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| Jet Print Inc. vs. Cohen |
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Between
Jet Print Inc. and Jet Copy Centres Ltd., plaintiffs, and
Moses Cohen, Isaac Cohen, M.C. Ash Holdings Ltd., Leoluna
Holdings Inc. and DMHC Plus Inc., defendants |
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[1999] O.J. No. 2864
Court File No. 99-CV-162779 |
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Ontario Superior Court of Justice
Nordheimer J. |
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Heard: August 5, 1999.
Judgment: August 9, 1999.
(14 pp.) |
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R. Lachmansingh and W.K. Juriansz, for the plaintiffs.
J. Diamond, for the defendants. |
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| Injunctions — Interlocutory or interim injunctions — Requirement of strong prima facie case or appearance of right — Circumstances when injunction will not be granted — Breach of negative covenant — Practice — Judgments and orders — Summary judgments — Counterclaim or set-off, effect of. |
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| Motion by the plaintiffs, Jet Print and Jet Copy Centres, for an interlocutory injunction. Cross-motion by the defendants, Cohen and Ash, for summary judgment on amounts owing as unpaid commissions. The plaintiff companies employed the individual defendants as salespersons. Their employment agreements contained a two-year restrictive covenant and a non-solicitation clause upon termination of employment. The agreements also contained an acknowledgement that a breach thereof would cause irreparable harm. The individuals subsequently incorporated corporations through which their commissions were paid. In 1998, the plaintiffs accused the defendants of fraudulently submitting invoices, and the defendants terminated their relationships with the plaintiffs. They went into business together, and the plaintiff companies alleged that the defendants solicited and accepted work from the plaintiffs' customers in violation of the employment agreements. |
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| Held, Motion and cross-motion dismissed. |
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| There was no strong prima facie case that the employment agreements remained binding. It was arguable that the employment agreements ceased to apply given the change in the relationship between the parties when the individual defendants began operating through their companies. Employment contracts containing restrictive covenants were strictly construed. It was doubtful that the covenants were reasonable in scope. There was no evidence that the individual defendants took any customer lists with them, or that they were key personnel who owed fiduciary duties. There was insufficient evidence of irreparable harm. A contractual waiver as to the existence of irreparable harm could only be construed as some evidence upon which a court could exercise its equitable jurisdiction. The balance of convenience favoured the defendants, who would face considerable limits on their ability to earn a living if the injunction were granted. The question of the unpaid commissions was best left for trial. |
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 Download PDF of full case |
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