COURT FILE NO.: CV-21-00667681-000
DATE: 20210909
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
M. GIBBONS VENTURE LTD., M.R.G. GROUP MANAGEMENT LTD., o/a M.R.G. GROUP, and MRG CONCERTS LTD. o/a MRG LIVE
Plaintiffs
– and –
JUSTIN KWAN
Zohar Levy, for the Plaintiffs
Peter W.G. Carey and Puneet Tiwari, for the Defendant
Defendant
HEARD: September 1, 2021
STEWART J.
Nature of Motion
[1] A motion for interim interlocutory relief in this action has been brought by the Plaintiffs M. Gibbons Venture Ltd., M.R.G. Group Management Ltd., o/a M.R.G. Group, and MRG Concerts Ltd. o/a MRG Live (“MRG”) before me, as directed by Vella J. on August 30, 2021.
[2] MRG seeks an order that the Defendant Justin Kwan ("Kwan"), on the terms as set out in MRG's Notice of Motion, be enjoined from disclosing certain confidential information, solicitation, and inducing of certain third parties, or communicating with them in a way that would generally amount to competing with MRG.
[3] In response, Kwan asks that this motion be dismissed on the basis that the information provided by MRG is inaccurate and that not one branch of the three-part test for granting the relief sought has been met by MRG.
[4] It is of some significance that the motion has been brought on an urgent basis before all of the evidence intended to be relied upon by both parties has been made available to the Court. Further, no cross-examinations have been able to be conducted on the affidavits which have been filed thus far. As a result, the relief being sought by MRG is based upon what is admittedly an incomplete record.
The Dispute
[5] Kwan was hired by MRG in March of 2016. MRG is involved, among other things, in organizing and promoting concerts and live events. Kwan came to MRG with 5 years of experience in the industry and continued to engage in that activity during his employment bringing with him a list of his contacts. Kwan was promoted to Senior Talent Buyer in September, 2018. He was permitted at that time to call himself a Director and earned approximately $90,000.00 per year.
[6] Kwan resigned his position on July 19, 2021. He has now started up a business called Modo Live along with other persons, none of whom he says were previously employed by MRG. Modo Live plans to promote and organize live events and concerts, as well as to provide artist management and record label services.
[7] On the day he resigned, Kwan offered to give two weeks' notice but was summarily removed from the office and his employment was terminated immediately by MRG.
[8] Shortly thereafter, MRG purported to rescind the termination and advised Kwan that he would remain employed for two weeks and thereby subject to the contract he was asked to execute when he was hired (the “Contract”). MRG continued to pay Kwan his wages for the two week period.
[9] MRG alleges that Kwan breached the confidentiality obligations and other terms contained in the Contract and has otherwise breached his duties to his former employer by engaging in allegedly prohibited solicitation and communication in pursuing his new venture, and is suspected to be continuing to do so.
[10] Kwan denies having breached any duty of confidentiality or other obligations. He takes the position that, to the extent he may have pursued other opportunities, he did so when he believed that his employment had been terminated. When he became aware that MRG had decided that he was still employed he ceased to do so for the final two weeks of his employment. Kwan maintains that there is no legal basis for seeking to curtail his efforts to earn a livelihood.
The Test
[11] Section 101 of the Courts of Justice Act, RSO 1990, c. C. 43 provides that a court may grant an injunction to restrain a responding party’s conduct, or compel certain conduct, where a court believes that it is just or convenient to do so in order to preserve the moving party’s rights. Such an order enables the court to preserve a moving party’s rights pending a full trial of the claims advanced.
[12] The well-established general test for injunctive relief is set out in RJR-Macdonald Inc. v Canada (Attorney General) (1994), 1994 117 (SCC), 111 D.L.R. (4th) 385 (S.C.C.).
[13] Interlocutory injunctive relief may be granted where the moving party establishes that: (a) there is a serious issue to be tried with respect to an infringement of the moving party’s rights; (b) the moving party will suffer irreparable harm if an injunction is not granted; and (c) the balance of convenience favours granting the relief sought.
Discussion
[14] It is important to keep in mind that this motion has been brought on an urgent basis for interim interlocutory injunctive relief and is not seeking a final determination of the issues either at the anticipated full-blown motion hearing, or pending trial. It is merely a determination of whether interim and temporary relief should be granted until the issue of whether relief pending trial might be ordered.
[15] I am of the view that MRG has demonstrated that there is a serious issue to be tried. In doing so, I am not confirming in any way that it will be ultimately successful in maintaining its position on the return of the motion. Although MRG is relying upon the Contract executed by Kwan when first employed by MRG which contains provisions relating to his use of confidential information and his duties while employed, the scope and enforceability of those provisions as well as whether Kwan used any information that might properly be considered to be confidential are destined to be matters of dispute between the parties.
[16] Having said that, on the basis of the information before me I consider that MRG will have a difficult time establishing that Kwan is subject to any ongoing fiduciary obligations to it, obligations that if imposed would substantially prevent him from earning a living from working in his chosen field.
[17] With respect to the second branch of the test, I consider that MRG has failed to show that it will suffer irreparable harm if the relief it seeks on this motion is not granted. To the extent it relies on the Contract, and assuming that the relevant portions will be found to be applicable to the ultimate facts and enforceable, it appears not at all likely that MRG will suffer any ongoing and irreparable harm.
[18] MRG is a comparative conglomerate in this small Canadian industry. Kwan is involved in what appears to be a junior start-up venture. MRG is or should be aware of its own contacts and any potential contacts, all of whom it may pursue for securing deals and maintaining its competitive advantage. Further, to the extent MRG may suffer any damage as a result of the alleged breaches by Kwan of which it complains, such damages are likely to be easily calculated and fully compensated by way of a financial award.
[19] Finally, I am of the view that, at this time and on the record before the Court, the balance of convenience favours a denial of the request made by MRG. To grant the relief it seeks would be to effectively shut Kwan down and prevent him from working in the field for which he is most qualified. It would also have a negative impact on others, some of whom have invested in or associated themselves with the new company, as well as on artists and other creative professionals in this industry at a time when opportunities for live performance are just opening up (it is hoped) after having endured long and difficult pandemic restrictions.
Conclusion
[20] For these reasons, the motion is dismissed but without prejudice to the entitlement of either side to make full argument on a more complete record when the motion for injunctive relief is made returnable before another judge.
[21] It is ordered that both parties proceed expeditiously with completing delivery of their motion material and conducting any cross-examinations thereon. They may seek to obtain an early return date in Civil Practice Court if they have not already done so, as well as a timetable for proceeding with the various steps in the motion if one cannot be agreed upon.
[22] I also suggest that the parties consider engaging in good faith discussions with the assistance of their counsel to see if the entire dispute may be resolved. I also encourage them to make use of such mediation facilities as may be available to them if considered to be of possible assistance in resolving their differences.
Costs
[23] I likewise urge the parties to settle the costs of this motion if at all possible. If such efforts fail, written submissions on the subject of costs may be delivered on behalf of Kwan withing 20 days of the date of release of this decision, and on behalf of MRG within 20 days thereafter.
Released: September 9, 2021
COURT FILE NO.: CV-21-00667681-000
DATE: 20210909
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
M. GIBBONS VENTURE LTD., M.R.G. GROUP MANAGEMENT LTD., o/a M.R.G. GROUP, and MRG CONCERTS LTD. o/a MRG LIVE
Plaintiffs
– and –
JUSTIN KWAN
Defendant
REASONS FOR DECISION
Stewart J.
Released: September 9, 2021