COURT FILE NO.: CV-19-6244420-0000
DATE: 2019/11/1
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GS International Holdings Ltd. and YIN WU
Plaintiffs
- and -
SMART VISION DIRECT INC., SMARTEYES DIRECT INC. and LI FANG CHEN
Defendants
AND BETWEEN:
SMART VISION DIRECT INC., SMARTEYES DIRECT INC., 2322932 ONTARIO INC. and LI FANG CHEN
Plaintiffs by Counterclaim
- and -
GS INTERNATIONAL HOLDINGS LTD, GS GLOBAL SECURITY INC., YIN WU, ZI PIN WANG, also known as PETER WANG and JAEDEN WIENS
Defendants by Counterclaim
Gregory M. Sidlofsky and James J. Dunphy for the Plaintiffs
Albert S. Frank and Ronald Minken for the Defendants
HEARD: October 11, 18, 2019
PERELL, J.
REASONS FOR DECISION
“Curiouser and curiouser!” Cried Alice (she was so much surprised, that for the moment she quite forgot how to speak good English).” [Lewis Carroll, Alice's Adventures in Wonderland & Through the Looking-Glass]
A. Introduction
[1] Before the court are curiouser and curiouser motions for injunctive relief.
[2] In the Plaintiffs’ motion, because of an alleged repudiation of several contracts to sever business relationships, the Plaintiffs, GS International Holdings Ltd. and Yin (Gabriel) Wu seek to enjoin the conduct of the Defendants SmartEyes Direct Inc., (“SmartEyes”), Smart Vision Direct Inc. (“Smart Vision”), and Li (Annie) Fang Chen.
[3] In the Defendants’ cross-motion, because of an alleged breach of fiduciary duty and alleged breaches of those contracts to sever business relationships, SmartEyes, Smart Vision, Ms. Chen and 2322932 Ontario Inc. seek to enjoin the conduct of GS International and Mr. Wu. In the cross-motion, SmartEyes, Smart Vision, and Ms. Chen also seek to enjoin the conduct of Zi Pin (Peter) Wang and Jaeden Wiens.
[4] With respect to the cross-motion, it may be noted that 2322932 Ontario Inc., Mr. Wang, and Mr. Wiens are not official parties; but are quasi-parties, having been introduced as parties to an announced but not-yet-pleaded Statement of Defence and Counterclaim. Curiouser and curiouser.
[5] Save for the matters of the Plaintiffs’ request that the Defendants be restrained from defaming their business and interfering with the Plaintiffs’ Internet communications and data systems, from the looking glass of the law of injunctive relief, the motions have factual bizarre narratives and hallucinogenic legal theories that do not support the claims for interlocutory relief.
[6] At the end of the day, the Plaintiffs may have a claim for damages for breach of contract, but interlocutory injunctive relief, particularly spiteful injunctive relief, is not appropriate where damages are an adequate remedy. At the end of the day, the Defendants may have a claim for breach of fiduciary duty or breach of contract, but interlocutory injunctive relief, particularly spiteful injunctive relief, is not appropriate where damages are an adequate remedy.
[7] Therefore, for the reasons that follow, I order that (a) the Defendants be enjoined from accessing the Plaintiffs' computer system; (b) that the Defendants cease redirecting the Plaintiffs’ websites to the Defendants’ website; and (c) the Defendants be enjoined from making defamatory statements about the Plaintiffs to the Plaintiffs’ customers and suppliers. I order costs in the cause.
[8] For the reasons that follow, I dismiss the cross-motion with costs in the cause.
B. Facts
[9] For present purposes, it is sufficient to summarize or generalize the material facts, which as I have already indicated above are in some respects bizarre or incoherent. As will appear, the most curious phenomenon is a shape-shifting trademark ownership.
[10] In June 2006, Ms. Chen opened SmartEyes to carry on business selling security surveillance equipment. SmartEyes operated out of a store in Markham, Ontario.
[11] Mr. Wu was an employee of SmartEyes. He joined the business as Sales Manager and by 2010, he was promoted to General Manager. Ms. Chen alleges that Mr. Wu was a senior and trusted employee with fiduciary responsibilities to SmartEyes and to 2322932 Ontario.
[12] Ms. Chen alleges that Mr. Wang, who was a branch manager, also had fiduciary responsibilities to SmartEyes.
[13] In May 2009, Ms. Chen incorporated Smart Vision as a holding company. Although Smart Vision did not sell security surveillance equipment, Ms. Chen began to operate Smart Vision and SmartEyes as if they were one enterprise.
[14] On April 27, 2011, Smart Vision registered the trademark “Galaxy” with the Canadian Intellectual Property Office. On the advice of her lawyer, Ms. Chen registered the trademark in the name of Smart Vision.
[15] Mr. Wu, however, believed or understood that SmartEyes owned the Galaxy trademark, which it manifestly was using in its business. From 2011, the trademark was used in SmartEyes marketing materials and products.
[16] On April 3, 2012, Ms. Chen incorporated 2322932 Ontario Inc. to operate a SmartEyes branch store in Mississauga, Ontario.
[17] On April 1, 2014, Mr. Wu purchased a 20% interest in SmartEyes and in 2322932 Ontario Inc for $320,000. Ms. Chen held the remaining 80% interests. Mr. Wu paid for his shares based on his understanding that SmartEyes and its subsidiary owned the Galaxy trademark. This is bizarre because the legal truth was that Smart Vision, which was wholly owned by Ms. Chen, owned the trademark. Curiouser and curiouser.
[18] Mr. Wu says that by mid-2017, he was unhappy with the business practices of Ms. Chen and wished to minimize influence over the business in which he was the minority partner. Ms. Chen denies knowing of Mr. Wu’s unhappiness, but in mid-2017, she agreed that Mr. Wu could start up a new company in which she would not have a controlling interest. Mr. Wu would continue to have a minority interest in SmartEyes.
[19] In his Statement of Claim, paragraph 33, Mr. Wu pleads that based on Ms. Chen’s business practices, he no longer trusted her and did not want to continue working with her. In paragraph 35, he pleads that as a result of Ms. Chen’s business practices, he decided to incorporate a new company in which Ms. Chen would not have control over the books and records. Curiouser and curiouser.
[20] On December 6, 2017, Galaxy Security Inc. was incorporated to carry on the business of selling security surveillance equipment. Mr. Wu and Ms. Chen, along with others would be shareholders. The new company planned to use the Galaxy trademark. It opened a store in Markham, Ontario, where, SmartEyes was already carrying on the same business.
[21] The next curious element of the narrative is that Ms. Chen and Mr. Wu agreed to pay for their shares in Galaxy Security by valuing the goodwill associated with the Galaxy trademark (which actually was owned by Smart Vision) and then transferring the trademark to Galaxy Security in exchange for shares in Galaxy Security.
[22] So, in early January 2018, Ms. Chen’s accountant, Samuel Lo, valued the goodwill attached to the trademark as being worth between $390,879 and $424,870, but Ms. Chen herself valued the trademark at $500,000. Then, using the $500,000 evaluation, although there was never was an actual transfer of the trademark to Galaxy Security, Ms. Chen received 330,000 Class A voting shares in Galaxy ($1 dollar each) plus $70,000. Then, although Mr. Wu never actually directly or indirectly had an ownership interest in the trademark and although a transfer of the trademark never actually occurred, Mr. Wu believed he had transferred his interest in the trademark for which interest and the payment of $150,000, he received 250,000 Class A voting shares in Galaxy Security. Curiouser and curiouser.
[23] There were five other shareholders who each purchased 100,000 Class A voting shares in Galaxy Security at their cash value. These shareholders apparently paid based on the belief that the Galaxy trademark was an asset of Galaxy Security (now GS International). Mr. Wang was one of the shareholders. As of March 15, 2018, the shareholders and their shareholdings of Class A voting shares were as follows:
Ms. Chen
330,000 (30.8%)
Mr. Wu
250,000 (23.0 %)
Mr. Wang
100,000 (9.25%)
Jie Guan
100,000 (9.25%)
Wenjun Shou
100,000 (9.25%)
Yu Qiao
100,000 (9.25%)
Ruoxi Wang
100,000 (9.25%)
[24] On February 16, 2018 and by addendum on March 15, 2018, Galaxy Security's seven shareholders signed a Unanimous Shareholder Agreement. The Unanimous Shareholders Agreement contained a non-compete, non-solicitation, clause. Under the Unanimous Shareholders Agreement, management decisions required a majority vote. Ms. Chen was the single largest shareholder, but she did not command a majority.
[25] Galaxy Security opened for business. Its store was in Markham, Ontario. Meanwhile, SmartEyes continued to operate its stores in Markham and Mississauga.
[26] I pause in the narrative to observe that if it is true that all of the parties were carrying on the same type of business undertaking of selling security surveillance equipment and if it is true that Mr. Wu had a fiduciary relationship with SmartEyes, then it is arguable that he was breaching that fiduciary relationship (unless there was a waiver) just by opening Galaxy Security. And, if is true that all of the parties were carrying on the same type of business undertaking and if it is true that Ms. Chen was bound by the non-compete, non-solicitation, clause in the Unanimous Shareholder Agreement, then it is arguable she was breaching that agreement from the outset (unless there was a waiver). Curiouser and curiouser.
[27] Returning to the narrative and putting aside these unusual factual elements of the litigation to be resolved some other day, the businesses operated for the next year or so, and on October 1, 2018, Ms. Chen sold 70,000 of her Class A voting shares to a new shareholder for $140,000 ($2 per share). The new shareholder apparently paid based on the belief that the Galaxy trademark was an asset of Galaxy Security (now GS International). This sale reduced Ms. Chen’s shareholding to 260,000 shares.
[28] Approaching the end of 2018, the business relationship between the parties was deteriorating. Ms. Chen says that she was deceived by Mr. Wu about her role in Galaxy Security. She says that she believed she would be in charge because she was to be the largest shareholder, a director, the Chief Executive Officer, and the President of Galaxy Security. She now believes that Mr. Wu was always planning to displace her as CEO and to gain control and to use the Galaxy trademark.
[29] After approximately a year in business, Ms. Chen, Mr. Wu, and the other shareholders in Galaxy Security decided to end their business relationship. They entered into several agreements to affect the severance.
[30] The severance agreements are, to put it mildly, the opposite of a masterful legal work, and it will be the work for another court to decipher and interpret them and to determine whether or not they were performed or breached. The core elements or core intent of the agreements, however, are relatively clear.
[31] One major goal of the severance agreements was that Ms. Chen would have no ownership interest in Galaxy Security, which would change its name to GS International, and which would not have any rights to use the Galaxy trademark. Thus, Mr. Wu agreed to purchase Ms. Chen’s remaining 260,000 shares in Galaxy and GS International agreed to return the Galaxy trademark, which bizarrely, Galaxy Security actually never had been received because the trademark was always owned by Smart Vision and had never been transferred or assigned except in the legal fantasies of the parties.
[32] The second major goal of the severance agreements was that Mr. Wu would have no ownership interest in SmartEyes of its subsidiary 2322932 Ontario and GS International would have no ownership interest or right to use the Galaxy trademark.
[33] Although it is far from clear, under the severance agreements:
a. Mr. Wu would purchase Ms. Chen’s 260,000 shares in Galaxy Security for $260,000.
b. GS International would repay a $208,000 indebtedness it had to Ms. Chen.
[34] Although it is far from clear, under the severance agreements:
a. Ms. Chen would pay Mr. Wu $350,511.29 for his shares in SmartEyes and 2322932 Ontario. This sum would be paid by setting off Mr. Wu’s $220,000 share purchase of Ms. Chen’s shares in Galaxy Security with the apparent result that Ms. Chen would pay $90,511.29 to Mr. Wu.
b. Under an Agreement dated December 30, 2018, Ms. Chen agreed to repurchase the Galaxy trademark for $330,000, which was to be paid by her forgiving the $208,000 loan to Galaxy Security and by her paying $122,000 in cash.
c. Under the Agreement dated December 30, 2018, SmartEyes agreed to pay $70,000 to Galaxy Securities. This payment was to be treated as a refund of a supposed deposit paid by Galaxy Security on the acquisition of the Galaxy trademark, which as frequently mentioned above, had never actually been acquired.
[35] The severance agreements were at least partially performed. On December 30, 2018, Ms. Chen returned her shares in Galaxy Security. On December 31, 2018, Mr. Wu returned his shares to SmartEyes and 2322932 Ontario. On January 25, 2019, Galaxy Security changed its name to GS International. Ms. Chen paid $70,000 seemingly with respect to the return of the Galaxy Trademark. Although the matter is disputed, GS International says it stopped using the Galaxy Trademark and the evidence is that it does not need the trademark to carry on business. The Defendants did continue to use the Galaxy trademark and they changed the name of the store in Markham to "Galaxy Security". On January 9, 2019, Ms. Chen obtained Master Business Licenses for both SmartEyes and 2322932 Ontario allowing them to use the business name "Galaxy Security," which they are doing.
[36] GS International and Mr. Wu submit, however, that pursuant to the various agreements, the Defendants were obliged to pay $282,511.29 ($90,511.29 + $122,000 + $70,000) by March 31, 2019. They submit that Ms. Chen and the corporate Defendants, however, paid only $70,000 leaving a remaining balance of $212,511.29.
[37] GS International submits that because the Defendants did not pay all that they owe, there has been a breach of the severance agreements with the results that only GS International can use the Galaxy trademark and Ms. Chen is in breach of the Unanimous Shareholders Agreement
[38] It is the Defendants’ position, however, that the Defendants have paid all that they owe under the severance agreements and or that if there are any sums outstanding, then that indebtedness has been discharged because GS International and Mr. Wu breached the severance agreements by using and infringing the Galaxy trademark.
[39] The use or the misuse of the Galaxy trademark is denied by GS International and Mr. Wu. Their position is that although they are not themselves using the trademark, SmartEyes and its subsidiary cannot use it and should be enjoined from doing so.
[40] The acrimony between the parties led to the litigation now before the court and Mr. Wu and and GS International brought their motion for interlocutory relief. They seek orders: (a) that the Defendants cease naming their store “Galaxy Security” and return to using the name “Smart Vision”; (b) enjoining the Defendants from accessing the Plaintiffs' computer system; (c) that the Defendants cease redirecting the Plaintiffs’ websites to the Defendants’ website; (d) enjoining the Defendants from making defamatory statements about the Plaintiffs to the Plaintiffs’ customers and suppliers; and (e) enjoining the Defendants from interfering with the Plaintiffs’ business relationships.
[41] In seeking interlocutory relief, GS International and Mr. Wu allege that Smart Vision, SmartEyes, and Ms. Chen have misrepresented, among other things, that: (a) the GS International and Mr. Wu are in financial peril; (b) they are no longer in business; (c) they are unable to sell certain security surveillance products; and conversely that (d) Galaxy Security Inc. or GS International has been purchased by the Defendants.
[42] Although they have not yet delivered a Statement of Defence and Counterclaim, Smart Vision, SmartEyes, and Ms. Chen (and 2322932 Ontario), bring a cross-motion for injunctive relief. They request orders, among other things: (a) enjoining Mr. Wu, Mr. Wang, and Mr. Wiens from competing with the business carried on by the Defendants; (b) enjoining Mr. Wu, Mr. Wang, and Mr. Wiens from soliciting the customers or suppliers of the corporate Defendants; (c) enjoining Mr. Wu, Mr. Wang, and Mr. Wiens from interfering with the Defendants’ business relationships; (d) enjoining the Plaintiffs from disclosing any customer lists, computer printouts, or any records, contracts, confidential materials or other documents obtained in the course of the employment with the Defendants; (e) compelling the Plaintiffs to return all copies (paper or electronic) of the Defendant’s confidential and proprietary information; and (f) enjoining the Plaintiffs from passing off the wares and services of the Defendants as the wares and services of the Defendant.
[43] Before completing the factual narrative, it should be noted that there are additional disputes between the parties; that is:
a. Ms. Chen says that she lent Mr. Wu $60,000 which has never been repaid.
b. After the severance of the companies, Mr. Wu requested that GS International be provided with the administrative access code to its email account and computer system that had been set up by employees of Ms. Chen’s companies. This request has been refused, and the Plaintiffs submit that the Defendants have interfered with the Plaintiffs' websites and have been monitoring and intercepting the Plaintiffs' email. Ms. Chen, however, says that this conduct has already been stopped, and the Defendants have no objection to an Order that that this conduct be enjoined.
[44] To complete the factual narrative, the Plaintiffs allege that beginning in January 2019, Ms. Chen has made defamatory and misleading statements to suppliers and customers that have damaged and threaten further damage to the Plaintiffs’ reputation and business.
[45] Ms. Chen denies making some of the alleged defamatory statements, and with respect to the others, she says that she has the defences that the statements were not defamatory, or the statements were justified. Without going into the details, I simply say that there is ample evidence that the Plaintiffs have established a prima facie case of some defamatory statements and harm to their business relationships with customers and suppliers. They have not, however, adduced any evidence to show actual financial harm.
[46] Further to complete the narrative, Ms. Chen alleges that Mr. Wiens, who was an employee of SmartEyes until March 15, 2019, became an employee of GS International and that he has breached his employment contract, which contains non-competition and non-solicitation provisions.
C. Discussion and Analysis
[47] Section 101 of the Courts of Justice Act[^1] provides the court with the jurisdiction to grant interlocutory injunctions. Section 101 states:
Injunctions and receivers
101 (1) In the Superior Court of Justice, an interlocutory injunction or mandatory Order may be granted or a receiver or receiver and manager may be appointed by an interlocutory Order, where it appears to a judge of the court to be just or convenient to do so.
Terms
(2) An Order under subsection (1) may include such terms as are considered just.
[48] A purpose of an interlocutory injunction is to preserve the status quo until the legal right asserted by the plaintiff can be dealt with by the trial court.[^2]
[49] In RJR-MacDonald Inc. v. Canada (Attorney General),[^3] the Supreme Court set out the test used for granting or refusing to grant an interlocutory injunction. Under the RJR-MacDonald test for an interlocutory injunction, the court considers three factors: (1) whether the plaintiff has presented a serious issue to be tried or, in a narrow band of cases, a strong prima facie case; (2) whether the plaintiff would suffer irreparable harm if the remedy for the defendant's misconduct were left to be granted at trial; and (3) where does the balance of convenience or inconvenience lie in the granting or the refusing to grant an interlocutory injunction.
[50] Under the RJR-MacDonald test, the court considers whether the plaintiff or applicant has shown that there is a serious issue to be tried in the sense that the plaintiff or applicant has a viable claim. For most cases, this factor sets a low threshold, and this approach negates the need of any intensive review of the merits at the preliminary phase of the proceedings. However, if its consideration of the other elements of the test is inconclusive, the court may revisit the question of the strength or merits of the plaintiff's case as an aspect of the balance of convenience factor.[^4]
[51] The irreparable harm analysis means the court will consider whether damages awarded after a trial will provide the plaintiff or applicant with an adequate remedy without the need for an interlocutory remedy.[^5] The onus is on the party seeking an injunction to place sufficient financial and other evidence before the court showing that irreparable harm will result.[^6] The onus is on the plaintiff or applicant to show that if made to wait for a hearing where damages are awarded, then he or she will suffer irreparable harm. If damages or some other trial remedy would come too late or be inadequate to repair the harm or be insufficient to do justice, then the harm may be said to be irreparable. Evidence of irreparable harm must be clear and not speculative.[^7]
[52] Examples of irreparable harm noted in the RJR-MacDonald judgment included: the plaintiff being put out of business; the plaintiff suffering a permanent injury to its business reputation;[^8] the plaintiff suffering a permanent loss of market share;[^9] and the plaintiff’s property being permanently depleted. Injury to the goodwill of a business may constitute irreparable harm.[^10] Passing off and using another’s trade name may constitute irreparable harm.[^11]
[53] A loss of market share, a loss of goodwill, or damage to reputation can, in a given case, constitute irreparable harm;[^12] however, these losses are not necessarily or categorically irreparable harm, and the attendant damages from a loss of market share, a loss of goodwill or damage to reputation are not necessarily unquantifiable.[^13] In Curran Farm Equipment Ltd. v. John Deere Ltd.,[^14] the Divisional Court stated that: "if the nature of the damages can be calculated in money, then no matter how difficult it may be to qualify damages, the court should decline to grant an injunction”.
[54] The balance of convenience analysis considers what is the effect on the parties and sometimes on third parties of the court granting or not granting the interlocutory injunction.[^15] This analysis involves a determination of which of the two parties will suffer the greater harm from the granting or the refusal to grant an interlocutory injunction pending a decision on the merits. In this context, the court will need to compare and contrast the harm that the plaintiff may suffer if the interlocutory injunction is refused with the harm that the defendant would suffer that would not be reparable by the plaintiff's undertaking as to damages if the interlocutory injunction is granted. The factors that the court may consider in assessing the balance of convenience and the weight to be given to them are indeterminate and will vary from case to case.[^16]
[55] If the plaintiff's case seems weak, then the undoubted convenience of an injunction may not balance the inconvenience of the defendant suffering the interference with his or her rights based on a doubtful claim. Conversely, if the merits of the plaintiff's case seem quite strong then the plaintiff's inconvenience of being denied an interlocutory remedy may seem to outbalance the inconvenience of the defendant having to suffer a restraint on his or her rights.[^17]
[56] The general test for an interim injunction is not used in defamation cases. In an injunction case where the defendant indicates an intention to justify; i.e., prove the truth of the statements, an interim injunction will not be granted unless the plaintiff proves that the words are so manifestly defamatory that a jury would inevitably come to the conclusion that the words were defamatory and impossible to justify.[^18]
[57] Turning to Mr. Wu and GS International’s motion for injunctive relief, there are two branches to it. The first branch is associated with enjoining Ms. Chen, Smart Vision, and SmartEyes or Galaxy Security, which is the business logo now being used by SmartEyes from using the Galaxy Trademark, which surreally has always been owned by Smart Vision and never was actually transferred away to GS International.
[58] I regard this branch of the Plaintiffs’ claim for injunctive relief as all of: legally ill-conceived; not satisfying the RJR-MacDonald test for injunctive relief; and spiteful.
[59] I say the claim for an injunction is ill-conceived because as confirmed during oral argument, the Plaintiffs are suing for breach of contract. The remedy for a breach of contract is damages using money to put the innocent party in the financial position it would have been in had the contract been performed by the guilty party. When a contract is terminated by breach of contract, the performed promises are not reversed as would be the case if a claim is made for rescission. For a breach of contract, the innocent party is not restored to its pre-contract position but rather is compensated for the unperformed promises. In the immediate case, the only unperformed promise by any of the parties is the alleged failure of the Defendants to pay $212,511.29. Pursuing a claim for breach of contract, the Plaintiffs have no claim to the trademark, only a claim to be paid for the trademark that was transferred in some surreal way back to its owner.
[60] The Plaintiffs purportedly structure their claim so that they have their cake and eat it. This is ill-conceived. The Plaintiffs might have been entitled to rescission, which would support a claim for still owning the trademark, but they sued instead for damages for breach of contract for not being paid for transferring the trademark. The Plaintiffs are not entitled to both rescission and damages for breach of contract.
[61] Moreover, for there to be rescission, there would have to be restitigio in integrum, which would entail that the entirety of the severance agreements be reversed, which is not what any of the parties want, need, or are legally entitled to. Mr. Wu has already resigned from SmartEyes and Ms. Chen has already resigned from GS International.
[62] There is a serious issue to be tried that the Plaintiffs have a claim for damages. There is no serious issue to be tried that the Plaintiffs have a claim for an injunction based on the Galaxy trademark belonging to them.
[63] However, if I am wrong in this regard, and the Plaintiffs satisfy the first stage of the RJR-MacDonald test, they fall very short from satisfying the irreparable harm and the balance of convenience stages. The Plaintiffs’ claim is ultimately to be paid an already ascertainable sum of money. There is no irreparable harm. Damages awarded after a trial will provide the Plaintiffs with an adequate remedy without the need for an interlocutory remedy. The balance of convenience also favours the Defendants who would be seriously harmed by the inability to use (more accurately by the inability to continue to use) the Galaxy trademark, which the Plaintiffs have indicated that they are not using and do not need to use.
[64] All this makes GS International’s claim for an interlocutory injunction spiteful. I say that the claim is spiteful because GS International is not using and does not need to use the Galaxy trademark. It is spiteful because GS International is using its claim for an injunction as some form of ransom for what it actually wants, which is $212,511.29. There is no irreparable harm and the balance of convenience does not favour GS International.
[65] I, therefore, dismiss the Plaintiffs claim for an injunction associated with the Galaxy trademark.
[66] The situation, however, is different with respect to the Plaintiffs’ claim for an injunction based on defamation. Put shortly, on the facts of this case, with respect to the defamation claim, the Plaintiffs do satisfy the three stages of the RJR-MacDonald test. I, therefore, grant an interlocutory injunction on the second branch of the Plaintiffs’ request for injunctive relief.
[67] This brings me to the Defendants’ cross-motion for injunctive relief. I can explain why I am dismissing this claim quite briefly. There are four reasons to dismiss the cross-motion.
[68] First, as noted above, although in the course of responding to the Plaintiffs’ motion, the Defendants have announced and disclosed the nature of their counterclaim that would be the basis for injunctive relief; however, the Defendants and 2322932 Ontario have not yet brought a counterclaim and several of the party defendants to the proposed counterclaim are not before the court. An injunction cannot be granted in such circumstances. Second, assuming the counterclaim and its parties were properly before the court, it is at least doubtful that the Defendants have a viable breach of fiduciary duty claim or breach of contract claim against Mr. Wu, Mr. Wang, and Mr. Wiens. The matter, obviously, needs to be developed, but there is the curiosity that GS International and SmartEyes would appear always to have been competing since both have stores in Markham. Third and fourth, assuming that there was a serious issue to be tried about the breaches of fiduciary duty, based on the record before the court, I am not persuaded that the Defendants have satisfied the irreparable harm and balance of convenience elements of the RJR-MacDonald Test.
[69] I, therefore, dismiss the cross-motion with costs in the cause.
D. Conclusion
[70] For the above reasons, I order that (a) the Defendants be enjoined from accessing the Plaintiffs' computer system; (b) that the Defendants cease redirecting the Plaintiffs’ websites to the Defendants’ website; and (c) enjoining the Defendants from making defamatory statements about the Plaintiffs to the Plaintiffs’ customers and suppliers. I order costs to the Plaintiff’s in the cause.
[71] For the above reasons, I dismiss the cross-motion with costs in the cause.
Perell, J.
Released: November 1, 2019
COURT FILE NO.: CV-19-6244420-0000
DATE: 2019/11/1
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Gs international holdings ltd. and YIN WU
Plaintiffs
- and -
SMART VISION DIRECT INC., SMARTEYES DIRECT INC. and LI FANG CHEN
Defendants
AND BETWEEN:
SMART VISION DIRECT INC., SMARTEYES DIRECT INC., 2322932 ONTARIO INC. and LI FANG CHEN
Plaintiffs by Counterclaim
- and -
GS INTERNATIONAL HOLDINGS LTD, GS GLOBAL SECURITY INC., YIN WU, ZI PIN WANG, also known as PETER WANG and JAEDEN WIENS
Defendants by Counterclaim
REASONS FOR DECISION
PERELL J.
Released: November 1, 2019
[^1]: R.S.O. 1990, c. 43.
[^2]: 674834 Ontario Ltd. (c.o.b. Coffee Delight) v. Culligan of Canada, Ltd., 2007 CanLII 8014 (ON SC), [2007] O.J. No. 979 at para. 22 (S.C.J.).
[^3]: 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.
[^4]: Omega Digital Data Inc. v. Airos Technology Inc. (1996), 1996 CanLII 11785 (ON SC), 32 O.R. (3d) 21; Empire Stevedores (1973) Ltd. v. Sparringa (1978), 1978 CanLII 1479 (ON SC), 19 O.R. (2d) 610 (H.C.J.); American Cyanamid Co. v. Ethicon Ltd., 1975 CanLII 2598 (FC), [1975] A.C. 396 (H.L.).
[^5]: Traynor v. Unum Life Insurance Co. of America (2003), 2003 CanLII 40149 (ON SCDC), 65 O.R. (3d) 7 (Div. Ct.); Paddington Press Ltd. v. Champ, 1979 CanLII 4566 (ON SC), [1979] O.J. No. 796 (H.C.J.).
[^6]: 2158124 Ontario Inc. v. Pitton, 2017 ONSC 411 at para. 48; Ciba-Geigy Canada Ltd. v. Novopharm Ltd., 1994 CanLII 19563 (FC), [1994] F.C.J. No. 1120 at paras. 117-118 (T.D.)
[^7]: 2158124 Ontario Inc. v. Pitton, 2017 ONSC 411 at paras. 49-51; Downtown Kids Academy Inc. v. Zakrzewski, 2017 ONSC 5045; Ontario v. Shehrazad Non-Profit Housing Inc. (2007), 2007 ONCA 267, 85 O.R. (3d) 81 at para. 26 (C.A.); Kanda Tsushin Kogyo Co. v. Coveley, [1997] O.J. No. 56 at para. 14 (Div. Ct.); 754223 Ontario Ltd v. R-M Trust Co, [1997] O.J. No. 282 at para. 40 (Gen. Div.); RJR-MacDonald Inc. v. Canada (Attorney General) 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 at paras. 57-59.
[^8]: Church & Dwight Ltd. v. Sifto Canada Inc., 1994 CanLII 7314 (ON SC), [1994] O.J. No. 2139 (Gen. Div.); Time/System International A/S v. Custom Planner Inc., [1986] O.J. No. 3049 (H.C.J.); Foodcorp Ltd. v. Original Chalet Canada Inc., [1981] O.J. No. 374 (H.C.J.).
[^9]: 1323257 Ontario Ltd. (c.o.b. Hyundai of Thornhill) v. Hyundai Auto Canada Corp., [2009] O.J. No. 95 at paras. 113-115 (S.C.J.); Church & Dwight Ltd. v. Sifto Canada Inc., 1994 CanLII 7314 (ON SC), [1994] O.J. No. 2139 (Gen. Div.); Source Perrier (Société Anonyme) v. Canada Dry Ltd., [1982] O.J. No. 3256 (H.C.J.).
[^10]: United States Surgical Corp. v. Downs Surgical Canada Ltd., [1982] O.J. No. 881 (H.C.J.).
[^11]: Car-Wal Garage Doors Inc. v. On Track Door Systems Canada Inc., 2018 ONSC 6078.
[^12]: 2158124 Ontario Inc. v. Pitton, 2017 ONSC 411 at paras. 49-51.
[^13]: Optilinx Systems Inc. v. Fiberco Solutions Inc., 2014 ONSC 6944; Cana International Distributing Inc. (c.o.b. Sexy Living) v. Standard Innovation Corp., 2010 ONSC 6273 at paras. 18-19 (S.C.J.); MD Management Ltd. v. Campbell, 2010 ONSC 2315 at para. 32 (S.C.J.), affd 2010 ONSC 6373; Bell Canada v. Rogers Communications Inc., 2009 CanLII 39481 (ON SC), [2009] O.J. No. 3161 (S.C.J.).
[^14]: 2011 ONSC 3791 at para. 16 (Div. Ct.). See also 2158124 Ontario Inc. v. Pitton, 2017 ONSC 411.
[^15]: Synergism Arithmetically Compounded Inc. v. 1130163 Ontario Inc., 1997 CanLII 12381 (ON SC), [1997] O.J. No. 4271 (Gen. Div.); American Cyanamid Co. v. Ethicon Ltd., 1975 CanLII 2598 (FC), [1975] A.C. 396 (H.L.).
[^16]: RJR-MacDonald Inc. v. Canada (Attorney General) 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.
[^17]: Bell Canada v. Rogers Communications Inc., 2009 CanLII 39481 (ON SC), [2009] O.J. No. 3161 at para. 38 (S.C.J.); Quizno's Canada Restaurant Corp. v. 1450987 Ontario Corp., 2009 CanLII 20708 (ON SC), [2009] O.J. No. 1743 at para. 46 (S.C.J.); Omega Digital Data Inc. v. Airos Technology Inc. (1996), 1996 CanLII 11785 (ON SC), 32 O.R. (3d) 21 (Gen. Div.); Empire Stevedores (1973) Ltd. v. Sparringa (1978), 1978 CanLII 1479 (ON SC), 19 O.R. (2d) 610 (H.C.J.); American Cyanamid Co. v. Ethicon Ltd., 1975 CanLII 2598 (FC), [1975] A.C. 396 (H.L.).
[^18]: Upper Canada District School Board v. Gilcig, 2017 ONSC 2904 (Ont. S.C.J.); Dale & Lessman LLP v. Atas, 2016 ONSC 5911 (Ont. S.C.J.); Palen v. Dagenais, 201 SKQB 383 (Sask. Q.B.); Canada (Human Rights Commission) v. Canadian Liberty Net, 1998 CanLII 818 (SCC), [1998] 1 S.C.R. 626 (S.C.C.); Rapp v. McClelland & Stewart Ltd. (1981), 1981 CanLII 1696 (ON SC), 34 O.R. (2d) 452 (Ont. H.C.J.).