Court File and Parties
Court File No.: CV-22-79900 Date: August 8, 2023 Superior Court of Justice - Ontario
Re: Erwan Jerger and Dr. Erwan Jerger Dentistry Professional Corporation, Plaintiffs And: Hisham Kaloti, Dr. Hisham F. Kaloti Dentistry Professional Corporation and Kaloti Holdings Limited, Defendants
Before: MacNeil J.
Counsel: Marc A. Munro – Lawyer for the Plaintiffs Sam Gebrael – Lawyer for the Defendants
Heard: March 15, 2023 (by videoconference)
Decision on Motion
Introduction
1Erwan Jerger and Dr. Erwan Jerger Dentistry Professional Corporation (“the Plaintiffs” or “Dr. Jerger”) seek an interlocutory injunction prohibiting Hisham Kaloti, Dr. Hisham F. Kaloti Dentistry Professional Corporation and Kaloti Holdings Limited (“the Defendants” or “Dr. Kaloti”) from operating a dental practice in breach of contractual non-competition and licensing obligations.
Background
2On October 25, 2021, the parties entered into a share purchase agreement for the Plaintiffs’ purchase of Dr. Kaloti’s Oakville dental clinic known as The Smile Stylist, located at 123 Trafalgar Road (“The Smile Stylist Clinic”); the closing date of the sale was February 18, 2022 (“the SPA”).
3In addition to the SPA, the parties also entered into an Amendment to Offer to Purchase Shares, dated December 13, 2021 (“the Amending Agreement”); an agreement providing for the continued provision of dental services by Dr. Kaloti at The Smile Stylist Clinic as an associate for three months, dated February 18, 2022 (“the Associate Agreement”); a non-competition and non-solicitation agreement, signed February 18, 2022 (“the NC/NS Agreement”); and a license agreement regarding the use of the “Smile Stylist” trade name and trademark, signed February 18, 2022 (“the License Agreement”).
4Prior to selling The Smile Stylist Clinic, Dr. Kaloti obtained an appraisal report from ROI Corporation, dated July 8, 2021, that appraised the market value of the clinic at $2,684,530.00 (“the Appraisal Report”). The bulk of the Oakville clinic’s market value was its goodwill. The Appraisal Report stated that the fair market value was “based upon the assumption that the Owner (Vendor) would offer the practice for sale over a reasonable period of time with full co-operation to transfer the practice goodwill and assets to the Purchaser for their benefit”. The Appraisal Report explained that it calculated the goodwill value as follows:
Based on the financial statements and the information and facts as represented to us and taking into consideration all [of] the foregoing information and including all patients’ charts, records, x-rays, and the necessary accounting records to continue the practice, but excluding the work in progress performed and charged to-date …
And in recognition of the following assumptions:
(a) The owner of the practice is willing to sign a mutually agreeable letter of introduction.
(b) The owner agrees to do everything reasonable to ensure that the existing telephone number of the practice is transferred to a new owner.
(c) The owner agrees not to carry on or be engaged in a practice within a reasonable radius of this practice and further not to solicit any patient known to be a patient of this practice as arranged by a legal covenant.
5The Appraisal Report was provided to Dr. Jerger in the course of the parties’ negotiations for the purchase of The Smile Stylist Clinic.
6Recognizing that The Smile Stylist Clinic was associated with Dr. Kaloti “through very extensive marketing”, Dr. Jerger insisted on a five-year non-competition provision. And, while Dr. Jerger initially wanted a 20-kilometre radius exclusion zone around The Smile Stylist Clinic, he ultimately agreed to a 15-kilometre radius. The non-competition provisions were set out in section 7.2 of the SPA (as amended by the Amending Agreement) and read as follows:
- The Vendor hereby covenants and agrees that he shall not for a period of five (5) years following the later of the Completion Date and the date that the Vendor’s associate relationship with the Purchaser and/or the Corporation shall terminate:
(a) directly or indirectly, in any manner whatsoever, including, without limitation, either individually or in partnership or jointly, or in conjunction with any other person or persons as principal, agent, shareholder, associate, or in any other manner whatsoever, carry on or be engaged in or be concerned with or interested in the practice of dentistry anywhere within a radius of fifteen (15) kilometres of [The Smile Stylist Clinic];
(b) disclose or otherwise communicate or make available to any person, firm or corporation the name of any client/patient of [The Smile Stylist Clinic] or the contents of the whole or any part of his/her charts, records, or x-rays (except as required by law);
(c) directly or indirectly, contact, solicit, interfere with or endeavor to entice away from the Purchaser in any manner whatsoever, any client/patient for his own account or on behalf of any other person or persons, partnership or corporation which carries on a practice similar to or in competition with that of [The Smile Stylist Clinic] and without limiting the generality of the foregoing, the Vendor agrees that he will not solicit such client/patient through mass market mail primarily directed within fifteen (15) kilometers of [The Smile Stylist Clinic] (the “Restricted Area”), publications of general circulation directed primarily at or specifically within the Restricted Area, or other means of advertisement directed primarily at the Restricted Area which would reasonably have the effect of inducing the clients/patients to seek their dental or hygiene treatment at any office other than [The Smile Stylist Clinic];
(d) directly or indirectly, contact, solicit, interfere with or endeavor to entice away from the Purchaser in any manner whatsoever, any employee or staff member working in [The Smile Stylist Clinic] on or after the Completion Date; or
(e) provide any dental or hygiene treatment to any current or prior patient of [The Smile Stylist Clinic], except in the case of a dental emergency. For clarity, if any patient is treated at a dental practice owned, directly or indirectly, by the Vendor, regardless of whether the Vendor is the treating dentist, it shall be considered a breach of this covenant. The Vendor agrees that in the event that he breaches this covenant he shall pay to the Purchaser one thousand dollars ($1,000.00) for each and every patient he has treated in contravention of this covenant (the “Migrated Patient”). In the event that the Vendor pays the $1,000.00 then the patient will become a patient of the Vendor. The sum of $1,000.00 is a genuine pre-determination by the parties of the damages which would be incurred by the Purchaser for the loss of patients from [The Smile Stylist Clinic] and is agreed not to be punitive in nature and not as a penalty with prejudice to any other rights the Purchaser may have as full and final settlement of the matter. The Parties agree to act in good faith and to use their best efforts to reach an agreement if any dispute should arise as to whether a person is a Migrated Patient. In the event of such a dispute, the Purchaser shall be entitled to contact the person in dispute directly to determine where they are receiving their dental care and the circumstances of leaving [The Smile Stylist Clinic]. The Vendor agrees to pay the Purchaser the chart fee referred to above for each Migrated Patient, within five (5) calendar days after it is agreed by the Vendor and the Purchaser that a patient of [The Smile Stylist Clinic] is a Migrated Patient.
Notwithstanding, the Vendor shall be entitled to treat any Family or Friend Patients (as provided in Schedule "J") without being in breach of the non-competition and/or non-solicitation covenants.
7In addition to the section 7.2 non-competition and non-solicitation covenants, Dr. Kaloti also agreed to the following general prohibition set out in section 5.3 of the SPA:
… Additionally, the Vendor agrees to not use the “Smile Stylist” name or branding anywhere in the GTA for a period of (5) five years.
8To summarize then, for the purposes of this present motion, Dr. Kaloti agreed to the following restrictions for a period of five years:
a. not to carry on or be engaged in the practice of dentistry anywhere within a radius of 15 kilometres of The Smile Stylist Clinic;
b. not to contact or solicit or entice away from the Plaintiffs any client/patient of The Smile Stylist Clinic;
c. not to, within 15 kilometres of The Smile Stylist Clinic, solicit clients/patients through mass market mail, publications of general circulation, or other means of advertisement which would have the effect of inducing clients/patients to seek their dental or hygiene treatment at any office other than The Smile Stylist Clinic;
d. not to provide any dental or hygiene treatment to any current or prior patient of The Smile Stylist Clinic, expect in case of a dental emergency; and,
e. not to use the “Smile Stylist” name or branding anywhere in the GTA (“the Restrictive Covenants”).
9In cross-examination, Dr. Kaloti acknowledged that he had had legal representation for the SPA transaction and that he had understood the SPA when he signed it.
10The NC/NS Agreement contained the same restrictive provisions as set out in section 7.2 of the SPA. By section 2 of the NC/NS Agreement, Dr. Kaloti expressly acknowledged and agreed “that all restrictions contained in this Agreement are enforceable and valid and all defences to the strict enforcement thereof by him are waived”.
11As a condition of the sale of The Smile Stylist Clinic, the Associate Agreement provided that Dr. Kaloti would continue to work in The Smile Stylist Clinic as an associate for a period of three months following the date of closing to ensure a smooth transition. His final day was to be May 18, 2022; for reasons that are not relevant to the motion before me, the parties extended the associate agreement arrangement until June 30, 2022. Pursuant to section 1.3 of the Associate Agreement, Dr. Kaloti was obligated to make best efforts to assist with the transition of patients into the Plaintiffs’ care. The Associate Agreement expressly recognised that the non-competition/non-solicitation provisions set out in section 7.2 of the SPA applied to Dr. Kaloti in his capacity as an associate dentist of The Smile Stylist Clinic.
12The Plaintiffs allege that, in December 2021, the Defendants purchased a property at 1395 Hurontario Street in Mississauga within a 15-kilometre radius of The Smile Stylist Clinic, while the parties were negotiating the purchase and sale of The Smile Stylist Clinic, and subsequently opened a competing dental clinic (“the Mississauga Clinic”) in breach of the Restrictive Covenants.
13The Plaintiffs further allege that Dr. Kaloti abruptly left The Smile Stylist Clinic on May 30, 2022, and that, on June 1, 2022, he changed the passwords for the “Smile Stylist” website thereby denying Dr. Jerger and his staff access to the emails generated by the client inquiry function, which is a critical resource for generating new clients. Rather than give up control of the https://thesmilestylist.ca website, as he was obligated to do, in September 2022, Dr. Kaloti converted The Smile Stylist Clinic website into a marketing tool for the Mississauga Clinic, which in addition to using the “Smile Stylist” branding, also introduced the “Kaloti Smiles” brand name. This was a blatant effort to conflate the marketing for the two clinics and redirect patients to the new clinic. The revenue of The Smile Stylist Clinic dropped significantly from June 2022 onward.
14It is the position of the Plaintiffs that the financial circumstances of The Smile Stylist Clinic have steadily deteriorated since Dr. Kaloti abruptly left. They allege that, in addition to the Defendants essentially stealing the Oakville “Smile Stylist” website, the Plaintiffs strongly suspect that Dr. Kaloti also took electronic copies of all patient files and is using those files to continue practicing with his former client base.
15The Defendants seek a dismissal of the motion. They submit that Dr. Jerger has sabotaged his own success at The Smile Stylist Clinic. The clinic had a proven record of success in providing a specialized practice, which Dr. Jerger failed to capitalize on. The Defendants argue that, while the Plaintiffs have framed the relief they seek as “interlocutory” in nature, its effect will be essentially “final” given that a trial will likely not occur for many years. If Dr. Kaloti is not able to practice dentistry at the Mississauga Clinic, Dr. Kaloti will likely be forced to sell the property at a loss.
Issues
16The following issues will be determined on this motion:
(a) Should an interlocutory injunction be granted prohibiting the Defendants from practicing dentistry or any associated business anywhere within a radius of 15 kilometres of The Smile Stylist Clinic, including at the Mississauga Clinic?
(b) Should an interlocutory injunction be granted prohibiting the Defendants from using the “Smile Stylist” brand name and trademarks on the internet regarding any business located within the GTA or anywhere physically within the GTA?
(c) Should the Defendants be required to deliver to the Plaintiffs control over “thesmilestylist.ca” domain name, website, email account and social media accounts for a period of twelve months?
Analysis
The Law
17The test to be applied when dealing with a motion for an interlocutory injunction is as set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at paras. 48, and 83-85:
(a) Is there a serious issue to be tried?
(b) Will the moving party suffer irreparable harm if the injunction is not granted?
(c) Does the balance of convenience favour the granting of an injunction?
18Where a party is seeking an interlocutory injunction to restrain breach of a covenant in restraint of trade, courts have held that a strong prima facie case needs to be established at step one: see GDI Solutions Inc. v. Walker, 2012 ONSC 4378 (Ont. S.C.J.), at paras. 27-37. If a strong prima facie case is made out by the plaintiff, the issues of irreparable harm and balance of convenience should still be considered but may apply with less rigour: see GDI Solutions Inc., at paras. 36-37 and 69.
19A strong prima facie case will be met where the judge is satisfied that there is a “strong likelihood on the law and the evidence presented that, at trial, the applicant will be ultimately successful in proving the allegations set out in the originating notice”: see R. v. Canadian Broadcasting Corp., 2018 SCC 5 (S.C.C.), at para. 17; and Parekh et al. v. Schecter et al., 2022 ONSC 302 (Ont. S.C.J.), at paras. 32-33.
(a) Should an interlocutory injunction be granted prohibiting the Defendants from practicing dentistry or any associated business anywhere within a radius of 15 kilometres of The Smile Stylist Clinic, including at the Mississauga Clinic?
Position of the Plaintiffs
20It is the position of the Plaintiffs that, according to Google Maps, the Mississauga Clinic is located 14.16 kilometres away from The Smile Stylist Clinic, contrary to the 15-kilometre non-competition zone. The Restrictive Covenants agreed to by the parties are clear and the Defendants are in breach of them. There is no defence. With respect to irreparable harm, the loss of goodwill is intangible and each day that it is lost without enforcement of the time-limited non-competition and licensing provisions cannot be recovered. The balance of convenience clearly favours the Plaintiffs as there is no justification for the Defendants not abiding by their contractual obligations. As well, with each passing day, the Plaintiffs’ damages increase and become more difficult to quantify.
21The Plaintiffs submit that Dr. Kaloti has admitted, in his responding affidavit, that after leaving The Smile Stylist Clinic that he was in contact with “multiple patients” and continued their treatment following his departure. This is a clear breach of section 7.2 of the SPA as well as the NC/NS Agreement. Given that the only contact information patients could have had for Dr. Kaloti would either be through The Smile Stylist Clinic or the https://thesmilestylist.ca website, the Plaintiffs contend that it is clear that Dr. Kaloti either contacted patients directly or they contacted him using the query function on The Smile Stylist Clinic website. In response to an undertaking for a complete list of all patients at the Mississauga Clinic, the Defendants produced a list of about 70 patients. Based on the client initials, it appears that, of these approximately 70 patients, 26 of them share the same initials as former patients of The Smile Stylist Clinic. Accordingly, assuming that 26 patients followed Dr. Kaloti to his new practice, it is reasonable to conclude that the balance of the patients found the new Mississauga Clinic through the website. This conclusion is reinforced by the fact that Dr. Kaloti admitted that the new Mississauga Clinic did not have a physical sign to identify its existence.
Position of the Defendants
22The Defendants’ evidence is that the Mississauga Clinic is 14.73 kilometres away from The Smile Stylist Clinic. They submit that it was Dr. Kaloti’s understanding that the parties’ agreement prohibited him from practicing dentistry within a “driving radius” of 15 kilometres and that it is unrefuted that the Mississauga Clinic is more than 15 kilometres driving from The Smile Stylist Clinic.
23The Defendants submit that, whether one takes the Plaintiffs’ or the Defendants’ distance, there is no evidence on the record that Dr. Jerger is harmed by Dr. Kaloti’s alleged 200 or 800 metre violation of the 15-kilometre non-competition zone. Had Dr. Kaloti opened up his new dental office 200 or 800 metres further away (e.g., one street over), there is no evidence that the patients who sought Dr. Kaloti’s care would not have travelled the additional 200 or 800 metres. The Defendants argue that, in light of the distance at issue, the breach is de minimis and so should be permitted.
24After leaving The Smile Stylist Clinic, Dr. Kaloti was contacted by his old patients regarding treatments that were not being completed and warranties not being honoured at The Smile Stylist Clinic. To protect the well-being of the patients, his “Smile Stylist” trademark, and the goodwill of The Smile Stylist Clinic, Dr. Kaloti had to step in and take care of the outstanding treatments for some of his patients.
25The Defendants argue that Dr. Jerger’s affidavit confirms that the downturn in his business started from February 2022. He provides a profit and loss statement from February through to October 2022 showing a significant downturn. Dr. Kaloti was not open for business until late September 2022 and the renovations to add a full dental chair were not completed until late November 2022. Therefore, Dr. Kaloti could not have been responsible for Dr. Jerger’s loss in revenue that started from late February 2022. Further, it is unrefuted that Dr. Kaloti did not request any patient records from Dr. Jerger.
26The Defendants also argue that Dr. Kaloti will suffer great harm if he is forced to sell his new practice since he only started practicing there in September 2022 and has about 70 patients. There is almost no value for a dental office that has a history of servicing only a limited number of patients. Further, in light of the current downturn in the real estate market and the short time that he has held the property, Dr. Kaloti would lose a considerable amount of money if he has to sell the property in the near future.
Discussion
Strong prima facie case
27I am satisfied that the Plaintiffs have raised a serious issue to be tried in terms of whether Dr. Kaloti has breached the Restrictive Covenants by practicing dentistry at the Mississauga Clinic. At the hearing, the Defendants conceded that there is a serious issue to be tried in this regard.
28Having considered the evidence before me, I am also satisfied that the Plaintiffs have met their onus of establishing a strong prima facie case in respect of a breach of the Restrictive Covenants at issue.
29The Plaintiffs’ evidence shows that the Mississauga Clinic is 14.16 kilometres away from The Smile Stylist Clinic. The Defendants’ evidence shows that the Mississauga Clinic is 14.73 kilometres away from The Smile Stylist Clinic. On cross-examination, Dr. Kaloti admitted that the Mississauga Clinic is located within a 15-kilometre radius of The Smile Stylist Clinic.
30With respect to the Defendants’ argument that Google Maps “can be up to 0.5 km off in accuracy” and, therefore, based on Dr. Kaloti’s measured distance of 14.73 kilometres between the two locations it is “very unlikely” that he is in breach of the non-competition zone, I am not satisfied that there is credible or reliable evidence before me to make such a finding. Accordingly, I decline to do so.
31Based on the evidence that was established at the hearing, I find that the Mississauga Clinic is located within the 15-kilometre non-competition zone.
32I do not accept the Defendants’ argument that the radius limit should be interpreted to be a “driving radius”. There was no credible or reliable evidence before me to support such an interpretation of the 15-kilometre non-competition zone. Further, neither the SPA nor the NC/NS Agreement describe the restriction zone in this way. I prefer and adopt the approach taken by the court in Dr. Jack Newton Dentistry Professional Corp. v. Towell, [2005] O.J. No. 4415 (Ont. S.C.J.), at para. 18:
… The natural and ordinary meaning of radius was found to be as it appeared in the Concise Oxford Dictionary, namely "A straight line from the centre to the circumference of a circle or a sphere." Hajiesmaeili v. Elahe (2002), 123 A.C.W.S. (3d) 685 (B.C. S.C. [In Chambers]) and Phillips v. Campbell (1993), [1994] B.C.J. No. 3241 (B.C. S.C.). I adopt the definition of radius as set out in the above cases and find that the proposed location of Dr. Towell's new dental office is within a radius of 15 kilometres.
33This was a purchase and sale agreement of a dental clinic between two parties of equal bargaining power. The Restrictive Covenants, involving a 15-kilometre radius for a five-year duration, were expressly negotiated by the Plaintiffs. The sale of the goodwill of his dental practice imposed certain obligations on Dr. Kaloti as a vendor. In considering the surrounding circumstances, the express non-competition/non-solicitation provisions agreed to by the parties are especially important. I find that the Restrictive Covenants are reasonable in terms of their time limit, territorial scope and activity.
34The Appraisal Report gave a value of $2,140,470.00 to the goodwill of Dr. Kaloti’s dental practice, constituting 80% of the appraised value of the business. The nature of the goodwill may be considered in terms of the connection between the patients and the going concern of the business being sold. Where the goodwill of a business is sold, it should not be depreciated or destroyed by the vendor. In this instance, a major component of the goodwill was directly related to Dr. Kaloti and the “Smile Stylist” name and branding. Indeed, the Appraisal Report identified that it was the “practice and related assets known as the dental practice The Smile Stylist, 123 Trafalgar Road, Oakville” that were being appraised. The parties negotiated Dr. Kaloti’s continued presence as an associate for a minimum of three months after the sale, and the continued use of the “Smile Stylist” name and branding in relation to The Smile Stylist Clinic for one year with an option to renew, because of the strong connection between the “Smile Stylist” trade name with the Oakville Clinic.
35The parties negotiated that a reasonable period of time for Dr. Kaloti to go back into the same business in the same area was 5 years. These are the terms upon which Dr. Kaloti sold the practice and Dr. Jerger purchased it. Dr. Jerger trusted that Dr. Kaloti would honour the Restrictive Covenants after their working relationship ended. It is not for Dr. Kaloti to now conduct himself in direct contravention of the agreed-upon terms.
36There is no evidence that the restrictive period is unreasonable. It is not permanent. It is for a 5-year duration only, following the sale date or the end date of Dr. Kaloti’s association with his former practice. Each case must be considered in light of its own context. Here, a crucial component of the purchase was the goodwill of the dental practice. The goodwill associated with the “Smile Stylist” name and branding was directly connected to The Smile Stylist Clinic and Dr. Kaloti. Dr. Jerger did not want Dr. Kaloti to work at another dental practice within the 15-kilometre radius for a duration of 5 years because the brand was very much tied to Dr. Kaloti and he could draw former and new patients to wherever he is working. Dr. Jerger noted his concerns in an email sent on October 23, 2021 to the ROI Corporation, who was mediating the sale negotiations between the parties, which read:
The clinic is tied to Dr Kaloti through very extensive marketing. Although that seems like it would benefit me, it would actually take several years to achieve disconnection. This in turn represents a great deal of risk to myself.
My understanding is that Dr Kaloti is intending to leave this area and move to Mexico to enjoy his resort. If he subsequently chooses to return to dentistry and use the brand again within 3 years, I again feel that this raises a risk to my own practice. Five years would be my optimal term.
I agree to reduce the restrictive covenant to 15km anyway.
37I find that, in this case, 5 years is temporally reasonable given that the Oakville dental practice, which was established in 2001, had been purchased by Dr. Kaloti in 2016 and he was strongly associated with the clinic and its name, The Smile Stylist, especially given that he had trademarked the name.
38With respect to the territorial scope of the Restrictive Covenants, I find that the 15-kilometre radius is not unduly wide or unreasonable. The Appraisal Report identified that 60% of The Smile Stylist Clinic’s patients “live/work nearby” and 40% “travel 5+ km”. There are other neighbouring cities and locations within the GTA where Dr. Kaloti could seek to practice. In Newton Dentistry, a restriction on practicing within a radius of 15 kilometres was also upheld as being a reasonable distance.
39I also find that the restriction of using the “Smile Stylist” name and branding within the GTA for a period of five years is not unreasonable given its close association with The Smile Stylist Clinic, and the fact that 80% of the value of the purchase price paid was for the goodwill associated with the dental practice which was known as The Smile Stylist.
40The scope of the non-competition term is restricted to “the practice of dentistry”. I find that the activities limited by this restriction are not ambiguous or too wide in scope. This captures the nature of the business activity that the Plaintiffs purchased from the Defendants.
41Thus, I find that the Restrictive Covenants are reasonable as between the parties.
42There is no evidence before me that the public interest will be harmed if the Restrictive Covenants are enforced. Patients will continue to have access to as many dentists as were in the neighbourhood as before. And patients who wish to be treated by Dr. Kaloti can travel outside the 15-kilometre radius to do so. In addition, courts have found that it is in the public interest that a person who has built up a business should be able to sell it and agree to refrain from competition with the sold business so that the purchaser is encouraged to buy it and maintain it for the general public benefit and his own profit: see GDI Solutions Inc., at paras. 46-47. In my view, it is in the interest of the parties and in the public interest that a reasonable restrictive covenant related to the sale of The Smile Stylist Clinic be upheld.
43I am of the opinion that the Restrictive Covenants are valid and enforceable, in accordance with the terms of the SPA and the NC/NS Agreement. While I understand that the relationship between Dr. Jerger and Dr. Kaloti has deteriorated and they each allege contractual breaches against the other, that does not void the agreements entered into by the parties. The Restrictive Covenants were inserted to deal with the possibility that Dr. Kaloti might leave and go into business again. It was clearly something that the parties directed their minds to. As the court explained in Newton Dentistry, at paras. 23-24:
23 The courts will more readily enforce a restrictive covenant contained in an agreement of purchase and sale than one contained in an employment agreement. There is no inequality of bargaining power when two equal parties enter into a purchase and sale agreement, whereas this is not the case in a large number of employment relationships. In J.G. Collins Insurance Agencies v. Elsley (1978), 83 D.L.R. (3d) 1 (S.C.C.), the Supreme Court of Canada stated as follows:
A person seeking to sell his business might find himself with an unsaleable commodity if denied the right to ensure the purchases that he, the vendor, would not later enter into competition.
24 The Ontario Court of Appeal held that the goodwill of a business, which has been purchased, is a legitimate proprietary interest, which will entitle a party to the contract to enforce a restrictive covenant. Tank Lining Corp. v. Dunlop Industries Ltd. (1982), 40 O.R. (2d) 219 (Ont. C.A.). In this case, Dr. Newton agreed to pay $346,000 for the goodwill associated with Dr. Towell's former patients and the restrictive covenant was given to protect the goodwill which was purchased.
44Given the nature of the Restrictive Covenants and the alleged breaches in this case, I am not persuaded by the Defendants’ argument that the de minimis principle properly applies here. In any event, I find that Dr. Kaloti has expressly waived his ability to raise such a defence by virtue of section 2 of the NC/NS Agreement whereby Dr. Kaloti has acknowledged and agreed that “all restrictions contained in [the NC/NS Agreement] are reasonable and valid and all defences to the strict enforcement thereof by him are waived”.
45Dr. Kaloti admits to practising dentistry at the Mississauga Clinic which is located within a 15-kilometre radius of The Smile Stylist Clinic.
46Dr. Kaloti negotiated and understood the terms of the Restrictive Covenants.
47The 5-year restrictive period set out in the SPA and the NC/NS Agreement has not yet expired.
48Accordingly, I am satisfied that the Plaintiffs have raised a serious issue to be tried and have shown a strong likelihood on the law and the evidence presented that, at trial, they will be ultimately successful in proving that Dr. Kaloti has engaged in the practice of dentistry within the 15-kilometre restriction zone in breach of the Restrictive Covenants.
Irreparable harm
49In RJR-MacDonald Inc. v. Canada (Attorney General), supra, the Supreme Court of Canada explained "irreparable harm" as follows, at para. 64:
“Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, [1985] 3 W.W.R. 577 (B.C.C.A.)). …
50Courts have found that unfair competition by a vendor can lead to irreparable harm as a result of the loss of potential patients and goodwill and the difficulty in quantifying that loss: see Newton Dentistry, at para. 33; GDI Solutions Inc., at paras. 71-72; and Button v. Jones, 2001 CarswellOnt 1785 (Ont.S.C.J.), at para. 14 (§7). I find that this is such a case.
51Here, the Plaintiffs paid a substantial amount for the goodwill associated with The Smile Stylist Clinic and the Restrictive Covenants were agreed to in order to protect that goodwill and restrain the vendor from resuming the business he had sold. There is evidence of the Mississauga Clinic having 70 patients and, of these, 26 having initials the same as former patients of The Smile Stylist Clinic. There is also evidence of the Mississauga Clinic being associated with the “Smile Stylist” website. Therefore, the evidence of loss is not speculative. In my view, the evidence suggests that the Plaintiffs have lost some of the market share to the Defendants’ competing dental clinic, something that Dr. Kaloti expressly promised not to do.
52The Defendants submit that the $1,000.00 amount identified in section 7.2(e) of the SPA can be used to adequately calculate any damages that the Plaintiffs incur as a result of Dr. Kaloti being allowed to continue to work at the Mississauga Clinic. I do not accept this as a viable option. Section 7.2(e) of the SPA provides that the sum relates to a breach of the covenant set out in that section. There has also been no method identified by which Dr. Jerger can accurately measure the number of active and prospective patients who move or have moved to Dr. Kaloti’s new location.
53In Elsley v. J.G. Collins Ins. Agencies, [1978] 2 S.C.R. 916 (S.C.C.), at pp. 929-930, the Supreme Court of Canada recognized that even where there is provision for liquidated damages, a plaintiff may choose instead to ask for an injunction to prevent breach of a restrictive covenant. Here, it is the Plaintiffs’ choice alone whether they wish to seek a remedy for payment of liquidated damages pursuant to section 7.2(e) of the SPA or proceed by way of injunction. It is not the choice of the defendant, Dr. Kaloti.
54I find that the Plaintiffs will suffer irreparable harm if Dr. Kaloti is allowed to continue to practice dentistry within the 15-kilometre radius of The Smile Stylist Clinic, including at the Mississauga Clinic.
Balance of convenience
55In my view, the balance of convenience favours granting the requested interlocutory injunction.
56I am satisfied that, if injunctive relief is not granted, the Plaintiffs will continue to suffer financial harm by losing patients and revenue they anticipated receiving from their purchase and operation of The Smile Stylist Clinic, and that this financial harm may not be fully quantifiable. The Restrictive Covenants formed an integral part of the purchase and sale agreement of the dental practice for which the Plaintiffs paid Dr. Kaloti. Dr. Kaloti has received the benefit of that bargain. It would be unfair to permit him to resile from his contractual obligations.
57While the Defendants expect to suffer some damages from having to shut down the Mississauga Clinic and potentially having to sell the property, such damages are quantifiable. Moreover, Dr. Kaloti is free to practice dentistry anywhere outside the 15-kilometre radius of The Smile Stylist Clinic.
58Having regard to the Restrictive Covenants voluntarily entered into by Dr. Kaloti, in my view the harm to be suffered by the Plaintiffs if the injunction is not granted outweighs any harm to be suffered by the Defendants if the injunction is granted. Dr. Jerger, has given an undertaking to pay damages suffered by the Defendants as a result of the interlocutory injunction if Dr. Kaloti is successful at trial.
59In the result, I find that the balance of convenience favours granting injunctive relief and ensuring that Dr. Kaloti not engage in the practice of dentistry within the 15-kilometre radius of The Smile Stylist Clinic, including at the Mississauga Clinic.
Conclusion
60An interlocutory injunction should be granted prohibiting the Defendants from practicing dentistry or any associated business anywhere within a radius of 15 kilometres of The Smile Stylist Clinic, including at the Mississauga Clinic.
(b) Should an interlocutory injunction be granted prohibiting the Defendants from using the “Smile Stylist” brand name and trademarks on the internet regarding any business located within the GTA or anywhere physically within the GTA?
Position of the Plaintiffs
61It is the Plaintiffs’ position that Dr. Jerger has suffered incalculable harm due to Dr. Kaloti not only opening a competing clinic within the 15-kilometre exclusion zone, but also by using the “Smile Stylist” website to promote and market his new practice. As a result of these actions, in conjunction with other professional misconduct allegations against Dr. Kaloti, Dr. Jerger was forced to abandon the “Smile Stylist” branding and construct his own brand without the benefit of any prior market presence. Dr. Jerger paid a significant amount of money for The Smile Stylist Clinic and then found himself competing against this very brand and the vendor who sold it to him.
62In September 2022, the Plaintiffs discovered that Dr. Kaloti had converted The Smile Stylist Clinic website into a marketing tool for the Mississauga Clinic which, in addition to using the “Smile Stylist” branding also introduced the “Kaloti Smiles” brand name. The Plaintiffs allege that this was a blatant effort to conflate the marketing of the two clinics and redirect patients to the Mississauga Clinic.
63The Plaintiffs allege that Dr. Kaloti has improperly maintained control of The Smile Stylist Clinic website. The Plaintiffs further allege that Dr. Kaloti was using The Smile Stylist Clinic website as a promotional tool for the Mississauga Clinic and this is a breach of section 7.2(c) of the SPA and section 1(c) of the NC/NS Agreement, which prohibits Dr. Kaloti from directly or indirectly, contacting, soliciting, interfering with or endeavoring to entice away any client/patient from The Smile Stylist Clinic.
64The “Smile Stylist” brand name and trademark was prominently displayed on the retooled website promoting the Mississauga Clinic. Pursuant to section 5.3 of the SPA, Dr. Kaloti agreed not to use the “Smile Stylist” name or branding anywhere in the GTA for a period of five years. Converting The Smile Stylist Clinic website to market the Mississauga Clinic using the “Smile Stylist” branding was clearly impermissible.
65The Plaintiffs allege that, due to Dr. Kaloti’s failure to relinquish control of The Smile Stylist Clinic website, Dr. Jerger has had to create a new website https://oakkornerdental.ca but since it is new, it does not have a strong internet presence. Meanwhile, https://thesmilestylist.ca remains associated with Dr. Jerger’s name giving the impression that he is a dentist practicing in association with Kaloti Smiles.
Position of the Defendants
66The Defendants submit that the Plaintiffs have not proven that the “Kaloti Smiles” website is in violation of the 5-year restriction imposed on Dr. Kaloti from using the “Smile Stylist” trademark to promote a business within the GTA. There is no evidence that the downturn in Dr. Jerger’s business can be attributed to Dr. Kaloti’s use of the “Kaloti Smiles” website. In any event, Dr. Kaloti has provided two adequate remedies to avoid any confusion going forward: upon entry to the “Smile Stylist” website, a pop-up appears stating: “ If you are searching for the former Smile Stylist office in Oakville, you can find Dr. Jerger at Oak Korner Dental - Click Here ”; and Dr. Kaloti has already made a request to the website managers to discontinue the smilestylist.ca domain name in relation to the Mississauga Clinic location; the domain name that will be used going forward is KalotiSmiles.ca or a variation on that name.
67There is no evidence that Dr. Jerger is harmed by Dr. Kaloti’s use of the “Kaloti Smiles” website and no evidence that new patients have gone to Dr. Kaloti who would otherwise have gone to Dr. Jerger.
68There is no evidence provided by the Plaintiffs to suggest that they would suffer irreparable harm if Dr. Kaloti is allowed to continue using the “Kaloti Smiles” website in the GTA.
Discussion
Strong prima facie case
69I find that the Plaintiffs have a strong prima facie case against the Defendants for breach of section 5.3 of the SPA which states: “Additionally, the Vendor agrees to not use the ‘Smile Stylist’ name or branding anywhere in the GTA for a period of (5) five years.”
70In my view, this term of the contract is clear in its meaning and is separate and distinct from any licensing agreement between the parties regarding the use of the “Smile Stylist” trade name and trademark by the Plaintiffs.
71While the evidence is that the Plaintiffs are now branding themselves as the Oak Korner Dental Clinic, that does not mean that there is no harm to them if the Defendants continue to use the “Smile Stylist” name and branding to market themselves within the GTA in breach of section 5.3 of the SPA. The Oakville Clinic when sold was known as The Smile Stylist.
Irreparable harm
72I am satisfied that the Plaintiffs will suffer irreparable harm if the Defendants continue to use the “Smile Stylist” name and branding contrary to the 5-year restriction set out in section 5.3 of the SPA.
73The Plaintiffs paid for a 5-year restriction on Dr. Kaloti using the “Smile Stylist” name or branding anywhere in the GTA. The Plaintiffs are entitled to have that covenant enforced. There is evidence that Dr. Kaloti has continued to use “thesmilestylist.ca” website since leaving The Smile Stylist Clinic on May 30, 2022, including to market the Mississauga Clinic; and that the Mississauga Clinic has obtained approximately 70 patients since it opened. Some of these may be former patients of The Smile Stylist Clinic and some may be new patients.
74The Plaintiffs cannot say what their full damages may be if Dr. Kaloti is allowed to continue to use the “Smile Stylist” name or branding within the GTA to try and market to clients in competition with them.
Balance of convenience
75I am also satisfied that the balance of convenience lies in favour of the Plaintiffs and in granting the interlocutory injunction to prohibit the Defendants from using the “Smile Stylist” name or branding anywhere in the GTA, given the financial harm the Plaintiffs will continue to suffer by the loss of patients and revenue they anticipated receiving when purchasing The Smile Stylist Clinic.
Conclusion
76An interlocutory injunction should be granted prohibiting the Defendants from using the “Smile Stylist” brand name and trademarks on the internet regarding any business located within the GTA or anywhere physically within the GTA.
(c) Should the Defendants be required to deliver to the Plaintiffs control over “thesmilestylist.ca” domain name, website, email account and social media accounts for a period of twelve months?
Position of the Plaintiffs
77The Plaintiffs argue that, while Dr. Kaloti retained ownership of the social media, emails and website for The Smile Stylist Clinic, the SPA provided for a license permitting the Plaintiffs the continued use of the “Smile Stylist” trade name, social media accounts, e-mails and the website (“the Trademark Accounts”) for a twelve-month period, following the closing date of February 18, 2022. This license was without cost for the initial first year, but thereafter the licensing agreement could be renewed annually based on a fee formula.
78The Plaintiffs allege that Dr. Kaloti breached the License Agreement by changing the password to the “Smile Stylist” website on or about June 1, 2022, thereby preventing Dr. Jerger from receiving inquiries from current and potential clients. This constitutes a material breach of the License Agreement and is damaging both to ongoing revenue and the goodwill value of the Oakville practice.
79Dr. Kaloti’s breach of the License Agreement and the Restrictive Covenants was exacerbated by a page on the https://thesmilestylist.ca website containing Dr. Jerger’s introduction to the Oakville practice, which gave the impression that Dr. Jerger was working for the Mississauga Clinic. Dr. Kaloti has provided no justification for his ongoing use of the https://thesmilestylist.ca to market and promote a competing dental clinic within the GTA, which is a blatant violation of section 5.3 of the SPA.
Position of the Defendants
80It is the position of the Defendants that Dr. Jerger did not honour some of his obligations set out in the License Agreement. On June 2, 2022, Dr. Kaloti’s lawyer sent Dr. Jerger a formal letter advising him that he was in violation of the License Agreement.
81The Defendants submit that the License Agreement only afforded Dr. Jerger one year’s use of the “Smile Stylist” trademark and this one-year period expired on February 18, 2023. Dr. Jerger has admitted that it was not until “July or at the end of August” 2022 that he was “kicked out of the website”. Therefore, at best, the Plaintiffs are only entitled to another 6 months of use of the “Smile Stylist” trademark. Further, control of the Trademark Accounts was never part of the assets for sale.
82In any event, Dr. Jerger has launched his own website and proceeded with a rebrand of The Smile Stylist Clinic to “Oak Korner Dental”. Dr. Jerger has admitted that he no longer wishes to be associated with the “Smile Stylist” brand. On his cross-examination, Dr. Jerger’s evidence was that his association with Dr. Kaloti is harming his reputation and that he is trying to move on and build a new practice. Thus, the Defendants question why Dr. Jerger is even seeking an injunction relating to the Trademark Accounts. Providing Dr. Jerger with control over the Trademark Accounts, even if only for 6 months, will allow for Dr. Jerger to “continue his campaign of destruction and intimidation – now with full control of Dr. Kaloti’s most valued asset”.
83The License Agreement is clear that this was to be a non-exclusive licensing agreement to the Plaintiffs to be used in the GTA. By definition, a “non-exclusive” license means that a different license can also be granted to another dentist for a different geographic region. In order to do so, the Licensor, who is Dr. Kaloti, must maintain control of the social media account and website. If control of the Trademark Accounts is handed over to Dr. Jerger, Dr. Kaloti cannot effectively promote the “Smile Stylist” trademark outside of the GTA, which he is allowed to do as per the License Agreement. An injunction forcing Dr. Kaloti to hand over control of the Trademark Accounts is entirely unnecessary, unworkable and would be very difficult to supervise.
84Despite Dr. Jerger’s violation of the License Agreement, by effectively launching a competing brand in August 2022, the “Smile Stylist” Facebook account still directs patients to The Smile Stylist Clinic. The “Smile Stylist” Instagram was converted in November 2022; and the local Google listing was switched in and around November 2022. The website was only rebranded as “Kaloti Smiles” after Dr. Jerger launched the “Oak Korner” brand and website. At that point, it became apparent that Dr. Jerger was not only not interested in using the “Smile Stylist” trademark, but he was actively attempting to discredit it.
Discussion
No strong prima facie case
85I am not satisfied that the Plaintiffs have a strong prima facie case to require that the Defendants deliver over control of “thesmilestylist.ca” domain name, website, email account and social media accounts for a period of twelve months, to the full exclusion of Dr. Kaloti.
86By virtue of section 8 of the Amending Agreement, Dr. Kaloti retained ownership and control over the “Smile Stylist” trade name and its social media, e-mails and website, which were not sold as part of The Smile Stylist Clinic’s assets. In this regard, section 8 reads:
- Section 2.1(w) of Schedule “A” of the Agreement is hereby deleted and replaced with:
“Schedule “B” contains a complete list of the tangible practice assets of the Corporation. In addition to the tangible assets, the Corporation owns all Goodwill of the Practice. For purposes of this Offer “Goodwill” shall mean the goodwill of the Practice, including, without limitation, all phone numbers, email addresses, fax numbers, social media accounts and passwords, patient lists, patient records, and the right of the Purchaser to represent itself as carrying on the Practice in continuation of and in succession to the Vendor (the tangible practice assets and Goodwill shall collectively be referred to as the “Practice Assets”). At the Completion Date the Corporation shall have good and marketable title to all of the Practice Assets free and clear of all liens, claims, charges, encumbrances and security interests whatsoever. All tangible practice assets of the Corporation are in good working order and condition and are in a good state of repair and maintenance, subject to normal wear and tear only. The computer systems owned by the Corporation, including hardware, software and firmware utilized in the Practice are fully functional and are, to the knowledge of the Vendor, free from viruses. All computer software currently being used in the Practice is properly and validly licensed for its intended use or owned by the Corporation. The Purchaser acknowledges and agrees that:
(a) the current trade name for the Practice is “The Smile Stylist” (the “Trade Name”) and is not part of the Practice Assets and will be transferred out of the Corporation to another corporation or to the Vendor (the transferee of the Trade Name and the goodwill to be known as the “Licensor”)
(b) the social media of the Corporation, e-mails and website of the Practice is not included as a Practice Assets and is not part of the Practice Assets and will be transferred out of the Corporation to another corporation or to the Vendor.
Notwithstanding, the parties acknowledge and agree that the Vendor and Purchaser will enter into a license agreement (the “License Agreement”) on or before January 22, 2022 which will be on the following general terms:
(a) the License Agreement will not be transferable and will only be binding on the Vendor on the condition that the Purchaser remains in good standing with the Dental College;
(b) the Licensing Agreement will be a license made between the Licensor and the Corporation for the use by the Corporation of the Trade Name, social media accounts, e-mails and the website;
(c) the Corporation will pay the following amounts for the use of the Trade Name and the Website:
- During the 1st year following the Closing Date there will be no charge by the Licensor for the use by the Corporation of the Trade Name and the Website, and further at the option of the Corporation:
(a) if the Corporation exercises a right to renew the License Agreement, in year 2 the Corporation will pay a license fee equal to 2% of the total gross revenue of the Corporation; and
(b) following year 2 the Corporation will pay a license fee equal to 3% of the total gross revenue of the Corporation.
All License fees will be paid monthly, one month in arrears on each monthly anniversary of the Closing; [Emphasis added.]
87The License Agreement entered into by the parties granted the Plaintiffs, subject to prescribed terms and conditions, a “non-exclusive license in the Greater Toronto Area” to use all rights, title and interest in and to the trademarks and trade name listed in Schedule “A” to the License Agreement in association with identified services; to display the trademarks in and on collateral advertising and promotional materials; to display the trademarks in and on the website, social media accounts and emails referred to in section 2.1(w) of Schedule “A” of the SPA, among other things. The term of the License Agreement was for one year from February 18, 2022, with the Plaintiffs having an option to renew the agreement for two additional one-year terms upon written notice and upon paying a prescribed license fee. Section 31 of the License Agreement provided for what was to happen after the License Agreement ended, and reads:
- Upon termination of this Agreement, Licensee shall immediately stop all new use and display of any of the Trademarks, and Licensee shall within fifteen (15) Business Days of termination:
i. Permanently cease use of all Proprietary Materials, return any and all tangible Proprietary Materials to Licensor, and permanently delete any and all electronic Proprietary Materials;
ii. remove all public displays of the Trademarks;
iii. shred or otherwise destroy any and all tangible Promotional Materials and permanently delete any and all electronic Promotional Materials;
iv. cancel any and all business name registrations made in accordance with paragraph 7(v) above;
v. provide Licensor with any information, passwords, credential, account numbers, documents, or other materials needed for Licensor to fully control, use, and enjoy the benefits of the website, social media accounts, and e-mails referred to in Section 2.1(w) of Schedule “A” of the Offer to Purchase Shares dated October 20, 2021, as subsequently amended; and
vi. otherwise permanently cease all use and display whatsoever of any of the Trademarks;
(collectively, the “End of License Requirements”). [Emphasis added.]
88In my view, by virtue of the above-noted provisions of the Amending Agreement and the License Agreement, Dr. Kaloti ultimately retained ownership of the “Smile Stylist” trade name and trademark. A non-exclusive license had been granted to the Plaintiffs to use the “Smile Stylist” trade name, social media accounts, emails and website. While it is not clear to me that the parties determined exactly how the Plaintiffs were to go about using the Trademark Accounts, I have not been directed to any provision whereby Dr. Kaloti was required to deliver over full control of the Trademark Accounts to the Plaintiffs. It is clear that the Trademark Accounts were not assets sold to the Plaintiffs.
Irreparable harm
89Given that the evidence shows that Dr. Jerger has re-branded The Smile Stylist Clinic under the new “Oak Korner Dental” brand name and no longer wishes to be associated with the “Smile Stylist” trade name and given that the initial term of one-year has passed with no request from the Plaintiffs to renew the licensing agreement, I am not satisfied that the Plaintiffs will suffer irreparable harm if the requested interlocutory injunction is not granted in the circumstances.
Balance of convenience
90Section 31(v.) of the License Agreement requires the Plaintiffs to deliver passwords, etc. to Dr. Kaloti to enable him to “fully control, use, and enjoy the benefits of the website, social media accounts, and e-mails” relating to the “Smile Stylist” license within 15 days after the license term ends. The hearing of this motion occurred after the expiry of the prescribed one-year term of the licensing agreement given to the Plaintiffs, with no renewal having been requested or granted.
91In my view, the balance of convenience lies with the Defendants as Dr. Kaloti ultimately retained ownership of the “Smile Stylist” trade name and trademark, and only granted a non-exclusive license to the Plaintiffs to use the “Smile Stylist” trade name and trademark for a one-year term that has since expired and has not been renewed, as per the terms of the License Agreement.
Conclusion
92I decline to grant an interlocutory injunction requiring the Defendants to deliver to the Plaintiffs control over “thesmilestylist.ca” domain name, website, email account and social media accounts for a period of twelve months.
93My decision in this regard may well have been different if the initial first year licensing term had not already been expired. Further, my decision should not be taken as a reflection on the strength or merit of any claim the Plaintiffs are making respecting an alleged breach by the Defendants of the contractual terms between the parties relating to “thesmilestylist.ca” domain name, website, email account and social media accounts.
Disposition
94In the result, an order will go as follows:
(a) an interlocutory injunction is granted prohibiting the Defendants from practicing dentistry at the Mississauga Clinic located at 1395 Hurontario Street, Mississauga, Ontario, pending the final determination of this action on its merits or until February 18, 2027, whichever date arrives first; and,
(b) an interlocutory injunction is granted prohibiting the Defendants from practicing dentistry or any associated business anywhere within a radius of 15 kilometres of The Smile Stylist Clinic located at 123 Trafalgar Road, Oakville, Ontario, pending the final determination of this action on its merits or until February 18, 2027, whichever date arrives first; and,
(c) an interlocutory injunction is granted prohibiting the Defendants from using the “Smile Stylist” brand name and trademarks, including on the internet, regarding any business located anywhere within the Greater Toronto Area or anywhere physically within the Greater Toronto Area, pending the final determination of this action on its merits or until February 18, 2027, whichever date arrives first.
95For clarity, the orders set out in sub-paragraphs 94(a), (b) and (c) above expire on February 18, 2027 and will be of no further force or effect, unless this action is otherwise disposed of first.
96At the hearing, counsel for the Defendants requested an opportunity to attend before me in the event that an injunction was granted and Dr. Kaloti has difficulty addressing any ongoing patients’ care and treatment. Since there was no cross-motion brought by the Defendants seeking relief of this nature, I am unsure what, if any, assistance I could provide in such circumstances. I am hopeful that the parties will be able to resolve any issue that arises. However, if they are not able to do so, they may contact the Trial Co-Ordinator’s Office in order to schedule a further attendance before me, if necessary.
Costs
97I would urge the parties to agree on costs. If they are unable to do so, then costs submissions may be made as follows:
a. By August 28th, 2023, the Plaintiffs shall serve and file their written costs submissions, not to exceed three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers; and
b. The Defendants shall serve and file their responding costs submissions of no more than three pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers, by September 11th, 2023; and
c. The Plaintiffs’ reply submissions, if any, are to be served and filed by September 18th, 2023 and are not to exceed two pages.
d. If no submissions are received by September 18th, 2023, the parties will be deemed to have resolved the issue of the costs and costs will not be determined by me.
MacNEIL J.
Released: August 8, 2023