Court File and Parties
COURT FILE NO.: CV-23-00711350 DATE: 20240103
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
PROGRAMMED INSURANCE BROKERS INC. Plaintiff – and – STONERIDGE INSURANCE BROKERS PREFERRED INSURAMCE GROUP LIMITED THEODORE A. PUCCCINI CHRIS OVECKA EVELYN KONECNY DAN O’BRIAN SARAH PEPPER LAURA VAN BOXTEL DEBBIE VAN HELDEN KACY WARWICK MIRANDA NEGRI Defendants
Counsel: Chris Hubbard, Akiva Stern, and Melina Zaccaria, for the Plaintiff Michael Wilson, Ben Hackett, and Meg De Snoo, for the Defendants
HEARD: January 2, 2024; additional submissions received January 3, 2024
AKAZAKI J.
Supplementary Reasons for Decision
[1] Yesterday, I heard a motion for interim injunctive relief pending the hearing of the interlocutory injunction motion next month and released my reasons later in the day. Counsel advised me at the hearing they had agreed to specific amounts of costs to be awarded to the successful party, and I awarded the costs to the successful plaintiff.
[2] Today the court received a letter on behalf the defendants asking me to consider an offer to settle the motion made on December 18, 2023, and to convene a case conference to deal with it. The letter was inconsistent with that joint submission made at the hearing, but I am obliged to explain why I will not entertain a further hearing on the issue. The plaintiff’s counsel submits the court is functus. In order for that submission to prevail, I would have needed to see the order after it is issued and entered: Wharry v Wharry, 2017 ONSC 2895, at para 24. In the circumstances, I can decline the defendants’ request but with more substantive reasons.
[3] The offer, as contained in an email appended to the letter, was to consent to the first four paragraphs of the plaintiff’s draft order dealing with confidential information, and to oppose the remaining paragraph dealing with non-solicitation. The letter also attached the antecedent correspondence between counsel setting out the sticking points in the way of resolution of the interim motion. For the reasons below, I do not find that the purported offer to settle the motion attracts costs consequences under rule 49 or that it affects my conclusion that the plaintiff obtained what it sought in the motion without extending the reach of the court’s authority beyond what was appropriate.
[4] The plaintiff’s insistence on non-solicitation as a part of the order stemmed from its distrust of the defendants. The defendants’ refusal to place limits on its marketing activities banked the tactical efficacy of a litigation documents freeze and ex post ethical wall around those documents (principally spreadsheets containing the plaintiff’s proprietary information). I agreed with the defence submission that paragraph 5 of the draft order contained an overly broad prohibition against solicitation of the plaintiff’s insurance clients, especially since only one of the remaining lateral-transfer employees was subject to an express contractual non-solicitation obligation to the plaintiff. As a result, I amended the draft order to tether any prohibition against the marketing of the defendants’ services to proprietary information acquired by the said employees in the course of their employment with the plaintiff.
[5] I expanded the scope of the confidentiality obligation so that the defendants cannot defend a potential contempt motion by submitting that they thought it was limited to the frozen and walled-off documents and did not extend to the mental acquisition of confidential information. I ported the non-solicitation prohibition from paragraph 5 into paragraph 3, so as not to impose the interim injunction on the defendants’ commercial activities beyond the purpose of protecting the confidential information. It was therefore insufficient for the defendants to have offered to consent to the first four paragraphs, because the offer did not really address the plaintiff’s concern but indeed continued to fuel its suspicion that the defendants would continue to solicit business from mental knowledge of the clients’ insurance details. The offer and the order obtained were not the same, as illustrated by the underlined amendments below:
THIS COURT FURTHER ORDERS that the Defendants, and anyone else having notice of the Court’s Order, are prohibited from disclosing to any person any private, confidential or proprietary documents, information or trade secrets of the Plaintiff, including information and documents relating to the Plaintiff’s clients and business opportunities and including information acquired mentally or by memory from or in the course of employment with the Plaintiff;
THIS COURT FURTHER ORDERS that the Defendants, and anyone else having notice of the Court’s Order, are prohibited from using for their own purposes (including solicitation of clients in the documents or information), or for any purposes other than those of the Plaintiff, any documents or information referred to in paragraphs (1) or (2);
[6] The costs rules in Anglo-Canadian jurisprudence have always been results-oriented. In this instance, counsel represented that the costs as agreed would follow the event. Sometimes it may seem to a party that it was not the losing party if the other party nosed out a photo finish. I do not view the changes I made to the above paragraphs of the order to be insubstantial. The cost of legal advice required to help the defendants navigate close to the prohibition is unlikely to be worth any commercial benefit from the effort. It is simply a version of the fifth paragraph that achieves the plaintiff’s aims but is more faithful to the court’s duty of restraint in exercising the injunctive power. Even if the outcome were more marginal, that photo finish can attract costs consequences: Dawit v. Kingsway General Insurance Co., [1997] O.J. No. 2888, at paras. 26-31.
[7] Before I conclude, I should also state that the interim relief motion was already a play within a play, and that the request to add a further concentric arc within it – a post-hearing case conference – should be reserved for plainer and more obvious needs to revisit an order, such as under rule 59.06. The few weeks before February 21 leave the parties a tight schedule to complete their out-of-court preparations for the big event. A hearing dealing with the costs of this by-the-way motion should not be wedged into it.
Akazaki J. Released: January 3, 2024