Aware Ads Inc. v. Walker et al, 2021 ONSC 7452

COURT FILE NO.: CV-21-00669995-0000

DATE: 20211110

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

AWARE ADS INC.

Plaintiff

– and –

GREG WALKER, JASPER PIRRIE, and 2792721 ONTARIO LIMITED

Defendants

Tudor Carsten, Breanna Needham and Cody Koblinsky, for the Plaintiff

Daniel Chodos, Athanasios Makrinos and Stephen Wolpert, for the Defendant, Greg Walker

Doug Best and Kaleigh Sonshine, for the Defendants, Jasper Pirrie, and 2792731 Ontario Limited

HEARD: November 1, 2021

VELLA J.

REASONS FOR DECISION – INTERIM INJUNCTION and related relief

1This is a motion for an interim injunction and related relief brought by the plaintiff, Aware Ads Inc., and brought variously as against the defendants, Greg Walker and Jasper Pirrie. It has been brought on an urgent basis.

2The Notice of Motion seeks an interim order restraining Greg Walker (“Walker”) from competing with Aware Ads Inc. (“Aware Ads”) or soliciting its clients, in accordance with the terms of his employment agreement, together with an asset freezing injunction and a Certificate of Pending Litigation. In addition, as against both Walker and Jasper Pirrie (“Pirrie”), Aware Ads seeks an order compelling disclosure of the individuals and entities involved in carrying on with a business called Ice Offers and an order restraining them from performing any work for, or otherwise participating in, the Ice Offers business, or any similar business, pending further order of the court.

3For the reasons that follow, the motion is dismissed based on the current evidentiary record.

I. BACKGROUND

4Aware Ads is in the business of acting as a service provider that facilitates contacts between advertisers and websites (called “affiliates”). It describes itself as an internet marketing company based in Toronto that specializes in all aspects of online marketing. It operates a department called Oasis Ads Media that specializes in direct response marketing for affiliates (website providers) and advertisers who wish to advertise their product on as many website platforms as possible.

5Walker and Pirrie are former employees of Aware Ads.

62792721 Ontario Limited (“2792721 Corporation”) is an Ontario corporation owned by Pirrie and was incorporated in November 2020.

7Walker was hired by Aware Ads in September 2013 and signed an employment contract dated September 25, 2013 (the “Employment Contract”). Walker says that he resigned from Aware Ads effective September 30, 2021 and that he told Aware Ads of his intent to part ways in July 2021. Aware Ads says it fired Walker for cause on or about October 12, 2021, after discovering that Walker had allegedly been conspiring with Pirrie to solicit clients away from Aware Ads and over to Ice Offers.

8Pirrie was hired by Aware Ads in November 2015. He was dismissed without cause by Aware Ads on February 18, 2020.

9Walker and Pirrie occupied complementary positions at Aware Ads. Walker dealt with the advertiser clients, while Pirrie dealt with the affiliate clients.

10Aware Ads claims that Walker and Pirrie were both fiduciaries to Aware Ads. Walker and Pirrie deny that characterization.

11Aware Ads has produced Walker’s signed Employment Contract that contains certain restrictive covenants; notably, a confidentiality provision, a non-competition clause, and a non-solicitation clause. Walker admits this to be his employment contract but challenges the enforceability of these clauses and says in any event, he has not breached any of the clauses. He also deposes that none of these restrictive clauses were brought to his attention at the time he signed the Employment Contract.

12Aware Ads has been unable to produce a signed employment contract for Pirrie but deposes that Pirrie’s employment contract has the same restrictive covenants as Walker’s Employment Contract. In the absence of being able to compare the contracts, Pirrie does not admit that his employment contract had the exact same restrictive covenants, with the same wording as Walker’s. However, like Walker, Pirrie challenges the enforceability of those restrictive covenants and says he did not breach any of them.

13By the date of this motion, the subject terms of the post termination 6-month non-competition and the 12-month non-solicitation covenants for Pirrie had already expired. However, these covenants, if enforceable, are still in effect with respect to Walker. Depending upon the effective date of Walker’s severance of his employment, the non-competition covenant will expire in or around the end of March or mid-April 2022, and the non-solicitation covenant will expire in or around the end of September or mid-October 2022.

II. PRELIMINARY MATTER

14Aware Ads sought to file a reply motion record that was delivered to the responding parties on October 25^th after 4:00 p.m. The reply record consisted of a relatively brief further affidavit of the principal of Aware Ads, James Vanderlinden (“Vanderlinden”), and it responded to specific allegations made by Walker in his responding affidavit.

15The responding parties objected as, in their view, the reply record was delivered late, and, in any event, it was not provided for in the timetable imposed in this matter.

16The responding parties stated that, in the event I allowed the reply motion record, they would not be seeking an adjournment.

17I reviewed the timetable. No deadline was mentioned for delivery of a reply record.

18It is not unusual within the context of an urgent interim injunction motion for materials to be delivered on short notice.

19In my view, it is necessary to have the best evidence available to determine this interim motion on the merits. In the absence of any suggestion that the responding parties wished to cross-examine Vanderlinden on this reply affidavit and noting that no cross-examinations have yet been conducted (unsurprisingly, given the short timeline for the motion), I allowed the filing of the reply record.

III. ANALYSIS

i. Interim Injunction

20The court must determine whether interim injunctive relief is warranted based on an extremely limited review of the limited evidentiary record.

21There is an extreme divergence of the material “facts” revealed in the respective affidavits, which will ultimately require an assessment of credibility as between the parties.

22The parties agree that the applicable test for interlocutory and interim injunctive relief is set out in RJR-MacDonald Inc v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.

23The onus is on Aware Ads to establish that each of the three branches of the RJR test is proven on the basis of clear, and not speculative, evidence.

(a) Serious Issue to be Tried on the Merits of the Case

24In the event that the interim injunction is granted, it will effectively take away the responding parties’ ability to work in their respective fields.

25The parties agree that where the requested interim injunctive relief will take away the responding party’s ability to earn a living, the moving party must prove that it has a strong prima facie case. This threshold has been interpreted to mean that the moving party must demonstrate that “its claim is almost certain to succeed”: see Camino Modular Systems Inc. v. Kranidis, 2019 ONSC 7437, at paras. 15-16. In Benson Kearley & Associates Insurance Brokers Ltd. v. Jeffrey Valerio, 2016 ONSC 4290, at para. 21, the court interpreted the strong prima facie case threshold to mean that the moving party must demonstrate that it was “clearly right and almost certain to be successful at trial.”

26Aware Ads relies primarily on the restrictive covenants contained in the Employment Contract and its position that Walker and Pirrie have breached them, essentially weakening Aware Ads’ market position by taking away its customers through misusing confidential information, soliciting its customers, and competing with Aware Ads through a business called Ice Offers.

27Aware Ads claims that Pirrie began working with Ice Offers within the term of the respective restrictive covenants, and later collaborated with Walker after Pirrie left but while Walker was still working with Aware Ads.

28The evidence proffered by Aware Ads is tenuous and credibly challenged by the evidence proffered by Walker and Pirrie. It is based largely on speculation by Vanderlinden and the evidence of a would-be customer, Sam Buchalter. In addition, the forensic investigation conducted by Grant Thornton LLP has not yet yielded much to support Aware Ads’ theory.

29For example, Aware Ads speculates that Ice Offers is currently located in a condominium unit owned by Pirrie’s company, 2792721 Corporation. Buchalter deposes that he was informed of this by Walker and attaches two screen shots of text messages to support his evidence. However, a review of those screenshots demonstrates that there is no mention of the street address of Ice Offers’ office, nor any reference to Pirrie’s company.

30Buchalter claims that his business was a potential customer of Aware Ads when he was actively solicited by Walker, who redirected him to Ice Offers in October 2020. Buchalter deposes that he had a telephone conversation with Pirrie and a third party, Chris Reale, with a view to this referral.

31Pirrie and Walker admit that this telephone conversation occurred in September 2020, but that the purpose was to connect Buchalter with Reale. Reale swore an affidavit and corroborates this version of events, including the lack of mention of Ice Offers during any of the conversations he had with Buchalter. Walker further states that Buchalter was seeking a place to post a learning platform and that this did not fit the Aware Ads’ business model. Further, and in any event, Buchalter is clearly working with Aware Ads, though it is not known whether he is a customer of Aware Ads.

32Aware Ads has not been able to adduce solid evidence that Walker and/or Pirrie have relationships with Ice Offers, much less relationships that would violate their restrictive covenants. It has produced at best tenuous evidence that Ice Offers may rent a unit from Pirrie’s numbered company. However, it has not produced evidence to rebut Walker and Pirrie’s denials, under oath, that either of them is or have ever been owners, officers, directors, employees, or shareholders of Ice Offers, or have ever invested any monies in Ice Offers. No corporate filing, website, or any other document from or about Ice Offers that have been produced show any affiliation of that organization with either Walker, Pirrie, or 2792721 Corporation.

33That evidence may be found in the future, but it is not in the existing evidentiary record at this early stage of the proceedings.

34Aware Ads must also prove that the restrictive covenants are enforceable. This is by no means certain. Walker and Pirrie point out that while the temporal limits of the restrictive covenants may be reasonable, the geographical limits are not, given that Aware Ads (and Ice Offers) is engaged in an internet-based business and it would have no way of knowing whether the ensuing services were technically delivered within the 150-kilometre radius of Aware Ads (located in Toronto) or not. Aware Ads says, at minimum, Walker and Pirrie have been conducting business within 150 kilometres of it based on its contention that the Ice Offers’ office is located at 2792721 Corporation’s unit. However, Aware Ads has not proven that contention. To the contrary, the evidence produced indicates that Ice Offers is based in Tampa Florida and has an online employee directory that lists three individuals with locations in America and India.

35Aware Ads admits that it does not have evidence concerning when Ice Offers was established as a business, what its corporate structure is, or whether Ice Offers is a business name only.

36Furthermore, the non-solicitation clause ostensibly prevents Pirrie and Walker from contacting any customer or prospective customers. They are in sales. Accordingly, they say the non-solicitation clause has the impact of a non-competition clause. They also submit that it is impossible to know who “prospective customers” of Aware Ads might be either at the time of their respective severance of employment and within the year following, and therefore this covenant is unenforceable.

37As stated, the Employment Contract also contains a non-competition clause preventing employment “by the business of a competitor” of Aware Ads either during the course of employment or for a period of six months after the severance of employment, even when dismissed without cause. As well, the employee cannot participate in any business within 150 kilometres of Aware Ads head office that competes with Aware Ads. The wording of this clause is very broad and prevents the employee from engaging with any entity that directly or indirectly is involved in a wide variety of activities.

38Courts will apply a higher degree of scrutiny to non-competition clauses as they can prevent individuals from earning a living in the business or profession they are trained for.

39In Labrador Recycling Inc. v. Folino, 2021 ONSC 2195, at paras. 24-25, the court held that the non-competition covenant was unenforceable because it did not limit customers or potential customers to those with whom the defendant had contact in connection with his former employment duties. Furthermore, courts have held that restrictive covenants that prohibit an employee from competing in a similar field of business are unenforceable: 2909731 Canada Inc. (Pewter Graphics) v. Toews, 2016 BCSC 852, at paras. 73, 79-83.

40In Toews, at para. 81, the court held that it is incumbent on the employer to prove that it held a proprietary interest in the information (in that case the potential customers) before it could claim that the employee had violated the non-solicitation clause. The court noted that this is particularly important where the customer base is accessible on the internet.

41Aware Ads asserts that Walker is in breach of the confidentiality provision, the non-competition provision, and the non-solicitation provision. Aware Ads asserts that Pirrie is in breach of the (long expired) non-solicitation provision.

42Aware Ads replies that whatever its geographic designation, it believes that Ice Offers is being operated out of a unit owned by Pirrie’s numbered company, 2792721 Corporation, on Richmond Street in Toronto, and that is certainly within the geographical restriction.

43Aware Ads offers no evidence to support the parameters it put into these restrictive covenants.

44Aware Ads also asserts that both Walker and Pirrie are fiduciaries and therefore subjected to the more stringent duties of loyalty and honesty, which includes the obligation to not use confidential information for their own selfish best interests.

45However, based on the evidentiary record it is clear that Pirrie does not meet the legal requirements for a fiduciary. Additionally, it is by no means clear on the current state of the record (and acknowledging the competing evidence on this issue) that Walker was a fiduciary. What is clear on the record is that he was neither an officer nor a director of Aware Ads, and it is questionable whether he held sufficient discretionary meaningful authority so as to qualify as a fiduciary.

46The lynchpin of Aware Ads case is proving that the competitor in question, a company called “Ice Offers” is linked to Walker and/or Pirrie. Ice Offers is in the same line of business as Aware Ads and competes directly with it for the same prospective customer base.

47The evidence of Aware Ads, in addition to the evidence above, consists of the following evidence.

48As against Walker: the existence of one email in which Walker was inquiring about a hotel room at a trade conference attended by Aware Ads (called the Affiliate Summit West Trade Show); the fact that one of Walker’s contacts works with Ice Offers; the fact that his revenues declined in 2020 and drastically in 2021; one screenshot of an email on Walker’s work computer at Aware Ads that shows a wire transfer payment to “Ice Traffic” in March 2020; seven screen shots taken by Grant Thornton LLP of Walker’s work computer showing conversations with a “Mr. S”, “Dom” and “Onofrio”; and the evidence of Buchalter, in which he deposes that Walker told him he was involved with Ice Offers. While none of the screen shots refer to “Ice Offers,” Vanderlinden speculates as to the identities of these three individuals and states that these three “client contacts” were the “primary point of contact for a group of advertiser clients doing business with Aware Ads from 2015 to mid-2019.”

49As against Pirrie: his numbered company owns a unit on Richmond Street; Ice Offers may be the tenant of this unit; and Aware Ads also relies on the above-mentioned evidence of Buchalter.

50As against Walker and Pirrie combined: Aware Ads states that the two former employees had access to confidential information while they were employed at Aware Ads, as they had data from Aware Ads’ CAKE system that essentially tracked the profits and revenues of Aware Ads’ advertisers and affiliates; Ice Offers is providing certain affiliates, which were also affiliates of Aware Ads, with prepayments of funds to incentivize affiliates to work with Ice Offers’ advertisers; Ice Offers ran random contests for affiliates and advertisers during the summer of 2020 that were similar to contests run by Aware Ads; and Ice Offers is one of the main sponsors for an industry event called the Affiliate Ball held at a tradeshow known as the Affiliate Summit West in November 2021. Furthermore, Ice Offers has rented a table at a tradeshow called the Meet Market.

51However, Walker provides detailed affidavit information that responds to all of these allegations. In particular, he notes that the strategies employed by Ice Offers that appear to parrot the strategies of Aware Ads are in fact common strategies employed by similar businesses in this industry and are not unique to Aware Ads. Notably, Aware Ads does not claim that these strategies are unique to it.

52Walker also provides evidence as to his personal circumstances in 2021 leading to the severance of his employment from Aware Ads. In a nutshell, his evidence is that he had significant family commitments relating to his mother and infant son, and that their health needs required him to devote more time to his family. Furthermore, he observes that it was logical that towards the end of his tenure with Aware Ads his revenues decreased drastically, in large part because he transitioned all of his accounts to his successor prior to his last day of work.

53Much of the evidence adduced to date in support of Aware Ads’ theory is circumstantial and speculative, save for the Buchalter evidence, which is hotly contested not only by Walker and Pirrie, but by another witness, Reale.

54Aware Ads has not produced one solid piece of evidence that directly connects Walker and/or Pirrie to Ice Offers, much less evidence connecting them during the tenure of the restrictive covenants, assuming the covenants are enforceable.

55On the other hand, Reale deposed that Ice Offers was never mentioned during the course of any of his communications with Buchalter. There is no evidence suggesting that Reale would have any reason to fabricate this evidence.

56In my view, the evidence falls far short of establishing a strong prima facie case against Walker and Pirrie. There are serious issues regarding the enforceability of the restrictive covenants, whether or not Walker and Pirrie are or were actually affiliated with the business of Ice Offers in some way, and whether or not Walker and/or Pirrie have breached their obligations under their former employment contracts. Another issue is whether they were fiduciaries of Aware Ads.

57Based on the current evidentiary record, Aware Ads has failed to demonstrate that it has a strong prima facie case against Walker and Pirrie; therefore, they have not raised a serious issue for trial.

58It may be that as Aware Ads continues with its investigation and this matter proceeds, further evidence will arise. However, based on the existing evidentiary record, and the limited nature of the review necessitated at this stage of the proceedings, Aware Ads’ motion for interim injunctive relief fails at this first step of the RJR test.

(b) Irreparable Harm

59Notwithstanding my finding above, I will review the second stage of the test. Aware Ads must demonstrate that, if the interim injunction is not granted, it will suffer harm that cannot be quantified or compensated by a monetary award of damages.

60Award Ads has claimed $20,000,000, on a joint and several basis, in damages against the defendants.

61Irreparable harm is measured not by the magnitude of the harm Award Ads will suffer, but by the nature of the harm it will suffer if this interim injunction is not granted: RJR, at p. 341.

62Furthermore, irreparable harm will not be established if damages will provide an adequate remedy to the moving party: 11123688 Canada Limited v. Springthorpe et. al., 2021 ONSC 1657, para. 26.

63The courts have recognized that a loss of actual or prospective customers can, in and of itself, constitute irreparable harm where the industry in question is competitive: The Catalyst Capital Group Inc. v. Moyse, 2014 ONSC 6442, at paras. 76-77; Ontario Graphite Ltd. v. Janik, 2016 ONSC 716, at para. 63. Furthermore, in appropriate cases, where there is a misuse of confidential information or a breach of a restrictive covenant in an employment contract, irreparable harm may be presumed without further proof: Ontario Graphite, at para. 62.

64Aware Ads claims that it has lost actual and/or prospective customers to Ice Offers as a result of Walker and Pirrie’s collusion, in breach of their respective restrictive covenants.

65Aware Ads also relies on the alleged misappropriation of confidential information, in the form of data from a system it calls “CAKE,” in support of its claim of irreparable harm. CAKE was described as a system that tracks deals in real time. From that information, Aware Ads could extrapolate the revenues and profits attributable to each advertiser and affiliate and thereby determine what the most lucrative (or unlucrative) customers were. As such, CAKE provided contemporaneous data only.

66A claim based on a loss of an actual or potential customer base, or a claim based on a misappropriation of confidential information, must have a solid evidentiary basis in order to meet this branch of the RJR test.

67There is no direct evidence that Walker or Pirrie misused the data from CAKE, nor is there any evidence that they took prints or electronic copies of CAKE before they left Aware Ads and used those copies to the benefit of Ice Offers. In fact, the confidential nature of the information located in CAKE is disputed in the evidence. At most, the evidence offered by Aware Ads is speculative and based on unproven assumptions.

68Aware Ads has only put forward a bald allegation that it has suffered a loss of actual and/or potential customers without any supporting evidence, save for Buchalter, who was not a customer of Aware Ads at the time of the communications that are the subject of his affidavit. More specifically, aside from demonstrating that Walker’s personal sales statistics declined and a drastic decrease in the account from a customer, Morrie Goldstein (handled by Walker but transitioned to Walker’s successor), from 2018 to 2021, there is no evidence as to whether Aware Ad’s overall revenues and profits have actually declined during the time period that it claims Pirrie and Walker were acting in concert (in 2020–2021). There is no evidence, for example, from Morrie Goldstein suggesting that he was lured to Ice Offers by Walker and/or Pirrie, or that he is indeed a customer of Ice Offers.

69There is also the reference to the “client contacts” mentioned earlier in these reasons that Aware Ads says it lost in mid-2019, but no evidence as to who the actual customers were, whether these customers went to Ice Offers and left Aware Ads, and if so whether Walker and/or Pirrie played any role in those customers leaving Aware Ads and going to Ice Offers.

70Pirrie and Walker claim that they do not have the data from CAKE. Walker points to the fact that he transitioned all of his customers to his successor during his notice period. They both say that this industry is a cottage industry with no customer loyalty. According to Walker, typically advertisers will work with more than one organization like Aware Ads at the same time in order to get their product to as many websites as possible. The price of the service is the driving force for these types of customers.

71Walker also deposed that much of the information contained in the CAKE database is ascertainable through publicly available websites and other sources, and this information is therefore not confidential.

72No evidence was advanced suggesting that at the time of their respective terminations, there were any safeguards put into place by Aware Ads to ensure that confidential information could not be appropriated by either Pirrie or Walker. This is most notable in Walker’s situation, since the letter terminating him for cause raises his alleged association with Ice Offers as the cause. The letter is dated October 12, 2021. Yet, there is no evidence that in advance of issuing this letter Aware Ads took any steps to lock Walker out from the internal data systems or took measures to escort him out of the office without advance notice when it received information from Buchalter in late September 2021.

73Aware Ads offers no tangible evidence to support its bald assertions that it lost customers to Ice Offers or to rebut the evidence of Walker that the reason why Ice Offers may attract affiliates is because its price for services is lower than Aware Ads.

74Speculation is not sufficient to prove irreparable harm: 2158124 Ontario Inc. v. Pitton, 2017 ONSC 411, at paras. 48-49.

75Therefore, Aware Ads has not established that it will suffer irreparable harm in the event the request for interim injunctive relief is refused.

(c) Balance of Convenience

76Aware Ads submits that its long-term viability is on the line, so long as Ice Offers exists. It points to the existence of two “customers.” I have addressed Buchalter’s evidence and the reference to the three “client contacts” already. The other customer that Aware Ads says it lost to Ice Offers is Morrie Goldstein. Morrie Goldstein is a client at Aware Ads whose account was managed by Walker during his employment with Aware Ads. Aware Ads states that the revenues for Goldstein’s accounts went from $1.7 million (USD) in 2018 to $4.2 million in 2019 and then dropped to under $100,000 in 2020 and has a revenue to date of $5,000 in 2021. Aware Ads asks for the inference that Walker therefore directed Goldstein to Ice Offers. However, as stated earlier in these reasons, there is no evidence from Goldstein, and no evidence supporting an inference that Goldstein’s accounts went to Ice Offers. At best, this is circumstantial evidence.

77Aware Ads has not advanced any evidence that will enable the court to determine what its damages might be; how to mitigate those losses; or what level of customer loyalty, goodwill, or brand recognition it attaches to its customers. In Springthorpe, at para 29, the court found that the moving party failed to demonstrate that the balance of convenience favoured it on these bases.

78There is little evidence from Aware Ads as to its current financial state, including the possible impact of the competitive nature of this internet-based industry aside from Ice Offers. Rather, the court is left with bald assertions about the future viability of Aware Ads.

79On the other hand, if the interim injunctive relief is granted, it will effectively deprive Walker and Pirrie from earning a living in their respective fields; namely, in the industry that Aware Ads operates in and industries that have an interrelationship with Aware Ads (such as financers of affiliates and advertisers).

80Accordingly, the balance of convenience favours the denial of the request for an interim injunction at this early stage in the litigation.

ii. Asset Freezing Injunction Against Walker

81Aware Ads requests a Mareva injunction, or alternatively, a Mills order, as against Walker. The test for a Mareva injunction is set out by the Supreme Court of Canada in Aetna Financial Services Ltd. v. Feigelman, 1985 CanLII 55 (SCC), [1985] 1 S.C.R. 2, at pp. 24-25. See also HZC Capital Inc. v. Lee, 2019 ONSC 4622, at paras. 44-45.

82A Mareva injunction is a pre-judgment remedy. As such, the Court will not grant a Mareva injunction absent compelling circumstances: see Patel v. Shikar Properties Inc., 2009 CanLII 21495 (Ont. S.C.), at para. 34, citing Lister & Co. v. Stubbs (1980), 45 Ch. D. 1 (C.A.).

83The only evidence Aware Ads has adduced in support of its claim that there is a real risk that Walker will remove assets from the jurisdiction is a series of bank accounts that were attached to the emails from Grant Thornton LLP’s forensic investigation, to which Walker was a recipient. However, beyond the fact he was a recipient, there is no evidence that the bank accounts belong to Walker, or that the funds being funneled through them belong to Walker. This is not sufficient evidence to ground a Mareva injunction.

84For the reasons stated, Aware Ads has failed to satisfy the test for a Mareva injunction; this includes a failure to demonstrate that it has a strong prima facie case against Walker. Furthermore, it has failed to demonstrate that there is a risk that Walker will remove assets from the jurisdiction or that such assets will be dissipated or disposed of before a judgment is satisfied.

85Furthermore, and for substantially the same reasons, a Mills order is not warranted. A Mills order is justified where a risk of dissipation of assets can be inferred by the fraudulent conduct of the party against whom the order is sought: Sibley & Associates LP v. Ross, 2011 ONSC 2951, 106 O.R. (3d) 494, at paras. 39-40.

86The evidence of fraud comes in the form of Vanderlinden’s evidence that Walker allegedly fraudulently concealed his connection with Ice Offers when he was silent in response to a question posed to various employees at Aware Ads about their knowledge concerning Ice Offers.

87In Manufacturers Life Insurance Co. v. Suggett, 1992 CarswellOnt 374 (Gen. Div.), relied upon by Aware Ads, the court held that evidence of a misrepresentation, fraud, and forgery will support the granting of a Mills order.

88The request for an interim Mareva injunction, or alternatively an interim Mills order, is denied.

89As a result, the request for an order requiring Walker to provide Aware Ads with an affidavit describing the nature, value, and location of his assets, and requiring him to attend for examination on his affidavit and assets necessarily fails; it is an order that is effectively a discovery in aid of an injunction: see Gold Chance International Ltd. v. Daigle & Hancock, 2000 CarswellOnt 2033 (S.C.), at paras. 37-38.

iii. Certificate of Pending Litigation Against Walker’s Home

90Aware Ads claims that it has an interest in Walker’s personal residence because Walker must have used funds from illicit transactions that he made with Ice Offers at the expense of Aware Ads to buy it. Award Ads’ proof consists of the timing of Walker’s purchase of his house relative to his alleged illicit activity with Ice Offers.

91Aware Ads submits that the court need not look into the merits of the case. The party seeking the certificate need not prove its case at this point; the test is met where there is sufficient evidence to establish a reasonable claim to an interest in the land based upon the facts, and on which the plaintiff could succeed at trial. The guiding principle is that the court may exercise its equitable discretion and consider all relevant matters: Transmaris Farms Ltd. v. Sieber, 1999 CarswellOnt 234 (Gen. Div.), at para, 62, 67-68; Courts of Justice Act, R.S.O. 1990, c. C.43, s. 103.

92The onus is on Walker to establish that there is no triable issue with respect to the claim.

93In its statement of claim, Aware Ads seeks a declaration that it has an equitable interest in Walker’s home located at 6142 Chelsea Road in Burlington, Ontario (“Chelsea Property”), which was transferred to Walker on March 31, 2021, on the basis of a constructive or resulting trust. Aware Ads urges that because of the timing of the acquisition of this property it is likely that the house was paid for with funds from Ice Offers.

94However, the evidence does not support this inference. Indeed, there is no evidence supporting the claim that Walker has received any funds from Ice Offers whatsoever, much less as a result of any misuse of confidential information, any illicit solicitation of customers belonging to Aware Ads and transferred to Ice Offers. Neither is there evidence that Walker received proceeds from improper competition with Aware Ads.

95Walker denies that he bought his house with illicit proceeds. He deposed that he, his spouse, and his young child live there. There is no evidence to challenge these assertions.

96Walker has established that there is no triable issue with respect to the claim for a certificate of pending litigation against the Chelsea Property at this stage in the proceedings.

97Furthermore, based on the relevant factors, in my view it would not be equitable based on the existing evidentiary record to grant a certificate of pending litigation. Walker has rebutted the evidence offered by Aware Ads and has not been challenged under cross examination. There is no shell corporation at play, the land itself is not unique, there is an alternative claim for damages by Aware Ads and given its CAKE system, there should be an ability to calculate damages. There is no suggestion that the Chelsea Property is at risk of being sold either.

98The request for a certificate of pending litigation against the Chelsea Property is denied.

iv. Order Compelling Pre-Discovery Disclosure by Walker and Pirrie

99Aware Ads seeks an order compelling Walker and Pirrie to disclose all entities and individuals who are involved with the Ice Offers business.

100Given the insufficiency of Aware Ad’s evidence formally associating Walker and/or Pirrie with Ice Offers, much less establishing that Walker and/or Pirrie have disclosed confidential information to Ice Offers, have improperly solicited Aware Ads’ pre-existing customers, and/or are improperly in competition by virtue of any alleged association with Ice Offers, this request for relief must also fail.

IV. RULING

101Award Ad’s motion is dismissed, without prejudice to its ability to bring a motion for interlocutory injunctive and the related relief in its notice of motion, on further and better evidence.

102If the parties cannot agree on costs, then the responding parties will provide their respective costs submissions within 20 days from the release of this decision, and the moving party will provide its responding submissions within 10 days thereafter. The submissions shall not exceed three pages double spaced and shall be delivered to my judicial assistant. I acknowledge that the cost outlines have been posted on CaseLines.