SUPERIOR COURT OF JUSTICE – ONTARIO
491 Steeles Avenue East, Milton ON L9T 1Y6
RE:
Bellwether Investment Management Inc., Plaintiff
AND:
Harbourfront Wealth Management Inc. and Jeffrey Black, Defendants
BEFORE: Justice Mills
COUNSEL:
Puneet Tiwari and Samyak Sharma (Student-in-law), for the Plaintiff
Mitchell Fournie, for Harbourfront Wealth Management Inc.
Jeffrey Larry and Grace Bryson, for Jeffrey Black
HEARD: May 5, 2026
ENDORSEMENT
1On April 20, 2026, I granted an interim injunction to restrain the defendants from using or disclosing any confidential information belonging to the plaintiff, and from soliciting or communicating with any of the plaintiff’s clients, contractors, or employees. The matter returned for a hearing on the merits with responding materials from the defendant Jeffrey Black. Harbourfront Wealth Management Inc. (“Harbourfront”) takes no position on the motion.
2The parties are all engaged in the investment business. Mr. Black is a seasoned investment advisor with a forty-year career in the business. He was a partner and portfolio manager with Crestridge Asset Management Inc. (“Crestridge”), supporting clients and providing advice respecting their investments. On September 19, 2017, he entered into a Share Purchase Agreement (“SPA”) with Lorne Park Capital Partners Inc. (“Lorne Park”) the parent company of the Plaintiff (“Bellwether”), to sell all the issued and outstanding shares of Crestridge. As part of the transaction, Mr. Black was hired as an employee of Bellwether, and he signed an employment agreement (the “Agreement”) which included non-competition and non-solicitation provisions. Mr. Black resigned from Bellwether and is now accused of breaching those restrictive covenants.
3The essential issue to be determined on this motion is whether an interlocutory injunction should be granted to restrain Mr. Black from engaging in competitive conduct and from soliciting Bellwether clients pending a final resolution of the claims advanced in the Statement of Claim, issued on April 10, 2026.
Preliminary Matters
4Prior to determining this motion on its merits, I must address the fact that Mr. Black breached my order of April 20, 2026, by sending an email on April 25, 2026 to all the Bellwether clients he previously serviced advising that due to legal and regulatory actions taken by Bellwether, his license to sell securities had been placed on a temporary hold and as a result thereof, he was no longer employed by Harbourfront. Mr. Black advised the clients that he would keep them updated on this matter, and he invited the clients to reach out directly to him “24/7” at his private email address and his private cell phone number. This is in direct contravention of the interim injunction which prohibited Mr. Black from communicating with or soliciting Bellwether clients.
5When invited to provide submissions on why Mr. Black should not be held in contempt, counsel advised that Mr. Black was of the view this email was not a breach of the interim injunction because he needed to update the clients respecting the current state of affairs and explain why he could not provide services to them at this time. Counsel also submitted that the non-competition provisions of the SPA and the Agreement are, or should be found to be unenforceable and therefore, the email communication was not inappropriate.
6This is a wholly unsatisfactory explanation for what appears to be a deliberate and flagrant breach of a court order, particularly an interim injunction which prohibited Mr. Black from taking the very action he took. He was ordered not to communicate with or solicit the Bellwether clients, and his email did precisely that.
7A show cause hearing shall be scheduled within 60 days to permit Mr. Black the opportunity to provide evidence and make submissions on why he should not be cited for contempt.
8Mr. Black submits the motion should be dismissed and the interim injunction set aside on the basis Bellwether failed to make full and fair disclosure of all material facts on the initial ex parte motion. I reject this submission as being unfounded.
9The SPA was disclosed. The fact the non-competition clause in the SPA expired in 2019 is of no consequence as Bellwether is relying on the non-solicitation and non-competition clauses in the Agreement which is attached as a schedule to the SPA. Further, failing to advise me that Mr. Black disputes the enforceability of the non-competition clause is not the omission of a material fact. This is a legal position asserted by Mr. Black which Bellwether is not obliged to disclose. Finally, the failure to disclose that the number of Bellwether clients serviced by Mr. Black is relatively insignificant when considered against the overall assets under management by Bellwether is not relevant. That may be the opinion of Mr. Black; however, the scale of the alleged wrongdoing is not a determining factor in whether there is wrongdoing. It is not a material fact that Bellwether was obligated to disclose for the interim injunction.
Interlocutory Injunction
10The applicable test to be met for an interlocutory injunction is as expressed in RJR MacDonald Inc. v. Canada (Attorney General)1: Is there a serious question to be tried? Will the moving party suffer irreparable harm if an injunction is not granted? Does the balance of convenience favour the granting of an injunction?
11To satisfy the first stage of the RJR MacDonald test for a mandatory interlocutory injunction, the applicants must establish they have a strong prima facie case.2 The serious issue to be tried standard is elevated when the interlocutory injunction seeks to compel a respondent to undertake a positive course of action to restore or maintain the status quo. If the overall effect of the injunction is to require a respondent to do something or to refrain from doing something, the moving party must demonstrate they have a strong prima facie case, one that is likely to succeed at trial.3
Non-Solicitation
12Mr. Black concedes the non-solicitation provision in the Agreement is valid and enforceable. He denies having breached the provision with the communications he sent to the clients, and he denies taking any steps to entice his colleagues to join him at Harbourfront.
13I disagree. Mr. Black engaged in communications that were a direct solicitation of the Bellwether clients.
14Prior to notifying Bellwether of his resignation, Mr. Black provided Harbourfront with a full list of the clients he serviced at Bellwether. He provided the clients’ private investment information and their current fee schedule. He identified the clients who receive recurring withdrawal payments. Mr. Black concedes having done so with the expectation that the clients would follow him to Harbourfront. He stated the clients are free to choose their own investment advisor, and the clients he serviced were free to join him at Harbourfront.
15Mr. Black also admits to having corresponded with the clients immediately following his resignation. He states in his affidavit that “None of these communications was off-side the non-solicitation clause in the Employment Agreement.” Of note, Mr. Black does not attach the communications to his affidavit so there is no evidence to support his self-serving statement nor to displace Bellwether’s valid assumption that the communications were in fact solicitous.
16As noted above, in breach of the Court order directing him not to do so, Mr. Black then wrote to the clients from his personal email address inviting them to contact him privately by email or at his personal cell phone number, night or day. This is clear solicitation.
17Mr. Black denies having solicited Linda Inthahack to join him at Harbourfront. He characterizes the act of providing her resume to Harbourfront as simply assisting a respected colleague to find alternate employment that will permit her to work remotely and provide her with greater compensation than she is currently being paid. He simply “passed along” her resume. The email Mr. Black sent to Harbourfront attaching Ms. Inthahack’s resume was a succinct “FYI”, suggesting he had previously discussed the matter with Harbourfront. He then authorized the sharing of her resume with others at Harbourfront. This is significant circumstantial evidence of Mr. Black’s wrongful solicitation of employees.
18I am satisfied Bellwether has a strong prima facie case respecting a breach of the non-solicitation provision of the Agreement.
Non-Competition
19Mr. Black denies Bellwether has a sufficiently strong prima facie case as to meet the threshold requirement for an interlocutory injunction with respect to the non-competition provision. He disputes its validity as being too broadly worded such that its enforcement would effectively prohibit him from working in the investment industry in Ontario.
20The Agreement was signed by Mr. Black, with the assistance of “a team” of legal counsel and having received independent legal advice. It provides that for a period of twelve months after the end of his employment with Bellwether, Mr. Black would not compete with or be commercially involved in any business in Ontario that competes with Bellwether.
21In clause 6.7 of the Agreement, Mr. Black agreed that the duties and obligations imposed on him under the non-solicitation and non-competition clauses are reasonable, valid, and would not unduly restrict or curtail his legitimate efforts to earn a livelihood following the termination of his employment with Bellwether. He expressly waived all defences to the strict enforcement of the restrictive provisions and agreed that Bellwether is entitled to any appropriate legal remedy, including injunctive relief. Mr. Black also acknowledged that Bellwether would suffer irreparable damage if the restrictive provisions were not strictly enforced.
22While these contractual admissions by Mr. Black are to be taken into consideration as to whether the non-competition provision is enforceable, they are but one factor in the analysis. I must be satisfied the provision is legally enforceable having regard to the existing caselaw and the expectations of the parties.
23There is no question Mr. Black was well compensated for the sale of the Crestridge shares to Lorne Park. The Agreement was attached as a schedule to the SPA, thereby inextricably linking the two documents. Mr. Black acknowledged that his services are “unique and extraordinary” which served as an inducement for Bellwether and Lorne Park to respectively enter into the Agreement and the SPA.
24Lorne Park is not a party to this proceeding. Bellwether is the plaintiff, and it is the twelve-month non-competition provision in the Agreement that is engaged for the purposes of this motion. The fact that it was a schedule to the SPA puts the Agreement into context vis-à-vis its negotiated terms and the expectations of the parties, but it is a stand-alone employment agreement between Mr. Black and Bellwether.
25Therefore, the level of scrutiny as to the validity of the non-competition provision in the Agreement will be more rigorous than that which would ordinarily be applied to a purely commercial agreement.4
26Restrictive covenants in employment agreements are prima facie unenforceable as a restraint on individual liberty. To be valid and enforceable, a non-competition provision in an employment agreement must be reasonable and the party relying on it bears the onus of proving that the provision is reasonable as between the parties. If the restrictive covenant is not clear as to the extent of the activity being restricted, the length of time of its application, or the geographical limits, the provision will not be reasonable, and it will not be enforceable. There will be deference provided to restrictive covenants negotiated between “knowledgeable persons of equal bargaining power” and the reasonable expectations of the parties will be a consideration.5
27If a restrictive covenant is found to be unreasonable, it must be struck. It cannot be judicially revised to be “read down” until it is reasonable. That would result in a restrictive covenant to which the parties did not agree.6
28The non-competition clause in the Agreement is not ambiguous. The activities to be restricted are clearly identified, the geographic limitation is the province of Ontario, and the applicable term is twelve months. The analysis then falls to whether each of these restrictions is reasonable in its own right.
29The activity restrained is expressed as “perform services for a competing business, or establish, control, own a beneficial interest in, or be otherwise commercially involved in any endeavour, activity or business” that competes with the business conducted by Crestridge and Bellwether, and any business Bellwether is in the process of developing from the date of the Agreement to the termination of Mr. Black’s employment.
30Bellwether submits the non-competition provision is reasonable. It was agreed to at the same time Mr. Black executed the SPA and it reflects the expectations of the parties at that time. Lorne Park was purchasing the shares in Crestridge. The value of those shares was in large part the client relationships and the book of business of Crestridge. The non-competition provision is limited to the Crestridge business purchased by Lorne Park and the business of Bellwether.
31Bellwether further submits Mr. Black is an educated and experienced professional who had the benefit of legal counsel when the terms of the agreement were negotiated. It is a business agreement between sophisticated parties. The restrictive covenant is limited to Ontario, and it is for a period of twelve months. It does not prohibit Mr. Black from working anywhere else in the country and Harbourfront has offices in Canada from coast to coast.
32In contrast, Mr. Black submits the provision is so broad that if it were to be enforced, it would effectively force him to retire as he would have no ability to work as an investment advisor. He is only licensed to sell securities in Ontario. He would be unable to work in any other province without undertaking the significant effort to be accredited as a securities dealer in that province. It is unreasonable to say that he is free to engage in any other business as he is 68 years old with forty years of experience in the Ontario investment industry.
33As was pointed out by counsel, there is a paucity of cases where non-competition provisions of employment agreements have been enforced respecting investment advisors. Nonetheless, I agree that this reality should not mean the industry is immune from the enforcement of these restrictive covenants. It cannot be that investment advisors are simply not to be bound by the non-competition agreements they sign with their employers at the time they join the company.
34The challenge that appears to have bedevilled employers and their counsel is to draft a sufficiently narrow provision that does not entirely restrain the individual from earning income in their chosen field while providing employers with adequate protection from the very real prospect of losing clients. By their nature, investment advisory relationships are built on a foundation of trust that is earned and established over time. The non-competition covenant is intended to provide the employer an opportunity to transition the clients to a new advisor and to allow a relationship of trust to be established with that advisor, absent interference from the departing employee. Balanced against that is the strong public policy imperative to limit intrusions on personal autonomy and to ensure the individual is not deprived of an ability to earn income.
35I am satisfied that the non-competition agreement signed by the parties is appropriately tailored to restrict Mr. Black from engaging in business that competes with the business of his current employer and the business he sold, for which he was well compensated. The language does not prohibit Mr. Black from engaging in investment advisory services, just those services that compete with Bellwether and Crestridge business. It is limited to Ontario, and it is limited in duration to twelve months. It reflects the terms Mr. Black agreed to at the time he was selling his business to Lorne Park. He was a very experienced investment professional supported by a team of legal counsel when he agreed to the breadth and scope of this restrictive covenant. There was no imbalance of power in the negotiation process.
36It is difficult to conceive of an enforceable non-competition agreement for the investment advisory industry that could be more tailored than the one signed by Mr. Black. To require more directed constraints on anti-competitive behaviour by a senior professional would render non-competition provisions entirely meaningless and utterly toothless. There would be no real protections for employers and absolutely no incentive for employees to abide their contractual duties.
37I am satisfied the non-competition provision of the Agreement is valid and enforceable. Bellwether has met its burden to show it has a strong prima facie case that the provision is reasonable, thereby satisfying the first test under RJR MacDonald. I am also satisfied Bellwether also has a strong prima facie case that Mr. Black has breached the non-competition provision.
38Mr. Black signed an agreement on March 8, 2024, to join Harbourfront as a partner and agreed to the compensation that would be paid for the Bellwether clients he was to bring with him. On March 27, 2024, Mr. Black signed an employment agreement with Harbourfront reflecting a start date of May 3, 2024 “or such other date as is agreed to”. Mr. Black then continued to work at Bellwether for a further two years until such time the Lorne Park shares issued to him pursuant to the SPA were re-purchased by Lorne Park and his five-year performance bonus had been paid. During those two years, he sent copies of confidential information respecting Bellwether clients to Harbourfront, and he disclosed Bellwether’s proprietary information to Harbourfront. He then tendered his resignation on March 20, 2026, with immediate effect and he sent emails to his Bellwether clients to advise that he was joining Harbourfront.
39The Agreement required Mr. Black to provide 60 days notice of resignation. Mr. Black advised he ignored this requirement because in his experience, most firms require investment advisors to leave immediately on termination or resignation. However, that is a decision to be made by Bellwether. It was a term of the Agreement that Bellwether was free to waive with appropriate compensation being paid. It was not a term that could be unilaterally dispensed with by Mr. Black.
40By accepting a partnership offer from Harbourfront, by signing an employment agreement with Harbourfront, by disclosing Bellwether’s proprietary information, and by providing confidential client information to Harbourfront, Mr. Black appears to have acquired an interest in a competing business, and he appears to be engaged in providing services for a competing business, both of which are violations of the non-competition provision of the Agreement.
Irreparable Loss and the Balance of Convenience
41The second test under RJR MacDonald is to establish that irreparable harm would be suffered if an injunction were not granted to restrain the improper conduct of the responding party, and the third test is that the balance of convenience favours the granting of an injunction. In circumstances where the plaintiff can establish a negative covenant is enforceable and that there is strong evidence of a breach of the covenant, there will be less emphasis placed on the issues of irreparable harm and balance of convenience.7 However, there is also no automatic presumption of irreparable harm such that an injunction must inevitably issue when a strong prima facie case is established.
42Mr. Black submits there is no irreparable harm that cannot otherwise be compensated for with an order for damages. He correctly submits that the interests of the clients must be put ahead of the firm. The clients are entitled to be informed if their investment advisor departs the firm, and they are free to follow their advisor should they choose to do so.8 There is no property in the clients.
43The preliminary indicators suggest 95% of the Bellwether clients serviced by Mr. Black intend to follow him to Harbourfront. One client has already moved their accounts elsewhere, choosing not to do business with either party.
44Mr. Black is also correct that a client’s portfolio composition is not proprietary information owned by the firm. The client is always entitled to receive a report on their investments, and the client is free to forward that information to a new firm. However, Mr. Black is not permitted do so on his own initiative. It is a breach of the client’s privacy rights, and it is a breach of the Confidentiality provisions in the Agreement.
45I acknowledge that due to the highly regulated nature of the investment industry, the movement of the clients and the revenue lost from the business can be monitored and calculated. This militates against a finding of irreparable harm, but it fails to account for the intangible losses that may be suffered by Bellwether such as the loss of goodwill and the reputational damage associated with the wholesale departure of a book of business.9 Those losses cannot readily or easily be quantified.
46I am satisfied the loss of the clients, and the loss of any trusted employees will cause irreparable harm to Bellwether. The relationships will be permanently fractured and impossible to repair. The established goodwill cannot easily or readily be recovered, and its loss cannot be compensated by an order for damages. The clients have been Bellwether clients since Mr. Black sold his book of business in 2017. There is no question he was their primary contact with Bellwether but undoubtedly the clients had connections and interactions with other employees.
47Goodwill is an intangible in the investment industry that extends beyond just the client advisor. There is also reputational loss to Bellwether and the ripple effect that could very well occur with a large-scale book of business departing on mass to a competitor.
48The loss of employees from solicitation by Mr. Black will result in non-compensable harm to Bellwether. Time will have been invested in training the individuals and they will have been exposed to Bellwether’s proprietary and confidential information. It is impossible to quantify the potential harm associated with the departure of an employee to a direct competitor.
49While the loss of fees paid by the clients can be calculated as damages, there are many market variables that impact the value of the lost commissions making it difficult if not impossible to quantify the value of those losses.
50Mr. Black submits that the balance of convenience lies in his favour as it would be a devastating loss for the clients if he were restrained from providing them with investment advice for twelve months. He submits that if there is any possible damage, it has already been done as the clients have been informed of his departure from Bellwether and of his move to Harbourfront.
51I am not persuaded that just because Mr. Black contacted the clients that an injunction should not issue. It is not inevitable that enjoining Mr. Black from further contacting the clients will only cause them concern and confusion. Undoubtedly, Bellwether will communicate with each of the clients to advise of the situation and to allay their immediate concerns.
Conclusion
52Bellwether has satisfied the RJR MacDonald test for an interlocutory injunction. It has a strong prima facie case that the non-solicitation and non-competition provisions of the Agreement are validly enforceable and that they have been breached. Bellwether will suffer irreparable harm if the wrongful conduct is not immediately stopped and the balance of convenience favours Bellwether.
53An interlocutory injunction shall issue to restrain Mr. Black from communicating with or soliciting Bellwether clients and employees. The terms of the interim injunction shall extend until this action is resolved or otherwise determined on its merits.
54Bellwether is entitled to its costs of this motion. I encourage the parties to resolve the issue however, if they are unable to do so, written submissions limited to three double-spaced pages with a Cost Outline and any offers to settle may be filed within 30 days.
55As noted above, Mr. Black shall appear before me within 60 days on a date to be fixed in consultation with the Trial Coordinator’s Office for a show cause hearing.
____________________________ J. E. Mills J.
Released: May 19, 2026
Footnotes
- 1994 CanLII 117 (SCC)
- R. v. Canadian Broadcasting Corp., 2018 SCC 5, at para. 15.
- Ibid., at paras. 16 & 17.
- Payette v. Guay inc., 2013 SCC 45, at para 58
- Mandeville Holdings Inc. v. Santucci, 2021 ONSC 4321, at para. 37.
- Ibid., at para 56; Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, at paras. 52-56.
- Timothy William Campbell v. BMO Nesbitt Burns Inc., 2010 ONSC 2315, at para. 32.
- National Bank Financial Inc. v. Canaccord Genuity Corp., 2018 BCSC 857, at para. 49.
- Edward Jones v. Voldeng, 2012 BCCA 295, at para. 37