The plaintiff, Gauvreau & Associates Professional Corporation, sought an interlocutory injunction against the defendants, Pelton & Co. Professional Corporation and Laurie Pelton, to enforce a non-competition agreement.
The agreement stemmed from the sale of Pelton's accounting practice to Gauvreau, which included goodwill and a client list, alongside an independent contractor agreement.
The defendants, after Pelton left Gauvreau, began servicing clients from the sold list.
The court, treating the agreement primarily as a business sale contract but also considering employment interests, found the seven-year, Ontario-wide non-competition clause unduly restrictive.
While acknowledging a serious issue to be tried regarding the enforceability and potential "reading down" of the clause, and finding irreparable harm in the loss of goodwill, the court granted a limited injunction.
This injunction prohibited the defendants from *further* soliciting clients on the sold list until trial, but did not prevent them from accepting business from clients who had already switched or those who had not yet retained them.
Costs were reserved to the trial judge.