Court File and Parties

COURT FILE NO.: CV-22-00682555-0000 DATE: 20230526 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: SALINA CHAGPAR PROFESSIONAL CORPORATION, carrying on business as CHAGPAR & ASSOCIATES PERSONAL INJURY LAWYERS Plaintiff / Defendant by Counterclaim – and – DAXIN JIN Defendant / Plaintiff by Counterclaim

Counsel: Gregory Govedaris, lawyer for the Plaintiff / Defendant by Counterclaim Andrew Jia, lawyers for the Defendant / Plaintiff by Counterclaim Peter Neufeld, lawyers for the Defendants in CV-22-00682554-0000, Salvatore Grillo and Grillo Law Professional Corporation cob as Grillo Law Personal Injury Lawyers Bryan Fromstein, lawyer for the Potentially Affected Non-Party

HEARD: May 17, 2023

Reasons for Decision

G. DOW, J.

[1] The plaintiff, Salina Chagpar Professional Corporation carrying on business as Chagpar & Associates Personal Injury Lawyers (“Chagpar & Associates”) seeks injunctive relief against the defendant, Daxin Jin, an employee of the plaintiff between March, 2016 and July 19, 2019. Her employment was the subject of an employment contract, the scope and terms of which are in dispute. The defendant is legally trained in Russia, fluent in both Russian and Mandarin and had previously worked for another well known plaintiff personal injury law firm. She is apparently well known and highly regarded for her legal expertise in her community.

[2] The employment contract set out her primary duty was to acquire four clients per month in return for which she was to be paid $135,000.00 per year plus “business expenses” detailed as cell phone, gas, food and entertainment expenses. In October, 2021 the defendant went on a medical leave and began receiving long term disability payments.

[3] The plaintiff subsequently came to believe the defendant was attempting to have some of the 50 to 85 clients she had recruited to the plaintiff’s firm switch their retainer to another firm, Grillo Law Personal Injury Lawyers (“Grillo Law”). It is alleged four or five of the plaintiff’s clients transferred their catastrophically injured claims to Grillo Law. Counsel for Grillo Law was served with the original Motion Record that sought widespread restrictive injunctive relief. This relief was repeated in the plaintiff’s original Factum dated April 28, 2013. In addition, the plaintiff sought to rely on privileged settlement discussions in its Supplementary Factum dated May 16, 2023.

[4] As a result, counsel for Grillo Law drafted and served a Motion Record which sought to exclude that evidence. At the hearing before me, counsel for the plaintiff conceded such information would not be relied on. It should be noted there is a separate action by the plaintiff against Grillo Law which was not before me.

[5] For clarity, the revised injunctive relief sought against the defendant is much narrower and restricted to not directly or indirectly soliciting the plaintiff’s clients, disclosing confidential information of the plaintiff and directing the defendant pass on any communications received from plaintiff’s clients.

[6] The defendant began employment with Longo Lawyers on or about March 1, 2023. On March 10, the plaintiffs received written notice from Longo Lawyers confirming transfer of another plaintiff file. As a result, the plaintiff served its Motion Record and material on Longo Lawyers. Longo Lawyers chose to file a Factum opposing the relief sought and requested permission to make submissions.

[7] It is clear and I accept the evidence that the defendant, through her years of employment with the plaintiff, had access to confidential information of Chagpar & Associates and particularly contact information. I also accept the terms of the employment contract, yet to be adjudicated upon, contained provisions regarding confidentiality (clause 8) and a restriction on the solicitation of clients or other employees (clauses 10 and 11) that may be unenforceable or limited at law. I also accept the request by four clients that the defendant recruited to have Grillo Law assume carriage of their matters to be beyond coincidence. Additional concern about the conduct of the defendant is raised when, within ten days of her commencing employment with Longo Lawyers, a client of the plaintiff requested their matter be transferred to Longo Lawyers.

[8] The concern raised by Longo Lawyers that individuals with personal injury claims should be able to decide which firm they wish to represent them is noted. However, for the duration of this litigation or until further order of this court, I am satisfied there are many highly skilled, well known plaintiff personal injury firms that regularly advertise in the Greater Toronto Area available to those individuals such that to exclude Longo Lawyers from that list is no hardship to those individuals.

Analysis

[9] The appropriate legal test was raised before me (RJR – MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311, at paragraph 48) and involved the three-step process of determining:

1. whether or not there is a serious issue to be tried or a strong prima facie case;
2. whether the moving party will suffer irreparable harm if the injunction is not granted; and
3. the balance of convenience between the parties.

[10] Regarding the serious issued to be tried, I am satisfied the terms, the validity and enforceability of the employment contract and whether any breach has occurred has been met. The defendant clearly has legal training and has relied on her favourable reputation within her community. She entered into a contract to recruit four clients per month to Chagpar & Associates in return for $135,000.00 per year plus specified expenses. Counsel for the defendant conceded this was a “very low bar” to meet. However, restrictive covenants attract a higher test involving a strong prima facie case. This is undermined by the less rigorous injunctive relief sought before me than what was initially set out in the Notice of Motion.

[11] I disagree with the defendant’s submission that the effect of any injunctive relief would be to prevent the defendant from working in the personal injury litigation field. She is free to be employed with a plaintiff personal injury law firm. She undoubtedly has legally related skills that would also make her a competitive candidate to be employed at a firm which practices personal injury law both for injured persons or defending such cases on behalf of property and casualty insurers. What she should not be doing pending the resolution of the issues raised in this litigation is attempting to influence any of the plaintiff’s existing clients to move their file to another firm and, in particular to her current employer.

[12] Counsel for the defendant also raised the non-solicitation clause as a restrictive covenant and that they are presumed to be unenforceable, particularly if ambiguous. From review of the terms, I do not find it to be ambiguous. Counsel for the defendant also raised his disagreement with the plaintiff’s efforts to categorize the defendant as a fiduciary. I have concluded that it was not necessary to determine this issue as part of determining whether the injunctive relief sought ought to be granted. Overall, the plaintiff meets this first part of the applicable test.

[13] Regarding the irreparable harm, I find there is some merit in the submission the defendant had access not only to the files opened for clients she recruited but all files of the plaintiff given the evidence about the team approach taken at Chagpar & Associates, meaning all staff and lawyers work on all files. While the loss of potential fees from files transferred can be calculated, the loss of potential files through referrals from the plaintiff’s existing clientele, being satisfied with the work performed and the result reached, is much more difficult to ascertain. The referral of a new client by a satisfied existing or formal client remains a time tested method of attracting clients and cannot be easily traced or quantified. In light of the nature of the injunctive relief sought, I am satisfied the plaintiff has met this part of the test.

[14] Regarding the balance of convenience, the harm sought to be prevented by restricting the actions of the defendant, whether deliberate (which was not proven) or innocuous, results in the loss of clients and revenue to the plaintiff. To the contrary, I have difficulty with any substantive harm occurring to the defendant. She was hired by the plaintiff to recruit clients for the plaintiff and was paid for her efforts. She has been hired by Longo Lawyers, presumably to do the same thing or a similar type of work. If the defendant had remained with Chagpar & Associates, each new client recruited would not be available for her to recruit again. The effect of the injunctive relief sought is to remove the plaintiff’s existing clientele from the world at large which includes the defendant’s community as potential new clients for Longo Lawyers.

[15] As a result, the balance of convenience favours the plaintiff pending the outcome of this action or further order of this Court.

[16] I appreciate and accept the defendant cannot control the actions of the existing plaintiff’s client who contact her. However, she can advise them of her inability to speak with them about this case given this ongoing litigation, that they should contact the plaintiff’s firm and forward to the plaintiff the details of such contact.

[17] As a result, I am prepared to grant the plaintiff’s request for injunctive relief in accordance with that sought at paragraph 32 of the plaintiff’s May 16, 2023 Supplementary Factum.

Conclusion

[18] For clarity, pending the determination of this litigation and subject to further order of this Court, the defendant Daxin Jin shall:

1. not directly or indirectly solicit or contact the plaintiff’s clients;
2. not disclose any confidential information of the plaintiff to any person, firm, corporation, partnership or other entity; and
3. direct any existing clients of the plaintiff that contact her of her inability to speak to them about their case given this order, direct them to contact the plaintiff’s firm and immediately forward to the plaintiff’s firm the details of the contact made including the identity of the client, the date and time of the contact and the contact information of the client as provided.

Costs

[19] With regard to Grillo Law, they sought a costs award if successful. Given the relief sought in the Motion Record served on Grillo Law and evidence upon which the plaintiff intended to rely back and subsequently abandoned, I have concluded they are entitled to recovery of their costs. They sought $2,305.20 inclusive of partial indemnity fees, HST and (zero) disbursements. This increased to $3,457.00 all-inclusive if on a substantial indemnity basis. While Grillo Law could point to some urgency, upon consideration of the factors enumerated in Rule 57.01 of the Rules of Civil Procedure and mindful of the discretion afforded me under Section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43, I have concluded substantial indemnity fees are not appropriate. The plaintiff shall pay Grillo Law $2,305.20, all inclusive forthwith.

[20] With regard to Longo Lawyers, their Costs Outline was in the amount of $6,944.80 inclusive of partial indemnity fees which increased to $10,416.11 on a substantial indemnity basis. Given their position opposing the granting of any injunctive relief, I find they were unsuccessful and are not entitled to any costs.

[21] Regarding the defendant, Jin, her Costs Outline was in the amount of $31,251.56, inclusive for fees and HST. It follows their lack of success prevents them from being awarded any costs.

[22] The defendant also raised and relied on precedent where injunctive relief is granted that costs should be reserved to the trial judge. As noted in Quizno’s Canada Restaurant Corporation v. 1450987 Ontario Corp., 2009 ONSC 31599 at paragraph 10, “the possible injustice of awarding costs to a plaintiff for having succeeded in obtaining an order to protect his or her position pending trial when the outcome of the trial reveals that that plaintiff’s position was not worthy of having been protected” should be avoided.

[23] For completeness, the plaintiff’s Costs Outline sought $15,120.00 for partial indemnity fees. This should assist the parties and trial judge in establishing the appropriate quantum as I order costs of this motion as between the plaintiff and defendant reserved to the Justice who determines this matter.

Mr. Justice G. Dow Released: May 26, 2023