they may die. Or they may decide that they do not need the service. Or they may fail to pay for their security services, prompting ADT to cancel their services. Or, of course, they may be persuaded to switch to a different security company.

24ADT Canada saw that it experienced an abnormally high churn rate for customers in western Canada, where Fluent had been its authorized dealer. Fluent’s dealer agreement had been terminated in October 2015. Security sales are seasonal. In April 2016, as the season started, these churn rates skyrocketed. Upon investigation, ADT Canada found that the excessive churn rate was attributable to an unusual rate of cancellations by customers who had been sold services by Fluent,⁵ at a rate more than fivefold over historic cancellation rates. These high churn rates continued over the summer of 2016, dipped somewhat in the fall, only to climb back up again in April and May 2017.

vi. ADT Canada Confirms Solicitation by Fluent

25ADT Canada investigated the abnormally high churn rate for its Fluent accounts. The investigation revealed more than 140 ADT Canada customers who had Fluent representatives visit their homes to try to convince them to terminate their contracts with ADT.

26On the basis of the evidence amassed by ADT Canada, more than 20 Fluent sales representatives were involved in this conduct. The sales tactics took place in multiple locations across western Canada, throughout the 2016 and 2017 sales seasons. The widespread nature of this conduct leads ADT to ask me to infer, for the purposes of this motion, that the conduct was directed by persons in Fluent senior to the general salesforce, that is, that this was no series of isolated misconduct by rogue salespersons, but a directed campaign to solicit Protectron/ADT customers in breach of the Restrictive Covenant.

vii. Proposed Third Party Verification

27ADT Canada proposes a system of third party verification to enable Fluent to comply with the Restrictive Covenant without having ADT Canada’s customer lists. Fluent has refused this proposal.

28Third party verification would work as follows. ADT Canada will provide the list of customers covered by the Restrictive Covenant to a third party. When Fluent seeks to do business with a new customer, it will contact the third party to find out if the proposed new customer is on the list. If the customer is on the list, then Fluent will not proceed to sign the customer up for services. The third party will not disclose its dealings with Fluent to ADT.

(b) The Wrongful Conduct Claim

(b) The Wrongful Conduct Claim

29During its initial investigation, ADT Canada learned from its customers or former customers that Fluent sales representatives, trying to persuade ADT Canada customers to terminate their contracts with ADT Canada, made statements including:

(a) ADT is an American company.

(b) ADT is no longer in business in Canada.

(c) Alarm systems in customers’ homes and business were not being monitored by ADT.

(d) ADT moved its headquarters to the USA, breaching Monitoring Agreements with its customers.

(e) Alarm signals were redirected to the USA where they were monitored, and then redirected back to Canada.

(f) Monitoring Agreements between customers and ADT Canada were not legally binding.

(g) ADT does not offer wireless security alarm services.

(h) ADT is guilty of “false advertising” for failing to advise that it is an American company.

(i) ADT is monitoring customers’ alarm systems illegally.

(j) ADT would not honour “loyalty discounts” promised to long-time customers (discounts that apply after the expiry of fixed-term contracts).

(k) Fluent had bought out ADT and had taken over its accounts.

(l) Fluent was affiliated with ADT and was responsible for its accounts in western Canada.

(m) ADT would not charge the full cancellation fee for customers terminating agreements.

(n) Customers could simply issue “stop-payment” orders and need not contact ADT to cancel contracts.

(o) Fluent had non-competition obligations, but that did not apply to customers whose fixed term agreements were about to expire.

The evidence of this misconduct was initially set out in memos prepared by ADT Canada employees. This evidence is, of course, hearsay as it reports things these employees were told by customers. Placing this evidence before the court first-hand is a problematic proposition for a company to do. Its customers and former customers do not generally wish to become embroiled in a dispute between these parties. Providing information to someone who phones them is one thing; swearing an affidavit, attending for cross examinations, and potentially attending at trial to testify is quite another.

30In this case, however, ADT did persuade 72 customers to provide information. 24 of these customers provided affidavits. 21 of these affiants were cross examined by Fluent.

31These impugned sales practices include at least three examples of Fluent personnel passing themselves off as ADT Canada personnel:

a. On August 2, 2017, Fluent sales representative Chamunora Mungoshi solicited an ADT customer in Medicine Hat, Alberta. Mr Mungoshi was wearing a shirt and hat with the Fluent logo, but he had an ID badge and lanyard hanging from his neck with the Protectron logo (a logo that then belonged to ADT Canada). Mr Mungoshi told the customer that he was from Protectron and was offering a “free upgrade” to the customer’s system. When challenged about what he was doing, Mr Mungoshi said that Fluent had sold accounts for Protectron “and he was entitled to try to get those accounts back”. He also said that his manager had instructed him to say that he was from Protectron, and he did not know that this was inappropriate.

b. In the summer of 2016, a Fluent representative attended at the home of a different customer⁶ and held himself out as an agent for Protectron.⁷

c. On August 23, 2017, a Fluent sales representative, Mark Hillier, solicited an ADT customer in New Norway, Alberta (a village about 100 kilometers south of Edmonton).⁸ The customer had had a Protectron system installed in 2013, and had a Protectron sign displayed on a stake beside his driveway, clearly visible to anyone approaching the house. Hillier was wearing a Fluent shirt. He removed a Protectron sign from a briefcase he was carrying, showed it to the customer, and continued to hold it during his dealings with the customer. Hillier described himself as being from Fluent, a “Canadian affiliate” of Protectron. Hillier suggested that the customer switch his service to the “Canadian affiliate” so that his services would be monitored from Canada rather than from the United States. The customer agreed to cancel his current contract with Protectron (which had a year to run) and to sign up for five years with Protectron’s “Canadian affiliate”. Hillier then sat in on the customer’s call to Fluent, during which the customer went through Fluent’s “welcome call” process, cuing the customer to answers that he should give. On August 24, 2017, a technician installed the Fluent equipment at the customer’s home. After this visit, the customer called ADT and learned that Fluent was not “affiliated” with Protectron and that his ADT services were not being monitored from the United States. The customer called Hillier several times and Hillier made two appointments to visit the customer to explain; he failed to keep either of these appointments. There was a 10-day cancellation window for the customer and, becoming concerned that Hillier would not appear before this period expired, the customer contacted Fluent to get an explanation and to request that his contract be cancelled. He was told three times someone would call him back, but no one did.⁹

3. Law and Analysis

(a) Test for an Interlocutory Injunction

3. Law and Analysis

32An interlocutory injunction may issue where “it is just and convenient to do so.”¹⁰ The test for exercising discretion to grant an injunction has three parts:

(a) is there a serious issue to be tried?

(b) will the moving party suffer irreparable harm if the injunction is not granted?

(c) does the balance of convenience favour granting the injunction?

The goal of an interlocutory injunction is to preserve a reasonable state of affairs so that justice may be done at the end of the case.

(b) Test for Injunctions to Enforce Restrictive Covenants

(b) Test for Injunctions to Enforce Restrictive Covenants

33ADT Canada Inc. argues that the test is “modified” where the moving party shows a strong prima facie case to enforce a restrictive covenant. As stated by the Divisional Court:

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 case? Similarly he must make a tentative and preliminary assessment of the possible defences which may be offered, all with a view to 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 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.¹¹

Or, in other words,

…. The stronger the plaintiff’s case, however, the less emphasis should be placed on irreparable harm and balance of convenience and, in cases of a clear breach of an express negative covenant, interlocutory relief will ordinarily be granted.¹²

34In a negotiated commercial agreement, rather than an employment agreement, it is clear that the courts tend to favour enforcement of commercial obligations of this kind.¹³

If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such case the injunction does nothing more than give sanction of the process of the court to that which already is the contract between the parties. It is not then a question of balance of convenience, or the amount of damage or of injury – it is the specific performance, by the Court, of that negative bargain which the parties have made, with their eyes open, between themselves.¹⁴

35Fluent accepts these general principles, but notes that restrictive covenants in employment and independent contractor contexts are subject to more rigorous scrutiny than are covenants arising in the context of the sale of a business. It argues that, in the latter context, a payment has generally been made for goodwill, and the parties are generally of equal bargaining power in respect to the sale agreement. The same is not the case in the context of employment law, a point acknowledged by ADT. I conclude that the “employment” cases are also followed in the context of some “independent contractor” cases.¹⁵ The more closely an independent contractor arrangement resembles an employment contract, the more likely that a court will look to all three branches of the general injunction test. The more it can be said that the independent contractor arrangement reflects payment for goodwill (that is, real consideration for an interest protected by the restrictive covenant), the less likely that the court will place great weight on irreparable harm or balance of convenience.

36In this case, there are factors tending both ways. The consideration paid to Fluent for recruiting customers for Protectron was premised on retention of those customers for several years. The financial structure of the dealer agreement would be defeated if Fluent could terminate the contract and recruit away all of the customers it had signed up. On the other hand, customers sign term contracts that contain penalty provisions if they terminate their agreements early. The nature of the interest protected by the restrictive covenant must be considered on the basis of a reading of the entire agreement, and I am not convinced that the agreement should not be considered as closer to an employment contract than an asset purchase agreement.

37Fluent argues that the Restrictive Covenant is unenforceable because it is ambiguous¹⁶ and unreasonable.¹⁷ It argues that it was unreasonable, as drafted and included in the dealer agreement, and its unreasonableness was magnified by ADT’s conduct in refusing to leave a customer list with Fluent and in rebranding Protectron as ADT. I accept this latter argument and so do not find it necessary to decide the first points.¹⁸

38I note that Fluent led some evidence that would only be relevant to non est factum or duress or some similar argument. For example, it said that it was “pressured” to sign the 2014 dealer agreement with Protectron and did not have time to have its lawyer review or comment upon the contract. These points were not pursued in oral argument and rightly so: the agreements were commercial bargains between businesses. Fluent was free not to enter the dealer agreement, or to delay entering it to obtain legal advice. I appreciate that Fluent was considerably smaller than Protectron, and much smaller still in comparison to ADT. But Fluent is still a business of some substance that is not unsophisticated, and the circumstances under which the contracts were agreed are no basis to relieve Fluent from its legal obligations.

(c) Specific Performance of the Restrictive Covenant Appears Unreasonable By Reason of ADT’s Conduct

(c) Specific Performance of the Restrictive Covenant Appears Unreasonable By Reason of ADT’s Conduct

39I have concluded that ADT’s motion to enforce the Restrictive Covenant does not meet the test for a prima facie case for an injunction because conduct by ADT has rendered the burden of compliance to be much heavier than it was at the time that it was agreed to by Fluent. ADT has sought to ameliorate the prejudice of its conduct by proposing a third party verification process. I have concluded that such a process would unduly hamper Fluent’s legitimate activities in the marketplace and would be impractical in the context of a business where sales are made through door-to-door solicitation.

40The context in which the Restrictive Covenant was given was as follows. Fluent was a substantial Protectron dealer with its activities predominantly in western Canada. It sold accounts to Protectron and was paid for those accounts, which were then serviced by Protectron. It was typical for customers to post a sign on their premises indicating that the premises were secured by Protectron monitoring.¹⁹ Fluent maintained a list of Protectron customers in its territories, so that it could concentrate its efforts on soliciting customers not already being serviced by Protectron.

41If the dealer agreement was terminated, Fluent would have had two ways to know which customers it could not solicit during the period of the Restrictive Covenant: signage on customer homes showing they were secured by Protectron and customer information about Protectron customers. Thus it would be relatively straightforward for Fluent to instruct its sales force not to solicit Protectron customers.

42When Fluent and ADT Canada entered into the Termination Agreement, Fluent agreed to return customer information to ADT Canada, and to destroy copies of this information in its possession. At the same time, it confirmed its continuing obligations under the Restrictive Covenant. There do not appear to be any terms in the Termination Agreement that address how Fluent was to observe the Restrictive Covenant without having a list of the customers to which those obligations applied.

43In the summer of 2015, Protectron changed its name to ADT Canada Inc., the name in which it appears as a party in this proceeding. This change of name was known to Fluent on termination: it is set out in the Termination Agreement. However, aside from the change of name of the company, on the evidence before me, ADT Canada Inc. had not begun to re-brand “Protectron” with the “ADT” name. It has since done so.

44On the face of the Restrictive Covenant, Fluent is precluded from soliciting Protectron customers, as of termination, for a period of five years. Without a list of these customers, Fluent now has no way of knowing who these people are. Existing customers of ADT Canada Inc. may have become new customers since October 2015. Fluent is not precluded from soliciting these people. Fluent is not and never has been precluded from soliciting customers of ADT Security Services Canada Inc. The impact of the rebranding on enforcement of the Restrictive Covenant is acknowledged by ADT in its evidence. In its defence of the injunction, Fluent led evidence that it was asking potential customers if they were Protectron customers (or had been such within the prior 12 months). If the customer said no, including if the customer said they did business with ADT, Fluent would try to sign the customer up. ADT, in explaining why this was not satisfactory compliance, said as follows:

Furthermore, Protectron changed its name to ADT Canada in or around July of 2015. Thus, many customers would be unlikely to answer “yes” to Fluent’s question (even though they were currently customers of ADT Canada). In other words ADT Canada (former Protectron) customers would have been receiving a bill from ADT Canada for a period of time that exceeded twelve (12) months by the summer of 2017. Accordingly, they might answer “no” to Fluent’s question on the basis that they were apparently a customer of ADT Canada and had not been monitored by Reliance Protectron within the last twelve (12) months. Nonetheless, such customers would clearly be captured by the [Restrictive Covenant] and ought not to be solicited by Fluent.

45Protectron’s name was changed in July 2015, but it is clear that the practical rebranding to the “ADT” name did not take place until after the Termination Agreement. After the rebranding, when customers would believe themselves doing business with “ADT”, Fluent has had no practical way to positively identify customers covered by the Restrictive Covenant. This situation has only become even more difficult: effective January 1, 2018, the plaintiffs amalgamated: there is now only one ADT company offering these services in Canada. The Restrictive Covenant would only apply to some, but not all, of its customers.

46I reject the suggestion by ADT that Fluent should submit to a process of vetting every customer it seeks to solicit through a process of third party verification. This was not agreed in the Dealer Agreement or the Termination Agreement. It is a cumbersome additional step in soliciting a customer and would disadvantage Fluent in its sales efforts. It also requires Fluent to trust, without verification, that the list of protected customers provided to a third party verification service is accurate.

47The onus is on ADT to show that the restrictive covenant is reasonable, and in particular, that:

a. ADT has a proprietary interest entitled to protection;

b. the temporal and geographic terms of the restrictive covenant are reasonable to protect the proprietary interests; and

c. the restrictive covenant is not against competition generally.²⁰

48As stated by Dickson C.J.C. in Elsley:

It is important, I think, to resist the inclination to lift a restrictive covenant out of an employment agreement and examine it in a disembodied manner, as if it were some strange scientific specimen under microscopic scrutiny. 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.²¹

49Fluent argues that ADT did not have a “proprietary right” in its customers, beyond the terms of the agreements with those customers. Thus, the argument goes, so long as no Fluent customer terminated early with ADT without paying the termination penalty, ADT’s proprietary interests have not been damaged. I reject this argument. It misconstrues the term “proprietary interest” as that term is used in the leading case from the Supreme Court of Canada on which Fluent relies. The “proprietary interest” a business has in its customers includes its contractual relations with those customers, of course, but also its customer list itself and the goodwill it has with its customers. If it were as argued by Fluent, restrictive covenants would be restricted to restraining inducing breach of contract. It is trite law indeed that permissible restrictive covenants may extend much further than this, as, indeed, did the term impugned in the Elsley case, which was upheld by the Supreme Court of Canada.

50The termination penalties do, however, impact on the analysis. They provide one measure of protection for ADT. As I understand it from the record, new customers are signed up for five year contracts. Fluent argues that “ADT normally breaks even on their contracts after 36.6 months’ worth of fees” and is protected for the balance of the initial five year term of the agreement by cancellation fees.

51The restrictive covenant runs for five years from the date of termination of the dealer agreement. For a customer that had signed up the day before termination, the restrictive covenant would be almost exactly co-extensive with the customer’s contractual obligations. However, for a customer whose five-year contract was to expire the day after termination, there would be no continuing proprietary interest for ADT in the customer after the contract expired, yet Fluent would be prohibited from soliciting the customer for another five years.

52Section 17.5 of the Dealer Agreement acknowledges that one of the bases to justify the Restrictive Covenant is that

Protectron derives benefit from the purchase of Customer Accounts if the Customer continues to purchase monitoring services beyond the original term of the agreement with that customer.

This is the core purpose of a great many restrictive covenants – to acknowledge the commercial interest the receiving party has in retaining its customers, and to protect that interest by restricting the other party from competing for those customers. This is part of what is meant by “proprietary interest” in the first branch of the test in Elsley. However, it is difficult to see how ADT’s legitimate commercial interests justify precluding competition from Fluent for customers whose contracts have expired.

53I do not decide the injunction on the basis of this point. But I note that it is an arguable position for Fluent – that the restrictive covenant, as drafted, may be much broader than is reasonable to protect any proprietary interest that ADT has in its customers.

54I leave this point – on which the injunction does not turn – and which I do not decide – with one further observation about the importance of context. It is clear from the case law that the “proprietary interest” that a business has with its customers is not restricted to the contractual obligation the customers have to continue to do business with the party receiving the benefit of the restrictive covenant. Indeed, in a great many cases there is no such obligation on the part of a customer. The “proprietary interest” is the goodwill the benefitting party has in its relationships with its customers.

55I say nothing whether this could be a basis for a reasonable restrictive covenant in the context of this case. There does not appear to be a continuing personal relationship between Fluent and the customers to whom it has sold Protectron/ADT services after those contracts have been transferred to Protectron/ADT. Thus, at the end of a five year contract, one would think that Protectron/ADT would have the relationship with the customer, rather than Fluent, whose door-to-door salesperson may not have seen the customer for almost five years. This is a far cry from the situation in Elsley, for example, where the insurance professional had an ongoing personal relationship with his employer’s customers, being the person who, on behalf of the employer, looked after those customers.²²

56Taking all of this into account, I conclude as follows:

1There is a serious issue to be tried as to whether the Restrictive Covenant was enforceable from the outset. But ADT has not established a strong prima facie case for its initial enforceability. It will be for the trial judge to decide if it was ever enforceable.

2Complying with the Restrictive Covenant was rendered impractical by decisions made by ADT. This impracticality cannot fairly be redressed by a third party verification system, which would impose unreasonable compliance requirements on Fluent. There is a serious issue to be tried whether ADT’s conduct has rendered the restrictive Covenant completely unenforceable, or whether ADT should be restricted to a remedy in damages.

(d) Restraining Injurious Falsehood and Passing Off

(d) Restraining Injurious Falsehood and Passing Off

57I am satisfied that ADT has established a serious issue to be tried that Fluent has engaged in misrepresentation, including having representatives pretend to be ADT Canada representatives.²³ The real question is the extent and nature of this conduct and whether, given the answer to those questions, an injunction should be granted.

(i) No claim for statements that are not false

58Truth is a complete defence to an allegation of defamation.²⁴ And a statement, though untrue, is not defamatory if it would not tend to lower the subject in the minds of reasonable right-thinking persons.

59The plaintiffs are not American companies. Both are incorporated in Canada. But their parent company is an American company. Fluent sales representatives have told customers that “ADT” is an American company. Is this a false statement? Is it actionable? Standing alone, in the overall context of the case, I conclude that it is neither false nor actionable. The plaintiffs are subsidiaries of an American company, indeed, a multi-national company headquartered in the USA. This fact may be an advantage for ADT with some customers, and a disadvantage with others, depending on the features of a security company that recommend themselves to a customer. I would not issue an injunction to restrain Fluent from raising this issue with customers, just as I would not restrain ADT salespersons from talking about ADT’s size and range of operations globally.

60Fluent argues that it is not clear that the claim that alarms are being redirected to the United States is false. Mr Wood, in his evidence, stated that while his home was being monitored by ADT, his alarm went off and he received a call from ADT from Texas.²⁵ But again, assuming Mr Wood’s experience was an anomaly, or had some explanation consistent with ADT’s position, it is not clear to me why this statement would be defamatory.

(ii) Some of the Statements May Not Have Been Made

61What a salesperson says and what a customer understands may be two different things. One customer, when questioned about evidence that Fluent claimed that ADT did not have wireless monitoring, on cross examination, stated that the Fluent salesperson emphasized that Fluent offers wireless monitoring. The inference he took from the statement was that this was a point of difference with ADT, though this was not, in fact, said by the salesperson:

Q: Did [the Fluent sales representatives] tell you that ADT was not able to provide a wireless or a cell service?

A: No, they didn’t really say that, no.²⁶

(iii) Statements Must Be Taken in Context: Fluent Was Not Disparaging ADT

62It is axiomatic that an impugned statement takes its colour and meaning from the context in which it is given. It is difficult to capture the context of numerous personal solicitations that are not recorded. However, the majority of ADT’s customer witnesses stated that Fluent had not been disparaging or negative and many stated that Fluent representatives did not badmouth ADT.²⁷

(iv) Statements Confusing Fluent’s Status in Relation to ADT

63As will be clear from my review of the facts, it is clearly established in the evidence before me that Fluent representatives have, on three occasions, passed themselves off as Protectron representatives. The first two incidents appear to have involved attempts by sales representatives to pass themselves off as Protectron representatives. The third involved an agent passing himself off as a representative of Protectron’s “Canadian affiliate”.

64This conduct is dishonest and unacceptable. It does not disparage ADT/Protectron, but rather tends to subvert the good name of ADT/Protectron to the benefit of Fluent, a form of passing off.

65The three examples given do not establish a pattern of company-wide passing off, and I decline to draw an inference that this has been directed by management. However, there are troubling aspects to these incidents that lead me to conclude that interlocutory injunctive relief is warranted.

66First, Fluent’s evidence is that its training and policies and procedures preclude this kind of conduct. Second, Fluent’s evidence is that it has implemented a multi-stage process to make sure this sort of thing does not happen:

a. The sales force is trained not to do this;

b. The “welcome call” protocol is designed to catch this sort of thing; and

c. Installation personnel are instructed to vet customers before completing an installation, in order to catch this sort of thing.

Not only were these steps ineffective in the third incident, described above, but it seems clear that the sales representative actively subverted the “Welcome Call” process. It is not clear how the installation protocol failed to catch the salesperson’s misconduct. And then when the customer discovered what had happened, Fluent failed to respond appropriately. And all of this happened in the immediate run-up to this injunction motion when, one would think, Fluent would want to be particularly careful to ensure that there would be no repetition of serious misconduct already alleged by ADT.

(e) Irreparable Harm

(e) Irreparable Harm

67As noted above, there is dicta that clear breach of an enforceable restrictive covenant, given between commercial parties outside the employment context (including to some extent the context of independent contractors) will be enforceable in accordance with its terms. I am not persuaded that this is because this constellation of facts obviates the requirements for irreparable harm and the balance of convenience. Rather, reconciling the authorities binding on this court, it seems to me that irreparable harm and the balance of convenience may be presumed in these cases. That is, being deprived of the benefit of a valid restrictive covenant may be a form of irreparable harm, and the balance of convenience favours enforcing lawful bargains between contracting parties outside the context of employment and some independent contractor contracts.

68ADT points to the contractual provision stating that “the remedy at law for any breach… of the provisions of this section will be inadequate”. I agree that the court may take this into account, but it still does not eliminate the requirement for ADT to establish irreparable harm.²⁸ And indeed, ADT has pursued its investigation and presented its case on the basis that it understands that an injunction will not lie unless it can establish that Fluent’s conduct is in some sense serious. Some “slippage” was bound to occur, as Mr Graham said in his affidavit, and it cannot be the case that if some minor breach occurs because of an error by a Fluent salesperson, the entire company will be subject to an injunction, breach of which could lead to penal consequences.

69In my view the position in Ontario is clear that a moving party must still show irreparable harm in cases involving breach of a restrictive covenant. I respectfully adopt the analysis in MD Physicians Services Inc. v. Jonathan Financial Group Inc. of Strathy J. (as he then was):

Similar circumstances to the case before me were addressed in a recent case involving the same plaintiff: MD Management Ltd. v. Campbell.²⁹ The plaintiff, MD, brought a motion for an interim interlocutory injunction restraining a former employee and its new employer from soliciting its clients. There was no motion for an Anton Piller order. Grace J. referred to authorities to the effect that irreparable harm will be presumed where there is a breach of a non-solicitation agreement, but held that the evidence of actual business losses (which he described as a “modest loss” of MD clients over a five month period since the departure of the employees) suggested that the damage was not irreparable. Moreover, he held that the alleged damage to MD’s reputation had not been irreparable.

Molloy J granted leave to appeal to the Divisional Court.³⁰ She found that there were conflicting decisions about, among other things, whether irreparable harm can be presumed by the breach of a restrictive covenant and whether loss of goodwill, loss of future business and damage to reputation could be irreparable harm.

The Divisional Court… dismissed the appeal.³¹ It rejected the submission that irreparable harm can be presumed where the plaintiff has made out a strong prima facie case of a breach of a negative covenant. The Divisional Court also agreed with the motion judge’s conclusion on the loss of reputation – at para. 13:

The motions judge recognized that it may be difficult to quantify damages to reputation, but he did not find the task insurmountable. It is also evidence from his reasons that he was not satisfied at this point that such losses had been suffered or would be suffered. He noted, for example, the small number of clients who had followed Mr. Campbell and that there had been no complaints under federal privacy legislation.³²

70I do not have a record to satisfy me that the conduct complained of has been material to ADT’s operations or has had a material effect on its Protectron client base. I know that “slippage rates” increased considerably, establishing that some of the conduct complained of has taken place, as I have already found. But I have no evidence of the materiality of that increase.

71This is important in a motion for an injunction. I do not know whether slippage of a few hundred customers is a terrible blow to ADT’s business, or a minor event. I do not know whether this is a derogation from a customer base of hundreds of thousands of customers, or a few thousand. This sort of information matters. The exceptional remedy of an injunction, carrying with it compliance costs and potentially severe penalties for any breach, will not be granted to remedy anything but serious misconduct or grave loss, that is, irreparable harm.

72To be clear, I am not finding that the potential losses here are trivial, or that the motion was brought in anything other than good faith. But, in the context of this industry, to establish that the conduct complained of is systemic – whether by design or maladministration – the relative scale of the conduct is important. I was left with the impression that many thousands, perhaps many tens of thousands, of potential customers are solicited in any given year. If that impression is correct, then almost all of the conduct complained of could be characterized as “slippage”. I do not make that finding – that will be for the trial judge to decide – but I do find that I am not satisfied that ADT will suffer irreparable harm that would justify injunctive relief before trial.

73I exempt from this finding the incidents where Fluent personnel have passed themselves off as authorized by ADT/Protectron. This is clear dishonesty. And although these incidents are not numerous in the record before me, ADT and the public are entitled to be protected from this kind of blatant dishonesty.

(f) Balance of Convenience

(f) Balance of Convenience

74Fluent argued about the disproportionate impact on its business of injunctive relief. In light of my conclusions on the first two steps of the RJR MacDonald test, I do not address this issue except in respect to the injunctive relief I am granting.

75I find that the balance of convenience does weigh in favour of ordering Fluent not to pass itself off as ADT or as authorized by ADT. This simply should not take place, and I can see no prejudice to Fluent in being forced to manage its workforce to secure compliance with this very basic principle of ethical and lawful dealing. That said, I do understand that, despite every reasonable effort to secure compliance, it is always possible that a misguided individual sales representative could breach this requirement. Fluent should ensure that the court’s order is brought to the attention of its workforce, and that other steps are taken to ensure compliance so that any future misconduct of this kind can be established to have taken place despite the company having taken every reasonable step to comply with the court’s order.

4. Other Issues

I. Delay

4. Other Issues

76Fluent argued that ADT’s delay in seeking the injunction should be a bar to injunctive relief.³³ I do not accept this argument, largely for the same reasons that I rejected it at the motion for interim relief:

Delay is a basis to deny injunctive relief. Here, the claim came to ADT’s attention about a year ago. ADT has spent the past year investigating and documenting the claim. There is evidence of 140 customers of the first-named defendant who “switched” to Fluent, and affidavits from about 18 of those customers stating what they say happened to cause them to change their service provider. I accept that it would take substantial time and effort to develop this kind of record.

Plaintiffs’ counsel argues that a moving party faces a dilemma in these cases. If the party rushes to court with a slender record, the basis for the injunction may not be proved. On the other hand, if the party takes the time necessary to prepare a thorough record, it risks an argument that the matters must not be all that urgent and irreparable if it was prepared to defer seeking court assistance for so long. This characterization of the dilemma is fair.

Some of the older cases characterize delay as “sitting on one’s rights” - a sort of affront to the court’s equitable jurisdiction. Current thinking does not usually rely upon this rationale. Rather, delay is evidence from which the court may infer that the moving party does not consider accruing harm to be irreparable.³⁴ The inference is permissive, not mandatory, and will depend on the circumstances of the case. This case is a good example: the plaintiffs cannot argue seriously that loss of a customer here or there will cause irreparable harm. However, long-term erosion of market share through a systematic campaign in violation of the [Dealer Agreement] could be a basis for finding irreparable harm.³⁵

77I have already found that ADT has not established irreparable harm and that the balance of convenience weighs against granting the injunction. I have so concluded without relying on the delay by ADT in bringing this matter to court. I see nothing in the circumstances of the case that would give rise to an inference that the moving party does not consider that it will suffer irreparable harm because it is willing to tolerate delay in order to pursue its rights.

II. Fresh Evidence

II. Fresh Evidence

78Each side brought a motion to adduce fresh evidence after the injunction motion had been heard but before it had been decided. I have exercised my discretion to admit all of the proposed fresh evidence.

(a) The Plaintiff’s Fresh Evidence

79The plaintiff’s fresh evidence concerns the experience of one customer, describing the manner in which he was recruited away from Protectron by Fluent. Fluent objects on the basis that this evidence could have been available at the time of the hearing. While it would have been possible for this evidence to have been available for the hearing (it came to ADT’s knowledge before the motion was argued), I am satisfied that the delay between ADT employees becoming aware of the information, and ADT being in a position to present it to the court was not as a result of lackadaisical pursuit of the evidence. Once it came to the attention of responsible persons at ADT and then to counsel, reasonable steps were taken to obtain an affidavit from the customer and then to move to put it before the court.

(b) The Defendant’s Fresh Evidence

80The defendant learned that the plaintiffs amalgamated effective January 1, 2018. Thus there is now only one ADT company involved in this proceeding, operating under the name ADT Security Services Canada Inc. This information was not available at the time of the hearing of the injunction motion.

(c) The Test for Fresh Evidence

81This is not a case of seeking to adduce fresh evidence after judgment or on appeal. It is a request to reopen the evidence after it has been completed but before a decision has been rendered. Where the fresh evidence is tendered before decision, the test for its admission is more lenient, and places more weight on trial (or in this case, motion) fairness and the procedural history of the case.³⁶

82As regards the plaintiff’s motion, the evidence materially adds to its case that Fluent is misrepresenting itself as ADT, or as an agent for ADT, one of the most serious allegations pursued in the second branch of ADT’s motion. As it turns out, the evidence does have “an important influence on the case.”³⁷ The process for admitting the fresh evidence and then conducting cross examinations on it did lead to delay in concluding assembly of the record and supplementary argument, but in my view this delay redounded to the detriment of the tendering party, ADT, by delaying it in obtaining a decision and then moving forward with the underlying case. I see no procedural prejudice to Fluent in admitting the fresh evidence.³⁸

83The fresh evidence tendered by Fluent clearly meets the test for fresh evidence. ADT acknowledges that this fresh evidence could bear on the structure of the court’s remedy, but denies that it is otherwise relevant. For the purpose of the motion to admit fresh evidence, it is not necessary to rule on how the fresh evidence could be used by the parties: it is admissible, and it is for the court to decide how it impacts on all of the issues before the court.

III. The Claim Against Graham Wood

III. The Claim Against Graham Wood

84I am not satisfied that there is a basis for relief against Mr Wood personally. He is the CEO of Fluent. This does not make him personally liable for every misdeed of the company. This is not a closely-held company that is an alter-ego of its proprietor. Fluent, although much smaller than ADT, is a publicly traded company, with numerous employees, and in the absence of evidence establishing personal wrongdoing by Mr Wood, an injunction does not lie against him.

85I appreciate that Mr Wood signed the dealer agreement and the termination agreement in his own name, as well as on behalf of Fluent. This is a basis for personal liability, but only to the extent that it is established that Mr Wood committed a wrongful act himself: signing in his personal capacity does not make him personally liable for the wrongdoing of the company.

IV. Effect of Findings in this Decision

IV. Effect of Findings in this Decision

86This is an interlocutory decision, based on an extensive yet partial record, and without the benefit of hearing and seeing the witnesses. It is not appealable, except by leave to the Divisional Court. The findings in this decision are based on this record and do not in any way bind the trial judge. This point is sometimes confused and can lead to unnecessary and sometimes confusing appeal proceedings. The goal of an injunction, if granted, is to preserve a reasonable state of affairs until trial, not to grant summary judgment or otherwise subvert the trial process. The very limited appeal rights available to the parties emphasize the limited effect of factual and legal findings: it would not be fair to saddle the parties with final determinations, or even initial starting points for analysis, for the trial, where appeal rights are severely limited, the record is partial, and the court has not had all the tools available to a trial judge to make credibility findings.

5. Order

5. Order

87An order is granted, as requested in paragraph (b)(ii) of the notice of motion, restraining Fluent and its agents or servants or any person acting under their instruction from identifying themselves as being associated with ADT in any way, including being authorized by ADT to take over alarm accounts or being an authorized dealer for ADT.

88The balance of the motion is dismissed, without prejudice to ADT pursuing its claims to trial.

89All findings in this decision are interlocutory, based on the limited record before this court, and are not binding on the trial judge.

6. Costs and Case Management

6. Costs and Case Management

90The parties shall take reasonable steps to agree on a schedule to move this case forward to trial, including terms for use of work done on this injunction motion for purposes of disclosure and discovery. This direction does not preclude further disclosure obligations or discovery rights. The parties shall also make reasonable efforts to settle the issue of costs, taking into account the use that will be made of work done for this injunction for the purposes of this trial. And the parties shall also take reasonable steps to agree on mediation prior to incurring further material costs in this case.

91The parties shall schedule a case management conference before D.L. Corbett J., on a date to be set with the court prior to June 30, 2019, to address scheduling, costs and mediation. If the parties have agreed on all of these things, then they may so advise the court in lieu of conducting the case management conference.

D.L. Corbett J.

Released: May 3, 2019

COURT FILE NO.: CV-17-576133

DATE: 20190503

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ADT Security Services Canada, Inc. and

ADT Canada Inc.

Plaintiffs

• and -

Fluent Home Ltd. and Graham Wood

Defendants

Footnotes

1. 1The plaintiffs also asserted misuse of confidential information by Fluent. There is no evidence that Fluent has or has misused confidential information and so this part of the motion is dismissed: Crain-Drummond Inc. v. Hamel, 1991 CarswellOnt 1011, para. 2.
2. 2ADT Security Services v. Fluent Home Ltd., 2017 ONSC 4294.
3. 3A “past customer” is someone who has been a customer within the prior 12 months.
4. 4Wood Affidavit, para. 31 and Exhibit “G”.
5. 5This pattern is illustrated starkly in a graph found at Exhibit “A” to the supplementary Rosenberg affidavit, para. 7.
6. 6This “different customer”, Trevor Muirhead, witnessed the incident involving Mr Mungoshi and attested to it (including providing a photograph that he took of Mr Mungoshi wearing Protectron identification: Exhibit “A” to the affidavit of Trevor Muirhead.
7. 7A third incident was referenced, contained in a complaint made to the Better Business Bureau. For me, this form of hearsay – a document provided by a complainant to a third party business – is too far removed for the purposes of a motion such as this. I have placed no weight upon it. See Better Business Bureau Complaint, Exhibit 12, Wood transcript.
8. 8This incident was set out in fresh evidence adduced after argument on the interlocutory injunction. I explain later in these reasons why I granted leave to adduce this fresh evidence.
9. 9The customer had further difficulties cancelling his contract with Fluent, and there may be issues about whether Fluent retained contract payments from the customer which I do not detail because they are not material additions to the motion at bar to the facts described above.
10. 10Courts of Justice Act, RSO 1990, c. C.43, s.101.
11. 11CBJ International Inc. v. Lubinsky, [2002] OJ No. 3065, followed in Van Wagner Communications Co., Canada v. Penex Metropolis Ltd., [2008] OJ No. 190, leave to appeal to Div. Ct. refused [2008] OJ No. 1707.
12. 12Robert J. Sharpe, Injunctions and Specific Performance, para. 9.40
13. 13See, for example, Payette v. Guay Inc., [2013] SCR 95 at para. 58. Payette concerned covenants given on the sale of assets.
14. 14Doherty v. Allman (1878) 3 App. Cas. 709 at 720, per Lord Cairns, described as a reference “almost invariably made” in cases of negative commercial obligations in Robert J. Sharpe, Injunctions and Specific Performance (2nd ed., Looseleaf), para. 9.10.
15. 15Winnipeg Livestock Sales Ltd. v. Plewman, 2000 MBCA 24, 2000 MBCA, para. 24; The Visual Group Western Canada Inc. v. Park, 2017 BCCA 301, paras. 46-47.
16. 16KRG Insurance Brokers (Western) Inc. v. Shafron, 2009 SCC 6, paras. 15-17.
17. 17Elsley v. J.G. Collins Insurance Agencies Ltd., 1978 CanLII 7 (SCC), [1978] 2 SCR 916, para. 13.
18. 18In my view, given the interlocutory nature of this decision, it should be decided on the narrowest possible grounds, with all other issues left for the trial judge.
19. 19These signs provided promotion for Protectron, of course, but also reduced the risk of security events: potential thieves, for example, could be deterred if they believed the premises were monitored by a security company.
20. 20Elsley v. J.G. Collins Insurance Agencies Ltd., 1978 CanLII 7 (SCC), [1978] 2 SCR 916, para. 19.
21. 21Elsley v. J.G. Collins Insurance Agencies Ltd., 1978 CanLII 7 (SCC), [1978] 2 SCR 916 at 923-24.
22. 22Fluent also argued that the restrictive covenant was too broad because (a) it covered all Protectron customers and not just those to whom Fluent sold Protectron’s services; (b) it precluded Fluent from accepting former Protectron customers, even if Fluent had not actively solicited them; (c) it appeared to extend to accounts purchased by ADT/Protectron from other competitors (which did happen at least once, when ADT purchased a company called Vigilon); and (d) the temporal dimension is unreasonably long because the “break-even” point for ADT is 36.6 months, not 60 months. I say nothing about these arguments in view of my conclusions that the Restrictive Covenant should not be enforced by an interlocutory injunction.
23. 23Church & Dwight Ltd. V. Sifto Canada Inc., 1994 CarswellOnt (Gen. Div.); Partition Components Inc. v. Rintamaki, 2003 CarswellOnt 3161 (SCJ), paras. 8-13; Mead Johnson Canada v. Ross Pediatrics, 1996 CarswellOnt 4075 (Gen. Div.)
24. 24Grant v. Torstar, 2009 SCC 61, para. 65.
25. 25Cross examination of Graham Wood, p. 230.
26. 26Cross examination of Roy Umpherville, pp. 10-11; see also cross examination of Adrian McNeil, p. 41.
27. 27Cross examination of Oscar Ollinger, page 30. Cross examination of Harry Panasiuk, page 27. Cross examination of Rock Rasmussen, page 37. Cross examination of David de Tremauden, page 34. Cross examination of Richard Porter, page 12. Cross examination of Larry Davis, page 30. Cross examination of Janet Hammack, page 21. Cross examination of Linda Granger, pages 21-22. Cross examination of Roxanne Kurnyek, page 11. Cross examination of Stephen Kauffman, page 15. Cross examination of Adrian McNeil, page 32. Cross examination of Jalna Zwarcih, page 14.
28. 28Jet Print Inc. v. Cohen, 1999 CarswellOnt 2357, para. 29.
29. 29MD Management Ltd. v. Campbell, 2010 ONSC 2315.
30. 30MD Management Ltd. v. Campbell, 2010 ONSC 4217 (Div. Ct.).
31. 31MD Management Ltd. v. Campbell, 2010 ONSC 6373, 2010 CarswellOnt 9218 (Div. Ct.).
32. 32MD Physicians Services Inc. v. Jonathan Financial Group Inc., 2011 ONSC 2409.
33. 33See Robert J. Sharpe, Injunctions and Specific Performance, para. 1.990; Hearing Clinic (Niagara Falls) Inc. v. Ellesmere Hearing Centre Ltd., [2008] OJ No. 5271, para. 22; Thompson v. BFI Canada Inc, 2014 ONSC 3726, para. 73; Bell Canada v. Rogers Communications Inc., 2010 ONSC 3010, para. 20.
34. 34Sharpe, Injunctions and Specific Performance, para. 1.990.
35. 35ADT Security Services v. Fluent Home Ltd., 2017 ONSC 4294, paras. 19-21.
36. 36671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 SCR 983; Varco Canada Ltd. v. Pason Systems Corp., 2011 FC 467, paras. 17-18; Jackson v. The Corporation of the City of Vaughan, 2009 CanLII 717 (ON SC), paras. 22-23.
37. 37671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 SCR 983, para. 63, citing Ladd v. Marshall, [1954] 1 WLR 1489 (CA). See also Varco Canada Ltd. v. Pason Systems Corp., 2011 FC 467, para. 17.
38. 38For example, the fresh evidence did not raise a new issue or cast evidence already received in a different light. It was “more of the same”, but a material addition to the weight of ADT’s evidence, and it was not unfair to Fluent that it should be required to respond to it. Finally, the incident in question arose after Fluent had implemented processes to safeguard against the conduct complained of in this proceeding, and so was material to the effectiveness of Fluent’s response, a point relevant to the need for injunctive relief,